Millicent Tu - Director of IR Eric Shen - Co-Founder, Chairman, and CEO Donghao Yang - CFO.

Ronald Keung - Goldman Sachs Binnie Wong - Merrill Lynch Alex Charter - Credit Suisse Natalie Wu - CICC Alex Liu - Daiwa Wendy Huang - Macquarie Alicia Yap - Citigroup Gao Yufei - 86Research Jeffrey Goh - Maybank Hou Tian - T.H. Capital John Choi - Daiwa.

Ladies and gentlemen, good day everyone and welcome to Vipshop Holdings Limited’s Second Quarter 2017 Earnings Conference Call. At this point, I would like to turn the call to Ms. Millicent Tu, Vipshop’s Director of Investor Relations. Please proceed, thank you..

Thank you, operator. Hello everyone and thank you for joining Vipshop’s second quarter 2017 earnings conference call. Before we begin, I will read the Safe Harbor Statement.

During this conference call, we will make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on our current expectations, assumptions, estimates and projections about Vipshop Holdings Limited and its industry.

All statements other than statements of historical fact we may make during this call are forward-looking statements.

In some cases, these forward-looking statements can be identified by words or phrases such as anticipate, believe, continue, estimate, expect, intend, is are likely to, may, plan, should, will, aim, potential or other similar expressions.

These forward-looking statements speak only as of the date hereof and are subject to change at anytime, and we have no obligation to update these forward-looking statements. Joining us on today’s call are Eric Shen, our Co-Founder, Chairman, and CEO; and Donghao Yang, our Chief Financial Officer.

At this time, I would like to turn the call over to Eric Shen..

Good morning and good evening, everyone. Welcome and thank you for joining our second quarter 2017 earnings conference call. We delivered robust operational results in the past quarter. Our total active customers for the trailing 12 months ended June 30, 2017 grew by 32% year over year, reaching 58.8 million.

Further, our efforts to manage the lifetime value of both new and old customers are bearing fruit, as shown by the 7% year-over-year increase in average revenue per user in the second quarter. We continued to add popular domestic and international brands to our platform to enrich our product offerings.

Our daily average SKUs online increased to 2.7 million from 0.8 million in the second quarter of 2016. Further, as our global brand awareness continues to improve, more and more brands are keen to partner with us, giving us opportunities to help brands enter the China market.

We are also delighted to announce that we have made additional progress with our new Super VIP paid membership program. In the second quarter, we increased the number of trial members by ten times, and phase two test results continued to show major improvement in average revenue per user. We are actively expanding our offerings for our customers.

Recently, we selectively added some SKUs in the Vipshop life channel to increase cross sell, which we believe will drive increased shopping frequency and average spend on our platform. We intend to grow this new category gradually, and therefore, do not expect it to meaningfully impact our growth and profitability in the near future.

At this point, let me hand over the call to our CFO, Donghao Yang, so that he may discuss our strategies in more detail and go over our operational and financial results..

Thanks Eric and hello everyone. In the second quarter of 2017, we made solid progress in a number of our strategic initiatives, particularly in the exploration of the Internet finance spin-off and the enhancement of our logistics capabilities.

Additionally, excluding impact from the Internet finance business, our free cash flow for the trailing 12 months ended June 30, 2017 improved significantly year over year, from a free cash outflow of 93.3 million to a free cash inflow of 1.96 billion.

During the second quarter, we added our four local warehouses in a number of strategic locations, namely Nanning, Urumchi, Jinan, and Harbin, China. This brings our total number of local warehouses to 11, in addition to our five regional warehousing centers. In the past quarter, we also expanded our warehousing space home and abroad.

Currently, we have approximately 2.2 million square meters of warehouses total, of which 1.4 million square meters is owned by our company.

We added around 4,000 last mile delivery staff and around 700 delivery stations in the second quarter, bringing the total number of delivery staff to approximately 27,000 and the total number of delivery stations to approximately 3,500.

We delivered 95% of our orders through our proprietary last mile network in the second quarter, up from 91% in the prior-year period.

Our national delivery footprint is a critical component of our overall ecosystem, which will continue to improve our logistics efficiency, increase our customer satisfaction, lower our cost, and drive our long-term growth.

Earlier this year, we announced that our Board of Directors authorized for us to explore a proposed spin-off of our Internet finance business into a dedicated entity, aiming to improve our cash flow and strengthen our earnings.

We are pleased to announce that we have officially launched the spin-off of the Internet finance business, which initiated a Series A financing in the second quarter. Operationally, our Internet finance business is delivering solid results as well.

In the second quarter of 2017, 4.4 million active customers used our consumer financing products, representing a 179% increase from 1.6 million in the past year period. As of June 30, 2017, the total balance of credit outstanding to customers was around RMB3.3 billion and the total balance of credit outstanding to suppliers was RMB823 million.

While this new business is growing extremely fast, we are pleased to see that our over 180 days default rate remains very low. Now moving on to our quarterly financial highlights.

Before I get started I would like to clarify that all the financial numbers presented today are in Renminbi amounts and all the percentage changes refer to year-over-year changes unless otherwise noted.

Total net revenue for the second quarter of 2017 increased by 30.3% to 17.52 billion, primarily attributable to a 22% year-over-year increase in the number of active customers to 28.1 million and a 23% year-over-year increase in total orders to 84.8 million.

Gross profit for the second quarter of 2017 increased by 19.1% to 3.86 billion, primarily driven by the expanding scale of the business. Gross margin for the second quarter was 22.0% as compared with 24.1% in the prior year period, primarily attributable to our investment in promotional activities for market share gain.

Fulfillment expenses for the second quarter of 2017 were 1.64 billion, as compared with 1.15 billion in the prior year period, primarily reflecting an increase in sales volume and number of orders fulfilled.

As a percentage of total net revenue, fulfillment expenses were 9.4% as compared with 8.6% in the prior year period, primarily attributable to our expansion to support an increase in our last mile business outside of the Vipshop platform.

Marketing expenses for the second quarter of 2017 were 752 million, as compared with 672 million in the prior year period, reflecting our strategy to strengthen our brand awareness, attract new users, and expand our market share.

As a percentage of total net revenue, marketing expenses decreased to 4.3% from 5.0% in the prior year period, primarily attributable to our strategic balance between promotional activities and our broader marketing efforts.

Technology and content expenses for the second quarter of 2017 were 448 million, as compared with 392 million in the prior year period, reflecting our continuing efforts to invest in human capital, advanced technologies, and our Internet finance business.

As a percentage of total net revenue, technology and content expenses decreased to 2.6% from 2.9% in the prior year period. General and administrative expenses for the second quarter of 2017 were 579 million, as compared with 434 million in the prior year period.

As a percentage of total net revenue, general and administrative expenses were 3.3% as compared with 3.2% in the prior year period, primarily attributable to an increase in share based compensation as well as the impact from building our Internet finance business. Our income from operations was 622 million for the second quarter of 2017.

Operating margin was 3.5% as compared with 4.8% in the prior year period. Non-GAAP income from operations, which excludes share-based compensation expenses and amortization of intangible assets resulting from business acquisitions, increased by 6.0% to 888 million from 837 million in the prior year period.

Non-GAAP operating income margin was 5.1% as compared with 6.2% in the prior year period. Our net income attributable to Vipshop’s shareholders for the second quarter of 2017 was 386 million as compared with 452 million in the prior year period. Net margin attributable to Vipshop’s shareholders was 2.2% as compared with 3.4% in the prior year period.

Net income per diluted ADS was RMB0.64 as compared with RMB0.76 in the prior year period.

Non-GAAP net income attributable to Vipshop’s shareholders, which excludes share-based compensation expenses, impairment loss of investment, and amortization of intangible assets resulting from business acquisitions and equity method investments, increased by 7.5% to 728 million from 678 million in the prior year period.

Non-GAAP net margin attributable to Vipshop’s shareholders was 4.2% as compared with 5.0% in the prior year period. Non-GAAP net income per diluted ADS increased to RMB1.18 from RMB1.12 in the prior year period.

As of June 30, 2017, our company had cash and cash equivalents and restricted cash of 4.2 billion and held-to-maturity securities of 343 million. For the second quarter of 2017, net cash used in operating activities was 0.27 billion.

Looking at our business outlook for the third quarter of 2017, we expect our total net revenue to be between 14.9 billion and 15.4 billion, representing a year-over-year growth rate of approximately 24% to 28%. With that, I would now like to open the call to Q&A..

[Operator Instructions] Our first question comes from the line of Ronald Keung of Goldman Sachs. Please go ahead..

And just have a question on your cash flow, could you just share with us how you're planning for your payable days when you negotiate with your suppliers as we have seen payable days actually have gone down and receivable days has been partly distorted by your finance business. And that has led to a slightly weaker operating cash flow this quarter.

So just want you to share what's your outlook for your free cash flow and for your CapEx expectations for the full year?.

Actually nothing has changed in our payables terms with the suppliers. And our operating cash flows excluding impact from internet finance business increased year-on-year and sequentially in Q2. But our quarterly operating cash flow will be impacted by seasonality and it could fluctuate significantly from quarter to quarter.

Having that impact from internet financing activities, the operating cash flow for the trailing 12 months ended June 30, 2017 actually increased to RMB4.8 billion up from RMB4.5 billion for the same period last year, which is very healthy.

Free cash flow for the trailing 12 months ended June 30, 2017 was 1.96 billion as compared with negative 93.3 million in the same period last year, which was a remarkable improvement. Cash flow on a trailing 12 month basis can better reflect our real cash flow situation of the business.

And for the full year we do expect to spend around RMB3 billion on our CapEx projects mainly our warehouse expansion projects and also we’re going to spend some money around RMB0.5 billion to RMB600 million to build the headquarters in Guangzhou..

Our next question comes from the line of Binnie Wong of Merrill Lynch. Please go ahead..

So looking at the second half right, we understand that company was trying to reinvest in our margins to drive faster growth and hence we see a lower net margin, operating margin from previous levels of 5% on GAAP net margins that company has maintained in the past. So wondering how much of that is related to lower gross margin.

I guess that is primarily related to couponing and discounts and how much of that is related to marketing costs. And within that how much is related to like branding marketing. The reason that I'm asking is because I want to understand whether some of these investments are one-off, when should we expect a recovery in margins.

Thank you for any colors Thank you..

Let me take that. Well, the year-over-year decline in gross margin in Q2 was primarily due to our increased promotional activities in April and June when we had two major provisions and decline more that does not suggest we can have marketing power with our suppliers, but indicates our active approach to reinvest the gained market share.

We do expect our gross margins to stay at a similar level in the next quarter, but in the long term, it will stabilize and improve. And also we’re trying to balance growth and profitability as our scale continues to grow and efficiency further improves, we will expand our profitability in the long run..

Our next question comes from the line of Zhou Evan of Credit Suisse. Please go ahead..

This is Alex asking on behalf of Zhou Evan.

So the first question is, what's the timeline for the spin-off of Internet finance business? How do we book the revenue and costs related to the Internet finance business? And the second question is, what's our strategy to improve the order frequency and order size?.

Let me take your first one. We're in the process of negotiating with potential investors. And the spin-off in, both the spin-off and the financing are expected to be completed by the end of this year. And after the spin-off is completed, we will not consolidate the revenue and earnings of the finance business into the public company.

The impact from the Internet finance business will not be shown on our financials anymore after the transaction is done..

[Foreign Language].

[Foreign Language].

This quarter we had seen very nice ample increase year-over-year due to the following reasons. Number one category expansion, number two better personalization and number three internet finance you know contributing to ARPU expansion and we have tried also the Super VIP which contributed very favorably to our ARPU expansion.

And we continue to believe that the trend will continue to improve and get better than the road..

Our next question comes from the line of Natalie Wu of CICC. Please go ahead..

So my question is regarding the [indiscernible]. So just wondering how much revenue contribution is from [indiscernible] logistics in this quarter. And what’s the percentage of order number [indiscernible]..

[Foreign Language].

[Foreign Language].

Well in the other revenue line in our income statement about RMB200 million was from services to customers or clients outside of Vipshop..

Our next question comes from the line of Alex Liu of Daiwa. Please go ahead..

I'm asking on behalf of John Choi. Would the management talk about plan of category expansion in the coming two to three years, specially what type of categories would management think about entering into or putting more emphasize on and how big will these new categories encounter our business mix in the time of three years.

My follow up is that how should we think about the future membership revenue from Super VIP program into this overall profitability outlook in the medium term. Thank you..

[Foreign Language].

[Foreign Language].

So Alex, I think to summarize what Eric just said, we’re actively looking for opportunities to expand category enrichment. So recently obviously we have communicated that we adding more SKUs within the Vipshop line style.

This is still based on selection driver, with the use of merchandise the selectively adding more SKUs that we enrich the quality life of consumers and obviously to meet the consumption upgrade. And so far early data suggests that it is helpful and beneficial to improve the time spend on our drive and also the ARPU on our website.

So I think average is 1 to 2 and that these categories are just trying to cross out to enrich our product offering. And we’re not trying to turn these categories into the major category contribution in our overall portfolio..

[Foreign Language].

And also with the marketplace business currently account only for 2.4% of our overall G&A and we’re looking for opportunities to increase this proposition gradually down the road. The categories that we are thinking would be big furnitures, electronics and bulky home goods items.

Again the purpose would be to enrich and upgrade, expand the variety and increase cross-sell and also we can leverage it on our capability in terms of merchandizing too. [Foreign Language].

[Foreign Language].

[indiscernible] with the Super VIP, obviously this is in trial period. The purpose is not trying to be profitable with this initiative; we are trying to use this Super VIP program to improve the stickiness of our users..

Our next question comes from the line of Chi Tsang of HSBC. Please go ahead..

Hi, this is [indiscernible] on behalf of Chi Tsang. Thank you management for taking my question. I was wondering if you could give some color on gross margins and operating margins going forward and whether you expect decline to continue for 3Q and the full year or whether you expect the trend to reverse? Thank you..

Thank you for question, actually we do not give margin guidance for the next quarter or any future period. But again, we do believe that our profitability, our margin level will stabilize in the next couple of quarters and we’ll improve it in the long term.

It will get the – the several factors that impacted are profitability in Q2, one was, lower gross margin. The second was, our investment into expand our last mile delivery services and thirdly, our internet finance business. The gross margin as we continue to gain market share, better scale continues to increase.

In the long term, we do expect we're going to have better bargaining power with the suppliers. So we are very confident that in the long term, our gross margin will stabilize and start to come back up.

And then for the other two factors, they will both improve in the next couple of quarters as we continue to gain or to grow our logistics or deliver this outside of Vipshop and also as we complete the transaction of the spin-off of our internet finance business.

So we're very confident that in the mid to long term, our margin profile or probability would stabilize and improve..

Our next question comes from the line of Wendy Huang of Macquarie. Please go ahead..

So the operating cash flow and the free cash flow both actually turned negative in the quarter.

I just wonder if this is kind of a one-off impact on the promotions you did in second quarter or we should the continuing negative cash flow in future quarters because I noticed receivables increased large that’s probably due to consumer financing that you did in second quarter, right. .

Yes. Account receivables went up mainly because the growth of our consumer finance business and as I said earlier. Once we complete the transaction or complete the spin-off of the internet finance business that impact will go away.

And also as I’ve pointed earlier in the call, quarterly operating cash flow could sometimes be impacted by seasonality and fluctuate significantly. So that’s why we like to ask you guys to also take a look at our cash flows for the trailing 12 months ended June 30, 2017 and compare that number with the same period last year.

Actually that number went up from 4.5 billion to 4.8 billion within a year. So basically our cash flow situation has been solid and healthy and over the long term we're confident that the cash flow will stay healthy and actually will continue to improve..

Our next question comes from the line of Alicia Yap of Citigroup. Please go ahead..

Sorry I joined the call late, just in case these questions have been asked, just wanted to get a sense in terms of the overall margins trends going forward.

I understand some of that it could be because of the promotional event, but just also wanted to get some color because obviously both our peers have been also doing quite aggressive promotions and for us, how are we going to manage our margins between the gross margin versus the sales and marketing expense. Thank you..

Our gross margin came down slightly compared to a year ago mostly because of promotional activities in Q2. We have one big promotion in April and another one in June. And we do have a couple of other factors impacted our net margins, namely our investment in our last mile delivery operations and also our internet finance business.

As I’ve explained earlier in the call, we do believe that over the mid to long term our margin profile will stabilize and come back up because the investment in the last mile delivery’s operations and also the internet finance business, those factors are mostly temporary and will improve shortly. .

Our next question comes from the line of [indiscernible]. Please go ahead. .

I'm asking the following question on behalf of Jialong Shi.

So could management provide any color on the private label e-commerce business, like what they started doing recently? Just wondering how management thinks of the outlook and potential of this kind of private label e-commerce business and whether management have plans to enter this niche market in the future. I will stop here. Thanks..

[Foreign Language].

[Foreign Language].

So yes, you just mentioned that some of the companies doing or considering the private label and from this initiative, Eric just mentioned that, in seasons like these that in Q4 this year, we may enter into the private label in particular for the home style, home goods category.

In our time, we have a lot of SKUs and also lot of funds and have to make sure that the private label does not cannibalize with the existing brands and stuff that we’re offering.

So we’re still exploring and trying to find a good optimization and confirmation, so that some customers, if they want to pick and choose quickly, optimize their shopping route, which is fine, but you have other customers who would feel like lowering kind of the lesson driven process, which is also buying huge.

So we’re still in the process of strategically figuring out what is the best optimization to cater for the private label business..

Our next question comes from the line of Gao Yufei of 86Research..

I have two questions. My first question is a follow-up on the sophisticated logistics business. Could you share some color on the probability of this business, for example, is this business running at a breakeven or making profit? And also my second question that we saw the quarterly active customers continue to decelerate.

Going forward, should we expect the trend to continue or reaccelerate in the second half of the year? And what is our strategy to drive the customer growth going forward?.

Let me take your first question. The third party logistics services are actually roughly at the breakeven point..

[Foreign Language].

[Foreign Language].

So just to reemphasize the 3PL logistic business, Eric just mentioned, it’s slightly profitable and the priority and the purpose is trying to provide services and consistent services to our business partners.

And in terms of your second question on the user growth rate in terms of deceleration, so Eric just mentioned that in the past, we probably had the law on the quantity in terms of user growth, but now, we’re focusing a bit more on the quality of the user growth in particular for the needs and we, also, I’m very pleased to see that even for our own customers, the cohort and the ARPU trend are trending quite healthy and quite favorably.

So this will provide us with more confidence to continue to follow this path, to focus and serve higher quality customers and trying to increase the share down the road..

Our next question comes from the line of Wendy Huang of Macquarie..

So this quarter, the consumer loan accounted for about 21% of your GMV versus 16% last quarter. And also, as you also confirmed earlier that the consumer financing is part of reason that your operating cash flow actually turned negative this quarter.

So I just wonder if you will, actually can show or keep the consumer loan contribution to GMV at certain level to avoid the cash flow impact going forward. Thank you..

Thank you for your question and the answer is not really, because as I said earlier, the impact of the Internet finance business on our overall financials will actually be kicking off by the end of this year when the spinoff of that unit is completed.

So we will continue to grow that business as fast as possible and as I said earlier, when the transaction is completed by the end of this year, the impact will go away. So it’s, actually, we’re not overly concerned about that..

Our next question comes from the line of Jeffrey Goh of Maybank..

I just want to ask about your gross margin. So you said that we should expect to see a stabilized gross margin, but if you look at the past third quarter, it’s usually a slower quarter.

So I’m wondering shouldn’t we expect that promotions to go slower in third quarter, maybe come back in fourth quarter? And also how does your competitors and how should we expect gross margin to recover if the promotions continue in the future. And also could you provide the new customers number please. Thank you..

Let me take your first question on our gross margin. Well, actually, our gross margin in Q3 will not necessarily be lower than Q2 because in Q2, we had two major promotional events, one in April and the other in June. In Q3, typically, we do not have, we’re going to also have some promotions, but not as big as the two that we had in Q2.

So gross margin in Q3 will not necessarily be lower and if you look at historical data, that was also the case. Q3 gross margin was not necessarily lower than Q2.

In the long term, the reason why we’re confident that the gross margin level will go back up and improve is because as we continue to gain more market share, as the volume continues to grow, we’re going to have greater marketing power with the suppliers, which will definitely help us increase our gross margin..

So your other question on new user count, so as we’ve noted, starting from this quarter, we do not disclose this number specifically, because as Eric mentioned on the call, we will like to manage both old users and new users in the more holistic view.

So we would like to direct the attention in terms of total active customer growth and also the drivers in terms of the ARPU and et cetera. [Foreign Language].

[Foreign Language].

So, we ran two major promotions during the past quarter. One was on 19th April and obviously this is our specific company promotion and obviously in terms of pricing, we could enjoy the lowest prices to get the business promotion led by the Vipshop. But if you look at one place in June, obviously, it is much bigger crowded space.

Some categories we manage to offer them lowest pricing, but not all, and Eric is saying that in the instance, in the occasion for example, Singles’ Day where everyone again joining in the big promotion, it’s likely that discounting can be very, very competitive across the board. So yeah, I think that’s the overall color..

Our next question comes from the line of Hou Tian of T.H. Capital..

I have two questions. It’s much more a fundamental questions. One is related to users. Actually, it’s not that how you might actually grow your users. I think the amount of investment, there is a concern about the feeling of the users.

How high can you go, regarding your eventual, the actual customers or strategic customers and you can say that because it seems like e-commerce is, activity wise, it’s pretty much strategic and every new customer, the acquisition cost is really high, result is poor.

So I wonder, what’s management’s strategy in growing the total user base going forward? That’s number one question. Number two is related to the logistics and the express deliveries. If you look at China, you have two models.

Alibaba is the platform model, also deliver activities, JVs, everything in house, but now, it’s gradually opened up to the cloud deliver methodology. So looking at Vipshop, you have like 27,000 delivery guys and 3,500 stations. It’s definitely not enough to cover China in such big scale.

So is that developing in house delivery guys or teams is the way to go and if it is, why? [Foreign Language].

[Foreign Language].

So in terms of your first question, the feeling of the total users for Vipshop, Eric just mentioned in China, there are altogether 500 million online shoppers, but for Vipshop last year, we only had 50 something million.

So obviously that number is still growing annually and we are also spending quite some money in terms of marketing to drive new user addition. And as you can see over the last few quarters, new user acquisition count increased slightly, but largely quite stable.

As far as Eric is concerned, as we can execute and deliver, providing good merchandise and good pricing, the users picking it naturally will be coming to the platform and which you would be also hoping that to attract new users. So that’s on your first question..

[Foreign Language].

In terms of the logistic and as far as Eric is concerned, we have already benefited some of the benefits by taking it in-house. Number one is consistency in terms of delivery services and number two, we can get to take our customer returns to our platform and number three, we can also use it as a contact point to interact with our end users.

And don’t forget that in China, there are altogether at the moment, 30 billion packages in China. So look at the market opportunities that there are plenty to go.

And if we’re able to scale up and improve on footprint and network, we can also use our network to have our business partners to deliver their packaging, delivery, the logistics business is actually economic scale, has economic scale benefit.

So as long as we’re able to grow our volumes in terms of cost leveraging and efficiency improvement, down the road, we anticipate to continue to read some of these positive benefits to Vipshop.

But of course, Eric just mentioned, we also partner with third-party logistic companies to take some of the bulky items, but the majority of the orders, over 90% of orders are handled and delivered by Vipshop..

Our next question comes from the line of John Choi of Daiwa..

I have a couple of questions here on your pro forma expense, it seems like, I remember that there, we will probably see leverage coming back later. Could management give a bit more color around when should we be seeing the leverage kick back in.

And secondly, in terms of your quality of user, I understand that management has emphasized that we’re trying to bring in more quality users compared to the quantity in the past few quarters, but can you give us a little bit more details of this cohort, what kind of customers are these people and do they actually spend more time on your platform, because one of the trends that what we’re seeing is that spending time on the platform seems to be important and has that led into more spending? Thank you..

Let me take the first one. Yeah. You’re right. Fulfilment expense, as a percent of revenue, went up from 8.6% a year ago to the current 9.4% and the majority of that increase actually came from the, our investment in our third-party logistics or delivery services provided to customers clients outside of Vipshop.

In Q2 alone, we added about 4,000 people to our payroll at the last delivery unit. And then, we’re expecting in the coming quarters, as our business volume, the packages that we deliver for client outside of Vipshop continue to grow and the leverage will start to come in and you will see that in our financial numbers..

[Foreign Language].

[Foreign Language].

So John in terms of your question on the users and the cohort, so I think Eric was saying, overall, in terms of the times there on website, we’re seeing some improvement and the pricing, frequency and purchasing frequency is also improving on our website too. We changed the internal KPI for users, starting in Q1 this year.

So in terms of more qualitative data to share on this particular metric, it may take some time for us to get that information and then to reflect and share that with you again..

There are no further questions at this time. I would like to hand the conference back to our presenters. Please continue..

Well, thank you everyone for coming to our call and we do look forward to speaking with you again next quarter. Thank you..

Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may all disconnect..