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Good afternoon. My name is Chris, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Quorum Information Technologies Q3 2020 Results Conference Call. [Operator Instructions]Mr. Maury Marks, President and CEO, you may begin your conference.
Thank you, Chris. Good morning, and thank you for attending Quorum Information Technologies Q3 2020 Results Conference Call. Quorum offers innovative and robust technology solutions and services to traditional and electric vehicle dealerships and original equipment manufacturers, or OEMs, across North America.Today, we will provide you with a financial and operational overview of our Q3 2020 results. After our presentation, we will open the floor to your questions.Marilyn will now begin with our forward-looking information advisory. Marilyn, please go ahead.
Thank you, Maury. Good day, everyone. Thank you for being here with us today. I would like to remind everyone that certain statements in this presentation and on our call are forward-looking in nature. These include statements involving known and unknown risks, such as the risks related to COVID-19, uncertainties and other factors outside of management's control that could cause actual results to differ materially from those expressed in the forward-looking statements.Quorum does not assume any responsibility for the accuracy and completeness of the forward-looking statements and does not undertake any obligations to publicly revise these forward-looking statements to reflect subsequent events or circumstances. For additional information on possible risks, including risks related to COVID-19, please refer to our MD&A dated December 31, 2019, located on the SEDAR website.Total revenue in Q3 2020 was $8.1 million, an increase of 36% over $5.9 million in Q2 2020. Q2 2020 included the $1.8 million in SaaS and BDC COVID-19 discounts that we gave our dealership customers in April and May. Total revenue in Q3 2020 increased by 5% over normalized Q2 2020 total revenue of $7.7 million, which does not include the onetime COVID-19 discounts applied in Q2 2020. Q3 2020 revenue was down year-over-year by 6% when compared to total revenue of $8.6 million in Q3 2019.SaaS revenue in Q3 2020 represented 73% of total revenue at $5.9 million, an increase of 39% over $4.3 million in Q2 2020, with those Q2 2020 levels having been impacted by the April and May COVID-19 discounts. SaaS revenue in Q3 2020 was up 2.4% compared to a normalized Q2 2020 SaaS revenue of $5.8 million and up 5% year-over-year compared to $5.6 million in SaaS revenue in Q3 2019.Our SaaS monthly recurring revenue per rooftop, or MRRPU, for Q3 2020 was $1,886 based on 1,045 total customers. This compares to $1,373 in Q2 2020 based on 1,035 customers and $1,844 based on 1,020 customers in Q3 2019.BDC revenues in Q3 2020 represented 23% of total revenue at $1.9 million, an increase of 21% from $1.5 million in Q2 2020, again with those Q2 2020 levels having been impacted by the April and May COVID-19 discounts.BDC revenue in Q3 2020 was up 4.3% compared to a normalized Q2 2020 BDC revenue of $1.8 million and a slight decrease of 1% from $1.9 million in BDC revenue in Q3 2019.SaaS and BDC revenue together represented 96% of our total revenue in Q3 2020 compared to 98% in Q2 2020 and 88% in Q3 2019.Services and onetime revenue in Q3 2020 represented 4% of total revenue at $0.3 million in Q3 2020, up 125% compared to $0.1 million in Q2 2020, but down year-over-year compared to $1 million in Q3 2019.In Q3 2020, Quorum began providing remote installation and training services for most products. In conjunction with the return of business that we saw in Q3 2020, this was reflected in the 125% increase in services and onetime revenue. Our move to remote installation will allow Quorum to continue to safely provide installation and training services as dealership demand continues to recover.Total gross margin was $3.7 million or 45% of total revenue in Q3 2020 compared to $4.1 million or 41% of revenue in Q2 2020 and $4.2 million or 49% of revenue in Q3 2019.SaaS gross margin was $3.7 million or 62% in Q3 2020 compared to $2.5 million or 59% in Q2 2020 and $3.8 million or 67% in Q3 2019. SaaS gross margin was impacted by increases in our third-party costs and by our decision to maintain our support staff level through COVID-19 to be able to scale up operations as our customer dealership business rebounded. We expect our SaaS gross margin to return to pre-COVID levels over 2021.BDC gross margin was $0.3 million or 14% compared to $0.2 million or 11% in Q2 2020 and $0.3 million or 14% in Q3 2019. We believe we have opportunities to increase our BDC gross margins in 2021.Services and onetime gross margin was negative $0.3 million or negative 90% compared to negative $0.2 million or negative 170% and $0.1 million or 13% for Q3 2019. The decrease in services and onetime gross margin is due to the reduction in upfront fees we charged. We did this in order to remove one of the barriers of entry for dealerships and proceeding with the installation of and the training on our solutions. This decision was made with a longer view of mind, which was to secure higher gross margin SaaS revenues.Sales and marketing expense for Q3 2020 was 9% of total revenue compared to 6% in Q2 2020 and compared to 8% in Q3 2019. Sales and marketing expense for Q3 2020 increased as a direct result of new hires during Q3 2020. Quorum is also investing in a more cohesive and integrated One Quorum sales and marketing team to deliver cross-organizational synergy and streamlined initiatives. We expect that 10% as our sales and marketing expense is more indicative of our run rate going forward.General and administrative expense for Q3 2020 was 16% of total revenue compared to 16% in Q2 2020 and compared to 22% in Q3 2019. The decrease in general and administrative expense year-over-year is due to a reduction in salaries and benefits expense due to the COVID-19 pandemic as well as proceeds received and accrued as a result of the Canadian Emergency Wage Subsidy, or CEWS. We expect that the amount of CEWS that we received will decrease over time. However, efficiencies from our One Quorum efforts should offset the lost CEWS. And as such, 16% as a general and administrative expense is likely a good run rate going forward.Research and development expense for Q3 2020 was 3% of total revenue compared to 3% in Q2 2020 and compared to 2% in Q3 2019. We expect that 4% as a research and development expense is more indicative of run rate going forward.Adjusted EBITDA was a record $1.5 million for Quorum or 18% of revenue in Q3 2020 compared to $1.1 million, which was also 18% of revenue in Q2 2020 and compared to $1.4 million or 17% in Q3 2019.Adjusted cash income, or ACI, was $1 million in Q3 2020 compared to $0.6 million in Q2 2020 and compared to $0.7 million in Q3 2019. The reason for the increase in ACI in Q3 is due to increased ACOA proceeds compared to the prior year and due to SR&ED refunds, which are normally accrued as a reduction of capitalized salaries in Q2 of each year, but due to the Canadian tax filing extension, we didn't accrue these until Q3. Our ACI run rate going forward will more likely be in line with prior years as we continue to invest in our product, research and development efforts going forward.At September 30, 2020, Quorum had a cash and cash equivalents balance of $10.2 million, $13.8 million in current assets, net working capital of $9.3 million and a current ratio of 3.1x. Long-term debt was $9.2 million, including the $8.1 million that we have drawn on our $15 million BDC capital debt financing facility.With that, I'd like to pass it back to Maury.
Thank you, Marilyn. As I said in our press release last night, I want to begin today by saying how proud I am of all the Quorum employees who rose to the challenges presented by COVID-19 in Q2 and who were the driving force behind the recovery of our business in Q3.In reviewing our Q3 2020 results today, there are 3 key items that I'd like to discuss that impacted our quarter. Number one, in continuing to navigate through the impact that COVID-19 had on our employees and our dealership customers, we were able to drive strong SaaS and BDC revenue increases over Q2. Number two, we posted a record EBITDA. And number three, beginning in Q2 and also through Q3, we continued working on our key development projects. And as a result, we are now launching MyDeal and PowerLane.In the quarter, we also welcomed Mike Herenberg, our new COO, to the Quorum team, and I am pleased to report that he has already had a significant impact on our operations.For the first of my key items, I will discuss our revenue. As Marilyn mentioned, our Q3 total revenue of $8.1 million was a 36% increase over Q2 2020. If considering normalized revenue without the onetime COVID-19 discounts applied in Q2, SaaS revenue and BDC revenue would have shown an increase of 2.4% and 4.3%, respectively, in Q3 over Q2.The Q3 over Q2 SaaS revenue increase of 2.4% puts Quorum back to a 9.6% SaaS annual revenue growth rate. September 2020 SaaS revenue was $2 million or an annual run rate of $24 million. And as Marilyn mentioned, SaaS revenue represents 73% of our total revenue.As we continue to focus on increasing the SaaS portion of our total revenue, we're constantly looking at how we can capture more of the dealership wallet or monthly spend. One way we do this is by utilizing a beachhead strategy, where we sell 1 product solution and then work to deploy more of our product suite into that existing dealership. And because each of these products has a measurable ROI for the dealership, both the ROI and the stickiness of our solution increases within the dealership as they utilize more of our solutions.By continuing to focus on expanding the number of Quorum solutions utilized by our existing customers, we ultimately grow our SaaS revenue and thus also grow our monthly recurring revenue per customer, or MRRPU. As an example of our cross-selling sales momentum returning in Q3, at the end of Q3 we had 41 accelerated customers utilizing DealerMine service CRM software compared to 37 at the end of Q2. Similarly, 135 accelerated customers utilized Autovance Desk solution at the end of Q3 compared to 125 at the end of Q2.Turning to our BDC revenue. The 4.3% Q3 over Q2 increase puts Quorum's BDC annual revenue growth rate at 17.2%. Our BDC revenue will also see additional long-term growth as we deploy a comprehensive electronic message handling team of agents for AutoCanada in Q4. This new team of agents will grow the AutoCanada BDC team by an additional 10%, as noted in our press release of September 28. For additional perspective, at the end of Q3, the AutoCanada BDC team already represented 55% of our total BDC agents.Our largest challenge in the BDC is maintaining enough agents to meet our customers' increasing demands for our BDC services. In September, we opened a second BDC office in St. John's, Newfoundland to help meet the demand.I'd like to end the first point by highlighting again that together Quorum's SaaS and BDC recurring revenue streams represent 96% of its total Q3 revenue.My second key item is our adjusted EBITDA. During the third quarter, Quorum continued to tightly manage its cost structure and balance sheet. The result was that Quorum produced an adjusted EBITDA of $1.5 million, which was a record for the company. We realized some additional cost synergies from our One Quorum strategy, which leverage the economies of scale from our 3 acquisitions. We are realizing savings in corporate areas like banking, insurance and employee benefits. We are also finding operational savings by centralizing our use of specific systems as well as centralizing service providers. Additionally, we are finding marketing efficiencies through consolidating our marketing and trade show initiatives and expenses such as having a combined presence at trade shows like NADA.In Q1 2020, we collectively had a $385,000 NADA spend. And this year, the trade show will be virtual, reducing our NADA spend to under 10% of last year's spend. In this case, we are reinvesting the NADA spend in growing our sales and marketing team to, in turn, grow our SaaS and BDC revenues.My third key item is related to product. It is critical that we are developing solutions that are highly relevant for dealerships as they navigate through these difficult times. Our development team launched the Autovance, MyDeal and PowerLane solutions for our customers late in Q3 2020. Both MyDeal, a digital retailing solution that helps dealership customers purchase a vehicle online, and PowerLane, a service lane inspection tool that also provides videos and pictures to dealership customers of possible repairs to their vehicles, have had strong initial sales to date. Quorum's immediate market size for MyDeal is the 320 dealerships that use Autovance Desk and Quorum is also receiving inquiries from new dealership. PowerLane's immediate market is the 400 Accelerator dealerships.Together, the commercialization of MyDeal and PowerLane have increased the available MRRPU of our product suite by another $1,000 to a total of $7,000. This expansion of our product suite will help increase our share of the dealers' monthly wallet. Another benefit of this product development is the stickiness of our product suite increases as our dealership customers deploy additional Quorum products.In conclusion, Quorum has weathered the impacts of COVID-19 thus far by remaining resilient and focused on the critical value that our solutions bring to our dealership customers. We remain committed to our customers' success, and we will continue to develop and deliver solutions that will support them for the long run as they manage the new and evolving demands that this current environment brings. We also continue to monitor and analyze the economy and the automotive dealership market in hopes of executing our growth plans as fast as the market will allow us to, while diligently managing the financial impacts COVID-19 may continue to have on our business.Operator, I'd now like to open the conference to any questions from our audience.
[Operator Instructions] Our first question is from Gavin Fairweather with Cormark.
Maury, maybe just to start, I was hoping you could touch on the sales environment with respect to Accelerator and then maybe also kind of talk about the backlog for installs and kind of how the services team is booked up on that one.
Sure. Yes. So Gavin, the last 2 months for us, September and October, have been solid sales months going across the company, actually. We're seeing solid sales in every division. If you're talking specifically about Accelerator, we're currently sold out at a 3 install per month run rate. We're currently sold out until the end of February.
That's helpful. I mean it sounds like on the cross-sell front into the Accelerator base, you've got a number of different initiatives on the go DealerMine, Autovance and then the new products like Q Analytics and PowerLane. Is -- are you getting traction kind of across those different products? Or is it weighted more one-to-one than the other? Just curious for kind of your thoughts and how you're focusing on the cross-sell opportunity there?
Yes. And good question. Probably, we're seeing some of the biggest uptake on Autovance Desk and MyDeal. And I don't want to -- I want to be careful because PowerLane is doing quite well as well as is DealerMine's service CRM. So they're all selling at decent rates. But if I were to pick the one that's in the lead right now, it's Autovance Desk and MyDeal.
Got it. And I was doing some kind of back-of-envelope math on some of the spend percentages that were referenced in the introductory remarks. So is it fair to say that on the gross margin -- or sorry, on the EBITDA margin side, you're kind of getting to move that up towards kind of 20% over time, given your One Quorum initiatives?
Yes. I mean, Gavin, there's lots of things in play there, so I'm not going to commit to a particular EBITDA percent.I think we outlined sort of some of the pieces. But just to give you a sort of overall context on this, right, we are investing more, as we mentioned, as Marilyn mentioned, in sales and marketing. We believe that we have a lot of run rate in front of us, not only from a new customer acquisition point of view, but from a cross-selling point of view. And we believe we're undermanned on our sales and marketing efforts. So we are increasing that.From a product perspective, we're increasing our product spend a little bit as well. We want to offset as much as we possibly can those spends with our [ Q-elaborate ] project going on. And you have seen some great improvements when you look at our G&A percentage as a percentage of revenue.So yes, we'll do as -- growth for us is critical and most important, but we'll do as much as we can to keep our EBITDA percentages high at the same time.
[Operator Instructions] Our next question is from David Kwan with PI Financial.
Just want to -- I'm curious to get some color from you guys just on the trajectory of the business, kind of since -- maybe since the start of Q3 and maybe now into Q4, especially given what's going on with the surge in cases. If you've seen kind of a moderation in particular, maybe over the last month or so?
Yes. I would say, if we look at the very start in November, is it as strong as our September and October? It's close. Like September was just a fantastic month for us. So it's hard to compare to that one. We had some record -- and some of our divisions had record sales months in September. October was off, but still well above our -- not well above, but above our targets across the company. We look like we're on target to date in November. So I don't think we've seen a real softening. We're pretty comfortable with how sales rates are going, but we're monitoring it closely.
That's helpful. I guess are you having issues just -- is there more restrictions being put in place here in terms of getting into the dealerships? Because I think a lot of them still want kind of at least a significant portion of the installation being done in person. Are you seeing some of those restrictions impact your ability to go out and do that?
Yes. So David, if you go across our product suite, right, the -- probably, the product that is the hardest for us to install remotely, and I think we've talked about this in prior calls. The one that's hardest to install remotely is Accelerator. Our teams have worked really hard to be able to do a remote Accelerator install. All our DealerMine products are installed remotely. All our Autovance products are installed remotely. So the pushback that we're getting from dealerships is they do tend to favor having us on-site for Accelerator.And to your point, right, like will additional travel restrictions shutdown sold Accelerator deals and installation dates going forward? To date, we haven't had that happen. We've navigated around it. And then to date, we've been able to successfully remotely install and make sure dealerships are comfortable with us remotely installing all of our DealerMine and Autovance products.
Yes. I was talking mostly on the Accelerator side because, obviously, that's where I think customers, as you indicated, would look to have in-person presence there.As it relates to the newer products, the MyDeal and the PowerLane, it sounds like, in particular, the MyDeal, I think you'd said, we're seeing some pretty strong demand. How should we take a look at that in terms of kind of the ramp there in terms -- as it relates to contribution to SaaS revenue?
Yes. So David, it's probably a little early for us to predict that out. I mean we just released the products. We're already into mid-teens on both MyDeal and PowerLane in terms of installs or in-the-queue installs. So we're pretty comfortable that we're on a great trajectory here.But let's -- I'll keep everybody apprised in the future quarterly calls, and we're obviously watching this really closely to -- because we've got lots of optimism across our company, but also across our dealerships around these particular products.
Okay. I'm just curious, especially for the MyDeal in this environment that it's really important, so I don't know to what extent you might have had a nice pipeline of opportunities or backlog that you might have already have in place, so -- okay.Just 2 more questions. Any update you can provide on adding new OEM integrations?
Yes. We're in some conversations with a couple of OEMs, but under any NDA on both of those. So we're working on it. I just don't have anything I can publicly share yet.
Okay. Perfect. Last one, just M&A. Curious to get an update there as to your thoughts and kind of what you're seeing in the market out?
Yes. So once again, we're in conversations with 3 different companies out there, once again, under NDA. So I can't share anything at this point in time.We are starting to see -- now this is based on a relatively small sample size, but we're starting to see a few more companies come on to the market as well. But those conversations are early, early conversations yet.
Our next question is from Gavin Fairweather with Cormark.
A couple more for me. I appreciate that I couldn't pin you down on the EBITDA margins, but maybe we could chat about gross margins for a little bit.When I look at the SaaS revenue line, it's kind of back to, I guess, the pre-COVID run rates, but the margins are a bit lower. Can you just touch on kind of what's going on there? Is there some more third-party costs kind of running through your COGS and more support? Because it sounds like it's going to take a couple more quarters maybe to get back to where you were?
Yes. And that's our feeling, Gavin. So yes, we got hit in the quarter with a few more third-party costs that we -- through price increases. So we're working our way through that. I mean, in some cases, we'll pass those increases from our suppliers on to our customers, so that will help us get our margins back.In other cases, we -- as Marilyn mentioned, right, we were careful about ensuring that we had adequate support people in place and -- during COVID because we felt that we would be growing again post-COVID, and that's proven to be true. So that's impacted us.And yes, like you said, we believe it's a few quarters here for us to work through some things and start to move our SaaS gross margins back to pre-COVID numbers.
I guess I'm just curious, is that the other kind of DMS providers who maybe increase the rates on DealerMine? Is that kind of what's going on?
Yes. That would be a very good guess as to what's going on.
Yes. Got it. You touched on...
It's a sensitive area for me to talk about, as you can appreciate.
Understood. You touched on adding additional personnel to the sales team. I guess I'm curious kind of what the focus of the additional bodies would be? Would they be focused on the U.S. or going after kind of OEM deals or Canadian dealer groups? Maybe just to the extent that you can talk about where you feel like you need some additional staff. Maybe it's all of the above. Just your thoughts there.
Yes. Yes, it is a little bit, but I'll give you some more color. So we are adding to our sales team in the Canadian marketplace a bit. Especially in our DealerMine division, we're adding another salesperson and we're also adding a demo person as well. So we're adding there.Our cross-selling team, we believe, right now, is adequate. We're adding to our marketing team and just really increasing our marketing throughput to -- with the ultimate goal here of driving a lot more leads to the top of the funnel.In addition, in the U.S. marketplace, we've already added to our Accelerator U.S. sales team, and we have plans to add 1 more person in -- to our DealerMine team as well.And yes, I think -- well -- and then you mentioned OEMs. So we are changing some responsibilities for some different people within our organization and giving them responsibility for OEM relationships, too. And some of that will impact S&M spending as well.
Got it. That's helpful. And then just lastly for me. Could you just touch on the addition of Mike in the COO role and kind of what his responsibilities are being and maybe kind of how your day-to-day has evolved with him being in the seat there in that new role?
Yes, you bet. So Mike is responsible for all of our installation and training efforts; all of our support efforts; all of our network infrastructure, underneath all of that, actually, company-wide; network and software infrastructure company-wide; responsible for our account management as well as the BDC. And then there's a few other pieces in there, too, but those are sort of some of the key responsibilities.So for him, the focus is on, number one, getting us more scalable as an organization. I think we've talked in the past about scalability issues around Accelerator and being able to do more installs as long as sales demand is there. So just scalability of the organization as a whole.Additionally, another responsibility for him is as we complete more acquisitions, to be able to onboard those acquisitions into a model that is fully scalable. And -- yes. And so those are some of the -- sort of the key focuses that he has.
And so you have a bit more extra time. Where you're spending that extra time? Which areas are getting more attention from you?
Well, I don't have extra time yet, but we're working through that. We're getting there.
Our next question is from Gabriel Leung with Beacon Securities.
I guess a lot of things have been touched on, but Maury, maybe I'll just ask a question in terms of your cross-selling efforts or upselling efforts, I guess, because that's obviously going to be a key growth driver for you guys. So like you said, from a dealer's perspective, it obviously makes a lot of sense to add some of these new -- or add more modules to their existing deployments for them from an ROI perspective.So I'm curious, in instances where customers have said, no, I'm just wondering what the pushback has been, number one. And number two is, that's the main question. And beyond that, what are the hurdles? Are they really within a dealership for you to upsell more stuff?
So your question around pushback. So -- I mean, Gabe, we still find out there in the marketplace, right, is there are people -- there are dealers that are very cost conscious in these times, and I get that. I understand that particular perspective. So there's going to be that particular pushback of just being very conscious of not wanting to introduce additional costs into their organization.So I think that's probably about the only pushback that we seem to be getting. Like when we're presenting -- when dealerships are expressing interest and we're presenting, we're doing quite well at closing these deals. They just take a bit of time to close. And then, of course, get the dealership comfortable with deployment dates and getting them installed. And then the dealership, of course, realizing the ROI from them and us being able to book the SaaS revenue from.
Do you ever run into...
Did I answer your question?
Yes. No. That's great feedback. I'm just curious, are there a lot of scenarios where you're coming, especially with some of the newer modules going head-to-head with an incumbent solution provider or is it typically greenfield?
No. No, we do. We definitely come -- there's definitely incumbents. We're seeing that in some cases in the digital retailing space. So that's what MyDeal plays in, right, is -- competes in is the digital retailing space. And we have some of our dealers out there that have gone to other solutions in the digital retailing space and just because we couldn't get the MyDeal product to market any quicker than we did. So they've decided they needed to go to a different solution.We are seeing in some of those cases, those dealerships come back to us and now talk to us about actually making the switch. So we will, in those particular cases, bump into contractual obligations that dealership might have with the existing provider that they chose prior to MyDeal. But we're working through that. And we're seeing -- we're having really positive conversations. I mean once again, it goes back to our overall model, right, of everything being integrated. When you go to a competitor of MyDeal, you're buying another disparate solution and putting it into your dealership and -- whereas MyDeal is just beautifully integrated into the rest of our suite. So our dealers really recognize that. And as a consequence, we're -- we believe we'll be winning some of them back.
Well, some of these -- you mentioned that there is some cases where there's an incumbent, whether it's MyDeal or PowerLane or whatever upsell module. Are there typically long maintenance contracts? If they are on the DMS side? Or are they typically shorter term in nature that they maybe able to get out of?
Well, you said longer-term contracts on the DMS side. So...
Sorry, are they as long as DMS contracts?
No. No, they're not. No. So a lot of times we'll see a 1-year contract on third-party solutions versus as we've talked about in the past, right, a lot of -- especially with our 2 main competitors out there, a lot of our DMS contracts that we come up against are 3, 5 or even as long as 7 years. That isn't the case when you're looking at other solutions.I'm going to group them in and call them third-party solutions, right, whether it'd be a digital retailing solution or service lane solution or so on and so forth. Those are normally a year, but a lot of times those can even be month-to-month.
Got you. And one last thing. Traditionally, on the Accelerator DMS side, it's -- your price point has always been much more attractive relative to your main competitors on these other solutions. How are you pricing the product relative to the other third-party solutions that are out there?
Yes. So we maintain that same pricing strategy. And that our price point is going to be less than other third-party solutions. No, not every single one, but generally speaking, it's going to be less.
Got you. That's really helpful. And congrats on the recovery in Q3.
Yes. Thank you. Yes. No, I was pretty pleased with the quarter and how it turned out. I mean the next challenge for us is to up that organic SaaS growth rate, but we think we've got a good plan in place to start doing that.
[Operator Instructions] And it looks like we have no further questions. So I'll turn the call back to the presenters for any closing remarks.
All right. Well, thank you, everybody, for attending today's conference call. And like I mentioned before, we're pleased with the quarter, and we're excited about the sales prospects going forward. If anybody has any follow-up questions, they can always contact me. But I appreciate everybody taking some time out of their day to attend today's conference call.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.