Q3 2022 Heritage Global Inc Earnings Call

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Greetings and thank you for standing by your conference will begin momentarily. We thank you for your patience and ask that you. Please remain on the line.

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Operator: Good afternoon, ladies and gentlemen, and welcome to the Heritage Global Third Quarter 2022 Earnings Call. All participants will be in listen-only mode. If you need operator assistance, please signal a conference specialist by pressing the star key, followed by zero. After today's presentation, there will be an opportunity to ask a question. To ask a question, please press the one followed by the four on your telephone keypad. Please note, this event is being recorded.

All participants will be in listen only mode.

Operator: If you need operator assistance, please signal a conference specialist by pressing the star key, followed by zero. After today's presentation, there will be an opportunity to ask a question. To ask a question, please press the one followed by the four on your telephone keypad. Please note, this event is being recorded.

After today's presentation, there will be an opportunity to ask a question. To ask a question, please press the one followed by the four on your telephone keypad. Please note, this event is being recorded.

To ask a question, please press the one followed by the four on your telephone keypad. Please note, this event is being recorded.

Operator: I would now like to turn the conference over to John Nesbett, Investor Relations for Heritage Global. Please go ahead.

John Nesbett: Thank you, and good afternoon, everyone. Before we begin, I’d like to remind everyone that this conference call contains forward-looking statements based on our current expectations and projections about future events and are subject to change based on various important factors. In light of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements, which speak only as of the date of this conference call. For more details on factors that could affect these expectations, please see our filings with the Securities and Exchange Commission.

Before we begin I'd like to remind everyone that this conference call contains forward looking statements based on our current expectations and projections about future events and are subject to change based on various important factors in light of these risks uncertainties and assumptions you should not place undue reliance on these forward looking statements, which speak only. As of the date of this conference call. For more details on factors that could affect these expectations. Please see our filings with the Securities and Exchange Commission.

As of the date of this conference call.

For more details on factors that could affect these expectations. Please see our filings with the Securities and Exchange Commission.

John Nesbett: Now I’d like to turn the call over to Heritage Global’s Chief Executive Officer, Mr. Ross Dove. Ross?

Ross M. Dove: Hi. Thanks, John, and good afternoon, everyone. Welcome to our third quarter 2022 earnings conference call. Let’s start today’s call with Brian Cobb, our Chief Financial Officer. He will discuss our financial performance to date. Brian, you’re up.

Brian J. Cobb: Thanks, Ross. Our third quarter built on the momentum we experienced in the first half of the year as reflected in our strong operating results, which included operating income of $3.5 million, improved profitability and EBITDA of $3.6 million. Our financial performance during the third quarter and the nine months ended September 30, 2022, reflected strong performance from both our Industrial and our Financial Assets division. 

Our third quarter built on the momentum we experienced in the first half of the year as reflected in our strong operating results, which included operating income of $3.5 million, improved profitability and EBITDA of $3.6 million. Our financial performance during the third quarter and the nine months ended September 30, 2022, reflected strong performance from both our Industrial and our Financial Assets division.

Our financial performance during the third quarter and the nine months ended September 32022 reflected strong performance from both our industrial and our financial asset Division.

Yeah.

Brian J. Cobb: We continue to see a substantial increase in the number of principal transactions executed in our Industrial Assets division, where we reported more than 350% increase in asset sales for the third quarter 2022 compared to the same period in 2021. Roughly one third of the growth in asset sales is attributable to the acquisition of American Laboratory Trading’s used lab equipment resale business in the third quarter of 2021. ALT has also proven to be an excellent source of auctions for HGB, not just in the third quarter, but year-to-date.

Where are we reported more than 350% increase in asset sales for the third quarter 2022 compared to the same period in 2021.

Brian J. Cobb: Roughly one third of the growth in asset sales is attributable to the acquisition of American Laboratory Trading’s used lab equipment resale business in the third quarter of 2021. ALT has also proven to be an excellent source of auctions for HGB, not just in the third quarter, but year-to-date.

ALC has also proven to be an excellent source of auctions for HCP not just in the third quarter, but year to date.

Brian J. Cobb: Services revenue also grew significantly in the third quarter related to an increase in volume as the current economic environment is driving increased consumer spending, which is resulting in more charge-off loans becoming available. With COVID-driven aid largely ended, we anticipate an increasing stream of nonperforming loans will continue to come to market.

Covid driven largely ended we anticipate an increasing stream of nonperforming loans will continue to come to market.

Brian J. Cobb: Assuming the current landscape continues, we expect that our specialty lending group will see an increased opportunity to deploy cash as we close out 2022 and into 2023. The company is in a strong position to meet the anticipated increase with our extended senior funding facility, cash on hand and our untapped credit line of $10 million.

The company is in a strong position to meet the anticipated increase with our extended senior funding facility cash on hand, and our untapped credit line of $10 million.

Brian J. Cobb: On a consolidated basis, operating income for the quarter was $3.5 million compared to $533,000 in the third quarter of 2021. Operating income in the Industrial Assets division was $3.1 million in the third quarter of 2022, a significant increase as compared to $765,000 in the third quarter of 2021. In our Financial Assets division, we saw growth of 249% to $1.6 million in operating income compared to $449,000 in the third quarter of 2021.

Operating income in the industrial assets Division was $3 1 million in the third quarter of 2022, a significant increase as compared to 765000 in the third quarter of 2021.

Yeah.

In our financial assets Division, we saw growth of 249% to $1 6 million in operating income compared to 449000 in the third quarter of 2021.

Brian J. Cobb: Net income was $2.3 million or $0.06 per basic and diluted share compared to net income of $474,000 or $0.01 per basic and diluted share in the third quarter of 2021. EBITDA of $3.6 million was significantly improved as compared to EBITDA of $638,000 in the third quarter of 2021 and adjusted EBITDA grew to $3.8 million for the third quarter of 2022, up from $740,000 in the third quarter of 2021.

EBITDA of $3 6 million was significantly improved as compared to EBITDA of 638000 in the third quarter of 2021, and adjusted EBITDA grew to $3 8 million for the third quarter of 2022 up from 740000 in the third quarter of 2021.

Brian J. Cobb: We’re pleased to see continued improvement in our operating results. But nonetheless, I remind everyone that we have a very large tax loss carryforward, which will be a valuable asset to the company as we continue to grow our profits.

Brian J. Cobb: Our balance sheet remains strong with stockholders’ equity of $38.3 million as of September 30, 2022, compared to $32.6 million as of December 31, 2021, and a net working capital of $13 million. And on a final note, as of September 30, 2022, the company has repurchased approximately 184,000 shares of our common stock for an aggregate cost of $296,000. With that, I’ll now turn the call back over to Ross.

And a net working capital of $13 million.

And on a final note as of September 32022, the company has repurchased approximately 184000 shares of our common stock for an aggregate cost of 296000.

With that I'll now turn the call back over to Ross.

Ross M. Dove: Thanks, Brian, and thank everyone for joining in today. So it may not be typical of the CEO to say, I’m thrilled on an earnings release, but I can’t help myself. I am thrilled with the performance of our team. After the great Q2, several investors followed up asking me if I thought it was repeatable. When I asked our management team, there was optimism across all five revenue streams, that optimism is prevalent today. Let me walk you through each, starting with industrial and then moving to financial.

It may not be typical of a CEO to say I'm thrilled on an earnings release, but I can't help myself I am thrilled with the performance of our team. After the great Q2, several investors followed up asking me if I thought it was a repeatable when I asked our management team there was optimism across all five revenue streams that are.

The Miss him as prevalent today, let me walk you through each starting with industrial and then moving to financial.

Ross M. Dove: On the industrial side, we have three businesses, as you know. We have an auction business, we have a valuation business and we have ALT, which services the life science community.

Brian J. Cobb: So let’s start with the auction business. There’s great news there. Our two largest clients are in the pharma sector, and both those clients have signed new five-year extensions, so we can count on them for five years of revenue growth. On top of that, we have one of the largest pipelines ever. Q3 is our largest quarter almost in the entire history of the company and the exception of auctions. Our valuation market is growing steadily right now. Why? Because there are certain reasons to believe there’s going to be a recession, at least by some predictions. In a recession, the valuation market for asset-based loans grows.

Great News there are two largest clients are in the pharmacy sector and both of those clients have signed new five year extensions. So we can count on them for five years of revenue growth.

On top of that we have one of the largest pipeline ever.

Q3.

Yes.

Our largest quarter almost in the entire history of the company and the exception of auctions are valuation market is growing steadily right now why because there are certain reasons to believe theres going to be a recession at least by some predictions in a recession the valuation market for asset based loans grew.

Ross M. Dove: It is currently growing, and we see growth over the next three years. So on the industrial side, we think all three revenue streams are positioned and poised for future growth this year and next year. American Lab Trading is growing because of a big push towards ESG by the largest industrial clients in the world and the largest pharma clients. As they do that, they want to avoid landfill, so more and more often, they’re coming to ALT and relying on us to resell and refurb assets and put them back into the circular economy. We think each of these revenue streams can grow, maybe not always quarter-after-quarter, but clearly year-after-year. 

Real clients in the world and the largest pharma clients as they do that they wanted to avoid landfill, so more and more often they're coming to L. T get relying on us to resell and refer of assets and put them back into the circular economy. We think each of these revenue streams can grow maybe not always quarter after quarter.

But clearly year after year.

Ross M. Dove: So we’re solid over there in my belief. Now if you move across the board, to the other half of our revenue stream, which is our Financial Asset division. We have two groups there. We have a group called NLEX. It’s 25 years old, that month-after-month sells charge-off loans. Why is that going to grow? Credit card debt has reached an all-time high of $930 billion. We believe that bodes well for the products we offer and the amount of asset flow we anticipate. We were slowed down a bit during the pandemic when there was not as much spending as there is today and where there are stimulus checks.

ROE credit card debt has reached an all time high of $930 billion, we believe that bodes well for the products, we offer and the amount of asset flow. We anticipate we would slow down a bit during the pandemic. When there was not as much spending as the rest of the day and where their stimulus checks.

Ross M. Dove: That is not the current market. We anticipate a high likelihood of NLEX having a record year in revenue because we’ve added many new clients, and our existing clients are growing the amount of assets that they’re entrusting us with. We think this will continue over the next one to two years. On top of that, our lending platform, that we lend out to the buyers of NLEX-type products from charged-off auto loans to credit card loans, et cetera, is rapidly going to grow now. The reason is we now have a brand-new $200 million capacity to lend. That capacity went from $80 million to $200 million announced last week. With the growth in our capacity and the growth in the companies we’ve onboarded, we have a strong belief that the Financial Asset division can go forward for the next two years with continued growth. So across the board, I am thrilled with our opportunity, I am thrilled with the people and how hard they’ve worked to put us in this position, and I’m thrilled with our future projects. So thank you very much.

We've added many new clients and our existing clients are growing the amount of assets determine trusting us with we think this will continue over the next one to two years on top of that our lending platform that we lend out to the buyers index type products from charged off auto loans to <unk>.

Card loans et cetera is rapidly going to grow now. The reason is we now have a brand new $200 million capacity to led that capacity went from 80 million to $200 million announced last week with the growth in our capacity and the growth in the company's we've on boarded.

We have a strong belief that the financial asset Division can go forward for the next two years with continued growth so across the board I am thrilled with our opportunity I'm thrilled with the people and how hard they've worked to put us in this position and I'm thrilled with our future projects. So thank.

You very much.

Ross M. Dove: And I welcome any questions from anybody. We’re always here and we’re always available.

Yeah. That came up. Okay.

That came up.

Okay.

Operator: Thank you. And if you would like to register a question, please press the one followed by the four on your telephone. You will hear a three-toned prompt to acknowledge your request. If your question has been answered and you would like to withdraw your registration, please press the one followed by the three. One moment please for the first question.

Operator: And if you would like to register a question, please press the one followed by the four on your telephone. You will hear a three-toned prompt to acknowledge your request. If your question has been answered and you would like to withdraw your registration, please press the one followed by the three. One moment please for the first question.

One moment please for the first question.

Operator: The first question comes from the line of Mark Argento with Lake Street. Please proceed with your question.

Mark Nicholas Argento: Hey, Ross, hey, Brian. Just quickly wanted to follow up on the guidance that you guys had in the deck or in the presentation. I think you had mentioned you expect $9 million in net operating income for the year compared -- I think the last best year was around 6%. So that’s obviously a nice increase. I think my math –- I think you guys have done almost $8 million implying one and obviously, a lot of momentum here, so I don’t know, maybe you could talk us through the guidance a little bit there. Is there any kind of thing going on in Q4, being a little conservative there? Any thoughts would be helpful.

Our guidance. Thank you guys added was that presentation I think you had mentioned.

<unk> 9 million of net operating income for the year.

And Ah compare the labs Brasil as Rob said, so that's obviously a nice increase.

I think by my math I think you guys have done almost eight.

Implied in one and obviously a lot of momentum here. So I don't know maybe you could talk us through the guidance a little bit there is there any kind of thing going on in Q4 being a little conservative there.

Any thoughts would be helpful.

Yeah.

Ross M. Dove: We’re being a little bit conservative there, yes. The reason we’re being a little bit conservative is, as you know, a significant part of our business is still transactional. And because of that, we always don’t get early visibility in the beginning of the quarter. So we wanted to basically give ourselves some room. And I can tell you that we’re extremely comfortable with the guidance we gave and we’re bullish on trying to beat that guidance. 

As you know a significant part of our business is still transactional and because of that we always don't get early visibility in the beginning of a quarter. So we wanted to basically give ourselves some room and I can tell you that we're extremely comfortable with the guidance, we gave and where bull.

As Sean trying to beat that guidance.

Okay.

Mark Nicholas Argento: Great. And then Brian, you had mentioned the NOLs. Remind us how big is the NOL. Where does it stand right now?

Ian you had mentioned the NOL Microsoft.

Where does that stand right now.

Brian J. Cobb: Yes. So the NOLs are approximately $78 million this year. We don’t change them quarter-over-quarter. As part of our tax update process that next quarter, we’ll have an adjustment to the NOLs. 

Approximately 78 million.

This year, we don't we don't change them quarter over quarter its.

As part of our tax update process at next quarter, we will have an adjustment to the Nols.

Yeah.

Mark Nicholas Argento: Great. And then the reporting segment, I know you guys still report kind of services and then -- excuse me, services revenue and the asset sale. Do you have the breakdown by functional group, industrials and financials?

Excuse me services revenue.

<unk>.

Could you do you have do you have a breakdown by bi functional group industrials.

Okay.

Okay. So.

So.

Multiple speakers: [Brian Cobb] So we don’t report that in the financials. We don’t report revenues by division in the financials. But what I can say about asset sales, which I touched on earlier, was that we had a large increase. And part of that large increase in asset sales was related to the acquisition. Based on what we can see, there’s three buckets here. There’s increases related to the acquisition of approximately 30% or one-third. We also have organic growth in our auctions division of greater than 50%. And the last piece of that is ALT is able to source auctions for us in principal deals, which make up a small part of that increase as well. [Ross Dove] So Mark, think of ALT not as an advisory company, but really its DNA as a trading company. So the vast bulk of its revenue is a buy-sell model rather than a fee-based auction model.

<unk> revenues by division in the financials, but what I can say about asset sales, which I.

I touched on.

Earlier was that we have at a large increase and part of that large increase and asset sales was related to the acquisition.

Based on what we can see there is there's three buckets here.

The increase is related to the acquisition of approximately 30% or one third.

We also have organic growth in our auctions division of <unk>.

Greater than 50% and the last piece of that is L. P is able to source options for us.

Principal deal switch make up a small part of that increase as well so mark think of a L. T not as an advisory company, but really its DNA is a trading company. So the vast bulk of its revenue is a buy sell model rather than a fee based auction model most of it.

Ross M. Dove: Most of their revenue is principal trading. So you’re going to see a significant increase each year as they grow because each year as they grow, the amount of principal deals we do will grow.

Mark Nicholas Argento: Great. And then in terms of the makeup of the net operating income, looks like roughly, was it two-thirds from industrials, one-third from financials? As you move on, do you see that kind of running at that kind of ratio? Or do you see contributions in financial?

The makeup of that.

Operator, not operating income.

Like roughly.

Two thirds from industrials, one third from quite agile.

As you move move or do you see that got a run in at that kind of ratio or do you see contribution.

Literally.

Ross M. Dove: It’s literally – and one of the great things about this company and the way that we build it on the built-to-last model is they don’t always do the same at the same time. There were multiple years when financial assets earned more than industrial assets. What happened is we hit a pandemic where industrial assets had a lot of benefits from the pandemic where the supply chain on new equipment was clogged and there was an inability for them to grow, or simultaneous the pandemic had a negative impact on financial assets where there were significant stimulus checks and less credit spending. So it can flip in different macro economies.

The supply chain on new equipment was clogged and there was an ability for them to grow we're simultaneous depend emmick had a negative impact on financial assets, where there were significant stimulus checks and less credit spending so it can flip in different macro economies we.

Ross M. Dove: We think that it’s an even race for who’s going to make more on any given year. And maybe over the long run, you could see more growth on the financial side because the lending business has cumulative profits annually, whereas the auction business on the industrial side will always be a little bit more transactional and have a little bit more spikes in revenue. So think of them as kind of equal participants.

<unk>, a little bit more transactional and have a little bit more spikes in revenue so think of them as kind of equal participants.

Mark Nicholas Argento: That’s helpful. And then last question, I’ll hop back in the queue. Just talking about the enhanced or expanded $200 million line. What do you have deployed on the $80 million line? And then how quickly -- and remind us how quickly you turn those loans as well. But how quickly you think you could deploy that capital? Thanks.

What do you have deployed almost 80 million line and then how quickly and remind us how quickly turn.

And those loans as well, but how how quickly you think you could.

Deploy that capital thanks.

Ross M. Dove: So to date, we’ve deployed $80 million, but some of that came off of our own balance sheet. It wasn’t all out of the prior $80 million line. We self-funded a lot of it on the smaller transactions, out of our own basically free cash flow. So in the end, obviously, we did an analysis when we went out and talked to multiple firms about creating the new line and you don’t get a $200 million line unless you’re pretty convincing that you can deploy it within 3 to 3.5 years. That’s kind of the guideline when you’re out asking for the capital. Nobody wants to give you a line that takes 10 years to deploy, so a reasonable goal would be 36 months to deploy it.

Basically free cash flow. So in the end obviously, we did an analysis when we went out and talked to multiple firms about creating the new line and you don't get a $200 million of line unless you're a pretty convincing did you can deploy it within three to three and a half years, that's kind of the guideline when youre out asking for the capital.

Nobody wants to give you a lines. It takes 10 years to deploy so a reasonable goal would be 36 months to deploy it.

Mark Nicholas Argento: Great. Well nice work on the quarter. Good luck the rest of the way here this year. Thanks.

Ross M. Dove: Thank you. Talk soon.

Yeah.

Operator: And the next question comes from the line of Michael Diana with Maxim Group. Please proceed with your question.

Multiple speakers: [Ross Dove]  Hi, Michael. [Michael Diana] Hey, Ross.

Yes.

Michael Keelan Diana: As you forecast excellent quarter, over the last few years, you haven’t really gotten a chance to talk about your lending group much. Obviously, you just talked about the additional capacity. Could you just talk a little more about how you source those loans and the demand for those loans? And also given what the Fed is doing, how the increased interest rates either help you or hurt you there?

But you know over the last few years, you Havent really gotten a chance to talk about your lending group much obviously, you're just talking about the additional capacity could you could you just.

Talk a little more about how you source those loans and and the demand for those loans and then also given what the fed is doing how the increased interest rates either help you or are you there.

Ross M. Dove: Sure. So it’s a very, very niche specialty practice. So it’s a lender that really is focused on only servicing about 35 to 50 clients, period. And there’s a 35 to 50 clients that are the largest privately held, nonpublic purchasers of charge-off consumer loans. These consumer loans are everything from old-school consumer loans like credit cards, like auto loans, et cetera, to kind of the new type of fintech loans like peer-to-peer loans, like the BNPL loans. We specialize in selling those loans through NLEX in the charge-off market. And because we’re a specialist in selling those loans, we’re probably one of the most capable people in the world to underwrite those loans. So we went out and we’ve onboarded about 30 companies that we’ve been to their facilities. We’ve made sure that they’re reputable, that they’re SOX compliant. And when those companies buy nonperforming charged-off loans, it’s very difficult for them to go to an FDIC-chartered institution and borrow the money. So they unfortunately have to pay a higher rate, which is unfortunate for them, but fortunate for us because we’re the provider of that capital. We understand the assets that are very comfortable going to us. Generally speaking, these are three and four and five-year loans where we charge them interest, we charge them points, and we do some form of revenue share often on the back end of the loans. And we do that on our own sometimes, and we do that on the larger ones with our $200 million funding capital, which used to be $80 million. So why did we get more money, Michael? Because we anticipate growth. During the pandemic, a lot of this product was sold to large public collection agencies, who have a low cost of funds. With more products coming available, a lot of these entrepreneurial companies didn’t – did work through us are now purchasing at a greater degree. And so our need for capital became greater, and we needed to fill that need.

<unk> of charged off consumer loans, these consumer loans, where everything from old school consumer loans like credit cards, like auto loans et cetera to kind of the new type of fintech loans like peer to peer loans liked to be NPL loans, we specialize in.

Selling those loans through analytics and the charge off market and because we're a specialist in selling those loans were probably one of the most capable people in the world to underwrite those loans. So we went out and we've on boarded about 30 companies that we visit our facilities. We've made sure that they are.

Reputable that their sox compliant and when those companies buy nonperforming charged off loans, it's very difficult for them to go to an FDIC chartered institution and borrow the money. So they unfortunately have to pay a higher rate, which is unfortunate for them, but fortunate for us because we're the provider of that.

Capital, we understand the assets that are very comfortable going to us generally speaking these are three and four and five year loans, where we charge them interest we charge them points and we do some form of revenue share often on the backend of the loans and we do that on our own some.

And we do that on the larger ones with our $200 million.

Funding capital, which used to be $80 million. So why did we get more money Michael because we anticipate growth during the pandemic a lot of this product was sold to large public collection agencies, who have a low cost of funds with more products coming available a lot of these entrepreneurial companies did.

Did work through us or not purchasing at a greater degree and so our need for capital became greater and we needed to fill that need.

Multiple speakers: [Michael Diana] And then with interest rates going up, I assume the rate on your line will go up, but obviously, you can lend at higher rates. How do you -- do you anticipate that -- [Ross Dove] No. What we did without bragging is we negotiated a multiyear fixed rate. So our rate won’t go up on that $200 million facility. It won’t go up because it’s fixed even if traditional rates go up. The only rate that would go up is on our conventional first line with our primary lender, which is a local San Diego bank, that rate will go up. But on this funding facility, we negotiated a fixed rate.

With interest rates going up I assume you're.

The rate on your on your wine will go up but obviously you can lend at higher rates. How do you do you anticipate when we did what we did without bragging as we negotiated a multiyear fixed rate. So our rate wont go up on the on that $200 million facility. It won't go up because it.

As fixed even the traditional rates go up the only rates would go up as one of our conventional first line with our primary lender, which is a local San Diego Bank that rate will go up but on this funding facility, we negotiated a fixed rate.

Michael Keelan Diana: Wow, that's great.  All right. So you expect your lending margins could actually go up over in the near term. Is that right?

Right. So so you you expect your your lending margins could actually go up in the near term is that right.

Ross M. Dove: Basically, at the end of the day, we’re not looking to raise our cost of capital. We think that we’re at the right spot right now on our cost of capital. So we think we have the right margin. We’re just going to hope that we pick the right clients, and we’re going to do a tremendous amount of due diligence and work hard to have the best borrowers so that we get a larger part of the back end. And we increase our margin by them being more profitable and more efficient, and us underwriting the best portfolios with the most upside. So that therein is where our skill lies.

Borrowers so that we get a larger part of the back ends and we increase our margin by them being more profitable and more efficient and us underwriting the best portfolios with the most upside so that they're in is where our skill lies.

Michael Keelan Diana: Alright. So it’s more demand driven?

Ross M. Dove: Yes.

Michael Keelan Diana: Okay, great. Thanks, a lot.

Ross M. Dove: Thank you. Have a great day, Michael.

Operator: And there are no further questions at this time. I will now turn the presentation back to the host. 

Okay.

Yeah.

Ross M. Dove: This is Ross. I’d like to thank everybody once again for participating. We’re always available if anybody has questions that they’d like to ask in a more private setting. Our CFO, Brian, is available. I’m available. And at any time, feel free to reach out if there’s anything else you’d like to know. We’d like to really thank you for the support you’ve all given us, and we hope that on an ongoing basis, we can continue to perform at a level that really keeps you guys excited about big shareholders. Have a great day everyone. Bye.

And we hope that on an ongoing basis, we can continue to perform at a level that really keeps you guys excited about big shareholders have a great day everyone.

Operator: That does conclude today’s conference call. We thank you for your participation and ask that you please disconnect your line.

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