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L-1 Identity Solutions Inc. (NYSE:ID)

Q2 2010 Earnings Call

July 28, 2010 11:00 am ET

Executives

Bob LaPenta - Chairman, President and CEO

Jim DePalma - EVP, CFO and Treasurer

Lisa Cradit

Analysts

Paul Coster - JPMorgan

Brian Rutternbur - Morgan Keegan

Michael Kim - Imperial Capital

Steve Velgot - Susquehana

Michael French - Morgan Joseph

Operator

Welcome to L-1 Identity Solutions Conference Call regarding the companies second quarter and first half 2010, financial results.

At this time all participants have been placed in a listen only more and the floor will be open for your questions following the presentation. (Operator Instructions). Thank you.

I will now turn the floor over to Lisa Cradit.

Lisa Cradit

Thank you for joining us for the second quarter and first half 2010 financial results conference call. Statements that representatives of L-1 Identity Solutions make during this call that are not historical facts are forward-looking statements made under the safe harbor provision of Private Securities Litigation Reform Act of 1995.

Forward-looking statements are based on management's current beliefs and assumptions that involve inherent risks and uncertainties. Any statements made today of our future expectations or results are necessarily only estimates.

Actual results could differ materially from any forward-looking expectations. Factors that may cause differences between forward-looking expectations and future actual results are fully described in the companies SEC filings.

The company expressly disclaims any obligations to revise or update any forward-looking statements. Representatives of L-1 plan to use the number of defined financial terms during today's call, including certain non-GAAP financial terms.

Please refer to the companies press release issued this morning which appeared on our website at www.l1id.com for further definition of and contacts for the use of these terms including a reconciliation of the non-GAAP financial terms to the most closely relevant GAAP financial term.

With that, I would like to turn the call over to Mr. Bob LaPenta, Bob?

Bob LaPenta

Thank you Lisa, good morning everyone thanks for participating in our second quarter and six months earnings conference call. First let me open up by saying that I like most of you are disappointed in the sales we had in the second quarter.

Most of it was due to the delay in PASScard sales, all of which will be shipped in the second half of the year as we indicated in our press release most of that is already in backlog and has been booked,

We also had a delay in a number of domestic and international licensing and national ID programs. We are encouraged however by the increase in pipeline of our new business opportunities across all of our divisions.

We have outstanding today over $1.2 billion of these business opportunities and we believe we are well positioned on a good number of them. I am also pleased that despite the lower sales we have been able to maintain our original EBITDA guidance as a result of our focus on expenses additional synergies we continue to realize in integrating the business and the favorable product mix including more IP and software related sales.

Now before I take you through some of the highlights and give color to some of the divisions and the sales forecast for the second half of the year. I’d like to update you on the status of our strategic alternative process. As you know we announced early in the year that we were going to evaluate our strategic alternatives.

We disclosed that we had hired Stone Key partners and Goldman Sachs on March 1, and we are following a well run and organized process. Thus far we have received initial indications and been through some multiple parties both domestic and foreign and the process is ongoing.

Over the past two months several companies have conducted a detailed due diligence process. We expect to continue discussions with a number of interested parties over the next few weeks and I'm hopeful to be able to advice you with the result shortly there after.

We are committed to enhancing shareholder value and are mindful of our customers and important relationships we have established with them. Our legal counsel advised me I cant say really too much more than that but I’m sure you may a question during the Q&A period.

Moving onto the divisions, taking a quicker look at some of the performance of our companies in the first half and what we hope and are confident that we will be able to achieve in the second half.

Biometrics is doing very, very well probably in the best condition they have been in since we acquired the company. Their new order pipeline doubled to over $350 million and as you read yesterday we were successful in becoming one of the providers for the for the de-dupe pattern on the deep UID program.

Now that’s a very controversial program. I know there’s a lot of rumors circulating on what that all means but this is a very, very key program and I think strategically it positions us really at the top tier of all of the biometric providers.

Our multi model ABIS technology has proven superior and we’re going to be involved in a process of de-duping and enrolling over 200 million people over the next two to three years.

So this is an indication as well not only in India, where ultimately after the two year period, there will be a competition for over a billion records for enrollment in de-duping but it also positions us well to sales of our mobilized product where we currently are one of two certified providers and in that program over the next two to three years, there’s a requirement for over 300,000 devices and being one of two approved sources, I think its going to improve exceedingly beneficial to L-1.

So this is a critical program, there are rumors circulating out there that we’re going to lose money on the program, that’s not the case. So we’re very happy to be part of that group.

We also received a critical follow on which we’ve been waiting for a long time on ABIS. Unfortunately, we only received half of it we expect to receive the second half in the third quarter.

But essentially year-to-date we are worth over $132 million of Secure Credentialing Awards and contract extensions, including a five year contract extension by flooring the Florida Department of Highway Safety and Motor vehicles. These are very important wins and credentialing is well positioned. We are on our way to completing the build out that we initiated over the past year and a half. As a result of that having 19 of 22 procurements and they are going to begin ramping up in the second half and we are very, very excited about the positioning of that division going forward.

We’ve also been notified that we've been selected for a very important program in Africa and we are waiting to get started on that program its been delayed and we are hoping to get some revenue in the first half, we now expect to get that in the second half we commenced operation on eight of our new drivers license wins are were providing infrastructure, we are providing secure drivers license and as we’ve indicated the cell prices on these contracts are up; over 50% supplier contracting and you are going to begin seeing that ramp up in revenue in the second half.

In Enrollment this is going very, very well again we are going to see a ramp up in the second half as the result of the TWIC program and ramp-ups in states of Indiana and New York as New Agencies continue to join our network.

We are also updating our program that has a potential of over a $1 billion, Middle Eastern program but in this program assuming we win a percentage of it and that we are assuming will be somewhere between 10 to 20%. We'll provide revenue in excess of $100 to $200 million a year for our enrolment services.

So they are doing very well and we’ve expect them to continue going robustly in the future. In the Intel group they continue to perform well, we are well positioned on very, very strategic programs SpecTal continues to outperform, and as we indicated in our press release one critical homeland security program has been approved of 40% increase in manpower requirements.

About 20% of those have been brought on during the first half of the year so in the second half we will have the full compliment of that initial compliment run through revenue and we will also have the second 20%.

So they're going to have a very robust second half also contributing to the increased sales levels that we expected in the second half. Now we provided the guidance for the year lot of people are going to say well the ramp is steep how are you going to achieve that and I’d like to provide some color and I’m not going to spend a lot of time on the numbers.

Jim is going to take you through the cash and he is going to take you through the sales, gross margins. But I would like to just give you some highlights of what I see happening in the second half.

In order to achieve the revenue ramp in the second half we need incremental revenue over the first half about a $100 million and that’s like of course our divisions in the following way.

Prudentially is going to be up over the first half about $40 million so they are going to go from about $85 to $125 million that is going to be achieved the PASScard sales that we talked about where all of those sales are going to be shipped in the second half.

And again most of that is already been booked. We have two large milestone buildings in California, New Jersey that represents $6 to $7 million. We expect that to happen in the third quarter. The price increases that I mentioned on the programs that were now putting into production is going to generate an additional $5-$6 million in the second half.

The African opportunity that I talked about where we have been notified by the customer that we have won is going to generate additional revenue of over $5 million. So, but eventually, we feel good about their ability to achieve that ramp in the second half.

If you talked about the biometrics division, they’re going to need an incremental revenue of about $20 million. That’s going to come from about $10 million of the tied 4s and 5s high 4s primarily for Afghanistan.

We’re going to begin shipping some of the mobilized devices for India and we're already taking orders for those and again, we’re very excited about that opportunity which resulted from the acquisition with Retica which we talked about earlier.

We’re also expecting a ramp up in sales from a key facial recognition program that we were rewarded from a city agency that we can't really talk about and also some addition in licensing and consumable revenues from the department of state award that has not yet been announced, we’ve been informed by the customer that we have been awarded that contract.

In enrollment, we need incremental revenue about $10 million, that’s going to come up from a ramp of continued ramp up in New York as there are an additional is a large agency. During that program, we hope to have that book sometime in September. Its going to continue to ramp up in TWIC program and Florida and the Intel group as a result of the additional man power and wins on re-competes; we expect that group to have incremental revenue, north of $10 million to $15 million in the second half.

So that represents the bulk of the ramp, a lot of it is already in backlog and so we’re confident to able to achieve that. But again I am particularly encouraged by the pipeline of business or backlog and the fact that though although some of those programs have been delayed we have not lost any key programs that we are currently competing on, I am also encouraged by the fact that we’ve been able to maintain our EBITDA and we are going to have very strong cash flow in the second half.

The EBITDA maintenance I think is particularly important we have a close eye on the sentence the product mix is continued to become more favorable in IP and software sales which really bodes well for the future.

Jim DePalma

Thank you, Bob the press release provides a detailed summary regarding the second quarter results and Bob has addressed many of the Key points regarding our strategic position and performance as well as our expectations from the second half of full year.

I will provide highlights regarding our overall financial position and some color on performance in our operations. Company's solid customer base and entrenched market position continues to provide a growing pipeline of opportunities for strong organic growth in the second half and in the future. Revenues from the second quarter 2010 were 164.1 million slightly below last year primarily due to a lower past quarter volumes and other items that offset as noted in the press release.

Some terminal worth noting. While our biometrics division was successful in increasing the ABIS license capacity in the quarter a significant portion of the requirement’s will differ to the second half, in addition significant multi-mobile and iris operated solution sets are expected to be delivered in the first four quarters of the 2010, compared to 2009 on similar type activities took place in the first and second quarters.

Our secure prudential division delivered approximately 25 to 30% of the expected annual passport and PASScard volumes in the first half of 2010 compared to 2009 when deliveries were more evenly distributed throughout the year.

There are several key points going, our secure credentialing business is nearly the completion of a significant phase of department of motor vehicle upgrade cycle of its leading North America position with over 15 states completed in the last 18 months in which we spent close to $100 million.

While taxing our cash flow over this period, this events results in robust future growth and cash flows. Secondly that growth is expected be derived from existing contracts and orders as Bob noted including projects in our DMB states like New Jersey and California. Price per card increases of 45% in terms of the individual states and their prices which some will come in the second half but it’s turning well for us in the future.

And on completed space and scheduled shipments of PASScards and passport as Bob noticed significant bids outstanding combined with contracts, near completion will accelerate growth through year end adding to already strong backlogs and uniquely position the companies to capitalize on the nearly $1 billion annual market for DMV activities.

Our biometrics division expected to grow significant in the second half driven by a strong mix of software integrated solutions and high end hardware applications many of which are in backlog including our department of states visa facial program. Our integrated facial solutions for a particular client and additional ABIS as our key client continues to expand usage, solidifying our position as the backbone of biometric activities.

The balance of the year will be driven by the demand for leading iris and multi motor solutions to US federal and international customers. Our enrollment services division continues to observe a strong overall growth as it builds the foundation for significant incremental volumes to new agencies in services and its one of a kind secure and open nation wide network.

The divisions overall pipeline has expanded significantly with these enrollment programs and the $1 billion range presenting near term gain changing opportunities. So there are opportunities out there that would add significantly to our backlog.

Our backlog is currently about $500,000 million but there are significant international opportunities that will significantly add a bit more successful when it comes to the backlog.

Our US intelligence enterprise continues to demonstrate its value position capabilities uniquely aligned with critical national security priorities. Outside of the contract that we’re talking about, the company continues to move into new growth particles including language analysis and operations programs. Average rate in the media exploitation and critical information technology opportunities that had significant growth implications as well.

From an operating standpoint reported gross margins for the quarter approximated 28%, slight decrease from last year’s 29% due to the change in revenue mix. Our cash margins were 35% for the current quarter. We expect reported margins to be in the 30% range in the second half with the cash margins in increasing to the 35 to 37% range, operating expenses excluding strategic and other charges as a percentage of revenue was just below 23% as we continue to maximize existing resource levels and truing cost as appropriate, operating expenses are expected to be around 21 to 22% in the second half with cash operating expenses falling bellow the 20% level.

What we believe are our cash operating expenses will be in the 19% range in the second half as the result the aforementioned the adjusted EBITDA was approximately 25 million or 15.5% of revenues and we expect that the second half EBITDA margin excluding strategic cost to be in the 16 to 17% range as gross profit margins and operating expenses in second level.

Other items in those total payments and interest expense for the quarter was $7 million and we expect cash interest to be approximately $28 million for the full year the company continues to pay minimal cash packages as the company realized $700 million in NOL cracked above the goodwill and advertise the intangible assets.

Weighted average shares are 87.6 million the company contains its target 87 to 88 million shares on a fully diluted basis for the full year. Our balance sheet and some other matters, a couple of items to note on the balance sheet.

Day sales outstanding were approximately 67 days of solid improvements on the first quarter we expect DSOs to move forward the 62 at a 54 day range by year-end. Inventory levels were consistent with the first quarter and the year end levels, tax payable decreased significantly with the timing of payments related to capital expenditures and other operations and as we paid down bonuses and things of that nature in the first half.

Working capital levels for the second half are expected to impacted timing of billings and collections relating to sales activities while our accounts payable is expected to increase moderately throughout the balance of the year. The company anticipates stronger free cash flow beginning the second half of the year as revenue increases and cash operating profits improve with working capital at normalized levels.

Capital expenditure will approximate 25 million for the second half as we approach the conclusion of our significant build out cycle. We expect our annual capital requirement after this year to go down significantly improving our cash flow. Total debt for the company was approximately $480 million senior secure borrowing of approximately 305 and convertible notes of 175 million.

We decide to defer a debt restructuring until we complete our strategic review but believe we have several strong options which will have a major positive impact on our debt profile. Just in concluding book to bill for the first quarter was first half was slightly over 1.0 to 1 driven by bookings in credentialing and enrollment businesses as well as federal and international bookings in our Biometrics and competitive winning in our Intel divisions.

As a result backlog was $1.3 billion or approximately $2 billion including options as of June 3. Back to you Bob.

Bob LaPenta

Thanks Jim. Now we’ll open it up for Q&A.

Question-and-Answer-Session

Operator

(Operator's Instructions) Our first question is coming from Paul Coster of JPMorgan.

Paul Coster - JPMorgan

Good morning. I have a few questions, but I will try and sort of pop in two quick ones here. First, Bob, can you explain to us what happened with the PASS Card business, why it got delayed and why the delay has no impact on EBITDA? What is the margin for that business?

Bob LaPenta

There it was delayed for two reasons. Number one, the demands for the card towards the end of the second quarter, the orders came in a little later than we had expected but I think the main reason was that we had some issues with a small number of the cards that were delaminating.

So we had to go through the entire stock of cards and determine what the issues were and we’re talking of millions of cards. We found maybe a couple of hundred cards that were delaminating. However, we had to find a core through that and that really delayed the shipment of the orders that we had by a couple of months.

We’ve identified the problem, we think we’ve narrowed it down to a particular batch that were produced on a particular day and now we’re about to resume shipments. So that will all happen in the second half. The margins are what.

Jim DePalma

We don’t have to get involved in specific margins.

Bob LaPenta

That’s a very profitable progress.

Paul Coster - JPMorgan

Okay. The other question I have got is the DMV business in particular looks like it is going to start to generate pretty strong cash. The CapEx is about to decline and you are instituting price increases, which is all good. Can you explain to us how you go about raising prices and what, if anything is the customer reaction to it?

Bob LaPenta

Good question Paul. As you know a lot of stakes even though there has been a lot of controversy on real ID most of the stakes are positioning themselves to improve their processes and fuel the security or their cards.

As you probably know over 35 states have already implement facial recognition. So the increase comes from the higher quality card it comes that with the more secure features on the card.

We are providing facial recognition software and basically improving the overall process that drivers license in each stage are using, that resulted in higher per card pricing and you can range from $2.00 in some states to in some of the smaller states $5 and $6.00, those contracts are already in backlog the customers, everyone of these is being competitive, and again we won 19 out of 22 procurements and as you probably know we did loose one in North Carolina to a competitor but again our success rate I think has been exemplary, we have great relations with the customers.

The credentialing business is a great business and I think and I know and I should point out, we said this year was going to be a really a transition year for L-1, and I think we are really proud of what we were able to achieve this year and we are really confident, what we are going to be able to do in the second. But the credentialing business when these programs now move into production you are talking a company that will grow north of 15% and have EBITDA margins of you are talking 30%, cash flow margins of over 55%. This is a franchisee we have 45 states and this business is in backlog.

In addition to that we are competing for the recent peak of the EPS program where you may recall there was some controversy about foreign providers in that program, don’t know if we are going to win but we are optimistic that we are going to get a piece of that.

Really not reflected in our numbers and we are also encouraged about this CAT-BPSS program which as been delayed. We are expected to be down selected over the next week or two. We really think we have a solution and we think that program is going to be a key security program for the US. But again this is a franchisee of very valuable business and I’ll be glad to take any of you through the details and I’m sure you would be impressed.

Jim DePalma

And as I think as I’ve indicated we spent $100 million over the past 18 months so starting in 2011 we are not spending that money in capital and b we are going to get an essence of that money back plus as we increase the prices already in backlog for those department of motor vehicle states that we’ve built up in the last two years.

Paul Coster - JPMorgan

The cost of the strategic alternatives, the hiring of the bankers, is that included in the EBITDA guidance?

Bob LaPenta

The cost of bankers is excluded in the 110 to 120

Operator

Your next question comes from Brian Ruttenbur of Morgan Keegan.

Brian Rutternbur - Morgan Keegan

Thank you very much. Can we talk a little bit about weighting the revenue for the second half of the year? Is it going to be up the revenue left you're going to produce, is it going to be primarily fourth quarter, 60%, 70% fourth quarter or 50/50? Can we talk a little bit about that?

Jim DePalma

Let me just use my calculator here for one second. I’m going to say that it's, just let me do this for one second. It is about 45% in the third quarter, actually about 47% in the third quarter and 53% in the fourth quarter and we’re already into August. So we’ve got a pretty good sense of the third quarter now.

Brian Rutternbur - Morgan Keegan

Okay and in terms of GAAP earnings profitability, do you anticipate being GAAP profitability in either the third or fourth quarters?

Jim DePalma

I think the answer to that is yes but let me just.

Bob LaPenta

The answer is yes and then yes.

Brian Rutternbur - Morgan Keegan

Ok, very good. Those are my questions, thank you very much.

Operator

Your next question comes from Michael French of Morgan Joseph.

Michael French - Morgan Joseph

Operator

Mr. French, your line is open.

Operator

Your next question comes from Michael Kim of Imperial Capital.

Michael Kim - Imperial Capital

Hi, good morning. Just first on the Biometric side, can you talk about the opportunities for follow-on orders for HIIDE 4, HIIDE 5 beyond Afghanistan and how you see that tracking into fiscal '11?

Bob LaPenta

As we indicated in our press release we have completed the development of a software solution that will enable us to integrate with this database and to integrate a HIIDE 4 or 5 into the database of many countries it's an exciting development. We believe we are going expand our customer bases starting in the second half but we have already begun shipping our HIIDE 5s to this Middle East new customer who has a tremendous capability and we just like that I think in a press release. There is really nothing like that device and we are looking for opportunities in additional Middle Eastern countries, Israel and in Latin America when they see the device they are excited about it and we think we are going to start receiving orders very shortly.

Michael Kim - Imperial Capital

Okay. And then, secondly, on the Africa opportunity you talked about with I think you mentioned around $5 million in the second half, what is your visibility on that and how can you frame that opportunity for fiscal '11?

Bob LaPenta

Again we’ve been informed by the customer that we been selected for that award and as is typical this business I don’t like it as much as you do, we were waiting to get aside purchase order that included in our, I think about 5, $6 million in that is included in our second half we expect to get in an order on one of the programs literally in week or two and on the other program in September and those programs combined are over $50 million.

Michael Kim - Imperial Capital

And then just lastly I know you are constraint what you can talk about the strategic alternatives but I’m throw in there you mentioned about interest from several foreign entities what’s the sensitivity with regard to some of your Federal ID programs you are positioning there and how that might impact your relationship with those customers?

Bob LaPenta

Again I can’t really provide too much color on that but it’s surprising to say a lot of due diligence has occurred over the past two months on both ends. We have a US parties and international parties that have done a lot work really I’m very impressed on the process and what these companies have done. We continue to talk to them and we are hoping within the next couple of weeks to have something to say.

Michael Kim - Imperial Capital

And you are still committed to a combined transaction with a intelligence services business or have your thoughts changed on that front?

Bob LaPenta

No what is going to happen we believe is there is a group of companies interested in Intel and there are group of companies in the vanity solution business.

Jim DePalma

And our NOLs give us a lot of flexibility on this contract sides.

Operator

Your next question comes from Steve Velgot of Susquehana,

Steve Velgot - Susquehana

I wanted to make sure I’ve heard something correctly before Bob when you were talking about the devices as part of the program in India. You are one of the two providers that would provide upto 300,000 devices or could you just go into that a little bit further?

Bob LaPenta

Yes, the requirement for and as you know, this program is multi modal including Finger and Iris. And again, when you talk multi modal, L-1 goes right to the head of the class. Our software is superior and improving just about test. The processing speed, the accuracy, it’s a good piece of software. But in order to enroll all the people that are going to be involved in this program was the requirement over the next 2 to 3 years of over 300,000 devices. We are one of two certified providers of the cameras and the live scans. I don’t want to talk numbers but they are very large.

Steve Velgot - Susquehana

Okay. And then just to give a little bit more color around how this seems like kind of the holy grail of ID solutions in India. But other than the de-duping fee that you receive, and I know you didn't want to put numbers on the devices, but is there a service component as well or is there training of the people in India that has to take place or how does this program roll out?

Bob LaPenta

The answer is yes and yes. We again, we were establishing and manufacturing capability. We have engineers in India and this program we believe is just the beginning. After the two year period, there’ll be a requirement for over a billion people to be enrolled.

We are well positioned there but again, we think there’s going to be additional training, a service, product requirement. India is going to be a great foot print, now some of the losers have been bad mouthing the winners and I can only tell you that they the losers tried desperately to get on this program so the fact that they are denigrating the program now is pretty interesting.

Steve Velgot - Susquehana

Okay. And then just one last one. And I know you had mentioned something about controversies surrounding when there is foreign buyers or foreign businesses providing some of these identity solutions. I guess that wasn't the case in North Carolina, but is it at all the case that any of the driver's license businesses would have some sort of negotiated out if there is a change in control of the company?

Bob LaPenta

The answer to that is no, but I really don’t want, it I can only tell you that we are pleased with the process and we are very pleased to have the number of companies interested after very detailed due diligence and I would hope to have someone talk to about it, maybe three weeks.

Operator

Your final question comes from Michael French of Morgan Joseph

Michael French - Morgan Joseph

Good morning, First question on the ABIS contract with the US government customer and you expect the additional 5 million in the third quarter do you expect them to come back in the fourth quarter for any additional above the 10 million in total?

Bob LaPenta

The answer is yes I don’t want to provide a lot of details but there is another license that we are currently working and the customer is very interested in but for competitive reasons I don’t want to really talk too much about that.

Michael French - Morgan Joseph

Okay. Well, since you brought this competitor up who could cause some delays here, are they still in the picture here trying to cause problems or have they ceased that activity?

Bob LaPenta

I really don’t want to comment on that. We are happy to have the position we have.

Michael French - Morgan Joseph

Okay. The decreasing guidance for this year was attributed to federal and international program delays. And you talked a little bit about that. I wonder if you could provide some more color on what is going on there and when we should start seeing more data points on that?

Bob LaPenta

I think you seen it really across the Board in the DOD space. DHS, TSA things are just taking a lot longer to get done. I can’t really put my finger on it but there were couple of US programs that we were hoping to generate some additional revenue this year and namely the CAT BPSS where we are hoping to book that already.

It’s a nice program valued over $55 million. We were hoping to get some revenue and I’m hoping that more successfully on this EPS program but the programs overseas this win that we had in Africa another one we had hope to already start recording revenue along.

So there are taking longer but as I’ve indicated the positive things the pipeline is expanding dramatically and we have over $1.2 billion in bids outstanding and we haven’t lost any material contract.

We lost one state contract in a moment and we lost really one DMV contract in North Carolina. But we were successful in I would say 80 to 90% of all of our recompetes and all other programs that were currently bidding on.

So it's just taken longer and I am as frustrated as you are believe me but the good news is the pipeline is big our backlog is big and when we started down this journey five years ago, we thought this space would really, really revolutionize the way the world travels, the way they cross borders, they way they run elections, national ID and I got to tell you, its coming fruition its an exciting space and we think this year we’re going to grow over 10% organically and next year we think that’s going to be maybe close to 50% and a lot of that is already in backlog.

Operator

Thank you. I will now turn the floor back over to Mr. Bob LaPenta for closing remarks.

Bob LaPenta

Well I know everybody’s busy, there’s a lot of earnings out today I. I appreciate your participation. Again, we look forward to updating you on the strategic process in about three weeks and I’ll just say, have a good day. Thank you.

Operator

Thank you. This concludes today’s teleconference. Today’s call is being recorded and will be available for replay beginning two hours from the conclusion of this call. The dial in number for the replay is 1800-642-1687 for US callers and 706-645-9291 for those outside the U.S. The pass code is 85797798.

Thank you please disconnect your lines at this time.

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