Universal Electronics' CEO Discusses Q2 2013 Results - Earnings Call Transcript

Aug. 9.13 | About: Universal Electronics (UEIC)

Universal Electronics, Inc. (NASDAQ:UEIC)

Q2 2013 Results - Earnings Call Transcript

August 8, 2013 4:30 PM ET

Executives

Becky Herrick - Investor Relations, LHA

Paul Arling - Chairman and Chief Executive Officer

Bryan Hackworth - Chief Financial Officer

Analysts

Steven Frankel - Dougherty & Company

Jason Ursaner - CJS Securities

Andy Hargreaves - Pacific Crest

John Bright - Avondale Partners

Operator

Good afternoon. My name is Stephanie and I'll be your conference operator today. At this time, I would like to welcome everyone to the Universal Electronics second quarter 2013 results conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions). Thank you.

I would now like to turn the conference over to Becky Herrick of LHA. Please go ahead.

Becky Herrick

Thank you, Operator. Thank you all for joining us for the Universal Electronics second quarter 2013 conference call. By now, you should have received a copy of the press release. If you have not, please contact LHA at 415-433-3777.

This call is being broadcast live over the internet. A webcast replay will be available for one year at www.uei.com. Also, any additional updated material non-public information that might be discussed during this call will be provided on the company’s website, where it will be retained for at least one year. You may also access that information by listening to the webcast replay. After reading a short Safe Harbor statement, I will turn the call over to management.

During the course of this conference call, management may make projections or other forward-looking statements regarding future events and the future financial performance of the company, including the benefits anticipated by the company due to the continued strength of its core businesses; the continued expansion of the company’s technologies into smart devices, such as smartphones, tablets, smart TVs, IPTV devices, game consoles and over-the-top services; the company’s ability to attract and retain new and existing customers due to its continued innovation of products and technology solutions such as Control Plus, QuickSet and a Nevo for smart devices apps; the benefits the company expects via the continued strength of its subscription broadcasting businesses including the growth anticipated in Latin America; the benefits the company expects as a result of the migration of its advanced technologies into midrange priced OEM consumer electronics products; and continued global general economic condition.

Management wishes to caution you that these statements are just projections and actual results or events may differ materially. For further detail on risk, management refers you to the press release mentioned at the onset of this call and the documents the company files from time to time with the SEC, including the Annual Report on Form 10-K for the year ended December 31, 2012 and those periodic reports filed since that time.

These documents contain and identify various factors that could cause actual results to differ materially from those contained in management’s projections or forward-looking statements.

Also, the company references adjusted pro forma or non-GAAP metrics in this call. These adjusted pro forma metrics are provided because management eases them in making financial, operating and planning decisions and then evaluating company’s performance.

The company believes these measures will assist investors in assessing the company’s underlying performance for the period being reported. UEI continues to incur certain expenses as a direct result of its acquisitions which it believes do not reflect its true operating results.

Adjusted pro forma results exclude the following expenses, amortization expense relating to intangible assets acquired, depreciation expense relating to the increase in fixed assets from cost to fair market value, other employee related restructuring costs, additional tax reserves recorded resulting from a tax audit in Hong Kong for years proceeding acquisition of Enson Assets Limited.

In its financial remarks, the company will reference adjusted pro forma metrics. A full reconciliation of these adjusted pro forma measures versus GAAP is included in the company’s press release that was issued after the close of market today.

On the call today are Chairman and Chief Executive Officer, Paul Arling, who will deliver an overview and Chief Financial Officer, Bryan Hackworth, who will summarize the financials, and then Paul will return to provide closing remarks.

It’s now my pleasure to introduce Paul Arling. Please go ahead, Paul.

Paul Arling

Thank you, Becky, and welcome everyone. Our second quarter financial results were better than anticipated. When comparing the second quarter of 2013 to the same period last year, net sales increased 17% and operating income grew 46%. Driving these results were two primary factors within our core business category.

First, we experienced continued strength in subscription broadcasting. Consumers continue to upgrade and add new hardware and services as new more advanced technologies get introduced. The Americas were a particularly strong region for subscription broadcasting this quarter and markets like Latin America are projected to have strong subscriber growth over the next few years. Market experts project that among the seven biggest markets of Latin America, the pay TV market will total nearly 100 million subscribers by 2018, that's a penetration of nearly 70% of the total of homes with TV and will rival the size of the U.S market. This is just one of many examples of the growth opportunities that lie ahead of us as world markets continue to develop great home entertainment options for consumers over the next decade.

The second contributor to our second quarter was growth in OEM or consumer electronics sales. Our OEM customers are building traditional home entertainment devices that now include more advanced technology, such as Bluetooth-enabled remote controls, touchpads and microphones. This trend toward incorporating advanced features traditionally reserve for high end products has migrated into midrange products and is driving demand for a wide variety of UEI solutions. We are working with leading companies in the home entertainment space on designs that efficiently integrate a variety of technologies into a single custom design remote with the ability to deliver new services such as gesture control, voice navigation and automated universal remote setup. Clearly, our core business remains strong and growing.

In addition, we are more excited than ever before about what lies ahead about in terms of our expanding market opportunity with smart devices such as smartphones, tablets, game consoles, smart TVs and over-the-top services. UEI has a large portfolio of technologies that transform these smart devices into simple TUs and intuitive universal remote controls that operate every entertainment device in the home regardless of brand or connection protocol.

We continue to gain traction with some of the world’s largest tablet and smartphone manufactures and UEI QuickSet and Control Plus are just two of the many types of technologies that we bring to our customers that enable us to win new business. UEI Control Plus is our latest control technology solution designed to completely eliminate remote control setup and effortlessly eliminates the age old complications of input and mode confusion.

This continues to be a focus for our development teams. The market and customer reaction to Control Plus has been very positive and we are actively working to bring this solution to market shortly. UEI QuickSet are embedded universal control setup technology for connected and smart devices continues to gain market share in the home and mobile entertainment space.

UEI QuickSet in combination with our comprehensive worldwide device control database initially deployed on many subscription broadcast smart TVs and high end mobile platforms is now being rolled out on many new devices by several leading brands in the industry and is quickly becoming an industry standard. We have recently contracted with some of the world’s largest companies in the consumer electronics, mobile handset and game console spaces and we expect to launch several projects we have developed for these major customers late this year and in to next year. We look forward to updating you in the months ahead.

With that, I would now like to turn the call over to our CFO, Bryan Hackworth to discuss our financial results.

Bryan Hackworth

Thank you, Paul. As a reminder our results for the second quarter 2013 as well as the same period in 2012 will reference adjusted pro forma metrics. Second quarter 2013 net sales were $136.1 million, up 17% compared to $116.7 million for the second quarter of 2012.

Business category net sales were $124.2 million compared to the second quarter 2012 net sales of $103.9 million as subscription broadcasting remained strong both domestically and in Latin America. Our consumer category net sales were $11.9 million compared to the first quarter 2012 net sales of $12.8 million.

Gross profit for the second quarter was $38.1 million or 28% of sales compared to gross margin of 28.5% in the second quarter of 2012. Total operating expenses were $26.9 million compared to the $25.5 million in the second quarter of 2012. This increase was driven primarily by our continuing investment in product innovations and technologies such as UEI QuickSet and Control Plus, as R&D spend increased by 18% compared to 3% for SG&A. These efforts are enabling us to gain traction of burgeoning smart device channel which includes mobile phones, tablets, smart TVs and game consoles.

Operating income was $11.2 million in the second quarter of 2013, up 46% compared to $7.7 million in the second quarter of 2012. The effective tax rate was 25% in the second quarter of 2013 compared to 18.2% in the second quarter of 2012. Net income for the second quarter of 2013 was $7.2 million or $0.47 per diluted share compared to $6.2 million or $0.41 per diluted share in the second quarter of 2012.

For the six months period ended June 30, 2013, net sales were $250.8 million compared to $220.4 million for the same period of 2012. Gross margin for the first six months of 2013 was 28.3% compared to 28.1% in the same period a year ago. Total operating expenses were $54.6 million compared to $50.3 million in 2012.

Net income for the six months period was $11.1 million or $0.73 per diluted share compared to $9 million or $0.60 per diluted share in the prior year period.

Next I'll review our cash flow and balance sheet at June 30, 2013.

We ended the quarter with cash and cash equivalents net of debt of $49.7 million compared to $17.7 million at June 30, 2012. During the second quarter, we repurchased approximately 37,000 shares for $877,000 of an average price of $23.93 per share.

DSOs were approximately 59 days at June 30, 2013 compared to 66 days the year prior. Net inventory turns were approximately 3.9 turns at June 30, 2013 compared to 4.3 turns a year prior. We expect inventory turns to range from 4 to 4.5 turns by the end of the third quarter.

Now turning to our guidance. For the third quarter of 2013, we expect revenue between $136 million and $144 million compared to last year’s third quarter revenue of $124.9 million.

EPS for the third quarter is expected to range from $0.48 to $0.58 per diluted share compared to $0.54 recorded for the third quarter 2012. It's important to remember that last year’s third quarter results included a lump-sum payment of approximately $2 million related to our successful settling of a patent infringement case.

I’d now like to turn the call back to Paul.

Paul Arling

Thanks, Bryan. So far in the first six months of 2013. Our sales are up approximately 14% and net income is up approximately 24%. Certainly, we are proud of these results, and we are on track for our most successful year ever. We continue to invest in research and development to produce the next generation of control solutions that translate into future growth.

Innovation has long been and will continue to be UEI Specialty. In addition to having the world’s largest database of control codes, we have a significant portfolio of intellectual property and embedded software and hardware designs to address the ever-changing needs of the market.

The home entertainment market has become very dynamic, some of the world’s largest and most established technology companies are interested in and are developing solutions for the home entertainments space as consumers across the globe are spending more than three hours a day watching television.

Similarly game console makers see the same trend and wish to become the center of the consumer’s home entertainment universe. The leaders in mobile, in their quest to become the device that drives the consumers’ life want to participate in this important area as well.

New, innovative, over-the-top-players are entering the market and bringing great user interface to help the consumer find what they want to watch quickly and easily. And the existing players both subscription broadcasters and consumer electronics companies are developing and bringing to market more

Electronics companies are developing and bringing to market more entertainment options with better user interfaces than at any time in history. The one thing that most of these companies have in common is that they choose UEI to partner with and utilize our technology, IP and products to power these next generation solutions.

With our market position, market approach and expanding market opportunity, we believe the future has never looked brighter. And I'm more excited than ever about the implications for our long term success. Stay tuned.

I'd now like to open up the call for questions. Operator?

Question-and-Answer Session

Operator

(Operator Instructions). Your first question comes from the line of Steven Frankel with Dougherty & Company.

Steven Frankel - Dougherty & Company

Good afternoon, Paul. Thanks for taking my question. Maybe we could start with your progress in the smartphone and tablet space. Could you tell us how many design wins you have there?

Paul Arling

Yeah. I don't have the exact count Steve, but we're with multiple brands. We have announced one brand, who's allowed us to do so, LG we work on their first generation and now in their second generation phones. I will tell you that there are other brands that are both going to ship very soon and are planning to ship product in the next year.

We don't like to get in front of our customers as far as product announcement. So we're going to keep that to ourselves. We're on multiple tablet platforms. So my guess is that if we accounted SKUs we're in the dozens now.

Steve Frankel - Dougherty & Company

Okay. And then on the inventory build, this is second quarter in a row that we've seen inventory build is this for products to be shipped in the back half or this is -- or this is a timing issue with some of your larger customers that just aren't taking product in the way you may have thought when you are building it up?

Bryan Hackworth

It’s Bryan, Steve. It’s the ladder we have one large customer in particular that, they had this build inventory for them, they delayed a launch of higher running product. So we're still holding inventory, it's supposed to ship in Q3 which we're confident it will. So the inventory, it’s a risk area at all, it's just, we're [sharing] about $5 million of that inventory currently. So that should go down in the short term.

Steve Frankel - Dougherty & Company

Okay, and then do you think you've seen the bottom of the TV business on the OEM side?

Paul Arling

Well it depends on your perspective, if we go out 20 years maybe not.

Steve Frankel - Dougherty & Company

Obviously, given what we've seen in the last year, you think it's --

Paul Arling

Yeah, I think it's picked up, it's picked up a little bit. It's not back to red hot levels, but the companies that we worked with seem to be doing pretty well. And I would say that it's better today than it was even 12 months ago.

Steve Frankel - Dougherty & Company

And you had mission there to kind of cross-sell some of your traditional product into some of that Japanese OEM customers that kind of come along with that acquisition, would you update us on how that's going?

Paul Arling

Yeah, it's going very well, in fact what we're doing is cross selling, UEI Technologies, for as I mentioned in the call, we have customers doing voice activated remotes obviously with embedded microphones and touchpad’s to navigate new interfaces that they placed on the TV for a lot of new entertainment options. So there has been a lot of a movement as far as new designs that those new relationships or those relationships developed to the acquisition a couple of years ago, have helped us with pretty substantially. So yeah, we are using those relationships to build advance remotes for some of the leading names in the TV market.

Operator

Your next question comes from the line of Jason Ursaner with CJS Securities.

Jason Ursaner - CJS Securities

Good afternoon, just given the restructuring and severance that's in the SG&A, how should investors be thinking about in SG&A run rate going forward and what's the variable component of that, that would be tied to revenue?

Bryan Hackworth

The restructuring cost we actually back out in the pro forma, so as you know we don’t provide individual guidance on the OpEx, we just provide the top line and the bottom line, so.

Jason Ursaner - CJS Securities

So what would the seasonal components of SG&A be?

Bryan Hackworth

You are looking at basically freight, you're looking at freight and delivery and you're looking at commissions, potentially bonus are the three main premium components.

Jason Ursaner - CJS Securities

Okay. So then looking at the guidance, it seems to be implying fairly down gross margin environment and normally that builds into the holiday season as you get some leverage on revenue, so I'm just trying to understand why that wouldn’t be case this year?

Bryan Hackworth

Yeah, I think your assumption is incorrect. We're not assuming downturn in the gross margin rate in the back half of the year. You're correct in the back half, you especially, it starts getting into a little bit of the retail season that yields a higher gross margin, in our business category, now it's than 10% of our total business now a days, but still that does push the gross margin up the little bit, up a little bit north.

Jason Ursaner - CJS Securities

The reason you guys didn’t provide a full-year guidance initially, was this wild card of embedded technology. Now as you are moving towards launch some of these, can you try to detail on the economics given that it's an increasingly important part of the growth story?

Paul Arling

Can you repeat that Jason?

Jason Ursaner - CJS Securities

Just as you have some better visibility on launches, without getting in to specific customers or specific launches, just what the economics of the technology you are providing would be on either unit basis or some type of individual project launch basically if it could impact the financials?

Paul Arling

Typically, it's unit basis. I would say that the majority, the vast majority of the agreements are based on some form of either hardware sale with the margin or a strict royalty. Sometime we split that out and sell a product along with the royalty so that can be parched but that’s how those go. Now in terms of the timing, as we discussed earlier in the year, there is commencement of the project which is whether or not you are going to be in the product. That way we will typically know, hopefully at least three months in front of launch. Sometimes many months, more than that but then you got to time the launch because obviously we're in element in some of these products. Just one element of many. So whether the product launch on August 28 or November 1, is a question at times, and then on the sales taste of the product. In some cases, we would know that because if there is an existing product we can use that as model. So there is a lot of variables in it. But the general economics of it are license. So probably a little bit higher margin in terms of those wins, because the less hardware we sell typically the higher the percentage on the gross margin. The lower the dollar ring typically, but the higher to gross margin percentage.

Jason Ursaner - CJS Securities

And on the licensing one, in terms of a range, I mean is it cents, is it dollars how does it relate to some of the remotes do you sell in?

Paul Arling

Well again it all depends on the solution, it could be cents if it’s in very huge contract, in terms of the unit volumes, but we’ve had license is here at UEI that have ranged from cents, dimes, to $5. Now typically they would be lower not at the $5 range. But we’ve had some substantial, and again it depends on what the customer is trying to do. If it’s a raw database license it’s less, if it something where they wish to have a cloud based serving of that database, which has additional cost to it and also is part of our IP portfolio. So it all depends on the features that spec out by the customer how we would price it.

Operator

(Operator Instructions). Your next question comes from the line Andy Hargreaves with Pacific Crest.

Andy Hargreaves - Pacific Crest

Just kind of following up on the previous question, is there incremental investment going on in Q3 because or higher tax rate, or something because it definitely seems like there is got to be some increase sequentially in cost somewhere?

Bryan Hackworth

Yeah. There is a little bit, we have been investing, like I said in the script. For Q2, we are investing in R&D and these products that Paul has mentioned in the QuickSet, they Control Plus, these all takes engineering time and dollar. So we've been investing, we believe we have invested wisely, the R&D is up 17% and 18% for Q2, where SG&A is up only 3%. So, it's actually, we think we're going to bank for a buck with our investments.

Andy Hargreaves - Pacific Crest

Okay. And then just on going back to the Q2 results on the gross margin

Bryan Hackworth

When Jason asked the previous question I wasn’t sure he went sequentially or compared to the prior year. But we have compared to the prior year, we did have settlement of our patent lawsuit and it was $2 million in Q3. So, I mean if you compare versus the prior year that will be true. We had a $2 million pop last year and Q3 (Inaudible) before.

Andy Hargreaves - Pacific Crest

Yeah. I was looking sequentially as well, but thank you. Looking back to Q2, can you just walk us through a little bit of the components of the gross margin change from Q1?

Bryan Hackworth

Yeah. It decreased about a half percentage point. I mean there are a lot of things that go into the gross margin. I mean if you're looking at virtually the half point it doesn't really take a whole lot. So if you're looking at you got mix between lines, mix within lines, you got FX rates, you got, I can list up 20 things. So really that one item that I would think stands out from Q1 to Q2 in terms of the going down and we did have a lot of sales to large customers. So whenever we have that, they've got some breaking powers. So it's going to placed on the gross margin a little bit.

Andy Hargreaves - Pacific Crest

Okay. And then last from me is just, can you comment, I mean you mentioned functionality going up on the CE side. Is it fair to assume that means the ASP trends are fairly good on that side as well?

Paul Arling

Yeah, that is correct. Yeah, because typically there is always downward pressure but higher end of the product did push it. It is a counter bailing force against margin erosion, right. When the higher end features are being brought down to the mid range product that will typically mean they are putting a little bit more value in the control device and usually driving up ASPs.

Andy Hargreaves - Pacific Crest

Just one last one, what was the other expense to $1.6 million in other this quarter?

Bryan Hackworth

It was basically FX loss, the FX loss it’s still outside the recent quarterly average due to significant exchanges rate moves that took place in the quarter. We do had our exposures if the cost to do so makes economic sense, we currently have added in place going forward and right now we believe that the return of the recent quarterly averages is likely.

Operator

(Operator Instructions) your next question comes from the line of John Bright with Avondale Partners.

John Bright - Avondale Partners

On the business segment the strength there, talk about how much of that was market share gain and how much of that might have been related to non-traditional type customer with new offerings first of all?

Paul Arling

Yeah, John its Paul, I can’t give you a precise percentage for each of those but they obviously all affected it. We had new wins that affected the market share gains in terms of why the number was better. We had I guess what you could mix shift because within OEM in particular they have many more products then our subscription broadcasters would have, so the typical subscription broadcaster will have a few products in their line that make up of the bulk of their shipments where as a TV, AV receiver, Blu-ray manufacture may have 100s, so what happens in those cases is again as you mention when they upgrade the middle range of the line it’s not technically a market share gain but it is a value gain within that customer and if we kick out competitor it’s a double win, while we are getting a market share in units as well as a gain in value.

There aren’t a lot of market tracking services so I can’t give you a exact percentages, but I would say that what’s happening is we’ve developed a lot of industry being technologies with QuickSet, Control Plus, and we are helping a lot of our customer choose between flavors of RF, RF for CE, Bluetooth, WiFi Direct and WiFi and we provide a lot of advising counsel, we build products with all these technologies, so we have lot of creditability as they move towards this new areas which all of them are doing. All of these as I mentioned a little earlier the customers want to move their products upscale, they want to differentiate and we are helping them to do that, so there is a lot of market share gain both currently and we would project longer term.

John Bright - Avondale Partners

That’s exactly where I was going forward Paul in QuickSet and Control Plus, this is something you have been treating for quite some time.

Paul Arling

Right.

John Bright - Avondale Partners

And talk to us about the stickiness associated with that, with these market share gains, because we may have seen over the years you have got some market share gains and then the customer wanted to right size to make sure that they weren’t overly dependent upon you. Talk to the stickiness the value proposition of QuickSet and Control Plus as we look over, they're not only the near-term but the next year or two years?

Paul Arling

Right. Well, I mean the stickiness is easy to understand. Rather than talking to customers or having them focus on how dependent they might be on a vendor, we like to talk to them about how likely is it that your consumer when they bring the device home, would they like to plug it in the wall, plug in the HDMI cable connecting the set top box and the TV for instance and have the remote automatically set itself up. How important is that to the user experience, the out of the box experience for your products.

And I think once you focus on that, I mean we're all consumers, everyone who works at UEI as well as all you guys as well as all of our customers, they understand that this has long been a somewhat painful process. And UEI has spent a lot of time and a lot of money as you pointed out over the last number of years on QuickSet, Control Plus is relatively new but QuickSet has been worked on for a while now.

And we've come up with ways that make these devices simply work, you bring them home, you plug them in. There might be a confirmatory step, a dialog box and the screen that says, hey you just plugged in this brand of TV, would you like me to set it up? You say yes, it's done. There is not a lot of complication.

So we do that as pretty sticky and not focusing so much. I think our customers like this idea and maybe will be less concerned about how much business they're giving to somebody particularly when the person bringing them this type of innovation is UEI.

John Bright - Avondale Partners

And that’s something is going to be very defendable in this, say move away from that. You do see success there. The competitor is not going to be able to offer that because it's something that you got IP on. Is that correct?

Paul Arling

Well, correct. I think importantly these things are not as easy to do as simply copying on to an 8-bit microcontroller or database, that is technically not extremely difficult. On a scale one to 10 in terms of difficulty that’s a three. Coming up with some of these cloud-based versions of our product, there aren't that many companies on earth frankly who could do it, so our competitors are not capable in many cases of doing it.

Now, there are companies who are, but then you pointed out the second barrier which is we thought of many of these ideas years ago, and obviously have IP around some of these concepts. But we don’t like sell on that basis, the selling point is that, we want to make the consumer experience extremely simple and we want our customers to not have to focus on this at all.

We do the work for them. We sell them the product, we sell them the service behind it and they don’t have to focus on this area, because we’ll handle it for them. And we're getting the receptive audience on all these technologies, because they see this is an (Inaudible) problem with AV products.

John Bright - Avondale Partners

Talk to us about any, and I know you don't want to lead your customers, that any non-traditional customers that have emerged in this pending fight we're seeing for the living room. And I don’t know does it, does your traditional 10% plus customers has that changed meaningfully at on the quarter?

Bryan Hackworth

Now we had one 10% customer in the quarter as well as year-to-date is the same customer.

John Bright - Avondale Partners

What about on the margin? Anything that you can talk to us about regarding non-traditional customers coming to the marketplace that you're seeing for this shall we say battle emerging?

Paul Arling

Sure, yeah, well I mean, not any that haven't already been in the press as to being either in or rumored to be coming in this market. I mean major technology companies, you guys read the business press there, many of them if not all of them are either considering or working on solutions here for better AV experience. As I mentioned in the earlier comments. Mobile device makers many of whom as I pointed many conference calls ago, about half of the world's television by the same companies that make half of the world's smartphones. So there is an overlap there and some of them are seeing the high end between these devices and potentially using into the future technologies that we're connected to.

Again envision a TV that has say a technology like QuickSet, if the TV has already been set up with the many devices connected to it. As soon as you connect your mobile device to the network, the set up packet could be transferred over such that when you launch the AV app it's already setup, there is no setup, it's already been done. It was done within the TV when you bought it.

So I mean we're envisioning things like this into the future as you and I pointed out earlier. We do have the technical capability to build these. We know this because we are the ones who have build them and we've also IP protection on many of the concepts they are in. So we feel really good about how the world is moving, how these connected devices are becoming more connected and how many of the companies I mentioned mobile device makers, these new innovative over the top companies are the existing players.

Consumer electronics companies and subscription broadcasters are on to this and are developing next generation products that are very interesting. They are probably spending more time and money than ever before than in their history, working on this type of stuff. So we think it's a very exciting place to be right now.

Operator

(Operator Instructions) At this time there are no additional questions. I would like to turn it back over to Paul Arling for closing remarks.

Paul Arling

Okay. I want to thank everybody today for joining us. And for your continued interest in UEI, we’ll be presenting at the Credit Suisse Small and Mid Cap Conference held in New York City September 17th and 18th we hope to see some or all of you there. Thanks very much for participating today, and goodbye.

Operator

Thank you. This concludes today’s conference. You may now disconnect. Speakers please close the line.

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