iPass's CEO Discusses Q4 2011 Results - Earnings Call Transcript

| About: iPass Inc. (IPAS)

iPass, Inc. (NASDAQ:IPAS)

Q4 2011 Earnings Call

February 16, 2012 05:00 p.m. ET


Steven Gatoff – SVP and CFO

Evan Kaplan – President and CEO


Fred Ziegel – Topeka Capital Markets

Kevin Hanrahan – KMH Investment Advisors


Good day ladies and gentlemen, and welcome to the iPass Fourth Quarter 2011 Earnings Conference Call. Just a reminder, today’s call is being recorded. At this time, I would like to turn the call over to the company.

Steven Gatoff

Thank you, operator. Good afternoon, everyone. Thank you for joining us to discuss our financial and operating results for the fourth quarter and full-year 2011. I’m Steven Gatoff, Chief Financial Officer of iPass, and I’m here today with Evan Kaplan, President and CEO.

I’d like to bring the following to your attention. The date of this call is February 16, 2012. Our discussion today contains forward-looking statements about events and circumstances that have not yet occurred. Statements regarding our projected operating and financial results for the first quarter of 2012 and the full-year 2012. Statements containing words, such as will, expect, anticipate, believe, plan, intend and should, and other statements in the future tense are forward-looking statements.

Actual outcomes and results may differ materially from the expectations contained in these statements due to a number of risks and uncertainties, including those set forth in today’s press release, our quarterly reports on Form 10-Q and Annual Report on 10-K that are filed with the Securities and Exchange Commission. These reports are available on our website and at www.sec.gov.

Please note that iPass undertakes no responsibility to update information in this conference call. On this call, we will provide and talk about our results using non-GAAP financial measures. The press release on our website includes text and tables that explain how we define and calculate the various non-GAAP metrics and the reconciliation of non-GAAP results to GAAP results.

The press release in Form 8-K announcing our financial results are available on our website. This earnings call is being recorded for replay. It is being webcast and will also be available on our website for one quarter until the next earnings call. Please note that this webcast is the property of iPass and any copying or rebroadcast without expressed prior written consent of iPass is prohibited.

Before I turn the call over to Evan, we’d like to note for you that we will be meeting with investors and analysts in Dallas, New York, and Boston next week and we will be presenting and Wedbush Tech Conference in New York on March 7th, the ROTH Growth Stock Conference in LA on March 14th, and at the B. Riley Investor Conference in LA on May 22nd. If you’re interested in connecting with us, please feel free to shoot us an email at ir@ipass.com.

With that, I’d like to turn the call over to Evan.

Evan Kaplan

Thanks, Steven. Good after noon, everyone, great to be here with you today and thanks for joining us.

I’m eager to jump into our Q4 results, state of our business and our view forward. But let me start toady’s discussion with a few summary comments. First, let me say that we will stop using the words ‘transformation’ or ‘turnaround’ to describe the iPass business going forward. In a very real way, we see iPass as having turned the corner, and we are very excited about the foundation we have built and the breakout opportunity in front of the company.

We now have our core enterprise business, OME, on solid footing and geared for growth. We believe we have a tremendously valuable Wi-Fi exchange opportunity evidencing traction and starting to take shape and our managed network service business is growing again. In our view, all of these businesses are being booed by a compelling market tailwind fueled by the dramatic resurgence in the build-out of Wi-Fi.

To get a sense of our assets and scale in the Wi-Fi domain, let me shed some light on iPass by the numbers.

To start, iPass has the world’s largest commercial Wi-Fi network footprint with nearly 700,000 hotspots across a 117 countries, and we anticipate doubling that number this year. In 2011, iPass had nearly 2 million unique users initiating almost 20 million payable authentications, generating more than 72 million Wi-Fi sessions across a global technology infrastructure that’s physically integrated more than a 140 plus, and growing, Wi-Fi operators around the world.

The network, the global supply chain that supports it, and the open mobile platform that we have built, nurtured and grown are unique and valuable set of strategic assets in this increasingly global mobile world. Put simply, we view iPass as running the world’s largest carrier-independent Wi-Fi network.

With these technology assets and our deep experience of authenticating clearing and billing wireless connections, we are able to tie together a fragmented but increasingly strategic group of Wi-Fi providers and drive meaningful value across the entire mobile ecosystem. We believe this positions iPass as the natural market maker in the global Wi-Fi space. This commanding position that’s evolving in an emerging market, we believe will deliver increasing value for our stockholders.

On a broad basis, there are two messages I’d like you to leave with today. First, we continue to perform well. We like our results and we like our growth profile in our core businesses. And second, we view 2012 as the year for growth and the metrics that we are most focused on specifically, driving scale with users, revenue in our core offerings, profitability and cash flow.

Steven will go through the financial aspects of this later in the call, but now I’d like to talk through the solid progress we’ve made to-date and some of the dynamics of the respective businesses that make this possible.

Looking first at open mobile enterprise which we recall as our mobility offering and platform that allows enterprise customers to access global Wi-Fi and manage their mobility costs across their employee base. We entered 2011 with strong growth in the very important metric of users on open mobile. We deliver a large aggregate and percentage increases as both active, monetize users and gross monetize users for the new open mobile platform. Specifically, we grew our gross monetize user account approximately 70% in Q4 by adding about a 100,000 more paying online users in the quarter to end the year with 230,000, and we grew our active OM user account approximately 125% by adding 30,000 user in Q4 to end the year at 54,000.

We are now seeing a steady clip of OM user ads on a weekly basis on the new platform driven largely by commitments from the likes of Exxon, Honeywell, Coca Cola, Ikea, Accenture, Olstom [ph], Stand Oil and others. Importantly, we have confidence that this will continue.

On another positive and important note we now have three more months of data on the usage intensity on the new platform, and frankly, the numbers have been consistent over the last year and the fly wheel effect of open mobile that we were targeting when we designed and built the platform is working. Put simply, a user on our new open mobile platform is roughly six times more likely to use our service on a paid network than a user of our older IPC products.

That’s good news and continues to drive our focus on accelerating deployments with new customers and those transitioning from legacy and IPC platform. In that way we now have a professional services deployment team that is focused on these large enterprise deployments. This is a new activity for the company and out of the gate they have shown the ability to make a difference and drive deployments can turn its driven users which in turn drives OM revenues, pretty straight forward.

Overall, perhaps the most important thing to note on the OME side is the turn. Starting in Q4 of 2011 after four plus years of steady decline we began growing our total monetized user base again. We anticipate steady as going forward. As we execute our 2012 plan, in addition to driving the platform transition from IPC to OM we are focused on three primary objectives for this business.

First, expanding our penetration of smartphone and tablet deployments to generate even greater usage intensity. Second, mapping our efforts in new customer acquisition with an increasing focus on Europe and Asia. And third, is offering an end user liable product for enterprise who are increasingly wanting employees to contact for connectivity services like Wi-Fi directly.

Now, with the growing OM enterprise base and an expanding network let me turn my attention to our open mobile exchange business of OMX. I'm very pleased with our progress and increasingly excited about our opportunity in this relatively new business.

As a reminder OMX is a business designed to take advantage of our unique network platform and asset to facilitate seamless global roaming for Wi-Fi much in the same way that it worked today for cellular. In other words, what companies like Sinoverse [ph] and TNS and others do in the CDMA or the GSM and the LTE cellular networks, iPass has and is rolling out for Wi-Fi.

This week we had another strong win for OMX with the announcement of our expanded relationship with China Telecom. When taken with our existing relationship with China Mobile these evidences are increasing strength in what is now the world’s largest Wi-Fi market. One note about our OMX business, we are very often not permitted to disclose immediately when we get a carrier win as many of the carriers prefer to wait until they are in the market with their offers.

To that end I simply want to note that we made significant progress during Q4 and this quarter signing agreements with a number of important international operators.

Our enthusiasm for OMX is bullied by an impressive pipeline of opportunities and iPass’s emergence as a clear leader and a neutral market maker in the space. The more we drive this business the more excited we get about the opportunity. But I would also caution everyone to really understand the nature of this business.

OMX is a carrier intensive business. If you know anything about this space the scales and the economics are huge, but the lead times to revenue are long. It’s a whole other world when you are dealing with telecom infrastructure services and is serving hundreds of millions of consumers. The great news obviously is that it’s super strategic and a compelling opportunity for iPass and there is a strong network effect we believe will play out.

As more carriers you add the more value that it’s created in the network itself, and as we have said before look for continued announcements evidencing our progress in the OMX space going forward.

Transitioning to our managed network services business or MNS business, I'm pleased to report that on the heels of an energized new leadership team and some really good operating discipline, we are seeing continued improvements to both the top and the bottom line in that segment. We are also excited about realizing some nice technology and product synergies with the core mobility business. You may have seen our recent announcements that we brought to market a new managed Wi-Fi offering where we build out and run in-store and in-branch Wi-Fi for U.S. based retailers and companies. We have already built a great supply and management platform at MNS to migrate these customers from expensive private line infrastructure to high speed, secure, internet based infrastructure adding a Wi-Fi deployment and management capability with a natural evolution and begin to create more synergies with our global mobility business, and opportunities to support our Wi-Fi suppliers with additional services. Stay tuned for more progress and continued growth on a managed network services side of the house.

Before I turn it back over to Steven I’d like to give some perspective on how I see 2012 shaping up.

As I said, 2012 is a year with a metrics really beginning to come into focus. In 2012 look for us to continue to invest prudently but aggressively in our mobility business. Look for us to add users, look for OMX to begin generating revenue, look for us to be profitable, perhaps more importantly look for us to begin growing revenue as we breakthrough the drag of the declining 3G and minimum commit network revenue business.

It’s been a very engaging few years with lots of heavy lifting and I'm pleased to say that iPass is now on a very solid foundation and looking at growth in all of the core businesses. While there remains a lot of hard work and real challenges ahead we go into 2012 with tremendous excitement for our business. A track record of solid execution that we believe already adds a lot of value and a commitment to further increase the financial and strategic value of the company for our shareholders.

Thanks for listening and l look forward to answering any questions at the end of the call. Over to you Steven.

Steven Gatoff

Thanks Evan. I’d like to talk through two topics with you. First the financial highlights of the fourth quarter and our overall performance for 2011. And second, provide our guidance for Q1 and some color on the full year 2012 as Evan said we head into the year.

In looking at our Q4 results, the important and consistent themes from the past several quarters continue to hold true about our current results. That is, first, on the top line, our continued execution driving open mobile users translated to revenue. The strong traction we saw in our growth and active open mobile enterprise users through our fourth consecutive quarter of sequential platform revenue growth which was a 20% annual growth rate and this high margin revenue stream.

Second, after several quarters of sequential declines and while a modest uptick we did deliver a Wi-Fi network revenue growth in Q4. And third, we continue to execute with strong operations discipline and deliver positive adjusted EBITDA Q4 and a full year 2011 adjusted EBITDA that was several million dollars better than expectations.

To drill down a bit first on revenue, the core of the 5% sequential growth and total platform revenue was driven by customer migrations to open mobile which continue to outpace the decline in the legacy IPC product and that was supported by the early flywheel effect of the open mobile platform. This is a central driver that’s moved from hypothesis a year ago to reality today. Migration to open mobile is gaining momentum as a result of product maturation, our continued deployment focus, and this OM flywheel effect.

As Evan highlighted, we are experiencing that the visibility, broader functionality and improved value prop of open mobile, is driving better results from customers who adopt the open mobile platform. The flywheel effect is really driven by three dynamics where we are seeing customers who migrate to open mobile show, one, meaningfully greater user penetration that is a greater number of users across their enterprise.

Two, greater frequency of use of our mobility platform throughout both the month and from month to month throughout the year. And three, greater network usage. The result of all this is a revenue positive dynamic which clearly drive its value creation for iPass with a now higher value user base.

Open mobile platform revenue growth, as a result, was a strong sequential 19% in Q4 over Q3. As part of this we are also seeing early signs from our carrier OEM partners namely Deutsche Telecom, Orange, and Telstra who contributed to both increased platform users and revenue in Q4.

Overall, for 2011, we grew open mobile platform revenue by more than 5x and despite the decline and legacy IPC grew total platform revenue by 20% to a $21 million run-rate. As I mentioned a moment ago the night news on the network revenue side is that we delivered a modest but positive growth of Wi-Fi network revenue in Q4, and importantly we expect to see this positive trend continue going forward.

Our final note on revenue is that our MNS business just continues to show better results and increasing opportunity. MNS revenue grew by a solid 5% sequential growth as well in Q4 over Q3, and with the launch of our new managed Wi-Fi and other services we are looking for strong continued revenue growth and product synergies really for the first time with our mobility business.

Looking briefly at the bottom line, our Q4 performance reflects the discipline of continued strong cost and operations management across essentially all functions which sets out a strong alignment of our cost structure with a revenue pattern. As a result in Q4 we deliver positive adjusted EBITDA of about $800,000, well ahead of guidance and contributing to a full year 2011 adjusted EBITDA result that was modestly negative, but several million dollars better than the anticipated $4 million to $6 million loss initially anticipated.

Finally, we ended the year with a continued strong balance sheet, with $25.4 million in cash, and again, zero debt.

Let me now talk to Q1 guidance. As both Evan and I have discussed, we entered 2012 with our strategically core OME and OMX platform revenue continuing to ramp, complemented by our focus on smartphones and tablets, new enterprise logos, customer deployments, and continued ramp in monetized user counts.

Given these dynamics our continued investment in growth and the impact of the continued by orderly wind-down of the legacy 3G and mid commit network revenues, for Q1 2012 we anticipate total revenue to be in the range of approximately $33 million to $35 million. And we anticipate adjusted EBITDA for Q1 to be in the range of a loss of $1 million to income of $0.5 million.

Despite the legacy network impact, the glide path is continuing to improve, as we’ve executed along the way these past several quarters. In addition to our guidance for Q1, we also wanted to provide you with insights on some outcomes that we’re targeting for the full year 2012. From the top-line perspective, we’re excited about the opportunities in front of us and a solid traction that we have.

Two key takeaways are that, one, we anticipate growing our core revenues around Wi-Fi network, OME and OMX platform and MNS revenue in 2012. And two, we expect Q1 2012 to be the low watermark in total revenue for the company and see sequential quarterly revenue growth in total revenue in the second half of the year.

Evan and I are focused on making 2012 a profitable year on an adjusted EBITDA basis and look to a modest but full-year positive adjusted EBITDA outcome as we aggressively manage costs but at the same time importantly invest in the open-mobile enterprise business to scale user growth in OMX to continue the traction on our global Wi-Fi exchange, and continuing to invest in the solid trajectory of MNS revenue and profitability growth.

Finally, we also anticipate generating free cash flow again at iPass in 2012. Stay tuned for more details on this as we continue through the year.

With that, I’d like to wrap up with two brief points from a financial perspective. First, we’re pointing our assets and resources to capitalizing on the opportunities in front of us. I think we’re doing a good job driving user traction and monetization, and we continue to work hard from an operational standpoint to support the key growth and value creation initiative that Evan has laid out. I look forward to communicating with you as we continue to progress throughout the year.

Second, we continue to manage our costs with discipline and specifically in support of driving returns to scale. It’s rewarding to now be experiencing the company’s forward-leaning direction. We will continue to invest in growth and we will continue to maintain our rigor so that as execution continues to drive favorable results on scale it shows up in the financial results, it’s accretive to revenue and profitability and it adds to stockholder value.

With that, we appreciate your time and support. We would be glad to open the call for any question. Operator?

Question-and-Answer Session


Thank you. [Operator Instructions] At first, we’ll here from Fred Ziegel, Topeka Capital Markets.

Fred Ziegel – Topeka Capital Markets

Hi, guys.

Evan Kaplan

Hey, Fred. How are you?

Fred Ziegel – Topeka Capital Markets

Good thanks Evan. Let me ask you a couple of things. First, I am sure you have seen the recent Cisco study which predicted that there is going to be an 18-fold increase in mobile data traffic in I think the next five years. But more to iPass story that they expect the shift or offloading to account for like 25% by 2016, so my question related to that is that would sound like there should be a greater sense of urgency on part of your OMX carrier partners to get off the dime, what’s your take on that?

Evan Kaplan

That’s a good question, Fred. So, I think we are definitely seeing that in the ecosystem. I think some of our traction evidencing the ones we’ve publicly announced and the ones we haven’t publicly announced, is that people are paying close attention. What you want to understand from a broader perspective is that in general Wi-Fi is becoming sort of the cheap and cheerful de facto network all over the world. Particularly when you look at developing countries like Brazil and China and India, Wi-Fi fill-in is taking the place of big investments in LTE, 3G and 4G.

What I want to get across to you guys on the call today is what our opportunity specifically looks like. We have a domestic offload opportunity. It’s not the biggest opportunity for us. It’s interesting. It’s part of – it’s basically aggregating all those Wi-Fi suppliers, so domestically carriers can offload traffic to domestic Wi-Fi suppliers.

But our real interesting opportunity is around the global nature, the roaming, the inter country roaming. So the idea that you would offload traffic as you travel, right, is a very, very big and important idea. So that’s where we are mostly engaged with the carriers, both the U.S. based carriers and the international carriers. We want to offer an alternative to what is becoming a ridiculous, it is a ridiculously expensive phenomenon which is roaming on 3G and 4G.

People are very afraid that they are just going to turn their phones off all the time and so offering a global Wi-Fi service is very important to a variety of different carriers picking the large carriers. Is that helpful in understanding Fred? A little long winded.

Fred Ziegel – Topeka Capital Markets

Yeah. Second question I have is, what has changed in MNS, you’ve obviously put some different people in charge, now we’ve got the Wi-Fi infrastructure offering. What did you see that changed your mind from what I guess I thought was kind of a – it was going to kind of run on its own?

Evan Kaplan

So you know in all candor, there are a couple of younger guys who we put in executive and leadership positions, who I started to spend a fair amount of time with, who learned the business a little bit more aggressively and understand. And then we could see some trends in the market even on the Wi-Fi sides, on the dynamics that were happening, the cable plant and infrastructure was getting upgraded at a very, very aggressive rate and we could see a potentially disruptive phenomenon. It used to be that when you are on private line or fixed line your speed and cost would be 4 or 5X basically what it was on a public infrastructure.

Now what we increasingly see as a disruptive trend is that the cable infrastructure particularly is getting up to such speeds and reliability and we have developed some fail over technology on that side that people are switching from the frame relay, the MPLS, the sort of a typical managed circuits and a surprising number of people are doing that. And so, once we started to see that happen and then we add these newer executives in place we felt like that business was on its own kind of disruptive curve, and that the opportunity there was significant. So, that caused us to sort of bring it back into focus, integrate it more tightly by doing some of the Wi-Fi initiatives and just leverage some of the synergies we have on the mobility side.

So it’s actually a pretty, I want to be humble, it’s a pretty nice result, but it’s not necessarily anything I was looking at two years ago.

Fred Ziegel - Blue Water Capital Markets

Okay. Final question from me. Where are we in terms of dial drag, minimum commitment drag, and is 3G now a drag that we should think about?

Steven Gatoff

Fair question. To put that in perspective Fred, obviously it’s Steven. So dial up has become a pretty small number. It’s 600 some odd thousand dollars for the quarter, but to your point 3G at just under $4 million and mid commit at just under $3 million a quarter of revenue is for the mid commit piece at least is high margin business step. We’ve seen the impact by our right sizing our customer arrangements. Our average customer contract length is about just under two years, call it 20 months. And so, as we have gone through the last year and a half probably, with customers and renewing some and extending on others, that classic dynamic of kind of quid pro quo or reduction of mid commit for right sizing the contract we have been able to extract some good economics for us, and so far as commitment to move to open mobile, better incremental economics on per unit pricing and then as well get people into longer term contracts.

So, the economics of the mid commit revenue is you probably should expect to see that decline probably, not as aggressively as it came down over the last year or two because that’s where the really heavy lifting was done. And I would expect always see some level of mid commit because it’s kind of like a health club membership, you will always have some element of the population that doesn’t use it as frequently.

And then on 3G, yeah, we would expect over a two year period that that revenue would decline to a meaningless number that we said we consciously are exiting that business. When we came here the company was selling 3G cards and that’s something that we just don’t see resonate with our value proposition or we are moving away from that.

Fred Ziegel – Topeka Capital Markets

If I have got the numbers right, minimum commit through 2011 was essentially unchanged quarter-to-quarter, is that right? It’s down a little bit.

Steven Gatoff

It goes down in 2011 from 2010 about 30%.

Fred Ziegel – Topeka Capital Markets

I'm sorry I meant quarter-on-quarter not year-on-year.

Steven Gatoff

Yeah, quarter-on-quarter continues to tick down a little bit.

Fred Ziegel – Topeka Capital Markets

Yeah, okay. All right. That’s it from me. Thanks.

Steven Gatoff

Thanks Fred.


Next we will take a question from Andrew Albrecht [ph] [indiscernible].

Unidentified Analyst

Hi guys. Thanks for taking my call. It seems like a lot of great things going on here. I appreciate all the hard work you have been doing. Did wanted to expand on Fred’s question a little bit on MNS. Myself included was in – when I originally entered the investment wasn’t really thinking of the opportunity there and that that would be a great growth driver, but we are obviously seeing that now. Can you expand a little bit more on the market opportunity that you see for that business and how big the addressable market, and how profitable could it be? You know obviously not next year but looking out will be helpful.

Evan Kaplan

Sure. The addressable market is, I don’t have those numbers off the top of my head, but it’s a pretty large market when you think about all branch office, retailers, site kind of network connectivity that’s a gigantic market. The interesting part of this business is just to be frank with you it’s a 35% gross margin business. So it’s not necessarily one of the reasons that it wasn’t on my first strategic hit list was because one is, I didn’t see things changing in the short term, and two is sort of the margin nature of the business wasn’t that exciting. What’s happened since then is the strategic framework has changed quite a bit, and the margins have improved. And so, we find ourselves in a situation where we feel like we can grow that business. So it’s getting more of our dedicated attention and we find that we can wedge some strategic synergies with our wireless business, with our mobility business.

Specifically, we look to try to build out or mange Wi-Fi infrastructure, and for retailers and other folks and share that with our footprint here domestically, we are looking for interesting way to combine those things together. But in a very real way the underlying drivers that drive each of those businesses are different. On is a disruptive curve in fixed lines and unlike the other ones a disruptive curve in global Wi-Fi. So, I feel like we are in a good place with it. So I hope that’s helpful, Andrew.

Unidentified Analyst

It is, and just expanding on next year a little bit, I mean the last three quarters here I think has grown low double digit year-over-year given the sort of disruptive nature of the market, you feel like double digits there is certainly that amount of opportunity out there for at least next year and beyond. Is that a fair statement.

Steven Gatoff

Yes. Hey, Steven, Andrew. Yeah that seems about right. They did a really nice job in 2011 and we continue to uptick that a bit as we go into 2012.

Unidentified Analyst

Okay, great, thank you.


[Operator Instructions] Next up is Kevin Hanrahan - KMH Capital.

Kevin Hanrahan – KMH Investment Advisors

Hi Evan, congratulations on those growth in the gross users on open mobile. I had some questions around that. It’s hard to project what's going to happen here, but would you expect that to continue growing as you deploy more customers going forward?

Evan Kaplan

Yes, absolutely. That’s what we’re targeting. I feel very good. I feel like it was very good if we ended the year somewhere in the 300K range for monetize active users, and maybe couple of hundred K more for gross monetize users. That would feel like that was a very good results. So that’s kind of how we’re thinking about it.

Kevin Hanrahan – KMH Investment Advisors

That was next question. So, over time, you would expect that active users and the paying undeployed users to kind of converge as more of the undeployed, you know, to go ahead and launch.

Evan Kaplan

Sorry, Kevin. Can you repeat the question?

Kevin Hanrahan – KMH Investment Advisors

I’m just saying that the active users and the paying undeployed users will converge over time, has more…

Evan Kaplan

Yes. Kevin, there will always be a gap on the OM stuff, but they’ll start to converge, yes. You would see – if we’re doing our jobs well you’ll see those lines begin to get closer together.

Kevin Hanrahan - KMH Investment Advisors

Right. And on the OMX side, do you think – I was hearing what you said about the lag and the tele-commerce being kind of slow behemoth, so would you think you would add some revenue maybe in the back half of the year and growing into 2013?

Evan Kaplan

That’s exactly how we frame it up. Hey, Kevin, just to come back on the point, and talking about those curve lines, not only would we expect them to come together over time, we’d expect the active to exceed the growth, because we don’t – we sign up for minimum – we basically signup for a minimum number and that’s what we include in our gross number and it’s possible that people start using more than we actually have contracted. So, a really good result would be those lines cross. So hope that clarifies.

Kevin Hanrahan - KMH Investment Advisors

Yeah, that’s does. So you expect to grow further in both of those, if we go through the year.

Evan Kaplan


Kevin Hanrahan – KMH Investment Advisors

Yeah, that’s great. So, I guess, a longer-term consideration is when you start to flow lots of positive cash, what are you going to do with the money?

Evan Kaplan

We’ll probably talk about that as time goes bullish.

Kevin Hanrahan - KMH Investment Advisors

Okay. Thank you so much, Evan.

Evan Kaplan

Yeah, thanks, Kevin. Appreciate the question.


Ladies and gentlemen, if there are no further questions that does conclude our question-and-answer session. I’ll turn the conference back over to management for any additional or closing remarks.

Evan Kaplan

Thanks operator. Thanks everyone for joining us. As always, glad to talk with you. We’re available in the week or two on the road, look forward to getting together.

Thanks very much.


Once again, ladies and gentlemen, that does conclude today’s conference. We would like to thank you all for your participation.

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