PAR Technology Corporation (PAR) Q1 2017 Earnings Report, Transcript and Summary

Welcome to the PAR Technology 2017 First Quarter Financial Results Conference Call. [Operator Instructions]. As a reminder, this conference is being recorded for replay purposes. It's now my pleasure to hand the conference over to Mr. Chris Byrnes, Vice President of Business and Financial Relations. Sir, you may begin.

Thank you, Brian and good afternoon. I'd like to welcome you, all, today to the call for PAR's First Quarter 2017 Financial Results Review. The complete disclosure of our results can be found in our press release issued today as well as in our related Form 8-K furnished to the SEC. To access the press release and the financial details, please see the Investor Relations and News section of our website at www.partech.com. At this time, I'd like to take care of certain issues in regards to the call today. Participants on this call should be aware that we're recording the call this morning and it will be available for playback. Also, we're broadcasting the conference call via the World Wide Web. So please be advised, if you ask a question, it will be included in both our live conference and any future use of the recording. I'd like to remind participants that this conference call includes forward-looking statements that reflect management's expectations based on currently available data. However, actual results are subject to future events and uncertainties. The information on this conference call related to projections or other forward-looking statements may be relied upon and subject to the safe harbor statement included in our earnings release this afternoon and in our annual and quarterly filings with the SEC. Joining me on the call today is PAR's President and CEO, Dr. Donald Foley; Bryan Menar; the company's Chief Financial Officer; and Karen Sammon. I'd now like to turn the call over to Don for the formal remarks portion of the call which will be followed by general Q&A. Don?

Thanks, Chris. Good afternoon. Thanks to each of you for joining our first quarter 2017 earnings call. In our short time together today, as I introduce myself to you as PAR's President and CEO, I will attempt to provide you insight and progress reports regarding our strategic initiatives. This afternoon, the company reported first quarter revenues from operations of $65.9 million as compared to $55.3 million in the first quarter of 2016, an increase of 19.1%. Our restaurant/retail segment revenues grew 52% when compared to Q1 2016. In the quarter, we recorded GAAP net income from operations of $1.3 million and diluted EPS of $0.08 per share compared to net income of $15,000 and $0.0 diluted EPS in the same quarter in 2016. On a non-GAAP basis, our recorded net income from operations of $2.2 million and diluted EPS of $0.14 per share versus $925,000 in net income and $0.06 per diluted share reported in the first quarter of 2016. We're pleased with the results in the quarter, results which have built on the momentum carried forward from 2016. In 2015, we successfully negotiated an asset purchase agreement of our hotel segment with Jonas Software for $16 million. I am privileged to report to you that we recently received the final payment of $4.26 million from Jonas Software shortly after our 2017 Q1 close, thereby successfully completing our divestiture. With proposals from management and with full endorsement by the board, PAR continues to execute the strategic plans for both our restaurant/retail and our Government segments. I'm pleased to report to you that we're making significant progress in our restaurant and retail key opportunities and I will provide more color on Brink and SureCheck later in the presentation. And we'll also report on the progress regarding our Government strategic plan. With the expansion of the office of the CEO, with the addition of Bryan Menar as our Chief Financial Officer, our C-suite now has the expanded bandwidth to focus with laser-like attention on the critical pieces of our strategic plan. I also want to highlight, we're in the midst of deploying our new ERP System. Two weeks ago, we successfully launched our new and modern customer relation management subsystem. I would now like to turn the call over to PAR CFO, Bryan Menar, to give further details on our financial performance for the quarter. Bryan?

Thank you, Don and good afternoon, everyone. Product revenue for the quarter was $37.2 million, up $15.1 million, a 68.5% increase compared to Q1 2016. During the quarter, increase in product revenue was primary driven by hardware sold to our Tier 1 customers, largely in McDonald's which represented 44% of total revenue in Q1 2017 versus 17% in Q1 2016. Additionally, the hardware associated with deployments of Brink POS increased approximately $28 million versus Q1 2016. Offsetting these increases was a $3.2 million decrease in Jack in the Box as we lapped their 2015 rollout which was completed in the first half of 2016. Service revenue for the quarter was $14.3 million, up $2.6 million, a 22.5% increase compared to Q1 2016. We continued to expand our recurring revenue base which includes both software-related services and hardware support contracts. Recurring revenue for the quarter was $9.1 million or 14% of total consolidated revenue compared to 14.5% in Q1 2016. Recurring revenue increased $1.2 million, a 14.4% increase compared to Q1 2016 due to software, up $0.7 million; and hardware support contracts, up $0.5 million. We continued to gain momentum with the deployment of Brink POS, noting 116% increase of Software as a Service compared to prior year. We exited the quarter with approximately $5.7 million of annual recurring revenue from Software as a Service contracts. Contract revenue from our Government business was $14.3 million, down $7.2 million, a 34% decrease compared to Q1 2016. This decrease was driven by the wind down of a large multi-year contract within our program-matching service offering. Contract backlog continues to be significant, noting total backlog of over $113 million as of March 31, 2017, up $32 million compared to Q1 2016 and down $15 million from the previous quarter. Now to review our margin performance. Product margin for the quarter was 25.9%, relatively flat versus the 25.5% in Q1 2016. Service margin for the quarter was 31.1% compared to 26.5% in Q1 2016. Service margins were up primarily due to growth in our Service as a Service platform, depot repair and call center service offerings. Government contract margin for the quarter was 11% compared to 8.7% in Q1 2016. The favorable variance is the result of the shift in revenue mix from PMO to the value-added product offerings of intelligence, surveillance, reconnaissance and mission support. GAAP SG&A was $9.6 million, up $2.1 million versus Q1 2016, primarily due to costs related to favorable year-over-year financial performance, such as commissions and bonus accrual. In addition, there were investments to professional development in our sales organization and advisory-related fees. Non-GAAP SG&A was $8.4 million, up $2.1 million versus Q1 2016. Research and development expenses were $3.6 million, up $0.8 million versus Q1 2016, primarily driven by software investments made to support acceleration of our Brink and SureCheck product lines. Now to provide information on the company's cash flow and balance sheet position. For the 3 months ended March 31, 2017, cash used by continuing operations was $1.2 million, primarily driven by amortization of deferred revenue from the customer deposits received in Q4 2016 for deployments in the first half of 2017. Cash used in investing activities from operations was $3.4 million for the 3 months ended March 31, 2017, versus cash used of $1 million for the 3 months ended December 31, 2016. In Q1 2017, capital expenditures of $2.3 million were primarily for PAR's new ERP system in addition to improvements to our owned and leased properties. Capitalized software was $1 million and was associated with investments for our restaurant/retail software platforms. Cash provided by financing activities from operations was $1 million for the 3 months ended March 31, 2017, versus cash used of $45,000 for the 3 months ended December 31, 2016. As of March 31, 2017, inventory balance was $24.8 million, a decrease of $1.4 million from December 31, 2016, primarily due to execution of our Tier 1 product deployments. Inventory turns were 6x for domestic and international operations which is up 1x versus Q4 of 2016. Accounts receivable increased $3.5 million compared to December 31, 2016, reflecting the increase in revenue versus Q4 2016. Restaurant/retail segment days sales outstanding improved from 49 days as of December 2016 to 45 days as of March 2017. Government days sales outstanding increased slightly to 46 days versus 44 days as of December 2016. This concludes my formal remarks and I would like to turn it back to Don.

Thanks, Bryan. As promised, I will provide you with some insight in PAR behind the numbers. First, I'll address our Government segment's strategic plan. Highlights of this plan are, first, objective 1 is to focus on and invest in both our value-added lines of business, both of our 2 value-added lines of business that rely heavily on the skills of our talented employees, in particular, our high-technology intelligence, surveillance and reconnaissance line of business and our mission systems line of business which provides, on site, a Government location's mission-critical services, in particular, operations and maintenance services worldwide. Objective 2 is to maintain our PMO services line of business, in which we provide quick reaction capabilities to rapidly procure and deploy critically needed products to many U.S. government locations. Regarding objective 1, our value-added lines of business. I am pleased to report that we have increased our value-added ISR line of business by 17.5% versus 2016 Q1. Our initiatives to diversify our ISR line of business at DARPA, the Defense Advanced Research Project Agency and at various 3-letter intelligence agencies are paying off. In particular, we increased our revenue with these agencies by 15% versus 2016 Q1. We're now a key player in the evolving media forensic technology initiatives at DARPA. By investing in our proposal center, by hiring additional experienced business development staff, by improving our proposal capture processes and support tools, we now have 29 proposals which have been submitted and are awaiting government decision. Regarding objective 2, maintaining our PMO services revenue. We have not as yet replaced our large indefinite-delivery, indefinite-quantity Eagle Intel-X procurement vehicle. As such, our PMO services revenues have declined. Looking at our Government segment business as a whole, I am happy to report that we successfully increased the revenue in our 2 value-added lines of business and that our margins have increased to 11% from 8.7% in 2016 Q1. I'm also pleased to report that our contract backlog has risen to $113 million, an increase of $32 million and an increase of 40% over 2016 Q1. Now turning our attention to the restaurant/retail strategic plan and the 2017 Q1 restaurant/retail performance. In anticipation of changing market dynamics, including customer demand for Cloud-based technology to reduce infrastructure costs, to improve labor metrics and to gain realtime visibility through Business Intelligence, PAR has developed and is executing to our strategic plan. In addition, the consumer base demand for frictionless ordering and payment is increasing interest in our solutions. The numbers presented by Bryan demonstrate our leadership in the hardware and services area. Yet these product -- hardware product growth numbers masked the progress we're making in our Brink and SureCheck software initiatives. The growth in Brink and SureCheck Software as a Service revenue continues at an exponential rate in Q1 2017. We reported a 116% increase over Q1 2016. Brink POS monthly recurring revenue at the end of March 2017 grew 98% as compared to the end of March -- monthly recurring revenue at the end of March 2016. Brink added 361 new sites in 2017 Q1, an increase of 83% over 2016 Q1. The number of Brink sites now exceeds 2,800. Moreover, at the end of '17 -- at the end of 2017 Q1, Brink's annual recurring software revenue reached $5 million, doubling the annual recurring revenue at the end of 2016 Q1. New Brink bookings in the current quarter included more than 500 sites, totaling more than $1 million in additional annual recurring revenue. To date, all installed and yet-to-be-installed sites represent an annual recurring revenue of $12 million. Since our last call, we announced several new customers, including CC's Coffee House, Showmars Hospitality Group and Salsarita's. We continued toward our previously stated goal 2,500 new Brink sites in 2017 and ending 2018 with 10,000 Brink sites and approximately $20 million of Brink annual recurring software revenue. Now to update you in SureCheck. SureCheck continues to expand its reach as it is recognized as a food safety and workforce efficiency, Internet of Things platform targeted for food retailers and distributors. We continue to see growing interest from contract stores, convenience stores and industries that demand data capture, business analytics and compliance with increasing reporting requirements. As an emerging part of our business, we're encouraged by SureCheck's performance in the quarter. We realized increases over last quarter's Q1 with hardware revenue rising 80%, software and related services revenue increasing 13% and implementation services grew by 25%. SureCheck is now deployed in thousands of locations. And in the month of April alone, users completed 28.7 million observations. SureCheck pilot projects crossed several industries and include large opportunities for new business, with device requirements in the tens of thousands. New customers include several Silicon Valley companies and their domestic corporate campus dining facilities, including a Fortune 50 corporation that is currently deploying a SureCheck solution to their campuses that includes Software as a Service, Internet of Things and the SureCheck advantage. PAR's SureCheck Advantage hardware has set the bar high in functionality as a mobile handheld device, with temperature capture capabilities, barcode and RFID code scanning as well as intuitive user interface. SureCheck and Brink together drive our strategy of annuitizing our business by increasing margin-rich software recurring revenues for PAR. Our focus and execution strength has influenced the growth on our recurring revenue portions of our business. In the past quarter, our company grew total recurring revenues by 14% over the previous year's first quarter. Even with the unusually high content of hardware revenue in this quarter, recurring revenue still comprised 18% of our total revenues. In summary, our solutions are leading in our targeted markets, distinguished by our Brink and SureCheck software portfolios, our industry-leading hardware platform and include tablets, other handheld devices and traditional POS, all supported by our customer success-focused service organizations. PAR's strong deep partnerships with the restaurant -- with restaurant and retail organizations across the globe are built on the quality of our products, our services and especially the teams that deliver these solutions daily, all supported by our core values. Together, we're executing our strategy that allows us to extend our leadership position. In closing, I want to thank our stakeholders for their confidence in our future and extend our appreciation to our employees for their hard work, their dedication, their commitment and their achievements. Thank you for participating in today's call. This concludes our formal remarks and I will now turn the call over to the operator to start the Q&A session.

[Operator Instructions]. Our first question will come from the line of Howard Brous with Wunderlich Securities.

Don, first of all, congratulations on your recent appointment and secondly, congratulations to you and Karen on a good quarter. What I would like to talk about is to address the items in the 10-K on the internal investigation material weakness. The disturbing thing about all of this is that and I'm quoting from the 10-K, the investigation also revealed that certain members of the upper management knew or should have known of the questionable conduct in 2015 and '16 but failed to take action to prevent or correct such conduct and it continues. So my questions surround and my concern is really this issue. Was there any bribery of government officials in Singapore?

First, Howard, one thing. Since you noted that I -- and I thank you for your kind words. Since you noted that I didn't join until April 12, I really want to thank Karen and her entire team for their performance in the first quarter. I had nothing to do with it. Regarding your second question, other than what we disclosed in our periodic reports filed with the SEC, including our 10-K and our soon-to-be-released or just-released 10-Q, we cannot comment on an ongoing investigation.

Okay. Let me continue and maybe some of these questions you might be able to answer. Were any employees of PAR terminated in China, Singapore or the United States as a result of this?

No. It's our practice not to comment on individual people. I can assure you we're fully cooperating with the investigation and we're taking necessary remedial actions.

Okay. In China and Singapore, what were the revenues in 2015 of each and 2016 and currently?

I'm going to defer to -- who wants to take the question?

I'll take it. So total international, as you know -- For instance, total international for this quarter was 6.5% of our total revenue for this quarter versus, like, 9.2% to for the last. China, Singapore is a subset of that as we have 6 different regions. So it's -- I don't have the exact number in front of me, but I believe it's somewhere between a 4% to 6%.

Each year? 2015 and '16?

Correct. U.S. dollar.

Okay. And currently? Same thing?

Correct.

Okay. Don, even though I know you're new but clearly, you've been on the board and you're aware of it. Has the board completed their reviews? And as far as you're concerned, all the issues of management changes been accomplished? And are there any other potential management changes as a result of this?

If you're talking about the C-suite, we have an outstanding C-suite and I'm very comfortable with it. Over time, we may fill out some positions in finance, legal or in other places as we need them. But I do not anticipate any changes in the C-suite.

Okay. What are the costs have been to date on this investigation? And do you expect any additional costs going forward irrelevant of what the DOJ might or might not do?

Yes, so, Howard, I'll take that as well. So sure, you probably saw on both the 10-Q and the 8-K that was filed a bit early for that. For the quarter, it was just under $1 million, about $962,000 related to this. That gets us to a later date on this about $2.3 million which is primarily really right in Q4 of last year and Q1 of this year. The investigation is not officially complete. It's primarily very close to being complete. It could be -- we can't comment on exactly what additional costs would be in regards to Q2.

Okay. All right. Lastly, do you have any sense of what the DOJ or timing on the DOJ and the costs of potential fine could be as a result of these actions?

No, we did an analysis on that, Howard, as well, working with both our external counsel on that as well and looking at -- or we note a reason on this, on an explanation on that. And we cannot put another and yes, you can actually see and that's what we actually referenced in the 10-Q.

The Q is not out yet, so I haven't seen it.

Correct. It would be premature for us to actually put it an estimated amount on there.

All right. Because my only personal concern clearly is, it's certainly in the NCTA issues that it could be 2x your financial gain as a maximum. That's rather expensive, so that's been my concern. And I'm going to assume that other than that, for the bulk of these issues, they have been resolved. Is that a fair comment?

Well, certainly, our General Counsel -- we cannot comment on an ongoing investigation. But I will remind -- I think it's fair to say that we have reported, okay, that there has been no material effect on any of our past reported financials. I hope that gives you some comfort to date, okay? No guarantees for the future, but to date...

No, I understand that there is a liability of a potential fine down the road with the DOJ, I get that. All right, all of the other questions I have about numbers, I'll talk with Bryan offline.

[Operator Instructions]. Our next question will come from the line of Sam Bergman with Bayberry Asset.

Congratulations, Don, on your new -- on a new position of CEO. So I'm going to start with the least important division, to me anyway. If we look at the run rate of Government, what's your expectations for the rest of the year, just the low point for Government sales or not?

Well, we don't give guidance.

The backlog is pretty strong, so I would assume -- I was surprised to see that, the low numbers in Government. So can you give us a little bit more color on that?

Yes, but -- where I think I can point you toward is, what I've always looked at in Government business are our leading indicators. Our book-to-bill during the last quarter -- or I'm sorry, for the trailing 12 months which is even better than the last quarter, our book-to-bill is 1.4 which is excellent in the industry. We did report, despite the loss of the PMO revenues, we're essentially flat in Q1 in terms of our profit. And I think -- those numbers give me comfort, no guarantee, but these leading indicators give me comfort going forward. I hope that helps.

So on the backlog ending this quarter, is it down from the fourth quarter? I thought the fourth quarter was higher.

The backlog is up. The backlog -- you're talking...

You look through the year itself, it's down...

No, no, no. I'm talking -- I'm only specifically talking fourth quarter versus first quarter of '17.

Correct. So it's down from Q4, $113 million which is up over 40%.

Yes. The Government is -- I can comment -- I have spent a lot of my life in that area. The Government is quite cyclical. Although with the new -- new administrations are always tough in getting started. My experience over the years is that even in a normal transition that it takes time to get the senior positions filled and I'm not talking cabinet members. I'm really talking the senior people who run various agencies and who are their lead support staff, especially in acquisition and in setting policy. We did have -- we avoided the government shutdown or routed the continuing resolution. So there's a certainly has been slowness in government decisions through what we call our Q1, okay which would be Government Q2. They start, obviously, October 1. With the $32 billion increase in the defense part of the budget that was recently approved, I'm hoping that the government will start to make decisions on the 29 proposals that we've had sitting or waiting government award.

Which is an increase from Q4 2016.

Yes which is also an increase. So both -- especially, seasonally adjusted, our contract backlog is high and our proposals awaiting award are high. So it doesn't guarantee anything, but it certainly gives me comfort, plus the fact that we've been able to run the business, okay, by shifting revenue from really much lower. I mean, in our -- where we've lost a lot of the revenue is in our PMO services organization which we basically help the Government with some quick reaction capabilities. I mean, we really buy other people's products, okay? Many of them sophisticated systems, whether they're drones or the drones with sensors on them. And we deploy them to various sites throughout the globe and we do it very efficiently. But most of that revenue is other people's products that we get very low margins on. So I'm very comfortable with maintaining our profit line. I think revenue will be a challenge subject to how fast the government reacts on our 29 proposals and we're submitting more.

Correct. So, I mean -- and then, Sam, if I can just -- just one comment on that. So the backlog is down from Q4, but basically, proposals awaiting awards is up versus Q4. It's the timing within that.

Okay. Let's go on to SureCheck. Can you give us any kind of number on the run rate yearly for SureCheck like you did on Brink?

At this point, I cannot give you the same kind of numbers that we're delivering on Brink. We're anticipating that as we come to the second half of the year and specifically by 2018, that we're going to start providing you with the quarter-over quarter and sequential quarter numbers as we're building up our metrics. We have been reporting on the number of devices that we're tracking as they vary from industry to industry and site to site and we're starting to get a good cadence of the growth. As you know, the software is aligned with the hardware. There's 100% attach rate with our hardware and software as we deploy solutions in the different industries that we're addressing. So it's a little premature right now, but we're looking to provide that kind of a visibility into the growth, again, as we go to the second half of the year and definitely within 2018.

One thing to note, too, is that with SureCheck, we have a number of sites that we started with that are basically licenses that we host. And we have converted to now a Software as a Service. And so we'll have to separate those 2 for you the next time and make a distinction between the 2. We're really focusing our strategic plan in SureCheck on our Software as a Service with recurring monthly revenue.

And actually, that's really a good point. So as we're releasing our next-gen software, SureCheck's software platform, we're intending to convert our existing base to recurring revenue. So they came to market as an enterprise license and as a traditional on-prem licensing and we're working to convert them. And that's not a guarantee, but that is our objective. So everything -- but everything going forward, with all of our new customers since the beginning of 2016 has been SaaS.

So are you expecting the Walmart license to turn into a SaaS model?

We don't have any guarantees and we're looking to implement the new platform. And if they adopt that platform, that's what we -- that would be our objective. But there's no guarantee that that's going to occur.

The last question is on Brink. Can you give us any more color, whether, Don, you can do it for us or Karen again, on the Tier 1 that you said were very interested in going forward with the Brink product?

I'll try one thing that impressed me first. We have a pilot. We have a 30-site pilot going with Dairy Queen. No, I can't -- oh, with a large customer. And it's possible we could extend that pilot, but I'll let Karen continue.

Yes. So we're working with a number of Tier 1s and they're in various stages, as I reported. We have 1 client that we have on a pilot that's extending. And if that goes well, then we would begin implementation in the fourth quarter and into 2018. The second client that we're working with is going into an extended pilot starting -- it already started. We're adding stores in May and June, with the expectation that, that could accelerate in the latter half of the third quarter and into the fourth quarter. So there's 2 that are relatively close. Others are in various stages of discussion and negotiation.

So those 2 Tier 1s that you talked about, can you give us quantity of sites if they were to get the Brink products for all their sites going forward?

Yes. So they're in -- they're close to 10,000 sites. Realistically speaking, I mean, that would take several years to implement all of them. Some of them have more corporate stores than others and the corporate stores would be the earliest to go, kind of like with the Five Guys that you experienced with us. So we also would earn the hunting license, as we call it, to be able to go after the remainder of the stores. And so I believe over the 2018, 2019 period that, that could contribute, the 3,000-plus stores in that period, maybe a little more.

And Five Guys is -- can you just give us an update on Five Guys? Is that 75% complete or less than that?

I can't do the math in my head, but we have roughly 700 of the sites deployed, with the 500 happening in the remainder of this year [indiscernible] I'm looking 100 stores.

Yes, close to [indiscernible].

Yes. We might -- so we're ongoing. We just had a really great conference with the Five Guys community and look to implement the number of stores in the second half of this year.

Our next question will come from the line of Joe Vidich with Manalapan Oracle.

I was wondering if -- with regard to the ERP system, when the implementation will be complete. And you had talked about an annual run rate savings after it's implemented and I was just wondering if you could refresh me on what that number was.

Yes. We just implemented the CRM phase of the -- of our ERP implementation. We expect to go live with the ERP in the later part of the summer and then convert our services platform towards the end of the year and the beginning of 2018. We're looking to reduce expenses by, I think I said $2 million over the course of the 2018 period, so on an annualized basis. And then we're -- that was our initial estimate and we're still going through our change management analysis and looking to see how we can optimize our organization and look for efficiencies to reduce expense across the board.

Our next question will come from the line of [indiscernible].

My question is for Don. Can you talk about why you wanted to become CEO at PAR?

Well, I'm really glad you asked that. I honestly don't like talking about myself, but since you're forcing me, since you asked for it, yes, I thought a lot about it. But PAR, it's part of my DNA. After graduating with a doctorate in '71 in electrical and computer engineering, PAR was my first real job. And I did my dissertation in the area of patent analysis and recognition and that's what PAR stands. That's what it was before we shortened the name. I came when we were in an old building. And 11 years later, we went -- we had an IPO at December 2, 1982. I'll remember it for the rest of my life. So that's how I got my beginning. But I came because I'm excited. There are very few industries where you get an opportunity to have -- to service a market that has exponential growth. And when I looked at -- I've been on the board since January 1, 2016. I've been a consultant to the board since January 1, 2012. I came back, I think, in 2011 to help Government, put together a plan to revitalize its high-tech business. When I looked at the strategic plan that Karen had put in place, I'm excited. I'm as excited as I was when I first came here in 1971. And that excitement -- and I look at what we might do. SureCheck market, in its maturity, is behind the Software as a Service market that this disruption is taking place in the restaurant industry. But I see great potential in that, too. So it's the excitement of working with some very bright people. It's the excitement to build, be part of small card, of something that I -- no guarantees, that I think we can grow. I'm very impressed with our new CFO that really has great experience at -- from Goldman Sachs and Chobani. And then our General Counsel, also with significant experience including, but not limited to, Chobani. So working with bright people in emerging marketplaces, a chance to help implement a strategy that Karen and her team presented and the board approved, I guess, it's excitement. That's my answer. It's excitement.

And then one other question on Brink. Now I know it was a great quarter year-over-year, but it looks like sequentially, if my numbers are right, inflations were down from 4.82 through 3.61. And I think bookings were down from about 1,200 to 500. Is that seasonality? Or can you guys talk a little bit more about that?

I'll start that. We've seen that in the past couple of years. The start of each year has been a slower period of January and February. As we stand here, I mean, the team has had pretty good bookings, simply the bookings themselves have been over 500. For the same period, installations were, let me say, just under 400. The team is still, with the booking that came in, doing more than strong, went up ahead the 2,500 mark that we have, with a goal for this year to double the site base. But this is similar to what we had seen in previous years, the slower period being in the beginning of the year.

There are no further questions. So now I'd like to turn the conference back over to Don Foley, Chief Executive Officer, for closing comments or remarks. Sir?

No, I just like to thank everyone on the call for taking the time. We're laser-focused to implement a strategic plan, 2 strategic plans that have been very well thought out. Thank you for your time.

Ladies and gentlemen, thank you for your participation on today's conference. This does conclude the program and you may all disconnect. Everyone, have a wonderful day.