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HCI Group, Inc. (NYSE:HCI)

Q3 2013 Earnings Call

November 5, 2013 4:30 pm ET

Executives

Kevin Mitchell - IR

Paresh Patel - Chairman & CEO

Richard Allen - CFO

Analysts

Casey Alexander - Gilford Securities

Ray Cabillot - Farnam Street Capital

Gregory Macosko - Montrose Advisors

Robert Paun - Sidoti & Company

Operator

Greetings and welcome to the Homeowners Choice Third Quarter 2013 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce to your host Kevin Mitchell, Investor Relations. Thank you. Mr. Mitchell you may begin.

Kevin Mitchell

Thank you, and good afternoon. Welcome to the call. With me today are Paresh Patel, our Chairman and Chief Executive Officer, and Richard Allen, our Chief Financial Officer. Following Paresh’s opening remarks, Richard will review our financial performance for the most recent three and nine months of 2013 and then turn the call back to Paresh for a brief update in business outlook. Finally, we will open up the call for your questions.

To access today’s webcast, please visit the Investor Relation section of our corporate website at www.hcigroup.com.

Before we begin, I would like to take the opportunity to remind our listeners that today’s presentation and responses to questions may contain forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Words such as anticipate, estimate, expect, intend, plan and project and other similar words and expressions are intended to signify forward-looking statements.

Forward-looking statements are not guarantees of future results and conditions and are subject to various risks and uncertainties. Some of these risks and uncertainties are identified in the company’s filings with the Securities and Exchange Commission. Should any risks or uncertainties into actual events, these developments could have material adverse effects on the company's business, financial condition, and results of operation. HCI Group, Inc. disclaims all the obligations to update any forward-looking statements.

Now, I will turn the call over to Paresh Patel, our Chairman and Chief Executive Officer. Paresh?

Paresh Patel

Thank you, Kevin, and good afternoon everyone. As Richard will expand on shortly, we are excited to report our outstanding results for the three and nine months ended September30, 2013. Besides our financial results among the highlights of the quarter were another quite hurricane season with the first hurricane not actually forming until September 10. Obviously, acquired a quarter than the corresponding quarter last year.

Secondly, the approval we received in August, 2013 to assume additional policies from Citizens. As of today, we continue this assumption of over 34,000 of those policies. Three, we continue to re-brand the company to HCI Group which helps avoid confusion our parent company, our insurance subsidiary and our other enterprises. And finally, we were named 13th on the Fortune’s List of 100 fastest growing public companies based on average revenue growth, profit growth and relative stock performance over the past three years.

Now I would like to turn the call over to our CFO Richard Allen to walk through our financial performance for the quarter, for the third quarter. Richard?

Richard Allen

Thank you, Paresh, and good afternoon everyone. For the third quarter of 2013, income available to common stockholders totaled $13.4 million or $1.13 diluted earnings per common share. This is an improvement from $2.8 million or $0.27 diluted earnings per common share in the third quarter of 2012. For the nine months ended September 30, 2013, income available to common stockholders totaled $49.9 million or $4.32 diluted earnings per common share. This compares with $16.8 million or $1.79 diluted earnings per common share for the nine months ended September 30, 2012.

Gross premiums earned in the third quarter of 2013 increased 53% to $81.2 million from $53.1 million in the same period a year ago. For the first nine months of 2013, gross premiums earned increased 52.1% to $245.7 million from $161.6 million in the first nine months of 2012. The increases were primarily due to revenue from policies acquired from Citizens in November, 2012.

Net premiums earned for the third quarter increased 73% to $52.9 million from $30.6 million in the same previous year quarter. For the first nine months of 2013, net premiums earned increased 58% to $170.8 million compared with $108.1 million in the same period a year ago. Net premiums earned reflect a benefit from the multi-year reinsurance treaties of $5.5 million for the third quarter of 2013 and $6.8 million for the nine month period just ended. This benefit was discussed in the earnings call for the second quarter.

Premium ceded in the third quarter of 2013 were 34.8% of our gross premiums earned compared with 42% in the third quarter of 2012. For the nine month period ended September 30, premium ceded with 30.5% of our gross premiums earned compared to 33.1% in the same previous year period.

Losses and loss adjustment expenses incurred total $14.5 million in the third quarter of 2013 compared with $15 million in the third quarter of 2012.

For the first nine months of 2013, losses and loss adjustment expense incurred total $47.8 million. This compares with $50.4 million in the first nine months of 2012. Losses and loss adjustment expenses incurred in the third quarter and nine month period of 2012 include $3.2 million and $4 million respectively related to claims from tropical storm Debby and Isaac.

Even with the increase in policy exposure since the third quarter of 2012, we continue to notice favorable trends in the frequency of reported claim as well as the average severity per claim. We are constantly monitoring claim activities for the development of trends and frequency, severity and cause of loss for the potential impact on incurred loss and loss adjustment expenses. Policy acquisition and other underwriting expenses for the third quarter of 2013 were $8.9 million compared to $6.6 million in the third quarter of 2012.

For the nine months September 30, 2013, policy acquisition and other underwriting expenses totaled $22.2 million versus $19.7 million for the comparable period of 2012. Other operating expenses which include a variety of general and administrative expense totaled $8.8 million during the third quarter of 2013. This compares to $4.7 million in a comparable period a year ago. For the nine months ended September 30, other operating expenses totaled $22.3 million versus $13.4 million for the comparable period of 2012.

Interest expense related to our January bond issue was $800,000 and $2.4 million respectively for the three and nine month period ended September 30.

Turning to our financial ratios, our loss ratio applicable to the third quarter of 2013, which we define as loss and loss adjustment expenses related to net premiums earned, was 27.4% compared with 49.1% in the third quarter of 2012. For the first nine months of 2013, the loss ratio was 28% compared with 46.6% in the same prior year period. The expense ratio applicable of the third quarter of 2013 which we define as underwriting expenses, interest and other operating expenses related to net premiums earned totaled 35% compared with 37% in the same prior year quarter.

The expense ratio applicable to the nine months ended September 30 was 27.4% compared with 30.6% in the same period of 2012. Expressed as a total of all expenses related to net premiums earned, the combined loss and loss expense ratio to net premiums earned in the third quarter of 2013 was 62.4% compared with 86.1% in the previous year. For the first nine months of 2013, the combined loss and loss expense ratio to net premiums earned was 55.4% compared with 77.2% in the same nine month period of 2012.

The improvements in these ratios reflect a significant increase in net premiums earned and continued favorable trends in cost related to our losses and loss adjustment expenses incurred.

Turning to the balance sheet, the investments and fixed maturity and equity securities totaled $74.1 million at September, 2013 compared to $44.8 million at December 31, 2012. Our cash and cash equivalents at quarter end totaled $273.9 million compared with $230.2 million at the end of 2012.

During the quarter, we added approximately $22 million to our investments in fixed maturity securities. Unearned premiums at September 30 were $188.1 million, up from $154.2 million at December 31. Loss and loss adjustment expense reserves totaled $43.5 million at September 30 compared with $41.2 million at December 31.

As you can see we’ve had another successful quarter of positive underwriting results with continued strengthening of our balance sheet in the period ended September 30.

Now I would like to turn the call back over to Paresh. Paresh?

Paresh Patel

Thank you, Richard. As you can see from our Q3 results, the core business even when carrying a full reinsurance load produces solid results. We are well positioned to capitalize on the integration of Citizens policies from the assumption that is effective today which will further enhance the insurance company.

As a company, we are more focused on the future and the next set of opportunities that present themselves. I note that while we come a long way in the past few years we only have 4% market share in one state out of 50 and in one line of business. And there are plenty of diverse avenues by which we can grow the company; we just have to be patient and opportunistic.

One example of that is the 34,000 policies we just assumed from Citizens. While we have the financial capital to assume more policies and -- while we have the financial capital assumes more policies and maintain the operational discipline to select only those policies that met our established underwriting standards. We expect this assumption to bring our estimated total annualized gross premium to about $400 million with approximately 170,000 policies in force.

We have also announced plans to enter the flood insurance market in the state of Florida. Many Florida residents are seeing drastic increase in the cost of fund insurance and we decided as a company to offer flood insurance to our existing policyholders most hard hit by these rate increases.

Our policyholders have always been very important for the company and we wanted to help them by offering insurance price at the near current rate without the drastic federal mandated includes that are going to be due on the Biggert-Waters Act. That being said, we will enter this market cautiously and with a strict focus on underwriting guidelines and calculated risk management.

Moving away from insurance, our other enterprises continue to progress on schedule and we hope one day to grow them to be of the size similar to our current insurance business. This is obviously a medium term goal.

On a less curious note you should know that Richard Allen, our Chief Financial Officer, is giving consideration to and we are discussing his stepping down as CFO which we expect to occur sometime in 2015, I repeat 2015 not 2014. Again, this is reflective of the HCI culture where we plan and discuss items long before their implementation.

Finally, on behalf of entire management team I would like to express our appreciation for the continued support we receive from our shareholders, employees, agents and most importantly our policyholders and customers. We look forward to a joint continued success.

With that, we are ready to open the call for your questions. Operator, can you please provide the appropriate instructions?

Question-And-Answer Session

Operator

Sure. We will now be conducting a question-and-answer session. (Operator Instructions) Our first question comes from Casey Alexander with Gilford Securities. Please proceed.

Casey Alexander - Gilford Securities

I have a number of questions. First of all, as you said in relation to your growth strategy only picking out 34,000 in policies, that’s not exactly strucking your capital base. What is the company’s capital allocation strategy going forward? And with that also we can get an update on Exzeo and its progress into becoming a revenue generating entity. So I’d like to cover on both of those places?

Paresh Patel

Good afternoon, Casey. Let’s talk about the Exzeo stock price. Exzeo as we've always said a medium term opportunity and it’s based on a premium model. So its monetization and revenue stream is actually probably about two, three years off. And but we are okay with that because it’s a -- it will be a growth play as we go down the road. We obviously already internally using for all our claims activity. We are beginning to talk to other companies after having a shakedown over the s summer to see if they want to use it as well and of course the price we are charging is zero. So hence no revenue in the short term, but likely thin that’s the kind of model that we're after. As the community has grown and developed there will be follow-on revenue opportunities and that’s what we look to capitalize on. So that’s Exzeo.

In terms of the capital position of the company et cetera the 34,000 policies we took down it’s an interesting item we take down what’s available as opposed to trying to hit a target number and take on inappropriate risk shall we say. So we continue to wait for the opportunities when they come to us and they do come to us. This flood insurance thing might be a whole different area if it plays out correctly; its early days yet but we shall see how that plays out. And as a final note in terms of capital allocation et cetera, there is a issue that has been brought up in conference calls in the past about what we are doing or not doing with the investment portfolio and as people noted at the end of second quarter we had almost $300 million in cash.

We had stated that we were unwilling to deploy that money to sort of try and make 50 basis points in treasuries which was really the situation that was occurring back in the early part of the year. Well, as the year has developed treasury rates have come up and the 10-year treasury has gone from 1.5% all the way up to at one point almost 3%, I think is currently sitting around 2.6%. But what that let us do is not to deploy some of that cash and do things like munis et cetera, and this will start adding to the investment income of the company. And just to give somebody a rough color as to what kinds of things we are talking about, if you can put $300 million to work earning 4% which was nearly impossible at the beginning of the year but it’s quite probable at this point of time, $300 million and 4% yield an income of about $12 million annually. So we could have a growth spot coming from a something that we’ve been very patient at building over the last few years.

Casey Alexander - Gilford Securities

Okay, great. Thank you.

Paresh Patel

Thank you.

Casey Alexander - Gilford Securities

Secondly, this is really -- the quarter that you just reported is really the only pure quarter where we can see the percentage of premiums that are being ceded to reinsurance. So is that 34.8% or let’s call 35% a reasonable level to assume until next June on the base book of business? Obviously, that book of business that doesn’t include the new Citizens policies that you took down.

Richard Allen

That’s correct, Casey.

Casey Alexander - Gilford Securities

Okay.

Richard Allen

The 34.8% is going to be relatively -- should be relatively stable and as you said excluding the impact of the new assumption.

Casey Alexander - Gilford Securities

Right, okay. Next can you -- I mean, I assume that before you started making any public declarations of the flood insurance that you were aware of what some of the underwriting assumptions were in terms of loss ratios and how much penetration of that 170,000 policy book that you have that you might be able to attack flood insurance on to? Can you give us -- I mean, I know it’s going to take a while for you to penetrate that book. But at the end of the day what are kind of the assumptions that you went into this risk in terms of how much additional premium per policy you might be able to charge for flood insurance and what some of the loss ratios were? Is there any way to give us any color on that?

Paresh Patel

Short answer, no but I will try anyway okay.

Casey Alexander - Gilford Securities

Okay.

Paresh Patel

Okay. Yeah, before we went public with this thing we spent weeks analyzing the data and everything else that came with it. In terms of loss ratios et cetera we think it’s a doable item on our part to be able to do this. And the reason we can do this is because we obviously have pretty healthy, pretty reasonable gross margin and we know how to underwrite books one policy at a time even when there is large volumes involved. So we did a lot of those kinds of blocking, tackling and computer modeling all those kinds of things that go with it. So that’s why we will stick to our underwriting discipline. But the big thing that we found was that how the NFIP views this world is different to how we look at it. They look at in terms of subsidized and non-subsidized, which are nice labels; we look at it terms of adequate premium and inadequate premium. So we look at the rates on line et cetera. So it gives us a different viewpoint on the matter.

And another aspect of this is what this does is it’s a wonderful -- we are not looking at it while it will grow the top line here, we are not looking at it to grow the bottom line and even nearly as much. Our reasons more for doing this is more of a -- as a differentiation tool which helps us retain our existing customer base and possibly actually will attract new customers. So we’re doing this as much to differentiate ourselves from the rest of the industry as opposed to it being widely profitable line shall we say.

Casey Alexander - Gilford Securities

Okay. All right. I will table that until we see some more -- until we get further into that business and then maybe we’ll have some more pertinent questions. Recently the company enacted a shareholder rights plan. Can you give us sort of what the board’s thinking was behind that?

Paresh Patel

Sure.

Casey Alexander - Gilford Securities

I don’t see the company necessarily in the hands of any activist shareholders or hostile shareholders that you guys have done a great job creating shareholder value. So I’m just curious as to what the board’s thinking was behind that?

Paresh Patel

It’s very simple, in the sense of we’ve always stated my job as Chief Executive Officer, if somebody wants to takeover the company and they contact us I get on a plane, I go talk to them get a deal as possible, bring it back, make sure the board signs up on it and then it’s up to the shareholders. We’ve always stated that, and that hasn’t changed. The item that we are more mindset of is if you look back two years ago the stock price was $8. If somebody had come along and offered 16 people would have jumped at it. A year ago this stock was around the low 20s, people would have jumped at it as $30 at that point.

We keep looking and we keep seeing more opportunity ahead of us than we’ve seen in the past behind us. So consequently we didn’t want somebody to come along and suddenly say hey, we'll offer $60 a share and we suddenly end up in a proxy war and bear hugs and have to talk to every shareholder as to what 60 is not a good price or whatever. It will be very distracting to management of running this company, and clearly we sort o hire plans for the future at this point whereby we can see a much bigger company.

We just wanted to make sure that if somebody wanted to try and do an end run around that, that they would at least have to have a discussion with us before they just put us in a bear hug because that will be extremely distracting to the operations of the company. And just a slight aside, good news is we’re a $500 million company, bad news is we are only a $500 million company. We do live in a world with the company’s worth billions if not hundreds of billions of dollars. So we just want to make sure that we won’t be defocused or distracted by somebody issuing a letter of bear hug or something of that nature.

Operator

Thank you. Our next question comes from Ray Cabillot with Farnam Street Capital. Please proceed.

Ray Cabillot - Farnam Street Capital

Two questions. The first on the flood insurance and you had stated that most likely that might be a lower margin business or left with drops of bottom line. Could you describe if that if you expect that to be from a higher percentage of premium ceded through reinsurance or would be more from a claims perspective? And in addition to that can you give us bit of a picture for kind of the relative cost of reinsurance to homeowners insurance in Florida to get a feel for kind of the -- if every policyholder bought it from you, which I know will not be the case, but premium amounts might be but then also we kind of so much to play around with what kind of percentage penetration would result what type of revenue?

Paresh Patel

Okay. Let’s start with the premiums. Our typical policyholder pays around $2200, might be $2200 and $2500. For the purpose of this conversation I’m strictly talking about homeowners policy, not condos, not private lines and those kinds of things. So just the bulk of our book. So just to set the stage. The typical premium is around $2200. The typical flood policy and not everybody has to have a flood policy it’s only if you are in the 100-year floodplain that you do. If you are not in the 100-year floodplain your typical policy can be as little as $200 to $400. If you are in the worst of the floodplain it can range up to as high as $5,000 or $6,000. So that’s the range.

What’s happening under the Biggert-Waters Act is that talked about the people especially in the floodplains which is the A zones and the V zones, maybe even in the right set of circumstances having to pay not $2,000 or $4,000 but maybe four or five times that amount of money and that’s what caused the issue.

We can step in and do it at those kinds of at the original prices for a number of reasons is because the same thing that we did before. Unlike the federal government we are not ensuring everybody, we are ensuring a select group of people so that gives us a slightly different edge. Secondly, we are talking about doing this as an endorsement to our existing policy as opposed to a brand new policy. So that does provide some efficiencies or lack of waste shall we say because there is not all the new policy issuance and all the expenses that go with all of those things, administration. So it does let us be more efficient in those kinds of areas. So as we look at those things we can do this at a cost basis that is less than what the federal government can do it.

And finally as far as the reinsurers et cetera go we have been in discussions with some of our key reinsurers on the matter. Clearly, we are not looking to do this across 100% of our book because not 100% of our book is the effected nor would we get 100% penetration.

Just more subset of the books there, but it will adding this will increase our reinsurance cost somewhat but our expectation is it will be offset by the revenue we'll be collecting. So it becomes a wash in that sense.

As far as the loss ratios, the flood insurance group loss ratios tend to be very bifurcated, in event per years it tends to be very low, on the other events when you get a hurricane it tends to obviously spike up tremendously. But then that’s risk management and we do that with wind insurance all the time anyway, we're risk manages that’s what we are doing here.

Ray Cabillot - Farnam Street Capital

One additional question and I’m not sure the best types of assets but when you are answering the question about the shareholder rights plan you kind of implied I think you looked and said there a couple of years ago at $8 a share, people didn’t know the opportunity going forward. It seemed like there was a -- that creates an implication that right now as you look out you see something much more than maybe the all time shareholders would see, unless I'm not sure that’s something you can comment on but if you can it would be interesting to hear?

Paresh Patel

Yes. Really, officially I can’t comment on it but I think I will continue to look for the growth of this company and on an operational basis I see more opportunities come by everyday.

Ray Cabillot - Farnam Street Capital

Thanks.

Paresh Patel

So.

Operator

Thank you. Our next question. (Operator Instructions) Our next question comes from Gregory Macosko with Montrose Advisors. Please proceed.

Gregory Macosko - Montrose Advisors

Just with regard to the 34,000 policies that were acquired, you said it was that somewhat smaller than you’ve done in the past but, could you talk about what’s your expectations are with respect to the fall off in those? In other words, typically you lose some of those policies over time. Have you looked at those and were you careful you’re expecting maybe more of those to be retained over time?

Paresh Patel

Good to hear you, Gregory, I hope your retirement is treating you well.

Gregory Macosko - Montrose Advisors

Very well, yes.

Paresh Patel

With regards to the policy I think the official number is 34,872. I’d say that’s the official number because we know it’s going to drop a little bit from that. And if last year’s anything to go by they’re on 10% if that that will drop off. Now, what’s occurring every year -- every time we do a take out and this is our 10th takeout the drop off is getting to be less and less. So consequently, what we’re expecting to roll off here is actually fairly miniscule. And if last year is anything both our Citizens assumption and our core both had about a 90% retention rate. So, we are starting to have a very solid traction with that share -- with our policyholders.

Gregory Macosko - Montrose Advisors

Okay. And then finally with regard to the use of capital, and you mentioned 4% share and 4 and you’re looking at the flood insurance et cetera. But what about outside of Florida? Could you give us any color on that? You didn't mention any possibilities in other states?

Paresh Patel

Yeah, absolutely. The items that’s always been there is we keep moving along in Alabama and we hope to write our first policy sometime in the first quarter over there. So all of those signs are going along. The other thing that was there was, as we had said in the second quarter, because you we were going into hurricane season that we wanted to try and keep capital and the powder dry in case there had been an event over the summer. We’re all very glad that there wasn’t, but in case there had then we had to be prepared.

But now that we’re on the far end of that obviously we’ll be looking to see what we can do to deploy the capital. And it may be everything from things we’ll talk about in terms of purchasing commercial real estate to actually we may get a competitive acquisition that may show up. It doesn’t have to be in Florida it could be in one of the other states. These are all items that we look at and opportunities we review every day. We just but we stay disciplined in the sense of until the opportunity is right, it’s better to wait than making unwise acquisition shall we say.

Gregory Macosko - Montrose Advisors

But Greenfield is not part of that like any of the lease at this point and then the other states, I mean, you're in Alabama I understand that there you're being careful there I mean is Greenfield a possibility?

Paresh Patel

Yes, it is. Absolutely, it’s the thing that we run quietly different to say number of other carriers who look like us in terms of Florida specialist is that we shouldn’t try to -- our viewpoint is we shouldn’t try to expand into say South Carolina unless we have some knowledge and/or advantage and a strategy as to how do that profitably. Otherwise it would be very good to get on the call and tell you we’re in eight states and we’re losing money in seven of them, I don't see that benefit to anybody.

Operator

Thank you. Our next question comes from Robert Paun with Sidoti & Company. Please proceed.

Robert Paun - Sidoti & Company

I want to follow-up on the latest Citizens assumptions. Are these policies similar in size to your current book of business in terms of the average policy size? And then maybe you can talk about the competition for Citizens policies. Seems like there are more players willing to take these policies now, is that a fair assumption?

Paresh Patel

Yes, in terms of let me give the routine numbers out the way. We are looking at about 34,000 policies, 35,000 policies in about $78 million in premium in force attached to those policies. So I think it works about $2,250 a policy or something of that nature. I'm presuming you’re asking that for your modeling purposes. So unless you hope --

Robert Paun - Sidoti & Company

Yes, that's right.

Paresh Patel

Yes, that should get you to that situation.

As far as the number of people doing takeout I think what you’re seeing is two things. And just to give quantifiable numbers to everybody, there are 16 companies doing takeouts between November and December of this year. And to put this to contrast, if you went back in 2010 there was may be one or two companies doing it in that period. So it's suddenly become very popular. The popularity is partly due I think because everybody has now understood how and why timing and proper selection really works mainly because of looking at Homeowners Choice over the years. So it made it a very popular thing to do.

Having said that, I think that’s why wanted to make sure we kind of talked about the 34,000 policies we took. There is also a question of is it Citizens a fished out pond? And that stuff starts becoming very relevant as you go into next year and people sort of start imagining the benefits of the clearinghouse. I think all these established carriers who wanted policies that are currently in Citizens basically undertaking them out in November and December. So, it was always going to be the case and you're seeing that play out.

Robert Paun - Sidoti & Company

Okay. Also looks like you bought more fixed income investments in the quarter. Can you talk about what you bought there? Was it corporate, munis, any other securities? And do you plan to put more of the cash to use in those investments going forward?

Paresh Patel

Okay, great question. I think we put about $22 million to work in the third quarter and I think the bulk of it was in munis. There was some dislocation in muni market due to the Detroit bankruptcy. We didn’t put any -- we didn’t go by any Detroit bonds or any Puerto Rico bonds in case people hate that level of attention to this stuff, but that disconnection plus at one point the 10-year treasury was almost 3% led us put some $23 million to work and I think we got an average yield across that new portfolio north of 4%. So that that was wonderful.

And as the quarter ended and we now look into the fourth quarter, as we have stated we are looking to put more of the cash pile to work and it’s starting to start adding hopefully a meaningful number to our investment income, because interest rate -- as the interest rates are starting to climb a little bit we are currently see opportunity there. In a perfect world we’d like to see 10-year treasuries go by under 100 basis points from here but I suspect that we are the only insurance company saying that.

Robert Paun - Sidoti & Company

Right.

Paresh Patel

Yes?

Robert Paun - Sidoti & Company

Right. Also one final question. Richard, were there any reserve adjustments favorable or unfavorable in the quarter?

Richard Allen

No actual reserve adjustments. We continue to review the trends and things are continuing as they have in prior quarters.

Operator

We've run out of time. I would like to turn the floor back over to management for closing comments.

Paresh Patel

Once again guys, thank you all for the support you showed to the company. We continue to move forward and we’re looking forward to a glorious fourth quarter and hopefully a good holiday season for everyone. Thank you.

Operator

This concludes today’s teleconference. You may disconnect your lines at this time. And thank you for your participation.

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