Apple posts $106 million profit on revenue of $2.35 billion
Apple today announced financial results for its fiscal 2004 fourth quarter ended September 25, 2004. For the quarter, the Company posted a net profit of $106 million, or $.26 per diluted share. These results compare to a net profit of $44 million, or $.12 per diluted share, in the year-ago quarter. Revenue for the quarter was $2.35 billion, up 37 percent from the year-ago quarter. Gross margin was 27.0 percent, up from 26.6 percent in the year-ago quarter. International sales accounted for 37 percent of the quarter's revenue.
The quarter's results include an after-tax restructuring charge of $4 million. Excluding this charge, the Company's net profit for the quarter would have been $110 million, or $.27 per diluted share.
Apple shipped 836,000 Macintosh units and 2,016,000 iPods during the quarter, representing a 6 percent increase in CPU units and a 500 percent increase in iPods over the year-ago quarter.
"We are thrilled to report our highest fourth quarter revenue in nine years," said Steve Jobs, Apple's CEO. "We shipped over 2 million iPods, our Retail store revenue grew 95 percent year-over-year, and the new iMac G5 has received phenomenal reviews and is off to a great start."
"We're pleased to report 37 percent revenue growth for the quarter and operating margin above 5 percent," said Peter Oppenheimer, Apple's CFO. "Looking ahead to the first quarter of fiscal 2005, we expect revenue of between $2.8 and $2.9 billion, operating margin above 7 percent and earnings per diluted share of $.39 to $.42."
For the year, the Company reported net income of $276 million on revenue of $8.28 billion compared to net income of $69 million on revenue of $6.21 billion in 2003.
AppleInsider will provide full coverage of the Apple FY 04 fourth quarter conference call, which begins at 5:00 pm EST.
The quarter's results include an after-tax restructuring charge of $4 million. Excluding this charge, the Company's net profit for the quarter would have been $110 million, or $.27 per diluted share.
Apple shipped 836,000 Macintosh units and 2,016,000 iPods during the quarter, representing a 6 percent increase in CPU units and a 500 percent increase in iPods over the year-ago quarter.
"We are thrilled to report our highest fourth quarter revenue in nine years," said Steve Jobs, Apple's CEO. "We shipped over 2 million iPods, our Retail store revenue grew 95 percent year-over-year, and the new iMac G5 has received phenomenal reviews and is off to a great start."
"We're pleased to report 37 percent revenue growth for the quarter and operating margin above 5 percent," said Peter Oppenheimer, Apple's CFO. "Looking ahead to the first quarter of fiscal 2005, we expect revenue of between $2.8 and $2.9 billion, operating margin above 7 percent and earnings per diluted share of $.39 to $.42."
For the year, the Company reported net income of $276 million on revenue of $8.28 billion compared to net income of $69 million on revenue of $6.21 billion in 2003.
AppleInsider will provide full coverage of the Apple FY 04 fourth quarter conference call, which begins at 5:00 pm EST.
Comments
Revenue Increases 37 Percent Year-Over-Year
iPod Shipments Top 2 million
CUPERTINO, Calif., Oct. 13 /PRNewswire-FirstCall/ -- Apple(R) today
announced financial results for its fiscal 2004 fourth quarter ended September
25, 2004. For the quarter, the Company posted a net profit of $106 million, or
$.26 per diluted share. These results compare to a net profit of $44 million,
or $.12 per diluted share, in the year-ago quarter. Revenue for the quarter
was $2.35 billion, up 37 percent from the year-ago quarter. Gross margin was
27.0 percent, up from 26.6 percent in the year-ago quarter. International
sales accounted for 37 percent of the quarter's revenue.
The quarter's results include an after-tax restructuring charge of
$4 million. Excluding this charge, the Company's net profit for the quarter
would have been $110 million, or $.27 per diluted share.
Apple shipped 836,000 Macintosh(R) units and 2,016,000 iPods during the
quarter, representing a 6 percent increase in CPU units and a 500 percent
increase in iPods over the year-ago quarter.
"We are thrilled to report our highest fourth quarter revenue in nine
years," said Steve Jobs, Apple's CEO. "We shipped over 2 million iPods, our
Retail store revenue grew 95 percent year-over-year, and the new iMac G5 has
received phenomenal reviews and is off to a great start."
"We're pleased to report 37 percent revenue growth for the quarter and
operating margin above 5 percent," said Peter Oppenheimer, Apple's CFO.
"Looking ahead to the first quarter of fiscal 2005, we expect revenue of
between $2.8 and $2.9 billion, operating margin above 7 percent and earnings
per diluted share of $.39 to $.42."
For the year, the Company reported net income of $276 million on revenue
of $8.28 billion compared to net income of $69 million on revenue of
$6.21 billion in 2003.
Non-GAAP Measures
The Company believes that presentation of results excluding items such as
restructuring charges and investment gains provides meaningful supplemental
information to both management and investors that is indicative of the
Company's core operating results and facilitates comparison of operating
results across reporting periods. The Company includes a full income statement
reconciliation of these non-GAAP measures to provide a more complete view of
their effect on results.
Apple will provide live streaming of its Q4 2004 financial results
conference call utilizing QuickTime(TM), Apple's standards-based technology
for live and on-demand audio and video streaming. The live webcast will begin
at 2:00 p.m. PDT on Wednesday, October 13, 2004 at
http://www.apple.com/quicktime/qtv/earningsq404/ and will also be available
for replay. The QuickTime player is available free for Macintosh and Windows
users at http://www.apple.com/quicktime.
This press release contains forward-looking statements about the Company's
estimated revenue and earnings for the first quarter of fiscal 2005. These
statements involve risks and uncertainties and actual results may differ.
Potential risks and uncertainties include continued competitive pressures in
the marketplace; the effect competitive and economic factors and the Company's
reaction to them may have on consumer and business buying decisions with
respect to the Company's products; the ability of the Company to make timely
delivery of new programs, products and successful technological innovations to
the marketplace; the continued availability of certain components and services
essential to the Company's business currently obtained by the Company from
sole or limited sources, including the timely resolution of manufacturing
issues associated with the G5 microprocessors used in many of the Company's
Macintosh systems; possible disruption in commercial activities caused by
terrorist activity and armed conflict, such as changes in logistics and
security arrangements, and reduced end-user purchases relative to
expectations; possible disruption in commercial activity as a result of major
health concerns including epidemics; risks associated with the Company's
retail initiative including significant investment cost, uncertain consumer
acceptance and potential impact on existing reseller relationships; the effect
that the Company's dependency on manufacturing and logistics services provided
by third-parties may have on the quality, quantity or cost of products
manufactured or services rendered; the Company's reliance on the availability
of third-party music content, and the ability of the Company to successfully
evolve its operating system and attract sufficient Macintosh developers. More
information on potential factors that could affect the Company's financial
results is included from time to time in the Company's public reports filed
with the SEC, including the Company's Forms 10-Q for the quarters ended
December 27, 2003, March 27, 2004 and June 26, 2004; and the Company's Form
10-K for the 2004 fiscal year to be filed with the SEC. The Company assumes no
obligation to update any forward-looking statements or information, which
speak as of their respective dates.
Apple ignited the personal computer revolution in the 1970s with the Apple
II and reinvented the personal computer in the 1980s with the Macintosh.
Today, Apple continues to lead the industry in innovation with its
award-winning desktop and notebook computers, OS X operating system, and iLife
and professional applications. Apple is also spearheading the digital music
revolution with its iPod portable music players and iTunes online music store.
NOTE: Apple, the Apple logo, Macintosh, Mac, Mac OS, QuickTime, iPod and
iMac are either registered trademarks or trademarks of Apple. Other company
and product names may be trademarks of their respective owners.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share amounts)
ASSETS:
September 25, September 27,
2004 2003
Current assets:
Cash and cash equivalents $2,969 $3,396
Short-term investments 2,495 1,170
Accounts receivable, less allowances
of $47 and $49, respectively 774 766
Inventories 101 56
Deferred tax assets 231 190
Other current assets 485 309
Total current assets 7,055 5,887
Property, plant, and equipment, net 707 669
Goodwill 80 85
Acquired intangible assets 17 24
Other assets 191 150
Total assets $8,050 $6,815
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Accounts payable $1,451 $1,154
Accrued expenses 1,229 899
Current debt -- 304
Total current liabilities 2,680 2,357
Deferred tax liabilities and other non-current
liabilities 294 235
Total liabilities 2,974 2,592
Commitments and contingencies
Shareholders' equity:
Common stock, no par value; 900,000,000 shares
authorized; 391,443,617 and 366,726,584 shares
issued and outstanding, respectively 2,514 1,926
Deferred stock compensation (93) (62)
Retained earnings 2,670 2,394
Accumulated other comprehensive income (loss) (15) (35)
Total shareholders' equity 5,076 4,223
Total liabilities and shareholders' equity $8,050 $6,815
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except share and per share amounts)
THREE MONTHS ENDED TWELVE MONTHS ENDED
Sept. 25, Sept. 27, Sept. 25, Sept. 27,
2004 2003 2004 2003
Net sales $2,350 $1,715 $8,279 $6,207
Cost of sales 1,716 1,259 6,020 4,499
Gross margin 634 456 2,259 1,708
Operating expenses:
Research and
development 122 111 489 471
Selling, general, and
administrative 379 314 1,421 1,212
Restructuring costs 5 -- 23 26
Total operating
expenses 506 425 1,933 1,709
Operating income (loss) 128 31 326 (1)
Other income and expense:
Gain on sales of
non-current
investments -- 8 4 10
Interest and other
income, net 19 16 53 83
Total other income
and expense 19 24 57 93
Income before provision
for income taxes 147 55 383 92
Provision for income
taxes 41 14 107 24
Income before accounting
change 106 41 276 68
Cumulative effect of
accounting change, net -- 3 -- 1
Net income $106 $44 $276 $69
Earnings per common
share before
accounting change:
Basic $0.28 $0.11 $0.74 $0.19
Diluted $0.26 $0.11 $0.71 $0.19
Earnings per common
share:
Basic $0.28 $0.12 $0.74 $0.19
Diluted $0.26 $0.12 $0.71 $0.19
Shares used in
computing earnings
per share (in
thousands):
Basic 383,463 362,191 371,590 360,631
Diluted 402,906 370,733 387,311 363,466
UNAUDITED NON-GAAP CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In millions, except share and per share amounts)
THREE MONTHS ENDED SEPTEMBER 25, 2004
Non-GAAP
As Reported Adjustments Non-GAAP
Net sales $2,350 $2,350
Cost of sales 1,716 1,716
Gross margin 634 634
Operating expenses:
Research and development 122 122
Selling, general, and
administrative 379 379
Restructuring costs 5 (5)(a) --
Total operating expenses 506 (5) 501
Operating income 128 5 133
Other income and expense:
Interest and other income,
net 19 19
Total other income and
expense 19 19
Income before provision for
income taxes 147 5 152
Provision for income taxes 41 1(b) 42
Net income $106 $4 $110
Earnings per common share:
Basic $0.28 $0.29
Diluted $0.26 $0.27
Shares used in computing
earnings per share
(in thousands):
Basic 383,463 383,463
Diluted 402,906 402,906
Notes:
(a) Pre-tax restructuring costs
(b) Tax impact of restructuring costs
UNAUDITED NON-GAAP CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In millions, except share and per share amounts)
TWELVE MONTHS ENDED SEPTEMBER 25, 2004
Non-GAAP
As Reported Adjustments Non-GAAP
Net sales $8,279 $8,279
Cost of sales 6,020 6,020
Gross margin 2,259 2,259
Operating expenses:
Research and development 489 489
Selling, general, and
administrative 1,421 1,421
Restructuring costs 23 (23)(a) --
Total operating expenses 1,933 (23) 1,910
Operating income 326 23 349
Other income and expense:
Gain on sales of
non-current investments 4 (4)(b) --
Interest and other income,
net 53 53
Total other income and
expense 57 (4) 53
Income before provision for
income taxes 383 19 402
Provision for income taxes 107 5(c) 112
Net income $276 $14 $290
Earnings per common share:
Basic $0.74 $0.78
Diluted $0.71 $0.75
Shares used in computing
earnings per share
(in thousands):
Basic 371,590 371,590
Diluted 387,311 387,311
Notes:
(a) Pre-tax restructuring costs
(b) Pre-tax gain on sales of non-current investments
(c) Tax impact of restructuring costs and gain on sales of non-current
investments
Apple Computer, Inc.
Q404 Unaudited Summary Data
Q304 Actual Q403 Actual Q404 Actual
CPU CPU
CPU Units Units
Operating Segments Units k Rev $m k Rev $m k Rev $m
Americas 472 $1,018 453 $928 471 $1,196
Europe 191 408 158 323 155 423
Japan 82 172 76 171 56 175
Retail 73 270 59 193 98 376
Other Segments (1) 58 146 41 100 56 180
Total Operating Segments 876 $2,014 787 $1,715 836 $2,350
Sequential Change Year/Year Change
Operating Segments Units Revenue Units Revenue
Americas 0% 17% 4% 29%
Europe -19% 4% -2% 31%
Japan -32% 2% -26% 2%
Retail 34% 39% 66% 95%
Other Segments (1) -3% 23% 37% 80%
Total Operating Segments -5% 17% 6% 37%
Q304 Actual Q403 Actual Q404 Actual
Units Units
Units k Rev $m k Rev $m k Rev $m
Product Summary
iMac (2) 243 $235 253 $279 229 $216
iBook 240 261 137 154 238 256
Power Mac (3) 173 332 221 419 156 340
PowerBook 220 435 176 348 213 419
Subtotal CPUs 876 1,263 787 1,200 836 1,231
iPod 860 249 336 121 2,016 537
Other Music Products (4) NM 73 NM 14 NM 98
Peripherals & Other HW NM 219 NM 208 NM 271
Software & Other NM 210 NM 172 NM 213
Total Apple $2,014 $1,715 $2,350
Sequential Change Year/Year Change
Units Revenue Units Revenue
Product Summary
iMac (2) -6% -8% -9% -23%
iBook -1% -2% 74% 66%
Power Mac (3) -10% 2% -29% -19%
PowerBook -3% -4% 21% 20%
Subtotal CPUs -5% -3% 6% 3%
iPod 134% 116% 500% 344%
Other Music Products (4) NM 34% NM 600%
Peripherals & Other HW NM 24% NM 30%
Software & Other NM 1% NM 24%
Total Apple 17% 37%
(1) Other Segments include Asia Pacific and FileMaker.
(2) Includes eMac product line.
(3) Includes Xserve product line.
(4) Other Music Products consists of iTunes Music Store sales and
iPod-related services and accessories.
NM: Not Meaningful
SOURCE Apple Computer, Inc.
Web Site: http://www.apple.com
Originally posted by ipodandimac
Damn. Just think how great it would be if there hadn't been Pmac delays! Q1 is gonna be incredible.
Add to that, that iPod Mini's are now in good supply around the globe.
Originally posted by murk
So how much will the stock fall tomorrow?
SELL! SELL! SELL!
Originally posted by MacsRGood4U
Stock is up over $3.00 in aftermarket trading. Tomorrow it will go down as some investors take a profit. Normal. (It's very much overvalued).
Apple's market cap is very low, as is the P-to-E. If anything, Apple is undervalued.
Originally posted by Splinemodel
Apple's market cap is very low, as is the P-to-E. If anything, Apple is undervalued.
Hahahaha! I love comedy.
Yeah, a P/E of 72 is very low... if you compare it to Yahoo and Excite in 1999, at least. Admittedly, they do have a nice large cash hoard, but there is no way you can consider Apple to be undervalued. "Fairly" valued... maybe. But at these lofty heights, the stock doesn't have much upside potential, IMHO. And I'm saying this strictly as an investor, and a Mac user, not as a "basher" or anything like that.
I'll put a small damper on people's spirits to start this trend. They're still selling 800k Macs per quarter. I don't think this number has changed much in 3 years, maybe longer. Hopefully my little bit of party pooping won't snowball into a full-fledged panic.
I have a good feeling about where Apple is going, but we don't need an over-inflated stock because investors' reactions to bad news are that much more dramatic when the stock is in a steep climb. A little temperance goes a long way, and stocks are long term investments.
Originally posted by BuonRotto
I'll put a small damper on people's spirits to start this trend. They're still selling 800k Macs per quarter. I don't think this number has changed much in 3 years, maybe longer. Hopefully my little bit of party pooping won't snowball into a full-fledged panic.
And this quarter it's still IBM's fault. It's always something.
I suppose the next quarter will be the truth test. I suppose they could say that IBM underperformed again next quarter, but that explanation can't last for long before people start reflecting the failure back on Apple management.
Really, this is getting absurd. And I'm the guy who thinks that Macs are up against an irrational (but all too real) glass ceiling in the marketplace...
I'm not terribly surprised to see depressed PowerMac sales; in fact, if anything, I consider that progress. But there had better be a world knee deep in iMacs and portable Macs next quarter.
On the optimistic side: Two million iPods?!?! With HP only contributing 6% of that total?! I couldn't stop laughing when I read that. It's completely over the top. Wildly beyond anyone's expectations. And that's before HP's had a chance to make much of an impact. Hot damn!
Apple is pushing a very interesting angle, that taps into one of the fundamental truths of business: It takes money to make money. They're arguing that their gross revenue is nearing an inflection point, and if they grow it about 15%-20% more then it'll pay serious dividends in terms of net profit - unless, of course, they decide to plow that revenue right back into R&D. But this strategy is aimed right at Wall Street. Right now, Apple is a breakeven company floating on a big pile of cash. The big pile of cash is just about the only thing giving the Street any lasting confidence in the future of the company (innovation entails risk, which entails the chance of failure). If their income/expense ratio and their principle/interest ratio hit inflection points, then all of a sudden they're profitable and growing. The way they've cultivated their nest egg, this can happen even if they only sell 850,000 Macs: They just added a cool half billion to their nest egg, even with historically low interest rates and an iffy stock market. Principle growth accelerates.
I have a good feeling about where Apple is going, but we don't need an over-inflated stock because investors' reactions to bad news are that much more dramatic when the stock is in a steep climb. A little temperance goes a long way, and stocks are long term investments.
All true, and if anyone actually paid attention to that wisdom, Wall Street would be a far different place.
But if Apple does crack $10B, look out. Their whole financial picture will change for the better. They will truly live up to Fred Anderson's description: "a cash machine." I can't pretend to know how WS will react to that, but it seems to be a strategy designed to warm the hearts of capitalists everywhere...
30% year-on-year revenue growth, too. That's like Wal-Mart territory. Next year, Apple might be a $10B/yr company again. I guess the gray lining is that it's all iPods, not Macs. But there's got to be synergy at some point. Or does it even matter?
Originally posted by MacsRGood4U
Stock is up over $3.00 in aftermarket trading. Tomorrow it will go down as some investors take a profit. Normal. (It's very much overvalued).
overvalued? depends on your yardstick. As a steel or coal company on current P/E sure. But based on momentum and forward guidance it is UNDERVALUED.
I agree that it may drop today until the rearview geniuses on Wall Street who are called analysts hop aboard with their upgrades. (some are exceptions Needham & Co., Merril Lynch, First Albany etc,)
I suspect with a half decent overall stock market AAPL will hit $50 before the end of January ...
Originally posted by Auream
Hahahaha! I love comedy.
Yeah, a P/E of 72 is very low... if you compare it to Yahoo and Excite in 1999, at least. Admittedly, they do have a nice large cash hoard, but there is no way you can consider Apple to be undervalued. "Fairly" valued... maybe. But at these lofty heights, the stock doesn't have much upside potential, IMHO. And I'm saying this strictly as an investor, and a Mac user, not as a "basher" or anything like that.
The value of a stock is completely and utterly dependent on one thing, how much the brokers and buyers are willing to pay for it. Nothing else. You can argue that the stock is 'over-valued' based off of archaic and ancient statistics and methodology, but it doesn't matter. Wasn't Cisco 'overvalued' when it hit $100 a share? Yep. Did that stop people from pushing it to $700+ a share? Nope. When Apple was selling for $12 a share, it was supposedly well undervalued (not even selling for its cash value). But that didn't mean everyone bought it up. No one trusted the company (few still do), so they bought it for what they thought it was worth, not what it was worth.
So if you were one of those "the stocks are overvalued" pundits in 1998 who got out of everything before it all crashed, you lost a lot of profit before it all 'crashed'. (Hell, my boss warned us in 1994-5 that the market was overvalued, and he was dumping his 401K money into a fixed interest fund until the DOW dropped back down below 4000. Then, when it hit 7000, he was waiting for it to drop to 6000 or so. Nevertheless, he didn't 'lose' money in the crash (yes, he didn't put it back until last year), but he certainly 'lost' a lot of money he could've made.
Originally posted by Louzer
The value of a stock is completely and utterly dependent on one thing, how much the brokers and buyers are willing to pay for it. Nothing else.
Sorry, I don't buy that crap. That's the way that mo-mo investors who lost it all back in 2000 and 2001 thought. I'm more of a value guy myself... there IS indeed an intrinsic value to most companies out there, and I'm afraid Apple's value right now is at least a small percentage above it. That doesn't mean it won't go up in the short term, of course.
But I like to quote Warren Buffet, who besides being the second richest person in America, also agrees with my viewpoint on stock valuations. "In the short run, the market is a popularity contest; in the long run, it is a weighing machine."
Sure, you can make money buying high and selling higher. But to be honest, just about every "legendary" investor out there made money buying stocks at a discount to "intrinsic" value. While there's great debate to what exactly constitutes intrinsic value, the fact remains that I don't really know of anyone who has made big money in the long run buying extremely high-valued stocks (relative to historical P/Es, cash flow, valuation of peers, etc.). Feel free to name some names if you'd like to back up your statements.
Originally posted by Louzer
The value of a stock is completely and utterly dependent on one thing, how much the brokers and buyers are willing to pay for it. Nothing else.
Stock = ownership. This isn't fantasy football.
Originally posted by Auream
Sorry, I don't buy that crap. That's the way that mo-mo investors who lost it all back in 2000 and 2001 thought. I'm more of a value guy myself... there IS indeed an intrinsic value to most companies out there, and I'm afraid Apple's value right now is at least a small percentage above it. That doesn't mean it won't go up in the short term, of course.
But I like to quote Warren Buffet, who besides being the second richest person in America, also agrees with my viewpoint on stock valuations. "In the short run, the market is a popularity contest; in the long run, it is a weighing machine."
First, I didn't realize Warren consulted with you on investment strategies.
Second, the fact that Apple went up again and is sitting at $44/45 indicates that someone out there thinks the stock is worth that price. Whether that's the 'value of the company' or whether it can sustain the price or whatever is immaterial. The price at any point is determined completely on what people think the company is worth. Otherwise Apple would never have sold for $13 nor would be selling for what it is now.
And its great to be talking long-term, too bad most investment people live quarter to quarter, not 5 years down the line (a bad quarter gets a guy fired, most companies don't keep around guys on the promise of long-term gains).
Originally posted by Louzer
First, I didn't realize Warren consulted with you on investment strategies.
Second, the fact that Apple went up again and is sitting at $44/45 indicates that someone out there thinks the stock is worth that price. Whether that's the 'value of the company' or whether it can sustain the price or whatever is immaterial. The price at any point is determined completely on what people think the company is worth. Otherwise Apple would never have sold for $13 nor would be selling for what it is now.
And its great to be talking long-term, too bad most investment people live quarter to quarter, not 5 years down the line (a bad quarter gets a guy fired, most companies don't keep around guys on the promise of long-term gains).
Don't use stupid strawman arguments. I never said Warren consulted with me on investment strategies, just that we SHARE investment strategies. Is it not possible to invest the same way as someone you've never met?
Finally, you still seem unable to grasp the fact that there is a difference between MARKET VALUATION, which changes on a day-to-day basis, and the actual VALUE of a company. These things are sometimes equal, but often wildly different. If you don't think it is possible to value a company independently of market value, then you'll never be able to be a successful investor.
I still can't even figure out what exactly your argument is. It seems to be that companies can NEVER be "overvalued" or "undervalued" because all companies are always fairly valued based on what people will pay for them. This assumes that markets are always 100% rational, and I'm afraid this is absolutely not the case. Often companies are bid up to rediculous heights for very little reason at all, and it has nothing to do with the actual value of the company if one were to study their financials and offer a price on the entire company, for example. Many times the opposite is the case as well, where a company is trading way below a fair value if one were to want to purchase the entire company. Ergo, it is ABSOLUTELY possible for a company's stock to be "overvalued" in an absolute sense, which is basically the idea behind my original response to your comment.