© 2024 Alpha Spread Limited. All Rights Reserved.
www.alphaspread.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on www.alphaspread.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. In no event shall Alpha Spread Limited be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on www.alphaspread.com, or relating to the use of, or inability to use, www.alphaspread.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance.
You don't have any saved screeners yet
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good morning. My name is Christie and I will be your conference operator today. At this time, I would like to welcome everyone to the Madison Square Garden Entertainment Corp. Fiscal 2021 Fourth Quarter and Year End Earnings Conference Call. [Operator Instructions] Thank you. I would now like to turn the call over to Ari Danes, Investor Relations. Please go ahead, sir.
Thank you. Good morning and welcome to MSG Entertainment’s fiscal 2021 fourth quarter and year end earnings conference call. Our President, Andy Lustgarten, will begin today’s call with a discussion on the company’s entertainment and Tao Group segments. This will be followed by an update from Andrea Greenberg, President and CEO of MSG Networks. Our EVP and Chief Financial Officer, Mark FitzPatrick, will then review our financial results. After our prepared remarks, we will open up the call for questions. If you do not have a copy of today’s earnings release it is available in the Investors section of our corporate website.
Please take note of the following. Today’s discussion may contain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties and that actual results, developments and events may differ materially from those in the forward-looking statements as a result of various factors. These include financial community perceptions of the company and its business, operations, financial condition and the industry in which it operates as well as the factors described in the company’s filings with the Securities and Exchange Commission, including the sections entitled Risk Factors and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained therein. The company disclaims any obligation to update any forward-looking statements that maybe discussed during this call. On Pages 6 and 7 of today’s earnings release, we provide consolidated statements of operations and a reconciliation of operating income to adjusted operating income, or AOI, a non-GAAP financial measure.
And with that, I will now turn the call over to Andy.
Thank you and good morning everyone. While we are clearly operating in a very fluid environment, we successfully navigated through one of the most challenging times in our company’s history and remain cautiously optimistic about the road ahead. Looking back at fiscal 2021, we saw number of positives, and I am proud of the role we played in helping to shepherd the return of live entertainment in New York as our venues hosted the city’s first large scale events since the start of pandemic. Tao Group did their part as well, helping to bring back the critically important hospitality industry, while returning to profitability in the June quarter. And with the acquisition of Hakkasan Group in April, we believe Tao is well-positioned to build on its track record of success.
We also continued to make meaningful progress on our next chapter, MSG Sphere in Las Vegas, heading toward the venues opening in calendar 2023. And in early July, our acquisition of MSG Networks created a company with greater scale and revenue diversity as well as enhanced financial flexibility. This was all accomplished during a very difficult year, when our performance venues and Tao Group properties were largely closed or operating with significant restrictions. And both the Christmas Spectacular and Boston Calling Music festivals were canceled.
We have talked throughout the year about the important steps we took during this uncertain period, including reductions in our spending, lengthening our construction timetable for MSG Sphere in Las Vegas, and completing a $650 million debt raise. These actions strengthened our balance sheet while protecting our core entertainment business. And while conditions have improved, we continue to monitor what’s happening in our markets. This includes New York City’s announcement earlier this month that while venues can continue to welcome people at 100% capacity, all guests who are dining indoors or attending indoor performances are required to show proof of at least one vaccination shot, which we think is beneficial for our businesses. We operate in the New York market, which already has one of the highest vaccination rates in the country and our research indicates that our fans in this market prefer attending vaccinated events.
We saw this firsthand during the fourth quarter, starting with the sold-out Knicks playoff games, where we hosted nearly 90% vaccinated crowds as well as across a number of concerts, which were sold at 100% capacity to all vaccinated audiences. Looking forward, we have begun to staff up in anticipation of what we envision could be a busy year ahead. While we are mindful of what’s happening with the Delta variant, including the cancellation of certain shows around the country, we think that vaccination policies that are increasingly being adopted by cities, including New York as well as companies in our industry, will be helpful.
We currently expect concert touring to begin ramping back up in late September, leading to a strong concert booking schedule on a full year basis. In fact, fiscal 2022 is currently pacing ahead of fiscal 2020, which as you may recall, was slated to be a record bookings year for our company prior to the onset of the pandemic. In addition, we continue to see enthusiastic levels of consumer demand through strong sales as new shows get announced. And Christmas in New York is back. Last month, we announced that tickets are officially on sale for the 2021 season of the Christmas Spectacular production. We are pleased with the early sales for the season’s 163 show run and are looking forward to the productions return. We also recently entered into a long-term lease renewal with favorable terms for Radio City Music Hall, which extends our lease until 2038, with an option to renew for an additional 10 years. We are pleased to have worked with Tishman Speyer on this agreement, which is a win-win for all parties involved as it ensures this landmark venue remains home of the Christmas Spectacular for many years to come.
Turning to Tao Group, fourth quarter results include the impact of the Hakkasan Group acquisition, which created a global leader in premium hospitality, with over 60 venues across five continents. The acquisition expands Tao’s U.S. presence in major entertainment markets, such as Las Vegas, Southern California and Miami, while providing instant international foothold in destinations like London and the Middle East. This increased footprint also provides local expertise to support further expansion. Another area where Hakkasan will help drive the business is through its expertise in licensing, which Tao intends to utilize alongside its owned and managed venue models as it continues to pursue growth opportunities. The easing of capacity restrictions in the fourth quarter helped drive strong results for Tao, with the majority of its revenue and AOI generated in the month of June. In addition, the best performing market for the quarter was Las Vegas, where Tao’s presence, which has significantly expanded with the Hakkasan acquisition, will be important to MSG Sphere at The Venetian.
We made meaningful progress on MSG Sphere this past fiscal year, achieving a significant milestone in June when we completed the structural steel for the main venue. Over the next 12 months, we intend to complete the roof concrete and the venue’s exterior facade as we continue to make progress on the interior build-out and pedestrian bridge. We also plan to move forward with the buildings, with building MSG Sphere’s Exosphere, the spherical structure that will surround the venue and eventually be covered with 580,000 square feet of fully programmable LED lighting. This impactful exterior display is just one of the ways customers will interact with MSG Sphere content. Inside the venue is where we will use state-of-the-art technologies to create first-of-their-kind immersive experiences. And this coming year, we will increase our focus on developing this content for Sphere.
Before I turn things over to Andrea, I would like to spend a moment on the emerging opportunity around mobile sports gaming. New York State’s application process is expected to conclude by early January. Many of the leading online sports betting operators are participating in the process, which creates a competitive market that we believe bodes well for us. From entertainment and media assets that reach millions to potential fixed venue-based opportunities that include The Garden and Tao locations, we believe we are one of the best positioned companies to help partners succeed in connecting with consumers. We continue to be in active discussions with many of the potential market participants and are increasingly bullish about this opportunity for our company.
In summary, while we know we are in a fluid environment, we are optimistic about the year ahead due to the strong pent-up demand we saw at our entertainment and Tao businesses in June, which has continued so far this summer; our progress with MSG Sphere in Las Vegas; and the powerful platform we have created with MSG Networks, which brings together our entertainment and media assets and positions us well for future opportunities.
With that, I will now turn the call over to Andrea.
Thank you, Andy and good morning. Looking back at the past year, our regional sports and entertainment networks faced their own challenges as a result of the pandemic. And we rose to the occasion, delivering our programming on all platforms without interruption while exploring ways to be more nimble and efficient in producing our content. We will certainly apply our learnings going forward and expect our business to benefit.
During fiscal 2021, we were also reminded once again of the power and popularity of live sports, following the return of the NBA and NHL for their shortened 2021 regular seasons. We saw ratings strength on our linear networks, including double-digit percentage increases in average household ratings for the Knicks, Rangers and Islanders regular seasons. We also saw all-time highs for viewership and engagement on MSG GO, our authenticated live streaming app. This strong performance continued into the post season, with ratings for the Knicks and Islanders’ first-round matchups well exceeding each team’s regular season averages. We look forward to welcoming our teams back for the upcoming seasons, which we expect will include normal schedules for the regular seasons.
And as we move forward in an evolving media landscape, we remain committed to building on our history of innovation to create value for our partners and viewers. We will continue to experiment with new types of content, including alternative versions of our live game telecast and explore new ways to monetize our media rights and content library through both new and complementary product offerings. We also will remain focused on interactivity, where we’ve seen firsthand with our MSG GO app, the benefits of interactive games on engagement and frequency of tune.
Furthermore, our ability to aggregate data across our linear networks, digital products and entertainment venues will provide even richer insights into viewers and customers, which we intend to leverage to drive our overall business. This data also makes us an even more valuable marketing partner, including in the emerging world of mobile sports gaming with a significant number of opportunities for MSG Networks, including everything from branded content to integrations on our mobile apps. We’re excited about the future and are confident in our ability to continue to innovate and effectively monetize our content, which we believe will ultimately help us drive robust ongoing adjusted operating income.
With that, I will turn the call over to Mark.
Thank you, Andrea. Let me start by reviewing our fourth quarter financial performance, which as a reminder, does not include the results of MSG Networks as the acquisition was completed on July 9. That said, MSG Networks’ stand-alone results can be found in our press release. And beginning next quarter, we will speak to this segment’s results in detail.
In the fiscal fourth quarter, we generated revenues of $99.8 million and had an operating – adjusted operating loss of $70 million. In terms of revenue, Tao Group generated $69.7 million. These results included the addition of Hakkasan at the end of April, and as Andy noted, were driven by strong reopening in our key markets, especially in Las Vegas. Revenue also included the impact of our various commercial arrangements with MSG Sports, including $8.3 million in arena license fees as the Knicks and Rangers concluded the regular seasons at The Garden in May, followed by three sold-out Knicks home playoff games. In addition, revenue was positively impacted by both live events and ad sales commissions from MSG Networks.
Looking ahead to fiscal 2022, we’d like to highlight a few items. First, we’ve started to strategically hire across our Entertainment segment to support the anticipated ramp-up of live events starting in late September. We also are working to fully staff our Tao venues to match the reopening momentum at restaurants and nightclubs. Second, we plan to increase our content development and technology investments related to our Sphere initiative. And finally, at MSG networks, we’re anticipating full NBA and NHL seasons, and therefore, expect to return to more normalized levels for certain expenses, such as rights fees and normalized advertising revenue.
Now let’s turn to capital expenditures. We had $130.5 million of capital expenditures in the fiscal fourth quarter, which primarily related to the construction of MSG Sphere in Las Vegas. Through June 30, project to-date construction costs incurred were approximately $850 million, which includes $98 million of accrued costs that were not paid as of June 30 and is net of $65 million received from Las Vegas Sands. As a reminder, last quarter, we announced that the cost estimate for the venue was approximately 10% higher than our previously announced estimate of $1.66 billion. As planned, during our recent annual budget process, we thoroughly reviewed the cost, scope and time line of the project and have refined our project cost estimate to be approximately $1.865 billion. As construction manager, we will continue to aggressively manage all aspects of the project and are excited for the venues opening in calendar 2023.
Finally, turning to our balance sheet, we had approximately $1.17 billion of cash as of June 30 and $1.52 billion if you include MSG Networks’ $348 million of cash. In terms of debt, the combined company’s debt balance was approximately $1.74 billion as of year-end. As previously noted, we believe that the merger allows us to optimize our capital structure, including the potential opportunistic refinancing of MSG Entertainment’s $647 million term loan, which was put in place during the pandemic last November and carries an interest rate of 7%.
With that, I will turn the call back over to Ari.
Thank you, Mark. Can we open up the call for questions?
[Operator Instructions] And your first question is from Brandon Ross of LightShed Partners.
Hi, guys. Thanks for taking the question. Andy, you mentioned your optimism around sports betting in the near term. I was wondering what your thoughts are on the change in Governor? And if you believe that could further up – open up competition and perhaps even additional ways to monetize betting? And then I have a follow-up.
Great. Thanks, Brandon. So look, I’m not going to opine on the politics of what’s going on in Albany. What I can talk about is the mobile gaming legislation and how it impacts us. So at a minimum, there is going to be four skins, four operators. This is a tremendous opportunity for us because that’s competition. That said that’s the minimum. There can be more. So when we looked at some of the application processes that went in, it gives us real confidence. One group, in their application, talked about a nine-operator model and with a 51% tax rate. In that one, they thought there would be over $900 million of wet gross tax revenue generated for the state, and that includes money for marketing. Another group, which only had four operators at a single consortium, pegged the opportunity at $1.3 billion in tax revenue for the state by the third year. So for us, it doesn’t – four or above is all – it’s going to be great and there is going to be competition. They are significant and it’s clear there is a significant takeaway for these operators to bring home. And the way they are going to do that is by driving their business. And there is one – we believe, one company best suited to help and work with them, and that’s us, right? We blended the market. We always had a great opportunity between our relationship with MSG Sports and the teams, our fixed asset here at the arena, Tao for hospitality, premium hospitality. But then with the addition of MSG Network, we’re able to add linear and digital online content. We can blanket the market in a way no other company can and be a partner for whoever wins, may it be four or more, we look – we’re looking at different deal structures, exclusive deals, nonexclusive deals. We’re talking to everybody who’s in the market, and we think this is a great opportunity for us and a great opportunity for New York State.
Thanks. And then just your stock has been down pretty significantly since the MSGN deal or sort of the original press article surrounding the MSGN deal, and Networks is a real cash flowing asset. I was wondering if you would ever consider using the cash flow from Networks for a stock buyback to be opportunistic with where the stock is?
Thanks, Brandon. It’s Mark. I’d start by saying our number one priority is always to protect and invest in our core assets. As you saw during the pandemic, that meant preserving our liquidity to position the company to return to business. Second, we are focused on the MSG Sphere initiative, which we continue to see as a unique opportunity – growth opportunity for our company. Finally, we plan to explore refinancing our term loan at MSG Entertainment, which we put in place in the pandemic as an insurance policy and carries a 7% interest rate. So while those represent our near-term focus areas, we regularly review our capital allocation priority. And over time, we will consider all options in determining the best use of capital. Thank you.
Thanks.
Thank you. Your next question is from John Janedis of Wolfe Research.
Thanks. I had two. First, on the Sphere, as the build continues, can you give us more color on how inflation is impacting your cost versus budget, given the $40 million or so increase? Can you give us the puts and takes beyond hitting that, call it, that revised target of the $1.865 billion and you plan to now update on that every quarter versus budget? And then separately, just on the network side, can you give us an update on the direct-to-consumer offering? Where are you in the process and timing? Will there be a gaming component with that launch? And are there any more rights that you need or have they all been negotiated? Thanks.
Hi, John, it’s Mark. I’ll take the Sphere cost estimate. As I mentioned earlier, we recently reviewed the cost, scope and time line of the project as part of our annual budget process. This included looking at current inflation trends and the impact to our cost estimates. We’ve also taken certain actions to manage our costs. First, we’ve secured the majority of the main structural steel for the project, with approximately 90% now fabricated. In addition, we poured approximately 95% of the concrete. Second, we’re also watching our supply chain and accelerating the purchase of high-risk items and where possible, identifying alternative manufacturers for certain components such as semiconductors to minimize any potential delays. And finally, we continue to evaluate all aspects of the design to identify opportunities to reduce costs by substituting one product with a comparable one. With that, I will turn it over to Andrea for the question on Networks.
Hi, John. Well, direct-to-consumer is certainly a developing market opportunity for us. And as you know, for the RSN industry in general, we believe that DTC is really incremental to our business and not a replacement for distribution through our current partnerships. And while we all acknowledge that the drivers to MVPDs have declined, meaning MSG Networks still serve approximately 5.5 million subscribers throughout our region, and that’s a substantial business. However, when we think about direct-to-consumer, we do recognize that there are millions of homes throughout our region that do not receive our networks. So for us, the question has been how can we best serve this portion of the market. And we believe there are number of ways we can do this, all of which we are currently and actively exploring. We could potentially cooperate with our existing distributors to serve the broadband-only customers throughout our market. We could offer a pure DTC product ourselves, we could offer a DTC product for a third-party or we could license certain of our content to other market participants. So, let me say we recognize the market opportunity and we are actively engaged in evaluating it. As far as right, we have indicated in our previous earnings call, that we could offer a direct-to-consumer product. And now we are just in the process of renewing our agreements with the NBA and the NHL, which we have renewed so many times in the past in the ordinary course.
Thank you.
Thank you. Your next question is from Paul Golding of Macquarie Capital.
Great. Thanks so much. A couple of questions, first one, around Hakkasan, is there any color you could give around the pre-pandemic performance of that business just to understand sort of what run rate could look like as its integrated in Tao under more normal operations? And then I have a follow-up. Thanks.
Sure. Thanks, Paul. This is Andy. So, this is actually the first earnings call that we have had to discuss this acquisition with you. I will say that we are really excited about it. It’s pretty transformative for Tao or Tao-Hakkasan business. In terms of size, rough order, nearly doubled Tao’s revenue base based on 2019 results and it expands Tao’s footprint, both here in the U.S. and key international markets such as the UK, London, specifically, Middle East. And it’s just – this is transformative for Tao. I will add, historically, Tao – Hakkasan has had a lower standalone margin than Tao. That’s part of the opportunity we see here. We think Tao’s management team is the best in the industry and they built up a great infrastructure for growth. Both of those will help drive the operational efficiencies that we expect to achieve here at Hakkasan. This will be believed or added to by the economy of scale as we see across both businesses working together, marketing efforts, procurement should drive this business. And in addition, Hakkasan and Tao, while very similar in terms of operating, there were some nuances in how they do in deal structure. Both have lease venues, but in addition, Tao really has more of an expertise in managed venues, which means manage for somebody else, higher – a little bit lower revenue, but a big piece of profit and a higher margin. So, we will look to those structures at the right time for Hakkasan brands. And vice versa, Hakkasan is very strong in licensing. And so we will look for Tao to capitalize on Hakkasan’s licensing expertise to enter markets that we may never would have entered on our own as operating. So, we think this is a great opportunity for both businesses to come together. What you have seen has been a great fourth quarter as it was included in the results. The headline, the robustness in demand so far, it’s been across all of our markets, particularly in Las Vegas. I will add that the momentum hasn’t stopped in July and August, we are feeling really good. I will note that the current – the most recent performance has been helped by a few factors. One, as we ramped up pretty quickly, some of our competitors have not opened or just first entering the market. Second, as we add staff, we have been rolling fully into it as we reopen. So, as staffing levels come back on and more competition, we expect margins to come back more towards historical normal. But that said, we feel really good about this business and its future and its opportunities.
Hi Andy, it’s Mark. I thought I will just jump in and add a little bit more color on Hakkasan’s results in the quarter. During the quarter, Hakkasan contributed approximately $28 million of revenue, which represented 40% of Tao’s total revenue of approximately $70 million. So clearly, it was a significant contributor for the quarter. I would also point out that we completed the acquisition on April 27th, so that’s about two months of contribution in the quarter. While we are not providing historical financials on Hakkasan, Tao’s business, including Hakkasan, is currently performing above its historical run rate for AOI. And while we expect that to normalize over time, we also see a lot of opportunity, now that Hakkasan is under the Tao umbrella in areas such as expansion and brand development as well as potential cost savings in functions such as marketing and procurement. I hope that’s helpful.
Thanks Paul. We will take the next.
Your next question is from David Katz of Jefferies.
Hi, good morning everyone. Thanks for taking my questions. I appreciate all the outlook information you have given. If we take a qualitative longer term look beyond fiscal ‘22, what can you share with us about up, down or sideways as we go out just a little bit longer term on the recovery?
David, it’s Andy. Thank you. So, as we – I think you should start at a certain beginning, right. And so as we talked about, our booking calendar for ‘22 is – we think is very strong or it could be very strong. Now this is driven by two factors, as we have discussed before, right. First is we have had all the shows that were supposed to be played off or scheduled, rescheduled into this year as well as all the new apps coming online. So, starting September, we are going to see a pretty big ramp up in our shows. What that’s done is the rest of the artists who wanted to be on the road this year are now going to have to look for dates for longer further out. So while historically, we would have been make it six months, nine months, maybe 1 year to start seeing holds, we are seeing a much longer than we have ever seen historically. This is across all of our venues, but particularly at the Arena, where our holds are up 50% versus the last pre-pandemic year. So, it gives us – this tells us there is real demand for artists to be on the road. We feel even further confident in this by after listening to Live Nation’s recent public comments, where they talk about the touring business for the years to come. Live Nation has a different purview than we do because they are buying global tours and mapping them out at the right time. So, while we speak directly to artists, they are speaking to whole tours. Together between what we are seeing and what we are hearing from artists and what we are hearing from Live Nation, we feel really good about not only this fiscal year, but what the future could be for the next few. Thank you.
Perfect. And if I can just follow-up, I know you have talked about the sports betting or the mobile gaming opportunity. And I just want to be clear about where you are, or how you are positioned. I mean it’s obvious what assets you bring to it. But it sounds as though you are sort of having discussions with a wide range of people so that you have irons and as many irons in the fire as possible, rather than sort of joining a group and formally submitting a bid. Is that a fair characterization?
So – well, it’s twofold. One, we didn’t submit an application to be an operator, right. So and that’s for a few reasons on it. One of them is just simply certain lead roles restrict your ability if you are a direct operator to put up Knicks and Rangers games on your platform. So, we didn’t think that made sense. In addition, as you have talked about, we are talking to everybody. We think we are the best way to any for – any operator or operators to reach the market. We have got great relationships with the current market leaders through our current partnerships as well as ones that we – new entrants that are coming in. So we think, we are in the best position, once we know who the – who has been selected to help drive those businesses. We talked about the assets we have, we are going to be able to blanket the market, and we will be able to do it better than any other partner could. And so we think that, that’s the right position for us to be in over the next – short-term as well the state works through the application process.
Got it. I agree. Thanks.
Christie, we have time for one last caller.
Certainly, your final question is from David Karnovsky of JPMorgan.
Hi. This is Anna Vazquez on for David Karnovsky. And thank you for the question. First, I was wondering if you could please quantify any cost synergies post-merger and what the timeline to realize this would be?
Sure. Thanks for the question. As we have talked about before, we expect to realize savings in three categories; taxes, operating expenses and interest payments. First, in terms of taxes, the merger allows for more efficient use of MSG’s entertainment tax attributes with MSG Networks’ near-term cash flow. As of June 30th, MSG Entertainment had an NOL of approximately $505 million and the company expects in calendar ‘23 to accelerate the depreciation of approximately 35% of the CapEx related to the MSG Sphere in Las Vegas. Second, we anticipate realizing approximately $10 million in annual savings, primarily related to public company costs. And finally, we believe that the merger enhances our ability to optimize our capital structure and lower interest payments. For example, we plan to explore refinancing MSG Entertainment’s term loan, which is callable or May. As of June 30th, there was approximately $647 million outstanding on the loan, and it carries an interest rate of 7%. So, we think there are some really attractive financial aspects of the transaction.
Thank you. And for the Las Vegas Sphere, is there any update you can provide in terms of how you have thinking about original content for the venue?
Sure. It’s Andy. Let me start at the top, right. We have talked about it before, but I think it’s really important to lay the groundwork. The Sphere is going to be an entirely the medium. It will be the first of its kind large-scale venue to be fully immersive for 17,500 people all at the same time. As Venues remains multisensory technologies, a high-resolution display point, larger than the size of three football fields will come up, wrap around and engulf the whole audience. They will use the world largest beamforming audio system. That will utilize more than 180,000 speakers to deliver a truly listening experience for our guests. In addition, have flex seating, which will enable the audience to feel what’s happening. There will be other 40 technologies to really complete the immersive experience. And as you know, we lengthened our construction timeline. We will take enough time to really work on developing both our technologies as well as our original content. So, in terms of the content that will be played in the Sphere, there will be multiple different types of events, will be original attractions, as we just mentioned, concerts, corporate events and select sporting events. And right now, we are taking the time to speak with key creators as we think about what our first show will look like. So, we look forward to sharing more as we get closer to our opening date in 2023. Thank you.
Thank you. I will now turn the call back over to Ari Danes for any additional or closing remarks.
Thank you all for joining us. We look forward to speaking with you on our next earnings call. Have a good day.
Good-bye.
Thank you. This does conclude today’s conference call. You may now disconnect.