nVent Electric plc
Q3 2006 Earnings Call Transcript

Published: 26 Oct 2006

[Operator:]

Good afternoon ladies and gentlemen and welcome to your Q3 2006 NAVTEQ Corp earnings conference call. (Operator Instructions) At this time, I'd like to turn the conference over to your host for today's call, Mr. Tom Fox, Director of Investor Relations.

[Tom Fox:]

Good afternoon, everybody. This is Tom Fox, Director of Investor Relations at NAVTEQ and welcome to our conference call to discuss financial results for the quarter ended October 1st, 2006. With me today are Judson Green, President and Chief Executive Officer; and Dave Mullen, Executive Vice President and Chief Financial Officer. By now you should have received a copy of our earnings release which was distributed earlier over the wire. Today's call is available by webcast and is being recorded. Information on the replay and the webcast is available in the release and on the Investor Relations' section of our website at www.navteq.com. Today's webcast also includes a PowerPoint slide presentation which you may access via the webcast. You may also download a PDF version of the presentation in the News and Events section of our IR website. Before we begin, I would like to remind you that some of the statements made during this call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations, assumptions and projections about NAVTEQ at the time that the statements are made. Such statements may include, but are not limited to, expectations of future operating results, growth in unit volume or share of business, penetration rates, product release schedules for NAVTEQ and our customers, and receipt of payments from our customers. The forward-looking statements are subject to certain risks and uncertainties that may cause the actual results to differ materially from our past performance and our current expectations and projections. For a discussion of these risks and factors that may affect future performance, please review the reports filed by NAVTEQ with the SEC in particular note the risk factors set forth under item 1A, Risk Factors, in the company's annual report on Form 10-K for the fiscal year ended December 31, 2005, and under the same heading in the company's quarterly report on Form 10-Q for the quarter ended July 2, 2006. NAVTEQ disclaims any obligation to update or revise any forward-looking statements except as required by law. We will begin today's call with some opening remarks by Judson and then Dave will walk you through some additional details on the quarter. Judson will had a few closing remarks and finally we will take your questions. During the question-and-answer session we would ask that you to limit yourself to one question. If you have additional questions, please re-enter the queue. We will finish the call no later than 6

[Judson Green:]

Thanks, Tom. Good afternoon, everybody and thank you for joining us. We are pleased with our third quarter results, especially with revenue given the headwinds we have faced this year. In addition, our cost management program, which we put into place earlier in the year, was effective in improving our margins and profit growth. We achieved record third quarter revenue of the $142.7 million, which grew 16% over the prior year. The revenue increase was driven by unit volume growth of 36%, which was partially offset by lower average selling prices. The lower ASPs were caused by a mix shift to less expensive portable navigation map units and license fee discounts, driven in part by higher volume. Excluding our distribution business, which declined slightly year-over-year, map data licensing revenue grew 22% in Q3. Operating income was $37.0 million. Net income for the quarter was $27.1 million, or $0.28 per diluted share. For the first nine months of 2006, revenue of $400.9 million grew 14% over the same period last year. Excluding the distribution business and other revenue, core map licensing revenue grew 18% for the first nine months. Year-to-date operating income was $90.9 million. Net income for the first nine months was $67 million or $0.70 per diluted share. Net cash provided by operating activities was $62.6 million for the first nine months of 2006. We ended the quarter with $278.7 million in cash and marketable securities and no debt. Before I begin discussing the various business areas, I'd like to provide an update on the customer receivables collection issue that arose during the second quarter. The customer completed an interim financing recently and we received a partial payment from this customer. The net revenue impact on our third quarter was $2.9 million related to the reversal of the revenue reserve. We have deferred an additional $3 million in revenue related to this customer as of quarter end. While we are encouraged by the recent progress, we now see it as unlikely that we will receive full payment of all overdue receivables by year end. Instead, we expect to receive additional partial payments in Q4 and the balance of what we are owed in 2007. As indicated in the press release, our Q3 revenue by geography is as follows

[Dave Mullen:]

Thank you, Judson. I'd like to provide some additional color on our results. As I do that, please note that for comparison purposes, our fiscal third quarter had 91 days compared to 91 days in last year's Q3 and 91 days in Q2. With respect to foreign currency, the average dollar euro exchange rate for the third quarter was $1.27, which compares to $1.22 in last year's third quarter. The stronger Euro increased third quarter revenue by $3.4 million and EPS by $0.01. Compared to the $1.20 rate used in our guidance at the beginning of the year, the stronger Euro increased third quarter revenue by $4.3 million and EPS by $0.01. On board or media-based revenue represented approximately 88% of our revenue in the third quarter with total map units sales up $2.6 million. Licensing revenue excluding the distribution business and other revenue comprised 80% of total revenue in Q3 compared to 76% in the year-ago quarter. Distribution comprised approximately 17% of our total revenue. We performed distribution services on 40% of our total in-dash volume, which was down from 43% in the prior year. The mix of distribution units in Europe was 57% and in North America was 22%, both down from the prior year. The year-over-year declines in distribution are caused by three factors

[Judson Green:]

Thanks, Dave. I would like to wrap up the call this afternoon by offering a few comments on our year-to-date performance and offer a preview of 2007. 2006 has certainly been a challenging year. Our year-to-date performance has not met our own expectations, which is why we have adjusted our full-year outlook. However, I am pleased with the way we have executed, and we remain optimistic about our future growth potential. Since our IPO more than two years ago, we have said that we would strive to balance the demands for reinvestment in our business with a desire to demonstrate the operating leverage in our model. From 2003 to 2005, our revenue exceeded our forecasts, and we were able to comfortably increase investment during the year. The opposite has been true this year. In 2006, we have responded to slower than expected revenue growth with a targeted cost management program, which has been effective. However, it would not have been consistent with our long-term objectives to offset the impact of every dollar of the revenue shortfall with cost savings. We're very much aware of the changes in our business and they have indeed caused us to think a bit differently about next year. Only three weeks ago, we kicked of our annual budgeting process for 2007. This is one of the most important things we do as a company and it involves input from employees at all levels from around the world. It is during this two-month process that we determine the appropriate investment level to grow the business and respond to the needs of our customers. The determination also involves careful consideration of our forecasted of revenue growth, targeted margin expansion, and desired profit growth. We see positive signs in the marketplace for next year. For example, 81 vehicle models in North America are expected to be launched or redesigned in 2007, up from 69 in 2006. Of these 81 models, over 70% will offer in-dash navigation and approximately one-quarter of those will be doing so for the first time. In addition, Global Insight, a leading research firm following the auto industry, estimates that SUV sales next year will increase 15% in North America when compared with this year. In the consumer business, we also see a steady pipeline of new portable products for our customers including more portable multimedia players and travel assistance, which will incorporate navigation with other useful functions and new form factors that will make portable GPS devices even more attractive and convenient. More and more navigation and location-based services solutions for the mobile phone are also coming to market. So while it is still early in our budgeting process, we are upbeat about our prospects and feel good about our ability to deliver margin expansion and profit growth in 2007. As we look even further into the future, we're confident in our ability to overcome challenges and take advantages of the growth and opportunity we see in the marketplace. This concludes our prepared remarks. Thank you for your attention. Now I'd like to ask the operator to open the lines so that we might answer questions.

[Operator:]

(Operator Instructions) Your first question comes from Noelle Swatland.

[Noelle Swatland:]

Hi guys, just two quick questions. First, could you just provide an update on the pricing environment? I think last quarter you had said that you felt like the in-dash pricing was a little bit tougher. I guess just on that, is it possible to see in that type of environment any renegotiations around some of the, say, 2007 business even though I recognize most of the bidding that your competitor is doing is on the '08 models? And then just lastly you had mentioned that you had given some new thought to your '07 guidance moving forward. Does that mean that we should start to anticipate a quarterly update in terms of your guidance moving forward? Thanks.

[Judson Green:]

Well, I think there were two or three questions there. First of all, I don't think we have detected any big changes in the pricing environment. It remains competitive. As new markets emerge or new segments emerge, it's important for us to educate new entrants as to the value of the map content and the vital role it plays in applications which the consumers are looking for. We're pleased with our approach to pricing and our consistent application of our pricing strategy. So, we really haven't detected any big changes in the pricing environment. With respect to I think another aspect was renegotiations, I would say that occasionally it may become necessary for us to enter into discussions about renegotiation, but I would say for the most part when we finish a negotiation, it's done, and it holds. I think your final question was about our guidance policy. I will let Dave answer that.

[Dave Mullen:]

Yes, I think it's our intention in the future on quarterly calls to either confirm or update guidance going forward for the full year.

[Noelle Swatland:]

Terrific. And then just lastly --

[Dave Mullen:]

That was two questions.

[Noelle Swatland:]

Sorry.

[Dave Mullen:]

I tell you what. You come back in after and we give somebody else a chance.

[Noelle Swatland:]

All right. That's fair, yes. Thanks, guys.

[Operator:]

Thank you, sir. We will go to Greg Cappelli.

[Greg Cappelli:]

Don't cut me off, Dave. Hi, guys. I guess my question is, can you just talk a little more about how order flow for handhelds are shaping up in the fourth quarter and what seasonality was like in Europe moving from Q2 to Q3?

[Dave Mullen:]

I think with respect to seasonality, Greg, that we didn't see any difference this year that we saw last year both in the in-dash and the portable business. And with respect to Q4, I think I make a general comment that we are pleased with the growth in the environment we expected to grow. I think getting more precision on that, you probably do a better job getting it from the people who are directly with the retailers. The public companies who are directly with the retailers can probably give you a better perspective on the details of how that market is going to grow in the fourth quarter. But we are enthusiastic about it.

[Greg Cappelli:]

Okay. And then just a quick follow-up. When you think about the model here and how it's evolved, is there any reason to change our thought process on your 40% incremental margin long-term guidance perspective going forward?

[Dave Mullen:]

I can't remember us ever saying 40%.

[Greg Cappelli:]

Incremental margin.

[Dave Mullen:]

Incremental. You know, that is a very rough benchmark, and each individual year we make our own judgments about what we want to do. As you have seen from historically, sometimes we have been higher than that, sometimes we have been lower. That's a very, very rough benchmark.

[Greg Cappelli:]

Okay, all right, thanks guys.

[Operator:]

Thank you, sir. We will go to Maynard Um - UBS.

[Maynard Um:]

Hi, thank you. Can you just expand a little on the mobile side and the business with Verizon? If I understand correctly you received a small amount of the monthly fees. But when do you anticipate this becomes a more meaningful percentage of revenue? Can you just provide the percentage of the database creation and SG&A that were related to fixed costs? Thanks.

[Judson Green:]

I think the first question had to do with when will revenue from off-board become more significant. I think we'd have to just to point out that we are still in the infancy of this business. We're very pleased with the consumer reaction but we're really at the onset of this evolution. I think it's going to take, over the next two or three years maybe, for this to become significant. We're pleased with the progress we've made, but this is a new segment of the business, and it takes time to work through a lot of technical issues and market issues and understanding the issues.

[Dave Mullen:]

This is the portion of expenses that are generally, relatively fixed, I think is the way describe it which we typically put in the 10-Q, but its 54% of our database creation distribution costs we would classify as relatively fixed and 75% of our SG&A.

[Operator:]

Sir, we will go to Bill Benton -William Blair.

[Bill Benton -William Blair:]

Good afternoon, guys. Maybe just a first clarification. If you could just Dave, on the AR that was up sequentially, obviously given the delay in when you received those royalty reports, that would suggest maybe an unusually strong July and August for in-dash shipments. Is that correct?

[Judson Green:]

No, I don't think we saw that particularly. I think if you look at the unit volume, I think unit volume from in-dash declined about 6%; last year it declined 5%. So that's pretty much about the same kind of seasonality that we've had in prior years. I don't think, in terms of the timing of shipments, what we're saying by that is there were more September shipments perhaps than there were July and August. That's what we meant by timing.

[Bill Benton -William Blair:]

I am trying to understand because you get your royalty reports about 30 days afterwards so it will be more of an August shipment than a September.

[Judson Green:]

Well, most of that, when we're talking about shipments, we really talking about the distribution business and that doesn't depend on royalty reports because we're actually shipping the units.

[Bill Benton -William Blair:]

Okay.

[Judson Green:]

So we don't have to wait for a royalty report on those.

[Bill Benton -William Blair:]

Okay. Thanks for that. And then when you talk about next year, you used the term “caused us to think differently about next year” in terms of budgeting. You talked about an expansion of margins and profit growth, you didn't talk about revenue. Was that just your feeling that with the pricing competition and those things out there, a little more cautious in terms of revenue growth? Could you expand on that?

[Dave Mullen:]

I think we expect revenue to grow. We're not at the point where were prepared to quantify what's going to happen in '07. We are in the middle of the process of doing that, which is what Judson was describing. I think what we're trying to communicate there, Bill, is that in large part, we decide how much to spend based on what we think revenue will be and a desire to show investors that there is operating leverage in the business. So, those two things influence how we decide how much we can spend.

[Bill Benton -William Blair:]

Okay. Okay great. Thanks a lot.

[Operator:]

Thank you sir. We will go to Steve Koenig - Jefferies.

[Steve Koenig:]

Hi, congratulations. A question on the PNDs and the volumes that you had. It looks as if the unit growth was okay, but revenue growth even after we look at reversing the receivables turned out to be pretty good. I am just wondering, are you able to say within say the PND category or within the in-dash category that your mix of units allowed pretty good pricing results? You know, maybe better than usual?

[Judson Green:]

I'm not sure how the mix affects pricing. They are really too independent things. If what you're asking is, you know, relative to our price decline, was there more or less on the in-dash side than on the portable side? I think it's pretty consistent. I suppose that if we look at it, it would probably be a slightly greater decline on the in-dash side and less on the portable side. But if your question is about ASPs rather than pricing, I don't know that we know enough about ASPs to look at it to comment.

[Steve Koenig:]

I think it was probably more about ASPs. It just looks like ASPs within a category, with an PNDs may have improved this quarter and in-dash may even have improved this quarter as well. I just wondered if you track it that way, and if that's consistent with what you had seen?

[Judson Green:]

I don't think that we've looked at it close enough to know the answer, unfortunately.

[Steve Koenig:]

Okay, fair enough. Thank you.

[Operator:]

Thank you sir. We'll go to Jeff Rath - Canaccord Adams.

[Jeff Rath:]

One question here as it pertains to [ADAS]. There seems to be an increasing awareness of this opportunity. I was wondering, Judson, maybe if you could give us your view of that market; timelines, opportunities, scope, and what might be some of the applications that you see rolling out in the coming years? As an adjunct there, if you feel that the data sets that you're building today are sufficient to enable that functionality in a lot of your OEM auto customers? Thanks.

[Judson Green:]

Okay. Well, first of all, we continue to believe that [ADAS] is an attractive long-term opportunity for us because it has the possibility of getting digital maps into more cars for uses other than navigation. You are correct. We have also noted that there appear to be number, perhaps more than the normal, of articles and even commercials that deal with the subject and are somewhat, if you will, teasing the public about what the possibilities are. Because this is part of the automotive industry, keep in mind that this kind of technology use is going to be adapted over a long period of time. This isn't something that's going to pop in the market anytime soon. We're very pleased, we already have a major customer which is using our digital maps for [ADAS] applications and we expect more to follow over the next two, three, four years. But this is going to be a long timeline. And yet an attractive one, because we think the types of applications that they're thinking about, a number of those applications are better informed with maps. Maps are not the only sensor or source of additional information or data that could impact an ADAS application, it could be radar, it could be other kinds of technologies. But when it comes to digital maps, things like lane departure, things like curb warning, adaptive cruise control, adaptive front lighting, adaptive transmission are examples where, in the R&D work that we've been working on for many years, we think there's a good body of evidence that suggests that this is a direction that the car OEMs want to go in. Once again, what comforts us and we get excited about is the fact that this is a different use of digital maps. It is addressing and helping the car companies to address a very real need to put more technology into the automobiles to reduce fatalities. I think that fundamental drive is not going to go away anytime soon. So we're going to continue to work and invest on this. I think the last aspect of your question had to do with building the data sets. And obviously, since we've been working on this for well over ten years I would guess, as we are creating each year's plan in terms of what we want to do with the database, we're taking into account the long-term needs from potential ADAS applications and incorporating those requirements into our map collection and building efforts. So, it's part of our long-term roadmap.

[Jeff Rath:]

Thanks.

[Operator:]

Thank you sir. We'll go to Peter Friedland - Soleil.

[Peter Friedland:]

Hi guys. A couple of clarifications. First, on the delinquent customer, could you just walk us through how that impacted your unit numbers in Q3 and in Q2? The second thing is if you could give some color on the timing, you mentioned that some PND royalty reports were pushed into October and just as much color as you can provide there would be great? Thanks.

[Tom Fox:]

Peter, it's Tom. On the first question, all of the units related to the delinquent customer are in the figures we reported in the presentation and in the remarks. So, there's no adjustment there.

[Peter Friedland:]

But does that mean that the units were left out in Q2 and they came back in Q3?

[Tom Fox:]

No, I don't think so. I think the units have always been in there.

[Judson Green:]

I think the units were in Q2 without the revenue and probably the revenue without the units in Q3.

[Peter Friedland:]

Okay.

[Judson Green:]

Not sure. We have to check on it, but I think that's the way it worked. With respect to the royalty reports, the only comment we made was that with respect to the TomTom 1 and this is typical of a customer, we would typically not get that royalty report until sometime, in the next month. Typically, that's not in time to get it into our financial results. That was the case with TomTom.

[Peter Friedland:]

But does that mean your PND, the numbers that you reported, are they more indicative of June, July, August numbers?

[Judson Green:]

That's probably right.

[Peter Friedland:]

And has that always been the case?

[Judson Green:]

Yes.

[Peter Friedland:]

Okay, thank you.

[Operator:]

Thank you sir. We'll go to Steve Lidberg - Pacific Crest Securities.

[Steve Lidberg:]

Good afternoon. I was wondering if you could talk about the adjacent data streams that are starting to flow into PND devices and systems; that being real time traffic monitoring as well as fuel prices and how that may or may not change your value proposition as you go into customers that may be looking at negotiating with separate sources with regards to providing those features? Thanks.

[Judson Green:]

Well, the adjacent data streams that you mentioned, fundamentally in our opinion increase the value of the systems that you're talking about, increase the utility to the end consumers. Just a simple example is, we think there are some consumers who may feel they may not have an interest in a map system whether it's in-line or PND. Yet when you begin to talk to them conceptually about introducing real-time traffic and other dynamic data, all of a sudden, it takes on a much bigger value proposition to the end consumer. Therefore to answer your question, we think this is a positive for us to be able to offer real-time traffic and in the future other dynamic content. It provides a service to our customers in that we're figuring out what this is, how to get it, licensing it, or developing it, as the case may be. Finding a way to properly quality control it, finding a way to properly tie it to the map, so that it works seamlessly with the application. We would look at this as a positive influence as we go forward, and I think time will tell just what consumers ultimately want. But our belief is that real-time traffic and other dynamic content added to our static content maps are going to be a positive.

[Steve Lidberg:]

As you look at the customers like a Garmin or TomTom, however, they seem to be presenting a strategy or be willing to negotiate independently with the separate providers. Is that generally the occurrence, or is that a relatively small portion of the customers as you see the market developing?

[Judson Green:]

Well, I think there's going to be a variety of different solutions. I think at the moment, it is a small portion. But the point is, if we have a customer who feels they want to do that on their own for some set of reasons, that's their choice. The fact of the matter is as this area of dynamic data is going to become more complex and richer as we look to the future, there's going to be more and more involved in working with it. We are able to get involved in this, do a good job of integrating it and quality controlling it as I said and be able to do that more cost effectively than if anyone of our customers who are out there trying to do it on their own. So, some may choose to go on their own and I would expect many wouldn't because it would be more efficient to get it from us. But, this aspect of the business will evolve over time and there will be a variety of different models and we will be flexible in working with our customers to offer the best we can and they can make their selection as to what they want to use and what they don't want to use.

[Steve Lidberg:]

Great. Thank you.

[Operator:]

Thank you, sir. We will go to Brett Manderfeld - Piper Jaffray.

[Brett Manderfeld:]

Hi guys a couple part question related to market share. I think first on the index side, I think you mentioned that Europe, you think you could see some market share increases looking out over the next couple of years. Can you comment on that related to the US? On the PND side, wondering if you see any market share shifts looking out to '07, especially given the new TomTom win? Thanks.

[Judson Green:]

Well, I don't think we are in a position to be very specific. I think what we were saying that our share of the business when it comes to vehicle, I think, I said we would expect to be about the same or actually drift upward slightly over the next few years. I think our share of business in the North American vehicle for that part of your question, is relatively stable. So I don't see any big changes there. With respect to the portable device sector, I think we're well positioned for our share of business there as well. I don't know at this moment that I would make a forecast or predictions about how it might change, but we think we're well-positioned and pleased with our share of business in both Europe and North America for portable devices.

[Brett Manderfeld:]

Very good. Thank you.

[Operator:]

Thank you sir. We will go to Jay Vleeschhouwer - Merrill Lynch.

[Jay Vleeschhouwer:]

Thanks. Good afternoon. Judson, I'd like to ask you to elaborate on some of your in-dash comments. What are your expectations in terms of how quickly in-dash pricing could come down? Is there any indication at all that the car companies and the dealers might be willing to forego some of the margin that now seems to account for a good portion of that four-to-one difference in pricing between in-dash and PND to finally drive the market? I think it was something you touched on in our last call. Could you elaborate on why you think some of the renewal and take rate programs might be a little slower? Is it a pricing issue? Is a market coverage issue or what?

[Judson Green:]

I think with the first question with respect to in line, in-dash pricing, you are correct. This is something we've mentioned before. But I'm not in a position to predict that it's going to come down any time soon. I think what we have said is that there's been a bifurcation of sorts, if you will. I think because the technology is so popular, you have on the one hand some OEMs, potentially for the luxury segment, feeling that this is something that could actually go north, not south, because of the popularity of the technology, the consumers want it, and I think there is a thinking that maybe over time there is going to be more content, more functionality. It's going to become a more important part of the car. At the same time that bifurcation involves the OEM is realizing that they really need to address the popularity of PNDs in their space and are coming up with as we've described a more of a lower-cost in-line system. There are multiple examples of those kinds of systems at retail prices less than a $1,000 or less than a EUR 1,000 that are in development. But again, I think I said it might be calendar year 2008 and even 2009 before I think that this would be significant enough to be noticeable. So, I think there's going to be more of a bifurcation there and I'm not in a position to predict what might happen in 2007 with in-line system prices because of all the reasons that we've described and just repeated. With respect to the renewal program for maps, which is really the update program and the trip program, which is really the take rate improvement program, I think we're very pleased with the take rate improvement program. I think that we've demonstrated time and time again where this has been helpful, where it is actually created new revenue opportunities both for the OEM and the system vendor, and this has good traction and a very good track record. We are less pleased with the renewal program for maps because it's just so obvious that this is something that should catch on and it's growing, but simply does not make the priority list for OEMs or their dealer organizations when they have got so many issues that they're worried about and dealing with. I don't have to enumerate all the challenges of the automotive industry, but then when you try to gather attention about a renewal program for maps and what is fundamentally a driver of their consumers' long-term satisfaction, that just not the most important thing on their list. That doesn't mean that we're not going to keep banging away at this and we expect to see continued progress on this and dividends from it. But we wish it were going faster, too.

[Jay Vleeschhouwer:]

At your developers conference a few weeks ago in LA, there was an interesting product roadmap comment that may tie into this issue with updates and that is your intent apparently to do more frequent, even so-called continuous, updates of the map. Is that something you really need to do and what might the business impact really be as a result of that?

[Dave Mullen:]

Yes, we clearly have an expectation. I think that our customers want it. Really, if you think about it, it's creating a more accurate map, reducing the latency between when the real world changes and when that change is incorporate into our map and more importantly when it's incorporated into the customers' map. I think all of our customers have an interest in that, obviously, in the in-dash business. They first have to build the capability to get that updated information into the vehicle, but there is an appetite for it and it's something that is definitely a priority for us. I think what it does, Jay, is it represents an opportunity to perhaps move to a subscription model over time where somebody will sign up to receive continuous updates rather than paying us the one-time fee that 88% of our customers do today.

[Jay Vleeschhouwer:]

Thanks, Dave.

[Operator:]

Thank you, sir. We will go to Max George - Ivory Capital.

[Max George:]

Hi, guys. Just had a quick question. I think you mentioned it earlier in the call. What was the percentage of the media revenue as a percent of total for the quarter?

[Dave Mullen:]

88%.

[Max George:]

It was 88%?

[Dave Mullen:]

Correct.

[Max George:]

Right. Perfect. I was reading it wrong. Thank you.

[Operator:]

Thank you, sir. There are no further questions. I will turn it back to you for closing remarks.

[Judson Green:]

All right. Thank you everybody for joining us today. Have a good evening.

[Operator:]

Thank you, sir. Thank you again ladies and gentlemen, this brings the call to a close.