CBOE Holdings Management Discusses Q2 2012 Results - Earnings Call Transcript

| About: CBOE Holdings (CBOE)


Q2 2012 Earnings Call

August 02, 2012 8:30 am ET


Deborah Koopman - Vice President of Investor Relations

William J. Brodsky - Chairman, Chief Executive Officer, Chairman of Executive Committee, Chairman of Chicago Board Options Exchange Incorporated and Chief Executive Officer of Chicago Board Options Exchange Incorporated

Alan J. Dean - Chief Financial Officer, Executive Vice President of Finance & Administration and Treasurer

Edward T. Tilly - President, Chief Operating Officer, President of CBOE, President of C2 Options Exchange, Chief Operating Officer of C2 Options Exchange and Chief Operating Officer of CBOE


Richard H. Repetto - Sandler O'Neill + Partners, L.P., Research Division

Howard Chen - Crédit Suisse AG, Research Division

Alex Kramm - UBS Investment Bank, Research Division

Patrick J. O'Shaughnessy - Raymond James & Associates, Inc., Research Division

Jillian Miller - BMO Capital Markets U.S.


Good day, everyone, and welcome to today's CBOE Holdings Second Quarter 2012 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded. At this time, for opening introductions, I would like to turn the call over to Debbie Koopman, Vice President, Investor Relations.

Deborah Koopman

Thank you. Good morning and thank you for joining us on our second quarter conference call. On the call today, Bill Brodsky, our Chairman and CEO, will discuss the quarter and our strategic initiatives for 2012. Then Alan Dean, our Executive Vice President and Chief Financial Officer, will detail our second quarter 2012 financial results. Following their comments, we will open the call to Q&A. Also joining us for Q&A is our President and COO, Ed Tilly, and our Executive Vice President and Chief Business Development Officer, Ed Provost.

In addition, I'd like to point out that this presentation will include the use of several slides. We will be showing the slides and providing commentary on each. A downloadable copy of the slide presentation is available on the Investor Relations portion of our website. As a preliminary note, you should be aware that this presentation contains forward-looking statements, which represent our current judgment on what the future may hold, and while we believe these judgments are reasonable, these forward-looking statements are not guarantees of future performance and involve certain assumptions, risks and uncertainties. Actual outcomes and results may differ materially from what is expressed or implied in any forward-looking statements. Please refer to our filings with the SEC for a full discussion of the factors that may affect any forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, after this conference call.

Now, I'd like to turn the call over to Bill Brodsky.

William J. Brodsky

Thanks, Debbie. Good morning and thank you for joining us today. It is my pleasure to report another very positive quarter at CBOE Holdings, where we delivered our eighth consecutive quarter of adjusted earnings per share growth and made significant year-over-year gains in market share. Our strong performance in multi-listed products, our ability to leverage proprietary products and a prudent approach to cost management enabled our company to achieve solid financial results despite lower industry-wide trading volume.

CBOE Holdings continues to generate and return enhanced value to our stockholders. We are especially pleased with our board's recent action to increase our quarterly dividend by 25% and to increase our share repurchase program by $100 million. My remarks today will focus on progress made in the quarter on our key strategic initiatives for 2012: product development; optimizing revenue in commoditized products; broadening our customer base; and leveraging our state-of-the-art trading technology.

Turning first to product development, we remain keenly focused on our high-margin proprietary products, which include CBOE's S&P 500 options or SPX and options and futures on CBOE's volatility index, VIX. Our S&P 500 Index product line, which includes SPX, SPXpm and SPX Weeklys, carries our highest options rate per contract. Second quarter average daily volume in SPX rose 12% over the prior quarter and 10% over last year's second quarter, while trading in SPXpm increased 17% against the previous quarter. SPX Weeklys continued to be one of the year's fastest-growing products. Through June, in SPX Weeklys, trading is up 46% over the previous year, while the second quarter volume rose 54% over the previous quarter and 65% over the second quarter of 2011.

We continue to design new SPX products to respond to specific customer needs. Last Friday, we launched SPX Variance Strips or V-Strips, which are aimed at qualified professionals, including OTC users. V-Strips are designed to trade a portfolio of SPX options series that replicate implied volatility in a single transaction and employ quoting conventions similar to those used for trading OTC variance swaps. After execution, each V-Strip is broken down into its components, which might include as many as 1,000 SPX contracts, which are then transmitted to and cleared by the Options Clearing Corporation.

As you can imagine, the unique construction of the V-Strip necessitates the support of highly customized trading technology. Our systems teams responded with the creation of a new patent-pending technology called BasketWeaver, which employs reverse engineering to deconstruct the VIX into its component parts. It is a wonderful example of how systems development is leveraging to power product innovation at CBOE.

Moving on to our volatility franchise, trading in options and futures on CBOE's volatility index or VIX continued to provide tremendous growth through the quarter despite relatively low volatility and low marketwide options and futures volume. VIX options volume rose 22% over the second quarter of 2011 and the dramatic growth in trading in VIX futures shows no signs of abating.

VIX futures volume for the second quarter was up 40% over the previous quarter and up a stunning 91% over the second quarter of 2011. Year-to-date through June, trading in VIX futures is up 75% over the same period last year. Monthly trading in VIX futures broke the 2 million contract mark for the first time in May, and set successive all-time monthly volume records in May and June. Keep in mind that VIX futures are 10x the notional size of VIX options. VIX futures growth is fueled in part by some 45 exchange traded products or ETPs tied to the VIX index. Total assets under management in volatility ETPs grew to $5.7 billion as of June 1 compared to $2.8 billion in December 2011.

We continued to expand our VIX product line in the second quarter. On June 18, we introduced the CBOE Interest Rate Swap Volatility Index, which is calculated using options on OTC interest rate swaps. Interest rate swaps and swap options are the most actively traded derivatives in the OTC market. We believe the index will provide -- prove useful in managing interest rate volatility risks and thereby increase CBOE's presence in this very dynamic area.

Turning now to our second strategic initiative, the optimization of revenue and market share in commoditized products. As mentioned earlier, we achieved considerable market share gains year-to-date, largely due to the success of our Volume Incentive Program or VIP, which we implemented in January and have continued to monitor and refine. CBOE's second quarter market share in multi-listed products, excluding dividend trades, was 22.6%. This represented a slight decrease of 60 basis points from our significant first quarter gains, but an increase of 210 basis points over last year's second quarter. Our year-to-date market share through June adjusted for dividend trades, was 22.9%, an increase of 150 basis points over the first half of 2011. Moreover, CBOE's total market share for all U.S. options trading in the second quarter was 29.8%, an increase of 290 basis points over the second quarter of 2011.

The next strategic initiative I will touch on today is the expansion of our customer base through targeted business development programs. Customer education is particularly significant to CBOE, where developing new frontiers in options and volatility trading is the centerpiece of our growth story. We are committed, in particular, to building ongoing relationships with customers through educational programs aimed at their specific options and volatility trading needs.

Today, I will highlight the expansion of 2 CBOE mainstays that have become leading brand names in options education: the CBOE's Risk Management Conference and The Options Institute, CBOE's world-renowned educational facility.

The CBOE Risk Management Conference, now in its 28th year, is an industry-leading event that provides an educational forum, where sophisticated practitioners examine the most current trends and concepts in risk management. RMC has proven to be a win-win for our customers and to CBOE, and attendees appreciate RMC for its substantive, content-rich program, and we value the opportunity to meet and work with customers who are likely to be early adopters of new products and services.

We are absolutely thrilled this year to leverage the success of the conference to increase our visibility overseas with the first European Risk Management Conference, which will be held between September 5 and 7 in Ireland. We believe that there is tremendous potential to increase the use of our products, particularly our SPX and VIX product lines among European investors and we expect the RMC Europe attendees, much like their U.S. counterparts, to be at the forefront of new trends in options and volatility tradings. We very much look forward to beginning this new chapter in RMC history.

Now, an update on the CBOE Options Institute, the world's only standalone facility dedicated to options and volatility education. The Options Institute annually conducts over 400 educational series, including regular classes, webcasts and seminars. The Institute's multilayered program uniquely provides us with a multitude of customer touchpoints that enable us to continue to interact meaningfully with customers as their trading and educational needs change and grow.

Often, these relationships are initially formed at the collegiate level. The Options Institute enjoys long-standing relationships with universities around the world and we are pleased to announce that it is currently developing an Options Lab, aimed specifically at college curricula. The Institute, this year, also initiated partnerships with organizations outside the traditional options trading community, including media outlets, such as TheStreet and Investor's Business Daily to further expand our educational and marketing reach. We are particularly proud of the Options Institute's faculty and staff, which include former traders, academics and noted authors, bloggers and experts in options and volatility trading.

Turning now to trading systems development. As announced in our first quarter earnings call, we have begun the rollout of CBOE Command, our company's next-generation trade engine technology. Throughout its 2012 rollout, which will culminate in the fourth quarter move of our service to New Jersey, significant upgrades will be added to CBOE Command, each resulting in an even more robust trading platform. Ultimately, Command will provide customers with the most comprehensive array of options and volatility products in the world, and place at their Command, new customized ways to access and trade those products.

Since our last call, the rollout of CFLEX 2.0, was completed as was the previously mentioned BasketWeaver system. I'm pleased to note that these new Command functionalities help to leverage trading in our proprietary product lines, in particular by creating a more efficient way to trade an existing product, as is the case with CFLEX 2.0 and SPX FLEX Options, or by allowing us to roll out a new product concept, as was the case with BasketWeaver and SPX Variance Strips. Our entire organization is very enthusiastic about Command and we look forward to reporting its continued rollout in the weeks and months ahead.

Looking ahead, we see considerable growth opportunities in the options and volatility space for the remainder of 2012 and beyond. A June 2012 Tabb Group study, tellingly calls, and I quote, "The U.S. options trading a standout from the crowd." And it calls for future growth in the U.S. options trading as a foregone conclusion and predicts that the the buy side trading will lead to volume growth. The report notes that firms are investing in options trading infrastructure and expanding their options trading capabilities to include new products, new markets and more complex strategies. Tabb calls it no surprise that volatility products are gaining the buy side's attention.

It is gratifying to note that our company's ability to leverage proprietary products to successfully compete in commoditized products and to prudently manage expenses enables us to continue to invest in future growth initiatives. We are well-positioned to benefit from anticipated growth in the options and volatility space as a result of our continued interest in leadership in education systems development and volatility in index option trading. Our solid financial position, our pristine balance sheet and strong cash flow leave us well-positioned to continue to grow our business, capitalize on opportunities and return value to stockholders.

With that, I want to turn this over to Alan Dean who will report on our financials. Thank you for your attention. Alan?

Alan J. Dean

Thanks, Bill, and good morning, everyone. As Bill highlighted, we reported solid financial results in the second quarter as we continue to focus on delivering industry-leading profit margins and growth rates. I'll provide a closer look at our financial performance, starting with a top-down review of our P&L.

As seen on this slide, operating revenues increased by 10% while diluted earnings per share was up 22%. We achieved strong operating leverage, reporting an adjusted operating margin of 49.8%, 280 basis points higher than the prior year period, a function of our revenue growth and effective expense management.

Before I continue, let me point out that our GAAP results reported for the second quarter of 2011 included certain unusual items that impact the comparison of our operating performance. These items are detailed in our non-GAAP information provided in the press release and in the appendix of our slide deck.

As shown on this slide, operating revenues increased by $12.3 million or 10%, primarily driven by increases in transaction fees, exchange services and other fees and market data fees, offset somewhat by a decline in access fees. Transaction fees contributed $8.6 million of the revenue increase, representing a 10% increase compared with the second quarter of 2011. The growth was driven by an 8% increase in trading volume and a 2% increase in the average revenue per contract or RPC. We experienced higher trading volume across each of our product categories, with the strongest growth coming from our highest margin products, index options and VIX futures, which also had a positive impact on RPC. RPC increased to $0.314 compared with $0.308 in last year's second quarter, primarily due to a shift in the mix of products traded, with index options and futures accounting for 28% of trading volume versus 26.2% in the second quarter of 2011. RPC also increased sequentially, up 12% in the second quarter compared to the first quarter, due to a shift in the mix of trading volume, as well as modifications to our Volume Incentive Program.

As most of you know, we implemented significant changes to CBOE's transaction fees earlier this year, including introducing a new Volume Incentive Program or VIP, and revamping our liquidity provider sliding fee scale to exclude our proprietary products. As anticipated on a year-over-year comparison, the fee changes significantly decreased the RPC and equity options, increased the RPC for index options and VIX futures and resulted in moderate changes to the RPC for ETF options. The fee changes were designed to drive incremental volume to our exchanges, leverage the strength of our proprietary products and maintain competitive pricing across all of our service areas and we are very pleased with the results that we have realized.

The market share gains we have achieved as a result of our Volume Incentive Program accrue far-reaching benefits to our business, powering the growth of Market Data fees, while providing support for access fees and exchange services and other fees, as well as allowing us to reduce Trading Volume Incentive expenses. As always, we will continue to monitor our fees to ensure that we are competitive and make prudent adjustments accordingly.

Exchange services and other fees increased by $3.6 million or 84% versus last year's second quarter, again resulting from fee changes we implemented at the beginning of the year. Based on year-to-date results and our outlook for the second half of the year, we are increasing our revenue guidance for these fees to be in the range of $27 million to $29 million for 2012. The growth of market data fees was primarily due to higher OPRA revenue allocated to CBOE, and increased revenue from CBOE's market data services.

Similar to what we saw in the first quarter, CBOE's market share gain resulted in a higher share of total options transactions cleared, which was the basis for allocating OPRA income. Access fees for the second quarter were down $900,000 or 5% year-over-year. The second quarter decline reflects the impact of our 2012 fee adjustments, as well as an increase in the number of permits holders taking advantage of our sliding scale pricing, which gives us a full year commitment to those trading permits. Access fees are in line with our expectations, tracking at the low end of our guidance range of $64 million to $67 million for the year.

Moving down the P&L to expenses, this next slide summarizes adjusted operating expenses, which were $66.5 million, up $2.8 million or 4% compared with last year's second quarter. Core operating expenses for the second quarter were $45 million, up 8% from $41.8 million in the second quarter of 2011, primarily due to increases in employee costs, outside services and travel and promotional expenses. The increase in employee costs primarily resulted from higher expenses related to salaries and self-insurance. Outside services were up due to an increase in legal fees, consulting fees and contract programmers. The increase in travel and promotional expenses primarily reflects our ongoing branding initiatives, which are focused on elevating the CBOE brand, and more specifically, building awareness for VIX products and SPXpm.

Volume-based expenses, which include royalty fees and Trading Volume Incentives, increased by $300,000 versus last year's second quarter, reflecting a $1.6 million increase in royalty fees, offset significantly by a $1.3 million decline in Trading Volume Incentives. The growth of royalty fees is directly related to higher trading volume in our license products, the one expense item I like to see go up. The decrease in Trading Volume Incentives was primarily due to changes in the criteria for contracts that qualify for the quantity-based fee waivers. Our success in bringing more customer order flow to CBOE allowed us to make these adjustments.

Our revenue growth, combined with our focus on expense management and operating efficiencies, resulted in adjusted operating income for the quarter of $66.1 million, a 17% increase versus 1 year ago. This represents an adjusted operating margin of 49.8%, up 280 basis points compared with the 47% in last year's second quarter. I think it bears repeating, we achieved our eighth consecutive quarter of year-over-year improvement in adjusted operating margin and the second highest ever reported.

Our effective tax rate was 41.4% for the quarter and year-to-date, which is equal to the effective tax rate reported for the first 6 months of 2011. The effective tax rate for the second quarter increased compared with last year's second quarter due to a higher provision for uncertain tax positions, offset somewhat by the benefit of a new tax apportionment method enacted by the state of Illinois.

Turning to the balance sheet, as shown on this slide, we ended the quarter with cash and cash equivalents of $127.1 million compared to $148.6 million at the end of the first quarter. The reduction in our cash position since the end of the first quarter is mostly due to estimated tax payments made during the quarter. During the quarter, we also repurchased nearly $22 million of our common stock, paid out about $11 million in cash dividends and spent nearly $12 million in capital expenditures. Capital expenditures for the first 6 months of this year were $19.5 million. On an annualized basis, our current run rate would exceed our guidance of $30 million to $35 million for the year. However, this is due to timing and more of the expenditures skewed towards the first half of the year. Therefore, we are holding our current guidance on capital expenditures. Year-to-date, we have generated nearly $87 million in cash flow from operations and have continued to return capital to stockholders. Through June, we have used nearly $53 million to purchase shares and return more than $21 million to stockholders in dividends. As of July 31, we had $3.3 million remaining on our $100 million share repurchase program approved in August of 2011.

Our strong financial position allows us to return capital to shareholders through increased dividends and share repurchases. Earlier this week, our board approved a 25% increase in the quarterly dividend and authorized another $100 million in share repurchases. Since our IPO just 2 years ago, we have returned nearly $600 million to stockholders, and as our actions show, we remain committed to allocating capital to enhance stockholder returns.

We believe the combination of dividends and share repurchases provides us flexibility to efficiently deploy capital, which is particularly important in light of the uncertainties surrounding tax changes. Along with our board, we will continue to evaluate all alternatives to enhance returns to our stockholders.

As we noted in our press release, we are maintaining our 2012 guidance that we provided in February 8 with one exception. As I mentioned earlier, we are raising our revenue guidance range for exchange services and other fees by $3 million.

Looking ahead, our focus is on being well-positioned to take advantage of volume upticks, while being nimble enough to adapt during lower volume periods. We believe we are in the best position ever to do just that. We have a solid debt-free balance sheet, strong free cash flow and a clear focus on creating value for our stockholders. We are successfully managing our business for the long term, while delivering consistent and solid top line and bottom line results. We are excited about the opportunities that lie ahead and are confident in our future success. With that, I will hand the call over to Debbie so we can take your questions.

Deborah Koopman

At this point, we will be happy to take questions. We ask that you please limit your questions to one per person to allow time to get to everyone. Feel free to get back in the queue and if time permits, we'll take a second question.

Question-and-Answer Session


[Operator Instructions] The first question is from Rich Repetto of Sandler O'Neill.

Richard H. Repetto - Sandler O'Neill + Partners, L.P., Research Division

I guess Bill, the first question is or the question is on volatility in the VIX, and you built the franchise on these products and they continue to grow. And I'm just trying to get an update on the customer segments and what's the run rate going forward. Where is the new growth coming from? And I'm going to apologize, but I got to sneak another one in. Can you comment on the night -- as an elder statesman in the exchange business, what can we do to prevent things and how is this going to impact, you think, trading going forward?

William J. Brodsky

No, let me lead with the second question, although, I've learned a long time ago, you don't talk a lot about an issue if you don't have all the facts, and I don't have all the facts. But I would say that look, our understanding is that the SEC and [indiscernible] are reviewing what happened yesterday. We're obviously reluctant to get ahead of the regulators on this, but from the accounts that we've seen, it appears that there was a technology glitch in the trading algorithm. All markets have rules to address these types of situations and it appears that the rules were used uniformly, once the problem was made known. It's very hard to predict, so everything is going to happen here. This isn't even 24 hours old, so I really think that we ought to just let the facts come out and then see what happens. On the second question, on the volatility issue, we are extremely enthusiastic about the continued growth of VIX. It is very gratifying and it's really part of what we've been telling people all along, and that is that we spend a lot of time educating people. We see growth in various segments, we see growth from the individual customers side. We see tremendous growth on the professional and institutional side, as I mentioned in my remarks on the Tabb survey, and we're also seeing growth because of these exchange traded products, where quite frankly, that's the product that individuals and others can go to, to let the sponsor manage the volatility portfolio for them based on whatever they view as their volatility needs. So we are supporting all that and in fact, one of the main reasons we're doing our risk management conference literally 5 weeks from now, is that we want to bring our whole volatility suite of expertise to the European Community directly in the conference. I will be there. We are very enthusiastic based on the success of our risk management conferences that we've been having here for many years, but particularly in how we've been able to use that as a launching pad for VIX education, to bring that to the broader community.


The next question is from Howard Chen of Crédit Suisse.

Howard Chen - Crédit Suisse AG, Research Division

Bill, you continue to execute well in both better and worse volume environments. I mean, you noted that the 8 straight quarters of earnings growth, but just on the environment, industry options, open interest levels are at or near the weakest levels since the financial crisis, what does that mean to you, if anything? And what's your level of concern that that's an indicator of weaker volume growth to come?

William J. Brodsky

Howard, it's a fair question and I've been in this business a long time and there were periods where you have these dips and things come back. And it's very hard to predict when they'll come back. I can think of a year ago, July, when we thought things were really dreadfully slow and then all of a sudden, August shut the lights out. So it's hard to predict when the changes will occur. But it's never a straight line. Ed Tilly will support me on this in terms of some data that may be helpful to you.

Edward T. Tilly

Howard, just to point out, we do track open interest as just one of the many matrix that we use to follow volume, and open interest does ebb and flow. We can look quarter-over-quarter where open interest will decline only to return the next quarter. And just specifically for CBOE, a little difference for you if we look across our product line. Yes, the multi-list options open interest has declined June to July. It has declined from March to June. But for CBOE, a little different story if we look out into our index complex where open interest is pretty much unchanged between June and July and up actually, from March to June. And then for our futures complex, open interest continues to increase. So a little different CBOE look but we're not at all at this point alarmed at the open interest change month-over-month or quarter-over-quarter.


And the next question is from Alex Kramm of UBS.

Alex Kramm - UBS Investment Bank, Research Division

Just wanted to quickly touch base on expenses. Alan, I think you left your guidance unchanged here. As I look at the current run rates, you're clearly still within the guidance, I mean on a year-to-date basis. If I just assumed the $45 million core, we would get to the high-end if we stay here, so maybe just talk to the trajectory. I mean, outside services were pretty high this quarter. You're still building out all this Secaucus stuff. So how is it going to flow through the remainder of the year?

Alan J. Dean

If you take our core expenses for the 6 months ending June 30 and multiply it by 2 and annualize it, I think we're just under the low end of our annual guidance. However, as you noted if you take our expenses for the quarter and project a trend, the continued growth rate year-over-year, then we'll wind up somewhere in the middle of our annual guidance range that we provided during February and we reaffirmed today. So that's how we see expenses for the year and consequently, we are maintaining our expense guidance, and think we'll wind up somewhere in the middle of that range.


The next question is from Patrick O'Shaughnessy of Raymond James.

Patrick J. O'Shaughnessy - Raymond James & Associates, Inc., Research Division

A question on your exchange service and other fees. I apologize if you already covered this, but your full year guidance, I believe is, you upped that to $27 million to $29 million. If that kind of run rate what you're doing first half of the year, that puts you over $30 million. So are you expecting some slowdown in that in the back half of the year?

William J. Brodsky

Obviously, we were conservative in the guidance that we gave for this revenue line item last February for the guidance that we gave to you entire year. We were concerned about the pushback from our customers, and how they would respond to these free increases even though we believe the fee changes we made were competitive. We believe that VIP helped mitigate some of that pushback, our volume incentive program. And even with 2 quarters behind us, we're still a little concerned that we will experience some degradation as the year wears on. And so consequently, if you annualize results for this line item, using results for the first 6 months, it is somewhat higher as you noted, than the guidance we are providing but it's just our concern about the last 6 months of the year, given the changes that were made in this line item.


The next question is from Jillian Miller of BMO Capital Markets.

Jillian Miller - BMO Capital Markets U.S.

So you guys have launched a bunch of VIX-related products, I guess trying to leverage the success of the underlying franchise and I know this quarter, you mentioned that you had the NASDAQ-100 futures launch. It's hard kind of in outside looking in to gauge what all these launches have amounted to from a revenue perspective. So I was just wondering if you might be able to give us an a idea for, apart from the original VIX option and futures, how much do you earn from all these various VIX-related products you've listed over the past couple of years?

Alan J. Dean

Certainly -- Jillian, this is Alan. Certainly, the VIX option in the future, that's what's the main driver of the increases in revenue, what we're seeing. And we have launched many products. They all start out as benchmarks and hopefully, they turn into products. There have been a couple of notable successes and the VIX emerging markets index is one that we're seeing some traction on and is starting to get my attention in terms of contributing to our top line. And we're also seeing licensing revenues starting to increase in our other revenue category. And it's almost getting to the point where I would give more granularity on that but not quite. But it's growing nicely, and so that's what I'm seeing from a P&L point of view. Ed or...

William J. Brodsky

I can add a little bit to that, Jillian. I think the success of VIX and the satisfying the demand for VIX exposure, overall volatility exposure, is really being satisfied by the liquidity and the ability to cover volatility in the S&P 500. And we see even a global interest in exposure, in using the VIX product line of the S&P 500. So not surprisingly, any competing product to VIX, the S&P 500 VIX, really has some uphill fight, whether it's global or our own domestic products. So again, our line here is to educate, bring new products to answer a broader range of users' demand but we will continue to do just that.


[Operator Instructions]

Deborah Koopman

I don't see any further questions. So with that, that completes our call this morning. We appreciate your time and continued interest in our company. Thank you.


Ladies and gentlemen, this concludes today's program. You may now disconnect. Good day.

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