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Evolving Systems (NASDAQ:EVOL)

Q4 2012 Earnings Call

March 12, 2013 4:30 pm ET

Executives

Daniel J. Moorhead - Principal Financial Officer, Principal Accounting Officer, Vice President of Finance & Administration and Secretary

Thaddeus Dupper - Chairman of the Board, Chief Executive Officer and President

Analysts

Michael Crawford - B. Riley & Co., LLC, Research Division

Harvey Poppel

Jon Jung

Richard Lee Todaro - Kennedy Capital Management, Inc.

Operator

Good day, ladies and gentlemen, and welcome to the Evolving Systems 2012 Year-End Results. [Operator Instructions] As a reminder, this program is being recorded. I would now like to introduce your host for today's program, Mr. Dan Moorhead, Vice President of Finance. Please go ahead, sir.

Daniel J. Moorhead

Good afternoon, and welcome to Evolving Systems 2012 Year-End Earnings Call. I'm Dan Moorhead, Vice President of Finance, and joining me today is Thad Dupper, Chief Executive Officer.

During the course of this call, we will be making forward-looking statements based on current expectations, estimates and projections that are subject to risk.

Specifically, our statements about future revenue, expenses, cash, taxes and the company's growth strategy are forward-looking statements. Listeners should not place undue reliance on these statements. There are many factors that could cause actual results to differ materially from our forward-looking statements. We encourage you to review our publicly filed documents, including our SEC filings, news releases and websites for more information about the company.

As a reminder, in July 2011, we sold our numbering business for $39.4 million in cash, plus the assumption of $5.8 million in liabilities. The resulting gain from the asset sale, as well as the financial results attributed to the numbering business are presented as discontinued operations in our 2011 financial statements.

Fourth quarter results. Revenue in Q4 increased 39% to $6.9 million from $4.9 million in the same quarter last year. License and services revenue grew 73% year-over-year to $4.6 million from $2.7 million. Customer support revenue was unchanged at $2.3 million.

Total cost of revenue and operating expenses in the fourth quarter decreased by 8% to $5.1 million from $5.6 million a year ago, reflecting the $500,000 restructuring charge we incurred in Q4 of 2011.

Year-over-year, sales and marketing expense declined 7% to $1.2 million, and general and administrative expense declined 8% to $800,000. These declines were offset by a 43% increase in product development expense to $900,000 from $600,000 a year ago.

Operating income improved to $1.8 million in Q4, a positive swing of more than $2.4 million over the operating loss of $600,000 we reported in last year's fourth quarter.

Our other income category, which consists primarily of interest income, gain on sale of investments and foreign currency gains and losses, totaled $60,000 in the fourth quarter and was related almost entirely to foreign currency gains versus $900,000 in Q4 last year when we had more than $700,000 in income associated with our marketable debt securities, which were all sold during the second quarter of 2012.

Q4 net income from continuing operations improved to $1.4 million in Q4, a 225% increase over the $400,000 reported a year ago. This translated to earnings from continuing operations of $0.12 per diluted share compared to $0.04 per diluted share last year.

GAAP net income in Q4 was $1.4 million or $0.12 per diluted share versus $1.8 million or $0.16 per diluted share a year ago. However, remember in Q4 last year, we reported $1.3 million in income from discontinued operations related to the sale of our numbering business.

Adjusted EBITDA from continuing operations in Q4 was $2 million, a sizable improvement over adjusted EBITDA of $200,000 in the same quarter last year.

Full year results. For the full year, revenue increased 38% to $26.2 million from $19 million in 2011. That increase was driven by 80% growth in license and services revenue, which improved to $17.6 million from $9.8 million last year, more than offsetting a 7% decline in customer support revenue to $8.6 million from $9.3 million year-over-year.

Total cost of revenue and operating expenses declined by 5% year-over-year to $20.7 million from $21.8 million, but would have been flat without the $1.1 million restructuring charge taken in 2011.

General and administrative expense was essentially flat year-over-year at $3.6 million. Sales and marketing expense declined 19% to $5.1 million from $6.2 million, and product development expense increased 24% to $3.1 million from $2.5 million year-over-year.

Operating income year-over-year improved by $8.4 million to $5.6 million from an operating loss of $2.8 million in 2011.

Total other income was flat year-over-year at $1.4 million and was primarily related to income from marketable debt securities.

2012 net income from continuing operations increased to $5.6 million from a net loss from continuing operations of $1 million, representing an increase of $6.6 million. This equated to earnings from continuing operations of $0.48 per diluted share as compared with a loss of $0.09 per diluted share a year ago.

GAAP net income for 2012 was $5.6 million or $0.48 per diluted share versus GAAP net income of $32.3 million or $2.88 per diluted share in 2011 when we recognized $33.3 million in income from discontinued operations.

Adjusted EBITDA from continuing operations increased to $6.5 million for the full year, a significant improvement over the adjusted EBITDA loss of $200,000 a year ago.

Now a review of our booking and backlog highlights. The company defines bookings as new, non-cancelable orders expected to be recognized as revenue during the following 12 months. In the fourth quarter, we booked $6.2 million in new orders, compared with $7.4 million last year. License and services orders were $3.6 million versus $4.6 million last year.

Dynamic SIM Allocation, or DSA, license and services orders in the quarter were $900,000 compared to $2.5 million a year ago.

Tertio Service Activation, or TSA, license and services orders were $2.7 million, up 28% from $2.1 million in Q4 last year.

Customer support orders were $2.6 million compared to $2.8 million in Q4 last year.

For the full year, total 2012 bookings came in at $24.6 million compared to $24 million in 2011. License and services orders for the year grew 12% to $16.5 million from $14.8 million last year.

DSA license and services orders totaled $6.9 million for 2012 versus $8.2 million in 2011 when we booked our largest ever DSA order with a Tier 1 customer in Russia.

TSA license and services orders increased 48% to $9.6 million from $6.6 million.

Customer support orders were $8.1 million compared to $9.2 million a year ago.

The company's total backlog at December 31, 2012, was $11.1 million versus $12.6 million at 2011 year end. License and services backlog was $6.7 million versus $7.8 million a year ago.

DSA license and services backlog was $3.7 million compared to $5.5 million last year.

TSA license and services backlog was $3 million versus $2.3 million a year ago. Customer support backlog was $4.4 million compared to $4.8 million last year.

Balance sheet highlights. Cash and cash equivalents at December 31, 2012, were $8.8 million compared to $34.3 million at 2011 year end. I'll remind you that during 2012, we returned more than $44.8 million to stockholders through dividends, which accounts for the lower cash balance year-over-year.

As of December 31, 2012, we had working capital of $13.9 million, up from the 2011 year-end balance of $11.7 million.

Dividend update. Today, the company declared first quarter dividend of $0.08 per share to stockholders of record as of March 22, 2013, payable April 12, 2013.

With that, I'll now turn the call over to Thad.

Thaddeus Dupper

Thanks, Dan, and good afternoon, everyone. As Dan just reported, we posted solid 2012 results. Some of the headlines were: revenue up 38%; record operating profits; adjusted EBITDA margins of 25%; gross margins of 69%; and for the first time, annual DSA revenue reached $10 million.

In addition, for 2012, we returned $4 per share to our stockholders through a series of dividends. And today, we announced that we have increased our first quarter dividend from $0.05 to $0.08, as a tangible sign of the confidence we have in the business.

Throughout 2012, we built momentum, with Q4 being our best revenue and operating profit quarter of the year. From a product perspective, both our major products, DSA and TSA, registered strong growth, with DSA revenue increasing 94% and TSA revenue growing by a respectable 17%.

From a customer view, in 2012, we added 2 new DSA customers with our first win in China and our first win in the Middle East with the Etisalat Group. And with TSA, we added a new customer in Africa. And although Q4 bookings tempered somewhat from our strong Q3 performance, we entered 2013 with a healthy order backlog in excess of $11 million.

Another highlight for 2012 was a 24% increase in R&D investment, which is key to any software company's long-term success and competitiveness.

And to that point, earlier this quarter, we introduced our latest product, SIM Reservation Portal. Essentially, SIM Reservation Portal extends DSA's on-device activation capability to now include the carrier's website. The reservation portal allows the subscriber to visit the carrier's website, browse, select and reserve a phone number, select a call plan and even complete the subscriber registration process. When finished, the subscriber receives an order number and/or a QR bar code, which they can then take to any of the carrier's outlets. Once there, and this is the impressive part, they swipe the bar code and DSA will automatically configure a SIM card with the phone number and call plan that was selected with the registration process already completed. The attraction of the reservation portal is that it allows a subscriber to complete this process in the convenience of their home or office, then go to any of the carrier's outlets and pick up the SIM with their preselected options ready for use. We think this is a major step forward in terms of convenience to our subscribers and a competitive advantage for carriers.

Today, we are in the process of deploying the reservation portal at our largest DSA customer and actively proposing it at our existing DSA customers and prospects. This is another example of how we continue to innovate the subscriber activation experience, and as a result, we continue to expand our already sizable competitive lead in the DSA market.

We recently returned from Mobile World Congress, which, as the name implies, is the world's premier mobile industry meeting. In addition to hosting a number of customer meetings, we were briefed on the latest trends in the wireless industry, some of which are very supportive of our growth strategy.

For example, the developing markets, which are strategic areas of focus on investment for Evolving Systems, continue to drive growth. In 2008, developing economies represented 35% of the world's mobile revenue. In 2012, that percentage increased to 42%. And by 2017, that number is forecast to grow to 50%. Furthermore, consider the GSM Association reported that from 2008 through 2012, mobile subscribers in Africa grew by 70% whereas today, we have 8 customers. In Asia, where we are also very active, subscriber growth topped 52%, and in Latin America, subscribers grew by 30%. These compare to North America's subscriber growth of 10% and European growth of just 7%.

With these trends expected to persist, we will continue to increase our investment in these markets. In Q4, we added sales personnel in Thailand and Hong Kong. And this quarter, we are adding hires in Delhi, Moscow and Mexico to support our growing business in those locations as well.

From a SIM perspective, as of January 2013, the number of SIM cards per subscriber averaged 1.5 SIMs in the traditional markets while the emerging markets averaged 2 SIM cards per subscriber.

In the emerging market, SIM patterns are influenced by cost-conscious consumers who tend to accumulate prepaid SIMs to deal with limited network coverage in rural locations and to benefit from affordable tariffs and promotions.

In the developed world or a traditional market, SIM patterns are influenced by the ownership of multiple devices as consumers purchase smartphones and tablets, and in many households, multiple tablets, as well as growing -- as well as a growing array of connected devices. As a result of these trends, i.e. the growth of smartphones, tablets and connected devices in the developed markets, we're seeing an increase in the number of DSA meetings we're having with carriers in North America. This growth in SIM cards, both in the emerging markets, as well as the traditional markets, enhances the DSA business case. As carriers deal with the challenges created by the proliferation of SIM cards within their distribution channels and networks, the benefits of DSA become more compelling. SIM logistics, network capacity and inventory, as well as the drive to offer personalized SIM-based services, are all key features of DSA.

And as I do every quarter, in closing, I will remind you we remain a company where the delay of a single key order can affect our quarterly results. With that, we continue to advise that it's more accurate to judge our performance on an annual rather than quarterly basis. And for 2012, that meant revenue growth of 38% and profit metrics that were strong across the board. EBITDA, operating margins, gross margins and EPS were all good.

Given the momentum we continue to see and the results we announced today, we believe Evolving Systems remains well positioned for long-term growth.

With that, we thank you again for joining us today, and we are now happy to take your questions. Operator?

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from the line of Mike Crawford from B. Riley & Co.

Michael Crawford - B. Riley & Co., LLC, Research Division

Thad, in the second half of 2012, the Tertio products really had a resurgence of growth. Is that something you expect to continue in 2013? Or do you think that it's going to be DSA being the primary growth driver in 2013?

Thaddeus Dupper

No. It will be DSA. DSA is the growth engine of the company. And you're right. In 2012, DSA -- TSA orders were very good, and that was really a result of a number of our existing customers migrating to LTE 4G networks. A lot of that work is completed so we do not expect to see TSA grow at the rate that we saw in 2012.

Michael Crawford - B. Riley & Co., LLC, Research Division

Okay. And then on the customer support, bookings, in particular, were strong in Q3 2012. I think, historically, Q4 has been the strongest quarter for that. Can you remind us what slowed [indiscernible].

Thaddeus Dupper

Q4 used to be very good when we had the numbering business. We had a lot of annual renewals. So these things are spread across the year, and we tend to renew them on the annual -- anniversary of when we did the original deal. So there's just the timing issue with some of these things. Right, Dan?

Daniel J. Moorhead

Correct. I would agree.

Michael Crawford - B. Riley & Co., LLC, Research Division

Okay. Great. And then you gave some interesting stats regarding emerging markets continuing to grow over the next 5 years. What about your thoughts regarding this year, say, any change in perception from heading into Barcelona versus coming back and collecting your thoughts after the Mobile World Congress?

Thaddeus Dupper

Well, we feel great coming back from Mobile World Congress. The emerging markets will continue to be a prime engine for DSA growth. We like what we're doing with the groups of operators we're installed in. We like the order flow and the RP traction we're seeing. I will say some of these RPs take a little longer to respond to and sometimes there'll be delays. So sometimes we'll run into a timing issue with closing some of these deals, so we are very encouraged by our order flow. And then the other thing that I would add is, what we're very enthused by is seeing a dialogue in activity in North America for DSA as well. As you know, that's something we haven't seen in the past and we're beginning to have meetings with carriers, substantive meetings, where they show an interest in DSA. And most of it's around smartphone and tablet migration and the sales and the growth that we're seeing in the tablet world. So if we can get the traditional market starting to kick in with DSA, in addition to what we're already doing in the emerging markets, then it becomes a very exciting story for Evolving Systems.

Michael Crawford - B. Riley & Co., LLC, Research Division

Okay. And then last question, you did say with the increase in the dividend that, that was a tangible sign of confidence in the business. But is that the expectation that, that $0.08 should carry through the remaining quarters of the year, barring some unexpected adverse development at this point?

Thaddeus Dupper

Well, past the form, it's a good indication of what we're going to do in the future. And then the other thing we'd say, Mike, is we only declare the dividend on a quarterly basis. So we don't want to make any assurances or commitments to the future quarters. But in the history, you've not seen us reduce the dividend. So historically, we've never done that. But again, I don't want to go out on a limb and make any commitments beyond Q1, but we were pleased to be able to increase it for Q1. And as you know, we've never decreased the dividend, an operating quarterly dividend.

Operator

[Operator Instructions] Our next question comes from the line of Harvey Poppel from Poptech LP.

Harvey Poppel

I do want to shift the focus though going forward, for a moment. You mentioned that the backlog number in the fourth quarter was a little less than the third quarter and your total bookings, I guess, backlog is down about $0.5 million. Should we be concerned about that as we look out over the short term?

Thaddeus Dupper

Well, not the short term. We have very little variability in our revenue quarter-to-quarter. We do occasionally run into some timing issues, Harvey. So a deal could slip and RFP process elongates a little bit. So a little bit of softness in bookings in Q4, maybe a little bit of softness in bookings in Q1 doesn't concern me. What we're seeing in terms of activity and order flow and interest in DSA is very, very good. So again, we're very bullish on the year. And if we had some timing issues with a quarter or 2, we wouldn't be alarmed by them and we wouldn't want our investors to be alarmed by it either.

Harvey Poppel

Okay. You did bring up the issue of the first quarter. I mean, we're almost through the first quarter now, at least with only a couple of weeks to go. Is that also looking a little soft? Is that why you brought that into play in your comment?

Thaddeus Dupper

Well, it isn't, but I will respond to it. One of the things we see with our funnel now that we're doing so much more business in Asia is Chinese New Year is a big deal. And it seems like this region of the world almost takes the month of February off. So I would say Q1 is going to be close to what we saw in Q4 bookings-wise. But again, the order flow and the RFP activity we see bodes very well for us. So I wouldn't want to get too distracted by a timing issue of 3 to 6 weeks in closing some of these orders. We were playing to the long game and the long game is we've never seen as much interest in our DSA product as we see now. We've never had as many RFPs as we've seen now. And we look at the size and shape of our order funnel and we're very confident. Again, maybe a little softness in Q1 bookings and more of a speed bump and a directional concern for us.

Harvey Poppel

Okay. Let me shift gears and kind of look way out then. How much of a runway do you have with the existing DSA product line? And what are you doing in R&D specifically to enhance that product line?

Thaddeus Dupper

Well, you saw that R&D spending is up 24% for the year, and a lot of our spending is in and around the SIM card. And what our product teams in the U.K. are working hard on is adjuncts to DSA, i.e. like the SIM Reservation Portal you just heard about earlier in the call that we announced earlier this quarter. But we have several expansions to DSA, all SIM related. And again, the underlying trend is the proliferation of devices. And if my household is any indication and I have a couple of young kids at home, we've got Kindle Fires, we've got iPads, we've got iTouches, we've got iPhones and the number of SIMs in a traditional market house is exploding and that even goes beyond the article you see in the Wall Street Journal today talking about the NikeFuel and these other health monitors, which many of them will have SIM cards in them as well. So we like the mega trend, the proliferation of connected devices, many of those devices having SIM cards, and we're leveraging our expertise in SIM cards to broaden the appeal of DSA and to increase the functionality of DSA, but also come out with other SIM-based related products. So we really expect people to look at us as the SIM software company. And whether it's managing or activating SIM cards, we think we have a unique team of experts in our company that could help any GSM carrier or LTE carrier in the world.

Harvey Poppel

Do you -- at the current time, do you get any direct revenue on a per SIM card basis?

Thaddeus Dupper

We license our product on a per activation basis. So as activations increase, the revenue comes in and that revenue is 100% margin.

Harvey Poppel

Okay. Good. Is there a reason why your support revenue was down last year? I only looked at the press release quickly.

Thaddeus Dupper

There is, and that scenario that we spent some time focusing on internally. What we've seen from our expectation, our experience is carriers are putting a lot of emphasis on maintenance renewals. And as a result, our renewals are coming under some pressure. And it's as if procurement departments around the world have put a priority to say maintenance renewals are going to come under renewal -- when they come up for renewal, they are going to come under renegotiation. That said, some of our DSA projects have been moved in production as originally forecast and then that means the maintenance revenue associated with those projects comes on the books a little slower, but that's really a secondary issue. The bigger issue is in this tight economy, carriers are looking for anywhere they can save. And one of the areas they seem to have singled out, at least with EVOL although I know it's with other companies as well, is the renewal of maintenance contracts.

Operator

Our next question comes from the line of Jon Jung from Trailhead Asset Management.

Jon Jung

You've covered a lot of the M2M pieces that I was interested in, but I think that anything else you could add to the color about where the machine business is going and how you play in that. I guess, the one thing I'm not certain about is exactly where your products fit in the machine-to-machine world and how you market those.

Thaddeus Dupper

Well, the way our products fit is when devices add SIM cards, that plays to our strength, obviously. Secondly, in M2M specifically, those devices that are infrequent intermittent transmitters are -- is the category or the slice that we're going after. And we've said that if an event happens, let's say, there's a cooling tower on a building and it starts drawing 7% more power than in the past, we would like the sensor on that cooling tower to detect the increased draw in electricity. Then, it would have the SIM card right next to the sensor. That SIM card, using our software, would auto activate. Our software would assign a [indiscernible] and a MSISDN to the SIM. The SIM would then connect to the head end, to the network carrier, and for this discussion, send an SMS saying cooling tower 17 needs maintenance and cleaning. That SMS would go to the maintenance department that maintains the cooling tower and they go up there and fix it. So that's an example of an infrequent intermittent communication. And what we like about our technology is, it's very good at activating SIMs. It's very efficient in using the network resources like MVs [ph] and MSISDNs, phone numbers, if you will. And as the M2M space materializes and the proliferation of devices starts to come on board, carriers are going to look for efficiencies like we have in our software to manage the vast array of connected devices, those which don't have to be connected all the time. I've often said it's a shame for a Kindle, an e-reader, to have a full-time MSISDN dedicated to it if the user doesn't buy a book for the next 6 to 9 months. With our software, when that Kindle wakes up, we would dynamically assign a number to it. The user will then browse through the Amazon store, select a book, by the book and then based on a business rule, deactivate that SIM in an hour, a day, a week, a month later if there's no activity. Then when the Kindle wakes up 2 months later, we automatically assign a MSISDN, they go into the Amazon store, buy a book and then so on. So it's a much more efficient use of MSISDNs. MSISDN is the technical term for phone numbers. And we think with number conservation in North America and the explosion of devices around the world, technology like ours will be very appealing to those carriers who enter the space. So that's our view and that's what we're executing towards, but we think long term, carriers are going to have to deal with this issue and technology like ours will become very relevant to them as these devices start coming online.

Jon Jung

Thad, what do you think will be the timeline in which you would expect to sell the first, I guess, piece of this business?

Thaddeus Dupper

Well, I'll be disappointed if we didn't close business this year, 2013, in this area.

Jon Jung

Yes, so you have a product that's pretty close to ready to go then?

Thaddeus Dupper

No. We have a product that's ready to go. We have dialogues underway with a number of interested parties. So I would say -- I wouldn't say it's material revenue this year, but I would definitely say it's revenue this year 2013 coming from the sector. But the growth engine, going back to Mike Crawford's comment, the growth engine for Evolving Systems today is dynamic SIM and the adjuncts that we're announcing and the extensions we're announcing to it. But long term, this M2M space represents a very interesting and intriguing area for us.

Operator

[Operator Instructions] Our next question comes from the line of Richard Todaro from Kennedy Capital.

Richard Lee Todaro - Kennedy Capital Management, Inc.

In the U.S. market, you guys have kind of downplayed that in the past because it seemed like a more low-end product that would be selling in emerging markets. So -- but then on today, you guys seemed pretty excited about the U.S. carriers starting to uptake the product and you said, I don't know if I misquote this, but it could be kind of a game changer for the business. So can you help us step through the opportunity, whether it is the tablet market or the machine-to-machine that comes on later? How do you think about that? And is there any way to size up that market for us and the competition and what it could actually mean from a financial perspective to your company?

Thaddeus Dupper

What I would say is there are 3 areas that we like about North America, other than the fact that doing business and collecting is a little bit easier than some of our other places [ph] , although I will give our finance team a lot of credit for doing such a great job on collections. But when we look at North America, we see 3 things driving the interest. One is, all the U.S. carriers are looking to get a little more active in prepay. And as you know, 76% of GSM subscribers around the world are on prepaid plans, and it's really only here in the U.S. that there's so many contract customers. So we think that the major carriers are looking at this, anticipating that the subscribers, the customers may have a stronger appetite for prepay, and as such, they're beginning to invest and look at prepay authors and the technology needed to do prepay. So we think that's one driver. The second driver that you mentioned is correct, which is tablets. Tablets are an enormous growth engine for carriers around the world. And the way that we can activate a tablet, a GSM tablet, not a Wi-Fi tablet, but a tablet that has a SIM card, is attracting some attention with North American carriers. And then finally, connected devices. Now connected devices, that demand hasn't materialized yet but we're still very long on that market. So prepay, tablets and then ultimately the machine-to-machine connected devices space are what's intriguing us about North America. And the interest and then the meetings we're having is picking up and we think that's only a good thing. Whether it's a game changer, it's too early to say, but with a company our size, $1 million dollars here or there starts to represent a pretty good percent for us in terms of growth.

Richard Lee Todaro - Kennedy Capital Management, Inc.

Is there an easy way to understand why they would choose your solution for tablets? It seems like that whether it's machine-to-machine or tablets, that the carriers are going to have these things being activated on and off and they need a really cheap and efficient way to be able to activate these without having someone on the phone and do -- and to deal with all of the expenses associated with these turning on and off all the time.

Thaddeus Dupper

Today, obviously, carriers can activate tablets because they're doing it today. I think the challenges, as demand increases and just coming back from Mobile World in Barcelona, it's all about tablets right now. We saw the first wave of growth with subscribers coming on board and penetration rates. Now it's all about mobile broadband driven primarily by smartphones and tablets. And ultimately, growth will come in from connected devices in the M2M space, but tablets are really the hot space right now and it's not just the iPad. We're seeing tablets being announced almost every other week from different players. And what's happening is some of these tablets should be on all the time, but some of these tablets don't need to be on all the time. And with number conservation in North America led by the FCC, our technology plays perfectly into that. Only assign a number to the tablet when it's connected. When it's not connected, when it's not busy, like IP addressing with the HNP, put it in a pool. So we're meeting with carriers, we're having these discussions and it's an area of interest right now. And what we want to do is translate that interest into business and revenue. And stay tuned and we'll see where it takes us. But a year ago, we weren't having these discussions. The fact we're having them now is a nice step forward for us. And as I said, it doesn't take much to move the needle on a company the size of EVOL.

Operator

[Operator Instructions] And this does conclude the question-and-answer session at today's program. I'd like to hand the program back to management for any further remarks.

Thaddeus Dupper

Well, thank you again for joining us, and thank you for the good questions, and we look forward to meeting with you again in the mid-May time frame to give you our most recent update on Q1. Thank you. Cheers.

Operator

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

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