Premier Exhibitions CEO Discusses F2Q 2012 Results - Earnings Call Transcript

Oct.13.11 | About: Premier Exhibitions, (PRXI)

Premier Exhibitions, Inc. (NASDAQ:PRXI)

F2Q 2012 Earnings Call

October 13, 2011, 9:00 a.m. ET

Executives

Chris Davino – President and CEO

Mike Little – CFO

Mark Sellers – Board of Directors

Analysts

Sam Yake – BGB Securities, Inc.

David (Daggitt) – Private Investor

Mario Skonieczny – Classic Value Investors

Norman Klein – Private Investor

(Iilia Frankstein)

Kenneth Miller – Nokomis Capital

Operator

Good afternoon, and welcome to the Premier Exhibitions Fiscal 2012 Third Quarter Earnings Results conference. Today’s call is being recorded. I would like to remind everyone that the company will be making forward-looking statements on today’s call. These forward-looking statements are based on current expectations, and are subject to a number of risks and uncertainties and are not guarantees of future performance. Undue reliance should not be placed upon them as actual results might differ materially.

Please refer to the risk factors identified in the company’s Form 10-K for the period ended February 28th, 2011 and subsequent filings with the Securities and Exchange Commission for a more detailed discussion of the risks that may have a direct bearing on the company’s operating results, performance and financial condition.

And now, I would like to turn the conference over to Christopher Davino, President and Chief Executive Officer of Premier Exhibitions Incorporated. Please go ahead, sir.

Chris Davino

Good morning, everyone. Thank you taking the time to call in this morning.

First, I’m going to turn the call over to Mike Little, who’s going to go through the quarterly results, and then Mike and I will take questions. I’m sure there will be a few, given we haven’t spoken since the court ruling came out, and the announcement that we made a couple of weeks ago with regard to splitting the company in to two divisions. I’m happy to talk about that. But first, let me turn the call over to Mike, to go through the results.

Mike Little

Thank you, Chris. Hello, everyone, and thank you for joining us today. With respect to the second quarter, as previously stated, we had anticipated that it would be a challenging quarter; due to the planned fewer exhibited days, and lower average daily attendance. These reductions were expected due to the seasonality of our permanent shows, and the less-than-full utilization of our traveling shows.

The revenue decreased for the quarter by 40% to 8.2 million from 13.7 million last year due to four fewer exhibitions presented. And as a result, lower overall attendance.

We had over 1,099 operating days in the second quarter fiscal 2012 compared to 1,757 operating days in second quarter of 2011. This reduction in revenue and operating days were the result of exhibiting our self-run Bodies exhibits and the utilization of our remaining shows.

Gross profit was 3 1/2 million compared to 4.9 million in the previous year, a 28.5% decline. While gross profit did decline, [inaudible] gross profit margins improved significantly this year from 42.9% from 36% in fiscal 2011. As the increase in the performance of our permanent locations and selling off more the touring exhibits within our overall exhibition portfolio, provided us with greater stability and better cost management.

EBITDA for the quarter came in at a loss of 1.1 million, adjusting for one-time non-reoccurring litigation and impairment charges [inaudible]. Our adjusted positive EBITDA, we had an adjusted – we had a positive adjusted EBITDA for the quarter. We were encouraged that the adjusted EBITDA remained positive, as we controlled expenses, although it still fell 900,000 [inaudible] fall off in total revenue.

In addition, we were pleased that our cash balance year-to-date remains positive, even with the capital expenditures in the second quarter for our new exhibit in New York.

Our GAAP net losses, inclusive of the charges that I will explain momentarily, was 1.8 million or a negative $0.04 per diluted share compared to a net loss of 200,000 or $0.00 per diluted share in the second fiscal quarter of 2011.

Delving into the results a little further, exhibition revenues decreased 42% to 7.3 million from 12.6 million in the year ago period. We had 658 fewer operating days, which was a 37 [inaudible] decrease and a 216-person drop in average daily attendance, which was a 32% decrease, offset slightly by a 6.2% increase in our average ticket price.

Merchandise and other revenue decreased 18% to 900,000 during the second quarter of fiscal 2012 from 1.1 million in the same period last year. While merchandise revenue declined on an annual basis, spending at our exhibits on a per-visitor basis increased during the period. We think that over time, merchandise revenue will provide a strong contribution to gross profits, and this remains one of our key operationally focused areas.

The merchandise changes we have already implemented, including adjusting product mix at our permanent venues, installing a new inventory management system to control cost and manage inventory levels, and renegotiate vendor contracts to reduce cost and improved margins are clearly paying off.

And finally, we began – we just recently began introducing new Titanic products, well in advance of the 100 anniversary next April, which we are hopeful will be well received by our customer.

Exhibition cost fell 48.2% to 4.4 million compared to 8.5 million in the second quarter of 2011. Once again, we benefited from exiting the self-operating Body touring segments in our business, and should experience incremental year-over-year benefits over the next two quarters with [inaudible] in the market.

Turning to overhead expense, G&A decreased by 13.4% to 3.4 million. The decline was due to lower rent cost, reduced professional fees, and lower compensation expense being more precise, while compensation expense – while compensation expense of 1.4 million for the quarter was flat from the same period last year. Last year’s compensation expense benefited from a reversal of a bonus accrual and the capitalization of corporate compensation expense relating to the 2010 dive totaling $0.5 million. In other words, while the numbers are flat in the comparison, we are achieving reductions in compensation expense.

While much of the heavy lifting on this line item is already behind us, we know that for us to generate positive cash flow, and positive EBITDA, gross profit margins must exceed our G&A expense.

On an annual basis, close to $5 million in overhead cost have already been taken out of business, and these benefits will be continued to be reflected in our results over the next few quarters. In addition to these cost savings, recently we’ve consolidated our lab and warehouse facility, reducing future rent cost in excess of $800,000 over the next five years.

I would now like to address two one-time charges, which affected our quarterly GAAP results. First, we incurred an impairment charge of 400,000 as we opted to terminate our license and agreement with Playboy International. As you may recall, we have been developing an exhibit under the Playboy license agreement with my joint venture partner. But for strategic reasons, we have decided not to move forward with this project.

For accounting purpose, the joint venture was allocated 200,000 of the impairment. And the net impairment impact to Premier was 200,000.

Second, we settled outstanding litigation, Sports Immortals Inc., for approximately $1 million. 800,000 of litigation expense was incurred in the second quarter, while 200,000 was already reserved in fiscal 2010.

Finally, included in these expenses from these two items, losses from operations in the second quarter was 1.8 million compared to a loss [inaudible] of 200,000 the same period last year. While we appreciate that our quarterly performance will always be somewhat correlated to attendance patterns, we remain focused on identifying additional areas, where we can control operational cost, trim our overheads, and realize further savings.

In terms of the balance sheet, cash and marketable securities combined were 4.1 million at the end of the second quarter, a $300,000 improvement from 3.8 million at the end of last fiscal year, while operating cash flow was down 121,000 compared to decrease of [inaudible] million last [inaudible] quarter.

Operating cash flow is moving in the right direction, both for the quarter and on a year-to-date basis. And we will continue to pay close attention to the deployment of our [inaudible].

With that, Chris and I will be happy to answer any questions that you might have. Operator, please open the lines for questions.

Question-and-Answer Session

Operator

Thank you, sir. (Operator instructions). Our first question today comes from Sam Yake, BGB Securities.

Chris Davino

Good morning, Sam.

Sam Yake – BGB Securities, Inc.

Good morning. I just had a – I’m wondering, since the Titanic, the Titanic ruling recently, have you been contacted by any potential buyers for the collection?

Chris Davino

We have not.

Sam Yake – BGB Securities, Inc.

You have not. Do you have a systematic way you’re looking at who potentially could buy the collection and, you know, how many people worldwide that may be? I would think it’s a relatively small pool.

Chris Davino

Well, I guess I’ll answer your question this way. Obviously, our focus, with regard to Titanic is maximizing value on behalf of shareholders, but doing it in a matter consistent with our role as steward of the collection and the wreck site. And I can tell you, at this stage, you know, obviously, we’re evaluating our strategic alternatives in that regard.

I’m not sure I can answer your specific question about, you know, who might be out there. What I probably can address is how we’ve positioned, or tried to position this property over the course of time.

Sam Yake – BGB Securities, Inc.

Okay. Thank you so much.

Operator

Next up, we’ll hear from David (Daggitt), Private Investor.

David (Daggitt) – Private Investor

Good morning.

Chris Davino

Good morning, David.

David (Daggitt) – Private Investor

I was wondering – good morning. I was wondering if you could expand on new Titanic products you mentioned you might be marketing next year in conjunction with the 100th anniversary. And also, how they will be marketed, and perhaps a little update on your plans for the exhibition in Michigan that I believe is scheduled to open next year as well?

Chris Davino

Sure. Let me start with the first part of your question. We’ve done a lot, or tried to do a lot over the course of time with the benefit of the assets and intellectual property created from Exhibition 2010 to dimensionalize the brand, if you will, beyond the exhibitions. We’ve got deals locked up with, or in process of being locked up with various media – media and entertainment companies to take these products to the market, be it, you know, documentaries on Exhibition 2010, unique objectives compared to what’s been done in the past out at the wreck site, to utilizing the really unique, high-def 3D video that we have for a separate TV segment that is somewhat of a narrated tour of the ship with similar content factored in.

So those are at least, you know, two products that we’re intending to bring to market. We’ve got other arrangements that are probably too early stage for me to really describe fully, but working with, again, other media and entertainment companies for – looking to utilize their outlets, be it magazine special editions, website connectivity. It’s really to deliver this unique, you know, and recently developed intellectual property to the Titanic fans around the world.

So I, obviously, can’t be too more specific at this point about our plans, but I can assure you that we’ve got fairly comprehensive plans to touch the marketplace in ways well beyond what we had done in the past, which are then really the narrow confines of the Exhibition business, taking these assets to the market with, you know, again, partnerships with various first-rate media and entertainment companies.

David (Daggitt) – Private Investor

Okay, and could you give an update on the plans for the Michigan Titanic Exhibition?

Chris Davino

Yeah, well, I can tell you just broadly at the anniversary, we’ve got the Titanic shows built really around the world, including in Michigan at the Henry Ford, which opens, I guess, in late March. Like all of exhibitions, you know, at the anniversary, we’re trying to, again, bring the story of Titanic to the marketplace, you know, adding some features into the show, you know, utilizing some of the content that we have developed to create a more engaging experience than what we had done in the past.

David (Daggitt) – Private Investor

Thank you. It sounds like next year will be a very interesting year.

Chris Davino

It should be.

Operator

Up next we’ll hear from Mario Skonieczny, Classic Value Investors.

Chris Davino

Good morning, Mario.

Mario Skonieczny – Classic Value Investors

Hey, how are you?

Chris Davino

We’re good.

Mario Skonieczny – Classic Value Investors

You guys recently, you know, the reorganization of your company and you made certain segments of your business. Can you talk a little bit about your reasoning behind it for a little bit?

Chris Davino

Sure. Absolutely, Mario. I think it’s obvious to everyone that at the end of the day we’ve got two very different businesses here; The Titanic Content business line that includes the assets, not only the artifacts but all the intellectual property that’s been developed over the course of time, the interactive site survey map, the mosaics of the ship, you know, both first-time assets in the world of Titanic, the rights to the shipwreck, the non-exhibition Titanic business from our web presence to our ecommerce presence. Again, all the media and entertainment relationships as well as the relationships across the oceanography space and archaeological space that all get to the stewardship of the wreck site itself, and the preservation of the wreck site and really, the preservation of the Titanic’s legacy.

So all of that is basically one business. The exhibition operations are quite a different business, be it Bodies, the Titanic shows, Dialog in the Dark and new projects that will peruse over the course of time.

The objective really was to segregate the businesses along those lines and to focus [inaudible] really to begin to really focus, although we’ve been doing this, you know, along the way, to focus resources in either of those two directions. And you know, to be candid, that really begins with me, where today, I’m spending, you know, giving up the business as Mike has described, and we’ve gone into some length on prior calls, you know, is largely, we think, fixed. I mean, it’s been simplified, cost has been stripped out, the inventory has been reduced, et cetera, et cetera. So with the benefit of that, I’m spending more and more of my time, you know, on Titanic so that we can realize on the value proposition that we began to build towards over the last two years, to take advantage of the anniversary that’s forthcoming.

Mario Skonieczny – Classic Value Investors

I see. And when you were talking about various strategic initiatives, I know you can’t talk much about details, but as shareholders, what kind of – what kind of possibilities? Could you mention any?

Chris Davino

Well, you know, maybe I can do it this way, Mario. And you know, I want to be somewhat circumspect here and take this on in the context of a hypothetical. But I think it probably provides a little bit of clarity as to what we’ve been trying to achieve and build towards over the last two years.

So when you think about very much a hypothetical mon summation of the collection, you know, whenever that were to occur down the road, probably the best way to think about what we’ve done and how we might position that is to put yourself in the shoes of a potential buyer. Again, hypothetically.

So if you consider, again, hypothetically, that a buyer group might include an institution like a museum plus [inaudible] factors of one step or another, you look at what they might be acquiring. And obviously, it’s more than just the artifacts. What we’ve been trying to build is a real brand around this property that includes, you know, again, a brand that’s beloved the world over. There are, you know, through our research, 6 million searches a month on the word Titanic. It gives you a sense on the reach and sustained reach of Titanic 100 years after her sinking. That’s pretty significant in the world of brands today.

We’ve been, again as I said earlier, trying to create connectivity to the marketplace, you know, beyond the exhibition. So if you’re, you know, a potential buyer group, that includes institutions, you know, individuals, whatever, it’s that connectivity that I think resonates and the means to deliver it through these various outlets be it [inaudible], et cetera. And really, the opportunity to preserve Titanic legacy, not only the legacy the mother shipwreck in partnership with all these various institutions that we’ve developed relationships with overtime, spanning both the public and private sectors.

So I’m saying all that in terms of very much a hypothetical, but I think it speaks to how we tried to position the brand, or built a brand over the last two years. And I think we’ve made great progress in all those areas where today we have a very much dimensionalized property that goes beyond what we started with a few years ago.

And again, all I can say, as I said earlier, is at this stage we’re evaluating all of these alternatives. But what we have been focused on, I think what we’ve done a good job in trying to create is butting these buildings [inaudible].

Mario Skonieczny – Classic Value Investors

I see. Thank you very much.

Operator

Next up is Norman Klein.

Norman Klein – Private Investor

Hi, Chris. How are you?

Chris Davino

Good, Norman. How are you?

Norman Klein – Private Investor

Fine, thank you. A couple of questions. How many artifacts do we have title to? The reason I’m asking is that in prior PRs, you’ve used the number 5,500 and when I add up the court rulings, it seems like it’s a number less than 5,000. What is the exact number that we have title to at this point?

Chris Davino

I’ll turn the question over to Mike.

Mike Little

Norman, I’ve researched that because I knew at one point you asked that last quarter. As I sat down with our curator, it’s a lot of – it’s the definition on a piece. So if you take, let’s say, a saucer or a cup, and if that cup, you know, we picked up that artifact from the bottom, and let’s say if that cup was broken in two pieces, is that one artifact or is that two artifacts. So the 5,500 on what we have up there are all those individual pieces of our entire collection. So that’s the difference as, you know, at some point they may speak about 5,000 artifacts, or 55, you know, 5,500 artifacts, that’s the difference.

Norman Klein – Private Investor

Okay. And I know I’ve asked this question a while back. Do we have adequate insurance for this collection at this point in case of theft or natural disaster?

Chris Davino

Yes, Norman. Very good question. The short answer is yes. Mike, do you want to talk about the specifics?

Mike Little

Yes, we recently renewed all our policies. We went through and looked at all of our [inaudible]. But to answer your question, yes. We have adequate coverage on all of our Titanic artifacts and Bodies specimens.

Norman Klein – Private Investor

Okay. Are you, in the near term, planning to tap the credit line that we have?

Chris Davino

Norman, I don’t think we’re in a position to talk about our plans with regard to future, you know, capital raises in any form, including the equity line.

Norman Klein – Private Investor

Okay. And what about Vegas? I mean, that seems like, you know, last year you were saying something was going to open up before the Super bowl and then that was delayed and I looked at some filing you did and we deferred half of the rent for some future date and – are we collecting anything on that now, and is there anything that is going to utilize that space anytime soon?

Chris Davino

Yeah. I’ll give you my answer to that and Mike can provide maybe a little bit more color commentary. We subleased that space to an exhibition operator who’s developing a new sports-related property. There has been delays. We’ve got a firm contract with him and rents are being accrued for a couple of months now and he’s, you know, trying to get the exhibition opened.

The benefits to us is, we’ve got a built-out space now that if you weren’t successful, I’m not saying he’s not going to be, then we’d be able to take over a space that’s been, you know, significantly improved with other people’s capital. But we’re hopeful that that exhibition will, you know, get up and running and that it will be successful and provide an opportunity for us to cross promote and drive traffic to our other exhibitions – to our exhibitions that are out there.

Norman Klein – Private Investor

I mean, like – I’m sure you guys explored this, but like would it have made sense to put Dialog in that third space [inaudible]?

Chris Davino

We’re not sure that Vegas is the right market for Dialog. Obviously, we’ve considered other content over the course of time, but with our capital constraints and other projects that we had going, it really just made sense four us to sublease that to a third party. We try to get the same benefit of having content, you know, a third type of content in the property that would drive traffic to ours as well. But I think we’re pretty well positioned with that. If he’s successful, we’ll be successful. If he’s not successful then we’ll be able to take over the space that’s been built out.

Norman Klein – Private Investor

Okay. And how is Dialog doing in New York? How are the attendance numbers looking?

Chris Davino

Well, look, it’s, you know, relative – it’s a relatively new property there. We recognize that this is going to take, you know, is going to build over the course of time in many ways through word of mouth. We’ve got a relatively limited marketing budget as compared to other property spend in the New York marketplace, you know, when they open. And you know, this is – Dialog is somewhat unique. What we tried to do, and I think where we’ve been successful so far is we built a really unique experience that far – true to what the Atlantic experience is in all it’s dimensions. It’s been really well received by the media. We got great reviews from the New York Times, which is a relatively tough outlet to get a good review from, as well as some others. Our marketing now, I think, does a much better job in our online presence, a much better job in articulating what this unique experience is to try to create advocacy – first awareness and then advocacy over the course of time.

We’ve also put in place – we’ve kind of experimented in Atlanta and we’re now rolling it out in New York, various forms of programming; entertainment programming and the like, so we can touch the marketplace at various levels; each one leveraging off each other. And again, I credit my team, you know, I put some really solid partnership relationships in place in New York to drive this as well.

But that all said, this will take some time. Now, we opened it late because of some issues that the Seaport – our landlord had with the building, so we effectively missed the summer season. We’re opening in kind of the slowest part of the year, so the slowest part of the year coupled with the fact that, you know, we missed the summer marketing opportunity and our just overall limited marketing budget, this will take a couple of quarters to get going in New York.

Norman Klein – Private Investor

Okay. And I read somewhere that you use Groupon for driving some traffic at one of the venues. Did that work out for you guys?

Chris Davino

Yeah, what – we are definitely doing more of that in our – with our installations. I think it’s a little bit different as you across market to market, but yes, we’ve had some success with some of those outlets if you will.

Norman Klein – Private Investor

Okay. Okay, thank you very much. Good luck.

Chris Davino

Thanks, Norman, appreciate it.

Operator

(Operator instructions). Next up is (Iilia Frankstein).

(Iilia Frankstein)

Yes, hi. I’m just wondering. I’m look at press release and I don’t see the Titanic assets on the balance sheet. Would you explain why?

Chris Davino

Yes. The I’ll give you my answer, then Mike will give you maybe more of an accounting answer. But they’re carried at cost, which is basically the cost that we’ve incurred over the course of time to bring them to – to basically recover the artifacts. There has not been the opportunity to record those at market value for a whole host of reasons. So today, they’re still appropriately carried at historical cost.

Mike Little

Yes, there’s no accounting treatment that allows me to mark up the assets, and mark-to-market is based on the appraised value. So as that stands, it’s the cost that’s on our books is basically the salvage cost, the cost to get those artifacts.

(Iilia Frankstein)

So is it going to appear on the balance sheet at some point?

Chris Davino

I don’t think we can foresee a change, you know, we’re obviously taking a look at it and working with our accounts to look at the appropriate accounting for these assets. But at the moment, I think they’re appropriately carried at cost.

(Iilia Frankstein)

Just so I totally understand you response, so…

Chris Davino

I’m sorry?

(Iilia Frankstein)

I don’t think I understood. Maybe I don’t fully understand your response. You described that they’re accounted for this way because of their accounting policies, you cannot record it? You cannot properly record this on the balance sheet?

Chris Davino

What I’m saying is, it is properly recorded pursuant to accounting protocol. It’s properly recorded at cost.

Mile Little

But not at appraised value. We do have title to all the artifacts.

Chris Davino

So the difference between what we think they’re worth, which is conceptually market value, which in this case is appraised value for lack of another marker if you will. But accounting principles dictate that it needs to be carried at historical cost, which is the cost of salvage. There’s a huge difference between those two numbers, but I think the accounting appropriately reflects what it is, at cost.

(Iilia Frankstein)

I see. I see. And what was the cost of recovery?

Chris Davino

The number on the balance sheet today, Mike, is?

Mike Little

$3 million.

Chris Davino

I think it’s like $3 million.

(Iilia Frankstein)

Okay. All right. Thank you.

Chris Davino

Thank you. Thank you for your question.

Operator

And we have a follow up from Mario Skonieczny.

Mario Skonieczny – Classic Value Investors

You know, I thought I had a question, but everything has been answered, so I don’t have any additional questions.

Chris Davino

Okay, Mario, thank you.

Operator

Thank you, sir. We’ll go to Kenneth Miller, Nokomis Capital.

Kenneth Miller – Nokomis Capital

Hi, good morning.

Chris Davino

Good morning, Dennis.

Kenneth Miller – Nokomis Capital

I was wondering, you’ve done a great job in the first half of this fiscal year not burning any cash despite accounting losses. Do you anticipate being cash flow positive or cash [inaudible] of the fiscal year and do you think you’ll need to raise capital?

Chris Davino

Yeah, I think we can’t really get into the forward-looking side of the business at this juncture. I think Mike described, you know, well what we’ve done to strip costs out on a permanent basis to scale back largely to the permanent installations that have, you know, a historic track record of attendance and cost and therefore margin as well as to with the operating business, look to not only doing self-runs, look to do shows with partners, be it museums or promoters, almost exclusively so that we’re not putting capital at risk. So that, you know, that’s kind of the business plan if you will for the exhibition side of the business. We’ve, you know, our major move in terms of exhibition – new exhibitions of late [inaudible], you know, New York, so take all that for what it’s worth as you contemplate what the future – what you think the future holds. I don’t think we can really get into a specific answer to your question.

Mark Sellers

This is Mark Sellers. I just want to chime in here.

Chris Davino

Go ahead, Mark.

Mark Sellers

This is Mark Sellers. I just want to chime in here. There’s a huge amount of pressure on management from the Board, including me, to not burn cash and to not have to use that equity line. We can’t say for sure whether we will or won’t, but I can tell you that the Board is putting a massive amount of pressure on them to not to try to tap – not to tap that. That’s pretty much all we can say at this point.

Kenneth Miller – Nokomis Capital

Okay, thank you.

Operator

And everyone, at this time – actually, we did just get a question from Norman Klein.

Norman Klein – Private Investor

I didn’t know Mr. Sellers was on the call, but since he is, I have a question for him. How committed are you still in [inaudible] with your equity in the company and getting the value that you feel you want to get from the sale? I’m sure you have some – maybe some pushes from your investors to monetize this. How far down the road are you willing to stay with this thing?

Mark Sellers

Well, my investors and I are on the same page and that’s that we’re going to get the best possible outcome for us and therefore, for the shareholders of the company given the fact that we can’t take an infinite amount of time, which means that we are running as fast as we can to get to an outcome that is good for everyone. But whether that takes two weeks or two years, you know, I can’t say that with any sort of certainty right now. All I can [inaudible]. Basically, that’s all I spend my time on these days, is trying to get to a positive outcome for everyone.

Norman Klein – Private Investor

Okay. And I’m going to ask you a question, which I'm not sure it’s a fair question for Chris. But I remember when you brought him on board, you had a call introducing him and you made a statement to the effect that if Chris is successful, we will have paid him too little, and if he hasn’t been – if he’s not successful, we will have paid him too much. Two-and-a-half years down the road, do you think we’ve paid him too much?

Mark Sellers

Well, the jury is still out on whether he’s going to be the cheapest CEO of all time, or the most expensive. So I’m going to refrain from…

Norman Klein – Private Investor

Okay. Sorry about that question, Chris, but I…

Chris Davino

No, no, that’s great. That’s a great question.

Norman Klein – Private Investor

I remembered that and I just wanted to see.

Chris Davino

Norm, I think Mark’s response is perfect. The jury is out. Let’s see what we can do from here.

Norman Klein – Private Investor

Okay. Okay, well, best of luck you guys.

Chris Davino

Thank you so much.

Norman Klein – Private Investor

Thank you.

Operator

And at this time, there are no further questions. I’ll turn the conference back to Christopher Davino for any additional or closing remarks.

Chris Davino

Well, again, thank you, everyone for the thoughtful questions. Mike and I are always available to answer any follow-up questions. You know how to reach us. And again, thank you so much. Have a great day.

Operator

Again, ladies and gentlemen, that does conclude today’s conference. Thank you for your participation.

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