Good day, ladies and gentlemen, and welcome to the Q4 2010 PMC-Sierra Earnings Call. Today's call is being recorded this Thursday, January 27, 2011.
At this time I would like to turn the conference over to Mr. David Climie, Vice President of Marketing Communications. Please go ahead, Mr. Climie.
Thank you. Good afternoon, everyone, and thank you for attending our investor conference call. With us on the call today is Greg Lang, President and CEO, and Mike Zellner, Vice President and CFO.
Please note that our fourth quarter 2010 earnings release was disseminated today via BusinessWire after market close and a copy of the release can be downloaded from our website.
Before we begin, I'd like to point out that during the course of this conference call we'll be making forward-looking statements that involve a number of risks and uncertainties. These risks and uncertainties include but are not limited to product demands, inventory levels, pricing, exchange rates, taxation rates and other risk factors that detailed in the company's SEC filings. Actual results may differ materially from the company's projections. For further information about these risks and uncertainties, please read the company's SEC filings including our forms 10-K and 10-Q.
If you're asking a question during the Q&A session of today's call, we'd request that you limit yourself to one question, and if you'd like to ask a second question, please re-queue with the operator. Thank you.
And I'll now turn the call over to Mike.
Thanks, Dave. I'll review our fourth quarter 2010 results and financial position and then turn it over to Greg to discuss our business activity in detail.
As expected, revenue in Q4 was slightly lower on a sequential basis at $159.3 million, a decrease of $3 million or 2% compared with Q3 revenue of $162.3 million. The Q4 revenue included approximately $6 million of revenue from our acquisition of Wintegra which closed on November 18, 2010. In Q4 we had one customer that represented greater than 10% of our revenues calculated on a rolling 12-month basis, namely HP.
On a non-GAAP, gross margin in the fourth quarter was 68.2% compared with 67% in Q3. This increase of 120 basis points was driven by product mix with a greater proportion of sales of higher margin WAN infrastructure products this quarter and lower sales in the area of microprocessors and Fiber to the Home as expected.
On a non-GAAP basis, operating expenses increased by $7.4 million from $65 million in Q3 to $72.4 million in Q4. Approximately half of the increase relates to the operating cost of Wintegra since the completion of the acquisition in mid-November. And the balance related to continued investment in R&D projects as planned as well as incremental tape-out cost.
In Q4 our non-GAAP operating margin was 23% compared with 27% in Q3, mainly due to Q4's lower revenue profile. Non-GAAP tax provision was higher as expected in the fourth quarter at $2.5 million compared to $1.6 million in Q3.
Non-GAAP net income for Q4 was 34.6 million or $0.15 per share on a diluted basis, representing an $8.3 million decrease from the $42.9 million or $0.18 per share generated in Q3. Q4 GAAP diluted net income per share was $0.05 versus $0.06 in Q3.
Please note that for each historical non-GAAP financial measure mentioned on this call, that a full reconciliation to the most comparable GAAP financial measure is included in our press release issued today. In addition, our GAAP to non-GAAP reconciliation of financial measures that will be provided in our outlook will be posted on our website under the Financial Reporting section of the Investor Relations tab.
The primary reconciling items for Q4 are as follows -- $7.4 million in amortization of purchased intangible assets, $5.6 million in stock-based compensation expense, $800,000 of non-cash interest expense, $6.7 million of acquisition-related costs, $4.5 million gain recorded on our previous investments in Wintegra, $3.8 million recovery of our investment in the reserve fund, and $10.8 million of income tax related adjustments as described in our press release.
Turning to the balance sheet, we entered the quarter with over $583 million of cash and cash equivalents, short-term investments and investment securities. Our cash position at year-end net of the $68.3 million face value of our convertible notes in the $181 million short-term bridge loan relating to the Wintegra acquisition was $334 million, a decrease of $153 million from Q3. This decrease primarily relates to approximately $204 million cash paid on the acquisition of Wintegra net of their cash acquired, $5.9 million of IP in capital expenditures, offset by $49.3 million of positive cash flow generated from operations adjusted for non-cash items and an additional $3.5 million of cash for employees related to stock issuances. In addition, please note that the short-term bridge loan related to the acquisition of Wintegra that was outstanding at our year-end was repaid in its entirety early this month.
Accounts receivable decreased $7.5 million to $69.3 million. Excluding Wintegra, we had 36 days of sales outstanding based on our quarterly sales volume, which remains a very healthy collections profile.
Our net inventory at year-end was $51.1 million, an increase of $15 million from the prior quarter. $13.9 million of this increase relates to inventory of Wintegra, including related fair value adjustments required under purchase accounting. The balance of our inventory increased slightly by $1.1 million or 3% from Q3.
We also saw a decrease in our deferred revenue from Q3 to Q4 which relates to inventory at our distributors. Regarding turns excluding Wintegra, our net inventory turns decreased to 5.2 times compared to 6 times in Q3 while at our distributors we saw an improvement in their turns of inventory, as mentioned.
So overall, although we did experience some working down of inventories in the supply chain, we believe our inventory levels including at distributors remains well-managed and the lead times from our factory partners have held steady.
With that, I'll turn the call over to Greg for briefing.
Thanks, Mike. Before I talk about the fourth quarter and the outlook for Q1, I'd like to take a -- make a few comments about PMC's performance in 2010.
Our total revenue last year was around $635 million, up 28% over 2009. If we exclude revenues from the acquisitions of Adaptec assets and Wintegra, revenue increased 20% year-over-year. Perhaps more interesting is that our revenue is up roughly 14% over our 2008 peak of $525 million. It's refreshing to see a quick recovery from the recession and a resumption of growth in our business.
From a cash generation perspective, we generated more than $174 million in non-GAAP operating income in 2010, providing an operating margin of 27% and non-GAAP EPS of $0.72 per share which is 44% growth over 2009 and 64% over a strong 2008.
Also very pleased to complete two solid acquisitions during the year, namely the acquisition of Wintegra, a fast-growing leader in the mobile backhaul market segment, and the purchase of Adaptec channel storage assets. Both of these deals have expanded our product pipeline, our expertise and our presence in key growth areas of storage and wide area infrastructure market.
Our operating metrics remained healthy with gross margin and operating income running in our target range, in our internal, and thus the inventory level is in good shape. Balance sheet is strong at the end of the year with a net cash position of $334 million. So overall 2010 was an excellent year.
So now let's talk about the fourth quarter of 2010. Fourth quarter results came in near the middle of our outlook excluding Wintegra. Net revenues ended at about $159.3 million with approximately $6 million from Wintegra during the stub period. Gross margins were in the middle of the outlook range and non-GAAP EPS of $0.15 was in line with analyst consensus. So the quarter was pretty much as expected.
Now by market segment, in the storage market segment, the enterprise IT spending environment remained healthy in Q4. Our top-tier storage customers continue to ramp their new 6-gig SAS platforms in the fourth quarter, and we expect these ramps to continue into 2011. We had very strong design wins in enterprise storage again in Q4. It's our strongest quarterly wins of the year.
We're very pleased to see EMC announce 41 products, new products, last week, including its VNX, VNXe, and VMAX refresh platforms, all with PMC content, and the latter now using our QE8 advanced controller with security encryption.
We're progressing very well on our new Series 6 product which is a 6-gig SAS solution running Adaptec's channel Hybrid [ph] RAID on our 6-gig RAID-on-chip, and zero maintenance cash protection. This is planned for launch at the end of this quarter and we expect to get very good traction in the channel with this product when it launches.
In the wide area network infrastructure market segment which includes both our wireline and wireless infrastructure products, activity declined slightly in Q4 with Europe being the slowest region in the quarter. Customers continue to work down inventory, and while we had anticipated this, we thought it would have been done at a faster rate.
In Q4 we began shipping our leading 10-gig and 20-gig hi-fi devices for OTN transport platforms as well as our META 20-gig solution for routing platforms. Production samples have been ordered by 15 of the top transport OEMs which represents all but one of the top tier. And on the router side, we shipped META devices to four of the five top router OEMs.
So as carriers move to packet-centric network architectures, PMC is well-positioned to deliver end-to-end multiservice OTN switching. We believe that this deployment of OTN will be a long-term secular growth driver. In the Q4 we secured several new OTN design wins with our OEM customers in China, Europe, Korea and Japan.
In the past few days we also announced the next-generation forward error correction, or FEC, technology for high-performance 40 and 100-gig OTN deployments. To reduce optical impairments in high-speed networking gear, you need advanced forward error correction, and our new Swizzle FEC device compensates for these impairments by correcting up to four times as many errors as any competitive solution and with 35% greater optical reach. This is another example of how we're building our technology portfolio to move quickly into the 40-gig and 100-gig OTN market segments, securing new customers and design wins in this area with innovative leading technology.
Our investment in mobile infrastructure has expanded with the acquisition Wintegra which finished the fourth quarter on solid footing with many new additional design wins for mobile backhaul, wireless base station and broadband access networks. Both European and North American customer demand remains healthy and the integration of this high-velocity Wintegra team into PMC has gone very well. We continue to expect this business to achieve growth of about 20% year-over-year given carrier requirements for improved backhaul capacity to support the ramp of more and more smartphones, tablets and laptops.
Beyond Wintegra, we announced two new wireless radio products for next-gen platforms called the SynthePHY and SyntheClock [ph]. These are the industry's highest-density dual channel 6-gig SERDES and clock synthesizer solutions for mobile applications. We started to ship to OEM customers in Japan, Europe and China. This is another entry point for PMC into the RF and Remote Radio Head market segment which we believe will produce or provide us with new growth opportunities.
In broadband access, our Fiber to the Home market segment was lower in Q4 as expected, but a bit better than we thought due to improvements in China. We expect our Fiber to the Home business to improve in Q1 again as EPON and GPON deployments expand. We expect the carriers in China will be planning for growth in subscribers in the range of 20% to 30% higher than 2010, which should bode well for equipment deployment. We also expect to see 2011, an increased focus from our customers and the carriers on 10-gig product evaluations in both Japan and China, so we'll be addressing those opportunities with solutions soon to be announced.
So now let's look at our first quarter outlook. Based on our backlog and bookings to date, we currently anticipate that PMC's revenue in the first quarter of 2011 will be in the range of $150 million to $160 million which is roughly flat to down 6% sequentially. This includes approximately $13 million to $15 million in revenue from the Wintegra acquisition.
There are also -- excuse me -- there are a couple of major factors that come into play in this first quarter including -- the first and biggest is the general seasonality of the enterprise storage market segment which historically experience lower levels of activity in Q1, approximately 5% to 10%. We see this at the higher end of the range this year as new 6-gig SAS platform rollouts rolled out some additional inventory at a couple of customers. We believe both factors will improve going into Q2.
And second, the continued work-down of inventory with several of our WAN infrastructure customers. To give us some perspective, our WAN revenue from China OEMs is down approximately 50% from the first half of 2010, while our European and North America OEMs are down about 20%. This, mind you, is on very solid market share position and not a market share loss. So we expect to make more progress burning off the inventory in Q4 but now expect this continue through Q1 which we currently anticipate revenue to start picking up in the Q2 timeframe.
While the inventory consumption is taking longer than expected, we're seeing some good signs with pull-in request for both storage and telecom customers and China wide area network revenue starting to recover. Of course we'll need to see broader evidence going forward and therefore remain prudent. But this is a good sign that customers are in fact working down their inventories.
We also feel the end-markets we serve are very healthy. The server and storage industry remains robust as witnessed by Intel's recent announcement and announcements from our customers such as EMC, IBM, HP and NetApp. And rapid growth in mobile and wire traffic will continue as reflected in Verizon and Ericsson's commentary this week as well. We expect this to keep carriers active in deploying new infrastructure and networking technology.
And to step back for a second, we see three major trends in the industry that are fundamentally driving our business over the next several years. Number one, the digitization of media and the explosion of video streaming that continues to drive increasing requirements for storage and network transmission capacity. Number two, the rapid increase in smartphone and tablets that drive enormous data growth over wireless networks. And three, cloud computing which is driving greater needs for storage and access in and out of the data centers as well as across the networks. These fundamental drivers are pressuring the transition from TDM to packet-based network equipment and the growth of high-performance storage. And I believe that PMC is very well-positioned to benefit from these trends.
We continue to invest in critical new technologies and solutions for our storage in communication OEM customers to enable them to build leading next-generation equipment that will be deployed by carriers and enterprises around the world. Our gross margins are strong, our market share is solid and growing, and our inventories are in good shape.
So with that, I'll turn it back over to Mike for details -- more details on the first quarter outlook.
Thanks, Greg. I'll now provide more information about our Q1 outlook.
Considering current levels of demand our expectation of booking rates through the balance of the quarter, we estimate that the essential revenue for PMC-Sierra for Q4 is in the range of $150 million to $160 million, as Greg mentioned.
Just shipped and shippable backlog as of December 31 was approximately $116 million and as of today is approximately $138 million, indicating that we would need approximately 25% turns from the end of December and 11% turns from this date to get to the midpoint of our revenue guidance for Q1. This level of anticipated turns, meaning those orders booked and shipped within the same quarter, was similar to the 22% turns in Q4 and is a return to the company's historical level of average quarter turns expected over the past three years.
On a non-GAAP basis, we expect our overall gross margin percentage in Q1 to remain similar to Q4 at 68% plus or minus 50 basis points. Non-GAAP operating expenses in Q1 are expected to be in the range of $74 million to $76 million, increasing from the $72.4 million in Q4 mainly due to a full quarter of Wintegra operations and other structural items including the payroll-related reset of employee benefits at the beginning of the calendar year and offset by -- also the effects, sorry, of foreign exchange on our foreign operations, partially offset by lower tape-out activity in Q1. On a general note, depending on the number and timing of tape-outs which do vary from period to period, our expenses could be affected by a couple of million dollars in any given quarter.
We expect non-GAAP net interest income to be about $0.5 million which is primarily net interest income from our cash position offset by servicing our outstanding convertible notes. Note that factored into this is having repaid all of our short-term bridge loan earlier this month which was related to our acquisition of Wintegra.
We expect the non-GAAP tax provision in Q4 to be $1.5 million to $2.5 million. As a reminder, the tax expense can be impacted by a number of variables associated with our ASC 740 liabilities including but not limited to a change in foreign income and product mix.
Regarding share count, we entered the year with a diluted share count of $236.3 million. At the end of Q1, our diluted share count is expected to be approximately $238 million.
For the upcoming quarter, we plan for the following significant GAAP to non-GAAP reconciling items -- first, amortization of purchase accounting cost associated with past business acquisitions, stock-based compensation expense, FX gain or loss on our net foreign tax liabilities, and the income tax effect of the above adjustments and other tax items. Additional non-reoccurring items associated with the restructuring or other costs positive or negative are always possible. As mentioned before, a GAAP to non-GAAP reconciliation of these financial measures will be posted on our website.
With that, we would like to open the call to questions.
Thank you. Ladies and gentlemen, if you would like to ask a question, please press star then 1 on your touchtone phone. To withdraw your question, please press the pound sign. If you're using a speakerphone, please lift your handset before entering your request. And as a reminder, ladies and gentlemen, please limit yourself to asking one question, but if you do have additional questions, please re-queue by pressing star 1. And now let us stand by for our first question.
And our first question comes from Ruben Roy of Pacific Crest Securities. Please go ahead.
Ruben Roy - Pacific Crest Securities
Thank you. Greg, can you give us a little more detail around the guidance? It sounds like the core business is going to be down around 8% to the midpoint of your guidance if you take out the Wintegra piece. And you guys had started to see some inventory correction going back to I think Q2 into Q3. And so, number one, what gives you the confidence that this is going to start to improve as you look out into Q2? And then number two, is this 8% downtick really mostly related to the WAN business, or like we saw last time, is it bleeding over into fiber channel and elsewhere? Thank you.
Yeah, sure. So, a couple of pieces to your question. One is your numbers, your math is about right. I would say probably the core business is around -- down about 5% to 10%, so the 8% number is certainly within that range.
And the biggest pieces of it were the two that I mentioned. One was on the storage side. So, storage is now the biggest business in the company, as you're aware, and we're seeing, and we've historically seen, and this dates back to kind of some of the fiber channel experience going many years back, in the order of 5% to 10% type of seasonality in Q1, tends to be the weakest seasonal quarter of the year. This year in particular, it's going to be higher than we really expected because we have our customers working through a big transition to a SAS, major SAS -- went through a major SAS transition and ended up getting too much inventory in place to do that. So that's pushing that a little bit higher than the normal. But that's the single biggest quarter-to-quarter down.
The WAN business is going to be down a bit more, but the bigger issue there is that it hasn't come back yet. We were expecting to see that pick back up and start to recover some of the inventory burn-off that we were doing, and it's taking longer than we expected, which kind of leads me to the last part of your question, is, you know, what gives us the sense now that it will start to pick up?
And just like in the front end of these things where you kind of look for some of those early indicators, on the front end, when you think there might be a downturn or a correction happen, you start to see some push-outs or attempts to cancel orders, that kind of thing, and that's usually some of the early signs. And we certainly saw that dating back into Q3.
On the flipside, when things start to pick back up, you see customers basically plant orders. Like for example today they might put an order in Q2 and then start to try to pull some of that business into Q1 as they burn through the inventory a little faster than they had originally planned. And we've actually seen that from two of our major customers, actually top-tier customers in both enterprise storage and in the telecom business, have actually pulled product in, in the last two weeks from Q2 to Q1. We also see China actually for the first time in two quarters, three quarters, we expect China to actually grow our WAN infrastructure business in Q1. Not enough to offset some of the other things I mentioned, but early signs, positive signs that things are potentially starting to get down to the end of that inventory turn.
Ruben Roy - Pacific Crest Securities
Thanks, Greg. Just really quickly a point of clarification. You mentioned EPON and GPON rollouts in China, Ericsson talked about a GPON win this morning. Are you shipping GPON for revenues into China currently?
Yes, we are. In China it's still relatively modest, but there is China Mobile and some of China Unicom is actually experimenting with GPON as well. So we do have some revenue there. And we have a major design win, one of the customers is going to be providing product into that China market. So, yes, we do participate there in GPON as well.
Ruben Roy - Pacific Crest Securities
Thanks very much.
Thank you. And our next question comes from Sandy Harrison of Signal Hill. Please go ahead.
Sandy Harrison - Signal Hill Group LLC
Great. Thanks. Greg, I know you guys were -- you're talking about storage being down a little bit more than seasonal. You guys, some of the newer products or some of your newer customers for storage products, IBM and others, I think there's probably an expectation that they would be coming up to speed about this time to help offset some of the seasonality. What's -- could you kind of give us an update on what you're seeing in some of these newer platforms and newer customers coming online?
Yeah, actually the transition that we've been talking about for SAS-2 in the storage system side of the business really started to take shape in 2010. We had very good growth out of NetApp who was a customer that we didn't have a lot of business with prior to this transition. And actually I think they were out yesterday or day before and had announced that they've now achieved almost 50% of their transition. I think NetApp is probably the farthest along and most aggressive on the SAS transition front.
So that is kind of an indicator of the progress that is getting made. But it also for us is an indicator that we probably have two-thirds of this transition to go in 2011 and finishing up in 2012. So it's off to a very good start.
Now back to the seasonality comment that we had this quarter. So if I just look at our quarter-to-quarter expectation for storage business, it's basically down. We believe it will be down 8% to 9%, which is at the high end of that 5% to 10% range. But if I take out the one adjustment that's going on at one of our big customers who did just transition some of their platforms, actually their whole product lineup, that number would be below 5%. So I think that's an indication of the strength of the end-market in storage. I think most of the major players there are announcing very good results in their equipment sales. Certainly we saw that out of EMC and NetApp and IBM comments in their script as well.
So all the fundamentals are very positive there, and we've got a little bit of seasonality and a bit of inventory consumption at our second biggest customer in the storage space, but we think that's going to -- we'll power through that and get back and grow fast in Q2.
Thank you. And our next question comes from James Schneider of Goldman Sachs. Please go ahead.
James Schneider - Goldman Sachs
Good afternoon and thanks for taking my question. I was wondering if you could talk a little bit about the Fiber to the Home space, not just in China but also Japan and Korea, what you're seeing for 2011, broadly speaking, you talked about subs in China, but talk about being up in Q1. You expected to be up again in Q2 and as is seasonally?
Yeah. Typically, and I'm not sure I have a great explanation for the seasonal pattern, but it's been true it seems the last several years in a row, is the first of the year tends to be stronger than the second half. And so we're entering into that first half. So this quarter we expect it to be -- I would expect to be up again second quarter. Hard to predict how the year finishes.
But one of the interesting things that I think is going on in the more mature PON markets which there are three major markets that have really done a lot of deployment as a percentage of overall, one is Japan, China and then Korea, I'd put on that list too. They're talking increasingly about Fiber to the Home which especially in markets like China, that becomes a much bigger play as opposed to Fiber to the Building and then running Ethernet out to the different units.
And so I think -- and I actually just returned from Japan and they are talking there about being more aggressive about getting Fiber to the Home deployed to their entire population instead of the major areas that they are today. So a lot of the talk it seems by the carriers and the governments that are the catalysts behind this is really to drive more Fiber to the Home which drives more endpoints for us and more volume. And they don't seem to be backing off at all. So that's in the kind of the more mature, established markets.
Outside of that, if you look at the other parts of the world, whether it's Europe, North America, we do think that there is some kind of growing momentum there. It is going slower than anyone thought, but we do think GPON is going to actually start to grow more substantially in 2011 in some of the rest of the parts of the world.
James Schneider - Goldman Sachs
Okay. And then on the Wintegra piece of the business, I think you said $13 million to $15 million for Q1. If I just run rate that flat line throughout the year, I mean it's obviously coming in lower than the $70 million target, so, that you talked about when you did the acquisition. So, can you give us a sense of like how we should think about that as growing throughout the year or the profile of that business overall?
Yeah. We still think that the growth target is on track. They, like most guys in the semi [ph] space, weren't immune to the inventory correction that we're all working through right now. They saw more of a flat spot and a dip because their customers are still growing into this space. And that's what this quarter. It's a bit of a flat spot. But we expect still growth throughout the year and expect to hit that. We believe we're going to hit the 20% three-year growth which gets into the low $70 million range for that part of the business in 2011.
James Schneider - Goldman Sachs
Okay. Thanks very much.
Thank you. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star then 1 on your touchtone phone. To withdraw your question, please press the pound sign. If you're using a speakerphone, please lift your handset before entering your request. And as a reminder, ladies and gentlemen, please limit yourself to asking one question. But should you wish to ask another question, please press star then 1 on your touchtone phone.
And our next question comes from Harlan Sur of JPMorgan. Please go ahead.
Harlan Sur - JPMorgan
Hi, good afternoon. Hey, Greg, on the last earnings call, I mean you talked about seeing sort of a positive inflection in bookings which was leading you and the team to believe that most of the inventory correction was behind you. And so I'm just trying to figure out, like what gives you the confidence that the bookings pickup or some of the pull-ins that you're seeing or alluding to here are kind of pointing to the same thing?
Yeah, that's a good question, and I do recall the comment that you're referring to. And at the time of the call last quarter, we did see bookings in the fourth quarter, looking -- picking up steam. But they also unfortunately kind of flattened out and slowed down after the -- actually into the holidays and after the holidays. So basically the trend didn't continue. And the challenge was trying to predict when we come out of these things or we're looking at data points that aren't necessarily as concrete as we'd like them to be.
So the data points we have today is good bookings into the second quarter next year, some early pull-ins, some growth in China where we've been particularly weak. And those are positive signs, but they don't necessarily mean that all the inventory will get burned off. I do believe that there are positive signs and we'll look back and think that, "See, Q1 is the bottom of the correction," and start seeing growth again in Q2.
Harlan Sur - JPMorgan
Okay. And then one of your competitors in the server racing [ph] said on their earnings call last night that they're making significant progress with your largest customer for the upcoming Rami [ph] generation of servers. I know the team at PMC has been keeping pace with the roadmaps. I mean you rolled out your second-generation product last year. I would assume with Rami [ph] right around the corner, that you would know if you guys or your competitors are there on the 6-gig SAS opportunity on these Rami [ph] based servers with your largest customer. Do you have any comments on that?
Yeah. It's a bit curious frankly. I think some of the other comments that I saw from that particular competitor were claiming that they have the best product and the best time-to-market technology in the industry which as is an obvious fact, they were late to market by over a year. We took their largest customer from them in that cycle and have won two-thirds of the business away from them on the storage system side.
So the comments are there are fairly inconsistent with reality, including the comments about any allusion to having traction at another special OEM. So our relationship with HP remains very strong and it's basically up to us to execute, deliver for them to continue along with the business as we have. So I wouldn't put a lot of stock into it and to the comments that were made.
Harlan Sur - JPMorgan
Okay. Thanks a lot.
Thank you. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star then 1 on your touchtone phone.
And at this time there are no further questions. Please continue.
Valerie [ph], thank you.
And thank you for attending the conference call today. We'll be scheduling our first quarter 2011 conference call the third week of April. At that time we'll be reviewing quarterly results and providing our outlook for the second quarter. So, thank you. And that ends today's call.
Thank you. Ladies and gentlemen, this does conclude your conference call for today. We thank you for your participation. You may now disconnect your lines. And have a great day, ladies and gentlemen.
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