Q1 2024 Transcat Inc Earnings Call

Yeah.

Right.

Greetings and welcome to the Trust Pet's first quarter fiscal year 'twenty 'twenty four final show it wears out.

At this time all participants are in a listen only mode. A brief question and answer that's kind of a follow that's a little presentation. If anyone should require operator assistance during the call first please press star zero on your telephone keypad.

And so that neither this call is being recorded it is now my pleasure to introduce your host Paul.

Barbados CFO . Please sir you may begin.

Thank you operator, and good morning, everyone. We appreciate your time and your interest in Transcanada.

With me here on the call today is our president and CEO , Lee Rudow, and our Chief operating Officer Mark Mahaney.

We will begin the call with some prepared remarks, and then we'll open up the call for questions.

Our earnings release crossed the wire after markets closed yesterday.

The earnings release, and the slides that we will reference during our prepared remarks can be found on our website Transcanada com in the Investor Relations section.

If you would please refer to slide two as you are aware.

We may make forward looking statements during the formal presentation and Q&A portion of this teleconference.

Statements apply to future events, which are subject to risks and uncertainties as well as other factors that could cause the actual results to differ materially from where we are today.

These factors are outlined in the news release as well as in the documents filed by the company with the SEC.

You can find those on our website, where we regularly post information about the company as well as on the SEC's website at SEC Gov.

We undertake no obligation to publicly update or correct any of the forward looking statements contained in this call.

Whether as a result of new information future events or otherwise, except as required by law. Please review our forward looking statements in conjunction with these precautionary factors.

Additionally, during today's call, we will discuss certain non-GAAP measures, which we believe will be useful in evaluating our performance you should not consider the presentation of this information additional information in isolation or as a substitute for results prepared in accordance with GAAP.

We've provided reconciliations of non-GAAP to comparable GAAP measures in the tables accompanying the earnings release.

With that I'll turn the call over to Lee.

Okay. Thank you Tom Good morning, everyone and thank you for joining us on the call today.

To start with transcripts overall performance in the first quarter of fiscal 2024, we delivered better than expected revenue margins and earnings across our entire business portfolio.

Consolidated revenue was up 11% to $61 million.

Driven by strong demand from our unique suite of diverse complementary services, including calibration pipette instrument rentals.

And excess cost control and compliance services.

Consolidated gross margin expanded 160 basis points to 39% and was driven by margin expansion in both our service and distribution segments.

Adjusted EBITDA, a key metric for us given our successful acquisition strategy grew 16% to $8 $5 million and expanded 60 basis points over prior year.

Turning to our service segment first quarter service revenue totaled $40 million up 18% from prior year organic growth was up 11% as we continue to benefit from the recurring revenue streams and highly regulated markets, our unique and differentiated value proposition and growth synergies between our combined busy.

Ms channels.

The service growth in the first quarter represents our 57th consecutive quarter of year over year growth. That's every quarter year over year for a little over 14 years.

We also reported a service gross margin.

32, 5%, which represents a 50 basis point increase over prior year.

The margin expansion, which exceeded our expectations was a result of double digit organic growth combined with increased productivity in our lab operations.

Lab operations continued to drive automation and continuous process improvement throughout our traditional client based lab network.

Moving to distribution first quarter gross margins expanded 270 basis points from prior year, driven in part by 15% growth in our high margin rental business. We continue to see strong demand for our rental offering which is an important differentiator as it enhances transcatheter ability to offer solutions to challenges our customer.

Space.

Our distribution segment, including our rental channel continues to foster organic service growth by generating a significant number of leads and strengthening our overall value proposition looking.

Looking at the entire business portfolio, where the first quarter of fiscal 2024, we benefited from our differentiated value proposition that.

That is resonating throughout our expanded addressable markets.

We also demonstrated the inherent operating leverage in our service business as we generated strong incremental gross margins from our double digit organic service growth the nexsan business.

Nice to see good growth benefiting from synergies with Trans cats core calibration business.

And the pipeline of synergistic opportunities is compounding at an impressive rate.

While the traditional calibration service market continues to be fragmented.

Seeing similar market attributes in the spaces, where Mexican piece.

Early in July we were able to capitalize on the opportunity to acquire stair qual specializes in instrument commissioning qualification and validation services to pharmaceutical medical device and diagnostic manufacturers.

<unk> also provides process engineering quality assurance and project management to recent clients like Thermo Fisher.

Pfizer Monza Charles River Labs and others.

We view the acquisition of steric, while as another important differentiator as next delivers their single source solution platform, which complements trans cats calibration services.

At the start of the first quarter. We also acquired the bolt on acquisition of St. Louis based T. I C metrology services.

The newly acquired calibration operation will be integrated with our current lab in St. Louis within the next year and we anticipate the operation will support solid revenue growth and the realization of various cost synergies as we consolidate the labs into one.

Overall, our balance sheet remains strong and our current leverage ratio is one five times, we've done an excellent job managing our working capital and then the first quarter, we generated $7 $5 million of free cash flow.

Over the course of fiscal 2024, we expect to continue to deploy capital to margin and revenue enhancing initiatives.

Along with the execution of our ongoing acquisition and integration strategy and with that I'll turn things over to Tom for a more detailed look at the financials for the first quarter.

Thanks, Lee I'll start on slide four of the earnings deck posted on our website, which provides detail regarding our revenue on a consolidated basis and by segment for the first quarter of fiscal 2024.

First quarter consolidated revenue of $60 6 million was up 11% versus the prior year on service segment strength and solid revenue performance in our distribution business.

Looking at it by segment service revenue growth remained very strong at 18% with 11% of the growth coming organically and the other 7% from acquisition.

As Lee mentioned demand in our service business remained strong in the quarter.

Turning to distribution revenue of $20 7 million was consistent with prior year.

Distribution segment, we continue to see excellent performance in our high margin rental business.

Turning to slide five our consolidated gross profit for the first quarter of $18 7 million was up 17% from the prior year and our gross margin expanded 160 basis points to 39% in the first quarter.

Service gross margin expanded 50 basis points. The service margin increase further demonstrated our ability to leverage higher levels of technician productivity and our differentiated value proposition, which continues to drive high levels of demand.

Distribution segment gross margin of 27, 7% was up 270 basis points driven by strong performance in the previously mentioned rental business.

Turning to slide six Q1, net income of $2 9 million decreased 4% from prior year and our diluted earnings per share came in at.

<unk> 38 cents netting.

Net income was negatively impacted by a shift in stock based tax benefits from Q1 of last year to Q2 of this year as well as higher interest expense the combined year over year impact of these two items was 11 cents per share.

We report adjusted diluted earnings per share as well to normalized for the impacts of upfront and ongoing acquisition related costs.

Q1, adjusted diluting diluted earnings per share was <unk> 52 cents.

Flipping to slide seven where we show our adjusted EBITDA and adjusted EBITDA margin we.

We use adjusted EBITDA, which is non-GAAP to gauge the performance of our business because we believe it is the best measure of our operating performance and ability to generate cash as we continue.

To execute on our acquisition strategy. This metric becomes even more important to highlight as it does adjust for deal related transaction costs as well as the increased levels of noncash expenses that will hit our income statement from acquisition purchase accounting.

With that in mind first quarter consolidated adjusted EBITDA of $8 5 million was up 16% from the same quarter in the prior year and adjusted EBITDA margin expanded 60 basis points, both segments had adjusted EBIT growth compared to last year.

As always a reconciliation of adjusted EBITDA to operating income and net income can be found in the supplemental section of this presentation.

Moving to slide eight operating cash flow was $7 5 million in the first quarter, which was up significantly year over year.

Q1 capital expenditures were 400 K higher.

[noise] than prior year and continue to be centered around service segment capabilities technology, including automation and future growth projects.

At quarter end, we had a total net debt of $46 $2 million with a leverage ratio of one point buybacks we.

We had $37 5 million available from our credit facility.

As previously announced we acquired Seroquel for four point to $5 million just after the end of the first quarter paid 100% the company stock.

Lastly, we expect to file our Form 10-Q on August 2nd after the market closes with that I'll turn it back to you Lee.

Okay. Thanks, Tom.

I'll wrap things up by pointing out that Transco has continued our track record of consistent performance over many many years and over various economic cycles.

We generated profitable growth in what has proven to be a very resilient business model and perhaps most important we.

We've assembled a very skilled leadership team, which we believe is the ultimate competitive advantage.

As we look forward, we expect to deliver strong performance throughout the balance of fiscal 2024, we expect organic service growth in the high single digit to low double digit range and the gross margins will continue to increase over time.

We will continue to execute our acquisition strategy to add capabilities and expertise.

Our geographic footprint into important regional markets and to bolt on opportunities that leverage our current lab infrastructure.

From both an organic and acquisitive perspective, our focus will remain on our diverse strategic channels, including calibration my bets instrument rentals, and Nexus suite of cost control and compliance services.

As in the past, we will leverage the highly regulated markets, where the cost of failure is high and our unique value proposition resonates the most.

Our go to market strategy remains the same that is to demonstrate to our demanding regulated customer base that transfer that can be trusted as their risk mitigating service partner, we do this by leveraging our core competencies, which allows them to focus on theirs in other words, we went together.

As we work as we work our way through the second quarter of fiscal 2020 for our acquisition pipeline remains strong and our initiatives designed to drive organic service growth and margin improvement continued to gain traction.

Effective allocation of capital has always been a hallmark of trans cat and at the heart of our growth strategy. We expect our balance sheet remains strong and supportive as we drive sustainable long term shareholder value.

We like the trajectory of our business and the leadership team calling shots in many ways as we discuss internally amongst our leadership team we feel like we're just getting started.

And with that operator, please open the line for questions.

Thank you we will now conduct a question and it takes off and if they would like to ask a question, but this tier one on your telephone keypad, a confirmation telling the world indicated your line is in the question queue.

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Sure.

Yeah.

And our first question comes from Greg Palm with Craig Hallum Capital Group. Please go ahead.

Awesome. Thanks.

Congrats on the great results everyone.

Hey, Thanks, guys.

I wanted to just maybe start with the quarter.

It wasn't that long ago, a couple months ago. Since since you gave an update are.

You nicely exceeded our expectations, but you know more surprisingly you you raised the outlook for for the full year or so at least on the service side for organic growth. So I'm just curious.

Did you see you know an uptick in in June specifically or what have you seen in July that makes you confident that one quarter out of the gates are you you raised the outlook for the year.

Okay, Yeah, great Greg I appreciate where that question is coming from it's we talk a lot about it internally as you can imagine it's really quite simple. We you know we've had three consecutive quarters of double digit growth, we like the pulse going into second quarter or at least you know we're almost halfway through second quarter and we just look at our pipelines and look at the business.

Activity in general we think.

The pulse supports you know being in the range that we stated so that a major change more of a subtle one but I think appropriately timed.

Yeah makes sense any you know specific you know end markets or areas that are maybe outperforming relative to what your expectations were a couple of months ago.

You know I wouldn't point to anything specific other than to say you know the we like the way some of the synergies are working out between next set in Trans Canada. The.

These two businesses continue to complement one another and by complement I'm, referring to you know the business activity levels that are on the increase as a result of working together.

Versus working separately or even before the acquisition. So I think that's gaining some traction and momentum probably.

Probably as much or more than anything.

Okay, and then just shifting gears to our distribution you know what really.

Caught us I'm surprised in a positive way was what's the gross margin there and I guess at a somewhat of a byproduct of strength in rentals. So any way you can give us a sense of what rentals growth was and you know maybe ballpark where rentals is in terms of mix is a part of distribution overall.

Yeah, Greg It's Tom I'll take that one I would just you know I would characterize the rental growth is stronger than.

It's at a higher level than what we're seeing on the service.

Syed.

Our rentals business.

Business.

And you know.

It continues to perform well.

With.

As we've kind of said in the past you know the margins are.

Significantly favorable to you know the overall distribution business. So I'll also point out that we have been able to continue to do some kind of advanced buys which continued to benefit.

The margins overall in the distribution distribution side as well so it's not only the rentals, but we see that kind of moderating as we get into the second half of the year.

As well so.

Okay, but just to be clear I mean that that margin in distribution, specifically was I don't know if it was a record but certainly one of the best that we've seen since <unk>.

Since we've been tracking the company.

I'm, assuming that's not sort of a normalized rate going forward, but maybe you can help us figure out what the normalized run rate is just given rentals as a bigger part of the mix because I think we used to think of it as kind of a low to mid twenties, but you know obviously you had a good year in fiscal 'twenty, three and really an outside.

As a result, you're in fiscal Q1.

Well I was going to say one thing real quick.

Okay.

What you're seeing on the margin side, you know it is intentional from our perspective.

<unk> done a lot of focus on allocating dollars to where we'd like to see the mix.

Yeah, where we'd like to see the growth mix come from and so you know as long as we continue to invest in that and the higher margin mix over time and it becomes concentrated more over time, we may see this business.

Pick up from you know more of the low margins are low twenty's. So the high twenty's over time and I think we're seeing some of that transpires. We speak you know in this past quarter, but I don't think it's an anomaly I think as the mix changes are by design and we allocate capital towards higher margin channels, you're going to see that continue to increase.

Tom do you see it any differently I know and I think the other thing I'll just add is that we're making a conscious decision to kind of shed some of the lower end.

Margin business, the traditional distribution business as well and the growth in rentals was kind of giving us the opportunity to kind of step away from some of that less desirable business.

It is positioned to do that now Greg versus you know a couple of years ago.

Yeah understood all right well, congrats again and best of luck. Thanks.

Take care.

Our next question will come from Gerry Sweeney with Roth Capital Partners. Please go ahead.

Hey, good morning, Lee and Tom Thanks for taking my taking my call.

Hey, good morning.

I wanted to spend just a little bit of time on next and strategy isn't the right word, but maybe I want to see if you could talk a little bit more about the opportunity behind <unk> and sort of that entire market.

I'm not sure.

The market size opportunity acquisitions, it's been a great. It's been a great purchase for you. Obviously you followed it up with a.

Sterile qual, but.

Just wanted to get a better feel for what really lies out there on that on that side of the business.

Right well first I mean, just just to take one small step back to describe the different models you know on the traditional transkei side, we do calibration services on the Nexus side. They they don't perform calibration services at all but they do everything around that around the calibration process theyre in the caliber.

<unk> ecosystem, and we use the words cost control and compliance because.

No most of their work is done in large life science companies, where they're doing CMS work, where the data is being consolidated from one system to a next where they're looking at ways to.

<unk> be more efficient to lower their costs over time through anything from efficiencies of usage of the instruments uptime.

Reliability could be interval adjustments involved so they they they they essentially.

Improved calibration programs, we do the calibration work and so you can see the natural complementary nature between the two we can bring them into our clients, which we have over 30000 are when when we see an opportunity to.

Where cost is a factor of efficiencies a factor they can bring us into opportunities when they see a problem in one of their clients because the calibration of Ben vendors and performing.

Effectively so there's just a natural good fit and when we go together. It sits at the same table and this is probably the biggest point, Jerry and where we're sort of pitching our value prop to a customer together it is really effective.

It's difficult to compete against us when we when all the stars aligned in that way and that's where we're seeing.

The growth both from a organic transkei perspective, and also from an exit perspective, just kind of working well and we think it's going to continue.

And I can certainly get that and I apologize, maybe it wasn't 100% clear, but you know.

Curious to how big of a market maybe that cost.

Cost control and.

Outsourcing efficiency market that isn't that how big is that opportunity.

That's something we're working on to try to come up with a range that would that would be meaningful to our shareholders I'm not going to be able to give you that size of the market other than today other than to say, it's significantly larger than just calibration. The calibration world is a one $5 billion to $2 billion market you know in North America.

It would be significantly larger than that because their business is driven well you know in a sense now that steric while in particular as part of that then the next the value prop you get commissioning startups and plants and so on and so forth and so as as capital our capital spent to.

Bill facilities around the country and there are certain estimates about life science capital spend that we take a close look at but while they you know that market is getting bigger and bigger for us as we expand our services within that ecosystem. So we'll try to work on a figure, but I will say, it's significantly could be tenex larger in that range from.

The traditional calibration business, so they'll help us gain share and then and then we'll gain share inherently by you know the nature of their business.

And the channels that they serve.

So suffice to say that it dramatically expands your addressable market and while Youre.

Pretty small Nathan in that market lots of runway lots of synergies and strengthens both sides of the house.

We think so and then we're doing business in Ireland as well, but then the nature of their business is.

It's not that difficult on their side of the equation to scale their business even beyond Ireland. We've you know we've done some work we I think we said last quarter in Belgium, and Germany. Because you have the same customer is another facility in Europe in a different country. It's it's not a big leap to service them to do an on site visit go back to Ireland do that do 80% of the work behind a computer.

So to speak and in periodic visits so it's unlike calibration, which we will scale. It have scale. It's it's it's a little bit easier as you cross border. So that's another attribute of the business that we like got.

Got it and how is the market fragmented or Sim.

Two the calibration marketers I mean calibration that Theres, a couple of larger players and a bunch of small players, but how does that how does the market from that perspective.

Well, we're learning more and more about the market as each quarter goes by but my.

The answer to that question is we think so in the end and part of the script and in this particular release was to say that we're discovering as we do our development work on the acquisition side that it is fragmented.

It may be equal to or even more fragmented than the calibration businesses. So it lends itself to those acquisition and integration opportunities that we see with traditional transco, we like that and that's why we mentioned it.

In the earnings script.

Got it.

One last question and I think this is all positive.

I'm trying to get another way are you know.

What.

Maybe I should know this but what does the margin profile of our clients.

You talked about it's easier to leverage so there it sounds like there are some either margin components or at least leverage opportunities on the Mexico side.

Maybe just yet.

Jerry.

It's Tom I mean, what we've said in the past right is that the.

The.

Gross margins for next Gen.

Generally higher than they are for the overall services and we'll just we'll kind of leave it at that.

Okay.

Got it okay.

Thanks, a lot appreciate it.

Luxury.

Our next question will come from Pat decks, and what Lark Lane Securities. Please go ahead.

Hi, Good morning, guys congrats on the quarter.

Good morning.

I'm, just I'm going to kind of keep it to two questions and let things go forward. One is I wanted to talk a little bit about the customer base labs, you know in the first half of the Oh gosh calendar year. There was some discussion about some impact with margin with regards to some of that new stuff coming online. So I'm curious what we could expect to see with regards to kind of.

Or an operating margin in the back half of this calendar year as we roll through and that moves behind and then tied into that as you know what the pipeline looks like with regards to new opportunities. There and then I've got a follow up.

Okay, Yeah, I get it so yeah cbl's.

Have won a handful of <unk> early in the year or at the latter stages of last year and as is typical when you when you layer to CBL.

The first couple of quarters tend to have a bit of a drag on services gross margins just for for reasons that make a lot of sense you know your new staff.

Lay of the land learning the processes all of the other lab that you're operating in so there is definitely a couple of quarters, where youre not at peak efficiency that tends to correct itself routinely over time and I think when you look at some of the margin expansion in the first quarter that we didn't necessarily anticipate.

Coming out of fourth quarter, you know some of it I can't put a number on it I don't think any of the guys there Ken but but some of it definitely is a byproduct of getting up and running in the CBL is over a quarter or two since they started so theres always going to be that factor and we know how to overcome it in a relatively short period of time, but it's the margin drag does.

Exist at the outset, so yes, we've made some progress there as far as the pipeline.

Which is the second part of your question you know the pipeline, it's pretty solid it's as solid as it's ever been and I think from CBL perspective from a client base lap perspective, I think that continues to be a product of the difficulty the market has finding technicians.

And so even our customers that would normally run an in house lab.

They struggle to find technicians, it's not like we don't struggle, but they struggle in a different way. They don't have a technician school Trans got University that we set up they don't have the networks that we have and quite frankly, there is no way in the world you know when they hire three technicians, a year and we hire hundreds or a hunter technicians, a year that they're going to be as as.

Proficient in it so we've got the tax we've got the backup we can move people around like we always have and that's that that adds a lot of value to these client based labs, who could at any given time be struggling and so I think that's.

Those types of.

You know labor tight environments is always going to be a good thing for us growing our CBL business client based lab business.

That's playing out this year as well.

Alright, let.

Let me move on to my next which is going around next side kind of the M&A pipeline I mean.

I mean.

The last time you know.

Spoke you know I mean, it was clear that the.

Pipeline for opportunities with M&A was robust and that there was a fair amount of discussion around opportunities within M&A.

Accentuating or adding to the Nextera portfolio, and then Lo and Behold you made your first acquisition on that front.

What's the pipeline look like in general how does it look like with regards to the consulting services you know.

When you look into that kind of area on the consulting side, which I'm a little bit more interested in.

Where do you see the opportunities and then like kind of where do you feel like would be the you know like the areas within kind of your next next a business that you'd want to bolster.

Well I think we look at some of our growth strategic growth opportunities across calibration.

As for Pipettes rentals, we'd say for next as well we're always looking for.

Acquisition opportunities that meet our sort of.

Stringent criteria, we're very disciplined so you don't have a track record like we do.

In terms of success versus lack of success unless you're very disciplined at the outset upfront and we remain disciplined in that we've got a great process and a great team that does this sort of work. So just having said that sort of as a foundational comment we are looking at the.

The nexus space that cost control and compliance.

Services space, because we think it is a good fit their calls an example of that so.

I feel pretty comfortable saying stair call it won't be the last acquisition, we ever make a next although you know the chance gateway is let's walk before we run and let's prove this out and let's make sure that it fits us as well as we think it's going to fit in with their leadership team can integrate this as well as we play on integrating it you know I like to see things prove it and so I get the question.

Yes, there will be more acquisitions likely in this space, we would expect that but we're not going to rush. It until you know the opportunity hits us that we think fits and that our leadership team has proven that on that side of the equation and they can do well with acquisitions I have every reason to believe at every confidence that they will but it's just the trashcan way to prove it before we jump in too far.

Just kind of want to make that comment, but again, it's the same way with all of our acquisitions. Our pipeline is diverse because we wanted to be able to support all of these areas.

And it just made sense to Eric what was the next one up that fit and.

Uh huh.

There'll be others in time.

Can I just sneak in one quick last one which is there on the distribution side of the business and you clearly are seeing some really good growth in the rental side of the equation there.

Probably you know as you mentioned answering the prior question on that.

The equipment actual sales side, you're exiting some of the lower and stuff, where there is low margins a lot of competition and stuff.

Not that not that nothing secret there, but how should we think of that in kind of in aggregate going forward you know in the past we've kind of always viewed it as you know call. It a GDP growth line item, you know kind of but I mean as you're.

You know kind of sort of retooling that business and you know kind of walking away from.

Things that you should walk away from things, where you know there's really not much of a profit margin and the juice isn't worth the squeeze does that change that calculus in terms of how we should think about the longer term growth for distributions.

I I would care I'm not sure I would characterize it exactly.

The way you did in that were not directly exiting their distribution business I think it's.

That way, there's no no no.

Totally get it totally get out I'm thinking I'm thinking more in line with our allocation of future incremental capital you know as we have capital to spend and we look at both get the service business over here with recurring revenue streams and driven by regulation, we've got the nex business with cost control and how that plays between.

Some of our other channels, we've got rentals, which is kind of like a bridge to everything you know when we look at how we allocate capital. It's just that the core distribution allocation.

Is decreasing as a percentage on a go forward basis and by the way. It has for the last five years, we've had investors overtime. It says can you double the size of your distribution business can you make it $150 million and we said well we could but we want because that's not our strategy and so as we go forward think about we like the <unk>.

Rentals mix more than the old line distribution mix, because the margins are better and it has more of a recurring nature to it by customer and so we've incrementally spent more dollars and that's been for the last 345 years running that's how we got these margins. That's why they are sustainable this is not an overnight thing.

Is something that's evolved over the last half a decade and continues to pick up momentum that's how I'd characterize it. So if we continue if you kind of draw the line out.

It continues that that pattern of allocation youre going to see similar growth results. I think you know in that margin over time and that profile over time that that's all the.

Tom would you describe that way or marker.

Yeah, I mean, I think ultimately.

Ted started with the question.

As a GDP like growth rate.

We should expect going forward and I would just say, yes, and and again, we expect to continue to perform well here.

Caution I would say is that we have we have been getting some of them. Some benefit from these advanced buys that we've been doing and I think that's the piece of it that that will kind of moderate as we get into the second half of the year.

Kind of change the trajectory on the margins a little bit, but still I think where we're talking about a mid twenty's kind of margin business versus a low twenty's margin business that we had you know three or four years ago, that's more sustainable as more sustainable way.

Okay Yeah.

I did catch that comment with regards to the advanced buys so but thanks for reiterating again congrats on the quarter.

Thanks, Jay Thank you.

There are no further questions at this time I would like to turn the floor back over to Lee Rudow for closing comments. Please go ahead.

Well. Thank you all for joining us on the call today. We certainly appreciate your continued interest in Trans Cat, we will be participating at the Oppenheimer Conference, which is on the 26th Oh excuse me, which is the 26th annual Tech conference for them on August 9th we'll be participating feel free to call, calling us there or join us.

If not feel free to check in is checking with us at any time.

We look forward to speaking with everybody again at the end of next quarter. So again, thanks for participating.

This concludes today's conference call you may disconnect. Your lines at this time. Thank you for your participation and have a good day.

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