Telanetix, Inc. Q2 2008 Earnings Call Transcript

Aug.14.08 | About: Telanetix, Inc. (TNIX)

Telanetix, Inc. (TNXI) Q2 2008 Earnings Call Transcript August 14, 2008 1:00 PM ET

Executives

Kirsten Chapman – IR, Lippert/Heilshorn & Associates

Doug Johnson – CEO

Paul Quinn – CFO

Analysts

Manny Recarey – Kaufman Bros

Alexander Berger [ph] – Hudson Bay [ph]

Jim Stone – PSK Advisors

Operator

Good day, ladies and gentlemen, and welcome to the Telanetix's second quarter 2008 results conference call. My name is Nikita, and I will be your coordinator for today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of today's conference. (Operator instructions) As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the call over to Ms. Kirsten Chapman. Please proceed ma'am.

Kirsten Chapman

Thank you, Nikita. I would like to thank everyone again for joining us on our 2008 second quarter conference call for Telanetix. With us on the call today from management are Doug Johnson, CEO; and Paul Quinn, CFO. Before I turn the call over to management, I'll read a short safe harbor statement.

Current statements contained in this call that are forward-looking statements within the meaning of applicable Federal Securities Laws, including, without limitation, anything relating or referring to future fiscal results and plans for future business development are thus perspective. Forward-looking statements are inherently subject to risks and uncertainties, some of which can not be predicted or quantified based on current expectations.

Such risks and uncertainties include without limitation, the risks and uncertainties set forth from time to time in reports filed by the company with the Securities and Exchange Commission. Although the company believes the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations we'll provide has been correct.

Consequently, future events and actual results could differ materially from those set forth and compensated by or underlying the following forward-looking statements contained herein. The company undertakes no obligation to publicly release statements made to reflect events or circumstances after August 14th, 2008. Before the company reviews the financials, I will define definitions and metrics which are not in accordance with Generally Accepted Accounting Principles, commonly known as GAAP. Management believes certain non-GAAP measures provide relevant and meaningful measures to evaluate the business. EBITDA is defined as Earnings or Loss Before Interest Income Tax Depreciation and Amortization. And the company defines Adjusted EBITDA as EBITDA adjusted for non-cash items including stock based and warrant compensation, severance costs, charges related to Series A preferred stocks, and changes in fair market value of warrant and beneficial conversions of future reliability.

On today's call, Doug Johnson, CEO, will review the company's accomplishments; and Paul Quinn, CFO, will review the financial statements; then Doug will deliver closing remarks and open the call for questions. It's my pleasure to now turn the call over to Mr. Johnson. Please go ahead, sir.

Doug Johnson

Thank you, Kirsten. And thank you all for joining us today. I'd like to begin my remarks with the point of perspective. Telanetix is in a very exciting business and marketplace. We deliver video and voice communication services via broadband. Our features are touted by our customers as cutting edge and our low cost IP based software that we've developed has the power to be very disruptive in the marketplace. Because of our technology advantages, both voice and video can be easily integrated at any time into a customer's existing infrastructure. This easy integration instantly creates cost savings for our customers and differs significantly from most providers who need to rip and replace when they enter a new company. Also, as broadband is becoming more ubiquitous and technology advancements lower prices for full feature telepresence, we believe our Voice customers are likely to adopt to Video. Finally, we developed our technology platform to enable us to sell software as a service which we believe yields gross margin benefits and delivers operating leverage, as we move from a development stage company to a scalable operating company.

Now, on to review our financial results. In May, our first quarter call, I established four major goals for the second quarter. And I'm very pleased to say that we accomplished those and more. First, we met our guidance and delivered second quarter revenues of $8 million, 4.5% over last quarter. Video contributed 20% of revenue and Voice 80%. The majority of which is recurring revenue. Also, we grew gross margins to 46.8% from 44.9% just a quarter ago.

Our second goal was to address our capital structure and we did just that. We transformed our capital structure. In June, we restructured our debt which significantly lowers our debt service requirement for the next six years and enabled us to allocate more resources towards growth and profitability initiatives. This week, we increased that new debt facility by $2 million creating more flexibility in our near term working capital. Our growth plan requires funds for advertising and sales expansion and this inflow meets our existing needs through the end of the year. We may chose to accelerate certain programs that may necessitate additional funds.

Our third goal was to improve costs and cost related controls. And here we've made very significant progress. During the quarter, I reorganized the teams under three general managers. Bob Leggio leads the Video Telepresence team, Peter Fyhrie leads the Voice for Enterprise, and Kent Hellebust the Voice for SMB. Each GM is responsible for his groups contribution margin, and our sales teams' compensation will be connected to both top and bottom lines. This structure helps to insure that everyone in the organization has his or her eye on the ball of driving long-term profitable growth.

During the second quarter, and into the third quarter, we implemented a reduction to a variety of other costs including work force, and we have moved from our developments stage. During the second quarter, we eliminated a number of executive goals. So far in the third quarter, we've also reduced duplicate of accounting, finance, and administrative functions. To date, in 2008, we've reduced head count by 10%. In addition, we continue with our integration into our Seattle facility, which eliminated redundancies and network cost. As a part of integration, we blended benefits and insurance which lowered expenses. And now we require less space in San Diego which is reducing rent. This cost reducing initiatives were implemented at the end of the second quarter. Consequently, they're obviously not reflected in the second quarter results, and are expected to impact the third and fourth quarters.

My fourth major goal for the second quarter was to assess our video business, and then to set programs to reinforce the strength and implement improvements to leverage our competitive advantages and reinvigorate sales. Through this assessment, I analyzed products, channels, including alignment of target customers, and cost optimization and here are my findings. In short, I believe our digital presence products is a differentiated, feature rich, and very cost effective solution that is very competitive in the market place. However, I also determined that we have an opportunity to improve our go-to market process and strategy for video distribution. As a result, Bob Leggio and I performed an aggressive executive search to sell this need. And as a result of that search, we hired J.D. Vaughn, a Senior Telepresence industry Executive as our Vice President of Worldwide Telepresence sales. Prior to joining Telanetix, J.D. Served a leadership roles at companies including Polycom, Accord Networks, AT&T, PictureTel, and Genesis Electronics. In Accord, in particular, he focused on distribution and sales and built from start up to $16 million in 28 months leading to an IPO and eventual acquisition by Polycom. In Polycom, as Vice President of sales for the Americas, J.D. led the vertical business solutions applications sales initiatives and was responsible for a $180 million in revenue. Bob Leggio and I are excited about J.D's ideas which we'll begun funding and implementing this quarter and believe that these changes will have a meaningful impact on video sales in 2009.

Regarding customer wins and product successes this quarter, we continue to move ahead. In Video, we released digital presence version 3.4.3 which extends greater support for high definition video to the entire digital presence product line and further improves video quality in both standard and high def scenarios. Also, we signed a joint technology agreement with AMD to develop Telepresence focused stream computing technology. We will not only benefit from the large amount of engineering and R&D that they are investing into this core technology but simply we can develop more and more powerful Telepresence solutions on smaller, more cost effective platforms, and do it with less of our own dollars and time using a technology path that has the full strength of AMD.

Next, we exhibited at Infocom in 2008, in Las Vegas in June. During the trade show, Telanetix spoke on multiple panels and the event was very well received. Our demo booth was packed with admiring and interested decision makers that went very well. We've also accomplished quite a bit in voice. We signed the two year extension with an estimated value of approximately $2.5 million with CallSource, who's a leading provider of call tracking technology and educational services. We believe this validates our value and demonstrate ongoing satisfaction with our performance, our reliability, and the cost savings that we deliver in voice.

Next, we expanded our channel programs and market reach through an agreement with OneCall, a Boston based unified communication solution provider focused on the real estate and financial services markets. And in July, we launched a new product, which we named DPS, with Costco wholesale, which offers a cutting edge phone system bundled with the phone service itself. Never before has the SMB market representing over 60% of all businesses in the US have access to a solution that's so simple. Simple to buy; one source, one bill for everything; simple to install, literally 15 minutes to install sophisticated digital phone system instead of a thousand dollar professional install fee; and simple to use. And never before have sophisticated business digital phone systems in service has been successfully sold through mass retail channels. So we're very excited about this one.

In summary, we have had a very busy and productive quarter. We have a competitive voice and video product and now we have the right video team in place to improve distribution. This is all complemented by improved cost, cost and cash management. As our plan is to be flexible while funding growth opportunities, we have decided not to provide short-term financial guidance. We are excited about our progress. We have re-directed our business and are steadfastly committed to profitable growth. And now, I'll turn our call over to Paul, who will provide you with greater financial details.

Paul Quinn

Thank you, Doug. On to our financial results for the second quarter of 2008. As Telanetix completed two significant acquisitions in the third quarters of 2007, I will provide comparisons to the first quarter of 2008 as they are more relevant.

Second quarter 2008 revenues were $8 million, up 4.5% sequentially compared to $7.7 million in the first quarter of 2008, reflecting an improved video product and service mix. Video accounted for 20% of revenues, or $1.6 million, up 18% from $1.4 million. Voice accounted for 80% of revenues at $6.4 million, up from $6.3 million last quarter.

We're going to review our Voice revenue in two categories – Core Voice business and a legacy product we refer as Enterprise Smart Number, for large enterprise markets. While the Enterprise Smart Number product is a profitable business, it's sales cycles are very long, and this model is not leverageable for us. Therefore, we are no longer marketing this product. As such, Enterprise Smart Number does not have associated sales and marketing expenses and we expect this product's revenue contribution to decrease over the extended term. But we do expect Enterprise Smart Number revenue over future quarters to moderately temper overall sales growth. It is important to note that this is a profitable product. In the second quarter, Core Voice products grew 3.3% and contributed $4.2 million which offset the 1.6% decline in revenue from the Enterprise Smart Number product. In addition, the overwhelming majority of all of our Voice revenue is recurring revenue.

As promised on the last call, we intend to provide operating metrics. The number of lines for our Core Voice business during the quarter was approximately 75,700, up from 69,050 last quarter. The churn for our Core Voice products during the quarter was 2.2%, down from 2.5% last quarter. We think this churn result indicate to you we have a best in class, quality of voice service. Further, we continue to make improvements to our network and how we support our customers. Gross profit was $3.7 million, or 46.8% of revenues, compared to the first quarter 2008 results of $3.4 million, or 44.8% of revenues, due to product services mix. Voice and network services gross profit was $3.4 million, or 53.4% of revenues, compared to 52.4% in first quarter. We continue to make progress in reducing the cost at delivering our voice services. This is both in terms of negotiating with our network providers and as we continue to grow, we better leverage our fixed infrastructure. Video gross profit improved to 20.8% of revenues compared to 9.9% in the first quarter. And this reflects our normalized mix of video software and installation revenue and better managed installation process.

Now, to expenses. As noted last quarter, we are integrating offices to increase synergies and reduce cost. During the quarter, SG&A was $6 million which included $1.3 million in severance compared to $4.5 million for the first quarter of 2008. Advertising for the quarter was $367,000 in line with $362,000 in the first quarter which we believe will increase in the next few quarters as we implement our profitable growth strategy. Please note, most of the cost reducing initiatives were implemented at the end of the second quarter, so they are not reflected in this second quarter results, and they will impact the third and fourth quarters. As Doug indicated, we started the third quarter with consolidated health plans and other reductions including headcount.

Research and development cost were $1.8 million which included those $500,000 in severance, compared to $1.3 million last quarter. Depreciation and amortization expense with $797,000 compared to $778,000. Total operating expense is $8.5 million, which included $2.4 million of stock-based in warrant compensation, including the $1.8 million in severance, compared to first quarter total operating expense of $6.5 million which included $325,000 of stock-based compensation.

Non-operating income related to the change in fair market value of derivative liabilities was $10.9 million compared to a non-operating expense of $2.2 million last quarter. Interest expense was $1.7 million compared to $1.3 million last quarter, in which our research of debt during the quarter, we eliminated our principal payments and reduced our monthly obligations.

And the charge related Series A preferred stock dividend and accretion was $0.6 million compared to $2.6 million last quarter. Net income for the second quarter was 2,000– second quarter of 2008 was $4.4 million, or $0.15 per diluted share, compared to net loss of $6.6 million in the first quarter of 2008, or $0.39 per share.

Second quarter 2008 adjusted EBITDA was a loss of $1.3 million compared to a loss of $1.7 million last quarter. The improvement in EBITDA reflects improved gross margins and initial impact of cost cutting programs. For the six months ending June 30, 2008, revenue was $15.7 million, net loss was $2.2 million, and adjusted EBITDA was a loss $3 million.

And now, to review our cash position. At June 30, 2008, the cash and cash equivalents balance was $1.1 million. And as we announced today, we've just added another $2 million to increase and strengthen our cash position. Also, we restructured our debt replacing the principal interest in dividend payments with interest only 6-year debentures in the aggregate amount of $26.1 million, resulting– significantly reduce our monthly debenture related commitments in future quarters. Net count at the period was 145 compared to 152 at the end of the first quarter. I look forward to reporting our progress in future calls and with that, I'll turn the call back to you, Doug.

Doug Johnson

Thank you, Paul. We are very excited about our progress in the second quarter. Financially, we met our expectations, transformed our capital structure, and reduced costs. Organizationally, we have reorganized our business units to focus on profitable growth. Augmented our teams and increased funds to fuel future growth including advertising and sales expansion. We have a recurring revenue model that is generating $32 million in run rate business. We've redirected our business and steadfastly committed to profitable growth. And now, we have the right Video team in place to improve distribution which we believe will have meaningful impact beginning in 2009.

I'm convinced that we're very well positioned to capitalize and one of the most significant revolutions in technology of this time and any other time in history. So, again, I thank the shareholders and the employees who have seen us through this process and I'm sure you will be pleased by the progress that we've reported on this call. I'll turn it back to the operator for Q&A.

Question-and-Answer Session

Operator

(Operator instructions) Our first question comes from the line of Manny Recarey of Kaufman Brothers. Please proceed.

Manny Recarey – Kaufman Bros

Thanks. Hi, guys.

Doug Johnson

Hi Manny.

Manny Recarey – Kaufman Bros

Several questions, you'd give out the number of lines in the quarter for voice. On video, is there any operational details you can give us with regards to revenue?

Doug Johnson

Manny, at this point in time, we are not giving out any of the details on the units of video.

Manny Recarey – Kaufman Bros

Okay. And I understand that you're not giving out any guidance just now, but with the two deals that you announced, one good servicing St. Vincent's Hospital. With those booked in the second quarter or those going to be booked in the third quarter and going forward?

Doug Johnson

They will be in the third quarter going forward, Manny.

Manny Recarey – Kaufman Bros

Okay. If you can talk a little bit more about how's your – with the extra $2 million to sales and advertising, accelerating that a little bit. Can you give any color on what your plans are there?

Doug Johnson

Yes. Absolutely. I think, there's two areas. One, as I mentioned in my prepared remarks, Manny, there are some ideas and some concepts and some marketing programs and some approaches that JD and Bob Leggio have put together on the video side that we're very excited about. And it's going to take some time, obviously, to fund and develop that, and so that's why we – use of the capital there. On the voice side, very directly, now we have – we frankly have a very well oiled machine that we can make a contribution into advertising dollars that frankly just returns to us in the top line in a matter of – in an analytical way that we can just manage day to day. And so were going to use this dollars, this funds to both grow the Voice and the Video businesses.

Manny Recarey – Kaufman Bros

Okay. And two more questions. One, of this thing, kind of – the operating expenses, with these cost reductions in placed, can you give any detail on how much they are going to save you on year, on quarterly, or annual basis. Trying to help from a modeling perspective.

Paul Quinn

Manny, we're not getting into that kind of detail on guidance at this point.

Doug Johnson

This is Paul speaking, by the way.

Paul Quinn

Right. This is Paul. But what we can say is we do see that the $2 million is definitely going to see us through to the end of the year. And as Doug indicated, allow us to strengthen our advertising and marketing. So that's about as far as we want to go at this juncture but I think it does give you some sense of the magnitude of the changes we've made right.

Manny Recarey – Kaufman Bros

Okay. And then kind of the last question on – in reaching positive EBITDA on a quarterly basis, is that a 2008 goal, or more of a 2009 goal?

Doug Johnson

Manny, it's a short-term goal of ours. And it's something that we're working very hard to accomplish. By the way, this is Doug speaking, and I'm t– it's the full commitment of myself, it's the full commitment of our business, it's the full commitment of our General Managers, it's what we're focused on doing. So I'm going to give you every bit of confidence that that's our complete focus. Profitable growth is the two words that we use around here constantly, but I'm not going to give you a date.

Manny Recarey – Kaufman Bros

Okay. Thanks.

Doug Johnson

Thanks, Manny.

Operator

Our next question comes from the line of Alexander Berger [ph] of Hudson Bay [ph]. Please proceed.

Alexander Berger – Hudson Bay

Good afternoon, gentlemen. It seems to me that the company derives an edge from it's engineering and research and development staff, and their ability to create products that are competitive in the marketplace. Could you talk about the R&D team, their background and what they have in the pipeline for the future that will continue to give Telanetix this edge, and perhaps how the investment that the company has recently had placed in it will take advantage of those opportunities?

Doug Johnson

Sure, and I'm going to answer the question – this is Doug – on both video and voice combined have a common DNA link in how we built this product that makes it, makes it so unique. Both of our products, voice and video, had been built in a way which utilizes industry standard hardware. We have built our service and our OSS stack in the code in a way that allows us to differentiate ourselves in the market around providing a low-cost, arguably the lowest cost, delivery of voice and video. We have – because we own our IP stack, our code stack, and our Voice and Video products from top to bottom, it also gives us flexibility and a speed to market that you just pointed out.

And let me kind of give you an example of that and some color around it. The alternative to how we have built our product would be to have purchased component parts from manufacturers in the Voice business. To use an example, you'd buy a soft switch and you'd buy session border controllers, and you'd buy a billing system and an OS system and a customer care system. You have to go through the regression testing and the effort to combine this piece parts to deliver a service. And that's frankly how the market works. That's how the market worked up to this point in time.

Our service delivery model is radically different. We've built all of our service model not only the product itself but how we deliver to market, inside the four walls of our organizations. And so, the consequence, we have the speed of change and just hasn't– that it doesn't exist in the market, and we have this, frankly, this low cost provider advantage that doesn't exist in the marketplace that we think we can leverage. So, it's a radically different approach. At the end of the day, I see voice and video as applications. I see them both these applications that ride over broadband and because of how we built video and how we built voice in this common architecture, both sides of the business enjoy this flexibility and speed to market and low cost provider advantage.

Operator

(Operator instructions) Our next question comes from the line of Jim Stone of PSK Advisors. Please proceed.

Jim Stone – PSK Advisors

Good afternoon, gentlemen. A couple of questions, I didn't hear clearly what you have for severance included in the R&D expense?

Paul Quinn

$500,000, Jim. This is Paul.

Jim Stone – PSK Advisors

Okay. Next, can you give us some examples of the synergies you're getting between telepresence and voice?

Doug Johnson

I can give you a great example. The announcement of Savas who, obviously, is a customer of ours – by the way, this is Doug speaking – is a voice customer of ours and we just announced them as a video customer and someone who recognizes the – arguably an early adapter because Savas is a technology and a Ford company, but that they're a picture perfect example of a company who is bought our voice and the video services. And we think that, as time goes on, Jim, we're going to have more and more examples of this synergy.

Jim Stone – PSK Advisors

Okay. What would you say is the reason, it doesn't seem like the video has had that much traction in the market considering all of its good features and good pricing. What do you attribute that to and what have you done to change it so it will get more traction?

Doug Johnson

Well, if, you know, you're right on, Jim. Our digital presence product is differentiated. It's feature rich, it's got this cost effective advantage to it. But, as I pointed out in my prepared comments, the – frankly, I've determined that we have the opportunity to improve our go-to market strategy or distribution, and that's where Bob Leggio and myself, Bob is the GM of the video space, did that executive search and said, “Look, how we really solve for this gap? How do we fix this in a short-term?” Because we've got this terrific – this terrific product advantage. But we all know that if you don't – and if you don't have the distribution piece figured out, that can be a big hole. That can be a disadvantage. So saw very quickly to fill the need, and as a result of that search for the leadership to kind of help us rebuild that distribution, we hired J.D. Von and if you've met J.D. you'll find Senior, Senior Telepresence executive . Now Accord networks is a company in video, and he led the sales team, and the marketing group at Accord, and he took it from start up, sound familiar, it's from start up to $60 million company in two years. He was the VP of sales at Polycom in the video space, running a $180 million piece of business.

So Jim, your question is – it's exactly how I'm thinking about the business, and we've this great asset, we've got this great product identified at – Bob and I identified a gap and in our go-to market strategy and I believe that we've taken the first step of getting that right, and that's putting the right leadership in place. And as I've mentioned, J.D. has a variety of different ideas and Bob also is a great contributor, together they are a great team, and we think that funding this now and giving it the time to develop, we're going to have a good strategy on the distribution side and close that gap.

Jim Stone – PSK Advisors

Was he at Polycom immediately proceeding coming to Telanetix or was there something in between?

Doug Johnson

He was immediately proceeding. Actually, he was– he stepped out of PolyCom immediately so, I– but yes, that was his last point of employment.

Jim Stone – PSK Advisors

Can you share with us some of the vision that he saw because that would, at first glance, that would seem to me a step down. So obviously he's seeing something and if you could share some of what his vision is of why he joined, that would be very helpful.

Doug Johnson

Well, I'd invite you that to have a conversation with him directly, but I'll see if I can't speak for him, taking the risk. I think what he saw was a very, very cool piece of technology in an extremely undervalued company and in the sense of trying to build personal success, the old buy-low, sell-high attitude's a good one, and I think JD saw a company that has a lot of upside. So, again, I don't want to speak for JD, he's a really bright, talented senior professional and so is Bob Leggio and I think that together they make a heck of a team, but I think is the answer would be that, there is a real opportunity here.

Jim Stone – PSK Advisors

Very well. I will give him a call. Do I just call corporate headquarters?

Doug Johnson

Yeah. We can set that up.

Jim Stone – PSK Advisors

Okay. I stop covering PolyCom a few years ago, so I didn't meet him then. Last question at this point, and then I'll turn it back. You have a line count going up roughly 10% sequentially on the access side and, clearly, revenue didn't go up as nearly as much. Could you give us some insight on that?

Doug Johnson

Sure. I just point out to you that you're– that there's a slight delay and, Paul, I'll turn it over to you, but there's a slight delay between when you sell a line or when you recognize its first month of revenue. So, for example, in a quarter, if you were to add all those lines in the last month of the quarter..

Jim Stone – PSK Advisors

I understand that but I was assuming, and maybe that's wrong, that you had much the same type of transition between the last quarter of last year and this quarter. And if that's wrong, then please correct me.

Paul Quinn

This is Paul. Jim, I'm not sure when you talked about last year.

Jim Stone – PSK Advisors

If you say, you went from $69,000 in the first quarter to $75,000, then was it in the low 60's in the last quarter last year going to $69,000 in the first quarter?

Paul Quinn

I get your point. I get your point. Yes, we are not giving that number out, Jim. But I think it's fair to say, I think your point that you're seeking to understand is does each of our product have an equal contribution to revenue from as we add lines to the unequal contribution to revenue. And the answer is we have a different set of products and they don't all add to revenue in the same rate. So, each line isn't a certain amount of dollars when added. We're giving the line count because we think it gives you the right understanding of how we're growing the business but with our different set of products, it's not a direct correlation to revenue on a percentage basis.

The other thing I've point out to is that there's a business day metric in there. That in the Voice business, the reality is that there's some months have more business days than others. So, that has some impact upon on revenues. At the end of the year, for example, Q4. You have this brutal, kind of, holiday period. If people would stop holidaying, it would be better for our business. But, so you do have some business but I'm not sure how much of that is taken into account but it's something that should be noted that – it will have impact in Q4 on the voice side. These business days is a general rule [ph] in telecoms.

Jim Stone – PSK Advisors

Okay. I'll step out and rejoin the line.

Doug Johnson

Thank you.

Operator

It appears there are no additional questions at this time. I will now turn the call over to Doug Johnson for closing remarks.

Doug Johnson

Okay. Thank you. Once again, thank you all for joining us today. We are, as you can tell, we are very excited about our video and voice opportunities and our plans for topline growth. And our plans for disciplined, disciplined cost control in 2008. Next week, on Monday, August 18th, 2008, we are presenting at the SRA Fourth Annual Summer Technology Conference at the Omni Hotel in San Francisco. And then, by the way, the first week of September, we'll be presenting at the Kaufman Bros. Eleventh Annual Investor Conference in New York City. So, I look forward to hopefully meeting some of you there and updating you on the business in our next call in November. Again, thank you very much and have a great day.

Operator

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a great day.

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