Executives
Brett Perry – Shelton Group
Larry Ciaccia – President, CEO and COO
Phil Calamia – Interim CFO
Analysts
Andrew Bennett – Raymond James
Steve Smigie – Raymond James
AuthenTec, Inc. (AUTH) Q3 2010 Earnings Conference Call November 9, 2010 5:00 PM ET
Operator
Welcome to AuthenTec’s third quarter 2010 financial results conference call. At this time all participants are in a listen only mode. At the conclusion of today’s call, instructions will be given for a question-and-answer session. As a reminder, this conference is being recorded today, Tuesday, November 9, 2010. I would now like to turn the call over Brett Perry with Shelton Group Investor Relations Agency of record for AuthenTec.
Brett Perry
Thank you everyone for joining us today to discuss AuthenTec’s third quarter 2010 financial results. With me today on the call are Larry Ciaccia, AuthenTec’s CEO and Philip Calamia, Interim CFO. As the operator mentioned this call is being recorded. It’s also being broadcast live in voice mode over the internet and may be accessed in the investor relations section of AuthenTec’s website at investors.authentec.com.
After the market closed today, AuthenTec issued a press release discussing its financial results for the third quarter ended October 1, 2010. By now everyone should have access to the press release and financial tables. However, if you do not, they are available on the company’s website.
Please be advised that the matters discussed in this teleconference contain forward-looking statements regarding future results or events. We caution you that such statements are in fact predictions that are subject to risks and uncertainties that could cause actual events or results to differ materially. Additional risks and uncertainties that could cause actual events or results to differ materially from these forward-looking statements may be found in the company’s filings with the Securities and Exchange Commission. Forward-looking statements are based on the company’s beliefs as of today, Tuesday, November 9, 2010. AuthenTec undertakes no obligation or responsibility to publicly update any forward-looking statements for any reason except as is required by law, even if new information becomes available or other events occur in future.
Additionally, in the company’s press release and during this teleconference, management will discuss certain measures and information in GAAP and non-GAAP terms. A reconciliation of GAAP to non-GAAP results is provided in the financial tables following the text of today’s press release.
I will now turn the call over to AuthenTec’s CEO, Larry Ciaccia. Please go ahead, Larry.
Larry Ciaccia
Thanks Brett, and good afternoon to everyone. Before we get into business and highlights for our third quarter, I’ll provide a brief update on the integration activities related to our September merger with UPECK, which brought together the two worldwide leaders in fingerprint sensors and related security software.
Since our announcement, we have been working diligently to integrate the two companies in an effort to accelerate the achievement of our cost synergies as well as our financial and strategic objectives.
From a structural perspective, we have organized a new AuthenTec into four product lines. These four product lines will provide us with a structure that broadens our revenue opportunities while provided the focused emphasis on our key markets and strategies.
It will be grouped into two reporting segments; Smart Sensor Solutions, or SSS and Embedded Security Systems or ESS. I’d like to take a few minutes to describe each of these product lines.
Our SSS business is made up of three product lines; smart fingerprint sensors, software in e-commerce and government and access control. The first of these products line, smart fingerprint sensors brings together the combined fingerprint sensor portfolios of AuthenTec and UPEK and is focused on our target markets in PC and wireless. These core markets continue to represent a large and growing opportunity with total annual volume exceeding several hundred million units.
The second product line is software and e-commerce solutions, which includes our True Suite, True Suite Mobile and Protecta Suite identity management software as well our icon family of USB fingerprint readers. This new product line will also include our web based e-commerce initiatives, providing customers with updated and premium versions of our software, along with compelling down loadable application developed by us, our partner network and third party developers.
These products will be sold through our web store and we envision this product line as an opportunity to accelerate the adoption of sensors in our core markets and also serve as a source of new revenue growth.
The third product line is government and access control solutions, represented by our family of touch sensors, including the industry’s only silicon based U.S. government FIBS201 compliant fingerprint sensor.
In the past, access control has been a secondary market for AuthenTec as we chose to focus primarily on PC and wireless opportunities. With the merger of UPEK, we are adding a product line with unique competitive positioning that addresses a very large total available market. We expect this business to be a material contributor to our revenue growth next year.
Complimenting SSS will be our Embedded Securities Solutions business, our second reporting segment, which we acquired from Safe Net earlier this year and has now been fully integrated into our company. This growing, profitable and high margin business addresses point to point security through semiconductor IP, software tool kits and content protection solutions required by a broad range of products and consumer and enterprise markets.
These four product lines bring together the integration of our last three transactions in a structure that will allow us to aggressively pursue the large market opportunities spanning consumer, enterprise and government security.
In addition, we now have the customer and market diversity to reduce our concentration exposure to any single market segment, which enables us to better capitalize in the opportunities in all our target markets. For example, while we expect growth in our PC segment, it is estimated this will represent just over 25% of our revenue in 2011, down from over 75% of our revenue in 2009.
In terms of the progress we have made on our integration activities, we are on track or ahead of the plans communicated during the merger conference call in September. We fully expect to achieve our $10 million in annualized cost synergy target beginning in 2011 and will start to see the initial benefits of our actions in Q4 of this year.
Recently, we have taken a number of key steps towards achieving these goals. Earlier this week, we instituted a reduction of approximately 25% of our worldwide work force, which will be essentially completed by the end of this year, fully completed by quarter one, 2011.
We have also taken action to consolidate the vast majority of our operations and work force located in Singapore, into our U.S. and China based locations, and we expect this also to be largely completed by the end of this year.
We do not anticipate any significant customer or business continuity issues related to these two actions, and if fact, believe we’ll be able to service our accounts in a more efficient and cost effective manner.
The merger with UPEK provided us an opportunity to take advantage of unique synergies between the two companies in a manner that will reduce our overall affects, while accelerating our strategic goals and providing a more definitive path to profitability.
Before turning it over to Phil for our detailed financial result, I’d like to discuss our third quarter customer product highlights.
Looking first to PC, as a result of the merger with UPEK, we have broadened our offering of sensors, package options, modules, complete match on module solutions. When combined with our complete software applications offering for enterprise and consumer, I believe we offer a more compelling value proposition tour PC customers.
We have been very active since the merger announcement, leveraging this newly expanded portfolio and the opportunities it will provide for future growth.
This quarter, we also achieved a design win with a major PC OEM for our AES 1660, our small sensor for PC markets and multiple commercial laptop models and expect initial shipments in mid-2011. We continue to see adoption of our smaller, more cost effective sensors across the PC market.
Turning to wireless, we announced a new Smart Sensor at the CTIA show in October. The Smart Sensor is the AES850 formerly code named Saturn, and is unlike any sensor on the market today. It is the smallest sensor we’ve offered and is designed to package for easy integration as an authentication device that also functions as a central or secondary navigation device on the next generation of smart phones.
Due to its form factor and small size, the AES 850’s functionality offers a significant value compared to navigation only devices at a very competitive price. This new addition to our wireless Smart Sensor portfolio compliments our AES 1750 Smart Sensor. We are actively engaged with several top hand set OEM’s that are currently evaluating the 850 for integration into their future products. Volume production is expected to begin in the first quarter of 2011.
During the quarter, we also received our first production order for one of our Smart Sensors that will be integrated in a new android based phone from a top five mobile phone OEM. We will support the OEM in a production ramp up with this yet to be announced phone for the U.S. market in the fourth quarter 2010, and the first quarter of 2011.
As we have stated many times, software is a key element in our strategy to further penetrate our target markets going forward. With the addition of UPEK, we have significantly added to our software capabilities and product offerings allowing us to accelerate our software related strategies across multiple markets.
These activities will now be managed in the newly formed software and e-commerce product line that I discussed earlier. This quarter, we had two significant announcements related to software.
First, we announced the availability of our True Suite Identity Management software for PC’s via download page accessible on our website. Existing PC users who upgrade to Windows 7 can receive our True Suite starter version for Microsoft’s Windows automatic update, and can upgrade to True Suite Premium by visiting our download page.
True Suite is now shipping on multiple notebook and net book models from four PC OEM’s and is expected to be included on models from at least six PC OEM’s next year, representing a pre-install base of more than 10 million PC’s by the end of 2011.
We expect True Suite to generate incremental revenue, establish new non OEM channels for AuthenTec and help grow the market by proliferating new sensor apps created by AuthenTec, our partners and developers.
We also announce a version of True Suite for mobile phones called True Suite Net Mobile. Optimized for the android operating system, it has an easy to use API to facilitate third party development of apps that can fully leverage the functionality of our sensors.
True Suite Mobile will be offered with our newest mobile sensors and is designed to simplify and secure the management of personal data through an intuitive interface for easy sensor set up and customizable user settings. True Suite Mobile is a result of customer and user feedback from over 12 million AuthenTec enabled phones, and we expect to offer our first application specifically for mobile via the android marketplace in our own web store in the first half of 2011.
Combined with our new product line of software and e-commerce solutions, we have positioned AuthenTec to drive increased adoption of sensors in both PC and wireless markets while setting the stage for standalone revenue producing business. Our intent is for these activities to fundamentally change how sensors are used in end products.
Our newly formed government and access control product line will offer government and commercial markets a portfolio of touch sensors and modules for applications in physical and logical access as well as mobile ID. One of our partners is submitting to the GSA’s approved product list, their hand held biometric terminal that includes our certified touch sensor, which will enable it to be purchased by government agencies such as the Department of Homeland Security.
Another partner is integrating our FIPS201 certified sensor module into a tri-modal; biometric hand held device combining our sensor technology with facial and iris recognition in a compact accessory sleeve for the I-phone. Both of these could begin production by mid next year.
We expect this product line to be a material part of our revenue in 2011 and to bring higher margins and ASP’s than our swipe sensors for PC and wireless. The government and ID markets has seen a lot of activity in recent months, as evidenced by the acquisition of our long time partners, Cogent and L1, by 3M and by Saffron respectively.
We look forward to participating in these attractive markets and the additional revenue growth opportunities they represent.
Looking now at the Embedded Security Solutions business, we had a great quarter in this business with revenue up 46% from the previous quarter. This business, which is now fully integrated into AuthenTec, was profitable again for the quarter and generated over $1 million of pro forma operating income.
One of our ESS design wins was highlighted by Motorola CPIA, where they announced that their new droid pro-mobile phone that incorporates our VP and client solution for androids. The Droid Pro is aimed at the enterprise market and incorporates our quick set DP Incline security solution, pre-installed at a VPN app.
This application ensures secure communication between Droid Pro users and networks to which they connect. Not only is our VPN app the first on the market to support Cisco IP set, it also offers inter-operability with the leading VPN gateways from Checkpoint, Juniper and many others.
This design win underscores the total security solution that AuthenTec can bring to mobile phones and other devices. We can now offer OEM’s not only client security through our Smart Sensor solutions, but also provide identity management software to enhance sensor features, and ensure point to point security via our embedded security solutions such as Quick Set, VPN and Client for Android.
Also in our Embedded Security business we announced earlier today that Applied Micro Circuits has selected our semiconductor IP to enhance security features in its new packet pro security processor. They chose our safe XL solution because it offers critical security functionality and high speed cryptographic features without compromising processor through put.
We look forward to support Applied Micro in its roll out of the packet pro family and additional embedded security opportunities.
Now I’ll turn the call over to our interim CFO, Phil Calamia, who will provide detailed financial results during the third quarter as well as an outlook for quarter four.
Phil Calamia
Thanks Larry. Good afternoon everyone. Revenue for the third quarter of 2010 was $10.2 million, which was at the midpoint of our previously updated guidance provided on September 7, 2010. These results included approximately one month of UPEK revenue, which is now reported as part of our Smart Sensor Solution segment.
The $10.2 million is comprised of approximately $4.1 million of revenue from Embedded Security Solutions and $6.1 million from Smart Sensor Solutions.
Smart Sensor revenue decreased from $7.9 million recorded in the second quarter of 2010 and the $10.3 million recorded in the year ago quarter. This decrease was primarily due to the previously announced OEM transitions of notebook models to the Intel Capella platforms that did not include AuthenTec fingerprint sensors, but was partially offset by the increased sale of wireless products during the quarter.
Sensors for the wireless market comprised 29% of our Smart Sensor revenue in the third quarter of 2010 as compared to 17% in the third quarter of 2009, representing a year over year growth of 65% and a sequential growth of 26%. Growth in wireless products was driven primarily by the ramp up of our new AES 1750 Smart Sensor to support two new mobile phones by Jujitsu.
Sequentially, the Embedded Security revenue of $4.1 million represented a 46% increase from Q2 driven primarily by license fees recorded during the quarter. On a GAAP basis, consolidated net loss for the quarter was $11.5 million or $0.37 per diluted share. This includes a one-time cost of litigation related to the UPEK merger of approximately $4 million and compared to a GAAP net loss of $3.9 million or $0.13 per diluted share in the second quarter of 2010, and a GAAP net loss of $4.2 million or $0.14 per diluted share in the third quarter of 2009.
On a non-GAAP basis, consolidated net loss for the third quarter of 2010 was $3.6 million or $0.11 per diluted share. This compares to our updated guidance of a loss of between $0.10 and $0.12 per share. These results, compared to a non-GAAP loss of $2.5 million or $0.08 per diluted share in the second quarter of 2010 and a non-GAAP net loss of $1.5 million or $0.05 per diluted share in the third quarter of 2009.
Non-GAAP results exclude certain legal and other one-time costs including those associated with the UPEK transaction, stock based compensation, amortization of acquired intangible assets and severance.
Non-GAAP net loss per share for the third quarter of 2010 was calculated using 31.5 million shares outstanding, which reflected the weighted average of approximately six million shares issued upon the closing of the UPEK merger.
Non-GAAP gross margin for the third quarter increased to 59.4% compared to 54.6% in the second quarter of 2010 and 46% in the third quarter of 2009. The 480 basis point sequential improvement in gross margin was due primarily to the higher mix of revenue from Embedded Security Solutions, which is a notably higher margin than that of the Smart Sensor segment.
Total operating expenses on a non-GAAP basis were $9.5 million compared to $8.3 million in the second quarter of 2010 and $6.3 million in the third quarter of 2009. Smart Sensor non-GAAP operating expenses in the third quarter were $6.9 million as compared to $6.1 million for the second quarter of 2010 and $6.3 million for third quarter of 2009. The increase was primarily due to the addition of the operating expenses of the newly acquired UPEK business.
Embedded Security Solutions non-GAAP operating expenses were $2.5 million as compared to $2.2 million for the second quarter of 2010.
Turning to the balance sheet, we ended the third quarter of 2010 with $36.1 million in cash and investments. This compares to $43.2 million in cash and investments at the end of the second quarter of 2010. As of October 1, 2010, accounts receivable were $10.8 million, up $5.2 million from the end of the second quarter of 2010, with the increase primarily due to the UPEK merger.
Day’s sales outstanding for the quarter were 103 days, up from the 48 days reported for the second quarter of 2010. At the end of the third quarter, inventory was $4.4 million, which represents 78 days on hand, and this reflects an increase as compared with the $1.7 million or 42 days on hand at the end of the second quarter of 2010.
The increase in both DSO and DSI versus the second quarter is due primarily to the addition of UPEK clients and products into the AuthenTec portfolio and is SKU’d with only one month of revenue from UPEK in the third quarter.
Capital expenditures for the third quarter were $259,000. Depreciation was $461,000 and amortization was $774,000.
As we’ve previously mentioned, when we announced the merger with UPEK, the combination of the two businesses presented a compelling opportunity for cost synergy. To meet our goal of achieving more than $10 million annualized cost synergies beginning in 2011, we have undertaken an integration plan that addresses the consolidation of manufacturing operations, a reduction in our global workforce and other cost saving actions that addresses the overlap of AuthenTec and UPEK.
We’ve begun a restructuring of UPEK’s Singapore operations that will reduce our expenses by approximately $5 million on an annualized basis, and we have also begun a substantial reduction in our workforce that eliminated redundancies across multiple functions and will yield savings of approximately $6 million on an annualized basis.
These and other cost reduction actions will bring us closer to our profitability goals while enabling us to continue funding the development of new products and technologies to fuel future growth. We expect these actions to be substantially complete during the first quarter of 2011.
Looking ahead to the fourth quarter of 2010, we expect revenue to range between $14 million and $15.2 million. We expect our non-GAAP blended gross margins to be approximately 50.5% during the fourth quarter. The reduction in gross margin as compared to the third quarter is due to the overall revenue mix between Smart Sensor and Embedded Security as affected by the addition of the UPEK suite of products into the Smart Sensor segment.
Regarding non-GAAP operating expenses, we expect our fourth quarter expenses to range between $11.5 and $12 million with the increase as compared to the third quarter due to the impact of full quarter of costs associated with the UPEK business, partially offset by the realization of initial cost synergies.
Earnings on our investment continue to be impacted by low interest rates and we expect our interest income in the fourth quarter to be approximately $35,000.
Finally, we expect the fourth quarter non-GAAP net loss per diluted share of between $0.11 and $0.13 based on approximately 36 million shares outstanding. This reflects the realization of approximately $1.1 million in cost synergies achieved through the manufacturing consolidation and the reduction in our global workforce.
Let me now turn the call over to the operator for questions and answers.
Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Andrew Bennett of Raymond James. You may proceed.
Andrew Bennett – Raymond James
Yes hi, this is Andrew calling in for Steve Smigie. Larry, can you talk, I think your gross margin is going to come down a little bit here in the fourth quarter because of UPEK as you guys mentioned, but you also alluded to the fact that PC’s are going to be declining quite a bit as a percentage in 2011. How do you see that kind of affecting your gross margin trajectory in the 2011 time frame?
Larry Ciaccia
Hi Andrew. One thing I want to make sure I was clear on, I did specifically mention I do think PC will be a much smaller percentage of our total revenue pie, certainly as compared to last year. But we do expect that business to grow next year.
I think gross margin certainly staying above the 50% threshold for next year is in our plans, and I think with the business composition we have, that’ll be achievable. But there’s naturally going to be some pressure for those margins to come down a bit as we’ve added – we’ve grown the non-Embedded Security side of our business, because that business had very, very good gross margin so you do get some dilution effect of that gross margin impact by growing the other pieces of the business.
Andrew Bennett – Raymond James
OK. And can you talk a little bit about what the kind of the breakout of the Smart Sensor business was in the current quarter PC versus wireless?
Larry Ciaccia
Sure. So you want to know the mix between PC and wireless quarter to quarter. So the PC business for the quarter Andrew, the PC business was approximately $3 million and our wireless business was roughly about $3 million as well, so you look to the Smart Sensor, $6.1 million for the quarter, that was again roughly half between PC products and wireless products.
Andrew Bennett – Raymond James
OK. Is there any way that you guys could quantify what the – what might be the impact of some of the Atrua [ph] business was in that third quarter. I know you mentioned last call saw a little bit of traction with radar in China. I mean have you guys been seeing any more wins there from those products?
Larry Ciaccia
We actually do have some new wins in China with some of the Atrua product, but I would say that wasn’t a big swinger in our Q3 wireless revenue number. We continue to be happy with the pace we’re working through that inventory that we achieved through the Atrua transaction and we continue to get some new design wins in that region.
Andrew Bennett – Raymond James
OK. And then I guess broadly speaking, over the wireless space there can you talk to some of the trends you guys are seeing out there in the M-commerce maybe by geographic region, how things are kind of shaping up as you see it?
Larry Ciaccia
Sure. I think as we’ve discussed many times, the M-commerce model in Japan is firmly entrenched. They have their own form of NFC if you will with the bellaca [ph] type technology. So we continue to see the adoption of our sensors on phones particularly with Jujitsu growing and we’re now penetrating all three families of phones that Jujutsu offers to the Japan market, the prime, the smart and the style series.
We expect to see that moving the android in the near future and Jujutsu continues to take share from their competitors in Japan I think primarily because they’re able to differentiate with fingerprint sensors in mobile phones.
In the U.S., certainly android will be big and in terms of our activity on those android phones, we’re pretty pleased with the progress we’re making. We spoke about a phone that should come to market in Q1.
I do think, NFC, although it’s been talked about for quite a while, now with some of the latest alliances and collaborations in that area, I think mobile commerce will be more important in the U.S. going forward and NFC will become very relevant once again, and we’re happy about that because we really feel the sensor, securing those mobile commerce transactions are basically securing your money on the phone is the key value proposition for us, and I think the same can be said in Europe. In China, not really seeing a big NFC push yet.
Andrew Bennett – Raymond James
OK. And then I guess finally, now that you’ve kind of integrated UPEK here and reorganized the business into some, into these four units here, any update on the competitive landscape now that things are kind of restructured?
Larry Ciaccia
Well, there’s less competitors out there. There’s still two competitors in this market and I actually any healthy market should have multiple competitors in and we expect those competitors to compete very strongly for the business that’s out there.
But for us, what we really focus on is our own competitive positioning in the market and I couldn’t be more pleased with the results of the integration to date with UPEK. I think the addition of the team and the technology and the products in our portfolio, all the things that I talked about on the call related to software, the initiatives we’re doing there to offer more complete value proposition to our customers, I feel as though our competitive position in the market has advanced from all the actions and transactions we’ve made in the past year.
Andrew Bennett – Raymond James
OK, great. Thank you very much.
Operator
Your next question comes from the line of Steve Smigie of Raymond James. You may proceed.
Steve Smigie – Raymond James
Great, thanks guys. (Inaudible) Just going back to the NFC question, you guys maybe you’ve seen Apple has announced some focus in that area and also maybe some Broadcom buying some NFC capabilities here. Are those two things what gives you confidence in terms of North America adopting it or are you just touch on those two events that would be great.
Larry Ciaccia
Well certainly that and then the Verizon, AT&T, the banks are getting more involved again. I think there’s going to be a more concerted effort to figure out the eco system and coordinate the eco system and maybe some of the initiatives in the past. Certainly Nokia is committed to this, and I think you’ll see others.
So it’s just – Steve to us, it’s just really a collection of a lot of different data points that say this is starting to pick up momentum again, because I mean we’ve been down this road as you know. You’ve been following us a while. The big NFC push was something we thought was going to happen three years ago.
But sometimes these technologies take time to really stick, but I really think the time is right and you’re going to see momentum on that for sure move forward.
Steve Smigie – Raymond James
OK. You guys talked about a lot of cost savings. Can you give us some sense of what we should be thinking about in terms of R&D as a percentage of revenue and sales and marketing, G&A percentage of revenue as we go through 2011, what that should look like?
Larry Ciaccia
Yeah, we’ve – when we spoke at conferences and the like in the past, and I think you’ve seen this as well, we put up a target model that was centered around about $100 million of revenue business that said R&D, 19% to 21%, SG&A 19% to 21%.
As we go into the second half of next year, we’re going to be making very good progress towards that goal, and certainly in the fourth quarter on a run rate basis, we’ll be very – we hope to be very close to starting to make progress against that target model which frankly we’re quite a ways off most recently.
Steve Smigie – Raymond James
OK. Can you talk a little bit about how you see seasonality typically for Q1? (Inaudible) at this point, but your thoughts on what that is typically and what factors we should consider as we get into Q1 and help (inaudible) and new platforms rolling back on, new wins maybe, just talk about seasonality there.
Larry Ciaccia
Sure. And I think just speaking traditionally, the PC market independent of fingerprint as you know, many times is a bit of a letdown in Q1. But I think for us now, for our business, especially the balance we have across the segments, we would not expect overall to see a down quarter in Q1 due to seasonality.
And I think on the PC side, as we talked about as well in the past, with the transitions that affected us around the Carpel platforms, those have actually flushed through so to speak in quarter three and we expect our PC revenue to grow from this point going forward due to some design wins that will be coming online.
Steve Smigie – Raymond James
Talk a little bit about ASP’s in the quarter, what you saw there.
Larry Ciaccia
Sorry.
Steve Smigie – Raymond James
Can you talk a little bit about ASP’s in the quarter for the sensor business?
Larry Ciaccia
I think overall our ASP’s were relatively flat to Q2. I mean they were down a little, maybe a percent or so, but actually we saw a bit of a flattening Q2 to Q3 in the sensor business.
Steve Smigie – Raymond James
OK, great. Thanks a lot. I look forward to seeing how the merged pieces work together. Thanks a lot.
Larry Ciaccia
Thanks Steve.
Operator
This concludes the question and answer session of the call. I would now like to turn the call back over to Mr. Larry Ciaccia for closing remarks.
Larry Ciaccia
Thank you operator, and thank you everyone for joining us today. We are very excited about the new direction for AuthenTec, which we believe better positions us to achieve our financial and strategic goals, provide greater diversity in more markets, significantly expand our customer base and create greater scale for our business. I look forward to reporting additional progress in the coming quarters of the year.
Lastly, I’d like to take this opportunity to thank all the employees of our newly combined company for the hard work as all of AuthenTec’s customers and shareholders for their continued support. Thank you again for joining us on today’s call.
Operator
Ladies and gentlemen, thank you for your participation conference. This concludes the presentation. You may now disconnect.
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Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.
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