Q1 2020 Earnings Call
[music].
Okay I'm welcome to the Sniffs micro first quarter 2020 earnings conference call in my <unk>.
Oh participants will be unless you know me now so do you need assistance. Please signal like conference specialist by pressing the Starkey followed by zero.
After today's presentation, there will be an opportunity to ask questions.
Please note this event as being recorded.
Now I turned the conference over to Charles Massmann. Please go ahead.
Thank you operator, and good afternoon, everyone. We appreciate you joining us today to discuss Smith, Microsoft Where's Finance results for the first quarter or by 2020 fiscal year ended March 31 2020.
Oh, you should ever see to copy of the press release with the financial results, if you're not have a copy and would like one. Please visit the Investor Relations section of our website at W.W.W. Dot Smith micro Dot com.
On today's call we adults Smith chairman of the Board, President and Chief Executive Officer, Smith, microphone and too Hot fire Chief Financial Officer.
Please note the some of the information you'll hear during the discussion today will consist of forward looking statements, including without limitation those regarding the company's feature revenue in profitability, new product development and new market opportunities.
Operating expense will company cash reserves.
We're looking statements involve risking uncertainties, which could cause x. results or trends to different materially no expressed or implied by forward looking statements.
More information please refer to run the risk factors included in our most recently filed form 10 k.
<unk> no obligation to update any forward looking statements, which speak to our management's belief and assumptions only the date bear mate.
I want to point out that in the forthcoming prepared remarks were referred a certain nongaap financial matters.
Refer back to our press release disseminated earlier today for reconciliation <unk> financial matters.
But that sat on now trying to call over to Bill Bill.
Thanks, Charlie Good afternoon, everyone in thank you for joining us today for 2021st quarter earnings Conference call.
I hope that all of you and your families are safe and well during the current cope with 19 pandemic.
Overall I am very please with our team as we continue to be very productive while working from home.
Due to the number of remote offices, we have around the world.
Working from home is really a normal courses business for most of us.
During the fourth quarter of last year, we significantly invested to upgrade our remote capabilities across the company and we have a great I.T. teams that has equipped armed place with collaboration technology to maximize our productivity.
First quarter 2020 was another great quarter for Smith micro I am very pleased with a strong results we delivered.
Revenues for the quarter came in at $13.3 million, a 58% increase over the 8.4 million report in first quarter of 2019.
Gross profit for the quarter was 12.1 million compared to 7.5 million for the same Porter last year.
Non gap net income for the first quarter increased the 4.1 million or 10 cents per share.
And it's important to know we delivered solid free cash flow from operations of 1.5 million.
Yeah more break down the financial spur other in his remarks.
These are very solid numbers for the quarter as we continued with strong growth and profitability safe at their family digital lifestyle solution continues to be the driving growth engine for the company.
Yes, we spoke last in early March we have made good progress toward the goal of integrating the expansive parental control speech yourself.
The the circle acquisition into the safe path codebase.
Once we have completed this integration effort now plan for mid summer of this year safe past seven will be the only digital lifestyle solution of its kind on the market to offer best in class family location services and parental controls functionality.
Inside and outside the home.
We see this as a significant competitive edge <unk> micro that will enable us to realize that there are a longtime vision upbringing to market. The most comprehensive white label family safety offering for wireless service providers.
From a strategic standpoint.
Circle acquisition puts us in the enviable position of having family safety solutions on both sides of the sprint T. mobile merger, which was completed on April 1st.
We are working closely with the new T. mobile to map out the future of his family safety product.
Progress we have made to this point is encouraging and we remain laser focused on executing our strategic vision in partnership with the new T. mobile.
While we have seen very strong growth from <unk> under spread.
Even more bullish looking forward regarding the potential growth of our family safety platform at the new T. mobile.
In addition to having what we believe is the most complete product on the market. We will now also be supported by the marketing might have the new T. mobile.
This is exciting as we now have the opportunity to sell the next generation of safe to a much larger subscriber base.
I'm also very pleased with the continued progress of our sales discussions and with the strength of our sales pipeline.
It is encouraging that our sales activity as not slowed at all even with the near total locked down of the global economy.
Looking at you spot we're excited with the win for our smart retail platform with H.T.M.T., Mexico, one of Mexico's largest mobile operators with more than 18 million subscribers.
H.T.M.T., Mexico began deploying the technology across a 15 hotter store footprint in early January.
However, the global spread of Crow, the 19 forced a temporary hope to the deployment.
We expect this will open up once the restriction is lifted regionally.
During the quarter with our constantly platform. We continue to work closely with both the new T. mobile and dish mobile on integration efforts across the board Yeah, I am pleased with the progress.
Was that let's turn the call over to Tim for a more detailed review Oh, the first quarter of financials Tim.
Thanks Bell.
For the first quarter, we posted revenue 13.3 million compared to 8.4 million for the same quarter last year and increase of 58%.
The increase in revenues was primarily result of continued revenue growth on the safe path platform, both organic activity and due to the circle operator.
This acquisition completed in February.
During the first quarter of 2020 revenue from safe Pat grew by 18% sequentially compared to the fourth quarter of last year.
All within the guidance range provided.
Resulting in Safepath revenue 7.8 million.
During the first quarter Safepath increased 240% compared to the first quarter of last year.
But the second quarter of 2020, we do expect the Safepath platform revenue to decrease between five to 10 per cent compared to the first quarter of this year.
The primary reason for the decrease revenue.
Directly related to cope at 19, causing the majority of sprint stores to be close.
End the related marketing initiatives plan for those stores not to be executed.
Cove at 19 situation is also causing a reduction in the number of subscribers as unemployment rates have increased.
In the coming quarters as stores reopen we expect a return to save path revenue growth.
We are also excited about the future opportunity with the new T. mobile and selling the safe passage solution to their user base.
Still discuss this further and a few minutes.
During the first quarter of 2020 Hon. Sweet revenue was 4.2 million down 4% compared to the fourth quarter of last year and down 3% compared to the first quarter of last year <unk>.
The current quarter decrease was due to the loss of sprint and boost subscribers using our premium calm sweet services.
We expect calm sweet to be flat to down for the second quarter of 2020, as we continue to navigate the mergers.
Boost with dish and sprint with T. mobile.
Revenue for a calm sweet advertising during the first quarter was approximately 350000, which was comparable to the fourth fourth quarter of last year.
In an increase of 300000 compared to the first quarter of last year.
The current quarter results were in line with our expectations.
As a reminder, this is variable revenue independent on third party activities.
We expect the second quarter of 2020 constitute advertising revenue.
Between 100 and 300000.
Do you spot revenue was approximately 750000 for the first quarter of 2020.
Up 34% compared to the fourth quarter of last year and down 30% compared to the first quarter of last year.
The current quarter results exceeded our expectations due to greater variable revenue with our two year, one U.S. customer.
As a reminder, we separate abuse by revenue into two categories fixed and variable.
He fixed portion of the revenue is related to license fees and is generally the recurring component of the revenue.
Variable portion of the revenue is related to device and promotional campaigns, which are short bursts of activity, resulting in revenue.
And the volume is less predictable.
Based on our current run rates, we continue to expect 2020 view spot revenues to be flat sit down for 2020.
Overall for all the reasons discussed, including the impact covert 19 is having on store activity.
We are expecting second quarter revenues to be down between four and 9% compared to the first quarter of this year.
For the first quarter gross profit was 12.1 million compared to 7.5 million during the same period last year.
Gross margin was 91% for the first quarter compared to 89% last year.
Gap operating expenses for the first quarter was 10.2 million, an increase of 2.7 million or 37% compared to last year.
Non gap operating expense for the first quarter was 8.1 million and increase of 1.4 million compared to last year.
The increase in non gap operating expense is primarily related to an increasing compensation and related expenses.
Our head count has grown 31% year over year.
And an increase in trade show expenses due to an extra event this year.
We continue to aggressively recruit and higher resources in all of our markets.
We will continue to invest in current resources and additional resources with a focus on the safe path platform.
Specifically around the circle code integration and additional Safepath Coyote device integrations.
As discussed on previous conference calls this head count activity.
Result in growth of the quarterly operating expense Runrate <unk>.
Additionally, we are looking at options to increase capacity through use of third party contract developers, which will allow a scale of all arrangement and would not be a permanent cost.
This is all to me current development needs.
The non gap net income for the first quarter was 4.1 million or 10 cents diluted earnings per share compared to a non gap net income of 776000 or two cents earnings per share last year.
Within the recently issued Pressrelease, we have provided a reconciliation of our non gap metrics to the most comparable gap metric for.
For the first quarter. The reconciliation includes the following adjustments.
<unk> compensation expense of 632000 intangible amortization of 515000, an acquisition costs of 918000, some of which are non cash.
Due to our cumulative net loss over the past few years are gap tax expenses, primarily due to certain state and foreign income taxes.
For non gap purposes, we utilize <unk> percent tax rate for 2020 and 2019.
The resulting non gap tax expense reflects the actual income taxes expense during each period.
To wrap up my financial review I will add some comments around Capitol.
We close the first quarter of 2020 with 19.5 million of cash.
During the quarter, we used 12.1 million on the acquisition of the circle operator business.
We generated 2.3 million of cash flow from operations.
And we received 2 million enough cash from Warren exercise.
Separately during April we received 2.3 million of cash from Warren exercises and we now currently have 3.7 million warrants outstanding.
In the short term, we will continue to invest the excess cash balance to preserve capital.
In the mid to long term the company will continue to evaluate strategic alternatives for utilization of capital to maximize shareholder return.
As we think about the company's long-term capital needs.
And overall best corporate practices, we will be initiating a shelf registration shortly.
We believe that having a shelf in place offers us the greatest flexibility over the next three years.
Lastly, due to the covert 19 impact on businesses. The small business administration <unk> was approved to administer the paycheck protection program.
Designed to provide a direct incentive for small businesses to keep their workers on the payroll.
Although the company does meet the qualifications of a small business.
Based on the April 23rd guidelines issued by these small business administration. The company has not accepted the loan opportunity.
This concludes my financial review.
Now back to Bill.
Thanks to him.
Talk more about our three core product platforms, beginning with you spot.
We may significant progress on the spot product development during the first quarter, adding some sick significant new functionality, such as content and U.R.L. filtering for in store devices improvements to the dynamic pricing portal as well as a new so.
Service feature for content creation.
We are branding this enhance self service capability as you spot studio.
Yes, but studio significantly broadens, our addressable market did better if that the different needs.
Curves around the world.
Before you spot studio carriers were not able to create and deploy their own in store.
Campaigns and needed to rely on professional services to update device content.
Do you spot studio as the base, we're now able to bring to market a tiered solution that has a much larger pool of potential customers, such a smaller European carriers and the knows.
We are currently in view spot related discussions with several carriers and expect to announce new customer wind in the coming corridors.
Yeah, let's move onto our voice messaging solution constantly.
<unk> and the smoke.
As I mentioned earlier good progress was made on integration efforts. We continued to work closely with the new T. mobile executives to ensure legacy spring subscribers continue to have access to the premium visual voicemail services that calm sweet provides.
Also working with the new T. mobile on their visual voicemail clans going forward.
And we are in similar discussions with booze and dish, we have a very strong relationship with both customers who are enthusiastic about com sweet.
At this point, it's too early to tell what the ultimate outcome of all of our discussions will be but I believe we are well positioned.
Are constantly solution is unique in the market and as a proven revenue generator, especially when compared to traditional voicemail systems, which are cost centers for carriers.
I look forward to providing you with further calm sweet updates as we worked through the mergers.
Now, let's talk about safe that the lead product for the company.
From a revenue perspective, Safepath performance master expectations for the corridor.
Revenues came in at 7.8 million for the quarter, 18% sequentially and up 240% over last year.
As Tim mentioned during his financial review, we expect Safepath related revenue to be down in the second quarter for two main reasons.
Burst covered 19 related store closures and the resulting stay at home than days, we'll have a negative impact unsafe path related revenue growth.
Heavy in store promotion at the service across France nationwide footprint has been the major driver of safe in down subscriber growth over the last 18 months.
And second with the merger, we expect some disruption as we work with the new T. mobile on how to integrate sprint safe and found and the T. mobile family mode service offerings.
On their brightside. These challenges should be temporary and we expect safe that to return back to a growth trajectory in the second half of 2020.
Additionally, the worldwide locked down has underscored the universal relevance and societal value of products like safe.
Activity in digital services have never been as important as they are right now screen time online gaming and social media use is at an all time high.
The need for tools that help parents effectively manage online content digital media consumption and device usage has never been more pressing.
Safe.
Smith micro hasn't proven solution that addresses all these challenges in a user friendly manner.
Extensive circle parental controls functionality, we are in the process integrating into safe past seven will only increase its value in the eyes wireless service providers and cable operators motivated to provide value added services that resignation with always.
On digitally savvy consumers.
Are connected home solution safe at home, which is also part of the new safe past seven no we'll be ready mid summer as well.
Expanded parental controls functionality that we're adding to the platform such as age base filters device time limits bedtime setting schedule off time and online rewards will enable our customers offer comprehensive digital safety solution for that.
Connected home that empowers subscribers to manage both cellular and non cellular devices, such as gaining councils mpcs.
Deliver the a a lightweight S.D.K. that resides in the home router are safe path home router agent will be compatible with most broadband modems and by G. routers.
Safe path home will enable wireless service providers to extend their brand relevance in the place. It is most important to the family digital lifestyle.
The connected home.
Exciting things are also happening was safe <unk>, the third pillar of our digital lifestyle solution.
During the first quarter, our product team made good progress on designing our lifestyle eco system for children's Wearables.
Much like are in home solution safe path, Iowa, T.X., then the functionality and value or the safe path platform be on smartphones to other connected device form factors.
When combined Safepath family Safepath home unsafe path.
Creates the safepath platform delivering a comprehensive value proposition for that connected family.
Taste, a single pane of glass management interface ties it all together.
Centralized management functionality provided by safe passage allows end users to see and control all connected devices on one screen with one amp.
In closing like most other companies we are facing headwinds in the short term is we worked through this cope with 19 pandemic.
That said I believe we're in a very enviable position of being able to maintain our profitability. Even if Q2 revenues are somewhat negatively impacted.
Are outlook for the long term has never been brighter.
Our sales pipeline is stronger than it's ever been and we have a strong strategic product portfolio than enables our customers to deliver profitable services to millions of mobile subscribers worldwide.
Our balance she's a strong we are committed to continue to deliver profitable results and free cash flow this year.
With asset operator, I'd like to open the call for questions.
Well now begin the question unanswered question to ask a question you May press start then one on your Touchtone phone.
If you are using a speaker phone please pick up your handset they for pressing the keys.
Try your question. Please press star than to at this time, we will possible entirely too it some other roster.
And the first question today comes from Scott Zero of Raw capital. Please go ahead.
Afternoon, Thanks for taking my questions and glad to hear you guys are or save sound unhealthy a along with your teams he there'll be and and maybe to to kick it off on on the Safepath numbers that you provided was circle included in that 7.8 million and if not could you give us an idea of what circle wasn't a quarter of that still entree.
<unk> for the 4 million for the year and possibly then looking out into the second quarter to give us some idea of what the linear already or the turnover return.
Then you know in March and April to give us some idea about how to model back going forward.
Hey, Hey, Scott.
The first quarter save past number that I've provided did include circle.
It was about 600000 of revenue for circle.
We had estimated about 500 I think [noise].
In the beginning of the acquisition in the second corridor, we had a initially guided about a billion per quarter for a full quarter and that number it's got a whole pretty solid so we expected to be around a million in the second quarter.
And and throughout the rest of the year.
Gotcha, perfect and and maybe just to follow up it sounds like the integration with circle is on track to maybe a little bit ahead of schedule, where the platform from a code standpoint will be ready to roll and the second half can you give us an idea of what's your your level of optimism engagement is with T. mobile it is a larger base. It's currently untapped.
And the ability to get in there and convert and sell them subscription services and maybe it's part of the two in terms of the broader discussion. It sounds like he continued be engaged with multiple carriers are for the save half platform could you provide a little bit more color or granularity in terms of you know size geography or timing of when you.
Would expect some positive outcomes.
Okay. Let me try to try to take that question first we are working very closely with the new T.T. mobile management teams as they'd be as they are being d. defined right right now we feel very positive about the move forward both with the.
The C.T.T. mobile family mode service, offering which was based on circle.
As well as with the spread safe and found offering that was based on safe that we see a clear road ahead to move these to the safe past seven though over some you know.
I think planned out the deployment, we may not deployed both at the same time, we'll probably deployed one and then bring the other one yeah. So that's in the in process. That's being discussed now there's a lot of planning on both T. mobile side and on this.
The micro side to make that happen, we will have the software ready by mid summer such that we can be looking at maybe first appointment.
The late summer timeframe so.
Yeah, there's a lot of work to be done it's not a simple process, but we have a good plan being mapped out.
As far as other carriers, we are in very.
Definite discussions in some cases Navy further along to that.
For a for sale.
Past the deployment.
These will be both in North America, and in Europe, and the Middle East. So you will see.
Announcements coming over the next month.
As we get to the point of the deployment. There. So yes, we feel very bullish we have a lot of work this being done.
That's part of the reason why we've grown our head count the way we have.
There is just a lot of effort in many different ways and many different areas and then also covers the other products I mean, we have a lot of work we're doing on constantly.
Both for T. mobile and four dish.
As well as what we're doing on on <unk> in that we have a number of carriers that we thought we probably would have had done by now had not cove at night, 19 gotten and away and having all the stores close so I I think you'll see wins on the view spots.
Might as well.
A lot of activity here and a lot of energy and a lot to look forward to we just need to get through.
As with everybody in this world, we Gotta get get get through this code date 19 problem.
Great. Thanks for the color built maybe just a quick follow up on calm suite, then I'll get back into Q., but in in terms of the existing base right. Now do you expect that to be relatively protected that that sprint premium base and what is the competitive offering that t. mobile has all the visual voicemail front and how do you think you stack up to that because it sounds like that's that's one of the immediate opportunities.
Thanks.
You're honest French site, we think that there will be you know a steady base that will continue to use com com suite for the foreseeable future.
There will be a transition you know that may take.
Me.
Two years I I'm not sure you know how to really picture that could take longer.
Where you know these these users will be moved from the spread system in the spring billing system et cetera.
Do a shih t. mobile offering and at that time, you know the the base would start to to to the decline on the T. mobile side. They haven't offering that was built for them by a con contract house and we think there's an opportunity to improve upon.
So we'll wait and see yeah, we are in conversation and that would be a very very nice when force.
On the decide you know I think there is very strong activity boost and we would consider that that will be a growth area for dish going forward, especially once the dish merger has been concluded and there's good focus put back on that business as well.
Well as you know we have I think a very meaningful opportunity to work with them on the calm sweet side in their posts paid business that they will be building out and will necessarily really want to have build out when there are moved over to their own five g. net network.
Great. Thank you.
The next question comes from Josh Nicholas be Riley F.B.R. Please go ahead.
Yeah. Thanks for taking the time to I answered My question mentioned Bell.
Part of the reason for the expected decline for state Pat in the coming second quarter is really just to to some disruptions as you work with T. mobile on how to integrate with the mute Cimo pop one is that just couldn't be like a a cue to a keeps you had winter than kind of off to the races back to growth again.
Or is it going to take maybe a a couple of quarters to get that could that finish.
Okay first off.
My number one had headline per second quarter is covered 19, and the fact that the stores are closed as I said, if you look at history, and we sort of assume history tends to repeat itself that one of the biggest areas of growth safe and found it spreads was driven.
By the stores and retail pro programs that brought new subs to the safe and found platform without the stores being open obviously that sort of curtails that activity.
We do expect that the stores will start to reopen.
The latter part a second quarter and should be opening still further and third quarter. So we think that problem should take care of itself as far as for the merger, which was the secondary part of of what I was alluding to yes. There is some timing now that we have to work with new T.
Teams. Some other teams are made up of former sprint people. Some of the teams are made up a former t. mobile people in some sort of a mixture and we have to work our way through with that and as such that takes a little bit of time and you know as far as getting focus back on the objective which is to build.
Family Safety platform that has a growing population and then turned gets a growing revenues dream I think most of this will be taking care of by the end of the second quarter I think at this point, we're already starting to see clarity.
And we are working on building out.
The plans and the strategies as to how to move forward clearly in in all cases safe past seven O., which is the can join product that incorporates the circle parental controls technology, along with all the features and.
Abilities of safe at from a location standpoint, as well as I see you know are well under way and I think that you know I think we should start to see a nice recovery you know and return to grow in third quarter and I would expect fourth quarter should be.
The you know full full guns blazing. So you know I feel very very positive about that.
Thanks.
Sorry, Yeah no no no provides a ton of color. That's that's really helpful glad to hear like the second half of the year right. It's gonna be back, especially Porky the business as usual and you mentioned the shelf I was little bit curious like I would imagine you you're going to have the best platform <unk>. It looks like once you have state that some point no with the acquisition.
Circle.
Are you seen in the current environment that that there's a lot of more attractive pricing for doing something like <unk> as a lot of companies are struggling to maybe don't have cash flow that you guys have.
Yeah, we see it as.
Opportunity I think you should view the shelf is just good corporate governance.
It needs to be in place such that if we are presented with a very compelling opportunity. We can go and raise capital if we need it clearly and the current.
Times as we sit here you know right now.
No chance whatsoever that we would want to pull down that shelf and as such it's just there and you know for the future and I think that's the way the market should should see it.
Hmm.
Yeah. It makes sense always good corporate governance to have that in place and then good to see the.
Obviously, a lot confidence in the business like.
Dictated by the fact that you're one of the few employers out there that that's probably been hiring right you have any kind of a target headcount that you're looking to kind of get to it. When you think you are have the platform built that it'd be ready to attack all these different opportunities that you're coming up.
We're ready to tackle of now.
As far as the platform you know it it is a constant effort of growth we will be in a in a spot now where we'll be looking to add more I.O.T. devices and I I see focus areas.
Clearly you know we are very heavily focused on getting safe past seven no done to get the power of the circle parental controls and the state that as well as the delivering the safe path home Tech technology as they finished product and.
We can actually go to business and working with carriers going forward for a deployment in five five g. routers and five five g. router strategies going forward. So yeah.
Right now we have immense opportunities almost everywhere, we look we have a.
A number of deals that we expect to see US you know launch in in a reasonable time timeframe. So yeah. There's a lot of reasons to look for the future and there's a lot of reasons to be very bullish on our business case.
Mmm.
Last question for me a two part like one do you think I guess fair to say that there's a good chance you may have already been able you you may have already announced a couple of deals with it wasn't for this <unk> 19, but you're feeling pretty confident about the ability of clothes wanted to deals across different areas. The plot form over the next like six.
Months or so and then.
<unk> once things that finalize with T. mobile for the second part like could you provide a little bit of high level color about how you think that roll out might take place as it as a sales staff gets trained up to.
To to sell like like it did at sprint.
Yeah, we will have a complete training pro program as part of our overall project strategy T. mobile has made it clear that they expect that from us as well, they're looking for that we're working with them on the marketing side as to how to go to market.
Work. So there's a lot that goes on that's a lot more than just delivering software and bringing in a service offering and in their particular case because they have a legacy platform that was based on the circle code and they also now.
I have a legacy platform that was based on the safe that code is a strategy how to move both of those platforms forward to the point that they decide they want to can join them and you know then we have one big large offering you know.
The work that we're dealing with T. mobile is a mess, it's a big undertaking the new T. mobile is a big carrier.
In their market opportunities are huge.
Much much bigger than what sprint was able to offer and as such you know we need to pay a lot attention to the to our new customer. There's a lot that they are going to look for from us and we want to be the park partner that can get it done.
Thanks for the detail belt or shit.
Again, it is star one to ask a question. The next question comes from Jim <unk> Oh pardon. Please go ahead.
Yeah. Thanks.
Can you address AAPEX in Q. too it seems like S.G.N.N.R. and D. Both go up a little bit is you have a full quarter of circle.
And plus all of the.
Programs, you have under way, but G.N.A. down because you because of the absence of the acquisition expenses is that.
Is that the right direction on those and can you put <unk> either arrange for a number on total effects.
Yeah. So we've we've been growing a couple 100000 per quarter.
I'm thinking non got now and I included a a non gap our backs reconciliation in the press release. So we did 8.1 million in the first quarter. So you should be faking several hundreds or thousands a increase most of that coming on the r. and D. line item some of it on a sales and marketing line item the circle acquisition.
Didn't necessarily in it of itself a drive our backs because we didn't acquire any people, but we're we're certainly working and spending a with our own teams extra money extra hours extra time to get that integration done.
As well as hiring as well as I alluded to in my prepared remarks to the possibility of some contract labor to help us through what we see is a a as bill indicated and amount of work that we we need we need to perform for so we see that.
As an opportunity so you should be thinking several hundreds of thousands increase a into two q.
Oh.
Okay.
Thank you and then anything special or unusual about operating cash flow, we should be aware of for the rest of the year.
In terms of the acquisition or any programs that you might have going on that would impact working capital.
Anything unusual.
To take notice the.
Yeah with with the acquisition just to start up at the building process you know the they the carrier terms are typically longer so just.
Just like last year with view spot you may see it three to six month delay before we start flow in cash associated with the revenues that I've talked about associated with a circle, but but nothing you know significant or material and I I expect all that to flush out by you know the third call.
Order, so you might see a delay in the second quarter, you know measured in half a million to to 700000, just because of the start building process, but but you'll see that all open up as we get into the the third quarter ended a fourth quarter no no problems. There. So nothing that we expect any any disruption.
To that.
Okay right. That's it for me thank slot good luck with everything.
<unk>.
Plus concludes our question and answer session I would like to turn the conference back over to Charles Manson part in closing remark.
One for joining us today, we hope you're all safe, we look forward to speaking to you in the future and should you have any questions or further comments. Please feel free to give us the call and I hope everyone has a great. After they will look for talking to get a third court.
[laughter] Princess now concluded and keep her attending today's presentation.
Connect.
[noise].