Hasbro, Inc.
Q4 2015 Earnings Call Transcript

Published: 8 Feb 2016

[Operator:]

Good morning. And welcome to the Hasbro's Fourth Quarter and Full Year 2015 Earnings Conference Call. At this time, all parties will be in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] Today's conference is being recorded. If you have any objections, you may disconnect at this time. At this time, I’d like to turn the call over to Ms. Debbie Hancock, Vice President of Investor Relations. Please go ahead.

[Debbie Hancock:]

Thank you, and good morning, everyone. Joining me this morning are Brian Goldner, Hasbro's Chairman, President and Chief Executive Officer; and Deb Thomas, Hasbro's Chief Financial Officer. Today, we will begin with Brian and Deb providing commentary on the company's performance and then we will take your questions. Our fourth quarter and year-end earnings release was issued this morning and is available on our website. Additionally, presentation slides containing information covered in today's earnings release and call are also available on our site. The press release and presentation include information regarding non-GAAP financial measures. Please note that whenever we discuss earnings per share or EPS, we are referring to earnings per diluted share. Today's discussion will exclude items from both our 2015 and 2014 results but do not speak to the underlying financial performance of Hasbro. Details on those items and reconciliation to our reported financial results are included in the earnings release and presentation slides accompanying this call. Before we begin, I would like to remind you that during this call and the question-and-answer session that follows, members of Hasbro management may make forward-looking statements concerning management's expectations, goals, objectives and similar matters. There are many factors that could cause actual results or events to differ materially from the anticipated results or other expectations expressed in these forward-looking statements. Some of those factors are set forth in our annual report on Form 10-K, our most recent 10-Q, and today's press release, and in our other public disclosures. We undertake no obligation to update any forward-looking statements made today to reflect events or circumstances occurring after the date of this call. I would now like to introduce Brian Goldner. Brian?

[Brian Goldner:]

Thank you Debbie. Good morning everyone and thank you for joining us today. Hasbro’s record performance in 2015 reflected the strength of our global teams and the power of our brand blueprint. Through a focus on franchise brands and partner brands consumer insight led innovation and compelling story telling we are connecting with consumers more deeply and across more demographics than ever before. It has taken us 10 years and significant investment to be in the position of successfully executing our strategy. Today, we are beginning to unlock the full economic value of our brands. The benefits of our strategy are not only delivering revenue gains, but are also driving higher levels of gross and operating margins which we believe are sustainable for the long term. In recognition of the strength of the year and our positive outlook, our Board recently voted to raise the quarterly dividend by 11%. This higher dividend reinforces our commitment to enhancing shareholder value over the long term. Demand for Hasbro initiatives was strong globally last year. Revenues increased 13% absent FX and reflected the strong demand we saw at the local level around the world. On a reported basis, revenues grew 4%, despite a significant negative impact from foreign exchange translation. Point-of-sale was very strong growing double-digits in developed economies including the US, UK, Germany, France, Spain, Mexico and Australia, as well as in many emerging markets where we receive retail data directly from our customers. We ended 2015 with retail inventories in very good shape, reflecting strong sell-through and high quality merchandize on shelf. Our growth drove market share gains in the 11 major countries where we have data according to NPD. In Europe, we took over the number two market share position. For the full year, Hasbro franchise brands’ revenue grew 7% including the impact of currency translation; franchise brand revenues declined 2%. The 7% growth was led by increases in PLAY-DOH, NERF, MAGIC

[Deb Thomas:]

Thank you Brian and good morning everyone. As Brian mentioned, Hasbro’s financial position is as strong as ever. We have tremendous momentum in our brands and we’re driving profitable growth throughout our business. Our global teams faced an extremely challenging currency environment and delivered successful programs to manage retail, consumer and business demands while improving the profitability of Hasbro. In 2015, absent FX we grew revenues across all operating segments and major geographic regions as well as in both franchise and partner brands. We delivered cost savings while investing in the future growth of our business. Finally, we generated $552 million in operating cash flow, ending the year with close to $1 billion in cash from the balance sheet. We remain committed to our capital allocation priorities and investing in our business, while returning excess capital to our shareholders through our dividend and share repurchase programs. Today’s announced 11% dividend increase coupled with $479 million in available share repurchase authorizations enables us to continue on this path. Looking at our segments for the full 2015, revenues in the US and Canada segment increased 10%. Excluding a $14 million negative impact from foreign exchange, segment revenues increased 11%. Growth in the boys’ Game and Preschool categories more than offset a decline in the girls’ categories more than offset a decline in the girl’s category. Hasbro franchise brand revenue increased 1% behind growth in NERF, PLAY-DOH and MAGIC

[Operator:]

[Operator Instructions] our first question is from the line of Stephanie Wissink with Piper Jaffray. Please go ahead with your questions.

[Stephanie Wissink:]

Congratulations on a nice finish to the year. Brian, I’m wondering if you can just talk a little bit more about the sales-to-cost balance. You’ve seen some nice favorable increases in your gross and operating margin, should we continue to expect that trend line throughout the course of the next couple of years. And then as you’re looking at some of the investment spend I think Deb you mentioned a few things that you still have on the docket. How many of those will flow through the P&L versus what would be capitalized on the balance sheet?

[Brian Goldner:]

If you look at our gross and operating margins, we believe that they are sustainable at approximately the 2015 levels, and over time we would hope to continue to expand those. We’ve talked about the points of leverage that we have in our business in order to expand them over time. Obviously the growth of our franchise brands that enjoy a higher than average operating profit margin, the growth of our entertainment and licensing business which as you saw has a very strong operating margin as well, and then of course as we continue to grow international markets, particularly emerging markets and we get greater economy of scale, those begin to approach the company’s average operating profit margin. So those three levers broadly will enable us over time to continue to expand operating margins, but we do believe that our operating profit margins and gross margins are at a new place and can remain at this higher level beyond 2015.

[Deb Thomas:]

And some of the investments that we are making as Brian just mentioned in things like MAGIC

[Stephanie Wissink:]

Great. Just one follow-up on the DISNEY PRINCESS business, I think that you had historically quantified that as about 30 to 50 basis points drag. As what you’re seeing in the channel now, are you expecting to arrive at leverage a little bit sooner than you would have initially forecasted or how should we think about that drag rolling offshore over the next 12 months or so.

[Brian Goldner:]

Yeah Steph, if you think about revenues this year through the first quarter, we’re working through the transition, and for the full year we have some strong expectations, but obviously it’s a transition year. We believe we get more leverage in our business over time in 2017 and ’18. So over time we’ll build more leverage in to that business as we again grow economy of scale and create new innovations in years out. But we’ve not said that we would get all that leverage this year.

[Operator:]

Our next question comes from the line of Drew Crum with Stifel. Please proceed with your question.

[Drew Crum:]

Can you guys talk a little more about your expectations for royalties, 8.5% in 2015? I think you suggested that in terms of mix partner brands would be at the high end of the historical range at least over the near term. Yet you expect royalties as a percentage of sales to be at about 8% in 2016. So just want to get some additional clarity on that.

[Deb Thomas:]

Hi Drew it’s Deb. I think it’s really just a mix. I mean we have such a strong entertainment driven mix of revenue this year. As our franchise brands continue to grow, we do expect that royalty number to come in closer to our five year average which was around that 8%. So that’s why as we look forward we believe we’ve got sustainability and our gross margin as our consumers are paying for innovation in our product and we’ve built some cost savings measures in there that we’re realizing now and our royalties will be closer to 8% than 8.5%. We think this year was just -- given the strength of STAR WARS as well as JURASSIC WORLD and MARVEL they were just higher than we expected they would be.

[Drew Crum:]

And then Brian can you comment on the performance of MAGIC during the quarter, any quantification in terms of sales growth and any noteworthy changes or variances in terms of the content strategy in ’16 relative to this past year.

[Brian Goldner:]

Yeah, MAGIC category grew for the full year. It grew very strongly in the fourth quarter; we talked about Battle for Zendikar being the most successful set launch. Just to remind everyone that MAGIC is really story-led, it’s much less responsive to the quarters or holiday seasonality, it’s really about the stories that we’re telling and we think the transition the teams’ taken the brand through this year and how we tell stories is very helpful to the brand as we go forward. So we continue to invest, improve and drive our online business. As Deb said, we would expect to see some revenues from the new MAGIC Next platform in 2017. But MAGIC is a long term growth driver for us and we’re very happy to have a brand like that also, and we’ll talk more about this on Friday that talks to and appeals to different demographic and psychographic that helps the company to expand our portfolio and deliver value and brands across a number of different demographic.

[Drew Crum:]

Just one last question from me, are you willing to share with the profitability or margin was for your emerging markets business in 2015.

[Brian Goldner:]

Emerging markets absent FX grew 15% and operating margin was a little bit lower mostly because of China as we’re investing in that business and then of course impacted by FX.

[Deb Thomas:]

The two of our biggest growth market this year absent FX continue to be Brazil and Russia, both growing over 20% absent FX. But the pressure of FX on those markets when you think the precipitous drop in their currencies that kept going on year along really put a lot of pressure on our emerging market operating profit.

[Operator:]

Our next question is from the line of Jaime Katz with Morningstar. Please proceed with your questions.

[Jaime Katz:]

I have a quick clarification actually, I think you guys had said that FX would be 15% to 20% of 2015 levels if those levels were at current rate. So is that right to think about as 15% to 20% of the 100 million incremental change?

[Deb Thomas:]

Yeah, I think what we are trying to highlight Jaime is that we don’t see the precipitous currency drops that we saw at the end of 2014 and into ’15. So our expectation of what our current rates are, we think they’ll continue to have an impact. Again particularly in countries like Brazil, which continue to have pressure on their currency of about a 100 million to revenue and about 15% to 20% of that would drop through the operating profit.

[Jaime Katz:]

And then are you willing to comment on advertising, the advertising spend outlook in the year ahead with royalties ticking up a little bit higher, what the offset might be?

[Brian Goldner:]

2016 and ’17 are both great entertainment years. In fact we’re sitting here today with more visibility, it’s a great entertainment and storytelling both from our own brands and our partners’ brands than ever before. And so we think advertising will remain below the 10% range that we’ve talked about historically. But it would be probably be in a range between where we ended last year and 10%.

[Operator:]

Our next question is from the line of Taposh Bari with Goldman Sachs. Please go ahead with your questions.

[Taposh Bari:]

Brian I guess just a color on STAR WARS appreciate the color in terms of contextualizing this year versus past movie years. Last we heard you were expecting a 50-50 mix from episodes between 2015 and 2016, is that still the case? And can you remind us or can you give us an update on how the US mix versus international mix of that property is trending versus the prior movie?

[Brian Goldner:]

Sure. So what we talked about was that in 2015 STAR WARS performed like a movie year, like other movie year, so it was very strong for us. And we also believed that STAR WARS can be equal in 2016 obviously rolling through the Force Awakens home entertainment window and then in to Rogue One. So we believe similar revenues. And I was looking at some of the detail of STAR WARS, and I think it’s rather interesting that prior to the movie release or if you take the full year numbers for STAR WARS, the US and Canada segment if you will, 56% revenues and international was 44%. However, if you look at the fourth quarter or more of the movie related revenues, the international segment revenues as a percent go to 54% and the US is 46%. So what we’ve said all along is that, as the brand benefits from more entertainment and benefits from more global movie releases that we would see a growth in that footprint, the global footprint of the brand, and we are in fact seeing that.

[Taposh Bari:]

Great, that’s helpful. And then just the other question I had was on capital allocations and M&A in particular. Can you just remind us what your criteria are for M&A as you think about acquisitions, and what your appetite in terms of making a transformational deal?

[Brian Goldner:]

We are focused on executing our brand blueprint strategy. We obviously have looked from time to time at opportunities to help us round that out to build our capabilities and we’ve spent the last 10 years doing that. So acquisitions like 70% of Backflip, our joint venture with the television network that’s continuing to improve its financial position, and we continue to remain open to ideas that enhance our strategic brand blueprint and the strategy that we’re executing. But we are very focused on executing our own strategy and really focusing in on how we build our business overtime. We have great brands in our portfolio and believe there’s lots of headroom for growth in our franchise brands and you’ll also see us introducing some new brands out of the box and new original brands over the next couple of years. So we think we are well positioned from a brand standpoint, but we do remain open to add on acquisitions that would help to enhance the strategic platform that we are running our brand blueprint strategy.

[Deb Thomas:]

From a capital standpoint, we also remain committed to returning our excess cash to our shareholders, and indeed we’re very pleased that our Board voted and we are able to report today an 11% increase in our dividends, because we do remain very committed to getting excess cash back to our shareholders.

[Operator:]

Our next question is coming from the line of Felicia Hendrix, Barclays. Please proceed with your questions.

[Felicia Hendrix:]

Brian if you could just go back to STAR WARS for a second because I just want to make sure I’m understanding what you’re saying correctly. You said STAR WARS was on par with prior years, so according to our notes that’s depending on how far back you look, somewhere between 500 million and 600 million and then you said half of that was in 2015. So I’m just wondering when you think about the kind of blend in 2015 and 2016 together is that what’s equating to the 500 million to 600 million or should be looking at the total and spreading it up. Just a little confusing to me thanks.

[Deb Thomas:]

What I was saying is that, just to give you a sense on an annual basis that STAR WARS for us in 2015 for the full year was comparable to prior movie years, and I might point to years like 2005 for example. And I was talking about the fact that if you took the full year number, you would see that the US was more represented in terms of the sale. So said differently, sales before the launch of the film were more oriented towards the US segment and less in international and as the movie entered the market in the fourth quarter, we talked about how the fourth quarter was about half of the total years revenues and that was more internationally oriented at about 54% versus the 46% for the US. We’re also seeing in 2015 Hasbro’s market share of STAR WARS growth fairly dramatically, because people are really responding to the innovation that we’ve brought to the product lines, to our role play which we’re selling incredibly well all lightsabers of different kinds including Kylo Ren’s lighsaber and then of course 3 and 3.25 inch scale action figure and of course our black series. Those are some of our top sellers and we’re rolling out new product and already have for 2016. We’ll continue to roll out new product throughout 2016 and we’ll make a transition more towards Rogue One for the back half of 2016, given the December movie release for Rogue One. And we do believe that 2016 can be comparable size to 2015.

[Felicia Hendrix:]

Deb just quickly, can you help us; I know it’s such a moving target, but you’ve given us some FX guidance in the past. Can you help us to think this through for 2016? You might have said that I might have missed it.

[Deb Thomas:]

Sure. We’re thinking that based on our current expected rates, we would have about $100 million negative impact to 2015 revenue, if you just apply those same rates with about 15% to 20% of that flowing through your operating profit. So that’s significant impact than 2015 versus 2014.

[Felicia Hendrix:]

And then you guys beat EPS nicely, but if you look at the reconciliation in your release your EBITDA seems to have come in lighter than consensus EBITDA. So I was just wondering how to reconcile that?

[Brian Goldner:]

EBITDA was in line with consensus, $856 million.

[Felicia Hendrix:]

For the quarter?

[Deb Thomas:]

I know we were actually pleased with our results for the quarter and for the year. So given our expectations they were in line.

[Brian Goldner:]

I think as we think about building our business, we really do think more annual and over three year basis than in any given --

[Felicia Hendrix:]

Okay, but there wouldn’t be like a strain like a line item or something that would make that difference right because you beat on earnings, I mean in fact it’s EBIT.

[Deb Thomas:]

Fair enough. Not that we aware.

[Felicia Hendrix:]

Final question just on SG&A, looks like it grew 18% year-over-year in the quarter. So just wondering how we should think about SG&A in 2016.

[Deb Thomas:]

On a full year basis we said we’ve got a couple of these investments which I indicated earlier we’ll outline a bit more on Friday at our meeting at Toy Fair. But a quite a few more of these investments that are continuing for the next few years before we start to see the revenue from it and that includes depreciation which is going to ramp down coming in ’18 from the new systems that we’ve put in. So we’ll highlight more of that and any other items that impact us of significance in SG&A line with compensation because of the performance of the year. But we’ll outline more about that on Friday.

[Felicia Hendrix:]

Would you say that compensation accounted for most of the year-over-year increase in this quarter?

[Deb Thomas:]

I would have to go back and look at the quarter, however again on a full year basis; we are in line from a percent of revenue standpoint of where we thought we would be at the beginning of the year.

[Operator:]

Our next question is from the line of Eric Handler with MKM Partners. Please proceed with your question.

[Eric Handler:]

Deb, what if you could walk through, sort of the puts and takes we might see in the entertainment and licensing business in 2016 and how it differs in ’15. In the first quarter I’m assuming you’re not going to have the Netflix bump, but sort of like-for-like how we might at the two years.

[Deb Thomas:]

That’s very good that you picked up on that Eric, because you know it’s like my favorite term and I get teased about it a bit, but it is a bit lumpy in that business because of that. And I believe having the Netflix in the first quarter would have an impact. However, we continue to invest in that business and we saw good growth not just in the studio and Netflix business but in our consumer product licensing business. And the strength of our brands and the licensing is much more stable than that entertainment driven revenue, or those large deals that you can see from time to time. So overall, one of the reasons why we’ve expanded our operating profit is because of the expansion in our entertainment and licensing business, and we continue to invest in that business for the long term because we see not just the revenue growth but the operating profit expansion opportunities for the company as a whole.

[Brian Goldner:]

And on Friday we’ll outline for you as well our efforts particularly in digital gaming. We’re going to talk about some of the new titles that are around Hasbro brands coming from Blackfoot Studios as well as some of the other gaming efforts and that’s all resident in that segment as well.

[Operator:]

Our next question comes from the line of Tim Conder with Wells Fargo. Please go ahead with your questions.

[Tim Conder:]

A couple here, any quantification Brian that you can give us on NERF, again that was your largest revenue producer, just any type of quantification there? And then as it relates to DISNEY PRINCESS, was a little bit of this faster than anticipated. Again you just touched on it a little bit earlier here, the international shipment that you did in Q4 it seemed like at the analyst meeting in November that you said, hey we are going to let the channel clear and the material shipments would start in Q2; so any additional color there? And then finally the capital allocation question here. You guys have executed well on the strategy over the last several years, cash flow is good and you gave a very good outline here with the partner businesses staying sustainable and then what you’re doing on the licensing and your own brands. Can that operating cash flow number of approximating 500 million, should that expand in the not too distant future, given the visibility and sustainability?

[Deb Thomas:]

As we look at our cash flow number, we will talk about more about that on Friday. So we look forward to seeing you then and talking more about that then. With respect to the DISNEY PRINCESS and FROZEN business, we began very small shipments in the fourth quarter. I think we did talk about DISNEY’s DESCENDANTS being a good contributor to 2015, however we have been working very closely with Disney and our retail partners to ensure the channel’s in good shape for everyone and our expectation is, we’ll begin to ship that in a more meaningful way in 2016. But we only had very small shipments in 2015.

[Brian Goldner:]

In the first quarter we’ll work through the transition on PRINCESS. So we will be shipping PRINCESS product and you’re starting to see displays up and rolling the product out around the world and we’re very happy with the transition in working with Disney and our retailers, they’ve been incredibly supportive and we’re seeing some good early indications of how a product is selling, its selling quite well. And then if we talk about NERF, the brand was up both in the quarter as well as full year double digits, and the sell-through was very strong and it’s really around Modulus around N-Strike and around Zombie Striker, as kind of the top performers for the years and then of course NERF Rival which is launched in a couple of countries in the world that are out in a few more as we move forward that more. This is a little bit more of the paintball like paint play pattern that we’re rolling out in markets around the world. So again the brand is our top brand at the company, and we just wanted to give that perspective because as we had created the franchise brand strategy many years ago, we believe that those brands were capable of growing to first hundreds of millions of dollars and then overtime even larger and NERF and PLAY-DOH are great examples of brands that have grown significantly over the last few years and they are among the top brands of the company.

[Tim Conder:]

Still clearly over double digit percent of revenues this -.

[Brian Goldner:]

Yeah, double digit percent of revenues.

[Operator:]

Our next question comes from the line of Gerrick Johnson with BMO Capital. Please go ahead with your questions.

[Gerrick Johnson:]

In the past you weren’t shy about giving us the actual Star Wars revenue numbers, so maybe you can give us that as oppose to close to what it used to be. NERF just clarification, is that your largest owned brand or is it the largest brand in the portfolio if you include partner brands. And then lastly on entertainment and licensing, I think you commented that MY LITTLE PONY is your biggest licensed brand. So is that the largest contributor to entertainment and licensing revenue and what’s the percentage of the total there?

[Brian Goldner:]

On Star Wars I think I gave some pretty good guidance that Star Wars was very similar to 2005 last movie year. We used to give out specific percentages of revenues for a whole host of reasons; we’d no longer feel that that’s specifically required. So I’d rather just give you some guidance up against the prior movie or NERF. It is the largest brand that has brought if you include all brands including franchise and partner brands, every brand. It’s the largest brand in our portfolio.

[Gerrick Johnson:]

And MY LITTLE PONY entertainment?

[Brian Goldner:]

On MY LITTLE PONY we’re talking about the licensing income. So this is within the entertainment and licensing segment our new rebranded team consumer product personnel generated the largest amount of revenues from MY LITTLE PONY business up significantly versus a year ago and that’s what we were referring to and no I’m not going to give you a percent as it relates to E&L.

[Operator:]

Our next question comes from the line of Jim Chartier with Monness Crespi Hardt. Please go ahead with your question.

[Jim Chartier:]

I just want to talk about the segment operating margins, yes indeed a really good progress in North America over the last couple of years and recognized that international’s been impacting by FX. A couple of years ago at International’s pretty similar to North America. Can you bridge the gap between international and North America at current exchange rates? Is the North America margin sustainable and what would the drivers be with getting international closer to North America?

[Brian Goldner:]

We made changes in our North American operation back in 2012 and reorganized that business in working with our retail partners. We believe that North American profitability is now at a new level and it’s relatively sustainable. Obviously there’ll be ups and downs overtime by bits, but overtime it can also grow as we continue to leverage our brands. International is just impacted by FX and may be Deb you want to talk absent FX where arte those margins because they are very healthy margins absent FX.

[Deb Thomas:]

Yeah, absolutely. Every one of our components of our International segment were up absent FX, and operating profit was also negatively impacted because of the FX impact. But again, so much of this year in the segments as well, product mix had a big impact on operating profit for the segment as well as the cost savings and we continue to get cost savings through ongoing initiatives. As you know, we had a $100 million cost saving initiative a few years back which we completed in 2015, but ongoing cost savings has always been a part of our business, and many of the things you’ve seen us invest and then are running through some of the lines like product development and then SG&A are ongoing investments to further decrease cost throughout our business including in our international segment.

[Jim Chartier:]

In the past, international’s been about 300 basis points lower than North America, now it’s over 600 basis points lower. Again if FX break-stay where they are do you believe you can get that margin close to 300 basis points differential in the future.

[Deb Thomas:]

Well we continue to make investments in the business to really reflect things in the currencies and to take cost out of the business of where we are actually incurring our revenues. So overtime, our expectation is that you’ll see more of our margins in the different operating segments come closer to each other. Now if you think about international, you’re in a lot of different markets though. So just by their own nature they’re going to have slightly administrative expenses. So will they ever be 100% the same? I don’t know. But they’ll move closer overtime based on all the initiatives are undertaken in the company.

[Brian Goldner:]

We’ve seen some great growth in several of the emerging markets we talked about, north of 20% growth in Russia and Brazil. In China this past year, our largest brand in China continues to be TRANSFORMERS, so you’re up against the movie here. I think that has more of a temporal impact in the year and overtime I would expect the trends that we’ve seen in our emerging market business and profitability to continue continued improvement for the company average operating profit margin. And as Deb said, there’s some puts and takes overtime as we continue to expand our capabilities, but we’re [trending][ph], right.

[Operator:]

Our next question comes from the line of Lee Giardano with CRT. Please go ahead with your question.

[Lee Giardano:]

Can you talk a little more about your expectations for Transformers and how the content cycle for that brand looks in the coming years?

[Brian Goldner:]

The brand performed very well for us in a non-movie year coming off of 2014’s movie, it was down much less than one expects. We’ve talked a lot about what brands do in the years following movies and TRANSFORMERS really bucked that trend for the full year being down about one-third versus typical more closer to 50%. So the television and other entertainment has really helped to support the brand and help drive our brand globally, and I’ll give you some more color on our entertainment plans, what’s coming out of the writers room and plans for Transformers, theatrically by Friday.

[Operator:]

[Operator Instructions] If there are no other additional questions at this time, I will turn it back to Ms. Debbie Hancock for closing remarks.

[Debbie Hancock:]

Thank you Rob and thank you everyone for joining the call today. The replay will be available on our website in approximately two hours. Additionally, management’s prepared remarks will be posted on our website following this call. Our investor event at Toy Fair is been held this Friday February 12, and our first quarter 2016 earnings release is tentatively scheduled for Monday, April 18. Thank you.

[Operator:]

This concludes today’s conference, you may disconnect your lines at this time, and we thank you for your participation.