NYFIX Inc. Q2 2008 Earnings Call Transcript

NYFIX Inc. (NYFX)

Q2 2008 Earnings Call

August 11, 2008 5:00 pm ET

Executives

P. Howard Edelstein - Chief Executive Officer and President

Steven R. Vigliotti - Chief Financial Officer

Analysts

William Gibson - Nollenberger Capital

Robert Jones - Wachovia Securities

[Edward Valinski] - [Secmark International]

William Martin - Raging Capital

Presentation

Operator

We’d like to welcome you to today’s NYFIX second quarter 2008 earnings conference call. (Operator Instructions) I’d like to turn the conference over to Mr. Eric Soterburg, Senior Vice President, Corporate Marketing.

Eric Soterburg

Thank you operator, and good afternoon everyone. Welcome to the NYFIX second quarter earnings conference call. My name is Eric Soterburg and I’m the Senior Vice President of Corporate Marketing at NYFIX. With me on today’s call are Howard Edelstein, our CEO, and Steve Vigliotti, our CFO.

Today’s call is being web cast and you can access the replay at our website www.nyfix.com under the Investor Relations section. Before we start today’s call, I would like to make you aware that certain statements in this conference call that do not describe historical facts, such as statements concerning future financial and operating performance, constitutes forward-looking statements. Such statements are subject to a number of risks and uncertainties, and may cause actual results to differ material from those statements. Any forward-looking statements should be considered in the light of the risk factors that appear in the risk factor section of our form 10-K for 2007, and our Form 10-Q for the second quarter that we filed with the Securities and Exchange Commission.

In addition, the forward-looking statements made on this call, represent our views as of August 11, 2008. We anticipant subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. These forward looking statements should not be relied upon as representing our views as of any date subsequent to August 11, 2008. With that, I would like to turn the call over to Howard Edelstein, our Chief Executive Officer.

P. Howard Edelstein

Thanks, Eric, and thank you everyone, for joining us here today. I’ll touch on some of the business and financial highlights from the recently concluded quarter and Steve will take you through our financial results in more detail.

Despite the impact of volatile conditions in the financial industry during the second quarter of 2008, at NYFIX, we remained focused on our growth initiatives and improving our bottom line. While our revenues declined by 7%, largely due to last year’s decision to discontinue our Fusion OMS product, gross profits improved and losses now are compared to the corresponding period in 2007.

Excluding the impact of lost business from the discontinuation of Fusion, revenues were higher compared to the same period a year ago. During Q2 we continued to roll out new products and services, make strategic investments and forge new partnerships across our business lines.

In June, we launched Appia v5, a new high performance version of our industry leading fixed engine that allows our clients to respond rapidly to fast moving market opportunities while at the same time streamlining operational costs.

We also acquired UK-based FIX City, a specialized provider of liquidity discovery solutions that will provide us with a compelling offering in the global market for LIs, which are now used by nine out of ten buy side liquidity traders to find liquidity according to the tab group.

In addition, we unveiled new partnerships with MetaBit in Japan and UL Link in Europe that will expand the reach of the NYFIX Marketplace, and add additional on net services for our clients. Finally, we made further progress with Euro Millennium during the quarter as well, growing both clients and liquidity.

On our last call, we noted that we’d be maintaining our focus on SG&A expenses going forward as we strive to make NYFIX a profitable business. Following the substantial investments we made in our infrastructure last year, and with the discontinuation of the Fusion OMS product now complete, we took a proactive decision, reduce our costs including headcount, across the business to improve our cash flow and preserve shareholder value.

By taking this action we will be realizing meaningful cost savings on an ongoing basis. I’d now like to quickly run through some of the second quarter highlights for each of our business lines.

Our fixed division is made up of two components, NYFIX Marketplace and our fixed software business. Despite the challenging environment, we saw double-digit percentage revenue growth in our fixed division during the second quarter. Driving this growth was an increase in the number of channels that members of the NYFIX Marketplace established with their trading counterparties.

The strong performance of our fixed division during this period demonstrates the benefit of our community-based subscription model, which reduces recurring revenues that provide balance to the transaction-based revenue stream which is much more volume dependent.

On the fixed software side, as I already mentioned, we’ve launched the newest version of our market leading FIX engine, Appia v5 in June. As demand intensifies for faster trade execution, Appia v5 will enable our clients to minimize data latency as a way to differentiate themselves and gain a competitive advantage.

In addition, EzeCastle, a division of BNY ConvergEz, one of the leading buy side trade order management system providers will be bundling Appia v5 with all their order management systems going forward. We believe that Appia v5 reinforces our reputation for innovation in this space and raises the bar for FIX engine performance.

During our last call, we talked about the acquisition of UK-based FIX City, which occurred in early April. The acquisition gives us a valuable desktop presence at over fifty of the premier buy side institutions in Europe, potentially expanding the number of trading counterparties available by the NYFIX Marketplace. It will also enable us to deliver a compelling IOI service to our mark-to-marketplace community. I am pleased to report that our integration of FIX City is proceeding on plan, and we are already capitalizing on the opportunities created by this investment.

Since the deal closed in early April, we have added 20 new IOI clients and have over 30 in contract process. The large majority of these firms are new to the NYFIX Marketplace. Full integration of IOI Net with the NYFIX Marketplace is now on schedule for completion in Q4 of this year.

We also announced two key marketplace partnerships during the second quarter, an agreement with connectivity and trading solutions providing UL Link in Europe. They will provide buy side marketplace members with on net access to the most up-to-date broker algorithms. An agreement with Japan based MetaBit that will expand the reach of the marketplace to many new brokers and exchanges in the Asia Pacific region, thereby providing our clients with greater access to global liquidity in this emerging region for us.

On the transaction side of our business, the key strategic initiative right now is Euro Millennium, which is progressing nicely. We are encouraged by the number of firms that have connected to the service since it was launched in March, and we continue to enjoy excellent participation for the twenty plus members of our client advisory board.

Orders into Euro Millennium are also beginning to build, and we have seen days with over $3 billion worth of liquidity in the pool and more than 400 symbols being exposed. We are expecting that Europe will develop a growing taste for dark pools in the coming year, following the pattern that emerged in the United States.

In the coming months we believe that our status as an early mover in Europe should serve us well as we continue to introduce new products while other competitors are only now entering the market.

We recently expanded the service to include cash equities in other European markets including Belgium, France, Germany, and the Netherlands. As discussed last time, our partner, SWX group, will soon be launching SWX Swiss Block which will be powered by Euro Millennium. We are looking forward to the impact that these achievements will have on the growth of this part of our business.

Meanwhile in the U.S., NYFIX Millennium's volumes have held fairly steady during the second quarter as compared to the first quarter, while overall trading volumes declined, industry-wide. Total consolidated industry trading volumes dropped by nearly 12% from Q1 to Q2 while Millennium volumes declined by only 2%.

While it is hard to measure precisely, it appeared that many competing independent dark pools lost considerable volume during this period. Also during this quarter, equity analytics provider, Quantitative Service Group, released a research report showing that executing trades in Millennium reduces market impact by as much as 21 basis points per share when compared to a broad range of trade execution venues, including other dark pools.

Significantly these results were true across a range of market sectors and trading strategists. As we look ahead to the balance of 2008, we will continue to focus on improving our financial performance while we grow our business through both organic and inorganic means. Despite the challenging and somewhat uncertain market conditions our sector faces, we remain confident in the outlook for our business and focus on achieving profitability.

And now I would like to turn the call over to Steve to review the financials for the second quarter.

Steven Vigliotti

Thanks, Howard. As previously discussed, we have been focusing more in 2008 on improving our net results through cost management initiatives and a greater emphasis on our more profitable businesses. As a result, while we continue to invest in long term projects, such as Euro Millennium and FIX City, our gross profit improved 9% during the quarter to $15.1 million, and our net loss was narrowed to $6.8 million from $7.4 million in the second quarter of 2007.

Revenues for the second quarter were $28.6 million, down 7% from the second quarter of 2007. This decline in revenue was primarily attributable to the impact of some recent shifts in our business mix, including the discontinuation of the Fusion OMS product and the reduction in our New York Stock Exchange stock direct market access business, which historically did not contribute to margins.

Overall revenues from former Fusion OMS clients across all our businesses were down $3.2 million in the quarter as compared to the second quarter in 2007. In addition to generating subscription and maintenance revenue for using the Fusion OMS product, these clients also generated revenue for our transaction services and NYFIX Marketplace businesses.

If we exclude the $3.2 million impact of the discontinued Fusion OMS product on our business, our revenues would have increased over the second quarter of 2007. Revenues from our fixed division were $16.6 million, up 17% from the second quarter of last year. This change primarily reflects the result of an increase of subscriptions for fixed order routing channels and revenue from the FIX City acquisition.

As of the end of the second quarter 2008, we had 8,960 billable direct order routing messaging channels in service, an increase of 20% over the amount of service at the same time last year.

The growth in our messaging channel subscription revenue during this past quarter was slowed slightly by a $400,000 decrease in revenues attributable to former Fusion OMS clients. FIX City which was acquired in April, 2008 contributed $700,000 in subscription revenue during the quarter.

Transaction services division revenues were $10.8 million, down 22% from second quarter of last year. This decline was primarily the result of a decrease in the use of NiSUS Nexis algorithm training products and our OTC DMA services by former Fusion OMS clients, as well as a reduction in DOT DMA revenues.

Transaction revenues from Fusion OMS clients were down $2.1 million during the second quarter, compared to the second quarter of 2007. Our dot DMA revenues, including associated pass-through amounts, were down $1.8 million during the quarter compared to the second quarter of 2007, lead to our decision to stop providing below cost services for clients who historically have not generated valuable matches NYFIX Millennium.

Revenues from NYFIX Millennium, our flagship transaction services offering, were up during the quarter despite a decline in volume, reflecting an improved mix of business in our dark pool. We averaged $48.1 million max shares per day in Millennium during the quarter, compared to $54.4 million during the second quarter of 2007.

Costs of revenues as a percentage of revenue was 47% during the second quarter of 2008, compared to 55% during the second quarter of 2007. This decrease primarily reflects a lower percentage of execution and cleaning costs, along with our absorption in the second quarter of 2007, over $1.6 million in out bound routing fees charged by the New York Stock Exchange for DOT DMA clients. We also had lower costs for subscription and maintenance revenue attributable in part to lower amortization of capitalized software and lower labor costs.

Compared to the second quarter of 2007, our SG&A costs were down slightly, even with a significant incremental costs such as Euro Millennium, $2.5 million for the current quarter compared to $600,000 for second quarter, 2007, and stock-based compensation $2 million for the current quarter compared to $100,000 for the second quarter of 2007.

We also incurred $900,000 in employee termination costs during the quarter associated with our workforce reduction. We were successful in reducing professional consultant fees during the quarter as reflected by a $2.2 million reduction in the level incurred in the second quarter of 2007.

During the quarter we also incurred costs related to the FIX City acquisition, including a $500,000 write-down of previously capitalized software initiatives, which will be replaced with the acquired technology, and $100,000 of third party consulting costs to integrate the new technology.

While we continued to make steady progress during the quarter connecting clients to Euro Millennium, expanding the service to new clients and building liquidity in the pool, there were no material revenues generated. Going forward we expect further losses for Euro Millennium, with loss of 2 to 3.5 million expected for the third quarter. As efforts continue to connect new clients, enhance client's electronic trading capabilities and incentivize clients to bring even greater volumes into the pool.

We made significant equity grants in the fourth quarter of 2007 and the first half of 2008, following the adoption of our 2007 equity compensation plan. These grants are up front and multi-year in nature designed to assist in retention and promote alignment of the interests of our employees, with those of our stockholders.

Stock-based compensation expense is expected to be approximately $2 million per quarter for the remainder of 2008. We expect to incur an additional $400,000 of third party consulting costs during the remainder of 2008, related to integrating the FIX City technology platform.

In June, we reduced our employee and consultant headcount by approximately 10% as we begin to leverage investments we made in our infrastructure during 2007, and put increased emphasis on our more profitable businesses. We expect this initiative to save more than $5 million on an annual basis going forward.

We do not expect to incur any further restructuring or wind down operating losses related to this discontinuation of the Fusion OMS product going forward. As the migration of clients off the system were substantially complete by June 30th. Although we do expect the transaction revenue comparisons to be negatively impacted over the next [few] quarters by the lack of Fusion OMS and New York Stock Exchange DOT business. In addition, the previously disclosed transitional programs related to remediation employment will complete by June 30th as well, and no future costs are expected for these items.

As of June 30th we had cash and cash equivalents of $52.2 million, a $5.5 million decline from March 31, 2008 reflected in part cash investments made of $6.9 million, net of cash required for the FIX City acquisition, and $2.4 million to purchase the minority interest of the former Millennium partners.

These investments were offset in part by an insurance advance received on a DNO policy of $5 million, and the receipt of an earn out payment from GL Trade of $2.1 million on the sale of NYFIX overseas.

We also had additional cash in our clearing balances on June 30, 2008 due to the timing of settlement obligations, and for additional clearing deposits. I would now like to pass it back to Howard for his concluding remarks.

P. Howard Edelstein

Thanks, Steve. On the whole we are pleased with the progress that we are making. Even if it has been one of the most challenging market periods of several years, we feel good about holding our own. In Q2 we increased our gross profit and narrowed our losses by focusing on our business margins. We continue to roll out new products and services that will generate incremental revenue and we continue to make key strategic investments that will drive future growth. While the business climate remains challenging, the increased emphasis we are placing on our more profitable businesses will provide us with greater operating leverage as market conditions improve.

As always, I would like to thank our shareholders for their support and hope they share our optimism as we look forward. Even I look forward to your questions. Thank you. Operator we can take questions at any time.

Question-and-Answer Session

Operator

(Operator Instructions) With Nollenberger Capital, we have Bill Gibson.

Question-and-Answer Session

William Gibson - Nollenberger Capital

Hi, Howard, my first question however is for Steve, and that relates to the $5 million of annualized savings. In terms of just building a model was some of that realized in the second quarter?

Steven Vigliotti

A slight amount of that was realized in the second quarter, probably $200,000 towards the end of June.

William Gibson - Nollenberger Capital

Oh, Okay. And I noticed you had, you know, had signed a partnership in South America and yet you didn't mention that. Did something happen with that?

P. Howard Edelstein

Bill, this is Howard. Hi, Bill. Well something is happening in the sense that we are starting to gets channels sold down in South America and that we had mentioned that earlier, so we just added the new partnerships that we had discussed since last time. But it is clear that we are partnering more and more to try and expand the marketplace and to basically peer our community or broaden our community through peering with other communities.

William Gibson - Nollenberger Capital

Okay thank you, and then one last question and I'll hand it over to somebody else. In terms of, you know, the Fusion OMS shutdown and those customers going away, I know you were going to try to retain as many as you could as Millennium users, but it sounds like they've gone to alternative pools?

Steven Vigliotti

Yes, well those customers were never really big Millennium users. They were primarily users of our Nexus algorithm suite, as well as some of our over the counter DMA services.

P. Howard Edelstein

So its part of the transactions group revenue but it was not part necessarily of Millennium revenue.

William Gibson - Nollenberger Capital

Okay, thank you.

Operator

And next up we have Bob Jones with Wachovia Securities

Robert Jones - Wachovia Securities

Good afternoon. I was looking over the S1 from Liquidnet , which I suspect you all approved as well, and was trying to make some comparisons. Apparently for the year through July we've averaged about 49.6 million shares a day in Millennium. Liquidnet in '06 averaged a little less than that, 47.8 million, yet during that year they did revenues of $252 million and an incredible pre-tax profit of $165 million or 65%. If you annualize our numbers, the NYFIX's numbers, we're at about half that run rate with a loss instead of a profit. I'm not sure exactly how to phrase my question. Can we one day aspire to numbers like they're producing and is there a way to move our business model more toward the shape of their business model?

P. Howard Edelstein

Bob, that's a good question and with a lot of data. Clearly we are both kind of in the Dark Pool space. Liquidnet is a great company and has focused very much on the buy side from day one, whereas you know NYFIX has been very much oriented as a sell side company. Having said that we are trying to move our business much more into having higher margins and attracting a more profitable flow, so it's hard to make a prediction as to how far that's going to go or how large it'll get but clearly we're interested in a higher margin business and we're trying like heck to grow the pool, so that is a destination of choice by a lot of the buy side.

Robert Jones - Wachovia Securities

I mean I would think that obviously their transactions are a lot larger on average than ours. One would think in most businesses smaller transactions would carry a higher margin than larger transactions. Is that not the case in this business?

Steven Vigliotti

No, it's not. It's typically, you know, it's a volume-based, per share rate and those rates tend to vary based on the customer segment that you serve, and here we clearly have different customer segments.

P. Howard Edelman

So another way to say that is the buy side is used to paying a higher rate per share than the sell side is.

Robert Jones - Wachovia Securities

Yes. Okay, thank you.

Operator

We'll next go to [Edward Valinski] with [Secmark International]

[Edward Valinski] - [Secmark International]

Hi. My concern really is with the competitive situation with regard to NYFIX. I've been seeing in various articles, I see that Goldman Sachs and Lehman Brothers and Credit Suisse along with a number of the exchanges are getting into this business and for them it's a matter of survival. I'd like your comments on really how you expect to be able to compete with these guys that has deep or deeper pockets and really have the breadth of business activity that, you know, you're impinging really on their livelihood. Yes, how – what is your strategy for dealing with this quarter and next quarter and the next year?

P. Howard Edelstein

Well, Ed, you know, thanks for the question. It's a good one. As you know NYFIX is a neutral player. We don't have a prop desk. We don't trade against clients. There's no doubt that the large broker dealers are doing everything they can to internalize trades, both from a cost perspective and from an efficiency perspective. We don't really view ourselves as competing necessarily with the large brokers. The current buy side plan is to go there and go there for specific reasons. The clients come to us for other specific reasons. We are, as you can see, on the cusp of making money on the volumes that we have and we're trying to grow volumes and grow order types everyday, and our goal is to get the company profitable based on growing the market share that we have.

Now it is true that the whole dark pool market as it's called is growing and there is a view that it's going to, you know, grow in different directions with different kinds of clients. So there is an opportunity for, I think, everyone in this space. From our perspective, you know, as we released recently, execution, quality and price improvement without worrying about who's on the other side of the trade is what NYFIX brings to the party and that continues to be our driving force – low market impact and price improvement.

[Edward Valinski] - [Secmark International]

Thank you.

P. Howard Edelstein

Thank you.

Operator

(Operator Instructions) Next in our queue we have William Martin, Raging Capital.

William Martin - Raging Capital

Hey, guys, how are you?

Steven Vigliotti

Hi there.

William Martin - Raging Capital

Have you given any thought to what you think, you know, a sustainable EBITDA margin looks like in, you know, 24 to 36 months out? What's your goal there?

Steven Vigliotti

Yes, I'll take that one Howard. Clearly our goal is to achieve profitability and we want to do that, you know, over the next several quarters and hopefully some time in '09. We're not giving guidance as there are a number of factors which impact our revenues, including market volumes, and certainly the uptick of Euro Millennium. So having said that certainly if you exclude the P&L effects of the long-term investment we're making there in Euro Millennium, as well as the non-cash stock-based compensation, we're basically at positive earnings, EBITDA and earnings, right now. And like I said, it is our goal even with those effects to net into positive earnings in the near future.

Certainly from a cash flow perspective we are much closer as the stock comp does not have a cash impact and our current rate of CapEx is expected to be lower than the regular investment we made the last couple of years, so basically there we're pretty close to breakeven now and hope to get there if we can maintain our current Millennium buy-ins and our current continued pace of growth in developing and establishing new order routing channels certainly by the of the year is what we're shooting for there. Again, dependent on continued volumes and marketplace growth.

William Martin - Raging Capital

Great. And on the fixed side where you had the 20% year over year growth in the latest quarter is that sustainable in this environment or do you have penetration issues for the market and just slow in trading volume? Does that pressure things?

P. Howard Edelstein

Well, clearly there is a, you know, in the U.S. particularly there is a question of market size; however, in spite plans and some consolidation going on we've managed to keep that growth. We feel pretty optimistic about it right now. We're also adding, as you know, through the FIX City acquisition a great deal of IOI traffic and new IOI challenge as well. So we're pretty optimistic there, and as you can see from the partnerships and our focus in Europe and now in Asia growing and peering the community through other communities will give everyone on this side of the pond an ability to reach someone on that side of the pond, and that's also a growth vector for us. So we're still pushing forward with the FIX, NYFIX Marketplace and feel pretty good about it.

William Martin - Raging Capital

Great. Thank you, guys.

P. Howard Edelstein

Thank you.

Steven Vigliotti

Okay.

Operator

And next we have a follow up from Bill Gibson.

William Gibson - Nollenberger Capital

Yes, my follow-up is really more of the same of the last two or three questions and that is in the past Howard you used the word transformational and, you know, I mean as an outsider looking at it what we fear are a lot are a lot of minor blocking and tackling, well not minor, but blocking and tackling things to, you know, battle it out daily. But what do you to get Millennium volume doubled, to really start pumping some margins? Is it a factor of one big customer coming in or is there something else up your sleeve in terms of an acquisition?

P. Howard Edelstein

Well, it's a good question. As you know I'm glad you took back the word minor because we are trying like heck to grow Millennium as you know. We're going down a number of paths, okay, one of which is to improve the quality of the liquidity. We have a lot of feedback that tells us this tremendous price improvement with low market impact, you know, trying to educate more and more of the buy side larger clients, et cetera. We are working really hard on new trade types. We're working really hard on reducing latency of the particular clients. So, you can call it blocking and tackling but it's also a good prudent business measure to make sure you're current with every, you know, nook and cranny of the business in order to get volume.

Now as we've said we're looking at both organic and inorganic vehicles to grow that and when there's something to report on that we will be very keen to do so. But right now blocking and tackling and growing the business and doing what we know how to do is important.

William Gibson - Nollenberger Capital

Thanks, Howard.

P. Howard Edelstein

Thank you.

Operator

Next up we have [Carl Warden]. He's a private investor.

[Carl Warden] - Private Investor

Good afternoon, guys. Howard, there was an article and in the article, the name of it was the NYFIX IT Man, you made a comment in there toward that and I quote, "If you transport three years ahead and look back, you will find it to be a very unique and large company that is looked as an electronic trading powerhouse." You know, I think, all of us that have been around are looking for vision and enthusiasm and those sorts of things and you've been blocked into blocking and tackling for this period of time. But that was probably the most visionary and enthusiastic statement I've heard out of the company and out of you since you guys came on board. Is there anyway you can elaborate on that a little bit, please?

P. Howard Edelstein

Well, I appreciate the comment. We really do believe there's a lot of value inherent and built inside of where we are today, including in Millennium and we believe there's a lot of upside in growth in Millennium. Our goal right now is to take that into the market. We have eliminated and, you know, you [inaudible] when we can say this, all of our operational and related issues of last year. We made investments in many different areas in the service. We have some unique assets that we're trying to leverage much greater, and I do believe over time, time will prove to us that being a neutral player, building a deep liquidity pool with a broad breadth of instruments at significant price improvement with no market impact, will become a much more important factor in the industry than it is today.

We also have, don’t forget, our investments in Euro Millennium and in Europe in general and those things have yet to kick in. So there is a bit of bridge between where we are today and where we need to be tomorrow, and if you take a look at the potential for that and the potential of inorganic activities on top of it we feel that we'll be in a good position. As I said in that article, when you look back and say wow, you know, we were able to fix the business. We were able to grow the business. And yes you're right there's been a lot of blocking and tackling but in order to win a game you've got to move the ball down the field.

[Carl Warden] - Private Investor

Along with Bill Gibson's question, and maybe you answered it and maybe I just didn't hear it right, is it theoretical since NYFIX has focused on the sell side and a lot of the infrastructure is sell side-driven that if you had a major buy side player come into the picture that you could theoretically see a vast improvement in the Millennium volume? Is that a possibility and is that the way things might happen once the house is in order?

P. Howard Edelstein

There is no doubt, [Carl], that we would like to expand our client base to include much more of the buy side. We offer a great deal of liquidity that the buy side should be interested in and the focus in the past has been primarily sell side. Being neutral and being able to offer price improvement, I believe we will be able to start offering buy side clients much more value than we have in the past. Don't forget, the perception of the company and the history of the company has been one thing and now we're trying to move that into an adjacent market space.

[Carl Warden] - Private Investor

Okay, thank you very much.

P. Howard Edelstein

Thank you.

Operator

(Operator Instructions) With no questions in our queue at this time, I'd like to turn the conference over to Mr. Edelstein for any closing remarks.

P. Howard Edelstein

Okay, thank you. I'd like to thank everyone for joining us and I'd like to particularly thank our shareholders for being patient with us during this past period of time. I'm looking forward to speaking to you again and giving you some more updates on our next call and Steve and I are both grateful. Thank you.

Operator

And that does conclude today's conference call. Thank you for your participation. Have a good day.

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