Q3 2024 NETGEAR Inc Earnings Call
Ladies and gentlemen, thank you for standing by. At this time, our participants are an elicinally mode. Later we will conduct a question and answer session. At that time, if you have a question, you will need to press star 1 on your push button phone.
I would now like to turn the conference over to Erik Bylin, please go ahead sir.
Thank you. Good afternoon and welcome to Nick ears third quarter of 2024 financial results conference hall.
Erik Bylin: Joining us from the company, I'm Mr. CJ Prober CEO and Mr. Bryan Murray, CFO.
Format of the call will start with commentary on the business provided by CJ, followed by a review of the financials for the third quarter and guidance for the fourth quarter provided by Bryan.
will then have time for any questions.
If you've not received a copy of today's release, please visit nettearsinvestorLations website at www.netcare.com
We advise you that today's conference call contains forward-looking statements.
Erik Bylin: Board-looking statements include statements regarding expected revenue, operating margins, tax expense, expenses, and future business outlook.
Actual results or trends could differ materially from those contemplated by these forward-looking statements.
For more information, please refer to the risk factors discussed in next year's periodic filing for the SEC.
including the most recent form-time queue.
Any four looking statements that we make on a call are based on assumptions as of today. And that your undertakes new obligations to update these statements as a result of new information or future events, except as required by law.
In addition, several non-gap financial measures will be mentioned on the call. The reconciliation of the non-gap to gap measures can be found in today's press release on our Investor Relations website.
At this time, I would now like to turn the call over to CJ.
Good afternoon and thanks for joining the Colt today.
CJ Prober: Today marks my nine months anniversary with Nick Geer and I'm thrilled with our progress and the speed at which we're executing on our transformation.
Our focus remains on creating long-term, shareholder value.
I'm more confident than ever that we will transform Nickier into a growing and higher margin business generating increased cash flow that were rewarded our current shareholders and attract new investors along the way.
Today I will cover the following three topics.
1st, Highlight 23, second, an update on our transformation on the heels of our recently completed strategic planning process, and third, our capital allocation plan.
Q3 was an excellent quarter.
Erik Bylin: We delivered above the revenue and operating income guidance that we increased in September, we were profitable, and we increased our cash balance by over $100 million through low-raner inventory and successfully defending our influential property.
Erik Bylin: There are several factors that contribute it to be strong results and I'll highlight a few.
First, we acted aggressively to rebalance the business. After identifying channel stocking issues earlier this year, we implemented a successful stocking plan.
That is behind us and we're now matching Selen with Selthrew, which also brings the benefit of more linearity of our top line.
I'm very proud of how the teamwork with suppliers and customers to aggressively get this behind us.
Erik Bylin: Second, we're executing.
We achieved the $27 million reduction in inventory in Q3, as we march towards our goal of reducing finished goods inventory to three months of supply by the end of the year.
This more discipline approach to inventory is driving improved demand and supply planning execution and the team is stepping up to the challenge.
Third, we are identifying exciting growth opportunities within Nickier.
Erik Bylin: Our pro-avv business had another record quarter driven by strong growth in North America and APAC. Enabling our overall NFB business to grow top line over 10% year-rear and to return to historical levels on contribution merchant.
Erik Bylin: We increased the number of Pro-AV manufacturing partners over 330. Further improving the ease of use and reliability of our Pro-AV solutions.
The Deep Integration, we announced with HP Poly for their Poly Studio GS62, System is a great example of our continued momentum with this vast and growing ecosystem.
We strongly believe that this pro-AV business is a gem that we can polish further and use as a driver of long-term revenue growth and cash flow generation.
Fourth, we're innovating. We launch several exciting and marking leading products across both businesses this quarter. A pull forward launch of the M7 Pro, the industry's first mobile hotspot that combines 5G and Wi-Fi 7, was a key highlight in 23.
We also launched several life-by-seven home networking products that have been very well received by consumers and aligned with our strategy of expanding our addressable market. In fact, for most of the new product introductions, we're struggling to keep up with the demand.
Erik Bylin: Cheers!
Erik Bylin: We are growing Recreem Revenue. This prayer is continued to make progress as we implement our strategy of simplifying our subscription offerings across our consumer and B2B businesses.
We ended the quarter with approximately 555,000 recurring revenue subscribers and we saw a recurring revenue growth 22% year over year.
Finally, we unlock a hundred million additional cash. Our IP litigation resulted in a large settlement with T.P.L.A. that will also lead to lower G&A expenses given the dismissal of several legal proceedings between us.
Erik Bylin: So, overall, excellent work by our team to deliver such a great quarter. I'm truly enthusiastic about our direction going forward.
On now shift to my second topic and update on our longer term transformation efforts.
Erik Bylin: In the spring of this year, after my global listening tour, where I met with employees, customers, partners, and investors from around the world.
We kicked out several interconnected work streams to define the future direction of Nickier.
This ongoing work had a major milestone earlier in the month and culminated in a new purpose in mission, a new set of values.
and three years strategic plans for each of our businesses. I'll touch on each of these briefly and we look forward to a more in-depth discussion at an investor day we're planning for the first half of next year.
Nickyers' prior purpose in mission was to be the innovative leader in connecting the world to the Internet. This serve the company well in the early days of the Internet where new product launches wild customers with new ways of connecting to the world.
Erik Bylin: Fast forward to today and this mission has largely been accomplished. Our new purpose that will serve us for the next 30 years is the power extraordinary experiences.
We do this today to our role in enabling professional sporting events, rock concerts, powering connectivity for schools in India and enabling the best in class, home gaming, and streaming experiences.
Annabling the extraordinary is our new North Star.
Erik Bylin: Our new mission which more specifically defines what we will view to realize this purpose is to unleash the full potential of connectivity with intelligence solutions that delight and protect.
Erik Bylin: [inaudible]
Erik Bylin: to
First, intelligent solutions is capturing the importance of the role that software and AI play in delivering the lightful experiences to our customers.
Nickyers Legacy is in delivering incredible devices, and as part of our transformation, our focus will be on delivering customer value via software and AI innovations.
Erik Bylin: Second, Protect is a critical element of our mission. The cyber world is becoming increasingly unsafe, complex, and a battlefield upon which nation states are raging war as evidenced by the various typhoons launched by the PRC against the United States recently.
Erik Bylin: As an independent US-based publicly traded company, Nick Ears incredibly well-quisitioned to be the trusted connectivity partner to consumers, service providers, and businesses.
Delivering on this promise will require us to continue to innovate in the realm of security, so that a core part of our differentiation is the peace of mind we deliver to our customers.
Moving on toward new values, we've defined the behaviors that will allow us to transform the business to deliver on our new purpose in mission.
There are many great things about Nicky Erskulture that we will preserve. So this transformation will require us to think and act differently and our new values will enable that.
We're integrating the new values into everything we do, for example how we recruit, manage performance, innovate for our customers, and be responsible stewards of the business for our investors.
I will say further details of the values for our upcoming investor day.
Erik Bylin: On the development of our three years for teetrick plans, this was the first of its kind strategic planning process for Nickier. Our new VP of strategy and our teams across the company did an incredible job analyzing the opportunity ahead, and we have clarity in the direction we are taking.
Erik Bylin: I'll share three big takeaways for me coming out of this process.
First, I'm more confident than ever that the opportunity I saw before officially stepping into my role is fully achievable. I see a clear path to long-term growth, stronger growth in operating margins, and improved cash flow generation.
Erik Bylin: We have a great foothold to begin with because Nick here's a recognized market leader with a brand that is synonymous with high quality and technology innovation across both our consumer and B2B businesses.
Second, our near-term plans to get there will involve directing our investments into the businesses that have the highest potential.
Many of these opportunities lie on the NFB side, given this business is addressing large markets with significant potential to expand our market share and our recurring revenue businesses.
and has the advantage of having stronger margins and greater profitability.
Finally, as we stabilize our consumer business and further invigorate the growth of our NFB businesses, we see a path to growing overall neck year revenue and expanding gross margins in 2025.
Erik Bylin: We have worked to do to finalize our 2025 plan, and as I mentioned earlier, we're excited to share more at an investor day we're planning for the first half of next year.
My last point on our transformation is an update on our team.
As I mentioned last quarter, we hired promote budget to lead our V2B business.
Since then, we've hired Eric Law to lead our B2B sales team. Erik has an amazing pedigree with over 25 years ago to market experience, mostly at Cisco and Ruckus.
We've also onboarded new B2B leaders in product management and user experience and are revamping in our sales operations capabilities for our B2B business with the help of a long-time poll-optim network's executive.
All these executives are joining Nick here because they too see the attractive opportunity in front of us. And from Nickiers perspective, we expect this investment in human capital to deliver stronger products, incremental market share, and better financial results and cash generation.
On now, turn to our capital allocation plan.
Erik Bylin: are playing cover's three areas, return of capital to shareholders, organic investments in the business, and potentially acquisitions.
I'll briefly cover each of these.
Since I joined early this year, we completed repurchases of about $10 million of our shares in each of the first two quarters, but we're mostly out of the marketing key three given the confidential settlement negotiations with T-Beeling.
Erik Bylin: with an expanded, repurchased authorization and an even stronger cash balance, you can expect this to be active in the market for us stocking Q4 posteranings, including during the restricted period.
From an organic investment perspective, as I noted previously, we do plan to invest in our NFB business to further and big-rate growth and drive margin expansion, the software differentiation and recurring revenue.
Some of this investment will be incremental effects and some will be pulled from slower growing parts of the business.
Erik Bylin: will be on improving the performance of our core businesses. We will be investigating acquisition opportunities that could accelerate our transformation with the focus on our NFB business.
The opportunities we could consider include software development capabilities that drive differentiation, margin expansion, and a recurring revenue.
Erik Bylin: Product adjacencies that are complementary to our current offering that would allow us to deliver a more integrated customer experience, leverage our brand or capitalize on our distribution footprint, or simply consolidation opportunities that are agreed to earnings.
Having completed many acquisitions on both sides of the fence, my bar for M&A is very high, so we'll be extremely selective as we evaluate these opportunities.
Includes the team's at neck year for all the incredible work that is happening to the rider customers and deliver on the transformation.
We had a great Q3, we've done much of the hard work to define the path forward. We have an amazing start-sour transformation and we're excited about delivering for shareholders as we power extraordinary experiences. I'll now hand it over to Bryan and look forward to your questions during Q&A.
Thank you CJ and thank you everyone for joining today's call.
We're once again pleased with the execution by our team this quarter, and delivering both revenue and profitability above our guidance range.
including a return to profitability.
Erik Bylin: The outstanding results were driven by higher than expected service provider revenue, boolean by the early launch of our new NightHawk M7 Pro 5G Wi-Fi 7 Mobile Hot Spot.
As a reminder, we took decisive action in the prior quarter to accelerate beast-talking of the channel.
Erik Bylin: To better position both sides of the business for more predictable performance, aligned to the market trends and reduced volatility.
Erik Bylin: We have already begun to see the benefits of this plan.
Erik Bylin: has evidenced by this course of results.
We also saw the additional benefit of reduced DSS which came in the 88 days.
are lowest level in over three years due to the improved linearity. With Channel Partners needing to maintain their lean inventory positions throughout the quarter.
and the
Our more profitable NFB segment performed well against our expectations.
and once again delivered a record record in market sales for pro-avv managed switch products.
in CHP. We saw continued strength in premium products. We made further progress in expanding our product for Folio addressing other segments of the market.
and we were able to pull in the launch of our next generation M7 Pro Mobile Hot Spot.
While the CSP retail market sized decline in third quarter, the decline continued to slow and key three compared to the earlier in the year.
However, we do see the U.S. retail market remaining quite promotional in part due to the holiday period.
Speaker Change: So the quarter in December 29, 2024, revenue was $182.9 million.
Speaker Change: of 27.1% of sequential basis, and down 7.6% you over year, above the high end of our guidance.
In addition, if I continue to drive in our own inventory by $27,000 in Q3,
and reaching a settlement with CP Link.
We generated approximately $106 million in free cash flow, and ended the quarter with nearly $396 million in cash to score from investments.
After successfully putting into this destocking behind this last quarter, we entered T3 well-positioned to match Celen with self-ru with our channel partners.
Consequently, the NFB segment delivered $78.5 million in revenue for the third quarter.
Up 31.2% sequentially and up 11.4% year over year.
led by our Pro-EV managed switch products, which once again saw in-ease her demand growth double-digit year of a year.
Momentum is clearly building behind NFB's growth trajectory.
Speaker Change: and we also continue to make progress with our strategic manufacturing partnerships.
In Q3, the CHP business delivered net revenue of $144.3 million. Down 18.1% yon a year over your basis.
Erik Bylin: and up 24.1% sequentially.
which benefited from the release of our latest M7 Pro Mobile Hot Bugs.
which pulled into the quarter because of great execution by our team.
Service Revitore revenue was $22.9 million. Above expectations, and boosted by the earlier than originally anticipated launch.
We saw our premium mesh products continue to up form the broader market.
are recently introduced a nighthawk products that broaden our market reach are performing well and receiving warm custom reviews. Attest them to the power of our brand and innovative technology.
Erik Bylin: With our additional new product introductions planned for release through 2025, we expect the full benefits of this new strategy to build over time.
We exited the third quarter with 555,000 recurring subscribers and we generated $7.9 million in recurring service revenue in the quarter. A year over year increase of 22%.
We continue to see increased emphasis placed by consumers on cybersecurity protection, privacy and premium support.
Erik Bylin: As we noted last quarter, we are confident that the optimal strategy is to grow recurring subscribers, and that is our focus going forward.
Erik Bylin: For the third quarter of 2024, net revenue for the Americas was $127.8 million.
The kind of 9.4% year of year and up 33.8% on a sequential basis.
Erik Bylin: To me in that revenue was $32.8 million, a decrease of 8.1% year of year, and up 19.9% quarter of a quarter.
Our A-pack net revenue was $22.3 million, which is up 5.5% from the prior comparable period and up 6% sequentially.
Erik Bylin: From this point on, my discussion points will focus on on-gap members.
Erik Bylin: The reconciliation from Gap to Nongap is detailed and are earnings released distributed earlier today.
Erik Bylin: Nongad Rose Marson in the third quarter of 2024 was 31.1%. Down 390 basis points compared to 35% in the prior year comparable periods. An up-heat 170 basis points compared to 22.4% in the second quarter of 2024.
This marks the first time this year we have achieved gross margins above 30%. As we begin to benefit from improved mix of NFB products
Erik Bylin: In the impact of age inventory begins to lessen, with our continued progress working down our own inventory.
Compared to the prior year period, our profitability was impacted by higher cost of inventory and are used to air freight as we begin to operate at leaner inventory levels.
Total Q3 non-get operating expenses came in at $55.3 million. Down 13.7% year over year and down 12.7% sequentially.
Now I'm going to get opportunities for the moment in the quarter, but the $10.9 million legal fee adjustment from the TP-link settlement, offset actual legal expenses and current prior quarters.
Our head count was 638 as at the end of the quarter of from 622 in Q2.
We are currently refining our long-term strategy and looking to make investments, primarily in our in-of-the-business.
Erik Bylin: Some of this will be incremental, and some will come from other areas of the business as we shift costs to the areas that will deliver long-term growth and expand profitability.
are not on yet foreign defense for the third quarter was 11% of net revenue as compared to 10.1% of net revenue in the prior comparable period and 13.2% of net revenue in the second quarter of 2024.
Erik Bylin: To continue our technology and product leadership, we are committed to continue the investment in our V.
The improved leverage from having the D-stocking of our channel partners behind us.
and our new product introduction into the third quarter.
combined with the offset of his store-go-level costs as a result of the TP-link settlement, enable us to deliver third quarter non-gap operating profit of $1.6 million, with an operating margin of 0.9% above the high end of the guidance range.
This was down 180 basis points compared to the year of period and up 2,250 basis points compared to the prior quarter. Our non-gap tax expense was $17,000 in third quarter of 2024.
Looking at the bottom line for Q3, we reported non-gap net income of $5.1 million and non-gap deluded earnings for share of 17 cents.
Turning to the ballot sheet, we ended the third quarter of 2024 with $395.7 million in cash and short from investments.
Up $111.4 million from the High Courter, and equating to $13.48 per share.
The increase is largely due to the cash payment from the T-beelings litigation settlement. However, even excluding the settlement impact, we delivered our fifth consecutive quarter of positive cash generation.
We continue to convert our working capital into cash and made significant progress lowering our inventory in the quarter, which declined $27 million sequentially.
During the quarter, $177 million cash was provided by operations, which brings their total cash provided by operations of the trillion-12 months to $199.6 million.
Erik Bylin: We used $1.7 million in purchase of property and equipment during the quarter, which brings their total cash use for capital expenditures over the treyling to almost $8.7 million.
With the better than expected reduction of inventory that third quarter, combined with seasonal terms with certain of our channel partners.
We expect that in Q4 we will be in a range of using $10 million cash to neutral But still generating cash in the second half of the year, even without the benefit of the legal settlement
In Q3 due to trading restrictions, we spent $1.5 million to repurchase approximately $99,000 of Nickier Common Stock at an average price of $14.92 per share.
We have approximately 3.8 million shares reserved in a current authorization.
So it's the beginning of 2020. We spent 146.1 million dollars to repurchase 5.8 million shares.
We will be resuming our Share Repair System Program in Q4 during our open window, and we plan to enable opportunist screen purchasing during the restricted period as well.
are fully-delived share count as approximately 29.4 million shares as it into the third quarter.
Now we'll cover our Q4 2024 Outlook.
As we experience in the third quarter, we expect to continue to see more predictable performance that is aligned with the Martha of both of our businesses.
Erik Bylin: to
Within NFB, we expect to experience continued growth led by our Pro-AV line of minute switches.
Within CHP, while we're seeing the signs of market recovery, we expect increased promotional activity within a retail business.
Erik Bylin: After the launch of an M7 Pro mobile hotspot in Q3, we expect revenue from the service writer channel to be approximately $20 million in Q4, down slightly on a sequential basis.
Accordingly, we expect fourth-quarter net revenue to be in the range of $160 million to $175 million.
We expect Ross Morgens and operating margins to continue to be impacted by our inventory reduction efforts and higher than expected transportation costs due to a variety of factors, including the Red Sea shipping crisis.
We also expect increased promotional activities within our CHP retail business, due in part to the holiday period.
Accordingly, we've specced our fourth quarter gap operating margin to be in the range of negative 12.4% to negative 9.4%.
and non-gap operating martin to be in the range of negative 8% to negative 5%.
Our Gap Tax Benefit is expected to be in the range of $2 million to $3 million. And our non-Gap Tax Benefit is expected to be in the range of $0 to $1 million for the 4th quarter of 2024. And with that, we can now open up for questions.
At this time, I would like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster.
Speaker Change: You're first.
Your first question is from the line of Adam Tindall with Raymond James.
Okay, thanks, good afternoon. CJ, I just wanted to start congrats on the T.P. link settlement.
Speaker Change: an update on what's potentially to come from this. I think there's still some legislation out there, some national security concerns. Maybe just remind investors of the potential impact from here and things that are still potentially on the dot-kit. And Bryan related to this on the T.P. links settlement. Maybe you could follow up just at a high level as we look at the income statement, particularly this quarter. What are the kind of one timers that we shouldn't be kind of repeating versus what's more permanent? And I'm mainly looking at non-gap, Rose margin and operating margin. For example, G&A, non-gap, G&A came down from 16 to 6. Is that stay down there? So you could just walk us through any one timers in the court.
Porter versus what is more permanent thanks.
Adam, thanks for joining. I'll take the first part of that. So, not not only related to our settlement, but as you reference, there is and continues to be a lot of government activity around.
Networking Equipment from
Speaker Change: Foreign adversarial countries.
and as you probably noticed there's a bit of a fever pitch with the election approaching around cyber attacks involving the PRC using botnets enabled by home networking, home and small business networking equipment.
and so the big development since our last earnings was the Select Committee for China sent the Department of Commerce a letter. It's very strongly worded letter.
Put the mentioning kind of the...
This is their quote, Glarings Security Issue and Significant National Security Trap that the Teepealing poses. And so that was quite a development.
That group at the Department of Commerce is the same group that banned Kperski, the...
Software Security Company from Russia. So we're following this closely.
Speaker Change: and there's a number of other developments.
Relating to the Routers Act, which is kind of targeting the similar thing, and that's made it's way through the house already, it's in the Senate. Obviously with the election, I think all these types of things slow down a little bit, so it'll be interesting to see and watching closely what happens after next week.
And I'm just a question on kind of the one time items that are in the non-gap earnings for the quarter regards to the T-Pillink settlement. It's actually fairly straightforward and me.
Speaker Change: Be easy to see in the AK that we put out there, but effectively it's really about $11 million as a country expense item that would have offset GNA in the quarter. And that was kind of a recovery for all the past.
Legal fees, they're all prior period legal fees associated with pursuing those actions against T.P. Lank. And so on a normalized basis, you could just add that 11 million dollars back in and get to an established baseline of optics.
Speaker Change: Got it, yep, that's very helpful thanks.
and I want to talk about the windfall of cash here in CJ, the capital allocation priorities. I want to pick on the organic investment piece of this first.
As we see here, based on the Q4 guidance, you know, kind of a normalized quarter, we're not quite at sustainable break even on the non-gap operating lines here in the model just yet. So I want to, you know,
kind of better understand how you're thinking about potential further investments in the model given the current operating structure of the business and what that would do in time to break even on the non-gap operating and combine.
Yeah, no great question. So maybe just I can kind of...
reiterates some of the things we mentioned on the call just from top line down. So, you know, we had a nice growth and NFB this past quarter. So we're excited about that. We see an opportunity to strengthen the performance of that business. And so overall we're expecting top line growth.
Speaker Change: Next year we also see opportunities to expand the resurgence for the year and part of that, you know, do the increase in mix of NFB, part of its tied to, you know, all the work that we're doing around.
is clearing out legacy products.
Matching Finish goods in Montori with the man's and there's even some additional upside there as we...
is hopefully this freight situation.
Speaker Change: Um...
Speaker Change: Results itself.
and then as it relates to OpX, we're taking a really close look at our spending across the board.
Speaker Change: Because...
is we look at our businesses and where to invest.
We want to thank you for that investment to come from just reallocating spend.
Investments. We do expect though to make some incremental investments on top of that rehabilitation next year and we're not expecting to be.
Procedible for the year in 2025.
We see our clear path to get there, but we remain really focused on driving long-term growth. We're not ready to put a stake in the ground as to what quarter we're going to turn break even or profitable, but I'm very confident that we are going to get there and part of them.
In a part of the plan, it's really setting us up for, we see a lot of growth opportunities particularly in the NFB side, and making sure that we're set up to capture those.
Speaker Change: Alright, okay, that's helpful
and on Kevallocation, Bradley, was helpful that you outlined the bucket and this might be a tough question to answer. But if I looked at the balance sheet, I think you're about about 400 million of cash. I think you've previously kind of alluded to somewhere around 150 million needed to run the business and one of the confirm that still the view. And if so, that leaves us with around 250 million of excess cash here, you know, kind of...
If we could just understand how you're thinking about the general weighting between those three categories, the Cherokee, or returning cash to Cherokee, or organic investment and MNA at this point, and just make sure that I'm understanding the excess cash correctly.
Speaker Change: Yeah.
Great Great question. So the one qualification on me is the 150 million of kind of working capital requirements.
is if there was to be a big shift, regulatory shift, you know, addressing some of the topics you asked about at the outset.
That would require more working capital than we've outlined there and quite a bit more. And so we don't want to be in a position to capitalize on that.
But then if you put it on that side, if you just look at our priorities.
We're definitely looking to return capital to shareholders. So, you know, we're expecting, you know, this quarter to reproach more shares on a dollar basis and we did in the, you know, prior to a few quarters.
and that's an important priority for us. We think that if you look at kind of the...
Speaker Change: Returning capital to shareholders.
Speaker Change: is a much more significant.
Speaker Change: Portion of our Tash then.
The Organic Investments were planning. On the M&A side, as I said, that say, our number one priority is to get the business back to profitable growth and addressing the opportunities in our core businesses. However, we are going to, you know,
A value-weight opportunity these are the ones that I outlined as it examples. But that's obviously very one-off and speculated a bit at this stage. We're really focused on getting the business turned around. And so hopefully that framing helps put it into more context.
Yes, it's a very helpful thank you.
Speaker Change: The World's World
Speaker Change: [inaudible]
At this time, there are no further questions. Our now-hand-taste call back over to CJ Prober, CEO for Culture remarks.
Well, thanks for joining, and we really appreciate the support of our global team partners, customers, and our investors, and look forward to continuing the open communication on our transformation. And on that note, Bryan and I will be planning to join Adam, our J Conference in New York and December, so whoever is there, will look forward to seeing you.
Speaker Change: This concludes today's conference call, you may now disconnect.
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