Turtle Beach Corporation (NASDAQ:HEAR) Q1 2018 Earnings Conference Call May 9, 2018 5:00 PM ET
Juergen Stark - Chief Executive Officer
John Hanson - Chief Financial Officer
Mark Argento - Lake Street Capital Markets
Andrew Uerkwitz - Oppenheimer & Co. Inc.
Good afternoon, ladies and gentlemen, and welcome to the Turtle Beach First Quarter 2018 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference may be recorded.
Before we get started, we will be referring to the press release filed today that details the company's first 2018 results, which can be downloaded from the Investor Relations page at corp.turtlebeach.com. On that website, you will also find an earnings presentation that supplements the information to be discussed on today's call. Finally, a recording of the call will be available on the Investor Relations section of the company's website later this evening.
Please be aware that some of the comments made during this call may be forward-looking statements within the meaning of the Federal Securities Laws. Statements about the company's beliefs and expectations containing words such as may, will, could, believe, expect, anticipate and similar expressions constitute forward-looking statements. These statements involve risks and uncertainties regarding the company's operations and future results that could cause Turtle Beach Corporation results to differ materially from management's current expectations.
The company encourage you to review the safe harbor statements and risk factors contained in today's press release and in their filings with the Securities and Exchange Commission, including, without limitation, their most recent quarterly report on Form 10-Q, Annual Report on Form 10-K and other periodic reports, which identify specific risk factors that also may cause actual results or events to differ materially from those described in forward-looking statements. The company does not undertake to publicly update or revise any forward-looking statements after the date of this conference call.
The company also notes that on the call they will be discussing non-GAAP financial information. The company is providing that information as a supplement to information prepared in accordance with accounting principles generally accepted in the United States or GAAP. You will find a reconciliation of these metrics to their reported GAAP results in the reconciliation tables provided in today's earnings release and presentation.
I will now turn the call over to Juergen Stark, the company's Chief Executive Officer. Juergen?
Good afternoon, everyone, and thank you for joining us. The past four months have been transformative for Turtle Beach. In March, we renegotiated our loans, extending their maturities and reducing the interest rates. In April, we retired the Series B Preferred Shares in a set of transactions that produced over $10 million of value for our stockholders.
These moves represented the culmination of over five years of work to improve the company's balance sheet. We also issued very strong preliminary guidance for Q1, based on market share growth and a strong underlying headset market. As a result, we believe the profile of the company from an investor standpoint has improved significantly.
The percent of our enterprise value, represented by our outstanding common equity has gone from approximately 26% at the end of 2017 to over 60% at the end of April. Our first quarter results were record setting across the board, with the company's net revenue, gross margin, net income and adjusted EBITDA at the highest levels for any first quarter since the company became public in 2014.
Driving this growth were market share gains on top of a very strong overall console gaming market, which is being driven by the success of Fortnite and PlayerUnknown's Battlegrounds, also known as PUBG. These games have drawn new gamers into the market and have generated higher headset attach rates than we have historically experienced. The strong market in our even stronger performance can be seen in NPD's latest North American console headset retail sell-through report.
Year-to-date through March 2018, we grew our revenue share 720 basis points to 45.9% from 38.7% in the same period in 2017. On a unit share basis, we improved 1,250 basis points to 44.2%. While the market was up 77.6% on a revenue sell-through basis, during the first quarter, Turtle Beach was up 110.3%, nearly double the 57% growth experienced by the rest of the market excluding Turtle Beach headsets.
Similar market share gains and strong market growth were experienced in the UK and our other large European markets as well. According to NPD, our total console headset revenue is bigger than the next four competitors combined and greater than all of the other third-party competitors combined.
Year-to-date through March 2018, we provided 7 of the top-10 best-selling headsets and had the number one Xbox One headset, the number one PlayStation 4 headset, the number one wireless headset on both platforms, and the number one chat headset on both platforms.
Now, I'd like to discuss some of the products that drove our record quarter. Launched in September 2017, our Stealth 600 wireless headset for Xbox One became the top-selling console gaming headset in monthly revenue by January 2018 and continues to be the top-selling console gaming headset each month to-date.
Also launched in September 2017 are Stealth 600 wireless headsets for PlayStation 4, became one of the top-five selling headsets by monthly revenue by January 2018, and has maintained that position each month to-date.
In the sub-$50 price tier, the Recon Chat headsets launched about a year ago have taken significant market share and were selling more than any other chat headsets in the market on a monthly revenue basis by October 2017 on both Xbox One and PlayStation 4 platforms. They maintained that position since then as well.
Strong brand, great distribution, products that gamers love and a track record of leading on innovation in those products year after year continue to contribute to our market success. In light of our favorable first quarter results, we are updating our Q2 estimates to what we believe will be another record quarter and a year that we expect to produce over 35% growth in revenues and more than 100% growth in EBITDA compared to 2017.
I will walk through our full outlook and other business developments after John addresses our first quarter results in greater detail. John?
Thanks, Juergen, and good afternoon to everyone. Net revenue in the first quarter of 2018 increased 185% to a company record $40.9 million, compared to $14.4 million in the first quarter of 2017. The significant increase was due to the higher market share in our core markets and increased sell-through driven by Fortnite and PUBG game releases, fueling stronger consumer demand.
Gross margin in the first quarter more than doubled to a record 36.8% compared to 15.4% in the first quarter of 2017. The increase was primarily due to a less promotional environment as compared to the prior year and higher volumes, driving fixed cost leverage.
Operating expenses in the first quarter of 2018, increased to $11.2 million, compared to $10.3 million in the same 2017 period, due primarily to an increase in revenue related sales cost and an increase in marketing cost relative to last year. Net income in the first quarter increased significantly to $2 million or $0.16 per diluted share, compared to a net loss of $9.9 million or a loss of $0.81 per diluted share in the year ago quarter.
The improvement was driven by our significant revenue and gross margin growth. It's worth noting that this was our first profitable Q1 since becoming public in 2014. Adjusted EBITDA in the first quarter of 2018 increased $11.4 million to $5.3 million, compared to a negative $6.2 million in the year ago quarter.
Note, that our preliminary Q1 results for adjusted EBITDA included an assumed expense item related to the renegotiation of our debt in March that wasn't required based on final accounting treatment of the loan agreements.
Now, turning to the balance sheet, we ended the quarter with cash and cash equivalents of $4.3 million, compared to $3.6 million one year ago. As a result of our $60 million revolving credit facility, we typically do not maintain a large cash balance.
Inventories at March 31, 2018 were $15.8 million, compared to $27.5 million at March 31, 2017, significantly lower given the strong sell-through from our market and share growth realized in 2018. Total outstanding debt principal at March 31, 2018, was $34.5 million, compared to $34.4 million at March 31, 2017. The debt consisted of $22.6 million in subordinated debt, $9.2 million in term loans, and $2.6 million of revolving debt.
Our senior debt leverage ratio, which we defined as total term loans and average trailing 12-month revolving debt, divided by consolidated trailing 12-month adjusted EBITDA stood at 1.0 times at March 31, 2018, compared to 2.1 times at the end of 2017, and 6.8 times just one year ago.
During the quarter, we amended and improved certain terms and covenants under our debt agreements, including a reduction in the interest rate and greater availability on our revolving credit facility. A 350 basis point reduction in the interest rate on the Crystal term loans, a 140 basis point reduction in the interest rate on the majority of the subordinated debt with Stripes. The ability to use a portion of the fund from a term loan to reduce the subordinated debt, more streamlined reporting including with respect to certain financial covenants and the extension of the loan's maturity date to 2023.
The net effect of the changes is expected to be interest savings of at least $3.5 million over the next five years. In addition, we recently paid down just over $3.2 million of the sub-debt and increase the term debt by the same amount to reduce our interest expenses subsequent to the end of the quarter.
As Juergen mentioned, about two weeks ago, following the end of the first quarter, we facilitated a series of transactions to retire the preferred B - the Series B Preferred at a discount of more than 50% relative to its redemption value. I'll remind you this was a nearly $20 million liability growing at 8% per year. In addition to the signification balance sheet improvement, the transaction is expected to result in a material reduction in non-cash interest expense going forward.
The retirement of the Series B Preferred Stock is a Q2 transaction. We do not expect any negative impact on net income or adjusted EBITDA in Q2 from these transactions. In addition, following the completion of these transactions more than 50% of our shares are held by public stockholders. So we are no longer a controlled company under NASDAQ listing rules.
The slide on Page 12 of our earnings presentation represents the value creating nature of these transactions for our shareholders, with approximately 60% of our enterprise value now being held by our common stockholders versus just 26% at the end of 2017.
Now I'll turn the call back over to Juergen for some additional comments on the business and our updated outlook. Juergen?
Thanks, John. Now, I'd like to discuss other developments that we believe demonstrate our growing momentum and introduce our increased full year outlook. We continue to drive our presence in the burgeoning esports market with key new partnerships. Our approach here is focused on quality of teams, not quantity. We recently announced a multi-year continuation of our partnership with top esports and gaming entertainment organization OpTic Gaming.
The updated agreement will see Turtle Beach continue to arm OpTic's World Champion Call of Duty and Gears of War teams and OpTic's Counter-Strike: Global Offensive team, as well as all OpTic content creators and streamers with our Elite Pro line of gaming headset and other gaming gear. The agreement has been expanded and now includes OpTic's DOTA 2 and PUBG Squads as well.
Additionally, other esports and gaming franchises under Infinity Sports and Entertainment, OpTic Gaming's holding company are also significant part of this partnership expansion with further details to be revealed over the coming weeks.
We also announced a new partnership with Knicks Gaming, the NBA 2K League franchise of the New York Knicks, as they are official gaming peripherals partner for the 2018 NBA 2K League season and beyond. The partnership will see Knicks Gaming players using Turtle Beach headsets at the Knicks Gaming training facility, and our two companies also plan to produce a variety of content highlighting the fun and challenging aspects of the inaugural season.
We continue to work closely with the esports team Astralis, currently ranked as the number one Counter Strike: Global Offensive team in the world after consecutive grand finals appearances and a DreamHack Masters title so far in 2018. Our partnership has grown with new content and a deep involvement in our PC focused product development initiatives.
Last on the partner front, we extended our partnership with esports team Splyce, one of the foremost esports organizations in the world, as their official audio partner for the console-based teams. Splyce continues to be a dominant force in Call of Duty and boasts with the newly crowned Halo World Championship winning team. We look forward to watching them take on Rocket League this year. In addition of these partnerships, we have an exciting slate of products coming this year, which will be announced at E3 in June.
Now moving to more commentary behind the Battle Royale phenomena, fueling the success of Fortnite and PUBG releases. For those unfamiliar with the format of these games, they are multiplayer, player versus player, online games, where the winner is the last man or woman standing. This new format has compelling survival mechanics, it can be played by teams or individually. These games are brought new players in the gaming, spanning genders and a broad range of ages. They are driving users on traditional platforms like Xbox, PlayStation and PC, but also on newer platforms for the genre like mobile.
Both games released last year and have really taken off on consoles in 2018. Headsets make these games more immersive and provide an advantage in hearing audio cues, which can help players, survive and facilitate team play. So as the games have attracted millions of gamers, headset sales have increased significantly as we've discussed.
We expect the Battle Royale format to have lasting appeal and not be a short-lived phenomena due to the style of the games and the addition of new participants into gaming. As the base on gaming headsets users goes up, we expect replacements and upgrades will too. We also expect more publishers, who will develop games with the Battle Royale format this year.
The demand for console gaming headsets has continued to grow into our second quarter. In fact, we've been working hard to significantly increase our supply to keep up with demand that has sustained at a rate of more than double our original forecast for four months running now.
Our operations team and factories have done a great job ramping up. I couldn't be more grateful and impressed by our team, and the teams at our manufacturing partners and key suppliers for what they've already accomplished on this front. We've also been air shipping to expedite deliveries and we'll continue to do so to support our retailers and do our best to keep them in stock.
So with these strong drivers on momentum in mind, I'd like to turn to our increased outlook for 2018. But first, let me walk through our second quarter expectations, which if achieved, will produce another record quarter.
We expect net revenues to increase a 151% to approximately $48 million, compared to $19.1 million in the second quarter of 2017. Please keep in mind, this assumes some level of stock out as we work to increase our supply given the high level of sustained sell-through over the past four months.
Net loss is expected to improve to approximately $0.05 per share, compared to a net loss of $0.57 per share in the second quarter of 2017. Adjusted EBITDA is expected to improve to approximately $2.5 million, compared to negative $2.8 million in the second quarter of 2017. The Q2 2018 estimate for EBITDA includes approximately $4 million of anticipated expedited freight cost, which mainly impact Q2, not Q1.
Other than the anticipated reduction in non-cash interest expense, our Q2 estimates exclude any other effects of the accounting treatment for the retirement of the Series B Preferred shares, which we do not expect to have an adverse effect on the net income or adjusted EBITDA.
Now moving to our increased full-year outlook. In 2018, we now expect net revenue to increase 37% to approximately $205 million, up from $157 million in our March outlook for the year, and compared to a $149.1 million in 2017. We are approaching our full year outlook estimating second half sell-through roughly in line with last year, which we expect is appropriately conservative as we continue to track the year-to-date sell-through increases and refine our view of the expected longer-term impact.
That said, we are planning our production and supply to be able to deliver product for upside scenarios should the increase in year-over-year sell-through continue into Q3 and Q4. Gross margin in 2018 is expected to be comparable to 2017, including the impact of additional cost we're incurring to expedite our products offset by operating leverage from higher revenues.
Operating expenses are expected to increase several million dollars in the second half versus second half of 2017, as we expect to make select additional investments to drive growth that are improved outlook now enables us to make. As a result, adjusted EBITDA in 2018 is now expected to more than double relative to our prior outlook and last year.
We expect adjusted EBITDA to be approximately $26 million, up from $12 million in our March outlook and compared to $11.6 million in 2017. This includes the growth investments I mentioned above. Net income in 2018 is now expected to improve to approximately $0.95 per share, up significantly from a net loss of $0.12 a share in our March outlook. Per share estimates are based on $14.2 million estimated diluted shares outstanding. This is compared to a net loss of $0.26 per share in 2017.
Similar to my earlier comment, please keep in mind, that this does not include any impact of the Series B retirement other than non-cash interest savings, we will achieve and the additional shares outstanding following the completion of those transactions. Although, as we said, we don't expect adverse impact on net income or adjusted EBITDA.
Our full year outlook anticipates positive free cash flow of approximately $20 million this year, which we believe will enable us to further reduce debt over time. Given the strong outlook, I'd like to address our strategic priorities for 2018, which remain unchanged.
First, continue to lead the core console gaming headset market. We have more great products coming this year and we will continue to focus on our brand, distribution, merchandising and all of the operational capabilities that make us the leader in our segment. We plan to make some investments to nurture and broaden our brand as well.
Second, drive our presence in the burgeoning esports markets. According to a February 2017 article published by Sports Illustrated, esports is expected to surpass $1 billion in revenue by 2019. As the leading provider of headsets to gamers in our core markets, even by the way when measuring PC and console gaming headsets together, we are one of the top providers of gaming gear to esports players and their fans.
And as I mentioned earlier, we have inked successful partnerships with some of the best teams in the world, teams like OpTic Gaming, Astralis, Splyce and others. Third, we plan to invest to drive future growth. As I have mentioned on prior calls, we believe we have opportunities in PC gaming headsets in new geographies like China as well as non-headset gaming accessories in the future.
The PC gaming headset market is similar in size to the console gaming headset market. And based on recent research we commissioned, we believe that our brand is known and relevant with PC Gamers in our core markets. That's our first priority and we'll be launching some new PC products this year in our core North American and European markets.
China is the biggest gaming market in the world and virtually untapped by us. We're making some modest investments in China this year, but currently intend to increase our focus in China over time as a second priority. We will also evaluate other gaming product areas, in which we can leverage our strong brand and great distribution to drive future growth.
With our strong performance in first quarter and significantly higher 2018 outlook, we believe we are now in an even better position to make these investments to broaden our business and drive growth in the future.
This is an opportune time to really thank the great team of colleagues here at Turtle Beach. Many of you have been here for years and helped us execute through the most recent console transition, improve the balance sheet and create a strong team in every area of the company. And every one of you have contributed to positioning us with a leading brand, fantastic retail relationships, outstanding products and strong operational capabilities which are enabling us to significantly outperform in a strong market.
Thank you, thank you. Thank you very much for everything you have done and continuing to do for the company. Operator, we are now ready to take questions.
Thank you, sir. [Operator Instructions] Our first question will come from the line of Mark Argento with Lake Street Capital. You may proceed.
Hey, guys. I knew this is a great quarter, great Q2 guide, very exciting times for the company, and congratulations for the success. Obviously, when you're growing as quickly as you guys are, just had some questions around inventory levels, in particular your ability to get product into the channel. I'm assuming you're having to air-freight some product in. But assuming that, taking the demand remains, which it looks like it's still very strong in retail, your ability to actually continuing to deliver at these types of growth rates for few additional quarters, what kind of stresses are put on the organization or is there a governing factor here in terms of the availability of product?
Thanks, Mark. And I appreciate the opening comments. So, yeah, that right now is a key area of focus for us. We receive retail data weekly and we jumped on this frankly early in January already when the higher sell-through came in. So this - so increasing supply has been a major focus. We have an excellent team operationally. We also have partners that have done an amazing job.
Factories are running at a multiple production level, even in the first few months after we initiated increases already. And we've done actually a reasonably good job staying in supply. Q2 revenue does anticipate some stock-outs by the way. And what we do, literally day to day the sales team will allocate orders to retailers globally to do our best to keep everybody in stock, but also prevent essentially hogging a product by one retailer for the benefit of another.
So that is an increased operational load. Our operations team in addition to being - working with the factories to increase supply, which has gone very well, obviously, we are also in the middle of working on component supply and everything else we need, not just for Q2, but in some cases all the way through the end of the year. That was my comment about - even today, now, we have to plan various scenarios for the year to make sure we can stay in stock through Q4.
Lastly, we are doing everything we possibly can to get product and including air-freighting. So Q2 includes about $4 million, which is significant by the way for us to get product here more quickly using air and other expedited freight. This is well worthwhile by the way to do this, because staying in stock and making sure anybody who wants a Turtle Beach headset can find one is obviously the top priority.
Great, helpful there. Turning to more some housekeeping, obviously, the retirement of the preferred, looks like about 14.2 million shares. Is that good kind of pro forma or good fully diluted share count we should be using going forward?
Yeah, 14.2 is exactly right.
Then you guys also on the prepared remarks mentioned something about now that you're below 50% of control ownership that you fall below a threshold. What's the - I'm not really familiar with the pros and cons of that. What does that afford you or what does that mean for you guys going forward?
There are a couple of things, actions we need to take over the course of the next year, some of them sooner in terms of committee composition and having a fully independent board one year after, leaving the control company status essentially. I view that frankly as a benefit to shareholders, because the majority of the company is now in the hands and controlled by public shareholders.
Great. And then, in terms of what you're hearing from retailers, are they allocating anymore shelf-space to the category, not just headsets, but maybe console gaming or gaming in general? It seems like the Battle Royale phenomenon is not necessarily kind of won and done, but it seems like it's attracting a whole another demographic or at least expanding the base a little bit.
Yeah, and I think the retailers are obviously well aware of the trends and we're in discussions as is everybody else in the industry about Q4 and how they'll handle shelf-space and all that. So we're optimistic that - they're obviously doing very well in the middle of this. And hopefully, they will recognize and treat holiday plans accordingly.
Thanks, guys. Congrats again.
Thank you, Mark.
Thank you. The next question comes from the line of Andrew Uerkwitz with Oppenheimer & Company. You may proceed.
Hey, thanks, gentlemen, for taking the call. You talked a lot about the tie-in with esports and Battle Royale. Could you talk about your views on Twitch streaming, how that's probably potentially affected sales and any potential efforts there to leverage that platform?
Yeah, the twitch streaming is including on Battle Royale and Fortnite and PUBG is a huge entertainment medium now as I'm sure you know. People are watching these streams and I think I heard one of the streamers the other day is currently making more money than any professional athlete on a monthly basis. Don't quote me on that, but that's what I was told at least. So this is huge.
We've got a strong partnership and just loved working with Dr. DisRespect. He is one of the big streamers. And our esports partnerships also include streaming components when these players are online and playing and those streams are being broadcast. And that's definitely an area that we focus on and will stay focused on as a way to communicate with users and have our headsets be in front of players everywhere.
Great. Thank you. And then just as a follow-up, as you think about the PC market, obviously, there's probably some brand awareness across platforms. But is there any differences that could either help or hurt as far as price points go or technology goes that you have or don't have between the two platforms?
Yeah. I'll try to give you a short answer. There is a more to it, but just to summarize it. The products are very similar, but PC products can have more capability built into software on the PC, it's around some processing things like that. So in general, PC gaming headsets tend to be technologically simpler than console gaming headsets. So for us, moving from what we do in console gaming to PC from a product standpoint is a piece of cake.
Retail in many cases is similar, but in some cases are different sections and departments, and even different buyers. So you do need to get shelf-space in the PC area, in order to start to make a move in that market, obviously the retailers are mostly the same as the ones that sell console gaming headsets, so we have good relationships and I feel like we've got an advantage there, looking at the PC market.
Those are two differences, one other one is that PC gamers buy keyboards and mice as well, and those over time will have a tie-in from a software and a lighting standpoint and all that. That's not something that we're focused right now. But over time as we look at PC, it's something will pay more attention to per my remarks about looking at non-gaming markets as well in the future, not this year.
Okay. That's super helpful. And I just ask one more, when you start to kind of think about sort of moving to the holiday season, and when we think about Battle Royale genre, is it just new gamers coming to Battle Royale, they don't have headsets? Is it the need for headset for squad modes that - is this the primary benefit? Have you done any kind of survey work? Totally understand if you have it, but around what it is specifically that is driving this, because it seems like more and more games are becoming multiplayer and with squad.
So it seems like there are games outside of Battle Royale that would seem headset would make would be needed. So I'm just curious, how you view the broader trends towards multiplayer and how that affects headset sales?
Yeah, Andrew, that's a really good question and comment. If you look at EA and Activision's earnings, they both had record earnings. So gaming in general as an entertainment medium is doing extremely well. That I wouldn't be surprised if some of that is reflected in gaming headsets as well, separate from the Battle Royale phenomena.
Battle Royale specifically is driving three - there are three drivers of growth. The first one is people who have existing Xbox and PlayStations are playing first person shooter, a lot of them are using headsets maybe moreover time exactly to your comment. But we suspect that the attach rate on Fortnite and Battle Royale games is even higher than it is on first person shooter. Because it's a survival game, the audio cues are really important, even if you're not playing on a team, and then there is a lot of play like there is in first person shooters. So that's kind of if you look at that like the core hard-core gamers, a lot of them are using headsets, but the attach rate might even be somewhat higher from Battle Royale.
The second segment is, console gamers that are playing FIFA and the 2K games and all that. Where the headset usage would be lower, and when they start playing one of these games, their headset usage is going to jump a lot. So there are lots of them are - lots of those players are going out and getting headset.
And then third, we do see new gamers buying PlayStations and Xboxes to play these games, and they're going and getting headsets at reasonably good attach rate from what our estimates in our analysis is showing us. Those are the two - the three key drivers of the increasing headset sales.
Got it. Thank you, guys, so much. I appreciate the additional color.
Thank you, Andrew.
Thank you. [Operator Instructions] And our next question will come from the line of [Steven Weber] [ph] with Bentley Capital. You may proceed.
Hi, guys. Great quarter as everyone has said and very great job. I just wanted to clarify one thing about the guidance that I'm confused about, if you look at the second quarter guidance sequentially relative to the first you have almost $8 million in incremental sequential sales that you're expecting in Q2. But you're expecting a loss where as you had a profit in Q1, I know you have the airfreight shipping in Q2. But I know you had a good amount of that in Q1 also. So I'm just having a hard time understanding, how that much incremental sales is swinging from a profit to a loss from Q1 to Q2?
Yeah, very, very, very simple. It's the - $4 million of airfreight is the big driver. And we did not have, I just made a small comment about this in the remarks. We did not have a lot of airfreight in Q1. The bulk of it actually hit starting in Q2.
I see. I see. Okay. All right. Great. Thank you. That's all I got.
Okay, yeah, sure. Thanks, Steven.
Thank you. At this time, this concludes our question-and-answer session. I would now like to turn the call back over to Mr. Stark for closing remarks.
Thank you very much. And a warm thanks again to our team, our manufacturing partners and our key suppliers for the great job they've done over the past months here to help us take advantage of the strong market. We look forward to speaking with our investors and analysts, when we report our second quarter results in August. Thank you very much.
Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.