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Good afternoon. My name is Christine, and I will be your conference operator today. At this time, I would like to welcome everyone to the Viavi Solutions Fiscal Second Quarter Financial Results. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you.
Bill Ong, Head of Investor Relations, you may begin your conference.
Thank you, Christine. Welcome to Viavi Solutions second quarter fiscal year 2018 earnings call. My name is Bill Ong, Head of Investor Relations. Joining me on today's call are Oleg Khaykin, President and CEO, and Amar Maletira, CFO.
Please note, this call will include forward-looking statements about the company's financial performance. These statements are subject to risks and uncertainties that could cause actual results to differ materially from current expectations. We encourage you to review our most recent SEC filings, particularly the risk factors described in those filings. The forward-looking statements, including guidance we provide during this call, are valid only as of today. Viavi undertakes no obligation to update these statements.
Please also note that unless we state otherwise, all results except revenue are non-GAAP. We reconcile these non-GAAP results to our preliminary GAAP financials and discuss their usefulness and limitations in today's earnings release. The release, plus our supplementary slides which include historical financial tables, are available on our website. Finally, we are recording today's call, and we'll make the recording available by 4:30 p.m. Pacific Time this evening on our website.
I would now like to turn the call over to Amar.
Thank you, Bill. Viavi’s fiscal Q2 results topped the high-end of our guidance in revenue, non-GAAP operating profit and non-GAAP EPS. Revenue at $201.8 million exceeded $175 million to $195 million guidance range with both NSE and OSP exceeding the revenue guidance. Revenue was down 2.3% year-on-year, primarily due to exiting unprofitable product lines in our SE business.
Operating margin at 12.6% beat the 9.3% to 11.3% guidance range with both NSE and OSP contributing to the upside. We continue to improve on expense management as operating expense at $97 million declined 5.8% from the year ago levels of $103 million. EPS at $0.09 exceeded our $0.06 to $0.08 guidance range, but it was down a penny from a year ago of $0.10.
Now moving to our Q2 results by business segment starting with NSE. NSE revenue at $153.6 million exceeded the guidance range of $132 million to $148 million. Overall, NSE revenue declined 2.5%. NE revenue increased 3.8% driven by solid growth in our field instrument business while SE revenue fell 20.9% from a year ago due to restructuring of unprofitable product lines in our Assurance business. NSE gross margins at 62.6% declined 190 basis points from last year.
This was a result of 310 basis points decline in NE’s gross margin due to unfavorable product mix, partially offset by an improvement of 310 basis points in SE’s gross margin driven by the SE restructuring plan. NSE operating expenses in the quarter were $88.2 million, a reduction of 7.8% from a year ago, reflecting benefits from SE’s restructuring and continued OpEx reduction. NSE’s book to bill ratio was meaningfully above 1.
Now turning to OSP. Revenue of $48.2 million exceeded the $43 million to $47 million guidance range driven by a better than expected demand in our anticounterfeiting products. Revenue was down 1.4% year-on-year. Gross margins at 54.4% declined 330 basis points from a year ago due to lower volumes in the anticounterfeiting business and unfavorable product mix with a ramp in 3D sensing revenue. Operating margins at 36.1% exceeded our guidance range driven by anticounterfeiting revenue upside, but declined 660 basis points year-over-year due to change in mix and OpEx investments in growth initiatives.
Now turning to the balance sheet. Our total cash and short-term investment ending balance was approximately $1.21 billion with total net cash of $301.8. Operating cash flow for the quarter was $23.9 million. In Q2, we repurchased $21.8 million of Viavi stock at a cost basis of $9.19 per share including commissions. Of the $150 million authorized share buyback, we have repurchased shares worth approximately $127.5 million as of the end of fiscal Q2.
With regards to our original $650 million 2033 convertible notes that is puttable and callable in August 2018, we have repurchased a total of $199 million in notional amount to date as of the end of fiscal Q2. Specifically, in Q2, we repurchased $12.5 million. Our remaining 2033 convertible notes balance is $451 million. Our total outstanding debt of $911 million includes the $460 million 2024 note. We will continue to be opportunistic in repurchasing a Viavi stock to offset earnings dilution from stock-based compensation.
Now to our guidance. We expect fiscal third quarter 2018 revenue for Viavi to be in the range of $190 million to $210 million, operating margin at 12.5%, plus or minus 1%, and EPS to be $0.08 to $0.10. We expect to NSE revenue to be at $138 million plus or minus $8 million with operating margins at 2.5% plus or minus 1%. We expect OSP revenue to be at $62 million, plus or minus $2 million, with the operating margin at 35%, plus or minus 1%.
The sequentially higher OSP revenue guidance in our fiscal Q3 reflects both the demand recovery in our anticounterfeiting products and higher 3D sensing revenue from shipments that occurred in our fiscal Q2. In the near-term, we see lower than forecasted demand for 3D sensing. However, we expect a rebound in 3D sensing demand driven by multiple customers and multiple platforms in the second half of calendar 2018. We are prudently expanding 3D sensing capacity to meet this projected demand.
Our tax expense for fiscal second quarter is expected to be approximately $4.5 million. We expect our other income and expenses to reflect the net expense of approximately $0.5 million and a share count to be approximately 230 million shares. Please note our fiscal Q3 guidance does not include our announced agreement to acquire Cobham Avcomm and Wireless Test and Measurement businesses, which Oleg will discuss in his prepared remarks.
With that I turn the call over to Oleg.
Thank you, Amar. I am pleased with our execution in Q2 as both segments exceeded their revenue and operating margin guidance. Starting with NSE, field instruments business for the second quarter in a row showed a sequential and year-on-year revenue growth. Our Cable Products have continued to be a major revenue driver as cable service providers deploy DOCSIS 3.1. We expect the trend to continue in calendar 2018.
The picture for access is just the opposite. G.fast is lagging DOCSIS 3.1 as telecom service providers are delaying the launch. However we anticipate G.fast to start ramping up later in calendar 2018. Fiber field instrument was strong sequentially driven by favorable customer demand and good sales execution. 11 production products were significantly weaker down sequentially and year-on-year as China based customers and NIMs continue to work down their optical component inventories.
We expect 11 production to strengthen in calendar 2018 and are optimistic about its long-term outlook, which is driven by several major technology trends including 5 wireless, 400 gigabit optical and Gen 4 PCI Express. The SE business declined nearly 21% from a year ago as a result of the discontinuation of unprofitable product lines and the declining in mature products. The overall NSE financials today reflect the restructured SE business resulting in a higher quality of revenues and margins from a year ago.
Moving on to OSP. Revenue from anticounterfeiting products in Q2 was higher than projected, driven by improved customer demand. The anticounterfeiting business is expected to continue to recover in the second half of fiscal 2018 from the loss of the December quarter. The overall demand for anticounterfeiting is driven by two factors. The base demand is driven by the reprint business and is supplemented by the periodic major currency redesign spikes.
While we have a robust pipeline of banknote redesigns, the timing of order placement is driven by the central banks and the issuing authorities. Our 3D sensing shipments experienced a meaningful revenue ramp in fiscal Q2, which is expected to continue into fiscal Q3. While the market acceptance of facial recognition has been a success, we are expecting a near-term weakness followed by a strong recovery and growth in the second half calendar 2018.
This afternoon we announced a definitive agreement to acquire Avcomm and Wireless Test and Measurement business of Cobham for $455 million cash consideration, subject to closing adjustments. The acquisition has been approved by boards of directors of each company and we are expecting to close the deal in our second half of fiscal 2018 subject to customary approvals and closing conditions. This transaction propels Viavi into a leadership position in supporting network equipment manufacturers and service providers in deploying the emerging 5G technology and services.
In addition, the acquisition provides an attractive diversification of our tangible Viavi into military, public safety and avionics test markets. The acquired businesses generated more than $200 million in revenue in calendar 2017. It is on par or better than Viavi’s average corporate operating margin and upon closing it is expected to be immediately and meaningfully accretive to non-GAAP EPS. The transaction also allows us to realize synergies with Viavi’s operational infrastructure and U.S. federal NOLs. We will provide more color on the strategic opportunities and synergies of this transaction post closing. In conclusion, I would like to thank the Viavi team for delivering a strong quarter and express my appreciation to our customers and our shareholders for their support.
And I will now turn the call over to Bill.
Thank, Oleg. On the Viavi Solutions company website, we posted a presentation that’s highlighting today’s acquisition agreement. This quarter we will be participating at Morgan Stanley Investor Conference in San Francisco on February 26. Christine, let's begin the question-and-answer session. We ask everyone to limit discussion to one question and one follow-up.
Thank you. [Operator Instructions] Your first question comes from the line of Patrick Newton from Stifel. Your line is open.
Yeah, good afternoon. Oleg and Amar, thank you for taking my questions. I guess first one is on the NE side, it definitely feels like it’s on the floor, even with poor 4Q CapEx trends from one of your largest customers. So I guess do you feel like with strong bookings and technology trends in DOCSIS 3.1 and Optical and eventually G.fast that this business is now inflected and could have a GDP type growth on a go forward basis. And while you're answering that could you perhaps layer in how investors should think about this business over the next several quarters as one of your largest customers increased its annual CapEx and has a goal of passing substantial number of homes with fiber.
Thank you, Patrick. Boy you loaded a lot of questions in one question, but sure, I’ll try to answer it all.
So I'm doing my best.
Okay. So, well, clearly I think a lot of it was driven, you started with cable, right. So it's a different segment of communication service providers. And we've been obviously waiting for a DOCSIS 3.1 to takeoff and it's kind of like dominoes one to one major service provider starts deploying and the rest quickly followed because nobody wants to be left behind. That’s now in turns puts a significant pressure in North America on people who deliver Internet to the homes through other means such as DSL or fiber to the curb. To stay competitive, they're going to have to accelerate some of their rollout. And then clearly cable is far ahead and I think it will sustain for the next several quarters after North America, clearly Europe, is yet to come and then there is Asia and Latin America.
So it is encouraging that finally the trend towards a much higher speed is taking place. And obviously, as the Edge gets deployed then there is also a need for the higher speed test equipment such as providing monitoring of the network core and so on. So we are encouraged by the – in the near-term with the strong cable demand. But it also gives me in some ways good to have slower ramp and G.fast because as cable reaches the peak and starts to plateau, it’s good to have the next wave of adoptions to start taking place, and we certainly hope that G.fast is going to start meaningfully ramp later in the year I mean just purely as a response to competitive pressure from cable providers.
That said, we’re also seeing very strong interest in optical products, mainly for the networking optical products not so much the lab and production test equipment for fiber optic modules, or China in general, but it's a robust demand in Europe and North America. So from our perspective, I think I expect clearly one quarter does not make a trend, but we do see some healthier optimism on our telecom service provider customers in terms of finally upgrading their networks and we certainly hope that happens – starts happening later this year.
As you mentioned one of our major customers – I mean as in immortal words show me the money. So, clearly, it is encouraging that they're talking about higher CapEx spend and we certainly hope a chunk of that change land in our hands. And obviously when you rollout new services, you need to buy new test and measurement equipment and we certainly hoping that that maybe an additional boost later in the year.
So just to add some numbers to this, Patrick, to give you a little bit of context. So any business grew 3.8% year-on-year in our fiscal Q2 and when you think about our guidance for fiscal Q3 that growth is going to accelerate from – anywhere from mid to high single digit. So to Oleg’s point, this Q2 was a one point and we are hoping Q3 will start and Q4 will start making it a trend.
And we are being cautious because I guess historically looking at Viavi and JDS Uniphase, Q3 while customers are still debating their CapEx spend can be a bit dicey, but we started this quarter with a very healthy backlog.
Yeah, I appreciate the details. And then just one on the Cobham business, can you help us understand the contributions from the TM 500 and then TeraVM within that $200 million plus run rate because I think those are the crown jewels. And on the op margin side, you did say kind of better than corporate average that that business segment under Aeroflex ranged anywhere from low single digits to 30% op margin. So can you from a, I guess, trajectory perspective help us to understand if it’s stabilized a little bit and the opportunity you see there on a go forward basis.
So the wireless business, the one you mentioned, is about I say roughly two thirds, I say between 60% and 70% of the total. And as you can imagine that business is doing very well and it's accelerating in fact it was came in much stronger in the fourth quarter than was expected. And it's largely driven by a lot of interest in the 5G. Network equipment manufacturers are buying their products and systems to develop the products and test their products in the networks. And the service providers are buying their products to run – test markets to run the – to test the deployments and to validate service providers solution.
So I think in that respect, there is a – I expect there to be a very strong interest in 5G portion of their products, but also we are seeing in a number of the other regions kind of like Tier 2 regions where 4G is just now up and coming and there is a healthy demand there. And it's a market that we were playing in and we shut down by and large of that business because to be honest we just didn't have the scale and execution. And I mean these guys are by far the best by far in the business. We were a distant second and then it drops very rapidly. So we are very optimistic about the long-term outlook for that business.
But also what's more importantly what they are developing today for lab environment, these types of technologies are going to migrate into our field instruments over the next couple years. I mean up to date Viavi didn't have much RF capabilities. And in combination with both, it was Cobham Wireless and Avcomm business, we just gained significant RF, a very high frequency design capabilities and very strong IP to integrate it into our field instruments and expand our field instruments TAM into the wireless infrastructure.
Thank you for taking my questions. Good luck.
Thank you.
Your next question comes from the line of Dmitry Netis from William Blair. Your line is open.
Okay, thank you very much guys and congrats on the quarter and the deal. So a couple of questions, just to continue on this Cobham acquisition. I am just trying to kind of get to the statement you made as meaningfully accretive. I mean is there any way to quantify what that actually means? It sounds there is maybe a positive trajectory on the top line from the wireless side of the business. I am trying to see where the synergies come from on the OpEx side even that there are some new areas that you’re entering in defense military side of the business. I am not sure if there’s any R&D synergies, but love to hear any thoughts on that.
And then just after you monetize your NOL following this transaction, how would you think about the balance of those NOLs following this transaction? I guess that’s three questions, so I apologize for that.
I was just waiting for you to pause. Hi Dmitry thanks for your three-part question here. So let me take the first one. Now it’s meaningfully accretive on a non-GAAP EPS basis as Oleg mentioned in his prepared remarks. This is a business is a $200 million plus in revenue. And as we said in prepared remarks the operating margins is in line to slightly above our corporate average operating margin. So if you can do the math, you will see that there is a big drop to the non-GAAP EPS. And that is before we go drive revenue and cost synergies in this business. There is, especially on the Wireless Test and Measurement side, there is an overlap with our business here as well as go-to-market. And also there's overlap on the OpEx side that we can optimize on both the sides of the house.
So this is even before we’d look at the benefit from NOLs. So I think overall you should think about this business similar to any business, low single-digit growth business. But we definitely have an opportunity to go drive the operating profit up double digit. So think about top line growing low single-digit for a long-term, but opportunity to actually go drive the EBIT double digit. So that's what we are looking at.
And on the NOLs, listen we have about $4.9 billion of NOLs. So there is enough to consume even after this acquisition.
Just the clarification on the EBIT side, the double digit, are we talking somewhere in the order 15% to 20% operating margins here, or just slightly above the corporate averages, call it 12.5% the way you guided for the fiscal Q3. So is that…
Yes it is. Again yes I won’t get – yes I will not get into the details. We will provide you specifically guidance once we close this business. But it is higher than our corporate average. Our corporate average in fiscal 2017 was 13.3%, it is above that. And I will leave it there for now. But we will provide you with all the details when we meet next time once whenever we close this deal.
Okay, alright. And if I could ask one more on 3D Sensing, I’ll leave the rest of the questions to everybody else to ask, but on 3D Sensing, I'm just trying to say, relative to your expectations the cost that you have seen here in the near term, I guess the trajectory is still very, very positive. But relative to your expectations how much is that being reduced by if you could quantify that, is it 10%, 30%, 50% any sort of quantitative number you can give us in terms of how that business is tracking now relative to the expectations would be helpful?
Well it is tracking obviously, in the near term, a little below our expectations. We never expected the numbers, some of the analysts and our competitors are throwing out. I mean every time we launch a new product, companies tend to over forecast. So we obviously (0:24:46)* had our internal forecast was much more prudent. But with some of the recent pullback in forecast, it still puts some pressure on our demand for the fiscal Q4.
But we view it as a relatively short term volatility that you experience when you have mostly one customer with one product. As you get multiple new customers and multiple new products from existing customers coming on line in the second half of calendar 2018, we actually expect this business to rebound and grow quite nicely. And we are actually in fact prudently expanding some of our capacity because we expect a much stronger second half of the calendar year.
Okay, thank you guys, appreciated.
Your next question comes from the line of Michael Genovese from MKM Partners. Your line is open.
Great. Just first following-up on that last answer for a little bit more granularity and hopefully, you're not you’re not repeating yourself because I probably missed. In terms of this near-term outlook being lower, is that hitting more in the fourth quarter than in the third quarter or is it also impacting the third quarter?
Yes, so let me let me start and give you a little bit more granularity here, right. So as we have always been transparent on what we are assuming from a modeling and from a business forecast perspective for our 3D Sensing revenue. So we said roughly $35 million to $45 million that’s the range that we were expecting. Now we look at the forecast and we want to be a little bit prudent here, so we're assuming roughly about $25 million-plus of 3D Sensing revenue for fiscal 2018.
Okay.
Now it doesn't impact Q3 as much because as you recall, we have a lag of one month between the time we ship and the time we recognize revenue. So what we shipped last quarter we are recognizing revenue this quarter. Now at some point in time this will all catch up, but that's not what we're assuming in our in our fiscal Q3. So the impact will be felt in Q4 of this whole take down and forecast.
But having said that, I wanted to give you guys more color on the OSP revenue as such, right. So when we met last time we said OSP revenue in second half is going to be – is going to grow versus the first half. What we are seeing is overall, for fiscal 2018 the OSP revenue has declined because we are taking down the revenue forecast for 3D Sensing. But the encouraging news here is the high margin anti-counterfeiting product revenue has actually come in higher than what we were expecting last quarter. So you see the anti-counterfeiting revenue is much higher than what we were expecting for fiscal 2018. And that is more or less offset by the decline in the 3D Sensing revenue.
So that's the dynamics. Again 3D Sensing revenue has a lower margin profile than the anti-counterfeiting. So I think this from a profit perspective, I think, it's more incrementally positive.
That's very helpful Amar. And just a follow-up, so at this point in time versus say a couple of months ago, do you have more visibility because it sounds like you did. I want to make sure, on these additional skews that this technology will go into later this calendar year and also just about additional customers what is your expectation there?
So I mean as you can imagine three months is a long time in this phase. So yes I mean we obviously have more visibility, not necessarily into specific products, we just look at customers’ forecasts and how many skews they're looking at and from there you can deduce whether or not it makes sense. So our expectations is it'll be over various new customers coming in with one or two platforms and further proliferation of this technology into other products, various customers.
Thanks.
Your next question comes from a line of Alex Henderson from Needham. Your line is open.
Couple of very quick questions, because I think they're almost one word answers. I assume you're not seeing any new competition in 3D Sensing?
Well I mean there's obviously a lot of people talking about it, but all the customers we are talking with, I'm sure they're talking to other players, as well. But we're getting some pretty firm commitments in indicators. So it leads me to believe that at least for now we are clearly in a lead position.
Okay. Is that a change from you saying you had essentially a lock on this business? I thought you guys were the only player in the category at this point.
We have a unique IP in this business. So I have not seen anybody who has demonstrated a solution that does not infringe our IP. But it would be foolish for me to think that we are the only guy out there who is doing it. But I think as far as I see in terms of meaningful business I do not see any viable competitors and this time.
Alright. So when we look at the $35 million to $45 million prior guide going to $25 million, I assume that's mostly out of the fourth quarter that you did some of five-ish type number that the Street was expecting in the December quarter and on track for the $15 million or so that the Street is forecasting in the March quarter and it’s supposed to be falling out of that following quarters. Is that’s the right way to think about it?
So I think I'm not going to confirm those numbers but directionally you're thinking is right.
Alright. And then just one last question I’ll cede the floor. You’ve made a comment on the acquisition. I just wanted to make sure I understood what you were saying. I think you said that you expected the low single-digit growth, was that for the acquisition or was that for the combined acquisition pro forma with the NSE or the NE business? I'm assuming that's just the acquisition.
Yes that's just the acquisition assets Alex. So what we are saying is it has a similar growth profile like our NE business so low single-digit grower. But given the synergies that we have and the operational improvements that we can drive in this business both go-to-market, as well as in the back office, we believe that we can grow the operating profit double digit for that piece of the business.
I’ll cede the floor. Thanks.
Yes, thank you.
Your next question comes from the line of Meta Marshall from Morgan Stanley. Your line is open.
Great, thank you. A couple of questions just first does this acquisition kind of change any philosophy with some of the SE businesses that you’ve wound down or changed any thoughts of whether you would divest some other assets within the company?
Second, just, are you starting to see any bring forward of kind of dates of 3D Sensing outside of smart devices? And then third just quickly given the NOL position I wouldn’t imagine so, but is there any impact with tax reform we should we be thinking about? Thanks.
Sure, thank you. So on the does it change any philosophy or view, it does not. I think in fact it’s very much in line with our, what I call big network enablement focused service enablement strategy. It plays right into that strategy. And in terms of the service enablement, everything we have now left at Viavi is what I would qualify as core technologies and they're doing very well. I think we restructure it the remaining business is now stable and actually growing. So I think we are doing in the right way we are not doing a Hail Mary, but rather we are approaching it in a very, very deliberate way to the market and selling our software products where we have very strong equipment position and have both products reinforce one another. So that's the answer on that piece. So I think we are very pleased with our current mix and strategy in NSE space.
Regarding the 3D, I mean clearly, most of the current opportunities are all in consumer electronics mainly smartphones. However, the advanced engagements that we are currently involved are also very – there’s very interesting space in the whole automotive space. But as you can imagine with automotive my bet is two to three years before we see any of these products come into the market.
So at that point, it's all path finding, R&D concept development stage in automotive and its prime time in consumer electronics.
Got it and then some comments on tax reform.
Yes tax reform Oleg.
Yes let me just give you some color here. So I think the tax reform has minimal impact to us. We typically companies that have NOLs and R&D credits, they have a DTA, deferred tax assets, associated with it. And this will be required to be restated using the new tax rate. And to the extent that a reduction in the DTA amount is not offset by the corresponding, what they call as the valuation allowance, then the reduction in DTA will be included in the tax expenses in the P&L. That's how it typically works.
However, in case of the Viavi, the reduction in the DTA will be totally offset by the release of a VA that we have. Therefore, for us the net impact of the P&L is almost zero. So again it doesn't impact us as much as other companies, but by the way we have to do the same amount of work to get ready for this new tax provision.
Got it. Alright, great. Thanks guys.
Your next question comes from the line of Dave Kang from B. Riley. Your line is open.
Hey guys this is actually Lee Krowl filling in for Dave Kang. A lot of questions have already been answered but I just want to confirm what you guys just said on SE. Did you guys say it's actually stabilized and begun to grow?
And then my second question is just with this transaction can you maybe just talk about the cap structure? I know you guys have been retiring debt and buying back stock and then obviously, you have a convert that comes up in the second half of 2018. So can you maybe just talk about the cap structure as you go and purchase this all cash transaction?
Yes, so let me first handle the SE question. So SE if you see, SE business, there are two pieces of business within SE. One is our assurance business and then the second piece of the business we call as the network performance and monitoring business. So these are two different businesses. One goes into the data center, the other one is to the service providers we sell, right. The assurance business is a business that we restructured. So the point we're making is as we continue to – as we restructured this last year, that's going to taper off. There's a mature piece within the business that's also running off very rapidly. So at some point in time that piece of the business will start stabilizing. And we have started seeing that stabilization in that business with the growth piece within that assurance, starting to grow and the mature assurance fees continuing to run off.
And there's the other piece of business which is the, which I call – that goes into the data center, that piece of the business is slated to grow. I think we have seen one of the best booking quarters in that business, it was a record booking quarter for that business. And we also started seeing deal sizes being much larger than before. So a good example of driving discipline with a new leadership team both in the product side, as well as on the on the sales side has now started paying some dividends there.
So that's the point we are making. We expect SE business to continue to stabilize in the $20 million, maybe $28 million to $30 million range and then potentially start growing sometime next year.
Now with regards to our capital structure, again there is no new news there. We are very clear on how we are going to manage our capital structure. We will continue to do share buybacks where it makes sense. If we believe we can do it opportunistically. On the converts, we did buy back some. But now I’m not going to open up my strategy here to tell you what we are going to do with our 2033 converts that will be due in August 2018.
So there are various options there. This acquisition doesn't change our approach to our capital structure and it still remains the same. So that's something that we will continue to execute on.
Got it, thanks guys.
There are no further questions at this time. Mr. Bill Ong I turn the call back over to you.
Thank you, Christine. This concludes our earnings call for today. Thank you everyone.
This concludes today’s conference call, you may now disconnect.