Q3 2024 Moving iMage Technologies Inc Earnings Call

Greetings and welcome to the moving image technologies third quarter 2024 earnings call. At this time, all participants are in a listen only mode.

Operator: Greetings and welcome to Moving Image Technology's third quarter 2024 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Brian Siegel, Vice President of Investor Relations and Strategic Communications for Moving Image Technology. Thank you. You may begin.

And answer session will follow the formal presentation, if anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

Speaker Change: As a reminder, this conference is being recorded I would now like to turn the conference over to your host Mr. Brian Siegal, Vice President of Investor Relations and strategic communications for moving image technology.

Speaker Change: Thank you you may begin.

Speaker Change: Thank you operator, good morning, and welcome to moving image Technologies earnings Conference call and webcast with me today is chairman and CEO. So Rasmussen, who will provide an industry overview cofounder executive VP of sales and marketing, Joe Delgado, who will provide a strategy and business overview and our CFO Bill Green for those of you that have not seen today.

Brian S. Siegel: Thank you, Operator. Good morning, and welcome to Moving Image Technology's Earnings Conference Call Webinar. With me today is Chairman and CEO, Philip Rafnson, who will provide an industry overview, Co-founder and Executive VP of Sales and Marketing, Joe Delgado, who will provide a strategy and business overview, and our CFO, Bill Green. For those of you that have not seen today's release, it is available on the Investor section of our website. Before beginning, I would like to remind everyone that, except for historical information, the matters discussed in this presentation are forward-looking statements that involve several risks and uncertainties.

Speaker Change: Release, it is available on the investors section of our website before beginning I would like to remind everyone that except for historical information. The matters discussed in this presentation are forward looking statements that involve several risks and uncertainties.

Brian S. Siegel: Words like believe, expect, and anticipate mean that these are our best estimates as of this writing, but there can be no assurances that expected or anticipated results or events will actually take place. Actual future results could differ materially from those statements. Further information on the company's risk factors is contained in the company's quarterly and annual reports filed with the SEC.

Speaker Change: Believe expect anticipate.

Speaker Change: That these are our best estimates as of this writing, but that there can be no assurance as had expected or anticipated results or events will actually take place.

Speaker Change: So future results could differ materially from those statements further information on the company's risk factors is contained in the company's quarterly and annual reports filed with the SEC now.

Brian S. Siegel: Now I'd like to turn the call over to Phil, take it away.

Phil: Like to turn the call over to Phil take it away.

Phil: Thank you Brian.

Philip L. Rafnson: Thank you all for joining us today. I'm Phil Rafnson, CEO of Moving Image Technologies, or MIT. As you look at MIT as an investment, industry and company-specific factors will contribute to our future performance. First, I'll address the cinema industry as it stands today. And then Joel will discuss why we're so excited about the future, where we are introducing potentially disruptive technologies into cinema, e-sports, stadiums, arenas, and other live entertainment venues. Historically, our business has been cyclical, driven by new technology and technology upgrade cycles, which has caused lumpiness in our results.

Phil: And thank you all for joining us today.

Phil: Until ration C E O a moving image technologies or M. I T.

Phil: As you look at it as an investment industry and company specific factors will contribute to our future performance.

Speaker Change: First I'll address the cinema industry as it stands today and then Joel will discuss why we're so excited about the future where we are introducing potentially disruptive technologies into cinema E sports stadiums arenas and other live entertainment venues.

Speaker Change: Historically, our business has been cyclical driven by new technology and technology upgrade cycles, which has cause lumpiness in our results. We are currently still in the early days of one right now where newer technologies such as laser projectors with upgraded servers news.

Philip L. Rafnson: We are currently still in the early days of one right now, where newer technologies such as laser projectors with upgraded servers, new screens, and smart sound systems are being purchased to replace older technologies. Additionally, we are seeing cinema owners build new theaters and upgrade or refurbish older ones. These new theaters often include new amenities, such as dine-in, bars, and more, all with the idea of making going to a movie a destination experience.

Speaker Change: Screens and smart sound systems are being purchased to replace older technologies. Additionally, we are seeing cinema owners build new theaters and upgrade or refurbish older ones. These new theaters often include new amenities, such as dine in bars and more all with the idea of making going.

Speaker Change: To a movie he destination experience prior to the actors and writers strike during the second half of 2023, the industry was normalizing and heading toward pre Covid box office levels. Unfortunately, the now settled Hollywood strikes impacted the industry. During the later part of.

Philip L. Rafnson: Prior to the actors and writers strike during the second half of 2023, the industry was normalizing and heading toward pre-COVID box office levels. Unfortunately, the now settled Hollywood strikes impacted the industry during the latter part of 2023 and are expected to be a headwind for box office growth in 2024 due to the delays in filming and the release of new content.

Speaker Change: 2023, and are expected to be a headwind for box office growth in 2024 due to the delays in filming and releasing a new content. This has had a trickle down effect on our business in 2024, but we are cautiously optimistic about the momentum starting to return as we.

Philip L. Rafnson: This has had a trickle-down effect on our business in 2024, but we are cautiously optimistic about the momentum starting to return as we get closer to 2025. Before turning the call over to Joe, I'd like to thank our dedicated employees. Without them, we would not be in what I believe is the strongest position we've ever been in as a company from an operational, financial, product, and competitive perspective. Thank you, Joe.

Speaker Change: Get closer to 2025.

Before turning the call over to Joe I'd like to thank our dedicated employees without them, we would not be in what I believe is the strongest position we've ever been in as a company from an operational financial product and competitive perspective. Thank you Joe. Thank you Phil and good morning, everyone.

Jose Delgado: Thank you, Joe. Thank you, Phil. And good morning, everyone.

Jose Delgado: I'll start by briefly reviewing our business and providing updates on each area. Today's cinema is our core legacy business, which consists of FF&E projects and selling our proprietary U.S. manufactured goods and third-party technology. As Phil mentioned, this part of our business has historically been more cyclical and lumpy, with project start dates often being pushed out, as we've seen so far this year due to the strikes. Additionally, FF&E projects tend to be at the low end of our gross margin profile, although there continues to be strong operating leverage in this part of the business.

I'll start by briefly reviewing our business and providing updates on each area.

Today's cinema as our core legacy business, which consists of about that the new projects and selling our proprietary U S manufactured goods and third party technologies.

Speaker Change: Al mentioned this part of our business has historically been more cyclical and lumpy with project start dates often being pushed out as we've seen so far this year due to the strikes. Additionally, EF any projects tend to be at the low end of our gross margin profile. Although there continues to be strong operating leverage in this part of the business.

Jose Delgado: Given the lower margin profile lumpiness and timing factors I just mentioned, a major part of our strategy going forward is to shift our mix towards higher margin products as well as smooth out the lumpiness and cyclicality for Cinema. This includes expanding our existing lineup of over 50 proprietary manufactured products, including our ADA compliance products and caddy line. By manufacturing these products, we can significantly increase our blended margins on FF&E projects and our overall company gross margin when sold a la carte.

Speaker Change: Given the lower margin profile Lumpiness and timing factors I just mentioned a major part of our strategy going forward is to shift our mix towards higher margin products as well as smooth out the lumpiness of cyclicality.

Speaker Change: For cinema. This includes expanding our existing lineup of over 50 proprietary manufactured products, including our Ada compliance products and <unk> lines.

Speaker Change: By manufacturing these products, we can significantly increase our blended margins on <unk> projects and our overall company gross margin when sold Ala Carte.

Jose Delgado: Additionally, our partnership with LEA Professional for smart power amplifiers is a potential source of growth and margin expansion for both FF&E projects and a la carte sales. There are two parts to this opportunity. First, there is power amplifier attrition.

Speaker Change: Our partnership with <unk> professional for smart power amplifiers as a potential source of growth and margin expansion for both FFT projects and Ala Carte sales. There are two parts of this opportunity first is power amplifier attrition on average each movie screen needs five to six power apps per screen and these tend to have any.

Jose Delgado: On average, each movie screen needs 5 to 6 power amps per screen, and these tend to have annual attrition rates of 5 to 10%. We estimate the total installed market for power amps in North America to be about $630 million, so the annual TAM is around $30 to $60 million. Given LEA is so confident in its product quality, with a warranty that is two times the industry standard, combined with the challenges that their competitors, which are also emphasizing the cinema market, I feel optimistic about sales continuing to ramp up in 2024.

Speaker Change: Attrition rates of 5% to 10% we estimate the total installed market for power amps in North America to be about $630 million. So the annual Tam is around 30% to $60 million given lea's. So confident is product quality with a warranty that is two times the industry standard combined with the challenges that they are competitive.

Jose Delgado: Of note, we just successfully completed testing with a top five cinema circuit. Another top five circuit is in field testing, and two other top 10 circuits are in discussions to begin testing over the next few quarters.

Speaker Change: <unk>, which are also deemphasizing the cinema market I feel optimistic about sales continuing to ramp in 2024.

Speaker Change: Note, we just successfully completed testing with a top five cinema circuit. Another top five circuit is in field testing and two other top 10 circuits are in discussions to begin testing over the next few quarters.

Jose Delgado: Additionally, there's a huge trade show in Europe coming up in June, which is a market we are optimistic about contributing to the medium to long-term growth of these products. The second part of this opportunity is new builds, as well as refurbishing and upgrading existing cinemas. For example, we have scoped LEA smart power amps into a current project, and we expect to continue to expand this opportunity going forward. Now, I'll provide an update on MI Translator, our multi-language technology solution with a recurring revenue stream that forms a high end of our accessibility strategy. The market in North America alone is tremendous, with over 70 million non-English proficient speakers who may not have previously attended the movies.

Speaker Change: Additionally, there is a huge tradeshow in Europe coming up in June which is a market. We are optimistic about contributing to the medium to long term growth in these products.

Speaker Change: Second part of this opportunity as the new builds as well as refurbishing and upgrading existing cinemas. For example, we have scoped Leds smart power apps into our current project and we expect to continue to expand this opportunity going forward now.

Now I'll provide an update on my translator, our multi language technology solution with a recurring revenue stream that forms the high end of our accessibility strategy. The market in North America alone is tremendous with over $70 million in non English proficient speakers, who may not have previously attended the movies with this product and service.

Jose Delgado: With this product and service, those who did attend previously can now have a significantly enhanced movie-going experience. This is a new product class for the industry, and its adoption has yet to occur. While a lot of the progress is in the background, we are moving this initiative forward by working with multiple industry groups to standardize and secure the transfer of data files between the studios and the cinemas. In parallel, we continue to build awareness for this product, and we believe the industry efforts bode well for a successful ramp for MI Translator once these items are resolved. We will keep you posted and appraised as things develop. CineQC, our SaaS-based quality control platform, is one example. CineQC is actually a third-party developed platform, and we exclusively license the global cinema distribution rights.

Speaker Change: Those who did attend previously can now have a significantly enhanced movie going experience. This is a new product class for the industry and the adoption has yet to occur.

Speaker Change: While a lot of the progress is in the background. We are moving this initiative forward by working with multiple industry groups to standardized and secure the transfer of data files between the studios understand that much in parallel we continue to build awareness for this product and we believe the industry efforts bode well for a successful ramp my translator. Once these items are resolved.

Speaker Change: We will keep you posted and appraised as things develop.

Speaker Change: <unk>, our SaaS based quality control platform is another example, <unk> is actually a third party developed platform and we exclusively licensed the global cinema distribution rights as you know we've been working with a developer at no cost to us and National Amusements, a large international movie circuit and paying customer on upgrading the product for them.

Jose Delgado: As you know, we've been working with the developer, at no cost to us, and National Amusements, a large international movie circuit and paying customer, on upgrading the product for the past year, including developing more robust reporting capabilities. While we've made significant progress with the system at National Amusements, after a significant analysis, we recently came to the conclusion that the overall technology needs to be upgraded in order to scale. And as such, we plan to more directly control software development going forward.

Speaker Change: Last year, including developing more robust reporting capabilities, while we've made significant progress with the system of National Amusements. After significant analysis. We recently came to the conclusion that the overall technology needs to be upgraded in order to scale and as such we plan to more directly control the software development going forward. Our current estimate is for the new.

Jose Delgado: Our current estimates are for the new development work to be completed by the end of the calendar year. However, once complete, we will have a much more robust, tested, and scalable offering to enable National Amusements to roll CineQC to its global cinemas and begin marketing to our other clients. The next opportunity for us is to move beyond cinemas.

Speaker Change: Development work to be completed by the end of the calendar year. However, once complete we will have a much more robust test it and scalable offering to enable national amusements to role Cindy QC towards global cinema and begin marketing to our other clients. The next opportunity for US is to move beyond cinema here, we are targeting to areas other live entertainment.

Jose Delgado: Here, we are targeting two areas; other live entertainment venues and eSports. I believe eSports has the potential to be a significant incremental growth driver for us in the years to come. There is an opportunity to create the Little League of e-Sports, hosted locally in cinema auditoriums, creating a safe, inclusive environment for kids to interact with each other in person through gaming. We believe this is a very attractive value proposition for parents, cinema owners, us, and our partners stand by. Here, our product Move eSports integrates six gaming stations with a master card or a production card that enables live play to be seen on the big screen.

Speaker Change: Venues and E sports I believe esports has a potential to be a significant incremental growth driver for us in the years to come there.

Speaker Change: There is an opportunity to create a little league of esports hosted locally in cinema auditoriums, creating a safe inclusive environment for kids to interact with each other in person through gaming. We believe this is a very attractive value proposition for parents cinema owners us and our partners sandbox here are.

Speaker Change: Product movies sports integrate six gaming stations with a mastercard or a production car that enables <unk> to be seen on the big screen right now given sandbox delays in raising growth equity, we began talking to certain larger customers with robust internal marketing capabilities about running their own leagues talks are still in the <unk>.

Jose Delgado: Right now, given sandbox delays and raising growth equity, we have begun talking to certain larger customers with robust internal marketing capabilities about running their own leagues. Talks are still in the preliminary stages, but we believe that our parallel paths for Move eSports will turn this business into a solid contributor and drive growth in the future. Finally, the growth opportunity I'm most excited about is what we currently call eCaddy. The TAM here is huge, with millions of existing seats becoming retrofit candidates.

Speaker Change: Preliminary stages, but we believe that our parallel paths for movies sports will turn this business and was solid contributor and drive growth in the future the.

Speaker Change: Finally, the growth opportunity I'm. Most excited about is what we currently call E. Ekati. The Tam here is huge with millions of existing seats, becoming a retrofit candidates. In addition to new stadium and arena bills.

Jose Delgado: In addition, the new stadium and arena builds. We have infused our caddy product line of cupholders with technology and will develop applications and services for use in stadiums and arenas. We introduced the eCaddy concept to executives at a handful of Major League Baseball stadiums, as well as those at other major sports stadiums over the past six months.

Speaker Change: Infused our caddy product line, a cup holders with technology and will develop applications and services for use in stadiums and arenas. We introduced the concept to executives at a handful of major league baseball stadiums as well as those at other major sports stadiums over the past six months, we received tremendous feedback on the types of applications that would.

Jose Delgado: We received tremendous feedback on the types of applications that would excite them and identified other potential ecosystem partners as well. We also recently got positive news from a vendor about significantly improved battery consumption, which we believe can open up more services and applications to this technology. Now that we have a module with a new battery, we are currently working on firmware and initial applications, as well as low-volume manufacturing planning. With initial prototype units likely available over the summer, we are also putting together proposals to field test with potential customers.

Speaker Change: Excite them and identified other potential ecosystem partners as well.

Speaker Change: We also recently got positive news from our vendor about significantly improved battery consumption, which we believe can open up more services and applications to this technology now that we have a module with a new battery. We are currently working on firmware and initial applications as well as low volume manufacturing planning with initial prototype units.

Speaker Change: Likely available over the summer we are also putting together proposals to field tests with potential customers. Once available we can move to the next step with potential customers and partners.

Jose Delgado: Once available, we can move to the next step with potential customers and partners. I believe this product will be a success. It's just a matter of to what degree, whether it's adding material, high margin growth or potentially being transformational for MIT.

Speaker Change: I believe this product will be a success, it's just a matter of to what degree whether it's adding material high margin growth to potentially being transformational for them while the.

Jose Delgado: While the potential here on its own is tremendous, in combination with eSports, Semi Translator, and CineQC, I believe it can reshape our business and financial models in the future. We'll keep you updated as we hit these milestones. Finally, we continue with an active corporate development program that includes business development deals we've made with companies such as Sandbox and LEA, acquisitions such as the ADA product line, and other ongoing activities. Well, things have played out a bit slower than we had originally hoped.

Speaker Change: Here on its own is tremendous in combination with esports semi translator in Sydney QC I believe it can reshape our business and financial models in the future. We will keep you appraised as we hit these milestones.

Finally.

Speaker Change: We continue with an active corporate development program that includes the business development deals we've made with companies such as sandbox and <unk>.

Speaker Change: Acquisitions, such as the Adi product line and other ongoing activities.

Speaker Change: In conclusion, while things have played out a bit slower than we had originally hoped much of this is due to industry factors that now seem to be behind us.

Jose Delgado: As we mentioned before, we remain in the early innings of our growth opportunity for our emerging technologies, while our strong position in our legacy business continues to improve, which will be a benefit to our results once the industry manages through the after effects of the strike. With that, I thank you, and I'll turn it over to Brian.

Speaker Change: As we mentioned before we remain in the early innings of our growth opportunity for our emerging technologies, while our strong position in our legacy business continues to improve which will be a benefit to our results. Once the industry manages through the after effects of the strikes.

Speaker Change: Hi, Thank you and I'll turn it over to Brian. Thanks.

Brian S. Siegel: Thanks, Joe, and thank you, everyone, for attending our earnings call. I'm going to spend a little time reviewing our model, and then I'll take you through the quarter, followed by a Q&A. Historically, our legacy FF&E projects have been the key driver of our business, making up roughly 60 to 65% of revenue. However, as Joe and Phil mentioned, FF&E projects are more cyclical and can often see start dates pushed out, as we've seen over the past three quarters due to the strike.

Brian: Thanks, Joe and thank you everyone for attending our earnings call I'm going to spend a little time, reviewing our model and then I'll take you through the quarter followed by a Q&A.

Brian: Historically, our legacy F&B projects have been the key driver for our business, making up roughly 60% 65% of revenue.

Speaker Change: Joe and Phil mentioned, Stephanie projects are more cyclical you can often see start dates pushed out as we've seen over the past three quarters due to the strikes.

Brian S. Siegel: We serve as a project manager, procuring and reselling FF&E and services for refurbishing, upgrading, and building new theaters. Since a large part of these projects involve pass-through costs with a small margin added in, project margins are on the mid-team. We have several routes to improve these margins, including upselling installation services, scoping our proprietary manufactured products into the project, and through the resale of higher margin technology products, including projectors and servers, and more recently, sound system products through our relationship with LEA professionals. Next, we sell our high margin proprietary manufactured offerings a la carte, which have margins ranging from 35 to 55% and include our fabrication, caddy, and ADA compliance

Speaker Change: We service a project manager procuring and reselling, Stephanie and services for refurbishing upgrading and building new theaters since a large part of these projects about pass through costs, a small margin added in project margins are in the mid teens, we have.

Speaker Change: Several routes to improve these margins, including Upselling installation services scope, we are proprietary manufactured products instead of projects through the resale of higher margin technology products, including projectors in servers and more recently sound system products due to our relationship with a professional.

Speaker Change: We sell our high margin proprietary manufactured offerings out with cars, which have margins ranging from $35 to 55% and include our fabrication caddy and <unk> compliance products. Additionally, since we are in the early days of a multiyear technology upgrade cycle, we received discrete orders for servers and projectors in early April ramp.

Brian S. Siegel: Additionally, since we are in the early days of a multi-year technology upgrade cycle, we received discrete orders for servers, projectors, and LEA power amps, all of which had gross margins above the company average. In the near future, as our emerging products like MITranslator, CineQC, and what we are calling eCaddy hit the market and start to scale, we expect our mix to shift even more significantly away from FF&E, as these products will likely have 50% plus gross margin.

All of which have gross margins above the company average.

Speaker Change: In the near future as our emerging products and my translator Cynic, you see and what we are calling <unk> hit the market and start to scale, we expect our mix to shift more significantly away from if any of these products will likely have 50% plus gross margins.

Brian S. Siegel: Now I'm moving to our third quarter results. We reported revenue of 3.9 million, up 4% versus last year. Gross profit decreased to 0.7 million from 1 million last year, and gross margin was down 1050 basis points to 17.4% in the quarter, resulting from an unfavorable product mix due to an order to resell seats, which had a low double-digit gross margin. Gap operating expenses were $1.3 million flat to last; Gap operating loss was $0.6 million versus a loss of $0.4 million last year due to lower gross profits and also demonstrating the downside of our high operating levels.

Speaker Change: Now moving to our third quarter results, we reported revenue of $3 9 million up 4% versus last year.

Speaker Change: Gross profit decreased $2 7 million from $1 million last year and gross margin was down 50 basis points to 17, 4% in the quarter, resulting from an unfavorable product mix due to in order to resell seats, which had a low double digit gross margin yes.

Speaker Change: Operating expenses were $1 3 million flat to last year.

Speaker Change: Operating loss was <unk> 6 million versus a loss of <unk> 4 million last year due to the lower gross profits and also demonstrating the downside of our high operating leverage.

Brian S. Siegel: Both GAAP and non-GAAP net losses were $0.6 million, or $0.06 per share, versus GAAP and non-GAAP net losses of $0.4 million and $0.04 per share last year. Moving to the balance sheet, our cash and cash equivalents were $5.9 million at the end of the third quarter.

Speaker Change: Both GAAP and non-GAAP net loss was <unk> 6 million or <unk> <unk> per share versus GAAP and non-GAAP net loss of zero point $4 million and <unk> per share last year moving to the balance sheet, our cash and cash equivalents were $5 9 million at the end of the third quarter.

Brian S. Siegel: Finally, even with the lower liquidity, we bought about 310,000 shares during the quarter. Now for an update on our FY24 outlook. The writers' and the actors' strike have impacted our customers due to the lower expected box office and by driving uncertainty into their 2024 budgeting processes.

Speaker Change: Finally, even with the lower liquidity.

Speaker Change: We bought back about 310000 shares during the quarter.

Now I'll provide an update on our FY 'twenty outlook.

Speaker Change: The writers and actors strikes have impacted our customers due to lower expected box office and by driving uncertainty into their 2020 for budgeting process. Given these factors, we expect revenue and gross margin to be down in fiscal Q4, as we complete the remainder of the order to resell those seats.

Brian S. Siegel: Given these factors, we expect revenue and gross margin to be down in fiscal key 4 as we complete the remainder of the order to resell the stock. Next, I previously provided upside opportunities that were excluded from our forecast. I will now update these items. The ADA product refresh and the top five cinema circuit are still in play for us, but the customer is still completing its budgeting. We believe it is a question of when, not if, this customer begins to place orders. However, we don't expect to recognize any revenue from eSports during the fourth quarter.

Speaker Change: I previously provided upside opportunities that were excluded from our forecast.

Speaker Change: These items, the aviate product refresh and a top class cinema circuit is still pay for us that the customer is still completing its budgeting process.

Speaker Change: Believe it is a question of when not yes. This customer will begin to place orders, we don't expect to recognize any revenue from esports during the fourth quarter.

Brian S. Siegel: With respect to LEA Smart Power Amplifiers, we do have this product scoped into some upcoming projects for new builds, and we rate positive on the ability of this product line to ramp throughout the calendar year. In summary, while the strikes have disrupted the industry for most of this year, we've continued to move forward with our emerging growth initiatives that will drive growth for the company in the years to come. Fortunately for investors, most of this progress is happening in the background.

Speaker Change: With respect to L. A smart power amplifiers, we do have this product scope into some upcoming projects for new builds and we're very positive on the ability of this product line to ramp throughout the calendar year.

Speaker Change: In summary, while the strikes have disrupted the industry for most of this year. We've continued to move forward with our emerging growth initiatives that will drive growth for the company in the years to come Unfortunately for investors. Most of this progress is happening in the background at this point.

Brian S. Siegel: Regarding catalysts, we plan to announce whatever orders we can through press releases and earnings calls this year. And, of course, we will provide any milestone updates related to our key emerging growth initiatives as appropriate. I want to thank everyone for attending today's call and look forward to speaking with you again on our next call in September. Thank you. At this time, we'll begin.

Speaker Change: Guarding catalysts, we plan to announce whatever orders, we can through press releases and earnings calls this year and of course, we will provide any milestone updates related to our key emerging growth initiatives as appropriate.

Speaker Change: Thank you everyone for attending today's call and look forward to speaking you with again, our next call in September.

Speaker Change: Thank you at this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.

Operator: Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change: <unk> tone will indicate your line is in the question queue you.

Operator: One moment, please, while we pull for questions. Ladies and gentlemen, I am showing no questions at this time. This will conclude our Q&A session and thus conclude our call today. We thank you for your interest and participation. You may now disconnect your line.

Speaker Change: You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys, one moment. Please poll for questions.

Speaker Change: Ladies and gentlemen, I'm showing no questions. At this time this will conclude our Q&A session and thus concludes our call today.

Speaker Change: We thank you for your interest and participation you may now disconnect your lines.

Speaker Change: Okay.

Okay.

Speaker Change: Okay.