Mettler-Toledo International Inc. (MTD) Q2 2008 Earnings Report, Transcript and Summary

Good day ladies and gentlemen, and welcome to our Second Quarter 2008 Mettler-Toledo International Earnings Conference Call. My name is Cara, and I will be your audio coordinator for today. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]. I would now like to turn our presentation over to our hostess for today's call, Ms. Mary Finnegan. Please proceed ma'am.

Thanks Cara, and good day everyone. I'm Mary Finnegan, Treasurer and responsible for Investor Relations at Mettler-Toledo, and I'm happy to welcome you to the call. I am joined by Robert Spoerry, Olivier Filliol and Bill Donnelly. I will start by covering some administrative matters and then turn the call over to Robert. Now for the administrative matters; first, this call is being webcast and is available for replay on our website at www.mt.com. A copy of the press release we issued today is also available on our website. You should be aware that the statements on this call, which are not historical facts, maybe considered forward-looking statements for purposes of the Safe Harbor Provisions under the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties that could cause actual events or results to differ materially from those expressed or implied. For further information concerning issues that could materially affect performance related to forward-looking statements, please refer to our filings with the SEC. We undertake no responsibility to release any revisions to forward-looking statements as a result of subsequent events or developments. One other item on today's call, we may use non-GAAP financial measures. More detailed information with respect to the use of and differences between the non-GAAP financial measure and the most directly comparable GAAP measure is provided in the press release. I will now turn the call to Robert.

Thank you Mary, and afternoon and welcome everybody to the call. We just finished our Board meeting here in Germany in Hanover and now as the day does end over here, we are very pleased to announce a great quarter. As usual I make some introduction remarks, and then Bill will provide details of our financial results and also new guidance. Olivier will then make some additional comments on our growth strategies, but we'll keep our prepared remarks brief. As most of you have heard either directly or indirectly, an update on our strategic initiatives from our most recent investor meeting. As always, we'll have time for Q&A at the end. I will begin with highlights of the quarter. We have seen continued solid momentum in our business. Local currency sales gross of 11% was very strong and exceeded our expectations. We had good growth across the board. Most geographic regions and product lines contributed to this very nice result. These strong sales gross led to an 18% increase in operating profit and the very strong 28% in case the percent increase in adjusted EPS. Gross in cash flow was also good with cash flow per share, up 26% into quarter. With these results, we are again increasing our guidance for the full year. Momentum in our business remains solid, but we're also alert for potential slow down. We'll have further comments on guidance and our outlook later on the call. I will now turn the call over to Bill for more details on the financials. Please Bill.

Thanks, Robert and hello everybody. As you heard from Robert, we had a great quarter, and are very pleased with the results. Let me begin with adjusted earnings per share, which came in at $1.40, a 28% over the prior year amount of $1.09. For the quarter, adjusted EPS excludes purchased intangible amortization expense. On the last page of our press release, we have a table that details the calculation of adjusted EPS. Let me provide you with more details beginning with sales, which were $515.6 million in the quarter, an increase of 11% organically in local currency. On a U.S. dollar basis, sales increased by 20% in the quarter, which included 9% currency benefit. I know I have said this before, but given a strong impact of currency on our results, I want to highlight the impact of currency. Although we do have a cosmetic benefit to the top line due to the weaker dollar, it is local currency sales growth that drives our operating profit growth. This is because we relatively naturally hedged with our non-dollar sales approximated on a non-dollar cost. The net impact of currency and operating profit and earnings per share tends to be relatively small. Breaking down sales by geographic destination, and all these percentages are in local currency, we are very pleased with the 10% local currency growth we reached in Europe. We had good growth in the quarter in almost all product lines. For the first six months of the year, sales were up by 7% in Europe. Sales growth in the Americas increased by 7% on an organic basis. We had very growth in lab and in food retailing, industrial was up as well with strong growth in product inspection, offset by reduction in one of our OEM customers. Year-to-date sales were up 4% on an organic basis in the Americas. Sales in Asia, rest of world increased by 22% in the quarter, with all product line showing very good growth; year-to-date of sales in Asia, rest of world are up by 20%. Now turning around and looking at it by product area, we had 11% organic growth in laboratory, with good growth in almost all product lines. For the first six months, laboratory sales were up 10% and on an organic basis. Industrial sales also grew by 10% in the quarter, with strong growth in both core industrial product and the product inspections side; and for the first six months, industrial sales were up by 8%. Finally, retail was up by 16% in the quarter with good growth both in Europe and in the U.S. Year-to-date sales are up by 3% in retail. I've kept my remarks here brief as Olivier will provide additional insight and sales by product category. Now let's look at gross profit margins. They increased by 20 basis points in the quarter to 50.2%. We drove 150 basis point margin expansion in the quarter on a constant currency basis. There were few items that came together to give us this strong result. This includes the impact of price increases and access of our material cost increases as well as the impact of leverage. Mix was relatively neutral in the quarter; currencies did decrease gross margins by about 130 basis points. This goes back to the impact of the weaker dollar, which I described before. Let me make some additional comments on raw material prices as I know it's an area of focus for many of you. Steel is an important raw material category for us as we use in a most product lines, but especially in our industrial products. We continue to be successful in limiting the impact of cost increases through procurement initiatives. These initiatives include using more low cost country suppliers and further consolidating the supply base. Our material price index, which is how we track year-over-year material cost inflation, is up about 50 basis points this year. We are also making supplemental price increases over and above our normal increases in those product areas, where product lines are particularly impacted by steel prices. In summary, we're more than offsetting our material inflation as evidenced by our strong margin expansion. R&D amounted to $26.7 million or 5.2% of sales, a 7% increase in local currency, while SG&A was $157.1 million, an increase of 11% in local currency. Let me break this down a bit more. Of course with the top line growth of 11%, we have higher sales, commissions and associated sales related expenses, our incentive compensation also increased during the period because of the strong performance. Beyond that, we also had increased investments in sales and marketing, especially in emerging markets. The net sum of all these P&L items is the result in a strong operating income. Adjusted operating income increased by 18% to $75.2 million as compared to $63.8 million a year ago. On a constant currency basis, our operating margins grew by 100 basis points in the quarter. Now continuing down the rest of the P&L, amortization amounted to $2.7 million in the quarter, while interest expense was $6 million; other expense amounted to $0.5 million. Our tax rate was 26% and we expected to remain at that level. Now for the share repurchase plan; during the quarter, we repurchased 585,400 shares for a total amount $58.3 million. Fully diluted shares for the quarter were $35.3 million and at the end of the quarter, we are at 35 million shares even. Our share count is currently 8% lower than at this time last year. Finally, earnings per share on a reported basis was $1.38 in the quarter. This compares to $1.07 in the prior year. Adjusted earnings per share were $1.40, which is a 28% increase over the prior year amount of $1.09. For the first six months, adjusted earnings per share was $2.41, a 28% increase over the prior year amount of $1.88. Now, let me turn and take you through cash flow. Free cash flow for the quarter was $64.4 million as compared to $55.3 million a year ago. This results in free cash flow per share of $1.82, which is a 26% increase over the prior year amount of $1.44. We are obviously very pleased with this growth. Our DSO was at 44 days in the quarter, a two day improvement over a year ago. And as I said on previous occasions, we're really pleased with the absolute level of DSO. ITO came in slightly lower than last year. That covers the quarter; but let me now take you through our guidance. As you see with our Q2 results, momentum remains very solid in our business. At the same time, we continue to be alert for any potential slow down in the global academy. We want to be positioned to react quickly if it's necessary. Now let me give you some additional color for the rest of the year. Let's start with Q3. We would expect local currency organic sales growth for the quarter to be in the range of 6% to 8%. This is higher than we had previously communicated to you. We are starting the quarter with a very solid backlog and if that seems slowdown in our markets today. This sales growth should translate into an adjusted earnings per share growth of $1.33 to $1.35, an increase of 16% to 17%. For the full year, we would expect adjusted earnings per share to be in the range of 553 to 563 per share, which represents the growth of 17% to 19% over 2007. This compares to our previous guidance, which had assumed a growth rate of 15% to 17%. For clarification purposes, I just want to remind you that adjusted EPS excludes the $0.07 expense related to purchase and tangible amortization and $0.07 per share gain for discreet items tax items that we had in the first quarter. One piece of background information I want to share is that we've assumed a refinancing of our existing debt in Q3. We have decided to refinance now as we were approaching a full utilization of our credit facility, the combination of the new facility as well as some longer term financing will provide higher interest cost in the short term, but we've already built this into the guidance we just provided you. Okay, that's it from my side and I will turn it over to Olivier, who will provide some commentary on the quarter.

Thank you Bill, and hello everyone. I will start with some commentary on the results and then turn to our growth strategies. As you have just heard from Bill, we had a great second quarter, which is on top of a solid first quarter, positions us well for the year. We feel confident in the year ahead, which is reflected in the increased guidance Bill has just outlined to you. We are of course cautious on the economy and will continue to monitor it closely. Now let me provide some additional comments on the quarter. Lab had a very strong quarter with organic sales up 11%, similar to what we saw in the first quarter the sales growth level was four-faced across most product lines and geographies. We continue to benefit from our strong product pipeline, our Spinnaker initiatives surrounding sales and marketing and strong growth in emerging markets. Turning to industrial; our core industrial business was strong in the quarter with very strong growth in Asia and good growth in Europe. Growth in Americas was down slightly, but I would note that this is again strong growth in prior year. Product inspection has another quarter of strong sales growth as market conditions in this business continue to be favorable. Finally, retail was up 16% with good growth in Europe and the Americas. We had nice project activity in both regions. That's all I wanted to comment on for the basement. Now, let me make just some brief comments on our growth strategy. Many factors are contributing to our operating results, including strong results in emerging markets, continued leverage of Spinnaker related programs and our focus on technology leadership. Let me cover this last topic in some more details as it is an important driver of our sales growth. Our product innovation continues to focus on solutions with tangible pay backs to customers. I would like to illustrate this with an example from process analytics, where we have introduced new technology to help our customers improve yield and lower maintenance costs. As a remainder: our process analytics business provides process industries such as pharma, biotech and chemical companies, solutions for monitoring, and optimizing liquid production processes. Our solution to combined sense of technologies would transmit us to measure bias analytical parameters. We integrate our solution with plant-wide control system and provide continuous monitory of analytical parameter like PH is oxygen and COC. Inline measurement measurements have many advantages versus taking a sample in a QC lab for analysis. One final note on the business, before I explain our new solution: it is absolutely critical that this inline census are properly calibrated, maintained and replaced on a timely basis. The malfunction or failure can have significant impact on the quality of products being manufactured, and can have tremendous impact on yields. Let me explain. A product batch for a pharmaceutical company can be in the range of $5 million to $10 million. If percentage of sales during production, the entire batch is lost. This is a huge cost to customers. Now let me explain our new solution. It consists of three elements: digital analytical sensors, new advanced transmitters, and a massive management software tool. We are marketing this unique solution under the name ISM, which stands for Intelligent Sensor Management. Let's start with the sensor. It has fully integrated electronics including intelligence referred to above. The intelligence is in productive diagnostic capabilities that managed the senor to its life cycle. Its life cycle includes the needs for maintenance, calibration, and eventually replacement, which I described earlier and the each of the status of life cycle are a revenue opportunity for Mettler-Toledo. The transmitter takes the information from the sensor and measures, displays and transmits it to the process control system. Our new transmitter has been designed to allow for high degree of flexibility in its interface. Specifically it can control our biogeo senses and we expect to add more parameters in the future. The transmitter also allows the customer to integrate their diagnostics data into its process control system and get real time alarms to avoid unexpected downtime and thus optimize yields. The final aspect of our solution is the asset management software tool, which manages the installed based in terms of calibration and replacement. Calibration at a facility can be done centrally and it's safe, easy and more accurate than when performed in the field. In terms of managing or replacement, the sensor provides a unique dynamic indicator, which the software uses to continuously estimate the remaining useful life, by continuing relevant viable such as temperature levels, resistance level and orders. This avoids unexpected down time and also maximizes the life of a sensor. The software tool also allows the customer to manage its entire installed base sensors and document all changes, which is an important for many industries including the pharmaceutical industries. Our new solution provides a significant and intangible payback to customers based on lower maintenance costs and higher yield in production, typically in the range of six months. And as it might be expected with such a powerful tool, initial customer reception is very favorable. This is just one example of a product launch that I thought it was a good illustration of a comprehensive solution that provides tangible payback to our customers. That is all that I wanted to cover today. In summary, we are very pleased with the strong operating results in the quarter. We have again raised our guidance for 2008, and remain confident in our ability to execute our initiatives. Momentum in our business remain solid. We remain cautious on the economy and we'll continue to monitor closely. We are ready to adjust our expense growth should conditions weaken. With that, we conclude on our prepared remarks, and I would now like to ask the operator to open the line for questions. Question And Answer

[Operator Instructions]. Your first question comes form line of Jon Wood with Banc of America Securities.

Hey, thanks a lot. Robert or Olivier, can you give us an update on the Qantas [ph] launch? Will that product be material in the back half of the year or will it take longer to make a meaningful contribution?

Okay. Hi, Jon. Actually important to know we have introduced Qantas into the markets, but in terms of shipping, machines and the instruments want to do the fill in Q4, and it will ramp up gradually. So, in Q4 it's going to have an impact, but the major impact is what is really starting next year then.

Okay and then on the retail, the new retail solutions; is that primarily responsible for the strength in that unit?

Partially, but actually we had a corporate growth in Americas and the Europe and yes we have some projects coming in, that are driven by the difference innovative solutions that we have also presented at the most recent investor meeting, but I wouldn't say it's just that.

Okay and then Bill, I understand your comments on the purchasing index, has anything changed since last quarter?

In terms of material price, I think. On a year-to-date basis, we did see second quarter, on a year-to-date basis is a little bit ahead of where we were in the first quarter. So, we saw some slowing down, but that could as much be as anything the mix within the quarter, so I wouldn't jump too much that we see necessarily flattening out and did see some things on the steel futures and stuff. So, and maybe that will improve somewhat down the road. But we're just continue to work hard and little things to try to manage that cost.

And so there has been no incremental price increases plan for now since your last call?

I'm sorry, I misunderstood. I thought you were asking more about our supplier costs.

Yes, I was; and then, I'm sorry I was, I flipped around.

Yes, so on the sales prices, we are raising prices, we actually did relatively aggressive in geo prices increases, raising prices that's more than we have in prior years and in particular on these products that have significant steel content.

Okay, thanks. And then Robert or Olivier, can you just comment on the M&A pipeline? Have you been more active on that front or asset prices, you're still a bit unreasonable? Thanks.

Actually, our view on M&A is still the same in the sense that if we feel very strong about our franchise and we feel that there is still great opportunities for us to further optimize. We are open to M&A, particular in the era of lifestyles like lab, process analytics. But in the very short-term, we don't have something that we just see now materializing, but I feel good about the platforms that we have. And yes, we all continually are looking for different opportunities that's the fact, down the road might share all that [ph].

Okay, thanks a lot.

Your next question comes from the line of Peter McDonald with Wall Street Access.

Question just... could you talk a little bit about how service did in the quarter?

Sure. Service grew mid single digits in quarter, I think it was 5%, little less than the product side of the business. And comfort growth was good in that part of the business as well.

Okay.And then how much is... do you have remaining on the stock repurchase plan?

We have nearly a $0.5 billion dollars and but just a as reminder that originally started out as a couple of $100 million plan and the Board has approved it periodically. And I think if we got down to relatively low level, we... assuming our balance sheet and other outlooks for the same would go back for more.

And just touching on the profits analytical inline measurement product area; who is the key customer base that you are going to be targeting that with and is that a retrofit type of sale or is it for new plans or across the board?

It is across the board, but we actually see that existing plants are regularly updating their measurement loops, and so there is actually a lot of retrofit opportunities, when we talk about the end user industries, it's very strong actually in the biotech pharma area, that's the main target industry segments. But we actually see that the chemical industry -- petro-chem industry is also very, very interested in this concept. I would say this to all these end user industries that are most targeted.

Okay. And I think it's and actually just going back, you did... have you passed on incremental price increases since the beginning of the year just to reflect?

Yes, we did.

Okay, thanks a lot. And congratulations on a good quarter.

Thank you.

Thank you.

Your next question comes from Tycho Peterson with JPMorgan.

Chi [ph] sitting in for Tycho today. First question is that, could you comment on the competitive landscape in China, particularly coming from the low cost manufacturers and if you're seeing any material impact there?

They're all around; no question about that. We don't face them in all of our market segments. I think we need to differentiate here. When we talk about the laboratory balances, when we talk about titration and TA. We see them very less as pursuing industry and the retail and business, the analog systems. The way we look at the Chinese market is kind of 3-tier, there is this high end mid-tier, where it's mainly import brands and where we are extremely well positioned. And then for the low-tier, their competitive there we see the local competitors and we wanted to actually get stronger in it; that's also a one of the reasons we are actually innovating to with local products. But in terms of market size to-date it's not so huge that segment and the competitors are all very small. It's a very fragmented competitive landscape.

And for your, I guess, your outlook for food retailing segment; has that improved since the last quarter given the stronger performance this quarter sort of an end of the year or...

What... actually have seen that in Q1 our growth in retail wasn't that strong, but this was against a very difficult previous year comparison. The comparison for rest of the year should actually not be as difficult and at times we are looking for good outlooks in the retail business for the rest of the year.

Great, thank you very much.

Your next question comes from the line of Rob Mason [ph] with Robert W. Baird.

Yes, nice job guys. Bill, real quick; do you have the sales by the three main product lines: lab, industrial, retail?

Sure. In the quarter, it was 43% lab, 44% industrial, 13% retail.

Okay. Do you have any sense that your customers order patterns were influenced in the quarter, or your shipments may have been influenced... either by the Easter movement or by your price increases, late or I guess only 3Q, but might have... they've been pulling some demand forward?

And the price increases, I definitely don't think we pretty much didn't announce them until; it would have been too late in the quarter. With regard to working days, I think, we tend to look... we would tend to look at on a year-to-date basis, I think that's worked itself out. We certainly lost a couple of working days in Q1, gained a little bit here. I think if you look at kind of our year-to-date results, you get a pretty good feel.

Okay and then, may be just last thought. As you move to the quarter, the macro indicators, really degraded in Europe. And I am just curious if you, it's not obvious from your second quarter results. But as you enter the third quarter, if you are seeing maybe evidence of those indicators turning down so significantly in June.

We don't see it in our business and we don't, I mean attempt to feel the indicators that we have, didn't show it. But of course, we remain alert. We also listen to what the other industrial companies are serving, and so on and we take advance series. But we don't have yet any early signs of slowdown.

So, your order intake has been good in June and then to July?

Yes, and that's really also why we have this solid outlook for Q3, we are really confident.

Okay, pretty good. Thank you.

Your next question comes from the line of Peter Lawson with Thomas Weisel Partners.

Actually, Patrick Delbie in for Peter. Bill, I appreciate the color you gave on steel. But I was just wondering how much of the price increase are you actually able to pass on to customers and are you seeing any pushback from customers one that?

Of course there are customers that pushback, but we feel that we have been able to it or push price increases through on the majority of our product lines to the majority of customer base. Even in places like China, we are pushing our price increases, which maybe historically has been one of the more difficult markets. And I think it's evidenced in the margin expansion year-to-date. If you look at it, it's not really mix relatives, very much prices in excess of the material cost going up, so that's a good sign. So we feel pretty confident about how that will in the second half of the year with what we are doing in New Jersey [ph].

Okay, and I know there is a lot of focus on Asia, especially the Analyst Day, you guys focused a lot on it. Would you mind giving us some color on some of the other emerging economies like Russia, India, what you are doing there?

Actually, both countries are important ones and have good momentum. We will also continue to invest actually in Russia as well as in India in significant ways. And they are all actually growing for us in similar way as China. And then that seems they import contribution. We are also in both Russia and India; we are represented across all of product lines, business lines.

I agree. Congratulations on the quarter, guys.

Thank you.

[Operator Instructions]. Your next question comes from the line of Jason Rodgers with Great Lakes Review.

Hello.

Hi, Jason.

Wondering, if you could give the sales breakdown as a percentage of sales for service and consumables in the quarter?

Service and consumables, together are probably about 33% or so in the quarter.

Okay, so you have the separate breakout of those?

Roughly 23% coming from 22% to 23%. I will point to 23%, coming from service and the rest coming and form the consumables side.

Okay and inventories were up about 25% or so from the prior year, little bit higher than the sales increase, just wondered if there is anything behind that?

Inventory; yes, sorry, I didn't catch the beginning. We've currency impacts, and inventory is one element. So if you did it on a constant currency basis, we've had kind of a seasonal increase, but that's so much larger than seasonal increase. One thing that we are doing is we are moving, more and more of our transportation from air to sea that linked in some of the puts more inventory and transit for us. As an example some of that balances we ship into fisher, we're now doing by sea. Then second example is that we're continuing to move more and more production to China and just generally speaking of course it's more cost effective overall, but it does mean for some longer yield tax.

Okay, and finally have you seen any change in demand trends from your pharmaceutical customers in the lab business?

I don't think particularly in this quarter that wouldn't be the case. I think the prior market has been okay, but not particularly exciting.

Okay, thank you.

[Operator Instructions]. It appears that there are no further questions. I would now like to turn the call back to management for any further comments or closing remarks. And it looks as we do have a follow up from the line of Jon Wood with Banc of America Securities.

Sure. Hi, Jon.

Hi, thanks. Bill, is the new product vitality changed at all. I'm just trying to figure out, I mean it looks like your numbers are going in the exact opposite direction of logic and across the board. I mean has there been any change in new products as a percent of sales over either sequentially or year-over-year?

I would say in total no, I mean we certainly have seen the power of what we've have done in terms of lack balance portfolio and some other things, but overall, it's not moved material.

Okay, any other comments on... I mean has there been even a change at the margin at the competitive landscape level, particularly industrial?

Not really.

Not really.

Okay. All right, thank you.

We're just trying to execute well, Jon.

Looks pretty good.

Okay.

Thanks a lot.

Thank you. Operator, are there any more questions?

You do have another question from line of Jonathan Groberg with Merrill Lynch.

Hi, Jonathan.

Hi, thanks for taking me call, sneaking in here; as you know there are a number of calls going on, but congratulations on a very fine quarter, and probably some of these questions have been asked. So my only question, while it seems from a number of good executing companies recently is they put up some pretty stellar numbers in this quarter in terms of organic revenue growth, and I'm just wondering you have, I think kind of a reputation for being a late cycle company. And as all of this kind of heading right before the economies slows. Just wondered if you can maybe touch on that or talk about that.

Hi, I guess with regard to the comment of life cycle that there are some elements of that, but of course there other parts of our business that I would say are less so in that category. And may be what I would also say is that is compared to maybe any earlier down turns, the mix of our business has changed. Just to give a couple of examples, servicing, consumables as a percentage of sales have grown nicely. We have a lot of things going in that and will make that continue to be solid growth and then of course emerging markets as a percentage of sales as well. So, I think we said it several times on conference call that at this point, we see no reason that we see no slowdown in terms of momentum, but we re-debate to stellar and we want to act on our cost structure if it needs to be.

Okay, I didn't know. But from the... that was a difficult question to answer, but I am just wondering are you guys calling this and obviously and how quickly do you think you could response should things change, fairly dramatically in terms of playing the right leverage to keep things in check from a cost prospective?

We told that it is actually in the last conference call that we had actually initiated at end of Q1, complicity plans within the organization. We partly execute it on them, and the other part we have basically ready if things would turn in a wrong way. And in that sense, we feel pretty perhaps to react actually quite fast on it.

Okay, great. And then and if you've talked about this, let me know we can talk offline or I can read it. But at your analyst day, which was excellent again, you talked about a number of new products that you had introduced. And maybe you can just give an update as to how some of those are playing out in the field?

I think the one of the major one that we presented there was Qantas [ph] and Qantas just to remind is a product that we want to go... we launched it in the market, but we are going to ship that one in Q4. And we are rolling in that globally on the gradual base. We had, however, a lot of customer demonstrations and testing inflations, receptions have been very, very strong. And in that sense, we are very confident that we are going to meet our forecast on this product. The other products that we have in the retail and this is... gets good reception in the market. This is something that we are presenting to customers and all major projects opportunities and we feel like sales are very good about that too.

Great, congratulations.

Thank you.

You do have one final question in the queue, and that comes from Charles Yuan with Newberger Berman [ph].

Hello Charles?

Sorry, can you here me now?

We can hear you now.

Great quarter. Have you seen an acceleration in share gains versus competition through the first half of the year?

Different by product line, we clearly think that there is some market share gain. We think... we don't think the market is growing this quickly. And, but I can't necessarily point in particular to anyone competitor that we are gaining more than another.

I think, it wouldn't say just the last two quarters. Normally, we succeed to grow at one and half to two times the market growth, until we feel that we're gaining market share continuously over the last few quarters, not just the last two quarters.

Okay, thanks. Great quarter.

Sure, thanks.

And that was your final question in the queue. Do you have any further comments or any closing remarks?

Thank you all for joining us. And we look forward to talking to you next quarter. Thank you.

That concludes this evening's teleconference. You may now disconnect.