Q3 2021 Earnings Call Transcript

Published: 17 Nov 2021

[Operator:]

Greetings. Welcome to Sportradar Third Quarter 2021 Earnings Conference Call. At this time, all participants will be in listen-only mode. A question-answer-session will follow the formal presentation. Please note this conference is being recorded. At this time, I’ll now turn the conference over to Sandra Lee. Sandra, you may begin.

[Sandra Lee:]

Thank you. Good morning, everyone, and thank you for joining us for Sportradar’s financial results conference call for the third quarter ending September 30, 2021. On the call today, we have Sportradar’s, CEO, Carsten Koerl, and CFO, Alex Gersh. This call including the QA portion may include forward-looking statements related to the expected future results for our Company. Our actual results may differ materially from our projections due to a number of risks and uncertainties, which are described in our earnings release and other SEC filings. Today’s remarks will also include references to certain financial measures, not reported in accordance with IFRS. Additional information including reconciliation of these non-IFRS financial measures is provided in our earnings release. This conference call will be available for replay via webcast at Sportradar’s Investor Relations website at investors.sportradar.com. Carsten will begin with an overview of Sportradar followed by our most recent highlights. Alex will then take you through a review of the financials before we proceed to QA. With that I’ll now turn the call over to Carsten.

[Carsten Koerl:]

Thank you, Sandra. Good morning to everyone. And thank you for joining our first earnings call as a public company. As some of you may be new to our story, I would like to take you through a brief overview about who we are, what we do, and the massive growth opportunities we see in front of us. Please note that this brief overview will make today’s call a little bit longer than what we typically go for. I’ll provide you an overview of our recent progress, performance, and finally I will turn the call to our CFO, Alex, for the financial review of the quarter and expectations for the remainder of 2021. Sportradar is a leading technology platform, enabling next generation engagement in sports and the number one provider for B2B solutions to the global sports betting industry, based and measured by revenue. We provide mission-critical software, data and content via subscriptions and revenue share arrangements to sports leagues, betting operators and media companies. We have been at the forefront of innovation in the sports betting industry and we continue to be a global leader in understanding, leveraging and monetizing the power of sports data. Our mission is to enhance sports fans and engagement globally through our fully-integrated technology and service platform. Sportradar offers one of the most robust and fully integrated sports data and technology platforms. We serve as a critical data infrastructure and content layer to the sports betting and media industries. On top of that infrastructure layer, we have built one of the most advanced and comprehensive software offerings. Our products simplify our customers’ operations, drive efficiencies, protect integrity and enrich fan experience. We have the largest volume of sport data in the world, but what’s so much more important is that we’re continually innovating to use the data, to provide valuable insights and develop products that move us higher up the value chain for our customers. Our end-to-end offering, integrated technology and global footprint make us an important partner for our customers and deeply embedded across the sports ecosystem. For our over 900 sports betting operator customers, we cover more than 750,000 events annually across 83 sports, including live data coverage of 600,000 events across 37 sports. The breadth of our data offering and sports coverage is an important differentiator for Sportradar. We are the number one provider of data to bookmakers. We supply sports data to over 85% of all bookmakers in the United States. Our offerings include pre-match data and odds, live data and odds, trading services, which we call MTS, as well as AV content product. Our full-suite of software solutions includes managed platform services, betting entertainment tools, virtual games and programmatic advertising solutions. We are the only one-stop-shop provider across the value chain in this B2B business. For our over 150 sports league partners, we provide across 900 betting operators and 350 media companies to distribute their data and content globally. We give them greater reach to serve as an intermediate to the highly regulated betting industry. Importantly, we provide integrity services to more than 600 leagues, federations and law enforcement agencies. These services help to ensure a fair playing field for all. What is also critical is that our integrity services give a deep relationship with sports leagues, who know that they can count on us. For over 350 media customers, including both traditional and digital leaders, we provide products and services to help reach and engage sports fans across all distribution channels. Finally, our newly formed sports solution vertical completes our circle of offerings to meet all of our customer and sport technology needs and demands. This vertical leverages the power of automation through cutting edge use of computer vision to help the sport organizations to better perform -- the teams to better perform on the field and increase profitability on the off-field actions. We are very excited about the recent acquisition of Synergy Sports and InteractSport. Through Synergy, we have a strong presence in the world of coaching and analytics, dominating both the professional and college basketball and baseball. Through InteractSport, we have gained an immediate presence in the sport of cricket. We couldn’t be more excited about sports solutions vertical, and we are focused to aggressively build our team and the computer vision experts to the best-in-class, automated video projection and data management solution. Now some words to our growth strategy. Turning to the growth strategy, we are in an exciting transformative time. Advancements in artificial intelligence, machine learning and computer vision are changing this industry as many other industries. I started Sportradar more than 20 years ago. I’ve been in the business for far longer and never experienced the time as exciting as this one now, right now. In addition to the digital transformation, the sports and media and the betting industry are converting, bringing together massive TAMs. Please see our public filings and slides in the presentation we have published for further statistics how we fuel the TAMs. Finally, the U.S. is driving the pace of change with a market that is rapidly adopting the demonstration in sports betting. To capture all this opportunity, we’re continually broadening our product portfolio to better serve customers and increase our touch points with the end users across the sports betting value chain. The more knowledge of the end user that we are able to collect, the more valuable our insights and platform services become to mix, sports betting companies and of course also to media companies. These network effects also enable us to enhance our product portfolio serving as a key element of our growth strategy. Other elements of the growth strategy are the followings

[Alex Gersh:]

Thank you, Carsten, and good morning, everyone. As Carsten already mentioned, we had a very strong third quarter of 2021 and an excellent nine months for the year. Let me take through our quarterly results in detail, and then I’ll provide the full year guidance for ‘21. Our third quarter group revenue grew 30% to reach it €136.8 million. Now, looking at the segmental revenue detail, our rest-of-the-world betting revenue grew 24% in the quarter to €78.6 million. This growth was primarily driven by an uptake in our higher value-add offerings, including managed betting services and live odds services, which increased 63% and 20%, respectively. And the increase was as a result of increased turnover and volume as well as new customer wins. The second segment is of course, rest-of-the-world AV revenue, and Carsten has mentioned this as part of his presentation, but just to reiterate. It grew 13% to €29 million. This growth was impacted by COVID-related schedule changes that occurred in fiscal 2020. Adjusting for that revenue growth This growth was driven by volume growth as we were able to sell more matches, primarily soccer and baseball, as well as growth from additional new content being sold to existing and new customers. Turning to the United States, we grew 119% in the quarter to €19.6 million. This was driven by growth in our betting service as in underlying market and turnover grew. We also experienced strong adoption of our ad

[Operator:]

Thank you. Our first question comes from the line of David Karnovsky, JP Morgan.

[David Karnovsky:]

Hi. Thank you so much. With the NBA, I was hoping you could provide some additional background on the deal, why do this agreement now when it still had a few years to go, you have your initiative with the NBA? And then, can you just expand on some of the additional distribution rights you’ve acquired, and do those start immediately or in 2023? Thanks.

[Carsten Koerl:]

Yes. Good question, David. So, it was -- this deal was a long effort, and we discussed it since quite a while with our partners, and we’re super happy that we could announce it today. The U.S. is undoubtedly the biggest growth opportunity which we see in front of us, and we want to focus on creating value, so investments in the United States are our top priority. The NBA is the top betting sports in the United States by pre-match, but more important by live. Live is something that we see main trend in the United States, and we see a lot of opportunities to monetize here with our live odds and with our managed trading services products. This was a main motivation. Looking now into the scope, we widened the scope enormously. So, that includes tracking data; it includes a tracking system. We can work now with our sports solutions vertical on new ways, how we capture data, how we give that to teams, and how we create value with the sports fans with new data which we have and the insights. The exciting thing was the NBA is, it’s a real strong technology partner. The NBA tries to think years ahead, and the deal is constructed about a strong technology partnership with a focus on U.S. betting of course, but also internationally. And I mentioned the 2 billion sports fans following the NBA globally, that simply fits perfectly to our profile. So, that’s the range, it’s an extended deal, but the scope and the focus is of course in the United States with the betting opportunity.

[David Karnovsky:]

Okay. And then maybe as a follow-on, Alex, any additional detail you can provide on the equity position for the NBA, and does that go to the lead now or to your…

[Alex Gersh:]

The deal, as we, I think, announced, starts at 2023. So, that’s when things start. But obviously, we have a -- we have an agreement, and they will become an equity shareholder Sportradar, which is really exciting for us. This is the kind of shareholders, we absolutely want. So, that’s really -- no other detail other than of what we already discussed in the press release.

[Operator:]

Our next question is from the line of Thomas Allen with Morgan Stanley. Please proceed with your question.

[Thomas Allen:]

Thanks. Just one other clarification on the NBA deal, in the old deal, you were the exclusive global provider, but you had a co-exclusive in the U.S., and I think China was an exclusive either. Does that continue, or you are exclusive for everything by yourself?

[Carsten Koerl:]

The headline of the press announcement says exclusive global data provider. And I hope that gives you enough clarification. There is an opportunity that the two partners, the NBA and Sportradar looking for market innovation. And there are companies that need data to create innovative products. That is something which has always in the interest of Sportradar and of course of the NBA. So, that is the difference to the existing deal. I hope that clarifies the situation.

[Thomas Allen:]

Okay, thanks. And then, this is my follow-up. A lot of the operators talked about a hold impact in the third quarter into the fourth. Respecting most of your contracts are not tied to revenues, but did you have a negative impact from events going against the operators?

[Carsten Koerl:]

Alex, do you want to take this question, or should I?

[Alex Gersh:]

Go ahead, Carsten.

[Carsten Koerl:]

Yes. Then I quickly take it. No, the opposite is the case. We had a very, very strong MTS growth. And MTS is our product where we are closest on the profit of the bookmakers. And, we enjoy the 71%, I think, year-on-year growth in that segment. There are always some ups and downs, but what has happened in the U.S. with the hold and profitability was not the trend worldwide. So, worldwide, overall, in this MTS product, that has leveled out very well for us and showed a strong growth and strong profitability.

[Thomas Allen:]

Perfect. Thank you.

[Operator:]

Our next question is from the line of Jason Bazinet with Citi. Please proceed with your question.

[Jason Bazinet:]

I had a simple question. Can you just remind us how many of your leagues have a sort of equity participation in the awards and radar today? And how should we think about growth in fully diluted shares outstanding, over the long-term, what’s a reasonable growth rate based on the agreements that you do have in place?

[Carsten Koerl:]

As a very general statement, I think you will not see too many equity deals from Sportradar, like we did it now with the NBA. The NBA is our most important partner, was our most important partner from the scope and from the size, and also looking to the extensive partnership. So, that was a very clear step for us to do this, to group with our partner where we enjoyed in the last seven years a sensational cooperation. And it’s in the sweet spot of our growth of the U.S. markets. We have an equity participation with the National Hockey League, on a much smaller range than the NBA. And you might see some smaller equity deals in the future here, not to the extent and scope like we see it now, or saw it with the NBA. We’re super happy with this. But, we do not intend to really widen this too much and dilute the shareholders there. We see here a value creation for the NBA and for Sportradar. That’s the reason why we did this.

[Jason Bazinet:]

Perfect. If I can just ask one follow up. Maybe I missed it in the release, but do you have the number of fully diluted shares outstanding as of the quarter?

[Carsten Koerl:]

Well, Alex gave you already down, so we have to refer you to the release. It’s fresh out of the press. And I think it is in the release.

[Alex Gersh:]

I think, if you mean in terms of -- you mean the number of shares for Sportradar, you don’t mean the -- or are you talking about the NBA?

[Jason Bazinet:]

No, no, for Sportradar.

[Alex Gersh:]

Yes. So, for Sportradar, I can tell you that we have total of 205,454,977 A shares. And then, we’ve got total of 903,670,977 participation certificates, which convert into 10 times less shares ultimately at some point.

[Jason Bazinet:]

Okay. Thank you.

[Operator:]

Our next question comes from the line of Robin Farley with UBS. Please proceed with your question.

[Robin Farley:]

Great. Thanks. Two things. One is, I just wanted to clarify your answer on the NBA data. Is it exclusive in the U.S. for NBA data, but not starting until 2023? In other words, it’s still shared --with some others before 2023? I just wanted to clarify that. And then, also just wanted to ask if you could give us a sense of either number of customers or percent of customers still using Sportradar for NFL data, just so we can kind of think about that opportunity, kind of important opportunity there is outside of the exclusivity there. Thanks.

[Carsten Koerl:]

Hi, Robin. So, to the first part, old deal remains in place for the next two seasons, and there is no change. So, there will be -- there are several providers for the U.S. live data piece. In two years, the new deal kicks in. And the new deal is different to the old one. So, within new deal, the NFL -- the NBA and Sportradar can decide, if it makes sense for one or the other provider to get access to the data, which is sub-licensing. And I think that’s very good for being innovators and developing the market, and we will take that decision together with our partner NBA, but the mechanics have fundamentally changed with the new deal. So, that’s the first part of the question. And the second one with the NFL, we told already that we lost not one client in the betting market. And we lost -- we recouped 99% of the revenues, which we predicted in media and betting together, which shows that we have been able to compensate the loss of the exclusive data rights with the NFL by capturing data in an alternative way. From a client perspective, it’s just exactly as we said during the road show, and this was expected that the big operators, the Tier 1 operators, they took the exclusive data from the NFL to widen some of the partnerships there. The smaller ones haven’t done this. So, the smaller ones are staying with Sportradar. I think, we are speaking about a little bit more than 10 operators here. Does that answer your question?

[Robin Farley:]

Yes. And just if I could clarify, when you mention that there is a decision in two years where you -- it sounds like you have the option to have the NBA data exclusively. Is that -- I assume there would be sort of an additional fee or something, if Sportradar chose that option. Is that fair to assume?

[Carsten Koerl:]

No. That’s not an option. Then you misunderstood me. There is a clear regulation between the partners NBA and Sportradar that we want to be able to give the data to some innovative companies. We keep that open. And there is a partnership agreement on this, and there are clear -- is a clear regulation in between, which I can’t go now too much into detail. But, it means that Sportradar will be the very preferred supplier of NBA data to the U.S. marketplace in the next eight years from the season 2023 onwards. So, that was the reason of the deal. This is not the option where we have to pay more money. That deal is closed now for clear financial terms. And there is nothing on top of this.

[Operator:]

The next question comes from the line of Shaun Kelley with Bank of America.

[Shaun Kelley:]

I just wanted to maybe dig in on some of the changes in economics you guys saw as a result of sort of some of the deals we saw announced with the NFL, kind of back in September. Has any of those relationships that were announced with sort of other operators impacted, let’s call it, the pricing dynamic or the take rate on any other products or deals with leagues? So, have you seen any pricing pressure on things that were sort of not NFL, but might’ve been tied to or impacted by the NFL agreement that your competitor has out there in the market?

[Carsten Koerl:]

Of course, the market reacts on these things. And the market was asked to pay a significant premium compared to what they paid in the season before. And that has an impact on the market. So, there is a sensitivity on the bookmaker market on this, same as the bookmakers are sensitive on tax rates. In a very general way, we see really strong, strong growing market in the United States at the moment. This is more driven by capturing market shares. And there is a cost sensitivity, but the cost sensitivity is probably not the main priority for the offering. That’s what we see in general. Going now into the granular, as you know that the NBA and the Major League Baseball, they have a different distribution model. So, they have a fee upfront, which is paid to baseball and basketball to get them access to the official seat, which is a different to the NFL distribution model and to the NHL distribution model. For the NHL, we are the exclusive rights for this also for the next decade, for 10 years, same like we have it now with NBA. And we see that as a thing, which we constantly have to refill. We constantly have to see changes in this landscape. It’s a very dynamic market, but for us, from our perspective, it was very important that we secure long-term stability. That’s what we did now with the NBA for 10 years, and with the NHL for 10 years. We are very proud that also for a long time we are associated with the Major League Baseball.

[Shaun Kelley:]

Great, thanks. And maybe just a quick follow-up, a lot of the sports betting operators in the U.S. are moving to or focused on sort of full tech stack ownership. Just wondering, I think you mentioned that you’re seeing actually quite good traction with some of your MTS and MPS products. Could you just give us a little color on where that traction is, especially in the United States, with clients or customers? And like how does the full stack ownership have an impact with some of the relationships with some of the bigger operators?

[Carsten Koerl:]

Yes, super happy. But, we have to dive really deep into the details, and I hope you will allow me a minute to explain the environment. So, if we speak about some services which the bookmakers take in house, you might mean platforms. There are very strong platform providers in the sports. We have a platform. There are many others which are claiming to have a very good platform. And our platform is doing the full service. That is the pay in, pay out, user acquisition back end, front end, et cetera, including risk management modules. Our MTS service is continuing to grow and grow. From a liquidity perspective, we are now on a year-by-year handle of round about run rate $15 billion as the tickets what we aggregate in the background. The more tickets and liquidity you aggregate, the better you are in a position to use AI to compile what we call a fair price. And that gives you over the long term, if you have more liquidity and diversity, pricing power for this. I think that’s not disputed from one of the players in the market. It’s only the question how quickly can you reach a position if your pricing power is big enough to generate alpha with the prices. And we are working very hard on this, like I alluded in my speech. And that’s a very exciting territory for us. I think, whenever we can provide superior service to our clients, the bookmakers, they will not hesitate to take it. And there are some bookmakers which simply might see that there is an edge if they have their own platform. I think in a very general way, the platform is a software business. And sports betting operators -- the sports betting operators which have to do the branding, the marketing, the licensing, a lot of daily operations, I think there are very qualified companies doing software development and managing the modules like I just said it to you. That’s our opinion about the debate of insourcing and outsourcing. I think it’s simply weighted by who can provide the more efficient and better service that our clients can have a better offer and be more profitable. And this is the decision point. And I hope I gave you an understanding about what is driving this. This is at the end really liquidity.

[Alex Gersh:]

If I can just answer, I mean we -- or just add a little bit, we have currently seven MTS customers in the U.S. right? So, yes, they are very small and, yes, you would expect us to start with the small bookmakers. But the fact that there are seven of them that already see the value in the product is very encouraging.

[Operator:]

The next question is coming from the line of David Katz with Jefferies.

[David Katz:]

I wanted to just talk about kind of a more long-term vision here, and I think that’s largely what a lot of discussions with clients are about Sportradar. If we look at the deals that have occurred, yours with the NBA, others with Genius, there’s a stake involved and a cost involved. How do you think this evolves the next 5, 10 years? And is there a point at which the cost of these exclusive rights either stabilizes or becomes uneconomic? And help us in some qualitative way paint a long-term vision for this.

[Carsten Koerl:]

Very top level I would be more concerned of a 51% tax rate comparing it to what are the costs of official data. And the market can decide on this really. The U.S. market has decided to value official data, and I think that’s a great decision. So, there are lots of pros in this. I don’t think that internationally every market will follow now the sample of the United States. But undoubtedly there is an acceptance of official data, and there is a participation of sport in this which I think is totally okay. I told you already before that we have not the intention to widening the scope here. And the NBA was a very, very special deal for us because it’s absolutely at the core of where we want to go and our visions are totally overlapping. And our vision is far beyond the data distribution. Our vision is the digital fan journey, the direct-to-consumer product to help to get into this channel with all the things, customized OTT AV services which are in their user profiling, and hooking them up with merchandising, connecting them with sponsorships, selling the right message on the right channels, lots of opportunities around RSMs, et cetera, PP. So, that’s a far wider vision why we did this deal. For the NBA, I think you can’t simply replicate it and only focus it on the data. If we are looking into the future, I think the market will find the right balance here. Official data is something which the market has accepted in the United States. Sportradar is executing the vision and mission here very consequently. But, I think from the scope of Sportradar, you will see not many of those deals following now the scope of the NBA. For the NBA, it made a lot of sense for us to align our equity with them and have them contributing on our growth.

[David Katz:]

Understood. And if I can just follow up -- and apologies if I missed it. The NBA stake that they are receiving, have you told us how large that is or how to calculate, how we might go about estimating that?

[Carsten Koerl:]

It’s 3% in total and it’s lasting over 10 years’ time at the interim in different tranches.

[Operator:]

Next question is coming from the line of Michael Graham with Canaccord Genuity.

[Michael Graham:]

Thank you. I wanted to just ask a high level question about your AV business. We hear all the time on the betting data side of your business that you are in a unique position, and clearly you have a complex product that is very difficult to replicate, and that creates a lot of competitive moats for you. And I just wonder if you could comment on your AV business and the extent to which you’re able to build competitive moats around your AV business that would make it difficult for others to replicate.

[Carsten Koerl:]

Well, I reported the growth numbers and Alex reported the growth numbers in AV. And I think, if you look for this, this is really super, super strong. And from a profitability perspective, we see that we get scale in the product. It’s all about building a portfolio which is interesting for specific client groups and regions. There are not many real global betting operators, a few of them. They need a different product than operators which are focusing, for example, on the U.S. as a region. So, we need to look that we get the critical amounts of rights for the regions and fitting that into the profile of our operator target. That’s a challenge, and we are on this journey since now many years. We reached now a point that we obviously gain scalability here, and this is reflected in the numbers. The future of this service and what is really diversifying us is we are using now the technology which we gain from the profiling of users and putting that into the audiovisual service that we understand this is a customer who might be interested in baseball, he might be interested in the Lakers and we might be interested in LeBron. If we have that information we can push him whatever video highlights or we can enrich during the video the offering and show him a specialized offering or the specific offering for his favorite sport or his favorite team out of the bookmaker offering where we provide the service. So, that intelligence to detect the user and to have the bookmakers to connect him with what he wants to do, he wants to simulate, he wants to do a retention and acquisition is the future development of this service. We started with this a couple of years ago. We are well on our journey, and that’s very good reflected in the numbers, I think.

[Operator:]

The next question is from the line of Bernie McTernan with Needham.

[Bernie McTernan:]

I was just wondering if you could detail just how much of the U.S. or global GGR the NBA accounts for. Because in your prepared remarks I thought you said that the NBA was actually bigger than the NFL. And if that’s the case, is there any reason to think that the price you paid for the NBA would be lower than the rumored price that Genius paid for the NFL?

[Carsten Koerl:]

Look, I don’t want to compare prices what we are paying and others are paying. We have a strong reason why we do this, and this is always commercially driven. We are looking to generate profit for our shareholders. And that’s the reason why we are doing such deal, and the NBA is following this general idea. Looking now to the league split, what I can give you is the breakdown for this year from the leagues and the split on the NGR in the United States. So, what I get here for pre-matches that the NBA is on a 21%; the NFL is on a 19% and the MLB is on a17%; the NHL is on a 4%; then the NCWA, the colleges and the others. What I get from a league split in-play, that’s the in-play revenues, the NBA is on the 25% and the NFL is on 14%, same like the MLBs of a 16% here. So, what I read from these numbers is the NBA is clearly a betting sport for in-play. We believe that in-play gets more and more market shares. We believe that this is a trend which follows very strongly what we saw in the international, especially the European market, for the last 10 years. And as you might know, in the European markets in-play is more than 70% of the revenues. At the moment, it’s more upside down in the United States, but we think there is a strong acceleration here into live, and the NBA is undoubtedly a better live betting sport than the NFL is. This was one of the decision drivers here because we believe of this market development. And I think the numbers are speaking here for a more fast-moving sport. The NFL has different characteristics in this way. And globally, I referred on soccer as an €850 billion handle. So, that’s the complete turnover which is wagered on soccer comparing it to €41.8 billion for the NFL with unofficial numbers from the last year. So, that’s the comparison here, which shows the NFL as a sport, American football comparing it to soccer globally is around about 5% of the handle volume. Of course, UEFA is only a part of soccer. There are many other leagues included in here, but that should give you a feeling for the dimensions in the global sports betting market.

[Bernie McTernan:]

No, that’s great. I appreciate all the color. And just as a follow-up, just interested in how competitive the bidding process was for the NBA. I’m assuming you and Genius went pretty hard at it, but was there a sense that there were others involved as well? A big question that we get is what Endeavor and OpenBet is going to try to do and if they can be a greater competitor in the space? So, really if this is like a two-player bid for the NBA or if there’s a much broader bidding -- amount of bidders for the asset?

[Carsten Koerl:]

All I can say is it was a very intensive process. I for myself, with the European team sitting here in Switzerland today, have been working on this until 3

[Operator:]

Thank you. At this time, we’ve reached the end of the question-and-answer session. I’ll now turn the call over to Carsten Koerl for closing remarks.

[Carsten Koerl:]

Well, thank you very much. And thank you all for your participation. We are very pleased with this quarter’s performance, and we are excited for the opportunities ahead. We have a high-performing company and we will continue to focus on maximizing shareholder value. I’d like to thank many of Sportradar colleagues working around the world for their exceptional efforts and our customers and partners with whom we’ve work seamlessly to deliver value to the market. Thank you for joining us on the call today, and I wish you all a great day. Thank you very much.

[Operator:]

This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.