Exlservice Holdings, Inc. (EXLS) CEO Rohit Kapoor on Q1 2019 Results - Earnings Call Transcript

About: ExlService Holdings, Inc. (EXLS)
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Earning Call Audio

Exlservice Holdings, Inc. (NASDAQ:EXLS) Q1 2019 Earnings Conference Call April 30, 2019 8:00 AM ET

Company Participants

Steven Barlow - VP, IR

Rohit Kapoor - Co-Founder, Vice Chairman & CEO

Vishal Chhibbar - EVP & CFO

Conference Call Participants

Margaret Nolan - William Blair & Company

Bryan Bergin - Cowen and Company

Joseph Foresi - Cantor Fitzgerald & Co.

Puneet Jain - JPMorgan Chase & Co.

Vincent Colicchio - Barrington Research Associates


Good day, ladies and gentlemen, and welcome to the First Quarter 2019 EXLService Holdings, Inc. Earnings Conference Call. [Operator Instructions]. As a reminder, this conference call may be recorded.

I would now like to introduce your host for today's conference, Steve Barlow. Sir, you may begin

Steven Barlow

Thank you, Lauren. Good morning, and thanks to everyone for joining EXL's First Quarter 2019 Financial Results Conference Call. I'm Steve Barlow, EXL's Vice President of Investor Relations. With me today in New York are Rohit Kapoor, our Vice Chairman and Chief Executive Officer; and Vishal Chhibbar, our Chief Financial Officer.

We hope you've had an opportunity to review our Q1 2019 earnings release we issued this morning. We've also updated our investor fact sheet on the Investor Relations section of EXL's website. As you know, some of the matters we'll discuss on this call are forward-looking. Please keep in mind that these forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, but are not limited to, general economic conditions, those factors set forth in today's press release, discussed on the company's periodic reports and other documents filed with the Securities and Exchange Commission from time to time. EXL assumes no obligation to update the information presented on this call.

During our call today, we will reference certain non-GAAP financial measures, which we believe provide useful information for investors. Reconciliation of these measures to GAAP can be found in our press release as well as the investor fact sheet.

Now I'll turn over the call to Rohit Kapoor, EXL's Chief Executive Officer. Rohit?

Rohit Kapoor

Thank you, Steve. Good morning, everyone, and welcome to our first quarter 2019 earnings call. In the first quarter, we reported revenues of $239.6 million, which represents a 15.8% increase year-on-year. Adjusted EPS for the quarter was $0.71. Our core business, excluding Health Integrated, is strong and grew by 9.8% on an organic constant-currency basis. This is our highest growth rate in the past 11 quarters. Excluding Health Integrated, we achieved an adjusted EPS of $0.79. Analytics had an outstanding quarter. Revenues increased 52.3% year-on-year to $87 million. Organically, Analytics grew 19.7% year-on-year compared to 15.8% in 2018. Our Operations Management business reported $152.6 million in revenues, up 1.8% year-on-year and 3.9% on an organic constant-currency basis. Excluding Health Integrated, Operations Management grew by 5.8%. We had strong performance in Insurance and Finance & Accounting, both of which grew by double digits.

Today, I would like to discuss 2 of our key growth engines: Insurance and Analytics. Separately, I will also provide a brief update on Health Integrated and our progress on SCIO. Our Insurance business has been a cornerstone of our growth since inception and represents 42% of our total revenues. In the first quarter, our Insurance vertical grew by 13%. We continue to expand relationships with existing clients and at the same time, have built a strong new client pipeline in Insurance. In the past 3 years, the number of clients contributing more than $10 million in annual revenues within the Insurance vertical has doubled.

Our new client pipeline is the strongest in the past 7 quarters across multiple service lines and across all of our geographies. The growth within Insurance has been as a result of increasing market demand combined with EXL's global leadership positioning in this industry. Our leadership position is founded on our deep domain expertise and capability that span across the end-to-end insurance value chain. EXL serves clients across property and casualty, life and annuities, retirement, reinsurance and broker segments. Our more than 11,000 insurance professionals include specialists, insurance, finance and accounting experts, insurance analytics professionals and actuaries. Together, they bring data and technology expertise, implementation rigor and operational excellence to deliver tangible outcomes at scale across more than 600 complex processes.

Our solutions are further strengthened by a suite of proprietary technology-enabled platforms that offer us greater visibility into client processes. This enables us to partner with clients to solve specific business challenges that are complex. Our market reputation and the wide range of capabilities in insurance operations gives us the opportunity to continuously expand our business. A perfect example is in Finance & Accounting where we see strong traction as a result of our value proposition in insurance-specific finance and accounting processes and technology-enabled solutions. Today, we deliver finance and accounting services to 12 of our top 20 insurance clients.

Our integrated digital capabilities in insurance are one of the most advanced in the industry. For example, we support end-to-end customer acquisitions for our clients by helping them design targeted digital marketing campaigns, driven digital customer journeys and couple this with automated underwriting engines. We also improve the quality, speed and cost of business processes in areas like policy administration and claims. So technology-led BPaas solutions, advanced automation, analytics and AI.

We are consistently recognized by industry analysts as market leaders. Firms such as Everest Group rank us in the top right-hand quadrant for our operations management capabilities in property and casualty as well as life and annuities insurance. In its most recent PEAK Matrix support, Everest Group cited our revenue growth, our geographic reach of our clients, our solutions across the insurance value chain and our digital capabilities as reasons for our leadership ranking. Overall, I remain excited about the prospects of our Insurance business.

The second area I would like to discuss is Analytics, which now represents 36% of EXL's total revenues. Our Analytics business continues to deliver strong performance and has grown across industries and geographies. In 2018, we further strengthened our Healthcare Analytics practice through the acquisition of SCIO. In the past, we have discussed our delivered strategy of organic and inorganic investments to build advanced capabilities across the full analytics stack: from data and data management to advanced analytics and AI. This has allowed us to build a differentiated leadership position in the analytics market.

As our clients visage towards the adoption of advanced analytics and AI, embrace enterprise-wide digital transformation and migrates to a modern data architecture, they are discovering the biggest impediments to their change agendas remains the absence of clean and complete data. We are able to help our clients unlock these new value tools to our enterprise data management services and data-enabled solutions. These capabilities are resonating very well in the marketplace.

Our enterprise data management services help clients with high-quality, well-governed enterprise data assets for easy consumption by the entire organization. We combine our advanced data management methodologies, technology expertise, our understanding of our clients' businesses to create new enterprise data assets, which can then be utilized to deliver targeted business outcomes. For example, we are helping a U.K. insurer build the enabling data assets required to support a digital omnichannel experience for end customers. By transforming their legacy customer data silos into a modern cloud-based environment, they will be able to achieve a consistent customer view across the organization.

Our data-enabled solutions provide end-to-end data and analytics capabilities as a one-stop shop. They are able to integrate external data streams with our own data and use proprietary advanced analytics algorithms to deliver superior insights. This helps our clients realize outcomes for specific use cases without having to acquire external data, invest in the infrastructure to maintain it and hire analytics talent to build predictive models. For example, we are helping a U.S. insurer deliver end-to-end customer acquisition capabilities. We leverage proprietary and third-party data assets that include more than 6,000 risk, credit and demographic variables as well as combine scores on online and offline behavior. We combine analytics, marketing, technology and operations to execute cost-effective new business, cross-sell and up-sell strategies. We have successfully expanded this across clients in health care and financial services as well. Data will continue to sit at the center of clients digital transformation agendas, and we are uniquely positioned to capitalize on this market trend.

Next, I want to discuss Health Integrated. Notwithstanding the strategic rationale at the time of investment, this particular asset fails to deliver the expected results, which is why we have decided to wind down the business. Our goal is to exit the business with professionalism and in a responsible manner. We are moving expeditiously to limit the impact of the exit and refocus our energies on more strategic portions of the business.

I would now like to provide an update on the integration of SCIO, which is nearly complete. We remain excited about the client base and the leadership team we gained with the SCIO acquisition. The SCIO leadership has been fully integrated into the broader EXL team and some have taken on a larger role within our organization. We have aligned the front-end sales force of SCIO with EXL to streamline our go-to-market strategy across the entire health care value chain. We expect this unified go-to-market approach to generate a strong pipeline among large payers and create new cross-sell opportunities in care management. We are also on pace to integrate the full business under our common operating ecosystem.

SCIO has been accretive to adjusted EPS every quarter, and the strategic rationale of the acquisition is playing out well.

Finally, I will end with a few comments on our pipeline. We continue to have a favorable demand environment in Operations Management and Analytics. In Operations Management, the pipeline is particularly strong among existing clients with opportunities to expand into new areas of their business and cross-sell new service lines. In Analytics, we continue to see robust demand among new prospects for our full Analytics stack. We are also seeing an increase adoption of our new and advanced offerings such as our data products, data management services and our AI and machine learning solutions.

In closing, I look forward to 2019 being another successful year for EXL. With that, I will turn the call over to Vishal.

Vishal Chhibbar

Thank you, Rohit, and thanks, everyone, for joining us this morning. I would like to start by providing insight into our financial performance for the first quarter 2019, followed by updated guidance. We had a strong quarter with revenues of $239.6 million, up 17.5% year-over-year on a constant-currency basis and adjusted EPS of $0.71, up 9.2% year-over-year. As you are aware, we are winding down the Health Integrated business. My discussion on the financial results encompassing revenues and expenses will be excluded - excluding the impact of Health Integrated in order to underscore the performance of the core business. I will discuss Health Integrated separately later in my remarks. All revenue growth numbers mentioned hereafter on - are on a constant-currency basis.

We had a great start to the year with revenues of $235.7 million, excluding Health Integrated, up 19.3% year-over-year and 9.8% or - year - on an organic basis. This is the highest organic growth rate since Q2 of 2016. Sequentially, we grew revenues at 1.8%.

For the quarter, revenue from our Operations Management business as defined by 5 reportable segments, excluding Analytics, was $148.7 million, up 5.8% year-over-year. This growth was primarily driven by clients from Insurance and Finance & Accounting segments. Insurance grew 10% year-over-year. This growth was driven by ramp up of 2018 rent and expansion in existing clients. Finance & Accounting continues its the steady growth momentum of 10% year-over-year. This growth was driven by ramp up of prior year rent and expansion in existing clients. This is the fifth consecutive quarter of double-digit growth for Finance & Accounting segment.

Analytics continued its strong performance with revenues of $87 million, up 53.1% year-over-year, including revenues of $19.1 million from SCIO Health Analytics. On an organic basis, Analytics grew 19.7% year-over-year. This broad-based growth was driven by expansion in existing client relationships resulting in strong growth in Insurance, Healthcare, Banking & Finance verticals. Sequentially, Analytics grew 1.1%. Gross margin for the quarter improved by 140 basis points year-over-year to 35.5%. This margin expansion was driven by better product mix, improved productivity and utilization. During the quarter, we increased our investment in frontline sales and digital capabilities, which increased our SG&A expenses to 20.7% of revenues. As a result, our adjusted operating margin for the quarter was flat at 14.5% year-over-year.

Our adjusted EBITDA for the quarter was $41.9 million compared to $35.5 million last year, which represents a growth of 18% year-over-year. Our GAAP tax rate for the quarter was 22.1%. Excluding the impact of discrete item, namely an excess tax benefit recognized on stock compensation, our normalized tax rate for the quarter was 27.3%. We had $302.7 million of cash and short-term investments and borrowing of $320.6 million, resulting in net debt of $17.9 million as of March 31. For the quarter, we spent $10.9 million on capital expenditures and repurchased 240,000 shares for $14 million under the share repurchase program. Excluding Health Integrated, our adjusted EPS for the quarter was $0.79 versus $0.69 in Q1 of 2018, up 14.5% year-over-year.

Now I would like to discuss the performance of Health Integrated business. Health Integrated generated revenues of $3.9 million this quarter compared to $6.4 million in Q1 2018. Health Integrated had a dilutive impact of 170 basis points on adjusted operating margin, leading to an adjusted EPS loss of $0.08. In addition, we reported an impairment charge of $1.2 million on fixed assets, which is excluded from adjusted EPS for this quarter. For 2019, we now expect Health Integrated will generate revenues in the range of $10 million to $14 million, including the $3.9 million for Q1. Our previous guidance for Health Integrated was $16 million to $18 million. The negative impact of adjusted EPS due to loss of Health Integrated is expected to increase to $0.23 to $0.27 compared to our previous guidance of $0.16 to $0.20, an increase of $0.07 loss on the top end and the bottom end. This does not include any non-vectoring winding down expenses that will not have any impact on the adjusted EPS. Structurally, the business has a higher fixed cost base on the regulatory and compliance requirement. In addition, we have normal operating cost to fulfill our contractual obligation as we transition. Therefore, the full quarter delivered services to our clients will not decrease a step with the decline in revenues as client transition out during the year.

The revenue and adjusted EPS estimates mentioned earlier are based on current transition time lines, which may change over the course of winding down process. We are having ongoing discussions with our clients to find out their respective time lines. And once finalized, we may adjust the revenues and adjusted EPS estimates accordingly. In addition, until those clients are finalized, we are unable to estimate the winding down expenses to be incurred, which will not have any impact on the adjusted EPS.

Now moving to our guidance for 2019. We are revising our revenue guidance to $969 million to $996 million from $975 million to $1 billion. This guidance represents a growth of 10% to 13% on a constant-currency basis. This includes the $10 million to $14 million of Health Integrated revenues as mentioned earlier. Excluding Health Integrated, there is no change in our core guidance.

Our adjusted EPS guidance was revised to $2.83 to $2.98 from $2.90 to $3.05 to reflect the higher Health Integrated losses of $0.23 to $0.27 as mentioned earlier. Excluded - excluding Health Integrated, our adjusted EPS guidance for core business remains the same at $3.10 to $3.21.

In the second quarter, we expect marginal revenue growth on a constant-currency basis owing to a decline in Health Integrated revenues in - from Q1 of 2019 to a range of $2.8 million to $3.4 million. Sequentially, we expect flattish adjusted EPS due to the impact of annual rate increases, in line with our prior year trends, and an adjusted EPS loss of $0.07 to $0.08 from Health Integrated.

In conclusion, all underlying business, excluding Health Integrated, is performing well with revenue growth of $19.3 million year-over-year and 9.8% year-over-year on an organic basis. Excluding Health Integrated, our adjusted EPS for the quarter was $0.79, up 14.5% year-over-year. We have high revenue visibility in our core business and are very positive to meet our profitability goals in 2019.

And now, Rohit and I will be happy to take questions.

Question-and-Answer Session


[Operator Instructions]. Our first question comes from Maggie Nolan with William Blair.

Margaret Nolan

A question about Health Integrated. Is there further downside to that $10 million to $14 million contribution that you've outlined and the decrease that you've seen thus far? Was that really driven by your efforts thus far to wind down the business? I'm just trying to get a sense of how that wind down is progressing and what potential downside there could be to the guidance you've laid out.

Rohit Kapoor

Thanks, Maggie. This is Rohit. So for us, the wind down of the Health Integrated business is taking place in a pretty disciplined and structured format. The revised guidance that we've provided to you both on the top line and the bottom line is our best estimate at this point of time. As you can see in the comments provided by Vishal, we had $3.9 million of revenue from Health Integrated in the first quarter. And in the second quarter, we expect approximately $3.5 million of revenue from Health Integrated. So that's $7.4 million of revenue in the first half of the year. We expect this thing to wind down gradually in the second half of the year. And in our estimate is that it will come in at somewhere between $10 million to $14 million as we fully wind down this asset. The greater volatility is perhaps on the EPS side. And there, as we get to wind down the cost and we get more certainty on the cost, we will certainly provide that updates to everybody as soon as we have more color on that.

Margaret Nolan

Okay. That's great detail. And then I wanted to ask about the Analytics segment. You're obviously seeing great growth there. You saw an improvement in margins over the course of last year. And I'm wondering if that's something that we can kind of expect to see this year as well, especially as you look at the year on a year-over-year basis, are we getting into kind of a trend where the increase in revenue and that strong growth is going to help expand the margin profile on a year-over-year basis?

Rohit Kapoor

Yes. Certainly. So in the first quarter of the year, our adjusted operating margin was 14.5%, excluding Health Integrated. Our guidance basically calls for our adjusted operating margin for the full year to be somewhere close to about 15% to 15.1% adjusted operating margin for the full year. And therefore, we would expect in the second half of the year our adjusted operating margins to increase, and the increase is fundamentally going to come from an increased volume of revenue that we anticipate in the second half of the year and a stabilization of our efforts pertaining to Health Integrated.

Vishal Chhibbar

So Maggie, I'll also - this is Vishal. Your point on Analytics margin improvement in Q1, that is right. That is driven by better margin profile for the SCIO Analytics business. And also, we had better utilization and a better productivity in our core Analytics business. And we do expect that will be a tailwind as we try to - as we can get to our number for the year for our adjusted operating margins on a total company level.


Our next question comes from Bryan Bergin with Cowen and Co.

Bryan Bergin

I wanted to ask on the SCIO contribution. I think I heard $19.1 million. Curious if that performance was in line with your expectations. I thought it was about $21 million last quarter, so I'm not sure if there's any seasonality we need to be aware of in that business.

Vishal Chhibbar

Hi, Bryan, this is Vishal. Yes. Typically, the first quarter is softer for SCIO compared to Q4 and coming to Q1. Also, bear in mind that in Q1 of last year, they had adopted ASC 606, which had benefits which accrued for them in Q1, which is not a repeatable revenue benefit in this year.

Bryan Bergin

Okay. And then just - you talked a lot about data management solutions. Can you give us a sense of some potentially the scale of those solutions you develop? And how we should be thinking about those from a sense of profitability standpoint?

Vishal Chhibbar

Sure. So as you know, Bryan, the data management spec is a very large and wide space, and this is a space where we're seeing a lot of activity at this point of time. The reason for the increased activity is as clients try and embrace digital transformation, as they try and leverage a lot more analytics and AI and as they try and have more customized offerings for their end customers, the use of data is becoming more and more important. And almost every single client and prospect in the marketplace today has a significant challenge on having data which is not clean, it is incomplete and can't connect well across the legacy enterprise platforms that these organizations have. And therefore, this data management capability is becoming more and more important. And what we are seeing is we are winning deals in this area, which start off being much larger size deals than what we had done previously on just providing analytics services around predictive modeling. So the size of the deals are much bigger. The market opportunity is a lot stronger. And what's resonating is our understanding of the domain in these industry verticals and our functional knowledge of how to use and apply data and make that a lot more valuable for our clients.

In terms of profitability of data management, that's pretty much in line with the profitability of the rest of our business. As we leverage more of a global delivery platform for data management, that will give us a lot more leverage in terms of the margins for data management. And we've already built up a strong capability around this in India, and we hope to be able to leverage that cost structure as we move forward.


The next question comes from Joseph Foresi with Cantor Fitzgerald.

Joseph Foresi

I was just curious on Health Integrated. When did you decide and why did you make the decision to completely exit the business? And maybe you could give us sort of a postmortem on what went wrong with - in the acquisition?

Rohit Kapoor

Sure, Joe. So we put out a press release and an 8-K on April 4, and that's the date when we took a decision to shut down the business. The reason why we decided to close down the business is because this particular asset was not meeting our strategic rationale and the time it would take us to fix this business structurally would have been way too long and we didn't think that, that was the prudent thing to do. I guess going in into the acquisition of this asset, we knew at the time of doing the diligence that there was actually a large client that was transitioning out, and we were fully aware of some of the challenges that this particular asset would pose for us. We did not recognize is that how much of the profitability this large client was masking. And when that large client transitioned out, we were basically able to see the profitability of the underlying business that remained. I think that's something which we recognized and that's why we've decided to exit this business. For us, the focus that we want to have going forward in health care is going to be a lot more applying data and analytics in the Healthcare segment. And that's something which SCIO provides to us, and we're going to be leveraging that capability a lot more strongly. And therefore, this felt much more prudent for us to be able to balance our efforts and focus on the areas that we were going to grow and strategically build upon, and that's something which our clients were seeking.

Joseph Foresi

Okay. And then on the margin side, it sounds like they're going to improve throughout the year and then move towards what you've given for guidance. Can you talk about what the cadence is for the next couple of quarters? Can you talk about the puts and takes? And it sounds like Health Integrated's sort of a variable on the margin side. Maybe you could talk about that as well. I just want to get a sense of how margins are going to progress throughout the year, what factors we should keep in mind and any particular variables that could swing it one way or another.

Vishal Chhibbar

Yes. Hi, Joe. This is Vishal. So as I mentioned in my prepared remarks, we do expect a continued decline in the revenues for Health Integrated. As I said on the midpoint, we expect the revenues for Health Integrated to be around $12 million. We - I already said in my prepared remarks that Q2 revenues will be between $2.8 million to $3.4 million, and we do expect that in Q3, Q4, that will have a further decline. The adjusted EPS accordingly will be in that range of $0.23 to $0.27; at the midpoint, around $0.25 for the year. So we already had $0.08 of loss in Q1, and we do expect another $0.07 to $0.08 of loss in Q2.

Excluding Health Integrated, we do expect that our core business - this quarter, our business operating margins were 14.5%. And we do expect that in the second quarter and also in the second half, we will have improved the margin on adjusted level for - our adjusted operating margin to be between the 15% to 15.2% level. So that 20 basis points guidance we had given at the beginning of the year, we will deliver that improvement.


[Operator Instructions]. The next question comes from Puneet Jain with JPMorgan.

Puneet Jain

So I'd like to see wind down of Health Integrated, and you also talked about if we should consider anything in flow or earnings impact from that beyond this year?

Rohit Kapoor

Hi, Puneet. So as I've said in our prepared remarks, we are winding down the Health Integrated business, but we're going to do this in a professional and responsible manner. There are a number of clients that we do serve, and we want to make sure that the transition is as smooth as possible and causes as little disruption as possible for our clients. So we're going to work with our clients in an expeditious manner. I think there are a number of creative alternative arrangements that we are trying to explore with our clients. And whether this includes automated forms of servicing and supporting them from the sidelines, that's something which we're going to do. At this point of time, it is difficult for us to give a very clear and hard estimate as to when the timing of this wind down will be complete. And we think we'll be in a much better position to provide you with that input when we come back and report our Q2 numbers, and we'll be able to share with you at that point of time.

Puneet Jain

Got it. And can you also share outlook for travel, transportation and utilities verticals? It seems like they continue to remain weak in this quarter. Can you talk about what do you expect those verticals to do rest of the year?

Rohit Kapoor

Yes. I think for us - look, the 4 verticals for us that are growing strongly and nicely are Insurance; the Analytics business; our Healthcare business, which we want to focus in on; our Finance & Accounting business. Those are businesses which are the larger pieces of our portfolio and that there is a tremendous amount of growth that's taking place. Our Travel, Transportation & Logistics business as well as our utilities business are actually resonating very well in the limited areas in which we're playing out there. And what we are seeing is that there is an increased use of data analytics and some of our other service lines that we provide to these industry verticals. We've also been able to convert some of our service offerings in Travel Transportation & Logistics towards industry solutions. So for example, in Travel, Transportation & Logistics, we provide freight billing as a service now, which is on a completely transaction-based pricing using advanced analytics and using our technology-enabled solutions. So I think those kinds of solutions are working out well, and we'd expect this to continue to perform as we go forward into this year and next year.


Our next question comes from Vincent Colicchio with Barrington Research.

Vincent Colicchio

Yes. Rohit, the U.K. business was off a bit in the mix. Is there nothing to see there from Brexit or any other factor or just ebb and flow?

Rohit Kapoor

Yes. Hi, Vincent. No. As you know, our U.K. business contributes somewhere around 12% to 15% of our revenues. It's pretty stable for us. We're not really seeing any impact because of Brexit or any other reasons. We do see a very strong pipeline in the U.K., and we would endeavor to continue to grow and build our business in the U.K. We're also seeing more traction, as we mentioned earlier, in Australia. And that part of the business also continues to grow. The place where we are adding on more capabilities on analytics and data management is the U.K. And as that starts to gain traction, I think our presence out there will get expanded even further.

Vincent Colicchio

And on the Analytics side, has there been any change in your, say, 2 to 3 year growth expectation for the business?

Rohit Kapoor

No. Our growth rate expectations for the Analytics business continues to be in the low- to mid-teens, and that's something which we'd expect this business to continue to grow for the next several years.


And I'm not showing any further questions at this time. I'd now like to turn the call back to our speakers for any closing remarks.

Rohit Kapoor

Thank you, Lauren. Thanks, everyone, for attending our Q1 earnings call. We really appreciate you being here. As we mentioned, the key message that we'd like you to take back from this call is that our core business continues to perform well. As we manage the wind down of the Health Integrated business, we are confident that we'd be able to grow our core business in a much more significant and meaningful manner. We look forward to providing you an update on this in our Q2 call and look forward to a terrific 2019. Thank you.


Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program, and you may all disconnect. Everyone, have a wonderful day.