USA Mobility (USMO) Q1 2013 Earnings Call May 10, 2013 10:00 AM ET
Good morning, and welcome to USA Mobility's first quarter investor call. Today's call is being recorded. Online today, we have Vince Kelly, President and Chief Executive Officer; Shawn Endsley, Chief Financial Officer; and MyLe Chang, Controller of USA Mobility. Also from the company's Software subsidiary, Amcom Software, we have Colin Balmforth, President; and Lynn Danko, Chief Financial Officer.
At this time for opening comments, I will turn the call over to Mr. Endsley. Please go ahead, sir.
Shawn E. Endsley
Good morning. Thank you for joining us for our first quarter investor update.
Before we discuss our operating results, I want to remind everyone that today's conference call may include forward-looking statements that is subject to risks and uncertainties relating to USA Mobility's future financial and business performance. Such statements may include estimates of revenue, expenses and income as well as other predictive statements or plans which are dependent upon future events or conditions. These statements represent the company's estimates only on the date of this conference call and are not intended to give any assurance as to actual future results. USA Mobility's actual results could differ materially from those anticipated in these forward-looking statements. Although these statements are based upon assumptions that the company believes to be reasonable, they are subject to risks and uncertainties. Please review the risk factors section relating to our operations and the business environment in which we compete contained in our 2012 Form 10-K, our first quarter Form 10-Q, which we expect to file later today, and related company documents filed with the Securities and Exchange Commission. Please note that USA Mobility assumes no obligation to update any forward-looking statements from past or present filings and conference calls.
With that, I'll turn the call over to Vince.
Vincent D. Kelly
Thanks, Shawn, and good morning. We're pleased to speak with you today regarding our first quarter operating results and what we believe was an outstanding quarter for both our Wireless and Software businesses. We've continued the strong operating performance and momentum that we established in the second half of 2012. On the Wireless side, we again ended the quarter ahead of our key operating goals for total revenue, operating cash flow, average revenue per unit or ARPU, and operating expenses. In addition, our Wireless sales force once again exceeded our plan for subscribers including gross additions, while our annual rate of subscriber churn improved to its best level in the company's history. Our Software business also achieved excellent results for the quarter with increased revenue, record first quarter bookings, revenue backlog near an all-time high and a growing pipeline of prospective accounts. Overall, we were able to maintain strong consolidated cash flow margins, operate profitably while reducing expenses and once again, return capital to our stockholders.
Shawn will discuss our financial results in more detail in a few minutes. But first I want to review some of the key accomplishments we achieved during the quarter.
Number one. Subscriber and revenue trends in our Wireless business continued to improve in the first quarter with rates of paging unit and revenue erosion below or near historically low levels. Our annual rate of subscriber erosion improved to 8.5%, the lowest loss rate in the company's history while our annual rate of revenue erosion fell to 12.4%, also among the best in many years. These impressive results were due in part to another excellent performance by our Wireless sales team which continued to outperform our goals for gross replacements while again reducing gross disconnect. We were especially pleased to see the continuation of these positive trends in our top-performing Healthcare segment with a net loss rate remained low at 0.5% in the first quarter.
Number two. our Software business also posted strong results for the first quarter. Continuing the momentum we established over the second half of last year. Software revenue and bookings increased from the year-earlier quarter while the backlog exceeded $40 million at March 31. In addition, Amcom's pipeline of sales prospects increased substantially in recent months, the result of outstanding work by our dedicated sales and marketing team, and increasingly diversified customer base and wider recognition of our software solutions. Our Software business also continued to expand the scope of its international sales efforts during the quarter including the addition of key accounts in Canada, the Middle East, the Asia-Pacific region. During the quarter we also broaden our software sales leads within such market segment such as healthcare, public safety, education, business, and government services.
Number three. We continue to reduce operating expenses during the first quarter mostly in our Wireless operations consistent with our long-term business plan. Occurring operating expenses for Wireless excluding depreciation, amortization and accretion, declined 8.6% from the year-earlier quarter. Going forward, we expect operating expenses in our Wireless business will continue to decline. However, we expect a portion of these cost savings we offset by additional investment in our Software business as we continue to reposition the company for long-term growth.
Number four. Strong performances from both our Wireless and Software businesses resulted in consolidated EBITDA of $15.5 million for the first quarter. This represented a consolidated margin of 29.3%. First quarter EBITDA for Wireless totaled $14.3 million, a margin of 36.9%.
Number five. Finally, and most importantly for stockholders, we again met our goal of generating sufficient free cash flow during the quarter to return capital to stockholders in the form of cash dividends. We paid our regular quarterly dividends of $0.125 per share on March 29. In addition, our Board of Directors has declared our next regular quarterly dividend of $0.125 per share to be paid on June 25. As of March 31, approximately $17 million of the authorized $25 million remained available for purchase under our stock buyback program which extends to December 31, 2013. Since the buyback program began in 2008, we have repurchased a total of 6,268,504 shares of our common stock and an average price $9.53 per share. Including the March 29 dividend, we have now returned the total of $467.7 million in capital to our stockholders over the past 8 years including $407.9 million cash dividends and distributions of 59.8 million in share repurchases.
Overall, we're very pleased with our operating performance and progress in the first quarter and we believe we're off to an excellent start in 2013. We met or exceeded the majority of our key operating goals, expanded our services and geographic reach, generated significant free cash flow, returned capital to our stockholders, and at the same time, we continue to make significant advances toward our long-term goal of transforming USA Mobility into a company with a viable path for long-term growth. We pursue that goal, I assure you we will continue to aggressively execute our business plans and actively explore all opportunities to create additional value for our stockholders.
I will comment further on our operating performance and related business activities in a few minutes but first our Chief Financial Officer, Shawn Endsley, will review first quarter financial results and share additional observations on our recent operating performance. Shawn?
Shawn E. Endsley
Thanks, Vince. Before I review our operating and financial results, I would encourage you to review our first quarter Form 10-Q, which we expect to file later today, since it contains significantly more information about our first quarter business operations and financial performance, than we will be able to cover on this call.
As Vince noted, we are pleased with our first quarter financial results and the continued progress we made toward meeting our long-term operating and strategic goals. Both our Wireless and Software businesses performed exceptionally well during the quarter, getting us off to a solid start in 2013 and continuing the momentum we saw in late 2012. Record low rate of subscriber churn and revenue erosion combined with reduced operating expenses and a stable ARPU, contributed to strong cash flows and continued high margins in our Wireless business. At the same time, our Software business reported increased revenue and bookings from the year-earlier quarter while the year-end backlog remained near its all-time high.
Looking first at our Wireless business. We are particularly pleased with the continued improvement in both subscriber and revenue trends as erosion rates once again either achieved or approached historic lows. With respect to our customer base, we ended the quarter with 1,480,000 units in service, a net decrease of 35,000 units compared to a decline of 51,000 units in the first quarter of 2012. The quarterly rate of net unit loss improved to 2.3% from 3% in the year-earlier quarter. While our annual rate of net unit loss improved to a record low 8.5% from 11.5% a year ago. To put the improved annual rate of subscriber erosion in broader perspective, the 8.5% rate in the first quarter compares to 19.5% and 21.8% in the first quarters of 2010 and 2009, respectively. Lower gross disconnects resulted in a quarterly gross churn rate of 5.2%, an improvement from the 2012 first quarter gross churn rate of 5.8%. Our 2013 quarterly gross churn rate of 5.2% was our lowest quarterly gross churn rate in more than 8 years.
Healthcare continued to be our most stable market segment, with the highest rate of gross placements and lowest rate of net unit losses. The net unit loss rate in Healthcare was only 0.5% for the quarter, it reflected a continuation of the trend that we have experienced since the second quarter of 2012 of less than 1% quarterly net churn. Healthcare represented 68.4% of the total paging subscriber base and we expect that percentage to continue to increase. Total paging ARPU was $8.25 in the first quarter compared to $8.29 in the fourth quarter and $8.50 in the first quarter of 2012. While ARPU has declined slowly in recent years, due mostly to a gradual increase in the percentage of units and revenue attributable to our larger accounts, we are pleased that overall pricing levels in our paging business remained relatively stable. Looking ahead, we expect paging ARPU will continue to decline slowly. However, we also will continue to evaluate pricing actions based on competitive factors.
Revenue from the Wireless business totaled $38.8 million in the first quarter, compared to $44.3 million in the first quarter of 2012. Paging revenue in 2013 of $37.1 million represents approximately 96% of Wireless revenue. Paging revenue declined 11.5% from the year-earlier quarter. To put this steadily improving trend in perspective, the year-over-year rate of paging revenue erosion was a record low of 13.3% in 2012, a decrease from 14.6% in 2011, 17.9% in 2010 and 19.5% in 2009. Our Healthcare segment contributed $23.8 million of direct paging revenue in the first quarter.
Turning to our Software business. Revenue for the first quarter totaled $14.4 million compared to $12.5 million in the first quarter of 2012, an increase of 15.1%. Of the $14.4 million, $6.8 million was maintenance revenue and $7.6 million was operations revenue. Maintenance revenue includes ongoing support of a software application, while operations revenue includes software licenses, professional services and equipment sales.
Software bookings for the first quarter totaled $14.3 million, an increase of 14.8% when compared to $12.4 million in the year-earlier quarter. As our sales force was able to consistently convert it's growing pipeline of sales leads and executed contracts.
Bookings are all purchase orders received from customers during the quarter and represent future revenue that will be realized upon installation or shipment. As a result of the solid bookings performance, our software backlog increased to a near record $40.2 million at March 31 from $32.7 million as we stated a year earlier. The total backlog at March 31 consisted of $25.3 million in operations bookings and $14.9 million in future maintenance renewal. We expect to convert this backlog into revenue in future quarters. The backlog consists of all previous purchase orders received from customers not yet recognized as revenue.
Finally, our maintenance renewal rate for software was 98.8% in the first quarter, compared to 99.7% in the fourth quarter.
On a consolidated basis, total revenue for the first quarter was $53.1 million, an increase of 2.4% from $51.9 million in the fourth quarter. Total revenue was $56.7 million in the year-earlier quarter, a 6.4% decrease.
First quarter operating expenses excluding depreciation, amortization and accretion, were $37.6 million with $24.5 million for Wireless and $13.1 million for Software compared to $38 million in the year-earlier quarter with $26.8 million for Wireless and $11.2 million for software. Recurring operating expenses for Wireless decreased 8.6% from the year-earlier quarter, and represented continued expense management in our Wireless business.
Payroll and related expenses which includes commissions, totaled $19.1 million for the first quarter including $10.5 million for Wireless, and $8.6 million for Software. Payroll and related expenses for Wireless declined 11.8% in the first quarter from the year-earlier quarter. While payroll and related expenses for Software increased 17.2% from the first quarter of 2012, reflecting our continued commitment to grow our software business. This expense item, which includes commissions, represents the largest element of operating expenses for both businesses.
Company-wide headcount at March 31 was 656 full-time equivalent employees including 367 for Wireless and 289 for Software, compared to 685 full-time equivalent employees a year earlier with 420 from Wireless and 265 from Software. On the Wireless aside, headcount declined 12.7% from the first quarter of 2012 while the number of Software employees increased 9%. Going forward, we will continue to adjust staffing levels as necessary to meet anticipated requirements for both our Wireless and Software businesses.
Site rent expense, our second largest operating expense, declined 2.1% to $4.2 million in the first quarter versus the prior quarter and 11.6% from the year-earlier quarter. Two key factors in our ability to generate further savings from site rent expense by continued elimination of transmitters and the relocation of existing transmitters to lower-cost sites. At March 31, we operated 4,649 active transmitters compared to 4,749 transmitters at year end 2012. We reduced the number of our paid active transmitters to 2,309 at March 31, from 2,386 at December 31, 2012, a reduction of 3.2%. While the number of transmitters located at customer-provided sites, that is those with no associated rent expense, totaled 2,340 and represented 50.3% of our active transmitters at the end of the quarter.
Excluding payroll and related expenses and site rent expenses, all other recurring expenses excluding depreciation, amortization and accretion, represented $14.3 million in the first quarter. All other recurring expenses for Wireless totaled $9.8 million, a decrease of 3.3% from $10.1 million in the first quarter of 2012. All other recurring expenses for software totaled $4.5 million in the first quarter of 2013, an increase of 16.9% from $3.9 million in the first quarter of 2012. This increase reflects our investment for growth in the Software business.
Consolidated EBITDA for the first quarter was $15.5 million, or 29.3% of revenue compared to $18.8 million or 33.1% of revenue in the year-earlier quarter. First quarter EBITDA included $14.3 million from Wireless or a margin of 36.9%. And $1.2 million from Software or a margin of 8.7%.
A schedule reconciling operating income to EBITDA has been included in our earnings release. Capital expenses in the first quarter were $2.3 million, with virtually all of it from the Wireless business, compared to $1.6 million in the first quarter of 2012. Capital expenses were primarily for the purchase of paging devices.
Net income for the first quarter was $6.9 million or $0.32 per fully diluted share compared to $8.5 million or $0.37 per fully diluted share in the first quarter of 2012.
Turning to the balance sheet. The company generated $15.7 million in cash from operating activities in the first quarter and ended the quarter with a cash balance of $71.7 million.
We expect to use a portion of that cash in connection with quarterly cash dividends and share repurchases in 2013. I would also note that while we repaid our debt balance in the second quarter of 2012, our existing credit facility remains in place and provides us with approximately $40 million of borrowing capacity for potential acquisition or related investment opportunities.
Finally, with respect to our financial expectations for 2013, we currently expect consolidated total revenue to range from $195 million to $213 million. Consolidated operating expenses, excluding depreciation, amortization and accretion to range from $150 million to $152 million, and capital expenses to range from $8.1 million to $9.7 million.
The breakouts between the Wireless and Software businesses are detailed on a schedule in our earnings release. Finally, I would remind you once again that our projections are based on current trends and that those trends are always subject to change.
With that, I'll turn it back over to Vince.
Vincent D. Kelly
Thanks, Shawn. Before we take your questions, I want to comment briefly on a few other items that may be of interest. First, I'll provide a quick update on our recent sales and marketing activities in the first quarter. Second, I'll briefly review our current capital allocation strategy. And finally, I'll comment on our business strategy and outlook for 2013.
With respect to sales and marketing activities, both our Wireless and Software businesses continue to aggressively pursue new business opportunities during the first quarter. On the Wireless side, we were especially pleased to see continued improvement in subscriber revenue trends while our Wireless sales team clearly delivered results and put in a tremendous amount of work to get those results. There are several other fundamental reasons why we've been able to consistently achieve a significant level of gross placements in each quarter, and while we expect the pace of paging unit erosion will continue to improve. From this [ph] key factors are these:
Number one. Pager remains relevant especially for the healthcare sector where our customers continue to recognize the value of paging as a highly reliable and cost-effective form of wireless communications. This is particularly true for first responders and emergency personnel who work in mission-critical roles for their organization.
Number two. Paging is less expensive. Calls remain the key advantage for paging. Despite the added functionality and popularity of smart phones and other wireless devices, our customers understand there's still nothing even close to paging from a cost-effectiveness perspective. In short, not everyone requires a smartphone to do their job. And hospitals, along with nearly all other organizations, operate within a limited budget.
Number three. Paging is reliable. Paging survival for architecture provides advantages over broadband and WiFi during times of local, regional and national disasters. By comparison, cellular and Internet-based technologies continue to suffer system failures and downtime during disasters of any scale including Hurricane Sandy last fall.
Number four. Healthcare is our major market segment. Healthcare continuous to provide a larger portion of our total Wireless customer base increasing from 27% in 2005 to 68% in the first quarter of 2013. While we expect that percentage to increase over time, in fact, we added 6 new hospital accounts in the first quarter.
Number five. Healthcare is also our most stable segment. Net churn for Healthcare was 0.5% in the first quarter compared to total unit churn of 2.3% for all Wireless. Adding to the stability of our Wireless healthcare base, Wireless revenue over the past year has been were virtually flat among our top 25 healthcare accounts.
Number six. We've established long-term customer relationships. Without a question, the ability of our sales and support professionals to forge and maintain long-term relationships with key customers in key business segment as contributed greatly to our improved subscriber trend.
Number seven. Cross-selling with Amcom is working. The coordination of selling and marketing activities between Wireless sales team and our Software sales team continues to play a key role in the development of business leads and ultimately new accounts. This unified selling effort produced 7 cross-divisional sales in the first quarter and also demonstrated our long-term commitment to provide a wide range of critical mobile communications capabilities for our customers.
Looking at our Software business, Amcom sales and marketing team also made significant progress during the first quarter. Sales were primarily within healthcare as well as the local and federal government agencies. They included both new and old customers with more than 26 figure contracts that we believe reflected growing market demand from customers from multiple software solutions to improve their critical communications. The bulk of our Software business continues to come from North America. However, we also saw strong and growing demand for our solutions in Europe, the Middle East, and the Asia-Pacific region. For example, in January, Amcom was awarded a contract for a major hospital complex in Queensland, Australia, to provide emergency notification, communications middleware and call center solutions. In our core North American market, Healthcare segment, Amcom's top selling solutions during the first quarter included critical smartphone communications, clinical alerting, and call center optimization. Two of the larger wins included a large hospital in Canada that shows our critical test results of management software. As you may recall, this is a solution we acquired a year ago. This customer saw a need to streamline critical test results to doctors for radiology, lab and cardiology that would expedite patient care. Also, a major hospital in Florida selected our Care Connect solution which helps doctors get in touch with each other more easily by using the right device at the right time and thus, better coordinating patient care.
Along with ongoing demand from healthcare customers, we added substantial business in public safety organizations. This included a number of systems for military bases as well as police and fire departments that need high-quality software solutions to process their inbound 911 calls and dispatch emergency responders more quickly and accurately. One strategy implemented by our Software sales team during the quarter was to export software solutions popular in North America to key international markets. The strategy has already yielded many new accounts in Europe, the Middle East and Australia. In addition, our marketing team increased its support for international sales, including participation for the first time at the annual Arab Health trade show in Dubai. Other successful marketing initiatives included record-setting lead generation and launching Amcom's first-ever user group, Amcom Directions.
I'd also like to note that our Software sales and marketing team generated a sizable number of new accounts as a result of our Annual Users' Conference held last November. Known as Connect 12, the conference attracted a record number of attendees representing hundreds of organizations. During the three-day event, customers and potential customers learned about our new solutions and upgrades through in-depth demos and discussions. This event a significant number of customers purchased add-on modules and we have secured many new logo accounts. Finally, I'd add that our investment and upgrading incomes management last year has clearly paid off and should continue to do so as the software sales potential of our growth engine is realized. Most importantly, we added Colin Balmforth as President of Amcom Software last September; Lynn Danko, CFO. The astounded [ph] managers bring strong resumes and experience to further strengthen our team. Too thin, we continued to invest in our Software team and the key areas of sales, marketing, professional services, maintenance, and support with additional management and staff counts.
With respect to our capital allocation strategy, the company's management and Board of Directors remains fully committed to our long-stated goal of creating stockholder value. During the coming year, we will continue to evaluate how to best deploy our capital resources to support sustainable business growth and to maximize stockholder value over time. In recent years, we have made a number of strategic decisions regarding capital allocation that we believe position us well for the future. The purchase of Amcom in March 2011 was a strategic investment that represented the unique opportunity for USA Mobility to begin the transition to a growth oriented software business model. As our business transition continues to evolve over time, we expect allocate to additional resources to expand the depth and breadth of our software application, service capabilities and market penetration. In addition, we expect to continue paying an annual dividend of $0.50 per share for the foreseeable future based on our current cash flow projections. We believe the current dividend rate provides a significant yield on our common stock, plus it allows us to retain strategic capital as we reposition the company for the future. We believe the renewal of our stock purchase program last July also demonstrates our commitment to return capital to stockholders in the short term with our transition to the long-term growth strategy continues to evolve.
Turning to our business outlook for 2013. We're off to a great start in the first quarter and were optimistic about the solid performance throughout the year. We expect to make steady progress in 2013 toward our performance goal, including continued improvement in subscriber revenue and cost trends. While the overall demand for paging may continue to decline, the value of paging for critical messaging remains strong and should allow us to generate solid cash flow for the foreseeable future. At the same time, we expect to add significant progress and momentum we've achieved in our Software business over the past year. While the sales cycle in the software industry can be uneven from time to time, we're excited about the momentum we've created over the past 3 quarters and our long-term prospects. We expect to achieve further progress this year and beyond, especially with our new leadership now in place. With Amcom enjoying a firmly established position in the growing mission-critical communications space, we expect continued expansion of our reach both within and beyond existing market segments, as well as extension of our sales into new geographic markets worldwide. In addition, we would continue to explore acquisition opportunities among Amcom -- among software and related businesses that are compatible with our current operations and generate additional revenue and ultimately will enhance long-term stockholder value.
In summary, we've made considerable progress in the first quarter. Our Wireless and Software businesses have blended exceptionally well over the past 2 years, enhanced each other's sales potential and established a solid platform for a successful future. We operate the company profitably, met our primary performance goals, reduced operating cost, increased organizational efficiencies and pursued aggressive selling efforts in all key target markets. As a result, we believe we're on track to complete over time our strategic goal of transitioning from a standalone paging company to a growing unified communications business, focused on providing mission-critical wireless and software solutions to public and private organizations in both national and international markets. With continued execution of our long-term business strategy, combined with continued commitment of our dedicated employees, we expect to make further progress toward that goal in the months and quarters ahead.
At this point I'll ask the operator to open the line up for your questions. [Operator Instructions] Operator?
Vincent D. Kelly
Okay, well, it looks like we did such a good job in our prepared comments that -- oh, here we go, we got one question.
We will go to David Wells with Hanson Wells Partners.
Just a few quick questions for you. As I look at the Amcom backlog from Q1, a little bit soft sequentially, and so I was just curious if there was any contracts that were kind of on the bubble that may have rolled into Q2 that would have caused the kind of modest sequential decline there?
Vincent D. Kelly
Lynn and Colin, do you guys want to take that one?
This is Colin, good morning, David. I just think it's just timing.
And then as I look at the Amcom guidance for the year, it, certainly, encouraging to see kind of the implying EBITDA margin guidance starting to march back upward but certainly, meaningfully below still where margins were prior to the acquisition. And so I'm just trying to get a sense of the timing of where you feel like we'll begin to see some cost levers from the investments that you've made in that business. And certainly, seeing the revenue pick up here in '13, is it the right time but do you really start to leverage that cost base in '13 or is that more of a '14 or '15 event where you'll see more kind of mid-teens or low-20s type EBITDA margin of that business?
Vincent D. Kelly
We really start to lever some margin more in the out years, David. We're not really running Amcom right now to get -- cash some margin. If we were, obviously, it would be very simple because most of the cost of the software business is headcount. We had to do the typical build versus buy analysis when we're looking to add functionality and add products and solutions. And a lot of times, lately just because of the cost out there with the client companies, we've been opting to develop, so we've added to our development staff. We've also added the staff in the management ranks as I mentioned upfront not just with Colin and Lynn, but other critical areas of the company. We're really building Amcom right now to be a good, in fact, a great long-term company in the software business in the unified communications space. We've also expanded somewhat in our international, so the goal right now is not to get a lot cash on margin out but at the end of the day, and this is my belief, any business, the long-term goal is to generate cash and return that capital to stockholders. It's just a question of how you do it. We were phenomenal at it that USA Mobility on the Wireless side but at some point, wireless gets small and we'd end our ability to do that and that's why we acquired Amcom. We think over the long term, making a little bit of investment in Amcom while we're still returning capital to shareholders, to our Wireless results, is the right way to go, that's the best way to get the best long-term shareholder value to be able to reward our shareholders, the 22 million shares that are near and dear to my heart that I think about every day, what can we do that's best for them over the long term. And I believe right now it's to continuing to reward them with a dividend that we pay on a returning basis but also to invest in Amcom. So at some point when Amcom is at scale, if you will, it has a meaningful cash flow margin and we continue the same track record that we've had these past 8 years since we formed the company.
That's very helpful. As you think about the share repurchase, is that kind of an opportunistic approach or do you put a program out and tick away at it as the quarters go along or how are you thinking about the balance of the year?
Vincent D. Kelly
We -- our history on share repurchases has been to be opportunistic because I talked about kind of the $9 or so average repurchase price we have but if you really kind of feel that way, a lot of that was repurchased back in 2008. So when we repurchased it, since then, we haven't had to pay the dividend on it. So we really had a great return on our share repurchases and it's a pet peeve with me that I think a lot of companies don't do a good job on share repurchases. I think in general, this is a blanket statement, I just rather see dividends, than share repurchases, but there are times when for whatever reasons, you're underappreciated and not understood and there's good things going on in your business and it makes sense to buy the stock back. So you think that's a little long-winded explanation compared to what you're looking for. But that gives you a little bit of insight into the philosophy.
Okay, well, that looks like that was the last question we have. I mean, what I'm saying, and we really look forward to talking to you after we release our second quarter earnings. We can't wait. There's good things going on in this company, and we are very committed to returning capital to our shareholders over the long term but we're also very committed to growing the business and investing in our Software segment. We think it's the right balance, we think it is the right formula to create long-term shareholder value and we thank you for your support, and have a great day.
This does conclude today's conference. Thank you for your participation.
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