Pitney Bowes Inc.
Q2 2016 Earnings Call Transcript

Published: 2 Aug 2016

[Operator:]

Good morning and welcome to the Pitney Bowes Second Quarter 2016 Results Conference Call. Your lines have been placed on a listen-only mode during the conference call until the question-and-answer segment. Today's call is also being recorded. If you have any objections, please disconnect your lines at this time. I would now like to introduce your speakers for today's call, Mr. Marc Lautenbach, President and Chief Executive Officer; Mr. Michael Monahan, Executive Vice President, Chief Operating Officer, and Chief Financial Officer; and Mr. Adam David, Vice President, Investor Relations. Mr. David will now begin the call with the Safe Harbor overview.

[Adam David:]

Good morning. Included in this presentation are forward-looking statements about our expected future business and financial performance. Forward-looking statements involve risks and uncertainties that could cause actual results to be materially different from our projections. More information about these risks and uncertainties can be found in our 2015 Form 10-K Annual Report and other reports filed with the SEC that are located on our website at www.pb.com and by clicking on Investor Relations. Please keep in mind that we do not undertake any obligation to update any forward-looking statements as a result of new information or developments. Also for non-GAAP measures used in the press release or discussed in this presentation, you can find reconciliations to the appropriate GAAP measures in the tables attached to our press release and also on our Investor Relations website. Additionally, we have provided slides that summarize most of the points we will discuss during the call. These slides can also be found on our Investor Relations website. Now, our President and Chief Executive Officer, Marc Lautenbach, will start with a few opening remarks. Marc?

[Marc Bradley Lautenbach:]

Good morning and thank you for joining our second quarter earnings call. Mike will take you through the specifics of the quarter. As has been the case for the last several years, there are a lot of moving parts to the quarter. From my perspective, there were four themes. Let me discuss each of them. First, our Ecommerce business continued to gain momentum and the business is positioned for a strong second half. We continue to add new clients and new geographies. I'll come back to this in a moment how this business is well positioned in a rapidly growing market. Second, in our Software business, we still have work to do. In previous communications, I have pointed to the importance of building channel partnerships with systems integrators and other technology companies. And we did make substantial progress on that score in the second quarter. We signed with 11 systems integrators; two global and nine regional. Let me give you an example of a relationship with a global systems integrator. In June, we joined forces with Accenture Digital, a world-class leader in digital customer experience. Pitney Bowes' EngageOne Video solution will be offered to Accenture Digital clients who are in the midst of their digital transformation strategy. Clients across verticals and public service industries can deploy EngageOne Video to boost customer loyalty, improve new customer on-boarding process, support content development, and scale video production. The scale that a partner like Accenture brings to Pitney Bowes gives us an opportunity for meaningful progress. On a related point, according to the second quarter Forrester Wave Communications Management Report and I quote, "video support through Pitney Bowes interactive and personalized EngageOne Video solution is best in class." Also in June, we entered into an OEM agreement with IBM. This agreement helps strengthen our position as a location intelligence supplier to a market-leader in business intelligence and analytics markets. These relationships and accolades are important for two reasons. First, they confirm that we have good products. Second, getting good products to market requires the right channels. All these partners are best-in-class in their respective markets and I'm confident they'll be important partners in bringing our products to market. So let me lay out how I see the Software business moving forward. You should see improved license performance as the first step in this business improvement, and we're starting the second half with a much improved pipeline. That will lead to improvements in subsequent quarters in related streams. As I mentioned in the last quarter, I expect this business to improve throughout the course of the year. While overall business investment in technology is soft, I still believe we can turn in better performance. Third, as we discussed on our last call, we deployed our new enterprise business platform in April in the United States. Although we often call this an ERP project, that really does not do justice to the scale of this initiative. The platform affects every aspect of our business, including how sales opportunities are managed, products are configured, leases and bills calculated, financials produced, customer service delivered, and client satisfaction managed. It is a substantial business process and technology reengineering project and now extends to approximately 80% of our revenue base. It is already producing benefits to our business and will deliver substantial benefits to our business over time. It is worth noting that some of the significant product announcements we have made in the last 90 days have been enabled by our new business platform. Although that said, the implementation of this platform caused some short-term interruptions to our business, particularly in the high volume portion of our meter business in April. Mike will elaborate on this more in his comments, but here's the bottom line. The platform now covers the preponderance of our business and the business case is still intact. In some cases, we can already see that the business benefits will be beyond what we had originally contemplated. Fourth and most importantly, we have been focused from the beginning on creating long-term shareholder value. I said to my team this last April that I believe the second quarter of 2016 would be one of the most pivotal quarters in our company's history in our transformation efforts to establish those fundamentals that enable long-term success. Let me explain what I mean based on our strategic pillars

[Michael Monahan:]

Thank you, Marc, and good morning. Marc outlined how our actions in the quarter are in line with our transformation objectives. I want to focus my comments on three things

[Operator:]

The first question comes from the line of Ananda Baruah, Brean Capital. Please go ahead.

[Ananda P. Baruah:]

Hey, guys. Good morning. Thanks for taking the questions. Hey, just a couple if I could. The first one, just wanted to go back to your remarks on the Ecommerce business and get a couple of clarifications. First off, could you – Mike, could you go back over the organic growth commentary for this quarter and what you said your related organic growth was from the year ago quarter. And then I have a follow up on that. Thanks.

[Michael Monahan:]

Sure. In terms of the Ecommerce organic growth looking at the Cross-Border business was 11% in the second quarter. And that compares to it being slightly down in the first quarter. One of the main drivers, obviously, has been the improving comparison of the U.S. dollar relative to the other currencies that we sell to outbound in the U.S. In addition to that, very strong growth in our UK outbound business and addition of new retailers to the marketplace or the retail component of our business. So, we've seen that improve in terms of growth in outbound volumes from both markets, so we feel good about the direction of that now that we have a better currency comparison.

[Ananda P. Baruah:]

And the Cross-Border growth of 11%, that includes everything that you just spoke of. It includes the UK outbound as well as the Borderfree outbound and your traditional eBay outbound. Is that...

[Michael Monahan:]

Correct. So, we think of the traditional eBay as a marketplace and the Borderfree component more as the retail. That's inclusive of both of those pieces.

[Ananda P. Baruah:]

Okay. Awesome. And then, another clarification. Was I accurate in interpreting your remarks that the FX headwind from U.S. outbound into the UK is actually being, for the most part, offset by the FX tailwind from your UK business outbound now as well?

[Michael Monahan:]

Yeah. If you look at – and again, given the change in the value of the pound in the last several weeks, given the Brexit vote, it's early days to know exactly what the pluses and minus will be. But the weakening of the British pound has actually made purchases from the UK grow because of the lower cost to buy from the UK. And the flip side of that is UK is an important outbound market from the U.S., and that's made the goods from the U.S. a little more expensive into the UK. So, it's actually early days a slight negative given the amount of volume outbound from the U.S. But as the UK grows that obviously diminishes.

[Ananda P. Baruah:]

Okay, got it. You mentioned – you made comments just a moment ago about – for Border reaching the returns goals by the end of the year. And so could you context that for us a little bit? The overall margins for the business there, I think, was 3.5% this quarter, which is a decent snap back. If I recall, upon acquisition, the returns commentary you guys made for Border, I believe, was mid-teens or 15% over the first 18 months of the kind of acquisition close. I would just love to get a sense of what we can expect for the margins as we go through the second half of the year and sort of what it means to you guys to kind of hit your return targets for Border as per your remarks by the December quarter. Thanks.

[Michael Monahan:]

Sure. Let me just approach it from a high level. So, if you think about from an acquisition standpoint, what we said upfront was we would get $20 million, $25 million of synergies out of the business. If you look at the amortization associated with the intangibles of the business, that runs at about $18 million a year, so getting those to be offset, so we've gone from basically flat to a little bit positive in the first quarter in that business. We think the leverage in the growth and the volumes is ultimately what drives the margin. We still have some synergies left to go through the balance of the year to get, so we see margin upside. The 15% margin is a long-term objective for the Digital Commerce Solutions business. I would say we're where we expect to be with the acquisition in terms of sort of the rate and pace of achieving the synergies as well as beginning to see the growth and the volume in the business.

[Ananda P. Baruah:]

Okay. That's really helpful. Thanks a lot. I'll cede the floor for now.

[Michael Monahan:]

Thank you.

[Operator:]

And our next question is from the line of Kartik Mehta with Northcoast Research. Please go ahead.

[Kartik Mehta:]

Hey. Good morning, Marc and Mike. I wanted to ask you, you talked about the ERP system now impacting about 80% of revenue, and I was wondering the confidence level why the remaining 20% will go well and according to your plan and in time?

[Michael Monahan:]

Sure. The simplest answer to that is the more complex implementation of the program is in the U.S., because we have the broadest range of business models, the highest volume of activities. So, getting it right in the U.S. accomplishes two things really. One is it obviously gives us a lot of experience in doing the cutover process and converting data and all that. Second, we're maturing the platform. And so, when we go to the other market, we have a much more complete and fully featured solution. And we've got people who have been through the process of implementation. So that strengthens our view of our ability to bring that into the other markets.

[Kartik Mehta:]

So, Mike, if you look – what do you think went wrong? It seems as though – I believe you had the Canadian ERP solution in first if I remember right and that went well. As you look was it just the scope of the project because the U.S. is such a large market or was it something else that resulted in this not going as well as you would have liked?

[Michael Monahan:]

I wouldn't say it didn't go well at all. I would say it went quite well. The impacts we're talking about here are really due to lost selling days. If you think about inside sales and supplies, every day is a selling day. And so, as part of a natural cutover, you take systems down, you go through training. Those are lost selling days. So, we don't think at all that this was problematic. We think actually it went quite well that in three months we're back where we started before and have a opportunity for further improvement.

[Kartik Mehta:]

Just one final one. Could you just provide maybe a little bit granularity about the earnings cadence you would expect in the third quarter and fourth quarter? I know you said fourth quarter you'll get the biggest benefit, but you still understand what type of benefit. It seems like fourth quarter has to be a pretty good quarter for you guys from a year-over-year earnings standpoint. I just want to make sure that I understand maybe the cadence of earnings.

[Michael Monahan:]

Yeah. It'll definitely be more weighted to the fourth quarter for a couple of reasons. One is – and probably most significant is the benefits associated with the ERP rollout. So, there are a couple of things that happened. One is productivity in the back office. We obviously ramped up resources to ensure we went through the cutover process smoothly. We'll ramp down those resources over time. We'll begin to get the benefits of taking the old systems down and those types of things. So those benefits will be skewed to the second half. We'll also continue to see improvement in the productivity of our sales organizations, back office organizations, finance, IT as we – as people get more familiar, more comfortable with the system. So, we clearly see a heavier benefit from that in the fourth quarter.

[Marc Bradley Lautenbach:]

I'd like to just add to Mike's comment about the implementation. I've had the opportunity to see probably 100 of these implementations. This is about as good as it gets. So, if you think of the life cycle of these systems and processes that we're deploying, it's measured in a decade or so. To have 60 days of interruption for a decade of benefit of $100 million plus, I'll take that trade every time. It's certainly wasn't helpful for the quarter, but it was the right thing to do for the long term of the business. And just the simple scale of the United States is so much greater than Canada and Canada was so much greater than everything else. This was the difficult deployment that we really had to focus on.

[Kartik Mehta:]

All right. Thank you very much. I appreciate it.

[Operator:]

We have a question from the line of George Tong, Piper Jaffray. Please go ahead.

[George K. F. Tong:]

Hi. Thanks. Good morning.

[Michael Monahan:]

Good morning.

[George K. F. Tong:]

Can you elaborate on when you expect North American SMB revenues to return to more normalized declines of about 2%?

[Michael Monahan:]

So, we've talked about the normalized run rate of the SMB business being kind of minus 2% to minus 4% from a market perspective. And if you look at over the last several quarters, we've certainly been in that range. And we believe now having gone through the sales force change as well as now the systems change that we should be able to return to that level, so it's sort of pre-impact and post our change in go-to-market. And then, obviously, we've begun to bring new products to market that should provide us some enhanced opportunities as well.

[George K. F. Tong:]

Got it. And then from a timing perspective, would you expect 4Q to be the quarter where you see the sort of 2% range and 3Q more of a transitional quarter?

[Michael Monahan:]

In terms of absolute numbers, I'm not going to do that by quarter, but, certainly, the fourth quarter we think we're fully back on track. We think the third quarter certainly will be a significant improvement from this current quarter as a result of (44

[George K. F. Tong:]

Got it. That's helpful. You touched on new software sales channels with partnerships with system integrators. Can you discuss any other steps you've taken to further improve software sales execution?

[Marc Bradley Lautenbach:]

Sure. Let me kind of divide this into a couple of different layers. As we talked about earlier in the year, we brought in new leaders. They are continuing to evolve the team. I would characterize those changes as on the edges, but certainly not anything terribly disruptive. We're continuing to invest in the products. So, if you look at the second quarter, you would see R&D spending gone up and that certainly had a lot of different contributors to it. But our Digital Commerce business, including Software, was an aspect to that. And we're looking at what I would say as tuck-in type of acquisitions. So we made an acquisition in the second quarter of a company called Maponics. Fairly small in size, but helps our products get better. So, we're evolving the management team. We're continuing to invest in the products. And then, obviously, our central focus has been channels. My thesis all along has been we've got the right products, so we need to continue to invest in those, but we've got to get the channels to get us to these new markets.

[George K. F. Tong:]

Very helpful. And then lastly in Global Ecommerce, can you discuss your plans to launch any potential new outbound shipping countries beyond the U.S. and UK and any other discussions you've had to add new large marketplaces to supplement growth?

[Michael Monahan:]

Yeah. So, George, we just announced in the last week that we are beginning outbound from Australia. So, we have a number of retailers that we're beginning that process with. So, we continue to look at opportunities to expand globally. That is our next and newest market. And we'll continue to look at other markets as we go forward.

[Marc Bradley Lautenbach:]

I would also say our thinking has shifted a touch on this subject in that if you would've asked me a year ago what were our primary drivers of growth in Ecommerce, I would've said the addition of more outbound countries. Actually, I'm now starting to think that the best and closest opportunity for growth is what I said before and that is outbound from the United States, outbound from the UK, outbound from Australia, but into markets like China and India, given the consumer and the middle-class evolution in those places coupled with the strong brands that we have partnerships with in the U.S., the UK. That has become the most obvious near-term opportunity for growth. So, we'll double down on some of those outbound range from markets we're already in, in order to facilitate growth into markets that have good engines of growth.

[George K. F. Tong:]

Very helpful. Thank you.

[Operator:]

Our next question comes from the line of Shannon Cross, Cross Research. Please go ahead. Shannon Cross, your line is open.

[Shannon S. Cross:]

Oh, sorry about that. Marc, I wanted to follow up on the last question or actually the last comment you made, because I'm curious what specifically can you do to drive more sales outbound into China and India? What do you think the retailers need from a support standpoint and just sort of how does that market ramp up?

[Marc Bradley Lautenbach:]

So, I think there'll be a couple of different levels to it. If you look at China as an example, we'll work to facilitate partnerships with companies in China, potentially marketplaces, but other partners as well that can carry the brand that we have from the U.S. and UK into those markets. I would see it as an expansion of partnerships that we already have. And as you know, we have relationships with Alipay and Tmall in China. We'll look for more activity with those partners in those spaces and likewise in India. China becomes a pretty good metaphor for the kinds of partnerships, so what can you do with marketplaces in India that help carry the very strong brands from U.S. and UK into those marketplaces.

[Michael Monahan:]

Shannon, I would add to that that because we present their whole portfolio of goods from often the U.S., UK outbound, we can also help them selectively present certain product categories into certain markets where we know there's a high propensity for buy against that. So, when you think about the broader Pitney Bowes portfolio and our ability to help clients identify growth opportunities in that with our customer engagement solutions and the like, one of the benefit is helping them get the right products to the right market, not necessarily their entire portfolio or even the retailer brand itself, but subsets of their offerings into given market. So, we see that as a significant value-add beyond the traditional process of just pricing and outbound transaction and getting it delivered.

[Shannon S. Cross:]

Okay, great. And then, I'm curious on SG&A, what's the kind of a normalized level for SG&A? I assume it was down a little bit more than normal this quarter because you had the missed sales, but obviously, 34% is getting down closer to the low 30% level you've talked about, maybe high 20%s at one point, that goes back a long time. But I'm just kind of curious as to how you're thinking about with the ERP implementation and all the puts and takes with the branding in that how we should think about SG&A when we get out a year or so.

[Michael Monahan:]

Yeah. Clearly, the benefits that we will get from the implementation of our platform will show up predominantly in the SG&A line. So, we believe that on a percentage of revenue basis, we'll continue to drive that number down as we go out. Obviously, the fourth quarter will see more improvement than the third quarter. And then, to your point of a year out, as we begin to get the larger share of the benefits of that system, we should see that number coming down further.

[Shannon S. Cross:]

Okay. And then, Mike, how are you thinking about cash flow on sort of – again, I hate to keep using the word normalized because we never – the world is never normal, but when you think about cash flow, you reduced it a bit this year with some puts and takes in that. How should we think about maybe working capital benefits offset by, I don't know, investment? Just can you give us some color? I know you don't want to guide a year out, but...

[Michael Monahan:]

I would say the simplest way to look at it, and we talked about this at our last Analyst Day, is that the single biggest variable going forward will be the growth in earnings. And so, if you think about the way our balance sheet's evolving, financed receivables as the Mailing business stabilizes should stabilize more. That's one of the drivers of free cash flow coming down over the last few years. We have less inventory dependency on the businesses that grow. The cash cycles for those businesses are shorter. So, we should see a fairly stable contribution of working capital and other balance sheet-driven items, and the big variable will be earnings growth.

[Shannon S. Cross:]

Okay, great. And then my final question is just on the Canadian labor negotiations. How do we think about the potential impact there? Is it mainly on the shipping side or is there something that could come through on the SMB Mailing as well?

[Michael Monahan:]

I would say it's principally on the Ecommerce side. So to the extent that there was concern about using Canada post by ecommerce players, they might divert transactions away from them or slow down their ecommerce activity. Early on in this process there was, I'd say, more noise about a disruption. Both sides have indicated they want to negotiate this. So, we continue to monitor that, and we'll see what the potential impact is, but we're hopeful that that will come to resolution.

[Shannon S. Cross:]

Great. Thank you very much.

[Michael Monahan:]

Thank you.

[Operator:]

We have a question from the line of Allen Klee, Sidoti. Please go ahead.

[Allen Klee:]

Yes. Good morning. How would you characterize the impact of the advertising campaigns that you've done, and any thoughts on changing your prior guidance of kind of the spend on it?

[Marc Bradley Lautenbach:]

Well, I'll take the first half and I'll let Mike take the second half. As I had mentioned, I believe, earlier in the year, I did some brand health work after the advertising had been launched. And we saw, I would say, meaningful improvements in consideration rates, and that's precisely what we had hoped for. So this is something that we'll roll out over years, not months or quarters. But early indications are that investments in the brand have paid off. So, we'll contemplate how we move forward with investments, given the realities of our business in the second half. But there's no doubt that this is something that our focus is going to continue to be on enhancing our brand.

[Michael Monahan:]

So, in terms of how to look at it in the financials, I think early on we had talked about sort of the first and fourth quarters being more elevated. Last quarter, we said we would pull some of that second half forward to the second quarter, which we did do. So, we expect kind of second half to be more in line with the prior year spend. And then, as Marc said, going into 2017, we'll evaluate the level of spend going forward.

[Allen Klee:]

Thank you. And then any commentary on the performance of your digital stamp and multicarrier solutions?

[Marc Bradley Lautenbach:]

I would say in sort of digital stamp, we have two products. One is more of a postal oriented product, pbSmartPostage, and we recently launched SendPro, which is a multicarrier shipping, SaaS platform. We had good success. That just launched in late April; good early success with the shipping platform selling into our customer base and really expanding the value proposition there. In pbSmartPostage, we continue to add new customers there, albeit we're still a relatively small part or a small share in that overall market. So, we do see continuing opportunity on both those fronts.

[Allen Klee:]

Okay. Thanks. And then, as you – part of your strategy in Software is to push the channel. Do you think that has an impact on the longer-term margin outlook for Software?

[Michael Monahan:]

No. Well, it will rebalance the margin between cost and expense. So, what you may find in some of these relationships that we offer some discounts off of the pricing of our software as a benefit to these systems integrators, but the flipside is that it allows us to have a different SG&A profile. So, from a net perspective, it will work out the same, although it might be slightly rebalanced.

[Allen Klee:]

Okay. And lastly, for your ERP rollout internationally, how do we think about when you're timing that for next year?

[Michael Monahan:]

We'll probably update further at the Analyst Day that we're going to have in the early part of December. But we're continuing to look at balancing the opportunities to enhance the North American piece with the international rollout. The other important piece of it is the data cleansing process. And so we're in the midst of that now. So, we'll finalize the timing of that as we go forward, and we'll give a further update in December. But we feel good about the opportunities in North America for getting our cost benefits as we go out.

[Allen Klee:]

Thank you.

[Operator:]

We have a question from the line of Glenn Mattson, Ladenburg Thalmann. Please go ahead.

[Glenn G. Mattson:]

Hi. Just with regards to Australia, can you say is that something you expect to contribute this year? Also, can you tell us how big you expect that outbound market could get? And then, lastly, in the past, you talked about rolling out other markets in line with your biggest customer in Ecommerce or your biggest partner, and now you're saying the thinking has changed a little bit. So I just wonder has their thinking changed also or how is that going?

[Michael Monahan:]

So, in terms of Australia, when you think about the largest outbound markets, obviously, the U.S. and UK are either the largest or top five types of markets. Australia is one of the top 10 markets, but obviously smaller than the U.S. and UK. As we've seen in both the U.S. and UK, there's a ramping process that takes some time to roll itself out, and once you get the first few retailers out there then we look to add around that. We've been very pleased with the ramp up of the UK. And so we'll expect, over time, Australia to grow. I don't expect it to be a huge contributor in the second half of the year, but certainly, begin to lay the ground work for some sustainable revenue over time. In terms of expansions into other markets, I think as Marc mentioned, we're obviously going to go where our partners and all see opportunity and want us to go where we think we can create a reasonable footprint and a profitable business. But we're going to balance that with the opportunities to really optimize the outbound opportunity around the world. I'd add that both in the UK and the U.S. we've expanded the number of countries we're outbound to. In the UK, it's now over 80 markets. In the U.S. it's over 100 markets.

[Glenn G. Mattson:]

Okay. Thanks very much.

[Michael Monahan:]

Thank you.

[Operator:]

And our last question is from Chapin Mechem with NE Investors. Please go ahead.

[Chapin Potter Mechem:]

Yeah. Hi, good morning. I'm wondering if you can address your plans for the PBIH preferred shares.

[Michael Monahan:]

Yeah, we're still evaluating that. We think there's likely an opportunity to refinance that with traditional PBI debt, but we're in the midst of finalizing our plan for that now as we speak.

[Chapin Potter Mechem:]

Okay, and just a follow-up with that. So, with the step up, the 50% step up every six months, my rough math, if you keep them out is about $0.07 a share in the next year. Is that the sum right?

[Michael Monahan:]

I don't have the number off the top of my head. I would say it's probably in the ballpark. Our expectation is we have an opportunity to refinance this.

[Chapin Potter Mechem:]

Great. And just one more thing on that, sorry, just to clarify, after 10/30 you could still take them out anytime at par, is that right, if it's not that done by the end of October?

[Michael Monahan:]

That's correct.

[Chapin Potter Mechem:]

Great. Thank you.

[Michael Monahan:]

Thank you.

[Operator:]

And Mr. Lautenbach, do you have any closing remarks?

[Marc Bradley Lautenbach:]

I do. Thank you. I'd like to build off of Allen's question, because I think it's an opportune segue. To a degree, for the last several years, I feel like we've been slogging uphill between market exits, channel shifts, the deployment of new systems, and you're all very familiar with the rest. With the deployment of our business platform in the United States, I feel like we've got some clear water in front of us and we're anxious to take advantage of that. So, from my perspective, we'll make a judgment about when we roll out the rest of the business platform. But my priority is moving towards having some clear water, so we can begin to yield on investments that we've made. So, I'm not particularly pleased with our results financially in the first half. That being said, if you look at this transformation in the context that I always have, and that is what we are doing to improve the long-term ability of this business to create value, I couldn't be more pleased. So, that's kind of where we are. As we move into the second half, I believe we are poised to begin to yield on some of the investments that we've made over the last quarters, the last several years, whether it'd be the investments in the brand, investments and our system investments in our channels and we're anxious to take advantage of that. So, we'll certainly update you more as the year goes on. But I think that's kind of a synopsis of where we are right now. So, I look forward to speaking with you again in 90 days.

[Operator:]

And ladies and gentlemen, this concludes our conference for today. A replay of today's second quarter earnings call will be made available later today at pb.com. Thank you for your participation and for using AT&T Executive TeleConference Service. You may now disconnect.