Sirona Dental Systems, Inc. F2Q08 (Qtr End 03/31/08) Earnings Call Transcript

Sirona Dental Systems Inc. (SIRO)

F2Q08 (Qtr End 03/31/08) Earnings Call

May 8, 2008 9:00 am ET

Executives

John Sweeney - VP of IR

Jost Fischer - Chairman, President and CEO

Simone Blank - EVP and CFO

Jeffrey Slovin - EVP and COO of US Operations

Analysts

Jon Wood - Banc of America Securities

John Kreger - William Blair

Andrew Weinberg - Galion

Tycho Peterson - JPMorgan

Presentation

Operator

Good day, ladies and gentlemen, and welcome to the quarter two 2008 Sirona Dental Systems Earnings Call. (Operator Instructions).

I would now like to turn the presentation over to your host for today's call, Mr. John Sweeney, Vice President of Investor Relations.

John Sweeney

Hello and welcome to the Sirona second quarter conference call for fiscal 2008. I think I'm just going to put you on hold for one second while one of our parties joins us, and then I'll come right back in.

Thank you and good morning, everyone. Before I turn the call over to Jost Fischer, Chairman, President and CEO of Sirona Dental Systems, I need to inform you that information in this conference call contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are information of a non-historical nature and are subject to risks and uncertainties that are beyond the company's ability to control. The matters discussed in this conference call are subject to various factors which could cause actual events and results to differ materially from such statements. Such factors include uncertainties as to future sales volumes of the company's products; the possibility of changing economic, market and competitive conditions; dependence on products, dependence on key personnel; technological developments; intense competition; market uncertainties; dependence on distributors; ability to manage growth; dependence on key suppliers; and other risks and uncertainties, including those detailed in the company's filings with the Securities and Exchange Commission.

The company undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this conference call. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this conference call.

Please note that in today's conference call you will be presented with additional financial information, including non-GAAP financial measures under Section 101 of Reg G of the 1934 Exchange Act. In addition, during today's conference call, management will comment on guidance for fiscal year 2008. Please note that all statements made in connection with the guidance are based on current expectations and actual results could differ materially from such forward-looking statements.

Now I would like to turn the call over to Jost Fischer, Chairman, President and CEO of Sirona Dental Systems.

Jost Fischer

Thanks, John. It is my pleasure to welcome all of you to our fiscal 2008 second quarter conference call. Joining me today are Simone Blank, Executive Vice President and Chief Financial Officer; and Jeffrey Slovin, Executive Vice President and COO of US Operations.

Let me begin by saying that we are very pleased to report yet another strong quarter, a quarter in which we showed very respectable growth across all of our business segment, and in all of our geographic regions. Revenues reached $189.5 million or up 26.2% versus the prior year quarter.

In the US, we achieved 7% revenue growth. Although US Imaging declined in the quarter, it is important to note that this performance was against a very strong comparison in the prior year quarter. The Imaging softness we experienced in the US was more than offset by strong performance in our CAD/CAM business, which also benefited from our new product launches and the training program.

We had impressive performance in our non-US markets. Germany and our other European countries both posted double-digit revenue increases. But the largest driver in the second quarter was our non-US, non-European business led by strong sales in Japan, Australia, Canada and South Korea. These markets continue to show an encouraging growth trend as they benefit from our strategy to increase our local sales and service infrastructure in selected markets.

While this has resulted in increased SG&A expense, these investments continue to show positive results. The second quarter demonstrates how Sirona benefits from its geographic diversification. As you know, non-US markets account for more than two-thirds of our overall business.

In addition to our geographic profile, Sirona benefits from having a broad product portfolio and a consistent pipeline of new product launch activity. As you recall, last year was a major launch year for us with new products including our, MC XL CAD/CAM milling unit, our new CAD/CAM software and, of course, our GALILEOS 3D-imaging system.

I would like to review the progress that we have made with these new products over the past 12 months, starting with our CAD/CAM biogeneric software. This software has been enhanced with powerful tools and a simple, predictable and faster workflow. Importantly, the software significantly reduces the learning curve for dentists. This is a key selling point for those who have not yet purchased a CEREC.

Last year, we also launched the MC XL milling unit. This machine mills a quality precisely fitted restoration in as little as four minutes, approximately twice as fast as the compact CEREC milling units. Collectively, these two CAD/CAM innovations represent our major step forward in dental in-office CAD/CAM technology. I am happy to report that both of these innovations have been very well received by the marketplace, resulting in our strong post-launch segment revenue growth.

Our CAD/CAM product launches also received some favorable attention from outside of the dental world. One was with an analyst who recently wrote a note about his positive CEREC experience, highlighting that he received a complete, high-quality restoration in just 35 minutes. Testimonials such as these have built the CEREC brand in the minds of dentists and patients.

Moving on to GALILEOS. Since our launch, we believe that GALILEOS has achieved the status as one of the clear leaders in its product category. GALILEOS low radiation dosage, excellent image quality, integrated software and ease of use, has been greeted with enthusiasm by the dental community. We believe that 3D imaging will play a major part in the future of dentistry and continue to contribute to our imaging system revenue growth.

I will now outline the highlights for each of our business segments. Revenues in our CAD/CAM segment increased 40%, driven by our MC XL milling machine biogeneric software and the trade-in program. CAD/CAM segment gross profit margin declined to 65.8%, down from 69.6% in the second quarter of 2007. The year-over-year margin compression was primarily due to foreign currency fluctuation and the MC XL trade-in program.

Second quarter Treatment Center revenues increased 34% with solid performance in all regions. Treatment Center segment gross profit margin was 38.6% on prior year's level. Imaging segment revenues increased 14% with particular strength in international markets, driven by the continued adoption of digital radiography. Imaging Systems segment gross profit margin was 59.7% in the second quarter in line with prior year's level.

Instruments revenues increased 14% with solid performance in our international markets. Instrument segment gross profit margin was 44.6%, down 1.7% from the prior year, mainly due to product mix.

Moving on to outlook. We are more than pleased with how our business has been performing and note that the positive sales momentum we experienced in the second quarter had continued into the third. However, it is important to consider that comparison get more challenging as we move through the rest of the fiscal year. Let me remind you that fourth quarter 2007 revenues increased 32% versus prior year.

Due to the uncertainty in the US economy, in the second half of the year we anticipate international markets to continue to outpace our US revenue growth. Our performance demonstrates that Sirona with its well balanced geographic profile, strong portfolio of leading high tech products, quality sales and service infrastructure, and excellent dealer relationships is well positioned for future growth.

I will now turn the call over to Simone, who will give you more details on our financial results.

Simone Blank

Thank you, Jost. Second quarter revenue was $189.5 million, an increase of $39.3 million or up 26.2% on a reported basis. On a constant currency basis, second quarter revenue increased 15.4% with Dental CAD/CAM Systems up 32%, Treatment Centers up 17%, Imaging Systems up 6% and Instruments up 1%.

United States revenues increased 7%, while international revenues increased 36%, up 19% constant currency, with particularly encouraging performance in Italy, Japan, Australia, Germany, Canada and South Korea.

Cost of sales was $103.1 million for the quarter, an increase of $23.5 million or 29.5%. Cost of sales included deal-related amortization and depreciation expense of $21.2 million compared with $17.7 million for the same period last year. Excluding deal-related amortization and depreciation expense, gross profit margin declined 200 basis points to 56.9%. The gross profit margin decline was driven by the continued weakness of the US dollar and the trade-in program for the MC XL milling unit.

Now I will review some of the components of our operating expenses in the second quarter. SG&A expense was $60.6 million, an increase of $7.7 million. As a percentage of sales, SG&A expense declined to 32% from 35.2% in the prior year quarter. R&D was $12 million, flat compared to last year.

Operating income plus amortization expense was $39 million, comprised of operating income of $16.2 million plus amortization expense of $22.8 million. This compares to second quarter 2007 operating income plus amortization expense of $24.7 million.

Gain on foreign currency transactions in the quarter amounted to $9 million compared to $1.9 million in the prior year period. Second quarter 2008 results included $6.7 million non-cash gain on the revaluation of the carrying value of the dollar-denominated Patterson exclusivity fee and a $4.4 million non-cash gain on the revaluation of dollar-denominated short-term intra-group loans to European entities.

The non-cash loss on derivative instruments amounted to $3 million compared to a loss of $0.9 million in the prior year period. Second quarter 2008 loss included a $4.7 million unrealized non-cash loss on interest rate derivatives, which mainly resided from the steep decline in US LIBOR rates in the quarter.

Net interest expense was $6.7 million compared to $6.2 million. The increase was driven by variations in the dollar/euro exchange rate. The income tax provision for the second quarter of fiscal 2008 was $4.6 million compared $0.1 million in the prior year period. The effective tax rate for the quarter and for fiscal 2008 is estimated at 30%. This compares to an effective tax rate of 35% for fiscal 2007. This improvement was caused by a reduction in the German tax rate and tax planning initiative.

The company's net income was $10.9 million, an increase of $10.6 million compared to the prior year. On a GAAP basis, second quarter earnings per diluted share were $0.20 compared to $0.01 in the prior year quarter. As you see in today's press release, we are identifying the per share amount of some of the items that analysts' routinely expect to get to their EPS estimate for Sirona.

When we looked at Thomson First Call, we saw that each analyst had a slightly different calculation for reporting and forecasting EPS, and I believe that is what's causing some confusion in the investor community. The items most commonly excluded from analysts' EPS estimate included one-time items, such as our November 2006 refinancing, deal-related amortization and depreciation, gains and losses resulting from the revaluation of the Patterson exclusivity payment, and gains and losses resulting from the revaluation of intra-group loan. We are now providing information for these items on a per share basis. So hopefully, this will be to a more consistent EPS definition as we move forward.

Excluding the items that we identified separately in our press release, second quarter diluted earnings per share was $0.34, an increase of 62% compared to $0.21 per share in the second quarter of 2007.

Moving on to cash flow, operating cash flow during the quarter was $27 million. Investing cash flow consisted of capital expenditure of $11.3 million, mainly the result of increased investments in special tools. At March 31, 2008, the company had cash and cash equivalents of $111 million and total debt of $591 million, resulting in net debt of $480 million. This compares to net debt of $463.3 million at September 30, 2007. The increase in net debt was attributable to fluctuations in the dollar/euro exchange rate.

Now I will make a few comments on the revised guidance that we put out this morning. As a result of the solid performance of the business in the first half of 2008 and the continued strengthening of the euro versus the US dollar, the company is increasing its fiscal year 2008 revenue guidance. Assuming that the euro/dollar exchange rates remains at current levels, Sirona now expects fiscal 2008 revenue to be in the range of $725 million to $745 million, up from the previous guidance range of $705 million to $725 million.

Higher revenue resulting from a more favorable euro/dollar exchange rate is anticipated to be offset by increased costs as more than three quarters of our expense are-euro denominated, leaving the overall profitability outlook unchanged from our previous guidance. The company expects fiscal 2008 operating income plus estimated $91 million of amortization expense to be in the range of $145 million to $155 million.

That concludes my review of the second quarter and guidance, and I will now turn the call back to Jost.

Jost Fischer

Thank you, Simone. As I am sure you will agree, we had another strong quarter. The year is progressing as we expected, maybe a little bit ahead of where we thought it would be at this time. Our international revenue base continues to shine and our results highlight the benefit we receive from our geographic diversification.

Despite all of the concerns we fear about the economic environment in the US, I think it is clear that our business is continuing to grow nicely. I am optimistic about our prospects and increasingly confident that we will be able to deliver towards the upper end of our fiscal 2008 guidance.

Simone, Jeffery and I will now address your question. Operator, please proceed.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from the line of Jon Wood of Banc of America. Please proceed.

Jon Wood - Banc of America Securities

Hey. Thank you. Jost, the CEREC growth of 32%, was the US growth rate higher or lower than that figure?

Jost Fischer

Now, first of all we were very happy with our 40% growth rate that we reported 32% in constant currency. We see strong performance throughout our entire region during this quarter. That means we do not have a clear big differentiation between our growth rates in all four regions that we report.

Jon Wood - Banc of America Securities

Okay, great. And then, qualitatively, how is the new CEREC user interest in the US tracking? I know the new users still electing to go with the new milling unit or has the mix changed a little bit towards the compact milling chamber?

Jost Fischer

Jon, let me explain when we brought out the MC XL, our large milling unit, we expected a certain mix going forward that would include both to be sold at a two third, one third ratio. And, while originally because of the trade-in program, it tracks higher towards the MC XL percentage. We now found a way of a more balanced portfolio in our sales. We see traction from new users to the MC XL unit as well to the doctors that are more price-cautious to the more compact milling unit. As you know, the price differentiation is between 80,000 for the compact unit is re-priced to a 110,000 to our MC XL pricing.

Jon Wood - Banc of America Securities

Okay.

Jeffrey Slovin

I will just add Jost that I think that we've seen a lot of success out there in the field with our users with the MC XL, so we are very pleased.

Jost Fischer

Yeah, absolutely..

Jon Wood - Banc of America Securities

So, you commented two-thirds, one-third is that relevant today. I know it started out more weighted towards MC XL but--?

Jost Fischer

Yeah.

Jon Wood - Banc of America Securities

But, has it rebalanced back to the two-third, one-third you mentioned.

Jost Fischer

Not yet, but we are tracking into that direction.

Jon Wood - Banc of America Securities

Okay. And then on the CAD/CAM gross margin, so is the trade-in program in the US done?

Jost Fischer

This is a question Patterson would have to ask. But from our perspective it is done.

Jon Wood - Banc of America Securities

Okay. So, would you expect the CAD/CAM gross margin to tick higher in the remaining quarters of this year based on the elimination of that program or the finishing of that program?

Simone Blank

You know Jon, the trade-in program obviously as we reported throughout the last quarters has an impact on our gross profit margin. So, that suggest, one, it's not in there anymore that we've seen improvement of the gross profit margin.

Jon Wood - Banc of America Securities

Okay, thanks. One more--.

Jost Fischer

Second phase is still Jon is that we have a currency fluctuation that also has an impact on the gross margin when we talk about these 70% levels of last year.

Simone Blank

That's correct.

Jon Wood - Banc of America Securities

Okay. And, so the price increase is basically designed to offset currency. So if I step back the whole business, would it be accurate to say you have a net pricing benefit as of this quarter?

Jost Fischer

Yes.

Jon Wood - Banc of America Securities

Okay. And then last one. What's the rationale for building cash on the balance sheet rather than de-leveraging?

Simone Blank

We look at this we always look at our options Jon, and look what we do with the cash. Now, one of our first options in place is to de-leverage and there are schedules, repayments, in the facility agreements included which would start next year. So, we always look at our options on what to do with the cash, but that de-leverage is clearly always in the number one.

Jon Wood - Banc of America Securities

Do you have a near term maturity schedule this year, or it doesn't start till--?

Simone Blank

Oh, it's November '09, it starts in November '09.

Jon Wood - Banc of America Securities

Okay. Okay, thanks a lot.

Simone Blank

You're welcome.

Jost Fischer

Thank you, John.

Operator

Your next question comes from John Kreger of William Blair. Pease proceed.

John Kreger - William Blair

Great. Thanks very much. Jost or Jeff could you just give us a bit more clarity on what was driving the weakness in the imaging business in the US?

Jost Fischer

Jeffery, maybe that you can take that.

Jeffrey Slovin

Absolutely. I think, one of things John, when we take a look at it we have to look at the prior year's quarter, which was extremely strong. We had a loyalty program promotion going on that was extremely successful. So, that took affect. And, I would say in general we are on track for what our expectations are for imaging in the US And keep in mind that we're posting 14% for the worldwide, and I am extremely pleased with what we are doing on the international side of our business.

John Kreger - William Blair

Okay, great. Thank you. Simone, thank you for the clarity around guidance and the adjustments. When we look at the guidance it seems as if the implied operating margin gets a bit worse in the second half of our fiscal year versus the first half. Do you agree with that math and are there any particular drivers behind that other than your assumptions for foreign currency?

Simone Blank

First of all let me say that we are very pleased with our results that we have achieved in the first half of the year, and also particularly in the second quarter, the 26% revenue growth and the 15% on the constant currency basis and as we said this positive trends has continued into the current period. So overall we are optimistic and even tracking slightly ahead of our expectations at this point in time. When we look at it even though we have to look at it on an annual basis, and everybody knows I think that quarterly progression for us can differ throughout the year, and we have given you some indication last quarter and the quarter before that what impact the quarterly progression, and things like the IDS last year, the major product launches we had and things like that. So, comps get more challenging as we move through the year and as just said we are increasingly confident that we will be able to deliver at the upper end of our guidance range.

John Kreger - William Blair

Okay. And then just one last question. Did you talk to your wholesalers and sales force, what sort of feedback are you hearing from the field about the impact of the slowing economy is having on your business in the US?

Jost Fischer

When we talk to our guys out there in the field, now we talk to our distributors. There is a slight impact of uncertainty that we feel or that they feel. But when you look at the overall impact it's a very small one that they say. Obviously it is not impacting the equipment sales to a very large extent and obviously there is also no differentiation between low-end equipment and high-tech equipment. What we hear but we can't comment on that, that the elective high-end procedures in some arenas are postponed but as I might remind you that our sales are towards a dentist. He pays for that and the patient at the end of the day for a CEREC procedure per tooth is around $500 dollars. So there is nothing on a double-digit trend.

And on top of that John, what we have seen, the good trends that we obviously have incurred a 7% growth rate in the US and 26% that quarter are continuing into the current quarter as far as we can look into that at this point in time, or have a book dollar sales. So we can at this point say, we are optimistic also on our US business going forward.

Jeffery Slovin

And maybe I just add a sentence or two about it. We really haven’t seen any of the Section 179 a stimulus package take effect and we think that that's probably likely to be seem in the latter part of the calendar year. And as you know when that was in place before, that did have a nice stimulus on the higher-end equipment.

John Kreger - William Blair

Great. Thanks very much.

Jost Fischer

Okay. Thank you, John.

Operator

And your next question comes from the line of Andrew Weinberg of [Galion] Please proceed.

Andrew Weinberg - Galion

Yeah. Hi guys. Quick question, you talked about a lot of stuff that was not in the press release and just want to make sure I understand this well. Understand first of all, your formal guidance now is that you'll be at the upper end of your expectations, because the press release was not clear on that?

Simone Blank

Well, a formal guidance is that the revenue is between $725 to $745 however we see the trends of the second quarter continue into the third, that's what you have said, and we are very optimistic at this point in time, and we increasingly confident that we will be able to deliver at the upper end of our guidance range.

Andrew Weinberg - Galion

Okay. Sim maybe able to quantify that better after another three months go by.

Simone Blank

Sure.

Jost Fischer

Surely we will revisit our guidance expectations in our third quarter conference call when we have more clarity towards the end of the year and we might revisit there.

Andrew Weinberg - Galion

Perfect. And then my other question is with regard to you called out I think some of the foreign exchange issues, but I just want to make sure the number right. You said there is $4.7 million interest rate derivative loss, which I can't find it, was that in the press release?

Simone Blank

No that's not in the press release, but you will see that in the 10-Q that will come out later today. And yes that's correct, it's a $4.7 million unrealized non-cash loss on the interest patterns that we have out here, and that has around $0.06 impact on our adjusted EPS. And you know that you might recall that 67% of our debt is hedged and therefore, and it's partly dollar and partly Euro denominated, $150 million is dollar debt. And during the quarter with respect of LIBOR rate declines, and we had some mark-to-market valuation on this, and that resulted in the recorded unrealized non-cash loss.

Andrew Weinberg - Galion

Okay, so if you [X out] all of the FX impacts rather than the…

Simone Blank

Actually that's FX sorry, its interest…

Andrew Weinberg - Galion

Okay, Sorry, if you X-out sort of those non-cash charges the OpEx and the interest you are talking about, $0.40 is that -- for the quarter is that accurate math or no?

Simone Blank

That -- and we said that the, -- sorry, the $0.34 plus the $0.06 is $0.40, yes that's correct.

Jost Fischer

Correct.

Andrew Weinberg - Galion

Okay, great. Thank you.

Simone Blank

You're welcome.

Jost Fischer

Thank you Andy.

Operator

And, your next question comes from the line of Tycho Peterson of JPMorgan. Please proceed.

Tycho Peterson - JPMorgan

Hi. Good Morning

Jost Fischer

Good Morning Tycho.

Tycho Peterson - JPMorgan

Simone you talked a little bit about the some of the margin contributors here. Can you give us a sense as to what the relative impact between FX and the CEREC trading program were, and were there any manufacturing variances here as well as you continue to ramp up on the new milling machine?

Simone Blank

You know, the impact on the gross profit margin for CAD/CAM is, I would say, it's both equal between the FX and the trading program. And, that's what we have seen also in the quarters before and that continued into this quarter.

Jost Fischer

Tycho, also to add to this. Yes, we are delivering on our cost and learning curve, assembling faster, moving on to learning curve also with our suppliers as to be more efficient and therefore with less cost. I think, we are going through that effect as we have discussed that in the past earnings calls. We are on track with this one.

Tycho Peterson - JPMorgan

Okay, on the imaging front, can you give us a sense as to, I appreciate your color before on the macroeconomics or macroeconomic backdrop here, but competitively are you seeing anything newer different, and can you talk a little bit about pricing in the imaging. Have you been able to maintain pricing for example, on Galileos?

Jost Fischer

When you look at it from a general point of view, we don’t see a major price depression or changes in the smaller imaging world in the Galileos world as well as with our panoramic units. There have been some slight pressures that resulted into additional volume, I think, that is feared to caught into the market, but Jeffrey, you can give a little color on that.

Jeffrey Slovin

I'd say towards the end of the quarter and the beginning of this quarter we've seen some nice momentum with some of our distributors with Galileos, and the pricing has helped and as Jost said, that there has been some price wars on the panoramic side, certainly on the lower-end panoramic.

Tycho Peterson - JPMorgan

Okay.

Jeffrey Slovin

And, the competitor seemed to be the same player that we've talked about over the last three quarters.

Tycho Peterson - JPMorgan

Okay, thanks. That's helpful. On CEREC, can you give us a sense or some talks before that there would be an international trade-in program that was introduced, is that still on deck?

Jost Fischer

Tycho, there is no formal trade-in program out there. We do have some trade-ins that are made on the local basis, but they don't have any large impact either on our sales, or on our margin. CEREC is tracking very good internationally, and we have felt the need to go in larger exchange programs at this point.

Tycho Peterson - JPMorgan

Okay. And then finally, if I didn’t asked about the E4D and just to level that, maybe you're seeing selling activity out there in the market, what sort of feedback you received?

Jost Fischer

Tycho, from my perspective I think, what we see out there is that now two-thirds of the market reps are talking positively about CAD/CAM. I think, that is the best indicator of what the market thinks now about CAD/CAM after some criticism for years about this. I think, this is an over all very, very positive sentiment, and as you know Patterson paid a $100 million for an exclusivity right because they believe CAD/CAM is the future in dentistry. Henry Schein has spent considerably amount of money and efforts to come to a market with a product in CAD/CAM because they believe CAD/CAM is the future in the dental office. So now, we see this as a positive for CEREC and of course we are not afraid of any comparisons also that, but we don’t feel any negative impact. We see this as a positive. The whole pie will get bigger and therefore the market leader share will get bigger as well.

Jeffrey Slovin

Let me just add, Tycho. We had our largest CEREC event yet and I think that was also stimulated by the fact that we have two thirds of the reps talking about it. So, what we had coming is not only Patterson customers, but all customers to take a look at CEREC, which was extremely successful.

Tycho Peterson - JPMorgan

Great, thank you very much.

Jost Fischer

Thank you, Tycho.

Operator

(Operator Instructions) And your next question comes from the line of Jon Wood of Banc of America. Please proceed.

Jon Wood - Banc of America Securities

Thank you. Simone, is the SG&A level is around $60.5 million, is that an appropriate run rate to use in the back half of the year, or do you expect that will come down any?

Simone Blank

I think the percentage wise run rate is the right one for the rest of the year. We had 32% in terms, as a percentage of sales and that’s a good run rate going forward?

Jon Wood - Banc of America Securities

Okay. And then, excuse me R&D; you still expect that between six and seven, as a percent of sales?

Simone Blank

Yeah. That’s absolutely correct.

Jon Wood - Banc of America Securities

Okay. Thanks a lot.

Simone Blank

You are welcome.

Operator

And that does conclude the question-and-answer session. I will now turn it to Jost Fischer for closing remarks.

Jost Fischer

Thank you for joining us today for our second quarter conference call. I look forward to updating you on our next quarterly conference call, and look forward to seeing many of you at some of the upcoming investor conferences that we will attend. Thank you very much. Good bye.

Operator

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a good day.

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