TransAct Technologies Incorporated (TACT) Q4 2022 Earnings Report, Transcript and Summary

Greeting. And welcome to the TransAct Technologies Fourth Quarter and Full Year Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would like to turn the conference over to your host, Ryan Gardella. Sir, you may begin.

Thank you, Rob. Good afternoon and welcome to TransAct Technologies fourth quarter and full year 2022 earnings call. Today, we’ll be discussing the results announced in our press release issued after market closed. Joining us from the company is CEO, Bart Shuldman and President and CFO, Steve DeMartino. Today’s call will include a discussion of the company’s key operating strategies, the progress on those initiatives and details on our fourth quarter and full year financial results. We will then open the call to questions. As a reminder, this conference call contains statements about future events and expectations which are forward-looking in nature. Statements on this call may be deemed as forward-looking and actual results may differ materially. For a full list of risks inherent to the business and company, please refer to the company’s SEC filings, including its reports on Forms 10-K and 10-Q. TransAct undertakes no obligations to revise or update any forward-looking statements to reflect events or circumstances that occur after the call. Today’s call and webcast will include non-GAAP financial measures within the meaning of SEC Regulation G. When required, a reconciliation of all non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP can be found in today’s press release, as well as in the company website. And with that, I’d like to turn the call over to Bart.

Thank you, Ryan. And thank you to everyone for joining us on the call today. Clearly, I cannot be more pleased with a fourth quarter results, or with the trajectory of the business as we enter 2023. As always, these numbers could not have been possible without the tireless efforts of the entire TransAct team. Thank you so much for your hard work and constant innovation. Before I jump into some dialogue regarding our two key markets, let me provide some highlights for the quarter and the year end. Our total revenue of $18 million for the fourth quarter was up a full 61% from the year prior period, with our casino and gaming market being up an incredible 123% to nearly $11 million. Our FST recurring revenue was also up approximately 14% to $2.4 million in the quarter, reflecting strong use of labels and additional software across our installed base. For the full year, we saw a total revenue grow by almost 48% to just over $58 million, which was our highest full year revenue numbers since 2015. This fantastic result was driven by an increase in our casino and gaming market of approximately 96% to $30 million for the full year and an increase in our FST recurring revenue by approximately 18% to $8.7 million, which was within our $8 million to $10 million guidance. I will now discuss more about our two key markets, FST and gaming and casino. First, our FSP market. I mentioned earlier, our FST recurring revenue which as reminder consists of software label sales and service, saw its third full year of sequential increase and its third quarter straight of over $2 million in revenue. We had another very strong quarter of label sales, and yet another record quarter for software sales. As our total installed base continues to grow, we will see our recurring revenue number continue to rise and smooth out in the long term set. Second, we're currently working with a number of large international QSR Restaurant Brands on testing and implementing our labeling solution, not just nationwide, but across parts of the world. In fact, we are already expecting the large QSR to start coming online in the second half of this year, which is the large opportunity I spoke about on our last call. Our expanded sales force has seen the restaurant market open back up for us as restaurants face growing inflation with labor and food costs. So we've just gone into fill the pipeline with new restaurant opportunities. As many of our investors know, we began selling our FST terminal in 2019 right before the unfortunate event of the pandemic and lockdowns that ensued, shutting down restaurants everywhere. But with some good fortune, we found success in the grocery aisle and in C-stores, which became in many cases restaurant replacement with expanded fresh food offerings. Our BOHA! terminal with our labeling only software provided an efficient and productive way for C-stores and groceries to sell fresh food. As we grow the number of opportunities in the restaurant market, I do remind our investors that from beginning of the lead to close can take almost 18 months of work. The QSR I mentioned, has taken over two years to convince them to convert to our cloud based labeling technology. Third, we continue to see success in the SMB market. Our sales team has already closed at least two SMB restaurant chains so far in the first quarter. And I believe that is just the beginning. Now let me touch on our Paid Terminals added in the quarter and for the full year. In the fourth quarter, I'm sorry, we added 251 Paid Terminals, ending the year with 12,180, up 23,062 from the year end of 2021. While this number is clearly below where we thought we would end the year, we did see a certain amount of fourth quarter sales get pushed into the first and second quarters. There will be opportunities in the pipeline. I have plenty of confidence in our outlook for FST’s 2023 results. We continue to see great traction with a number of valuations currently underway across some well-known international brands. While, it will take some time to close the opportunities in the pipeline, I believe in our ability to execute these in 2023. Now let's talk about our casino and gaming market, which continues its streak of historic success. Let me start with a little background on the business, pre-COVID, the casino and gaming market growth opportunities were driven by casino expansions, slot replacement cycles and new casino openings around the world. We basically operated what was essentially a two horse race for casino printer sales worldwide. However, from what we can tell in our conversations with customers and industry context, this dynamic has at first slowly and now quickly changed heavily in our favor. As we discussed at length last quarter, late in the second quarter, we began to pick up market share from customers around the world due to our competitors inability to supply customers with their printers. We began to add an additional production line in the third quarter based on slot manufacturers demand and our ability to get the needed parts in electronics to build our printer. With the demand continuing, we then began to install a fourth production line in the fourth quarter. We're just starting to manufacture printers on that line right now. TransAct’s casino and gaming printers have become the market. We are breaking sales delivery and backlog numbers for our printers at record pace, and this shows no signs of slowing in 2023. As such, we feel confident that our casino and gaming sales will continue to be strong for 2023 and clearly be bigger for the full year 2023 versus 2022. Additionally, with the increased level of production, we're hoping to finally work our way into an inventory position versus air shipping our printers directly from the point of production. As a reminder, our casino and gaming products typically have gross margins above our corporate average which is showing up in our financial results as experienced in the fourth quarter of 2022. This is an incredible moment for our business, and is the result of the hard work and dedication of our R&D and procurement teams. And let me send a huge thank you to our gaming and casino sales team. They had to juggle all the new orders in demand by customers and keeping them all happy. There's been a lot of work accomplished at TransAct. And we all know electronic parts shortages are an issue around the world. I cannot thank our engineering and procurement teams enough for the work they did to ramp up production to meet this market demand. I can only say it has truly been crazy. With the favorable FST market and the growing gaming and casino sales, I feel it is important to give some guidance to our shareholders and analysts. Please understand this guidance is based on what we know today. We are currently anticipating full year 2023 total revenues to between $70 million and $72 million. Additionally, we are anticipating that as a result of our cost cutting initiatives, which were fully implemented in the third quarter and projected revenue growth we are projecting. We're also anticipating total adjusted EBITDA between $5.2 million and $5.4 million. Both of these items are based on the assumptions I have discussed. Now with that, I'd like to turn the call over to Steve to discuss our financial results in more detail. Steve?

Thanks Bart. And thanks everyone for joining us. Let's now turn to our fourth quarter and full year ‘22 results in more detail. Total net sales for the fourth quarter were $18 million, up 61% compared to $11.1 million in the prior year period. For the full year ’22, total net sales were $58.1 million, which was up 48% compared to $39.4 million in ‘21. Sales from our food service technology market or FST for the fourth quarter were $3.1 million, down 13% compared to $3.5 million in the prior year period. For the full year, FST sales were $12.4 million, down 2% compared to $12.6 million in ‘21. These declines were entirely driven by lower hardware sales, mostly as a result of seasonal fourth quarter slowness in Q4 ‘22. We added 251 paid terminals in the fourth quarter, and ended the year at 12,180 units in the market. Our recurring FST sales which includes software and service subscriptions, as well as consumable label sales for the fourth quarter were $2.4 million, up 14% compared to $2.1 million in the prior year period. For the full year, recurring FST sales were $8.7 million, up 18% compared to $7.4 million for the full year ‘21. Our ARPU for the fourth quarter of ‘22 was $806 down 16% compared to $965 in the fourth quarter of ‘21. As Bart has mentioned before, the downward pressure in ARPU is a result of additional terminals in the installed base, which are currently not generating any recurring revenue. But the good news is we are growing our population of BOHA! terminals printing labels in the market, giving us fertile ground to hunt for additional business and eventually sell additional BOHA! software apps to these customers. Our casino and gaming sales reached a quarterly record of $11 million, up 123% from the fourth quarter of ‘21 and up 42% sequentially from the third quarter of ‘22. We saw strength across the board as our casino and gaming products continue to pick up market share with our international sales up 108% year-over-year, and our domestic sales up 131% year-over-year. For the full year, casino and gaming sales were up 96% slightly more than $30 million. This was a result of a new competitive dynamics that Bart spoke to, including a competitors inability to supply their customers with product, leading to increased market share for TransAct. POS automation sales for the fourth quarter more than doubled, increasing 143% from the prior year to $3 million. This was a result of higher Ithaca 9,000 sales due to a key supplier once again being unable to deliver product this quarter, as well as a special project we were able to service with our POS printer for large QSR combined with our ramping production, allowing us to fulfill orders sooner than expected. However, sales decreased sequentially as expected, as shipments of printers for this special project came to an end. POS automation sales for the full year were $10.7 million, up 121% from the full year ‘21. Moving to TransAct Services Group or TSG. For the fourth quarter, TSG sales were down 24% year-over-year to $946,000. This decrease was largely due to slower sales of spare parts and accessories. For the full year ’22, TSG sales were $5.1 million down 15% from the full year ‘21. However, due to the need by customers in certain markets to keep their printers working longer due to supply chain constraints, we expect TSG revenue to grow in ‘23 as we supply spare parts for this new demand. Moving down the income statement. Our fourth quarter gross margin was 45.8% as compared to 38.7% in the prior year quarter. Full year gross margin was 42% as compared to 39.1% in the full year ‘21. These gains were result of a favorable change in product sales mix and price increases we instituted during ‘22 to help offset inflationary effects. Our operating expenses for the fourth quarter increased 12% to $7.7 million. For the full year ’22, operating expenses were $32.1 million, up 30% from the full year ‘21. Breaking this down a little bit further, our engineering and R&D expenses for the fourth quarter increased 7% to $2.1 million. For the full year ’22, these expenses increased 15% to $8.6 million. The increase was largely due to higher expenses related to designing out unavailable parts and qualifying new parts as issues arose throughout the year. Our selling and marketing expenses increased 2% to $2.6 million for the fourth quarter. And for the full year, our selling and marketing expenses were $11.3 million, which was up 48% on year-over-year basis, largely due to return to pre-COVID levels of spending, as well as the build out of the FST sales group and higher sales commissions to our casino and gaming sales team. Lastly, our G&A expenses increased 27% to $3 million for the fourth quarter. For the full year ’22, our G&A expenses were $12.2 million, which were up 27% from the full year ‘21. The increases were largely due to across the board salary increases, and higher depreciation and expenses to support the company's new ERP system that we implemented during ‘22. We generated operating income of $494,000 in Q4, ‘22, compared to an operating loss of $2.6 million in the prior year period. For the full year, our operating loss was $7.7 million, compared to an operating loss of $9.4 million in ‘21. Now the bottom line, we record a net income of $260,000, or $0.03 per diluted share, compared to a net loss of $823,000 or $0.08 per diluted share in the year ago period. For the full year, we had a net loss of $5.9 million or $0.60 per diluted share, as compared to a net loss of $4 million or $0.43 per diluted share in a year ago period. Our adjusted EBITDA for the quarter improved to $1.3 million compared to adjusted EBITDA loss of $2.2 million from the fourth quarter ‘21. And for the full year, our just EBITDA loss was $5.2 million, compared to a loss of $7.5 million in ‘21. As Bart mentioned, looking to 2023, we expect to generate total adjusted EBITDA of between $5.2 million and $5.4 million, which would be a great turnaround for TransAct. And with that, I'd like to turn the call over to Bart for any closing remarks. Bart?

Thank you, Steve. It's been a just a hell of a ride the last 12 to 18 months. But here we are with an exciting 2023 coming. I do want to mention that I will be attending the ROTH conference that's coming up Monday and Sunday night, Monday and Tuesday in Southern California and available for one on one should you want to come and join and meet with me. With that operator, I'll turn the call over to questions.

[Operator Instructions] First question comes from Jeff Martin with ROTH MKM.

Thanks. Good afternoon, Bart and Steve, hope you're both doing well. Wanted to start out with some insights about the guidance as well above my model estimate for 2023. So great to see that EBITDA profitability is material, curious if you could kind of give high level how that breaks out between casino and gaming, which obviously, you've got significant win at your sales there. And then with FST, it sounds like FST you are looking more towards the 2024 significant ramp in terminal install. So am I reading that right?

Yes, good question, Jeff and thank you, and hope as well at your end and clearly, we'll see over the weekend. The way we look at the year on a macro basis is we'll see lower POS sales only because this special project is over. We'll see higher TSG sales. It is interesting that in certain markets that we used to serve, we're being asked to supply spare parts, which of course is at wonderful margins. And then we do expect both casino and gaming and FST sales to be up. Regarding casino and gaming, clearly, we're trying to meet the demand. And the fourth production line is up and running. And I think we're pretty good right now it leveling up the factory and eventually getting to air to ship printers by sea so that we can start stocking some printers, which will help our customers now as they're still paying for air freight. In our FST business, we are seeing a better first quarter than we had, in the fourth quarter, we saw some orders get pushed out. When we were in the POS business, the fourth quarter was always our lowest business because most restaurants do not want to install new technology once Thanksgiving comes and the holiday start. We are in a cycle of the business where we've won a lot of C-stores. We've won a lot in the grocery aisle and now restaurants are starting to pick up and that seasonality of restaurants will have an effect on our sales just in timing. But we are expecting that one large QSR will start rolling out technology, which will include both terminals and software. And that should start towards the middle of the third quarter, if everything goes right, with the testing and all that, we expect to start rolling that out. And clearly that'll begin in the mid, beginning mid to end of the third quarter through the fourth quarter. And then we'll definitely pick up next year. But we do have some other projects that we should see incremental growth in 2023, both in our recurring revenue and our hardware sales for FST. So ‘23 versus ’22 should be up.

Okay, and then could you give us an update on your large QSR customer? How the rollout is going? What kind of visibility you have, I think we ran into some issues with a large integration they were working on, is that continue to be a distraction, any color there would be helpful.

The launch QSR that we are working on, we don't see any distraction. I'm not sure what that was about. But we are trying to get large –

Large C-stores not large QSR.

Oh, large C-stores, I'm sorry, Jeff. Yes, we are started seeing business come back. So we're staying close to them. It's been a funky kind of six to eight months with them with starts and stops and all that. But we have seen some new orders come in, Jeff. So that bodes well for continuing rollout. So we will hopefully that continues. But we have seen some orders come in the first quarter.

Okay, great. And then in terms of component apply? Sounds like those issues are largely behind you knock on wood. But curious if you had any additional challenges in Q4 or are thus far in Q1?

The thing that we've been able to do, you will recall the whack-a-mole, of course, is to get through the really tough part issues, processors and things like that motor drivers, which were really difficult. Now we see spot issues on some of the other parts. We have become a major customer of one of our suppliers, because of putting in the fourth production line. So we feel we're now more important to them to pay attention to us. So we stay very close to it. You can understand, we used to have daily meetings, we used to meet literally seven days a week, it was 24x7. If something hit two o'clock in the morning, the calls would start. Now we're down to once a week and just trying to ramp up production. We feel good about it. We have like I said a meeting every week, we follow the production. And like I said, we are trying to get to an inventory position now. So it gives us a little confidence in the parts that are coming in.

Our next question is from George Sutton with Craig-Hallum.

Thank you. And Bart congrats on the good results. So relative to what you were referring to with respect to an international opportunity with QSR brands. I'm just curious if you were referring to new logos, are you referring to the same logo as your domestic expected rollout later this year?

Oh, yes. So our QSR is our global, so every QSR that are big customer work, big customers of ours are global. So we work with them both domestically and then in not across the whole world but in certain markets that they accepted our products. So again, these are global QSR.

Relative to the supply chain issues at your casino printer competitor, can you give us any update of what you're hearing in the market relative to their issues?

I remember your, I loves your analysts report a picture tells 1,000 printers right. I think that was your report. It was fabulous. Look, I don't want to talk about our competitor. What's -- what we're grappling with is the demand it's kind of -- it's almost a perfect storm in a way but a perfect blooming flower. We've got a casino market that's come back after a very, very difficult time. Remember, casinos never closed, and they closed in 2020 and 2021. So they're back, it's very crowded, I just got back from Vegas last week, still very crowded, they're buying slot machines, which is great for us. But at the same time, we're the, basically the only printer supplier. So you we are grappling with that challenge. I did do a shout out to my sales team, both inside sales and outside sales when slot machine manufacturers who are also trying to grow their business can't get product, they get angry and not happy. And when they found out we had products it was great that they came to us. But we had to manage their expectations. Clearly, we were sold out in the fourth quarter. So I give a shout out to my sales team, my inside team Tracy running worldwide gaming that they manage the customers’ expectations, and we kept them happy during what was a sprint for us. If you know that the term sprint in the software world to get all this done and be able to ramp up production the way we did. These parts shortages are real, and they're still out there. I give a shout out to our suppliers, one in particular, that worked with us on the chip. And by deciding to use the same chip across all of our platforms. They said if we would do that, they would respond in kind, and I do a shout out to them to thank them. And my engineers that said, okay, I'll make this chip work across all of our product lines. So it was a great effort. And from what we see right now the demand continues. And we just got to stay on top of it, we've got to stay close to it. And we've got to understand our customers’ expectations because the good news is we have printers, but the bad news is we have the printers and we've got to maintain those relationships as we supply those printers to the marketplace.

Understand. One of the things, Steve, I'm wondering if you could look at Q4 and then the full year ‘23 guide and break it down into volume versus price for us given that you've raised prices. I'm just curious how much of a component price is?

You mean, how much did the revenue go up because of each of those, George?

Correct.

It really is a combination, we're not going to break out specifically what it was. But it was a combination of the two, obviously volume was up but price also contributed as well.

In 2022, in 2023, it's all volume, the price increase, we haven't raised price in 2023. So it's all volume, the pricing, last price increase we put through was September of 2022. So the growth of 2023 will be I mean, there'll be compared to the first quarter of pricing is up, but also our costs are up. So you can't just look at that, right? Our operating costs are up because of wage inflation and all that. So it's really volume, George. I mean, the volume is up.

Got it.

Some due to the price though too because of the full year effect of the price increases, but Bart is right.

Year-over-year.

But you also have expenses that are up, you have operating expenses that are up. We give a hell of a raise an increase to keep our employees so it's going to be a good volume year for us.

Our next question is from Mitchell Sacks with GS Asset Management.

Guys, congrats on a super Q4. So this is the first time I've seen you guys give guidance and obviously been following you a while. Can you just talk a little bit about why you have the confidence this year to give guidance as you such and obviously it's a very nice turnaround from a business that suffered during COVID and now into a nicely profitable stance. If you could do that'd be great.

Yes, Mitch, when we looked at the numbers and now again we all know that something can change in June and bomb to go off, China could say they're taking it to another level but what we see right now is a very steady casino business. And we do have these projects with SSP. So we felt due to the fact that we came through such a difficult period that you deserved to hear from us. What we were seeing right now, again, things can change. And we saw that as the pandemic hit, things can change. But given where we've come from, and the support that we've had from the shareholders over these past couple of years, and how difficult that has been for them, to watch what's occurred not without, not just with us, but other companies. We felt good about sharing some of this good news. So you could at least see that we've made a lot of progress, and we're expecting even more progress this year.

Awesome. And then with respect to the FST business, we've been to the restaurant show and seeing what's out there. Are you seeing anything out there from any competitors that give you any pause in terms of your kind of first mover advantage?

No, I think the low hanging fruit is labeling, Mitch, and when you talk to a restaurant company, and then we'll talk about the different verticals, right, when you talk to a restaurant company, and they are fighting food inflation and labor, and labor shortages and labor inflation, and you sell them the labeling, and you show them what it can save them. That's it resonates with them, you're not asking them to change the whole system, you're really just saying, look, here's what we can do, you've already had, you're either doing it by hand, or you've got our old 9,700 in. And now look at what you can do with this thing. And it's resonating. So in the restaurant industry the talk of labor savings, and the fact that they can see the label better and either not serve something that's expired, or can see that something is expiring and make some stuff up. So they don't lose their food and throw it out. And if we can save them 2% - 3% on waste, it's huge. So we're really focusing in on what where we think we're the strongest, which is labor, and we always have them. Now the C-store and grocery aisle is all about fresh food and labeling. And the interesting thing there is a lot of our customers are starting to see that that label can become a marketing device. And we're working with them on different designs and brown labels and color labels and things like that. And the C-store market is very interesting market, like 60% of the C-store market are individual stores. So you're really just working on the top 30%- 40%. But they're all looking at fresh food as a growth. And when they start looking at that and looking at what's the most efficient, productive way to do that. Clearly, our labeling solution is catching their attention. And included the fact that we've been in the industry, the longest with labeling, right? We started with McDonald's, right? 9,700 started rolling it out, big orders in 2014 and all that, we've learned a lot about labeling and the different things that people can do with it. There are things that we do that nobody else does, just because of our experience over the years. So what we are really trying to focusing on is when we look at the restaurant market, stop talking to huge story. Get in and talk to them about where their costs are, and how you can help their costs. They're taking temperature today, we get it. But if you can show them a clear label that says, hey, in two days, that thing's going to expire. Maybe you want to cook some more something with the tomato sauce, so you don't have to throw that out. So we've heard from restaurants, how much money we're saving them on both labor, but also on food costs. And even one restaurant company told me personally, that they think that their food quality has gone up. So we're really trying to focus, Mitch, and I share this with you on where we can sell. Because look, restaurants are, they still have headwinds, man, they came out of a tough pandemic, and they got inflation up the wazoo. They got food, they got labor shortages, when you can sit down and just say, look, you're doing this today, but look what we can do for you. And it's not that expensive. We can sell you the software for the labeling and we can sell you the terminal and all that. It really resonates with them. So that's where we're really taking the focus.

Our next question is from Jeff Martin with ROTH MKM.

Thanks, Bart. I wanted to ask you about your capacity in casino and gaming. I mean you look at Q4 was $11 million in revenue. I always thought of the business is $5 million quarterly in terms of capacity at your market share, that would suggest you're near 100% market share now. And on top of that you've got pent-up demand to service. So I guess question number one is how much pent-up demand remains? Number two, do you anticipate your competitor or within your guidance, do you assume that your competitor comes back into the market? Or do you assume that you're kind of the only game in town still for the balance of 2023?

So what's important for us, and we're all doing a fair amount of travel to keep our ears to the ground to listen to what's going on with our competitor, because we have ramped up our production. We are assuming that we're going to maintain most of the market share through 2023, we do assume that it's going to come down a little because it's hard to imagine them not coming back. But our backlog is really high. I mean, people are walking up our production. So we have, and that answers the question, okay, why can you give some guidance, because we have some visibility that we've never had before. Our casino customers would buy and we would ship, we always had inventory. And now they're replacing orders months ahead of time. So we have some visibility to the demand. But we do project in the second half that it comes down a little and still feel that this sales and EBITDA numbers are good. With the fourth line that we put the jobs, our capacity can meet what we consider the demand to be today. We look at the history of the casino business, we do know that there was pent-up demand in the fourth quarter, because there was this shortage of product in the fourth quarter. There was a shortage, huge shortage of product in the third quarter. So we were able to make up some of that shortage. But we are seeing the demand continue. And we do think that the fourth production line should meet that demand. Like I said it pretty much it's right now getting up and running. And we do believe that fourth line will let us meet if there's continued demand. And should there be more demand, which we're not expecting, well, at least have that capacity. Because we are using that demand to put some printers on the ocean to eventually get to a stocking position. We don't want to have to charge our customers to airfreight. So we are increasing the demand. You'll see our inventory come up a tiny bit because we want to put some product on the ocean and start to service them out of our inventory versus airfreighting to them.

We've reached the end of the question-and-answer period. I would now like to turn the call over the Bart Shuldman for closing comments.

Look, I'd like to thank our shareholders. 2020 was an amazing time when we had launched some really cool technology, and you had a lot of people asking for it. And then everything just shutdown. And I know I've talked about and everybody has experienced that. And it was tough. It was tough on our shareholders, tough on our employees, tough on me to have to explain what was going on to our shareholders. And I really do appreciate the support that you gave us. I can only be thankful that we can in return share some success with you to drive that success in the business. And without any disruption this year. And let's hope we don't see any drive to these numbers that we've given you. I do look forward to those that are going to go to the ROTH Capital conference be the first one the year for us and happy to sit down in one on one. I'm making myself available both Monday and Tuesday. I think Monday is getting filled up, Tuesday is also getting filled up. But I'd be happy to fill you in to fit you in. And for me to just have a beer or something. But I do want to thank our shareholders. I also cannot thank our employees more. And these are really good people who never gave up and came through for all of us so thank you very much. We look forward to our next conference call and continuing on this journey. Thank you.

This concludes today's conference. You may disconnect your lines at this time. And we thank you for your participation.