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Edgewater Technology, Inc. (NASDAQ:EDGW)

Q3 2013 Earnings Conference Call

October 30, 2013 10:00 AM ET

Executives

Paul McNeice – Director-Finance

Shirley Singleton – Chairman and Chief Executive Officer

Timothy R. Oakes – Chief Financial Officer

David Clancey – Executive Vice President, Chief Strategy Officer and Chief Technology Officer

Analysts

Lee Jagoda – CJS Securities, Inc.

John D. Vandermosten – Singular Research

Alexander Renker – Sidoti & Co. LLC

Operator

Good morning and welcome ladies and gentlemen to Edgewater Technology Incorporated Third Quarter 2013 Financial Results Conference Call. At this time, I’d like to inform you that this conference is being recording for re-broadcast and then all participants are in listen-only mode.

At the request of the company, we will open the conference up for questions and answers following the presentation.

I will now turn the conference over to Paul McNeice, Vice President of Finance for introductions.

Paul McNeice

Thank you Ashley. Good morning everyone and welcome to Edgewater Technology’s third quarter 2013 financial results call. I am here today with Shirley Singleton, Edgewater’s Chairman, President and CEO; David Clancey, Edgewater’s EVP and Chief Strategy and Technology Officer; and Timothy Oakes, Edgewater’s Chief Financial Officer.

Before we begin, I would like to remind everyone that today’s call may contain forward-looking statements as described under the Securities Act. Investors are cautioned that such statements could involve risks and uncertainties that could cause actual results to differ from current expectations with respect to such statements. These types of statements and the underlying factors related to these statements are listed and reported in filed information with the Securities and Exchange Commission, as well as the company’s press release that was distributed earlier this morning. The statements made during today’s call are made only as of the date of today's call and the company undertakes no obligation to update the forward-looking statements to reflect subsequent events or circumstances.

With that, I will now turn the call over to Shirley.

Shirley Singleton

Thanks Paul, hello everyone. I’m pleased to report that we achieved mid-single digit year-over-year growth in both total revenues and service revenues and we posted improvements in gross margin, net income, adjusted EBITDA and cash flow.

But before I comment any further, let’s turn it over to Tim and get into the details. Tim?

Timothy R. Oakes

Thank you, Shirley, good morning everyone, and thank you for joining us on this morning’s call. As usual, I will jump right into our prepared comments on the financial results for the third quarter.

Total revenue for the third quarter of 2013 was $25.4 million compared to $24.2 million in the third quarter of 2012. Service revenue for the third quarter of 2013 totaled $21.4 million compared to $20.2 million in the year ago quarter. On a year-over-year basis, third quarter 2013 service revenue grew by 5.7% compared to the third quarter of 2012. The increase in third quarter service revenue was driven by improvements in our sales pipeline during the latter part of the first quarter, contrasted against the weakened sales pipeline we experienced in the second half of 2012.

The improved sales pipeline we experienced during the first half of 2013 has provided us with a healthy backlog of signed engagements entering the third quarter. Additionally, we continue to drive our sales pipeline during the third quarter, reflected by our 28 first time engagement signed during the third quarter, which places us back in our normal new customer range.

While we entered the quarter with what we believed to be a sufficient amount of signed projects to achieve sequential growth in our third quarter service revenue, our ability to grow the service revenue was handicapped by customers delaying the start of project engagements, most notably within our ERP related service offering.

Although we saw these projects launched during the third quarter, they kicked off later than originally anticipated which generated lower than anticipated amount of service revenue.

During the quarter, we continue to advance our strategy of designing and building strategic targeted intellectual property based solutions to augment our mix of strategic service offerings. As we have mentioned in the past, we believe the leveraging of intellectual property has and will continue to have a positive impact on our sales pipeline activity.

Billable consultant utilization for the third quarter of 2013 was 71.1% compared to 69.5% in the third quarter of 2012. Improvement in our year-over-year utilization is reflective of the $1.2 million increase in third quarter 2013 service revenue, while the sequential decrease in our billable consultant utilization is largely attributable to the previously described project delay.

Software revenue was $2.3 million during the third quarter of 2013 compared to $2 million during the third quarter of 2012. The increase in year-over-year quarterly software revenue was primarily due to a $260,000 increase in comparative PI2 related revenue recognized during the third quarter of 2013.

As a side note, the third quarter of 2012 represented the first quarter in which we began to recognize PI2 related software revenue. We recognized a total of $614,000 and $354,000 in PI2 related revenue during the third quarters of 2013 and 2012 respectively.

During the third quarter of 2013, we recognized in aggregate approximately $2.8 million in revenue from the PI2 asset sale. As of September 30, 2013, we had $453,000 of deferred PI2 revenue remaining to be recognized in future periods.

Additionally, as we discussed and described during our second quarter earnings call, third quarter 2013 software revenue was also impacted by a change in how we reported certain resales of Dynamics AX software. Prior to the second quarter of 2013, we essentially reported software resale revenue on a growth basis, reflecting all revenue and cost of revenue on our periodic statement of operations.

As a result of changes in the nature of certain software resale transactions, during the second and third quarters of 2013 we also recorded software resale revenue on a net basis, reflecting only the amount due to Edgewater as revenue. And not reflecting any growth amount of software revenue or software cost in our statement of operations.

We want to emphasis that amount of software revenue reported going forward along with the associated margin and the timing of margin we’ve recognized on software resale, may vary significantly from quarter-to-quarter, depending on specific reporting treatment for each individual transaction.

With respect to other standard quarterly revenue metrics we note that our annualized service revenue per billable consultant was $370,000 in the third quarter of 2013, compared to $359,000 in the third quarter of 2012. The slight improvement in this metric is the result of timing of the recognition of previously deferred revenue as well as our EPM service offering continuing to represent a larger portion of our total service revenue mix.

Our EPM service offerings accounted for approximately 62% of our total service revenue during the third quarter of 2013, compared to 58% in the year ago quarter.

As previously highlighted, we entered into first time engagements with 28 new customers during the third quarter of 2013, compared to 33 new customer engagements in the third quarter of 2012 and 25 in the second quarter of 2013.

Service revenue generating during the quarter by our top 10 customers represented 27.8% of total service revenue compared to 29.3% in the third quarter of 2012. No individual customer represented more than 5% of our total service revenue during the third quarter of 2013, while one customer represented more than 5% of total service revenue during the third quarter of 2012.

At the end of the third quarter 2013, we maintained 321 total billable consultants, which included 16 contractors. This compares to billable headcount of 331 including 23 contractors at the end of the third quarter of 2012.

Total gross margin in the third quarter of 2013, was 38% compared to 36.5% in the same year-ago quarter. While gross margin related to service revenue was 38.9% during the third quarter of 2013, compared to 38.7% during the third quarter of 2012. The improvement in total gross margin during the third quarter of 2013 was attributable to the year-over-year growth in service revenue as well as the increase in PI2 software revenue. The consistency in gross margin related to service revenue during the third quarter of 2013 is the result of improved quarterly service revenue and associated billable consultant utilization offset by increase billable consultant salaries and wage related expenses.

Moving on to SG&A. SG&A expenses, including embezzlement related expenses, totaled $7.6 million in the third quarter of 2013, which is consistent with $7.7 million in the same year ago quarter. We continue to proactively manage our SG&A expenditure rates.

Net income for the third quarter of 2013, was $1.8 million or $0.14 per diluted share compared to net income of $793,000 or $0.07 per diluted share during the third quarter of 2012. The largest drivers of improvement in our net income were the current quarter’s growth and service revenue and the increase in the software revenue associated with the recognition of the PI2 software revenue.

With respect to our non-GAAP measures, adjusted EBITDA was $2.5 million or $0.21 per diluted share and 9.9% of total revenue in the third quarter of 2013. Compared to $1.4 million or 12% per diluted share and approximately 5.8% of total revenue in the year-ago quarter. The comparative change in adjusted EBITDA is similarly attributable to third quarter 2013 service revenue growth and the incremental recognition of the PI2 software revenue.

Additional information regarding our use of non-GAAP measures including a reconciliation to the most comparable GAAP measures can be found on our press release that was issued earlier this morning and is also available on the Investor Relations section of our website at www.edgewater.com.

As of September 30, 2013 we continue to maintain a strong balance sheet and carry no debt. On September 30, 2013 cash and cash equivalents totaled $17.5 million compared to $16.7 million on December 31, 2012.

Year-to-date our cash position was bolstered from $793,000 from employee stock plans and option exercises, primarily offset by $1.2 million in payments associated with the settlement of pre-acquisition of Fullscope sales and new tax liability, which we believe are fully recoverable from an existing acquisition related escrow account. $1.5 million of repurchases of Company’s common stock and to a lesser extent purchases of intellectual property and property and equipment.

As of September 30, 2013, our cash and cash equivalents represent $1.43 per diluted share. We are reporting cash flow use and operations of approximately $5.9 million during the third quarter of 2013, compared to cash flow from operations of $5.4 million during the third quarter of 2012. Accounts receivable balances including unbilled AR, totaled $19 million at the end of the third quarter of 2013, compared to $18.3 million as of December 31, 2012.

Our DSO metric related to billed AR was approximately 60 day as compared to 66 days at the end of the third quarter of 2012.

In closing, I would like to make two final comments on other financial related activities during the third quarter. In September 2013, we entered into a three year secured revolving credit facility under which Edgewater may borrow up to $10 million including an additional accordion feature that will enabling the company to request an additional $5 million as needed extending the total credit facility borrowing capacity to $15 million over its three year term.

The credit facility secured by the personal property of the Company and its domestic subsidiaries and is subject to normal covenants. The credit facility will be used for working capital including funding growth initiatives, stock repurchases and acquisitions. No amounts were drawn under the credit facility as of September 30, 2013.

Finally in September 2013, the Company’s Board of Directors approved both an increase to and an expansion of our existing stock repurchase program. The Board approved a $7 million increase to the Purchase Authorization bringing the revised Purchase Authorization total to $23.1 million.

Additionally, the program that was scheduled to expire in September 2013 has been extended so as to expire in September 2014. We did not make any stock repurchases during the third quarter of 2013 and during the first nine months of 2013, we have repurchased a total of 365,000 shares at an aggregate purchase price of $1.5 million, reflecting an average purchase price of approximately $4.14 per share. As of September 30, 2013 there was approximately $10 million of purchase authorization remaining under the stock repurchase program.

Now I’d like to turn the call back over to Shirley for further comment on the third quarter.

Shirley Singleton

Thanks Tim. We’d really hoped for a grand slam meaning all our metrics would be up including sequential service revenue. But several sign customers decided to delay launching their projects until September. It looks like to us they must have taken a vacation in August and while we didn’t achieve that grand slam, we do want to mention that we hope our Red Sox grab one tonight.

During the third quarter, we engaged in 28 new projects with customers such as Baylor Health Care, Texas Service Life Insurance, DayGlo Color, Focus Brands, BayCoast Bank, and VMware, and I think one of the nicest things about looking at this mix of new customers is that it was really evenly spread. The customer acquisition across Classic Consulting, EPM and ERP. And as you probably have inferred from Tim’s comments the monetization of IP actually played a role in our financials this quarter and it is a key part of our strategy. So that being said, I thought – Dave and I chatted about it. We thought it might make sense for us to recap our overall strategy and we’re going to make this in four points.

Point one is that we plan to continue to grow within defined channels such as Microsoft and Oracle and those of you that have been listening to us on over several earnings calls that should be no surprise with our ERP and EPM offerings securely loft in those channels.

Point two is that we expect to continue and invest in IP. It served us well. As I mentioned, you could see that in the financial this quarter. And the purpose of the IP is to really augment pre-prepared platforms, products that already exist and add to that mix and thus enhance our consulting services.

The third point that we’d like to make in terms of our strategy is that we intend to keep Classic Consulting squarely towards the top of that pyramid of IP services. It’s a strategic place to be where you get the opportunity to make business and technology choices with C-level executives and this becomes especially important in times of software replacement cycle. So Classic Consulting has a position in this strategy as well.

And then the fourth point we’d like to make is that we’re going to look to drive consolidation in our specialty areas, which is the pieces I just talked about, especially if an acquisition target shares our vision of combining services and IP. As it relates to our go- forward guidance we’ll be challenged by the holidays in their position where they fall on Wednesdays. We were concerned about this that we actually had – we did a reach out poll to some of our customers and there is some early indication that some of these are larger customers and in particular are EPM customers may shutdown for the whole week or/and limit our ability to grab maximum bill days.

So when we look at what will our service revenue be in Q4, I think sequentially it’s a close call. We don’t feel confident enough to say we’re going to be up because of that unknown factor and what the poll is telling us. So for now we expect service revenue to be flat sequentially. We certainly have revenue to burn, but I’m not sure we’re going to be able to do it, depends on who takes the days off. However, we still anticipate the Q4 service revenue will experience high single-digit year-over-year growth and for that we’re very grateful.

Actually I guess we’d like to open it up for some questions please.

Question-and-Answer Session

Operator

Thank you. The question-and-answer session will begin now. (Operator Instructions) Thank you. Our first question comes from Lee Jagoda. Please state your affiliation followed by your question.

Lee Jagoda – CJS Securities, Inc.

Hello?

Shirley Singleton

Hi, Lee, you’re there?

Lee Jagoda – CJS Securities, Inc.

I am. Can you hear me?

Shirley Singleton

Yes. Now we can.

Lee Jagoda – CJS Securities, Inc.

Okay, great. So can you just quantify the impact that the delays in Q3 have that like we are shipping to Q4 and maybe touch a little more on why you think that this year’s holiday falling on a Wednesday versus a Tuesday would have a lager impact? And then maybe just remind us what if any impacts or delay you had related to Hurricane Sandy last year.

Shirley Singleton

Okay.

David Clancey

Surely. I’ll take that one. In terms of the delayed projects, first notice recently we’ve had delays where we couldn’t get customers to put pen to paper and this incident, these are actually physically sign engagements as we entered into the third quarter meaning they had been signed in Q2.

There were several projects. They primarily aggregate on the ERP service offering and if I look at it in total without having an exact number, you’re looking at something between $600,000 and $750,000 of service revenue or potential service revenue that we weren’t able to capture in the quarter because of the expansion of these project starts.

As it relates to your question on the influence of the holidays falling on a Wednesday, it’s a tough day. If you look at years past you can have a holiday on a Monday or a Tuesday, which would open up availability for billing on the remainder of the week as people may take time before. But as we look at it we feel that that holiday falling in the middle of week makes us susceptible to the front end of the week as well as the back end of the week in terms of losing billable hours.

Additionally, as Shirley talked about, we did reach out to some of our customers primarily on the EPM side where on the EPM side there is a lot more hand-holding in terms of performance of your job and in terms of performance of the services we’re offering with a physical live body of the customer and if they’re going to shutdown or if they’re going to have individuals on their step take holidays, it does open us up to the unknown in terms of what we’re going to able to drive for billability during that period. Because of that uncertainty that makes us somewhat cautious in terms of what we look at fourth quarter service revenue generation to be.

And then, anther comment you had was on Hurricane Sandy. I mean Hurricane Sandy was really, I believe to the East Coast. I mean, let’s really call it the northeast in terms of New York. I don’t have a quantified number as to what the overall drag on fourth quarter 2012 service revenue was, but I would relationally state, I mean even assuming a flat revenue number in Q4 from Q3 that’s still almost $2 million up in service revenue. So some of that Sandy impact would certainly be captured in that $2 million number.

Lee Jagoda – CJS Securities, Inc.

Okay, great. Then just shifting gears a little bit to the SG&A line, it was down roughly $500,000 sequentially. Can you walk through the components of the delta and whether or not it’s sustainable going forward?

Timothy R. Oakes

As I look at SG&A, some of it is commission based, some of it is occupancy and facility based, network cost, cellphones and what not. Some of it is also recruiting based. Obviously we’ve had a lot less recruiting this year, if you look at the consistency in the billable headcount. From sustainability if you look at the preceding quarters we’ve been migrating in that $7.5 million to $8 million range. We don’t anticipate looking forward significant SG&A expenditures. So I think modeling-wise it is in a sustainable range right now.

Lee Jagoda – CJS Securities, Inc.

Okay. And then one more question. I’ll hop back in queue. Shirley, you appear to have sufficient cash flow to fund your business as well as repurchase a significant amount of stock relative to pro release. Can you announce this $10 million credit facility to fund growth and for working capital, can you talk about what you’re seeing out in the market that led you to take the action when you did?

Shirley Singleton

Well, our strategy as I mentioned, going forward we’re looking to consolidate in our areas of specialty and I’ve been very open about talking – but looking for acquisition opportunities that might fit our vision in terms of IP and services. So that march continues. And part of securing the credit facility when we did is there was lots of opportunity to secure one at a very advantage price when you don’t need one.

Timothy R. Oakes

Correct. And if you think when we acquired Fullscope there was significant financial stress on the system and when that occurs many times you can achieve very good deals whether on consolidation strategy. So it’s best to have these facilities in place, before that to be able to take advantage of it. As Rothschild [ph] said, the best deals are when the blood has been running in the streets.

Lee Jagoda – CJS Securities, Inc.

Okay, thanks very much.

Shirley Singleton

Does that help you Lee?

Lee Jagoda – CJS Securities, Inc.

Yes, yes.

Shirley Singleton

I just want to dry power if there is multiple opportunities; I am going to go for opportunities.

Operator

Thank you. (Operator Instructions) our next question comes from John Vandermosten of Singular Research. Your line is open.

John D. Vandermosten – Singular Research

Good morning everybody.

Timothy R. Oakes

Hi, John.

Shirley Singleton

How are you?

John D. Vandermosten – Singular Research

Pretty good. Just I wanted to ask a question just on the new customer side. It felt like there was a pretty broad group of industries that you listed today. Can you maybe discuss, maybe changes in trends in terms of what industries are in the focus of new customer acquisition.

Shirley Singleton

Okay, I am looking down my list here. I think our ERP practice had some really nice manufacturing wins. So manufacturing continues to be a spot for us. What seems to be emerging and within the cross selling section as well between among the subsidiaries is healthcare. We’ve been moving into that field, it looks like healthcare needs planning, budgeting and consolidation services. That would be a new thing. We’ve had some play in there for EPM, but it looks like that tends to be opening up. And that matches right into classic consulting where we’ve already been working in there on Accountable Care initiatives.

So that seems to be feeding off each other, stimulating cross selling and opening up customer base to others. Let me shift to anything else here, I want to say it’s evenly spread among all three like I said which is terrific for a while there whether we section for it again in 2009. If classic consulting guys were not securing loss of engagements then it was more heavily weighted towards EPM. It was nice to see it kind of even out, does that help you John?

John D. Vandermosten – Singular Research

Yeah it does, it does. And just in terms of the size of the new customers, have you seen that change I think in the last call you said that some of the larger customers or making up the new ones, but if the customer mix is shifted towards larger size, have you seen a change in size as well.

Shirley Singleton

We’re seeing size in ERP drift northwards. We are seeing the sizes in EPM. The small white to start and then in decent rough to large sized follow on engagement. And in classic consulting it’s still not hitting on all cylinders in terms of large contract although we have some new works that look pretty promising. So and that’s been the stage which classic consulting has been in for some time. It tends to be a little more dicey in that subsidiary in terms of commitment.

I will tell you that what’s in the pipeline are one year gigs that are sitting here, waiting to sign as opposed to one month. So while they are not signed I can see the appetite building, but I wouldn’t say in terms of wholesale software replacement cycle we are still in the beginning stages of it. I am not seeing everyone running in there and saying let’s replace everything.

John D. Vandermosten – Singular Research

And then on the retainer side of things, has that continued to improve. I know that’s pretty small part of the business, to just point that. Is that still an area that’s expanding?

Shirley Singleton

Yeah, it’s what the little engine that would yes. The answer is yes. It continues to expand and it seems to be doing well accelerating in our EPM offering. And the ERP piece seems to be a little up; in the classic it seems to be similar, staying flat.

John D. Vandermosten – Singular Research

Okay. You have the answer to my question. And then just to question on the trend in the quarter, did it seem – I know you said there is some delays in time contracts starting, was it due to any concern or maybe government shutdowns upcoming or any other issues like that or observations in terms of the trend throughout the quarter?

Shirley Singleton

I don’t want to call that out as the reason. I saw softness in August, in particular in ERP and they were signed gigs and it was failure to launch. We’re waiting well like, come on lets go, lets go. And they just didn’t want to engage. In terms of sales, I've seen it pick up at September, went on in October, came in and I see a little bit more activity, but for a while there was some softness and I’m not sure why. I don’t know if it was the government shut down. Don’t know, but all I can tell you is the data.

John D. Vandermosten – Singular Research

Okay. And just one final thing, just kind of confirm that you have 321 – you said 321 billable headcount including contractors, is that correct?

Timothy R. Oakes

Yes, John, that’s correct.

John D. Vandermosten – Singular Research

Okay, thank you so much.

Shirley Singleton

You're welcome.

Operator

Thank you. Our next question comes from Alexander Renker of Sidoti & Company. Your line is open.

Alexander Renker – Sidoti & Co. LLC

Good morning, everybody.

Timothy R. Oakes

Good morning Alexander.

Shirley Singleton

Hi, how are you?

Alexander Renker – Sidoti & Company LLC

Good, how are you?

Shirley Singleton

Good.

Alexander Renker – Sidoti & Company LLC

I’m sorry, I got disconnect for a period, I missed the beginning portion of the Q&A, so if any of that I am asking has already been addressed I apologize.

Shirley Singleton

No problem.

Alexander Renker – Sidoti & Company LLC

So my first question is, I was just wondering if you could compare the customer sentiment generally on the part of C level executives as far as spending goes on project. I know last year as kind of week for that and you’re taking a little bit about the failure to launch this quarter as well. So just on a relative basis quarter-over-quarter if you can elaborate that would be helpful?

Shirley Singleton

Sure. Last year I think it was more – there were big wishes on the budget. There wasn’t a lot of budget backing up some of the wish list that we saw. This year I see more realistic budget where people actually have the money set aside. This failure to launch comment was on the ones that were already signed. Alex it wasn’t the ones that weren’t signed, so that’s an important distinction. And just what I mentioned few minutes ago to John is that we saw that softness in August.

The ERP folks, customers told us that they just didn’t want to launch until September, I did see some softness in sales in our August and I started to get a little bit concerned, but as September came in it seemed to be picking up. I don’t really believe that the things we have in the pipeline are more like last year what was, yes, I wish I can have this, but I don’t have the budget. I see people whether it’s – I recall it somewhat healthy, but I wouldn’t say it’s over the top where people are just spending money left and right. I hope on characterizing for you what you’re looking for.

Alexander Renker – Sidoti & Co. LLC

Yes. I know. That’s definitely helpful. And I guess my last question was just in terms of new customer engagements for the full year, it’s look like for the first three quarters new customer engagements are down a bit, I know the December was a very weak quarter for new customer engagements last year. Do you see an increase in December this year and where do you see that level for the full year relative to last year.

Shirley Singleton

Okay, that’s – it’s a really good question. So latter half of last year was very soft and as we mentioned going into Q1, we didn’t have a lot of backlog there was a lot of things in the pipeline and so Q1 reflected some weakness, and we’ve talked about that at that time and as Q2 came in and Q3 and as Tim, mentioned earlier in his comments, we are seeing returns and normalcy in terms of how many customers we have acquired.

So, Q1 was weak for us, we would hope – we are hoping that we come out of the gate stronger than we did, but it looks like continued improvement over the last two quarters and in particular year-over-year.

Timothy R. Oakes

Yes, I would say – I would add to that Alex, that last year we did a 103 new customers for the full year, year-to-date this year we were at 74 new customers. We saw last year and this – I think somewhat does tails into John’s question to Shirley about customer sentiment.

Last year in the fourth quarter we had 16 new customer engagements, and what we’re seeing right now, I mean I think where we’d end up would be right now as we see, I think we would certainly beyond par with last years new customer engagements.

Alexander Renker – Sidoti & Co. LLC

Okay, interesting. As far as new customers go – going back to 2011, would you guys say that was an anomalous year in the sense of a really high number of new engagements?

Shirley Singleton

An anomalous year.

Timothy R. Oakes

We had 129 new customer engagements in 2011, I mean 2011 was a strong year for us, it matched with the growth trajectory we were on at that point in time.

Alexander Renker – Sidoti & Co. LLC

Okay.

Timothy R. Oakes

And that’s the way we were prior to the softness we experienced in 2012, I mean I’m not sure I’d say, it would be an anomaly, I think it reflected where we were with our business in the growth we were achieving at that point in time.

Alexander Renker – Sidoti & Co. LLC

Sure, okay that’s it from me. Thanks guys, nice quarter.

Shirley Singleton

Thanks.

Operator

In queue there are no further questions, I will turn the conference call back to Ms. Shirley Singleton for closing comments.

Shirley Singleton

Okay, well, thank you very much for listening, we will be at the Sidoti conference in January, we are very pleased to be invited back there and our next earnings call is February 26. Tim, do we have anything else today.

Timothy R. Oakes

No, that’s it.

Shirley Singleton

We are here today, if you’d like to give us a call or tomorrow and happy to discuss anything with anyone who wants to give us a call. Thank you very much Ashley.

Operator

Ladies and gentlemen, if you wish to access the replay for this call, you may do so by dialing 800-585-8367 or 404-537-3406 and using the access code 72329904. This concludes the conference for today. Thank you for your participation. Have a nice day. All parties you may now disconnect.

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