Edgewater Technology Inc. CEO Discusses Q4 2011 Results - Earnings Call Transcript

| About: Edgewater Technology, (EDGW)
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Edgewater Technology Inc. (NASDAQ:EDGW) Q4 2011 Earnings Call February 29, 2012 10:00 AM ET


Paul McNeice - Director, Finance

Shirley Singleton - President and CEO

Tim Oakes - CFO


Lee Jagoda - CJS Securities

Nick Halen - Sidoti & Company


Good morning and welcome ladies and gentlemen to Edgewater Technology Incorporated Fourth Quarter 2012 Financial Results Conference Call. (Operator Instructions).

I’ll now turn the conference over to Mr. Paul McNeice, Director of Finance for introduction.

Paul McNeice

Thank you, Karen. Good morning everyone and welcome to Edgewater Technology’s Fourth Quarter and Full Year 2011 Financial Results Call. I’m here today with Shirley Singleton, Edgewater’s Chairman, President and CEO; David Clancey, Edgewater’s EVP and Chief Strategy and Technology Officer; and Timothy Oakes, Edgewater’s Chief Financial Officer.

Before we begin I would like to remind everyone that today’s call may contain forward-looking statements as described under the Securities Act. Investors are cautioned that such statements could involve risks and uncertainties that could cause actual results to differ from current expectations with respect to such statements. These types of statements and the underlying factors related to these statements are listed and are reported in filed information with the Securities and Exchange Commission, as well as in the Company’s press release that was distributed earlier this morning.

The statements made during today’s call are made only as of today’s date and the company undertakes no obligation to update the forward looking statements to reflect subsequent events or circumstances.

With that, I’ll now turn the call over to Shirley.

Shirley Singleton

Thanks Paul. Good morning everyone. Tim tells me that we’re welcoming some new investors on the call this morning so I thought I would change it up a little bit and describe what Edgewater does so that we can get everybody on the same page. I want to make sure everyone understands.

In a nut shell Edgewater provides strategic consulting services and if you think about who the buyers are, specifically CSOs and if we think about a market it’s broadly in the upper mid-market and it’s selectively in the global 2000 market. We’re not typically reaching interim maintenance budget. The buyers are really using funds that they set aside for transformational change. If I narrow down the CSOs into what is a really hot buyer of our services, it’s usually a CFO and the first thing that comes to mind that they want to buy is budgeting, planning and consolidation services or as we call it EPM, which stands for Enterprise Performance Management.

The best way to understand EPM is if you have ever done an Excel spreadsheet and fast fingered a formula in the spreadsheet, it could literally change your financial forecast which isn’t a good thing if you are public company’s CFO. So you really need a hardened down process to be able to rely on software to assist you in your budgeting, planning and consolidation and that’s an area where we have a fair amount of expertise. In fact, we’re a platinum partner which is a very coveted position within the Oracle channel. We are frequently recognized as top five worldwide solution provider and I wish I could I get a hardened quote but the rumor is we’re number one in North America in planning in the Oracle channel.

That represents a good chunk of our business and that business is hot. The second major thing that I wanted to highlight is ERP or, Enterprise Resource Planning which is also an offering where the CFO is in the buyer’s seat. The implementation of a ERP system is a major change for a CFO. It’s like getting open heart surgery. You are taking out a financial system and replacing it with something else. In our case, our specialty is in the Microsoft dynamics channel which is their AX product.

Why would people want to change off their financial systems? It sounds like who wants to have open heart surgery. The reason is some of these systems are one and the twos. The last time there was a major change in ERP systems was really Y2K. It’s been 12 years and we’re seeing people that are deciding to invest and change our their infrastructure. Also emerged as acquisitions occur, when you are grabbing another company or divesting. Sometimes when you divest from a company the company is spun off and it really doesn’t have any internal financial systems to stand on its own. So there is a lot of trends that are driving this and in particular Edgewater is specializing in the manufacturing process and discrete portion of ERP replacement cycles again in the Microsoft channel and it’s very strong for us.

And then lastly, most buyers, the great products accelerated. Our product based consulting business has grown like a weed in the Microsoft and Oracle channels but you still need some good old fashioned systems integration custom code to sort of knit these things together. When we put in an ERP system, normally it has to touch some old backend systems and communicate with trading partners and all of these interfaces may be custom or partially custom. So that’s where the original classic consulting business comes in. Think about it as a wrapper around EPM and ERP where this is sort of like the hit squad that can go in and build anything from scratch and make it integrate within the existing environment.

I hope that helps a little bit in terms of what Edgewater does for a living. We do report as one segment but I would call out to all of you, all the old investors and new that the Microsoft and oracle channels are really being kind to us and we’re growing. In fact this is the first time in the press release we’ve talked about an annual guidance of double digital service revenue growth and that’s due to what I see in these channels.

During the quarter we secured 28 new customers, some of them Saber, Turk, Carolina Healthcare, HVT Global and Indiana Farmers to name a few and we also finished over $100 million in revenue for the year. With that I’d like to turn it over to because we really have some good numbers here, Tim.

Tim Oakes

Before we began discussing fourth quarter performance we would like to mention that the fourth quarter concludes what has been a very positive year for the company. Our 2011 fiscal year is extenuated by many positive highlights. First and foremost we have achieved a fairly significant milestone in the history of the company having surpassed the $100 million in total revenue for the full year period. Additionally during 2011 we have continued to improving our operating metrics including the establishment of an all-time high and quarterly and full year service revenue, improved total and service related gross margin and gross profit performance, improvement in adjusted EBITDA performance, returned positive net income for the full year despite recording a $2.2 million noncash lease abandonment charge during the fourth quarter and generated solid operating cash flow.

Total revenue for the fourth quarter was $26.4 million, compared to $23.5 million in the fourth quarter of 2012. Service revenue was $20.8 million during the fourth quarter compared to service revenue of $17.7 million in the fourth quarter of 2010.

On a year-over-year basis we are reporting double digit growth in both total revenue and service revenue. Year-over-year growth in fourth quarter total revenue and service revenue was 12.2% and 17.9% respectively, which is entirely organic as the Meridian acquisition was completed in the second quarter of 2010.

Similar to the third quarter of 2011, it is again worth highlighting the fact that we achieved this growth, absent any contributions from the Fullscope process related contracts which contributed both service revenue and royalty revenue in the fourth quarter of 2010. As discussed during our previous earnings call and disclosed within our periodic SEC filings, Fullscope’s process related contracts concluded at the end of the second quarter of 2011.

The year-over-year growth in our fourth quarter 2011 service revenue is driven by continued demand for our Oracle and Microsoft channel service offerings which is reflected in the 28 new customer engagements we entered into during the fourth quarter and our ability to maintain fourth quarter 2011 utilization at 75.6% and a quarter that has traditionally been a soft quarter from a service revenue and utilization perspective due to some seasonal influences in the holiday season.

On a sequential quarterly basis, total revenue increased by $1.4 million or 5.4%, compared to the third quarter of 2011. The sequential increase in total revenue was a result of increases in both service revenue and software revenue.

Service revenue on a sequential basis increased by $777,000 or 3.9% compared to the third quarter of 2011. As with our increase in year-over-year quarterly service revenue, sequential quarterly growth is similarly being driven by demand for our product based consulting services and our ability to remain a stabilized utilization rate during the fourth quarter.

Software revenue, which includes related maintenance revenue was $3.8 million during the fourth quarter and represented 14.3% of our total quarterly revenue, compared to $3.6 million or 15.4% of total revenue during the fourth quarter of 2010.

Our quarterly software revenue is primarily comprised of re-sales of Microsoft Dynamics and software and maintenance. As we do each quarter, we would like to remind you that quarterly software revenue is volatile and subject to customer demand.

With respect to other standard quarterly revenue metrics, we note that our annualized revenue per billable consultant metric was $346,000 in the fourth quarter of 2011 compared to $314,000 in the fourth quarter of 2010. We entered into first time engagements with 28 new customers during the fourth quarter, essentially managing the 30 new customer engagements entered into in the fourth quarter of 2010.

During all of 2011 we entered into first time engagements with a total of 129 new customers compared to only 102 in 2010. Service revenue generated during the quarter by our 10 customers represented 23.5% of total service revenue, compared to 28% in the fourth quarter of 2010.

Further on a full year basis service revenue generated by our top 10 customers represented 20.2% during 2011, compared to 24.9% in 2010. No customers accounted for more than 5% of our total service revenue during either the fourth quarter or full year period of 2011.

Moving on to gross profit, total gross profit as a percentage total revenue was 37.5% during the fourth quarter, compared to 38% during the fourth quarter of 2010 and 37.4% in the third quarter of 2011. Gross profit margin related to service revenue was 41.6% in the fourth quarter compare to 39.5% in the fourth quarter of 2010 and 40.6% in the third quarter of 2011. The slight decrease in fourth quarter and year-over-year total gross profit is primarily the net result of growth of our quarterly software service revenue offset by the absence of royalty revenue from the Fullscope process related contracts.

Fourth quarter total gross margin on a sequential basis is essentially consistent with the third quarter of 2011 and is reflective of the increase in fourth quarter service revenues and the decrease in gross margin contribution of software revenue as a result of the revenue mix between software and maintenance revenue.

The year-over-year and sequential increase in our service revenue gross margin is attributable to the comparative increases in the periodic service revenue reflective of our maintaining or increasing our billable consultant utilization rates.

Global consultant utilization rate was 75.6% during the fourth quarters of 2011 and 2010 and was 75.5% during the third quarter of 2011. As of the end of the fourth quarter of 2011 we maintained a total of 313 billable consultants which includes 26 contractors. Billable headcount including contractors was 290 at the end of the fourth quarter 2010.

Touching upon SG&A expenses, SG&A expense as a percentage of total revenue was 32.9% during the fourth quarter of 2011 compared to 35% in the year ago quarter and 26.5% during the third quarter of 2011. A reminder that SG&A expense during the third quarter of 2011 also included a $1.4 million reduction in expense facility and with changes in the estimated fair value of certain contingent earn out consideration.

In absolute dollar terms SG&A expense totaled $8.7 million in the fourth quarter which represented a year-over-year increase in SG&A expense of $441,000 as compared to the fourth quarter of 2010. The year-over-year increase in SG&A expenses related to increases in commissions and bonus related expenses related to our growth in revenue and the improvements in our current year operating performance.

Sales related salaries and wages, recruiting expenses, product development expenses and travel, training and recruiting expenses. These increases were partially offset by the absence of the company’s fourth quarter 2010 non-cash charge related to potential sales and used tax issues resulting from the Fullscope embezzlement issue.

On a sequential basis excluding any consideration of the non-cash changes and the estimated fair value associated with the contingent consideration, SG&A expense on an absolute dollar basis increased by $690,000. Similar to the year-over-year changes in SG&A expense the sequential quarterly increase in SG&A expense was attributable to increases in commissions and bonus related expenses, recruiting, non-cash stock based, compensation, offset by decreases in travel, fringe and other various overhead expenses.

During the fourth quarter we incurred approximately $18,000 in embezzlement related expenses compared to $775,000 in the fourth quarter of 2010. While we did not incur significant expenses during the fourth quarter associated with the embezzlement issue we continue to caution investors that we may incur additional costs related to this issue in the future. As we have stated in our periodic earnings call, we do not have an estimate for anticipated future cost associated with the embezzlement issue.

In December 2011 we announced the recording of a lease abandonment charge resulting from our abandonment of certain excess lease base within our corporate headquarters. The company recorded a $2.2 million non-cash charge during the fourth quarter. We anticipate that the abandonment will generate annual savings of approximately $580,000 during 2012 and approximately $2.2 million over the remaining life of the lease which expires in July of 2016. The company will continue to evaluate the assumptions related to the calculation of the lease abandonment charge on a routine periodic basis.

Future adjustments arising from changes through our original assumptions or estimates if any will be recorded a paired expense in the period the changes are identified. The 2.2 million lease abandonment charge due to the non-visibility of the charge on a tax basis and the full valuation allowance against the company’s deferred tax attributes essentially reflect the tax affected impact upon our reported 2011 periodic net income or net loss amounts.

Depreciation and amortization expense decreased during the fourth quarter as compared to the fourth quarter of 2010 by approximately $289,000. The decrease is primarily associated with a reduction in amortization expense recorded against the intangible assets identified in connection with the company’s previous completed acquisition. We are reporting a net loss during the fourth quarter of $1.9 million or $0.17 per diluted share, compared to a net loss of $150,000 or $0.01 per diluted share in the fourth quarter of 2010.

Looking at our non-GAAP measures, adjusted EBITDA was $1.6 million or 6.1% of total revenue and $0.14 per diluted share in the fourth quarter of 2011, compared to adjusted EBITDA of $2 million or $0.16 per diluted share in the year ago quarter. And looking at the year-over-year changes in adjusted EBITDA, current year service revenue growth was offset by both the absence of revenue generated from the process related contracts as well as our continued investment in product development.

As it relates to product development we’ve been able to leverage the work we performed under the process related contracts and are developing propriety software modules based upon the dynamic sales platform. Two examples of such development efforts released by the company include the chemical accelerator and an FDA toolkit. Releases related to these products can be found on our website.

Additional information regarding the use of non-GAAP measures, including a reconciliation to the most comparable GAAP measures can be found in our press release that was issued earlier this morning and has been posted on the Investor Relations section of our website at www.edgewater.com.

Moving on to some final operating metrics, cash and cash equivalents totaled $10.3 million as of December 31st compared to $10.9 million at the end of 2010. As of December 31st our cash and cash equivalents now represented $0.86 per diluted share.

As of September 31, we reported a consolidated cash balance of $13.3 million. Our ending cash balance as of December 31 reflects essentially breakeven cash flow from operations during the fourth quarter, decrease in connection with a $2.7 million payment and full settlement of the Fullscope acquisition earn out agreement and approximately $139,000 of stock repurchases.

It should be noted that fourth quarter cash flow from operations was affected by the delayed receipt of several receivable balances which were collected during the first quarter of 2012. Accounts receivable balances including unbilled AR totaled $23.3 million at the end of the fourth quarter. Our DSO metric related to billed AR was approximately 64 days, compared to 59 days at the end of the fourth quarter of 2010.

A final comment updating our stock repurchase authorization. While we are pleased with the overall performance of our business in 2011 we continue to believe that our stock is undervalued. We are committed to taking the necessary steps to create long term value for our stock holders. During the fourth quarter the company repurchased a total of 44,000 shares of common stock at an aggregate purchase price of $139,000. Our ability to repurchase common stock has been limited due to the timing of our blackout periods. As of December 31, 2011 we had just under $4.6 million remaining on our stock repurchase authorization which expires in September of 2012.

With that I’ll now pass the call back to Shirley.

Shirley Singleton

Thanks Tim. Good job. We’re pleased with where we are but we have work to do. We are really looking at some growth in the Microsoft and oracle channels and I just educated you and talked about the ERP. What we’re planning to do next this year was, let’s talk about the Microsoft channel is AS is part of a suite of products called Dynamics. We are actively building out other pieces of that, they call it a stack. So our CRM business that we have talked about prior earnings that is getting marketed if you will, Microsoft is part of the staff and we are going to expand our marketing capabilities that across the entire Microsoft staff, so in the end when you hear future earnings call you may not hear so much of an emphasis on ERP as standalone but it would be that we are building out the stack.

The Oracle piece we already have all four of the stack products if you will that are run into EPM, we cover all of those and then the Oracle are we are really looking at international expansion, we mentioned when was it Tim that UK opening a year ago. That was over a year away, we are getting traction in the UK the business is not necessarily based in the UK but we are using that as a jumping off point. As well we had added application support services as a new offering this year across all of our businesses.

What that will do hopefully will give us a little bit of annuity revenue stream and it's too early to call that out in terms of how big it could be but we have plans for expansion in application services, the reason why is because if you are client based consulting job, their customer itself may not know how to continue to maintain the system in a reasonable time frame after we leave s they are very open and actually asking for our assistance in coming and providing application support. We are targeting on double digit service revenue growth for 2012 and I mentioned that earlier and we anticipate the Q1 service revenue will be sequentially flat, let’s not move side of that, that is up year-over-year as Q4 what Tim had forecasted.

Tim Oakes

Yes 20.8 it's all time high.

Shirley Singleton

And with that Karen we would like to open it up for questions.

Question-and-Answer Session


(Operator Instructions). Our first question comes from the line of Lee Jagoda of CJS Securities.

Lee Jagoda - CJS Securities

Can you just quantify the impact at the higher revenue how an SG&A in form of increased bonuses.

Tim Oakes

Yes I can but I would answer it a little bit differently as opposed to just simply focusing on bonuses. In the quarter we had the luxury of the revenue growth but at the same time it does cause an increase on the variable expense component of SG&A. So in addition to bonuses where we have over achievement on some plans not all given how the plans layout across the business, it similarly impacts commission expense, with increasing commissions and achievements against plans encoded. Again not everybody but certain individuals at rest (ph), as well as it has the impact of increasing other variable related expenses recruiting, training, travel based expenses.

So to kind of expand on the question your original ask the fourth quarter growth, year-over-year, and even sequentially does have an impact on overstating some SG&A expenses if you were to compare it to previous quarters.

Lee Jagoda - CJS Securities

Got it and just asking the question slightly different way can you quantify the fixed piece of SG&A versus the variable piece in absolute dollars.

Tim Oakes

No I don’t have that with me it's a fair question but I don’t have that that I can even give you a reasonable answer that would be (inaudible) that I can stand by right now.

Lee Jagoda - CJS Securities

So surely this is the first time in recent memory, you have given direction on your year revenue view, I don’t want to call it guidance but it's certainly a full year revenue view.

Can you talk about of some of the things that are giving you confidence to express these views this early?

Shirley Singleton

I don’t think we have ever given annual guidance like this; again it goes back to my remarks about the Oracle in the Microsoft product base consulting channels. It's a function of us looking at the pipeline talking to Microsoft and Oracle and themselves, we are just, it's a target it's not guidance we are going to shoot for that and I think there is a shot at us securing double digit growth.

And do you want me to go into any more details than that Lee or?

Lee Jagoda - CJS Securities

I think that’s OK for now, last question and I will hop back in queue. As I look at software revenue if you are thinking about double digit revenue growth for this service piece should software growth faster or slower than service?

Shirley Singleton

It's variable because there are some opportunities that we get - we are actually just doing a license feel and no service it's rare but I am trying to answer the question as truthfully I can. So software isn’t necessary a one for one predicator of service revenues.

Tim Oakes

It's also going to be depend on the mix of service revenue in terms of which of our service offerings are growing for instance if EPM is a large driver of growth you can’t necessarily expect that you will see a wiggle in the software line.

Shirley Singleton

And the other thing that would come to bare Lee is our work in CRM I mentioned we are building up stack, we will be selling CRM licenses as well, so there will be another license component.


Thank you. And our next question comes from the line of Nick Halen from Sidoti & Company.

Nick Halen - Sidoti & Company

Just first off utilization rates, you guys mentioned that they are flat year-over-year, and you guys had pretty strong top-line growth, I was wondering with the dynamic spy that were and I guess what your expectations are for in 2012?

Tim Oakes

To answer the first part in terms of the revenue growth and his stabilization and utilization rate, a utilization rate increased year-over-year, billable head count increased, so far that’s one good time that drives revenue growth. We increased billable consultants and we kept them business and the second part in terms of what else could twist on our revenue growth point of view it could again come down to the service offering mix. So really those are the two things that you would need to look at as you evaluate the utilization and the increase around it.

Nick Halen - Sidoti & Company

Okay and now I mean we are seeing a lot of consolidation it is across several industries and I know you guys mentioned in the past, healthcare and insurance or two industries that you guys were kind of honed in on and I was just wondering if you are still seeing significant opportunities there and what other industries may have popped up recently that you are seeing some opportunities.

Shirley Singleton

We don’t want to forget the manufacturing piece because that’s the whole X (ph) play that we have talked about, so manufacturing, there appears to be some amount of resurgence of manufacturing in the upper middle market and they are looking for a software play for them to reinvent themselves and Microsoft (inaudible) like it's one of the solution.

So I call out manufacturing, healthcare is continuing to be a play for us. Everyone is wondering about how we are going to get paid for performance this year as a healthcare provider and what happens there is the data become a very important element, we have an EIM processor and an information practice that deals with everything that’s beta.

What’s happening to them is they are in a nutshell they have to rearrange how they doing their P&L, the quickest way I can describe without going on for 20 minutes. And therefore the data needs to be reorganized to be able to produce quality reports and payment request reports for the healthcare providers and you see the influence in the insurance companies themselves on the healthcare side as well.

So it's right both in insurance and healthcare and then lastly yes we are seeing people contemplating, a replacement cycle in policy administration, the policies within insurance. We have some nice pipeline on that where we have seen hesitation because these types of projects can be up to $5 million that -- depends employees but no one signing on those but they are thinking about it and I think that’s more than anything in our business, that’s a reflection of confidence or not in the economy, does that help?

Nick Halen - Sidoti & Company

Yes absolutely, thanks. And can you just talk a little bit about where you guys say it I guess in the cloud computing space and what opportunity that present you guys.

Shirley Singleton

Yes we are doing a fair amount in cloud and when you see our filing in the KOC (ph) a new chart that’s in there when we are calling out cloud. Cloud is occurring in several occasions for us, the first place that I want to call is in the business advisory section. We are getting, we get a fair amount of work from private equity firms where they look into mergers and acquisitions and deals and that when they are taking on a new entity they are saying us they are coming to us and saying should I have this in the cloud, what should I this in the cloud, what should be in the cloud and what shouldn’t be in the cloud.

So think of it as cloud advisory, what should I put in the cloud and what should I not and I am not hearing a lot of that talk by the way from other integrators, if we peel the onion you go down in yet another layer.

We have an existing customer where are putting CRM and they have a sales force that U.S. based and China based and their questions was us to was is well should we put everything in the cloud and when we looked at it we said yes in the U.S. that’s fine, let’s do it cloud U.S. but let’s not in China because of the infrastructure problems that may not give them an uptime that’s what they need for their sales force so this whole.

So this whole question of what should be in the cloud and what should not be in the cloud, we have an example of another customer who just finished a job for who happens to be the (inaudible) Union and what they wanted was is they needed IT and they said what should we do we are thinking about buying this huge system and what we did with a business advisor guy because we went in and said you are really not set up to be an IT shot. And this is what we caught you have to cost about resources and then in the end we have put them in the cloud and outsourced everything that they run and they would say as in the old days, in 70s and 80s time sharing was the equivalent of cloud and back then it was the time sharing because of the cost of the equipment. Today cloud is being used as again time sharing but this time instead of the cost of equipment is the cost of people.

Tim Oakes

Right it's a cost that actually do the customization of the software and the building of the environments, so what we on an advisory base is point out to customers when it makes eminent sense for them to really look at things as service, every company that needs technology now can’t afford to build an IT department, there aren’t enough people in the country trained. There aren’t enough around the world trained to do that, so we have to optimize that resource and the way to do that is to see the things to the cloud in an appropriate manner that makes sense. It's kind of like many companies don’t do their pay roll, they hand it out to a pay roll services. So when you come in you even think about its automatically handed out.

Well now people are saying well maybe I should do the same thing with my mail systems I should do the same thing potentially with CRM, maybe I should pick up software as a service and certain key aspects, especially when I have a company that wants to focus on what it's business line and not being a top notch IT department.

Does that answer your question Nick?

Nick Halen - Sidoti & Company

That was great. Thank you and then just lastly I guess for Tim I know you mentioned and I apologize how much is less in the buyback and when does that expire again.

Tim Oakes

Nick just under $4.5 million is less on the authorization and the authorization expires on September of 2012.


Thank you. (Operator Instructions). We do have a follow-up from the line of Lee Jagoda of CJS Securities.

Lee Jagoda - CJS Securities

Just one quick follow-up, can you quantify the impact that the receivables questions had on the cash flows in the quarter?

Tim Oakes

It was literally at hand full of customers and to quantify it I put it in the ball park of somewhere in the $1 million I do want to emphasize though that on those receivables we did collect that money in the first quarter.


Thank you, sir. And that concludes our question-and-answer session for today. I would like to turn the conference over to Ms. Shirley Singleton for closing comments.

Shirley Singleton

Okay. Thank you, a couple of announcements, we are going to be at the Bareilly (ph) Conference, it's May 21st to the 23rd, we are not sure on we are representing it yet so I can’t give you a definitive date, we will do press release so that you can see when we are going to be there.

I also wanted to tell you that Edgewater has been selected to do the Closing Bell Ceremony for NASDAQ in June 19th, Tuesday and so the management team and we are going to have a customer Open House in New York. We are going to invite all of our customers and prospects that are in that area to meet with all of us, and that’s something that we are looking forward to.

So look for us, Tuesday June 19th, and then lastly our Q1, 2012 earnings call will on May 2nd. Can you speak anything else Tim?

Tim Oakes

No I think that’s it. Okay, Karen I think we are set here.


Thank you ladies and gentlemen if you wish to ask a replay of this call you do so by dialing 855-859-056 and then entering access code 49865055, international participants may dial 4045373406.

Those numbers again are 855-859-2056 and 4045373406, access code 49865055.

This concludes our conference for day. Thank you all for participating and have a nice good day. All parties may now disconnect.

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