Aug 6, 2013
Executives
Deepak V. Dutt - Vice President, Treasurer, Investor Relations Officer and Member of Disclosure Committee Dean A.
Manson - Senior Vice President, Secretary, General Counsel and Member of Disclosure Committee Michael T. Dugan - Chief Executive Officer, President and Director David J.
Rayner - Chief Financial Officer and Executive Vice President Pradman P. Kaul - Chairman of the Board of Managers, Chief Executive Officer and President Anders N.
Johnson - President
Analysts
Jason B. Bazinet - Citigroup Inc, Research Division Timothy J.
Quillin - Stephens Inc., Research Division Andrew DeGasperi - Macquarie Research Chris Quilty - Raymond James & Associates, Inc., Research Division Anthony Klarman - Deutsche Bank AG, Research Division
Operator
Good morning. My name is Tiffany, and I will be your conference operator today.
At this time, I would like to welcome everyone to the Q2 2013 Earnings Conference Call. [Operator Instructions] Mr.
Deepak Dutt, you may begin your conference.
Deepak V. Dutt
Thank you, Tiffany, and good day, everybody. Welcome to the EchoStar's second quarter 2013 earnings call.
I'm joined today by Mike Dugan, our CEO; Dave Rayner, CFO; Pradman Kaul, President of Hughes; Mark Jackson, President of EchoStar Technologies, Anders Johnson, President of EchoStar Satellite Services; Kenneth Carroll, EVP, Corporate and Business Development; Dean Manson; and Tom McElroy. Dean Manson is General Counsel, Tom McElroy is our Controller.
As you know, we invite media to participate on listen-only mode on the call and ask that you not identify participants or their firms in your reports. We also do not allow audio taping, which we ask that you respect.
Let me know turn this over to Dean Manson for the Safe Harbor disclosure. Dean?
Dean A. Manson
Thank you, Deepak, and hello, everyone. All statements we make during this call that are not statements of historical fact constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that could cause our actual results to be materially different from historical results, and from any future results expressed or implied by such forward-looking statements.
For a list of those factors and risks, please refer to our annual report on Form 10-K and our quarterly report on Form 10-Q, filed in connection with our earnings. All cautionary statements that we make during this call should be understood at being applicable to any forward-looking statements we make wherever they appear.
You should carefully consider the risks described in our report and should not place undue reliance on any forward-looking statements. We assume no responsibility for updating any forward-looking statements.
I'll now turn the call over to Mike Dugan.
Michael T. Dugan
Thanks, Dean. Good morning, everyone, and welcome to the call.
I'll start with a few highlights of our performance for the quarter and then Dave Rayner, our CFO, will give you some financial overview. In our ESS business unit, American government services exercised their option to our 257 megahertz on EchoStar 9, with renewal up to the second quarter of 2014.
Also, Harris CapRock extended their contract for a limited period through 2013. We signed a short-term lease with DISH Network for full use of EchoStar 8.
We also took an impairment charge on EchoStar 12, which Dave Rayner will expand on in the financial statements. On the business development front, we continue to actively pursue the joint venture initiative to enter the Brazilian DTH market.
Negotiations with potential partners have progressed considerably, although not to a point where I can provide many details. We have moved EchoStar 15 into the 45-degree orbital slot to demonstrate the capability of the high power DBS satellite and initiate the testing of the various aspects of the service.
We will be ready to quickly launch our service once we have an agreement. Results have been very positive and, in addition, we continue to explore our international opportunities to deploy satellite-based platforms around the world.
Now let's talk about Hughes. In our Hughes Internet Service business, we have added another 44,000 subscribers in the second quarter of 2013, continuing the strong performance since the launch of our HughesNet Gen4 service on October 1 last year on the spacecraft known as JUPITER 1 or EchoStar 17.
Given that Q2 is seasonally our weakest quarter for subscriber adds, we're very pleased with his performance. In the last 3 quarters starting with the launch of Hughes Gen4 service on October 1, we've added a net of 140,000 subscribers.
We ended Q2 '13 with a total of 736,000 subscribers. Our sales agency relationship with DirecTV for this consumer service was launched late in Q2, so while it did not have a meaningful effect on Q2 adds, we were very encouraged with DIRECTV's contribution in July.
All of DIRECTV's channels are now available for the service -- that's distribution channels for the service and we look forward to them being a significant contributor going forward. We're also very pleased to now have both DirecTV and DISH Network as our channel partners in the Consumer Internet business.
Though still early in the cycle, the construction of EchoStar 19 is proceeding on schedule. With over 160 gigabits of throughput, this new Ka-band satellite will have over 60% greater capacity than EchoStar 17, which is known as JUPITER 1, and is expected to be the world's highest capacity broadband satellite when launched.
It's planned for launch in mid-2016 and will cover all the continental U.S. and much of Mexico and Canada.
Hughes non-customer order input in the second quarter of 2013 also accelerated at a strong pace with 206 million in new orders, a 71% increase over the second quarter of 2012. Key contributors to the strong growth were Row 44, Digital Deluxe and Telefonica.
Row 44 signed 3 large, multiyear contracts with Hughes for provision of space segment, network operations center service and maintenance, and other ancillary services and support of Row 44's North America, European and Transatlantic service footprint. The current service footprint covers approximately 480 Southwest Airlines and Norwegian airline aircraft.
Digital Deluxe selected Hughes Europe to provide managed high bandwidth connectivity services to over 3,000 cinemas in the U.K., Germany, France, Italy and Spain during the initial phase with the goal of expanding to over 8,600 cinemas across Europe within 5 years. This will transform film distribution in Europe from physical hard-disk delivery to cloud-based content delivery.
I'm pleased to announce Telefonica selected Hughes to supply its Latin American subsidiary with JUPITER class ground equipment and related services to power their first commercial Ka-band broadband service. In mobile countries in Latin America, gateways will be installed in the second half of 2013 with terminal deliveries late in the year.
Other significant orders in our North American enterprise business include National Oilwell, Barco, Xplornet, Chevron, Colonial Pipeline Digital Cinema and CSK O'Reilly. Other significant international orders were from TelePlaza, Telmar Brazil, Yahsat and State Bank of India.
The strong order activity resulted in an order backlog of approximately $1,064,000,000 for our Hughes business at the beginning of third quarter 2013, compared to $968 million at the same time last year, which together would be approximately $1,290,000,000 of contracted backlog, and our service business continues a strong visibility into future revenues. These backlog numbers do not include our consumer and set-top box business.
Turning to EchoStar Technologies, our Sling mobile apps have reached an all-time high rating across iOS and Android, which includes DISH mobile applications, DISH Anywhere, placeshifting, Explorer second-screen social media and content search and transfer sideloading as well as the Sling retail applications. DISH is rated at 4.5 plus stars and Sling retail is at 4 plus stars.
Sling also successfully launched BOD support in addition to mobile applications recently. Finally, we launched the retail Slingbox 350 in Japan in Q1 '13 following several years of solid performance with the prior Sling product line.
We're now beating expectations and forecasts towards Q2 '13 with the new product. In summary, our existing business segments continue to perform well as we expand our global presence, and we continue to explore key partnerships within the international market.
I'll now turn it over to Dave Rayner, our CFO.
David J. Rayner
Thank you, Mike. I will provide a few highlights for our financial performance in the second quarter before we get into the Q&A session.
Revenue in the second quarter was $830 million, up 3% over the second quarter of 2012. EBITDA was $149 million compared to $184 million last year.
This decline is primarily due to the impairment loss of $35 million due to anomalies on our EchoStar 12 satellite. Over time, EchoStar 12 has been experiencing loss of electrical power.
Our ongoing engineering analysis has concluded that further loss of power is likely, thereby reducing future revenue-producing capacity. DISH satellite is leased DISH Network.
In connection with the preparation of our financial statements for the second quarter, we determined the future net cash flow from DISH would not be sufficient to recover the carrying amount of the satellite. As a result, we recorded a $35 million impairment charge.
Net income attributable to EchoStar shareholders in the second quarter was a loss of $9.8 million and diluted loss per share was $0.11, compared to net income of $35.7 million and diluted earnings per share of $0.41 in the second quarter last year. The year-over-year change was impacted by the impairment charge, as well as higher depreciation expense as a result of EchoStar 16 and 17 being in service.
Our free cash flow, defined as cash flow from operations less capital expenditures, was $57 million in the current quarter as compared to $58 million use of cash in the second quarter of 2012. As of June 30, we had $1.6 billion of cash and marketable securities giving us adequate resources to pursue our planned growth opportunities.
Capital expenditures for the quarter were $86 million, compared to $164 million last year. The drop is primarily the result of lower satellite spending.
Last year, we had both Echo 16 and 17 in late-stage construction. This year, we're in the early stages of construction of Echo 19.
For the full year 2013, we are expecting capital expenditures to be in the range of $365 million to $385 million. Now a couple of financial highlights from our business segments.
ETC revenue for the second quarter was $426 million, a decline of $20 million from the second quarter last year. The decrease was primarily due to lower sales to Bell Canada and other international customers, partially offset by higher revenue from DISH Network, equipment sales, uplink services and professional services.
EBITDA for the quarter was $32 million compared to $39 million last year. The decline primarily due to the lower revenue.
ESS revenue for the second quarter was $85 million, a 19% growth over the second quarter of last year, driven primarily by additional revenue from the lease of EchoStar 16 and CATSAT 1, partially offset by EchoStar 6 and 8 coming off lease at the beginning of the year. Although, as Mike mentioned, DISH entered into a new short-term lease on Echo 8 in the second quarter, which contributed somewhat to the growth.
EBIT for the quarter was $34 million compared to $52 million last year. Once again, the impairment loss of $35 million impacting that growth.
Excluding this impairment loss, ESS EBITDA grew 28% over the second quarter of last year. Hughes' revenue for the second quarter was $315 million, an increase of 11% in the second quarter last year.
The increase was primarily driven by strong consumer and enterprise growth, partially offset by revenue in the mobile satellite business, which is largely opportunistic in nature and was pretty strong last year. EBIT for the quarter was $73 million, an increase of $3 million over the second quarter, driven primarily by the revenue growth, offset by -- somewhat by the higher subscriber acquisition costs.
I'll now turn the call over to the operator to conduct Q&A.
Operator
[Operator Instructions] Our first question comes from the line of Jason Bazinet from Citi.
Jason B. Bazinet - Citigroup Inc, Research Division
Yes, I just had 2 quick questions. Did I hear correctly on the call, I think this is new information that you gave, CapEx outlook for '13, I guess that's my first question, at $365 million to $385 million?
And then my second question is if you think about what you expected the profile of the Hughes broadband subs to be before you launched this next gen service, are there any surprises or differences in terms of the customers that are coming on, either in terms of what broadband they had before or whether or not they had your prior service? Any sort of color you can give us, on any surprises, would be helpful.
David J. Rayner
So, Jason, in regards to CapEx, yes, you heard correctly, $365 million to $385 million for 2013. The broadband subs, I'll turn it over to Pradman and let him address that.
Pradman P. Kaul
Yes, sure. Thank you, Dave.
No, I don't think we have been surprised. We've been very pleased, in fact, that -- at the rate at which we are signing of new subs.
But the cash aspect of the sub is pretty consistent with what we had in the past.
Operator
Our next question comes from the line Tim Quillin with Stephen's and Corp.
Timothy J. Quillin - Stephens Inc., Research Division
How should we think about the ESS revenue and the margins, which are also real nice there, should we expect some kind of drop-off in revenue related to EchoStar 12, or are the results that we saw in the second quarter at a sustainable level?
David J. Rayner
I think -- I'm not going to give you a forecast on ESS, but obviously, the margins on the ESS business are very strong just given the amount of capital expenditures that go into it, so that obviously drives EBITDA. EchoStar 12, we are forecasting a decline in capacity on that satellite over a future period.
Exactly how fast some of those -- some of that power loss is going to contribute to capacity loss is a little bit more art than science. But there is no question that we are not anticipating the same amount of revenue off the back of '12 going forward that we've seen in the past.
How quickly it will roll off, I think it's still uncertain. We've got our forecast, but as I said, it's not science.
Timothy J. Quillin - Stephens Inc., Research Division
Can you give us any sense of what kind of revenue you're doing with that satellite?
David J. Rayner
We've never broken up the revenue on a satellite by satellite basis.
Timothy J. Quillin - Stephens Inc., Research Division
Okay. And then moving onto Hughes and, again, an excellent quarter in a lot of different ways.
But how should we think about seasonality now in the third quarter? So I know that the second quarter is probably your low ebb in terms of subscriber additions and maybe the impact to DirecTV is going to offset any seasonality anyway or add to the sequential increase, but how are we thinking about things in third quarter?
Pradman P. Kaul
Well generally, Q2, as you mentioned, is our lowest quarter, Q3 is our second lowest, Q4 is the second highest and Q1 is the best. So we expect that trend to continue and so far, in July, we're seeing that trend.
And of course, as you mentioned, DirecTV is going to help that growth in the next couple of quarters.
Timothy J. Quillin - Stephens Inc., Research Division
That sounds encouraging. In the 10-Q, there was mention of dishNET, or the dishNET fees being based on volume thresholds beginning January 1, 2014.
What does that entail?
Michael T. Dugan
Yes, I'm not sure.
Pradman P. Kaul
I never submitted to look at that. I'm not sure that's stuff we can answer right away.
Timothy J. Quillin - Stephens Inc., Research Division
I'll move on to the next question. I just want to ask Pradman about the -- about your non-consumer business where your bookings were obviously excellent and there's a couple of different elements there.
But I wonder if you could comment just generally on the demand for managed network services and what you're seeing in terms of maybe a macroeconomic turn there? And then I was just wondered if you could comment on what you're doing with Telefónica and what that might -- what the financial details of an arrangement like that or even a generic example of a big Ka-band roll out like that might mean for you?
Pradman P. Kaul
Okay. Very quickly on the managed network services.
Again, the numbers have been very encouraging. After a few years of flat to declining enterprise revenues in North America, we are seeing growth in that sector.
And I think it's primarily due to the change we made a few years ago to offer our customers the [indiscernible] Okay. So we still have echo?
Michael T. Dugan
No, go ahead.
Pradman P. Kaul
We're hearing the echo here. Okay.
Anyway, we're -- our managed network services is getting a great response from the market because for the first time, we are basically telling our customers to use the best access technology available for each branch and the value-add to the customer is a single point of contact and complete offering irrespective of the technology that's used for accessing each branch. So we're using DSL, we're using wireless, we're using cable and of course, we're using satellite to offer our customers the best solution.
That switch has really found a hit of responsive cord with major enterprises in North America and Europe and has resulted in the significant improvement in our enterprise business. In terms of Media Networks for Telefonica, we're basically broadening equipments for two gateways, 1 in Texas and 1 in Chile.
And this will cover 9 countries in South America. We have -- the satellite that we use is a key capacity on this process satellite and our role for Media Networks is for supplying equipment.
So we'll be supplying gateway equipment and we'll be supplying remote CPE or Viasat terminals. Very, very excited about this because it introduces our JUPITER platform all over Central and South America and expands the coverage of our technology globally.
Operator
Our next question comes from the line of Andrew DeGasperi with Macquarie Capital.
Andrew DeGasperi - Macquarie Research
Just a question on Brazil. I was just wondering if, with the recent Satmex, are you going to start to transition?
And also, what's the impact with that with DISH Mexico and is there any underlying impacts to Brazil on the competitive front?
Michael T. Dugan
Well, you threw me a curve there at the impact [indiscernible] when you asked about DISH Mexico because, no, we don't think that relationship should have much of an impact to the DISH Mexico business plan, we should put it that way. To Brazil, I think we'll continue to see it as a solid market.
Obviously, the economy is not as robust as it was, say, 1 year ago, but we continue to look at options, and certainly there's still some strong potential for a partnership with existing services down there. It's about all I can say to that.
Andrew DeGasperi - Macquarie Research
And secondly, on the Echo 12, which you're having the power drained, is there any -- at this point, are there any contingencies as far as potentially replacing the satellite in the near future? Or at this time, you're just going with what you have?
Anders N. Johnson
This is Anders Johnson. Echo 12 right now is deployed to DISH, as itself a backup spacecraft with a 61.5-degree orbital location.
As its capabilities degrade, as the power budget shrinks, we're modifying our restoration plans to provide DISH with other capacity that's available on other satellites. I don't think we'd be launching new satellites, strictly speaking, as a backup.
But we do have quite a few satellites in the air that are available for restoration services, and that's part of our contingency planning.
Operator
Our next question comes from the line of Chris Quilty with Raymond James.
Chris Quilty - Raymond James & Associates, Inc., Research Division
I wanted to follow-up, Pradman, I think you mentioned that the constitution of your retail net adds in the HughesNet business is sort of unchanged. Can you remind us of what the mix looks like there, sort of wholesale versus retail?
Pradman P. Kaul
We don't obviously disclose that mix publicly. But as Mike said earlier in --- the DISH wholesale channel is doing very well.
Chris Quilty - Raymond James & Associates, Inc., Research Division
Okay. And with regard to, I know you don't provide specifics, but maybe trends on the churn and the ARPU in the SAC and those businesses, are there any material changes?
Pradman P. Kaul
Not this quarter. The ARPU obviously, as our whole sale mix increases from where it used to be a year ago, the ARPU obviously declines a little bit, which is a natural phenomena of having a mix of wholesale and retail.
And we don't really keep data on churn. But it would -- from the net adds, you could probably get a feel of what the churn is.
David J. Rayner
Let me add a couple of things in there, Chris. Certainly, the ARPU, we're expecting that to -- I mean, it's come down from where it was pre-wholesale and we expect it to go further as we add additional wholesale customers.
The churn, I think, generally speaking, the churn is probably higher than we would like, but it's been very good on the JUPITER service. We continue to see that the legacy customers churning as they did in prior periods pre-JUPITER, giving us incentives, trying to get as many of those people on the new Gen4 service as possible.
In terms of SAC, if you look at SAC across all of the subscriber base, SAC is going to come down on a per customer basis, once again simply because of the wholesale arrangements. But I think compared to where we were prior to wholesale, on strictly retail customers, SAC is about the same as it was previously, as is ARPU.
Chris Quilty - Raymond James & Associates, Inc., Research Division
Okay. Now the DirecTV relationship as that ramps up, are we going to see an increase in SG&A related to fees associated with that or is sort of offset by the wholesale with DISH?
Pradman P. Kaul
Well, DirecTV is a sales agent just like many of our sales agents, so they're treated exactly the same way. So you shouldn't see any difference there, except if we increase our subscriber count, then obviously the total SAC expense will increase as a result of that.
DISH is a classical wholesale relationship, so there's a big difference between the 2.
Chris Quilty - Raymond James & Associates, Inc., Research Division
Okay. And one other item on ARPU, how has the new VoIP service been received and has it met expectations at this point?
Pradman P. Kaul
Yes, I think at this stage -- we just kicked it off a month or so ago, and it's doing very well. And the number aren't huge yet, but it's meeting our expectations of a startup, so we have good hopes that, that'll be a valuable asset to our marketing and revenue aspirations in this business.
Chris Quilty - Raymond James & Associates, Inc., Research Division
Pradman, while I have you, you mentioned that domestic ViaSat business didn't comp in on international?
Pradman P. Kaul
Yes. I think international has been doing well, too.
If you look at the list of wins that we had this quarter that Mike talked about earlier, you'll see the numbers are growing. Europe is doing particularly well this last quarter.
We had some big wins in Europe. And India is doing well.
Brazil is struggling a little bit because of the economy, but still holding its own. So again, our international business is meeting our expectations.
Chris Quilty - Raymond James & Associates, Inc., Research Division
And just to repeat, particular application that's driving the growth, whether rural telephony or classic enterprise ViaSat ?
Pradman P. Kaul
It depends on the region. In India, the major application has been rural banking and rural ATMs.
So we are building a huge network, connecting all the rural banks, which is the biggest growth industry in India. In Europe, it's very much like North America, it's managed network services for enterprises.
In Brazil, it's cellular backhaul because the cellular networks grow the need for backhaul is increasing dramatically. So it's different applications in different regions of the world.
Chris Quilty - Raymond James & Associates, Inc., Research Division
Great. And on Brazil, the Hispasat opportunity, was that a competitive bid on equipment side?
Pradman P. Kaul
Well, Hispasat actually contracted with Telefónica Media Networks and sold them their space segment. So we didn't directly have a relationship with Hispasat.
But obviously, the win with Media Networks Telefónica was a very competitive procurement against our classical ViaSat competitors, which we were successful in winning. So that was a big win for us.
Chris Quilty - Raymond James & Associates, Inc., Research Division
Okay. And the fact that Eutelsat just announced last week that they're acquiring a satellite with, I believe, 24 Ka-band transponders for the Brazilian market.
You've now got 2 satellites coming into Brazil with Ka-band capacity, you obviously are playing on one of them. It's probably fair to assume Eutelsat will continue to go with ViaSat.
Does the capacity coming into Brazil in any way either motivate or dissuade you from the opportunity of potentially putting a satellite with Ka-band capacity in Brazil or the Latin American market?
Pradman P. Kaul
Yes, Brazil is a very interesting opportunity for us. As you know, we've been in the enterprise business in Brazil for many, many years and doing well.
It's a market we intend to play in for a long time. So I think the availability of Ka-band Space segment, we view as an opportunity for us, and we hope we'll use it in the right way to grow our business in Brazil.
But we have nothing to announce at this stage.
Operator
[Operator Instructions] Our next question comes from the line of Anthony Klarman with Deutsche Bank.
Anthony Klarman - Deutsche Bank AG, Research Division
It's Anthony Klarman with DB. I wanted to try to go back to one of the prior questions on the mix.
I think at the time when EchoStar acquired the Hughes business, one of the advantages that we talked about was, there was this big unserved and underserved penetration opportunity. I think there was something like 20 million or so homes that were completely unserved by broadband, and there was another big slug that was relatively underserved or under-penetrated.
As you look at where your growth is coming from, is your go-to-market strategy in place to kind of attack that unserved and underserved market? Or as you look at the subs that you're getting from some of your wholesale partners, whether it's DTV or DISH, are they coming from more of the traditional segments where you have some fairly robust competition from cable and other broadband providers?
Pradman P. Kaul
Our traditional market segment has been the unserved and underserved market, not cable and DSL markets, and that's where most of our subs have been coming from in the past and continue to come from in the present. So we're still focused on that market segment, because we're trying to maintain our ARPUs at the level that they are.
Michael T. Dugan
I think it's fair to say that the subs from all channels look pretty similar, we don't see a huge difference from any partner that's attacking a segment they shouldn't be. I think we work too close with the wholesale and the sales channels to ensure that we all focus on the same type of sub and we've been pretty successful.
Anthony Klarman - Deutsche Bank AG, Research Division
Yes, that was exactly one of my questions. Another follow-up, maybe for Dave, as you look at the liquidity here, obviously, it's pretty strong and when you look at the CapEx plans that you've talked about and if you can extrapolate out, are there any other additional investments that you'll have to make with CapEx on the older portions of the fleet that might still be getting leased by DISH?
And as you look at the liquidity, there's only about $180 million or so down in the restricted group where the bond restricted group is, a lot of it is at the parent. How do you think about what other strategic things you might be looking at, at the parent?
Are you considering other forms of M&A like you did at the time when you acquired Hughes business?
David J. Rayner
Yes. I'll answer that second part first.
We're certainly looking at other M&A opportunity. There's a number of things that are interesting.
Obviously, we're interested in things at the right price that fit into our overall business strategy. With that said, you can never say, yes, we're going to do it, or, no, we're not going to do it.
We're going to continue to look at opportunities. Overall, in terms of liquidity, obviously there's a number of things that we're working on for the business development with Brazil being front and center.
Brazil is a -- is obviously a major focus of ours right now and that will be the use of some of that available cash. In terms of replacement cycle on some of the older satellites, I'll let Anders expand on that.
But we're going to look at it on a case-by-case basis. One of the things that you got understand is that technology has changed in terms of the amount of capacity you can put on a satellite for when some of those birds were originally launched.
But Anders, do you want to stand...
Anders N. Johnson
Yes, Echo 16 was launched last year and put into service with DISH early this year is a perfect example of that. The satellite effectively took over the capacity of 2 older satellites, as well as offered up significant expansion capacity for DISH, which they're still in the process of ramping up as they bring additional HD local into locals into service using the spot beam capacity that the satellite affords.
So on a going forward basis, there isn't necessarily the need for a one-for-one replacement, but we work very close with DISH in evaluating their needs from a demand side and match it with capacity. Right now, DISH has under construction themselves the Echo 18 program, which we are managing for them, which there too will provide them both with capacity that is otherwise distributed across multiple satellites, as well as growth capacity and restoration capacity in the event of fleet contingencies.
So there's nothing right now that I could identify, in a replacement sense, that specifically DISH is in need of.
Operator
[Operator Instructions] There are no further questions at this time.
Michael T. Dugan
Okay, operator, thank you were much. We'll close up the call at this time.
Thanks, everybody, for joining us.
Operator
This concludes today's conference call. You may now disconnect.