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Good day, ladies and gentlemen. And welcome to the OSI Systems Second Quarter 2019 Conference Call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session, and instructions will be given at that time. [Operator Instructions] As a reminder, today's conference is being recorded.
I would now like to turn the call over to Alan Edrick, Chief Financial Officer. Sir, you may begin.
Thank you. Good afternoon and thank you for joining us. I’m Alan Edrick, Executive Vice President and CFO of OSI Systems. And I’m here today with Deepak Chopra, our President and CEO.
Welcome to the OSI Systems fiscal 2019 second quarter conference call. We would like to extend a warm welcome to anyone who is a first-time participant on our conference calls. Earlier today, we issued a press release announcing our fiscal 2019 second quarter and six months financial results.
Before we discuss our results, I’d like to remind everyone that today’s discussion contains forward-looking statements. In connection with this conference call, the company wishes to take advantage of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 with respect to statements that may be deemed to be forward-looking under the securities laws. These forward-looking statements are based on management’s current expectations, and are subject to uncertainties, risks, assumptions and contingencies, many of which are outside the company’s control.
Such statements include without limitation, information regarding the expected financial and operational performance of the company and its operating divisions; including the company’s expected revenues, earnings and growth.
Undue reliance should not be placed on forward-looking statements as actual results could differ materially from our forward-looking statements due to numerous factors, including factors described in the company’s periodic reports filed with the SEC from time-to-time. All forward-looking statements made on this call are based on currently available information and speak only as of the date of this call. And the company undertakes no obligation to update any forward-looking statement that becomes untrue because of subsequent events or new information or otherwise.
During today’s conference call, we may refer to both GAAP and a non-GAAP financial measure of the company’s operating results. For information regarding non-GAAP measures and comparable GAAP measures and a quantitative reconciliation of those figures, please refer to today’s press release regarding our fiscal 2019 second quarter results, which has been furnished to the SEC as an exhibit to a current report on Form 8-K.
Before turning the call over to Deepak to discuss the company’s general business and operations, I’ll provide a high-level financial overview of the second fiscal quarter.
First, we reported record second quarter revenues of $303 million, a 9% year-over-year increase. This increase was driven by the performance of our Security and Opto divisions. In Security, we've reported record Q2 revenues of $189 million representing approximately 10% growth over Q2 of fiscal 2018, primarily attributable to significant growth in RTT and cargo equipment sales, partially offset by the expected reduction in year-over-year turn-key revenue from our current Mexico contract.
Revenues in the Opto division increased 13% year-over-year primarily driven by acquisition related sales growth. Healthcare division revenues in the second fiscal quarter were down 2% year-over-year, but the 35% sequential increase in revenues from Q1 indicates the division is on the rise. Second, we reported Q2 fiscal GAAP diluted earnings per share of $1.03 compared to a loss per share of $2.47 in the same prior year period due to the charge from last year's Tax Act.
On a non-GAAP basis, Q2 EPS was a record $1.19 per diluted share compared to $.97 in Q2 of fiscal 2018. Non-GAAP earnings were solid across each of our divisions with improvement in Healthcare's performance compared to the past several quarters, significant operating margin expansion in the Opto division and strengthened Security; particularly in light of the difficult comparison with the prior year as a result of the changes in that Mexico contract. Q2 non-GAAP EPS excluded the impact of impairment, restructuring and other charges, amortization acquired intangible assets and non-cash interest expense, all net related tax effects.
It also excluded certain discrete tax items. Our cash flow from operations was $43.7 million during the second fiscal quarter, and capital expenditures were $4.8 million. Finally, we ended the quarter with a backlog of approximately $1 billion. Before diving more deeply into our financial results and discussing our updated fiscal 2019 financial guidance, let me turn the call over to Deepak.
Thank you, Alan. Happy New Year and thanks to everyone joining us on today's call, As Alan mentioned, we are pleased with our results for the quarter and the first half of fiscal 2019 as we achieved record sales, strong adjusted earnings growth and solid cash flow. Each of our three divisions, Security, Healthcare and Optoelectronics contributed to the quarter. And we are very well-positioned to achieve a very strong year.
Reviewing the Q2 performance and highlights for each division beginning with the Security. Q2 revenues in the Security division were $189 million, a 10% increase from the prior year. This was a record sales quarter for this division. Strong sales of cargo and vehicle inspection systems and RTT and related maintenance would offset somewhat by the lower turnkey revenue contribution from the new M set contract which was anticipated. First-half bookings were $357 million representing a one one-time book-to- bill ratio. Highlighting into the airport activity, we announced a $16 million contract to provide service and spare port for checkpoint inspection systems.
Our RTT checked baggage install base continues to grow and the year-over-year RTT revenue growth during the quarter was very robust. Shortly after the quarter end, we announced an $11 million order for RTT 110 for a European airport. The new products during the quarter, we introduced a trace product the Itemizer 4DN which uses a non -radioactive ionization source and is optimized for narcotics detection and ideal for drug interdiction applications across a variety of markets such as Customs and Border, prisons and critical infrastructure among others.
Our integrated services business continues to grow with programs in Asia, Europe. Latin America and the Middle East. After quarter end, we announced another turnkey win a 10-year agreement for the port of Santo Tomas de Castilla, a major port in Guatemala. We will construct civil works, deliver and integrate Rapiscan Eagle P60 high-energy X-ray inspection systems, perform security screening and related data analysis for 100% of the cargo both inbound and outbound, utilizing our proprietary remote imaging and data analysis software search scans.
This win leveraged our experience with existing programs as we demonstrated our proven capabilities to this new customer. The new Guatemala program will be a free per scan arrangement and does, is not included our backlog. In addition, a new Integrated Services program in Asia is expected to begin operations in Q4. The integrated services business is performing well and we are seeing a strong opportunity pipeline of potential new programs. Overall, the first half security bookings were solid and even more importantly the pipeline activity remains very robust.
We look forward to a strong second half for this division. Moving on to the Healthcare division which reported a very solid quarter revenues were $51.6 million, slightly down from last year, but as Alan will discuss with new leadership and cost improvements, the business performed much better delivering significantly improved adjusted operating margin compared to Q1. Building on what we started in past quarters, we reduced our cost base and exited an unprofitable sales channels and a product family. This not only adds enhanced focus to our core patient monitoring, cardiology and supplies business, but adds to our operating margins as collectively these areas adversely affected profitability in the past.
During the quarter, we announced a $450 million IDIQ, Indefinite Delivery Indefinite Quantity award from the Department of Defense US to provide patient monitoring solutions and related accessories and training. The IDIQ contract provides the company an opportunity to potentially receive delivery orders up to the value of the IDIQ award but does not guarantee any orders over the term of the contract. Going forward, we expect Spacelabs to continue its path to becoming a meaningful contributor and a consistent performer.
We anticipate to return to year-over-year growth in the second half. Moving to our Optoelectronics division, its revenues for the quarter were about 13% higher than the prior year. This revenue growth was driven by our core optoelectronics business, coupled with the acquisitions in the flex circuit and optical sensor business. During the quarter, we announced a $10 million order, a significant order size for this division to provide components for use in devices for a leading medical technology OEM customer. The recent acquisitions combined with our efforts at overall strategic repositioning have helped transform this division into delivering consistent and strong performance. Alan will discuss the financial performance in more detail. Q2 was a high-performance quarter with each business unit performed well and helped us reach record revenue.
Security continues to expand its equipment install base and integrated services customer base. Space labs is a turnaround story which is well on its way and the Opto divisions top line growth and ability to deliver strong profitability is highly valuable and important because it is also a critical supplier to the other two divisions.
With that I'm going to turn the call back over to Alan to talk in detail about our financial performance before opening the call for questions. Thank you.
Well, thank you. Deepak. Let's now review the financial results for the second fiscal quarter in greater detail. As mentioned previously, our revenues in Q2 of fiscal 2019 increased 9% year-over-year. Q2 revenues in the Security division increased by 10% from Q2 of last year, driven by growth in both cargo and vehicle inspection equipment sales and RTT. The 13% year-over-year revenue growth reported for our Opto division was driven by revenues from the Flex circuit businesses acquired in January 2018 and from our optical sensor and higher-level assemblies business acquired in July 2018, partially offset by a reduction in intercompany sales as inventory levels decreased as we focused on working capital management.
As Deepak mentioned, we are pleased with the direction in the Healthcare division. Our revenue in the second fiscal quarter constituted the divisions' best quarterly performance for the 2018 calendar year. Revenues increased 2.5% year-over-year in our core patient monitoring, cardiology and supplies and accessories product lines. This increase was offset by the de-emphasis of sales in our anesthesia product line and in an underperforming sales channel that we exited during the second fiscal quarter, resulting in an overall 2% decrease in net revenues.
Our Q2 gross margin of 36.4% was comparable to the 36.6% in Q2 of last year. We saw a gross margin expansion in each of our Opto and Healthcare divisions with a slight year-over-year reduction in the Security division gross margin. As mentioned on previous calls, our gross margin will fluctuate from period to period based on revenue mix among other factors.
Moving to operating expenses. In Q2 of fiscal 2019, SG&A expenses were up $7 million over SG&A in the same period last year, primarily in the Security division and also due to the added expenses from the Opto division acquisitions. We continue to focus in all of our divisions on improving efficiencies, and prudently managing our cost structure.
R&D expenses in Q2 were $12.8 million, down from Q2 of the prior year as was also the case for the last quarter. This was primarily due to efficiencies in our Security division from the post acquisition consolidation of operations of acquired businesses, and our Healthcare division from reductions of our de-emphasis on anesthesia products. We remain focused on innovative product development which we view is vital to the long-term success of our business.
Impairment, restructuring and other charges were negative $1.3 million in Q2 of fiscal 2019 as compared to a positive $8.3 million in Q2 of fiscal 2018. The current year amount reflects a net insurance reimbursement of certain legal costs incurred which were partially offset by charges in our Healthcare division related to employee severance and the wind-down of sales channel costs.
Moving to taxes. Excluding the impact of discrete tax items, the company's effective tax rate was 28.3% in Q2 of fiscal 2019, essentially unchanged from the rate in the prior year quarter. During the three months ended December 31st, 2018, we recognized a discrete tax benefit of approximately $400,000 resulting in a reported effective tax rate of 26.8%. During the three months ended December 31st, 2017, we recognized an approximate $56 dollar net discrete tax charge primarily from changes under the Tax Act.
Let's now turn to a discussion on our non-GAAP adjusted operating margin, which excludes the items mentioned earlier in the call. The company's non-GAAP adjusted operating margin improved to 11.4% in Q2 of fiscal 2019 from 10.8% in Q2 of fiscal 2018. This increase was primarily driven by the strong performance of the Opto division and a favorable mix of higher margin revenue in our Security division.
Looking on a sequential basis, the adjusted operating margin in the Healthcare division increased from negative 4.4% to positive 10.8% reflecting the significant progress in turning this business around. Moving a cash flow. In Q of fiscal 2019, we generated $43.7 million in operating cash flow. The strong cash flow was driven by increased profits and significant improvements in working capital. Collections were strong as Day Sales Outstanding or DSO decreased from 76 days in Q1 of this fiscal year to 68 days in Q2 of fiscal 2019.
As mentioned on the last call, we had a big buildup of inventory in Q1 to support future shipments with strong Q2 sales and improved inventory management; inventory declined significantly contributing to the strong Q2 cash flow. Capital expenditures in the quarter were $4.8 million, while depreciation and amortization was $14.1 million. During Q2, we repurchased 184,170 at an average price of $71.59 per share for a total cost of $13.2 million. Under our current board authorization, we have approximately 562,000 shares remaining for potential repurchase.
Our balance sheet remains strong. We ended the quarter with net leverage of approximately 1.9 as calculated under a revolving credit facility. Finally, turning to guidance. We are raising our fiscal 2019 sales guidance to a range of $1.150 billion to $1.185 billion and we are increasing our fiscal year 2019 non-GAAP earnings per diluted share guidance to $3.93 to $4.10. Note this guidance factors in start-up costs associated with the new turnkeys which occur in advance of recognizing revenue just like the past turnkey projects, as well as not quite as favorable margin mix in the Security division.
This non-GAAP diluted EPS range excludes impairment, restructuring and other charges, amortization of acquired intangible assets and non-cash interest expense and their associated tax effects and discrete tax items. Additionally, we continue to evaluate the impact of tax reform on our effective tax rate including the effect of new taxes associated with computations for the Global Intangible Low Tax Income known as GILTI and Foreign -Derived Intangible Income known as FDII. Each of these provisions is complex. The effective tax rate is subject to significant volatility and will be updated as more analysis and information is available.
We currently believe the sales and non-GAAP earnings guidance reflects reasonable estimates. Actual sales and earnings, however, could vary from the anticipated ranges due to the risks and uncertainties specifically affecting our business and generally affecting industries in which we operate. These risks and uncertainties include items beyond our control such as site readiness or product installations, evolving government trade policies, customer acceptance and a timing of orders in each division and other risks and uncertainties discussed in our SEC filings.
We have continued to grow our business while investing in product development and making selective, strategic acquisitions. Our product and acquisition investments enable OSI to continue our leadership role with innovative products and solutions across our various industries.
Thank you for participating in this conference call. And at this time we would like to open the call to questions.
[Operator Instructions]
And our first question will come from the line of Larry Solow with CJS Securities.
Your line is open.
Great, thanks and good afternoon. And just quickly on the Guatemala port contract. I was wondering if you could maybe give us help us quantify or at least give us some perspective on the size of that. I realize it's a steeper scan, but maybe just based on traffic in that port compared to Puerto Rico or something perhaps.
Larry, this is Deepak here. We normally don't go into the details, but I think we can say it that it's in the vicinity are smaller than the Puerto Rico contract. Alan, you want to add something to it?
Yes, that would be correct. It's not as large as the Puerto Rico contract.
Okay and just to clarify the integrated service contract, you mentioned that's ramping this quarter that in Asia that's the one that you announced I think in August of 2017 if not mistaken, is that right?
Just for your clarification, your question, I said the word Q4 not Q3 and it's in Asia and it's also similar size to the Guatemala contract.
Okay, great. And then so a global question obviously the border wall and border security has been obviously in the news a lot lately. And what are your thoughts on is potentially there's somewhat alternative funding that's been mentioned or proposed? And that would be --sounds like that include a big uptick sort of in security and scanning stuff at borders. I got to imagine you guys are super well positioned with that helped by AC&I? Any thoughts on that.
Well, you said it well. Basically, there's been a lot of press on the non-intrusive equipment at the border. We are very well positioned. CBP is a very good customer for us and we have a very broad product portfolio. And we continue to watch it. We are very excited about it. A lot of prospects but more than that there's not much we can say.
Yes, understood. Just switching gears real quick on the Healthcare side. I know you sound like certainly your cost-cutting and exiting the less profit or non -profitable business has helped that a lot. What about just top-line growth? Do you think you can actually grow the patient monitor business? It sounds like it's stabilizing the --could you see top-line return to growth in the back half the year or perhaps next year?
The answer is yes again. Remember last conference call also said the word focus, focus, focus. We are very much focused on it on the patient monitoring, cardiology and supplies and accessories. US is very much focused in that and start and we look, we feel good about it that the second half will be stronger and there'll be a top-line growth.
Okay, great. Last question on Opto. Was there -- can you just give us help understand --was there some organic growth there? And I know you had two acquisitions that helped a lot. How about organic growth and then second part of that question just on the operating margin side. Again reach record levels, are these sustainable numbers? Is that being helped by integration of some of these acquisitions you've been doing or any thoughts on that would be great? Thanks.
Larry, this is Alan. I'll take that. Yes, in addition to the acquisition related growth, we did see organic growth most notably in our core optoelectronics business, sensors and detectors and some of the Flex circuits. So we're real pleased with that. The operating margins as you point out, we're outstanding for the Opto division. There really were not any specific one-time items that necessarily contributed to that. So we believe that we should continue to see strong operating margins, similar security there was some favorable product mix within that as well. But it'll vary from period to period. We're quite happy with these margins.
Our next question comes from the line of Jeff Martin with Roth Capital Partners. Your line is open.
Thanks. Hi, Deepak. Hi, Alan. Congratulations on a great quarter. I wanted to touch on potential impact of government shutdown being the 34th day now. If you're seeing anything impact the Security segment there?
Well, we have had no impact of any kindness at this moment. Obviously, we continue to consciously look at it. We are such broad based company with so many different businesses all over that we don't see any impact. But we have to just be cautious to keep looking at it, keep watching it.
I would imagine given a long lead time nature of that business that a shutdown for two months isn't going to really impact you that much is. Is that a safe assessment?
That's what I'd better say it. On the other hand and keep in mind that after that there is other -- you have to get a factory acceptance test. You have to work with the customer of some specifics, specifications, the sites has to be ready. So, obviously, if this thing lasts for a long time and there could be some delay, but we don't expect this to go on for too long.
Okay and then in terms of activity in the Middle East, if I recall correctly, the last time oil prices declined precipitously there was some impact relatively short-term but it did impact. Just wondering if you're seeing that again this time around?
Right now our activity remains very robust in Middle East. There's a lot of activity there, and I've said it in the previous calls, in that world of Middle East the asset protection is very important. So security is something that doesn't suffer. So we continue to be excited about Middle East, and all those --in all that region.
Okay and then I was wondering if you could compare and contrast and integrated services contract versus a turnkey contract. I don't think we've ever done that on an earnings call. I figured it might be helpful to walk people through the similarities and differences of that.
Very good question. Basically these are the words we all keep making it. So the best way to describe it is there's an equipment sale. Equipment sale normally comes with service and support and maintenance and every one of them can be considered integrated. If it's a very broad-based like the Mexico contract and it has lot more services associated with it, it can become a complete turnkey integrated. If all the services are not in one shot, but it comes in phases or in some cases there are services but not everything is included, it becomes an integrated.
So it's a very loose way of saying it. All we are trying to teach and talk about it is, its turnkey complete can have everything included including image analysis, training and everything else. And integrated can be, it has some training in it, but doesn't have image analysis. It can have some broad base connection with other equipment. So it's a real --it's a little what I call a hybrid kind of an approach. I hope my answer gives you some more clarity.
Our next question comes from the line of Sheila Kahyaoglu with Jefferies. Your line is open.
Thanks and good afternoon. Deepak, just following up on the last point how do we think about the business as a percentage of, what services at the moment, how do we think about that evolving over time?
Would you again repeat the question, Sheila?
Sure. The fee for service contract with Guatemala, what you're doing with Puerto Rico, you do have this service model that's quite unique. What percentage of the business is it within insecurity and how do we think about that evolving over time?
Sheila, this is Alan. I'll take that. It represents under 20% of our security revenues. So it's a nice amount and we hope it'll be a nice growing amount and expect it to grow further into the future. But right now it represents under 20% of our security revenues.
Sheila just to add on to it what Alan said, and again a little bit on what Jeff asked before. We've said it before, any sale of equipment and service over the years can still be changed over to an integrated services. Any integrated services model at time can also become a full turnkey or vice-versa. So these are all sort of blended in and Alan had said before, the integrated services and turnkeys has relatively more higher margin than an equipment sale. And it also has a longer term contracts because you do a lot of investment upfront for civil works and equipment and stuff. But like Alan said it is about 20% right now. And we continue to think that we will grow that.
Thank you and is there, just with the Guatemala contract and the one port, are there other ports in the country and are there other opportunities in Central America? How should we think about that? The expansion.
There are opportunities all over the world.
Okay and I think on just security profitability. It's been about a year since you've anniversaried Mexico. You've maintained your margins. Is this sort of a 14% level we should be thinking about as a baseline for security going forward or 15% level, how do we think about that?
Sheila, this is Alan. I'll take a shot at that. I would say our security management, our security team did an outstanding job filling the hole associated with the reduced revenues from the New Mexico contract and as a result the margins that we've been reporting have been very strong. We'll see some fluctuations from period to period in our operating margins based upon the product mix. The mix between product and service, as well as the geographic channels. So it's hard to say a particular amount is steady. So as we will see some volatility.
Okay and then last one on the $450 million IDIQ in Healthcare and the patient monitoring systems, the DoD. Was this the completely new in and are there other suppliers? How do we think about the task orders coming in?
Well, basically we have been doing business with the US military, Sheila. It's a little bit more prevalent in the security side of the business. Basically, it's an indefinite delivery, indefinite quantity kind of an order. It makes like your product has been accepted and is a valid product for various identities and hospitals in that defense broad barrel to buy. If more than one company gets qualified but those two, three companies that get qualified, they now can go and take it as an opportunity to open to doors to be able to go negotiate with each of the hospitals independently.
There's no guarantee that you're going to get a specific hospital to do it, but it gives them the ability to go with you because you're qualified.
Got it. Is a DoD a new customer for Healthcare?
No, Sheila. We've had the DoD as a customer in the past and we had had an IDIQ with them in the past. And this is a new IDIQ for us. We've put resources over the last 12 to 18 months on the government as we view that as a growth opportunity for the division. And I think this IDIQ only serves to reinforce that.
Our next question comes from the line of Josh Nichols with B. Riley FBR. Your line is open.
Yes, thanks for taking my question. I do want to ask a lot of strength of Opto division, as well as the others. How much of those sales were internal to the other two divisions by the way if you have that number handy?
Sure, we'll get to that number here in a second. The intercompany sales for Opto were down compared to, on a year-over-year basis. So really the strength and the great growth in the Opto division came from third party sales as intercompany were down, but let me give you that exact number here. Intercompany sales for the quarter were $9 million compared to $11 million last year. So external sales were up 19% and intercompany sales were down about 18% as we were right sizing our inventory levels and improving our working capital management.
Great, good to hear. Then I did want to ask, I know that the --what the company quantifies as services revenue took like a bit of a drop after being really stable in Q4 and Q1 and even Q3 of last year. Could use just provide a little bit of additional information on how we should be thinking about that or what the cause was?
Josh, this is Alan. So the primary reason for the drop in the service revenue is just the year-over-year comps on the Mexico contract. The turnkey, all turnkey revenues that we get go into service revenue and in Q2 of last year we were still operating under the old Mexico contract. Where in Q of this year, we're operating under the new Mexico contract. So that was the primary driver of the decrease in service revenue.
And then could you comment any, I mean, a lot of companies have been talking about some trends that they're seen in Europe and Asia maybe a little bit of slowing. What are you seeing there? I know that there's been a big tailwind especially in Europe with the checked baggage conversion cycle. Any additional info you can provide regionally.
This is Deepak here. We said it before that there's a finite deadline for the European airports, our business in RTT and we've announced it has gone up and we continue to get more market share and Europe and Asia are both are very much our focus primarily for growth in the checked baggage business.
Our next question comes from the line of David Williams with Drexel Hamilton. Your line is open.
Thanks for the time and congrats on the quarter and the improved outlook. I want to kind of think about your bookings and the growth that you're seeing there. Can you talk a little bit about what's driving that? Is it more of a new customer wins or share gains perhaps or maybe just the improving penetration rates among your existing customers?
This is Deepak here. I would make a general statement it's all of the above. It's global. It's a very broad product customer base whether it's imports and border crossings, whether it is aviation checkpoint or it's at the checkpoint or it's embassies. It's all over. It's a broad base and even the region wise, Asia is very strong for us. Europe has been strong; Middle East has been strong. And US have been strong especially with the CBP. And Latin America with the Panama Airport and now this rail in Guatemala. And we look at it that the whole growth from us is our play fields.
Great. And then if we kind of think about the OpEx spend and what you're seeing or the increase in SG&A there. Is-- do you see that there may be some opportunities for some increase synergy and maybe what that incremental leverage could be as thing that your revenue growth, how should we think about the total OpEx and the leverage that you could get from there?
Sure. This is Alan. So we very carefully manage our operating expenses. Some of the growth that we've seen is to support the growth of the overall businesses. Some of it relates to the acquisitions that we did in which case we acquired some SG&A. So we'll continue to manage the SG&A very carefully. And our goal is to always grow the SG&A at a lower rate than we grow revenues. And thereby showing the operating margin expansion and the leverage effect that you mentioned.
Right. And lastly on the, I guess on the M&A front. Are you seeing a lot of opportunities for some other activity there? And, if so, what areas do you think there are holes you could fill with through M&A or some other activity and acquisitions?
Well, this is Deepak here. Obviously, our position always has been we don't go into specifics, but it's pretty common knowledge. We've said it. We've been very active in the optoelectronics business in what we call strategic acquisitions of increasing our product portfolio. And in the security, we continue to look at where we can do this. We think that consolidation will continue. We want to be focused on it. And if we could also look at our product lines which are complementary to our Security business, we'll continue look at it. And we are not shy of it where it is in the world.
End of Q&A
Thank you. And I'm showing no further questions at this time.
Ladies and gentlemen, thanks once again for participating in our conference call. We look forward to the second half and speaking with you at the next earnings call. Again, I want to thank all the employees and the support that all the stockholders have given us. Thank you very much.
Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. And you may all disconnect. Everyone have a great day.