Ladies and gentlemen, thank you for standing by, and welcome to the Fourth Quarter and Year-End 2019 Universal Electronics Inc. Earnings Conference Call. [Operator Instructions]. I would now like to hand the conference over to your speaker today, Kirsten Chapman of LHA Investor Relations. Please go ahead, ma'am..

Thank you, Sydney, and thank you all for joining us for the Universal Electronics Fourth Quarter and Year-End 2019 Financial Results Conference Call. By now, you should have received a copy of the press release. If you have not, please contact LHA at 415-433-3777 or visit the Investor Relations section of the website.

This call is being broadcast live over the internet. A webcast replay will be available for 1 year at uei.com. Any additional updated material, nonpublic information that might be discussed during this call will be provided on the company's website, where it will be retained for at least 1 year.

You may also access that information by listening to the webcast replay. During this call, management may make forward-looking statements regarding future events and future financial performance of the company and caution you that these statements are just projections. Actual results or events may differ materially from those projections.

These statements include the company's ability to timely develop and deliver products and technologies that will be accepted by our customers and enable the company to obtain new customers and enter new markets, including the company's QuickSet technologies and platform, voice-enabled advanced control products, nevo.ai, Nevo Butler, smart speakers, home automation and sensing technologies and products.

The continued adoption and purchase of our customers -- by our customers of our technologies and products, the continued trend of industry toward providing consumers with more advanced technologies, management's ability to manage its business via product mix adjustments and increase in operational efficiency to achieve its net sales margins and earnings as guided.

The effects that public health issues, including the outbreak of COVID-19 have on our business and management's ability to mitigate those effects and the ability of management to minimize the effects that trade regulations pertaining to importation of our products and the tariffs imposed on them.

The company undertakes no obligation to revise or update these statements to reflect events or circumstances that may arise after today's date and refers you to the press release mentioned at the onset of this call and the documents the company files with the SEC. In management's financial remarks, adjusted non-GAAP measures will be referenced.

Management provides adjusted non-GAAP metrics because it uses them for budget planning purposes and for making operational and financial decisions and believes that providing these non-GAAP financial measures to investors as the supplemented GAAP financial measures helps investors evaluate UEI's core operating and financial performance and business trends, consistent with how management evaluates such performance and trends.

In addition, management believes these measures facilitate comparisons with the core operating and financial results and business trends of competitors and other companies. A full description and reconciliation of adjusted non-GAAP measures versus GAAP is included in the company's press release issued today.

Finally, please note, we are no longer including the effects of constant currency and ASC 606 revenue recognition in our non-GAAP financial statements. As a result, the prior year 2018 non GAAP figures, as previously reported, have been adjusted to reflect these changes.

On the call today are Chairman and Chief Executive Officer, Paul Arling, who will deliver an overview; and Chief Financial Officer, Bryan Hackworth, who will summarize the financials. Paul will then return to provide closing remarks. It is now my pleasure to introduce Paul Arling. Please go ahead, sir..

Good afternoon, and thanks for joining us today. In 2019, we executed our plan to implement specific initiatives to enrich our product mix, increase our operational efficiency and free resources for strategic investments.

Our goal has been to enhance our competitive position, diversify markets, gain customers and ultimately achieve consistent and profitable growth that has been a hallmark of Universal Electronics. Our execution delivered the strongest year in our company's history. More importantly, we have enhanced our profitability profile.

I'll give a quick summary of our financial success, and Bryan will provide more detail later. For 2019, net sales reached $751.7 million, up 11%, and EPS was $3.55, up 68% compared to last year. Throughout 2019, we have rebalanced our product line away from lower-margin devices to more advanced, differentiated solutions carrying higher margins.

While this rebalancing has, in some cases, led to lower revenue levels on a near-term basis, which we have currently offset with growth from new advanced solutions, we believe it will yield improved margins and profitability over time. Our efforts, in fact, are coming to fruition.

By the fourth quarter, gross margin rose to 29.3%, and operating margin reached its highest level in 4 years. I am proud of our team and the company we have built. Since our beginning in the 1980s, we have been an industry pioneer, setting standards for control and sensing technologies in the smart home.

First, with our wireless remote controls, and more recently, with our QuickSet-enabled award-winning voice search control solutions. Already, we have shipped over 100 million of our voice remote controls to customers around the world. Throughout our evolution, our people, innovation and technology have differentiated UEI.

And today, we continue to move our products upstream. At CES 2020, we exhibited some great new solutions. We introduced the fifth generation of our flagship QuickSet Cloud platform that enables consumer electronics devices to universally and ubiquitously discover and control electronic devices and services in the home.

QuickSet Cloud is now active in many of the new and emerging set-top boxes. We are also now deeply embedded in 3 of the top 4 TV OEMs as well as being a key ingredient in several prominent speaker -- smart speaker and hybrid voice-enabled set-top boxes launching this year.

More recently, at Samsung's Unpacked event earlier this month, Samsung announced the release of their Galaxy Home Mini with a QuickSet-enabled setup and control of many of the latest smart devices in the home as well as all manner of legacy devices via the built-in IR port.

Commercially speaking, QuickSet continues to deliver outstanding performance as our footprint across connected devices ranging from smart TVs, set-top boxes and now smart speakers, continues to grow and enhance our overall gross margins.

We see a lot of new opportunities on the horizon for our advanced technology software and chip only platforms, these technology solutions are evolving traditional customer relationships and helping us build new customer relationships in new markets and channels.

Overall, we delivered our best year ever and are excited for the potential that lies ahead in 2020 and beyond. I'll now turn the call over to our CFO, Bryan Hackworth, for a review of the financials. Please go ahead, Bryan..

Thank you, Paul. Fourth quarter net sales grew to $174.8 million compared to $168.3 million in the fourth quarter of 2018. The increase reflects greater adoption of our advanced platforms and subscription broadcasting, offset by our decision to opt out a certain low-margin business.

Gross profit reached $51.2 million or 29.3% compared to 28.7% in the fourth quarter of 2018. Our improved gross margin rate reflects the successful execution of enriching our product mix, favoring advanced solutions, including greater royalty revenue and reducing sales of lower-margin products.

Operating expenses were $33.9 million compared to $31.9 million in the fourth quarter of 2018. R&D expense increased to $7.2 million this year from $5.9 million in the prior year quarter, reflecting our continued investment in innovation and new product development. SG&A was $26.7 million this year compared to $26 million last year.

We'll continue to invest in technology and product development to continue our long-standing leadership in bringing differentiated solutions to the market, while keeping operating expenses flat in 2020. Operating income was $17.3 million, up from $16.4 million in the fourth quarter of 2018.

Operating margin increased to 9.9% compared to 9.8% in the prior year quarter. Our effective tax rate was 20.7% compared to 22.7% in the prior year quarter. Net income was $12.8 million or $0.90 per diluted share compared to $11.7 million or $0.84 per diluted share in the prior year quarter.

For the full year 2019, net sales grew to $751.7 million, the highest in our history, representing an increase of 11% over 2018. Gross profit margin increased to 26.7% from 24.8% in 2018. Operating margin increased to 8.8% compared to 6% in the prior year.

Net income was $50.1 million or $3.55 per diluted share compared to $29.7 million or $2.11 per diluted share in 2018. Next, I'll review our cash flow and balance sheet at December 31, 2019. Cash and cash equivalents were $74.3 million compared to $53.2 million at December 31, 2018.

Net cash provided by operating activities was $45.3 million for the fourth quarter and $85.3 million for the year, both records for UEI. For the year, strong free cash flow of $63.9 million enabled us to reduce our outstanding debt by $33.5 million, while increasing our cash balance by $21.1 million.

Our cash conversion cycle approximated 111 days as of the fourth quarter of 2019 compared to 109 days in the fourth quarter of 2018. Now turning to our guidance. Excluding any impact from the COVID-19 virus, we expect first quarter 2020 net sales to range from $170 million to $180 million compared to $182.7 million in the first quarter of 2019.

And EPS to range from $0.90 to $1 compared to $0.82 in the first quarter of 2019, illustrating our improved profitability profile. I'd like to comment on how the COVID-19 virus is impacting our business. There was a delay in restarting our China factories following the extended lunar New Year.

However, at this time, all 3 of our China factories have resumed operations, albeit with reduced labor force. Further, we are happy to report that there are no known cases of the virus among our labor force, and we expect to be fully staffed within weeks.

In addition, our suppliers are also coming back online, although with the same labor and logistics issues that we are facing. Logistically, we are taking steps to secure cargo capacity so that we can ship predictably and at a reasonable rate as soon as production and transportation activity normalizes.

While China is important to us as a manufacturing center, we sell very little into the China market at this time. Therefore, any impact will be related to the speed at which we can ship product to customers who are primarily in Japan and Korea.

We do not expect any delays in supplying to our North American customers this quarter because we believe we have adequate components and safety stock, and our Mexico production facility remains at full capacity. Based on our current knowledge, the COVID-19 virus may impact labor component suppliers and shipping lanes.

As such, we currently estimate up to $10 million of net sales could be pushed to the second quarter, which equates to approximately $0.12 to $0.15 per -- of EPS. We are working diligently to mitigate any negative impact. However, the final outcome remains uncertain at this time. I would now like to turn the call back to Paul..

Thanks, Bryan. In 2019, we set and executed our plan to improve our customer-facing organization and our bottom line. Staying true to our steadfast mission to deliver customers innovative control and sensing technologies, we posted the best financial results in our history.

Regarding COVID-19, with our geo diversity, flexibility and most importantly, our cohesive team we have overcome numerous adverse macro conditions before, most recently with tariffs and emerged stronger than ever before.

With our new technologies, growing market opportunities, our strong 2019 cash flow and strengthened balance sheet, we enter 2020 with an incredibly solid foundation. Further, our plan to elevate our product offering and enrich our margins is in motion. Voice-enabled advanced products continue to gain significant traction.

Existing and new customers are becoming more engaged in product development as our technology helps them differentiate and raise their devices to the next level. And our advanced technologies continue to expand their applications beyond traditional home entertainment, such as smart speakers and home gateways.

We are excited about all the opportunities ahead and look forward to reporting them to you in the future. Stay tuned. Operator, we'd now like to open up the call for questions..

[Operator Instructions]. And our first question comes from Jeff Van Sinderen with B. Riley FBR..

First, let me say congratulations on the strong operating metrics in Q4. Let me ask you this kind of a multipart question, but can you give us a little more on what you're seeing supply chain-wise in China? Just kind of wondering if there's more color you can give us there since it is sort of a -- it's not just limited to one company.

And then, I guess, the $10 million pushout, what's your best guess on when you'll be back on schedule? I know there's a lot of variables that are tough to predict. And then also, I know you said Mexico is running at full capacity or full -- I think, you said full capacity.

Is that optimized at this point? Or what is still left to do there to optimize that?.

Okay. Well, there was a lot in there. I'll start with Mexico. Mexico is at full capacity. There is probably some further improvement to be made there.

But the team has done a great job of getting that over the last year, 1.5 years -- converted it from what was once a like new facility where we did basically refurb units to a full -- more full production facility and gotten that up and running relatively efficient. I think there is still some room to improve.

But generally, they've done a great job down there and have plenty for Q1 to produce. And that hasn't really been the issue near term. In China, it's difficult to report on. It's day-by-day. All 3 factories are open. It's reported to us that -- I think it was 95% of our vendors have reported to us that they're up and running.

They probably do face some difficulties with the return of labor. Two of our factories -- well, we have 2 factory locations there, which are, I guess, I would say, more rural. Maybe we were more fortunate than others in that we have probably a higher percentage of local workforce.

We used to have a facility in Shenzhen that would have a higher level of migrant workforce, people coming from other regions. I would presume the returning workers there is a little bit more difficult when people have to travel across multiple provinces of China to return to work.

Our facility in Western China, Changzhou, as we call it, it's been up for two weeks now. And they're getting up to speed. They're not quite at full capacity, yet. That usually does take time even in a normal year. GTY opened later than that and are getting up to speed now.

I'm told by the end of next week, we should be up to speed in two of those three facilities. The other one will take a few more weeks. As far as supply chain of the supplies coming in it hasn't been a problem yet. But again, it's difficult to know. So we tried to isolate those orders this quarter that may be impacted.

Those are the numbers that Bryan shared with you. Our team has looked at, obviously, order by order to figure out which ones could impact us, things we think we may not be able to get done this quarter.

We're told by those customers that if we don't ship it by the end of this quarter, they're open orders, they'll take it in the first weeks of -- if we have it done that of Q2. So we're going to manage it. We're going to obviously try to take that number as close to 0 as possible.

But our expectation is that there'll probably be some effect, of the $10 million in revenue could be missed this quarter and shifted into Q2. That's our estimate....

Okay. That's all really helpful. And then I wanted to follow-up with one more, if I could. Just in terms of, I guess, where you feel you are in the process of eliminating some of the lower-margin products. And I know you're ramping up in some of the higher margin.

I guess how we should think about that for 2020? Is that an ongoing thing? Are we getting -- do we still have a ways to go before you -- where you want to be in terms of margins and getting the higher-margin products, higher concentration?.

Yes. Well, I think we're operating pretty much where we want to be right now. We've put a lot of discipline in place on this. We've looked at every one of our products. On these calls, we often get asked about 3 dozen SKUs that we have. But it's probably a good fact for people to know that last year, we had 1,800 SKUs within our company.

So -- and while it's important to focus on those major ones, there is a lot more to the major -- to our business than just those major SKUs. And we've gone through them, determined the level of differentiation in each product to determine the appropriate pricing for the value conveyed.

In some cases, we didn't feel like the product was properly priced. And we've made some changes there. There has been -- obviously, when you do that, your margins will increase one way or another, either because the lower-than-average-margin product will no longer be with you or the margins on the product that you're selling will go up.

But we've done it in a very careful way and focused on small to medium-sized customers. Our large customers, obviously, get treated a little bit differently because they buy quite a bit. So it was done with a lot of discipline, SKU by SKU. And the team here, the marketing team and sales team have done a really good job on it.

And going forward, every new product we will look at in this way and determine the appropriate pricing, again, for the value conveyed. So I think it's helped. Also, the world is moving to these more differentiated solutions. So we are getting a natural movement up the differentiation curve in our business anyway.

With these 2-way IP-enabled voice-driven products, they usually have differentiated features in them, which leads to a little bit better margins.

So we've had a couple of natural effects that have moved us as well as some new disciplines that we've put in place, and it's led to an improvement in the profitability of our business, both on a gross and, of course, net basis..

And our next question comes from Steven Frankel with Dougherty..

Paul, I want to dig into this notion of opting out of business. And I do appreciate the improvement in gross margin. How much of what we're seeing are a substitution, for example, if somebody buying software and the chip rather than in prior years, they might have had you make the complete remote.

And therefore, you had higher revenue but lower gross margins..

Yes. Most of it isn't that switch, Steve. Most of it isn't. It's -- the expansion of the chip only and licensing business has just been a growth with either new customers that we brought on or an expansion of the number of SKUs covered within the current customers' product line.

So what happens is, in some cases, they take years to move this feature through their product line. The first year, they'll put it on the highest end of their SKUs. The next year, they'll bring it down a couple of notches within their product line.

And then, in some cases, they may take our features across their entire product line, which expands the number of units with those licenses.

On the rebalancing of the product line, it's just been more -- again, looking at the product line, we sell everything from mainstream product, traditional universal remote controls, all the way up to QuickSet-enabled 2-way voice products with software that rides on the set-top box and in the cloud. These are most highly differentiated products.

And we just feel like, again, these products, particularly when sold to medium to small-sized customers, whose volumes aren't enormous that the margins on those products should be -- the value conveyed to the customer needs to be paid for. And in some cases, not many.

We had probably had some cases where we had products that had lived for a few years, costs had gone up on either labor or materials, and we haven't exacted any price increases on customers. And in some cases, we went and said, these are the prices that we expect to be paid. And in some cases, they pay them.

In which case, the sales and margin on those products went up. In other cases, they may have found an alternative. And therefore, that revenue was lost. But typically, the margin on it was lower than average, which will enhance your margins, even with that business lost.

So it hasn't been a lot because, obviously, our largest customers, we do not do this with. Typically, theirs are very specific programs with very specific margins and very specific costs. It was more on, I would say, the other 1,400 SKUs within our business, some of which that have maybe $100,000 in sales per year.

So we went through that line-by-line detail-by-detail and determined, are we appropriately marketing these products, are appropriately pricing these products. And in most cases, we were, but in some cases, we felt we needed to make some changes and did that..

Okay.

And given this switch, is it -- I know you don't want to forecast gross margins for Q1, but it would seem like this switch helps minimize or eliminate the typical sequential drop in gross margins that you typically see?.

Yes. Steve, it's Bryan. Yes. I'd agree to that. I think for Q1, if you were to use the gross margin rate that we achieved in Q4, I don't expect it to be significantly different..

And again, you'd say, in general, this is kind of the new normal.

This is a gross margin rate that you should be able to sustain or improve upon, depending on the drivers of the business?.

Yes. And there are a lot of variables that go into the gross margin. So I don't want to forecast out and say we're always going to be at x percent. I mean you've been with us for a long time, and you've seen even within a year of the gross margin rate. Even in good years, it could be kind of up and down depending on the mix.

And there's a lot of variables. You got foreign exchange rates, et cetera. But yes, overall, if everything remained constant, and there were there were no other variables, I would say the way the product mix is now and the way we're producing in China, I would say we're on a good path..

Okay. Great. And what was Comcast in the quarter? Or any other 10% customers..

Comcast was the only 10% customer, and they were at 16.3%..

Okay. And Paul, maybe some color on where you think you are in terms of advanced remotes.

Is that 50%, 60% of revenue today? And what's the new design pipeline look like, especially over the next couple of quarters, to the extent that you can comment on things that you think are launching?.

Sure. Yes. I think the next-generation AV control and home control is still early innings. Obviously, some players in the world have really led here and have been out with these solutions for some years now. But obviously, there still are some large names that haven't introduced yet.

And as we've said for quite some time, the high-ARPU markets of the world, you'll probably see this type of product become ubiquitous here in the U.S., of course, Western Europe, Japan, et cetera. These areas of the world are -- basically, these products are going to become commonplace. They have not yet.

There are a lot of providers in those areas that I've just mentioned that have not introduced. Many of them are working on them. Some, you will see this year. Probably some of them in the front half of this year. That's at least the schedule. So yes, there will be more and you'll probably see that over the next few years.

There may even be iterations of the first-generation products that come out. New features being brought out with accessories that may go along with them, provided by our technology. So we're pretty excited about the things that are out there.

The market is, again, still relatively early in this transition, and we think there's a lot of room to grow with these new platforms. IP enablement with voice can drive a lot of applications in these new services that we can provide software and/or accessories -- hardware accessories to help implement with our customers..

Okay. And then to go back one more time on the potential supply chain disruptions. Just let me make sure I understand what you said.

You -- so the low end of the revenue range still assumes that you ship out everything that's in the plan to the extent that there are delays, that's the incremental $10 million that you might be vulnerable to slipping into the next quarter..

Yes. That's correct, Steve..

Okay.

And then lastly, any update on paying down the debt, kind of is -- when is that credit line mature? And are you thinking about replacing it? Or is your plan to try to pay that debt down in the next 12 months?.

Well, we paid down over $33 million last year. So I think we're in a comfortable position now. There was a point, I think we got to $110 million, and we wanted to give ourselves a little more breathing room. So I think over the last year, 1.5 years, we've done a good job paying it down. And currently, it's at $68 million.

Each quarter, we meet with the Board, and we go over use of cash, whether in the best -- to determine what's the best use of cash, whether it's paying down the debt, if there's an M&A opportunity, share buybacks. So it's something that's a quarterly analysis is done. So I don't want to say we're going to necessarily pay it down.

The line is revolving, two year line. And usually, when we get within a year of exploration, we renew it. So we just did that. So we still have about 2 years left on the line. And it's about $120 million line. So I don't anticipate any change. We've had this for a while..

[Operator Instructions]. And our next question comes from Greg Burns with Sidoti. .

The shift in the product mix and how you're managing your product portfolio, how much of an impact did that have on revenue for the fourth quarter versus where you were guiding coming into the quarter? And similarly, with your guidance for the first quarter, you're guiding to revenue being down year-over-year.

How much of an impact is the product rationalization having on that revenue?.

Yes. Greg, it's difficult to know exactly that number, it's not able to be precisely calculated for this reason. There are some SKUs -- some products that are live.

And on those, when you make a price change, you could probably estimate if the customer were to decide to take that product somewhere else over the course of the next 6 months because usually what would happen is they would buy for a time period and then design a new one and move on. That effect would be difficult to estimate, but we probably could.

The other one is when you do a new product and you make a bid on a replacement product for that specific SKU because what happens sometimes is they'll iterate their product line and it'll just be a derivative of that first product. And if you make a bid on that and decide what your margin should be on it and then do not receive the business.

It's difficult to know exactly what would have happened. The loss of that revenue would be difficult to determine.

But rest assured that in most of these cases, what's happening is some of these SKUs are lower margin, meaning we're looking at these products and saying, the margins that are gained from making these at the current level are not high enough for the value conveyed.

So when we price them, we price them to what we think should be appropriate, often lower than our average margins and then determine -- the customer will determine whether they want to do that or not. So how much business is that? My guess is it's millions, but probably not tens. That would be our estimate..

Okay. And then when we look at the guide for the first quarter, implying down a couple of percent year-over-year, how should we think about -- I mean why is that, that you have a bunch of, I guess, deployments benefiting last year.

So was it a tough comp? Or is there something else going on? And then as you look to the balance of the rest of 2020, do you expect revenue growth to pick up, based on what you're seeing in the pipeline, and then will potentially launch?.

Yes. In Q1, one of the benefits we had last year was -- towards the end of 2018, we had a few at a minimum, at least a few product launches of advanced platforms. So we got into Q1, they were in full swing. And I think we benefit from that a little bit. Right now, it's a little more mature.

So I think there's a little bit of a drop in sales because of that.

I think also, as Paul was talking about, this -- and Steve Frankel asked this question about substitution, it's not a direct institution within a customer, but if we raise prices on a certain product and a customer doesn't agree to it and say that those units go away, but then you replace it with another customer that is buying our advanced technology and they're paying a pure royalty or they're buying a chip with our technology embedded on the chip.

The sales dollar ring isn't going to be as high as us selling a full remote. However, the profit is similar. And I think you're seeing that in the bottom line. You see it in our guidance. I mean, sales -- you're right, sales are down in Q1, the guidance versus the prior year first quarter. But our profits are up significantly.

If you take the midpoint, I think it's 15%. So I mean it's just a -- it's a little bit of -- it's a mix change. I don't think it's bad at all. I think we may have lower sales in Q1, but the profit per sales dollar is higher..

Okay. That makes sense. And then just for the balance of the year, someone had asked earlier about the pipeline, and it sounds like you do have visibility on some things rolling out. So aside from this mix shift, maybe more royalty-type revenue.

Do you have visibility on the deployments of higher-end products coming out throughout the year that might suggest revenue growth might pick up as we move through the year?.

We do. We have projects in the pipeline that we would expect to launch as this year progresses..

Okay. And then lastly, can you just talk about what you're doing with nevo.ai? I mean maybe this is part of this mix shift to more software licensing-type revenue.

But -- originally, I thought of this as you bringing out your own product with the Butler and selling that into the subscription broadcast market, but it seems like now you're shifting the strategy there a little bit, maybe licensing out nevo.ai, what is the strategy behind that? And where might we see that get deployed this year?.

Sure. Yes, yes. Well, you're already seeing elements of Nevo Butler. As I think I said on the last conference call, Nevo Butler was a product that could be implemented by customers, but it was a collection of UEI elemental technologies, QuickSet Cloud, nevo.ai interoperability as a service.

We have a number of things within Nevo Butler that -- Nevo Butler was not only a product but it was also a demonstration vehicle for customers, many of whom looked at Nevo Butler and said, we really like what this product does, but we're building a product, and we'd like to build these elements into our product.

So instead of it being a hardware solution for them they maybe even more efficiently said, can't we just build these elemental technologies into our product? To which we said, well, of course, you can. I mean you don't necessarily have to buy the hardware in order to get these great services or these great technologies.

So we're already designing these elemental technologies into products. TVs, set-top boxes. And again, you're seeing this already in products that are in the market, but also we'll see it as time goes on. So we think this is an important element to build these technologies into a product like Butler. Butler still can be sold as a product.

But more importantly, it's a demonstration platform for the variety of technologies we can bring to other people's products..

Okay.

And do you foresee -- will we see nevo.ai in any consumer electronics or other products this year? Or is that maybe a 2021?.

No. No. You'll see elements of Nevo Butler in products this year..

And I'm not showing any further questions at this time. I will now turn the call to Paul Arling for any further remarks..

Okay. Thank you for joining us today and your continued support of Universal Electronics. It's important to note that in March, we will present at the Sidoti Spring 2020 Investor Conference in New York. We look forward to seeing you soon. Have a wonderful day..

Ladies and gentlemen, this concludes today's conference. Thank you for participating. You may now disconnect..