Tangoe Management Discusses Q1 2013 Results - Earnings Call Transcript

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Tangoe (OTC:TNGO) Q1 2013 Earnings Call May 9, 2013 5:00 PM ET


Gary R. Martino - Chief Financial Officer and Principal Accounting Officer

Albert R. Subbloie - Founder, Chairman of the Board, Chief Executive Officer and President


Raimo Lenschow - Barclays Capital, Research Division

Chris Koh - Stifel, Nicolaus & Co., Inc., Research Division

Nandan Amladi - Deutsche Bank AG, Research Division

Eric Lemus


Good afternoon, my name is Brian, and I will be your conference operator today. At this time, I would like to welcome everyone to the Tangoe First Quarter 2013 Financial Results Conference Call. [Operator Instructions]

I would now like to turn the call over to Mr. Gary Martino, Chief Financial Officer. Please go ahead, sir.

Gary R. Martino

Thank you. Good afternoon, and welcome to the Tangoe First Quarter 2013 Earnings Call. We will be discussing the results announced in our press release issued after the market closed today. Again, I am Gary Martino, Chief Financial Officer of Tangoe. With me on the call is Al Subbloie, Tangoe's Chief Executive Officer.

During the call, we will make statements related to our business that may be considered forward-looking statements under Federal Securities laws. These statements reflect our views only as of today and should not be reflected upon as representing our views as of any subsequent date. These statements reflect our current views regarding the future and are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For a discussion of the material risks and other important factors that could affect our actual results, please refer to those contained in our most recent annual report on Form 10-K, which is on file with the SEC.

Also, during the course of today's call, we will refer to certain non-GAAP financial measures. There's a reconciliation schedule showing GAAP versus non-GAAP results currently available on our press release issued after the close of the market today, which is located on our website at www.tangoe.com.

With that, I'll turn the call over to Al. And then I'll come back a bit later to provide some further details regarding our financials and our forward-looking outlook. Al?

Albert R. Subbloie

Thanks, Gary. I'd like to thank everyone for joining us on the call today. Tangoe's global organization executed at a high level during the first quarter, which contributed to results that exceeded our expectations across our key reported operating metrics.

During the quarter, our growth continued to be driven by a combination of penetrating existing customers, adding new logos, leveraging our strategic alliance partners and expanding our international presence.

As we have heard over the last few weeks, the first quarter proved to be more challenging for many software companies. Against that backdrop, I am pleased to share that Tangoe not only delivered solid first quarter results, we also believe that we remain on track to deliver against our full year total revenue, profitability and cash flow expectations.

In addition, we remain confident in our ability to drive solid, sustainable growth beyond 2013 based on business that we have already booked, our growing pipeline of opportunities and ramping productivity on our expanding global distribution resources.

Taking a look at our results for the first quarter, we continue to see strong demand for our Communications Lifecycle Management solutions as total revenues increased 31% to $44.9 million, which was $600,000 above the high end of our guidance.

From a profitability perspective, we also exceeded our guidance by delivering adjusted EBITDA of $6.7 million, representing an adjusted EBITDA margin of 15% and year-over-year growth of 65%.

In addition, we generated $5.6 million in free cash flow during the first quarter, which was an increase of 78% year-over-year. Across the board, it was a strong start to the year as we continue to realize the benefits of our growth strategy and synergies from our recent acquisitions.

Now I would like to provide an update on some of our key accomplishments during the first quarter. We increased total spend under management to $24.7 billion during the first quarter, which is up 40% year-over-year. The strong growth of our spend under management continues to be driven by a combination of moving deployments into production, with both new and existing customers, along with our continued high renewal rates.

During the first quarter, we added 39 new logos through a combination of our expanding direct sales efforts and strategic alliance partners. This was another strong performance, and it was above our recently raised target range of adding 25 to 35 new customers per quarter.

The momentum of our new logo wins and customer expansions is being fueled by the growing productivity of our increased investments in sales and marketing. We remained on track with our sales hiring plans and are encouraged to continue expanding our sales resources based on the returns that we are seeing.

During the first quarter, we closed transactions with new and existing blue-chip customers, such as Credit Suisse, Atos, Con-way, Jabil, Johnson Electric, Moody's, Pitney Bowes and MedImmune, among others.

In addition to the transactions I just mentioned, I'm pleased to share that we are realizing increased cross-sell and upsell active with customers that have come to Tangoe by way of acquisition.

While our integrated sales organization is indifferent with respect to how the customer originally came to Tangoe, it is nonetheless encouraging to see the expansions of acquired customers playing out as we expected.

For example, during the first quarter, we expanded our relationship with Kaiser, Equifax and John Deere. These expansions range from 30% to over 2x the size of the relationship when the customer was brought into Tangoe, and its representative of the broader opportunity we have.

It is also important to point out that in each of the customer examples that I just referenced, we remain focused on continuing to add business value and further expanding our relationship. As we have shared in the past, when it relates to consolidation acquisitions, it isn't until after we have completed the customer migration process over to Tangoe's platform that we typically begin our upsell and cross-sell efforts. Once that process is completed, customers can really benefit from our integrated suite of solutions that span fixed, mobile, real-time TEM and mobile device management. We believe we are still in the early stages of realizing the upsell and cross-sell potential of our acquired customer base, and we are well positioned to capitalize on this opportunity.

In addition to expanding Tangoe's base of great customer relationships and providing an attractive ongoing growth opportunity, our consolidation acquisitions during 2011 and 2012 significantly strengthens Tangoe's market leadership position.

In our core telecom expense management market, we believe that Tangoe has nearly doubled the size of our lead between ourselves and our nearest competitor's comparable business. This is important because Tangoe has increasingly become recognized as the industry's preferred choice.

Another driver to our long-term growth is the expansion of our business with strategic alliance partners. During the first quarter, we continued to benefit from our go-to-market partnerships with IBM, HP, AT&T, Dell and Xerox, as we closed a number of bundled deals across our suite of solutions. We believe this continues to highlight Tangoe's value proposition as the white label CLM provider of choice for the world's largest outsourcers, systems integrators and carriers.

We were pleased to announce that BT Italia-owned ERPTech, which is the largest alternative telecommunications operator solely dedicated to the business segment in Italy, has adopted Tangoe's rTEM solution as a value-added offering for its customers.

The ERPTech deal comes on the heels of our previously announced agreements with LIME, a division of Cable and Wireless, and Telefonica. We look forward to providing further updates on our progress with the carrier channel. We remain excited about rTEM, which is a critical cost-containment capability that enhances both our mobile telecom expense management and MDM solutions.

In regards to MDM, we continue to benefit from the mobile device revolution and had a particularly strong sales quarter as our enterprise customers continue to demand solutions that meet the challenges of Bring Your Own Device access to enterprise resources and the ability to manage devices across every operating system, including iOS, Android, BlackBerry and Windows.

Tangoe has had ongoing success selling MDM, as well as our rTEM, solution as a bundle with our mobile and fixed offerings, further evidence that one of our key strengths is the fact that we're the only provider to offer a complete integrated solution for enterprises.

As a reminder, MDM and rTEM still represent under 10% of revenue today, due to the strong growth of our overall business, though we believe they represent an attractive long-term growth opportunity, due to the explosive growth in connected devices and smartphone adoption.

We also continue to make progress on our long-term product roadmap for matrix CLM, our next generation Communications Lifecycle Management solutions suite. Our multiyear matrix roadmap includes enhancements to our existing suite, as well as new modules. While we will be providing updates throughout the year, which include a number of new technology offerings, I'm pleased to share that our first matrix module, enterprise portal, is generally available this month.

Enterprise portal is a robust and highly intuitive business intelligence tool providing users with highly configurable and analytics for their fixed and mobile estate. It is also extensible to other communication categories like IT expense, cloud and machine-to-machine. We have a number of early adopter clients already in production, and the feedback has been very positive.

In the quarters ahead, we intend to release additional new modules, including bill assurance, which improves upon our superior auditing software capabilities, and is extensible for third-party data sources and communications categories. We also plan to release our dynamic benchmarking module, which provides insight into how a company's business is performing against industry standards and peer groups in a variety of areas. There's still more innovation, including a forecasting module to enable enterprises to manage their communications budgets and actuals around the globe on a real-time basis.

As we bring these new solutions to market, along with enhancements to our existing solutions, we believe matrix will further extend Tangoe's product leadership position and fuel additional market share gains.

Finally, our international operations remain a priority for Tangoe, particularly given our estimate that international markets account for over half of the $425 billion in global telecom spend.

During the first quarter, international accounted for $6.2 billion of Tangoe's total $24.7 billion of spend under management, and it grew 32% on a year-over-year basis. We are pleased to announce that we signed a large customer deal with Nokia to roll out our mobile solution globally. This is a great transaction for Tangoe. And given the scope of this deployment, it is currently expected to roll out over the next 9 to 12 months.

Given the investments we have made this past year, we believe we are in a position to benefit from the predominantly greenfield international opportunity.

So in summary, we are very pleased with our execution during the first quarter and believe that Tangoe remains well positioned to continue gaining market share. We have a growing pipeline of opportunities, and we are continuing to increase investments and sales and marketing based on the positive returns that we are seeing.

The strategy we have communicated ever since our IPO is working. We are driving solid revenue growth. We have consolidated the industry. And we have established a clear market leadership position in a large and growing market opportunity. In doing so, we have established a highly attractive financial profile that combines scale, recurring revenue, attractive growth, along with strong profitability and cash flow.

With that, let me turn it over to Gary to provide more details.

Gary R. Martino

Thanks, Al. Our strong start to the year reflect solid execution across our business. In terms of my prepared remarks, I will first provide you with additional details on our first quarter performance. We will then conclude with our outlook for the second quarter and the full-year 2013.

Starting with the P&L. Total revenue was $44.9 million, up 31% year-over-year and exceeding the high end of our guidance range of $43.8 million to $44.3 million. Our recurring revenue was $40 million, an increase of 30% year-over-year and representing 89% of our total revenue.

Our non-recurring revenue represented the remaining $4.8 million of revenue for the first quarter, an increase of 42% year-over-year, though down slightly from $5 million in the fourth quarter of 2012.

As we have said in the past, our non-recurring revenue can fluctuate on a quarter-to-quarter basis. When we look at the full year 2013, we continue to expect solid growth in both our recurring and non-recurring revenue.

And now drilling down further into some of the drivers of revenue. We ended the quarter with $24.7 billion in spend under management, which is up approximately 40%, compared to the first quarter of 2012.

As Al mentioned, we have a strong new logo quarter, where we added 39 new customers, as Tangoe typically adds 25 to 35 new customers on a quarterly basis. We continue to expect variability in this metric quarter-to-quarter as we execute our land and expand sales strategy.

In addition to winning new customers, we also continue to do a good job retaining and expanding our existing customer base. Also, in addition to customer expansions that Al highlighted earlier, our overall renewal rates remained above the 90% range during the quarter.

And turning to expenses and profitability for the first quarter, our GAAP gross profit was $24 million versus $18.4 million for the same period during the previous year. Our GAAP operating income for the quarter was approximately $900,000 compared to $600,000 during the first quarter of 2012. Our GAAP net income per share was $0.03 for the first quarter of 2013 based on 40.5 million fully diluted shares, compared to a break-even per share results on 39.4 million fully diluted shares in the year-ago period.

Taking a look at our results on a non-GAAP basis, our gross margin percentage was 54.8%, which is up slightly from 54.5% in the same quarter last year.

Our non-GAAP operating income, which excludes stock-based compensation expense and the amortization of intangibles associated with acquisitions among other things, was $6.2 million for the quarter and represented 13.9% of revenue. Non-GAAP net income per share was $0.15 based on 40.5 million fully diluted shares and exceeded our guidance of approximately $0.14 per share. This compares to $0.09 per share based on 39.4 million shares in the year-ago period.

First quarter adjusted EBITDA was $6.7 million, which was above our guidance range of 6.4 million to 6.6 million. This represented an increase of 65% compared to the same quarter last year and an adjusted EBITDA margin of 15%.

As we mentioned on our fourth quarter earnings call, the sequential decline in adjusted EBITDA margin in Q1 compared to Q4 reflects our typical increase in cost early in the year associated with payroll taxes, global sales kick-off expenses and higher marketing budgets.

Similar to 2012, we expect Q1 to be the low point for adjusted EBITDA margin during 2013.

And now turning to the balance sheet. We ended the quarter with $43.6 million in cash, which is down from $50.2 million at the end of the fourth quarter, due primarily to the payment of deferred purchase price obligations of $8.8 million related to acquisitions.

During the first quarter, we also repurchased approximately $3.2 million of stock. And to date, we have used approximately $5.9 million to buy back stock against the $20 million share repurchase program we announced in November of 2012.

During the first quarter, we generated $5.8 million in cash flow from operations and $5.6 million in free cash flow, an increase compared to $3.5 million and $3.1 million, respectively, in the first quarter of 2012.

As a reminder, during the first quarter, we also make cash payments related to the company's annual corporate bonus program. I'd like to now finish with some thoughts regarding our financial outlook, starting with the second quarter. Total revenue for the second quarter is expected to be in the range of $45.6 million to $46.1 million. Adjusted EBITDA is expected to be in the range of $7.1 million to $7.3 million. Non-GAAP net income per share, which excludes stock-based compensation and amortization related to acquisitions, among other things, is expected to be approximately $0.16 based on approximately 40.5 million weighted average diluted shares outstanding and a tax provision of approximately $300,000.

And now turning to the full-year 2013. We are reiterating our guidance for total revenue in the range of $188.5 million to $191.5 million for the full year 2013. As a reminder, we provided our initial guidance for 2013 earlier than most software companies on our third quarter 2012 conference call. And our current guidance for total revenue remains slightly above our initial view. As Al discussed, we feel very good about our growth potential. We're addressing a large and underpenetrated market opportunity. Tangoe has a clear market leadership position, and we have been consistently expanding our global distribution with investments in our direct sales, as well as strategic channel partners. We believe the combination of these factors will enable Tangoe to enjoy solid revenue growth over the long-term.

From a profitability perspective, we continue to expect 2013 adjusted EBITDA of $31 million to $32 million, which represents an adjusted EBITDA margin of 16.5% at the midpoint and growth of 39% to 43% on a year-over-year basis. We continue to expect full year 2013 non-GAAP net income per share, which excludes stock-based compensation and amortization related to acquisitions, among other things, to be in the range of $0.67 to $0.70 based on approximately 41 million weighted average diluted shares outstanding and a tax provision of approximately $1.2 million.

And finally, we continue to expect free cash flow to be in the range of $25 million to $26 million for the full-year 2013, which represents a 13% free cash flow margin at the midpoint and growth of 67% to 73% on a year-over-year basis.

As Al pointed out earlier, we believe that Tangoe has firmly established the financial profile that is highlighted by solid revenue growth, combined with strong profitability in cash flow. And that is what our 2013 guidance illustrates. We remain focused on extending our leadership position in the CLM market by enhancing our technology, expanding our customer base, increasing the spend of existing customers, and leveraging our channel partnerships, all of which position Tangoe very well for the long-term.

With that, we'd be happy to take any of your questions.

Question-and-Answer Session


[Operator Instructions] We'll go right to our first question from Raimo Lenschow with Barclays.

Raimo Lenschow - Barclays Capital, Research Division

2 questions, if I may. First, more a long-term strategic one. Al, if I look out into the market and think about MDM, there seems to be a kind of a shift in terms of how people are thinking about it. MDM is classic. MDM seems to be less in favor now, as people think it's too intrusive, especially if you do Bring Your Own Devices in there. Can you think about how -- what you see in terms of trends in the industry there, and how you're positioning yourself? And then maybe a question for Gary.

Like, historically, you kind of -- were kind of more in a position to kind of raise -- what you did and congratulations. And then small raise about the guidance. Now this quarter is the first quarter where we just kind of had about in-line guidance going forward, and I had some questions from investors in there, how we think about it. Is that kind of economy-related, or what's your thinking there?

Albert R. Subbloie

Well, thanks for the question, Raimo. Good to hear from you. We'll talk a little bit about MDM. There does appear to be a little bit of a shift at MDM. And I want to remind everybody from the time we got into the MDM business, we've been really the integrated platform. We don't view MDM necessarily as a standalone model. We view it as an integrated overall mobile platform. And we feel like the world will move towards that direction. I think the last 2 years, we've seen a little bit of an adoption of MDM standalone to really just basically get iOS and Android into the enterprise. But I believe in the longer run, we'll see CIOs and corporations take a more strategic view towards an overall mobility platform.

Keep in mind, Tangoe has a number of components that manage the overall lifecycle of the device. We view MDM as simply one of those, and it's a plug-in for us. That's how we promote it. And we certainly are getting traction there and feel good about that moving forward.

Gary R. Martino

Raimo, with regards to the guidance, as you recall, we guided at the end of Q3 of last year for this year because we felt good about our outlook for the year. And as you recall, we slightly increased that guidance as well. So we feel very good based on a good Q1. And based on the outlook, we feel good about reiterating the increased guidance that we had provided at the beginning of the year.


And we'll go to our next question from Tom Roderick with Stifel.

Chris Koh - Stifel, Nicolaus & Co., Inc., Research Division

This is Chris Koh for Tom. So just to clarify a little bit on the organic growth rate. I don't know, sorry if I missed it earlier, but if we try to back into an organic growth rate on recurring, I get something in the 12% to 13% range. I think you'd previously guided to 16% to 18% for the year. Are you still comfortable with that range? And if so, what gives a comfort that you're going to be able to accelerate in the back half?

Albert R. Subbloie

Well, thanks for the question Chris. Good to hear from you. Just a reminder, we had a good quarter in Q1. We're excited about it. We did give guidance annually at the end of the third quarter last year. We, obviously, upped that a little bit in Q4. We're not updating our view quarterly of organic growth and, obviously, feel really good about our sales performance. I think we feel good about the ramping in the second half of the year and the revenue growth. As we stated, we still feel good about all that. We had good performance, and our new logos are, obviously, a good testament of that, along with we're on course with our hiring plans on our pipeline. So we're feeling good about the year, as we stated, that we can achieve the -- reiterating the guidance that we get.

Chris Koh - Stifel, Nicolaus & Co., Inc., Research Division

Is there any color you're able to provide in terms of how the acquisitions did in the quarter versus the core business?

Gary R. Martino

Chris, I think we touched on -- we're working to get into starting out breakout acquisitions. I mean, obviously, some of the acquisitions now have been with us for several years. So I think the objective is just to focus on the overall business and the overall growth. And I think we provided some viewpoints on Symphony, which is the nearest acquisition. And I think people had a perspective of what that would contribute and that -- from a growth standpoint that, that really wouldn't be 4 quarters until the fourth quarter of this year. So I think if you use that information, you have an outlook.

Albert R. Subbloie

Chris, just -- it may come up, but I'll bring it up. We've been saying now for a good 6 months that we don't have a -- we're not aggressively trying to do material acquisitions out there. We're going to continue to focus on the organic growth and the sales force, the international expansions. We feel good about that. And I think we're continuing with that philosophy moving forward. And as you know, Symphony has now been in, what?

Gary R. Martino

Since August.

Albert R. Subbloie

Since August of last year. And we're continually to focus on the migrations. It's obviously moved both Symphony and ProfitLine over to the Tangoe platforms, and that's going well.

Chris Koh - Stifel, Nicolaus & Co., Inc., Research Division

Okay, great. And then just a question on the renewals. I think, Gary, you mentioned it was over 90% this quarter. And in the past, I think you've mentioned mid-90s. I just wanted to double check to see if you're still comfortable with that mid-90s number?

Gary R. Martino

Yes, the renewal rates this quarter were consistent with prior quarters. I think we've always said that over 90%, which, obviously, we've restated again.


And we'll go next to Nandan Amladi with Deutsche Bank.

Nandan Amladi - Deutsche Bank AG, Research Division

Question about upsell and cross-sell. You said you were in the early stages of that. Are there any ways for us to try to quantify that?

Albert R. Subbloie

Well, we're not breaking that out, obviously. What we do, do annually, if you remember, is I believe we stated at the fourth quarter call that we did about 30% of our new bookings into the customer base. Certainly, a portion of those would be in the acquired parties. We didn't break that out, but we did have a contribution in the first quarter that was certainly meaningful enough for me to call out a couple of customer names and good customer names, and we gave a little bit of a shape to the uptick within those acquired customers. You might remember I also referenced in the past the SAP deal, which was a pretty large uptick, obviously, from one of the acquired parties as well. So when there's meaningful transactions, I'd like to do that, so people recognize that we're making good progress on that front.

Gary R. Martino

And in terms of overall customer cross-sell and upsell, I think we'd shared that on an annual basis, we'll update people on how much customer cross-sell and upsell contributed in terms of percentage of new bookings. As Al said, it was approximately 30% last year. We feel good about customer cross-sell and upsell and will be, obviously, a very material contribution this year, and we'll update people on that percentage at the end of the year.

Nandan Amladi - Deutsche Bank AG, Research Division

And one other follow-on related to guidance, some of the questions have been asked already, but given you're continuing to ramp your sales force and you're channel activity, are you factoring in a different lag effect before that turns into revenue? Or are you just being conservative given it's just the end of the first quarter?

Albert R. Subbloie

I don't want to directly comment on that. What I will comment on, is we continue to expand the sales force. I'll remind everybody because I think I've said this a number of times that we'll take anywhere from 6 to 9 months to ramp a salesperson. We also have 6 to 9 months sale cycle in our model. If you track back on our expansion, obviously, we've got traction on that in the first quarter. We felt really good about it. We're continuing to expand it really exactly along the lines that I've shared with everybody for the last 6 months. And right now, I feel we'll continue that expansion right through to the end of the year. There is naturally a lag. And we've, obviously, been building that in for the last couple of years with our expansion growth. And again, I'll just remind you, I think we're reiterating our guidance for the year and feel those goals are certainly achievable.

Gary R. Martino

And as part of our guidance, I think we had shared that we expected somewhat higher growth later in the year as the year progresses.

Albert R. Subbloie



[Operator Instructions] And we'll take our next question from Eric Lemus with Raymond James.

Eric Lemus

First question, looking at your existing customers, and I guess more so your seasoned existing customers that have been on the platform for years, what is the same-store sales figure looking like? And how much of the installed base have you guys achieved full account integration in terms of your products and geographies?

Albert R. Subbloie

We don't really do a "same-store sales." I think when we quote our renewal rates, we don't include cross-sells or upsells or new additional items of new business with those customers. So those renewal rates that we're talking about are specifically revenue retention on the same set of products, same set of spend on a year-over-year basis. So we don't really do it on a same-store sales. And I think what we do share in terms of the new business side, how much of that is coming from our existing customers, which, obviously, if we were to add that into the renewals, then it would be a much higher number, but we don't really track it that way.

Gary R. Martino

But I'll reiterate now, it's early in the year. We had stated that we did -- about 30% of our new bookings last year came out of our customers. And right now I feel like that percentage at the end of the year will remain consistent with what it's been in prior years.

Eric Lemus

Okay, great. That's helpful. And then I guess on your European business. How meaningful is your sales force and your service capability there, say 6 months ago? Are you pretty much in line with what your expectations are? Or do you think there should be more capabilities there to meet the need?

Albert R. Subbloie

Well, I think your question is one of capacity. And we're pleased with the increase in capacity. We've grown it pretty dramatically in the last year to 1.5 years. And not only have we grown it in just headcount, but we've got some good quality skilled folks in Europe. It's been a -- it certainly has done very well. We're pleased with it. Europe is a big market for us. Now Asia Pac is a little behind that because remember we started around the summer of last year, but it's tracking in a similar manner. And we just started the Latin American push about 2 months ago as planned. So far, feel really good about international expansion including Europe.

Gary R. Martino

And over the last several calls, we've actually called out some large European-based companies that we've -- and I think it's safe to say without the kind of expansion in growth and presence that we've had in Europe, it wouldn't have been in as good a position to win those deals.

Albert R. Subbloie


Eric Lemus

Right. I guess that's a good segue to my next question. The large kind of marquee software companies that you guys landed, have they rolled out yet?

Albert R. Subbloie

They're in the process, and I stated when we did the deal, probably not unlike Nokia that I mentioned. They're in the middle of rollout. It's going well. It'll continue to ramp. It did contribute to some degree in the first quarter revenue, but it'll ramp all the way through to the end of the year.

I again remind everybody, we're doing multi-regions throughout the globe. They're typically done in a phased, rollout manner. Obviously, the company themselves has to be able to handle those projects. Now sometimes they overlap those phases, but they tend to run out sequentially with a small overlap. That's very typical of the large global rollouts.


[Operator Instructions] And as we have no further questions, I would like to turn the call back over to Mr. Subbloie for any further or closing remarks.

Albert R. Subbloie

Great. Well, I'd like to just take a minute to thank everyone for joining us on the Q1 call. We're excited. We feel good about our results. We feel very good about our opportunity for 2013 and beyond, and we'll look forward, obviously, to speaking to everybody after the second quarter. Thanks for joining.

Gary R. Martino

Thank you, everyone.


And this does conclude our conference for today. We thank you, again, for your participation.

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