Q3 2021 KVH Industries Inc Earnings Call
Good day and welcome to the Kv H Industries, Inc. Q3, 2021 earnings Conference call. Today's conference is being recorded at this time I would like to turn the conference over to you Roger Keeble. Please go ahead.
Thank you operator, good morning, everyone and thank you for joining us today for caveats Industries' third quarter results, which are included in the earnings release. We published this morning, joining me on the call are the company's Chief operating officer, Brent Brewing and CEO Martin kits fan Haney Kim.
Before we dive in a couple of quick announcements first if you'd like a copy of the earnings release. It is available on our website from our Investor Relations team.
If you'd like to listen to a recording of today's call. It will be available on our website. If you are listening via the web feel free to submit questions to IR at K V H Dot com.
Finally, this conference call will contain certain forward looking statements that are subject to numerous assumptions and uncertainties that may cause our actual results to differ materially from those expressed in these statements.
We undertake no obligation to update or revise any of these statements. We will also discuss certain non-GAAP financial measures and Youll find definitions of these measures in our press release as well as reconciliations of these non-GAAP measures to comparable GAAP measures.
Encourage you to review the cautionary statements in our SEC filings specifically those under the heading risk factors in our 2020 Form 10-K, which was filed on March 3rd and our Form 10-Q, which is expected to be filed sometime this afternoon.
The company's other SEC filings are available directly from the Investor information section of our website.
Now to walk you through the highlights of our third quarter I will turn the call over to Martin.
Thanks, Roger and good morning, everyone. Thank you for joining us today.
We achieved another strong quarter, reflecting our success in implementing our strategic initiatives total revenues increased by 5% in the third quarter to $43 million from $41 1 million in the third quarter of 2020, and our non-GAAP adjusted EBITDA for the quarter was $1 5 million compared to three four in the third quarter last year.
Contributing to these results were a 13% increase in airtime revenue record Q3, VSAT shipments in our mobile connectivity business and continuing careful management of operating expenses.
Like many companies, we feel the effects of ongoing supply chain disruptions and the increased cost of goods. These global issues slow deliveries of our products in both mobile connectivity and inertial navigation, while we could have shipped more if it not for these constraints were able to shift the bulk of these orders into Q4.
<unk> continues to be strong and outpaced production capacity.
Our team here did an outstanding job.
Of adapting to the supply chain challenges are engineers identified alternative technical approaches and our procurement logistical teams worked hard to track down necessary parts to get them to our factories.
And managed to get products shipped to customers around the globe.
We did see increased costs related to purchasing hard to get chips and of course incoming freight was higher.
In response, we have begun to raise prices on select products and services in Q4, and we expect to implement additional price increases on January one in 2022. So despite these challenges our lead times have remained reasonable for our customers and we're able to ship out a record number of VSAT units in Q3.
Now, let's look at the details of our segments.
Starting with mobile connectivity Q3 is historically a slower quarter in the mobile connectivity market due to seasonality. Nevertheless, VSAT unit shipments were up 53% compared to the third quarter of 2020 and set a new record for any third quarter.
This increase was spurred in part by demand for our new Ultra compact Tracfone V 30 in both leisure and commercial maritime markets.
In fact sales of our smallest VSAT systems were up more than 100% over last year.
Shipments are an excellent indicator of future airtime revenues does virtually every one of those units will become an airtime subscriber.
Typically during the next quarter.
Our Q3, VSAT airtime revenue was $24 6 million, an increase of $2 9 million or 13% compared to Q3 last year.
We also increased our active subscriber base by 12%.
Revenue for agile plans, our connectivity as a service program for the commercial maritime sector was up more than 54% compared to the third quarter of 2020.
<unk> plan subscribers now represent 47% of our total mini VSAT broadband subscriber base.
We continue to make excellent progress on our initiative to migrate customers from our legacy network to our HTS network.
As you know we have a long standing plan to shut down our original Arclight network on January one 2022, and then operate only our HTS Global VSAT network for primary service.
We project the total cost savings of around $12 million next year, and a net savings of roughly $5 million to $6 million in annual airtime expenses, depending on how many customers move over for those customers moving dates yes, we will of course be adding bandwidth to the HTS network.
We've always assumed that not all arclight subscribers would migrate exactly by year end and we expect that by January 1st the customers, who do not migrate will represent.
Much less than 10% of airtime revenue and we anticipate that a majority of those customers will be lethal leisure vessels, which are seasonally suspected suspended in our inactive during the off season, we expect at least.
Half of those customers to take action when they prepare their boats in the spring.
And the leisure marine market the industry continues to enjoy high levels of leisure boat sales and some manufacturer backlogs for new boats now extend into 2023 and 2020 for.
Analysts project the global recreational boat market will grow from $16 4 billion in 2021 to 23 billion in 2027.
And we are well positioned to take advantage of this growth thanks to our industry, leading products known for their outstanding performance quality and value.
We appreciate the show of confidence by members of the National Marine Electronics Association, who recognize three of our products. Our track version UHD seven our new Tracfone V 30, and Tracfone LTE Marine cellular system, all with 2021 product of Excellence Awards. These this marks the 20.
Fourth consecutive year. We've received this award for one of our <unk> satellite TV systems 19 years in a row for our Tracfone satellite communication systems, and the third consecutive year for our cellular system.
From a leisure Marine services perspective, we saw the highest level of demand for our caveats elite unlimited streaming service since we launched it in 2019.
Earlier this year, we expanded coverage to include the eastern Seaboard of the U S and Canada and.
And joining the Caribbean and the Mediterranean. We also increased our service speeds and adjusted pricing in Q3 and appear to have found a sweet spot for yacht owners demand increased and we've actually sold out weekly subscriptions in two of these regions. This premium service has an <unk> of around $7000 a month.
As we head into winter subscriptions in the Caribbean are expected to be very strong.
In the commercial market macro industry trends are uniformly positive port call arrivals in Q3 were up 12% year over year. The Baltic dry index is up 125% oil's up over $80 a barrel shipping confidence is at the highest level ever recorded and containership charter rates alright and.
That's it in a $200000 per day.
During the quarter, we continued to build our position within leading commercial fleets around the world Breathe a shift hard in Germany recently signed agile plans to deliver connectivity and crew welfare content to their fleet of cargo ships bulk carriers and container ships as well as for their more than 2000 seafarers.
Greek ship manager a M. <unk> is rolling out agile plans to its fleet in collaboration with our service partner in the region.
And we've also added some important customers in Asia and our service revenue is now almost perfectly split between the Americas, EMEA and Asia Pac.
Finally on the commercial front it was great to see content revenue up versus Q3 last year as our cruise ship customer steadily resume operations. This is an important turning point in our media business, which is an extremely high margin business and a great contributor to our mobile connectivity margins.
Our maritime Iot business continues to develop as we steadily expand our partner in application ecosystem. Most recently announcing that net SASSA has joined as a watch solution partner and fastest focus is container tracking and application of particular value right now as container rates are soaring in the shipping industry seats.
To straighten out the global supply and logistical challenges COVID-19.
Ph watch is being designed into partner solutions and is actively included in proposals by our partners.
These efforts are the foundation of our future success, as we're essentially creating and serving an entirely new market space in the maritime industry.
The Big news in our Iot business is yesterday's introduction of cloud connect the third component of our <unk> watch suite.
<unk> of Maritime Iot solutions.
Initially we offered flow for basic $24 seven machine to machine connectivity for real time, Iot applications and remote expert.
<unk> expert intervention, which connects experts onshore to engineer with onboard in real time on video now.
Now, we're offering cloud connect an edge to cloud Iot connectivity solution with advanced edge computing that enables the integration of maritime applications and digital services for smart shipping.
<unk> connect addresses the complexity of acquiring data from hundreds of onboard sensors with a comprehensive package containing data source definitions data mapping and associated dashboard and.
And onboard cloud edge connect Ed Surber aggregates and processes data from the vessel sensors and provides a hybrid cloud architecture that enables edge and cloud based data storage along with API based data access for analysis cloud based data reporting and dynamic visualizations.
Now cloud connected support a broad selection of stakeholders in the maritime industry. For example vessel owners and operators can see equipment data in real time, just noon reports monitoring reporting and verification reports to check their compliance with energy efficient energy efficiency ship Index for example.
Equipment manufacturers like engine manufacturers can monitor their onboard equipment to support service contracts and warranties and multi card service providers can use the data to provide remote service and repair.
And vessel performance optimization companies can rapidly deploy digital services by pulling live data from the cloud to reduce fuel consumption throughout our fleet.
Aviation is blueprint software normalizes data channel name to one global standard for ease of integration.
We believe the cloud connect is the most advanced versatile and robust maritime Iot connectivity and analytics solution available in the maritime industry.
Cloud connect uses a dedicated caveats watch terminal so multiple subscribers can enjoy enhanced security compliance with IMO cyber security guidelines and priority transmissions since theyre not reliant upon the ship owners to share a sliver of the vessels connectivity.
Cloud connect has been undergoing live testing on several prospective customer vessels for months now and will be available on November 30th.
The power of cloud connect is its ability to turn data into economic benefit for our fleet of vessels and we're very excited to bring it to market as the maritime Iot segment continues to develop.
Now moving onto our inertial navigation business within the <unk> product line, we definitely had supply chain challenges, which limited deliveries in Q3.
Fiber optic gyro and OEM product sales decreased.
Half a million dollars or 6% in the third quarter compared to Q3 of last year. The demand for <unk> products continues to be quite strong and we now have a total backlog of $22 million for our inertial navigation business.
Within the market.
There is an increasing interest in autonomous robotics and platforms, including autonomous trucking.
Long haul trucking industry faces a severe crunch regarding drivers with an estimated shortage of 80000 drivers.
As a result, we're seeing accelerated demand from autonomous trucking companies.
We've achieved some recent design wins with some of the leading autonomous truck developers and leading autonomous platform companies.
<unk> has been selected as the primary inertial sensor do with superior performance.
I am used are being integrated into sensor fusion solutions that include Lidar and radar as well.
We expect to be able to announce the companies who are working with in the autonomous trucking space in the company in the coming months.
Our success in autonomous vehicle market is starting to become an important part of the fog business.
In fact, we expect over 20% of our fog revenues to come from autonomous vehicle platforms next year.
In addition to vehicles autonomous everything industry is expected to grow with a CAGR of 31% and gave the Hs products that meet the needs of many of these new applications.
Elsewhere in our inertial business, we recently received a $7 $9 million fiber optic gyro order for remote weapon stations built by escrow mono in Spain.
As you may recall remote weapon stations has long been a pillar of our inertial business. Thanks to our system's ability to accurately measure vehicle motion and withstand the shock of gunfire, while helping keep the weapon precisely aimed at the target.
We have a solid pipeline of <unk> opportunities as well.
We're expecting an important production order from a U S customer during the fourth quarter of this year.
So to wrap up we achieved record VSAT shipments and solid year over year growth, even in the face of disruptions to the global supply chain.
While we expect these to continue for some time, we're still successfully delivering on our strategic priorities delivering strong growth building backlog in our key markets and establishing a firm foothold in exciting new markets and applications chip.
<unk> deliveries and other components remain a concern for Q4.
For Q4 and could limit our overall growth rate in the short term. However, as we've previously indicated our midrange targets of low double digit growth for revenue and mid teens percentages for adjusted EBITDA margins are on track. We continue to believe that our financial outlook will translate into substantial share.
Holder value.
Now I'd like to turn the call back to Roger for a more detailed look at the numbers Roger.
Thanks, Martin as Martin mentioned earlier, our third quarter revenue came in at $43 million, even compared to $41 1 million recorded in the third quarter of 2020.
Our consolidated gross profit margin was 35% for the third quarter as compared with 38% in the third quarter of last year.
Revenue from our mobile connectivity segment increased three points here $1 million with a gross margin of 35%, which was down two percentage points.
Revenue from our inertial navigation segment decreased $1 $1 million year over year with gross margin decreasing five percentage points to 36%.
Service revenue for the third quarter was $27 7 million, an increase of $3 3 million or 13% from $24 million in the third quarter of last year.
By segment service revenue in our mobile connectivity segment increased by $3 4 million or 14%. This.
This increase was primarily due to a $2 9 million increase in mini VSAT broadband airtime revenue as Martin noted airtime revenue grew to $24 6 million or approximately 13% over the third quarter of last year and the related gross margin was 36%.
Product revenue for the third quarter was $15 2 million a decrease of one 4 million or 8% from $16 7 million in the third quarter of the prior year.
By segment, our mobile connectivity product revenue decreased by zero point $4 million or 5%, primarily due to a decrease in tracfone product revenue.
Inertial navigation product revenue decreased approximately $1 million or 11%.
Within this segment tack NAV sales decreased by 0.6 million this quarter compared to last year's third quarter, while our combined fog in OEM revenues decreased by zero point $5 million.
And our inertial navigation segment service revenue was down by less than $100000.
Operating expenses for the quarter were $18 4 million up $2 1 million from the third quarter of last year almost.
Almost half of that increase was compensation related as we were starting salary and benefit cuts put in place to mitigate the impact of the COVID-19 downturn the.
The remaining increase is primarily due to a decrease in funded engineering expenses and an increase in professional fees.
At the operating income level. These changes in revenue margins and operating expenses resulted in a loss from operations of $3 2 million, which was up $2 7 million compared with the zero point $5 million loss recorded in the third quarter of 2020.
Our mobile connectivity segment generated an operating profit of $1 5 million compared with an operating profit of $2 3 million last year, while our inertial navigation segment had an operating profit of <unk> 3 million for the quarter compared with an operating profit of $1 $4 million last year.
Our unallocated loss was $5 million compared to last year's $4 2 million.
For the third quarter, our net income was 4.0 million compared with a net loss of <unk> 5 million in the same quarter last year.
This quarter, we recorded a $7 million gain associated with the forgiveness of the Paycheck protection program loan we received last year on.
On a non-GAAP basis, which excludes the income from the forgiveness of this loan as well as amortization of intangibles stock based compensation and other nonrecurring costs such as unusual non operating fees foreign exchange transaction gains and losses related tax effects and changes in our valuation allowance and other tax adjustments.
All those adjustments, we had a net loss of $1 2 million compared with net income of $1 $1 million last year.
EPS for the quarter was <unk> 22 per share compared with <unk> <unk> per share in the same period last year non.
Non-GAAP EPS loss for the third quarter was <unk> <unk> per share compared to non-GAAP EPS profit of <unk> <unk> per share last year.
Our adjusted EBITDA for the quarter was a positive $1 5 million compared with a positive $3 4 million in the third quarter of last year for a complete reconciliation of our non-GAAP measures. Please refer to the earnings release that was published earlier this morning.
Total backlog at the end of the third quarter was $25 4 million of which approximately $8 8 million in scheduled to be delivered during 2021 backlog for our inertial navigation products and services at the end of September was approximately $22 2 million of which approximately $5 9 million of scheduled to be delivered during 2021, which include.
It was about $5 3 million for fog products alone.
Net cash used in operations was $2 9 million compared to less than 0.1 million used in operations for the third quarter of last year.
Cash flow from operating activities is still positive for the year to date as well as for the last 12 months capital expenditures for the quarter were $4 7 million and for the full year, we expect capital expenditures will be in the range of $19 million to $21 million. The majority of which is driven by agile planned shipments cash provided by financing activities was <unk> 3 million.
Resulting in an ending cash balance of approximately $27 million.
With respect to the full year at a high level. We noted as noted in our earnings release, we believe that revenue growth over last year will be in the high single digits and EBITDA will grow faster than river.
However, opex is expected to tick up in Q4 due to a variety of factors and production capacity constraints brought on by supply chain issues will be a limiting factor for revenue. Although this will hold down 2021 performance, the resulting backlog sets us up well for next year as the backlog for 2022 is now double what it was at the end of June.
This concludes our prepared remarks, and I'll now turn the call over to the operator to open the line for the Q&A portion of this morning's call operator.
If you would like to ask a question. Please signal by pressing star one on your telephone keypad. If you are using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment.
Again star one to ask a question, we'll pause for just a moment to allow everyone the opportunity to signal.
Our first question comes from Ric Prentiss with Raymond James. Please go ahead.
Good morning, everyone.
Good morning, Rick.
Couple of questions first Martin when you go back to.
Of your prepared remarks.
You mentioned something about adjusted EBITDA margins in some revenue so not just the guidance you gave it.
Our remarks, Mike what were you referencing as far as our revenue and adjusted EBITDA.
Yes, we had.
Given some.
Sort of mid term guidance or outlook back in June.
Which was.
Double digit revenue growth and mid teens EBITDA margins adjusted EBITDA margins as kind of our business model targets that we're working towards.
And based on everything we're seeing today, we feel like we're in a very good path to achieve those.
Let me clear that was just sort of mid term targets. Those are not that's not intended to be guidance for next year or for this quarter for that matter.
Something we haven't just restating something that we had put out there in the presentation.
John I just wanted so midterm means over the next several years.
That's something that's not no no no no right yeah.
Long term it would be three to five years mid term would be two to three years.
Okay cool.
So some interesting and exciting news on the autonomous trucking autonomous vehicle areas in general what can you share with us as far as looking at that addressable market your ability to go into that addressable market what steps do you need to make to scale up to hit those numbers.
Well the autonomous trucking market.
Those numbers are not tens of millions of units like the automotive market. So it's actually.
And easier step for US then going straight to automotive volume so.
As this ramps over the next year or two.
We feel very comfortable that we'll be able to keep pace with our production.
For that.
And as I pointed out that is this is not something that is three to five years away. We expect starting now really next year, 20% of our fog revenues will be coming from autonomous vehicle platforms.
And we've been hearing from some of the logistics transportation companies.
Hello, Hello ops.
Small drone light vehicles or maybe it will.
Totally controlled.
Some progress into that as well what can you share with us on that sub market.
No I can't say that we have so the most of our customers are autonomous but sometimes autonomy means that there is a lead vehicle and then there are three or four follower vehicles. For example that are self driving.
But the lead vehicle might have human driver in it but none of these platforms are either tele operated per se.
Not the ones that were on.
Okay.
And then we also noted cost of service came in a little longer than we were looking for obviously you'd be ready to move over the customer base, but how should we think about the cost of service transition going from third quarter to fourth quarter next year.
Did you say it was a little lighter than you thought.
Here, Yeah, I think so yes, I think it was a little lighter than we thought.
As reported this morning, so we're still in a bit of a blur.
Yes, yes so.
It came in I think our overall margin was a little bit better than we expected as well fairly consistent with last quarter or.
So we've been adding capacity as we've been adding subs. So we've been adding a lot of stuff to the HTS network.
So keep in mind that when we say.
The net subscriber.
Growth number of 12% and airtime revenue was up 13%.
That is it.
It doesn't indicate how much capacity, we're adding to HTS as people migrate off about 90% of all the revenue is already on the HTS network. So.
And that.
Thats really whats driving the cost saving for next year, especially so come January we'll shed and immediate.
$10 million plus of of cost, making the year over year cost reduction on the order of $12 million and where we are now we've already incurred a fair amount almost of the increase in the HTS network. So that's a long answer, but saying that this migration is going well.
As long as we don't strand too many customers come January.
It's going to be a big net positive for US next year. So we should see improving margins is my point.
Okay, great appreciate it stay well.
Okay, Alright, thanks, Rick Thanks, Greg.
Thank you once again as a reminder to our audience you may ask a question by pressing star one.
Your next question comes from Chris Quilty with Quilty analytics. Please go ahead.
Okay.
Hi, guys I wanted to follow up on that.
Morning, I wanted to follow up on the autonomous vehicle, if youre targeting 20% next year, what does that compare to either this year or in recent years the contribution.
It's significantly larger I don't have the exact number for this year, but it's.
My guess it would be more than double next year.
Got you and most of the historic shipments were sort of legacy.
Designs and hardware, yes relatively expensive.
Are you looking at the contribution next year being more pik derived products and higher volume.
Yes, 100% of everything we ship.
Next year is pic based so.
So.
The answer is yes, so it will be our new photonic chip.
Based products and they are primarily I am use as opposed to single sensor. So that's another difference from what we've seen in automotive is that for these trucking type applications, they're looking for a three axis <unk> not just a single axis.
You all sensor.
Understand and I think historically you've talked about.
Set last year historically was you know order of magnitude thousands of dollars and presumably you're coming down too.
Hundreds of dollars or high hundreds of dollars. So youre seeing significant you're implying at least significant volume increase if those numbers are still accurate.
Well it's.
The short answer is no we're not we're not in the dropping prices into the hundreds of dollars yet.
That would require significant volume as you point out so we will scale.
The price as the.
Self driving trucking ramps up but theres no from a competitive perspective theres no need for us to be in order of magnitude cheaper than we are today for example, so.
Do we intend to maintain the margins next year.
We.
Grow into this market with with our customers.
Great and can you give an update on where you are in terms of your production capacity because I know you've been dropping in new production line.
In the past year, and what sort of volume you're scaling for.
Yes, it's kind of ironic we've done everything to be able to build units quickly the invention of the photonic chip we've added some optical automated assembly equipment.
And that's the only thing that we're not having production issues with that.
But now it's all trying to get chips in and when you finally get the chips you know its late in the quarter and you have to try and build things and you have work in process on the floor. It's just a horribly inefficient way to manufacture and thats, especially true in our Chicago facility and but it's also true here in Middletown.
Even when we get the parts oftentimes, they're not sequence correctly. So it really is disrupting manufacturing in a way that's worse than what youre seeing in terms of our ability to get product out the door. It's just not an efficient way to build so from an optical component point of view, we're in fantastic shape for.
Large scale production.
Well that's good to hear.
On the Tech Dev Order you said you expect in Q4 is that sort of seven.
Seven digit or is that an eight digit type of order in terms of scale.
Yeah.
It's a it's a big one it's a large program over time I mean over time, it's going to be a very large program by historical standards. How much how much is actually order that will be delivered in Q and next.
Here, it's still set up in the air and we know the program is very large, but theyre still working through what would be in next year versus future years. So, yes, it's north of $10 million and as Roger said, whether they take it all in 2022 remains to be seen.
And this is one of the well known programs that <unk> been working on for Pat.
Past couple of years.
Prototyping and testing.
Yes.
Yes.
Pete customer.
So.
Perfect and switching over to the mobile connectivity side.
You talked about some potential price increases that youre going to implement both this year and going into next year is that.
Something that you are seeing amongst your competitors already or expect to see amongst them or do you feel like.
You are having to step out in front in terms of those pricing increases.
Well its mostly.
Due to the hardware cost and it's unclear whether that's going to be a permanent change for example.
In order to keep production lines going we've ended up buying chips from.
Effectually known as scalpers.
Were you paying 10 X the price of a chip just say you don't shutdown and can't ship a $20000 antenna.
You are paying $100 for a $10 part for example, so there.
There are definitely increases in our cost of goods sold and going forward, we're going to.
Pass those along to our customers.
In order for us to be able to keep delivery. So our customers are more interested in getting the product there.
And then waiting six months, which is the lead time on some of these chips yeah with respect to competitors I mean, it's kind of a mixed bag, we've heard about some price increases.
But it's you know.
Goodnight.
Perfect information, but we have heard about some increase it by either by other providers.
Alright, so I should have been stocking up on chips when they were stocking up on toilet paper.
Yeah, everybody had the wrong yeah.
Okay.
The HTS.
Shift that will happen January one.
Can you give us an idea of whether there are any potential incremental costs of the transition you've talked about in the past, possibly having to really a sub.
Subsidize customers or other costs that you may incur in Q4 to get that transition done.
Yes go ahead, yes, it may be some cross Chris, but it won't be overly material we're talking.
100, or $200000. So we're not talking like a significant expense going out the door.
And it's more like upgrade kits and upgrading their existing equipment.
And giving them.
Deals on hardware.
Right understand.
And final question just in terms of Capex I think either for this year or if you can step out and think about next year and what you may incur in terms of agile plan.
<unk> capex or PVH watch related Capex expenditures.
Do we do we stay in the same sort of levels as 2021 or do you expect a step up.
I mean, we're not really ready to talk about next year, yet I think.
On a relative basis, obviously as we grow subscribers on the agile plans we're putting.
Thanks, that's good Capex, that's all rental revenue generating so I think you can sort of think about it.
The capex sort of being proportional to sort of.
Agile revenue growth.
But we haven't really we're not really prepared to put out anything specific about next year at this point, Brian I think the business model isn't changing for agile the growth continues to be very very strong there.
<unk> got a strong backlog.
As well for agile as we entered this quarter and for next year. So Directionally I think you're going to see something similar next year and then as far as what's goes.
As Brent and Roger you said everything is success based so the more successful potentially the higher the capex, but that would mean that we are successful.
Great Hope Capex goes up.
Yeah.
Thanks, Chris.
That will conclude today's question and answer session. Mr. <unk> at this time I will turn the conference back to you for any final remarks.
Thanks, operator.
We have no final remarks here I want to thank everyone for joining us for the call. We appreciate it and we look forward to.
Successful.
End of the year.
Thanks, Daryl thank you.
Thank you. This concludes today's conference all participants may now disconnect.
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