Take-Two Interactive Software, Inc.
Q3 2013 Earnings Call Transcript

Published: 6 Feb 2013

[Operator:]

Greetings, and welcome to Take-Two Interactive’s third quarter fiscal year 2013 earnings call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Hank Diamond, Senior Vice President of Investor Relations and Corporate Communications for Take-Two Interactive. Thank you, sir. You may begin.

[Hank Diamond:]

Good afternoon. Welcome and thank you for joining Take-Two’s conference call to discuss its results for the third quarter of fiscal year 2013 ended December 31, 2012. Today’s call will be led by Strauss Zelnick, Take-Two’s Chairman and Chief Executive Officer; Karl Slatoff, our Chief Operating Officer; 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, 2012. These documents may be obtained from our website at www.take2games.com. And now, I’ll turn the call over to Strauss.

[Strauss Zelnick:]

Thanks, Hank. Good afternoon and thank you for joining us today. I am pleased to report that Take-Two delivered strong revenue growth, profits, and cash flow in the third quarter. The key drivers of our results were the record-breaking release of NBA 2K13, continued strong sales of Borderlands 2, the successful release of XCOM

[Karl Slatoff:]

Thanks, Strauss. I’d like to begin by giving an update on the progress we’ve made with our online initiatives. Our strategy has been to focus on a select number of high-impact projects that have significant strategic and financial value to Take-Two while taking a balanced approach to managing risk. As with our core business, we believe that the strength of our IP and commitment to quality can create compelling commercial opportunities that will differentiate us from other players in the market. Given their attractive scale and growth characteristics, we have initially focused our efforts on the online gaming market in Asia where we have teamed up with the best-in-class partners whose expertise complements our own. Through each of these projects, we continue to develop deep knowledge of this growing market segment and are building a clear vision of how we can best leverage this expertise on a global scale. On October 24, NBA 2K online, our free-to-play online basketball game, launched on the Tencent portal in China. Co-developed by Visual Concepts and Tencent, the game is generating significant buzz in the region and user metrics are building momentum. We continue to tally gameplay based on consumer behavior and are very enthusiastic about the game’s prospects to become a meaningful contributor to our profits. We plan to bring NBA 2K online to additional markets such as Taiwan and the Philippines. Pro Baseball 2K, our online baseball game, is being developed by Visual Concepts in partnership with Nexon Corporation in Seoul. The game entered closed beta in November in Korea and is on track for an open beta release this spring. And 2K’s massively multi-player online game, Civilization Online, continues to make progress. Currently in development with our Firaxis Games studio and XL Games, which is led by renowned industry veteran Jake Song, Civilization Online is one of the most exciting and ambitious online game development initiatives in the region. I’ll now discuss our announced pipeline of upcoming releases. On February 26, 2K will deliver a worldwide retail release of the Borderlands 2 add-on content pack, which funnels all of the digital content previously released for Borderlands 2 onto a single disc. The Borderlands 2 add-on content pack is a must-have for Borderlands fans who haven’t already downloaded the content, adding hours of additional gameplay and exciting new features for the first two add-on campaigns, Captain Scarlett and Her Pirate’s Booty and Mr. Torgue’s Campaign of Carnage. On March 5, 2K Sports will release Major League Baseball 2K13 for the Xbox 360 and PlayStation 3. The title will feature Tampa Bay Rays Cy Young award-winning pitcher David Price as cover athlete and will once again be supported with a perfect game challenge, 2K Sports’ groundbreaking $1 million competition. We are pleased to enter into this new mutually beneficial agreement with various entities associated with Major League Baseball and we expect Major League Baseball 2K13 to contribute to the profitability of 2K Sports. From Irrational Games, the makers of the highest rated first-person shooter ever, BioShock Infinite is set to release March 26. Consumer enthusiasm and buzz for this launch continued to grow by the day and we expect the title to be a significant critical and commercial success. In addition to a series of special additions that are currently available for preorder, fans can purchase BioShock Infinite

[Lainie Goldstein:]

Thanks, Karl, and good afternoon, everyone. Today I’ll review our results for the third quarter and then discuss our outlook for the fourth quarter and full year fiscal 2013. All of the numbers I will be providing today are non-GAAP results from continuing operations, and all comparisons are year-over-year, unless otherwise stated. Our press release provides a reconciliation of our GAAP to non-GAAP measurements. Starting with our results for the third quarter of fiscal 2013, net revenue increased 71% to $405 million. This result exceeded our outlook range of $325 million to $375 million due to the breakout success of NBA 2K13, along with better than expected holiday sales of catalog and digitally delivered offerings. Catalog sales accounted for 22% of net revenue led by Grand Theft Auto IV and Red Dead Redemption. Revenue from digitally delivered content grew 244% year-over-year and accounted for 23% of net revenue. The largest contributors were offerings for the Borderlands franchise, in particular digital sales of Borderlands 2 and its add-on content, XCOM

[Strauss Zelnick:]

Thanks, Karl and Lainie. Our strategy of delivering a select portfolio of the highest quality entertainment experiences continues to serve us well and remains one of the core values of our organization. We strive diligently for excellence with each release. And while that’s not a guarantee for success, it has proven to be the predictable outcome. We continue to balance our creative passion with the rigor and discipline to deliver profits and value to our shareholders over time. I’d like to take a moment to thank our colleagues for their dedication and hard work and our shareholders for their continued support. And we’ll now take your questions. Operator.

[Operator:]

(Operator Instructions) Our first question comes from the line of James Hardiman, with Longbow Research. Please proceed with your question.

[James Hardiman:]

Hi, good afternoon. And thanks for taking my call and congrats on another great quarter. A couple of quick questions here. Talk a little bit about the move of Grand Theft Auto out of the spring window that you had previously talked about and into September. Maybe give us a little bit of the puts and takes, I guess, A, from a competitive window standpoint, and B, just given the fact that there’s likely to be some next-generation consoles that are going to be coming out shortly after the September release, and ultimately how we should think about the strategy as you’re trying to straddle sort of the current generation and the next generation.

[Strauss Zelnick:]

Thanks James. Look, Grand Theft Auto stands alone. It’s a unique property. And I think we’re all extraordinarily excited about this title, and we think it’s just going to blow people away frankly at a level I don’t think anyone properly anticipates yet. And the reason that the title is coming out in September is because that’s the time required to make sure it’s everything everyone expects and then some. As it happens, I think September is a great window. The fact is it’s a very open field that early in the fall. And as between late spring heading into the summer doldrums or early fall in an open field, that wasn’t the reason that the title moved, but I think it happens to be a terrific time to launch it. And in terms of next-gen, look, as we all know, first of all, nothing has been announced yet, but assuming the consoles are coming when some of us at least think they are, that’s obviously a very light installed base initially. And I’m confident that this company is going to have an extraordinary array of offerings for next-gen when the time comes.

[James Hardiman:]

Great. And then just in terms of MLB 2K, although not recently, you’ve quantified sort of the losses there in the past. Can you just, it sounds like, for the first time in a while, this is going to be a profitable release for you guys in terms of baseball. Can you help us with the comparison versus last year, how much money did you lose on that?

[Strauss Zelnick:]

We previously announced the range of losses based on a legacy deal that we inherited. I think we said it was typically around $30 million a year. We also announced that that deal entered a sunset period and ultimately expired on its own terms. And the expectations about a new MLB release obviously reflect a new deal. And we are very optimistic and enthusiastic about both the creative elements of that and the financial elements of that.

[Karl Slatoff:]

Yes, and as we said in our statements, we expect that title to contribute to the profitability of 2K Sports.

[James Hardiman:]

Very helpful. Thanks guys.

[Operator:]

Our next question comes from the line of Ben Schachter with Macquarie. Please proceed with your question.

[Ben Schachter:]

Hey guys. Congratulations on a good quarter. A couple of questions and then a quick follow-up. For GTA V, how should we think about the post-sale revenue opportunities versus previous GTAs? And then separately, on full game downloads, obviously you are having some success there. Is that primarily from Steam and how do the economics differ for that versus physical retail distribution? Thanks.

[Strauss Zelnick:]

In terms of post-sale revenue opportunities, to answer that, I’d have to sort of outline what the expectations are, and I’m going to leave it to Rockstar to talk about the game and what comes after. But just as I said, we couldn’t be more enthusiastic. Our full-game downloads come from an array of places, including Steam, and in terms of our margins, we’ve said this many times before, they are slightly higher for digitally distributed products, but not meaningfully so.

[Ben Schachter:]

All right. And Strauss, if I could just follow up with one quick one, just high-level, when you think about the next-generation consoles, most likely they’re going to be a lot more focused on media convergence at a higher level beyond just games. How does that impact you and the other publishers?

[Strauss Zelnick:]

If that happens, and, look, the current consoles allow for all kinds of different media consumption. But if you’re talking about the consoles becoming a set-top box, first of all, I’d be happy to debate that endlessly and I could probably take both sides of the debate, as you know, Ben. But I think the answer is it doesn’t really influence us. People have access to a full array of media choices as it is, and we’re thrilled by that because the launch of new platforms is great for a company positioned the way we are positioned, and tablets have been great for us so far and mobile devices are great for us. Our job is to make the highest quality interactive entertainment and meet consumers where they are, wherever they are in the world, whatever device they want to consume our products on, and be flexible about the business models as well. So do I think that a broad-based offering from a next-gen console affects us? Only to the benefit of people who are more engaged with something they can watch high-quality entertainment on, from us it’s probably a good thing.

[Karl Slatoff:]

It’s Karl. The other piece is it also creates a potential opportunity for the console to penetrate deeper than they are right now. If it’s attractive as a broad media device, then there may be folks out there that pick it up not as a gaming machine, but in fact now they have access to a gaming machine, and it may encourage them to enter the gaming market as a consumer.

[Ben Schachter:]

Great, thanks and good luck.

[Operator:]

Our next question comes from the line of Arvind Bhatia with Sterne Agee. Please proceed with your question.

[Arvind Bhatia:]

Thank you very much. I’d like to add my congratulations as well. A couple of questions for you guys, first one on your basketball franchise, which continues to do better every year. And I heard you guys talk about your digital revenue there. Is there any way for you guys to help us understand what kind of attach rate you’re getting, whether it’s in dollars or other ways to think about, so we can understand the opportunity beyond just the disc sale. And then similarly, on Borderlands 2, I think you said that was your largest digital contributor. Just generally trying to get a sense of the attach rate beyond the disc? Thank you.

[Strauss Zelnick:]

Arvind, thank you. We don’t actually talk about attach rates, and ARPUs and the like. Our focus here on a creative basis is what drives the organization, and every year the folks at Visual Concepts try to make basketball better and this year is almost highly rated basketball game we’ve ever had with a 90 Metacritic score and we sold in 4.5 million units. And the unit sales reflect the fact that we are delighting consumers. We’ve offered the opportunity to have a multiplatform experience on the go and for the first time the opportunity is to make in-game purchases. All those things make consumers happy. Happy consumers spend more money. We make more money. It’s a virtuous circle. We tend to think of it that way, we tend to think of it less as a specific numeric attach rate, although of course we could back into that figure. But it doesn’t really tell us very much about what we’re trying to do around here. The same thing with Borderlands. We are putting out digital add-on content because that’s what consumers want. We try to price it fairly. We want everyone’s experience of one of our games to be one where they thought they got more value than the value they paid for and that they’re always happy. And that’s why Metacritic says for the past four years we’ve had the number one quality rating among any third-party publisher. That’s why we have the results we have, and that’s why we have $450 million of cash on our balance sheet.

[Arvind Bhatia:]

One quick follow-up. This kind of ties into where we are in the cycle, et cetera. You’ve got a great property coming up in March in BioShock. I’m wondering, as you review the retail landscape in the next three to six months and what you expect there, has your expectation for BioShock changed at all? What are you seeing in terms of the preorder activity and how reliable that may or may not be at this point in the cycle? Just for planning and modeling purposes, how are you thinking about BioShock? That would be helpful.

[Strauss Zelnick:]

Look, the retail landscape is interesting. If you go back just nine months, things were looking pretty bleak and there were a lot of people just saying the industry is in decline. And we denied that that was the case. It’s certainly not our view. Our view was the industry had had some disappointments, and frankly we’ve had some disappointments. This is an industry that, like all entertainment businesses, relies upon hits for its health and well-being. And it’s further complicated by the nature of the hardware console cycle. And we are heading into the late stages of that cycle. All that said, there’s a huge install base. And you give people what they want, they come out for it. This quarter is living proof of that. BioShock Infinite is shaping up really well. The buzz is extraordinary. The title has already won a lot of awards. We have the highest expectations for it.

[Arvind Bhatia:]

Appreciate it guys. Thank you.

[Operator:]

Our next question comes from the line of Daniel Ernst with Hudson Square Research. Please proceed with your question.

[Daniel Ernst:]

Yes. Good evening. Thanks for taking my call. A couple of questions about digital. One is, in the past, you’ve said that it really is the margins aren’t all that different. And I’m wondering, given the margin progression you’ve had lately and the success you’ve had in digital, what the margin profile of digital overall is looking for the business versus package today. And then two, as it relates to Borderlands and wouldn’t more broadly in digital what opportunities you have in creating more of an ongoing relationship with your customers, certainly fans of GTA or fans of Borderlands have affinity to that game but do you have an opportunity in there with things like season pass or others in having more of an ongoing either relationship of building relationship versus just kind one off downloads? Thanks.

[Lainie Goldstein:]

Daniel, It’s Lainie. I’m just going to answer your first question about digital on the margins. So we have said before that we see that the margins are pretty much in line with what we see at retail margins. But from time to time depending on the title, if the title’s a hit and there is a tremendous amount of volume for the title, depending on what the cap software was to develop the download or the marketing cost we can see a bit of a better margin than the retail, but overall in the grand scheme its pretty much in line. As a percentage of revenue it seems to be a bit stronger because of some of the deals that we have with third parties and how we’re capturing the revenue on this top line.

[Strauss Zelnick:]

Yeah. Your point about on ongoing relationship with consumers is a good one, because just a few short years ago we’d put out a big release and that was pretty much it, then you’d put out your catalog offerings. This company had a faded strategy to build up its catalog offerings based on the quality of what we do, and I think pound for pound we have the best selling titles per SKU in the industry which reflects our quality. Then we were also a standard bearer in delivering our content for our titles with the launch of Grand Theft Auto IV and the downloadable content packs that came along with that. And you’re wise to point out Borderlands because Borderlands itself has been a standard bearer for add-on content delivered digitally, well done. Does that mean that these games will transition into a situation where you are constantly putting out new episodes and that bridges you from release to release? We don’t see the business shaping up that way but it does mean that the life cycle is extended greatly and we’ll continue to experiment with what this means creatively for consumers. I also think as you see tablets roll out and become the more and more important game platform that episodic treatment of games may become much more relevant for tablets given the perceived price point limitations for a tablet. But we’ll see if it turns out that way. What you are hearing though is we are not role based, we are flexible. We will try anything that delights consumers as long as it fits within the rubric of the very highest quality releases in the industry.

[Daniel Ernst:]

Great. Thanks for the color. And just one other follow-up on next-gen, what you’re thinking about development budgets having to develop for both the current gen and the next-gen on some key titles. So in the sports titles, or annual type of events is that going to strain development budgets heading into next fiscal year? Thanks.

[Strauss Zelnick:]

We don’t have any reason to believe our development budgets will change significantly and if anything I would say we’ve become group wide much tighter in terms of how we spend our money. There’s been a challenge, a stated challenge for us and we are very, very focused on it. So we can’t say specifically, but no, we don’t expect to see a meaningful change and what it cost us to release these top quality products.

[Daniel Ernst:]

Great. Thank you.

[Operator:]

Our next question comes from the line of Mike Olson Junior with Piper Jaffray. Please proceed with your question.

[Andrew Connor:]

Hi guys. Great quarter. This is Andrew Connor on for Mike. I had a high level question. The installed base today is obviously very large and it appears that the 360 and the PS3 are going to continue to be major influencers in the space. Similar to the prior cycle transition, I’m sure there will be lots of cross-generational software for the next couple of years post-launch. But my question is really how do you go about developing for both current and next-generation consoles, when clearly the development teams want to be innovating, and yet there is a trade-off where we’ll have to be accommodating to the current installed base? Thanks.

[Strauss Zelnick:]

Well, you’re right, navigating this part of the cycle is a challenge. I’m actually really pleased with the way we’ve done it. Obviously, we’ve released our major release schedule for the coming periods and we’re excited about that. We really can’t talk much about next-gen because we’re not the ones to talk about it first. But rest assured that, around here, we think as far ahead as we possibly can, as do our creative teams. And everyone is really excited about the possibilities and we’re working diligently on them. And I’m very confident that we’ll navigate the transition when it does occur successfully. I’ve said before and I’ll repeat it, there are four elements that you need to succeed in these transition periods. And that these transition periods present enormous challenges for companies that don’t have them and enormous benefits there for those who do. They are strong owned intellectual property, strong creative teams in-house, strong technology and a strong balance sheet. We have all four.

[Andrew Connor:]

Thank you.

[Operator:]

Our next question comes from the line of Mike Hickey with National Alliance Securities. Please proceed with your question.

[Mike Hickey:]

Hey guys. Thank you for taking my question and congrats on a great quarter. Strauss, historically, you’ve kind of been, not to put words in your mouth, but hesitant to believe in the Facebook market. And now that it looks like Facebook is kind of resetting towards an interest in developing something for the core gamers, and given that’s your development expertise, I was curious if you’d kind of reset how you think about that and if you’re developing any games, core games, for Facebook.

[Strauss Zelnick:]

No, I wasn’t skeptical about Facebook. I was skeptical about Zynga to be exact. And I remain highly skeptical about Zynga. Facebook is an incredible platform serving hundreds of millions of people, a great promotional platform and potentially a great game platform. We’ve happily done business with Facebook. I assume we’ll keep doing so.

[Mike Hickey:]

And then for next-gen consoles, I’m hearing that the portability of current-gen is going to be a lot easier. And so I think this question has been kind of dragged into the dirt here, but just philosophically, you see Bungie looking to do a dual generation launch, given how close they are to next-gen machines. And I mean, it’s pretty obvious that once the next-gen is announced from Sony, which is likely February 20 and Microsoft probably in April, that all things being equal, even as great as GTA is there’s going to be kind of a natural demand kickback on current-gen software as people save up dollars and excitement for next-gen. So not to get any specific on data, necessarily on a particular game, but all things being equal, if you had the opportunity to do a dual-generation launch, would you see that as a net benefit or is it too arbitrary to even know?

[Strauss Zelnick:]

Mike, let’s have a little gentlemen’s bet. But there is not one gamer who’s going to sit it out of Grand Theft Auto V hoping that something down the road is going to come along that’s better. Grand Theft Auto V is going to blow everyone away, and it will be in the market in September. In terms of strategy around current-gen and next-gen, we have to wait for the announcements. And as I said, look, we’re always looking over our shoulder. I’m a big believer that arrogance is the enemy of continued success. But we are planning as well as we can, and we think we are extremely well positioned. And our creative teams have a burning desire to bring consumers what they want, when they want it, and I’m convinced we’re going to keep doing that.

[Mike Hickey:]

Okay. And the last question, if you would, there is kind of nontraditional approaches to controlling the living room from a games perspective and maybe outside of that, but you have Oya that is looking to kind of do a free-to-play DROID model that’s expected to drop in June. You have Bowles that is looking to kind of bridge the PC to TV market. You have a lot of people, intelligent people, trying to create effective mainstream solutions from the tablet market to the TV. I’m just curious, when you look at these different trends, emerging technology trends, relative to your development expertise, where do you see the best opportunity?

[Strauss Zelnick:]

All of the above. Our opportunities, we obviously go where the audiences are. So in certain instances, we are not going to spend the resources unless there is a demonstrated audience. When you have the top intellectual property in the business, you can afford to be a little reticent. The one thing we wouldn’t do would be support everything at enormous expense to our P&L and our balance sheet without knowing where the audience is going. But we’ve always been willing to support meaningful initiatives very early on, even when there wasn’t a big installed base. And I imagine that selectively we’ll do that. What typically happens is our creative teams look at the opportunity and they weigh the cost and the complexity of supporting the platform with the potential audience and the economic opportunity, as well as the creative opportunity and whether it turns them on or not. Our stated strategy though is not to be rule-based, to be flexible, and to be wherever the consumers are.

[Mike Hickey:]

Great. Thanks guys. Good luck.

[Operator:]

Our next question comes from the line of Brian Fitzgerald with Jefferies. Please proceed with your question.

[Brian Fitzgerald:]

Thanks. I’m curious if you’re seeing any differentiation around engagement or purchase prevalence across kind of iOS or Android or smartphones or tablets? And then a second question in terms of timing on MBA expansion into Taiwan and Philippines, how should we think about that? Maybe a little color. Is it a meaningful coding experience or is it more market timing? Thanks.

[Strauss Zelnick:]

Just to clarify, you’re asking a question about whether we see different demographics across these different tablets?

[Brian Fitzgerald:]

Yes, maybe indirectly or I guess do you find a tablet guy purchasing more than somebody else or an Android guy purchasing less than an iOS guy?

[Strauss Zelnick:]

We haven’t seen a meaningful difference as yet, but it’s kind of swamped by the various growth factors and different territories of the different devices and also swamped by the fact that we don’t put out everything for every platform simultaneously. So, I’m not sure we can read it that well. We’re still really in early-stage experimentation mode. And I’m sorry, your second question? We haven’t really talked about how we’re rolling out in other territories. We do have the rights and the ability to roll out in other territories. And we are always balancing the opportunity with the risk. It’s still early days, but we are exceedingly encouraged by what we’re seeing in Asia, and we are now generating revenue and cash flow from Asia.

[Brian Fitzgerald:]

Great, thanks.

[Operator:]

Our next question comes from the line of Edward Williams with BMO Capital Markets. Please proceed with your question.

[Saul Ponedd:]

Hi, this is Saul Ponedd for Edward Williams. I was just wondering. Can you provide some more color on how NBA 2K online is doing in Asia, perhaps how it’s tracking or what timeframe you were considering it to be coming to profit, you know how the economics differ in other regions?

[Karl Slatoff:]

Hi, it’s Karl. As we said in our comments, we’re very pleased with how the metrics are tracking NBA in China right now on the Tencent platform. In terms of how fast we’re going to be rolling it out other territories, et cetera, we really don’t have anything else to say about it at this point. But like we said before, we’re very pleased with the progress we’ve made together with VC and Tencent.

[Saul Ponedd:]

Okay. And then just how did the economics differ just between like the various regions? Is it...

[Karl Slatoff:]

On the NBA game?

[Saul Ponedd:]

Yes, the online game?

[Karl Slatoff:]

Okay. We are only in China right now. So I would say there’s no differentiation because we are only in one market.

[Saul Ponedd:]

Okay. And then just final question on digital. Can you just remind me, do you recognize the gross amount or the net amount?

[Lainie Goldstein:]

We recognize the net amount.

[Saul Ponedd:]

Okay. Great, thank you.

[Operator:]

Our next question comes from the line of Phil Boyer with Credit Suisse. Please proceed with your question.

[Phil Boyer:]

Hi guys. I just had a quick question. On the digitally delivered, you guys mentioned it was 23% of net revenue. I was wondering if you can give me any color on where most of that is coming from?

[Lainie Goldstein:]

Most of it is coming from Borderlands 2 in this quarter and then also from our catalog.

[Phil Boyer:]

Okay.

[Lainie Goldstein:]

And also NBA 2K13.

[Phil Boyer:]

Okay. All right. Thank you.

[Operator:]

Mr. Zelnick, we have no further questions at this time. I would now like to turn the floor back over to you for closing comments.

[Strauss Zelnick:]

I just want to thank everyone for attending today’s call. Obviously we are very encouraged by the results we have released we are excited about in BioShock Infinite, we are very focused on that. And on keeping the momentum going on in our digitally delivered offerings and our catalogue offerings and of course we are all immensely excited about next year’s releases, including but not limited to Grand Theft Auto V. So it’s a good time for us. We are very encouraged, very optimistic. And again thank you for joining us.

[Operator:]

Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.