Tecsys Inc
TSX:TCS
Earnings Call Analysis
Q2-2024 Analysis
Tecsys Inc
Tecsys, a leader in supply chain solutions, reported a robust second quarter for fiscal year 2024, bolstered by significant growth especially in its Software as a Service (SaaS) offerings. The SaaS segment saw a 37% growth in revenue, with SaaS bookings rising by 34% and a matching 34% increase in Remaining Performance Obligations (RPO), indicating a healthy future revenue stream. Holding strong market recognition and capitalizing on the post-pandemic momentum, Tecsys experienced a record turnout at their user conference and is making promising strides in the healthcare sector, particularly in transforming pharmacy supply chains.
The company's gross margin remained stable at 44%, identical to the previous year's figure. However, the combined margin for SaaS, maintenance, support, and professional services improved slightly from 46% to 47%, primarily due to the expansion of high-margin SaaS offerings.
While the company saw a decrease of 5% in professional services revenue compared to the same quarter last year, they maintain a strong and growing backlog, indicating the dip is viewed as temporary. Management anticipates a quick recovery, projecting the professional services segment to bolster back up in the coming quarters, given the current backlog and ongoing project initiations.
Increased sales and marketing costs, including those for their user conference, and ongoing investments in research and development led to a net loss of $340,000 for the quarter, contrasting with a $715,000 net profit in the same period last year. However, the company's solid balance sheet, with $33.6 million in cash and no debt, allowed them to repurchase shares and increase their quarterly dividend to $0.08 per share. Despite a temporary slowdown in professional services revenue, Tecsys has adjusted their short-term adjusted EBITDA margin outlook to 4%-6%, while maintaining a positive guidance for fiscal 2025 in the range of 8%-9%.
Tecsys has affirmed growth goals of 35%-37% for SaaS revenue and 10%-15% for total revenue in fiscal 2024, reflecting confidence in their business model and rising profit and free cash flow. This outlook has underpinned their decision to fund a Normal Course Issuer Bid (NCIB) and increase dividends, showcasing their commitment to providing shareholder value.
Looking ahead, Tecsys is poised for stable growth and continued industry leadership. By enhancing their SaaS offerings, fortifying strategic partnerships, and intensifying focus on healthcare supply chain solutions, Tecsys is set to leverage innovative technologies and customer service excellence. These strategies are expected to sustain Tecsys' trajectory in creating both customer and shareholder value over the fiscal year 2024 and beyond.
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Good morning, everyone. Welcome to Tecsys Second Quarter Fiscal Year 2024 Results Conference Call. Please note that the complete first quarter report, including MD&A and financial statements were filed on SEDAR+ aftermarket close yesterday. All dollar amounts are expressed in Canadian currency and are prepared in accordance with International Financial Reporting Standards.The company has added a companion presentation to today's call, which is available on the website at www.tecsys.com/investors. Some of the statements in this conference call, including the question-and-answer period, may include forward-looking statements that are based on management's beliefs and assumptions. Actual results may differ materially from such statements. I would like to remind everyone that this call is being recorded on Friday, December 1, 2023 at 8:30 a.m. Eastern Time.I would now like to turn the conference over to Mr. Peter Brereton, Chief Executive Officer at Tecsys. Please go ahead, sir.
Thank you, and good morning, everyone. Joining me today is Mark Bentler, our Chief Financial Officer. We appreciate you joining us for today's call. As many of you saw in our results posted yesterday, our company closed our second quarter with continued overall revenue growth, underpinned by 37% of SaaS revenue growth. Our SaaS bookings for the quarter were up 34%, and we have a healthy RPO, also up 34% over the same time last year. Our customer count continues to grow, and we've added new loans in both Canada and the U.S., spanning commercial and government entities. I wanted to take a moment to highlight some key accomplishments in Q2 and how we see the laying the foundation for value creation. If you're following along on our company -- or companion presentation, I'll be speaking to Slide 3. Our market position and presence continues to strengthen. Our history of positive recognition from Gartner remains solid, and our status as a leader in the healthcare industry is well established. Recently, we were included in the inaugural value matrix for warehouse management system technology by Nucleus Research, earning a spot in their expert quadrant. This independent analysis is yet another validation that the solutions we are bringing to market are valuable to the audiences we serve. When it comes to an enthusiastic customer base, we saw this on full display at our user conference in September. It was our first since the pandemic, and the enthusiasm for its return was clear. We had a record turnout, 40% higher turnout than in 2019, and the number of partner organizations represented at the conference more than doubled, highlighting that the investment we have made in growing our partner ecosystem is bearing fruit. A key highlight with our remarkable lineup of customers and partners. We heard from supply chain leaders at Mayo Clinic, Nissan in North America, and Intermountain Healthcare, among many others. We shared the stage with AWS, RiseNow, Zebra Technologies and more. And we had the opportunity to celebrate some remarkable milestones during our award ceremony where we recognized McLeod Health, Werner Electric and Tecsys' Children's hospital. Every session panel and keynote at the conference was an opportunity to showcase best practices and innovations. In fact, we formalized our focus on innovation at the user conference with our announcement of the Tecsys Innovation Lab. R&D has always been a key investment for Tecsys, representing more than 15% of our annual revenue. We are building on that past investment. With a focus on AI, machine learning, data science, process modeling and other advanced technologies, this research-driven group is committed to addressing real-world business challenges through co-innovation and rapid prototyping. We are already seeing some interesting use cases emerge in both the general distribution and healthcare sectors. Regarding the healthcare sector, those who have been following our story for some time will know that we are the market leader in North America for health systems and hospital supply chain solutions with an end-to-end value proposition that is second to none. At the heart of our offering is a consolidated service center and the industry best practice that Tecsys largely established with projects in several of the top healthcare organizations in the U.S. The depth of our portfolio in the healthcare vertical means that one new logo carries years, if not decades, of expansion opportunity into base account white space. We are particularly excited by one new whitespace initiative that is certainly heating up. You may have noticed our recent announcement on Baptist Health. It's a great new logo for Tecsys and an important new entry for our healthcare offering. Baptist Health is amongst an early tranche of customers who have turned to Tecsys to transform their pharmacy supply chain. This emerging market has demonstrated problem in managing their inventory, and Tecsys is uniquely positioned to serve them. Our history has been not to just enter these spaces, but to redefine them, and we believe that the consolidated pharmacy service center carries that potential. With Baptist Health, Parkview Health, St. Luke's Health and others, we have early momentum in the market, a trusted position in the healthcare sector, and a solid customer base. And my early pipeline indications are that there's certainly healthy demand for these solutions. That momentum continued this quarter with a 7-figure base account deal that expanded to include pharmacy. Additionally, with our white space opportunities and new business pipeline and our existing healthcare and distribution sectors continues to show positive momentum. We are seeing excellent activity in our base account. Base accounts around conversions, including a large elite ERP SaaS migration deal this quarter. We believe our continued momentum is a testament to our clarity of vision and sustained investment in technology as well as an obsession with customer success. We also launched a normal course issuer bid this quarter, which we continue to execute to buy back shares at an attractive value. We have confidence in our business outlook, and we believe that this initiative allows us to use excess cash effectively to enhance shareholder value. As we continue to invest in the solutions we sell and the manner in which we sell them, Tecsys has proven to be among the best cloud-based solutions available in the markets we serve. We have the people, the partners, the products and the plan to capitalize on these emerging market opportunities. We continue to add new hospital networks and global brands to our repertoire customers. We are seeing an expanding pipeline of new SaaS opportunities, expansions and conversions and we see a very solid path for shareholder value creation. Before turning back to results, I wanted to just take a moment to welcome Andrew Kirkwood to our Board. Andrew's global leadership, experience and high-growth supply chain organizations like BluJay Solutions, Blue Yonder, RedPrairie and Manhattan Associates will be instrumental in developing our continuing growth strategy. Andrew is based in the U.K.And I will now hand it over to Mark to provide further details on our second quarter financial results as well as financial guidance on several key metrics.
Thanks, Peter. We're pleased with the sustained performance in our second quarter ended October 31, 2023. I'm going to start with Slide 4 and talk a bit more about SaaS. SaaS continues to be a key driver for our growth, and we believe the key driver for value creation. Reported SaaS revenue growth in Q2 of fiscal 2024 was 37%, reaching $12.1 million in the quarter. At the end of Q2 of fiscal 2024, SaaS ARR represents 63% of our total ARR and recurring revenue in Q2. So that's SaaS plus maintenance and support represented just over 50% of total revenue for the first time ever. Q2 SaaS ARR growth was 35% year-on-year on a constant currency basis. SaaS bookings were $3.7 million in the quarter, which is up 34% compared to the second quarter of fiscal 2023. SaaS Remaining Performance Obligation, or SaaS RPO was $146.7 million at the end of Q2 fiscal 2024, and that's up 34% from $109.5 million at the same time last year. On a constant currency basis, that growth was 32%. So yes, we are excited about SaaS. Moving on to Slide 5. Total revenue for the quarter was $41.5 million. That's 9% higher than the same period last year. On a constant currency basis, total revenue growth was 6%. I'm going to come back to professional services revenue on the next slide. But first, I want to point out the decline here in license revenue, down about $0.8 million compared to Q2 of last year. This is really the back end of our transition to SaaS and is an important driver in our year-on-year adjusted EBITDA result comparison in Q2. For the second quarter, total gross profit was up 10% compared to the same quarter last year. That's about $1.7 million of additional contribution in the second quarter and SaaS was the key driver. As a percentage of revenue, gross margin was 44%. That was flat compared to the same period last year. However, combined SaaS, maintenance, support and professional services gross profit margin for the 3 months ended October 31, 2023, was 47%, and that was up, compared to 46% in the same period in fiscal 2023, and that was in spite of lighter professional services margin.The main component of the increase in gross profit margin was SaaS margin expansion, and we're pleased to report that this is tracking as planned. Switching now to our expenses for the quarter. OpEx increased to $18.7 million, higher by about $3.1 million or 20% compared to Q2 of fiscal 2023. The largest component of the increase was sales and marketing costs, which included ongoing investment as well as costs related to our user conference in the quarter. Research and development costs were also higher on ongoing investment despite having benefited from an increase in tax credits recognized in the quarter. Net loss, adjusted EBITDA and earnings per share in the second quarter of fiscal 2024 were impacted by higher operating expenses, which were partially offset by higher margin contribution. Net loss in the quarter was $340,000 compared to $715,000 net profit in the same quarter last year. Adjusted EBITDA was $1.0 million in Q2 fiscal 2024, that compared to $2.8 million in the same period last year. Relative to the second quarter of fiscal 2023, despite solid growth in our SaaS business, lower professional services and license revenue negatively impacted current quarter profitability, which is a good transition to Slide 6. Professional services revenue for the second quarter was $12.9 million. That was down 5% from $13.5 million reported for the same quarter last year. Despite a sequential temporary dip in professional services revenue this quarter, due to project scheduling and swift growth of our partner ecosystem, we maintain a strong backlog. In fact, professional services backlog was a robust $40.3 million at October 31, 2023, and that's up 27% from $31.9 million at the same time last year. We are adequately staffed to drive $15 million plus of professional services revenue per quarter, and our intention is to maintain current staffing levels as we grow into that level of revenue. Turning now briefly to our results for the first half of fiscal 2024. Our total revenue was $83.5 million. That was up 15% compared to $72.3 million in the same period last year, and that's 11% growth on a constant currency basis. SaaS revenue for the first half of fiscal 2024 was $23.6 million. That's up 40% from $16.8 million in the same period last year, and that's 36% growth on a constant currency basis. Our adjusted EBITDA for the first half of fiscal '24 was $4.2 million compared to $4.3 million in the same period last year. Basic and fully diluted earnings per share were $0.06 in the first half of fiscal '24 compared to $0.05 same period last year. We ended fiscal 2024 with a solid balance sheet position. We had cash and short-term investments of $33.6 million and no debt. Q2 net cash provided by operating activities was $4.2 million. And during the quarter, we used $673,000 to repurchase shares under our NCIB. Additionally, the Board yesterday approved an increase in our quarterly dividend to $0.08 a share. Only with respect to financial guidance and I'm moving on now to Slide #7. As a result of the temporary slowdown in professional services revenue, we are adjusting our short-term adjusted EBITDA margin outlook to provide a range between 4% to 6%, while affirming our adjusted EBITDA margin guidance for fiscal 2025 in a range between 8% and 9%. We are also affirming our guidance for SaaS revenue growth in a range between 35% and 37% for fiscal 2024, and we are affirming our guidance for total revenue growth in a range between 10% and 15% for fiscal 2024. Please note that it is our confidence in our rising revenue and margins that is supporting our confidence in rising profit and free cash flow, and that in turn, is supporting our decision to fund the NCIB and the dividend increase. I will now turn the call back to Peter to provide some outlook comments.
Thanks, Mark. Tecsys stable growth continues through the second quarter of fiscal '24, with a strong balance sheet and a robust backlog and sales pipeline. We're seeing widespread buyer intent across our target markets, solid opportunity cycles and a highly capable sales team with the tools and the talent to capitalize on a market that's ready to invest. Our expanded healthcare sector offering, and growing footprint gives us confidence that the healthcare sector will continue to serve as an important growth engine for us. Our converging distribution business presents a significant market opportunity amidst shifting supply chain dynamics driven by factories like aging legacy systems, digital adoption and a realization that heightened consumer expectations are here to stay. And so after an impressive fiscal '23, we are pleased that the first half of fiscal '24 continues to trend. We are demonstrating dominance in our key markets and seizing on emerging opportunity in growth markets. As we continue to celebrate Tecsys' 40th year in business, we continue to invest strategically so that we remain at the cutting edge of our industry. Based on these principles and a clear vision of our market opportunity, we believe the remainder of fiscal '24 is on track to continue growing shareholder value. In summary, I want to remind analysts and investors some key things for fiscal '24 and beyond. First, a sustained commitment to our expanding SaaS revenue model, which will drive changes in the way we deploy solutions and delight customers. Secondly, a continued strategic partnership approach, characterized by deeper and stronger alliances. This helps us tap into new opportunities and fuels our scalability around the world. Third, an emphasis on advancing and deepening our healthcare vertical, covering both med-surg and pharma. We continue to solidify our position as the go-to provider for healthcare supply chain solutions. Lastly, a continuous evolution of our distribution and omnichannel business platform that takes advantage of innovative technologies in the power data, now with the support of our new innovation lab. To the final point, I'd just like to stress across our markets, we will place emphasis on customer success. We have long stood by the philosophy of customers for life and a big part of that formula is to deliver value quickly, stay connected and then expand on the value delivered. With that, we'll open the call up for questions. Thank you.
[Operator Instructions] Our first question comes from Amr Ezzat with Echelon Partners.
Peter, Mark... Just looking to get color on the services gross margin, 47.5% is pretty healthy, but it's lower than last quarter's 49.6%. Is the read-through for us if this is purely on professional services?
Yes, absolutely. You know that. And as I mentioned it -- yes, as indicated in my prepared remarks, our SaaS margin expansion is really on track with our plan.
Fantastic! Then is there like any color you could give us on maybe slightly lower, like professional services you're sort of running close to that $50 million capacity, then a bit of a dip this quarter. Is there anything for us to think about for the next couple of quarters?
I was just going to say, Amr, we see it as a temporary dip. I mean, this happens to us every few years. Like most quarters, you've got -- I mean, typically, we're running 50 to 60 projects at a time, right? And typically, five or six of them are kind of the big ones. And usually, every quarter, you have one or two ending and one or two starting and you don't even sort of see the transition down and the transition up. It seems like every 2 or 3 years, we end up with 1 quarter, where, like a bunch of big projects all in at once, and new projects are just starting up, and you end up actually seeing that dip between these projects. And that's what happened this quarter. We have a number of very large projects starting up. We had a number of large projects that ended, and you end up with this sort of transition that all added in the quarter. So it will happen from time to time. It creates a bit of lumpiness, but our view is that those projects will be winding up again in the third quarter, and we had full strength in the fourth quarter.
Then just on Mark's comments, I mean year-to-date, you're up 40% year-on-year. You continue to guide 35% to 37% growth for the full year. So is that a case as you guys are building some buffers into your numbers? Are you expecting a deceleration in the second half of the year? Or how do you sort of think about that?
Well, I mean, I think if you see our expanding SaaS revenue line, it takes more and more bookings to grow that and to increase that growth number. We see some really solid opportunity in the coming quarter. We've got really strong pipelines. So we're definitely feeling good about bookings in the quarters ahead. About the impact, if you just kind of model it out, you'll see a significant increase in SaaS revenue and landing in that 35% to 37% range. I mean, we think that's the likely outcome.
And do you guys have an updated number for us on the cost of the user conference?
I mean we don't really disclose that number. But if you look at the increase of our overall marketing spend in the quarter, there's rough order of magnitude, there's $0.5 million of cost in outline. There's also quite a bit of travel related to that event that's sort of peppered in throughout the rest of the P&L, but that's sort of the order --
So that appears to be $0.5 million that you're talking about?
Yes.
Okay. Got it. Because sales and marketing is higher than $1 million like quarter-on-quarter. And now I recall last quarter, you said it was $0.5 million. So on the EBITDA margin outlook for the year moving to 4% to 6% or moving to 6%, if I were to think about the different items that prompted that move. So obviously, new professional services that you spoke to. Is there anything else that we should be thinking about outside of that?
No, that's it. That's the number, Amr. I mean, we had $14 million -- almost $15 million, $14.9 million of professional services in Q1. And the timing dip that we saw in this quarter, that's like $2 million lower than what we're staffed for essentially, right? So as Peter indicated, now we expect that, yes, it's definitely a temporary dip. So that level is going to be going up in the coming quarters. But we're not going to do $17 million to make up for the dip. You know what I mean. So that's coming through the margin.
Our next question comes from the line of John Shao with National Bank.
So Peter, could you just give us some additional color on the demand for the pharmacy solution you mentioned in the press release? Like maybe how we should think about the nature of these customers? Are they existing or new, their size and timing of their final implementation?
Yes, it is still a development market for us. So we're having a little bit of trouble precisely sizing ourselves. What we've seen so far is if we look at sort of what's happened in the last 12 months, we've seen a couple of new accounts and a couple of base accounts adopt the full pharmacy supply chain. So we're seeing it coming from both sides. When we look at the overall market TAM, we haven't yet adjusted our TAM slide to really reflect that. But it certainly looks as though overall, it probably adds another sort of $300 million to $500 million to the TAM kind of thing. And the payback on it is nothing short of fantastic. And this is not -- I mean sometimes when you look at these things, you have to look at sort of some hard pay back some soft payback. It makes people's lives easier. It helps the clinicians. It gets frees up time for them to spend more time with patients, et cetera, in addition to some hard savings. On the pharmacy side, there's just a massive amount of hard sales across 340B price management, reduction in expired product, more speed buying. The payoff is quite significant, and it's in an area of supply chain that a lot of these hospitals are wrestling with drug shortages and need the ability to know exactly what they have and where they have it and be able to sort of stretch it to the max kind of thing. So we're still sort of getting our heads around how big it is, how fast it's going to move. But we are very excited with the opportunity in that space. We've been sort of working a way at it for probably 5 years now. And I've got to tell you, by the end of the fourth year, I was starting to wonder if anything was ever going to take off. Well, I think we finally connected all the right dots and have the right ROI backing to show that this thing really pays off, and we're pretty excited about what we're seeing.
Okay. Got it. So, so much discussions have been around the healthcare side of the business. And I was just wondering if you could just comment on the complex distribution opportunities in 2024 and perhaps beyond?
Sure. That market -- I mean, an interesting market, it's a very large market. There's -- we estimate 12,000 companies in North America in that market for us. And that market was picking up speed in '18 and '19. Definitely hit the breaks through the pandemic. The pipelines began waking up about a year ago at the very top end of the funnel. So there are quite queries coming in and so on. It began moving into the main part of the pipeline in the spring. And if you look at our pipeline in that market today, it's doubled, almost exactly double what it was a year ago. So it has really picked up. We are just starting to see deals getting to final decision points. So we're sort of waiting to see is this thing -- our Board is actually going to improve the spend. There's still a lot of caution in the market. People worried about recession and economic slowdowns and interest costs are still high and so on. So there are things that would be slowing down that market. On the other hand, most of them are running 25 to 25-year-old systems that we're pointing in time for Y2K. And a lot of them are feeling like they really can't wait anymore. So it looks like that sort of dam is about to burst. We're suspecting that to hit sort of over the next couple of quarters. But honestly, the jury is still out on it. Like until we see Board's directors actually proven new investment in these areas. And sort hard to call it. Gartner is predicting a 20% annual increase in this space for the next 10 years. And I think they're right that the market is right for a massive technology renewal cycle, but we're sort of waiting to see. Our actual business in that market is growing quite nicely. If we look at our SaaS revenue, for instance, it's up significant double digits over last year. But most of that still is coming out of our base. There's not that much an account activity action coming through yet.
Okay. And my last question is in terms of the outlook for the PS revenue, how much do you think the upcoming holiday season going to be factor where you're trying to project a rebound in professional services in the near term?
Yes. Clearly, it's a good question, John. And that is kind of a seasonal -- I mean there's definitely some seasonality in that quarter. But what we're seeing right now is the -- we expect the number to certainly increase from these Q2 levels because of the dynamics that Peter talked about earlier. So it typically isn't our -- that quarter with those holiday seasons, and it isn't typically our biggest professional services quarter of the year. I mean, that tends to be Q4 broadly. But we expect Q3 to be moving up from Q2 levels for sure.
[Operator Instructions] Our next question comes from the line of Gavin Fairweather with Cormark Securities.
This is Graham on for Gavin. So my first one is on pharmacy. Can you remind us the competitive landscape of what that kind of looks like in pharmacy? And maybe if you have any statistics on early win rates, that would be really helpful.
Yes. I mean, it's interesting and it's very similar at this point to what we've seen across the sort of med-surg and the whole Cath lab IR general supplies area of hospitals in that; we don't see any competitor that is providing a full end-to-end supply chain. We do see players that offer pharmacy buying solutions. So just once you know what you need to buy, they provide a portal that allows you to go and purchase the drugs. We also see there are players that just offer forecasting and demand planning specific to pharmacy. And then there's players that offer pharmacy automation. So dispensing machines and sort of pill counters and bottle fillers and all that kind of thing. But in terms of an end-to-end platform, it goes all the way from forecasting to demand planning through into central supply areas, central distribution center, with the ability to do sort of just-in-time delivery out to hospitals with patient-level doses, we don't see any direct competition at this point. So, so far, and it's early, I would emphasize it's early. But if you look at the sort of the ones we've signed in the last 12 months, our run rate has been 100%. So obviously, we'd like to keep it there.
Then again, it might be too early for this, but if you have any color on kind of sales cycles in pharmacy? Like are they also under 1 year similar to healthcare? Any color would be helpful.
Yes, they seem to be under a year. I think part of it is when you actually look at the ROI, I mean we've seen some of these situations where their 5-year ROI. It looks like it's going to be over $100 million. So when you're looking at that level of ROI, the project takes on some degree of urgency.
And then just, I guess, the last one on complex distribution. Are there any sort of verticals where you're seeing the pipe striking specifically? And if you want to call any of those out.
Yes. Probably the area that continues to look the most interesting and it makes sense in a way because it's a little bit adjacent to our hospital space, but it's drug distribution. The drug distribution market is looking like it may be one of the first ones to sort of really wake up and get moving. But there's other ones. I mean, consumer goods is -- it looks like it's going to wake back up again. The whole electrical HVAC kind of market looks like it's going to wake back up. 3PL, which is -- I mean, 3PL is old model, horizontal than a vertical, but it's also looking like it's getting pretty active. But I would say, from what we're seeing today, it looks like pharmaceutical drug distribution is going to be the front runner there.
Perfect. And sorry, just one more from me before I pass the line. How many IDMs did you guys add in the quarter? And maybe what's some of the cadence that you guys are expecting for adding within sort of the next couple of quarters?
Yes. Hard to call. We added two in the quarter. In terms of -- from here, we keep thinking the number is going to rise. And what seems to happen instead is the average deal size rises and the base continues to expand pretty dramatically. I mean, if you look at our base today, I mean, we could literally stop selling new accounts and just go after the base and probably get to our 3- or 4-year goal for SaaS. I mean, there's notedly that much opportunity sitting there in the base. But it certainly -- if I were to hazard a guess, I would say we're going to continue for the -- in the near term, I think you'll continue to see 2 to 3 quarter added. It may spike above that occasionally, but I think it's going to be in that kind of range.
[Operator Instructions] And it seems we have no further phone questions at this time, sir.
Great. Well, thank you, everyone, for joining us for today's call. And in case you haven't picked it up, I'm not sure we've ever been more excited about the future of this business. Last few years have certainly had their challenges. But as we look at what we see going forward here, I think we're in for a pretty exciting couple of years. So, thanks for taking the time to join us. And as always, if you have additional questions, please don't hesitate to reach out to Mark or I, and we will be in touch after the end of the next quarter. Thanks, and bye for now.
That does conclude the conference call for today. We thank you for your participation, and we ask that you please disconnect your lines.