Nancy McKinley – Vice President, Human Resources and Administration
Nicholas R. Schacht – President and Chief Executive Officer
Charles R. Waldron – Chief Financial Officer
Jerry Herman – Stifel Nicolaus
Nick Genova – B. Riley & Co. LLC
Learning Tree International, Inc. (LTRE) F3Q09 Earnings Call August 11, 2009 4:30 PM ET
Welcome to the Learning Tree Q3 2009 earnings conference call. (Operator Instructions) I’d now like to turn the presentation over to your host for today’s call, Ms. Nancy McKinley, Vice President for Human Resources and Administration.
Good afternoon. Joining us today from management are Nick Schacht, our President and Chief Executive Officer and Bob Waldron, Chief Financial Officer. As a reminder, except for historical statements, the matters addressed in this conference call are forward-looking statements. Please do no put undue reliance on these forward-looking statements since they are based on key assumptions about future risks and uncertainties.
Although we believe that our assumptions are reasonable, inevitably some will prove to be incorrect. As a result, our actual future results can be expected to differ from those discussed in this call, and those differences may be material. We are not undertaking any obligation to update forward-looking statements.
To help you assess the major risks in our business, we have identified many but not all of them in Item 1A of our Form 10-K. Please read those risk factors carefully. Some of the factors discussed in our Form 10-K that could effect us include risks associated with changing economic and market conditions, the timely development, introduction, and customer acceptance of our courses, competition, international operations including currency fluctuations, technology development and new technology introduction, efficient delivery and scheduling of our courses, adverse weather conditions, strikes, acts of war or terrorism and other external events, and attracting and retaining qualified personal.
Now I would like to turn the call over to Nick Schacht.
I will begin today’s presentation by commenting on some results we have achieved in adjusting our operations to current market conditions, after which I will cover our performance in our third quarter of fiscal 2009 which ended July 3, 2009. I will then provide some forward-looking information about our fourth quarter of fiscal 2009.
Following my presentation, we will open the floor for questions and discussion. Bob Waldron, our Chief Financial Officer, will join me in the Q&A section of this conference call. For your convenience, we have posted the text of these prepared remarks in the Investor Relations section of our website. Go to www.learningtree.com/investor.
While we continue to operate in a challenging economy, we are encouraged that the actions we have taken to manage our business have achieved their intended effects, some even earlier than we had expected. Most notably, during our third quarter of fiscal 2009 we realized significant benefits from the profitability improvements and cost savings that we had implemented in our first and second quarters.
We achieved a gross profit of 55.3% in our third quarter, exceeding the 52% to 54% range we had projected at the end of our second quarter. Additionally, we were able to realize greater savings from our operating cost-cutting than we had originally anticipated, further enhancing our third quarter profitability. Later in this presentation I will discuss some of the key contributors to these results.
We are continuing to evaluate all aspects of our business to identify additional opportunities to grow revenues, cut costs, operate more efficiently and refine our processes and business model consistent with current market conditions. Our goal is to meet the challenges of today’s turbulent economy, while positioning Learning Tree to capitalize on opportunities to gain market share and ultimately grow.
I’d like to summarize some key line items for our third quarter of fiscal 2009. Revenues in our third quarter of fiscal 2009 were $32.3 million, compared to revenues of $46.9 million in our third quarter of fiscal 2008, a decline of 31.2%, of which 6.7% was the result of changes in foreign exchange rates.
As I just noted, our gross profit percentage in our third quarter was 55.3% of revenues which, while higher than expected, was less than the 58.2% we achieved in the same quarter of fiscal 2008.
We reduced our operating expenses to $14.6 million during the third quarter of fiscal 2009 from $22.0 million in the same quarter of our prior fiscal year. As a result of these factors, our income from operations was $3.2 million, compared to $5.4 million in our third quarter of fiscal 2008.
Net income was $2.1 million compared to $3.8 million in our third quarter of fiscal 2008. Our earnings per share on a fully diluted basis in our third quarter of fiscal 2009 were $0.15 compared to $0.23 in our third quarter of fiscal 2008. This includes the impact of a 6% reduction in the number of our weighted average of outstanding common shares as a result of our stock repurchases, which I will discuss later.
As I just noted, our revenues of $32.3 million for our third quarter of fiscal 2009 were 31.2% lower than our revenues in our third quarter of fiscal 2008. This was due to several factors. During our third quarter of fiscal 2009, we delivered 26.4% fewer attendee days of training than in the same quarter of our prior year. As I just mentioned, changes in foreign exchange rates adversely affected our reported revenues by 6.7%. These factors were partially offset by a 1.9% positive effect of price increases.
Overall during our third quarter of fiscal 2009, we trained a total of 19,117 course participants, a 20.7% decrease from the 24,094 we trained in our same quarter last year. Our participant levels were slightly adversely affected by the Easter effect. Easter this year occurred in our third fiscal quarter rather than in our second fiscal quarter as it did last year. Easter typically reduces the number of participants in the quarter in which it occurs by about 2% compared to a corresponding quarter in which Easter does not occur.
During our third quarter of fiscal 2009, attendee days of management course training decreased 13.7% to 22,659, compared to 26,265 in the same quarter of our prior fiscal year. Attendee days of IT course training decreased 31.7% to 42,899, compared to 62,833 in our third quarter of fiscal 2008. Total attendee days of training in the quarter decreased 26.4% to 65,558, compared to 89,098 in our third quarter of fiscal 2008.
In our third quarter of fiscal 2009, average revenue per participant was 13.6% lower than in the same quarter of fiscal 2008. This decrease was principally due to the 6.7% impact from changes in foreign exchange rates noted earlier as well as an increase in the relative proportion of participants in shorter management course events and events held at customer locations which have lower average revenue per participant than longer IT course events and events held in our own education centers. These decreases were partially offset by the effect of price increases.
Now I’ll turn to our operations in our third quarter of fiscal 2009 and how they compare with the same quarter of fiscal 2008. Cost of revenues was 44.7% of revenues in our third quarter of fiscal 2009 compared to 41.8% in our third quarter of fiscal 2008, and our gross profit percentage accordingly was 55.3% compared to 58.2% in the prior year. As I mentioned previously, our actual gross profit percentage for our third quarter exceeded our expectations at the time of our last conference call. This was principally due to two factors—improved enrolments and reduced last minute cancellations compared with what we had been expecting and the fact that we were realize the results of our initiatives to reduce direct costs somewhat sooner than we had anticipated.
We’ve continued to pay close attention to all aspects of our operating model in an effort to maximize our gross profit. Changes in foreign exchange rates do not materially affect our gross profit percentage since exchange rate changes decrease our cost of revenue by approximately the same percentage as they decrease our revenues. The change in cost of revenues as a percentage of revenues in our third quarter of fiscal 2009 reflects a 20.4% decrease in average revenue per event, partly offset by a 14.5% decrease in average cost per event.
The decrease in our average revenue per event is the result of the 13.6% decrease in average revenue per participant I discussed earlier and a 7.9% decrease in average participants per event. The decrease in average cost per event principally results from the effect of changes of foreign exchange rates in addition to our success in reducing certain cost of sales compared to our third quarter in fiscal 2008.
During our third quarter of fiscal 2009, we presented 1540 events, a 13.9% decrease from the 1788 events conducted during the same period in fiscal 2008. We spent $1.6 million on course development during our third quarter of fiscal 2009, $1 million less than in the same quarter of our prior fiscal year. As part of our cost saving efforts, we have reduced course development expense, principally by reducing the number of new course titles under development compared to the same quarter in our prior year.
Course development expense was 5% of revenues in our third quarter of fiscal 2009, compared to 5.6% in the same quarter of fiscal 2008. In our third quarter of fiscal 2009, we introduced 8 new IT course titles and retired 5 IT course titles, and we introduced two new management course titles and retired none. We had begun the development of many of our new course titles prior to scaling back our course development growth initiatives in response to current economic conditions. Our library of instructor-led courses numbered 211 titles at the end of our third quarter of fiscal 2009 compared with 175 titles at the same point a year earlier. At the end of our third quarter of fiscal 2009, we had 70 management titles in our course library, compared with 50 management titles at the end of our third quarter of fiscal 2008. Our library included 141 IT titles at the end of our third quarter of fiscal 2009 compared to 125 a year earlier.
During this period, we have continued to research and develop various approaches to delivering hybrid learning which combines instructor-led classroom training with web-based e-learning.
In our third quarter of this fiscal year, we’ve reduced our sales and marketing expense to $7 million from $11.2 million in the same quarter last year. Approximately $1.9 million of that reduction was due to mailing fewer catalogs and reduction in other marketing activities. $1.1 million was due to lower payroll costs, $0.5 million was due to lower sales commissions as a result of lower revenues, and $0.3 million was due to lower costs for professional services compared to our third quarter of fiscal 2008. The remainder of the reduction was spread among several expense categories.
Approximately $0.6 million of our overall reduction in sales and marketing expense was caused by a 5.4% effect from changes in foreign exchange rates. Sales and marketing expense in our third quarter of this fiscal year was 21.7% of revenues, compared with 23.9% of revenues for the same quarter of our prior fiscal year.
G&A expense during our third quarter of fiscal 2009 was $6 million compared to $8.1 million in our third quarter of fiscal 2008. Approximately $1.2 million of our reduction in G&A costs was due to lower compensation related expense, including lower accruals for incentive compensation and equity based compensation, and $0.5 million was due to lower expenses for professional services. The remainder of the reduction was spread among several expense categories.
Approximately $0.5 million of our overall decrease in G&A expense for our third quarter of fiscal 2009 was due to changes in foreign exchange rates compared to our third quarter of fiscal 2008. Despite our reductions in absolute expenditure on G&A, the reduction in our revenues resulted in G&A expense in our third quarter of 18.7% of revenues compared with 17.3% in the same quarter of our prior year.
As a result of these factors, in our third quarter of fiscal 2009 we had income from operations of $3.2 million, or 9.9% of revenues, compared to income from operations of $5.4 million or 11.4% of revenues in the same quarter of our prior fiscal year. In our third quarter of fiscal 2009, other income net was $0.3 million compared with $0.7 million in the same quarter of fiscal 2008. The difference primarily resulted from a decrease of $0.6 million in interest income due to lower interest rates and lower cash balances which was partially offset by an $89,000 foreign currency transaction gain compared to a loss of $229,000 in the same quarter in fiscal 2008.
As a result of the preceding factors, our pre-tax income in the third quarter of fiscal 2009 was $3.5 million compared to pre-tax income of $6.1 million in our third quarter of fiscal 2008. In our third quarter of fiscal 2009, we recorded tax expense of $1.4 million based on an effective tax rate of 38.7%. This compares to tax expense of $2.3 million and an effective tax rate of 37.3% in our third quarter of fiscal 2008.
Net income for the third quarter of fiscal 2009 was $2.1 million, or 6.6% of revenues compared to net income of $3.8 million or 8.1% of revenues in our third quarter of fiscal 2008. During our first nine months of fiscal 2009, the total of our cash and available for sale securities decreased by $19.1 million to $75.1 million at July 3, 2009 from $94.2 million at October 3, 2008. This decrease is primarily due to our use of $21.0 million to repurchase our stock on the open market and foreign exchange translation losses of $1.7 million. These decreases were partially offset by $4.9 million in net cash provided by operations during our first nine months of fiscal 2009 and $1.7 million from investing activities.
During our third quarter of fiscal 2009, we repurchased 766,305 shares of our common stock at an average price of $10.04. From the end of our third quarter through August 7th, we repurchased an additional 162,551 shares of our common stock at an average price of $10.52, and between October 15, 2008, when we reinitiated repurchases, and August 7, 2009, we have repurchased a total of 2,422,439 shares at an average price of $9.38. This brings our total outstanding shares to 14,162,697 as of August 7, 2009. We may make additional purchases of common stock through open market transactions, but we have no commitments to do so.
On July 30, 2009, we sold some of our auction rate securities, receiving $9.0 million in cash as payment for their full face value. This sale reduced the total face value of our remaining auction rate securities to $17.1 million. As a result of the recent redemption, and based on a new valuation of our remaining auction rate securities by an independent expert, we have reduced our temporary impairment related to auction rate securities from $5.2 million to $2.6 million, establishing a fair value of $14.5 million for those remaining securities. This $14.5 million fair value is classified in non-current available for sale securities in our third quarter balance sheet.
All of our remaining auction rate securities are subject to a repurchase agreement we’ve signed with UBS which gives us the right to sell them to UBS at their face value any time between June 30, 2010 and July 2, 2012. Because we do not believe that the value of these securities is permanently affected, impairments to these assets do not affect our reported net income.
One of the effects of the recent economic turmoil has been the strengthening of the U.S. dollar compared to a year earlier. Approximately half of our business annually is conducted in currencies other than U.S. dollars and fluctuations in exchange rates will affect future revenues and expenses when translated into dollars. If the exchange rates of August 7, 2009 remain constant for the remainder of our fourth quarter of fiscal 2009, we would expect to report an unfavorable effect of approximately 4.6% on our revenues during our fourth quarter of fiscal 2009 compared to the same quarter of fiscal 2008.
Of course, we would also see a favorable, though lesser, effect on our overall expenses. The effect of changes in foreign exchange rates is somewhat less pronounced on operating expenses than on revenues and cost of sales, primarily since our operating expenses are more heavily dollar-denominated, largely because of corporate management and our centralized IT, marketing and course development activities which are located here in the United States and which support our worldwide operations.
Because of our 52/53-week accounting calendar, every so often one of our fiscal quarters comprises 14 calendar weeks, while most quarters comprise 13 calendar weeks. Our fourth quarter of fiscal 2009 will be a 13-week quarter, but our fourth quarter of fiscal 2008 was a 14-week quarter. Accordingly, even if our revenue per week were unchanged from last year, this calendar effect would result in 7% lower revenues for our fourth quarter of fiscal 2009 than the same quarter of fiscal 2008.
We currently expect revenues for our fourth quarter of fiscal 2009 of between $30.5 million and $32.5 million, which would represent a reduction of between 27% and 31% from revenues of $44.2 million in our fourth quarter of fiscal 2008. This includes the 4.6% negative effect of changes in foreign exchange rates and the 7% negative impact of our accounting calendar I just discussed.
We expect a gross profit percentage in our fourth quarter of fiscal 2009 of between 54.5% and 55.5% compared to 56.7% in our fourth quarter of fiscal 2008, largely because the fixed costs of our education centers and classroom equipment will be allocated to fewer expected events this year compared to the same quarter of our prior year, and because we expect to have somewhat fewer participants per event in our fourth quarter of this fiscal year than in our fourth quarter last year.
We expect overall operating expenses for our fourth quarter of fiscal 2009 to be between $14.0 million and $15.0 million, a reduction of between 32% and 36% compared to $21.9 million in the same quarter a year earlier.
As a result of the above factors, we expect to achieve fourth quarter operating income of between $1.7 million and $3.2 million compared with $3.2 million in our fourth quarter of fiscal 2008. We expect fourth quarter interest income to be approximately $0.2 million.
Overall, we expect to report pre-tax income for our fourth quarter of fiscal 2009 of between $1.9 million and $3.4 million, compared with $4.0 million in the fourth quarter of our prior year. We estimate that our effective tax rate in our fourth quarter of fiscal year 2009 will be approximately 41.5%.
In summary, we expect that today’s challenging business climate will continue for an indeterminate period. We believe that the improvements we have made in our business over the past several years have built a strong, effective position from which to address the challenges that lie ahead. We have already significantly adjusted our business model in response to current conditions and we will continue to make further adjustments as needed in response to the exigencies of the evolving environment.
We are continuing to work hard to generate more sales and to capitalize on our infrastructure and on our financial strength in order to take advantage of what we foresee as a period of enhanced opportunity to capture increased market share. We are confident in our long-term ability to grow our revenues and profits when economic conditions improve, and we remain enthusiastic about the future opportunities for Learning Tree.
Now, I would like to open the floor for questions.
(Operator Instructions) The first question comes from the line of Jerry Herman – Stifel Nicolaus.
Jerry Herman – Stifel Nicolaus
Can we start with the sales and marketing line? You guys did a really good job there of controlling costs, and I am wondering if maybe you can shed some additional color on some of those expense reductions you mentioned, in particular if you mind giving us an update on the quantity of mailings or some volume discussion in terms of mailings and also headcount.
I can do both of those for you, although you know it’s not our practice to actually disclose the absolute quantity of catalogs that we mail. Suffice it to say that we’ve continued our efforts to very carefully analyze the response rates from the various segments of our marketing database, and we’ve continued to mail our catalogs and e-mail and market heavily to those segments of our database that are giving us good response, but at the same time, cutting back significantly the marketing to the areas of our database where we’re not getting a substantial response. In terms of our headcount, in sales, currently we have approximately 435 total employees worldwide. Of that, approximately 174 of those are salespeople and support people, and of the 174, approximately 107 are commissioned salespeople.
Jerry Herman – Stifel Nicolaus
And that group includes the telemarketers as well, correct?
Yes, it does. That’s correct.
Jerry Herman – Stifel Nicolaus
On a go-forward basis, will these efficiencies continue to be achieved? What I’m asking is you’ve cut costs in reaction to a weak market, but also is there a structural change in sales and marketing that will continue?
Certainly we will continue to manage our investment in sales and marketing consistent with what we see happening in the market, so that said, as we see a strengthening demand and when we see a strengthening in demand emerging, I would expect that we would respond by continuing to spend an appropriate amount in sales and marketing. Of time, our long-term model has consistently been that roughly 25-26% of our revenues is an appropriate spend for sales and marketing. We’re a little bit under that now, but we think that appropriate for the current market. We haven’t really adjusted the overall structure or process of our sales and marketing, so as our volumes increase, I would expect to see an increase in the expenditure for sales and marketing as well.
Jerry Herman – Stifel Nicolaus
Has there been a permanent shift in terms of where you get your leads from, i.e., more e-mail relative to mailed catalogs?
We certainly are increasing our use of e-mail as much as we possibly can. That’s not only a response to the current market conditions or cost of print mail, but simply a recognition of the fact that email and electronic business is much more prevalent every year in our business environment than in the preceding year, so yes, it would be safe to say that we are getting an increased number of leads and an increased level of response overall from our electronic marketing efforts as an overall portion of our total marketing efforts, but at the same time, I would continue to emphasize the fact that we has an integrated sales and marketing structure, so we depend heavily on not only our electronic marketing but our print marketing and the efforts of our salespeople. It’s that combined effort that yields the results that we got.
Jerry Herman – Stifel Nicolaus
I have more of the strategic question, Nick. You mentioned your continuing developments in the hybrid learning area. Could you maybe update us on what’s going on there?
We’ve been working as we reported in our previous conference calls on a variety of approaches to hybrid learning, and we have developed one approach which we’ve recently names Anywhere, which is a model in which we enable remote attendees to participate in a live Learning Tree class without actually having to be in the classroom. We’ve gotten very good customer feedback from the effectiveness of those responses. We’ve been very encouraged with those results, and so we’ve recently begun test marketing that approach. It’s one where based on the response from our customers we think that there’s a lot of promise.
Your next question comes from the line of Nick Genova – B. Riley & Co.
Nick Genova – B. Riley & Co.
I wanted to follow up on that Learning Tree Anywhere platform that you guys are offering now. It’s still in test, I understand that, but can you give us a sense as to if you get a positive feedback like you have been so far, how quick would it be for you guys to be able to roll that out to a wider variety of courses and what kind of impact can we look to on you guys from an overall financial perspective, assuming it would help you leverage course participants per event, etc., which would hopefully boost gross margins? Can you talk about it from a long-term strategic perspective if it does work out?
I can give you some color, but because of the fact that we’re so early into test marketing, I’d be reluctant to make any projections about what we might see from a business results perspective. Certainly, as we go forward with Anywhere and we get the results of our test marketing back in over the next couple of months, in a few months, I’d be in a position to provide somewhat of a more concrete assessment of what the results are likely to be, but that said, I think you’ve actually pinpointed at least the initial results that we would expect, and that is that to the extent that we can bring in one or two or more remote attendees into a class that we’re already holding, the vast majority of that revenue drops to the bottomline and therefore has the potential to increase our gross profit. Things that we are very being careful to measure at this point in time along with the response to our marketing are what happens in the way of cannibalization, are we seeing a response from people who would have come to the classroom but are now preferring to attend as remote attendees, because the remote attendees to carry a bit of incremental cost as well, so we have to measure all that and balance all that out and see what happens, but the effect that we’d be looking for in the short term would clearly be an improvement in the gross margin by increasing the number of attendees per event for those Anywhere titles.
Nick Genova – B. Riley & Co.
And is this somewhere if you did decide to go forward with it, with like a full scale rollout, is it a relatively easy process to roll it out, or does it take quite a few quarters to go that direction?
It’s not altogether easy process to roll it out. There are a lot of details that have to be handled not only for the process overall of managing remote attendees and making sure that the technology works, but then on a course title by course title basis, we need to ensure that an individual course title will actually perform effectively in this mode. At the same time, we are cautiously optimistic that if we see effective results from our test marketing, we should be able to release titles and increase the number of course titles offered through Anywhere fairly quickly over time, but again it depends upon the results that we see from the early stages.
Nick Genova – B. Riley & Co.
Moving to the expense side, following up on the sales and marketing questions, obviously at some point if you cut sales and marketing too far, it starts to impact you from a revenue perspective. Same with G&A. You have to have a certain level just to support the business. If revenues were to kind of stay around this level and you didn’t see any significant rebound in the couple of quarters, do you guys have further room to cut at this point or do you think that at this point you’ve kind of gotten as lean as you can get within reason?
I’d go back to what we said in the prepared remarks, which is that we think at this point in time we have made the adjustments to our business that we believe are necessary for the current environment, so one could always cut further, but at the same time, as you pointed out, we want to be very careful to maintain strength in our business where appropriate and therefore we don’t believe that if the environment stays the same, we need to make any significant further cuts, and the projections that we provided for the fourth quarter of this year actually pretty much underscore that, in that you can see we’re projecting roughly the same level of operating expenses as we had in the third quarter, the quarter that we just finished. So I would say that at this point in time, we believe we’ve done what we needed to do.
Nick Genova – B. Riley & Co.
Are you guys seeing any encouraging trends out there, anecdotally out there, that would imply that maybe you guys are close to a bottom from a corporate IT trend perspective or just corporate training in general?
We’re seeing a mixture of signs. As you know, last year we trained people from about 11,500 organizations around the world, and so it’s very difficult to generalize. We have some customers where we are seeing positive signs, and we have other customers where we’re not seeing positive signs, so at this point in time, I don’t think I can say that we’re seeing anything that we would construe as an overall trend toward an improvement, but at the same time, we for the present have seen a level of stability in our overall level of decline.
Your next question comes from the line of Jerry Herman – Stifel Nicolaus
Jerry Herman – Stifel Nicolaus
Nick, could you give more color on the pricing? It looks like you got a little bit of lift there, and could you maybe talk about where that’s coming from and any price increases planned for the forthcoming months?
As you know, our practice has been to steadily increase our prices consistent with the overall cost of doing business or cost of living, and so the approximately 2% impact of price increases that we saw in the most recent quarter is reflective of the price increases that we had instituted during about the past 12 months around the world, and that’s pretty much every aspect of our business, from our various public course products, our individual seats in our passports and vouchers as well as increases in our onsite course pricing, and this is a combination of change in list pricing and moderation of our various discount levels and so on. At this point in time, we see no reason to discontinue that practice. We will continue to match our pricing and our price levels to what we’re seeing in the cost of doing business on a going forward basis, and we would expect to continue to see the effect of price increases phasing in steadily over time.
Jerry Herman – Stifel Nicolaus
Is there any greater flexibility on the IT side versus the management side at this juncture?
I don’t see that there’s a significant difference between those two markets. We’re seeing more or less the same dynamics in each market.
We have no more questions in the queue at this time. I would like to turn the call back over to Nicholas Schacht for any closing remarks.
Over the past 35 years, Learning Tree has combined solid fundamental educations principles, innovative and pioneering technology, and data-intensive, process-focused business practices to create a business model that has provided the highest quality of service and extra-ordinarily consistent results for our clients. Throughout this period, we’ve demonstrated the durability of our business model and the enduring value we provide our customers by increasing the productivity and knowledge of their employees.
Since our founding in 1974, Learning has weathered repeated financial downturns and capitalized on numerous periods of economic expansion, and as we have been establishing our preeminent position as the world’s leading vendor-independent provider of training for managers and IT professionals, we have also built a strong financial base on which to grow and prosper.
During the present financial crisis, we have taken and are continuing to take the actions necessary to maintain that financial strength. Meanwhile, we intend to continue to capitalize on our market position, competitive advantages, and financial strength to increase our market share. We remain committed to the proposition that the long-term success of our customers depends in part on their investment in technology and in the training of their personnel to leverage that investment.
We look forward to continuing to help our customers maximize the productivity and the effectiveness of their employees and the competitive capabilities of their organizations. Thank you very much.
Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect.
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