MiX Telematics' (MIXT) CEO Stefan Joselowitz on Q3 2017 Results - Earnings Call Transcript

| About: MiX Telematics (MIXT)

MiX Telematics Limited (NYSE:MIXT)

Q3 2017 Results Earnings Conference Call

February 02, 2017 08:00 AM ET

Executives

Stefan Joselowitz - President and CEO

Megan Pydigadu - CFO

Paul Dell - Interim CFO

Analysts

Brian Peterson - Raymond James

Bhavan Suri - William Blair

David Gearhart - First Analysis

Operator

Good day everyone and welcome to the MiX Telematics Fiscal Third Quarter 2017 Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Megan Pydigadu. Please go ahead.

Megan Pydigadu

Good day and welcome to MiX Telematics earnings results call for the third quarter of fiscal 2017 which ended on December 31, 2016. Today, we will be discussing the results announced in our press release, issued a few hours ago. Joining me on the call today are Stefan Joselowitz, which many of you know him as Joss, President and Chief Executive Officer of MiX Telematics; and Paul Dell, our Interim, Chief Financial Officer.

Before I review our forward-looking statements, I wanted to make a few comments. This will be my last call with MiX Telematics given my resignation and our recent appointment of Paul Dell as Interim CFO. On November the 15th, we announced that I will be leaving the Company to pursue a new career opportunity in a non-competitive industry, along with my commitment to ensure a smooth transition of the finance functions here at MiX.

With the recent appointment of Paul, I am very confident that the Company is in good hands. Paul is a Chartered Accountant and has gained significant finance experience and an in-depth knowledge of MiX Telematics since joining MiX in 2010. He was originally appointed as Group Financial Manager and in 2012 was promoted to Group Financial Controller. Paul is well-recognized as a team member of the MiX team, having supported our growth and proven himself as a strong manager over the years.

Now, turning to our forward-looking statements. During the call, we will make statements relating to our business that may be considered forward-looking, pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectation. For a discussion of the material risks and other important factors that could affect our results, please refer to those contained in our Form 20-F and other filings with the Securities and Exchange Commission available on our website, at www.mixtelematics.com under the Investor Relations tab.

Also, during the course of today’s call, we will refer to certain non-IFRS financial measures. There is a reconciliation schedule detailing these results currently available in our press release, which is located on our website and filed with the Securities and Exchange Commission.

With that, let me turn the call over to Joss.

Stefan Joselowitz

Thanks Megan. I would like to thank you all for joining us to review our third quarter fiscal 2017 financial results and outlook. Before I walk you through some of the Q3 operating highlights and key accomplishments, I wanted to thank Megan for her seven years of service to MiX Telematics. She has been a big part of our growth and success, and we wish her well on her new opportunity. In terms of Paul, I have complete confidence in his ability and know he will do a great job for us, given his tenure at the Company and value he has added over the years.

Now, turning to the quarter. We are extremely pleased with our execution during Q3, highlighted by our ability to exceed expectations across all key operating metrics. In particular, we achieved adjusted EBITDA margins of 22%, which highlights our commitment to sustain profitable growth without sacrificing investments in sales or innovation. We are starting to see some initial leverage from our bundling strategy and the investments we have made in the Americas.

Looking forward, we expect this overall trend to continue as we advance through our investment cycle and anticipate that EBITDA margins will steadily improve towards our normalized long-term target of 30% plus.

During the quarter, our subscription revenues increased sequentially as we added over 20,000 net new subscribers, taking us to a total base of 605,000. This was one of the largest quarter-over-quarter increases in subscribers in our history, driven by both our premium fleet and asset tracking portfolios.

Our results were driven by general strength across the portfolio globally including a positive contribution from energy sector customers. We are very pleased with ongoing momentum with our large fleet clients as they continue to recognize the value of having a centralized global telematics platform, the same way they view having a single ERP system versus using a myriad of local providers. This broad-based momentum is highlighted by the follow-on customer activity during Q3, which included a contract with our R-Truck, [ph] a U.S.-based natural gas service provider for just under 1,500 vehicles, the deployment of which commenced in January; five new Brazilian based bus and coach customers, collectively adding 750 vehicles; Transmec, an Italian based transport and logistics company who signed up with us last year, committed to adding a further 200 trailers through service fleet; and non-energy services, a U.S.-based company has initially committed 400 vehicles to us, and there is a potential to double that this year.

It is important to point out that the mine [ph] initially started to ensure compliance with the ELD mandate and then expanded to fully leverage MiX’s platform to group safety and increase their competitive advantage. Our ability to offer integrated solutions with the advanced fleet telematics and ELD compliance and MiX Vision was the primary reason for the expansion. This will provide a great reference for the study for other fleets that are considering advanced ELD strategies.

We continue to expand our top line with similar opportunities and as a result, we remain optimistic about the potential to capture new subscribers as they adopt telematics technology to enhance road safety, drive cost efficiencies, and comply with federal regulations.

As a reminder, there are just over 3 million trucks that are subject to the ELD mandate according to the Federal Motor Carrier Safety Administration. And we continue to see top-line growth across the set of [ph] vehicles beyond the energy sector which we expect to favorably impact our presence in Americas.

In addition, we believe that MiX remains well-positioned to capitalize on this opportunity over the next several years, given the importance of compliance for customers and the need to look with the trusted, repeatable partner that has a strong history, relevant experience, and great referencable accounts.

I think it is important to note that most of our wins with bundled deals highlight our ongoing commitment to utilize our strong balance to achieve a significantly higher cash return as the average customer lifetime is approximately eight years. As a reminder, the expected lifetime cash contribution from a typical bundled premium fleet customer is almost $1,000 higher than compared to an unbundled deal. We also continue to have our retention rate in excess of 95% with our large premium fleet customers, and some of these relationships extend well-beyond our average customer lifetime of approximately eight years. This emphasizes our ongoing commitment to customer service as well as our ability to consistently delivery an easy-to-understand and easy-to-measure attractive return on investment, which also drives the long-term customer retention.

Looking forward, we expect these trends to continue and to see in excess of 80% of new subscriber adds choosing our bundled option, which will enhance overall ARPU and decrease lower margin hardware revenues.

During the quarter, we also saw ARPU being positively impacted by our customers’ ability to subscribe to a range of add-ons on top of our core solutions, which not only increases revenue per vehicle but also enhances customer retention. Some examples include MiX Vision, MiX Go and Hours of Service, which can each add between $10 and $20 per vehicle per month.

Longer term, we expect to continue leveraging the power of our premium fleet base to generate diversified revenue streams, which will not only drive overall ARPU and subscription revenue growth over time but also improve our growing leverage and cash generation over the lifetime of the fleet subscriber.

I want to remind you that our functional currency is the South African rand, which has continued to strengthen against all major currencies and remained the headwind on our revenues with the resultant muting effect. Of course, for U.S. investors in which I’m one, transacting a stronger rand back into dollars is a positive and on balance I prefer strengthening rand cycle. But, as a result, subscription revenue growth on a constant currency basis was in reality higher than what we are reporting.

So, in summary, we are very pleased about our strong Q3 execution, particularly better than expected growth in subscription revenues and improvement in our adjusted EBITDA margins as they steadily improve towards our normalized, long-term target of 30% plus. While we still expect to see quarterly up and down fluctuations, we believe MiX is well-positioned to maintain the momentum, given our product diversification, integrated global platform, and strong balance sheet, which allows us to pursue our increasing ARPU strategy, given the significantly improved longer term returns.

With that, let me turn it over to Paul to run through the details on the quarter.

Paul Dell

Thanks Joss. Now, let me walk through our third quarter fiscal year 2017 performance, and recall that our reporting currency is the South African rand. For convenience, we have translated our results into U.S. dollars both for the 2017 and 2016 periods using the December 31, 2016 rate. You can find these conversions in our press release. In addition, please note that our results are presented on an IFRS basis unless otherwise noted.

Total revenue, during the third quarter was R401 million, which is 6% year-over-year increase. Subscription revenue during the same period also increased 6% to R311 million and exceeded the high end of our guidance range. This was due to the ongoing growth in our asset tracking business combined with positive traction from our premium fleet customers across our geographies and vertical markets, including the energy sector.

As Joss noted in his remarks, our business is undergoing a transition to significantly more bundled contracts. This is positive for our business longer term as the larger subscription engagements are more profitable. And as we have said in the past, we are happy to absorb the near-term profit and loss affect, and we believe funding the upfront cost is an excellent use of our cash as the returns are very attractive.

We ended the third quarter with over 605,000 subscribers, an increase of 10% year-over-year as we added over 20,000 net new subscribers, which was nearly triple our performance last quarter. This resulted in the Company exceeding the 600,000 subscriber mark for the first time in our history.

Hardware and other revenue was R91 million, up 8% year-over-year and 36% quarter-over-quarter. The increase was primarily due to large customer purchases for our MiX Vision solution in Europe and telematics [ph] units in North Africa. Our current pipeline doesn’t indicate the similarly high level hardware sales for Q4. The elevated Q3 hardware revenue resulted in subscription revenue, representing 77.4% of total revenue in the quarter.

Looking forward, we expect ongoing shift towards bundled deals to increase our subscription revenue as a percentage of total revenue, which will provide us both improved visibility and higher margin.

Our gross profit margin in the third quarter was 66.6%, compared to 68% in last year’s third quarter. The margin was impacted by the higher contribution from lower margin hardware revenue this quarter, as well as increase in the cost per connection from transitioning to Amazon Web Services. We continue to believe our current model supports total gross margin in the high 60s and that we can achieve our long-term total gross margin in excess of 70%.

In terms of our operating expenses, our sales and marketing costs now represent just over 12% of total revenue, and we are pleased to see that we are now nearing our stated long-term target range of between 11% and 12% of revenue.

General and administrative expenses were 42.6% of total revenue, down from 45.2% last year, highlighting our ongoing commitment to cost control and scale in the business. The increased hardware revenue also benefited these metrics. Recall that our general and administration costs include research and development costs non-capitalized. For those of you interested to see our historical capitalization and development cost expense, we have provided a table in our earnings press release. We still believe that over time, as the business becomes full scaled, general and administration costs as a percentage of total revenue should reduce to below 40%.

We achieved an operating profit margin of 11.9%, an increase from 8.9% posted in the third quarter last year, and this highlights the scale we are seeing in the business. To provide an update, additional information regarding our financial results, we disclosed adjusted EBITDA and adjusted EBITDA margin as well as adjusted profit for the period, which are non-IFRS measures and we have provided a full reconciliation table in our press release.

Third quarter, adjusted EBITDA increased 24% to R88 million or 21.9% of revenue compared to R71 million or 18.8% of revenue last year. As Joss mentioned in his remarks, this is the highest adjusted EBITDA margin the Company has achieved in almost two years and highlights MiX’s commitment to sustain profitable growth without sacrificing investments in sales or innovation.

IFRS profit for the period, which includes the net foreign exchange loss of R4.9 million before tax was R35 million, down from a profit of R58 million in the year ago quarter. The comparative quarter included a net foreign exchange gain of R69 million on U.S. dollar cash reserves.

During the current quarter, the change in an uncertain tax position relating to research and development expenditure reduced the effective tax rate by 14.8%. Adjusted earnings for the quarter was R37 million or R0.07 per diluted ordinary share, which was up from the R16 million or R0.02 per share we posted a year ago.

Turning to the balance sheet, we ended the quarter with cash and cash equivalents of R359 million, up from R347 million at the end of last quarter. From a cash flow perspective, we generated a R97 million in net cash from operating activities and made R72 million investments in capital expenditures, leading to positive free cash flow of R24 million for the third quarter compared to negative free cash flow of R40 million in last year’s comparative period.

Now, turning to our financial targets for the full year 2017 and the fourth quarter. Given the better than expected third quarter results combined with our expectation of continued momentum of our large fleet customers as well as improved operating leverage in the business, we are increasing our subscription revenue and profitability guidance for fiscal 2017. Specifically, for the full year, we are now targeting subscription revenue of R1,233 million to R1,236 million or year-over-year growth rate of 6.6% at the midpoint of the range, up from our previous guidance of R1,220 million to R1,230 million.

We are also expecting to deliver total revenues of R1,513 million to R1,525 million compared to our previous guidance of R1,501 million to R1,525 million. As we noted in the press release, our financial targets are sensitive to exchange rate fluctuations, particularly volatility related to the rand versus the dollar. We arrived to that guidance assuming average exchange rate of R14.20 to the $1, consistent to the average exchange rate used in quarter two guidance.

We’re also increasing our adjusted EBITDA guidance to between R275 million and R295 million on an adjusted EBITDA margin range of 18.2% to 19.4%; this compares to our previous guidance of between R270 million and R290 million or an adjusted EBITDA margin range of 17.9% to 19% and highlight the margin expansion we expect to continue seeing in the business. This would lead to an increase in adjusted earnings per diluted ordinary share of 12.2 to 14.7 South African cents based on 632 million diluted ordinary shares, and an effective tax rate of between 29%-32%; this is up from our previous guidance of 11.8 to 13.8 South African cents. For the fourth quarter of 2017, we are targeting subscription revenue in the range of R315 million to R318 million.

In summary, we were very pleased with our third quarter results and believe that MiX is well-positioned to maintain the momentum for the remainder of the year and beyond, given our industry-leading integrated fleet management platform; product diversification; ongoing traction in key verticals and geographies; and commitment to sustain profitable growth.

Operator, we are now ready to begin the question-and-answer session.

Question-and-Answer Session

Operator

[Operator Instructions] The first question is from Brian Peterson from Raymond James.

Brian Peterson

Hi. Good morning, guys, and congrats on a great quarter. So, Joss, I wanted to hit a little bit on the oil and gas customer base. You mentioned that that was a driver this quarter in the healthy subscription numbers. Trying to understand how big of a factor that was. And if I think about the slack in the model from some of the oil and gas customers that might come onboard in fiscal 2018 and beyond, how much slack that we still have left?

Stefan Joselowitz

Thanks, Brian. In an absolute numbers, during the quarter, as to a contributor towards our 20,000, it wasn’t a huge component to that 20,000, but from a subscription revenue perspective, of course they’re high ARPU subscribers. But what was significant is that we had far previous quarters where it was in fact an anchor ankle around our ankles, and was in fact some muting on our growth. So, this quarter, it was -- we were delighted that it was a positive contributor and not insignificant, nice contributor. And we are expecting that momentum continuing; we’re looking good in our pipeline. And we’ve announced some new deals which we’re starting to roll out now. And all of these that will layer on; and we’re good about our momentum.

Brian Peterson

Got it. And so, if I think about your guidance for the fourth quarter, I think it assumes about 3% growth in subscription revenue. I’m not trying to peg you on fiscal 2018, but as the comps sort of ease, as we look into next year, is it fair to say that that might be the bottom for subscription revenue growth?

Stefan Joselowitz

Yes. In terms of our plans for 2018, we will certainly give a lot more clarity when we report the next quarter, say in a few months’ time. We are very excited about the quarter we just delivered. And as I said, we’ve got a warm feeling about our momentum going forward. So, that kind of growth percentage in terms of the guidance we’ve given for the year. Remember, we’ve got up to what I consider to be a horrible start. So, to finish the year on that basis, I’m pretty pleased where we’ve positioned ourselves, taking into account the start that we did. Assuming a full year of normalized performance, I would consider that to be disappointing. So, I guess watch the space, and we’ll give you some guidance, more specific guidance when we talk to you again.

Brian Peterson

Got it. And maybe just one more from me, you mentioned one win specifically related to ELD. Is that more the exception or the norm at this point? I’m sure that’s driving the pipeline, but how big of a driver is that in terms of actual subscribers at this point? Thanks.

Stefan Joselowitz

In terms of ELD mandate itself?

Brian Peterson

Yes.

Stefan Joselowitz

Yes. It’s certainly a driver -- in terms of our current subscriber base, I wouldn’t say -- our current achievements in the quarter we just reported, I wouldn’t say in and of itself it’s been necessarily a huge driver. In fact if any, we have announced a deal, which started as -- the conversation started as an ELD conversation and evolved into something much bigger than that, and as the conversations turn into a contracted subscribers, that is starting to roll out. So, it didn’t impact last quarter; it will impact this quarter. But many of our conversations and our pipeline are certainly driven around, if not broader than that, they are certainly starting with an ELD discussion, and obviously our portfolio allows us to grow much broader than that. And not to say, we won’t do basic ELD stuff, but the value-add for our customers is much bigger as we got deeper into our portfolio. And so, we expected to be a bigger contributor for the year going forward in terms of revenue driver than it was for the year behind us.

Operator

Our next question comes from Bhavan Suri from William Blair.

Bhavan Suri

Just to talk through a couple of things. Obviously, you said the drag on the business from weakness of energy wasn’t there. But, you did see some upside. And I was wondering, was there specific vertical you saw the upside from, was it some of the coach and carriers above guide, what vertical did you see any upside from?

Stefan Joselowitz

Bhavan, we saw -- it was balanced upside, and that’s what particularly pleased me most about the quarter. We saw contributions from multiple geographies and multiple verticals including the energy sector. So it wasn’t -- I don’t want to give the wrong message, it wasn’t a neutral. We did see positive growth and valuable growth out of that sector, but other verticals as well, transport, logistics, bus and carriage, our asset tracking business and all of our geographies contributed. And that’s what we need. We need all of the pistons to be firing and that’s what will make unlock the magic, as we move forward.

Bhavan Suri

Got it. If you look at the pipeline and the mix of the pipeline from a vertical, geographic perspective, do you feel that’s pretty balanced too or is that skewed at all to any one side; is it more skewed towards the U.S., given you’ve been investing in sales there? How should we think about how that pipeline mix might look?

Stefan Joselowitz

It’s again, reasonably balanced. We’ve seen -- even some surprising; we’ve got a great team in Brazil, but they’ve been facing a very tough economy and disrupted. We’ve got -- I’ve been pleasantly surprised by the result that they delivered, strong growth. So, they are competing extremely well; we’ve seen good contribution out of the African business; out of Europe; our U.S. business was a contributor in the quarter that we just reported; Middle East and Australia are certainly the -- energy sector in the Middle East is recovering slower than it appears to be recovering in the U.S. but I think there is other factors that play there. So that market was more neutral for us. But all-in, our operations are contributing not only at the topline, also in term of efficiencies, good cost management et cetera, et cetera.

Bhavan Suri

You touched on ARPU expansion a couple of times I guess on the call. If you look at the products that are driving -- you’ve got Fleet Manager, you’ve got your Hours of Service, you’ve got MiX Vision, you’ve got MiX Tabs, and MiX Tabs is relatively new of course. But, as you look at that, any particular bundle or any particular model that’s driving it, any one you’re seeing strength or better uptake in?

Stefan Joselowitz

Yes. I’d just say, this has been a really long time for us, and we’ve got many subscribers and many fleets that utilize that service. The standout one in recent quarters now and it’s exciting one for us because it is -- it got off to a slow start, MiX Vision. So, we’re seeing good uptake in multiple geographies including the Americas, both Latin America and the United States with fleets recognize that this -- having a strong telematics product with video [ph] integration of vehicle gives some very strong efficiency, management and safety benefits. And so we’re seeing very good uptake from that. And that product, as you’ll recall, it was -- it started off very slowly; and it’s now something that’s measured in tens of thousands. And it’s a real ARPU driver. So, I am excited about this.

Bhavan Suri

And then, one last one maybe from me for Paul. Paul, welcome obviously, you’ve been here for a while but to the new role. When you look at the gross margin guidance, you sort of commented sort of 70%. But if I think about that and I say okay, so hardware continues to decline as a percentage of revenue, obviously ticked up in the quarter but say it does, as you push the bundle deals and you see that and then ARPU ticks up because of the modules and cross-sell and things [ph] we’re doing. As I think through that, does this get higher than that 70%, potentially longer term, because the hardware piece becomes de minimis and you’ve got sort of really good software up-sell or do you think 70 is kind of a good long-term target?

Paul Dell

I think, Bhavan, at this stage, we’re aiming for the 70% mark, and maybe they’d be slightly above, but I think 70% is a reasonable basis to put in your projections.

Bhavan Suri

Okay, because you have...

Paul Dell

And it will take a little bit while as we -- we’ve still got a bit of hardware revenue. So, [Multiple Speakers], come on that will do over fiscal 2018 and beyond.

Bhavan Suri

Okay, because have at 70 several quarters and above 70 in some cases. And so, it just sounds like you could do it.

Stefan Joselowitz

I think this quarter we did have quite high hardware revenue, which all carry lower margin [Multiple Speakers].

Bhavan Suri

Yes.

Operator

And we’ll go next to Brian Schwartz from Oppenheimer.

Unidentified Analyst

Hi, this is [indiscernible] filling in for Brian Schwartz. Congratulations on the quarter and congratulations, Paul on the responsibilities. We look forward to working with you in the future. Just one real quick one from me just the real great subscriber number that 20,000. I wanted to -- I think that’s the most you’ve had in 11 quarters and I wanted to dig into a little bit more. You gave some great color in your commentary about some of the deal activity that comprises of 20,000. But I was wondering if you could talk about the general mix of that number between new customer wins and expansions at existing customers. And if you could, maybe some commentary on the mix between fleet customers and consumer subscriber mix too?

Stefan Joselowitz

Sure, yes. So, number of questions there, but certainly between fleet and asset tracking, the number was weighted towards asset tracking. As we would expect, that’s the high volume driver in our business. In terms of new customers, this is always healthy mix between existing customer expansion and new deals across all verticals. As I mentioned already, we’ve seen -- we saw good growth out of bus and coach sector in various geographies; we saw contribution out of the energy sector, both from existing customers expanding their fleets, getting back to work so to speak, and new customers recognizing that they need to make some investments in the fleet to either improve their own internal efficiencies which was pretty much given in all cases, or stock preparing for the for ELD compliance, if not already compliant, on the way to being compliant. So, a good mix of new wins and the existing customer expansions.

Unidentified Analyst

And, if I could, just one quick on the Beam-e product. Has there been any geographies that are reached scale or reaching where Beam-e can now be introduced, and has pricing been relatively stable for Beam-e over the quarter?

Stefan Joselowitz

Yes, crossing is stable, so that’s the answer to your second part of your question. And so, the first part is there is no specific geography that’s reaching scale from a Beam-e rollout perspective, but don’t necessarily have to be geographies. We do have some customers, so let’s call the money geography that have scale in their own right that are trialing on new MiX Tabs solution which was basically Beam-e on steroids for some of the international markets like Europe and the USA.

Operator

[Operator Instructions] Our next question comes from David Gearhart from First Analysis.

David Gearhart

Most of my questions have been asked up to this point, but piggybacking on the last question on Beam-e. I just wondered if you could provide a little color on MiX Tabs, if there is anything worth sharing on that product at this point.

Stefan Joselowitz

Nothing significant worth sharing, other than we’ve got some customers; we’ve talked it is quite significant in itself, trialing the product which is from our perspective the first step towards turning it into a revenue driver. So, we’ll keep you posted as far as that evolves.

David Gearhart

And then going back to the question on the 20,000 sub-adds and then getting a complexion or is that sort of the complexion of that mix and competition [ph]. I know it’s been heavily balanced, not heavily but just like more asset tracking based versus premium fleet. Just wondering, if you’ve seen a little bit of a shift back towards similar to mix being fleet versus asset tracking and if you expect that to occur?

Stefan Joselowitz

Well, we’re certainly seeing that momentum starting as we see that the drag that we’re experiencing just about for five quarters in a row from contraction from certain customers as these often turn into contribution now. And we would expect with the projects that we’ve got going on and some committed deals and what we have in the pipeline that mix will continue to what this quarter the right sized position. My feel is that we’re getting sort of a 50-50 contribution from those. Remember, from a subs revenue perspective, it’s not as misbalanced, because the revenue contribution from the fleet side is significantly higher in some instances, 10 to 1 compared to Beam-e subscribers. So, we don’t have the same impact. But nonetheless, if 50% of our 20,000 growth was high ARPU fleets, our subscription revenue performance would be spectacularly better than what we just reported. So, we’re constantly pushing our teams to get the levels right in our business?

David Gearhart

And last one for me, I mean you have -- you talk about pipeline and I just wondered if there is any way that you’d be willing to comment on number of vehicles in the pipeline or someway to just quantify what the pipeline looks like of opportunities beyond vertical to geography, just a high level vehicle count, what you’re looking at or what is possible?

Stefan Joselowitz

Unfortunately, not David, we’re feeling really good about the quarter we just delivered. We think that momentum can and will be continued into Q4; and beyond that, we’ll give a better feel of -- a much better feel of our view of the next year, next fiscal year, the next time we have this discussion in the three months time. So if you wouldn’t mind giving us that opportunity, we’ll give you a much clearer picture then.

Operator

And that’s all the time we have for questions today. Mr. Joselowitz, I’ll turn the conference back to you for additional or closing remarks.

Stefan Joselowitz

Thanks you. I j9ust wanted to take this opportunity to thank everybody for their attention and taking time to listen to the evolvement of the next story. Any of you who are attending the Raymond James conference in Orlando, in early March, we’ll look forward to meeting and speaking with you then. Until the next time we chat, all the best. Thank you.

Operator

And that does conclude our conference call today. Thank you all for your participation.

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