Q1 2020 Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the Digi International first fiscal quarter 2020 conference call. At this time, all participants are in listen only mode.
After the speaker presentation, there will be a question answer session to ask a question during the session you're willing to press star one on your telephone.
Please be advised that todays conference is being recorded if you're acquiring any further assistance. Please press star zero.
Now I'd like to hand, the conference over to your speaker today CFO , Jamie Locke you may begin.
Good afternoon, everyone and thank you for joining us today to discuss the fiscal 2021st quarter results of Digi International.
Joining me on today's call is Ron Konezny, our president and CEO , well will provide his thoughts on their business and I will follow with the highlights of our financial performance. Following our prepared remarks, we'll take your questions.
We should our earnings release shortly after the market close you may obtain a copy through the financial release, a section of our Investor Relations website at <unk> Dot com.
Some of the same until we make during this call are considered forward looking at are subject to significant risks and uncertainties.
Payments reflect our expectations about future operating and financial performance and speak only as of today's date, we undertake no obligation to update publicly or revise these forward looking statements.
Well, we believe the expectations reflected our forward looking statements are reasonable we give no assurance such expectations will be met or that any of our forward looking statements will prove to be correct for additional information. Please refer to these forward looking statements section in our earnings release today and the risk factor sections of our 29 chain Form 10-K and subsequently.
Ports on file with the FCC.
Finally circuit the financial information disclosed on this call includes non-GAAP measures information required to be disclosed about these measures, including reconciliations to the most comparable GAAP measures are included in the earnings release. The earnings release is also an exhibit to form 8-K that can be accessed the the FCC filing section of our best too.
Relations website now I'll turn the call over to Ron.
Thank you Jamie and welcome to everyone that has joined our call today.
We also good starting in fiscal 2020 year.
Capped by the closing of the opening your acquisition.
Welcome won't be open geared to the Digi family.
As indicated by the open your acquisition.
The going maturity for IP solutions business segment, and our annual guidance did you just focused on profitable growth.
Because there were a little capital requirements and acquisition activities, we've been presenting both GAAP and non-GAAP profitability metrics non-GAAP metrics, EBITDA and adjusted EPS provider stakeholders, well the run rate view of our operating profitability.
Growth will continue to be an imperative.
You would they profitability lens for both organic and inorganic initiatives.
That context, I will provide an update on our business segments.
I have two product and service business segment now closed the results earlier acquisition to reflect the integration of old guarantee that the FCC regulations will not be providing standalone results for over here.
We are ahead of our new product revenue projections, which we expect an increase from 40 million to 70 million in fiscal 2020.
Led by our cellular product family enhanced by new and improved service offerings that complement our products.
We continue to experience high when rates are a key accounts in top opportunities.
The strong performance from our direct sales team.
We commenced deployment of our Smart City project and it's a strong fall built to take the collective experience to other opportunities.
Gross margin improved and operating expenses were well managed to produce strong profitability.
We're working hard to say about channel partnerships to ensure they are supported and enjoyed profitable growth while managing inventory levels.
Well. The addition of all year, we expect fiscal 2028.
And our most recent physical fiscal quarter second does courses me.
There's also show higher revenue improved gross margins expanded EBITDA margins.
Our smartphone IC solutions business experienced subscriber additions closer to both our history and expectations. We added over 3000, new sites with virtually no subscriber churn during the quarter to end with nearly 67000 subscribers.
Approximately 15 million an annualized recurring revenue.
Well its margins improved reflecting the contribution of higher margins from our growing recurring revenue.
We have transitioned nearly all of our customers that run to gateways to fourg LTE gateways, ensuring continuity and service.
We continue to progress smarts and 4.0, what's in the destination consolidated mobile web platform.
We are adding new sites and expect to transition some existing customers throughout the year.
Larger enterprise deals slipped out of the quarter and we're working hard to compress cycle times to bring value to our customer more quickly.
We're not lose many opportunities on the quarter.
We're highly focused on gaining customer confidence and moving quickly to capture ROI.
Yeah, I T solutions business had a modest philosophy is that based on lower expected revenues, but we expect growth any profitable fiscal 2020.
As indicated last quarter topline growth will moderate year over year to reflect our focus on building, our subscriber count and recurring revenues through bundled offerings.
At least a portion of our new customers will likely operating versus capital pricing model in any event subscriber additions will continue to be a key metric that fall.
We expect top and bottom line performance improves throughout fiscal year.
At the corporate level, we've made progress in our journey to simplify and automate our business model and prophecies software services and subscription will continue to be emphasized across our business segments into higher overall annualized recurring revenue.
We went live on our CRM ERP system for the entire company in fiscal quarter one.
Which was an exciting and rewarding accomplishment.
We now have one database run the company will get better at both using the system and making it easier for our customers to do business with Digi.
We closed 150 million an attractive debt financing to close the opening your acquisition without shareholder dilution.
We are in compliance with all of our covenants, we expect to lower our debt position as we generate free cash flow, which will help prepare us for potential future acquisitions.
We have more work to do to improve our working capital as inventory and accounts receivable increased to end fiscal Q1.
We have process improvement and resource changes and supply chain finance and we expect will produce quick results.
The Corona virus outbreak is serious and we're monitoring the situation closely.
We have worked with our China based resources to ensure their safety and health is protected including closing our offices.
Temporarily in China. In addition, we're monitoring the impact of the outbreak on our supply chain, while most of our manufacturing is outside of China. Many raw materials are sourced in the area is unclear what impact the corona buyers will have overtime, but we work to minimize its impact on our results.
Lastly, we consider did you to be it to be sensitive to our environmental impact our social standing within days and our communities into a diverse an independent governance model.
Embarking on both document documenting our ESG efforts and pushing did you to do more expect future updates on this key initiatives as it's important to all of our shareholders as increasingly becoming a key investment criteria.
I'll now turn the call over to Jamie more detail on our financial performance.
Thanks, Ron and good afternoon, everyone, starting with some of the key financial highlights that contributed to this financial results of our fiscal first quarter.
Quarter revenue performance was 62.3 million with adjusted EBITDA performance of 6.4 million, which is 10.3% of revenue.
Those items are better than the top end range from a last guidance will be provided you.
On a per diluted share basis, our adjusted EPS was 15 cents per diluted share also exceeding our quarterly guidance range, while our GAAP EPS was one cents per diluted share compared to our guidance range of a loss of two cents.
Two two cents gain per diluted share.
Finally, we put our cash to work during our first fiscal quarter with the successful closing in the open to your acquisition.
We funded this acquisition through approximately 30 million of domestic cash on hand, combined with an additional 110 million and proceeds from our credit facility through our lending partners.
Well, we now have net debt position on our balance sheet for the first time in company history, we do expect to generate significant cash during fiscal year 2020.
Breaking down the results by business segment, I'll start with our products and services business.
Natural Impactable figure was not material to the overall performance of the business in the first fiscal quarter integration efforts are quickly embedding opened year ended the Io tea products and services business.
Standalone open your results will not be presented and we will stay consistent with segment reporting requirements.
I would you products and services revenue increased year over year 2.5 percentage in the first fiscal quarter of 2020 to 54.6 million. There are several factors that contributed to the girl well not material incremental revenue associated with yoked Your acquisition higher sales from our cellular products and increased services revenue.
These increases were partially offset by lower sales of other product offerings compared to the fiscal first quarter 2019.
Our I don't see products and services gross margins were 48.8% compared to 47.6 in fiscal Q1 of my team an increase of 120 basis points.
This increase was driven primarily by incremental margin performance associated with the opens your contribution increased margins in our services category product mix and lower manufacturing costs.
Shifting to our I O T solution segment as Ron mentioned, I would you solutions as well servicing nearly 67000 sites.
It really continues to be the main focus area for us in that business, depending on which model customers utilize the time of purchase either a capital purchase or an opex purchase onetime revenue experiences variability and that can make year over year or even a sequential comparison a bit less intuitive and just looking at revenue. So we continue to focus on adding those sites in the business.
Yes, and growing annualized recurring revenue.
With that site called R.E.R.R. finished at approximately 50% of total solutions revenue per quarter.
We finished the quarter with revenue of 7.7 million down from the prior year of 9.0 million.
The decrease was attributed to less onetime revenue recognized by our site additions from prior year, which was partially offset by the growth in our recurring subscription revenue.
During the quarter aren't you solutions gross margin was 49.5 up 50 basis points compared to fiscal first quarter of 29 gene which was at 49.0%.
The main driver is the larger percentage of revenue from occurring compared to one time and this continues to demonstrate the leverage in our business model is recurring revenues grow in the business segment.
To wrap up I wanted to touch in a few additional balance sheet items, our fiscal first quarter cash position ended at 49 million.
Our M&A our position landed at 81 million, which is up from approximately 56 million at the end of our fiscal year at September 32019.
We had a handful collections that spilled over into the first part in January . We believe this is the result of customers managing their year end cash positions combined with the holidays and we already now have cash in hand on those collections.
Our inventory position, which includes the incremental addition of open here has increased to 47.3 billion up from our year end position of approximately 40 million.
And finally, our ending deposition hours of the fiscal first quarter 2020.
As an approximately 107 million.
That puts us at a total debt leverage position of approximately 2.5, and then not consolidated leverage position of under 2.0, well within our internal targets.
Let's now discuss the upcoming quarter.
We expect revenue of 70 278 million with adjusted EBITDA of 11 to 13 million.
We expect GAAP EPS to be 0.7 to 11 cents per diluted share while our adjusted non-GAAP EPS to be 29 to 33 cents per diluted share.
That quarterly guidance supports no update to our full year guidance that we have previously provided of revenues between 310 in 325 million and adjusted EBITDA of 45 to 50 million.
That guidance includes our previous guidance for opened you're a 45 million and revenue of 15 million in adjusted EBITDA.
We recognize that the guidance above does have a heavier weight on the back part of the year, which is not unexpected.
Our newly acquired open gear business has historically have a seasonality that is more weighted to the back half of the calendar year.
We also expect similar seasonality in the Aiotv products and services business and if you combine that with our continued focus from our sales teams more project based revenue our year becomes more backend loaded.
We are maintaining our non-GAAP EPS guidance of $1.14 to $1.27 per diluted share. However, we are updating our GAAP EPS targets.
As we now works through our purchase accounting and our debt position, we now see the impacts on the new amortization associated with the intangible assets created combined with the interest expense from the credit facility neither of which were included in our previous guidance.
As such we are moving our EPS guidance to 31 to 41 cents per diluted share.
That completes our prepared remarks at this time, Ron and I are pleased to take your questions achieve could you. Please provide instructions to our callers.
Yes, Sir as a reminder to ask a question you will need to press star one on your telephone.
To withdraw your question press the pound.
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Please standby why we compile the Q when a roster.
Our first question comes from Scott Cerro.
Capital.
Line is open.
Hey, good afternoon. Thanks for taking my question congratulations on the open gear transaction closing.
Running Jamie just to follow up in your comments and the guidance into the March quarter. Yeah. It does seem even more back end loaded I was hoping we could work through a little bit more details and qualitative comments.
In terms of how you're expecting then open gear to wrap it sounds like it's more of a seasonal business is there anything else. That's really changed on the margin and is the corona virus and any sort of impact kind of factored into that that seasonal impact as well and then I had another follow up.
Yes, I'll just make some comments and then may Jamie can can offer any additions as well.
Historically opening here has had a ramp they have been growing and the ramp throughout the year sequentially. So we think.
That will continue as well inside of Digi. So we have the their revenue ramping.
We also we knew the first quarter was going to be a lighter quarter for us we're seeing the ramp continue based off that quarter, we did a little bit better than we thought we would.
Initially, but what we do see see both.
Digi key business as well as patients ramping throughout the fiscal year as well so you've got three entities that we're expecting sequential quarterly improvement.
On the cross virus right now we have that felt a specific impact in terms of delivering products and services. We do have some suppliers in China in particular that had been told to stay home and not go to office for a week or two.
And that's not going to have any material impact on us but.
One thing any of US know how serious this will get and there'll be any continued extensions of the Chinese new year holiday.
The extensions go long enough then we certainly get worried and so that's that's the kind of stuff. We're monitoring very closely we don't generate revenue from China, but we are dependent on them from the supply chain perspective.
Okay, and if I could run just follow up on open gear, maybe a little bit more granularity I think it's heavily skewed towards datacenter, but there's a lot of branch office built into their as well I was wondering if you could give us a little bit of color in terms of that the demand trends that you're seeing right now both from an end market standpoint energy.
Graphics standpoint, and ultimately what is the growth rate in the market here for out of bed solutions. Thanks.
Yes, those are those are good questions.
Over the years experience that really had started off with strong results in what we call core data centers and the growth of the edge has really outpaced the growth of core datacenters.
For a lot of people, we tend to think of Datacenters as being the hyperscalers like Amazon and Google and Facebook.
But theres a lot of investment going on across various industries, and both cloud as well as hybrid cloud and increasingly edge deployments more more companies are looking to have intelligence closer to where activities are being generated and reducing latency and improving responsiveness. So there have their solution. So we.
Second the secular trends that continues we do believe opening gear up their growth rate, which has been in double digits is outpacing the market's growth rate broadband, which has been estimated to be 7% to 9%. So we do think that they've been taking share.
Great. Thank you.
Thank you. Our next question comes from Anthony Stoss of Craig Hallum.
Your line is open.
Hi, guys.
Great great job of the gross margins Im curious maybe for Jamie If you think theres a shot in fiscal 2000, and a quarterly basis that you could cross over that 50% Mark.
And maybe a little more detail on what drove the strength on the gross margin side in December that a couple of follow ups.
Yeah, Thanks, Tony I think.
No margin improvement as something that we've kept an eye on its nice to see that flow through I think one of the risks on on crossing over that threshold and an aggregated level.
And it sounds funny to say that it's a risk, but depending on that mix on the solutions business. If theres a lot of capital purchasing that takes place.
This equipment margins will spike up revenue number and those problem solved 50.
Sometimes and so that could have placed some pressure there if it's more opex dependent.
That I think we would we would have a better chance I think we continue to see the margin improvement activities that we're taking.
On the products and services side, we have good mix.
We are seeing good cost actions continuing to flow through.
Especially as we moved our manufacturing to third parties in so it is definitely something that I think is and I shot, but probably a little too early for me to give you a firm commitment on but I do think its possibility.
Okay. Thanks for that and then Ron I know you've only had opened here under your belt for about a month Im just curious what kind of cross sell opportunities you're seeing also if theres any kind of cost of goods synergies are best practices that you folks are learning from the opened gear.
Team and then also I didn't hear much talk about the legacy products driven just curious if that's expected to be down sequentially from March.
Yes. That's those are really good questions. We're also really fast start with integration to helping your team and again a lot of it is because we share some DNA up with with Digi with open gear and with accelerated so culturally it's been a really good fit we absolutely are learning things from open gear and how they do a channel how to go to market. It today.
Focus on their their customers and we have identified some some great opportunities to do some account mapping there are several customers where they have been invited from an out of band perspective in those some same customers. Many times retail are looking for business continuity.
So we think theres going be some opportunities to really collaboration between the two on the go to market as well as.
We have been working to consolidate or supply chain operations in terms of sourcing and we've established a strategic sourcing group.
For that very purpose. So we do think theres opportunity for us to enhance our cost of goods and and hopefully continue to capture that in gross margin percentage.
We're also working closely with our contract manufacturer strategy to make sure we get good spend and low transformation rates there.
Okay, then last question.
T solutions group being down sequentially in the December quarter lumpy or just a little bit more on why that happened and then do you expect that group to be up flat or down sequentially in the March quarter.
Yes, we we had some nice subscriber additions so we're happy with the subscriber additions the mix of the spot ambitions didnt have quite as much onetime revenue upfront we had a good chunk of those that shows the bundled.
Model, which of course.
Depresses your topline revenue.
Even though again it builds nice subscribers. They are we do expect sequential improvement not only in F Q2 but throughout the year, we have some larger enterprise deals and particular in the food segment that we expected to have closed and they slipped.
Two until future quarters so.
As I mentioned in my comments, we don't feel like we are losing opportunities as much as we're not getting them to move more quickly and making sure they understand the ROI.
Okay. Thank you.
Thank you. Our next question comes from Mike Walkley.
Canaccord Genuity your line is open.
Great. Thanks, Ron just to build on that last question as we think about the IP solutions business.
Can be lumpy, depending on whether the customers by upfront or not but is there. Another way. We can think about maybe how to track to health and growth of the businesses. There is a site additions you think three to 4000 of quarter kind of the good run rate or you think some of these large products.
Large projects that you're bidding on that you should see bigger side addition throughout the year in terms of sequential site addition to.
Growth.
That might migrate question and we are really.
Focused on that subscriber count because we think is closely tied to annualized recurring revenue that at the high margin portion and most investors will look at the margin on that recurring run rate business that both rolling and we're retaining and keeping customers happy.
Three to 4000 site ads have been something we've we've probably commented as our target and I think we can go further in certain periods. When we get larger enterprise deals that that complement that sort of what run rate business.
Great. Thank you and just going back to the stronger seasonality in the back half of your thanks for sharing kind to open gear seasonality, it's part of the seasonality to some of these smart city potential deals in the pipeline.
Maybe you can comment on the one household.
Ladies and do you think given your pipeline you might have some others to maybe that add to that back half of the year revenue trajectory.
Yes, another good question and the first large smart city project that we announced last year and have begun deployment that certainly we'll we'll pay some of the revenue. The other applications were chasing in the pipeline is building do have longer sales cycles. We've got many times the government hence the involved.
And there is an RFP procurement process. So we do think that the pipeline is building in that we'll be able to capture some as opportunities, but they are going to happen towards the second half the year.
Thanks last question for me and I'll pass on Jamie just just a little housekeeping can you just help us maybe with a purchase accounting just kind of what you're modeling now for the non-GAAP to GAAP walk through for amortization interest expense.
So Mike. Thanks, It's a good question I I am not ready to do that we're still working through that as you know we've got a couple of quarters before we vital finalize that so we've got some prelim numbers that are on the book based on a first pass on the valuation.
But.
We will continue to work through that and in terms of our Q2 numbers and as we finalize that is albeit a little bit more ready to actually give you the the sort of.
What we project on a permanent go forward basis, but right now it's awfully early in the purchase accounting cycle.
Okay understood. Thanks for the updated non-GAAP EPS guidance. Good luck Lithia with year end. Thanks My question.
Thanks, Mike.
Thank you. Your next question comes from Jason Smith.
Lake Street your line is open.
Hey, guys. Thanks for taking my questions just want to follow up on some of the previous questions on some of the deal from the Iot solutions that slipped out of the December quarter curious if you could just quantify how much revenue that related to add.
Some color on why those deals got pushed.
Yes, as I mentioned I think one of our opportunities is to help customers that have not had an opportunity to deploy aiotv projects in the past to help them have success and many times. We're helping you gave them trains and then they are on their own for a period and we're going have to have boots.
On the ground during those key testing period to make sure. They understand the system works that they run into problems were there to advocate for them and for the solution.
So I think thats the big challenge, we have in front of US the opportunity is to help customers have success initially again confidence in the rollout.
I don't have specific numbers for you, but the pipeline is very strong.
The best it's ever been in terms of the opportunities that we're chasing.
The key for US is to help customers gain the confidence that they can get this ROI quickly as they look at the initial pilots that typically start these enterprise deals.
Okay. That's helpful. And then just lastly curious your thoughts on what inventory looks like in the distribution channel.
It's really it's really around 20 million, which is pretty pretty standard for us. So theres no excessive inventory in the channel or or not neither isn't necessarily the particularly at a low points.
Okay. Thanks, a lot.
That number of course excludes any open given all of your generally does not have kind of inventory in jail.
Okay.
Thank you. My next question comes from Greg Burns of Sidoti income.
Go ahead.
Good morning, Alright.
The when you guided.
For this quarter, we are you assuming any.
Okay.
No we do not we do not so we had any nine business days of open gear that we had not previously incorporated in we expect to the January one close date in our in our guidance.
Okay.
No just I assume it's a small number but how much revenue did it contribute anything CBS .
Yes, Greg It is a small number and because it's embedded in the segments.
I think the best I can tell you is that it was not material to the quarter in terms of revenue or in terms of bps. So it was not material.
But because of the way we've got an integrated.
Right now we we.
We wouldn't be able to carve it all because of cutting into our segment reporting as weve laid it out.
Okay.
And then.
In terms of the solutions business I think the you'd mentioned the.
It was about $15 million at the end of the year at the end of the fourth quarter.
Similar type numbers this quarter, despite the site growth.
Our ARPU is declining.
And we see little Big sequential I think we actually I think we increment from wrong do I think we used approaching $15 million beyond. So the reality is we're kind of what kind of directionally guiding to that number Greg and so we said it's it's approaching.
It's it's a function a rounding so when you really break it down the sites times. The ARPU now the ARPU on the incremental sites is down a little bit as Ron kind of talked about based on what the site adds were.
Which you have different ARPU is based on the verticals, you're filling site, it's not anything that artificially low or lower than the acceptable range. It's in the range based on the verticals that we provided and that we actually talked about this pre call. We do run into this area, where you kind of get a nuance of approaching to 15 and it doesn't look like.
Moved but if you took it out past.
That decimal point on 15 billion you'd see that there was actually pretty decent move on it.
And our ARPU is our generally holding both on an aggregate level as well as per vertical.
Okay. Thanks, Leslie what was the right on the debt.
It was a it's a tiered structure on the debt based on our leverage position the coming out was 2.25 plus sell on and then as our leverage goes down it will it will stagger itself down from there.
Okay. Thank you.
Yeah.
Thank you. Your next question comes from David Gearhart first analysis.
Question. Please hi, good afternoon. Thank you for taking my questions. My first question relates to be able to I don't see solution business I know, you've said that it should ramp sequentially. As you go through this year and the past you said, 20% last quarter. I think you said, 15% plus can you give us an update on that estimated growth rate that we should kind of thinking about it as a CAGR.
Yeah. This is really no update to that that estimate from last quarter kind of consistent with our reiteration of annual guidance.
So we do expect is going to vary depending upon what portion of the market Ilecs a bundled their opex pricing.
Model.
But with the take rates, we've seen assume what you're going to be more directed towards the food or or restaurant segments.
That that will still be able to hold those expectations.
Got it and then lastly from me it's been a wall since you've talked about the mature legacy business as part of Digi wondering if you could give us an update in terms of where it stands in terms absolute revenue and the percentage decline. So maybe we can model out of the drag and kind of when you when you should see relief from that drag.
Yes, it's a really good question because.
What's happening is the opening of your portfolio really really fits nicely into that product family.
There's also some active dialogue on.
On the sales forces of Digi and opening your what set of products to each salesforce want to take advantage of.
It's a little bit early and we want to be very sensitive to how will we get run their business and vice versa.
In our in our model, we assumed a 5% to 10% decline in our network business, which is consistent with.
With previous years, we have done some new product introductions are anywhere you SP and connect IP, which we think can have the potential to moderate that that that temperature actually but we we also are reviewing that with the open gear team to make sure. We've got to could go to market. There are a number of digi customers.
For example that could benefit from your solution in some cases.
I mentioned earlier, we could complement open gear solution with.
So the routers from from our Digi portfolio.
Thanks for that color that's it for me.
Thank you again to ask a question. Please press star one when you've touched on telephone again, that's star one on your touched on telephone question.
Our next question comes from a line of <expletive> Ryan Authority. Your line is open.
Thank you say just a housekeeping one Jamie I'm not sure I caught in a few provided the services revenue under corridor.
Are you.
First solutions are inside of biology of products and services inside product and services no. We haven't carve that out typically report just the segments and so we reported that but we didn't call on services stand alone.
I'll tell you that we have seen growth in there.
And.
Ill.
But but we haven't we havent traditionally carved out outside of the segments.
Okay.
Thank you.
On your easiest from GE documentation, obviously that's.
Kind of an investment focus people are looking at what's your what are your expectations for your documentation. When we have provided what are you hoping to do there.
Yes, it's a good question. We're early in this and this journey and I think the good news is we have a number of.
Actions and accomplishment that we have already.
Implemented or have taken advantage of that are consistent with I think.
Some some really nice CSG.
Programs, and we expect really on a quarterly basis to give at least some updates on the program and inhabit documented on our website.
And again a lot of these things we just moved into a a gold lead that headquarters we do have a a diverse independent board.
Active and many of our communities and with our employees and so.
So we're going to provide data back up these things in addition to.
To the spirit of our policies.
Of the challenges you've seen from some announcements is there bolt on ambition, but lack maybe some data points.
In one of the objectives, we have is to really provide data tobacco.
Statements that we have.
Okay, great. Thank you.
Thank you at this time I'd like to turn the call back over to Ron Konezny for closing remarks, Sir.
Thank you, let's see in closing I want to thank the entire did you team our customers and our partners. We are steadfast in our commitment to profitable growth and to building shareholder value.
Thank you and have a good evening.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
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