Good evening, and thank you for standing by for the New Oriental's fourth quarter and fiscal year 2016 earnings conference call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question-and-answer session. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host today, Ms. Sisi Zhao. Please go ahead, ma'am.
Thank you. Hello, everyone, and welcome to New Oriental's fourth quarter and fiscal year 2016 earnings conference call. Our financial results for the periods were released earlier today and are available on the company's website, as well as on Newswire services. Today, you will hear from Stephen Yang, Chief Financial Officer. After his prepared remarks, Stephen will be available to answer your questions. Before we continue, please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our results may be materially different from the view expressed today. A number of potential risks and uncertainties are outlined in our public filings with the SEC. New Oriental does not undertake any obligation to update any forward-looking statements except as required under applicable law.
As a reminder, this conference is being recorded. In addition, a webcast of this conference call will be available on New Oriental's investor relations website at investor.neworiental.org. I will now turn the call over to Mr. Yang. Stephen, please go ahead.
Thank you, Sisi. Hello, everyone, and thank you for joining us on the call. I'm pleased to report another year of solid results. Net revenues in fiscal year 2016 increased more than 18% to almost $1.5 billion, with operating income up 29.5% and student enrollment up 25.8%. Throughout the fiscal year, we opened six new schools in new cities and added a net of 18 learning centers in existing cities. In total, we added approximately 71,000 sq m of classroom area, extending capacity by 7%. At the same time, utilization rates consistently improved by 2% to 8% to around 19% during the fiscal year. In short, the business has been on quite a positive trajectory. Our strategies are working, and our investments are bearing fruit, allowing us to lay down an important foundation for ongoing expansion and growth, particularly in the area of our O2O efforts.
More specifically, our O2O interactive education system is now being used across all key business lines. Teachers and students in all 55 existing cities across our school network are using our new PopKids and U-Can Visible Progress Teaching System, and the feedback we're getting is very strong. We launched the O2O system for overseas test prep business such as IELTS, TOEFL, and SAT programs in some of the large cities in China. Market feedback has been very positive in that area as well, and we will continue to improve our O2O products and services. In terms of the performance for the fourth fiscal quarter, as mentioned before, this time of year is part of our peak season for K-12 business, which lasts through the second half of our fiscal year, and we performed quite well during this peak period this year.
Fourth quarter net revenues exceeded the high end of our initial expectations, increasing 20.1% to $394.9 million, with operating income up 61.1% and student enrollment up 32.5%. PopKids recorded a fourth-quarter revenue increase of 42% and enrollment growth of 65%. This is an exciting increase from a year ago when the revamped program was just starting to pick up. Led by the strong momentum of PopKids and U-Can, our K-12 business is poised for future growth. Turning to pricing, per program blend ASP slightly decreased by about 9% year-over-year. On an apple-to-apple basis, which is GAAP revenue divided by total teaching hours, hourly blend ASP is flat year-over-year. To provide a breakdown of the hourly blend ASP, please know that U-Can declined about 4%, PopKids increased about 3%, and overseas test prep program increased about 4% year-over-year.
The decrease of per program blend ASP is mainly due to the shifting of revenue mix from the overseas test prep business with higher ASP to the K-12 business. In the second half of the fourth quarter, we saw a huge increase of enrollments for U-Can PopKids summer classes, whose ASP is much lower than our normal class in the spring semester as the summer classes are shorter in terms of the total teaching hours. In addition, the slowdown of VIP business also contributed to the reduction of per program blend ASP. On a final note, these growth rates were calculated in U.S. dollar terms, so the ASP growth was negatively impacted by the RMB devaluation for about 5%. We're very encouraged by the consistent improvement of margin, and we presently expect that to continue going forward.
For the fiscal year, operating margin increased by 110 BPS to 13.4%, which is a little bit higher than our initial expectations. For the fourth quarter, operating margin went up by 240 BPS to 9.4% from a year ago. This is a tangible proof of our commitment to enhancing operational efficiency, and we will continue to focus on this in the fiscal year 2017. Now let me give you a detailed update, our performance across individual business lines. Our revenue driver, K-12 all subjects after-school children business, achieved gross revenue growth of about 31% year-over-year for the fourth quarter, driven by exceptionally high enrollment growth of about 49% year-over-year. For the whole fiscal year, K-12 had a revenue increase of about 32%, supported by enrollment growth of over 39%. Break it down.
The U-Can middle school, high school, all subjects after-school children business recorded a gross revenue increase of about 28% for the fourth quarter and 30% for the fiscal year. Student enrollment grew approximately 37% year-over-year for the quarter and 35% for the fiscal year. Our Pop Kids program again delivered outstanding results, with gross revenue up significantly by about 42% for the fourth quarter and 35% for the fiscal year. Enrollment went up about 65% for the quarter and 46% for the fiscal year. Our overseas test prep and consulting business together reported revenue growth of about 10% year-over-year for the fourth quarter and 8% for the fiscal year. Finally, VIP personalized classes business recorded revenue growth of about 3% year-over-year for the fourth quarter and 14% for the fiscal year.
Next, I will provide some updates on the progress we have continued to make with our important optimized market strategy. As a reminder, we have been focusing aggressively on maintaining a good and positive balance between top line and bottom line growth while investing in build out our O2O integrated education system. We're confident that this strategy is working and it's enabling us to perform very well. With respect to our core offline business, in the fourth quarter, we opened 2 new schools in the cities of Yangzhou and Jinzhou and added a net of 19 learning centers and expanded certain existing ones. This led to a fourth quarter add of approximately 44,600 sq m of classroom area. For FY 2016, we opened 6 new schools and added a net of 18 learning centers, bringing our total number of learning centers to 748.
We also expanded certain existing learning centers, thereby only adding 71,000 sq m of classroom area for the full year. As for our online business, we invest $18 million in the fourth quarter and $54 million in total for the fiscal year to improve and maintain our O2O integrated education ecosystem. Most of the investments were recorded under G&A expenses. We have been devoted to this online business build-out since 2014, and our hard work has been rewarded with increase in customer retention and the addition of new customers. We fully believe this is transforming our business. Before I go into the details, just a quick recap of 3 levels of our online platform. The first level, also the core of our online system, is an O2O two-way interactive education system across all of our business lines.
The second level is our pure online learning platform and supplementary online education products under New Oriental brand. The third level of our ecosystem is for New Oriental to take minority shareholdings in online education companies that complement our own online education offerings. Starting with O2O two-way interactive education system, we aim to extend New Oriental's traditional offline classroom teaching offerings to online education services. This is also an important factor that sets us apart from other key players in the market. With advanced O2O product services, we're poised to gain more market share and improve brand recognition going forward.
U-Can Visible Progress Teaching System, our interactive education system, has been successfully rolled out across all 55 existing cities in our nationwide school network, and this expansion drove positive performance. Pop Kids English program, Shuangyu, has also gradually expanded its coverage to 53 cities by the end of the fiscal year from just 38 cities a year ago. The O2O system for the domestic test-prep program was being used in five cities by the end of the fiscal year. Since its launch in the second quarter, the interactive education system for overseas test-prep programs, including IELTS, TOEFL, and SAT courses, was rolled out in three cities by the end of the fiscal year. For the second level of our online education ecosystem, we have seen consistent growth in our pure online learning platform and other supplementary online education products.
In the fourth quarter, Koolearn.com generates net revenue of $12.8 million, up 42% year-over-year. The number of paid users increased about 18% year-over-year. The number of cumulative registered users has reached 13.5 million. KuDao.cn, our online broadcast open platform for both New Oriental and third-party teachers, achieved over 827,200 registrations in the fourth quarter. Donut, a series of game-based mobile learning apps for children, recorded over 41.3 million downloads by quarter end. Leci, English language vocabulary training app for mobile phones and tablets app, recorded about 4.3 million users by quarter end. For the third level of our online education ecosystem, we invest in select online education companies with a minority stake, and we continue to look for new opportunities that will not only complete our own offerings, but also facilitate our O2O integration.
Now, let me walk you through the other key financial details for the fourth quarter specifically. Operating costs and expenses for the fourth quarter were $361.5 million, representing an 18.2% increase year-over-year. Non-GAAP operating costs and expenses for the quarter, which excludes share-based compensation expenses, were $357.9 million, an 18.9% increase year-over-year. Cost of revenues increased by 18.9% year-over-year to $163.4 million, primarily due to increase in teachers' compensation for more teaching hours. Selling margin expenses increased by 11.4% year-over-year to $59.4 million, primarily due to increases in direct promotion expenses and selling marketing staff compensation. General administrative expenses for the quarter increased by 20.5% year-over-year to $138.7 million.
Non-GAAP general administrative expenses, which exclude share-based compensation expenses, were $135.1 million, a 22.4% increase year-over-year, primarily due to increases in R&D expenses and human resources expenses related to the development of O2O integration. Total share-based compensation expenses, which were allocated to relate operating costs and expenses, decreased by 22.7% to $3.6 million in the fourth fiscal quarter. Operating income for the quarter was $37.1 million, a significant 61.1% increase compared to $23.0 million in the same period of prior fiscal year. Non-GAAP income from operations for the quarter was $40.7 million, a 46.9% increase compared to Non-GAAP income from operations of $27.7 million in the same period of the prior fiscal year. Operating margin for the quarter was 9.4% compared to 7.0% in the same period of the prior fiscal year.
Non-GAAP operating margin, which excludes share-based compensation expenses for the quarter, was 10.3% compared to 8.4% in the same period in the prior fiscal year. Net income attributable to New Oriental for the quarter was $42.0 million, representing a 17.6% increase from the same period in the prior fiscal year. Capital expenditures for the quarter were $15.4 million, and this was primarily attributable to the opening of 35 new learning centers and renovations of existing learning centers. Turning to the balance sheet. The deferred revenue balance, which is cash collected from registered students for courses and recognized proportionally as revenue as the instruction is delivered, at the end of the fourth quarter, was $646.9 million, an increase of 29.1% as compared to the $501.2 million at the end of the fourth quarter of fiscal year 2015.
Before we move into the Q&A section, I'd like to talk about our overall outlook and priorities for fiscal year 2017, then our specific revenue expectations for the fourth quarter. Looking ahead to fiscal year 2017, we're planning to continue to focus our optimized market strategy and build on the success we have achieved through this approach. The initiatives are working. We're confident that by continuing to roll them out, we should drive additional progress and success. To give you more specifics, first, we will continue to expand our offline business. We plan to add 30 to 40 new learning centers for K-12 business in existing cities. We also plan to enter one or two new cities where we identify as markets with the most business opportunities. Second, we will continue to invest in our O2O integration and initiatives in online education offerings.
In particular, we will focus on product refinement and maintenance. We will continue to make investments, we believe that total spending will begin to stabilize this year compared to the huge annual incremental increase over the last two fiscal years. Third, we will continue to have a top priority on improving utilization of facilities and controlling costs across the organization to drive continued margin expansion. We believe that by executing all of these things, we will be in very positive position over both the near and long term. In terms of the first quarter of the new fiscal year, we expect total net revenues to be in the range of $508.9 million to $527.3 million, representing year-over-year growth in the range of 11%-15%.
If not including the impact from the recent RMB depreciation, the projected revenue growth rate will be in the range of 18%-22% for the first quarter of fiscal year 2017. We talked about the tax reform during the previous conference call, I wanted to provide an update on this. The good news is that starting in May 2016, the value-added tax, VAT, that applies to New Oriental's major training and children business lines will be 3% rather than the 6% we anticipated. As we have been paying 3% business tax previously, this means the new tax reform won't cause extra tax burden. We therefore expect no material impact on our top line or bottom line for fiscal year 2017 from this. Lastly, I must mention that these expectations reflect New Oriental's current and preliminary view, which is subject to change.
At this point, I will take your questions. Operator, please open the call for this. Thank you.
Thank you, sir. Ladies and gentlemen, the question and answer session of this conference will start in a moment. In order to be fair to all callers who wish to ask questions, we will take one question at a time from each caller. If you have more than one question, we request you to join the question queue again after your first question has been addressed. Now, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press the pound or the hash key. Your first question comes from the line of Zoe Zhao from Credit Suisse. Please ask your question.
Hi, management. Thank you for taking my question. I have two questions. One is, we've seen very strong K-12 enrollment growth for the past quarter. How is the growth rate of enrollment in June and July excluding promotion trending currently? The second question is, what is the retention like for the summer promotion so far? Do we see more aggressive than expected defense from those local players who also started to do promotion this quarter? Thank you.
Okay. Thank you, Zoe. I think for the K-12 business, yeah, we had a very strong student enrollment in last year. I think the good trend is continuing. Even in June and the first half of July, we're seeing the very strong student enrollment growth for K-12 business. In terms of the summer promotion classes, I think we had a very strong number. I think it is better than we expected. Till now, we got the 200,000 student enrollments so far. I don't have the retention rate for the autumn semester till now. Based on the forecast, I believe we will get the 50%-70% retention rates for those students who enrolled in the low price summer classes. Is it clear, Zoe?
Just want to clarify on the retention rate, do we measure this by head counts or enrollments, like course enrollments?
By the enrollments.
Right. Could you give us more color about the very strong enrollment growth excluding promotion in June and July? Are we talking about similar ballpark number as in 30%-40% for June and July? Do we see a higher base effect for the next quarter given the relatively soft guidance?
Okay, Zoe. When we report the student enrollment, we don't count the low price student enrollment.
Yeah.
Yeah.
Understood. Yeah.
If we take out the low price classes, in the first half of the first quarter, we still see the student enrollment growth somewhere at 25%-30%.
Okay, thank you.
Okay, thanks.
Thank you. Your next question comes from the line of Alvin Jiang from Deutsche Bank. Please ask your question.
Hi. Thank you very much for taking my question. I have a quick question. It is on the expansion plan in fiscal year 2017. We can see our peer company already started accelerated expansion into new cities. Do you think New Oriental will also accelerate expansion again? Is there any impact to our operating margin going forward? We can see, we have strong margin improvement in recent quarters, so I am not sure how we look at this expansion and the margin in FY 2017. Thank you.
Okay. Thanks, Alvin. In terms of the expansion plan, we added 24 learning centers in the whole year of fiscal year 2016, and we opened six new schools in five new cities in this year. We expect to step into one or two, maybe three new cities in the coming new year, and we plan to open 30 to 40 new learning centers in fiscal year 2017. Compared to the total learning centers we have now, it is 748, it is just like a 5%-7% expansion percentage. Anyway, what I mean is our student enrollment growth, what is the volume growth in the coming year, we expect to be in the range of let's say the 15%. The student enrollment will be, let's say, the 25%, but the volume growth will be at the 15% growth.
You will see the very strong same-store sales continuously in fiscal year 2017. Based on the 30, 40 new learning centers we plan to build in fiscal year 2017, it will not drag the margin. On the contrary, I think the operating margin in the fiscal year 2017 will be slightly go up. Yeah. Because the more leverage of the business. Yeah.
Okay.
That's our plan, the expansion plan. Yeah.
Okay. Thank you.
Okay. Thanks, Alvin.
Thank you. Your next question comes from the line of Fan Liu from Goldman Sachs. Please ask your question.
Thank you for taking my questions. This is Jason Huang asking on behalf of Fan Liu. Can the management share with us what the utilization rate targets by the end of fiscal year 2017? Also, you mentioned about the Shuangshi model in your conference previously. Would you mind elaborate on that and how does it compare to our opponent TAL's model? Thank you.
Okay. Yeah, thanks, Jason. In terms of the utilization rates, at the end of the year, the fiscal year 2016, we got the utilization rates at about 19%, which means, compared to last year, we got the 200 or 300 basis points up. In fiscal year 2017, we hope we get the utilization rates by 20% or 21%, because it's very easy to calculate. If our revenue grows by 20% year-over-year, we just expand 7% of new classroom area, it will drive the utilization rates up. Your second question is about the Shuangshi. We're still in the process of the piloting the program, we just pilot the program in several cities since this year.
I think it's too early to say that were the results or the impact for the business. I think I will pull this question to maybe three or six months. When we run the business for several months, I will answer your question in more detail. Okay? Thank you.
Thank you. Your next question comes from the line of Natalie Wu from CICC. Please ask your question.
Hi. Good evening, Stephen. This is Wu. Thanks for taking my question. I've got two questions here, actually. The first one is, you mentioned that you've got 200,000 enrollments for your summer promotion, right? Just wondering what percentage comes from Beijing, and can you update us which cities you only started the summer promotion plan since this year compared with last year? This is my first question. The second one is regarding your guidance. Can you give us some breakdown on each business line forecasted growth, say, Pop Kids, U-Can, overseas English prep, domestic English prep, et cetera. Thank you.
Okay. Your first question is about the summer promotion classes. We got 200,000 student enrollments for the summer promotion classes. I think 50%, that means 100,000 student enrollments, belongs to Beijing. We have around 30 cities to do the summer promotion. Let's say the other cities except Beijing occupied another 50%. Your second question is the breakdown for the Q1 revenue guidance. Typically, we don't guide the revenue growth by business line. In general, I can share with you some information that's below. The K-12 business will grow by more than 30%-40% in the Q1. For the overseas test prep, I think it should be, let's say the 10% in RMB term. What I'm saying is only in RMB term, because I don't know the exchange rate.
The pure online, 30%-40%, also the adult English and domestic test prep, I think this will go down by 5%. This is the breakdown of the Q1 guidance.
Great. Just for clarification, we mentioned this 50% of enrollments of your summer promotion coming from 13 cities. You mean that the net add cities this year is 13 or the total number is 14?
Oh, 30. Three, zero.
Oh, 30.
Yeah, 30. Last year, we only did it only in Beijing. This year, we spread it out to 30 cities.
Great. What about the subjects? Do you also expanded the subjects?
This year, in Beijing, the summer promotion classes are for the all three subjects, math, Chinese, and English. Also in Shanghai, three subjects. For the cities outside Beijing and Shanghai, all the other cities, we only have the summer promotion class for math only.
Great. Thank you. Very helpful.
Thank you.
Thank you. Your next question comes from the line of Tian Hao from DH Capital. Please ask your question.
Yeah. Stephen, [inaudible] . Good evening. I have a question regarding the seasonality. As you guys shifting the weight away from English overseas test preparation to K-12, it seems like the seasonality has been changed, normally Q1 is the strongest quarter. However, in this year or almost last year, it didn't seem like the Q1 is still the strongest quarter. Would you please elaborate the new norm of your seasonality? That's the number one question. The second question is related to your subject. English is your strong foothold, and I wonder in the U-Can program, how are you going to plan to rapidly grow in your other subjects? That's two questions.
Okay. Thanks, Tian. I think it's a good question, the seasonality question. Business has changed a lot in the last three, four years, and the K-12 business is the key growth driver. The Q1 of the summer classes is not the strongest season. What I mean is, Q1 is not the peak season for K-12 business. What I mean is the Q3 and Q4 will be the peak season for K-12 business. If you recall the growth rates in individual quarters in fiscal year 2016, in the Q1 of fiscal year 2016, we got the 16.4%. The second quarter, 18%, third quarter, 21%, and fourth quarter, almost 20%-21%. That means the Q1 should be the lowest season for the revenue growth because of the different business lines. Yeah. This is my answer for your first question.
Your second question is about the subjects. Within the U-Can, the middle school, high school business, the English is only account for one-third of the total revenue.
The non-English subjects, the other eight subjects, grows faster than the English class going forward. Going forward, you will see the higher growth rates for non-English subjects. That's my answer. Is it clear?
Yes. Thank you.
Okay. Thanks, Tian.
Yeah.
Thanks.
Thank you. Your next question comes from the line of Wendy Huang from Macquarie. Please ask your question.
Thank you. My first question is about your pricing strategy. What kind of price increase or ASP expansion that we should expect for the FY 2017 across the different English segments? The last quarter's non-GAAP Operating Margin was around 10%. In the past few years, you have been able to recover your margins. Where shall we see your long-term non-GAAP Operating Margin to stay with the recent expansion and also recovery?
Okay. In terms of the pricing, within fiscal year 2016, we used a different price strategy compared to year before last year. During fiscal year 2016, we roll out our new O2O products, especially for K-12 business. We just want to take more market share. We just allow the local school heads to increase the price by only 5% on hourly basis. Going forward, what I mean, in fiscal year 2017, I think we believe we will use a little bit more aggressive pricing as one its methods. I guide the ASP for the K-12 business will increase by 5%-8% in RMB term. For the overseas test prep, we dominate the market. In fiscal year 2017, we still increase the price by around 8% in RMB term.
For the domestic test prep and adult English, we increase price by the 5%-8% year-over-year in fiscal year 2017. This is my answer for first question. What else is there? Okay, the margin.
Margin. Yeah.
Okay. Last year, the fiscal year 2015, the Operating Margin was at 12.3%. This year, we got the 110 basis points up, our target for Operating Margin is to get 17%-18% in next three, four years. If you recall the earnings call, fourth quarter call, our guided methods, our Operating Margin will keep flat in fiscal year 2016. As a result, we got a 110 basis points up. Next year, I still just want to guide the Operating Margin will get slightly up. Yeah. That's it.
Okay. I have just one housekeeping question on the headcount. What was your total headcount, and also the number of teachers as of May, and also what kind of percentage increase should we expect for the FY 2017? Thank you.
Okay.
Headcount.
On the headcount, as you know, end of May, the total headcount is 36,000 employees, and the teachers is around 19,000. Based on our budget, I think the total headcount of next year will increase by 5%-10%. This is the budget.
Okay. Thank you very much.
Thanks.
Thank you. The next question comes from the line of Mariana Kou from CLSA. Please ask your question.
Hi. Good evening, management. Thanks for taking the question. I just have two quick question. I think on the overseas test prep, you mentioned the blended ASP is up slightly. Could you actually help us understand a bit of the broader view of this business in terms of total revenue, how are we trending? I guess that would imply some comments on the bottom. That's my first question. The second question, just a bit of a housekeeping as well. Last quarter, I think there's a jump in tax rate. Could you actually share a bit more color in terms of your tax outlook in the next 12 months? Thanks.
Okay. For the overseas test prep pricing, in going forward, I think we will increase the price by 8%-9% in RMB term year-over-year. The student enrollment growth will keep flat, so it will get 8%-10% revenue growth year-on-year midterm for overseas test prep courses. For the ETR, this year, the fiscal year 2016, our ETR is 14%. Next year, I think the ETR will be somewhere at 14.5%, because based on the tax structure, some high tech companies will lose the tax preference in the next year. The tax rate will steadily move up, let's say, before 14.5% or somewhere at 14%-15%. Yeah.
Okay. We should just think about it on a more full year basis, because if you just look at Q4 year-on-year, I think there's quite a significant increase in the effective tax rate. I think we should just focus on full year.
Yes, it will be. Yes.
Yes. All right. Thank you.
Yeah.
Thank you. The next question comes from the line of Claire Cao from Morgan Stanley. Please ask your question.
Good evening, Stephen and Sisi, and thanks for taking my question. Just want to follow up on the RMB 50 courses. I'm wondering what's the percentage of those course enrollment were contributed by English subjects? Considering that the current enrollment number is pretty impressive at 200,000, I'm wondering how should we think about the margin impact in the coming fiscal first quarter? Thanks.
Okay. There were a lot of questions for the summer promotion classes. I think, yeah, we gathered the 200,000 student enrollments for summer promotion classes. I think we will get the 50%-70% retention rates afterwards. I think, we will get 2%-3% extra revenue growth from the summer class, what it means on a yearly basis. In terms of margin, I think we will get a negative impact for Operating Margin slightly in Q1 because the price is very low, and we have to pay the teacher salary. I think it will have a little bit positive impact for Operating Margin for the whole year because of the potential higher retention rates. Is it clear for your question?
Yes, thanks. How about the enrollment contribution from English subject?
What I mean is the English enrollment within the U-Can or all the business lines?
Oh, sorry. I mean for the low price courses this summer.
Sorry, I don't have the numbers.
We don't disclose by subject details for the promotion numbers.
Yeah.
Actually, it should be come from all subjects. Cities outside Beijing and Shanghai, the promotion is mainly for math.
Yeah.
Understood. Thanks.
English subjects, let's guess, it should be below 30% or 25%. Most of the class are the math class.
Okay, thanks. Very helpful.
Okay, thank you.
Thank you. Ladies and gentlemen, we are now approaching to the end of the conference call. I will now turn the call over to New Oriental's CFO, Mr. Stephen Yang, for his closing remarks. Please go ahead, sir.
Again, thank you for joining us today. If you have any further questions, please do not hesitate to contact me or any of our investor relations representatives. Thank you.
Thank you. Ladies and gentlemen, that does conclude our conference for today. Thank you all for participating. You may all disconnect the lines now.