John Farr – President and Chief Executive Officer
Randy Jonkers – Chief Financial Officer
Sarkis Sherbetchyan - B. Riley & Co.
Pervasive Software Inc., (PSVW) F4Q10 (Quarter End 6/30/2010) Earnings Call July 27, 2010 5:00 PM ET
Good afternoon, my name is Steve and I’ll be your conference operator today. At this time I would like to welcome everyone to the Pervasive Software Incorporated Fiscal Year Fourth Quarter Financial Results Conference Call. All lines have been placed on mute to prevent any background noise.
After the speakers’ remarks there will be a question-and-answer session. (Operator Instructions).
Thank you, Mr. Randy Jonkers, Chief Financial Officer, you may begin your conference.
Randy G. Jonkers
Thank you; good afternoon and thank you for joining us. I am Randy Jonkers, Chief Financial Officer, Pervasive Software. While we wait for others to join on I will go over the standard disclaimer regarding remarks on this call.
This conference call may contain forward-looking statements within the meanings of the Federal Securities Laws including statements regarding the company’s or management’s intentions, hopes, beliefs, expectations and strategies for the future. Forward-looking statements may include without limitation, statements regarding the following: future investments, sales, market growth and direction, competition, revenue growth, operating margins and profitability.
A detailed discussion of risks and uncertainties that can cause actual results and events to differ materially from such forward-looking statements is included in Pervasive’s most recent filings with the Securities and Exchange Commission.
Pervasive does not undertake any obligation to update forward-looking statement to reflect events or circumstances after the date of this conference call.
Also and as a reminder, our non-GAAP results for the quarters ending June 30th, 2010 and 2009 exclude the amortization of purchase intangibles and stock-based compensation expense and present income taxes at a statutory rate of 34%.
We believe that the non-GAAP results described in today’s press release and in this conference call are useful for an understanding of our on-going operations and to assist the investor community in comparing Pervasive’s non-GAAP results from period to period as well as comparing our results with that of similar companies.
We use these non-GAAP results to compare our performance to that of prior periods for analysis of trends, to evaluate the company’s financial strengths, develop budgets, manage expenditures and develop a financial outlook.
Non-GAAP results are supplemental and are not intended as a substitute for GAAP results.
Note that our call today is being broadcast simultaneously here at the Pervasive website; welcome to those listeners.
In this call we’ll cover two primary agenda items. First, I will recap Pervasive’s results for our fourth fiscal quarter, then John will update you on our current operations that are planned looking forward into our next fiscal year.
Now for the financial results. Today we released the financial results for the fourth quarter of our fiscal year 2010. Revenue and earnings were at the top end of our updated guidance provided on July 6th. Pervasive revenues totaled 11.7 million in Q4 which is an increase of approximately 600,000 as compared to Q4 of last fiscal year.
Our GAAP basis net income was approximately 800,000 in Q4 and diluted earnings per share was $0.05. Our effective tax expense rate in Q4 was 31% which is consistent with Q4 of last fiscal year.
Our non-GAAP net income in Q4 before amortization of purchase intangibles and stock-based compensation expense and tax of 34% was 1.2 million and our non-GAAP earnings per share was $0.07.
We ended the quarter with approximately 40.4 million in cash in marketable securities and had approximately 17.2 million shares issued and outstanding.
Also during the fourth quarter we repurchased approximately 461,000 Pervasive shares on the open market at a total cost of approximately 2.3 million or approximately $4.97 per share. We generated approximately 1.1 million in positive cash flow from operations.
Our DSOs or Days Sales Outstanding were 62 days, consistent with our prior fiscal quarter.
By geography our Q4 revenue was as follows: domestic revenue totaled approximately 8.5 million in Q4 up 14% from Q3 and up 28% from Q4 of last fiscal year. Our international revenue principally Europe and Japan totaled 3.2 million or 27% of our revenue in Q4.
At a product level our database products represented approximately 58% of our business while our integration products represented approximately 37% of our business respectively in Q4 while our Business Exchange, DataSolutions and DataRush products accounted for the remainder.
Turning to operating expenses, our operating costs and expenses totaled 10.5 million in Q4 including stock-based compensation expense and amortization related to acquired tangibles in the approximate amount of 600,000 for a non-GAAP expense of 9.9 million as compared to a non-GAAP expense of 9.4 million in Q4 of last fiscal year.
We had 229 employees at the end of Q4 which represents a decrease of nine employees at the end of the third quarter and an increase of 12 from Q4 of last fiscal year.
Now looking forward; we expect revenues in our first quarter of fiscal year of 2011 to be in the range of 10.5 to 11.5 million compared to 12.2 million in Q1 of fiscal year 2010 which included compliance-related revenue in the amount of 2.4 million.
We expect GAAP basis diluted earnings of $0.00 to $0.02 per share. We anticipate that our effective tax rate for the first quarter will be approximately 34%.
Non-GAAP profitability is expected to exclude stock-based compensation expense and amortization of acquired and tangibles representing approximately 600,000 in the first quarter of fiscal year 2011. With that we expect non-GAAP and fully taxed diluted earnings per share on our first quarter of fiscal year 2011to be $0.02 to $0.04. Our non-GAAP effective tax rate for comparative purposes reflects a statutory rate of 34% on pre-tax non-GAAP income.
Both of our GAAP and non-GAAP guidance is consistent with the guidance we provided in our earnings guidance update on July 6th. We anticipate cash flows from operations to be between one and two million for the first quarter of fiscal year 2011. Also, as in prior quarters we are not provided specific guidance beyond Q1.
For EPS calculation purposes we expect our GAAP basis and non-GAAP fully diluted share counts for the first quarter fiscal year 2011 to be approximately 16.7 million and 17.3 million shares respectively. Note the share count estimate excludes the impact of any future share repurchases.
Now let me turn the call over to John Farr, CEO of Pervasive Software.
John E. Farr
Thanks Randy. The corporate level highlights for our June quarter includes the completion of our 38th consecutive quarter of profitability representing near consistent profitability for the last nine consecutive fiscal years, our third consecutive record quarterly revenue in our integration business, the beta release of our next version data base Pervasive SQL Version 11, advancement of the agenda of our emerging businesses, Pervasive DataCloud, DataSolutions and DataRush and we completed our 17th quarter of active share repurchases.
Now let me turn more specifically to the June quarter highlights and updates within the various prior quarters. In our database business, for new listeners and as a reminder, our Pervasive PSQL v10 embedded database is designed to help ISVs, and VARS and OEMs successfully embrace new technologies including the Windows Server 2008 operating system from Microsoft as well as take advantage of the latest in 64 bit technology for accelerated database performance.
Our database engineering team is continually focused on keeping our product up to date with the ever-changing environment and the known or anticipated needs of our ISV customer base. Just last fall the team released our Pervasive PSQL version 10 Service Pack 3 which is an update for compatibility with Microsoft Windows 7 desktop operating system.
Our v10 version lifecycle has served us well, however our original expectations for this release had been muted a bit over time. Microsoft continues to provide “downgrade rights” from Windows 7 which is pre-loaded on many PCs purchased today down to Windows XP. This can arguably have the effect of deferring what would otherwise be a driver for small and mid-sized businesses to upgrade hardware and related operating systems and applications and the databases that serve them.
Microsoft has extended these downgrade rights yet again with the recent beta release of Windows 7 Service Pack 1. So while we believe that small to mid-sized business will ultimately upgrade to the latest OSes from Microsoft, that market event and the benefits to our database business will be more likely to take place over a relatively longer period of time.
That said, we are excited about our upcoming release of PSQL Version 11 MC release which is available on beta today with general availability scheduled for later this summer. Our v11 MC release will feature multi core processing capability to support the latest and rapidly proliferating commodity hardware -- multicore hardware. We are already seeing exciting performance gains experienced by our beta testers with respect to increased processing fees on multi core.
The hallmarks of our embedded database development have always centered on performance and simplicity, v11 delivers both. The increased speed offered by multi-core as well as simplifying the complexity of multi-core in development and in use by our – or rather in deployment and used by our customers. In our world, speed sells.
Then onto the integration business. Our integration revenues in this fourth quarter of fiscal year 2010 represented our third consecutive record for quarterly revenue from the integration products.
We have achieved annual growth rates, revenue growth rates for this business of 6% in 2008 and then 8% in fiscals 2009 and 2010. And more recently, a trailing three quarter growth rate of 14% in the December, March and June quarters combined compared to the same three quarters of the prior year.
We believe that the ever increasing scope and velocity of change in the digital world around us at the hardware levels, the OS level, the middleware and application levels in (inaudible) and on demand environments will continue to massively complicate the problems of integrating data and applications.
Our currently shipping integration product in Pervasive Data Integrator Version 9 and our upcoming Pervasive Data Integrator Version 10 is scheduled for early adopter release in the later half of this calendar year.
Pervasive Data Integrator Version 10 will include our new service oriented architecture, enhanced management capabilities and a rich Internet application style of user interface. The service-based architecture allows for extensibility, reliability and scalability while the user interface provides an intuitive Internet browsing experience for designing, managing and monitoring integrations.
Software businesses exist in order to simplify the complex. And the complex challenges of data and application integration will only increase in our ever changing digital world for years to come.
Industry analysts also appreciate what Pervasive Integration has to offer presently and the future deliverables. In December we announced that we are positioned as a visionary in Gartner’s Magic Quadrant for data integration tools. It is a significant accomplishment to be reflected at all in a Magic Quadrant even more so to be positioned as a visionary.
The Gardner report positioned only 14 integration vendors in its Magic Quadrant and listed 38 other integration vendors who were excluded from the Quadrant due to lack of size or breath, while still other integration vendors were not even cited in the first place.
On to business exchange, our solid results have allowed us to capitalize on acquisition opportunities such as our ChanneLinx asset purchased in August of 2009. As we have said in the past, the acquired business now operating as Pervasive Business Exchange, has the opportunity to add value to and or benefit from each of our other businesses. For example, we recently announced the availability of agent technology to allow business exchange users to easily select QuickBooks, invoices and attachments to generate and send electronically formatted EDI compliant invoices via the Pervasive WebDI business to business interchange.
This QuickBooks example is the first of many last mile integration scenarios that ChanneLinx was not able to offer prior to the acquisition. We are continuing our work through expected post acquisition efforts to migrate our business exchange customers to our newest WebDI 2 platform and we’ve also begun our migration of our business exchange WebDI business to Microsoft Windows Azure platform. These efforts provide our business exchange business with the enhanced scalability combined with future marketing and sales investments will set up business exchange for a solid year in fiscal 11.
On to DataSolutions: we have grown our Pervasive DataSolutions customer base to now more than 170 subscribers. We continue to invest in systems and processes to automate as fully as possible the new customer experience. Almost a year ago now we successfully moved our entire Pervasive DataCloud infrastructure to Amazon’s Elastic cloud for more cost effective capacity and virtually limitless scalability.
Initially Pervasive DataSynch QuickBooks to Salesforce edition, our suite of solutions has grown to support on premises as well as on demand versions of QuickBooks as well as support for Microsoft Dynamics CRM.
The DataSolutions team has recently released two new solutions to the market as well as a web store to promote and make available our various DataSolutions and those developed by our partners.
Our two new offerings are DataSynch for FreshBooks and Salesforce and Ida Apps who is the partner that produced an e-commerce platform application that utilizes out DataSynch for QuickBooks, for Salesforce and our credit card gateway solutions.
Please take a look at out web store at pervasivedatasolutions.com.
And lastly our DataSolutions team is working on a data sync solution for next week to Salesforce which is presently available in beta form.
On to DataRush: we recently announced a significant update to Pervasive DataRush offering extensible libraries for data preparation and analytics as well as an integration to a nine open source workflow interface for data mining.
Pervasive DataRush is ideal for ISPs and OEMs and system integrators as well as end users in industries such as healthcare and pharmaceuticals, financial services, telecommunications, oil and gas and utilities as well as the government agencies who are striving to improve data quality and implement timely analytics as they face increasing data volumes and complexity.
Pervasive DataRush is an embedded parallel data flow platform that helps eliminate performance bottle necks in data intensive applications. Its expanded capabilities enable a broader range of users to cost effectively address the growing challenges and complexity of big data. It provides dramatically reduced timeframes for data preparation and analysis and enables the consumption of very large data sets without having to rely on sampling or the use of expensive high maintenance coaters.
With the ability to dynamically scale and fully loaded multiple technology Pervasive DataRush enabled applications can quickly typical bare preparation bottle necks involved in cleansing, aggregating or de-duplicating data. This new release experiments the platform to perform data mining and predictive analytics allowing organizations to extract timely knowledge from their large data sets and enable more informed decisions.
The scalability of Pervasive DataRush across cores and data sizes it's high preferred extensibility, ease of [informentation] and cost efficiency allows users to future prove their applications to automatically take advantage of increases core counts as multiple hardware goes from dual core to 8, 12, 24 or 48 cores and beyond. It takes care of complex file or programming issues so developers can focus on their core challenges rather than on the intricacies of developing highly parallel mobile core radio applications.
As I said last quarter in March we participated in Intel’s launch of their Xeon 3500 series processor in which Intel published supporting quotes from 28 other technology vendors. Pervasive’s quote was highlighted on page on page one along with four other companies including IBM, Microsoft and [Red Art], why? Because we’ve achieved astounding prove pack on big data approaching nearly two terabytes an hour with highly parallel Pervasive Data platform on the four processes of 32 core, Intel Xeon 3500 Series based server.
Together, Intel’s and Pervasive’s innovative technologies deliver the power to successfully tackle massive data challenges on a compact pre-pran and deliver transformative results.
Our DataRush business recognized its first licensed revenue in the December quarter; we welcomed new sales and marketing management in January and recognized revenue again in the March and June quarters.
We are building our plans for fiscal year 2011 which began July 1 and expecting 2011 to be the year that DataRush generates its first million in revenue.
Now, we’ve spoken routinely now about our many opportunities for success including but not limited to multi-core becoming irrelevant and viable to al large database customer base and Microsoft Windows Server 2008 and Windows 7 on the desktop ultimately a new catalyst in backup applications serving in [SMB].
Also in our integration business continuing to grow as it has in particular over the past three quarters with increasing and more leverage able channel and other recurring revenue.
Also our DataSolutions business continuing to add new solutions as we also establish credibility in the cloud in our DataRush Business successfully building an enviable real ship position in an emerging market while also establishing credibility in next generation analytics and data manning markets which I will here to forth refer to as our big data opportunity.
So let me stop and take a quick moment to test ourselves in at least two of these areas and that is in establishing credibility in a cloud and establishing credibility in big data. We believe the Cloud is increasingly a platform of choice for application design, development and or deployment and our own Pervasive DataSolutions team developed and continues to enhance our own 24 by 7 multi-tenant Pervasive DataCloud. Initially developed to increase the simplicity and efficiency of deploying and managing our own subscription based on-demand data sync product line, our Pervasive DataCloud is now also being leveraged by our integration products team to host the design, development and deployment of data migration and integration solutions created by our customers.
With more than 200 customers presently utilizing our Pervasive DataCloud, our Cloud presence is gaining momentum, utilizing the near limitless capacity offered by our DataCloud ever structure partner, Amazon Web Services. We recently announced our summer 2010 update to Pervasive DataCloud 2. The update to Pervasive DataCloud 2, a secure and reliable on-demand platform as a service, has been fully implemented and our new capabilities are automatically available to our 200 plus Pervasive DataCloud users.
Pervasive DataCloud has the flexibility to host both Pervasive developed solutions and custom data services created by third party end users or partners. Pervasive DataCloud summer 2010 gives partners’ multi-level Cloud security with granular permission levels for users and groups as well as O off remote client site authorization.
The platform also now supports more usage based billing flexibility with metering for CPU storage and bandwidth at the user level and as relating to services delivered on Pervasive DataCloud continues to expand, we in turn deepen and extend the capabilities Pervasive DataCloud offers to our growing customer and partner base. Our on-demand Cloud based architecture means users across the globe gain instant automated access to new Pervasive DataCloud features.
Are we being recognized in the Cloud? We recently hosted the Austin Cloud Camp, one of a series of “earn” conferences in cities around the world. We had over 100 attendees with lightning round talks from Dell, IBM and of course Pervasive and are now taking the lead in forming an Austin Cloud users group with the kickoff mainly scheduled here Pervasive later this evening and with about 2 weeks notice we have over 60 people registered to attend.
And analysts continue to recognize our efforts in the Cloud including recent posts by Dan Woods on Forbes.com, Laurie McCabe of the SMB Group, Mark Smith of Ventana Research and Channel Web’s Andrew Hickey. We are also being invited at an increasing pace to speak at Cloud focused events and provide content for industry publications. For example we recently participated in a panel at Microsoft’s World Partner Conference regarding our development experience with Microsoft AGER. We are also scheduled to present a Cloud Con web event on August 26th and we were recently published in the eWeek Knowledge Center with an article on how to leverage Cloud computing while preserving work flows between applications.
In the world of big data and with respect to big data, you should recall my earlier comments about our previous involvement with Intel’s launch of its Xeon 3500 series processor. With what was initially limited to a quote from Pervasive about our 2 terabyte per hour processing speeds using Pervasive DataRush on Intel processors, that has now been highlighted by Intel in the form of its own case study published during the June quarter.
We’ve also recently completed a test of the extreme scalability of DataRush, demonstrating performance scale building on a 384 core SGI box using the same executable we used on an 8 core or 32 core machine. The combination of sheer speed on a given set of cores and the ability to deliver a nearly new scalability on cores as they are added with no core change is getting up into conversations with prospects today and we are excited about what this coming fiscal year can bring for us in Pervasive DataRush.
We’re being recognized in big data. Analysts continue to recognize our efforts in the cCloud including recent posts by Robin Bloor of the Bloor Group, Brett Sheppard of Big Data News, Mark Smith of Internal Research and Philip Howard of Bloor Research. We participated in the scaling the database in the Cloud panel at a recent GigaOM Structure 2010 event in June discussing how commodity multi-core machines can be used to shatter the speed and economics of processing big data.
We are also scheduled to present at QCon in November on a performance and scalability panel as well as a stand alone presentation on data flow programming, a scalable data centric approach to parallelism. Our Cloud and Big Data investments are gaining recognition. Information Management just recently included Pervasive in its list of 40 vendors we’re watching in 2010 for our work in data integration including integration to Cloud based SaaS applications and Big Data analytics. The article, written by editorial director Jim Erickson, lists the top 40 vendors within the information management space who are most talked about among customers and analysts.
In my humble opinion, we are establishing our credibility in Cloud and in Big Data. That brings us to a close of our fiscal year 2010 and we’re looking forward to fiscal year 2011. We’re nearing the completion of a very important exercise of developing our operating plans for the fiscal year ending June 30, 2011 and our annual operating plan will be submitted to our board for approval later this summer and while we do not publicly communicate the details of our financial plans, I can say that we remain committed to a strategic balance of investment in both our flagship and emerging products while also maintaining a tenacious focus on profitability.
We are bullish on Pervasive and continue to buy back our outstanding shares as we have consistently done now for the last 18 quarters and as Randy already mentioned we were active with our buy back in the June quarter. We continue to be active with our share buy back in July and thus far have acquired approximately 300 to 45,000 shares at a total cost of approximately 1.7 million or approximately $4.89 weighted average per share in the July month.
Today we announced the expiration of the previous $10 million share repurchase program and the authorization by our board of directors of the new $10 million program effective immediately. Our issue now standing shares have now been reduced to a total of 16.8 million shares as of today July 27th, 2010.
Over the past four years we’ve reduced our total potential dilution IE outstanding common stock and stock options by approximately 30% while maintaining a substantial cash balance over that same period of time. Our consistent profitability and positive cash flow from operations have allowed us to substantially reduce our total shares and options outstanding while also maintaining a very healthy balance sheet and enabling us to strategically invest in our flagship products, our emerging products and our new innovation initiatives for the future.
The newly authorized share repurchase program reflects our continued confidence in the future of the business while also providing us a vehicle through which we can continue to return value to the shareholders. Pervasive continues to enjoy many competitive advantages including solid and proven product lines, a well developed channel and operating leverage, a very strong balance sheet, furious focus on innovation and a consistent profitability and positive cash flow.
And a quick investor relations note, we are scheduled to present at the Free Port Advisors Midwest Ideas Conference in Chicago on August 31st. That will be the first time we’ve presented in a traditional IR type of setting in the Chicago area in many years and then the Rodman & Renshaw Annual Global Investment Conference being held in New York City from September 12th through the 15th. We hope to see many of you at these events and at other events in the near future.
I’ll now open the floor for questions, if you will please operator.
(Operator Instructions). And your first question comes from Sarkis Sherbetchyan with B. Riley & Co. Your line is now open.
Sarkis Sherbetchyan - B. Riley & Co.
Hi, can you hear me well?
John E. Farr
Sarkis Sherbetchyan - B. Riley & Co.
Congrats on the quarter. Just a couple of questions on my end here. What is the release of Pervasive PSQL version 11 bring to the table and what would make customers upgrade, I mean is it expected to drive higher revenues for the database segment in the near-term?
John E. Farr
So there are several questions in there Sarkis. First of all what would cause a current customer, current ISD customer running their application on version 10 or some prior version to upgrade to our new version 11 and the quick use case there Sarkis would be that in a world of multi-core now with multi-core machine sitting on your desktop and perhaps in the server room if you’re a slightly larger business with client sever based operations, in the world of multi-core the sad truth is that most software out there will actually run slower on their multi-core machine because those individual cores of that multi-core machine are actually damn down if you will a bit because of the heat issues that are the heat wall that the chip developers are running against and so any given app and certainly the small business world will run slower on that 4-core or multi-core machine.
So we’re already – our ISD customers are facing the unimaginable and unacceptable proposition of facing performance degradation for their commercial applications as they continue to deploy it into a world that is increasingly based on multi-core machines. So not only can we help them with our version 11, avoid their performance degradation, we can actually help them achieve and realize performance improvement with those applications drawing on multi-core utilizing our Pervasive PSQL version 11 database.
Now how long will that take, what time frame? You mentioned the word near-term. As I have said with all of our prior major version releases – the customer uptake of our newest version will take place over time. Our ISD customers have their own release cycles for their applications and generally speaking, they will tend to wait for their next natural release date of the application before they will adopt our newest database so they can go through their own normal QC processes etc.
So what happens is while we are typically say two and a half to three year development cycle for major versions of our database, it will start out a little bit at one level and then switch back will be achieved somewhere in the middle of that two and a half to three year period of time.
Sarkis Sherbetchyan - B. Riley & Co.
Okay great and I guess along the size of the integration business, it’s been pretty strong and really what’s driving the strength there, are you seeing anything in the overall environment that might suggest that growth won’t continue?
John E. Farr
See, while I’m saying nothing to suggest that the demands of integration, challenges of integrations out there, I’ve seen nothing to suggest that they will slow down. In fact I see everything that would suggest that the challenges experienced by our customers and our prospects are only going to continue to get harder and harder over time. With the onset of on-demand computing and constantly growing data sizes and data types, I mean the challenges of migration and integration are astounding and will only get worse over time which is music to a software vendor’s ears especially one that is involved in integration space.
So we will continue to address those needs as they develop in the market and in some cases in advance of the market demand with future versions. So now I think it will continue, now we’re very happy to be on this three quarter run of quarterly record revenue and certainly that wins confidence here internally at Pervasive on our plans for next fiscal year and certainly our plans in the coming year would have us continuing that record performance and I mentioned that recent quarters translated to 14% kind of growth rate over the last three quarters combined and we think that the business can continue to do that and perhaps more. It should and could and we believe can be a 20% kind of grow over the near future.
Sarkis Sherbetchyan - B. Riley & Co.
So would it be safe to say that you might make some incremental investments there to accelerate that growth?
John E. Farr
Well we will – with the growth we will increase our investments in the business but we will also try to expand the margin that the contribution rather that’s coming out of that business in absolute dollar terms. But certainly our imperative is to grow the top line. We’ve demonstrated our ability to be a profitable company, we need to grow the business and we will invest in the various areas, database included.
All of our businesses need a level of investment to maintain and grow our total business and the rest of that question is we will continue to invest in our new areas, DataRush, Data Solution and DataCloud because those we believe are potentially even greater revenue growth opportunities for us in the coming years.
Sarkis Sherbetchyan - B. Riley & Co.
Great and maybe if you don’t mind talking about some of the changes that have been made on the DataRush side since the new management was brought on and when should we expect some increased sales productivity?
John E. Farr
Well I think you’ll see the increased sales productivity in this fiscal June 30 ’11 year, I mean we believe strongly that we’ll be on path to recognize our million dollar of revenue and that will – it’s a milestone, it’s an important milestone, every new business, new product goes through at least that one milestone and this one that we’ve set out there is something that we will applaud the day that we achieve.
So quite frankly the sales and marketing activities sine Ray came on board has included assessing the sales tarp that we had on board when he arrived, it’s also recruiting new sales talent which we are being very selective in our recruiting and hiring plans. It is refining our go to market messaging so that when we’re talking to prospects that we don’t spend quite as much time convincing them what we do and who we are and taking things like the scalability on the SGI box, I mean being able to scale from quad core machine to 384 core processor is astounding and is something that the market just has not seen and we’ve been told by others in the market that we are unique in this regard, sitting in a perspective customer meeting the other day where the reason they were talking to us was because of the performance that we were able to demonstrate on a given multi-core machine but also the simplicity of the scalability that could be achieved just simply by adding more cores to the solution.
So we’re excited about all the things lining up here and to give Wall Street which is very numbers oriented something to look forward to, then I’d say it is the day that we have quarterly earnings release in which I say we achieved our millionth dollar.
Sarkis Sherbetchyan - B. Riley & Co.
Well thank you and good luck.
John E. Farr
Alright. Thanks Sarkis.
(Operator Instructions). There appears to be no further questions, I’ll turn the call back over.
John E. Farr
Alright, thanks Steve. Appreciate everyone’s participation in the call today and have a great evening.
This concludes today’s conference call, you may now disconnect.
Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.
THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.
If you have any additional questions about our online transcripts, please contact us at: email@example.com. Thank you!