ICF International, Inc. (ICFI) Q3 2016 Earnings Report, Transcript and Summary

Welcome to the Third Quarter 2016 ICF Earnings Conference My name is Sharine, I'll be your operator for today's call. At this all time all participants are in a listen only mode. Afterwards you will be invited to participate in the question-and-answer session. [Operator Instructions] Please note this conference is being recorded on Tuesday, November 1, 2016 and cannot be reproduced or rebroadcast without permission from the Company. And now I would like to turn the call over to Lynn Morgen of MBS Value Partners. Lynn, you may begin.

Thank you, operator. Good afternoon, everyone, and thank you for joining us to review ICF’s third quarter 2016 performance. With us today from ICF are Sudhakar Kesavan, Chairman and CEO; John Wasson, President and COO; and James Morgan, CFO. During this conference call, we will make forward-looking statements to assist you in understanding ICF management’s expectations about our future performance. These statements are subject to a number of risks that could cause actual events and results to differ materially. And I refer you to our November 1, 2016 press release and our SEC filings for a discussion of those risks. In addition, our statements during this call are based on our views as of today. We anticipate that future developments will cause our views to change. Please consider the information presented in that light. We may at some point elect to update the forward-looking statements made today, but specifically disclaim any obligation to do so. I will now turn the call over to our ICF’s CEO, Sudhakar Kesavan, to discuss third quarter 2016 performance. Sudhakar?

Thank you, Lynn, and good afternoon, everyone. We appreciate you are joining us today to review our third quarter results and discuss our business outlook. We had our first conference call as a public almost exactly 10 years ago. And we at ICF are pleased with the way our company has evolved and grown over the past decade. We've consistently executed our strategy of leveraging our advisory work into implementation assignments, driving substantial revenue growth across all of our key clients' categories. For the same time, we've made investment to diversify and expand our revenue sources. Both actions have resulted in significant earnings growth. Now back to the present. Revenue from US government clients showed solid growth in the third quarter following two consecutive quarters of strong year-on-year comparison. Health, energy, environment and infrastructure issues are amongst the leading federal priorities. ICF's recognized subject matter expertise in these areas and our scale in digital and IT services have enabled us to increase our win rates for federal contracts and position the company for continued growth in these markets. Revenue from our commercial clients increased 9.4% compared to last year's third quarter. If commercial rate, energy and digital marketing work performed for state and local government clients are included, our commercial revenues grew 11.4%. Our energy markets business is benefiting from our leadership in energy efficiency work which is again where the combination of advisory work and program implementation capabilities helped us grow. Also, ICF's marketing and customer engagement skill significantly enhance our business proposition in this market as ultimately the success of energy efficiency program is depended on the participation and engagement of utility customers. In the first nine months of this year, I have been paid a record energy efficiency contract awards for ICF. Additionally, our end-to-end capabilities and long standing relationships are setting the stage for us to broaden our work for utility client in two ways. First, we are helping them as they evaluate how to integrate distributed energy resources such as solar and wind into their investment decision. And second helping them design and implement program to reflect the evolving business model. Our commercial digital marketing business also performed well in the third quarter showing solid year-on-year growth in line with our expectation. Revenues benefited from additional work existing clients and the new business that we have been winning over the last several months .Many of the new wins have involved collaboration across ICF Olson as well as integrated pitches where ICF business units specifically with utility aviation and healthcare payer provider clients and across state lottery opportunity. Our state and local government business continues to post impressive double digit revenue growth; this is partly due to energy and digital work that we are doing but also reflects a substantial increase in assignments around infrastructure and environment planning. International government revenues as anticipated continued to be soft in the third quarter. In London and Brussels where we have large offices are clients are grappling with major European Union issues including Brexit which has resulted in postponement of some of the programs they are working on. Across our international business, we continued to be focused on managing cost and aligning resources where we believe we have potential for growth. We achieved third quarter diluted EPS growth of 18.6% on 6.1% revenue growth thanks to high utilization and increased contribution from our commercial business along with the benefit of lower depreciation and amortization expense. We expect to continue to grow earnings at higher rate than revenue; we will also continue to invest in bid and proposal activity and other areas that will drive long-term revenue growth in all of our markets. These investments have served us well in the past and have contributed the record setting year-to-date contract awards, backlog and pipeline figure that we just reported. In addition, the strong showing represents how we have successfully leveraged our business development dollars over larger implementation contracts. This was a key part of our stated growth strategy 10 years ago at the time of our IPO. Providing our implementation capabilities such as technology, data analytics, marketing services, customer engagement and program management to a broader range of clients remains an essential element of our future growth plant. We see our current client set in both the government and commercial arenas as an excellent market for the function capabilities. In addition, ICF Olson is an activator for our business driving new client relationships that we can leverage across our entire organization. I'll now turn the call over to John Wasson, ICF's President and Chief Operating Officer who will provide insight on our operating performance in the third quarter and the development that underpin our expectations for continued growth. John?

Thanks Sudhakar. Good afternoon. We are very pleased with our third quarter financial results as they were in line with our expectations. We also had an excellent quarter for contract wins which were $579 million, 24.5% above last year's third quarter bringing year-to-date wins to a record $1.2 billion. These sales together with our record pipeline of $4 billion at the end of Q3 set the stage for continued future growth. The breakdown of third quarter revenues by client category was as follows. US federal government accounted for 49% of total revenues comparable to the 2015 period and last quarter. Revenues from commercial clients increased to 35% of total revenues, up from 34% in last year's third quarter and in Q2 of this year. And state and local government increased to 11% showing year-over-year growth and more than compensating for the decline in international government revenues which only accounted for 5% of total Q3 revenues. Revenues from US federal government clients increased 4.6% compared to last year's third quarter, representing execution on over 1,000 contracts across our broad range primarily civilian agencies. This business is characterized by generally stable revenues and long-term contract because of its good visibility through a multiyear backlog which reached a record $2.2 billion at the end of the quarter. The majority of which is for federal clients. Our federal government work is well diversified and year-to-date about 90% of our federal government revenues represented work for civilian agencies. In the third quarter, we had a number of large wins in the federal arena including multiple contracts valued at $71.5 million with the administration for children and families within HSS. Under this program we will support a broad range of services such as Caring House Development, Child Welfare and head start among others. Under multiple contracts valued at $41 million we provide technical assistance to the US Centers for Disease Control and Prevention including IT training and technical assistance, communications, data management and other services. A $35.5 million contract with US defense held agency to provide support services to Defense Centers of Excellence for Psychological Health. A contract with the US Navy Cyber Warfare and Engineering Division, Naval Surface Warfare Center for $33.5 million to support the defense critical infrastructure program. And a contract with US Department of Justice Office for Victims of Crime for $33.4 million to provide training and technical assistance. There are more many contracts this quarter as we noted in our release. So this gives you a good sense that type of work and the size of the engagement that we are currently winning. We continue to expect mid single digit growth in our federal government work for full year 2016. As Sudhakar mentioned third quarter revenues from our commercial clients' increased 9.4% year-over-year and have shown continued sequential improvement throughout the year. Digital marketing services and energy markets together increased 13.7% this quarter and accounted for 79% of commercial revenue. Our commercial energy markets business comprised to both our energy efficiency and energy advisory work had an outstanding quarter and posted the 25.5% year-over-year increase in revenue and were up 15.3% sequentially from last quarter. This performance more than offset the ongoing wind down the large energy infrastructure project on West Coast that we've discussed previously. Key commercial energy contract wins announced in the quarter included a previously mentioned contract with the combined value of $95.5 million to support energy efficiency programs for industrial and commercial clients for the major utility holding company. This is the largest energy efficiency contract ever awarded and ICF is one of the only a few company that they scale to bid and win an energy efficiency contract of this size. Additionally, we won a $23 million contract with a major Midwest utility to provide energy efficiency implementation services and proprietary marketing, analytics and IT platforms to support residential programs. And two contract with the combined value of $17.9 million to support residential, commercial and industrial energy efficiency programs for a major utility in the east. In addition to the transformational forces at work within utility industry that Sudhakar mentioned, other long-term positive for business include the Federal clean Power Plan rule making, the recent guides by the California Public Utilities Commission directing utilities to use more third party administrators and implementing energy efficiency programs and a consolidation elected utility companies and state utility regulators of fragmented energy efficiency programs within their portfolios that can be bundled to be more efficient and cost effective. Turning to commercial work performed by ICF Olson. As expected we saw solid improvement this quarter with revenue growth of 5.8% year-over-year and 2% sequentially. We had a number of imported wins this quarter including three contracts with a combined value of $4 million to provide customer loyalty and communication services for major hotel chain. And multiple contracts valued at $2 million within international tracking technologies and services company to provide digital solutions. We have a number of innovated pitches underway including four with our commercial energy group where we have an opportunity to build upon the multimillion dollar project that we've discussed previously as well as two others with new clients and two in the health arena. What we are seeing today is really what we had expected from the acquisition of Olson. They have a very powerful offering when combined our digital services with our traditional lines of business. And as we market together, we are getting traction and uncovering new opportunities that neither company could have won separately. Overall, the ICF pipeline continues to be strong and we had wins in financial services, hospitality and food services and distribution of retail among other key verticals. The lottery pipeline remains active with six new opportunities under pursuit. During the quarter, we won five additional opportunities for two existing lottery clients, Ontario Lottery and Gaming in California. State and local government revenues grew by 20% in the third quarter. Increased level of state and local activity was driven by digital, energy efficiency, and transportation and infrastructure projects. Finally, our international government business revenues declined to 5.3% of third quarter revenues, down 18.9% from Q3 of last year. We previously discussed that we able to face new projects within our largest client in the European Union has been delayed due to issues associated with the migration crisis, security concerns and with the Brexit vote that occurred at the very end of Q2. That being said, our international government business continues to be successful in getting new contracts and has a trailing 12 month book-to-bill ratio at a substantially above one. It is difficult to predict the timing of when these programs will be activated but we remain positive for the long term and are keeping cost carefully in check. Let me in reply providing you an overview of our business development performance and employee turnover metrics. Our pipeline was a record $4 billion at the end of the third quarter after winning $579 million in award this quarter. The pipeline includes 33 opportunities bided in $25 million and 59 opportunities between $10 million and $25 million. Finally, our annualized domestic turnover rate was 15.8%. And let me turn the call over to our CFO James Morgan.

Thanks John. I am pleased to report that this was a record revenue and earnings quarter for ICF. Revenue was $306.5 million for the quarter, an increase of $17.6 million or 6.1% over last year’s third quarter. Approximately 50% of the revenue increased reflected growth from our commercial business. The other 50% represented year-on-year growth across our federal and our state and local government markets, which more than compensated for the decline in international government revenue which is John noted continued to be impacted by program delays and changes in foreign currency exchange rates. Service revenue increased 3.1% to $223.2 million from the 2015 third quarter. Gross profit increased $4.1 million or 3.7% as compared to 2015. Gross margin was 37.6% ahead of 36.4% we reported in this year's second quarter butt below the 38.4% of last year's third quarter. The year-on-year variation is mainly due to an increase in path through revenues in 2016, primarily from government clients which negatively affected 2016 Q3 gross margin by an estimated 80 basis points. As previously mentioned in prior earnings calls, we continue to work to effectively manage our indirect cost and selling expenses while investing in long-term growth drivers. Indirect selling expenses for the third quarter were $84.2 million, a sequential decline of $0.4 million from the second quarter, about $3.2 million higher than 2015. However, as percentage of revenue indirect selling expenses declined to 27.5% as compared to 28% a year ago and 27.7% in this year's second quarter. Operating income increased 10.6% to $23.8 million on a year-over-year basis. Excluding $0.4 million of special charges related to severance for staff realignment and international office closures, operating income would have been $24.2 million in this year's third quarter. Depreciation and amortization expense was $4.1 million, down $0.2 million from $4.3 million in 2015's third quarter. As expected certain intangibles from prior acquisitions became fully amortized this past quarter. As a result, amortization of intangibles decreased from $4.3 million reported in 2015's third quarter to $3.1 million in the third quarter of 2016. The effective tax rate was 39.2% for the quarter, compared to 38.5% in the third quarter of 2015. This increase was primarily due to reserves for tax positions related to prior years, partly offset by return to provision true up. We continue to expect the full year tax rate for 2016 to be no more than 38%. Net income was a record $13.4 million, an increase of $1.9 million or 16.4% from the $11.5 million reported in last year's third quarter. EBITDA was $31 million for the quarter, inclusive of the $0.4 million of previously mentioned special charges. For the quarter, EBITDA margin was 10.1%, adjusted EBITDA margin to exclude the impact of special charges was 10.3%. Excluding the impact of higher year-over-year pass through revenues our adjusted EBITDA margin for Q3 was 10.5% which was aligned with our Q3 expectations and similar to what we expect for Q4 of 2016. As previously mentioned, net income was a record $13.4 million for the quarter or $0.70 per diluted share compared to $0.59 in last year's third quarter, an increase of 18.6%. Non-GAAP EPS which excludes amortization of intangibles, as well as any special charges related to severance for staff realignments, office closures and acquisitions was $0.81 per diluted share for the quarter, an increase of 8% over the $0.75 in the third quarter of 2015. Cash provided by operating activities for the year totaled $57.8 million, a $14.9 million increase over the $42.9 million reported for the same period in 2015. Strong cash flow for the quarter allowed us to pay down our credit facility by $36.7 million. As of September 30, 2016, our long-term debt decreased $281.2 million. I should also note that during the third quarter of 2016 the company entered into a hedging transaction to mitigate the financial risk associated with potential future interest rate volatility for a portion of the debt outstanding under our credit facility. The details of the transaction represented in our 8-K filing dated October 5th, 2016. Day sales outstanding for the third quarter decreased to 71 days, as compared to 73 days at the end of 2015. We continue to anticipate the year end DSO to be in the 72 day to 77 day range, including the impact of deferred revenues. Capital expenditures for the first nine months of 2016 were $13.7 million. We expect capital expenditures for the full year of 2016 to be between $18 million to $20 million. Year-to-date, we repurchased 305,590 shares at an average price of $37.28 per share. As a result, we have more than achieved our previously stated intention to make share repurchases at a level to offset the dilution caused by our employee incentive programs. Per share guidance for the full year of 2016 assumes weighted average diluted shares outstanding for the year for approximately19.3 million. Additional full-year 2016 guidance for financial modeling purposes is as follows. Full year 2016 depreciation and amortization expense is expected to be in the range of $16.3 million to $16.8 million. Amortization with intangibles is expected to be between $12.3 million to $12.8 million or tax affected impact of approximately $0.40 per share. Full-year interest expense is expected to be in the range of $9 million to $9.5 million. And full-year cash flow from operations is expected to be in the range of $85 million to $95 million for 2016. With that I’d like to turn the call back to Sudhakar.

Thanks James. To sum up we executed well in the third quarter and expect full year 2016 results to be in line with our previous guidance. Based on our performance to date and current visibility, we have narrowed our revenue range for the year to $1.185 billion to $1.195 billion. Our diluted EPS range to $2.45 to $2.50 and our non-GAAP EPS $2.91 to $2.96. At the mid point of these ranges, diluted EPS for 2016 would increase 23.8% from 2015 level and non-GAAP EPS would increase 11.2% over last year's levels. Both achieved on a 5% revenue gain. Looking ahead, share of the takeaways we discussed at the end of 2016 Investor Day which took place on October 20th this year. We believe ICF is positioned to outperform projected federal government spending forecast of [0.2%] growth in 2017 because we work in growth areas like public health, climate change, resilience, energy and cyber. We have a fast growing commercial energy business where we have one large amount of work both in marketing analysis and advisory and in energy efficiency implementation. We believe the utility industry work will continue to grow due to significant change in the structure of the industry and increased regulation to reduce greenhouse gas emissions. And ICF Olson is an activator for ICF's entire business. We will continue to take that skill set and experience into our legacy context and we'll continue to invest in expanding our combined client roaster by taking advantage of the increasing digitization and consumerization of the economy. Operator, I would now like to open the call to questions.

[Operator Instructions] And our first question is from Tobey Sommer of SunTrust.

Thank you. Just a couple of questions for me. Could you give us some color on what opportunities are in the market place for sort of the chunkier contract that you described in the energy space where there is more rarified competition? Is this kind of early rare opportunity or are they are more of these to be had?

I think in the utility space there are -- the traditional opportunities which we have been doing quite well. The energy markets work and the advisory work as well as all the implementation work in the energy efficiency space. But the industry is restructuring and there are significant changes to the way the industry is going to be structured going forward primarily because of the fact that there is enormous amount of distributed energy resources which all of us are sort of putting in place like solar energy in homes and others and I think that the utility is figuring out how to cope with the fact that there is always kinds of regulations to which are forced them to take this energy generated by the decentralized sources into their grid, while they have this cost of the grid and cost of generation facilities which currently exist across their service territory. So I think that combining the centralized generation with distribution energy resources and how exactly they will procure energy to supply to their customers is all changing. And I think how it is changed and how things are going to change is something which we have developed some expertise in and we have invested quiet a bit to, to figure out the whole distributed energy resources structure and how the utilities are going to evolve. And we are helping them figure this out and as they implement program in these areas we will I thin continue to have a good position in helping them do so. So that is sort of the more rarified kinds of opportunities which we are just about seeing and I think there are certain state the progressive ones which potentially do things on regulatory fronts more quickly like New York and California and this case also Minnesota which are doing things which are quite different from what other states are doing and we are quite involved in some of those program in this sort of rarified arena.

Okay. Thank you. On the Olson front, just like you to maybe comment on the opportunities that you see, are you working on set of RFPs and business opportunities to take Olson and your legacy customers now that we maybe able to hear about in coming quarters or is this sort of a long-term push to be able to offer Olson services into those clients?

I mean we've talked to you about things which we have successfully done with some of our clients. We have worked with healthcare clients and customer engagement issues. We have worked with utility clients on where Olson has been front and center and trying to do social listening, social media analytics. We have worked fairly significantly with -- we won this utility project in Canada which is quite a significant one which couldn't have been won. So if you -- we did -- after the Investor Day feedback we did add up the awards which we've gotten over the last two years since we had Olson. And it is -- if you look at where we worked with them and where they work with us. It is in the tens of million of dollar and it is a fairly nice pipeline which we have. So I think that we have won some work, we have learned from it and I think we now know exactly where to focus on so I think you will be hearing more about these areas going forward.

And I would say I think we are making progress on multiple verticals, energy, aviation, federal, lotteries and so healthcare and so yes I think there will be more to say across multiple verticals, Tobey, and we really are seeing the leverage are play together our subject matter expertise with the digital capabilities.

Okay. Last question for me. I was wondering if you could comment on having a continue resolution in whether that has impacted the cadence and the rhythm of business? Thanks.

No. We haven't seen any impact of that. I mean I'd say that as you've seen from our growth in the federal arena over the last three quarters, we had robust growth. I think our clients are generally showing a willingness to move out on new programs and new initiatives and we really haven't seen any change in that environment. So I think we remain confident that we can continue to grow and grow more rapidly than the budget, standard line budget in the civilian agencies.

Thank you. Our next question is from Bill Loomis of Stifel.

Thank you. Good quarter. Just one question on the income statement. The other income had a jump into $732,000 what was that relates to?

We had some corporate and insurance proceeds from quarter end insurance policy that impacted that to some degree. And so we have the benefit there which to be honest if we look at that from the standpoint of that's roughly that's $0.02 of positive impact. The same time we had some higher tax rate for this quarter which was also about $0.02 impact going in other ways so that net of those is essentially net of each -- each of they are out for the quarter.

Okay. On the international what's the margin drag? International still profitable or can you give us a sense of how much of that's dragging results rate now on the margin side?

International is still profitable, Bill. I think we are definitely profitable there. It's probably mid single digit profitability.

Okay. And just on international what's -- any thought on when some of those -- when the customers will start moving forward on some of those programs? And it sounds like they won a lot of business based on that book-to-bill you talked about substantially over won but customers are put on the shelf but they haven't cancelled the program? So what are they looking for to start this up? Is there any thing that any time line?

I think part of it's just traction book-to-bill and I think these clients between the migration crisis in Europe, security concerns, all Brexit vote, and there has been a lot of distraction in the European Commission I would say and the clients are distracted. I think it is as we've talked about for the last several quarters on this call, it is certainly impacted us the slow activation of work. I would say that and we see some early signs of things improving and there is generally more positive outlook for our European leaders of that business. But I think we are being pretty cautious and we are -- we want to see it for several quarters before we are comfortable that the activation has truly picked up. But as you said I mean the book-to-bill remains terrific. And there are some early signs that the clients have started to spend again and we are monitoring it carefully. And in the interim we are watching the cost very carefully to make sure we are profitable in Europe. I think in the long run, to global issues we work on, they are going to be highly relevant to Europe and we are in a good position there and so with this confidence I think we have a positive long-term look. We are just managing it very carefully in a short run.

Yes. I think to some extent, Bill, there is some analog to what happen to us here in the US. We had a good book-to-bill from 2012 and 2015 but nothing really -- or 2014 nothing really moved. So hopefully that analog will workout the way it workout here we will see.

Great. And then just on state and local, I know you guys talked I guess last year with the super storm Sandy tough comp that would flow but you have been doing very well on state and local, what is the kind of the pipeline over the next year, do you expect things to slowdown there or is it strong enough that you could still show good growth for the state and local?

I think as we've talked about over the last -- turn of the last couple of quarters, we've had --we've been doing some significant implementation work on the state and local front and it had very high pass throughs related to that work. Infrastructure projects with an environmental focus, energy, transportation projects. And so we've had high pass throughs which have driven up the growth rate significantly. We do make some margin on those processes but obviously not as much as when we were doing the work ourselves. I think we would -- I think we remain generally optimistic that we can grow the state and local business going forward kind of in the low to mid single digits. I think we had some really unusual and high pass throughs over the last several quarters on several major contracts.

Thank you. And our next question is from Tim McHugh of William Blair.

Hi, guys. This is actually Trevor Romeo in for Tim today. Thanks for taking my questions. Really quick just the follow up on the pass throughs. I know you just mentioned state and local but it appear that they are higher in general again this quarter. So anything else that's driving that and then do you expect that trend to continue going forward?

I would say that it is -- the majority of it's not only state and local, there are some on the government side, US federal side also. So that's the majority of it, it is through federal or for the government business area. As far as going forward, it is always difficult to perfectly predict that especially from a timing perspective but this year we are running somewhere in the neighborhood of around 26% and 27% of revenues are in past throughs last year it was more in the 24% to 25% range. I would say as we move forward into next year, given the type of work that we are doing and more and more implementation of work in larger programs, there probably be a tendency for a little higher pass throughs this coming year.

Okay, great, thanks. And then just one more going back to energy efficiency, I think you guys mentioned on the last call you had won about $300 million new contracts to date. One do you have an update to that number as end of the Q3? And then two, are we seeing a full quarter contribution at this point or those still kind of in ramp mode?

I mean in terms of the number I think we are all in year-to-date through the end of the third quarter on energy efficiency wins, we are certainly north of $300 million slightly above $300 million has been won through the end of the third quarter. I think we are still in the ramp up phase. I would say at the third quarter obviously with the significant growth we just talked about north of 25% growth in the energy business. And we are certainly seeing the effect of variety of program ramping up in the third quarter. I think certainly I think we are pretty close on ramping up most of those major programs and we will benefit from them obviously over the next three quarters as they continue to go full out. And over the next several next years. I mean many of those contracts are long -term contract, three to four years contracts.

Okay. Great.

I would say the one thing to keep in mind too on the win, I'd just say when John mentioned the $300 million, probably the biggest change it is happened since Q2 to now is that more those wins have been formalized and they have actually contractual documents have been signed as opposed to verbal agreements.

Verbal agreement right.

[Operator Instructions] Our next question is from Mark Jordan of Noble Financial.

Hi, guys. This is actually Ben Klieve filling in here for Mark Jordan. Thanks for taking my call. And a couple of quick questions for you. First, regarding the guidance that you issued for the rest of the year. I think you narrow the diluted GAAP earnings figure -- excuse me you narrow the GAAP earnings range but then you looked at the non-GAAP range a bit above prior expectations. So first I was just wondering comment on that quickly.

Yes. I think the biggest change there is that there is two things impacting the difference between the GAAP earnings EPS and the non-GAAP and one is obviously the amortization intangibles that is somewhat impacted, the EPS is impacted by the number of shares outstanding and as share counts gone down that's a little bit of an impact to improving it. The biggest impact is really due to special items that we mentioned throughout the year and they continue in these quarters that have impacted the difference between the two. So if you add everything up between GAAP to non-GAAP it is about $0.46 difference at the midpoint and $0.06 of that is related to the special items.

Okay. Perfect. Thank you. And then regarding the pipeline, I am wondering if you can provide a little bit of context in terms of what contracts you have out regarding specifically the size? Are there any kind of big contract that are really driving that $4 billion pipeline more the kind of general mix of lot of seven, eight figures that they are outstanding?

Yes. I mean I think in generally we have a very diverse pipeline and very large pipeline of diverse entities. I did give it end of our remarks which I just reiterate in terms of the largest opportunities coming in the pipeline, we have 33 opportunities greater than $25 million and 59 opportunities between $10 million and $25 million. So given that -- it certainly gives you sense that we have a lot of substantial deals in the pipeline. So it is a very diverse pipeline.

Okay, thank you. So I guess I maybe missed those figures before. Sorry about that.

No. It is fine. I have in my finger tips.

Thank you. And at this time I'd like to turn the call back to management for closing remarks.

Thank you for joining today's call. We look forward to keeping you updated in the coming months. And then we would talk to you again for the fourth quarter numbers early next year. Thank you again.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.