SS&C Technologies Holdings, Inc. (SSNC) Q2 2023 Earnings Report, Transcript and Summary

Thank you for standing by. My name is Bailey and I will be your conference operator today. At this time, I would like to welcome everyone to the SS&C Technologies Q2 2023 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the call over to Head of Investor Relations, Justine Stone. You may begin.

Welcome and thank you for joining us for our Q2 2023 earnings call. I'm Justine Stone, Investor Relations for SS&C. With me today is Bill Stone, Chairman and Chief Executive Officer; Rahul Kanwar, President and Chief Operating Officer; and Patrick Pedonti, our Chief Financial Officer. Before we get started, we need to review the Safe Harbor statement. Please note that various remarks we make today about future expectations, plans, and prospects, including the financial outlook we provide, constitute forward-looking statements for the purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our most recent annual report on Form 10-K which is on file with the SEC and can be accessed on our website. These forward-looking statements represent our expectations only as of today, July 27th, 2023. While the company may elect to update these forward-looking statements, it specifically disclaims any obligation to do so. During today's call, we will be referring to certain non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to comparable financial measures is included in today's earnings release, which is located in the Investor Relations section of our website at www.ssctech.com. I will now turn the call over to Bill.

Thanks Justine and thanks everyone for joining. Results for the second quarter are $1.363 million in adjusted revenue, up 2.5% and our adjusted diluted earnings for share were $1.08, an increase in interest expense which was $118 million in Q2 2023 compared to $68 million in Q2 2022, and general expenses have put some pressure on our bottom-line. Adjusted consolidated EBITDA was $502.4 million and our EBITDA margin was 36.8%, up 103 basis points from Q2 2022. Our second quarter adjusted organic revenue was up 2.5%, driven by strength in our alternatives business, particularly private markets, which was up over 20%, Intralinks and retirement businesses. SS&C generated cash from operating activities of $584.2 million for the six months ended June 30, up $132 million or 30.5% over the same period last year. We paid down $125 million in debt in Q2, bringing our consolidated net leverage ratio to 3.27 times and our net secured leverage ratio to 2.28 times consolidated EBITDA. In Q2, we bought back 2 million shares for $111.9 million at an average price of $56.17 per share, and we will continue to target 50% of our cash flow to stock buybacks and 50% to debt pay down. Our M&A strategy remains disciplined and we have yet to see movement on any large assets. We do think that there will be opportunity to do some tuck-in acquisitions in the near term. Expense management will be a priority for the remainder of the year. Our internal deployment of Blue Prism digital workers is well underway, and we are on track to see what your targets. We currently have over 500 digital workers deployed across all business units. We believe this is one of the fastest deployments of digital workers in Blue Prism's history. Currently, the largest use of Blue Prism is in our goods and fund administration businesses, but we see significant opportunity in retirement, health, regulatory, and tax reporting. Operational functions in production with digital workers include reconciliation, break investigation and resolution, statement downloads, daily price files, investor contract notes, and statements and reporting. We expect the FTE savings to accelerate in the back half of the year as these live processes are embedded in the business and the full benefits are realized. I'll now turn it over to Rahul.

Thanks Bill. Our business continues to strengthen as we prioritize innovation and new product rollout across. Intralinks rebounded with 9% growth in Q2. Average deal sizes up, price increases have been implemented. Deal services, which offers redaction and NDA services, has become Intralinks fastest growing product. In our investor portal business, we launched InView, a purpose-built portal designed for investors to aggregate all of their fund reports into a single view and make data-driven decisions. Initial client feedback has been positive. As Bill mentioned, private markets continues to accelerate with strong growth in Q2. Private credit, in particular, is a big opportunity for us and our offering has made significant advancements as we go live on the SS&C private cloud environment. GoCheck integration, loan platform integration, our robust data platform are all key functionalities to manage complex fund structures. Retirement, which grew 7% in Q2, has several multimillion dollar opportunities in the pipeline. We recently surpassed $1 billion on our retirement income clearing and calculation platform and have grown the number of participants 42% since January. Sales remained strong in Q2, with headline wins in fund services, Advent, and GIDS. Some key attributes that our prospects cited were strong functionality, ability to purchase both software and services from a single vendor, and our commitment to innovation. Sales priorities remain disciplined execution, offering holistic and comprehensive solutions for customers and paying close attention to their onboarding experience. As one example, we recently announced Blue Prism has partnered with the National Health Services Shares Business Services team to provide additional services to the NHS in England. Using Blue Prism's intelligent automation platform, NHS organizations can improve patient care, expedite patient processing, and transform standardized services, contact center communications, HR, finance, and other corporate functions. These new capabilities mirror the needs of our pharmacy and health care customers in SS&C Health and review the kind of our health care products and services, including DomaniRx, along with Blue Prism to be a powerful solution. I will now turn it over to Patrick to run through the financials

Thanks. Results for the second quarter were GAAP revenues of $1,362.6 million, GAAP net income of $130.7 million and GAAP EPS of $0.51. Adjusted revenues were $1,363.4 million. Adjusted revenues were up 2.5%, adjusted operating income increased 6.7% and adjusted diluted EPS was $1.08, a 1.8% decrease from Q2 2022 due to the impact of higher interest rates on our debt. Adjusted organic revenue increase on a constant basis was 2.5%. Acquisitions contributed $5.8 million. Foreign exchange had an unfavorable impact of $3.4 million. We had strength across several product lines, including alternatives, GIDS transfer agency services, Blue Prism and the Intralinks businesses. Adjusted operating margins expanded in Q2 2023 as we manage expense growth. Adjusted operating income for the second quarter of 2023 increased $30.5 million or 6.7% from the second quarter of 2022. Adjusted operating margins were 35.6% in the second quarter compared to 34.2% in the second quarter of 2022. Excluding acquisitions, expenses increased 0.6% on a constant currency basis. Acquisitions added $3.8 million of expenses and foreign currency decreased costs by $6.2 million. Net interest expense in the second quarter was $118 million, an increase of $50.3 million or 74% from Q2 2022. Q2 2023 net interest expense includes $3.4 million of non-cash amortized financing costs and OID. The average interest rate in the quarter was 6.59% compared to 3.45% in the second quarter 2022. Adjusted net income, as defined in Note 4, was $274.6 million and adjusted EPS was $1.08, and effective tax rate was 26%. Diluted shares decreased to $255 million from $257 million in Q1. Higher share repurchases during the first and second quarter look to the decrease. On the balance sheet and cash flow, we ended the second quarter with $439.7 million cash and cash equivalents and $7 billion of gross debt. SS&C's net debt, which excludes cash and cash equivalents of $114.4 million held at DomaniRx, was $6.6 billion as of June 30th. Operating cash flow for the six months was $584.2 million and $136.7 million or 30.5% increase compared to the same period in 2022. And for the six months ended June 30th, we purchased treasury stock for a total of $246.6 million or 4.3 million shares at an average price of $57.78. We declared and paid a dividend of $101 million in common stock compared to $102 million last year. Net debt payments for the six months was $169.8 million. And for the six months, we paid $226.9 million of interest compared to $112.6 million in 2022. In the six months, we paid income taxes of $159 million comparable to $156.5 million in 2022 and our accounts receivable DSO was 53.1 days compared to 55.9 days as of June 2022. Capital expenditures and capitalized software totaled $121.4 million or 4.5% of revenue on a year-to-date basis. Our LTM consolidated EBITDA, which we use for covenant compliance, was $2,031.6 million as of June 30. Based on net debt of $6.6 billion total leverage ratio was 3.27%, and our secured leverage ratio was 2.28%. On outlook for the remainder of the year, I'll cover a few assumptions. First, we'll continue to focus on client services. Retention rates will continue to be in the range of our most recent results. We have assumed foreign currency exchange will be at current levels. Our outlook assumes software license business will have lower growth in the second half of the year compared to previous expectations. Adjusted organic growth for the year will be between 2% and 4%. Adjusted organic growth for Q3 will be in the range of 1.5% to 4.5%. We have assumed interest rates will stay consistent with current rates for the remainder of the year, and we will manage expenses and personnel costs to improve our operating margins. And we'll continue to invest in our business long term with capital expenditures in the range of 4% of revenues and I would expect our GAAP tax rate to continue to be approximately 26%. So, for the third quarter of 2023, we expect revenues in the range of $1,355 million to $1,395 million. Adjusted net income in the range of $287 million to $309 million and diluted shares in the range of $254 million to $256 million. For the full year, we expect revenues in the range of $5,469 million to $5,575 million. Adjusted net income in the range of $1,160 million to $1,225 million and diluted shares in the range of $254 million to $257 million. For the full year, we expect cash from operating activities to be in the range of $1,165 million to $1,335 million. The DST Arista 401(k) settlement, which we recently announced, is excluded from these cash flow estimates. If the court approves the settlement in 2023, we expect the impact on cash flow to be approximately $40 million net of taxes. And I'll turn it over to Bill for final comments.

Thanks Patrick. and I want to congratulate you on your retirement. Patrick has been with SS&C since 1999. You've seen us through over 60 acquisitions, the go private transaction, and our 2010 IPO. Thank you for your accomplishments and your dedication. I also want to welcome Brian Schell to SS&C as our newly appointed CFO. Brian will join us SS&C on August 7th from his position as CFO of [Indiscernible]. Brian has MBA from George Washington University and has done Graduate Degree from the University of Notre Dame. Finally, SS&C has spent the past 37 years developing and acquiring a broad range of market-leading technology. We have added world-class service around these products. Multiple times, we have aggressively and extensively defended our intellectual property against misappropriation. We have done it successfully multiple times. On occasion, our professional fees will pick up as we hire expensive legal talent. And now, I will open it up for questions.

[Operator Instructions] Your first question comes from Kevin McVeigh with Credit Suisse.

Thanks so much and let me add my congratulations to Patrick as well, and welcome to Brian. It looks like you continue to see real nice momentum in the organic growth came in at about 2.5% and the guide for Q3 and the full year is 3%. If I do the math, I think that implies 5% for Q4. I just want to confirm that, number one. And then that's a really nice acceleration from the beginning of the year. Maybe if I'm right on that 5%, could you maybe just help bridge maybe from the 1% to the 5% or maybe the 2.5% that you just put up to the 5%, maybe start there?

Well, I think that we did 2.5% in Q1, in Q2 2.6% maybe. I think in Q3, we're expecting somewhere between 1.5% and 4.5%. And for Q4, I think, Patrick, what do we have for Q4 on the organic revenue growth?

Q4 at the midpoint in Q4 at about 4.8%, so close to 5%.

Yes. Does that answer your question, Kevin?

It does, Bill. And any sense that the professional fees on IT. Just any additional just thoughts around that? Because it seems like the delta on the EPS was interested, it sounded like some medical. And then I think those professional services that you just alluded to, is that right?

Medical claims, obviously, interest expense is by far the biggest thing to impact EPS. But on operating basis, medical claims and professional fees were more than expected in Q2. And we -- you have no choice but seeing these things through to the end. But if you don't protect your IP, then we're not protecting the shareholders' assets. And so we will continue to do that. And like I said, we've been successful a number of times.

Makes sense. Thanks so much.

Your next question comes from Dan Perlin with RBC Capital Markets.

Thanks. Bill, maybe you could just spend a moment talking about some of the you've got for these investments that you mentioned in the release. You sound pretty adamant that they're going to drive incremental revenue growth. The -- obviously, just talking about the organic growth?

Well, I think, Dan, what we've done is we spent a lot of money building out a number of new systems and even in what has been a pretty tough financial market, even though it's gotten a little stronger than last quarter. But you can see on our AUA that ticked up about $15 billion in Q2, that's a good harbinger of some of the things that we've done for our clients that separates us from our competitors. And I think what we've done with the technology in our services business is to make it that it's a compelling offering for our clients and our prospects and we continue to take business from our competitors. I think it's still lumpy, right, particularly with the best funds. We have -- feels we think we would have sort of closed months ago that literally drag. And there's really, at least as far as we think that there's nothing we can do to make the biggest fund to go faster. So, that's one thing. And then on the technology, the Aloha products has been pretty strong. We've done pretty well with singularity. We've got real momentum in all the additional products that we've done with Black Diamond. We've combined Black Diamond with our trust accounting so that RIAs can continue to keep -- keep the assets that they've gathered when it goes generational and the generation puts it in trust for the kids, oftentimes, they lose that business because they don't have tri-counting capabilities. So that's been pretty popular for us. And Geneva continues to dominate in the large-scale hedge fund business. And I think we have a number of those private markets as we've said, it was up over 20% in Q2. So, there's any number of pockets of strength is in all the pockets to be a strength in the same quarter, right? So, I think it is -- it's just a cost. It's making sure we're executing at a very high level and that we go for the wins. And that's we're still a very profitable company. We generate tremendous amounts of cash. We're not going anywhere. We're still very competitive, and it's just a question of really getting the entire orchestra perfectly in tune. We still on?

Dan, you have a follow-up?

Sounds like maybe we lost the operator.

I think we lost the operator. Yes.

I thought it was a really good answer though.

I believe we have Andrew Schmidt from Citi as our next question. The operator should be joining again soon.

Go ahead, Andrew. We must not be connecting with the--

No, they can still hear us.

Can Andrew hear us?

I think so. I just can't open his line from where I am.

Yes. Yes.

Andrew, your line should be open hear us.

Well, some of the things that we're working on as we have this lull in our conference call. We're excited about bringing Brian Schell on and he brings a lot of experience and expertise. You obviously have big shoes to fill with Patrick. But I think our opportunity to -- can grow is going to be tied to continuing to up our talent and execute. We have full pipelines. We have leading positions in lots of segments of financial services. We have a real opportunity in DomaniRx, and it's really bringing all that to fruition. I think that's the challenge that we have. And I think we're up for that challenge. And we're generating $502 million in EBITDA. That kind of gives you a feeling that you have enough resources to get it done.

Your next question comes from the line of Peter Heckmann with D.A. Davidson. Please go ahead.

Okay. Glad to have us back online here. Bill, can you talk a little bit this trade settlement -- shorting the trade settlement cycle to one day plus and then eventually to T. that's been talked about for a very long period of time. Do you view that as a catalyst at all for some of your clients to consider upgrading older systems?

I think that if they have to, then they will. And if they can continue to mandate it, like a lot of them have done so far, I think they'll continue to do that. So for it to be a mad dash to get new technologies in, I don't foresee that. But there will be some that want to take advantage of the increased capability of the newer systems, the security, the speed and then also the reconciliation parts of that stuff and making sure that everything gets processed in a very timely fashion. So, there will be some disruption, but I don't think there'll be a tremendous amount of incremental revenue. Like, I don't think there's a few hundred million or something like that, right? And to move the bar on SS&C, you got to do $100 million or $200 million.

Right. Okay. Okay. And then Intralinks up 9% is particularly impressive given that M&A continues to be down by 25%, 30% year-over-year. I know you mentioned one area and I didn't quite catch it, but can you talk about some of the areas outside of M&A where Intralinks is outperforming and allowing that business to continue to grow.

Do you want to take that, Rahul?

Sure. I think the biggest area outside of M&A is the alternatives area. That's the in-view portal that I mentioned in my comments. It's the LP communication, capital call distribution, statement distribution, those kinds of things. And as we continue to bring our businesses closer together, develop joint solutions, we're finding lots of opportunities to sell that web and LP communication system to our fund administration clients and going to market as sort of a joint package. And that's been attractive. So, that's another area where that alternatives business is growing even faster than the M&A business right now.

And I think we have like redacting services and other investments to the core offerings that have also been pretty attractive.

Okay, that's helpful. And then just last question. Just in terms of the way you report in this quarter, you talked about a couple tough comp from software license fees. On an annual basis, I don't believe you're still disclosing this as a separate line item, but software license fees, are we kind of talking around $65 million, $80 million a year? Is that about the right level if we just delayed the provincial licenses?

I don't really have that off the top of my head, Pete. I would guess that we sell, yes, probably something $20 million, $25 million a quarter.

Okay, all right. I appreciate it. I will get back in the queue.

Your next question comes from the line of Andrew Schmidt of Citi. Please go ahead.

Hey guys. Thanks for taking my questions and let me extend my congratulations to Patrick, and look forward to working with Brian when he comes forward. I wanted to ask on the operating expense base. Obviously, it's been a volatile couple of years, and there's been more variability there than historically. Maybe just talk about just your visibility when it comes to the expense base in terms of just what to expect? On one hand, you maybe had a few things, labor cost for the past year. Now, you have these legal fees picking up a little bit. On the other side of this, we also have Blue Prism benefits. So, just wondering just how will this balance out in terms of your overall margin structure and visibility going forward? Thanks a lot guys.

Well, I think our -- if you look at our expenses on a constant currency basis, excluding acquisitions in Q2, I think it was up 0.6%. So, as an overall marker, to keep your expense growth at less than 1% is, I think, pretty impressive. And as much as we've been deploying and getting some of the benefits of Blue Prism, it's like -- it's a little bit like we're in spring training. For baseball, we're not going to get really hit our stride maybe until the middle of summer. So, I think we have a lot of opportunities to further our cost management, our expense management with the deployment of digital workers. And we think we can just give our workers current human workers better jobs with more interesting work and let the digital workers do the repetitive stuff that computers are great at. So we think we have a tremendous opportunity there. Occasionally, you'll have a situation where you think your IT has been misappropriated and then you got to go defend and that's not a cheap process. And -- but it's a necessary process. And so that happens and we had some excess medical claims in the second quarter. And that's going to happen. We have a big population and we want to make sure they have great health care. And so whatever that is, we're happy to pay it.

Got it. Thank you for that. And to be clear, you're still -- it looks like -- correct me if I'm wrong, you're still expecting operating margin in the back half. Is that correct?

We are.

Okay. Fantastic. And then. Just lastly, it sounds like growth sort of expected some slowness in terms of license revenues. What's the expectation for just license revenue pull-through in the back half, just given that, that can be more variable relative to kind of the other sources of revenue. Just curious to get your visibility around that. Thanks a lot guys.

Well, license revenues are kind of capital expenditures for our customers. And more and more, they're going for outsourced services, longer-term contracts and less large steel capital commitment. So, I would suggest that the license business will continue to evolve more term licenses, probably perhaps longer term, which might offset some of the move towards because on longer-term licenses, you get 606 recognition. So, there's a lot of moving parts and some of the stuff with the accounting and the reporting, GAAP and then adjusted GAAP and all that, it gets a little. So, for me, I watch cash. How much cash do we get coming in here? And cash doesn't lie. So, I think that's kind of my focus and how people interpret accounting rules is a difficult process.

Got it. Thank you, Bill.

Your next question comes from the line of James Faucette with Morgan Stanley.

It's Michael for James. Thanks for taking our question. Bill, I think at a conference in late May, you were talking to buyback potential in the $700 million range. And then we have the buyback announcement for roughly $1 billion. Is there anything we should be reading into in terms of the higher quantum there just in terms of your use of free cash flow?

I mean I don't think so. I think if we find acquisitions that we want to buy that we can get at a price where we feel like we can we can make some money, then I think we will go after acquisitions first. But after that, we're going to pretty much split it between stock buybacks and debt repayment. If interest rates alleviate, we'll probably allocate more to stock buybacks than we would to debt pay down. But we're not going to go 100% either way. And we view it as art more than we view it as science are going try to be wise.

Makes sense. Appreciate that. Maybe just a follow-up on the organic rev cadence throughout the rest of the year. It seems like a scaling on the organic revenue side with exit rates close to 5% in 4Q. But is there anything in the pipeline and/or what you guys are planning on doing from a pricing perspective that gives you the visibility into that 5% number in 4Q?

It's a whole combination of things, right, including price increases and getting the large-scale deals that are already in that have revenue -- have that revenue flush through in Q4 and then it's selling new business. So, I think it's a combination of things, and there's work to be done, of course. But it's still July. We've got a lot of time, and we have a lot of really talented people. And we expect results and on balance, they deliver them.

Thanks Bill.

[Operator Instructions] Your next question comes from the line of Terry Tillman with Truist. Please go ahead.

Hey guys, this is Joe Meares on for Terry. Extend my congrats to Patrick and to Brian. It's always nice to see a fellow claim in the corporate. I have a question about Blue Prism. I think at the end of last year, you had expected about 100 digital workers, you have 500 now. Do you expect to get to 1,000 by the end of 2023?

I think the numbers we gave at the last conference call was between 1,350 and 2,700. And I think Rahul can correct me if I'm wrong, but we would expect to have close to 2,000 by the end of the year.

I think that's right.

And just a follow-up. I think in the past, you've noted about a $50,000 savings per role that's migrated Blue Prism. Is that still accurate? Or are you seeing better over savings as you've implemented more of these workers?

I would say that, that's still the kind of rough estimate of where we are. We -- as we automate different processes, there's more of a -- it might be a little bit wider of a range of what we say by digital worker. But I think we would still say the averages somewhere around $50,000, plus or minus 10%.

Great. Thanks so much guys.

Your next question comes from the line of Patrick O'Shaughnessy with Raymond James. Please go ahead.

Hey good evening. Can you speak to which part of the company where your intellectual property litigation is targeted? And has the potential effect of your IP had any impact on that business at this point?

Yes, it's primarily in our fund services business. And I would say that we think it has that impact on our business. And -- so that's why we fight these things, Patrick, is that there -- you don't want to compete against people that are competing against you with your technology. That doesn't seem particularly fair.

Got it. Makes sense. And then what are you seeing out there in terms of deal multiples? Obviously, SimCorp sold recently at a pretty lofty multiple as data. Are there pockets where multiples are starting to come in? Or is it all still pretty frothy?

I don't quite understand either one of those deals, frankly. But obviously, those are smart people that do those things, and so they do. I just look at it that we make a whole lot of money. And if we keep our eye on the ball, we're going to get some nice pits and we're going to knock them out of the park. And there's no reason to -- I understand, right? I mean we want total shareholder value and we always want our stock to go up rather than go down but we live in a 90-day world on that stuff. But technology and big time customers that they don't really live on a 90-day world. . Sometimes they wait six months before they in contract and the contract doesn't change at all in those six months. So, it's getting in the cadence of your customers and making sure that you have enough pipeline that when people delay, you got other ones that you can accelerate. And so I think that's our real challenge is a $5.5 billion if you want to grow 10% didn't have any attrition, we still have to sell $550 million. We have 4% attrition, but we have to sell $750 million. That's a lot of revenue. That's a lot bigger than most of the people that we get to.

Understood. Thank you.

Your next question comes from the line of Alex Kramm with UBS. Please go ahead.

Yes hi. Good evening everyone. Just wanted to come back to organic growth for a second here because I don't think that's been asked on the actually the cut down. I mean you were at -- I think the midpoint was 3% before -- sorry, yes, 3% before -- before -- 3% now. You talked about the software licenses, so that makes sense. But is it at all? Or is there something else that you would highlight why the reduction? I mean, you did come in better in the second quarter here as well?

I can take it.

Go ahead, Patrick.

Yes, I think it's all -- I mean, when you compare the outlook we provided a quarter going to this outlook, it's pretty much the software business. Advent as an institutional asset management. And we're seeing improvements in some of the other outsourcing business like alternatives, Intralinks, and our health business from where we expect it to be. So, it's mostly the software business. It's still growing in the back half of the year. It's still growing in the back half of the year, but not as much as we expected.

Okay. And then maybe on a more positive note, the GIDS business, I don't think is kind of on this call at all to pretty solid back-to-back quarters, I mean, so in the context of the normal growth in that business, 3.5%, but seems strategicable. So just wondering if there's any incremental color if that's a good growth rate for the time being? Or if you're hopeful that it's not only stabilized, so we can actually accelerate from here?

Well, I think we've done a pretty good job of repositioning that entire business. And I think that we have some optimism about being able to close big deals. But in the [Indiscernible] business, they're very large, tens of millions annually. So it's a long sales process. And so it is fraught with delays. So, while we have some optimism, I would say that we're watching that very closely. Rahul, any color?

Well, I think I agree with everything you said. I think the other thing that I would highlight is some of our largest opportunities in the company globally are in this business, right? So, to Bill's point, the sales cycle are a little bit longer. We have to keep our eye on it at all times. But in terms of a medium-term outlook, if you kind of look out even a couple of years, we do think that this business is capable of growing a lot faster than kind of low single digits than it is right now.

All right. Very good. Thanks guys.

There are no further questions at this time. I will turn the call to Stone.

Thank you, Bailey. Again thanks everybody for being on the call. I can assure you that we are pretty focused and we look forward to talking to you at the end of October. And Patrick, thanks again. See you.

Thank you.

This concludes today's conference call. Thank you for joining. You may now disconnect your lines.