Take-Two Interactive Software, Inc.
Q2 2016 Earnings Call Transcript

Published: 6 Nov 2015

[Operator:]

Greetings and welcome to the Take-Two Interactive Software Second Quarter Fiscal Year 2016 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Hank Diamond, Senior Vice President of Investor Relations and Corporate Communications for Take-Two Interactive. Thank you Mr. Diamond. You may begin.

[Henry A. Diamond:]

Good afternoon. Welcome and thank you for joining Take-Two's conference call to discuss its results for the second quarter of fiscal year 2016 ended September 30, 2015. Today's call will be led by Strauss Zelnick, Take-Two's Chairman and Chief Executive Officer; Karl Slatoff, our President; and Lainie Goldstein, our Chief Financial Officer. We will be available to answer your questions during the Q&A session following our prepared remarks. Before we begin, I'd like to remind everyone that the statements made during this call that are not historical facts are considered forward-looking statements under federal securities laws. These forward-looking statements are based on the beliefs of our management, as well as assumptions made by and information currently available to us. We have no obligation to update these forward-looking statements. Actual operating results may vary significantly from these forward-looking statements based on a variety of factors. These important factors are described in our filings with the SEC, including the company's Annual Report on Form 10-K for the fiscal year ended March 31, 2015 and Form 10-Q for the fiscal quarter ended June 30, 2015, including the risks summarized in the section entitled Risk Factors. I'd also like to note that unless otherwise stated, all numbers we will be discussing today are non-GAAP. Please refer to our earnings release for a GAAP to non-GAAP reconciliation and further explanation. Our earnings release and filings with the SEC may be obtained from our website at www.take2games.com. And now, I'll turn the call over to Strauss.

[Strauss H. Zelnick:]

Thanks, Hank. Good afternoon and thank you for joining us today. I'm pleased to report that during the second quarter, we delivered better than expected revenue and earnings growth. Our results were led by the blockbuster launch of NBA 2K16, continued robust demand for Grand Theft Auto V, and strong growth in recurrent consumer spending. The launch of NBA 2K16 was the most successful in the history of the series with over 4 million units sold in during its first week, including strong digitally delivered sales that approximately doubled year-over-year. According to the NPD Group, adjusting for days in market, NBA 2K16 had the best launch month of any sports game during this new console cycle. The title also has been a hit with critics and is the highest rated sports game of 2015 on Xbox One according to Metacritic. Virtual currency for the NBA 2K brand continues to exceed our expectations and has been a significant contributor to revenue growth. During the second quarter, recurrent consumer spending on NBA 2K grew by nearly 120% year-over-year, benefiting both from online play and the MyNBA2K companion app. With the holiday season approaching, demand for NBA 2K16 remains strong and consumer engagement has been outstanding with more than triple the number of games played online versus last year's release. I'd like to congratulate the teams at 2K and Visual Concepts for once again surpassing our high standards for excellence and delivering a stellar addition to our industry-leading basketball series. More than two years after their initial launch, Grand Theft Auto V and Grand Theft Auto Online continue to exceed our expectations, particularly as the installed base of new gen consoles expands. During the second quarter, Grand Theft Auto Online was once again the single largest contributor to recurrent consumer spending. Rockstar Games continues to support this vast online world with a rich array of new content. Most recently, the release of Ill-Gotten Gains Part Two, Freemode Events, Lowriders and the Halloween Surprise. This ongoing release of new content has been a key driver of players strong engagement with Grand Theft Auto Online and it's significantly enhanced recurrent consumer spending. Grand Theft Auto Online now has over eight million active users per week, which is more than it had at the same time last year. These results underscore the continued strength and vibrancy of this unique and groundbreaking entertainment experience. A variety of other titles from our diverse portfolio also contributed to our second quarter results led by NBA 2K15 and offerings from the Borderlands and WWE 2K series. During the second quarter, digitally delivered revenue grew 57% to $141 million, driven by better than expected growth in both full game downloads and recurrent consumer spending. Recurrent consumer spending grew 39% year-over-year and accounted for 20% of our net revenue in the second quarter. In addition to virtual currency for Grand Theft Auto Online and NBA 2K, recurrent consumer spending was enhanced by a variety of other offerings. These included downloadable add-on content, particularly for the Borderlands series, Evolve and WWE 2K15, WWE SuperCard, which was updated with new content, and NBA 2K Online, which remains the number one PC online sports title in China and continues to generate profits every month. Digitally delivered revenue, especially recurrent consumer spending remains a high-margin growth opportunity and a key strategic focus for our organization. We expect digitally delivered revenue to grow in fiscal 2016, driven both by higher full game downloads and recurrent consumer spending. As a result of our outperformance in the second quarter, we're increasing our financial outlook for the full fiscal year. Our holiday season already is off to a great start and we anticipate a strong back half to fiscal 2016. Today, Take-Two's long term potential to generate revenue growth, margin expansion and returns for our shareholders is greater than ever. Our company's strength reflects our unparalleled creative assets, sound financial foundation and unwavering commitment to delivering the highest quality interactive entertainment experiences. I'll now turn the call over to Karl.

[Karl Slatoff:]

Thanks, Strauss. I'd like to begin by congratulating 2K and Visual Concepts for their record breaking launch of NBA 2K16, which once again raised the bar for our annual basketball series. In addition to delivering an even more true to life NBA experience, the team has done an exceptional job keeping consumers highly engaged with the title after their initial purchase. I'll now discuss our recent releases and pipeline for the remainder of fiscal 2016. On October 8th, 2K and Cat Daddy Games extended our portfolio of action packed mobile entertainment experiences with the release of NHL SuperCard. This collectible card battle game challenges players to build teams of current and legendary NHL players, train them and test their skills in exhibition, season and rivals-based action. On October 9th, 2K and Firaxis Games launched Sid Meier's Civilization Beyond Earth – Rising Tide, a massive expansion pack for the Sci-Fi title from our award winning Civilization series, which has captivated fans for nearly a quarter of a century. Rising Tide has earned rave reviews from top critics including a 9 out of 10 from both Game Informer and GameSpot. The pack enriches the Beyond Earth experience by offering a robust array of expansion content with even more strategic ways to shape humanity's future on an alien planet. On October 27th, 2K released WWE 2K16, the latest installment in our popular sports entertainment series. The title enjoyed a successful launch, including significantly higher review scores versus last year's release. For example, IGN scored WWE 2K16 an 8.8 out of 10, stating that the title is as close to a fusion of performance and competition as a wrestling game has ever gotten. WWE 2K16's strong reviews are among the best ever received by the series and reflects (8

[Lainie Goldstein:]

Thanks, Karl and good afternoon, everyone. Today I'll review our results for the fiscal second quarter and then discuss our outlook for third quarter and fiscal year 2016. All of the numbers I'll be providing today are non-GAAP and all comparisons are year-over-year, unless otherwise stated. Our press release provides a reconciliation of our GAAP to non-GAAP measurements. In addition, please note that starting this quarter, we are providing on our website additional details regarding the non-GAAP components of our cost of goods sold and operating expenses. Starting with our results for the fiscal second quarter, net revenue grew 169% to $364.9 million. This result exceeded our outlook range of $275 million to $325 million, due primarily to stronger than expected revenues from NBA 2K16 and Grand Theft Auto V. Digitally delivered revenue grew 57% to $141 million and accounted for 39% of our total net revenue. 51% of digitally delivered revenue was derived from recurrent consumer spending, which increased 39% year-over-year. The largest contributors to digitally delivered revenue were Grand Theft Auto, NBA 2K and Borderlands. Catalog sales accounted for $165.8 million of net revenue, led by the Grand Theft Auto series and NBA 2K15 Gross margin decreased to 48%, as this year's launch of NBA 2K and its associated licensing costs were recorded in the second quarter versus in the third quarter last year. Operating expenses were $124.4 million, up by $14 million due to higher marketing for NBA 2K16 and increased personnel expenses. Interest and other expense was $2.6 million. Tax expense was $16.4 million. And non-GAAP net income increased to $32.7 million, or $0.30 per share, up from a net loss of $35.4 million or $0.44 per share in the prior year's second quarter. This result exceeded our outlook range of $0.05 to $0.15 per share. On a GAAP basis, we reported net revenue of $347 million and net income of $54.7 million or $0.55 per share. Turning to some key items from our balance sheet at September 30, 2015 as compared to June 30, 2015. Our cash and short-term investments balance decreased to $1.06 billion. This equates to net cash of $9.34 per share, which includes the potential dilution from our convertible notes. During the second quarter, we used $26.6 million to repurchase approximately 954,000 shares of our common stock at an average price of $27.84 per share. Our accounts receivable balance increased to $240.9 million and inventory increased to $24 million, due primarily to the launch of NBA 2K16 at the end of the quarter. And software development costs and licenses increased to $369.3 million, reflecting the development efforts around our pipeline of upcoming releases. Now I'll review our financial outlook for the third quarter and fiscal year 2016, which is provided on a non-GAAP basis. Starting with the third quarter, we expect net revenue to range from $400 million to $450 million and net income per share to range from $0.40 to $0.50. Revenue is expected to be driven primarily by Grand Theft Auto V and Grand Theft Auto Online, NBA 2K16 and WWE 2K16. We expect gross margins in the mid 40%'s. Total operating expenses are expected to decrease by approximately 10% due primarily to lower marketing expense. Selling and marketing expense is expected to be about 15% of net revenue, based on the midpoint of our outlook range. Our third quarter outlook also reflects interest and other expense of approximately $2 million and weighted average shares of approximately 113 million. During the third quarter, we expect to record a tax benefit of approximately $20 million from incentives provided to promote video game development. Excluding this benefit, our effective tax rate is expected to be 29%. Interest on the convertible notes, net of tax is $1.4 million which should be added back to net income to calculate net income per share. Turning to the full year, we are raising our financial outlook to reflect a better than expected second quarter result, strong forecast for the balance of the year and the expected tax benefit; partially offset by the impact of moving the planned launches of Battleborn to May 3, 2016 and XCOM 2 to February 5, 2016. We now expect to deliver net revenue of $1.325 billion to $1.425 billion and net income of $1.00 to $1.15 per share. The majority of revenue is expected to come from Grand Theft Auto V and Grand Theft Auto Online, NBA 2K, WWE 2K, the Borderlands series and XCOM 2. We expect the revenue breakdown from our labels to be roughly 50% 2K and 50% Rockstar Games. We expect our geographic revenue split to be about 55% United States and 45% international. We expect gross margins in the upper 40%'s. Total operating expenses are expected to increase by approximately 4% driven primarily by increased personnel expense from a higher head count at our development studios, higher research and development expense and increased depreciation expense. Selling and marketing expense is expected to be about 15% of net revenue based on the midpoint of our outlook range. We project interest and other expense of approximately $7 million and weighted average fully diluted shares of approximately 114 million. And our effective tax rate is expected to be 29%, excluding the $20 million tax benefit that we expect to record in the third quarter. Interest on the convertible notes, net of tax, is $5.5 million, which should be added back to net income to calculate net income per share. We expect our operations to generate cash during the second half of fiscal 2016. Our strong performance during the first half of the fiscal year illustrates our ability to deliver consistently, the highest quality entertainment experiences within a financially disciplined organization that fosters creativity and innovation. With our holiday season underway, the balance of this year promises to continue our positive momentum and further enhance our company's sound foundation for the future. Thank you. Now, I'll turn the call back to Strauss.

[Strauss H. Zelnick:]

Thanks, Karl and Lainie. On behalf of our entire management team, I'd like to thank our colleagues for delivering another strong quarter for our company. And to our shareholders, I want to express our appreciation for your continued support. We'll now take your questions. Operator?

[Operator:]

Thank you, Ladies and gentlemen. We will now be conducting a question-and-answer session. Our first question comes from the line of Justin Post from Merrill Lynch. Please go ahead with your question.

[Justin Post:]

Thank you. Strauss, in the press release, you had some comments about a big pipeline ahead or confidence in your pipeline. What can you tell us about the future when we look at Take-Two versus some of the others in the industry? We do have less visibility and we understand that's kind of the nature of the company. But what can you tell us about the pipeline and why do you feel confident about it? Thank you.

[Strauss H. Zelnick:]

Well, we have talked about some upcoming releases. We talked about Battleborn, of course. We talked about Mafia III and we have titles that we've been bringing in every year, NBA 2K and WWE 2K. And of course, we have recurrent consumer spending in our catalog. So the market has a lot more visibility into our company than ever before. We've also said that we expect to be profitable on an ongoing basis and we've been over-delivering compared to our expectations for some time, pretty regularly. So I hope that gives the market some confidence about our view of our business on a going forward basis. Also since 2007, we've successfully launched one new hit property every year in addition to bringing back our beloved franchises over and over again. And while there is no guarantee we'll be able to do that, it certainly is our goal to continue to launch new titles and new hits and new franchises in addition to bringing back sequels of existing franchises. Today, we have 11 titles that with one individual release have sold at least 5 million units. We have over 40 titles that have sold at least a couple of million units. So we think it's the best collection of owned intellectual property in the business. So I guess I probably have to use the caveat – past performance is no guarantee of future success. On the other hand, our strategy speaks for itself, and while we do allow our labels to make product announcements and our product announcements are tailored to marketing, not to analyst calls, we are very proud of our past success and we think we're well positioned going forward.

[Justin Post:]

Great. And maybe one follow up, when you do get some of these blockbuster brands back, the world will have much more digital sales as far as downloads and recurring and other opportunities. Could the margins be higher going forward as these big titles come out?

[Strauss H. Zelnick:]

Yes, they ought to be for a couple of reasons. Recurrent consumer spending is by definition a higher margin business. The shift to digital distribution is a higher margin business. And so those two things matter, and obviously catalog is a higher margin business, and as catalog becomes more reliable and a more important part of our business that is higher margin. So Lainie talked about our margin expected in the upper 40%'s; that's a very significant change from what this company look like just a few short years ago.

[Justin Post:]

Thank you.

[Operator:]

Thank you. Our next question comes from the line of Brian Fitzgerald from Jefferies. Please go ahead with your question.

[Timothy L. O'Shea:]

Yes, hi. Tim O'Shea here for Brian. Thank you for taking my question. I'm just wondering, at this point in GTA Online's lifecycle, when you release these big content updates like Ill-Gotten Gains or the Freemode Events, what's the impact do you see the player engagement is spending? I'm just curious about what kind of uplift you see at this point in time? And then Strauss, in the prepared remarks, you mentioned the it's – you had some optimistic comments just around the higher full game downloads. I figured it's worth asking what you're seeing in terms of the percent of games being downloaded and maybe where you expect that to go over time? Thanks.

[Strauss H. Zelnick:]

Yeah. The effect of new content is it increases engagement and when we have more engagement, we have more recurrent consumer spending. I get that stands to reason. We don't release the actual statistics around that – the actually data around that – but we do have eight million or more active users weekly for Grand Theft Auto Online. So it's continuing to outperform our expectations and we're very gratified by those results. To your question about the percent of purchases that come through digital distribution. For frontline, it could be 20% of our revenue, it could be a bit more than that. For catalog it's a much higher figure, for PC it's a much higher figure.

[Timothy L. O'Shea:]

Thank you.

[Operator:]

Thank you. Our next question comes from line of Arvind Bhatia with Sterne Agee. Please go ahead with your question.

[Arvind Bhatia:]

Thanks for taking my question and I'd like to add my congratulations. I was wondering if you guys could talk about some of the emerging growth areas such as eSports and virtual reality and how you see Take-Two potentially benefiting from those areas down the road? And then on WWE, the brand has been strengthening. You guys are having some early success. Wondering if you can maybe talk about how the title has done in terms of growth versus when you first acquired this brand a couple years ago? Thanks.

[Strauss H. Zelnick:]

Thanks Arvind. In terms of potential areas like eSports or VR, obviously are very different. We were an early – we made an early bet on eSports – we had a position in Twitch which was sold to Amazon. It was a very small investment for us, but it was quite successful. We have made our games available for eSports competition. But that's been a more marketing experience than it has been revenue generating. We think it's a very exciting space; it remains to be seen what the nature of monetization can be for companies like ours, but it's certainly a good thing, and creating another form of engagement, just speaks to the robust nature of this entertainment experience, and it's just another reflection of how important interactive entertainment is today to consumers. I've talked about virtual reality before. There will be virtual reality headsets hitting the market; there will be software hitting the market. It does remain to be seen how consumers feel about what the nature of an interactive entertainment experience is in VR and how comfortable that experience is. We've said that we're involved in R&D in the space. We find it really fascinating. Our creative folks find it fascinating, but there's not much to be said until we see how that market develops. If the market develops in a way that's consistent with the kind of intellectual property we have, we expect to be there and we expect to do well in it, but I think it's too early to call. And finally, in terms of WWE, it continues to develop well. I'd just like to make the note that the Metacritic scores are significantly higher this year than last. That's gratifying because we are focused on improving the quality of the title. It seems to be doing very well, certainly exceeding our expectations.

[Arvind Bhatia:]

Thank you, guys.

[Operator:]

Thank you. Our next question from the line of Eric Handler from AKM – MKM Partners. Please go ahead with your question.

[Eric O. Handler:]

Thank you very much. I appreciate answering the question. A follow-up on GTA Online and correct me if I'm misstating you, Strauss. I think at the start of the year, you talked about in your expectation for GTA Online, that you didn't – the expectation was that revenue wasn't going to grow. Now, that we're halfway through the year, it – has the game – is the game sort of at a stable run rate from where you were, several quarters or entering the year, or has it accelerated or declined even? And then secondly, with NBA Online in China, I'm just curious, now that the new NBA season is underway, what's being done differently maybe this season in China and how that business has been growing?

[Strauss H. Zelnick:]

Yeah. I think the answer is both businesses are stable and successful. We're really not talking about changes and – except to say that Grand Theft Auto Online continues to perform well and continues to exceed expectations. And NBA 2K Online in China also continues to perform well and is generating revenue and profits. But we're not giving more detail than that.

[Eric O. Handler:]

Okay. Thank you very much.

[Operator:]

Thank you. Our next question comes from the line of Ben Schachter with Macquarie. Please go ahead with your question. Ben Schachter - Macquarie Capital (USA), Inc. Hey, congratulations on a good quarter. Strauss, thinking about calendar 2016, I assume you're not going to talk about any unannounced releases, but aside from continued hardware growth, what are the most important industry dynamics for your business next year? And then Karl, if you could just say, WWE, should we be modeling that to grow year-over-year for this year? And then finally, Lainie, the $20 million tax benefit, is that a new addition to guidance or was that already in the annual guidance given last quarter? Thanks.

[Strauss H. Zelnick:]

Yeah. It's – this is Strauss. In terms of the industry dynamics that really are vivid for us, I would say that there is, when you deliver a title that excites consumers, they seem to like stay engaged and that engagement can be monetized from recurrent consumer spending if you do it right. So we're driven by the idea of delighting consumers, and then we focus on monetization, not the other way around. We think it's crucial for a high quality entertainment company. That's our compact with our consumer. There is no question though that the market is now open minded with regard to ongoing engagement and ongoing spending even after an initial release. The second dynamic that's relevant to the shift to digital distribution, which does generate more margin dollars for us and does mean that there's an opportunity for catalog to remain that even if it doesn't make sense to have discs on shelves. So those are both good things and then Lainie will talk about taxes.

[Lainie Goldstein:]

The $20 million tax benefit is a new addition to our guidance for the third quarter and for the year.

[Karl Slatoff:]

And Ben, you also asked about WWE, it's Karl. Look, obviously, WWE – the game is – we're thrilled the way WWE has launched this year. The game is better than last year; I think both the critics and the consumers are acknowledging that. It's really too early. We obviously haven't announced anything about how we're doing but we're very excited about it. And WWE 2K 2015 grew 40% over WWE 2K 2014 and we think this is a better game. So we're obviously very hopeful and excited about this year.

[Operator:]

Thank you. Our next question comes from the line of Drew Crum from Stifel. Please go ahead with your question.

[Drew E. Crum:]

Okay, thanks. Good afternoon everyone. So as it relates to Battleborn, is there a way to quantify the impact to your fiscal 2016 guidance, moving that game out of the fiscal period? And then secondly, any updated thoughts on how you intend to address the convert that comes due in about a year here? Thanks.

[Lainie Goldstein:]

So for our convert, we have a – the $250 million convert matures in December of 2016. So right now, it doesn't make economic sense to take it out, but we'll evaluate it when it matures and see what the company's position is with our cash and what our potential uses are for it and we'll make a decision at that time on how we want to close out that convert. The other question on Battleborn, we don't give out specific title-by-title numbers in our guidance, but our guidance overall went up. We had the tax credit, as we just previously mentioned. But our second quarter did much better than we had expected; also the forecasts for our other titles for the remainder of the year is very strong and that more than offset the Battleborn move out of the year.

[Drew E. Crum:]

Thanks, guys.

[Operator:]

Thank you. Our next question comes from the line of Neil Doshi with Mizuho. Please go ahead with your question.

[Unknown Speaker:]

Hi. This is (32

[Strauss H. Zelnick:]

Yeah. Obviously, there's enormous learning to be had in our experience with NBA 2K Online in China but I'm not trying to capture it in a few short sentences on this call. But we had no experience in massive multiplayer and no experience in China and no experience in free-to-play before we launched that title and now we have a great deal of experience and we developed it in partnership with a phenomenal company, Tencent. So I would hope that we would apply all of that learning to the launch of Civilization Online and we're feeling pretty good about it as we head into an open beta; it remains to be seen but it is looking pretty good. In terms of our commitment to Asia, it remains very strong; it's a growth area. And what's exciting about it is, businesses which may be not that interesting in the U.S., for example, massive multiplayer games – a very tough, very competitive, very expensive business in the U.S. – can be very interesting opportunities in Asia, which is why we're pursuing them over there. And then with success, we do have the opportunity to bring those around the rest of the world, potentially even including the U.S. So, we think the strategy remain sensible. We've done exceedingly well throughout Asia since we opened our headquarters in Singapore a number of years ago.

[Unknown Speaker:]

Okay, great. And just one final question. Do you have an update on what looks interesting to you now in the M&A market, especially in light of the King acquisition?

[Strauss H. Zelnick:]

We're in the same position, which is, we have a significant amount of cash. We've got a very strong balance sheet. So in addition to returning capital to the shareholders, and we just did that, we just bought back about 1 million shares of stock on what now in today's market, looks like favorable terms. We have the ability to support organic growth, which has really been the story around here. We've grown very significantly organically. And of course, we can support inorganic growth as well to the extent that we maintain our discipline and we focus on accretion to shareholder value, and we're very focused on accretion. So, there's no update to the strategy. The strategy remains the same. We remain open minded on the one hand and disciplined on the other.

[Unknown Speaker:]

Great, thank you.

[Operator:]

Thank you. Our next question comes from the line of Mike Hickey with Benchmark Company. Please go ahead with your question.

[Michael Hickey:]

Hey, guys. Great job on another quarter. Congratulations. Curious on the eight million weekly players for GTA Online, Strauss. How that split between prior and current gen, with I guess the backdrop that Rockstar has stopped updating the prior gen experience. And so, I guess I'm sort of wondering in addition to that question, if you anticipate an uplift to 2K15 sales over the holiday as perhaps online players transition to current gen. And I have a follow up.

[Strauss H. Zelnick:]

Yeah, we're not giving any more detail except to say that the title of GTA V and GTA Online continues to do well and continues to exceed our expectations.

[Michael Hickey:]

All right, fair enough. The – it's worth a shot. The – this may be problematic as a question as well, but curious looking at Rockstar North, I think the same article that said eight million weekly players that came out maybe a month or two ago, said that there was a fair amount of resources, maybe the majority of Rockstar North, was still working on the development of – the ongoing development of content for GTA Online. So, I'm curious if you can give us any sort of perspective of the amount of resources from Rockstar that you continue to devote to the ongoing development of that game? Thank you.

[Strauss H. Zelnick:]

Mike, we don't comment on allocation of any of our resources.

[Michael Hickey:]

Okay, guys. Great job. Best of luck.

[Operator:]

Thank you. Ladies and gentlemen, we have no further questions in queue at this time. I would like to turn the floor back over to management for closing comments.

[Strauss H. Zelnick:]

We're pleased that we had another great quarter. We attribute it to continued tight focus on our strategy of being the most creative, the most innovative and the most efficient company in our business. And our results are driven first and foremost by the creativity of thousands of developers who – we're lucky to have here in the shop – and by the many people who support those activities to make sure that we do a great job marketing and distributing their titles and also running our business day-to-day. So, once again thanks to our colleagues, thanks to our shareholders and thanks to those who joined the call today. We appreciate it.

[Operator:]

Thank you, ladies and gentlemen. This does conclude our teleconference for today. You may now disconnect your lines at this time. Thank you for your participation and have a wonderful day.