Manhattan Associates' (MANH) CEO Eddie Capel on Q2 2014 Results - Earnings Call Transcript

| About: Manhattan Associates, (MANH)

Manhattan Associates, Inc. (NASDAQ:MANH)

Q2 2014 Earnings Conference Call

July 22, 2014 16:30 ET


Eddie Capel - Chief Executive Officer

Dennis Story - Chief Financial Officer


Mark Schappel - Benchmark

Terry Tillman - Raymond James


Good afternoon. My name is Stephanie, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Manhattan Associates Second Quarter 2014 Earnings 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 period. (Operator Instructions) As a reminder, ladies and gentlemen, this call is being recorded today, Tuesday, July 22.

I would now like to introduce Dennis Story, CFO of Manhattan Associates. Mr. Story, you may begin your conference.

Dennis Story - Chief Financial Officer

Thank you, Stephanie, and good afternoon, everyone. Welcome to Manhattan Associates’ 2014 second quarter earnings call. I will review our cautionary language and then turn the call over to Eddie Capel, our CEO.

During this call, including the question-and-answer session, we may make forward-looking statements regarding future events or future financial performance of Manhattan Associates. You are cautioned that these forward-looking statements involve risk and uncertainties, are not guarantees of future performance and that actual results may differ materially from projections contained in our forward-looking statements.

I refer you to the reports Manhattan Associates files with the SEC for important factors that could cause actual results to differ materially from those in our projections, particularly our Annual Report on Form 10-K for fiscal 2013 and the risk factor discussion in that report. We are under no obligation to update these statements.

In addition, our comments include certain non-GAAP financial measures in an effort to provide additional information to investors. All non-GAAP measures have been reconciled to the related GAAP measures in accordance with SEC rules. You will find the reconciliation schedules in the Form 8-K we submitted to the SEC earlier today and on our website at

Now, I will turn the call over to Eddie.

Eddie Capel - Chief Executive Officer

Well, good afternoon everyone. We are quite pleased with our second quarter and first half financial results. We continue to be encouraged by our near-term and long-term prospects. We posted record results across essentially all financial metrics. Our competitive position continues to improve and customer satisfaction continues to increase across the globe.

Total revenue for the quarter was a record $122.5 million, up 20% versus Q2 of last year and adjusted earnings per share were also a record of $0.29, increasing 21%. So, with these strong results, we are raising our revenue and earnings per share guidance for the year and Dennis will take you through those details in just a moment.

License revenue for the quarter was $18 million, up 11% over Q2 last year. We closed three $1 million plus license deals in the quarter, one, with a new customer and two, with existing. Two of the large deals were in the U.S. and one was in Latin America. Two of the three deals were led by omni-channel initiatives and one of the three deals included our platform-based warehouse management system. In all three of these three large deals, we were successful against head-to-head against very strong competition.

Our sales teams across the globe executed very well and our competitive win rates head-to-head in sales cycles against our major competitors remain strong at about 75% for the quarter. And overall for the quarter, about a third of our license revenue was from net new customers. And whilst the ratio of net new customers can fluctuate somewhat from quarter-to-quarter, we are quite pleased with our new customer acquisition performance all led by our commerce suite of omni-channel ready solutions.

Our consulting services business posted record revenue results in Q2, up 25%. Demand and visibility continues to be quite strong as we added 130 associates to our global team in Q2 and we continue to search for about a 100 more professional services people to meet the needs of our customers. Overall, with the strong quarter and first half performance, we are optimistic, but we still remain somewhat cautious as the global economy continues to exhibit sluggish growth. But our outlook is positive, our pipeline is solid, services business demand is strong, customer satisfaction is good, and implementations of our solutions are going very well.

Our focus remains on being the leading pure-play technology innovator in the supply chain commerce market, leveraging our platform strategy in investments and research and development to deliver solutions to help our customers get commerce ready for the new omni-channel world.

And I will provide more color in my business update following Dennis’ review of our financial results.

Dennis Story - Chief Financial Officer

Thanks Eddie. I will review our Q2 2014 non-GAAP results which we call adjusted results and GAAP EPS performance and close with our 2014 full year guidance. Yet we continue to knock the cover off the ball with a solid 2014 performance posting total revenue of $122.5 million, an increase of 20% over Q2 2013. By region, Americas grew 18%, EMEA grew 33% and APAC grew 15% compared to Q2 last year. Adjusted earnings per share for the quarter was $0.29 increasing 21% over the prior year fueled by solid revenue growth, continued expense management and our buyback program. On an apples-to-apples basis EPS grew 25%. This excludes the current year currency impact and the $1.6 million sales tax reserve reversal we have recognized in Q2 of 2013.

As previously discussed the $1.6 million reserve was booked in Q4 of 2008 and reversed in Q2 of 2013 due to expiring tax audit statutes. The net result is strong organic revenue growth continues to drive quality earnings leverage. Our Q2 2014 GAAP diluted earning per share was a record $0.27 increasing 23% over the $0.22 we posted in Q2 2013. Our GAAP performance was driven by the strength of adjusted operating results. A detailed reconciliation of GAAP and non-GAAP adjustments is included in our earnings release today. The remainder of my P&L discussion represents our adjusted results.

License revenue for the quarter totaled $18 million. From a regional perspective Americas posted license revenue of $14.5 million, EMEA $1.6 million and APAC $1.9 million. In the backdrop of global macro sluggishness, our license performance continues to depend heavily on the number and relative value of large deals we close in any given quarter. While we continue to remain cautious regarding the macro environment with three consecutive quarters of $17 million to $18 million in license revenue, we expect to achieve high single to low-double digit percentage growth in full year 2014 license revenue.

Shifting to services, business demand remains very solid. Q2 services revenue totaled $93.5 million increasing 20% year-over-year. Our services revenue is comprised of two revenue streams consulting and maintenance. Our consulting revenue for the quarter totaled $65.7 million, growing 25% over Q2 last year. As Eddie mentioned we hired 130 professional services associates across the globe in the second quarter about half which are recent college graduates has started with us in June. Year-over-year, we have grown our services practice by nearly 235 associates, up 16% as we continue to support increasing demand and focus on customer satisfaction.

Maintenance revenue for the quarter totaled $27.8 million increasing 8% over last year. Solid license revenue performance, cash collections and retention rates of 90% plus contributed the year-over-year growth. For annual maintenance renewals we have recognized revenue on a cash basis, so the timing of cash collections can cause inter-period lumpiness from quarter-to-quarter.

Moving to the consolidated services margins for the quarter, they came in at 56.2% on strong revenue growth. A favorable rupee contributed about 30 basis points to our margin in the quarter and about 40 basis points in the first half. With our recent new hiring ramp up and waiting to get them to full productivity combined with seasonally lower utilization in Q3 and Q4 due to summer vacations and holidays, we expect our full year 2014 services margins to normalize into the 55.4% to 55.5% range.

Operating expenses for the quarter were $35.5 million compared to $30.5 million in Q2 2013. Excluding the $1.6 million sales tax reversal in Q2 2013, operating expense was up 11% driven by performance-based compensation, incremental marketing investment in our annual momentum customer conference, and early stage global investments in facilities expansion and enterprise IT system replacements necessary to support our workforce growth and future scalability. These investments are factored into our 2014 full year guidance and the full run rate impact of the facilities and IT investments will come online in 2015.

Turning to operating income and margins, with strong revenue growth, we delivered record Q2 adjusted operating income of $34.9 million, with an operating margin of 28.5%, up 90 basis points over Q2 2013, which includes the $1.6 million sales tax reversal. For a perspective on full year operating income and margins, let me start with the 2013 baseline. 2013 adjusted operating income totaled $108.6 million, increasing 23% over 2012 with operating margin of 26.2%, up 270 basis points. Apples-to-apples versus 2012 operating income growth for 2013 was 19% with operating margin up 25.3%, improving 180 basis points over 2012. This excluded a total of $3.5 million in favorable FX currency impact driven by the rupee and the sales tax reserve.

So, for the full year 2014, we continue to target 180 to 200 basis point expansion in operating margin approximately the same as 2013. At the midpoint of 190 basis points, this would peg 2014 full year adjusted operating income at about $134 million with year-over-year organic growth of 23% and an operating margin of about 28.1%. So, we expect Q3 and Q4 operating margins to run at about 28.3% and 27.2% respectively, reflecting quarterly license and services revenue mix due to seasonality. So, that covers the above the line operating performance, not too shabby. Below the line, other income was $312,000 in the quarter, which essentially is all interest income, whereas Q2 2013 included $1 million in FX gains representing a $0.01 negative comp impact for Q2 2014.

Regarding taxes, our adjusted effective income tax rate was 37.2% versus 36.4% in Q2 2013. On a year-to-date basis, our effective rate was 37.2% compared to 34.9% last year. Our 2014 higher effective tax rate is due primarily to two factors: first, a higher proportion of U.S.-based taxable income, and second, the expiration of the U.S. R&D tax credit legislation on January 1, 2014. As we mentioned in our Q1 2014 call, in January of 2013, Congress approved both the 2012 and 2013 R&D credit. So, 2013 results includes two years of tax benefit significantly impacting our year-over-year comps. We are currently projecting a full year effective tax rate of about 37.2%, which assumes a second half effective rate of 37.1% and anticipates no Congressional approval of a 2014 R&D tax credit.

Now, transitioning to diluted shares, for the quarter, diluted shares totaled 76 million shares, down from Q1 2014 shares of 76.8 million. We continue to put excess cash to work, investing $25.1 million to repurchase 782,489 shares of Manhattan common stock in the quarter against option exercises of 17,152 shares. For the balance of 2014, we estimate Q3 and Q4 diluted shares to be about 75.8 million and the full year weighted average diluted shares to be 76.2 million. Our estimate does not assume additional common stock repurchases. And finally on shares, last week our Board approved raising our share repurchase authority limit to a total of $50 million.

Now, turning to cash flow, for the quarter, cash flow from operations was $1.9 million and on a year-to-date basis $21 million compared to $33.7 million last year. Capital expenditures were $2.4 million in Q2 and we continue to estimate full year 2014 CapEx to be about $6 to $8 million. Operating cash flow in the first half of this year was impacted by significant increase in global cash taxes paid and record revenue growth. Regarding global cash taxes, year-to-date we have paid $24.3 million in estimated income taxes versus $8.6 million in the first half of 2013. Of the $24.3 million paid year-to-date, $16.4 million was in Q2, which included $6.5 million for 2013 overall representing a $12 million increase over Q2 2013.

Regarding revenue, we closed the quarter with $87 million in trade receivables, representing a $20 million or 30% increase over Q1 2014 driven by growth. Q2 strong total revenue performance across all revenue lines, including large license deal closure in June, pushed the DSOs to 64 days versus 53 days in Q1 2014.

So, overall, we expect our operating cash flow to strengthen in the second half as the quality of our trade receivables and cash collections remains strong and incremental cash tax of paid comps improve. Our balance sheet continues to support long-term strategic flexibility and stability with zero debt and cash and investments totaling $101.4 million at June 30, 2014 compared to $125.9 million at March 31, 2014. The sequential decline in cash and investments was driven by the $25 million investment in our share buyback program in the quarter.

Now, I will update our 2014 guidance and then hand off to Eddie for the business update. Overall, we continue to remain cautious given continued global slow growth. We are expanding our existing revenue guidance range and are increasing our EPS guidance to include the impact of favorable Q2 results. For full year 2014 revenue, we are adjusting our guidance range from $460 million to $465 million to $472 million to $477 million, representing 14% to 15% top line growth over 2013. We expect our full year total revenue percentage split to be about 50:50 first half versus second half. We expect Q3 license revenue to be lower than Q4 license revenue due to typical seasonal summer holidays impacting buying and services revenue down sequentially from Q3 to Q4 due to traditional seasonal holidays.

For adjusted diluted earnings per share, we are raising our guidance range to $1.10 to $1.12 representing 20% to 22% growth over 2013 adjusted EPS of $0.92. Our revised 2014 GAAP diluted earnings per share guidance range is a $1.03 to $1.05 representing 20% to 22% growth as well over 2013 GAAP EPS of $0.86. The $0.07 full year EPS difference between GAAP and non-GAAP adjusted EPS represents the impact of stock-based compensation.

In summary, achieving the midpoint of our guidance will result in a 2014 growth profile of about 15% top line total revenue and 21% adjusted earnings per share. That covers our 2014 guidance.

Now, I will turn the call back to Eddie for the business update.

Eddie Capel - Chief Executive Officer

Thanks, Dennis. Well, first, let me provide a little more detail on the deals we closed in Q2. As I discussed at the beginning of the call, we have recognized three large deals in the quarter one in retail, one in CPG and one in grocery. All three deals were driven by strategic technology modernization programs, with two of the three deals specifically driven by omni-channel initiatives. The other large deal was driven by distribution management legacy system replacement program leveraging our platform based warehouse management system. And as we previously mentioned digital commerce continues to drive omni-channel interest across all retail sub-verticals including grocery. We continue to see solid progress in our core verticals led by the retail segment that’s fueled by the digital commerce revolution and the way in which retailers wish to engage and service their customers.

In Q2 our license fee mix was equally weighted with warehouse management solutions making up 50% and 50% representing our other solutions. A meaningful portion of our WMS and non-WMS license and services revenue activity continues to be driven by existing and new customer omni-channel initiatives and the reinvention of their supply chains. The retail, consumer goods and grocery verticals were our strongest license fees contributors making up more than half of the license revenue for Q2 2014. As software platform technology and experience help our customers adapt to the challenges of the omni-channel marketplace and our efforts are certainly bearing fruit in our net new customer win rate and the loyalty rewarded to us by our existing customer base. And we are certainly very pleased with the successes we have achieved over the past 18 months or so.

Software license wins with new customers that have permitted us to share their names included the Country Road Group, Grupo Bimbo, ICA Sweden AB, ValueVision Media and Yusen Logistics. Expanding relationships with our existing customers included American Eagle Outfitters, Ascena Retail Group, Cleveland Golf Company, David's Bridal, Delta Faucet, Desigual, FEMA, GENCO Holdings, Genuine Parts Company, Giant Eagle, Hudson's Bay Company, Ingram Industries, Nature's Best, Mothercare, Samsung India, Shanghai KW Logistics, Southern Wine and Spirits of America, Super Retail Group, Wineworks, and VF Services.

Our professional services business around the world continues to perform very well and received high mark for customer satisfaction. Now as you might expect, our global services team are in full swing with retail omni-channel supply chain commerce enablement initiatives. With more than 70 system go-lives in the quarter and a busy second half of the year on deck. There continues to be strong focus on store execution solutions and multi-platform – product platform-based implementations, this has been happening over the past few quarters and we expect this trend to continue.

We continue to be the leading innovator in supply chain technology. For the quarter, we invested $12 million in research and development with about 650 people dedicated to R&D. During the first half of 2014, our innovation team has been busy with new product releases. Most of our products released on an annual cycle and many of them typically do release in the spring time. In the quarter we have released our 2014 version of distributor order management with our new available to commerce omni-channel capability providing our retail customers with the ability to make any unit of inventory within their network available to any customer whether that customer be on a mobile device, shopping online or simply standing in one of their stores. Available to commerce is a purpose built – is purpose built to maximize availability, but to do so in an operationally controlled manner. Available commerce is a high velocity real-time availability engine which enables our retailers to ensure their customers’ satisfaction remains high while maximizing profit margins at the same time increasing traditional in-store and online card conversion rates.

Our store inventory and fulfillment solutions continue to gain grant as we assist some of the world’s most successful retailers in transforming their stores into order fulfillment centers of excellence. Since January, we have increased the number of live stores by 65% and more than doubled the number of stores licensed with this solution. We have also just released a new version of store inventory and fulfillment, which offers key enhancements to increase the order fulfillment throughput of a given associate. Additionally, this latest release is at first to be made available on the Android mobile operating system.

Digital commerce and mobility continues to drive considerable focus by retailers on becoming more customer-centric and offering us much choice and convenience as possible. While keeping the promise to the consumer maximizes revenue contribution for our retailers, it can substantially reduce operating margins. And in our 2014 product releases, we have taken a major step toward addressing underperforming inventory through the integration of our inventory optimization suite with enterprise order management.

For the first time in the industry, replenishment algorithms are aware of all inventory segments, retail, e-commerce, wholesale and so on and can predict the demand across the segments and plan inventory utilization accordingly. These segment plans are then shared with enterprise order management to virtually manage a single pool of inventory thus offering significant reduction in inventory whilst meeting demands of all channels. We believe that this new offering represents a notable competitive differentiating capability for both Manhattan Associates and for our customers.

Also this past quarter, we released the latest version of our market-leading warehouse management system for open systems. Many of our larger warehouse management programs over the last few years have been driven by the demands of omni-channel retail and the need for larger, faster and more efficient e-commerce fulfillment. Consequently, a great deal of focus for the 2014 release of WMOS has been geared towards these most complex operations, including capabilities to further improve workflows with greater order aggregation and advanced order fulfillment capabilities. Likewise, e-commerce orders placed greater demand on same day and parcel shipping capabilities than a normal operation and the latest release of our solution provides faster performance and greater carrier choices than ever before.

As you can tell, at the core of our success, continues to be our strategy to grow through investment and innovation, as supply chain process platform-based suite of solutions, including our omni-channel solutions distinguishes us from all other competitors. Our R&D team continues to do an outstanding job of driving innovation in all product areas and we continue to deliver more robust, more efficient solutions to all of the markets that we serve.

As I mentioned in our last call, in May, we held our annual customer conference, Momentum in Hollywood, Florida. Over 1,000 of the best and brightest supply chain professionals came together to exchange ideas and concepts and we had the privilege to share with them Manhattan’s go-forward strategy and progress. The conference theme was get ready, get commerce ready. And at Momentum, we highlighted two essential elements, the concepts of always being ready to sell and always being ready to execute. These strategies help companies become commerce ready and maximize the profitability and scalability of their supply chains for today’s dynamic omni-channel marketing. And of course, these solutions complement Manhattan’s core vision of supply chain commerce. These concepts, the educational breakout sessions, and the customer presentations made for a terrific event that was very well received by all of the global attendees.

Turning to our global associates for a moment, we ended Q2 with more than 2,700 employees around the globe, up about 255 over Q2 of 2013. 95% of our headcount growth is in our professional services group on strong demand to support top line growth and customer satisfaction. We have finished the quarter with 66 people in sales and sales management and 59 quota-carrying sales reps, that is down 2 from last quarter. We continue to look at adding about a half a dozen additional sales professionals, the majority of which will be in the Americas.

So, let me close my prepared remarks with a brief summary. We are very pleased with our 2014 first half performance and we remain focused on our customers and getting them commerce ready. Our relative competitive position continues to be strong and improving. We will continue to invest in innovation to extend our market leadership and differentiation in supply chain commerce enablement. With the world’s most talented supply chain employees, the best software solutions and good market momentum, we are well-positioned for the balance of 2014 and beyond.

So, Stephanie, we’d be happy to take any questions at this point.

Question-and-Answer Session


(Operator Instructions) Your first question comes from the line of Mark Schappel with Benchmark.

Mark Schappel - Benchmark

Hi, good evening and nice job on the quarter, especially in the top line. Dennis, question for you – I will start with you here. Despite the revenue upside in the quarter, cash flow from operations was much lower than anticipated and I believe you addressed that a little bit in your prepared remarks with taxes. I was wondering if you would just kind of go over that metric one more time?

Dennis Story

Yes. Just two – is two primary drivers, Mark. Our cash – global cash taxes paid, we paid about $16 million in Q2, okay, which is $12 million delta over the prior year. Of that $16 million, $6.5 million of that included 2013 final year estimated taxes. It’s all based on higher taxable earnings. That’s a good thing. I guess when you are paying taxes it’s a good thing, right. But more importantly, it’s the record revenue growth. So, if you look at record revenue for the quarter, total receivables was up $20 million over end of quarter Q1 2014 or 30%. And a lot of that has to do with the amount of license revenue linearity that’s recognized in the quarter itself. So, our overall global collections, is very strong. Year-to-date, our global collections are exceeding our revenue and I expect the second half is going to turn out just fine.

Mark Schappel - Benchmark

Okay, thanks. And then another question for you, Dennis, are you raising the license revenue guidance for the year, if I recall correctly, it was formerly like 7% to 8% for the year, is that being raised?

Dennis Story

Yes. Technically we are not giving guidance, but I did say we expect high single to low double-digit growth in the license line.

Mark Schappel - Benchmark

Okay. Then, Eddie, moving over to you, when it comes to the topic of new adjacent areas to move into in the supply chain space, whether it be through internal R&D efforts or go through M&A. I was wondering if you could just kind of whet our appetite a little bit as to some of the areas or capabilities that seem a little – that seem interesting to you?

Eddie Capel

Mark, it’s a terrific question. Obviously, we continue to invest heavily in our platform solutions. We still believe there is plenty of runway for enhancement of the solutions that we have. The omni-channel and the retail revolution clearly is creating opportunity, creating expansion possibilities for us. You have heard me talk a little bit about the success that we have had moving into the store. We have talked about that a little bit before, but certainly even since our last earnings call, we have seen the store enablement solutions go live in hundreds of more stores and thousands more have been licensed. So, you should expect to see us do more in that general area. Mobility is certainly another area that’s we are heavily focusing on in all of our existing solutions and creating new capabilities based upon mobile technology. So, I would say continuing to invest in our platform, look for us to continue to enhance our store capabilities and certainly drive mobile capabilities in the near-term.

Dennis Story

Hey, Mark, if I can piggyback on that too, Eddie mentioned that and yes, this can move from quarter-to-quarter depending on license revenue, but one of the encouraging signs was 50% of the license revenue was WM, 50% was non-WM and a big catalyst for that is our success in the omni-channel related initiatives.

Mark Schappel - Benchmark

Okay, great. And then one final question here with respect to order deal pipeline, Eddie would you characterize it as being bigger or larger than it was last year at this time, if I recall quickly you have done seven $1 million plus deals this year so far and I think that’s about the same as we did last year, I was wondering if you just give us an idea of how you see the pipeline shaping up in that respect?

Eddie Capel

Yes. Sure, I mean I will obviously not going get into specifics Mark, but we are excited and enthused about the pipeline, the big deal pipeline for our license revenue. We are also enthused about our services demand for the balance of the year and going into 2015, so overall, just encouraged by both of those aspects of our business.

Mark Schappel - Benchmark

Okay. Thanks for talking to me.

Eddie Capel

Certainly. Thank you, Mark.


(Operator Instructions) Your next question comes from the line of Terry Tillman with Raymond James.

Terry Tillman - Raymond James

Hi, good afternoon gentlemen. Thanks for taking my questions. Nice job on the quarter. I have got a series of easy questions for you all. Dennis I guess the first one for you is for the services gross margin, as we start to think about over the next couple of years could we start to see that expand again I mean you already have a great gross margin in that combined maintenance and pro-services gross margin, but you are adding a lot of resources, is there some efficiency gain that we should appreciate in the model as we kind of move more into the out years though as a lot of these younger folks that you bring on board start to become productive and off the bench so to speak?

Dennis Story

Absolutely, but it’s we do have world-class margins, so it’s not episodic but absolutely there is leverage in the model.

Terry Tillman - Raymond James

Okay. And I guess Eddie in terms of I mean this quarter the license I mean now we are at $18 million, so we have had three quarters of – it feels like there has been the boats are raising in terms of the business and activity level, it’s not like you have a major increase in seven-figure deals, so I guess in those kind of six figure deals call it $300,000 to $700,000 give or take $100K here or there that kind of mid-size deal activity, are you actually seeing kind of improvement in demand broadening of activity in that kind of (indiscernible) business?

Eddie Capel

Yes. I think that would be a fair characterization Terry that mid-size or mid to upper size deal there has been a healthy pipeline a healthy close rate for us there and anyhow that pipeline continues to be pretty robust for us.

Terry Tillman - Raymond James

Great, it’s good to hear. And I guess my last question is I mean talking about inventory optimization or replenishment I mean that’s like old schools talking about old Evant business, as you talk about kind of integrating with order management and this part of omni-channel, are you seeing improved activity around your replenishment solutions or is it too early to tell if you could start to see some healthy pull-through of that product set?

Eddie Capel

Yes. We are seeing good activity Terry. I do think that and we have talked about this a little bit before at our user conference with our customers and so forth. I think that in the continuum of this omni-channel revolution, most retailers and they are beginning to really be challenged by the inventory attributes of this revolution meaning that it is not uncommon for our customers today to be operating with safety start frankly in every single channel in which they operate versus being able to look across all of those channels, pool inventory, manage one level of safety stock and obviously drive capital advantage in that regard. And by integrating our solutions together in a differentiating and a creative way, we think that we can really help them to get the most out of their working capital and their inventory and of course create some differentiation for us.

Terry Tillman - Raymond James

That’s it for me. Thanks guys.

Eddie Capel

Okay. Thanks Terry.


(Operator Instructions) There are no additional questions at this time.

Eddie Capel - Chief Executive Officer

Okay, very good Stephanie. Thank you very much. Well, thank you everybody for joining us on the Q2 earnings call. Enjoy the rest of your summer. And we will look forward to talking to you in about three months from now. Bye-bye.


Thank you. This concludes today’s conference. You may now disconnect.

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