GURE 海湾资源

Operator

Good morning. My name is James and I will be your conference operator for today. At this time, I would like to welcome to the Gulf Resources 2017 fourth quarter and annual earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]. Thank you. I would now like to turn the call over to our presenter for today, Ms. Helen Xu. You may begin the conference.

Helen Xu

Thank you operator. Good morning, ladies and gentlemen and good evening to those of you who are joining us from China and we would like to welcome all of you to Gulf Resources' fourth quarter and fiscal year 2017 earnings conference call. My name is Helen, the IR Director. Our CEO of the company, Mr. Xiaobin Liu will join us this call today as well. I will be offering translation for the management comments for the company's operating results as well. I would like to remind you to all our listeners that in this call, management's remarks will contain forward-looking statements which are subject to risks and uncertainties. The management may make additional forward-looking statements. Therefore, the company claims the protection of Safe Harbor for the forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from those discussed today depending upon number of risk factors, including, but not limited to, the general economic business condition in China, future product development and production capabilities, shipments to end customers, market acceptance of new and existing products, additional competition from existing and new competitors for the bromine and other oilfields, agriculture and production chemicals and change in technology, the ability to make future bromine asset purchase and various other factors beyond the company's control. All forward-looking statements are expressly qualified in their entirety by this precautionary statement and the risk factors detailed with the company's reports filed with the SEC. Accordingly, our company believes that expectation reflected in these forward-looking statements are reasonable and there can be no assurance of such will prove to be correct. In addition, any reference to the company's future performance represents the company's management's estimates as of today, March 19, 2018. Gulf Resources assumes no obligation to update these projections in the future as market conditions may change. For those of you who unable to listen to the entire call at this time, a replay will be available for 14 days at the company's website. The call is also accessible through the webcast and the link is accessible through our website. So please look at our press issued early for details. The company has issued a press release detailing all of our financial information, including important financial tables. In addition, we have filed our 10-K with the SEC as well. Because all of the events surrounding the closure of our facilities, we have decided to spend most of this call answering questions we have received from investors with slightly some major numbers discussion. So first of all, let's look at the major financial numbers. To enable investors to better understand our financial results, we refer to one-time issues that impacted earnings. This includes write-down of property, plant and equipment, specifically for the chemical factories of $16,636,322 as a write-down and not included as they were not aiming to be solely related to the government's order to close the factories and the cash for direct labor and the factory overhead of $6,883,557 incurred during the shut down. In addition, an impact of the U.S. tax law is also deemed a one-time event and assuming same tax rate of 25% for year 2017 and 2016 while doing calculation. So first let's look at that. The year-end cash of approximately $208.9 million, which is $4.46 per share. Total revenue was approximately $107.5 million, a decline of 28% as compared to the previous year. Gross profit decreased 19% to approximately $44.4 million. Income from operation declined 77% to $11.2 million. This includes the impairment of property, property, plant and equipment due to chemical business relocation of approximately $16.6 million and the charge for direct labor and factory overhead of approximately $6.9 million incurred during the shut down. But if excluding these two items as well eliminating the unrealized gains and losses from changes in the value of the currency, operating income would have been approximately $36.2 million, a decline of 21%. Income before tax equaled to approximately $11.6 million, a decline of 76%. Excluding the items discussed above, income would have around $36.6 million, a decline of 21%. The tax rate went from 25% to 78% because of the new tax act in the U.S. causing companies to have to pay tax on foreign earnings over eight years. Net income declined 93%. Excluding the items referenced above and the changes in tax rate, net income would have been approximately $27.6 million. Earnings per share were $0.05. Excluding the items listed above, EPS would have been $0.59. Bromine revenues declined 26%. Income from operations declined 41%. Crude salt revenues increased slightly to approximately $8.98 million despite the factory closures. Income from operation increased approximately $2.4 million due to the higher price of salt. Chemical revenues declined 33%. Write-offs of PP&E totaled around $16.6 million resulting in a segment loss of about $1 million. So now we are going to start with a review of each of the business segment with responded questions following up. First, let's look at the bromine and crude salt segment. For bromine, on September 1, 2017, the company received notification from the Government of Yangkou County, Shouguang City of China that production at all its factories to be held with immediate effect in order for the company to perform rectification and improvement in accordance with the county's new safety and environmental protection requirements. Later on, the local government organized the Safety Supervision and Administration Department and the Environmental Protection Departments conducted inspections of every bromine production enterprises within its jurisdiction, in order to improve security, environmental protections, pollution and safety. The company had been working closely with the county authorities develop the rectification plans for both its bromine and its chemical businesses. The company and the government had agreed on a rectification plan for Haoyuan Chemicals, the company's bromine business which is currently under process. As reported in January, the company has converted its factories and mines from coal to electricity, installed computerized production monitoring and safety equipment, lined all of the salt ponds, paved roads and performed some other upgrades. A report on the rectification including photographs of the new equipment was issued on January 29, 2018. It can be found on our website in the About Gulf tab. The total cost of rectification is estimated to be approximately $35 million. During the year 2017, the company spent around $17.9 million on this process. The largest portion, $13.7 million was spent on enhancement work in the salt fields. The additional $4.2 million was primarily for equipment. In 2018, the company will continue to invest in this project on enhancement projects for transmission channels and ducts, equipment and upgrades. In addition to the $35 million, the company expects to spend an additional $40 million in 2018 to carry out enhancement projects for its extraction wells. This should allow the company to increase its efficiency and the utilization. The company expects to complete the rectification and improvements of the bromine and crude salt factories and be ready for the government inspection in the first half of 2018 and will commence operations upon receipt of the approval from government. Once the company has received the approval from government, it will begin test production. Then it will begin to carefully ramp up production in each of the factories. Full production should be achieved in a few months. After the completion of the rectification, the only potential constraint is the waste water treatment. It is still unclear if the government will place some small limitations on waste water. We are currently working with the government on the waste water issue. In the worst case, it is possible that we may have a small reduction in capacity. So first let's look at a question for this segment. The first question is that, where are you currently with the rectification? The response from company management. If you refer to our press release of January 29, 2018 and look at our website on the tab, About Gulf, you will see that we have been very active in conducting our rectification. We have built aqueducts, lined our coastal pump, converted from coal to electricity, installed computerized controlled equipment, installed monitors and specially they are linked into the computer system, installed cameras and other safety equipment, paved our roads and installed other equipment to meet the new standard required by the government. By looking at the photograph which were taken by one of our U.S. consultant, it should be clear that we have been working closely and diligently to meet to standard of the government. The company expects to complete the rectification and improvement process first where after the government's inspectation and arrange production commences according to the government's opinions and approvals in the first half of year 2018. Second question. When do you expect the first production facility to be reopened? Response from management. We cannot control the timing of the government, but we are working closely with all of the authorities. The government has to inspect many factories in the local area. There are no guarantees as to exact timing. However, we expect to receive approval soon. Question three. How will production ramp up? Response. Because we had to put so much new equipment, we will begin by testing our new production facility. After initial test, we will begin to ramp up production. Because we have never opened this manufacturing at one time and because so much of the equipment is new, we are not certain as to how long it will take us to reach full production. However, our best estimate is that it should not take more than a few months. By the beginning of the third quarter, we should be able to produce at a very high level. Question four. What utilization rate do you expect to operate the factories going forward? We are very optimistic about the potential for higher utilization rate because of industry condition which we will discuss in a later question. Question five. What is the current total cost estimate for the bromine rectification? Answer. We continue to believe that the bromine rectification project will cost $35 million. This estimate also includes the money spent on the crude salt pond. In addition, we will spend additional of $14 million in 2018 on our extraction wells. This will allow us to produce much more efficiency. Question six. Do you still expect to consider buying some new production facilities? Response from management. We are currently not in negotiation with any other company. We are 100% focused on getting our facilities approval and opened. However, we are aware that there are many smaller producers that do not have the capital or the capabilities to completed the rectification. We believe we may be able to buy some smaller producers at comparable low prices. Should these opportunities present itself, we should certainly be open to considering it. Question seven. What is your view of the current and future market condition for bromine in China demand and supple? Response. It is perhaps the most important and most exciting issue. Demand should continue to be quite strong. Some of the earlier industries for bromine products such as oil drilling and medicine growing very rapidly. On the other hand, we are feeling that supply is going to be permanently reduced by 30%. A combination of higher demand and lower supply should lead to a continued increase in pricing. In 2014, the average selling price of bromine was approximately $2,886 per ton. In year 2015, it increased to approximately $3,162. In year 2016, it increased further to around $3,799. While in year 2017, it increased to $3,953. Now the price of bromine is around $5,000 and with the capacity continue to be removed, we expect the price of bromine to remain extremely high. We are making any projections. However, at these prices we believe that our bromine business could earn exceptional profits. In year 2010, with average price of bromine was around $4,082, our bromine segment earned around $48.5 million. In the current pricing levels, we had significant earnings leverage. Question eight. What are your expectations for next quarter? Response from management. This is a difficult question. It will depend on the exact timing of approvals from the government for each of our factories and the timing of testing and ramping up of production. We do believe we will be in full production by the beginning of the third quarter. Question nine. What are your expectations for bromine prices and feel for the year rest of 2018? We expect price to remain very high especially as compared to other areas closed for the rectification. We expect to be able to produce at capacity during the second quarter of the year. Question 10. What impact will the bromine rectification have on crude salt? Answer. Crude salt is a byproduct of production of bromine. If the capacity of bromine in China is will reduced by 30%, logic would indicate that crude salt supply would also decrease. Last year, the average selling price of crude salt increased by 15%. Although our facilities were closed for full month, profit in crude salt increased slightly. In year 2010, when crude salt prices were much higher, we earned around $11.4 million in this segment. With the reduced capacity in bromine, we expect crude salt price to rise and crude salt profits to potentially reach record levels. Now let's look at the chemical segment. On November 24, 2017, the company received a letter from the Government of Yangkou County, Shouguang City, China notifying the company to relocate its two chemical production plants located in the second living area of Qinghe Oil Extraction Plant to the Bohai Marine Fine Chemical Industrial Park. This is because the two plants are located in or near residential area and their production activities will have certain impact on the living environment of the residents. This is as a result of the country's effort to improve the development of the chemical industry, manage safe production and curb environmental pollution accident effectively and ensure the quality of living environment of residents. All chemical enterprises which do not comply with the requirements of the safety and environmental protection regulations will be ordered to shut down. To date, the company has secured the land for the chemical factory. It is currently working on the design of the factory as well as on the relevant documents to apply for construction and the project plan certificates. The company expects this process will take several months. The company expects the new factory will be fully operational by the beginning of year 2020. However, it is working very hard to get the project completed earlier. There is impairment loss on property, plant and equipment related to the relocation of our chemical production plant in the amount of approximately $16.6 million, since much of the equipment that was used in the chemical factory was relatively old. Further, even if it had been newer, the company believes it might not have passed the new environmental tests. The total cost of the new factories is currently estimated to be $60 million. The company has incurred a relocation cost around $9.7 million for land lease. The company is not writing off any of the goodwill related to its chemicals business. The company believes that the new chemical factory should be able to produce strong sales and profits. There may be much less capacity in the chemical industry as many factories may be permanently closed. In addition, other factories will have their capacity reduced. Gulf should have a very modern factory that operates highly efficiently. With less competition and better equipment, Gulf believes it can generate sales and earnings in this segment at a level well above previous results. The level of capital expenditures in year 2018 will depend on the timing of the approvals. As soon as the design, project plan and construction are approved, Gulf will move ahead as quickly as possible. Gulf continues to control the land and buildings where the old chemical factories are located. At this time, Gulf has not considered how or if it can monetize this asset. We are very optimistic about opportunities in chemicals, Mr. Liu stated. Many factories may be permanently closed. This should reduce capacity and lead to increased pricing. Once our new factory is built, we should be able to generate strong sales and earnings.” The first question for this segment. Why have you had to move your chemical plant? Answer. Our chemical plants were located in an area close to a large number of residents. For example, there was workers' housing for government owned oil company. The government decided that chemical factories represented too large a risk for the local population. Hence it has decided to create a major chemical industrial park that is far away from all residents. We will relocate there. Question two. Are all chemical plants going to relocate to this industrial park? Answer. For those chemical enterprises which do not comply with the requirement of the safety and environmental protection regulation will be ordered to shut down. These plants will not be allowed to reopen or to move to the industrial park. Our facilities are being given the opportunity to move to the new industrial park. Question three. What is the status and the schedule for the new facility? Answer. We have secured land. We are currently working on the design of the factory as well as on the relevant documents to apply for construction in the full project plan. This process should take several months. Once the permeation has been approved, we will finalize the design by hired contractor and purchase the needed equipment because when the government approval's along the way, we cannot guarantee a specific timeline. However, we believe the factory will be fully operational by the beginning of year 2020. We can see the possibilities of getting the factory and operational much earlier but we prefer to make a conservative projection. Question four. What will the facility cost? Answer. At the present time, we expect the facility to cost approximately $60 million. Given the fact that we currently have over around $400 million in cash, we should have more than enough money to build this facility, finish the bromine rectification and improvement and still may have efficiency target as well. Question five. Will you use any of the equipment from all factories? Answer. We will not use the equipment from old factories. These factories were very older. Most of the equipment was old. The new factory will have to stick to environmental and safety standards. This means that we will have to purchase state-of-the-art equipment. Even some can use but this ma incur more relocation cost as well. So management decides to use all new equipment. Question six. What will be the capacity of the factory? Based on our discussion with the government, we believe the factory will be slightly smaller than the combined size of our two current factories. However because we will be utilizing very molding equipment, we believe we will have the same capacity in the factories that we had in the original factories. Question seven. Are there any specific plans for the land occupied by Gulf's old factories? Answer. We control this land. However, at the present time we have not started to consider what to do with the land. Until the new factory is completed and the new factory is reopened, we will consider alternative for the land of the company's old factory. Question eight. What's the right path do you expect for both tangible and intangible asset in the chemical business? In year 2017, we wrote off about $16.6 million for the impairment of property, plant and equipment related to the chemical factory. We were not going to write off intangible asset, goodwill. We believe that our chemical business will be very successful in the future. We will do have a modern and many of our competitors will disappear. As a result, we do not believe our goodwill or unused power will be impaired. Question nine. What do you expect your operating and capital expense to be in year 2018 for chemical business? Answer. This will largely depend on the timing of the approval from government. As soon as we receive the needed approval, we will hire contractor to begin construction and start to purchase equipment. It's difficult to quantify exactly when this fact will occur. Question 10. How is the step taken by the government impact the future profitability of the chemical business as with bromine? We believe that chemicals will offer our company a highly attractive supply and demand equation. Throughout our county and our province, chemical factories are being permanently shuttered. This process is occurring as well throughout other provinces. Our national government has made improving environment one of its top goals. When you look at the report from our U.S. based consultant on the website, you will see that his iWatch registered weather as extremely unhealthy. Our government and the people do not want to see this in the future. We want air we can breathe not see. We want to know that our people safe. But the state government foresees many chemical companies to permanently close and others to significantly upgrade their facilities. We believe we will have much less competition. It should enable us to have much higher margins. In addition, because our new factory state-of-the-art equipment, we should be far more efficient. We believe our chemical business, like our bromine business will be able to earn record profits in the future. Lastly let's look at the natural gas segment. The company has solved the waste water problem in our initial well. The secondary problem was the technical drilling problem. The company has been working closely with Southwest Petroleum University in Sichuan Province. The experts at this university have helped with the design scheme that will solve the technical drilling problem. The company has ordered the required custom equipment and is now waiting for delivery and installation. Originally, the company believed it would be able to receive this custom equipment in time to begin drilling during the first quarter of 2018. However, because natural gas is in very short supply and very high demand in China, the manufacturers of this equipment were backlogged. We believe this equipment will be delivered within the next month. It should take the company more than one month to install and test the equipment. We believe this will enable us to begin producing during the second quarter. The company expects to spend approximately $1 million on its natural gas project in year 2018. The company has not yet decided whether to drill another well in year 2018. While the company remains very optimistic about opportunities in the natural gas business, management believes its primary objective should be to get the bromine plants fully operational and do whatever is necessary to expedite the approvals and begin construction on chemical plant. These businesses have traditionally been very profitable. The company needs strong cash flow and profits from these businesses if it is to fully develop its natural gas business. Over the intermediate to longer term, the company believes that the natural gas opportunity will be very substantial. Daying County is very focused on development. In addition to drilling for natural gas, Gulf could also drill for bromine and it could also eventually open a chemical plant, which could help this rural county with employment. The issues Gulf is confronting with rectification and relocation have not reduced its expectations of the potential for the natural gas business. So let's look at the first question for natural gas project. Have you solved the waste water problem? Yes. We have solved the waste water problem plus ordered the custom equipment. What other problem are you currently addressing? As we mentioned that the company has solved the problem, now it's ordered custom equipment for the drilling which has been designed scheme mentioned by the Southwest Petroleum University and is now waiting for the equipment to be delivered and installation. Question three. When do you expect to begin production from first well? Originally, the company believed it could be able to receive this custom equipment in time to begin drilling during the first quarter of 2018. However, because natural gas and the natural gas equipment is really high demand in China, the manufacturer of this equipment was backlogged. So we believe this equipment will be delivered within the next month. It should take the company to more than one month to install and test the equipment. We believe this will enable the company to begin production during the second quarter. Question four. When do you expect drill a second well? The company has not yet decided whether to drill another well in year 2018. The management remains very optimistic about opportunities in this natural gas business. However, management believes it's primary objective should be to get the bromine plant fully operational and do whatever necessary to get approval and begin construction on the chemical segments first. So this business has traditionally been very profitable but management cannot afford to detract from the major requirements of rectifying the bromine and building a new chemical plant. So we have a lean management team. So we have to maintain our focus. We need to get the profits and cash flow from our bromine and chemical business to generate the cash that we will use in the future in the natural gas business. Our first goal is to make sure everything in our core business is leaded and healthy in the right direction. Then we will begin to drill more wells. Question five. What are the planned capital and operating expenses for natural gas in 2018? So as we mentioned before, it would be approximately $1 million on its natural gas project in year 2018. What happens to your employees? So not let's look at the employees as a discussion. What happens to your employees during the factory closures? At the end of year 2016, we had around 738 employees. At the end of year 2017, we had 699 employees. Many of the employees were under rectification project. Some employees who were idle in bromine we will retain most of our employees. We do not want to train new employees. When the rectification was completed, a number of employees in the chemical business were terminated. U.S. taxes. Will you have to pay taxes on previous income? According to the new tax laws, these taxes will have to be paid over eight years period. We are working with our auditors to draw a tax efficient solution. In addition, whenever we return money to the U.S., we will taxed at the new lower rate. Balance sheet. The company said it had over $208 million in cash at the end of year 2017. How do we know this is true? As part of the year-end audit is the auditors check all the company's bank accounts. Our auditors have checked all of the company's bank accounts and determined that we do have this cash, then they issue the audit report. So before we turn to the open question, I would turn the call over to Mr. Liu to do some closing comments. [FOREIGN LANGUAGE]

Xiaobin Liu

[FOREIGN LANGUAGE]

Helen Xu

Okay. The comments from Mr. Liu. This has been an unprecedented time for our company. All of our factories were closed at the same time. While we strongly with the goal of the government to improve the environment and protect the health of its people, it cannot be imagined how difficult it has been to rebuilt and do rectification for every bromine and crude salt facilities and begin to plan our new chemical factory. We are a small organization. Our management has been working night and day to get this thing accomplished as quickly as possible.

Xiaobin Liu

[FOREIGN LANGUAGE]

Helen Xu

Fortunately we had and still have a very large amount of cash that has enabled us to everything in a first-class manner. We believe this will make us a much stronger and much more profitable company in the future. Many of our competitors are disappearing and will not be allowed to back into the business, we have ample resources to capitalize on this opportunity.

Xiaobin Liu

[FOREIGN LANGUAGE]

Helen Xu

We know that many investors would like us to push faster with our natural gas business. However, our major goal has to be first to get our bromine and crude salt facilities operating at capacity and then build our new chemical plant. Once we have accomplished that, we can move aggressively on our natural gas and right opportunities in Sichuan Province.

Xiaobin Liu

[FOREIGN LANGUAGE]

Helen Xu

We also appreciate the patience of our investors. We know many investors will like us to buyback or pay a large dividend. At this time, we have to focus on our core business. Having more than $200 million in cash has enabled us to what is necessary to emerge as a much stronger and more profitable company. We are not making any unusual projection. However, we believe our own bromine and crude salt business has earning power of $1 or $1.50 per share, even if we make no acquisition. Our chemical business should have similar earnings power. Our future project should turn to be even more profitable. In the next five years, we believe we could earn more than $4 per share and generate substantial amount of free cash flow.

Xiaobin Liu

[FOREIGN LANGUAGE]

Helen Xu

We know this seems a long time in the future, but we are building a foundation and have the capital to achieve this dream. And we will try our best and since have stabilized to find a way of creating value for our shareholders. Okay. So the discussions have finished. Hi James, can we open up for the question part?

Operator

[Operator Instructions]. Your first question comes from the line of Mohamed Eldeeb [ph]. Your line is open.

Unidentified Analyst

Yes. Good afternoon everybody. I am an investor for years in Gulf. Although I always believe in the company and I know they are doing a good job. But I keep hearing the same news every report. Gulf Resources would be great again. It will be successful. We will be this. We will this. The fact is, it start for $1.40 for a company, their book value is more than $8 is unacceptable. And there is reason for that. The government really control you and bureaucracy in China, it is unacceptable. You are moving too slow for any business. This is not right. Did you ever think about moving the company out of China so you can get things done? Thank you.

Helen Xu

[FOREIGN LANGUAGE]

Xiaobin Liu

[FOREIGN LANGUAGE]

Helen Xu

Okay. Cool. Hi Mohammed. So Mr. Liu said that actually this is management also considering question. They have been always thinking about this question. While they are listed on U.S. and they think if over the long term there is no reflected right corrected on the company's value, company management team would actively suggest to support its shareholder and Chairman to list it back in China.

Unidentified Analyst

Thank you.

Helen Xu

Thank you.

Xiaobin Liu

[FOREIGN LANGUAGE]

Helen Xu

And at the same time, Mr. Liu want to say that thanks for the patience from our shareholders these many years. Our management team will be working more hard as they can they will try their best to get more value for our shareholders.

Unidentified Analyst

Thank you.

Helen Xu

Thank you.

Operator

[Operator Instructions]. Well, there are no further questions at this time. Please continue. I am seeing that we have a question from the line of John Roth [ph]. Your line is open.

Unidentified Analyst

Yes. In the last quarterly report, there were indications that the principal owner was going to invest more money in the stock. Has that transpired?

Helen Xu

Hi. John, you there? Okay. I will translate your question. [FOREIGN LANGUAGE]

Xiaobin Liu

[FOREIGN LANGUAGE]

Helen Xu

Okay. So as we discussed with the Chairman last time that he is actually in the process to set up his account with an agent in the U.S. Because now the agent and the policies in the U.S., which is quite difficult for the Chairman and especially someone from China to set up an account in U.S. is the first reason. The second reason is that since the last time he announced, but there is not much time left. Now he is still waiting the company's blackout period.

Unidentified Analyst

I take it he has not yet made this purchase. Is that correct?

Helen Xu

Yes.

Unidentified Analyst

Does he still plan to do so?

Helen Xu

Yes.

Unidentified Analyst

Okay. Thank you.

Operator

Your next question comes from the line of Christopher Heck [ph]. Your line is open.

Unidentified Analyst

Hello. I just wanted to ask what the estimates are for the volume of gas that might be underneath the properties?

Helen Xu

[FOREIGN LANGUAGE]

Xiaobin Liu

[FOREIGN LANGUAGE]

Helen Xu

Okay. So because until now there is no formal estimate of the underground natural gas resources yet, we do not know yet. But we have got one advice from the professional agent. They told that we have continually do the production for more than half year then we can get approximately reserve amount under the belt.

Unidentified Analyst

Okay. Thank you. I appreciate that information. I appreciate all the hard work you guys are doing in very difficult times with changes from the government. And I do believe that going forward, as you said, that our earnings will increase dramatically and this company will be worth vast multiples more than what it is now and I appreciate the hard work and encourage you to all keep it up. Thank you.

Helen Xu

Thank you. It's our pleasure.

Operator

[Operator Instructions]. So there are no further questions at this time. Please continue.

Helen Xu

Hi James, if there is no more questions, can we close for the call today?

Operator

Yes, please. We don't have any other questions at this time. You can go ahead and close the call.

Helen Xu

Okay. [FOREIGN LANGUAGE]

Xiaobin Liu

[FOREIGN LANGUAGE]

Helen Xu

Thank you for joining the call today. Have a good day.

Operator

Well, this concludes today's conference call. Thank you everyone for participating. You may now disconnect.