PAR Technology Corporation (PAR) Q2 2018 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to the PAR Technology Fiscal Year 2018 Second Quarter Financial Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today’s call Mr. Chris Byrnes, Vice President and Financial Relations. Sir, you may begin.

Thank you, Durenda and good afternoon. I'd also like to welcome you today to the call for PAR's 2018 second quarter financial results review. The complete disclosure of our results can be found in our press release issued today at 4:00 PM 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 details in regards to the call. Participants on the call should be aware that we are recording the call this afternoon, and it will be available for playback. Also, we are 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 also 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, PAR's Chief Financial Officer; and Karen Sammon, the Company’s Chief of Staff. 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?

Thank you, Chris. Good afternoon. I thank each of you for joining us this afternoon. I would like to begin today by highlighting our financial results for the second quarter, by providing an overview and update of our business. I will then turn the call over to our CFO, Bryan, who will take a closer look at our financials. We will conclude the call, as usual, by taking your questions. Now, to review the quarter. Second quarter revenues were 52.6 million, a decrease of 15.6% compared to the second quarter last year. Our year-over-year revenue performance was due to lower hardware and hardware related service revenues from our traditional tier 1 hardware only customers in the restaurant retail reporting segment. The company was able to partially offset these reductions with growth in SaaS revenues related to Brink and continued growth from our government segment. On a GAAP basis, we reported a net loss of 1.3 million and loss per share of $0.08 in the second quarter compared to net income of 2 million and $0.12 earnings per diluted share in Q2, 2017. On a non-GAAP basis, we reported a net loss of 652,000 in the quarter and a loss per share of $0.04. Now to review the quarter's business highlights. Starting with Brink. In the second quarter, we activated 1365 new customer sites, a 160% increase from the second quarter last year and the largest number of stores activated in any single quarter. The average monthly recurring revenue per site exiting the quarter was $130. At the end of Q2, we had over 6400 restaurants, utilizing PAR’s Brink solution, an increase of 94% from where we were at the same time last year. New Brink bookings in the second quarter totaled 700 restaurants. While we anticipate a similar run rate for our bookings in Q3, as our Arby’s corporate development successfully concluded in mid-June and as we enter the slower summer months, we expect to return to a more accelerated booking rate in the fourth quarter. With the successful implementation of Arby's Corporate, PAR is the only cloud point of sale solution to be deployed in more than 1000 stores for any single brand. And more notably, we have done it twice. Both Arby’s and Five Guys. This accomplishment establishes Brink as the leading solution for the multi-unit segment of the restaurant market and validates that major chains are confident in the advantages that cloud POS offers. The 6400 plus active Brink sites at the end of Q2 includes over 300 unique concepts, a testament to Brink’s broad market appeal. Interest remains high in Brink. Our target market is multi-unit limited service restaurant chains, QSR and fast casual, but operate more than five sites. The segment represents over 300,000 stores and 950 unique brands. Today, we are engaged in various stages with more than 23% of these sites. We continue to accelerate our investment in the Brink solution, both by adding features and functionality and by enhancing our underlying technology platform to meet growing demands of the market. In late Q2, we announced the release of PAR Pay, the cloud based payment solution that offers our Brink customers real time transaction visibility, allowing anywhere access to view transactions and settlement details, analyze trends, reconcile payments and manage charge backs across all stores. Interest in PAR Pay is building and should contribute to increase our monthly recurring revenue. PAR’s reputation as an innovative leader in hardware and lifecycle services is recognized throughout the industry and creates opportunity for our software solutions. For example, our hardware platforms are being well received by our customers. Our hardware and services businesses are important components of our portfolio and continue to be a positive contributor to our company's financial results. Now, turning toward PAR’s food safety and digital task management solution, SureCheck. Last quarter, we announced four additional pilots based on our new SureCheck version 10.0. I am pleased to report that all four pilots are progressing quite well. Based upon this positive performance, we GA released SureCheck version 10.0. Additionally, we are receiving interest in SureCheck for digital checklist and IoT from restaurant operators who are feeling the pressure from labor cost, decreased labor availability and increased store complexity. Managers require solutions that create operational efficiencies through automation. That is digitizing tasks, capturing data directly from IoT devices and seamlessly making that available to the enterprise. Now to review our government performance. I am again please to report a strong quarter as segment revenues grew 22% in the second quarter versus the prior year. Our Intel solution revenues grew 32% in the quarter, while the mission systems business line grew by 13% in the second -- versus the second quarter 2017. Contract margins remained strong at 11.7%. PAR Government closed Q2 2018 with a multiple year contract backlog of nearly 111 million. In summary, we have made progress in the key areas of our business, regarding subscription software solutions. Revenues generated from our cloud solutions continue to grow and as I mentioned, grew at 66% in Q2. The rollouts to our tier 1 Brink customers continue and this is the foundation of our future growth. We are innovating in ways that truly matter for our customers. We are executing our strategy, leveraging our technology to disrupt the industry and positioning PAR for long term success. I would like to extend my thanks to our customers, our partners, our shareholders for their continued support and confidence in PAR. I especially want to thank our employees for the hard work and dedication, which is essential to creating value for all of our stakeholders. Once again, thank you for participating in today's conference call. I will now turn our call over to Bryan for his more detailed review of our financials. Bryan?

Thank you, Don and good afternoon, everyone. I would now like to take this opportunity to provide some additional details surrounding our second quarter results. Product revenue for the quarter was 20.9 million, down 11.8 million, a 36.1% decrease compared to Q2, 2017. Our hardware sales in the restaurant/retail segment were down versus prior year, as we lapped major hardware project installations to a large domestic customer in the second quarter of 2017. In addition, international revenue in the restaurant/retail segment was down compared to Q2, 2017. Q2 2018 results did include 2.6 million of hardware associated with deployments of Brink, up 0.3 million, a 13% increase versus Q2, 2017. Service revenue for the quarter was 13.9 million, down 1.1 million, a 7.3% decrease compared to Q2, 2017. The decrease was driven by hardware related services, down 2.1 million, offset by software-as-a-service revenue, up 1 million, a 66% increase compared to prior year. The increase in SaaS versus 2017 was driven by a 94% increase in the Brink installment fees from June 30, 2017 to June 30, 2018. We exited the quarter with 9.8 million of Brink annual recurring revenue from SaaS contracts, compared to 7.5 million as of December 2017. Contract revenue from our government business was 17.7 million, up 3.2 million, a 22% increase compared to Q2, 2017. This increase was driven by a 2.2 million increase in our intelligence, surveillance and reconnaissance business line and a 1 million increase in our mission systems business line. As Don mentioned, contract backlog continues to be healthy, having a total backlog of 111 million as of June 30, 2018. In regards to margin performance for the quarter, product margin for the quarter was 26.5% compared to 25.4% in Q2, 2017, with favorable mix consisting of a higher ratio of terminals sold in the restaurant/retail segment. Service margin for the quarter was 26.8% compared to 30.8% in Q2, 2017. The unfavorable year-over-year margin rates are due to increased investments in our call center to support growth and Brink installment, constraints on overhead absorption related to decline in hardware support services, partially offset by favorable product mix driven by growth in our SaaS revenue. Government contract margin for the quarter was 11.7% compared to 11.2% in Q2, 2017. The increase in margin is primarily due to favorable contract mix within the intelligence, surveillance and reconnaissance, partially offset by contract mix in mission systems business line for the quarter. Now to review operating expenses. GAAP SG&A was 9 million, up 0.1 million versus Q2, 2017. The increase was primarily due to growth on spending in sales and marketing and information systems to support growth at our Brink POS and SureCheck solutions, offset by reductions in international operations, cost associated with our investigation at our China and Singapore offices and reductions in other domestic general and administrative costs. Non-GAAP SG&A was 8.3 million, up 0.1 million versus Q2, 2017. Non-GAAP SG&A adjustments for Q1, 2018 included 0.3 million related to the investigation of conduct at our China and Singapore offices, 0.3 million for equity based compensation and 0.1 million for severance costs. Research and development expenses were 3.2 million, up 0.5 million versus Q2 2017, driven by an increase in investments to support the current and future growth in Brink. Now to provide information on the company's cash flow and balance sheet position. For the six month ended June 30, 2018, the cash provided by operations was 0.6 million, primarily driven by a decrease in networking capital requirements, partially offset by net operating loss. Cash using in investing activities was 3.8 million for the six months ended June 30, 2018 versus cash used of 5.6 million for the six months ended June 30, 2017. In the three months ended June 30, 2018, we capitalized 2.1 million of costs associated with investments in the restaurant/retail segment’s software platforms, in line with the same period in 2017. Non-software CapEx was 1.7 million for the six months ended June 30, 2018, down 1.8 versus the same period in 2017. The decrease was primarily related to a decrease in capitalized costs associated with the implementation of our enterprise resource planning system and information systems infrastructure versus the same period in 2017. Cash provided by financing activities was 5.5 million for the six months ended June 30, 2018 with 4.9 million of borrowings from the line of credit and 0.7 million of proceeds from exercised employee staff options. As of June 30, 2018, the inventory balance was 26.8 million, an increase of 5 million from December 31, 2017. Inventory turns were 3 times for our domestic and international operations. The increase is primarily driven by timing of procurement related to hardware projects expected to be deployed in Q3. Accounts receivable of 33.4 million increased 3.3 million or 10% compared to December 31, 2017. Receivable balance was broken down between government segment, up 9.3 million and the restaurant retail segment, 24.1 million. The restaurant/retail segment days sales outstanding increased from 57 days as of December 2017 to 70 days as of June 2018. The government days sales outstanding increased from 37 days as of December 2017 to 47 days as of June 2018. This concludes my formal remarks and I will now turn the call over to Q&A.

[Operator Instructions] First question comes from Howard Brous from B. Riley.

Don, Karen, congratulations on a stellar quarter in the SaaS business, which brings me to really one question. Why are you not doing a rights offering or a spinning off the SaaS business separately from the defense business?

You want to spin it off Howard?

Separate the SaaS business, absolutely from the defense business. I understand the defense business generates cash, but there's several methodologies because frankly the value of the SaaS business far exceeds anything, far exceeds the price of the stock, as we see it today at $18.27? You're doing a great job, you and Karen, no question about that.

I think Matt Cicchinelli, the President of car PAR Government business is doing a great job also. My answer is the same as it was before. Okay. The board always considers, okay, what we can do to maximize shareholder value. It considers the cash generated from the government business to fuel our investments in the Brink, SaaS business and we consider and evaluate virtually every meeting the right timing, okay. And we will we will continue to do so.

All right. So let me then second area, SureCheck. Well, you started going back Q3 of 2017 with significant growth in the first nine months. Then, we graduated to the next quarter monetizing basically because of a substantial slowdown. Last quarter, not this one, we talked about how mature the market is. And now, we're talking about four opportunities. Can you better define the opportunities in the SaaS area for SureCheck, what kind of margins we look for 2019?

The answer at this time is that we're really working on our strategic plan for 2019. We will be presenting to the board in September. As I've said before many times, we continue to evaluate the potential of SureCheck, potential of monetizing it. It's a work in progress. The market is certainly far behind the maturity of the market for the SaaS based Brink business and our focus quite honestly and the revenue that we're getting is really coming from the Brink side. It's just too early to separate out the financials for SureCheck, but I can assure you, we're constantly evaluating it and we're spending the vast majority of our investment resources on Brink.

[Operator Instructions] Our next question comes from Adam Wyden from ADW Capital.

This is a little bit of a follow-up on Howard. I totally get why you're not bringing up the businesses. Brink is in super growth mode and to some degree is probably constrained by resources. I'm sure, you guys saw that Toast raised about $120 million at a $1.4 billion valuation on 10,000 installed units and we’re at 65,000 installed units. They now, I guess, the total committed funding is 250 million, if you include the 112 million and I think we can agree that the total retained earnings of PAR, since inception probably hasn't been 250 million. So we can agree that 250 million has not been invested in Brink, yet, we're still not that far behind them. I guess my question to you is, do you agree with the valuation disconnect and have you explored maybe potentially raising money at the subsidiary level. I'm not sure if you guys saw this, but GM raised money at cruise automotive from Softbank at a $12 billion valuation. And they were reinvesting all the capital from their core automotive business into the automotive -- autonomous and it was losing money and it achieved two things. It allowed them to free up their resources from their core business and at the same time put a place marker on valuation and give growth capital to the future business. I mean, what efforts have been made to kind of explore raising money privately into Brink and how do you guys hope to narrow the disconnect because as far as I can tell, you guys aren’t, at least, maybe you can correct me, you guys aren’t backing away from your 30,000 or 34,000 unit target on 2020 and I run my math backwards, 2000 per year per box, if we get some PAR Pay and pricing growth. That's 70 million of SaaS in the whole company that’s valued at 250. I think that kind of bridges the gap to kind of what Howard was saying. So how do we kind of get from point A to Point B and how do we get more capital in to Brink, so we can really accelerate growth because we’ve got to devote more resources to grow faster, I mean, to do more installations than 1500 a month to really get the thing moving. I mean, and I’ve said a lot here, but I mean I think it's super important, so I'm curious your answers?

We’re always interested in what you say and the challenges you present. I'd like to break this in two pieces. I'd like to have Brian address excess capital market and I would like Karen, I believe, she has a number of things that she'd like to say about Toast. I believe it was 115 million, but I do believe they sold 8% of their company, which would have, just as you said Adam, give them about a 1.4 billion of valuation. And I’ll let Bryan take the capital question and I'll take – I’ll let Karen take the comparison to Toast. Bryan?

Adam, thanks for the question. You are correct and I understand Howard’s perspective as well, but yes, I mean, the government business has been providing solid continuous good cash flow for the organization for a while and continue to see growth in that. That has helped for us to utilize operating cash flow to invest back into the growth into the Brink space. That being said, we’re also aware of the competition and the capital raise that’s been going on in the space as we continue to see disruption in the POS cloud space within the restaurant/retail segment. And as such, what I’ll say, is we’re always assessing our options that we have out there. And I know you brought up a couple of those there, but we're always assessing those and how do we continue to address disruption in the industry.

So you think that you can grow at the same rate as Toast without ramping up sales and marketing and getting more people. I mean it seems hard to grow at the same clip and on board all these things without additional capital in terms of sales and installation. I mean, do you think that you guys can get to 34,000 without real growth capital in 2020. I mean, are you guys backing away from that, Karen?

Let me try one thing. We are addressing our capital needs and I can’t comment on it now, hopefully soon as the comparison with healthcare.

My only comment to you would be, selling, government or selling hardware, look, I think I agree with Howard. I think that this long term should be a software pure play and to the extent that you can get money for hardware, I'm for it, to the extent that you can get a very high valuation for government, I'm probably for that, but I'm just thinking holistically high level, you've got competition in Toast that’s raised $250 million at a fifteen times revenue multiple. It seems like from my perspective, instead of selling cash flow firewood at low multiples, it would behoove you not to try and explore some sort of private capital raise in to Brink at a valuation closer to 1.4 billion. Now, if it's not 1.4 billion, it may be at 600 million, may be 700 million, but I mean trying to monetize kind of the work that you've already done as opposed to trying to sell income producing assets at less than desirable valuations, which leads me to my second question, which is payments. So I think we talked on the last call about payments and creating an ISO and merchant services. Your entire competition is basically doing this and again, I go back to the 50 or 60 basis points, I mean, what – PAR Pay is just a module and it's great and I'm happy to have it, but the real money is making money on the merchant processing for individual customers. I mean, that to me is a two or three times sized opportunity. I mean, if you do get 30,000 customers at 1.5 million, that’s $45 billion of transaction value, and if you're making 60 bps on that, that's $300 million of net payments EBITDA. I mean, even, if you were to get half of your customers to do it, it’s still 150 million. That's a $2 billion or $3 billion business. I mean, that should be equally as high of a priority for you guys as getting customers, I mean, selling payments to them. I mean, where are we on that?

Adam, good to hear from you. So, we are, as you know, we're investing heavily into the Brink platform and our Brink solution and we’ll continue to do so. We see a huge opportunity for the company in the segment of the market where we're competing. And as Don commented earlier, we’re focused on the, what we call, tier 3 C up to tier 1. So five stores and above, which is roughly 310,000 restaurants and over 900 individual concept.

That's just domestic by the way, a lot of these chains are going to get –

You’re right. That’s North America and so that does give us an opportunity as we're working with multinationals and that gives us an opportunity to move internationally at the right time in the right locations. And so we continue to invest heavily in the platform and to increase our footprint, to increase the site base, we've talked about the fact that this, as we see it right now, is a land grab and we do -- in competing with Toast, Toast just started a down market [indiscernible] focused with the tier 4s and moving into the tier 3s. And as we noted, we are the only company that has had the success of implementing concepts with more than 1000 stores and even more when you move to 500 stores and above. Nobody else has done that yet. There are complications that come with being in this market segment.

Well, Toast got Jamba with 1000 units. Didn’t they?

They won Jamba. So we had to see them deploy Jamba. So there is a difference between winning and implementing.

And by the way Jamba just got bought by Roark as well, which happens to be a customer.

Yeah. They did by Focus Brands. So yes, and we are working with all of those accounts. So, you're right, you're absolutely right. And so, they are making a move, they've raised a lot of capital. And you're correct that we didn't, we haven’t raised as much capital because we have an infrastructure, we have a service organization, we have an implementation organization. So because we have been in the business –

But they're installing a lot more than 1500 units per month. I mean, we, I mean, I guess my point is with $100 million, just hypothetically, again, I'm going to Howard, right, but like my view is, at 6500 units, right, and you're not backing away from your 30000 or 34000 2020 like, 70 million in SaaS, we should be able to raise money at somewhere between 500 million and 1 billion, right? And if we could raise $100 million off of that, we could really -- we could, a, hire a lot more installers, because my understanding is the bottleneck on installation is having installers and having people, I mean, I think, that to me is an advantage Toast has. They have a lot of customer service and they have a lot of installers. So that would solve one thing. And then it would allow us to have sales and marketing people to go and do a small and medium sized business where we can get payments? I mean, again, I'm not saying sell assets at low prices, I'm saying, this is a huge greenfield market and we're neck and neck with Toast one and two and we should be able to crystallize some of the very attractive venture financing that's going on in the marketplace. I mean Lightspeed, all these people are raising huge dollars and huge valuations. Meanwhile, our entire company is trading for 250 million and we have 30 million of real estate, we've got a government business that's worth 100, we've got some hardware, we've got SureCheck. I mean, we’re effectively valuing this Brink at a very low valuation. So, again, I'm really against kind of trying to monetize assets at low multiples when we have a high asset multiple inside of this thing, that I think Howard is trying to say that like we should be able to be getting VC style capital terms, even as a private subsidiary. That's why I use it on Cruise and by the way, you're also discounting the payments argument too. I mean, Toast’s valuation was done on a combined SaaS and payments, we haven't even implemented payments yet. I mean, is that something kind of a merchant processing, I mean, where do we stand on that?

Yeah. So like we said, last quarter, we are a referral partner and that generates revenue and have negotiated better terms and we are looking to become a retail ISO. And as far as Toast is concerned and others that are in the tier 4, they are payment facilitators. They are able to – it comes with risk and cost and that is not part of our strategy at this point, because we're a focused market, but as a retail ISO, it will enable us to participate in higher rates.

Well, even more reason to raise capital at attractive rate because it provides you the capital to go move forward with the merchant processing, to the extent that there are more capital needs on that. I mean, it all kind of points to the same thing, which is I think Howard and everybody else was kind of scratching their head, like I am to say, look, you guys brought this thing with 300 units, you've miraculously taken it to close to 7000. Against competition, that's got $250 million of the venture capital and the question is, is, if we want to get in line with them, and kind of build the business like theirs, a, capital is very cheap as it relates to SaaS and point of sale and b, you need the capital to be competitive. And so I think all of us are really impressed with what you have done, Karen in buying this thing, but I think it's at the point now where the company kind of needs to put the grownup pants on and really spend money to kind of be competitive, because there's enormous amount of money going into this. And I think we've got the best product, but we want to win and I think winning, we've got to have payments and we've got to have a lot of capital. I mean, it's remarkable what you guys have done, but I think you’re at the point now where you can kind of really turn it up.

Adam, we're listening, Adam.

Last question, on SureCheck, there was a thing in your PowerPoint deck that listed McDonald's as the customer. I assume, they're piloting. I mean, Howard asked about this, but you kind of have been flip flopping in terms of selling it, not selling it, doing it, clearly, it has some value, but I guess my question is, has something changed? I mean, is it inflected? I mean, you're investing more resources and clearly not as many as Brink, but I mean I guess my question is, is there kind of mind share, just kind of futzing around with it and if you could get 30 million bucks for it, would you sell it today to someone or do you really think it's got, because initially you guys said that the TAM was as big -- was much bigger for this than Brink, so I’m kind of curious kind of high level you know why you're futzing around with it or has something changed such that you think it could be a lot more valuable now?

One answer is, we are in a pilot. Okay. The second part is, it's just been a slower market to adapt and we're constantly evaluating it. As I've mentioned I believe on our last call, we’ve basically in version 10.0 to be price competitive at certain points. We've basically separated -- we have modules, separate modules for food safety, for the digital task management and for the Internet of Things and we're reevaluating, okay, where market adoption is, where we stand within that market and it's been -- we're looking at how we maximize returns for shareholders. So, it's very hard to do in a market that's as immature as that is.

Okay. And last question, you guys are still sticking to your 9000 or 1000 book for 2018. I mean, is there anything that you see that would lead you to believe that doing 30,000 to 35000 in 2020 is not on. I mean, you've got 6500, you’ve done Arby’s and Five Guys integration, you're talking to 20%, right, 22% of the 317,000, and I get it [indiscernible], how do you see the backlog building? I know you said bookings of 700, but I mean, that's really just stuff that's going to be installed 60 to 90 days. I mean, can you give people a little bit more insight into the pipeline and your level of confidence in kind of getting up to those numbers, because if you do, this is the most ridiculous stock price we’ve ever seen.

We are engaged at all stages, okay, with 23% of market that’s over 300,000 that we think we're a leader in. Okay. And that's today, okay. So my math is right, 20% of 300,000 is a big number. I mean, we're not going to close all of them.

And a lot of those big chains are international too, so if you do well domestically, you'll get them international?

That number -- it just gives me an awful lot of confidence. We're getting, I think our customers are really pleased with our -- with what we're delivering, we're investing in it, I'm very -- you know me, Adam. I'm very optimistic and we're pushing.

And I’d just like to add more of that Adam is, right, as we look at it right, looking at the adoption within the market itself, right, so we still believe it's in an early adopter phase, we’re seeing that starting to move forward into probably more closer to the higher teens. As we talk about 30,000 sites, that is about 10% market share, what we're looking at there. That will be something higher in that regard to -- that addressable market that actually adopts over say the next two to three years. And yes, you're correct. That is domestic. So, yes, in regards to us, still pursuing on a 30000 within the next, let’s call it, 2.5 years, that is still on our radar. We're going forward with that, the opportunities are out there. To your point, we've got to properly make sure that we invest wisely to be able to activate on that.

Right. I mean I guess my point is, is that, you did this Arby’s and you did this Five Guys and you celebrated a 1500 install. I'd like to see 5000 installs per quarter personally or something much greater. I mean, look to go from 10 to 20 and from 20 to 30, 10 to 20 is 2500 installs a quarter and 20 to 30, from 19 to 20, it's more and look, it’s kind of funny, because when you look at Toast, they've done not that much better than you on SaaS, they've clearly done better on payments, but it’s SMB, but they've done it with 250 million and you've done on a shoestring. I would just like to see you guys be able to do the same things they're doing with a big warchest and it's admirable that you've done on a shoestring, but now the question becomes, as you start implementing these large scale enterprises, which I think you want and you need, the question is, you don't want to be bottlenecks with installers and customer service like you want to be able to say, look, I can implement a Subway, a McDonald’s, I want to be able to implement five mega -- monolithic things at once. And I just think from a resource perspective, I know it's going to be easier with more money and you guys should be able to access resources at comparable financing rates, I would think. So that's all I’m saying. I mean, I just, I want to make sure that you guys understand that you have a wonderful opportunity ahead of you and we see an enormous amount of capital attracting to the industry and we've got the best products, so we should add that capital, so we should -- so we can be competitive. I think that's my point, I mean, and it’s payments, it’s everything, right. So whatever you guys can do to accelerate the resources devoted to Brink, that's going to accelerate your unit adoption installation and payments, so I think you're going to get very, very, very, very high returns.

Thank you for your insights. We’re listening.

Thank you.

Our next question comes from Howard Brous from B. Riley.

Just to tie a bit of a ribbon around what both Adam and I are saying. From my memory, from a few minutes ago, Bryan, you said you generated $600,000 from cash flow from operations. Is that a correct number?

Yes.

That's the point. With $600,000 of cash flow from operations, how can you do what we think is very possible to do and the money is out. There's no question about that at very high multiples of what you're doing.

Understood, Howard.