Smith Micro Software, Inc. (NASDAQ:SMSI)
Q1 2016 Results Earnings Conference Call
April 26, 2016, 04:30 PM ET
Charles Messman - Investor Relations-MKR Group
Bill Smith - Chairman, President and Chief Executive Officer
Steve Ziggy Yasbek - Chief Financial Officer
Carla Fitzgerald - Chief Marketing Officer
Rich Valera - Needham & Company
Kevin Dede - Rodman
Jeff Bernstein - Cowen Prime
Good day and welcome to the Smith Micro Software First Quarter 2016 Financial Results Conference Call. Today’s conference is being recorded.
At this time, I would like to turn the conference over to Mr. Charles Messman. Please go ahead, sir.
Thank you, operator and good afternoon. Thank you for joining us today to discuss Smith Micro's financial results for the first quarter ended March 31, 2016. By now, you should have received a copy of the press release with the financial results. If you do not have a copy and would like one, please visit the Investor section at www.smithmicro.com or call us at 949-362-5800 and we will email one to you.
On today’s call, we have Bill Smith, Chairman, President and Chief Executive Officer of Smith Micro; Steve Ziggy Yasbek, Chief Financial Officer; and Carla Fitzgerald, Chief Marketing Officer and myself Charles Messman.
Please note that some of the information you will hear during our discussion today will consist of forward-looking statements, including without limitation those regarding the company’s future revenue and profitability, new product development and new market opportunities, operating expenses and company’s cash reserves.
Actual results or trends could differ materially from our forecast due to a variety of factors. For more information, please refer to the risk factors discussed in Smith Micro’s Form 10-K for 2015 and Form 10-Q filings for the three quarters of fiscal 2015.
Smith Micro assumes no obligation to update any forward-looking statements or information which speak only as of the respective dates. Before I turn the call over to Bill Smith, I want to point out that our forth coming prepared remarks, we will refer to certain non-GAAP financial measures. Please refer back to our press release disseminated earlier today for a reconciliation of the non-GAAP financial measures.
With that said, I'll now turn the call over to Bill. Bill?
Thanks, Charlie. Good afternoon everyone and thanks for joining us today. Looking at the first quarter results, revenue for the quarter was $7.2 million, which exceeded our expectations and our guidance. We also have done a good job of preserving cash, where we have ended the quarter at $13.1 million, an increase over 2015 year end cash balance.
During the first quarter, we made good progress on the recent deals we closed in Q4 of 2015 and remain on track with the deployments scheduled. The sales pipeline is very solid and extremely active.
In fact, I am pleased to see the pipeline warranting us adding sales executives that we just brought on board. I am confident we are well positioned to see accelerated growth in the second half of the year.
During our last earnings call we announced the pending acquisition of Birdstep Technology's AB, based in Sweden. We completed the acquisition on April 7, and the team is aggressively working to integrate the people, products, customers and facilities into our business operations.
I will share more details on our progress with the acquisition, our growing pipeline, and other highlights for the quarter right after Ziggy provides the detailed financial results. Ziggy?
Steve Ziggy Yasbek
Thank you, Bill. First, let me go over our customary introductory items. As we have in past quarters we have provided non-GAAP results and a reconciliation of non-GAAP and GAAP results.
The non-GAAP results discussed on this call net out stock based compensation related expenses and normalizes our tax expense or benefit to provide comparable operating results. Accordingly, all results that I refer to in my prepared remarks for both 2016 and 2015 are non-GAAP amounts.
Our earnings release which will be furnished to the SEC on Form 8-K contains a presentation of selected GAAP financial measures and related non-GAAP financial measures and a reconciliation of the differences between the two. The earnings release can also be found in the Investor Relations section of our website at www.smithmicro.com.
In terms to our currently completed first quarter, let me provide some details. For the financial modelers let me provide the difference between GAAP and non-GAAP P&L metrics.
In terms of stock compensation, stock comp totaled $361,000 for the current period, broken out as follows; $2,000 cost of sales, $70,000 selling and marketing, $121,000 R&D and $168,000 G&A.
Because of our losses over the past few years, our GAAP tax expense is primarily due to foreign income taxes. For the first quarter of 2016, this reflects a favorable non-GAAP tax adjustment of $1,287,000 million.
For the first quarter, we posted revenues of $7.2 million and a loss of $0.04 per share non-GAAP. This compares to revenue of $10.5 million for the same quarter last year. International sales was approximately $134,000 this quarter across all our business groups.
Our wireless segment reported revenues for the quarter of $6 million, as compared to $9.2 million last year. Our graphics segment posted revenues of $1.2 million, as compared to $1.3 million last year. Total deferred revenue at March 31, 2016 was $1.1 million.
Switching now to gross profit, non-GAAP gross margin dollars of $5.1 million compares with $8.4 million during the same period last year. Non-GAAP gross margin as a percentage of revenue was approximately 70.7% for Q1 of 2016, compared to 79.9% for Q1 of 2015.
The decrease in gross margins was primarily due to the lower sales and the product mix. Non-GAAP gross margins by business segment were as follows. Wireless was 78% and graphics was 75%.
Switching to operating expenses, non-GAAP operating expenses for the first quarter of 2016 were $8.4 million, an increase of $600,000 or 8% compared to the first quarter of last year.
From a year-on-year perspective, selling and marketing expense increased 9%, engineering expense has increased 20%, but G&A expense decreased 8%. Non-GAAP operating loss for Q1 was $3.3 million, as compared to operating income of $610,000 in Q1 of 2015.
Non-GAAP net loss for the first quarter was $2.1 million or $0.04 loss per share, as compared to net income of $378,000 or $0.01 earnings per share last year. Cash increased for quarter by about $200,000 ending at $13.1 million at March 31, 2016.
With regard to guidance, we expect revenues for the second quarter of 2016 to be up slightly from the first quarter in the range of $7.3 million to $7.6 million. Revenues should start to grow at a higher rate starting in the third quarter.
In terms of housekeeping, we expect to file our quarter end 10-K by the end of this week, which will represent our final statements for the period.
And at this point, I'll turn the call back over to Bill.
Thanks, Ziggy. I am very excited about the progress we are making with current customers and the continued growth in our sales pipeline. The proliferation of Wi-Fi is opening up many new opportunities with carriers, cable companies and MVNOs who want to first make Wi-Fi discovery easier that can offload data to reduce cellular roaming cost, third measure and manage quality of service over Wi-Fi and finally, automate the provisioning of Wi-Fi services including secure handling of end user credentials.
Our NetWise solution addresses all of these needs and the flexibility of the platform allows us to start in one area and grow our footprint over time. Analytics is a common entry point for many of our accounts, customer intelligence becomes increasingly important in competitive markets and NetWise provides critical insights into the user experience that are not available from network base or application base analytics solutions.
Our unique device based analytics help to improve wireless services, accelerate network and device troubleshooting and more precisely target customers for new products and services. As a result, we have deals in play with both service provider sand enterprise customers who want more mobile intelligence to seize their big data initiatives.
The Internet of Things or IoT space is a third area fueling the pipeline, as IoT deployments begin to scale, the cost and time to manually update device firmware and functionality becomes unwieldy.
Our NetWise device management and further solutions, provide efficient over the year diagnostics allowing configuration and firmware updates to reduce these maintenance costs, while also ensuring systems are flexible enough to support new features and evolving device type.
Because NetWise is highly reliable and inexpensive to deploy, particularly compared to competitive offering, it is well suited for the connective house, transportation and industrial IoT scenarios and we have sales cycles developing in these areas as well.
As I stated earlier in the call, to capitalize on the growing market traction, we have already hired several new sales executives, with experience from industry leaders like Ericsson, Nortel and Syniverse.
We also have a new sales executive based in Asia from the Birdstep acquisition. One of the benefits we described coming from the Birdstep acquisition was a rich international sales pipeline and the progress in that territory is going well.
We expect to close a commercial deal this quarter with a large telecom operator in Asia Pacific that has several million mobile and broadband customers. We also have pilot project starting with two different carriers in the region and we hope to convert these two commercial agreements in the second half of the year.
The Birdstep transaction provided us with a number of benefits beyond the sales pipeline, including the addition of a very strong technical team. Our Stockholm office includes engineers, quality assurance testers, product managers and program managers with an average of 12 years in the wireless industry. A leading technical company such Ericsson, Nortel, TeliaSonera I and Nokia.
Half of them have master’s degrees in subjects like computer science, mobile computing, electrical engineering and artificial neural networks. Some have MBAs and marketing and finance to accompany their technical degrees and we even have a few patent holders in the group.
In the highly demanding and complex wireless space, the value of experience cannot be overstated. Adding this team of well trained technical resources who are immediately productive will help us accelerate our product roadmaps and deliver customer-specific solutions that differentiate us in the market.
Our ability to customize solutions to meet the unique needs of our customers is a key reason why companies choose Smith Micro and this team is excited to help us innovate, execute and exceed our customer expectations.
From a product perspective, the Birdstep acquisition supplied us with advanced virtualization and data streaming capabilities that will enhance our NetWise analytics solution. The technology supports used cases where near real time analytics are valuable, such as troubleshooting, network management, customer care and targeted advertising.
In addition, we now have a solution for Wi-Fi provisioning that is already in commercial deployment. The solution works with Wi-Fi network partners like Boingo and passes subscriber credentials from the cellular to the Wi-Fi network automatically behind the scenes, which simplifies access to Wi-Fi for the end user by also maintaining network security.
These are just two of many areas in which Birdstep technology is adding value to our NetWise platform. We plan to re-brand and take these solutions to a broader market in Q2 and Q3 of this year.
The acquisition of Birdstep is a great example of the type of companies that fit well with Smith Micro, offering complementary technology, a team of experienced engineers in a location or tangential market that gives us access to new customers. We will continue to look for comparable small companies that can help Smith Micro grow faster, while maintaining the healthy balance sheet.
As I said earlier, we remain on track to grow revenue significantly in the second half of the year. The NetWise deployments with new carrier and cable customers I described last quarter are on track, as our NetWise Captivate deployments in the enterprise space.
Moreover, we have a NetWise Captivate pilot project schedule to launch this quarter which we see as a great opportunity. I cannot provide any further details, but it is very promising and a top priority for the quarter.
While the focus of today's call has predominantly been on our NetWise opportunities, I want to emphasize that we continue to make progress in the other areas of our business. We have released a new standard space comp suite client that allows us to more easily integrate with third party voice mail systems, including enterprise PBX systems, and we are getting ready to release a newly designed Abator service that could be integrated into an MMS client.
We have also released the latest version of our VIDIO Prime solution for multi platform video streaming and we are preparing for a new release of our Anime Studio graphic software launching in early Q3.
It is a very busy and exciting time at Smith Micro. I know that our brand quality in the industry is exceptional. We have shown the ability as a trusted partner to deliver high quality software across millions of devices around the world. And to do so with a leading players in the industry, I can say I am truly excited about the opportunity ahead for us.
And with that, operator, I will open the call for questions.
Yes, sir. Thank you [Operator Instructions] We will go ahead and take our first question from Rich Valera with Needham & Company.
Thank you. Your first quarter revenue came in a little bit better than we and - if you had expected, but your second quarter not a whole lot of sequential growth. I wondering if there were some timing issue there, where you maybe you got some revenue earlier than you had expected?
Steve Ziggy Yasbek
Yes. I think that’s a good read and it kind of balances out with the second quarter. Again, our whole focus, however, is on growing our revenues at a much more accelerated rate in Q3 and Q4 and our business case is proceeding nicely.
Got it. And still targeting breakeven are better in the fourth quarter, is that the goal?
Steve Ziggy Yasbek
That’s a true statement.
Got it. And Ziggy, from an expense modeling standpoint, how should we think about expenses heading into 2Q versus the 1Q levels?
Steve Ziggy Yasbek
Operating expenses should be up about 3 or 400k in Q2 over Q1 and most of that is due to Birdstep.
Sure. And then into 3Q of – I would think of much smaller incremented if there is one, is that fair?
Steve Ziggy Yasbek
Yes, it should be you know, it should be about flat, I'd say.
Got you. Okay, fair enough. Okay. So any couple of maybe new deals that you would highlight. Bill, I know you talked about a lot of different opportunities, is there one or two that you'd point out as particularly significant or having the most, maybe the most revenue potential in the back half incrementally from where you are today?
Actually Rich, if I look back on the last 34 years, I cannot obviously say, I've never had as exciting and active of the sales pipeline as we have today. We have a number of meaningful deals in our pipeline. Yes, there are few that are maybe truly game changing.
But nonetheless, they are all very positive. They all show the proper kind of growth. They are all in the wireless space by and large and they really find traction, not only in the NetWise products or network management, but also in the comp suite products for massaging.
So, it’s a very exciting time here. There is a lot of pressure to execute into – execute sharply and the entire team is focused on that. We understand the opportunity that we have right now and we understand what it potentially will mean to the company and to our shareholders.
Great. Thanks for that. That’s it from me.
And we'll next move to Brian Swift with Security [ph]
Thank you. Maybe just to add a little more color on the first questioner, relating to what visibility you have going forward on customer ramps. You've talked about Comcast in the past. And can you give us an idea of what kind of revenue stream you experienced in either Q4, Q1 and any kind of visibility going forward?
And then the unnamed new customer, can you give us any better guidance in terms of how that is going to ramp up throughout the year? In other words, deals that you already have versus the pipeline that you discussed?
Well, as you know we talked to great lengths about the success we have especially in Q4 of 2015 where we did close some very significant deals. As we said in our prepared comments, all of those implementations are moving ahead on schedule and with very positive results.
So I can't name - names, our customers just don’t want their names used at this time. Hopefully some day that will change, but that’s the rule that I have to operate with. As far as with Comcast, its – they had you know, they continue to grow, the level of activity at Comcast is expanding and I really don’t want to get into exact numbers, but I will say that we're quite pleased with what we see and what we see moving forward.
So I know it’s been long run to get Comcast up to levels that I think we all expected. But it’s not because Comcast or Smith Micro haven’t been focused, it’s just a matter of gaining all the different factors lined up and we see that happening. So it’s positive.
Okay. Can you give me the Sprint number for Q1, and you had any other 10% type customers?
Sprint was 65, was 65% of our total sales and then Fast Spring which is our third party graphics, web store that was about 13.6%.
Okay. So you didn’t have any other 10% customers there?
Okay. And I just wondered, maybe you can talk to me little bit about, I happen to be an AT&T customer and I was in Paris last week and used their Dashboard product, and is there any cumbersome, do you have to download the software and then and you want to know around the town you got to hunt for their customers or you know, they are approved carriers and it seems like that will be a very larger co-place, you know, for you to be going, its kind of frustrating that as you've described what NetWise does, why they wouldn’t be using it?
The use case that you just spoke about is one of that a number of different players on the carrier and cable MSO side, you know, have interest in and you are correct in saying that the application of our NetWise technologies would make that kind of experience better and I think its one of those things. Obviously we're not involved with the Dashboard program right now, but let's wait and see.
Okay. Well, I am glad to say that you're not in it now, because that would have been very good testimony of your product.
But glad to hear that maybe there were still a prospect. Okay, I'll come back if have any other.
We'll go ahead to Kevin Dede with Rodman.
Hi, Bill. It’s Kevin Dede.
Yes. So, I was surprised, I think as many others were, with the top line I apologize because I fell off the call when you – Rich may have asked this already. Can you give us some detail on where the upside surprise was delivered?
Steve Ziggy Yasbek
Actually, Rich did the question and we did a little bit better in Q1 than we had planned. There was some business that we had expected would be booked in Q2 that was closed out and revocable in Q1 and so that helped.
We're going to continue to stay focused on Q2 because remember we've always said, our guidance is plus to a guidance that were also supposed to beat it, so we're going to do the best we can to do the same thing next quarter. And where the real growth for our business case happens is in the second half, we do expect some strong growth in Q3 and Q4 and as was questioned earlier, we definitely still are pushing towards a breakeven or profitability quarter in Q4 and its definitely part of our business plan.
Okay, great. So the – not to beat the Comcast force again, but it seems in past cases that’s been lumpy. And I am curious to see if maybe that was part of what triggered Q1 above your expectations, if you can be that specific?
Steve Ziggy Yasbek
I can't, I will say that, we are working very closely with our cable MSO customers to try to develop a business case that is not lumpy, and that is a major focus for us. It’s also of great interest to them because it’s more leveled their expenses quarter-over-quarter.
So hopefully we will be able to say in the not to just future that we have worked out the proper deal that makes both sides happy and that would smooth things out.
Okay. So, on the fourth quarter call, early March you mentioned Zonetail as your first captivate customer. I am wondering if you can speak to that a little bit more closely on adoption and feedback?
Steve Ziggy Yasbek
Yes. The implementation with Zonetail of our NetWise Captivate technology for proximity, marketing has proceeded very nicely. We're fully on schedule. They are in the process of deploying the technology with a number of their customers and it’s been a very good start to the process.
So you're still getting that – yeah I am sorry, go ahead Ziggy.
Steve Ziggy Yasbek
We also signed – are on second one in Q1 too.
Right. But that one you haven’t named yet?
Steve Ziggy Yasbek
No, we have not.
But you're still speaking to revenue second half, as part of acceleration with regard to Captivate?
Steve Ziggy Yasbek
Yes, we think Captivate is going to be a very strong product for us. We are seeing traction in where we expected see it on the enterprise. We're seeing a lot of interest in it in areas of capturing analytics data about peoples buying habits et cetera. They can then be applied to market research firms that can be monetized by some of carrier customers. And there is a lot of activity with this product. It looks to us like its going to be a very successful offering.
Okay. Can we switch gears little bit and talk about the new comp suite client you talked to Bill, it seems that that be might something that would fit in pretty well with your Converse arrangement.
I am wondering if you can kind of talk about a little bit and maybe speak to the development of that business. I don’t know that we've really seen anything come of out that arrangement yet, and I am wondering if you can give us an update.
Yes. We still don’t really see the traction we had hope for from Converse, as they've actually talked about recently they have some of their own issues, post their merger and those are actually questions probably better post to them than us.
What I can say is that, what we have developed is a standard space OMTP [ph] approach to interfacing to carrier, as surprise backend voice mail systems to allow us to effectively provide the end user front end with visual voice mail.
This is a project that opens up a number of opportunities for us and we do have a number of opportunities in the works right now, and so it is a just another positive development for that products roadmap.
So would you speak to opportunities you mean with Converse or both with and outside working with them or do you have…
Yes, what I am looking at are deals outside of Converse and some of them are quite large.
Okay. So there is no balance to exclusivity with them?
I don’t understand that word?
Of course you don’t. Thanks, All right, let me floor over. Thanks, Bill.
[Operator Instructions] We next move to Jeff Bernstein with Cowen Prime.
Yes. Hi, guys. Thanks for taking my questions. Just a couple here. Just to follow up on the comp suite question. So was I hearing that this is going to be compatible with back end to enterprise type or UCAS type voice mail systems and then kind of allow you to have a visual voice mail interface to UCAS service?
Well, without saying whose system, I would say, any voice mail system that is standards compliant, we can now easily interface to, it’s not a proprietary approach which we've used in the past and it does open up the market opportunity. So your basic premise is yes, absolutely.
Got you. Okay, great. And then just wanted to get your sort of more cosmic view on where things are going in cable, you signed another MSO I believe in addition to Comcast, I think we're starting to get a little clarity in the market now around you know, Charter Time Warner and increasing talked about 5G using unlicensed spectrum. So where is the future, what do you see now as the path forward?
The future is – and I think this is really the driver to the pipeline that we are now working with, the future is very bright. The user of unlicensed spectrum solve a number of challenges that the wireless industry faces, and it’s really how to effectively use that spectrum in a way that delivers a quality user experience that is - that you can monitor.
I mean, one of the challenges when you go to unlicensed spectrum by definition is that all the tools that carrier are - now Amazon has within their network infrastructure stop, because when you leave their network and you go to Wi-Fi you are suddenly off their network and they don’t know what's happening with you.
From the user perspective, first of all you don’t know that you - the carriers - cellular network and you've moved to Wi-Fi and if it doesn’t work properly if your carrier is problem, whether they know about it or not.
So opportunities within Wi-Fi are profound. It has reached a point in time where it’s obvious what the need is as more and more data is being shift across various networks. The proliferation of video data is just immense.
And so the loads on these networks are really profound and its just cost a lot of money to continue to buy more spectrum and build out the carrier networks and you have Wi-Fi there and easily its accessible and you starting to see so many players working to build out worldwide Wi-Fi networks. And of course you see what's happening with the cable MSOs who are building out enormous Wi-Fi network.
So all this is all coming online, its coming online now. We are probably in a better place today then we've ever been and our goal now is to sell more, without making money and move forward as rapidly as we can.
And then I apologize you gave a bunch of information earlier I am not sure I totally got it all. You mentioned network security, I think and hand off capabilities from Birdstep is that right and the ability to put on some of the I guess, I'd call it merchant Wi-Fi networks that are already out there et cetera, can you just elaborate on that a little bit?
Yes, what we have done is we as a team now going forward sat down and we have the Birdstep co base and product offerings and we have the Smith Micro product offerings and what we've done is we tried to develop a process to use the best above and create a Smith Micro product offering that is second to none.
We are definitely in a leadership role now. Their offerings - they had something’s that we didn’t do. We had things that they didn’t do, but the combination is just incredibly powerful.
Okay. And then you did mention something about video, video product or something and I missed that?
Yes, we do a – we have a product called VIDIO Prime, it allows the user to view video messaging within their browser, its very effective and its highly utilized in the hospitality industry, as a way to deliver video content to a hotel or crew ship customer anywhere in the property rather than being tethered to a box in your room. And so it’s an exciting product, its one that we haven’t focused a lot on, but we are starting to see some traction.
Got you. Great. Thanks very much.
And we do have a follow up from Kevin Dede with Rodman.
Yes, Bill. I just was hoping you could kind of go over the Birdstep integration little bit, pour more detail. I am curious to know how many heads you intend on keeping there and what you expect the expense side to look like.
And then the lastly, whether or not you are still seeing they are on track to deliver I mean, I guess, what was the number about $3 million on an annual basis?
Yes. Let me take the last one first, because that’s the easiest one to answer. Yes, we think they will deliver, but we said they would in the current fiscal year. As far as the headcount, we picked up 21 folks from the Birdstep transaction and they are broken down as follows. 14 of those people are engineers, 3 are program managers, 2 are product managers, one is in the finance area in Sweden and one is in sales.
We also have stated that we were looking for expenses to go up in the 3 to 400,000 range most of its coming from these added costs, but also it’s coming from the fact that because of the strength of our pipeline we have added sales muscle to our team. And so we have additional headcount there to try to take care and service these opportunities that are coming to the forefront.
Okay. So the 300 to 400 that’s on a quarterly basis?
Okay. Then you mentioned the deal that they were working on in Asia was that pre your negotiation with them and basically came to their pipeline or is that something you guys worked on together?
No, they actually had - and this something that we had talked about when we first talked about the reasons for doing the acquisition. They have a very important pipeline in development in Asia Pac. And this particular deal that we expect to close this quarter was one that they were working on and it is a carrier, it is a NetWise opportunity.
And so the first of what we believe will be a number of wins in Asia Pac. We also talked about the fact that we are entering into proof-of-concept trials with other carriers that we believe we can close in the second half.
So I would say all now we are very pleased with what we see coming out of the region. We are expanding in headcount there, in a way have sales and engineers to back up our sales executive there and that really is all driven by the fact that we see deals closing and business happening and its working as we had expected.
So based on my understanding, of NetWise, all the software components are pretty complicated, my guess would be that you would try to incorporate Birdstep functionality that you don’t already incorporate into the code that NetWise currently is written in, is that sort of the way you think you are going to integrate the two products or I mean, and how long do you think that process would take?
Yes. I kind of started the Birdstep earlier. We have taken a very careful deal with this. We come up with a strategy where we take the best of both companies product offerings to create a really industry leading product offering going forward. The timing it will take probably over the next month or two to get a lot of it done and that’s really the timeframe that we're focused on.
The one thing that I can say to you is that at the end of this day we will only have one product, one code based. We're not going to have multiple products doing the same thing in the field where we try to maintain those.
There is only going to be one NetWise product. There is a number of different products within the NetWise family I should clarify that, we have the NetWise Director, we have the Optics. We have all these different used cases for NetWise, but there is only going to be a single code based that’s the most efficient and effective way for us to get our job done.
Okay. And you see that developing from the current NetWise code base. I guess is kind of what I am wondering?
Yes. It’s a combination. Its combination and we will be - the end product will be NetWise, the primary product that we're building off of this NetWise, but we're adding a lot of features and functionality from the Birdstep code base and it’s called SMART.
So you'll see a lot of the capabilities within NetWise rapidly expand over the next couple of months as we incorporate more and more this technology into our single flagship product moving forward.
Very good. Thanks so much for taking my questions. They were much appreciated.
And ladies and gentlemen, with no further questions in queue. I'd like to turn the conference back over to management for closing remarks.
I want to thank everyone for joining us today. Should you have any further questions, please feel free to give me a call at the office and we'll look forward to speaking to you on our next conference call. Thank you.
Ladies and gentlemen, that does conclude today's conference. We do thank you for your participation and you may now disconnect. Have a great rest of your day.
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