Alan Roden - Senior Vice President of Corporate Development & Investor Relations Dan Bodner - Chief Executive Officer, President, Corporate Officer and Director Douglas E. Robinson - Chief Financial Officer, Principal Accounting Officer, Vice President and Corporate Officer.

James Moore - FBR Capital Markets & Co., Research Division Paul Coster - JP Morgan Chase & Co, Research Division Shaul Eyal - Oppenheimer & Co. Inc., Research Division Michael J. Anderson - Crédit Suisse AG, Research Division Jeffrey T. Kessler - Imperial Capital, LLC Brian W.

Ruttenbur - CRT Capital Group LLC, Research Division Jonathan Ho - William Blair & Company L.L.C., Research Division.

Good morning, and welcome to the Q2 2014 Verint Systems Inc. Earnings Conference Call. [Operator Instructions] As a reminder, the conference call is being recorded today, Wednesday, 4th of September 2013. I now like to turn the call over to Alan Roden, Senior Vice President of Corporate Development. Over to you..

Thank you, operator. Good morning, everyone, and thank you for joining our conference call today. I'm here with Dan Bodner, Verint's CEO and President; and Doug Robinson, Verint's CFO. By now you should have seen a copy of our press release that includes selected financial information for our second fiscal quarter ended July 31, 2013.

Our Form 10-Q will be filed shortly. Each of our SEC filings and earnings press releases is available under the Investor Relations link on our website and also on the SEC website.

Before starting the call, I'd like to draw your attention to the fact that certain matters discussed on the call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other provisions of the federal securities laws.

These forward-looking statements are based on management's current expectations and are not guarantees of future performance. Actual results could differ materially from those expressed in or implied by the forward-looking statements.

The forward-looking statements are made as of the day of this call, and except as required by law, Verint assumes no obligation to update or revise them. Investors are cautioned not to place undue reliance on these forward-looking statements.

For more detailed discussion of how these and other risks and uncertainties could cause Verint's actual results to differ materially from those indicated in forward-looking statements, please see our Form 10-K for the fiscal year ended January 31, 2013, or Form 10-Q for the fiscal quarter ended July 31, 2013, when filed, and other filings we made with the SEC.

The financial information discussed today is primarily non-GAAP. A reconciliation of the non-GAAP financial measures to GAAP measures is included in today's earnings release, as well as in the GAAP to non-GAAP reconciliation found on the Investor Relations link on our website.

Non-GAAP financial information should not be considered in isolation or as a substitute for GAAP financial information, but is included because management believes it provides meaningful supplemental information regarding our operating results when assessing our business, and is useful to investors for informational and comparative purposes.

The non-GAAP financial measures the company uses have limitations and may differ from those used by other companies. At the end of the call today, I'll provide an Investor Relations update, but now I'd like to hand the call over to Dan.

Dan?.

one, retail and finance organizations have ongoing concerns about fraud around the branch and ATM machines.

To address fraud more effectively, we're enhancing capabilities of our video solution such as facial recognition, providing our customers the ability to identify suspicious transactions in the video and match known fraudsters with facial identification.

Two, also in retail and finance, we're expanding our video portfolio for branches to help them understand customer experience by providing branch managers with analysis of customer traffic, customer engagement and shopping experience.

And three, our Situation Management Solution now supports integration of multichannel data from a wide array of security systems, providing security officers with holistic Actionable Intelligence to more effectively safeguard people and assets.

Overall, our expanding portfolio of Security Intelligence Solutions presents us with new growth opportunities over time. Turning to our guidance. As a result of our strong Q2 and first half and the positive trends that we have discussed today, we're incrementally more confident in the year and expect a strong second half.

With respect to EMEA, we believe the region's revenue will decline this year as compared to last year. However, a potentially improving macroeconomic environment will impact in a positive way next year. After a long period of weak environment, we believe now could be a good time to invest in EMEA to drive growth for the long term.

At this time, while we had a strong Q2 and we are more confident in the full year, we are maintaining our annual outlook for revenue growth of 6% to 7%, and earnings per share of $2.75, plus or minus $0.05. Now I would like to turn it over to Doug to discuss our financial results in more detail.

Doug?.

Yes, thanks, Dan. Good morning, everyone. Most of our discussion today will focus on non-GAAP financial measures. A reconciliation between our GAAP and non-GAAP financial measures is available, as Alan mentioned, in our earnings release and in the IR section of our website.

Differences between our GAAP and non-GAAP financial measures include adjustments related to acquisitions, including amortization of acquisition-related intangibles, certain other acquisition-related expenses, stock-based compensation, as well as certain other noncash or nonrecurring charges, including expenses associated with our merger with Comverse.

I'll start my discussion today with the areas of revenue, gross margin and operating margin. In the second quarter, we generated approximately $223 million of total revenue across our 3 segments. With $126 million in Enterprise Intelligence, $32 million in Video Intelligence and $65 million in Communications Intelligence.

This compares to approximately $215 million of total revenue in the second quarter of the prior year, with $118 million in Enterprise, $39 million in Video and $58 million in Communications Intelligence. In terms of geography, in Q2, we generated $120 million in the Americas, $46 million in EMEA and $57 million in APAC.

This compares to approximately $124 million in the Americas, $50 million in EMEA and $41 million in APAC in the second quarter of the prior year. Q2 gross margins were 68.8% compared to 66.4% in Q1, and 66.6% in Q2 of the prior year.

As we've discussed in the past, due to the product and revenue mix within or across segments, particularly within the Security segment, overall gross margins can fluctuate significantly from quarter-to-quarter.

We expect Q3 gross margins to be down from Q2, but as we discussed last quarter, we expect gross margins for the full year to be similar to last year. During the second quarter, we generated $51 million of operating income compared to $37 million in Q1 and $43 million in Q2 of the prior year.

Operating margins in Q2 were 23.1% compared to 17.9% in Q1 and 20% in Q2 in the prior year, primarily due to improvement in gross margins as I just went through. Our Q2 EBITDA came in at $55 million or 24.8% of revenue, up from 20% EBITDA margin we recorded in Q1. This brings our last 12 months EBITDA to $211 million.

Now let's turn to other income and interest expense. In the second quarter, other expense net totaled $8.6 million, reflecting $7.4 million of interest expense, which includes some amortized interest costs, the balance related mainly to the impact of foreign exchange.

For the first half, the foreign exchange negative impact on our non-operating income was approximately $3 million or about $0.05 to our earnings per share. Our Q2 cash tax rate was 10.5%, reflecting what we now estimate to pay in cash taxes for the remainder of the year.

As we've discussed previously, we expect to enjoy a low cash tax rate for several years due to our NOLs and the amount of income we generate in low tax rate jurisdictions. These results drove diluted EPS of $0.70. Now turning to the balance sheet.

As of July 31, 2013, we had approximately $356 million of cash and short-term investments, including restricted cash, compared to approximately $327 million of cash at the end of Q1. Q2 cash from operations on a GAAP basis came in strong at $47 million.

For the first half of the year, GAAP cash from operations was $73 million versus $39 million in the first half of last year. We ended the quarter with total debt of $645 million and net debt of approximately $290 million. At quarter end, we had 53.6 million average fully diluted shares outstanding.

Before moving to Q&A, I'd like to discuss our guidance for the year ending January 31, 2014. As Dan noted earlier, we expect revenue to increase between 6% and 7% compared to the prior year. We expect Q3 revenue to be at a similar level to Q2, which would result in more than 10% year-over-year growth in Q3.

And as usual, we expect Q4 to be our strongest quarter of the year. We are targeting operating margin similar to last year, slightly above 22%. Based on recent foreign exchange rates, we expect quarterly interest and other expense to be approximately $7.5 million in each of Q3 and Q4.

We expect our non-GAAP cash tax rate to be approximately 10.5% for the year, reflecting the amount of taxes we expect to pay this year. Based on these assumptions and assuming approximately 53.7 million average diluted shares outstanding for the year, we expect non-GAAP EPS to be $2.75, plus or minus $0.05.

In conclusion, we are pleased with our performance in the first half, we have more confidence in the year and are well positioned for accelerated growth longer term. This concludes my prepared remarks.

And with that, operator, can we please open up the lines for questions?.

[Operator Instructions] We have our first question coming from the line of Daniel Ives of FBR Capital Markets..

This is actually Jim Moore in for Dan. And first question, I just wanted to drill down a bit on EMEA. It sounds like things are getting a little better.

Are you seeing some improvement? Maybe you can just talk about are you seeing deal sizes change or just overall demand picking up?.

Yes. So clearly on the government side, which we highlighted, that government spending in EMEA was an issue last year. Very pleased to have 2 orders, 8 digits, more than $10 million each. So that's a clear shift.

And we have a large customer base of government customers in EMEA that are very interested in our portfolio of Security solutions, so the ability to get budgets approved and get back to purchasing large projects is obviously very encouraging. In terms of the Enterprise side, we see, overall, some signs of macroeconomic improvement.

As I mentioned before, we don't think this is going to be reflected in this year's performance. We still think EMEA will decline for us in the year.

But that all is very encouraging relative to next year and that's why we think that from a resource allocation standpoint, while we allocated some less resources over the last 3 years, recognizing that EMEA is going through some difficulties, we now believe it's time to allocate more resources in EMEA in preparation for growth..

Okay, great. And then, on the margin side, you guys had a really nice tick-up here in the second quarter.

Is this just a function of the Security business getting a little lumpy and you guys getting more in the second quarter or can you maybe explain the dynamics there?.

Well, we actually had positive execution almost on all fronts. We discussed that the Enterprise business, we expect it to improve from Q1 to Q4 as it does every year. And we cannot say that we expect to be a $10 million improvement every quarter.

So in Q2, the Enterprise business improved more than $10 million, around $13 million, so that's obviously within the trend that we expected. It'll be stronger and Security was strong as well. And in addition to the overachievement in revenue, we also had a good mix that drove gross margin to a good level, and we continue to have good expense controls.

So we really had all these things contributing to strong EPS. And on top of that, we're very pleased with our cash collection efforts which drove a very strong cash flow from operations and overall cash position..

And the next question is from the line of Paul Coster of JPMorgan..

I just want to focus in on this gross margin question a little bit more, if you don't mind.

What percentage of revenues now are coming from analytics versus capture? And shouldn't we still be expecting gradual margin improvement as a trend, looking forward, with that shift?.

Yes, I think we have discussed in the past that we have an opportunity to accelerate growth over time as we continue to add analytical solutions. This is not going to be a mix that will change in 1 quarter. So overall, we still have about 50-50 mix between capture products and analytics. But clearly, we are growing our analytics portfolio.

Analytics is growing at higher growth rates, which kind of shifts the overall growth rate of the company. And we've discussed, we're not giving guidance for next year, but we discussed growth acceleration over time. In terms of the near-term gross margin, we do see for the year, as Doug mentioned before, gross margin will be similar to last year.

We think in Q3, it may be somewhere between Q1 and Q2, as Q2 was stronger than we expected. So maybe a little bit of -- a number between Q1 and Q2, but overall for the year, similar to last year. And the big opportunity for gross margin improvement over time is when the hardware component of our revenue will be declining over time..

And you stated that there was a lot of 7- and 8-digit deals this quarter. What does this mean in terms of visibility now? Is your visibility into the next sequential quarter much better than it has been in the past? And does it now extend out 2 or even 3 quarters? And I've got one last follow-up..

Yes, some of these large deals are going to be recognized over multiple quarters. But I think, overall, we think that as we said, we feel more confident in the year. We think that the macro environment is somewhat the same, but we are executing better. And we are ahead of our plans, internal plan in H1.

We feel like we are gaining some market share and we feel like we have a very complete and competitive product offering.

And very important for us is the fact that we have invested in a unified suite, which we think is helping us to get customers to deploy larger projects as they're comfortable buying more solutions from Verint but in an integrated, unified fashion that can drive more ROI into their organization..

Okay. My last question is the malware cyber application that you talked about that's of use to government customers, amongst others.

Have you assessed the addressable market there? And how -- with the initial success that you've had, are we in the first inning of penetration or are we sort of further along than that?.

Yes. So we are excited about Cyber Intelligence, we see that as more than just malware detection, which is just one product that we offer in this category.

We like to think about a completely different approach to cyber and use intelligence, Actionable Intelligence, to address a number of different challenges that our customers, the government customers are sharing with us.

One of them is that there's a lot of players in the cyber security market that's focused on protecting the network, putting a perimeter around the network. Our approach here is to use deep packet inspection and deep intelligence from the network to identify malware that somehow already penetrated.

So despite the fact that there's a lot of effort by organizations to put a perimeter around it, there could be different ways for the network to get affected. And we see that the customers are excited about that -- their opportunity. So we're not looking -- the addressable market for cyber is very large.

For us, it's still a very small business but one that we believe we have the technology to become a player. And we're not targeting to compete with larger players, mostly we compete with smaller, very innovative startup companies.

But because of unique technology and because of our very good relationship with large government customers, we think that presents an opportunity for us to be a strong player in this market over time..

Our next question is from the line of Shaul Eyal of Oppenheimer..

A couple of quick questions on my end.

Dan, the health care customer, the big contract that you mentioned at the beginning of the call, is that a greenfield opportunity? Was that a displacement or even an existing client?.

That is a separate -- it's an existing client but it's a greenfield opportunity because it's a different division of an existing client, who's a very, very large company. And this division in preparation for the Affordable Care Act, had to deploy some technology and found that we have what they need.

So I guess, it's a combination of existing customer and a greenfield opportunity..

Fair enough. You also mentioned that you find this is the right time to invest more in Europe.

What do you mean by that? Are you hiring more sales people, looking into some kind of adjacent markets to invest? What's the extent behind it?.

Yes. So this is more of a resource allocation. So I don't think you think about it as a huge investment. But we clearly, we had, over the last few years, we had strong Americas and APAC performance, and we've allocated more of our resources to these geographies, and we're now looking to shift back into EMEA.

Specifically, it will be translated into a number of different actions, some of them will be hiring. We do have a hiring plan, overall, for the second half of the year in preparation for next year. And certainly, EMEA will get their fair share..

Fair enough.

And Dan, as you continue to grow your share and you do more in the analytics, as you discussed also, do you see Verint running into a new set of competitors that you haven't seen in prior years?.

Yes. We certainly think that as we expand our addressable market, and that is a natural evolution of Verint, we're preparing to become, hopefully not in the too far future, $1 billion-plus software company and that, by evolution, will get us into more solutions that compete with other companies. Our approach, however, is unique.

We're not looking to compete directly with solutions from other companies. We are integrating additional capabilities to our existing suite. And that's a very important and differentiating approach to how do we expand our addressable market into adjacent markets..

Our next question is from the line of Michael Nemeroff of Crédit Suisse..

This is Mike Anderson on behalf of Michael.

Could you, first of all, give us a split of the product, and service and support growth rates within Enterprise Intelligence, as well as, Security Intelligence?.

Okay, I'll have Doug address this in a moment. But I think it's important to understand how I think about product and services, and what is our business model here. As we discussed before, we have a growing portfolio of products. And we are bundling many different products when we sell a project.

As a result, we've seen more large projects and we do have more over $1 million projects in Q2 over last -- over Q2 last year, and we also have in H1, over H1 last year. So that business model of becoming a more strategic and a more meaningful vendor to our customers is driving large projects.

And what happens is, in some large projects, there is a different allocation to product and services than we had before. And that is kind of shifting from product to service.

So again, I'll let Doug explain it, but I just want to say that from my perspective, I'm more concerned about growing overall revenue for Verint and that shift or that allocation between product and services is not an issue that I'd focus on.

Doug?.

Yes, sure Dan. Yes, Mike, I wouldn't read too much into the product-service split. As Dan mentioned, we do have large projects and as they get bigger and they get more complex, just from an accounting perspective, we have to allocate more into the services.

But we look at it as a bundled deal, we do it for one amount and it's more of an allocation in there. We're having good product growth across all the segments and what we see is, the way the numbers are playing out, it's more of just what gets allocated from a given quarter..

Okay, that's helpful. And then, speaking of large projects, I think last quarter, you signed 2 very large projects in APAC that you were expecting to go live in the second half of this year.

I'm just wondering, did that -- did either of those projects start to go live in this quarter? And if there was any, like, a quicker implementation announced?.

Yes, some of those large projects have milestones, so it's not necessarily that they are completed but we do recognize revenue over time. And we do expect for the year -- and that's reflected in the second half, to your question, we expect for the Americas to be kind of in line with our overall guidance.

EMEA will be declining and APAC will have very strong growth. So I think that you're right. Some of the project we announced in Asia Pacific will contribute to a very strong year in Asia Pacific that will offset the -- our weakness in EMEA this year..

And next question comes from the line of Jeff Kessler of Imperial Capital..

The movement toward analytics in your revenue base, can you describe the types of data and the types of solutions that clients are looking for that is different than what you've seen in the last, let's just say, a year ago or 2 years ago? What types of data are they trying to figure out and make sense of?.

Yes, that's a very good question. Clearly, across all our customer base, there is a trend toward omnichannel data.

So not only do they want to look at more different types of data, but they also want to collect this data and look holistically across data channels because they recognize that there is correlation that exists within different data channels.

But the type of data, clearly, there is growth in web and social media data and the desire to add that to the mix. Clearly, the trend within speech data is increasing as customers recognize that the speech analytics technology is really working and creating a lot of value.

There's all kinds of textual data that comes from e-mail and chats sessions that contain important data. And obviously, video. Video is obviously the area where -- video analytics is in very early stages, but there are many different things that the technology is capable of doing in terms of -- unearthing Actionable Intelligence within the video.

So almost every type of data is of interest, and the capture of the data comes from a lot of different networks and devices.

So there's a large variety of technologies that we have the ability to integrate with, help our customers capture the data and then, more importantly, help our customers glean the insights from the data and operationalize the insights in their organization.

As they get more data, as they get more insights, our customers realized that this data is very valuable and they're looking for additional workflows and applications that help them to operationalize this data so it can become more actionable. And we think that this is really what we do across all our products and markets.

We provide our customers Actionable Intelligence, which is capturing the data, getting the insight from the data and then, operationalize those insights so they can become actionable..

One quick other question, and it's a question that I've been getting from a lot of clients, and that is -- and it's related to EMEA and their -- and EMEA's version of what privacy means.

Given the fact that granted we've had some incidents here like Sandy Hook and the Boston Marathon, which require -- which obviously, would boost demand for your product. Some of the NSA issues, so to speak, that we've seen has caused, let's say, some backlog or pushback on privacy issues over in EMEA.

And I'm wondering if any of the, despite the fact that you just signed 2 very large projects, obviously, over there, are you finding it a little bit harder to market or are you finding anything, any type of pushback in terms of privacy versus the types of work you want to do for governments over in EMEA?.

No. We don't find any of this and we believe that -- we're excited about the growth opportunity in this area because we think there's really 2 separate issues here. One is the fact that nobody debates the fact that collecting Actionable Intelligence is very effective to fight crime and terror.

So that desire and demand for leveraging Actionable Intelligence is there. The debate -- the second debate is what are the controls, internal controls that the government needs to implement to make sure that the data is used to fight crime and terror and not for illegitimate purposes.

And that's a separate, that's a separate debate and in different countries, may end up in different internal controls. But we are of the view that this is not going to diminish the appetite to fight crime and terror. And collecting the data and analyzing the data is a very, very important component in doing that effectively..

Our next question is from the line of Corey Allen of CRT..

This is Brian Ruttenbur, actually. And a couple of quick questions, probably for you Dan, is the growth in the industry long term that you're competing in, is it 6% to 7%? I'm just trying to understand what you see in the long-term growth and long-term margins for your business.

Can you address that? Are you going to be flattish on the gross margin this year? 6% to 7% top line.

Is that something that we should anticipate going forward?.

Yes. So a company our size has multiple different products, some of them are more legacy products, such as the recording capture products that are very slow growth now. And some of our products are double-digit growth. So the overall growth opportunity for Verint has to do with the mix of the slow-growth and the high-growth products.

Now it's very important to understand that we sell all our products in a bundled, integrated suite. So we don't have the appetite to have our recording products decline, because if you don't record you'll capture the information, obviously, the opportunity to get the insights and to operationalize those insights is diminishing.

So we are very excited about continuing to provide our customers the ability to collect and capture data, but we recognize that this is a slow growth opportunity.

And once they collect more and more data, they have more appetite to analyze the data and the outcome, Verint is able to address that with a lot of different analytical solutions that have high double-digit growth opportunity, so it's the mix.

And our strategy is to continue to add more capabilities to analyze the data and operationalize the data and that will create incremental improvement in our overall growth rates. Relative to the 6%, 7%, Brian, I think this is also a reflection of our current macroeconomic environment.

And we think this represents a good growth rate relative to our competitors. We believe we are taking market share. So as the macro environment improves, we will improve our growth rates. And on top of that, their own execution, we see an opportunity to improve our growth rates even further.

And in terms of gross margins, just to address that part of your question, we still have about 15% of our revenue, give or take, are related to hardware components that we patch through. And over time, as that diminishes, that presents some growth rate opportunity.

And we are not controlling these trends, but we think that over time, customers will buy hardware themselves, and that will help improve our gross margin..

Our next question comes from the line of Jonathan Ho of William Blair & Company..

Can you talk a little bit about your pipeline of opportunities? And do you see sort of further 8-digit sort of opportunities either in EMEA or in other regions for the balance of the year?.

Yes, we do. We can't -- obviously, we can't project that every quarter we'll be announcing an 8-digit deal, but I think we have been doing that for quite some time. We clearly are positioning our larger portfolio to customers and they find it attractive. And some of them decide to buy it on a piecemeal basis.

So they may give us a $2 million or $3 million order but the following quarter will be another $2 million and the following quarter, another $2 million and obviously, that doesn't -- it's not announceable as an 8-digit project. But many of them do decide to make it all in one purchase, which creates an opportunity to announce a large project.

Either way, we see customers increasing their investment in Verint's portfolio. And we certainly have opportunities that are 8 digits in our pipeline right now for the rest of the year..

Got it. And just in terms of, I guess, the typical size of deals. Are you seeing that increase in terms of number of 6-digit deals, 7-digit deals, 8-digit deals? I don't know if you track that metric, but I just want to get a general sense of maybe how the deal sizes are progressing..

They are trending up. They're trending up, yes..

We're seeing more large deals this quarter than we did in this quarter a year ago, in a continual trend there..

Got it. And just 1 final question around seasonality. Should we expect any type of unusual seasonality in the third or fourth quarter, just given that you guys kept your full year guidance.

Is there anything that was maybe a pull-forward or any type of timing shift that we should be aware of?.

Yes, well, with respect to the seasonality, Jonathan, Q4 is always our strongest quarter. Q1 goes into over a kind of rebuilding and that's similar across the industry. Q2 and Q3 are variable. We had some good upside in Q2 this quarter. Going into Q3, you heard our comments about that.

We see maybe 10% or so revenue growth from the year prior, but slight sequential growth there. So there's always some timing difference around the Q2, Q3, what goes on there, but Q4 is always the strongest quarter of the year..

And we have a question from the line of Paul Coster of JPMorgan..

I have a quick follow up. Dan, I was intrigued by the $8 million video order for a financial services company. It's difficult to mention that with the site specifics.

So can you kind of give us a little bit of color around what the nature of that deployment was? And what, if any, lessons can be drawn for future deployments at other large financial services companies or other enterprises for that matter?.

Yes. I think this is one of the largest banks. They have many, many branches and ATM machines, and their concern is general security. But also, as I highlighted, there is a growing concern about fraud. And we believe that video, and now video and facial recognition is a good combination of addressing fraud.

As fraudsters that go from one ATM machine to the next, you can capture the video, you can identify fraudsters and you can take action very quickly. So it's just one example of why we think that financial services have a growing interest in leveraging Actionable Intelligence for video..

And do you think this would be taken note of by the rest of the industry and perhaps, subsequently, used by others or is this a unique product?.

This is not unique. This type of application is not the first.

We've been selling video to financial services for many years, and we continue to expand the capabilities to deliver more than just a video management solution but to develop applications, analytics around video that use video analytics or use data sources in addition to video to just make the video more useful for our customers for fraud and compliance purposes.

So not unique. Certainly, many banks already adopted this kind of application, but we will continue to evolve the solution to make it more useful. And I think that, that will continue to create demand for our products within financial services..

Okay. Thank you, ladies and gentlemen, and that now concludes the Q&A session. I would now like to turn the call back over to Alan Roden. Thank you..

Thank you. Before ending the call today, I'd like to provide a brief update on our Investor Relations program. I'm pleased to announce that we'll be presenting at 2 conferences in September. The Deutsche Bank Technology Conference in Las Vegas on September 12. And the CRT Conference in Greenwich, Connecticut on September 28.

We look forward to seeing you at these events. Thanks for joining, and have a great day. Take care..

Thank you very much. Ladies and gentlemen, that now concludes your conference call for today, and you may now disconnect. Thank you very much..