ACI Worldwide, Inc. (ACIW) Q4 2015 Earnings Report, Transcript and Summary

Good morning. My name is Heidi, and I will be your conference operator today. At this time, I would like to welcome everyone to the ACI Fourth Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Vice President of Investor Relations, John Kraft, you may begin your conference.

Thank you, Heidi, and good morning, everybody. Today's call, like all of our events, is subject to both Safe Harbor and forward-looking statements. You can find the full text of both statements on the first and final pages of our presentation deck today, a copy of which is available on our website as well as with the SEC. On this morning's call is Phil Heasley, our CEO and Scott Behrens, our CFO. Before I hand the call over though, I want to remind everybody that ACI will be attending the Annual Raymond James Institutional Investor Conference in Orlando on March 7 and 8 and that we will be hosting an Analyst Day at our headquarters in Naples, on March 10. With that, I'll turn the call over to Phil.

Thank you, John. Good morning and thanks for joining our call. Quarter four was a strong quarter and a nice finish to 2015 for ACI. The market demand for our solutions continues to grow and we exceeded our booking expectations with 19% growth after adjusting for foreign currency fluctuations. SNET grew 10% in quarter four which represents our strongest SNET growth of the year, setting a new bookings record. SNET for the full year grew 8% after adjusting for FX. In particular, the Merchant Retailer segment shows the strongest growth with total sales bookings growing 93%. With the recent acquisition of ReD and PAY.ON, we're building on ACI's long history of helping merchants with their brick and mortar in-store payments. Now, we can deliver a seamless and secure omnichannel payment experience in any retailer modality; in-store, mobile and online with both on-premises and hosted SaaS options for delivery. We have a growing pipeline in the merchant space and we expect this momentum to continue. And as we've discussed before, retailers are increasingly preferring to purchase our solutions on a SaaS hosted basis, which lowers their complexity and risk and shortens their time-to-market. As a result, we've accelerated our efforts to broaden our global SaaS footprint with best of class, highly secure data center capabilities and will be launching our new European data center later this year. We also signed a very important and strategic universal payments contract in quarter four with one of the largest banks in Australia. This long time customer is utilizing ACI's UP Framework for Immediate Payments and as a part of a broader next-generation project. This contract is another validation of our UP Framework can help modernize aging banking systems by delivering better efficiency, accelerating speed-to-market and improving the end user experience. Our cash flows from operations grew 23% in 2015 to $183 million and our 60-month backlog grew $162 million over last year on an organic constant-currency basis to $4.3 billion, also representing a new record. 2015 also represented an important year strategically. In addition to the e-commerce and omnichannel benefits I just discussed, the PAY.ON acquisition also brings us increased global payments reach with hundreds of different payment connections. Between our existing ACI solutions and the PAY.ON capabilities, we are able to direct payments across more payment networks in more places around the world than anyone, not only for the e-commerce market but also for the global financial institutions as well. So far the PAY.ON acquisition is performing better than our initial expectations and we look forward to marketing its capabilities across our global distribution network. And while it is not new news that over the last few years, banks have been slower to respond to the disruption in the marketplace, we believe that the movement within the Retailer segment is actually starting to pressure the FIs to act as well. Leveraging our established and trusted position on both ends of the electronic payment transaction, ACI is uniquely situated to help our customers with their payment modernization efforts. As we continue to pursue the FI market at full speed, we have launched new initiatives designed to make it easier for these FIs to reinvent their payment systems. We have done so by both offering our universal payments technology to our legacy BASE24 classic customers as well as offering Linux support, all-in one-end two-end solution. This combined offering allows FIs the migration path that is much lower risk than a full conversion, something very enticing to the market according to our pre-launch research. Lastly, our previous announced plans to sell our Community Financial Services operation along with our gain from the sale of Yodlee Investment provided us the growth capital to reinvest and position the Company for even stronger growth in the future. Examples include the expansion of our SaaS capabilities in Europe and our investment in cyber security. In addition, our significant financial flexibility enables us to continue to execute against our share repurchase plan where we currently have $138 million available on our authorization. In summary, we see accelerated market interest from financial institutions and intermediaries, merchants and billers as they look to update their payment systems and address the real-time expectations of today's consumers. In 2016, we expect accelerating organic growth as well as margin expansion as we help our customers capitalize on the opportunities created by significant industry disruption. I will now hand the call over to Scott, who will discuss our financial results and our 2016 guidance. Thank you.

Thanks, Bill and good morning, everyone. I first plan to go to the highlights of the fourth quarter and full-year 2015, then provide our outlook for 2016. We will then open the line for questions. I'll be starting my comments on slide 6 with key takeaways from the quarter. Starting with sales, our new sales bookings were up 10% in the quarter after adjusting for foreign currency fluctuations, with particular strength in new account and new application sales. And as Phil already mentioned, we signed a Key Universal Payments contract with one of the largest banks in Australia who will be utilizing ACI's UP Framework for Immediate Payments for its next-generation switch. Our total sales bookings including term extensions were up 14% in the quarter after adjusting for FX. These sales bookings contributed to a very strong growth in backlog with 60-month backlog of $4.3 billion and 12-month backlog of $918 million at the end of the year. Excluding the PAY.ON acquisition and adjusting for FX, our 60-month backlog was up $110 million during the quarter and our 12-month backlog was up $27 million. Revenue of $309 million was up 8% over Q4 2015 after adjusting for FX and adjusted EBITDA of $115 million was also up 8% over Q4 2014. Turning next to slide 7, with key takeaways from the full year. For the year, net new bookings and total sales bookings set an all-time high for ACI with net new bookings up 9% over last year after adjusting for FX. And if you exclude our CFS business, our bookings were up 11%. Total sales bookings were up 19% after adjusting for FX or up 21% excluding our CFS business. For the year, revenue was up 5% after adjusting for FX or up 7% excluding our CFS business. And adjusted EBITDA of $260 million was essentially flat with last year or up 2% excluding our CFS business. Operating free cash flow of $143 million was up 6% from last year or 8% excluding our CFS business. In a particular note, we reported strong GAAP cash flow from operations, up 23% over last year. We ended the year with $102 million in cash and $939 million in debt. During the year, we drew down $181 million on our revolver for the acquisition of PAY.ON and paid down $134 million for a net increase in debt of $47 million compared to year-end 2014. During the year, we received cash proceeds of $35 million and recorded a gain of $24 million from the sale of our ownership by positioning Yodlee and subsequent to year-end, we announced the sale of our CFS business for expected proceeds of $200 million. The cash proceeds will be available for normal uses of cash flow, including debt repayment, share repurchases, of which we still have $138 million available on our authorization, and one-time CapEx investments, including our new data center and cyber security investments. Finally, turning to slide 8 is our outlook for 2016. For your financial modeling purposes, we have provided a pro forma view of 2014 and normalized for the acquisition of PAY.ON, the divestiture of CFS and to reflect 2015 revenues at our year-end foreign currency change rates. And as a reminder, with our mix of foreign currency denominated revenues and expenses, FX is generally a top line revenue phenomenon that has minimal impact at the margin level. So for the full-year 2016, we expect revenue to be in a range of $990 million to $1.02 billion, excluding any revenue contribution from our CFS business. This representing a growth in the 4% to 7% range. We expect adjusted EBITDA to be in the range of $265 million to $275 million, again excluding any contribution from our CFS business. Our adjusted EBITDA margin will be approximately 31% or 100 basis points higher than our pro forma 2015 results. We expect our revenue phasing by quarter to follow our historic seasonality with Q1 revenue expected to be in a range of $205 million to $215 million excluding any contribution from our CFS business. And depending on our close date, CFS may contribute up to $23 million of incremental revenue in Q1. And lastly on slide 9, you'll also find we've provided additional data for your 2016 financial models. We expect GAAP interest expense to be approximately $42 million with cash interest payments of $36 million. Capital expenditures are expected to be in a range of $50 million to $60 million, which excludes one-time investments in our European data center of approximately $20 million, and cyber security of $5 million. We expect depreciation and amortization in a range of $95 million to $100 million and non-cash compensation expense is expected to approximate $48 million for the year, including $6 million related to the stock consideration and the acquisition of PAY.ON. Pass through interchange revenue should approximate $140 million. We expect our GAAP tax rate to be approximately 35% for the year with cash taxes in a range of $25 million to $30 million. Our diluted share count should approximate 120 million which excludes any future share buyback activity. And lastly, our guidance excludes approximately $15 million in expected one-time integration divestiture-related expenses for PAY.ON, CFS and our continued data center and facilities consolidation and bill payment platform rationalization. Following the sale of our CFS business, ACI and Fiserv will be operating under a Transition Services Agreement for a period of time and will disclose financial detail separately from our ongoing operations. So in summary, we finished 2015 strong and look to accelerate our growth in 2016. That concludes my prepared remarks. Operator, we are ready to open the line for questions.

[Operator Instructions] Your first question comes from the line of George Sutton from Craig-Hallum Capital. Go ahead, your line is open.

Thank you. Given that I have just one question, I will ask a big picture question to Phil. Phil, on your last call relative to the sale of CFS, I think you concerned people, particularly, maybe people who weren't as familiar with the story when you said that the banks had been slower to make decisions and therefore you were pivoting to retail as sort of a better option. Could you kind of put into context of what you really see in terms of the bank interest in moving forward with some of your, like the UP platform as an example relative to retail, which we now is a big opportunity.

Sure, I will George. And you and everyone else can have a follow-up question. That was administrative error on our part. So we’re not trying to limit questions. George, to begin answering your question, we did about $1.25 billion in sales this year, alright just around $1.25 billion. A huge amount to that was renewing our franchise business which is largely with the FIs state and my comments before sincere was saying that the banks are very highly regulated at the moment [indiscernible]. I think they're a little taken back by the - how quickly this real-time digital world is moving. I think they may have been concentrating on mortgages for a long time and what not. So I stick with my statement that I believe that they're moving slower than they should move and they're potentially losing opportunity. But their renewal and growth business with us has never been strong, has never been stronger. My frustration has been with the pace in which they are - in which they are transcending to the next level and losing opportunity for the - what I perceive as potentially losing opportunity for themselves, right. Now, we are doing - we can't names, there are some real leaders in the industry that are stepping out and if you kind of look at the products that they're coming out with and what not, it's clear that they are catching up and getting in front of what's going on and we are proud to be involved with them. The point I was trying to make last time was that I was surprised, I told you we're up 93% and we have been - on the retailer side of the business, and that business is accelerating. It's surprisingly how quickly - I somewhat overestimated the speed in which the banks would embrace this. I wildly underestimated the speed in which all clients of e-commerce and retailers would embrace it and bring margin back to their side of the equation. And with PAY.ON, it's kind of interesting. I told you we have over 300 endpoints that we add onto our end-point. That has not been lost on - that's not been lost on the - some very smart FIs and it's not been lost on scores of global retailers in terms of what that means. It eliminates geography as a disadvantage. And it also allows people to - lot of people say the battle is between card present and card-not-present. The truth of the matter is, everyone is building a card-not-present - call it an omnichannel, but they are building a card-not-present situation so that when the incidental is card-present, well guess what, card-not-present systems that are totally modernized, you still don't need your card when you are present. And it's becoming more and more convenient to use your card, you want to use your card or not. You just have to watch TV to see some of that stuff. So it is really accelerating very fast. The thing about PAY.ON so important is that it's globalized stuff, very fast. We can let Asian retailers be much, much more powerful e-Commerce players to Europe and the US and US ones to Europe and other parts of the world. So suddenly speed of light is becoming really - real-time speed of light transactions are becoming more and more the norm. So the future is very, very bright. I mean, it's a - the world doesn't change as fast as the people who see the changes but we are at a point right now where the velocity is really picking up and we're feeling good about it.

Yes, George, the only thing I'd add to that, it's not that any sort of pivot in our strategy, it’s just that the retailers are frankly moving faster right now. And that is representative in our sales bookings where our merchant retailers sales doubled year-over-year, now albeit off of a smaller base, but it's not a change in direction and strategy, it's still very core to the banks. But the retailers are certainly moving along faster.

Okay. You mentioned - Phil, at the end of your comments, you mentioned that you see accelerating growth and margin expansion and guidance would suggest a modest margin expansion not necessarily that acceleration. I wondered if you could put that into a time context.

Well, margin, well, I think we'll put it, I'll say it two ways - and the math, you have the data that'll push it up. The elimination of taking the non-core non-strategic CFS out of the mix actually changes the margin gain, George, right. There is a very noticeable margin increase. That's why we gave you 2014 as well as 2015 in the package, right so that you reset it. So we start out at a significantly higher margin to begin with and then we say we're going to deliver another one - on top of that, we're going to deliver another 1% or so of EBITDA on top of that. So it is actually really - it is really significant. As a matter of fact, it's, I think, it's kind of important to take a backwards look because the business has very different metrics with and without CFS on a backwards as well as a forward look.

Yes, and what I would add to that and we put this in our - in the slide material George, is really what we'll talk about as we step out from a roughly 28% margin with CFS, you take it out and you step up to a 30% margin from there we’re growing 100 to 120 basis point expansion next year. And then on the revenue side, that is moving up - taken ranges well up to the 4% to 7% range.

Your next question comes from the line of Brett Huff from Stephens Incorporated. Go ahead, your line is open.

Quick question, a little bit to follow-up on the last one. The 4% to 7% growth, I think that includes inorganic and sort of currency impacts and if we adjust for that, I think the organic constant currency guidance is something like 2.5% to 3.5% [ph] if my math is right. And if that's the case, and we came off of 7% organic constant currency growth rate in the fourth quarter, are we just being conservative or is there a deceleration of something that we just need to pay attention to that we're trying to accommodate and what looks like from a run rate point of view kind of we're either being conservative or I'm not quite getting something. Can you just shed some light on that for me?

Well, Brett, it's not a deceleration of revenue or we can have quarterly seasonality differences. The fourth quarter was very strong on a comparable basis. But in our earnings slide materials, we actually do a walk where we annualize for PAY.ON. So we're adding it into our pro forma and we show the FX impact. So what we're assuming in our guidance is that we do not have CFS in, but that we have PAY.ON in for the full year and that's representative of 4% to 7% growth rate.

So the 4% to 7% is growing off of a base of an adjusted 2015 that both excludes CFS and adds PAY.ON as if it's a full year?

Exactly, that's on slide eight of our deck.

Okay, I appreciate that clarification. And then a bigger picture question. We haven't talked about the direct connect opportunities in a while, because I think the retailers have really commanded a lot of attention given the success that you are having with them. But wanted to touch on the direct connect situation and get any update from you all on that?

Well, we put out a little white paper on PAY.ON because we thought the market understood half of the reason we purchased PAY.ON and we didn't think they understood the other half of the reason we purchased PAY.ON. The integration of PAY.ON into our capability actually is a major step forward in terms of point-to-point. It actually makes the bank less the driver and although bank-to-bank is one scenario of point-to-point, but what it really does is with all its and now our origination and destination points, our ability and of course you have to use the EPS 2.0, the ability to in effect switch from any point of origin to any point of destination is not a goal anymore, it's a reality, we can actually do it. Now what happens is that we will be very silent in terms of an awful lot of these point-to-points because the more people want point-to-point, the less they want to publicize it, because if you think on the debit side of the world, that debit is branded four or five different ways. And if point-to-point is one of the utilities, that's something you can advertise or it's something that you can feel very comfortable not to advertise. So we have never been further along in terms - we were there. Our ability to provide point-to-point now with the integration of PAY.ON as well as having 2.0 out and having the switching speeds that we have under the Linux-based EPS. There is no point-to-point volumes that we don't think we could handle.

Great, thank you.

Your next question comes from the line of Wayne Johnson from Raymond James. Go ahead. Your line is open.

Good morning. I thought that the fourth quarter results looked pretty good on the revenue side. One thing that did surprise me a little bit and I apologize if I missed this, if you can provide some clarification on the sales and marketing line, that was kind of well above what we were looking for. Can you talk a little bit about that as it relates to the fourth quarter and how we should think about that line item in 2016?

Sure. I'll answer it and then I will let Scott answer it, is that we landed up paying massively more commissions than we had expected because so many of our people exceeded their quotas and whatnot for the year, Wayne. And so the way you should think about that in the future is that it should either go away or we should or we'll do a lot better in terms of our growth and we'll be confronted with having to pay it again. Because we pay awful lot of our commissions at the time of sale, so it's not a trailing, it's contracted volume we pay for right upfront.

It's a high quality problem to have it sounds like.

Yes, the only other thing I'd add to that is, yes, I mean our total sales booking that includes term extensions was much stronger than we thought and then it's a mix on the new sales. If you look at our breakdown of the new sales bookings, we had much higher new account and new application sales, so either a new net new logo or a cross sale versus just add-on sales at the existing business. So the mix came in much higher on net new accounts, new apps which drove commissions higher as well.

So, Wayne, we are moving away from that old stuff that you always give me a hard time about and this our new age stuff that's coming in.

All right, good. Would like to hear it. Well done, sounds like you have a favorable trajectory in that regard. Follow-up question if I could, please. So could you categorize the pricing environment for renewals and for new accounts and new app sales?

Yes, as a matter of fact, I think, we could win a little bit of an award as a management team for making the right economic decisions in 2015 versus selfish personal decisions. Everyone is suffering through big FX changes and whatnot and I think you know we manage true kind of a natural hedge. We will only do as much business in a country in the local currency as we have expense in local currency. So we're very unsophisticated, but very durable in terms of how we hedge. We did not adjust our pricing as related to our book of business, but what we did do and I think our financial show it is that we took a lot less in the way of ILF and we let the customers pay over the term. That's why our backlog increased the way it did. So instead of taking the revenues upfront, we're taking it over the whole five-year period. So it did hurt us in terms of the fourth quarter revenue. It was actually a negative, but really a positive in terms of holding our pricing and having that money coming back to us over the next 19 quarters instead of booking at the first quarter, Wayne.

Okay, thank you. I will get back in queue. I appreciate it.

[Operator Instructions] Your next question comes from the line of Peter Heckmann from Avondale. Go ahead. Your line is open.

Good morning, everyone. A follow-up on to that last question. As regards waiving ILFs, was that something that you did in 2015 to respond to the FX situation or is this a permanent change in business model?

It's a little bit of both. We did two things in ‘15. We did respond and mostly in the second half of the year, the way I just described. But we also came out with that coupling program where we're putting the BASE24 classic and EPS under a combined offering. And what we've told our customers is that, if they increase - and I don't know if I should tell the number, but if they increase by a certain percentage, the volume they contract for over the next five years, we will actually go full subscription with them, that is new volume not slope volume. And so that will increase the amount of subscription as a percentage that we have. We also are given the opportunity just to contract the way they historically contracted. So we are going both ways. But we've gone, I guess - if you look over the last two or three years, revenue from sales has continued to become less and less - it's become a small and smaller part of our business. And we expect that to continue. So we tend to create more value than we do current period revenue growth, but you can't feel bad about that because once you're two and a half years into every one of those changes, it's a permanent CAGR growth for us. It's permanent growth for us. So it's a tough - sometimes it's tough personal decision to make, but it's an easy economic decision.

Okay, that’s helpful. And then as a follow-up on the merchant side of the business, can you - I would assume these are larger retailers, but can you talk about in terms of what types of retailers would be most interested? Can you talk about different geographies that's currently, primarily in the UK? And then as well, are the retailers typically big ticket, small ticket and do you expect to design what we would consider to be relatively potentially large retailers in 2016?

I will tell you that our retailer business was very strong in Asia-Pacific, it's very strong in Latin America, but we're doing more business than ever in the US. And in the US, I would say our spectrum of retailer size is probably from mid-sized retailer up. So it's a very large population of retailers. In Great Britain, we've always had a very - now we probably have 9 of the 10 largest retailers already and that's more expanding our relationships with them. On the Continent, we have signed some very, very large retailers and what not. So and may show up today in the sale side, but the implementations are a little bit out. So I would say that it's - whereas Europe, we are very strong and we've had some good stuff. Europe was probably the weakest of our growth around the world although it wasn't poor, right. And then we had a - from a percentage standpoint, perhaps the largest growth came out of Asia-Pacific and then Latin America after that.

Great. Thanks for your update.

[Operator Instructions] Your next question comes from the line Paul Condra from Credit Suisse. Go ahead, your line is open.

Hey, thanks. Good morning gentlemen. I wanted to ask a little bit about in the financial verticals just given recent commentary about credit loss provisioning going up, general economic growth fears, how that's translating into your conversations with bigger banks in the way that they're thinking about IT spend and just any detail or color you can provide around that?

I don't know if you know, but I used to be banker. I mean, we're at the period right now where fee revenue and not nuisance fee revenue should be very, very important to the banks, which means that payments should be accelerating on the total poll of interest. We are seeing increased capital spending because the best elixir to having higher credit cost is having higher transaction revenue. So it's natural versus our natural plus what I was speaking about before - it's a little bit like the old introduction of credit card days. If they don't respond - if financial institutions don't respond to the changing payment environment, they are going to start losing share. So you're seeing larger - the leaders are already investing heavily and what not, the followers are the ones that don't like to do anything first, they are beginning to increase their spending noticeably, I guess is the way I would say it.

So when you say increase in capital spending, you don't mean necessarily as a whole, but just towards the more payments piece of their idea?

Yes, we have no idea what their total spend is, we only get to see what our universe looks like and our universe seems to be and not seems to be - it's getting larger. And so we don't know whether that's a marshmallow effect, someone else is getting less and we're getting more, but we're seeing more. And we're seeing strongly more in parts of the world that have just said it's time to re-engineer our payments.

I apologize, because I don't have your slides in front of me, but as you look at PAY.ON's growth rate in 2016, the expectation that business - that growth will accelerate beyond that looking out to 2017 or sustain that growth rate.

Well, we've already presented that 35% growth rate in 2016. So I mean, that's pretty healthy growth rate relative to the rest of business. I don't think we'll project to this point beyond that.

Can you give any commentary just about momentum or I mean, I know, we've grown up to small base, I'm just kind of curious how do you think about maybe a longer term trajectory there?

Well, I'll say this much and maybe Scott will say, ReD has markedly exceeded its expectations. And the brief time we've had PAY.ON, we are above expectations at this point. And our core merchant offerings are like we said we are up 93%, so they're above expectation. I don't know what - is there anything?

The only reason I'd say is that gets into our - the fact that the merchant retailers are buying it at an accelerated cliff and so combining the ReD retail decision assets as well as PAY.ON assets, they are both growing at our fastest rate right now.

My biggest issue in the retail space is that they are - I have to increase my speed of implementation, right, that is my biggest worry that I have in that category. So it's not whether the business was out there, is that we've got to scale to meet the demand that's there.

Okay. Maybe just last one, just comment on the comp competitive environment that you're seeing in PAY.ON just given the business is out there, you're bumping up, so are lot of other players, can you mention any competitors that you're seeing?

Well, there's plenty of players out there, but we're more of an orange merchant than we are a market player. So the people who are interested in us are interested in white labeling. We don’t - PAY.ON is not a branded offering in the marketplace, we facilitate branded offerings in the marketplace. That's like the point-to-point I was talking about before. So I'm sure we have competitors, but our main market is actually facilitating people who want to be white labeled in terms of our capabilities.

Thank you.

Your next question comes from the line of Brett Huff from Stephens Incorporated. Go ahead, your line is open.

Hey, guys, just one quick follow-up. And Phil, I think I heard you right on this, but wanted to make sure I did. I think a question was asked before as are you all pivoting from banks to retailers on UP and I think the answer was not pivoting that the bank demand is good, it's just that the retail demand is better right now and so it's really more additive than either or, is that the right way to think about that?

That's correct. That's absolutely. If you think about as a teeter-totter, I've always seen this is as a teeter-totter that was heavy-weighted towards the bank side and lighter-weighted towards the merchant side. We've suddenly - because the same - it's two ends of the same solution. And we've suddenly seen a ton of weight come over to the merchant side and we've not lost, I just told you we had a record year in renewing our bank business, it is the innovating up to the next level, I think there is still a lot, a lot of opportunity on bank side for them to progress and the retailers are just moving much faster than we expected them to move.

And then one final question, I think in the last call you said you had, I believe the number was couple dozen conversations going with large banks on the UP product. And that we expected one to close kind of in the next couple quarters. Can you give us an update, even just qualitatively on kind of where we are there, as you know, folks are just, they're watching closely and they're watching closely for that big US bank deal [indiscernible]?

Well, a big UP deal did close in the specific market, a very big UP deal closed there in the fourth quarter and there are a couple dozen conversations taking place. And we have - so we have in England and France, there are two major, major bank one in each country that are also moving and there is dialog in the US. I mean, I think we both know this happens the let Mike try it mentality on big technological changes is still alive and well. And as a matter of fact in Mexico we're also progressing to a large UP installation. So they are coming Brett. The inventory dialog is actually increasing not decreasing. And one by one they are coming off. The deal in Australia is a very big deal and it really validates what we're doing in UP. And what's going in Great Britain and France are also. The one in Latin American is nice, but it's just not that big. It will hold your and it's up and running but it's just not that big to say oh, wow, we've invented the world. So that's going well.

There are no further questions at this time. I turn the call back over to the presenters.

Thanks everybody. We look forward to seeing folks in the coming weeks.