Digital Turbine, Inc. (APPS) Q1 2019 Earnings Report, Transcript and Summary

Good afternoon and welcome to the Digital Turbine’s Fiscal 2019 First Quarter Results Conference Call. All participants will be in listen-only mode. [Operator Instructions]. After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Brian Bartholomew, Senior Vice President of Capital Markets and Strategy. Please go ahead.

Thanks, Kate. Good afternoon and welcome to the Digital Turbine first quarter fiscal 2019 earnings conference call. Joining me on the call today to discuss our results are Bill Stone, CEO; and Barrett Garrison, our CFO. Before we get started, I would like to take this opportunity to remind you that our remarks today will include forward-looking statements. These forward-looking statements are based on our current assumptions, expectations and beliefs, including projected operating metrics, future products and services, anticipated market demand and other forward-looking topics. Although we believe that our assumptions are reasonable, they are not guarantees of future performance and some will inevitably prove to be incorrect. Except as required by law, we undertake no obligation to update any forward-looking statements. For a discussion of the risk factors that could cause our actual results to differ materially from those contemplated by our forward-looking statements, please refer to the documents we file with the Securities and Exchange Commission. Also, during this call, we will discuss certain non-GAAP measures of our performance. Non-GAAP measures are not substitutes for GAAP measures. Please refer to today’s press release for important information about the limitations of using non-GAAP measures as well as reconciliations of these non-GAAP financial results to the most comparable GAAP measures. Now, it is my pleasure to turn the call over to Mr. Bill Stone.

Thanks, Brian. And thank you all for joining us today. I want to start with our stated goal which is to build a growing and profitable business. Our June quarter was our fifth consecutive quarter of positive adjusted EBITDA with 46% revenue growth year-over-year despite several headwinds. I am going to break my comments out into three areas. First is some commentary around our new agreement with Verizon. Second is a recap of the June quarter. And final will be some operational commentary around our three growth levers of devices, new products and our media business. First, I’m pleased to announce we’ve reached agreement with Verizon on a new four year deal that will go through August 2022 and are in process of executing the agreement. This new agreement will not only cover our current products but also includes new products that Verizon is interested in, such as Single Tap, Folders, notifications and post-install actions. We expect this deal to be accretive to revenue and gross profit over the term of the contract. There are incentives for us as we achieve higher revenue tiers to improve our revenue share and gross margin percentage. The lowest revenue tiers are identical margins to our prior agreement. In other words, there are no commercial terms that are unfavorable to our prior agreement, only upside opportunities for us. We are also exploring additional product collaboration opportunities at Verizon's request that would be incremental to this agreement. We are processing some minor administrative details on the agreement and anticipate filing an 8-K in advance of the expiration of the current agreement next week. Next, our June quarter finished at $22.1 million in revenue, up 46% over prior year and $0.2 million in positive adjusted EBITDA. If I break out the headwinds and tailwinds from the quarter: on the headwind side, it was disappointed sales of a key flagship device; our higher margin international revenue partners performed below our expectations; and finally, delay by one of our US partners for a one-time expansion of Single Tap capabilities with a major social media platform. On the tailwind side, I was pleased to see our revenue per device or RPD in the United States of $2 which compares to $1.32 for the same quarter last year. This is a fundamental health metric of our business that showcases advertiser demand for our platform and a key driver of growth. Other tailwinds included very positive momentum with AT&T, contribution from other products that was less than 5% of revenue a year ago and now over 15% of revenue, and strong results from our large social media partner and large US operator. Now, turning to the current and future quarters. We see three main growth drivers from our platform: more devices; more products; and more and deeper media relationships. First on devices, we added 24.6 million devices in the June quarter which now brings us to over 175 million devices in our base. We have recently signed contracts with seven OEMs that represent an annual opportunity of 15 million incremental devices. Some of these have already launched in the September quarter, and all will launch this calendar year. I’m excited about these launches as they will be with multiple versus just a single product. The pipeline is also very encouraging with numerous high-profile OEMs very deep in the pipeline process. We've also received greater than expected inbound interest for expansion of our platform into other types of screens and our product and R&D teams are exploring moving beyond just smartphones. Our second growth lever of products, as I mentioned earlier, a year ago, 95% of our revenues from our O&O business were from dynamic preloads. While that product continues to experience revenue growth, its overall contribution has declined now to 85% as we see ramp in our other products. In particular, Single Tap, Folders and post-install actions are showing nice growth. Barrett will comment on the margins in his remarks, but over the longer-term as these products ramp, this should be a benefit to our gross margins. We see this as a growth driver for all partners but in particular a growth driver for our existing US partners where their device growth may be muted. While still early days, we’re seeing conversion list of 50% on Single Tap proving that a better user experience drives better results for advertisers. In particular, we are excited about what we are calling [wrap to app], where consumer can be on a mobile website such as ESPN or Delta or Yelp or alike and get a richer native application driven to their device via Single Tap while staying in the mobile web if they so choose. This drives higher engagement for the app provider while still not disturbing the consumer experience. We also have some encouraging engagement results from our post-install actions where we’re seeing 30% lift in engagement, which in turn drives higher revenue per slot and revenue per device. On our media business, we continue to grow our revenue per device as media partners are seeing positive returns on investments from their Digital Turbine spend. We are seeing encouraging trend with mobile media. As most of you know, the mobile media industry is growing at greater than 30% compound annual growth rate, but we are seeing the law of diminishing returns for advertisers spending on the very large platforms that are now no longer generating the same ROI for them. They’re saying that their incremental dollars are better spent on other platforms such as Digital Turbine versus continuing to spend more dollars on the same platforms. In the United States, Digital Turbine is now the number three distributor of Android applications only behind Facebook and Google. We saw a number of new advertising brands in the quarter begin spending on our platform such as Adidas, The Wall Street Journal, Sirius XM and Kroger just to name a few. Our focus areas in the media business are to continue include scaling our demand outside the United States, leveraging our new inside sales team to help with the long tail of app providers and working on numerous new partnerships that help us scale versus only going direct. In particular, I’ve been excited to see our expansion of our Oath relationship outside of Verizon and is now contributing meaningful revenue with our other global partners. And finally, before I turn it over to Barrett, often times our earnings calls can be just about the numbers, but I wanted to conclude my remarks today with my increasing enthusiasm regarding our improved focus and execution. The past six months have been largely consumed with the content and A&P divestitures, finalizing the European Union GDPR compliance requirements and finalizing our own Sarbanes-Oxley compliance. I want to thank our team for the hustle while completing these things simultaneously as there were material undertakings for small global public tech company. Our organization has now been able to turn its attention a 100% to the growth levers I described earlier and I am excited with the execution improvements over the past 60 days I’ve seen as a result. It’s setting us up nicely as we talk about the numbers for the future. With that, that concludes our prepared remarks and I’ll turn it over to Barrett to take you through the numbers.

Thanks, Bill. And good afternoon, everyone. Before we go into a more detailed overview of the numbers, I wanted to provide a couple of updates. First, we recently announced the closing of two divestiture transactions with our Advertiser & Publisher business and our Content & Pay business and the teams are now in the process of fully transitioning these businesses to the new owners. As a reminder, these non-core divestitures are expected to enable greater organizational focus on a higher growth and higher margin O&O business. Secondly, I wanted to provide an update on the progress with the SEC as it relates to the previously disclosed internal control matter. We are finalizing a proposed settlement of this matter with the staff of the SEC, which is subject to the final approval of the SEC. We expect to provide an update or disclose the final resolution before our next quarterly report in November. We have included the general parameters of the proposed settlement in our 10-Q filed today, which includes the settlement of $100,000 payable by the company. Based on the proposed settlement terms, the company does not expect this matter to have a material impact on its operations or financial position or any impact on historical financials. This matter and internal controls are very important to the company and I'm pleased to be finalizing this matter and proud of the diligent efforts of the team can now be SOx compliant. Now, let me turn to the financial performance in the quarter. As a reminder, results of our divested businesses are treated as discontinued operations for all periods presented in our financials. My comments today will refer to results on the continuing operations, unless otherwise noted. All of our comparisons are also a year-on-year basis unless noted otherwise. Revenue of $22.1 million in the quarter was up 46%. And as Bill referenced, we delivered this growth despite disappointing sales of flagship device launch against expectations and a delay by one of our US partners for a one-time expansion of Single Tap capabilities on a major social media platform. However, these headwinds were offset by other improvements on the platform, including increased revenue contribution per device and new product revenues gaining increased traction. As Bill referenced, while our core dynamic preload business is growing nicely, we generated a greater portion of our revenues from other products. In the quarter, other product revenues made up 15% of total revenues as compared to less than 3% in the same quarter last year, illustrating the progress of the new products added to our platform. Turning to gross margin -- gross profit and margins, revenue growth enabled non-GAAP gross profit dollars to increase by over $1.3 million year-over-year to $6.9 million in the quarter. Non-GAAP margin was 31% in Q1, down from 37% in the prior year. Margins in the quarter were lower year-over-year driven largely by two factors. First, one of our largest, fastest growing US carriers had a higher revenue share as compared to the same time last year that they're growing over. This revenue share is based on cumulative volume thresholds achieved at the end of calendar year 2017. In addition, certain new incremental product revenues that I referenced earlier have a revenue sharing component with one of our major carriers that had a negative impact on overall margins based on the existing revenue share structure. Let me leave the discussion on margins by noting that while we are encouraged about our opportunity to expand margins overall, given our current revenue mix, we would expect similar margins as generated in Q1 over the near term. As a reminder, gross margin rates can be sensitive to changes in partner mix and revenue type and these fluctuations may vary from quarter-to-quarter. The opportunities for margin expansion will depend on the timing of launching and ramping higher margin partners and growth in our new product revenues. During the first quarter, total operating expenses from continuing operations were $7.6 million compared to 6.6 -- $6.7 million in the prior year quarter. As a reminder, since we are now reporting our divested businesses under discontinued operations, all of our shared and corporate expenses are being allocated to continuing operations. Cash expenses in the quarter were approximately $6.7 million which were down on a sequential basis from Q4 cash expenses of $7.6 million, despite incurring higher annual accounting and Sarbanes-Oxley cost in the quarter during. During Q1, total adjusted EBITDA was positive $0.2 million, up from a loss of $0.1 million in the first fiscal quarter 2018 and non-GAAP adjusted net loss in the quarter was $0.6 million loss from continuing operations or negative $0.01 per share. That’s compared to a net loss of $1.1 million or negative $0.02 per share in the first quarter of 2018. Our GAAP net income from continuing operations for the first quarter was positive $1.5 million or $0.02 per share based on 76.2 million weighted shares outstanding, compared to a net loss of $4.1 million or negative $0.06 per share loss for the first quarter of 2018. Included in our GAAP net loss for the quarter is a recorded gain of $3.2 million from the main impact to the change in fair value of derivative liabilities resulting from our convertible debt, which is highly sensitive to the company’s stock price. And as a reminder, the derivative liabilities on our balance sheet will fluctuate as our stock price moves and may have a material impact on our reported GAAP financials. Now, moving to the balance sheet. We finished the quarter with $8.6 million in cash, which was ahead of our internal expectations. We had continuing operations consuming about $2.7 million in negative free cash flow during the quarter, largely driven by timing of working capital changes due to revenue growth in the quarter, combined with a reduction in certain fiscal year end payables. Discontinued operations consumed about $1.3 million in negative free cash flow from certain one-time transaction costs and working capital changes as we transitioned these divested businesses. Our debt levels remained unchanged from prior quarter. There were no conversions on our convertible notes during the quarter and the gross principal amount of the original 16 million notes ended at 5.7 million at the end of the quarter. Now, let me turn to our outlook. We currently expect Q2 revenue of approximately $23 million representing a projected year-over-year growth of about 45% and expect sequential improvement to adjusted EBITDA. With that, let me hand it back to the operator to open the call for questions. Operator?

We will now begin the question-and-answer session. [Operator Instructions]. The first question comes from Mike Malouf of Craig-Hallum Capital Group. Please go ahead.

I wanted to know if you could just sort of explore Verizon just a little bit. So if I understand what you said, if you were to keep the revenues basically flat with Verizon, then you would experience basically the same margins that we have and that any incremental growth adds to the gross profit margin, is that how I should read it?

Yes. So, Mike, if you think about it, is that the new deal is identical to the existing deals, nothing changes, but as we add new products, then the opportunity for us to hit higher revenue tiers would result in higher gross margins for us. And so, it's really a more holistic deal. So rather than just think about the past -- over the past four years and rather thinking about the next four years and the things we want to do, how we can think about accreting the margins of our current products as well as our new ones to achieve higher revenue tiers.

So that’s a lot different than sort of how you were set up from the beginning of Verizon where you had as your revenue grew to different tiers your gross profit actually would go down.

That’s right. So almost I think it’s reverse revenue here, that how we’re kind of referring to it internally but it really is contemplating now a much expanded product relationship with Verizon than what we had in the real view there.

Got it. That’s helpful. And then with regards to Single Tap, can you just give us an update on where we are with that roll out? You mentioned that it negatively affected the June quarter, based on a particular rollout, but it sounded like it was a one-time roll out, so more confused by that.

Yes. Sure. So there is really two elements of Single Tap. One is, our integration with a large social media platform, a large operator here in the United States and that continues to grow nicely. With that, we had an opportunity for one-time event with them to be able to go out and do something that would generate basically one-time opportunity for us that was material. That opportunity is still out there. We had thought that was going to come in the June quarter but it did not. So that was a little bit disappointing to us but the opportunity still remain to go do that as we go out to the remainder of the fiscal year. The second part of Single Tap is integrating with other media partners and platforms and that is live on a number of operators. It is not yet live on Verizon and AT&T. We expect that to happen in the current quarter and that will help accelerate the second part of our Single Tap offering.

Okay, great. And then just one final question. With regards to América Móvil, I know that you were putting your APK, get it installed with Samsung. Is that ongoing now so you can start to jumpstart that? And to what extent if you can get Samsung to install this that could they install this on all their phones to make it sort of ubiquitous, so you could cover -- basically worldwide coverage?

Yes. So as far as América Móvil goes, we are working on expanding some new technology with them that going to dramatically improve the install rates and performance, which for you as well as others that have followed the story for well, know that’s been a disappointment. So I guess many heard at the Analyst Day, América Móvil, commented on that directly they are excited about some of those technical improvements that will improve the install rates. Regarding Samsung, I’m very excited and bullish about the opportunities that we’ve got with them globally, right now, so you’ve got to stay tuned for more.

The next question is from Darren Aftahi of ROTH Capital Partners. Please go ahead.

I wanted to follow-up on a couple things on the prior question. So on your sort of one-time opportunity with the social platform, is that something you can kind of couch as being a calendar 2018 event, or should we just -- is that kind of discount as you can't really kind of gauge the timing of when that’s going to happen?

Yes. What we’ve done in our kind of -- in our forward-looking guidance Darren is we’ve taken it out. So if that happens, it would be upside for us. We still think there's an opportunity there but I’d rather hope for the best, plan for the worst kind of thing on that one-time opportunity. So it’s taken out of our guidance, but it’s still very much on the table.

Fair enough. And then with your new product line up, as you complete the Verizon deal here in the near future, can you just strategically talk about which of your new products you feel like will resonate with AT&T and Verizon more quickly? Then in conjunction with, I know you guys noted the base improvement in the new product revenue. Can you just kind of give us a sense for where you see kind of that mix going over the next six months?

Yes. So, I’ll break it out into three categories. I think in terms of very short-term performance, I am really excited about the engagement results we’ve seen on post-install action. So that’s the type of thing where all of this we see -- for example, with the Starbucks app on a phone, you’ll see notifications, as they come on and you get a free latte at your birthday or what those kind of things were, you might not have remembered, you had a Starbucks app on your phone. And we see tremendous listen engagement for that and that in turns drives better revenue per slot and revenue per device performance. And so, we’re really in a process of scaling that real time right now. So that's quite encouraging in the very short-term. In the mid-term, we’re excited about the opportunities with AT&T and the Time Warner merger as it relates to things like our Folders products, they -- between DirecTV, AT&T and Time Warner have nearly 200 different applications that you got to think about how to get the right apps to the right people at the right time. And so, there’s tremendous opportunity for us to add value there with our Folders product with them and -- as well as with Verizon and Oath and others. So I think I am excited about that in the mid-term. Long-term, I am most excited about Single Tap. We’re seeing some very encouraging results and now that the next step is to get that launched on Verizon and AT&T in the current quarter, and then start seeing that grow. I don’t expect to see that deliver material results for us in the September quarter. But as we go forward into the next calendar year, I am really excited about the prospects there.

And then just a couple of more. On the 15 million incremental devices by the end of the year to stem in OEMs, can you just talk about the context? Is that being influenced by your Qualcomm relationship you announced earlier this year?

Yes, no, it’s not really specifically with Qualcomm but it is being driven by our business development activities in Asia which we have been pretty aggressive in Korea, China, in India. So really this is about cutting our cheese with these new OEMs. It’s a new distribution channel for us. They’ve some different requirements. It’s obviously international. We want to learn from all of our new products with them. And I think it sets us up really nicely for some of the much higher profile players in the region which I mentioned in my comments we’re really deep in the pipeline process. So I'm excited about it’s really getting to cut our cheese with these longer tailed OEMs albeit with material device volumes, we’re talking about eight figures of device volumes, but it’s really set us up now to learn to scale when some of the bigger boys come on later.

And just last one from me. You talked about the expansion into other form factors. Can you just indulge us -- are these sort of handheld form factors or perhaps something much larger?

It’s something that we’ve demonstrated at Mobile World Congress and other places that, really our platform is screen agnostic and we’re focused on smartphones just because that’s the largest opportunity. But what we’re seeing now is the lot of inbound interest. It’s not us going out trying to create outbound, it’s inbounds coming to us. They say, “Hey, can you work on these different screens” and whether these are large tablets, or wearables or televisions or what have you, people are interested in how they can use our mobile delivery platform to help them with these other screens. And so, we’re spending some time right now making some investments on how we could do that and then enjoy opportunity to do -- looking and sharing things cross-screen, so in other words you could be on a television watching the Golf Channel and you see Golf app come up and have a Golf app delivered directly to your phone, things like that, that we’ve seen some advantages from. So those are things that we’re investigating, not anything for the very near term for the next quarter but as we think about the growth opportunity for the business it’s definitely something that’s encouraging and exciting.

The next question is from Sameet Sinha of B. Riley FBR. Please go ahead.

Hey, guys. This is Lee Krowl filling in for Sameet. Thanks for taking my questions and congrats on getting the Verizon deal in. First question, I just wanted to dig in, during the quarter you guys had a weak performance from marquee product launch, that same customer announced a new product for the current quarter. Just kind of curious what kind of expectation you have for that device in light of the last quarter's kind of tepid performance as it relates to revenue guidance?

I will take that one. We’ve obviously considered the S9 device perform last quarter in our guidance, it was not a strong launch. So I think we've been rather conservative. But we do expect -- we have -- we don’t have it from last year. While we think that it could be an exciting opportunity I think we’ve been prudent in our guidance here and factored in how the most recent launch has performed.

Okay. And then switching over to RPD performance, I know you guys said that it was around $2. Just kind of curious what the drivers behind the jump is, whether it's brand driven or maybe just one-time event, just kind curious because it is such a large jump in a single quarter?

Yes. So our commentary was really about doing some $2 in the US compared to a $1, about $1.32 a year ago in the same quarter. It was driven by two factors. One is just increased demand from advertisers and advertisers have seen a positive return on investment from using the Digital Turbine platform and I referenced in my remarks about how there is diminishing returns on platforms like Facebook and Google and we’re seeing a number of advertisers like The Bank of America and Yelp and eBay and others. They are saying “Hey, my incremental dollars are better spent on Digital Turbine than spending more money on those other platforms”. So that helps us accrete results, is variable number one. And then variable number two is, we’ve been able to expand our slots with AT&T and a couple of other providers. So that obviously adds us an incremental revenue opportunity. So that’s a combination of those two things that’s helping drive the improved performance. And yes, I really want to reiterate that that’s a fundamental health metric of our business as advertisers are willing to spend and continue to spend more to be on the home screen. So that’s something I encourage investors to continue to look at as far as our performance goes.

Got it. And then it’s very clear that North America is doing really well and it seems like that's a little bit offset by international and we would read that to mean that perhaps India is still maybe a headwind. Just thoughts on when maybe India and a few other geographies can you maybe snap back and start to contribute to growth?

Yes. So I am encouraged in India with both the new OEM deals that we’ve announced, as well as we expect to see Reliance Jio that had initially launched with a smartphone and they moved to really low end featured phones, transitioned back to smartphones. Again I think that will really help jumpstart that relationship for us going into the future. So we continue to be pretty bullish on India. But with that being said, we still have some work to do in terms of how we scale our international demand and that's a major focus area for the business right now which is a combination of us adding additional local salespeople on the ground, doing partnerships, I referenced Oath as an example but other advertising agency partnerships and then leveraging our global inside sales force for the long tail of apps. And that’s really the factor to get a better reach in that particular market as well as Asia Pacific more broadly. But we’ve got some wood to chop to get where we need to be, but we are excited about it because that’s where the growth is. And for most of our Asia Pacific and Latin America and European accounts, the margin structure is also favorable. So it is a major focus area for us.

[Operator Instructions] The next question is from Ilya Grozovsky of National Securities. Please go ahead.

Just wanted to kind of go through the gross margins a little bit more. So if you had the contract that you will have going forward for the next several years with your largest customer, had you had that in this current quarter, what do you think gross margins would've been like in the current quarter, given the volumes that you did?

Yes. So just to reemphasize what Bill outlined as far as the proposed terms in the agreement, the existing level of revenue volumes would be at kind of the current gross margins that we’re seeing today in the quarter and what it -- what the contract would allow us to do is when we drive incremental revenue at certain levels with new products or even if we’re driving core revenue upwards of levels close to where we are today, then those would accrete margins. But based on the volume today we would with the new contract have similar gross margins.

So -- and then -- so that leads me to my next question which is given the -- how big your largest customer is and where your gross margins have trended over the past several quarters down to the low 30s here in the current quarter, would that be offset by the new customers that you have and plus the higher margin new products that you have in terms of the incremental growth is really from those guys, right? So you’re continuing to reduce your largest customer, your dependence on the largest customer. I think last quarter you were down below the 50% level. And so, shouldn't the gross margins be helped by the non-largest customer contribution?

Well they wouldn’t be. But one other thing that’s important to understand is the product mix and the -- whether it’s licensing or it’s a rep share, the product mix has a lot to do with it as well as the partner mix. And so what we have -- while we’ve seen our largest partner make up less of a concentration, we also have partnerships that have similar structures to revenue sharing that we’ve seen -- that we have with the Verizon contract Bill just outlined, whereby as their volumes increase, they get a higher revenue share. And one of our fastest growing -- as I mentioned in the call, one of our fastest growing partners had a higher revenue share this year versus last year, and you see that as we grow over that year. The other thing is depending on the particular product and who it’s launched with; it could either accrete or compress margins. And in this quarter, I referenced in my comments around the gross margins that we launched a product had margins below the aggregate for this particular product and for this particular partner and that impacted margins in the quarter.

The next question is from Jon Hickman of Ladenburg. Please go ahead.

I have a question about operating expenses. As you know transition the discontinued operations to their new owners, you seem to indicate that there was further reduction in particularly the SG&A are, is that true?

Well I don’t think I indicated that today on the call. But what we do see is because the way we’ve recognized our expenses, we breakout our continuing operations and our discontinued operations. We have -- I referenced -- I mentioned in the call that we’ve reduced our cash expenses, our cash OpEx what we call it for our continuing operations. And so, we will evaluate our SG&A and the requirements to support just growing our business ongoing but right now I wouldn't outline any significant declines in our overall SG&A in the near term.

The next question is from Michael Solomon of Maxim. Please go ahead.

The margin question was answered, and Bill, this is probably more an opinion question but it seems like you've been able to hand these carriers business that basically carries no cost for them. And now you're handing some social media companies in the same opportunity. Why do you think -- I’m struggling with the market cap and where the stock is traded based on your progression and what you’re doing, something doesn't make sense. Do you get a feel for why that's happening or what the carriers are saying and can we get a bigger piece of the puzzle when you sign some of these deals going forward?

I appreciate it. I mean I can’t comment on the stock, I guess if had a crystal ball, I knew what’s going on with the stock I wouldn't be doing this job, I would be doing a different job, I am a TMT mobile person and I’ve got a lot of experience and expertise on that. But then -- and we saw -- what I’d say is that we’re going to staying continue to execute. We think we got pretty special here; the franchise value of what we've built with all of these deals around the globe is something we’re proud of. We think we’ve put ourselves in a really great position for the future and now we got a platform. And as we add devices and we add products and we add all these advertising partners, those are things that should enable a real scale and real exponential growth and those are things we’re excited about. That’s why we’re here. And we’re going to continue to grind out and execute on that. And my belief is that markets may not get it right in the short-term but in the long-term they will and we’re going to continue to grind it out and focus on the strategy that we’re excited about. And at some point, the market should be paying attention to that.

This concludes our question-and-answer session. I would like to turn the conference back over to Bill Stone for closing remarks.

Thanks all, and appreciate everyone joining the call today. We will be back in touch in our next earnings call later this year and we will keep you apprised of our progress. Thanks to all and have a good night.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.