Q4 2020 Progress Software Corp Earnings Call
Good day, everyone and welcome to today's progress software Corp corporations excuse me corridor for 2020 Investor Relations call at this time I'd like to turn the floor over to Mr., Anthony Folger Chief Financial Officer. Please go ahead Sir.
Thank you Greg.
Good afternoon, everyone and thanks for joining us progress software as fiscal fourth quarter 2020 financial results Conference call.
With me today is Yogesh Gupta, President and Chief Executive Officer.
Before we get started I'd like to remind you that during this call we will discuss our outlook for future financial and operating performance corporate strategies.
Claims cost.
Cost initiatives, our integration of share yes.
The impact of the cold at night gene crisis on our business and other information that might be considered forward looking.
This forward looking information represents progress software's outlook and guidance only as of today and.
And is subject to risks and uncertainties persist.
For a description of the risk factors that may affect our results. Please refer to our recent SEC filings in particular, the section captioned risk factors in our most recent form 10-Q.
<unk> progress software assumes no obligation to update the forward looking statements included in this call, whether a result of new developments or otherwise.
Additionally, on this call all financial figures, we discuss our non-GAAP measures unless otherwise indicated.
You can find a reconciliation of these non-GAAP financial measures to the.
The most directly comparable GAAP numbers in our financial results press release, which was issued after the market closed today and is also published on our website.
This document contains the full details of our financial results for the fiscal fourth quarter of 2020, and I recommend you reference it for specific details. We have also published a presentation that contains supplemental data for our fourth quarter 2020 results, providing highlights and additional financial metrics both.
Our earnings release and this presentation are available in the Investor Relations Investor Relations section of our website at investors Dot progress Dot com.
Today's conference call will be recorded in its entirety and will be available via replay from the Investor Relations section of our website.
With that I'll now turn it over to Yogesh.
Yes.
Thank you Anthony and good afternoon, everyone.
As I'm sure you've all seen in today's press release.
Finished the year on a very positive note with revenue and EPS, both above our expectations.
We also delivered strong year over year revenue.
Yes, Coke GAAP book to four and that's why 20.
Overall I'm pleased with our results both for the fourth quarter and full year 2020.
These results reflect the durability of our business.
And our success in executing our total GAAP strategy.
While the uncertainties and disruptions also called.
Well, the 19 pandemic impacted the timing of our effort.
[noise], yeah impacted the timing of our efforts to close a little bit and upselling existing customers. We believe our strongest zone and relentless commitment to ensuring customer success by delivering high quality product offering some support enabled us to excel in 2020.
This focus on customer success also helped us maintain our industry, leading customer retention rates.
I'm also extremely pleased with the progress we are making in executing our total growth strategy.
Our 2019 acquisitions Ipswich has proved to be successful both financially and operationally and we remain bullish about our acquisition of show.
It was a pioneer in deadlocks index Tech ops and extends our long standing leadership position.
The developer ecosystem.
More share in a few minutes.
Anthony will provide more details during his comments about the revenue upside in the quarter came primarily from better than expected Openedge and did not direct software license revenue.
Fold without consistently high customer retention rates.
In addition, just contributed to our results for roughly two months in fourth quarter and share contribution was right in line with our expectations.
For the full year, the cutting revenue contribution continues to grow in 2020 and at least 80 per cent driven by strong net retention rates.
As always our employees' commitment to the success of our customers and partners remains a key factor in driving progress. This performance and we are grateful for their contributions.
Our teams continue to work remotely.
And while we're optimistic about the roll out of the COVID-19 vaccine globally.
We're confident that we can continue to execute on our strategy.
Operational financial objectives, and provide the high quality support our customers to other cost due to weather the MD office.
All working remotely.
As you know one.
One of our areas of focus in the fourth quarter was the integration of share.
Which we acquired in early October.
I hadn't been thrilled by the response from share customer study acquisition.
So it was an impressive or eight fortune 500, and central price customers, who have come to rely on share products for their multi cloud and hybrid cloud devops need.
[noise] with engaged with many of these customers since the acquisition closed and they're pleased that SAP is now part of progress the larger income actually much stronger organization with the commitment to continue assess legacy of delivering high quality products and support as well as to chefs vibrant open source community.
We're also extremely pleased with the progress to date.
All the integration process into our business.
The integration is on track and going well with key elements already complete.
Although we still have much work to go in EPS like 21 to complete the integration.
I am now more confident that we will meet our objectives.
We'd be continuing support and enthusiasm of shopko stores.
Share operational and financial performance in Q4 was in line with our expectations.
As we look forward to 2021.
We are positioned to me.
Potentially exceed the financial targets that we set for ourselves back in September when we announced the acquisition.
I'd now like to spend a few minutes on our growth strategy in general.
As we have embarked on our total growth strategy cookies did M&A.
Both store to internal capabilities by making key investments.
Including in our M&A capabilities.
These investments have yielded and will continue to yield good.
Take benefit both.
Both in sourcing and executing opportunities and integrating acquisitions more quickly.
As a result.
M&A capabilities combined with the large fragmented than going that box market opportunity.
Well this is the most well execute on our total growth strategy.
Enabling us to deliver.
Stains shareholder value for years to come.
The Democrats market does not look of progress.
As I've said many times Congress has over the last 40 years been a leader in the application development market.
And we just been central to the success of developers the Nike professionals throughout that time.
The launch of the deal flow Openedge and the ongoing value divided by our Openedge customers is a testament to that.
And it's not limited to just open it the same is true across our entire product portfolio and customer base.
Our combination with good switch almost two years ago added strong capabilities around Nike operations.
The additional share provides you with splunk and automate the deployment with a strong emphasis on security and compliance.
So I like the term Dev ops and deficit ops relative <unk>.
[noise] markets are not look like as we have a long history of delivering products to develop person IP professionals that enable them to develop deploy and manage high impact business applications.
It's worth spending a few moments talking about the <unk> market.
Industry analysts forecast that the day law smart cyclical come a little over 4 billion revenue in 2019.
Nearly $15 billion, including 26, it cannot all 19%.
And while a large and growing market share is important.
The lead this market is also relatively fragmented and presents an opportunity.
<unk> total gold status.
To provide a sense of the M&A opportunities. So progress it's important to consider the broader infrastructure software market, which includes the day box market.
During the slides you had from 2014 per 2018.
Venture capitalists invested over $100 billion yeah.
Early 16000 companies when the infrastructure software market.
And this fanatic pace continues to income.
In addition to venture investments good equity investors took an active.
Some founder owned businesses businesses have grown to scale.
And moving on to that companies are looking to divest assets that no longer fit that strategy.
As it is out.
We believe there are many opportunities in our market well our strategy for many years ahead.
Looking ahead to 2021.
<unk> expense on the plan that resulted in our success in 2020, namely our total growth strategy driven by the expansion of our business through accretive acquisitions added relentless focus on customer retention.
Our focused M&A efforts will continue to spend them already solid position in the Dev ops and deficit cops markets.
At the same time, we will continue to deliver superior value to our customers in the form of high quality products excellent customer support.
And a lower total cost of ownership.
Enabling us to maintain our impressive and strong customer retention rates.
Operationally, we remain focused on operating the business efficiently.
Allowing us to generate best in class operating margins.
We are confident that our total growth strategy.
Combinations with this operating philosophy.
Well it provides substantial and sustainable value.
All of our stakeholders.
In summary, we're very pleased with our 2020 performance, especially considering the uncertainties faced early in the year.
We continue to demonstrate the good ability inherent in our business and I'm confident in our ability to continue advancing our strategy and 2021.
With that I'd like to turn the call over to enter to provide more details on our financial results and our outlook Anthony.
Thanks Yogesh.
Good afternoon, everyone and thanks for joining our call.
As I'm sure you heard and Yogesh his remarks.
These with our results in the fourth quarter with revenue operating margin EPS and free cash flow all surpassing our expectations.
We're also delighted with the acquisition of share and how the integration has progress to date.
Turning to the numbers our revenue for the quarter of 129.1 million.
Represents 5% growth over the prior year quarter and reflects stronger than anticipated sales of our openedge and <unk> products.
Despite closing the schuff acquisition five days later than anticipated we were still able to deliver these very strong results on the top line.
Our operating discipline through the COVID-19 pandemic resulted in continued margin expansion a trend that we experienced through 2020.
For the full year revenue of 456.2 million, representing 6% growth compared to fiscal 2019.
That growth largely driven by a full year revenue contribution from Ipswich and a two month revenue contribution from shelf [noise].
With customer retention rates remain consistently strong throughout the year, we're very pleased with our top line results and believe our business showed tremendous resiliency in fiscal 2020.
Turning to expense its total cost and operating expenses were 81 million for the quarter up 6% over the years low quarter and 273.5 million for the full year.
One per cent compared to fiscal 2019.
For the quarter the increase in cost in operating expenses was driven by the acquisition of chef and partially offset by a reduction in cost and operating expenses across the rest of our business largely driven by measures we put in place to combat the spread of gold at 19.
For the full year the increase in costs and operating expenses reflected a full year of activity for ex switch and two months of activity for schuff.
Partially offset by cost management measures put in place in the fourth quarter of 2019.
Cognitive business.
Hold with the same coated related reductions in costs and operating expense each that I previously mentioned.
Operating income for the quarter was 48.1 million.
And operating margin of 37%.
Compared to 47.3 million in the year ago quarter.
For the full year operating income was 182.8 million for an operating margin of 40%.
An increase of 20.5 million or more than 200 basis points compared to fiscal 2019.
We recognize that a portion of the margin improvement achieved in fiscal 2020 is the result of better than expected performance during the year.
However, our perspective on sustainable operating margins is unchanged in the high Thirtys.
The reason for this is because a portion of the fiscal 2020 margin improvement.
Was driven by reduced expenses, resulting from the restrictions we put in place to combat the spread of Coke at Nike.
In addition, it's worth highlighting that our integration of chef.
And the recognition of related cost synergies will take place gradually over the course of 2021 likely resulting in higher operating margins later in the year.
Earnings per share were 91 cents for the quarter, an improvement of 12 cents or 15 per cent compared to the year ago quarter.
For the full year earnings per share were $3.09, an improvement of 40 cents or 15% compared to fiscal 2019.
Moving on to a few balance sheet and cash flow items.
We ended the quarter with 106 million in cash cash equivalents and short term investments.
And a debt balance of 384.5 million, which is comprised of our term loan in the amount of 286 million.
98.5 million under our revolving line of credit, which we drew down to partially fund the schuff acquisition.
Yeah, so for the quarter was 54 days.
Paired to 56 days in the fiscal fourth quarter of 2019.
Deferred revenue was 193 million at the end of the fourth quarter up almost $16 million from a year ago.
Reflecting the addition of chefs deferred revenue after purchase accounting adjustments.
Adjusted free cash flow was 40.7 million for the quarter up 11% compared to the year ago quarter.
And during the quarter, we repurchased $40 million of progress stock.
As a result at the end of Q4, we had 190 million remaining under our current share repurchase authorization.
Now I'd like to turn it to our outlook for Q1 and the full year 2021.
Our expectations for chef and chefs contribution in 2021 have remained largely unchanged in that we anticipate chefs business to grow low single digits as we focus our efforts on customer retention.
And as previously mentioned, we expect the integration of share it continues throughout 2021.
As a result, we expect to recognize cost synergies gradually throughout the year.
And to exit the year with an operating margin contribution from chef of at least 35%.
In addition to chefs contribution.
When developing our outlook, we assumed that some of the headwinds resulting from the economic challenges brought on by the COVID-19 pandemic would continue for at least a portion of 2021.
But our topline excluding chefs contribution would be roughly flat for the year.
We've also assumed that our operating expenses related to travel facilities.
And related activities will be lower during the first half of 2021.
Due to the continuing told at 19 restrictions.
Our outlook for 2021 also reflects a lumpy quarterly distribution of revenue for our day to direct product line.
As a reminder, datadirect is the only product in our <unk> segment.
For the full year, we expect the product line to remain largely flat.
And consistent with our prior statements. We believe the annual contract value will remain in the range of $32 million to $33 million.
However.
As it relates to the quarterly distribution of revenue.
We expect Q1 revenue for the day to direct product to decline by almost $9 million when compared to Q1 of 2020.
And we expect to see a corresponding increase in the second half of the year most likely in Q4.
The overall impact on the air is obviously not meaningful however, it's important to highlight.
The expected release dates for multiyear OEM contracts impacts the quarterly distribution of revenue in 2021.
I'd also like to point out that chefs subscription license model, it's similar to that of day to direct.
As a result in 2021, we will aim to enhance our disclosure to ensure it better reflects the underlying performance of our business, including the addition of chef.
With that for the first quarter of 2021, we expect revenue between 119 and 123 million.
This includes a full quarter contribution from chef Paul.
Partially offset by the almost 9 million dollar reduction in day to direct revenue as previously discussed.
We also expect earnings per share of between 72 and 76 cents.
For the full year 2021.
We expect revenue of between 513 and 521 million.
Representing 12% to 14% growth over fiscal 2020.
Substantially all of this revenue growth reflects the full year contribution from schuff.
We anticipate an operating margin for the year of approximately 37%.
With a slight headwind.
From the shelf acquisition, which will improve through the course of the year as I previously outlined.
We're projecting adjusted free cash flow of between 150, and 155 million and.
And we expect earnings per share to be between $3.22 and $3.28.
[noise] when comparing our EPS guidance to 2020 results. It's important to note that Weve included a two cents increase for the anticipated impact of foreign exchange on a year over year basis.
Our guidance for full year, U.P.S. assumes a tax rate of 20% and approximately 44.5 million shares outstanding.
In closing I'd like to reiterate that we're thrilled with our Q4 performance the acquisition of Schuff and our outlook for 2021.
We believe the investments we've made in our M&A capabilities position us well to execute our total growth strategy and create real value for our shareholders.
[noise] with that Greg I'd like to open the call EPS for Q1 day.
Thank you very much Sir and ladies and gentlemen, if you do have any questions. Please go ahead and signal by pressing star one on your Q and a.
Excuse me on your telephone keypad and just make sure you have your mute function turned off to allow us to receive day signal against that star one for any questions.
Pause for just a moment.
And first we are going to hear from Dan Ives with Wedbush Securities.
Hi, This is strecker on for Dan.
In the in the integration process, so far which S. can you just talk about maybe what has surprised you. The most over the past three months and then.
A follow up as we booked into fiscal year 21 with shaft, then and your guidance. What she is the biggest challenges for the team versus some of the low hanging fruits out there. Thank you.
So Oh, hey, Thanks back Oh. This is Yogesh you know the the most impressive thing for me has been.
How wonderful the customers are I mean, you know that we have amazing customer sets chef.
And they are you know clearly excited about the fact that progress acquired chef.
That progress is now.
And the shaft product to their full is now part of a much stronger company with with it much stronger global presence.
We are truly committed to delivering on.
The product road maps on the future filled up and have since other products on making sure that the customers how successful as well as our strong commitment to the open source community that schuff had so the fact that look I mean, continuing the strategy that you have had but now with a stronger business behind it I think is really the most exciting.
Thing for me.
And it has been to the Americans. This year, how excited our customers are there. This EPS customers about this acquisition so that that would be sort of a big positive that critical <unk> <unk> or <unk>.
In terms of you know or the next year. You know we are confident we are Oh, you know with respect to where we see the business going we expect to continue our integration work has started off really well.
As I mentioned, we've actually completed some of the activities already but there's more to be done in 2020.
And I've talked about 2021.
And you know.
Those making sure that we are continuing to get the synergies over time back we expect and exit the year at the right level of synergies accounts have I think that could be an important thing for us to continue to make sure that we are.
On our overall product portfolio not just the true, but everything that you have a you know continue to focus on retention rates customer satisfaction.
And and you know along the way also winning new customers and and an expense some existing customers, but really sort of just I think it is really more of the same that's directly I don't think there's anything unusual next year that you foresee at this point average.
Yeah, I mean, you want to add anything to that.
No, yes, I know.
I think that covers it.
Okay.
Thank you very much.
Hey, Thanks, Brian.
All right and next then we'll hear from Mark Schappel with benchmark.
[noise] Chappelle excuse me, Sir I pronounce around.
Hi, Good afternoon. Thank you for taking my question.
Starting with you with.
Hey, good you're going to hear from yeah.
If I recall correctly yogesh.
Last year I think your <unk> study or you're looking at close to 200 companies a year out from an M&A perspective, and given your enhanced M&A team now would you say, you're looking at a similar rate of companies or or or even more for that matter.
So I think that day, but in some ways. The number of companies have gone up a little bit, but I think the other part Mark I think I think we are.
They do a better job of honing and filtering and making sure. We're looking at that right. Once more free I think you know I think that's a quality also matters as I'm sure you can imagine so no I I can really confident about our ability to go out and identify assets and and Ah you know continue to execute on our clinical strategy.
It's an interesting thing you know were built a strong team not just on a.
Finding and sourcing or M&A deals and executing on them and I know, making that happen, but also on integration and systems and other aspects of our business, though over the last year. So both investment I can car you know, we're seeing some of them come back without [laughter] mm integration that is ongoing and I think we'd also get better.
On that front as well so I think it's both sides I actually improving truly excited about the opportunity ahead.
Great. Thanks, and could you remind us of the size of the company was that that you're that are in your target zone.
Yeah. So you can go we look for you know I think we've said before that 10% to 20% revenue range is sort of ideal one, but we will look at something smaller if it makes sense and something bigger if it makes sense like.
It depends on the asset that comes up.
The sweet spot for us [laughter] being sort of a 40 $200 million every business, but I you know I, if something came along that was $20 million that maybe what the right fit and the right type of company with the right production rate.
I I think you know to us that would be very attractive order pickup even over $100 million.
Moving to Mark I feel.
But at this point the team is ready to do.
You know good do you look at a faster pace than we did over the last two years and end up and continue to integrate them. So so and.
The range is still a sweet spot range is that still kind to 20 per cent approximately <unk> of our revenue.
Great and then in your prepared remarks, you you'd mentioned integration is moving over to in your prepared remarks, you stated that the key elements of the schuff integration already completed I was wondering if you could just ah fill in a few more details on what those key elements or.
Yeah. So some of the key elements that are complete I'd gone imply all key elements. So please if I said that I'm I I spoke about some.
Some of the key element car are already in place and.
Good day, an example, right now that they will be closed per month books that aren't on our financial system. So the people moved into our HR systems and B what pay for that so all the employees already know what pay system everybody on day, one had their email set up and they were on our domain and had login.
It really on the system side and on the integration of the financial processes and all that has been very rapid and remarkably good and smoothed.
We also are continuing.
Continuing to add it happens a shaft was using sales force for their sales.
Automation and so do we owe the CRM side so.
We're bringing those together and so on so I could.
They would be getting out of a out of the gate, we were able to do back and to integrate their systems. He will bring people on board, we do well.
Put the functional where they belong within the company on day, one so that the people who knew exactly we're talking to take some day, where a part off on the very first day that big joint.
All these things I can then be able to stock interacting with customers on day, one so they the person who's leading this this this business for us and Oh reports to me and he he's has personally spoken with nearly 50 customers like 50 enterprise customers it and and the team has spoken to many more than that and so it's all those things have gone.
We'd be well and and that's what's exciting about it mark.
Great and then if they did you state the schuff contribution in your prepared remarks.
The core.
Oh for the quarter I did not mark, but it was on a non-GAAP basis. It was just over $9 million 11.
Great. Thank you that's all for me. Thank you.
Sure. Thank you Mark.
All right and then moving on from Sidoti we have on U.S. soda strength.
Hi, Yogesh and Anthony Thank you for taking my question and congratulations on the nice results.
Thank you and a good start and so I guess a follow up on that.
Cash and acquisition that M&A, So I guess I'm just curious how many.
Did check employee and wasn't sure and when when you have to.
Put them on.
Sure, Yes, [laughter] employed.
You know over 200 people you know actually you know close to almost 250 people or when we brought them on board.
But you know of course, you know from a perspective of as as you know to drive synergies and so on we you know we we brought a.
A slightly smaller number onboard and we have basically continue to work with the with the team obviously.
I know when you have a company that was the startup that was looking to grow rapidly and have a culture of working in a start up and looking to be an IPO and so long when doesn't makes it like this there are some employees, who kind of want to go and look at them up the startup. So we've had some turnover like that but it's all you know very much as you would expect.
Good you know and and you find that to.
To us what does that what has been to you that we continue to.
Execute on our product Roadmaps, we delivered and uses or per product in the fourth quarter. We continued to support customers and weve been kinda requirements and backup <unk> and another kind of financial ties in the business as you know as Anthony said in his prepared remarks that that you know despite being you know five days into the.
The second month.
Oh the courthouse, so we got the Olympic less than two months of contribution we were still able to get the contribution on the top line that can be expected for from share. So I. It business has been good and really any employee turnover that has happened.
In fact, it our business right and in any way shape or form.
Thank you and.
I think you mentioned you said when you acquired check that you and I expect it to be accretive in the first quarter do you still think that or.
Anthony I don't yet can you speak to that.
Yeah, I think on the on your was that in the you know as we entered fiscal 21. So the first quarter of 21, we would start to see a accretion from chef and we still expect that so our expectations are still in line.
You know, we expected that flow Q4, because shuffles, just sort of a breakeven business. When we acquired it you know it may not be accretive in the two month period, certainly as as the calendar turns and you get into Q1 fiscal 2001, we did say, we expect it to be accretive and you still good.
Okay. Thank you.
And since you had such a successful and integration with interest, which and so that created a paid up there do you see yourself being able to use that play that's a jaffray Sir.
They're learning some channel then our heat GAAP, so or whatnot.
Oh, no I'm not absolutely, yes, I mean, you know we argued that playbook, but do you consider the payable right. Every single time, we would do an acquisition, we'll probably learn something additional that adds to that playbook, but yeah. We the playbook is a we have a playbook, where you could do day M&A due diligence, we he was good or poor villiger or <unk>.
Jason and you build up a you know.
Hi, net and add to it as we do additional acquisitions could eat acquisition has some subtle differences and you need to make sure that whatever learnings we have react to that so I'm actually very confident and comfortable with where the playbook is today.
And that I can we can execute other M&A deals and and apply that playbook to that.
Okay, Thank you and and sort of.
What are you seeing in the M&A market has that changed in the last couple of months and then [noise].
How has it changed if at all.
We have not seen any kind of significant change in the last couple of months to be honest with you I think it is a constant flow of you. A you know we are you know we are seeing a very very robust set of.
You know do you flow and and and as I said earlier you know we are we are getting better and I think we've gotten significantly better income so making sure that they are the right type of targets and they continue to be so so yeah, I know I am actually I'm very confident that but the deal flow is not an issue.
Okay and how soon do you think you would be able to take on the non acquisition gave and yet you're still digesting.
So for me I believe you can take on we are comfortable taking on another deal now like I said I cannot you know, we're not slowing things down were not saying, let's stop and pause that we feel very confident that where the right opportunities show up we'd be able to execute on an ex <unk>. So I'm. So after six weeks as you know we decided to pause for about six.
But we have not cost at all a share.
Okay. Thank you and just to switch gears then [noise].
Didn't you.
Yeah, I mean, it's sort of impact on your business when they're sort of the still low in cyber attacks happened.
We have not seen.
Not really any significant impact we are seeing some interest in walks up gold, which is our network management product in the market and folks are asking and wondering whether they talk to the switch from so moving school, our product, but it's really sort of low level of activity. So low.
Rather rather small and it's so no meaningful you know business impact income. So you know suddenly a whole bunch of so full of its customers showing up at our doorstep. So.
But but you know it's not from our perspective I you know we continued to execute on our you know our go to market efforts.
You know and and as I said, you know so low teens is not really.
That you know, but not really creating any interest smoke meaningful opportunity.
Okay. Thank you and then the last one is there anything you.
Still challenging period that you see mcneil inputs coded.
Well I think that you know.
<unk>.
Yes, good [laughter] already even though you know, we're all very hopeful and I'm really excited about the.
The vaccine and the possibility of it being available globally very rapidly moving places like GAAP, you know Europe, and India, where we have a larger employee population I do you know to me Paul School. There I don't think there are additional you know.
Other kind of I mean, it's a normal operational things that we have to continue to do a and we've got to do them. So well, we see that be pulled it having it as Anthony said, you know some impact and some headwinds in the first half a year or so.
As as we you know get back closer to normal but beyond that.
I I don't really see any additional significant challenges.
Okay. Thank you that was helping me.
Thank you I'm here.
All right and following on it looks like there's no further questions. At this time I would like to turn the floor back over to Yogesh Gupta for any additional and closing remarks.
Thank you Greg. Thank you all for joining our call today, we are truly excited about a couple of formats and 2020.
Our integration on the flow of shaft is well on track and as we continue to execute on our total GAAP strategy.
Slide 21, we will further strengthen our position in the back office and back office markets.
And we look forward to talking to you soon thanks, again and stay healthy and safe but.
Bye bye.
And once again, ladies and gentlemen that concludes our call for today. We do appreciate you joining US you may now disconnect.
[noise].