Usio, Inc. (USIO) Q3 2019 Earnings Report, Transcript and Summary

Good afternoon, and welcome to the Usio Earnings Conference Call for the Third Quarter Ended September 30, 2019. All participants will be in listen-only mode. After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Participants of this call are advised that the audio of this conference call is being broadcast live over the Internet and is also being recorded for playback purposes. A replay will available shortly after the end of call through November 28, 2019. I would now like to turn the conference over to Joe Hassett, Investor Relations. Please go ahead, sir.

Thanks, Ben, and thank you, everyone, for participating today. Welcome to Usio’s third quarter 2019 financial results conference call. The earnings release, which Usio issued earlier this afternoon, is available on the company’s Investor Relations website at usio.com/investor under News. On the call today are Louis Hoch, President and CEO; Vaden Landers, EVP and Chief Revenue Officer; Tom Jewell, Senior Vice President and Chief Financial Officer; and Houston Frost, Senior Vice President of Prepaid Services. Management will provide prepared remarks, and then we will open the call to your questions. Before we begin, please remember that comments on today’s call include forward-looking statements. Forward-looking statements can be identified by the use of such words as estimate, anticipate, expect, believe, intend, may, will, should, seek, approximate or plan or the negative of these words and other similar words and phrases. Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements, including risks related to the realization and the opportunities from the Singular acquisition; management of the company’s growth; the loss of key resellers; the relationships with the Automated Clearinghouse network, bank sponsors, third-party card processing providers and merchants; the volatility of stock price, the loss of key personnel, growing competition in the electronic commerce market, the security of the company’s software, hardware and information; compliance with complex federal, state and local laws and regulations; and other risks detailed in the company’s filings with the SEC. These forward-looking statements speak only as of the date of this conference call and should not be relied upon as predictions of future events. Usio expressly disclaims any obligations or undertaking to update or revise any forward-looking statements made today to reflect any change in Usio’s expectations with regard thereto or any other changes in the events, conditions or circumstances on which any such statement is based, except as required by law. Please refer to the company’s SEC filings on its Investor Relations website for additional information. With that, I would now like to turn the call over to Louis. Louis?

Thank you, Joe, and welcome, everyone. Usio achieved record transaction processing volume in the third quarter, processing over $900 million in electronic payments through our various platforms. Once again, we believe our continued growth best reflects the appeal that our comprehensive industry-leading value proposition offers our merchants, financial institutions and independent software vendors. Overall, revenues in the third quarter were up 10% from a year ago. Revenue growth was led by increases in credit card and prepaid card processing, with ACH revenues essentially flat for this quarter. The 4% growth in ACH transactions process was offset by the 9% decline in return check volumes. The ACH market is expected to experience secular growth in the mid single-digit range and we believe we can outgrow that market. Our NACHA certification, our industry-leading technology and our continued expansion of premier bank sponsors, has us well-positioned to sustain our competitive advantage. In the last quarter, we launched the new Remote Check Capture Service and started marketing to our existing ACH clients. RCC was well received and we expect this offering to increase ACH revenue and associated margins in the fourth quarter. This is another example of our innovative industry-leading technology that has enabled us to successfully outgrow the market. We believe we will be able to continue to maintain this record over the long-term. Revenues in our card business were up from a year ago, as transaction processing volume was up 12% and associated dollars processed were up 8%. Card revenues include the initial contribution of our proprietary payment facilitation platform, as well as our legacy card businesses. These are encouraging early signs that our investment in the card business is beginning to realize the potential to generate strong growth we believe this market offers. Vaden will have more on the card performance in a moment. We’re focusing on improving transparency, especially now that we’re starting to see Prepaid and PayFac growth. So I’d like to turn the call over to Houston Frost for some more further insights into our Prepaid business.

Thank you, Louis. We began discussing the results of our prepaid card line of business last quarter and plan to continue this practice moving forward. Card load and transaction volumes more than doubled from the third quarter a year ago. And, in fact, the comparison of any 2019 quarter with the same quarter in 2018 shows nearly 100% transaction and load volume growth. We continue to improve functionality and push forward on new sales. The results are being driven by the addition of new clients, as well as the continued growth of existing customers. We do believe there is untapped potential in serving some of Usio’s existing clients on the merchant services side. Our new corporate expense solution is able to tie in directly to the merchant accounts we offer. And this solution highlights our ability to offer an integrated card, ACH and prepaid issuing solution to help meet all of our clients’ electronic transaction processing needs. At this time, I’ll turn the call back over to Louis.

The growth generated over the first three quarters of 2019 has exceeded the growth of any of the individual markets we serve. This suggests that we are gaining share. Furthermore, both credit card and prepaid card processing volumes in 2019 through nine months have already exceeded the processing volumes for all of 2018. However, the growth has been somewhat below our initial expectations for the year, and we’re now looking at a growth to be in the 12% to 13% range for the full-year. If the encouraging results we’ve begun to see in the card business can accelerate faster than currently expected, we can see those – we could achieve those growth rates. To realize the value we’re creating, we sustained a high-level of investment in the business, because we believe in our growth strategy and we believe this investment could ultimately be amply rewarded. With that, I’d like to conclude my opening remarks and turn the call over to Tom Jewell, our Senior Vice President and Chief Financial Officer, to discuss some financial results in more detail. Tom?

Thank you, Louis, and Welcome, everyone. Thanks for joining our call today and your interest in Usio. I’m going to provide a brief review of our financial results before turning the call over to Vaden. We continue to have a strong balance sheet with a cash balance of $2.6 million and no debt. For the third quarter, we reported quarterly revenues of $7.1 million, up 10% from $6.5 million for the third quarter of last year. All the growth in the quarter was organic. Gross profits for the quarter were $1.5 million, unchanged from a year ago. Consolidated gross margins were 21.8% for the quarter, compared to 22.5% in a year ago quarter, with the decline due to increased proportion of lower-margin, credit card and prepaid margins versus the prior year. General and administrative expenses for the quarter were $2.1 million, compared to $1.5 million in the same quarter last year. The increase in SGA – SG&A was due to continued Investments, as Louis has mentioned, in our business and particularly in our PayFac and Prepaid growth initiatives. We expect to continue our investment in our general and administrative expenses at these or lower levels as we go forward. Our third quarter operating loss was $1.2 million, compared to $0.8 million in the third quarter of last year, primarily due to the incremental investments in our growth initiatives, primarily Prepaid and PayFac platforms versus prior year, as mentioned previously. Adjusted EBITDA was a loss of $420,000, compared to a loss of $60,653 in the same period last year. The adjusted EBITDA loss did not change substantially from the second quarter. Bottom line, the net loss for the quarter was $1.2 million, or $0.09 per share, compared to a net loss of $0.8 million, or $0.07 per share for the third quarter last year. Quickly looking at results for the year-to-date – on a year-to-date basis through September 30, 2019, revenues were $20.8 million, compared to $18.6 million a year ago, a 12% increase, all of which was organic growth. Gross profits were $4.4 million for the nine-month period, up 10% from $4 million. The operating loss for the first nine months was $3.6 million, compared to a loss of $2.9 million for the same period last year, with higher loss attributable to the incremental investments in our growth initiatives. Adjusted EBITDA for the nine months was a loss of $1.2 million, compared to a loss of $0.6 million for the same period last year. In summary, the business is growing at double-digit rate, supported by the positive cash flow generated in our ACH business. We continue to use the cash flows to fund incremental investments in our PayFac and Prepaid growth initiatives. This quarter, our year-over-year growth was led by the performance of these growth initiatives. While we – have they – while they have not reached scale, we are seeing growth and we remain committed to the success with our PayFac and Prepaid growth initiatives. At this time, I’d like to turn the call over to Vaden. Vaden?

Thank you, Louis, Tom and Houston and welcome, everybody. The last three months have been another quarter of steady progress building the foundation in an exciting and rapidly evolving segment of the electronic payments market, PayFac. Over the past few calls, we described how the pipeline has continued to expand and integrated partnership opportunities have followed suit. And as noted in our filings this quarter, card was a key driver of the quarter’s overall growth. Heading into January of this year, we had very minimal processing volume on our PayFac platform. In the third quarter, volume was up 24% over the second quarter and 52% over the first quarter of this year. We expect this ramp up to continue into the fourth quarter and for the foreseeable future, as we have a number of new clients with scheduled implementations during the early part of 2020. For instance, we are still on track for the December launch of two sizable healthcare players, whose volume, once fully implemented, should have a significant impact on both our card processing and ACH volumes. It’s great to see the PayFac processing volumes beginning to ramp in this particular line of business contributing revenue. We have consequently undertaken an extensive analysis examining how we’re forecasting the timing of these implementations. And we now understand that the delays we’ve experienced are almost entirely attributable to the level of prioritization and pace at which our customers implement PayFac in a box. ISVs have many competing priorities and trying to get them to share our sense of urgency has been our single biggest challenge today. So we’re focused on getting these software deals up and moving faster. One strategy that we’ve employed is to create deal structures with attractive financial incentives that better align our respective organizations, as well as put us in a better position to control the timing and pace of these implementations. Small improvements, such as this, can result in substantial benefits. In fact, with some of the adjustments we’ve made, we’re already seeing a few breakthroughs of late. More partners are beginning to relinquish control of the process, showing more trust in our experience and track record and allowing us to lead their implementation. As our success stories grow, we are confident that the market will increasingly get it. In closing, I would like to reiterate that all of the relationships we discussed on prior calls remain very much alive and are progressing. I think, we have sufficiently articulated the links to which we are going and the success we have experienced signing new ISV clients. As I said in previous calls, our team is laser-focused on converting our pipeline into the volume of revenues it represents and to create value for our loyal and dedicated shareholders. At this time, we’d like to open up the call to questions. Operator?

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Gary Prestopino with Barrington Research. Please go ahead, sir.

Hi. Hi, everyone. Whole series of questions here. Vaden, the healthcare provider that you’re going to be putting online in December, is that practice when you’re saying, it’s coming online fully in December? Is that another entity?

Yes. Gary, that’s one of the larger ones that are continuing to materialize and generate new customer signings of revenues. So we’re – we remain very excited about the promise of that potential partnership.

Okay. And then have you added any ISVs in the pipeline? Last time, we spoke, I think you said, you had about 50 in the pipeline. Has that grown at all?

It hasn’t, and we’ll be doing some announcements, hopefully, here in the next few weeks about some of those signings, where timing is appropriate and the partners are aligned with our belief that a press release is important and critical to launch.

Okay. And then in terms of the ACH business, you mentioned something about a Remote Check Capture Service, RCC, what is that exactly?

Hi, Gary. So Remote Check Capture allows you to present a remotely presented check directly through the Fed. It doesn’t go through the ACH network. And it’s another way for merchants to collect funds. And we’re primarily using that service in our mortgage industries, in our consumer lending type of scenarios.

Okay. And then why was the returned check transactions down? Was something happened there?

Now, so returned checks is when we submit a ACH payment and it comes back as NSF or account closed or invalid account number. It’s actually good to have a lower volume from a risk perspective, from a revenue perspective, because we earn more on a returned transaction instead of the original transaction. It’s actually a detriment But it – it’s not anything that we’re worried about or the volumes on a percentage basis were relative. So we like the mix of our portfolio going forward.

Okay. And then lastly, for Houston, you mentioned something about untapped potential with PayFac. You’re doing something with what they’re that with your card business through PayFac?

Yes. So we haven’t done any significant marketing efforts around this. But the essential concept is that, the accounts that proceeds from credit card processing, the account that those proceeds are deposited into could be and can be a commercial expense account that we manage on the prepaid side. And so what that can do is give a merchant, particularly would be useful for some of these smaller merchants that you would see on the PayFac side kind of the end merchant account on the PayFac side. It would give them faster access to dollars process through those merchant accounts. And there are also ways we can kind of tie pricing together on that to lower their overall merchant processor pricing. So those are the basic benefits, and we’re working on some new marketing materials that will – and some new programs that we can push our clients right now, it’s really just been sales agents bringing up this concept on sort of an ad hoc basis.

All right. Thank you.

Thanks, Gary.

Our next question comes from Brian Kinstlinger with Alliance Global Partners. Please go ahead.

Jacob stepping in for Brian. Last quarter, you talked about two sizable healthcare customers that have combined 143 facilities now in your system and ready for the monetization phase. Furthermore, you said that you were beginning to see processing dollars attributable to PayFac beginning to ramp. First, have you been able to monetize any of the 143 facilities? And then what changed since the last call that resulted in lower than expected revenue in 3Q?

I’ll take the first part of that, Jacob. Those accounts are all on-boarded in the active phase of implementing. Some of them are weighing on POS devices to arrive at the shop, so they can plug them in and start to use them. So that’s a- that’s an aspect of the integration that is not been turned on completely yet. But it will in the next 30 to 60 days, as they pull them out of the box, plug them in and again, train employees and start to use them. So all those locations are online, live and up and running with the exception of the ones that require the terminal to provide the processing. And I’m sorry, can you repeat the second part of question?

Yes. And what changed since last – since the last call that resulted in lower than expected revenue?

I think – yes, go ahead.

There’s a couple of factors. One, prepaid revenue for Q3 was less than Q2, not a lot. Returned check processing, which we talked about earlier, was down 9%. And those were – those are two contributing factors.

Okay.

I’ll speak quickly if you want on the Prepaid side. In some cases, we’re just having client orders get delayed, and they’re not delayed by much, but a one to two-week delay in an order can shift revenue from Q3 to Q4, for example. We also had an instance, where revenue was – it was not significant, but some revenue was shifted, it just happened to not be captured in the third quarter that we anticipated to be captured. So it’s part of just timing on the prepaid side is what is really where I kind of play some of the blame at least on the prepaid side of the house. So, in that – from that perspective, we anticipate making up that decline in improvements in the fourth quarter.

Okay. And – sorry. And then can you give us a sense with PayFac getting installed in several applications. When you expect to see volume and revenue growth meaningfully impacted?

Well, I think, as we pointed out in the comments that, that is starting to show up in the third quarter. I think, you’ll see it even become more impactful in the fourth quarter. But as we said in prior calls, really Q4 and into early quarters in 2020, is when you’ll really start to see these numbers show up in a meaningful way, just based on the cadence of these implementations and how things are – we deal with similar timing issues that Houston just mentioned in the prepaid side of the world. So we go and talk with our partners about implementations and we build out these timelines. And then they decide that for whatever reason they need to move an aspect of the timeline out two or three weeks. That two or three weeks could impact, where that revenue falls in terms of the quarterly impact. So we’ve seen a lot of that. And again, I’ve said this before, we – we’re doing things. Every time, we do something in this PayFac business, it’s the first time it’s been done in a lot of cases. And so, we’re learning a lot that will help us better forecast and predict kind of when revenues will show up, as we move in the out months and quarters and years here.

Okay, thanks. And just a couple more. And then when I realized revenue mix is important, total transaction volume has seen the year-over-year growth rate, which was 3% during 3Q, decelerate for several quarters in a row. Is this a trend? Is this trend a result of slower growth in ACH credit card processing or both?

It’s definitely not a trend and us process – the total dollars processing can be a little bit misleading, because it really depends on the mix. And you’ll see us in the future quarters give more transparency to the dollars processed by division. Every division has different margins. So, obviously, any time that number goes up, it’s good. But if it goes down, it doesn’t necessarily mean that our revenues are going to go down with it.

Okay. And then finally, can you talk about M&A, both in terms of building scale that could drive economies of scale and then separately, technology?

So we – we’re trying to grow organically, aggressively, and we’re going to be successful in doing that. In fact, adding on the Vaden’s comments about PayFac, I think, the easiest way to think about PayFac’s growth potential or revenue growth potential is, if you picture a hockey stick, we’ve done really good building out the blade of the hockey stick and we think that’s almost full. And we’re about ready to go up that hockey stick when it comes to grow. But we’re definitely looking at properties. As you know, that our industry is in a lot of consolidation at all levels and there are properties out there that makes sense for us. If we were to buy something, we try to buy it less than our current multiples. And it would be something that is accretive in terms of financials and people and technology. And then to follow-on to the other part of your question is, we continue to invest in technology. At the end of the day, that’s what we are as we’re technology company that facilitates payments. And we’re committed to advancement…

And I’ll just add one final thing to those comments and that is that, the way structured our processing agreements with our partners and people, who authorized capture and several transactions for us, we have built in scale-based pricing that we’re able to leverage as we move upstream. And some of the growth that we’ve already achieved has allowed us to realize some better economies of scale. And we expect that process will continue in terms of the widget pricing, if you will, as we continue to enjoy success.

All right. Thanks. That’s all for me.

Thank you.

Thank you.

Thank you. Our next question comes from Barry Sine with Spartan Capital. Please go ahead.

Hey, good evening. I want to go back to PayFac, if I could, and delve in a little further on some comments you’ve already made incentivizing customers to get revenue. First of all in terms of ISVs, you’ve signed – signing up their merchant customers and then getting the merchant customers to actually use the product. What levers are you pulling? And I think you referred to something along the lines of taking more of this on yourself. If you could elaborate a bit more of what’s going on behind the scenes, that’s going to drive the improvement that we would expect over the next couple of quarters in terms of PayFac revenue recognition?

Yes. Thanks, Barry, for the question. I’ll just try to keep it at a high-level without giving up any competitive information based on how strategically we’re working to change some of those things. But if you just think about, typically, and we’ve been at this for 24 months now and really selling this thing in earnest for about a year in full production for about nine months. We – when we started out, we would bring a partner on with a revenue share arrangement that was pre-negotiated upfront. And that revenue share arrangement was, whether you he something or whether he did nothing. And we’ve begun to start to make some changes to the way that those revenue structures and shares are organized. So that they fall in line and line up with the things that need to happen in order for there to be a successful implementation, which for us, results in volume showing up on the system, so that we can generate revenue and cash flow. So those kind of things are showing some improvements already. I mean, if you can get 15%, if you do x or 35%, for doing X plus, Y plus, Z, it’s much easier to see your way clear to get an X, Y and Z done in a much shorter timeframe. So that’s, that’s just an example of some of the work that’s being done as it relates to how we structured the deals. And as it relates to your second question about, how do we pull levers with merchants to get them to actually activate on the system, once they’ve been batch boarded, a lot of that is work is being done on the front-end. And it’s how – it really comes down to how the software partner decides to handle it, whether they’re going to make it their only offering, their preferred offering or just another offering. And we try to stay away from partnership arrangements, where we’re just another offering. We like to focus on the first two, because that there’s a sense of priority. There – there’s a clear sense of proper payment monetization there, and we tend to see much better results in those two – first two scenarios. So, if we can get them to mandate it, we’re seeing very good traction and we’re seeing very good traction out of the gate. If we can get them to make it the preferred option, then we see even better traction for those guys. And then if we can get them to mandate it and apply a penalty for any non-performers are non-adopters, and that sort of nirvana, that’s the best of all worlds. So those are just some of the things that we’re working on and focused on and hopefully, that helps answer your question.

Shifting gears over to ACH. In the industry, there have been some incidents in the news this year. And I wonder if you can comment, and I really don’t know, has there been a positive impact in your business that maybe you’re picking up market share is kind of a better quality provider? Has there been a negative impact as folks that are scared away moving to other providers? What are you seeing as a result of some of the news on ACH?

Well, the only bad news that I’m aware of is missed their payroll or whatever that is. Is that what you’re referring to?

Yes. The company’s the other payroll issue with the ACH provider out in California?

First thing is, we don’t do – we don’t even initiate payroll payments through ACH. We’re not involved in payroll. So we haven’t had any effect, positive or negative from that. I’m aware of that situation and read deeply on how it occurred. But it’s – when you send out credits in the ACH world, you better have good funds before you send the money out. And it’s something that our company lives and dies by, who knows. We make sure we have good money before we send out a credit. So – but, again, we’re not in payroll processing.

And customers for other types of ACH payments haven’t come back and taking a second look at their providers?

No, I haven’t seen any of that.

Okay. All right. Those are my questions. Thank you very much, Joe.

Thanks, Barry.

Our next question comes from Ron Nisser, private investor. Please go ahead.

I have some questions for Louis. Good afternoon, Louis.

Good afternoon, Ron.

Would you comment please, on your past involvement with the Check 21 Act and all that goes back a long ways, but I still think pet should have some attention. And could you comment on the processing and handling of bank independent cards and phone number 1877 PDS-PAYS? Thank you.

Ron, we’ve never done anything with Check 21. So I’m not really sure what you’re doing – what you’re talking about there and referring to our call center number for our Prepaid programs. We do have a number of programs out there, Fancards, Pfizer, Medtronics, Eli Lilly, OpenTable. list is long and it’s getting – the names are even becoming more prestigious through that offering. So I’m not really sure if I answered your question, but…

Well, yes, you have covered some of it. But the Check 21 Act was, you were involved with it years ago, because it was handling the pictures of checks instead of the real thing, which cut in years ago. So your experience in processing and handling payments goes back a long way, back to 1998. So do you think that the phone number 1-877-PDS-PAYS could ring off the hook in the foreseeable future?

Well, since that’s our call center, I hope that it doesn’t ring off the top all, because we don’t want to be paying for a whole bunch of expense there to manage a call center. But we are imaging checks today. In fact, the new service that we talked about earlier, RCC, part of that process is imaging checks, if that’s what you’re referring to. But we expect our volumes on Prepaid to grow, and we’re investing heavily in Prepaid. We’ve had quite a number of wins in Prepaid and Prepaid is growing nicely. So we hope the transactions grow, but we hope the customer service center does not grow, that we’re able to take care of our customers through self-service options, which is something that we excel at.

All right. Sure. And could you comment on bank independent cards? Are you making any headway there, while you’re catering to the non-banked population, as well as bank?

Well, since we got Houston here, I’ll let him answer that.

Yes. How are you doing, Ron?

Fine, Houston, [right answer]. [ph]

Just to be upfront, in the U.S. any of the card networks or associations, so MasterCard or Visa, all need to be issued by a federally regulated financial institution. So we – the only bank independent cards that would really exist are what you would refer to as closed-loop cards. So these are branded gift cards. And we don’t handle any closed-loop cards at this time and have no plan on really processing or handling any closed-loop card products, which is what I believe you’re referring to by saying bank independent cards.

I think he’s referring to the Akimbo card and it would help them under bank.

Okay. Is that what you mean, Ron?

The footprint that FiCentive and Akimbo MasterCards with the add-on of five additional payment cards, once rules and regulations iron out, has my attention. I think the potential there needs to be – it’s still potential, but it needs to be brought to the floor and discussed because sooner or later, you have to enable the non-bank, the network in a fast lane, as well as people with banking accounts. Do you have any comment on that?

Yes. We have been primarily focused on B2B sales on really across all the products that – and services that Usio offers, but also on the prepaid card issuance side. So while we do indeed offer the Akimbo card, as well as support other businesses, consumer products, we are not pushing a lot of marketing direct-to-consumer right now. We do have a good card base on the Akimbo card and we continue to get press every once in a while on that product. But right now, primarily cards are being distributed by certain business partners and mainly organic traffic that comes through the Internet. So at this time, we don’t believe that pushing consumer marketing efforts is a wide use of the company’s capital and that we’re going to be able to scale faster and more efficiently by focusing our efforts on B2B distribution channels for our prepaid card customers.

I understand that. I understand that the rules and regulations are governing prepaid accounts has been passed, but the other payment solutions are, like healthcare solutions, are still in the development and deployment stage they have to be voted on by the politicians. So you have any knowledge of prepaid accounts, rules and regulations that I’ve read have passed?

Well, of course, we do have knowledge and earn close contact with our issuing banks compliance teams, as well as our own internal compliance team. The major impact that happened this year, happened at the beginning of the year, which was a CFPB rule that went into effect. And yes, we had gotten ahead of that for all of our programs to ensure that we were doing the fee disclosures, as well as providing our customers with the – with adequate access to cardholder statements, and the other things that those – that the CFPB rule required. So, certainly, regulation is at the top of our mind, as it is with our bank partners.

Okay. One other thing, would you like to comment on Sunrise Bank or St. Louis Bank, how are you proceeding with them, if you’ve made any progress shortly?

Well, Sunrise Bank is our primary bank partner on the card issuance inside. So we have been working with them for many years now. And they’re a great partner. So, things are proceeding as usual and as we expected with Sunrise Banks.

Well, I know you dot all your Is and cross all your Ts, I keep track of what you’re trying to accomplish before rules and regulations are voted on governing the payment industry and the healthcare industry. So I will hang up on that number and wish you all the best.

Thanks, Ron.

Thank you, Ron.

Okay.

As there are no more questions, this concludes this afternoon’s call. On behalf of Usio, we would like to thank you for your participation. Have a great night. You may now disconnect.