Good day, ladies and gentlemen, and welcome to the Q3 2017 The Cooper Companies, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] And as a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference Ms. Kim Duncan, Vice President of Investor Relations. Ma'am, you may begin.

Good afternoon. And welcome to The Cooper Companies third quarter 2017 earnings conference call. During today's call, we will discuss the results included in the earnings release along with the updated guidance and then use the remaining time for Q&A. Our presenters on today's call are Bob Weiss, Chief Executive Officer; and Al White, Chief Financial Officer and Chief Strategy Officer. Before we begin, I would like to remind you that this call is contained forward-looking statements, including all revenue and earnings per share guidance, and other statements regarding anticipated results of operations, market or regulatory conditions and integration of any acquisitions or their failure to achieve anticipated benefits. Forward-looking statements depend on assumptions, data or methods that maybe incorrect or imprecise, and are subject to risks and uncertainties. Events that could cause our actual results and future actions of the Company to differ materially from those described in forward-looking statements are set forth under the caption Forward-Looking Statements in today's earnings release and are described in our SEC filings, including Cooper's Form 10-K, all of which are available on our website at cooperco.com. Should you have any additional questions following the call, please call our Investor line at 925-460-3663 or e-mail ir@cooperco.com. And now, I'll turn the call over to Bob for his opening remarks.

Thank you, Kim, and good afternoon everyone. Welcome to our third quarter 2017 conference call. This was another solid quarter with share gains, improving margins and strong cash flow. On a consolidated basis, we reported 556 million in revenue and non-GAAP earnings per share of $2.64. CooperVision posted another strong quarter with 7% as reported revenue growth or up 8% in constant currency. Daily silicone hydrogel lenses grew 47%, while Biofinity and Avaira combined to grow 10% both in constant currency. CooperSurgical posted revenue growth of 13% up 4% pro forma with Fertility up 26% or 6% pro forma. Moving to the details, CooperVision posted third quarter revenues of 437 million, up 8% in constant currency. By geography, the Americas grew 2%, EMEA grew 13%, and Asia-Pacific grew 13%, all in constant currency. The Americas stands out as it was soft, but based on market data the entire market was soft. We continue to see good data in the Americas so it appears this was an anomaly and we expect stronger growth in future quarters. Overall, revenues continue to be driven by our silicone hydrogel lenses led by MyDay and Clariti in daily space and Biofinity in the monthly space. Regarding daily, our two tier approach within the daily silicone hydrogel space allows doctors to offer premium in mass markets lenses with the latest materials. MyDay is our premium daily silicone hydrogel lens and is offered as a very high quality sphere and toric. Our Clariti products are sold on a mass-market basis and remain the only daily silicone hydrogel lenses family with the sphere, toric, and a multifocal offering. In addition, Clariti is competitively priced against several daily hydrogel products that we maintained a nice competitive advantage. Overall, we continue to believe where it deserves the healthiest modality compared…

Thank you, Bob, and good afternoon, everyone. Most of my commentary will be on a non-GAAP basis, so please refer to today's earnings release for a full reconciliation of GAAP to non-GAAP results. Bob covered revenues, so let me focus on the rest of the financials and guidance. For the quarter, consolidated gross margins were 64.8%, up nicely from 63.6% last year with both CooperVision and CooperSurgical posting improved gross margins year-over-year. CooperVision's gross margins were 65.5%, up from 64.2% last year, driven by the product mix shift gains and currency, partially offset by higher cost inventory tied to our annual plant shutdowns in fiscal Q1. As a reminder, our inventory turns through the P&L over six months, so our plant shutdowns in fiscal Q1 resulted in higher cost inventory turning through the P&L in our fiscal third quarter. Bob mentioned the Avaira transition and I want to comment quickly that we did experience higher sequential cost associated with switching patient from Avaira to Avaira Vitality mostly from writing off inventory. Having said that, we excluded these unique transition costs totaling 2.8 million for non-GAAP repurposes. To be clear, this is a very positive transition for us as we are providing a high quality replacement product while realizing manufacturing improvements to significantly improve future gross margins. We expect we will see most of this benefit in the back half of next year and into fiscal 2019. CooperSurgical posted a nice bump in gross margins to 62.4%, up a 120 basis points from 61.2% last year. These improvements were driven by success around our integration efforts within Fertility along with the margin improvement in our base medical device business. Consolidated operating expenses grew 10.5% in the quarter driven by investments throughout the Company. We spent time in prior quarters discussing investments…

[Operator Instructions] And now our first question comes from the line of Brian Weinstein with William Blair. Your line is now open.

Hey, guys. Thanks for taking the question. I am wondering if you could it talk at all about any kind of pricing benefit that you guys are seeing. I know you've raised some pricing on strategic lenses in April. What benefit has that been giving you? And can you talk about the difference how you're going about your price increases versus how some of your competitors do that? And did that cause any kind of an issue in the market? Thanks.

Sure, Brian. Pricing gets a lot of questions and has historically got a lot of questions. It is true there are some competitors raising prices -- list prices. It's also true that as an industry we've been trading up, we've been more about trading up. So, 90% of the action of growth in the industry is trading up, less than 10% has anything to do with pricing and that's been that way forever for 30 years. So pricing sometimes is a tactic, it allows you to do things as you are shifting wares from a two week modality into a one day and a one month modality. So, you may do something with your list prices. At the end of the day, it's the net growth that matters, it's the trading up that matters. And I would say pricing is nothing more than a minor tactic in achieving whatever you're trying to do. The industry has done a phenomenal job of moving now people out of the two weeks space into the monthly, into the one day space. The growth of the industry the last four years plus has been the one day modality in the U.S.; and for the last 10 years, it's been the one day modality outside U.S. So, I'm not going to comment too much more on the granularity of pricing tactics.

Thank you. And our next question comes from the line of Joanne Wuensch with BMO Capital Markets. Your line is now open.

Hi, thank you very much for taking my question. Two of them. One, could you please walk us through your EPS guidance bridge roughly $0.14 at the midpoint that you raised it? How much of that is from tax, FX and probably some other components in there?

Al, you want to?

I'll take that one. Yes, from a tax perspective, we came in probably just a little lighter maybe than expecting in Q3, but Q4 as we guided to 9.5%. So for a full year basis, we're probably you know in that 7.5 little bit north of that maybe range. So I wouldn't put much in there from tax. From an FX perspective that's a little bit of a different story. We had about $0.06, $0.16 -- I am sorry, $0.16 benefit from FX this quarter. And when we look at Q4, we have about a $0.12 FX benefit, so some nice benefit coming from currency in Q3 and Q4. We obviously invested a lot of that and as I talked about, we're taking the opportunity here to do some upgrades especially within distribution throughout the business to ensure we meet customer demand going forward. And there really wasn't much else there, so it's pretty much driven by, doing what we were doing. And then outside from foreign exchange [Indiscernible] reinvest in the infrastructure and business.

Thanks. So, here's my second question is, last quarter you're helpful to give us some idea of how fast you are ramping up your sales force. Could you give us an idea of where the sales force hires are and how the productivity is progressing? Thank you.

Yes, I would say that we have put a lot of energy the last 12 months into sales force expansion. And while I won't quote exact numbers in terms of feet on the street, I would say we have expanded our sales force year-over-year 20% in vision. So a lot more feet on the street, we're still under indexed against all of our primary competitors and even a smaller competitor. Having said that, the productivity I think is reflective in the fact that we continue to grow twice the markets. So we're getting a lot of results out of that expanded feet on the street. It does take 9 to 12 months to have sales persons fully productive, so we’re still marching up that curve very nicely. It's a global expansion. It's not only the U.S. So, we continue to find Asia-Pacific as largely been a bootstrap pay as you go basis, but hire as many as you need to continue to expand your coverage in Asia-Pac. In Europe, we're borderline almost number one now in the marketplace neck-and-neck with Alcon and continue to add two feet on the street in Europe also. So, it's going very well. We're happy with the progress. We're happy with the availability of what is out there to have and attract into the CooperVision family.

Thank you. And our next question comes from the line of Jeff Johnson with Robert W. Baird. Your line is now open.

Bob, I wondered first questions if you could just talk on the North American market, obviously, it came in a little softer than we might expected. I think the numbers at the end of the press release are growing, so that I don't it includes the promotional activities, but maybe if you could just talk about kind of what you think is going on in the North America market this quarter? Thanks.

Sure. Yes, you're going to have to mute I think there is something because it is in the background, okay, that's good. Yes, the Americas, the North Americas, as I indicated was soft, we think the on eye activity is good. So, the throughput is good, the trading up is phenomenal going from two week to one day. So really some of the anomaly I think if we look at the last six quarters since J&J started their activity and whether it's the migration from UPP or whether it's consolidation of distribution whether it's some of the tactics that J&J has used in the marketplace by way changing distribution channels, there is a host of activities that could lead to tough comps and hard to figure out what's going on. Net, net, net over a multiyear period and I have to go multiyear even though our UC like to go 12-months, the market is very good. But I must admit it's been I'd say one quarter does not a trend make. This quarter clearly is not indicative of a trend nor do I think it's indicative of the market strength, which is fine on a -- clearly on our worldwide basis. Sorry, I don't have a better answer than that, but it's -- I would admit it's pretty squirrelly.

Okay. And a very quick follow-up for Al maybe promotional activity on Clariti and MyDay went up [Indiscernible] May 1st. CVI gross margin maybe a bit softer than we were looking for. Can you quantify any impact of those promotions? Or was it much to the P&L at all this quarter? Thanks.

Yes, it's challenging to quantify that, right. No, I would say, it was not a big impact to the quarter though suffice it to say.

Thank you. And our next question comes from the line of Larry Keusch with Raymond James. Your line is now open.

Two quick ones. Bob, you sort of mentioned this. But can you talk a little bit about the recent trends in the two-week segment of the market? My sense is that, that category is accelerating in its erosion, if you will. So, I am just curious, if, A, you think that, that's consistent with what you are seeing and what you guys are really doing to try to continue capture those two-week patients as they come loose? And then the second question for Al is, could you just -- I am really just trying to think about next year's cash flow generation and obviously CapEx is very cyclical for your business. So I just wanted to get some sense of how you are thinking about CapEx needs for next year?

I will deal with the first one. You are absolutely right. There is an acceleration of the two-week space shifting into the daily and to a lesser extent the monthly. We have been putting up pretty good Biofinity numbers. So yes some of them are waiting for the monthly category. I applaud the efforts that J&J has in that arena. They are about 90% of that market or a little more. So that's the wear base. And we want that wear base and they know it out of the two-week and to other spaces and primarily the one day modality. Since they have adopted that strategy, really when they came out with the one-week product and then the one day product meaning a one-week oasis and then a one day oasis, they have really accelerated the depth of that two-week space. And we find that, we are getting our fair share. Obviously, when you look at the Clariti and MyDay numbers 47% growth over a higher base, so year-after-year that base goes up and it continues to grow very impressively. And clearly the U.S. is a big part of that growth because of that shift from the two-week into the one day space.

Yes, I would say on the CapEx question. Obviously, we are closing out a strong year here. We are going to have free cash flow well in north of 400 and our CapEx looking like it's going to be in light 150. I would say that because of the way it's calculated in terms of whey you write the check, I think that we will close out strong year. It would not surprise me if next year's CapEx -- I would be surprised but not higher, certainly could be in that 150 to 200 depending upon what we do. As I mentioned distribution as an example, wouldn't surprise me if we have new distribution facility as an example in each business next year. So I could see -- certainly see CapEx being higher next year. On the flip side, our operating cash flow will continue to grow and year-over-year free cash flow continued to improve. So fiscal '17, strong close to the year should result in strong free cash flow. Fiscal '18 even with higher CapEx, if we have it, it's going to be an even stronger free cash flow year as what I would say at this point.

Thank you. And our next question comes from the line Larry Biegelsen with Wells Fargo. Your line is now open.

I have one for Bob on the Americas, one for Al on 2018. I will try to ask them both upfront, if you need me to clarify, I will. But Bob back to the Americas, I mean the 12 months, it's been weak -- the last 12 months have been week. So, it's not just a one quarter phenomenon, I guess what I'm trying to understand is what gives you the confidence that it's going to recover, if it's unclear based on your earlier answer exactly what's going on. I mean one theory is that it was the destocking a year ago, and that's just kind of rolling out. So can you give us any color as to why you're confident you know that the market will recover? You know, it's not just a J&J phenomenon obviously your results in the Americas have also been depressed. So a little bit more color on that would be helpful? And then second for Al, you talked about EPS, but you didn’t talk about sales. Consensus right now is about 7% on the top line. I'm assuming that underlying excluding currency. Are you guys comfortable with that? And is currency about a 3% tailwind to sales and $0.60 to EPS next year? Thanks for taking the questions guys.

Okay, on the Americas. Our confidence really comes back to -- if we look at from a four year perspective the Americas has done well. More like 4% and we do have the acceleration of the trading up and keep in mind I've mentioned in the past that a trade up of an oasis non-compliant wear is 800% trade up to an oasis one-day compliant wear. So two week non-compliant referring it as a monthly and buying it in -- available in a two year supply because they buy a one year supply at two weeks which turns into a two year supply on a monthly basis. They then shift to buying 730 lenses and they're very compliant because they don't have lens care regimens and all that stuff. So, we're highly confident that once you get through the noise level of everything that's gone on including just how much J&J sells the pipeline in the third and fourth quarters of 2015 that kind of created anomalies throughout the next period. And to including some of the antics of going direct, trying to go around the middle man and to including some of the consolidation going on with partnerships of large retailers, so there's a lot of moving parts, but underlying that is the market that looks very healthy from a wearer perspective and a trading up perspective. So, we're highly confident, we'll see normalized correlation between that shift and the revenue line in the future.

And Larry when it comes to guidance, I'm not going to provide too much color yet. It’s a little early. The business has obviously been performing well from a top line perspective and we don't fluctuate significantly. So, we'll see how that plays out, but I don't want to give specific numbers on that yet or frankly with respect to currency as much as the markets move. You know making the statement that we’re comfortable staying low double digits and use 11% as the midpoint you can argue that that's conservative. And certainly when you look at our Q4 guidance here of 14 to 18% as reported, we obviously strive for stronger numbers. At this point in time though, still months and months and months away from next year and giving guidance, I think it’s prudent to just stick with where we are right now. And we'll update it accordingly when we get on the December call.

Thank you. And our next question comes from the line of Steve Willoughby with Cleveland Research. Your line is now open.

Good afternoon thanks for taking my call. I had a question. Two questions for you. First on the CSI business, if I remember correctly a quarter ago, you commented how you saw some of the headwinds of that business were going to abate here in the third quarter. And so just if could provide any more color on exactly what's going on there? And how long you expect the pressure you are seeing on the office business to continue? And then I guess just one last question on the Americas, Bob, do you think there is any impact from the increase rebating activity sort of pulling forward demand because there is just more annual supply sales happening these days?

No, I think the surgical.

Yes, I think surgical price. The third part it was to touch weaker than certainly at least I was expecting it was going to be the Fertility business did okay there was still some integration activity and the probably linger to little bit longer than I thought it was going to. So I think it we will see a little bit stronger fourth quarter performance there. The base there is so, yes, there is a lot of legacy products there so, EndoSee, as Bob mentioned are disposable history to scope is doing really well and we're continuing to make a lot of progress there, but some of the base products are a little bit harder to get moving there. So I still think that business is more along wise of the 3% to 4%, 5% maybe kind of growth business that component that base business component of it. So that was a little bit lighter it's hard to get into the any individual quarter and pinpoint the specific issues associated with it, but I do think you'll see a little bit of improvement on that in Q4 also.

On rebating particularly into the Americas, I think there is a silver lining to the whole of rebating. I think you are right that the rebating activity has increased and that makes sense when you think about what we're doing as an industry moving from the two weeks space and trying to provide that incentive to and do you fit in the one day modality. So there is a lot of energy is being spent on trial you'll like it. If we can get to there to try it once you realize how convenient it is, they'll probably stay and not go back ever again because it's just too convenient, and I speak as the user not and not only as user who used to clean the lenses every day. So I don’t worry about cleaning lenses every day. I throw them away every day. So the strategy of rebating and creating that extra incentive to say hey net, net, net this is not to expensive right now. Keep in mind there is a list price, now, list price is getting higher and higher relative to the net. And so I can net out take my money and spending our lens care and shifted into the one day modality and feel real good about that and the convenience lone behold down the road, it could be that the rebates start diminishing, once you're a new fit and no longer a new fit, but a re-user who knows what will happen. So I think more important to have your list price, full list price of that cards or list price of the hotel room, I don’t care what list price you are talking about where you suddenly provide a $1,000 list and the $500 refund well. It's a $1,000 list and a $1,000 bill certain times, so that's kind of same in this industry as every other industry on how you play that out.

Thank you. And our next question comes from the line of Chris Pasquale with Guggenheim. Your line is now open.

Thanks. Al, I wanted to start by circling back on the guidance update and the impact to currency here. So you guys have been looking for currency to be neutral for the year which implied about a 2% -- sorry $0.02 headwinds in the back half. Now, it sounds like there is actually going to be $0.28 positive in the back half, so the implication is that on a constant currency basis full-year guidance came down by about $0.15. Is that math correct, and if so, what’s driving that?

Yes, I mean, I am not sure exactly how to and in terms of what's driving it, I mean obviously currency has been moved in our favor. So, when you look at it, the numbers are roughly correct, that’s true. I mean some of these are given ranges especially on forward-looking guidance, but that’s true. The answer to that though is the investment side. So when we gave guidance last quarter, we saw the currency strength, already it’s a matter of fact that when we guided we guided with some relatively conservative FX rates. And we were getting in front of especially distribution is the best example I can give. You guys have heard, you’ve done survey work and you’ve heard some distribution issues that we’ve talked about it in the past. We have a lot more volume going through our distribution center. A lot of our business is driven by daily growth. We have -- customers are demanding a higher level of excellence when it comes to shipping that’s both through within Vision and Surgical. Our business is about growing and growing pretty consistently. So we are getting in front of that and we started that at beginning of last quarter. Now it’s much easier to do that so to speak and report good numbers when you have currency at your back. We went a number of years when we were fighting currency. And so putting up pretty good numbers in the face of currency and now it’s kind of flipped the other side. So we are taking advantage if you will of the currency situation to invest some of those dollars.

Thank you. And our next question comes from the line of Matthew O'Brien with Piper Jaffray. Your line is now open.

Thanks so much. So two questions. Al, can you just be a little more specific on how much you’re going to be investing between this year and next year? How much of its coming this year and how much of its coming next year and exactly where those investments are going to be going domestic versus international? And then may be for Bob, on the Procornea side, that asset I think if I know it has a pretty sound presence in China. Is there an opportunity to accelerate your contact lens business in China as a result of that acquisition? And then myopia control as a segment I think can be overtime hundreds of millions of dollars. I mean when do you think that acceleration in that market occurs, is it sometime this decade? Thanks.

I mean a lot of investment is going be offshore. So obviously I mentioned distribution a couple of times and you are going to continue to see that. We will have probably a couple of new distribution centers coming up within Vision and Surgical and an expansion of existing distribution centers. So you’re going to see a lot of activity there. We are not going to hold back on sales and marketing investments either. And as we’ve mentioned, Bob has talked you through, we are at around 2 times in the market. We have a lot of momentum, a lot of really good products. We are going to continue to invest dollars in both business to drive market share gain. So you are going to see that, and when you look at how much, some of that’s frankly to be honest with you gets dependent upon currency. I mean if the euro outwards that and continue to give us the opportunity to do some investments, we are going to take advantage of that. A lot of those are variable factors and we can be around that. But we do believe in the long-term of the business and we are going to invest accordingly.

On Procornea, we obviously haven’t given a lot of air time at this juncture. But you are correct that big part of their business is in fact in China. Relative to whether or not and to what degree that will allow us to accelerate, our overall franchise in China, I would assume yes there will be some benefits, but quite frankly a lot of what makes, what's okay and what Procornea is about and myopia control, it’s pretty much in the hands of a specialty area where people really focusing on what it takes to slow the progress of myopia particularly in younger generation, younger part of the generation. So I don't think there's a real lot of spill over there. We are tremendously excited about the space, but we also are realistic to say this can be a long haul development. Myopia's going up around the world significantly. It’s gone from you know basically 20% of the world and it will be approaching 50% of the population by 2050 and directionally, it's clearly headed that way. What's causing it very much is taking people off rural area the countryside, putting them in schools is one of the leading thoughts. Having less natural sunlight is a thought. Whatever the real reason is, it’s clear that myopia is going up around the world and that the world will need a better portfolio of products to address high myops which run into problem later in life with retinal detachments and various other forms of eye challenges, so we're excited about it but it’s not going to be immediate so we're looking beyond the next five years I think in terms of where it starts moving the needle.

Thank you and our next question comes from the line of Andrew Hanover with JP Morgan. Your line is now open.

Thanks for taking our questions. So I thought I'd start with Al with my first question and then follow it up with Bob for my second. But I wanted to Al just go over guidance real quick and just understand CVI five to seven at pro forma guidance? And what the contribution was in terms of the acquisition last quarter I would say a year ago? And then Bob on torics and multifocals have somewhat of an easier comp this quarter, you're launching Clariti Toric in the U.S. and MyDay Toric in Europe. Any color you can give there in terms of some of the pushes and pulls in the quarter?

Yes, couple of comments on CooperVision revenue that we did not disclose the financial terms details of that acquisition, but it was small. So I can tell you there's a minimal impact to revenues on CooperVision from that. If you look at our guidance from CooperVision from last quarter to this quarter certainly some of that was currency, as we saw the improvement in currency within the business, but it would take -- we actually take the business up even more than that. So operationally, the underlying fundamentals of CooperVision are very strong and the kind of 5% to 7.5% growth that's given for the next quarter would be an improvement, right, the only reason that it looks like it’s less than an as reported basis is because we're coming off a lot of different comps.

On the dynamics of toric and multifocals, we have a lot of activities going on around the world both as to products and as to geography. In terms of a lot of activities that's leading to solid growth in Asia-Pac with MyDay Toric continuing to roll out there and torics in general by far the most mature market in the world and that's a relative term not really mature is the Americas where Torics are far advanced compared to the rest of the world by a factor of more than 50%, meaning there's a lot more penetration. For example in Japan and Germany, there has been a history in the past of dealing with astigmatism by RGPs, big in Germany, big in Japan, but new -- the newer generation, the young adults are not getting RGPs. They are getting torics when they have astigmatism. So, tremendous growth opportunity is there. We're happy with the numbers we're putting up. We're happy with some of the progress we've made with MyDay Toric, which is early in the game in terms of rolling it out now into your and later next year in the U.S. We're happy with Biofinity extended range, the made to order. So a lot of good things that should keep a solid momentum in that specialty contact lens area.

[Operator Instructions] Our next question comes from the line of Jon Block with Stifel. Your line is now open.

First one Bob or Al maybe just the optimal capital structure [indiscernible] chatter out there that there were certain limits health assets that might be for sale. I know you are not going to comment specifically on those assets. But can you talk to your leverage or appetite for more acquisitions in CSI considering it still seems like the integration is going on with some of the deals that we've done last year? That's the first question. And the second one just small P&L question. Any details on the 3.2 million other income gain in the quarter, an lastly Al, I want to make sure I heard you as the 2.8 million that was excluded from non-GAAP results that was specific to the Vitality transition, that's the case and it was excluded in this quarter, but not the past couple because it was larger than expected? Thanks guys.

Yes, let me write a couple off here something if you want. The Vitality you are right 2.8 million, it was something like a $1 million or maybe a little bit less last quarter. We had not called it out at that point. Now, it's moved up to a point here where I think it's worthwhile to actually highlight as we mentioned. It will occur again I think probably a similar amount in Q4, probably again in Q1. And then it will tail off that transition is getting done. So I don’t believe it's ever going to be that larger to the number, but it's important enough I think from our perspective to be transparent kind of highlight that. If you look at the 3.2 million the other income and there are lot of that' is going to be associated with foreign exchange, so that's going to be below the line FX gains on our intercompany loan. So we kind of see that fluctuate, you will see that the gains on quarter see at as a loss on quarters that just kind of maneuvers around currency, but that's what the majority of that would have been. If you look at our optimal capital structure, I guess the way I'd say I look at it is this quarter our bank defined net funded debt to EBITDA, which is the way I look at it, it was 1.71 time. So from a leverage perspective, we're probably a little bit on the light side right now. Obviously, we look at things like investing in the business, we look at acquisitions, we look at share buybacks and so forth as different avenues and enhanced shareholder value and we will continue to do that. I think that from a leverage perspective defined that way. If you start getting below 1.5 times or certainly as you move toward the one or lower, you are getting yourself kind of unlevered in today's lower interest rate world. If you are going to be move up towards north of three or certainly as you move towards 3.5, if you were to move that high right here you would have to raise a question mark on that as your leverage risk is going to go up.

Thank you. And I am showing no further questions at this time. This does conclude today’s Q&A session. I would now like to return the call to Mr. Robert Weiss for any closing remarks.

Well, I want to thank you for joining us today for an update on how the year is progressing. We have a lot of positive activities going on as you can see. We look forward to updating you as we approach and come out with our year-end numbers. and I believe that’s on December the 7th. And so, we look forward to giving you an update at that time. Thank you.

Ladies and gentlemen, thank you for participating in today’s conference. That does conclude the program. And you may all disconnect. Everyone have a great day.