MDC Partners' Management Presents at Citi 2014 Global Internet, Media and Telecommunications Conference (Transcript)

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MDC Partners, Inc. (NASDAQ:MDCA) Citi 2014 Global Internet, Media and Telecommunications Conference January 6, 2014 5:15 PM ET


David Doft - Chief Financial Officer


David Doft

Well, thank you, Chris and thank you for having us here. We really appreciate everyone joining us today.

It’s a great question. It has been a very strong period for us over the last few years, but the reality is that we’ve had a track record over a very long period of time, a period of time of outperforming our competitors and our industry and gaining market share and we think and expect that that will continue.

We’ve put together a network of agencies that have grown up in a world where the Internet exists and one of our firms 72andSunny has a phrase, they say they are born modern. It really encapsulates our point of view on the industry. And we’re in a world where everyone talks about different media but the reality is that everything has become digital, it’s fast becoming digital and it’s at the core of thinking of everything that we should be doing and are doing. And that’s allowed us to be much more nimble and innovative we believe and deliver better results for clients on a more sustained basis which has allowed us to gain that market share that we have, as you alluded to with our differentiated growth rate.

Our goal is to continue to attract the best talent, continue to put forth the best work and results for clients and continue those sorts of market share gains. It’s easy to say that but we’ve done a lot of things to help us that continue to open up new opportunity to facilitate that growth. We’ve significantly scaled our business over the last few years; we’ve tripled in size over the last six or seven years and have materially broadened out our capabilities in terms of not just disciplines in terms of advertising and marketing but also geographies. And so if you look back a few years ago, when we were a smaller business, we were essentially a 100% North American business. Now we’ve 6% of our revenue in Europe and Asia and growing very quickly, grew in the mid 30% in the third quarter year-over-year and have opened up the opportunity for more global engagements of clients. Over half the advertising in the world is spent overseas and now we’re able to go after that.

We’ve added to our capabilities across disciplines like public relations, social media, digital analytics, largely on organic basis but also via acquisition that allowed us to stay on the cutting edge of kind of where dollars are going. And deliver on the promise of being more targeted and delivering higher returns on marketing investment for our clients for their dollars.

We were the first agency holding company to launch an agency training desk for example, back in the summer of 2008, leveraging the programmatic media buying that’s become more of the buzz words in the last six to 12 months and we’ve been there for some time. And so we believe that by continuing to focus on the things that allow us to deliver those better results for clients that we should continue to gain market share over the next few months but also next few years.

Next to that though we continue to focus on optimizing the performance of our businesses from a financial standpoint and while we have been able to claw back about 400 basis points of margin as you alluded to Chris, we do think that we still have a ways to go. Our guidance for 2013 is for margins in the mid 13% range of EBITDA margin but we’ve stated that we believe we’ll get to 15% to 17% within the next three years. And so that implies an expectation of on average 50 to 100 basis points of margin expansion per year over the next three years. And we’re very focused on doing that.

And it’s a combination of optimization of the portfolio, it’s a combination of leveraging investments we’ve already made. For example the international investments, that’s allowed us to open up that new revenue stream, didn’t come without cost. If you look back two years ago, it was losing double-digit millions of dollars for us. Part of the margin expansion we have had to date is getting that to more breakeven but then going forward it’s getting that to normalized margins, which in our mind is kind of a 20% range at the agency level, right there alone, 6% of revenue getting 20% incremental margin you are talking about 100 basis points, just from that for MDC overall as an example.

And then we’re also benefiting from a mix shift in our business. Our faster growing businesses happen to be our higher margin businesses. And we expect that to continue as well. So the combination of those things gives us very high visibility, we believe on achieving that more medium term margin target.

So in aggregate between the revenue growth and the margin opportunity we think on an organic basis we should be able to drive double-digit EBITDA growth over that time period and with the capital efficiency of our business and the tax shelter we have should drive about 20% free cash flow growth on average, purely organic, over the next three years.

Unidentified Analyst

That’s great. I think going back you touched upon international’s about 6% of your business today. How big do you see the international side becoming? What you just think are the sort of main drivers of the growth abroad?

David Doft

So we’ve built our international business on the back of existing global clients that we’ve been working with in the U.S. predominantly. And because of success we’ve had with many of them here they’ve asked us for helping new markets as they had need in that, that’s driven that investment by us to go there. And that we think will continue to be the primary driver of our growth overseas. That being said now that we have infrastructure in 11 offices across Europe and Asia it has allowed us to now participate in new business pitches for new clients on a global basis. And we’ve begun to have some success on that front as well in the fourth quarter; I mean this has been reported publically.

One of our agencies out of their Amsterdam office, 72andSunny was able to win this Smirnoff Vodka global account. We couldn’t have competed for that two years ago and so that’s very exciting for us. And so the combination of existing clients and new clients we think is that ample opportunity to grow that business.

That being said and our CEO recently has said that he doesn’t think in the near term we would get beyond 10% on the international businesses percent of total. And the reason for that is, not that we don’t expect that business to grow but we still see a substantial growth in U.S. and Canada and in our core North American market. So that it will, I think will not allow the international business to get bigger than that in the short term. But over time as we attract more global business surely we can get bigger than that.

Unidentified Analyst

Great and I guess you touched upon the ability to attract new talent and perhaps other agencies that may want to join the MDC family. Like how would you say you guys would differentiate yourself against maybe some of the larger agencies like Omnicom or Publicis?

David Doft

Sure. So let's start with the incremental agencies and they very much drive the mindset I think that attract talent to our business. But when we are investing in new agencies it's very much a self-selecting group and I think that’s one of the reasons why we’ve been so successful with our acquisition strategy, is, the fact is we are buying firms that believe their best days are ahead of them. And I know it's very easy to say that but the reality is that if you didn’t think your best days were ahead you’d sell a 100% of your business in an auction and take the highest price and if you do that we are not the buyer, to be very clear.

We don’t buy 100% of agencies, we buy a controlling stake, typically between 60% and 80% of the business but we are investing behind management teams that believe their best days are ahead, that aspire to bigger things and want to partner with us to help them achieve those larger aspirations.

And maybe they want to take some money off the table and that’s okay, but at the end of the day is they need help scaling their business and they are coming to us for that help. So it's a self-selecting group. That means it’s a negotiated transaction, it's not an auction and it means that we are aligning interest about building long-term value in the business because they benefit from that long-term value.

So it's not about maximizing an earn out in the short-term, it's about maximizing long term value of the business and achieving the aspirations they have on scaling their business. And the reality is, is that MDC has a great track record of helping smaller agencies scale. And it's not so easy because a lot of firms hit a ceiling as they scale because the principals often the lead creative or the lead new business person, they are also running the day-to-day operations of the business and it gets to a point where they can’t touch every piece of work.

And so we were really good at helping them unburden themselves, it allows the business to institutionalize itself and the way of thinking of the principals, to then scale beyond them and it's because of our success with firms like Crispin Porter and 72andSunny and Anomaly and others that has given us the creditability that attracts other firms to talk to us about that.

And it's just that partnership philosophy frankly that attracts talent broadly, because we very much believe in empowering talent to pursue their creativity to drive innovation and don’t pigeonhole agencies that are -- and those agencies don’t pigeonhole individuals into any silos that prevents them from doing that.

And the fact is that the best creative talent are the ones that are best attuned to leveraging new technologies, whatever it may be, new ones are invented every day and when we go walk the trade floor show I’m sure we’ll see new ones that are invented for tomorrow, that it may want to be able to adopt those and evolve them and come forth with solutions leveraging those to drive better results for their clients.

That’s not so easy at a lot of agencies and it takes a culture of creativity and innovation that allows that and we very much try to foster that within our firm. And then reward those individuals for success in making delivery. And so it’s a combination of those things I think that’s led to our success.

Unidentified Analyst

Great, I guess you’ve mentioned the importance of scale. Do you -- does MDC have any sort of thoughts of about, at some point does the size of the agency, sort of becomes a detriment, you know, recently we’ve seen the pending Publicis-Omnicom merger that’s -- I don’t think it’s closed yet, but do you have any thoughts of that specific merger how does that potentially impact MDC and the – how maybe you guys sort of benefit from some of the fall-out from a merger such as that as far as picking up business or anything of that nature?

David Doft

Sure, so it’s funny. Historically scale has been a big topic in our industry, both on the creative side of business and on the media side of the business. And we’ve very much benefited over the last 10 years from the way technology has allowed smaller agencies on the creative side to compete against the biggest agencies in the world, because at the smaller firms is where the innovation was happening, the great ideas and the break through results. And we’ve put together I think the largest and I think best group of those smaller firms that have been able to deliver on that promise.

And that’s been able to disrupt the creative side of the advertising business because technology has been the great equalizer on that standpoint, and distribution of those ideas have become a bit more commodity-like versus the value-add and strategic nature of the ideas and the creative execution.

And so scale is not really a factor on that side of business. It’s about producing great insights and great work that resonates with consumers that drives results for the client. The media side of the business has been a bit of a different story because the economics of it is such that scale has become, has been a bit of barrier to other firms. And up until two years ago we were not a material player in the media business.

And the reason for that is that it’s consolidated around five or so global players that were able to leverage their scale to, I’m not going to say drive better performance but at least allow themselves to deliver at lower cost an equal performance to their clients. It has made it harder for smaller guys. But again technology is changing that world too and that’s what gets us too very excited about it and why two years ago we’ve began to build the strategy around attacking the media side of business in the belief that we can disrupt it much like we’re able to disrupt the creative side of the business over the last 10 years.

And it really came out of launching the agency trading desk back in 2008 that I mentioned before and even though we didn’t have a large media clientele to leverage that against the case study, that have delivered for us and the success that we were able to deliver for clients opened our eyes to the fact that we are moving into a world where if you believe that more and more media and all media eventually would be traded on an exchange-based platform and where performance matters, not scale, right. And in a performance world we think we can win.

And so we acquired a couple of the larger independent media agencies in order to broaden our client base and go after that more aggressively and while we’re still in the early days are very excited about our prospects there. And I think scale become less and less important. And this is all important, I think, in the context of the Publicis-Omnicom merger and while they are fantastic organizations I don’t want to denigrate them but I don’t know an industry where the largest player is the innovator, the largest player moves the fastest.

And so from our standpoint we were pretty excited because we think that our smaller, more nimble group of businesses will have at least as good an opportunity, if not better against much bigger players that are out there. And the fact is the combination of these two companies is now, is going to be 23, 25x our size, think about that.

And with this combination and with the Dentsu-Aegis merger last year we’re actually number -- seventh largest in the world. So look at that differential, so there is lot of room for us to run, a lot of market share for us to continue to gain and we should be able to continue to move faster and be more innovative and deliver those better results for clients in this environment than ever before.

Unidentified Analyst

Great and so I mean I attended your investor day recently, one of the things that struck me as interesting that you touched a little bit upon is the agency trading desk, Varick Media. Can you talk a little bit more about that business and how is the MDC positioned relative to your competitors? And it seems like it's also a pretty fast growing business and can you may be give a rough sense of when it might be a more meaningful part of your EBITDA profile?

David Doft

Sure. So the Varick Media Management business or VMM for short is our platform for exchange based buying or programmatic media buying. It began in 2008 buying display advertising off of an innovation that had happened a year or two before with the launch of right media which is the first display advertising exchange. Since then it's evolved to other media’s who are now buying and display mobile social online video. We’ve done campaigns in digital out of home streaming radio and over the last few months have been testing terrestrial television in the spot cable market targeting to the home through the set top box.

And so essentially across all media at this point and as all media becomes digital it will only I think increase the amount of inventory across different media available to this sort of buying. And what it allows us to do is to leverage our third party data, proprietary data and client data together and do the analytic to do hyper-targeting down to the individual level and buy only the media that will drive the highest return and not buy anything else and reduce the waste, as opposed to buying the rate card off of a media property or buying a network and getting an audience that might not necessarily be 100% the ideal audience for you.

And so if you think about it we should be able to spend less money for clients and get more leads, more revenues by cutting out that waste. And we have case studies and many of them where we’ve actually been able to do that. So it's a very exciting prospect for us. The economics of it are quite favorable because then we can share in some of the upside for the client and move just a bit away from the labor-based sort of incentive models to more performance-based incentive models and that’s exciting for us too from a margin standpoint as well.

While it is small relative to total MDC it's surely not insignificant in terms of the incremental EBITDA that has allowed us to generate and we are very excited about that going forward. And we don’t talk about the specifics of it at this point but surely it's something that is among the more exciting things that we are doing in terms of our growth prospects going forward.

What’s also interesting about it is and frankly now that Wall street kind of caught on to some of the pure plays that have gone public in the world is, I think it does highlight the I think unique place that ad agencies can fit in this world where technology can be a tool for us to leverage our insights and strategic relationship with clients to help them drive better results in a way that no pure play can that’s out there and no technology can, because the fact is that they all sell a point solution.

If you are company X and I don’t want to mention specific names in a public forum but you are company X and you are a public company and all you are going to sell your client is your solution. Whereas we can step back and we can sell all solutions and have built the platform where we can integrate amongst them and frankly move in real-time or close to real time, and I say we are real time yet, among different ones, whether it's a different media, whether it's a different tech platform. So we can continually optimize and that’s something that no point solution can do.

And so we are finding out we’re largely outperforming any point solution out there on behalf of our clients that allows us to continue to grow our business by delivering tangible results to our client’s benefit. So it's very, very exciting.

And our competitors, you would ask, sure everyone has their version of a solution of this and the reality is as I think here we also benefit from being more the insurgent in this space because we’ve been able to push forth innovations a lot faster than our competitors have among the agency group. They still have hundreds of people, thousands of people whose job is to buy media the old way. And it’s very hard for them to just move fast enough because people try and protect their jobs, it’s human nature in a way that when you are new to it we can be much more aggressive on testing and innovating on behalf of clients. And I think it’s proven in our ability to grow this business faster than they’ve been able to.

Unidentified Analyst

We can, I guess talk a little bit more about margins. You guided to sort of 15% to 17% margins over the next few years. Can you talk a little bit more about the sort of the drivers of expanding margins? You talked a bit about portfolio optimization and sort of taking companies that previously were generating losses, to at least going to breakeven. Can you may be talk a little or given an example of a company that you helped sort of turn around the sort of losses or at least breakeven or hopefully to gains?

David Doft

Sure. So I gave the example before about international and that’s I think very specific and clear opportunity. The broader portfolio optimization is really two different things. It is working with agencies that are of scale in order to help them grow more efficiently and get a bit higher conversion of incremental revenue to the bottom line. It’s not that they are necessarily underperforming but there it’s scaling smartly so that we can recognize that upside.

And it’s also working with firms that have underperformed and then getting them back to normalized margin. And we’ve been very active over the last couple of years in restructuring some of the underperforming firms and we’ve a portfolio, like everyone in this room has a portfolio, and not everyone is performing optimally. So there is laggards that sometimes need some work.

And so 2013 has had a fairly high level of severance during the year as we moved to fix that and we should benefit from that going into 2014 and beyond, a bit more of efficient operating structure. But then there is also a two or three smaller firms that never quite scaled like we hoped that we’ve begun to be more active in looking at solutions. And so, and we’ve done a number of these over the last few years but you should expect that there will be mergers of smaller firms into larger firms, to protect specific capabilities, to protect clients but take out some of the infrastructure of that, if not flat out, in the past we had from time to time a flat out divestiture.

And all these things are on the table to help us continue to optimize the performance. And it’s incumbent on us as the parent company of these businesses to look at all those options in order to optimize our performance broadly and while it’s kind of a last case, last case scenario to exit a business or even merge it, the reality is that sometimes, that’s something that needs to be considered.

So it’s the gamut, it runs the gamut of those sort of things that we’re working on to do that. And we’ve beefed up our operational expertise at the parent company in order to help us facilitate that. We’ve added expertise also around international operations to make sure that we’re scaling smartly in those markets and just ensuring that as we get bigger we are doing the smart things so that we can grow but grow profitably.

Unidentified Analyst

Great. I guess we have some time left and just wanted to see if anyone from the audience had any questions for David. So there is mic in front of everybody. We ask that you just press the button so that the webcast folks can hear.

Question-and-Answer Session

Unidentified Analyst

Can you comment a little bit about what you are seeing in the acquisition environment and sort of how much -- given that you are now 7% of the industry in terms of size, how much more room for growth is there out there?

David Doft

Great, thank you. So just to correct you, so we are about 3% of the industry in North America and a bit of a rounding our overseas. So on a global basis we’re probably more like 1%, 1.5%. And so we still think we have a tremendous amount of room to grow the business. We are as we’ve said previously, we are beginning to look again for acquisition opportunities and while we were fairly active in 2010 - ‘11, early 2012 we largely sat on our hands over the last two years, while we digested those businesses and brought our leverage down on our balance sheet.

And so I think investors should expect us to begin to buy firms that are of similar size and profiles of the ones we’ve brought before. We tend to look at businesses between $10 million and $30 million of revenue, we are looking for businesses that are growing faster than MDC and have higher margins than MDC. So give us a tailwind both to growth and margin profile of the business.

We are looking, we are always looking for that next great creative agency which has been the bread and butter of MDC historically and those will be more opportunistic as we come across them and as -- should we be able to come to deal terms with people, we are looking to bolster our insights capability, our analytics, our media business which we, as I said, before we think there is a very large opportunity in. We continue to poke around public relations which has just been under the radar but spectacular success for us in terms of between 2007 and 2010 building out that platform and it's been a big success.

And frankly strong PR firms are very much at the forefront of social media and content marketing and so it's a bit of a backdoor into those very strong growing areas of marketing spend. And some other areas we tend to poke around as well but those are the core areas we are looking at.

And historically we’ve paid about 5x profit before tax on average. We are very focused on achieving a minimum return, a cash-on-cash return of 20% annually on our acquisition and that’s the framework at which we are looking to buy.

But what we’ve said and we’ve talked about at our Investor Day in November is that investors should expect that we will add between 3% and 5% to revenue via acquisitions, those smaller types of acquisitions annually which means that, that organic revenue growth we talked about before, that’s kind of doubling of the industry 5% to 7% with acquisition should be more like 10%, with the margin profile of those businesses being 20% is what we target. That would mean that the EBITDA growth with the organic margin expansion and acquisitions you are looking more like a mid-teens annual target for us. And then the way that translates to free cash flow would be more of a 25% to 30% on top of the 20% organic would be added for acquisition, 25% to 30% annualized free cash flow growth.

So that’s pretty much the financial framework that we are operating by right now, and we do see, I think ample opportunity on the acquisition front to be able to fulfill that in terms of the M&A side and then we need to continue to execute effectively, to continue to deliver that on the organic side and we are very excited about the prospect to do so.

Unidentified Analyst

If I could follow up, do you have a lot of firms coming to you or are you guys going out seeking acquisitions even that you are somewhat unique in terms of retaining ownerships taken in entities you do acquire and you tend to work with them over along a longer period of time?

David Doft

It's a great question. It is a mix and a lot of firms do come to us because word of mouth leads them to us. Our industry, a lot of people know each other, a lot of the leaders of agencies have worked together in the past and so the success we’ve had with firms that we’ve brought into the portfolio over the last few years has definitely resonated with entrepreneurs who are running other agencies and we definitely get a decent amount of inbound increase about meeting us or introductions from our existing agency leaders of other firms that they think fit our profile and that they believe produce great work for clients and great results and might be ready for a relationship with us.

But that being said we also proactively reach out to some and we pay attention to who is doing great work out there, and if we see a firm on a consistent basis put up strong performance from clients, we want to know them, we want them to know us and I think one of the beauties of our partnership, our concept and philosophy is that it's built on mutual trust and sometimes that takes a long time to build. And so some of our biggest successes as agencies that have come and joined our portfolio once that we proactively reach out to but then we got to know them sometimes for years because they are not always ready right away.

They think they can accomplish more on their own before they are ready to take on a partner. And so there is firms in the portfolio we had relations with for seven years before we consummated the transaction. And sometimes it’s seven months. So it runs the gamut but we are definitely proactive about it and if we don’t know somebody doing great work we find a way in or we just cold call them and introduce ourselves.

Unidentified Analyst

I guess, touching a little bit about the other side of use of capital, how do you guys think about return on capital? It seems you guys sort of increased your dividend, I think it was 41% pretty recently. Can you sort of give us some general thoughts about your current capital structure?

David Doft

Sure. So we’ve a couple of very I think clear points of view. One is we are focused right now on deleveraging the balance sheet. We are a little over 3x levered after 3Q. Our goal is to get down to below 2.5x. We think we can do that within two years, maybe two to three years, even while pursuing this moderate acquisition strategy that we talked about. And we are very focused on doing so.

But at the same time we generated significant amount of cash. And we also think while paying a dividend is nice we think paying a growing dividend is better. And so as we grow free cash flow over time you should expect that we will look to increase that dividend. And we’ve said in the past that we would look to payout about 25% of free cash flow via dividend and target a roughly 3% dividend yield. Those don’t always exactly line up, so I wouldn’t say that there are hard rules of thumb but there is the framework of which how we think about it.

And at the end of the day is that given the cash generating profile of our business we believe we should run a levered balance sheet to drive [record] [ph] returns for shareholders just not too levered that we put the business at risk. And so that’s how we think about it.

Unidentified Analyst

Great, and in the past couple of years MDC has been such a great story with the margin expansion, the strong organic growth and that sort of resulted in a pretty strong equity performance last year. I guess what would you say to sort of people who are newer to the story and thinking about investing in MDC today and if they ask themselves hey the stocks had a great run, have we missed it or, how would you sort of tell them there is more growth to come?

David Doft

It’s a great question and we’re getting that question a lot. And the reality is that the framework, the financial framework that we’ve talked about in this discussion today and that we laid out at our Investor Day in November has attempted to answer that question, because if we could put up those sort of numbers, which I think are very reasonable to grow organically 5% to 7% after we’ve compounded at 9.7% for the last seven years, I think it’s a reasonable expectation. We need to do it.

It means a lot of things from an operational standpoint at our end. But it’s reasonable to acquire an incremental 3% to 5% it seems reasonable to put up that sort of revenue growth with the margin opportunity that we talked about and the free cash flow growth that, that implies, the 25% to 30% combination of organic and acquired, if you just run the math, right, it’s arithmetic.

If you just run the math and keep the multiple where it’s at today and run it out three years and even discount it back one year, say within, in two years you are looking at a stock that’s close to double that it is today.

Lot of assumptions there, I know that. It’s not formal guidance to the framework of how we think about the business. But the reality is that even if our business slows down we think that we can drive significant equity value for our shareholders. And the management team is the largest shareholder of this company. In aggregate between our CEO, who is the Founder and owns well north of 20% of the company and management team, we own between 25% and 30% of the company.

We like the stock going up I’ll admit it. I know it’s not always okay for management to talk of the stock too much. Our goal is to drive shareholder value and drive the stock price higher and we think we have a strong financial framework that allows us to do that and a strong strategic positioning that should translate into that sort of financial performance.

Unidentified Analyst

We have a couple of minutes left, just want to give the audience a chance to ask any more questions.

Unidentified Analyst

[Question Inaudible]

David Doft

It's still early days. I think you are still looking at something like teens, 20% from a display side of budgets that are going there. But you still have clients that haven’t adopted it yet. It's still new enough that not everyone is comfortable with it. It's still largely with performance-based clients direct response oriented clients and only early days being into the branded side of things. So I think we have a long, long way to go in terms of that. And that’s before you even get to the more traditional media, before you get to the radio side of the world, the television side of the world which is beginning to open up to it. So it's a long way to go.

Unidentified Analyst

[Question Inaudible]

David Doft

We tend not to give kind of industry prognostications like that. It's growing very quickly that’s all I will say. Thanks.

Unidentified Analyst

I guess we have time left maybe for one more question I just want to ask. You guys did a stock split last year and can you, I guess talk a little bit about the thought process behind the stock split and sort of how that helped your volumes and what the investor reaction to that’s been?

David Doft

Sure, over the last few years outside of questions about the business and the economy and those sort of things, the single biggest recurring theme we’ve gone is people who really like our story but couldn’t buy our stock because the trading volume wasn’t liquid enough for their risk management threshold. And so we’ve been thinking a lot about how we could fix that.

One is that we’ve stepped up our conference appearances just trying to pound the street a bit more and that’s helping get more research coverage. We were fortunate to get inclusion in the Russell 2000 a couple of years ago and that surely helped to get the Indexes flowing.

But we’ve done research and there’ve been academic studies that show that companies that have done stock splits have seen on average 10% lift in trading volumes and so we thought that, that was something we are pursuing and so we did it to try to drive trading volume in the [main] [ph] purely. Thankfully it’s succeeded to date. We are a couple of months into it, trading volumes are up 30%, I believe on a dollar volume basis. Surely helped a little bit by the stock going up as well but it definitely picked up materially. And I think that’s something that’s been very much appreciated, the feedback we’ve gotten has been very positive for that.

And so going forward that’s something that we’d consider doing again at, I don’t know, if all is well and it makes sense. We’ll keep trying to focus on that liquidity because as a small cap stock it's a big issue for us, for investors.

Unidentified Analyst

I think we are out of time but I want to thank David and MDC for coming. It was great to have you guys. Thank you.

David Doft

Right, thank you very much for your time.

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