Radiant Systems Inc. Q2 2010 Earnings Call Transcript

Aug. 6.10 | About: NCR Corporation (NCR)

Radiant Systems Inc. (RADS) Q2 2010 Earnings Call August 5, 2010 4:30 PM ET

Executives

John Heyman - CEO

Alon Goren - Chairman and CTO

Andy Heyman - COO

Mark Haidet - CFO

Rob Ellis - VP, Finance and Accounting

Analysts

Andrew Jeffrey - Suntrust

Rich Kugele - Needham & Company

Gil Luria - Wedbush Securities

Terry Tillman - Raymond James & Associates

Dan Rice - Northland Securities

Brad Whitt - Gleacher & Co.

Vincent Colicchio - Noble Financial

Brian Murphy - Sidoti & Co.

Operator

Good day and welcome to the Radiant Systems Second Quarter 2010 Earnings Release. At this time, I would like to turn the call over to your host, Mr. John Heyman. Please go ahead.

John Heyman

Thanks to everyone for joining us this afternoon. With me here today are Alon Goren, our Chairman and Chief Technology Officer, Andy Heyman, our Chief Operating Officer, Mark Haidet, our Chief Financial Officer; and Rob Ellis, our Vice President of Finance and Accounting.

Before we get started, Mark is going to run through the forward-looking caveats.

Mark Haidet

As always, certain statements contained in this conference call are forward-looking statements within the meaning of the Securities Act of 1995, such as statements relating to financial results and plans for future business development activities, and are thus prospective. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the company’s control. These risks are detailed in our most recent 10-K filed with the Securities and Exchange Commission.

During this call, we will also discuss certain non-GAAP financial measures. Reconciliation of these financial measures to comparable GAAP measures can be found in our earnings release and on our website at radiantsystems.com under Investor Relations.

John Heyman

Thank you very much Mark and again, thanks everybody for joining us this afternoon. We know everybody has a very busy schedule. Before I say anything, I want to address our employees and our channel partners many of whom are shareholders of the company.

Let me express our deepest gratitude to, from all of our investors to each of you, your hard work is driving results for our customers, our company, and our shareholders, and on behalf of all of them, I just would like to pass on a huge thanks, like never before this quarter validates your hard work and exceptional dedication, and we all know the best is yet to come.

As a preface to my otherwise short comments today, a number of things have come together to lead to these incredible results and increased forecast for the remainder of the year. Large direct customer wins are resulting in significant long-term roll outs, new product launches are yielding strong adoption and our channel partners have picked up steam across the industries and the geographies that we serve.

We are winning share from our competitors and we are continuing to penetrate our installed base with new products that are helping our customers drive revenue growth and operating efficiencies in their size.

Just a few quick highlights, revenues grew 22%, the direct wins and the momentum of our channel partner business are increasing system sales, which were up over 40% for the quarter and recurring revenues continued their strong growth, led by 41% growth of our SaaS businesses. Overall recurring revenues grew approximately 16%, when adjusted for our business change Mark, who describe a bit later.

Historically, we have laid out our long-term operating margins, at the targets of 15%. The revenues in this quarter are combined with good mix and a leverageable operating model allowed us to achieve this target.

It is clear to us that achieving 15% on a sustainable basis is within our sides, and that higher operating margins are achievable over the long-term. The profitability in the business is helping us drive very strong cash flow, we have cut our debt by $30 million over the past 12 months and we are continuing to strengthen our balance sheet.

Off course all of this is now history and while it was an outstanding quarter by almost any measure that you or that we would look at in the business. The really good news is the sustainability of these results and the growth we foresee into the future.

Specifically, I will talk about five quick points. Number one, we are in the early phases of long-term rollouts with series of recent wins amongst large direct customers with significant franchisee channels. Number two, our pipeline remains very strong across all of our businesses. Three, our channel partner businesses, which were down significantly in 2009 are now up and gaining momentum. Four, we are eyeing the continued launch of new products later this year and into 2011 and five; we are ramping up our very successful sales efforts around current and planned SaaS offerings.

So, I am encouraged by these strong results. I am even more encouraged by the sustainability of the momentum in the business, which we believe will continue throughout this year and propel us into a prosperous 2011 as well.

Mark, will run through the financials and our guidance increases in a moment. One component, we are very excited about given the revenue and earnings acceleration that we have seen is that we can more quickly fund some of the important growth initiatives before us such as the continued build out of our SaaS sales force.

With that, I will turn it over to Mark and then I will make some concluding comments.

Mark Haidet

As John described we are pleased with the results of the quarter. Our revenue was $87 million, which exceeded the high end of our guidance of $82 million. Overall revenue grew 22% over the same period in 2009 driven by systems revenue, which grew 41% due to direct customer rollouts as well as increased demand in our channel partner business.

Our recurring revenue is grew 12% from the prior year and contributed 41% of total revenue in the quarter and as John pointed out, we did have a change in accounting for a portion of our recurring revenue. During the quarter, we restructured our agreement with our credit processing sales partner.

The structure of the new agreement results in a portion of the revenue being booked on a net basis instead of gross, so while the credit processing business and its profits grew during the quarter, the revenue booked was approximately $1.8 million less than under the gross method. Without the change, the normalized growth rate for recurring revenue would have been 16%.

Overall, our gross profit margin increased 260 basis points from the first quarter to 47%, with improvements across all categories of revenue. Year-to-date our gross profit margin is 46%. Our adjusted operating income for the quarter was $13 million resulting in an operating margin of 15% bringing the year-to-date margin to 13% and resulting adjusted net income for the quarter was $9.3 million, or $0.26 per diluted share, which is $0.05 over the high end of our guided range.

Our cash from operations was $12.6 million generating free cash flow of $9.8 million for the quarter and $6.9 million for the year. Capital expenditures were $2.8 million and our net debt position improved by $14.4 million during the quarter, giving us total available capital of approximately $64 million between our cash and the availability on our line of credit. This gives a significant capital to pursue organic and inorganic growth opportunities as the business evolves.

So, now I would like to talk about our guidance changes. Based on our current visibility in the business, we are increasing our revenue range by $14 million to a range of $336 million to $340 million. This increase is due to improved demand from our channel partner business and the expected pace of our customer rollouts. This guidance represents growth in the range of 17% to 18% over 2009 and 11% to 13% over 2008.

For the third quarter, we anticipate revenue in the range of $85 million to $87 million representing growth of approximately 20% over 2009. From an earnings standpoint, we are increasing our guidance for the year by $0.06 per diluted share resulting in a range of $0.87 to $0.90 per share. With third quarter EPS of $0.23 to $0.24. The guidance anticipates gross margin between 46% and 46.5%.

One final note, it is important to remember that all of our earnings guidance is on an adjusted basis, which excludes amortization of acquisition-related intangibles, employee stock compensation expense, and non-recurring charges, and includes the ongoing cash benefit of the utilization of net operating losses and tax credits. John?

John Heyman

Mark, thanks a lot and before we open it up for questions, just to summarize, it's increasingly clear to us that the work we have done in the past few years, which is centered on taking great care of our customers, investing significantly in research and development and to very large markets and building the best sales force in the industry, is beginning to translate into business model that is thriving in good times and in uncertain times.

The economic climate as we all know remains uncertain, but we feel like that’s actually presented us with new opportunities to have discussions with our customers about how we can drive revenue growth and control cost in their sites. Our strategy and our execution, is allowing us to succeed our goals and we are facing a more promising outlook it seems almost every day.

With that, we will take questions.

Question-and-Answer Session

Operator

(Operator Instructions). We will take our first question from Andrew Jeffrey with Suntrust.

Andrew Jeffrey - Suntrust

Hey Mark just to clarify on the services revenue thanks for that explanation. So, when you report net revenue for payment services now, does that mean that effectively the GAAP, or reported gross and EBIT margins, look better than they would have otherwise in that services segment?

Mark Haidet

Yes, just to clarify, the change in accounting is for a portion of the payments systems business, it’s not the entire piece, and so while the answer to your question is yes, it is not a material impact, but there is an improvement to the gross profit margin and to the operating margin.

Andrew Jeffrey - Suntrust

When I think about the rest of this year, should you return to sequential growth in services in the back half? Because the implication obviously is it makes the overall revenue result this quarter even more impressive, given the system sales number. Obviously, the implication for the back half is if you're looking at flattish sequentials in services because of the accounting changes, it implies, obviously, a continued very robust system sale environment.

Mark Haidet

Yes, we’d expect that in Q3 and Q4, we’d see sequential growth in our recurring revenue services.

Andrew Jeffrey - Suntrust

When we get to '11, ostensibly that growth should accelerate all else being equal, right, just because you've cycled the comparisons?

Mark Haidet

Correct.

John Heyman

The only quarter that would be. First of all, this is a smaller part of the overall recurring revenues Andrew. So, we’d just like we did this past quarter, where we read through all the metrics we've laid out. We will continue to do that and on recurring revenue side and then the only tougher comparable force in the payment’s business alone would be in the first quarter, but the rest of the recurring revenue business and the rest of the SaaS business will continue to make that look immaterial.

Andrew Jeffrey - Suntrust

With regard to system sales, it sounds like you've laid out the growth drivers pretty well, but incrementally, if you look at the acceleration that you saw this quarter, could you break that down a little bit? How much of that is channel coming to life, and how much of that is the rollout of larger chain restaurant installations?

Andy Heyman

This is Andy. It's very well diversified across the board, whether it would be by industry or geography or channel versus direct. We saw fantastic growth across the board in the quarter.

Andrew Jeffrey - Suntrust

One last one and I'll jump back into the queue. In terms of larger deals, could you characterize the pipeline and then also just how much more of a tail there is on the revenue from the conversions you have remaining? In other words, does it extend beyond '10 into '11, or is this pretty much a 2010 phenomenon ex-new customer signings?

Andy Heyman

As we look at the business right now, we take a three to five-year view of the pipeline in the backlog of the business, and really as far out as we can see. The pipeline looks very strong for us. It looks stronger in all of our industry segments. It looks strong, when we look at, as John mentioned the franchise order, franchisee relationships. We are in a lot of these rollouts. We haven’t even begun to penetrate the franchisee side. So, we could not really be more pleased as we take that three to five-year outlook with the pipeline. So, we are really encouraged about the sustainability of the business and for what we saw in the second quarter.

John Heyman

I think the other thing Andrew just to know is, every time a system gets rolled out and often for our systems rollout with direct side that’s Phase I of the rollout, right behind that comes the implementation of many of the recurring revenue and SaaS based services. So, each of those creates a tail for us and growth there.

Operator

We will take the next question from Rich Kugele of Needham & Company.

Rich Kugele - Needham & Company

Just a few questions from me, I guess first, with already achieving the 15% operating margin and you did talk about looking at what the sustainability of that is, but do you think that there is new range we should maybe now expect for what your target could be over the next call it 12 to 18 months?

Mark Haidet

Yes, this is Mark, Rich. Over the next 12 to 18 months, I think we would stay in our similar ranges we’ve been at. We demonstrated the ability to get to 15%. I think as the year evolves as we’ve made some investments and the business evolves with gross profit mix, I don’t think we’ll obtain that for the full year, although we will have better than we originally guided operating margin.

We still believe we can increase operating margin 100 to 200 basis points a year. So, I think if we look at our three to five-year horizon that’s where we see the increase of looking more towards an 18% than towards a 15% over that mid-range term.

Rich Kugele - Needham & Company

In terms of international, how was the international mix and what opportunities do you think are there? Are you seeing a recovery in that side as well?

John Heyman

Rich. The international business grew at around 27%. So, higher than the company's overall growth rate and again what is most important there is the Columbus product is now actually in sites and operating and we will be releasing that late this year as planned and we look for significant contribution from it next year.

Rich Kugele - Needham & Company

Okay, great. Thank you so much.

John Heyman

Yes, I’ll say one thing on the operating model question. I think if you look at the investments we are making globally as we grow. That’s going to become more of an earnings contributor to the company. Second, is the recurring revenue mix will continue to be higher for the company and the SaaS businesses are growing faster than anything. That’s going to help the mix.

Then just overall scale I think, as we demonstrated in this quarter will continue to help the operating margin, and balancing all of that is, as we’ve reiterated with the street time and again is there's investments we still want to make, but feel the long-term growth of the company. Specifically, right now we are ramping up the host of solutions, the SaaS based sale force because of the growth we see it delivering today and know we can deliver in the future.

Operator

We will take our next question from Gil Luria with Wedbush Securities.

Gil Luria - Wedbush Securities

Maybe I missed it in the release, but do you have breakdown between hospitality, retail and international?

Mark Haidet

This is Mark. Yes, we can give you the breakdown of that. There's roughly 60% hospitality, 30% retail sports and entertainment, and 15% international.

Gil Luria - Wedbush Securities

I am not sure that adds up but we will go with that.

Mark Haidet

And that's what $0.20 in international. So let me give you the general numbers. It was about $51.5 million for hospitality, close to $22 million for retail sports and entertainment, $12 million for international and then there was about $1.5 million of central and other revenue as we break it out in our segments.

Gil Luria - Wedbush Securities

Got it. Then the channel, you made some comments, earlier in the year you talked about seeing some recovery and not being sure how that's going. It sounds like your commentary now is that that's on more secure footing than it was in the quarter and I imagined to get to the number of you had on revenue that had to be pretty good. What's the commentary been like in July?

We know from last year that's the business that there was the most economically sensitive and I think there is some concern that there being a little more economic concern right now and customers and consumer spending trends not being as robust as they were early in the year, may be that the channel business wont continue to go strong. What's your commentary on what you are hearing there in July?

Andy Heyman

This is Andy. It's an interesting question. If I followed what newspapers said and then read around pipeline reports that they just wouldn't match up and what we are hearing on the street right now, almost to a partner, is everyone on the partners is that the business is very solid, the second half looks as strong or stronger than the first half, we are not banking on that, by the way, in our numbers.

That would represent upside for us but that's word on the street and I think it all comes down to we have tools that helped businesses in tough times to make more money. With that we attract new customers and encourage spending or help them control operating costs. So we are very pleased with what we are hearing on the street right now.

Gil Luria - Wedbush Securities

Got it. And then finally, your earnings guidance, above expectations, obviously, but sequentially down, and I think you're saying you're investing, obviously, in the significant growth opportunities you have. Can you help us pinpoint a little bit where that investment is going to go into? Is it more R&D? Is it international demand generation? Where's a lot of the investment going to go into?

John Heyman

Well, first of all let me just one factual anecdote. On the last question it was, we are able to see our channel data every day, so that's build into our forecast. The second thing would be investment in the future. I would say the primary investment is going in into increasing the size of the SaaS based sales force that's out there, helping our channel partners selling to their install base, and then our second area would be in research and development.

Operator

We will take a next question from Terry Tillman with Raymond James.

Terry Tillman - Raymond James & Associates

Thanks guys and a great job. A series of questions. I'm sure they're all easy, though. But in terms, then, for the channel, following up to prior questions, what do we think, then, for the full year? I understand you're going to try to keep some cushion and be conservative, but if I recollect right, was it basically, it's breakeven, it doesn't grow this year, it's flat, and now is there a modest growth for the year? How do I think about it quantitatively on the channel?

John Heyman

For the year you are asking, Terry?

Terry Tillman - Raymond James & Associates

Yes.

John Heyman

Well, in terms of what we had planned on at the beginning of the year or we continuing to plan in the second half is, we've been looking at low single-digit percent growth but what has occurred in the first half is much more significant than that.

Terry Tillman - Raymond James & Associates

Okay. So actually you would still be kind of expecting a low single-digit in the back half or is there a little bit of ramp there or no, and you're just going to be conservative?

John Heyman

Well, I would call conservative as much as we plan the business based on highly visible revenues, and so, what we don't to plan on the same upside that we were able to realize in the first half. My hope is that we are able to maintain, we're north of 20% growth right now on channel business, I'm optimistic we'll be able to maintain that but we're not banking on it.

Terry Tillman - Raymond James & Associates

Okay. And then, sorry on the repeat here but I had a real specific product question and I think its P1515, if I am not mistaken, that was considered a lower price point, hardware device introduced this year. Is that proving to be more effective for the channel, where there is, maybe, some more price sensitive customers. Is that one of the driver of the strength and/or as P1515 something that's also been effective on the direct side?

John Heyman

It's been effective across the board and I think if you spend a lot of time with the direct customers I think they will tell that they are similarly price sensitive as a small business would be.

Terry Tillman - Raymond James & Associates

Okay. And then, maybe just another question, I guess, higher level question this relate to,. John, I think you talked about the strength in your pipeline. I mean it seem though, like in '09, there was just a substantial and maybe abnormally large number of RFPs and you won a lot, so I know that's going to fund growth for a couple of years. How actually RFP activity, new deals to be had or lost this year? How does that actually look out on an absolute basis compared to what seem like a lot of pent up demand for new deal signings last year?

John Heyman

I think we see the activity as high if not higher and we've already closed a couple of big ones this year. The bread and butter for us is all the medium sized ones that probably don't light up the wall-street size, but they are the bread and butter for our business and we are engaged in a number of large opportunities right now and even more medium sized opportunities.

Terry Tillman - Raymond James & Associates

Okay, great, and maybe, Mark, just the last question relates to, with the changes, is this more of a proactive or is this retroactive? Is there any restatement you'll do around the carve out of some of that payment processing?

Mark Haidet

No, it's a perspective. So there's no retroactive change but it is a recurring change going forward.

Terry Tillman - Raymond James & Associates

Okay, and I think you had said there was about $1.8 million that was basically affected? Is that right?

Mark Haidet

That's correct, in the quarter.

Terry Tillman - Raymond James & Associates

What's the gross amount? Let's say this didn't happen. Could you give us a sense on, I'm just trying to understand what the actual base of business is in that area?

Mark Haidet

If we grossed it back up for the quarter, it would have added $1.8 million to the overall payments business.

Terry Tillman - Raymond James & Associates

Yes, and then I was just curious. Are you all willing to share how much that business is in total on a quarterly basis?

Mark Haidet

We haven't really been breaking that out. It's kind of built in into our overall recurring numbers. So I don't think it would be appropriate to single it out.

John Heyman

But it's not even 20% of recurring revenues just to give you a feel. This is not a significant part of the recurring stream.

Operator

We will take our next question from Chad Bennett with Northland Capital Market.

Dan Rice - Northland Securities

Thanks for taking my question, and nice quarter. This is actually Dan Rice today pitching in for Chad. First question here, how did the specialty retail perform during the quarter, and can you give any color on growth rates?

Andy Heyman

Yes, this is Andy. Specialty retail had a fantastic quarter they had their best quarter they have ever had by far. Our prospects there continue to be outstanding. It's a market that, by our assessment, is a larger market than the restaurant business. For us it represents a huge growth opportunity and our team there has continued to perform outstanding. They had fantastic growth in the quarter.

Dan Rice - Northland Securities

Great, okay, and then any update on when the new SaaS product, Payment Guard, should be released and color on any other new SaaS products down the pipeline?

Andy Heyman

Well, we have a host of security offerings coming to market in the fourth quarter. So that is a big opportunity for us in 2011 that's in front of us. Then we also have a number of other products on the road and that are in development and as you are probably aware we do not like to comment on specifics of this.

Dan Rice - Northland Securities

All right, okay. Then lastly, could you give, may be where headcount is today on the SaaS sales force and maybe where you expect to, by the end of the year?

Andy Heyman

Roughly 14 to 15 people today and we are going to try to increase that to 25 to 30 people by the end of the year.

Dan Rice - Northland Securities

Okay, so double it, okay. All right, thanks, guys.

Operator

(Operator Instructions). We are going next to Brad Whitt with Gleacher & Co.

Brad Whitt - Gleacher & Co.

Congratulations on hitting your operating margin target. Looking at the SaaS business, it looks like, I think I had it up 25% last quarter, 41% in this quarter, nice acceleration there. Is that the kind of growth we should expect over the next several quarters?

Andy Heyman

Well, Brad we had an analyst day back in May and we guided to, we tell peoples as we felt like we can grow business in the mid-20s in the short term. It has been growing at that or higher and it's been a great quarter for us. We are going to continue to try to drive that growth but I am not sure that we can keep up 41%.

However, we are building sales force, there is a huge install base out there. There is the payment. The return on the investment is exceptionally high for our operators. They are easy to implement products. So we are going to keep charging way.

Brad Whitt - Gleacher & Co.

Along those same lines, is there any chance that the channel partners would sell some of these SaasS products at some point?

John Heyman

Well, the SaaS based sales force is there to compliment the efforts of the channel partners. Some of them are adept at doing that but most of them are focused on gaining new real estate and the sales force's ability is to help them penetrate their install base.

Andy Heyman

And they are involved in all of the SaaS offerings. The question in different market is it takes the lead on the sales process who is helping on that implementation and support of it, so it's a collaborative effort.

John Heyman

And they are incented on them as well. So that's what we did to prevent any kind of channel conflict.

Brad Whitt - Gleacher & Co.

I guess back to the operating margins. Where are you seen some of the additional leverage? Is it just the fact that SaaS is becoming a bigger part of the revenue mix or what are some of the areas that point to the leverage that you're seeing in the model?

John Heyman

Well, I think the SaaS is our highest profit item, line item and that business is growing the fastest. So that's certainly having some carry. I think that overall the value we are able to drive and mix of customers as it helps on the gross profit line from a system's perspective and then overall volume is helping us to scale against operating expenses. So we see those things continuing. At the same time we are balancing some of the investments we want to make for long-term growth.

I would point of that Europe specifically is bigger area of investment for us right now and so we would see the operating margins getting much better over there in '11, '12, '13 as we start to volume in that part of the world.

Operator

And we'll take our next question from Vincent Colicchio with Noble Financial.

Vincent Colicchio - Noble Financial

Nice quarter, guys. Related to Europe, are we on track in terms of doing a pilot with the new hardware product in Europe later this year?

John Heyman

We are actually in sites already. So we are tracking very well.

Vincent Colicchio - Noble Financial

Is it too early to say, are we getting any feedback on that, or where do we stand?

John Heyman

Feedback has been great. Reseller, I was just over there a couple weeks ago. Andy was over there five to six weeks ago. Resellers are incredibly enthusiastic about the product line and we are eagerly anticipating launching it in the fourth quarter. We think we'll get small contributions from them and much more meaningful over the next few years.

Vincent Colicchio - Noble Financial

I know you guys had won a deal in the stadium market this quarter. Is that market starting to improve and/or your execution improving there? Should we expect more wins in coming quarters?

Andy Heyman

Yes, this is Andy. I wouldn't say it's getting a whole lot healthier in that business. Our win rate continues to be very high, north of 75%. The problem is the volume of the deals remains low. So we continue to win our share and our hope is that market comes back a lot but right now it's a soft market.

Operator

We will take our next question from Brian Murphy with Sidoti & Co.

Brian Murphy - Sidoti & Co.

Hi, thanks for taking my question. This is probably for Andy. Just in terms of adoption for your SaaS products, is there much of a difference in terms of the uptake between your quick-serve customers and your table-serve customers?

Andy Heyman

That's a good question. The uptake is probably pretty similar in both. I think that in terms of percentages, when you start looking at absolute numbers, one thing to just realize is that in the small business community, you have a higher, you don't have as many quick service small businesses that are not represented by a franchise or as you do table-service.

So the meaning behind that is that depending on the module you are building would affect what your uptake is. So it's probably a little bit more heavy on the table service side than on the quick service side because of those dynamics. Some of the SaaS modules, bigger customers might have their own methods of handling that kind of functionality.

Brian Murphy - Sidoti & Co.

Okay, great and Andy, I think last quarter you mentioned or you referred to some decent displacement of competitors and I'm wondering whether you're seeing that more or are you displacing more of the large, horizontally oriented hardware guys or is it more the smaller, pure play POS competitors?

Andy Heyman

For us, it's been a mix of who we were replacing and at this point, the majority of our system sales are coming from replacements. Three years ago, it's probably not the case; it's probably coming from new site openings. So we are really encouraged by the appetite and demand we are seeing, but when we are pulling out of system, it's a mix of larger and smaller competitors. Its been a tough economic environment for a lots of companies, we have seen a lot of competitors either go out of business or pull back significantly on those R&D area in the sales area, and so it seems like it's a very democratic situation in terms of who we are pulling out?

Brian Murphy - Sidoti & Co.

What does that mean for the M&A pipeline?

John Heyman

We continue to look at deals. I would say all smaller deals focused on primarily the SaaS based, and we see some opportunities but we are not ready to pull the trigger on anything and I wouldn't be surprised to see us do a small deal this year, but we wont be doing anything big and we are just always looking for ways to kind of compliment the values that we have already got.

Operator

And that concludes today's question-and-answer session. I will now turn the conference back to John Heyman for any further and closing comments.

John Heyman

Alright, again thanks to everybody inside Radiant and our channel partner community has been helping drive these results. Thanks to all our shareholders and analysts for their time during the busy earnings season and we very much look forward to speaking to you at the end of the third quarter. Take care

Operator

And that does conclude today's conference. We thank you for your participation.

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