Bottomline Technologies Inc. F4Q10 (Qtr End 06/30/10) Earnings Call Transcript

Bottomline Technologies Inc. (NASDAQ:EPAY)

F4Q10 (Qtr End 06/30/10) Earnings Call Transcript

August 12, 2010 5:00 pm ET

Executives

Rob Eberle – President and CEO

Kevin Donovan – CFO

Analysts

Jon Maietta – Needham & Company

George Sutton – Craig-Hallum

John Kraft – D.A. Davidson & Co.

Brett Huff – Stephens

Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Bottomline Technologies fourth quarter 2010 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct the question-and-answer session. Instructions will be given at that time. As a reminder, this conference is being recorded.

Statements made today may include forward-looking information subject to risks, uncertainties, and other factors that could materially affect actual results. For further information, please see Bottomline's reports filed with the SEC pursuant to the Securities Exchange Act of 1934, which are available at SEC's website, www.sec.gov. During their remarks, references to Bottomline's financial results relate to non-GAAP or core financial results. These results are also referred to as core operating income, core EBITDA, core net income and core earnings per share in our earnings release.

A reconciliation of GAAP net income to core net income is provided in the earnings release. These results exclude amortization of intangible assets, equity-based compensation and acquisition-related expenses. Throughout this call, when they refer to their financial results, it has that meaning. Bottomline will be providing forward-looking guidance on the call. A summary of the guidance provided during the call is available from the company upon request.

I would now like to turn the conference over to our host Mr. Rob Eberle. Please go ahead.

Rob Eberle

Good afternoon. Thank you for your interest in Bottomline Technologies Inc. Welcome to the fourth quarter fiscal '10 earnings call. I'm delighted to report on what was another strong quarter for Bottomline, capping an outstanding fiscal year.

I'm joined by Kevin Donovan, Chief Financial Officer, who will provide a detailed review of the quarter's financial results and our guidance going forward. We'll be available for questions following Kevin's remarks.

Q4 was another strong quarter for Bottomline. Revenue growth was a clear highlight of the quarter, with revenue up 19% from the prior year. Subscription and transaction revenues were up 54% from the prior year. Our focus on SaaS or software as service platforms is paying off as evidenced by this growth.

Operating income was $7.6 million, up over $2 million from the prior year. Operating income as a percent of revenue was 18%, EPS was $0.24.

The fourth quarter capped an outstanding fiscal year. From a financial standpoint for the year, we grew revenues 15% to $158 million, we grew EBITDA 77% to $34 million, we grew operating income 92% to $29 million and we generated EPS of $1 per share.

Just as importantly, from a strategic standpoint we positioned our business for growth and future success with the PayMode platform, our strategic relationship with Bank of America and a cash balance of over $122 million.

Turning back to the fourth quarter, it was a great combination of in-quarter execution and strategic positioning for future growth. As I noted, we grew our subscription and transaction revenue 54% from the prior year, which reflects our success with SaaS platform, such as the Legal eXchange.

During the quarter, we added five new customers to the Legal eXchange, included Riverport Insurance and Berkley Risk Administration. Each time we add new customers to Legal eXchange, we are adding incremental revenues to a relatively fixed-cost basis, driving attractive and predictable incremental margins.

Our investment in the SaaS business model is paying off. As we ended the quarter with just shy of $12 million in subscription and transaction revenue. This means we are close to a $50 million a year run rate subscription and transaction business.

This is important to investors because, one, it is a predictable revenue stream and goes to the overall predictability of our business, second, as our subscription and transaction revenues grow, it will drive margin expansion and EPS growth and finally, as the Street gets greater visibility to this asset, it will become a more important component in Bottomline's overall valuation.

We continued our strategic progress with PayMode in the quarter and we’re delighted to not only see continued sales activity from Bank of America, we're actually seeing net increase. Increased sales proposals and increased new customers, including, for example, a large state that came on to the platform in the fourth quarter.

Finally, I'll comment on our follow-on offering and our plans for the additional cash we've raised. We have a history of successful acquisitions. We've proven acquisitions, if done right, to be a great way to acquire new technology, new customers, enter new markets, bring on strong talent and most importantly accelerate growth.

What has happened is that the M&A market has become a cash market. Sellers are not interested in or would apply a significant discount to stock. We want to be in a position to pursue additional M&A and not be excluded from a process or opportunity because of the cash on our balance sheet.

With our successful raise of an additional $62 million, we are now well-positioned to pursue strategic acquisitions. Our target areas include the following, product extensions, geographic expansion, healthcare and bank carve outs.

We have an active pipeline and a disciplined valuation process. We know there are properties out there that would make attractive additions to our business. We do not have a particular timeline for the deployment of the funds.

Our only guideline is we'll do the right deals for Bottomline and our shareholders. It's not about how quickly it's all about the right deals. We look at many opportunities, in fact, since the offering we've spent a significant amount of time with one business, which while attractive on many levels ultimately we could not justify the valuation and have declined to proceed further.

We will find good additions to Bottomline and our strong cash balance puts us in an excellent position to do so. We will be patient, disciplined and thoughtful, and we will do the right deals for our company and our shareholders.

So, in closing, for the quarter we grew topline by 19%, gross subscription and transaction revenue by 54% and generated EPS of $0.24. That completed a year in which we recorded $1 per share of EPS, EBITDA of $34 million and operating income growth of 92%. We enter fiscal 2011 confident we will produce continued strong results in the quarters and years ahead.

With that, I'll turn it over to Kevin Donovan for a detailed review of the financials, as well as, our guidance going forward and then, we'll open up the call for questions.

Kevin Donovan

Thank you, Rob. We had a very good fourth quarter, which completed a very successful year. The quarter was highlighted by strong revenue and profit growth. Revenues grew by 19%, while operating income increased 42% from the prior year. At the outset of the fiscal year, we committed to deliver $1 per share in earnings. As we announce our fourth quarter results today, I’m pleased to report that we achieved this financial objective.

Highlighting several other strong financial results in the quarter, subscriptions and transactions revenue increased 54% to $11.9 million. Operating income was 18%, up 300 basis points from a year ago. EBITDA was $8.8 million, a 39% year-over-year increase. EPS was $0.24, a $0.02 increase from the fourth quarter of last year and cash flow from operations was significant at $8 million for the quarter.

As we look back on fiscal 2010, it was a year of growth. Over the last 12 months, we have grown revenue by 15%, subscription and transaction revenue by 33%, expanded gross margins and drove an almost doubling of operating income from $15.3 million in 2009 to $29.3 million in 2010, a truly tremendous result.

I will now provide a more detailed look into several key financial highlights of the quarter. First, revenue growth, second, margin expansion and profit growth, third, the balance sheet and cash generation and fourth, a forward-looking guidance.

So, let me start with revenue growth. During the quarter we grew revenue 19%, our revenue growth was highlighted by the 54% growth in subscriptions and transaction revenue. As Rob highlighted earlier, on an annualized basis, subscription and transaction revenue stream is approaching $50 million.

Subscription and transaction revenue is a major focus for our business, as we are providing more of our offerings on this type of model and we are increasing our investment in SaaS-based platforms. One of the key benefits of the high incremental margins that SaaS-based platforms ultimately provide with scale.

We expect our newest subscription and transaction-based offerings to be one of the key drivers of our future margin expansion as they grow as a percentage of overall revenue. Subscription and transaction revenue growth was the primary driver behind the $3.4 million year-over-year increase in recurring revenue. Recurring revenue was $25.8 million in the quarter or 62% of overall revenue and it represented over half of our overall revenue growth.

At the start of the quarter, the combination of our recurring revenue and backlog provide visibility to approximately 85% of the revenue we record in the quarter, which provides the basis for the predictability of our financial model.

The second item I'm going to speak about is margin expansion and profit growth. Operating income was $7.6 million in the fourth quarter, a 42% increase from the $5.4 million reported a year ago. Our growth and profit during the quarter was driven by the $3 million increase in gross margins. The gross margin growth was primarily attributable to our subscription and transaction-based offerings, as well as, professional services associated with customer implementations.

From an operating expense standpoint, we have been effectively balancing our spend through increased investment in areas driving future revenue growth like sales and marketing and development expense, while maintaining or decreasing our expense levels in the general and administrative areas of our business.

Sales and marketing expense increased 7% from last year and is in line with our focus on revenue growth. Development expense increased 10% from last year. We expect the investment in technology to continue into 2011 as we build out the products driving future growth. And G&A expense decreased 5% from last year.

The combination of gross margin growth and greater leverage in operating expenses drove a 42% increase in operating income. As I look towards our longer-term model, our focus on subscription and transaction offerings and SaaS-based platforms will drive increased levels of profit.

With higher levels of incremental margins for these offerings, we expect to expand our gross margins into the low to mid 60% level over the next three years and drive operating margins of 25% plus. We have a high degree of confidence in the financial model, and our ability to ultimately achieve and exceed this longer-term target.

Turning to the balance sheet, we generated significant cash from operations during the quarter and completed a follow-on offering. Cash at the end of June was $122.8 million, a $64.5 million increase from last quarter, which puts us in a great position to pursue future growth acquisitions.

The increase in our cash position reflects the proceeds of the follow-on offering and strong cash flow from operations. In connection with the offering, we issued a total of 4.5 million shares, generating net proceeds of $62.4 million.

$57.5 million of these proceeds were received during the quarter, with an additional $4.9 million received after quarter end with the exercise of the underwriters' over-allotment option. The $4.9 million received after quarter end is not reflected in our June 30 cash position.

During the quarter, we generated $8 million of cash from operations, up from $3.5 million last quarter and $6.7 million last year. Over the past 12 months, we have generated $26.2 million of cash flow from operations and $21.8 million of free cash flow.

DSO was 57 days, a decrease of three days from last year and in line with last quarter. Backlog at the end of June, excluding guaranteed PayMode revenues from Bank of America, was $68.1 million. The backlog was driven by orders of $39.5 million, which were up $3.8 million from last quarter and $1.7 million from last year. We ended the quarter with a cash balance of approximately $4 per share.

As we look forward, we see continued growth in 2011. Based on the strong pipeline for our product offerings across both new and existing customers, we are increasing our fiscal year revenue guidance by $1 million to a range of $171 million to $174 million.

From a quarterly perspective, we are increasing our first quarter guidance by $500,000 and increasing our second quarter guidance by $500,000 as well. We expect to generate 20% growth in net income on the year. And we are maintaining our prior earnings guidance adjusted for the incremental share count associated with the follow-on offering.

In summary, we had another very good quarter, with 19% revenue growth, 54% growth in subscription and transactions revenue, $8 million of operating cash flow and a 42% increase in operating income. We look forward to building upon our 2010 success as we deliver growth in 2011.

We will now open up the call for any questions.

Question-and-Answer Session

Operator

(Operator instructions) Our first question today is from the line of Jon Maietta with Needham & Company. Please go ahead.

Jon Maietta – Needham & Company

Hi. Thanks very much. Rob, I was wondering if you could talk a little bit about the tone of business on the ground, what's going out – what's going on in the field today? How active and full is the pipeline today versus a quarter ago, six to eight months ago, that type of thing?

Rob Eberle

Sure. I think I'll comment on a couple of areas. One, in terms of our corporate business, selling our platforms to corporations, we're seeing more activity and of a much stronger pipeline than we did, say, a year ago at this point in time. I think a year ago we still were in a much, much tighter budgetary position and companies have come to the realization that business goes on and you need what we provide.

So, we've seen that – we've seen that area a bit stronger. Area where I've seen particular strength in the order flow as well as in the pipeline is with financial institutions. And as we're providing more and more capability in our platform and our WebSeries platform, we've also be able to elevate the level of dialogue, relationship that we participate in these institutions.

So, the combination of the two has grown not only our number of customers but our deal size as well. So, that would be my two comments on the ground sales and pipeline activity.

Jon Maietta – Needham & Company

Rob, with regard to the treasury management business and the financial institutions, is much of that activity replacement activity and if so, is it replacing legacy systems?

Rob Eberle

The exciting thing about we do for banks, is we're a customer-facing platform. And banks are major providers of technology of functional capability around payments and movement of money flow and management of cash for their corporate customers. Our platform is one of the ways that banks compete. In fact, the web and our capability is the principal way that banks compete for corporate customers. What that means is it's not really a traditional sell software and there'll be a three or four year cycle, or maybe five or six year cycle, to a new platform and upgrade.

But rather, there's continual competitive pressure to either catch up, maintain where they are, or to try to establish a lead over competitors with the technology they're providing. So, we see an ongoing activity from our customers as they're continuing to add capability and often time extending that into other new geographies, new acquisitions and the like. So, it is – really doesn't follow the traditional software sale; wait a while, upgrade, occasional new module cycle.

It's a much more continuous program with our largest customers where I think on our eighth phase, really the eighth cycle, if you will and those have overlapped and been continuous. So, it's a great market because we're revenue facing, we're how the banks generate revenue and it's always a priority for them. And we're seeing that area heat up and we're seeing a larger market share. We're winning more deals and we're winning larger deals.

Jon Maietta – Needham & Company

And I think you had mentioned on the prior conference call that, with regard to the SI's, you're seeing them look to Bottomline to help provide strategic insight in some of the service that may be in previous years would go to Accenture and IBM. Is that still sort of ….

Rob Eberle

No. We're doing more of that work. We're not officially engaged in that role but we're certainly doing more of that work. The other thing I'd say, though, that we're doing – what's really changed, if not necessarily from a year ago, certainly from two or three years ago a dramatic change. And that's the levels that we participate and the way we interact in the design of systems, the design of strategy.

We've gone from being a vendor that would provide a capability that the customer asked for, to oftentimes to an RFP process too, and many cases a strategic partner that's helping frame the RFP, helping frame the architecture, helping frame the technology decisions, which puts us in a much more important role, a bigger role, and also one where we have much greater confidence that they'll be continued business coming our direction.

Jon Maietta – Needham & Company

Got it. Okay. That's it from me. I'll get back in the queue.

Operator

Thank you. Our next question is from the line of George Sutton with Craig-Hallum. Please go ahead.

George Sutton – Craig-Hallum

Hi, guys. I noticed you really called out a number of different healthcare wins in the quarter. And in past quarters, you've called them out, but certainly not to the extent you had this quarter. Is there something in particular that's driving these healthcare institutions to what you're doing and if you could wrap the comments into your M&A opportunities and how that might fit with this?

Rob Eberle

I'd separate them out. I will – I'd say that we're at the early stages of developing a more vertical focus around healthcare and when I say early stages, that is an opportunity for us that'll evolve. I believe, over a number of years, what we've been doing is more focused marketing effort and more focused packaging effort around our solutions, which are applicable payments, invoicing, business documents are applicable all industries, but with a greater focus on healthcare.

So I think that's a bit of what you'd see in more names. The other piece, frankly, to be honest about it, is that you'd – in any given quarter, it's always difficult for us to get the names of customers who are using us to move their money because they're just reluctant to allow the use of their name. So, you also could have a factor where there's some more healthcare customers who are willing to do so.

In terms of M&A opportunities, we see healthcare as a wonderful opportunity for Bottomline. There are so many different payment streams where our technology could be applicable. We think that M&A is an excellent way for us to get additional domain expertise, customers and potentially find the types of verticals that we've been successful with in the past, things like the Legal eXchange, so that's why healthcare is one of the key areas for us from an M&A perspective.

George Sutton – Craig-Hallum

Now, if you looked at the Fin-Reg Bill as we did, at least from our perspective, the very clear area that banks will need to make their money in the future is in the corporate payment area. And it looked designed perfectly for what you provide. Is that how you were reading the Fin-Reg Bill as well?

Rob Eberle

Well, we think that what we see is the corporate cash management is just going to be more important for a number of reasons. One is certainly the Fin-Reg Bill is one of them.

The second is a trend that’s been going for some period of time and that's the global economy and the fact that the capabilities that corporations require and the functionality that corporations require, they look more and more to their banks. And more of the financial supply chain you can automate, the more of the cash balance and the more of the customer's financial transactions a bank can retain.

So we see all of those factors, including the increased regulation being favorable. You are at a very high level. You see the legislative intent is more around limiting consumer trends, consumer fees and consumer transactions. And so shifting more of the opportunity for banks and shifting the importance to their relationships with their corporate customers.

George Sutton – Craig-Hallum

Lastly from me, if I could. Can you just update us on PayMode market activity? Last quarter, you really were limited to the Bank of America referrals. Could you update us with where that stands today?

Kevin Donovan

Yes. We're still focused principally on the Bank of America. A couple of things we’ve done is we've completed the integration of PayMode and the business Business eXchange, so we have the invoice capability, is now combined and we've launched the combined Paymode-X solution, that's our new – that's how the combined product has been renamed and we've also rebranded that which is important, because as we're talking to other banks and beginning to talk to other banks about coming on as potential channel only partners, distancing the platform to some degree from Bank of America is important because while it's attractive to get leading bank capability, other banks aren't looking to bring on a Bank of America platform as much as they are Bottomline.

So we changed the look and feel and have a website and have a whole new branding around PayMode-X. From a pipeline standpoint, I can tell you that we have a really healthy pipeline from Bank of America, which is exciting for us because our concern of course was that this channel doesn't stay on – or doesn't stay on as strong and in fact it's increasing. And then from our own perspective we signed two deals – PayMode direct deals in the quarter as well. So on all fronts we're pretty pleased with the way things are going and the continued opportunity of PayMode-X represents.

George Sutton – Craig-Hallum

Thanks, guys.

Operator

Thank you. Next we'll go to the line of John Kraft with D.A. Davidson & Co Please go ahead.

John Kraft – D.A. Davidson & Co.

Hi, Rob, hi Kevin, nice work in the quarter.

Rob Eberle

Thank you.

John Kraft – D.A. Davidson & Co.

Just first question is a follow-up really and regarding the acquisition pipeline. Rob, you mentioned the four areas you wanted to focus on and I appreciate that. Are we – we’ve had to take that those were in particular order for a reason? Is there a priority there? And then secondly I guess is there anything currently that you’re seriously looking at?

Rob Eberle

Well, it's always difficult to comment on M&A pipelines. So to a large degree I would restrict our remarks to what we said. I did mention that we looked at something pretty seriously since the offering but stepped way from it, just couldn't justify valuation standpoint. I also mentioned that we have a strong and active pipeline. I won't say that the list was in any particular order by any means, because for example bank car bouts to me can represent one of the more exciting areas, certainly was the fourth item mentioned on the list. So it's not in a particular order. They each are attractive areas for us. You have to work with the market opportunities that are out there and we also don’t want to be too eager from evaluation standpoint, so.

John Kraft – D.A. Davidson & Co.

Sure.

Rob Eberle

So we're patient and disciplined, but we know there are good businesses that we can make even better businesses as part of Bottomline.

John Kraft – D.A. Davidson & Co.

Sure. That's helpful. And then just some housekeeping questions here. Five new Legal eXchange customers was a nice for at least a booking standpoint. What percent of the revenue is Legal eXchange now?

Kevin Donovan

I don't have the exact percentage, but Legal eXchange revenue was up from last quarter. And one thing to note with Legal eXchange, we'll sign customers, many times they'll be customers that have transaction volume to revenue stream, so they actually don’t get reported into our orders number within the quarter.

John Kraft – D.A. Davidson & Co.

Okay. Thanks, Kevin. And then on SWIFT, I haven't heard much from – in that regard lately. Is that – first of all in the subscription and transaction revenue and what sort of contribution have you been seeing from that?

Kevin Donovan

Yes. It is in the subscriptions and transactions revenue stream and that was a 7 figure annual subscription fee that we had from SWIFT.

John Kraft – D.A. Davidson & Co.

So we're on track but no real changes to that?

Rob Eberle

That's correct.

John Kraft – D.A. Davidson & Co.

And then I guess lastly, FX impact in the quarter, was that related to the other expense this quarter? It was a material number.

Kevin Donovan

Yeah. That relates to FX. FX gain and loss. There was some FX loss in the quarter as we translate some of the items.

John Kraft – D.A. Davidson & Co.

Got it. Thanks, guys.

Operator

Thank you. (Operator Instructions) And the next question is Brett Huff with Stephens. Please go ahead.

Brett Huff – Stephens

Good afternoon, Kevin and Rob. And thanks for taking my questions.

Rob Eberle

Thanks.

Brett Huff – Stephens

Just to follow-up a question – it was asked on the PayMode or PayMode-X platform, I think last quarter, Rob, you had sort of laid out you thought that some of the larger deals that you were hoping to be working on would be at least a couple of quarters or maybe four quarters away. First of all, I want to make sure I'm remembering that right and if so, what’s your view on sort of those big bank deals that you're thinking about now?

Rob Eberle

Well let's clarify on – we have a non-compete with Bank of America that says we cannot sign a list of named large banks. And that has – that’s a two-year non-compete, so that would exist through next September. So through September 11.

Now, we can have dialogue with banks prior, but we can’t sign anyone. So, in terms of any expectation around signing, it would be at least a year from September that we would be able to sign one of the named larger organizations. In terms of other banks, I think we're still a ways out from signing other banks. I think the branding was a huge step forward in distancing us from Bank of America and positioning us as a viable third-party branded site for other banks. We're happy are the level of activity.

But banks work in a slow process. So it's not something that's going to be a 90-day sale cycle or anything like that. I would expect a year. So, if we were to get anything before the end of the calendar year, I’d frankly be surprised and pleased, but I think within the year from now, we would have other banks come on. And then once things open up after about a year and a month or so from now, we'll be able to be more active in signing other banks on.

Brett Huff – Stephens

Helpful. And then just another kind of off-shoot of that question. When you are talking to the banks, or the other parties you're trying to sell this to or get on the network, when you talk with them, how does that conversation go and what are the benefits they're looking for and is it on the radar screen as something they're interested in, are they coming to you or are you going to them? How is that? It seems like a revolving space.

Rob Eberle

I would say right now that's absolutely on their radar screen of something they're interested in. It's not something they're viewing as essential yet and we think the market is going to get there. In terms of the value, the value and proposition Bottomline represents pretty straightforward. Rather than building something yourself, you can be a participant to a network that has one of the leading banks in the U.S. and certainly in the world as well on the platform and immediately have a network of over 100,000 vendors. So from a bank standpoint, to build this yourself or to look at any smaller – and the competitors are a fraction of the size of Bottomline's network. Really, from our perspective it doesn't make any sense. I think the biggest piece is to move it from radar screen of interest to a must have to be competitive offering and we think that will take place in the next couple of years.

Brett Huff – Stephens

Okay. And then last question. In your wholesale business, can you comment a little bit about – it sounds like it continues to be strong. Can you comment on where the pipeline activity and the recent bookings have bee? Has it been domestic, or more international, or is there any kind of color you can give us on how those sales are going?

Kevin Donovan

Yes. So from a sales perspective, recent wins were domestic. But from a pipeline perspective, we have strong pipeline across both North America, Europe as well as opportunities over in Australia and into Asia-Pacific.

Brett Huff – Stephens

That's what I needed. Thanks for your time.

Rob Eberle

Thank you.

Operator

Thank you. And next we'll have a follow-up from the line of John Maietta from Needham & Company. Please go ahead.

John Maietta – Needham & Company

Hey, thanks. Kevin, just a couple of model questions here. With regard to gross margins, you had provided an outlook there. How should we think about that line in the near term? Is it kind of flattish, reasonable or do you expect a modest pick up?

Kevin Donovan

Yes. Flattish to modest pick-up. Mid 60% level that I commented on was part of the three-year plan. That will grow over time. But you won’t see that move up here in the near-term.

John Maietta – Needham & Company

Yeah. Okay. And then with regard to CapEx, do you happen to have the Q4 number and then just notionally, how should we think about CapEx in fiscal '11?

Kevin Donovan

I don't have the specific number right in front of me. It's not going to be significantly different than the CapEx we've seen over the last year. So very similar – maybe a slight tick-up, but nothing dramatic in terms of the difference.

John Maietta – Needham & Company

Okay. And just the last one, in terms of revenue mix, would you expect that subscription and transaction revenue line to grow sequentially from the Q4 level?

Kevin Donovan

Yeah. We typically see subscription and transaction revenue stream, we would see being up from Q4 to Q1.

John Maietta – Needham & Company

Thanks very much.

Operator

Thank you. And at this time, there are no further questions.

Rob Eberle

Well, thank you. Thank you for your time and interest in Bottomline Technologies. We're pleased to report a strong fourth quarter that concluded a very strong fiscal year as well. And we look forward to reporting on first quarter in just a few months time. Thank you, again.

Operator

And ladies and gentlemen, this conference will be available for replay after 7 p.m. Eastern Time today until August 19. You may access the AT&T executive playbook service by dialing 1-800-475-6701 and entering the access code 143788.

International participants may dial 1-320-365-3844. And again, the numbers are 1800-475-6701 and 320-365-3844 and the access code is 143788. And that does conclude our conference for today. Thank you for your participation and for using AT&T Executive Teleconference Service. You may now disconnect.

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