HealthStream Inc (HSTM) 2006 Q4 法說會逐字稿

Greetings, ladies and gentlemen, and welcome to the HealthStream Incorporated fourth quarter 2006 earnings conference call. At this time, all participants are on a listen-only mode. A brief question-and-answer session will follow the formal presentation. [OPERATOR INSTRUCTIONS]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Robert A. Frist, Chief Executive Officer. Thank you. Mr. Frist, you may begin.

Thank you. Good morning, and welcome to our fourth quarter and year-end 2006 earnings conference call. Also in the room with me are Susan Brownie, Senior Vice President and CFO; Mollie Condra, Senior Director of Communications, Research and Investor Relations. Susan, would you read the forward-looking statement, please?

Certainly. This conference call will contain forward-looking statements regarding future events and the future performance of HealthStream that involve risks and uncertainties that could cause our actual results to differ materially from those projected in the forward-looking statements. Information concerning these risks and other factors that could cause the results to differ materially from those forward-looking statements are contained in the Company's filings with the SEC, including Forms 10-K and 10-Q. Bobby?

Thank you, Susan.

Well, this morning we're excited to take a look back at 2006 and the fourth quarter of 2006 results, more specifically and in detail; and then a brief look at -- to 2007 to share our excitement about all the great things that we've lined up to drive our growth into the future. So we wrapped up the year, looking just at numbers from all perspectives, the year feels good. And we're proud to report that net income rose by about 600,000 to 2.5 million, which was a 31% improvement over 2005. And we did that on -- on top line growth of 16%, turning in 31.8 million in top line growth. So at the macro level, the numbers look good and feel good, and we're proud of the accomplishment in the growth we were able to achieve over the course of the year. And if you look at it from a different perspective, the platform growth, and one of the main metrics that we report on, it's also an exciting time because we were able to average about 45,000 implementations a quarter, measured on an FTE basis, which means that we contracted about 180,000 new subscribers in the year. We implemented about 180,000 subscribers in the year, and our current backlog as of year end was about 100,000 subscribers. This is clearly a dominant market share position in the acute care and hospital space. And we're proud to see our progress continue in soaking up market share and gaining new customers.

In fact, if you look at some of the new customers we're adding they're as prestigious as ever and as strong as ever. And in the fourth quarter, for example, we added Brigham and Women's Hospital, Kettering Medical Center, Anderson Hospital, and Shands Jacksonville Medical Center in Florida. So our current customer base was joined by an excellent array of new customers, and that's a great testament to the strength of our sales force and the strength of our product. So on all measures, contracted subscribers, fully implemented subscribers, which reflects billing, and the backlog, which represents kind of future pipeline we feel good about all those numbers. In fact, another important event that occurred in the fourth quarter related to customers was the renewal of HCA. And we're now underway with HCA under a new 4-year agreement that was signed in October. So, again, we're very excited to secure that agreement and look forward to the next 4 years serving the market leader in the acute care space, HCA is our -- as a lead customer for our learning services.

Another thing to cover is the both challenge, excitement, and opportunity that's embodied in the launch of our next generation platform. The challenge associated with it is it's a monumental task of migrating our historical customer base, which represents now nearly 1400 hospitals, 7 or 8 years the historical data, from the old architecture to the new generation platform. And I'm proud to report as of this morning, we've reached another major milestone in our movement towards succeeding in deploying and getting acceptance for our new next generation platform. At 5 a.m. this morning, approximately another 450 customers were migrated and activated on the next generation. And a huge difference from the last conference call where we had a few hospitals live, now we have close to 600 hospitals live on next generation representing about 650,000 of our FTEs. And again, that was this morning at 5 a.m., we added about another 450 accounts, representing maybe about 0.5 million users. So we now have about 650,000 active users on our next generation platform. The challenge, of course, is we still have the other half to go. And in the next couple of months, we'll continue the migration process, but with two major migrations under our belts, our team is, while exhausted today, excited about the move to the new platform. This represents a major, major milestone, an improved architecture that provides better scalability, an improved architecture that allows more rapid product development in the future. And what we believe to be a foundation for the future of our growth. So it's great to celebrate together with the teams that have spent the last 4 days in a deployment mode, the success of migrating such a large percentage of our customer base and activating this morning at 5 a.m.

In other notes and in another perspective is to look at the growth of our research group, which is growing and strong and thriving. They continue to add customers and also have achieved certain milestones on their own. For instance, in September, they achieved -- they became an approved vendor for HCAHPS by CMS and reporting begins on HCAHPS on October 1st, which is we think a driver for more potential business in our research unit. So we're very excited about their progress as an operating unit for the Company. Content continues to perform well and is a big part of our future. Libraries like our patient [safety] library now have over 0.25 million subscribers to that specific library. And we continue to gain traction in content sales. Some of the challenges, of course, is that we continue to invest in this migration of next generation. It's turned out to be more complicated and challenging than anticipated. That's why we're so excited about our progress. But a lot is tied to the launch of next generation. So we're experiencing some delays in product launch and in revenue recognition, and a little bit more of a backlog on implementations than we would like due to the next generation. But fortunately I'm able to report today significant progress, and we hope that by April 15th we'll have the migrations under our belt and turn our attention to implementation and back to the growth mode on that subscriber base content selling and reducing implementation backlog. Of course, backlogs are a good thing, and in other ways, they represent opportunity to generate additional revenues as they are -- as we catch up.

So those cover some of the great challenges and the tremendous excitement inside the Company as of this morning and today. Looking back over the year, the additional adds to management and the Board of Directors, I feel very well-positioned as we enter into 2007.

I think the thing to do now is to turn it over to Susan for a more detailed look at some of the numbers for the fourth quarter and full year. A few closing statements, and then we'll take any questions we have. Go ahead, Susan.

Thank you, Bobby.

As Bobby mentioned, our revenues for 2006 grew by 16% for the full year, with 11 to 12% due to organic growth and the balance due to the in-year impact of the timing of the Data Management and Research acquisition at the end of the first quarter of 2005. Our fourth quarter revenues grew by 6%, with growth focused in our higher margin hospital channel revenues. These revenue improvements and the continued growth in our internet-based subscription revenues were reflected in gross margin improvements for both the full year and the fourth quarter. Net income for the full year improved by 587,000 or $0.02 per diluted share, despite the addition of almost 700,000 of share based compensation in 2006. The fourth quarter reflected comparable earnings per share, but also reflected the addition of 138,000 of share based compensation. Again, both related to our adoption of FAS 123R on January 1st, 2006. EBITDA, which we describe as earnings before interest taxes, share based compensation, depreciation, and amortization, reflected similar improvement for both the fourth quarter and the full-year 2006. In addition to the incremental share based compensation, our results reflect incremental investment in sales and account management personnel during 2006. As we noted in more detail in our release, days sales outstanding increased during the fourth quarter of 2006, primarily associated with the significant receivable due to a December live event that was outstanding at year end, and included both revenue and pass-through expenses. We've collected roughly half of these balances to date, and we anticipate improvement in our DSO rates to be more in line with historical results by mid year.

Moving to the 2007 picture, we anticipate continued revenue growth; however, we do expect that revenues from our hospital base customer channel will increase as a percentage of total revenues, with the first quarter comparable to full-year 2006 rates, but increasing as a percentage of revenue during the remainder of 2007. With the exception of the first quarter of 2007, which is impacted by seasonal factors, we anticipate that revenue and net income will improve over the same quarters in 2006, resulting in full-year net income per diluted share of $0.12 to $0.14. Further, as we noted in our press release, we anticipate additional spending during 2007, associated with product development, sales and account management, general and administrative expenses, as well as amortization. While most of these expenses are associated with additional personnel spending, general and administrative expenses are anticipated as a result of preparation for compliance with Section 404 of the Sarbanes-Oxley Act and additional share based compensation. While each category of expense is expected to increase in absolute dollar amounts, we anticipate that product development, sales, account management, and marketing expenses will reflect modest increase as a percentage of revenues, with somewhat higher increases as a percentage of revenues associated with amortization, mostly linked to our next generation and new product launches, as well as general and administrative expenses. We're looking forward to continued growth and improvement in 2007.

Bobby?

Thank you, Susan.

As we kind of conclude the discussion part and look forward to questions, there's a few things that I need to accomplish. One is I need to thank Ron Hinds for his service as Chairman of our Audit Committee over the last 4 years. He's provided excellent leadership to that function of our Board, and I'm most appreciative of his service. We're also, obviously, excited about the addition of Dale Polley as our replacement Chairman of the Audit Committee with a tremendous background of financial expertise. And Gerry Hayden, another financial expert added to our Board in the last year. So we're sad to see Ron go, we're appreciative of his contributions, but excited, as well about his replacement, Dale Polley. In addition, I have to congratulate Kevin O'Hara, who we announced in this press release was promoted to Senior Vice President. He'll be overseeing our products and platform strategy and serving as our general council. We're most excited about what we believe he'll bring to the table to add to our team. And in fact, looking back over the last 12 months and the investments we've made, I'm very proud of the investments we're making in people, both new -- new to the Company and old, as they grow and develop and help us grow this company. So congratulations to Kevin O'Hara.

And then, I can't go much further without recognizing the rest of the Company. And what I mean by that is I've never seen a company rally so much around such a great challenge as this next generation deploy. And it's really no single department in the Company. It's been an entire company effort. And for a company our size, it's been a magnificent thing to watch. And I can't say enough how much I appreciate the efforts of our employees to successfully transition our customers towards the next generation platform that will carry us into the future. Their efforts have been outstanding, and I'm most appreciative of their accomplishments.

At this time I'd like to turn it over to questions because we feel we've had a very strong year, a good fourth quarter, and as we get through these migrations, we look forward to reporting future quarters. At this time, I would like to turn it over for questions.

[OPERATOR INSTRUCTIONS]. Sean Jackson, Avondale Partners.

Good morning.

Hey, Sean.

Can you just talk about given that the guidance in '07, it looks like you do expect a big ramp -- it seemed like -- at least there's a big acceleration in revenue as you go through the year. Is that just a function of getting the next generation platform out of the way so you can focus on implementations? Or is there something else that is there?

Sean, I would characterize that there are two components of it. First, as we mentioned in the transcript, we have a little bit of seasonality in the first quarter associated with our pharma and med device side of the business. But we do reflect a ramp, particularly on the hospital side of the business as we get through next generation deployments and then anticipate new product introductions at an accelerated rate through the remainder of the year.

Okay. And speaking of the new product, which ones do you anticipate having the most contribution?

The APS or fetal monitoring content that we introduced during 2006 will have a continuing impact. The Laerdal content for basic life support and to a lesser degree, advanced cardiac life support will have an impact in 2007. And then also we anticipate introducing our Competency Center product during the second half of 2007.

With the primary impact of that product in early '08. So that'll be kind of a summit launch and a big year of investment in that Competency product, which I think as you know, that product has been a challenge for us and represents our second or third year of investment. We're pretty confident we're going to get it right this time and really build some order value on it in the second half of the year and see revenues on it in early the next year.

Okay. And also, the tax rate -- just give me an update on what that is and where do you see that going?

Sean, as we have disclosed historically, we do have significant NOLs that the Company's not given benefit to in its financial statements. We maintain a full valuation allowance because of where we've been from a historical standpoint in generating taxable income. Anticipate that the effective tax rate would represent approximately 10% of taxable income. But because of the acquisitions that we've done historically, we do have differences between book or financial statement income and taxable income. So modeling a very minimal tax rate is consistent with the approach that we've taken for 2007, and that would be less than 10% of taxable income for financial statement purposes.

Okay. All right. Thank you. Good quarter.

Thank you, Sean.

[OPERATOR INSTRUCTIONS]. Vincent Colicchio, Noble Financial.

Good morning, guys.

Good morning, Vince.

Excluding HCA, your renewal of 97% on the FTE side looks healthy. Do you expect limited price erosion, if any, to continue into the new year?

Vince, with regard to 2007 renewals, the level of activity should be roughly half of the renewal activity that we experienced during 2006. Would characterize that we have -- we've modeled our 2007 expectations with virtually flat price growth. However, as we documented in the press release and guided there, we have gained pricing improvement during every quarter in 2006 with respect to the annual contract value. Please keep in mind, too, that that renewal rate is just specific to the base platform so it does not reflect incremental growth associated with new product penetrations as well. But do anticipate both continued pricing improvement on those renewals, although it's not reflected in our guidance at this point. And also reflect continued growth in product penetration across our customer base.

Okay. On the DMR side, growth slowed in the quarter, could you give us a little more color on that and where you expect the growth to be in the first quarter?

I would characterize in the fourth quarter of 2005, DMR did experience pretty significant growth. On the full year, the DMR growth reflected strong growth for full year purposes. Anticipate continued growth at roughly a 15% rate for the survey and research side of the business associated with DMR. However, individual quarters can be impacted by seasonality with that -- with respect to that component of the business.

Okay. To what extent are you feeling pent-up demand for new products given the slower than expected migration to the new platform?

I think it feels really good, meaning we have a lot of expressed interest in this product -- in the product sets that we've been teeing up. And just feel really good about both the sales organization with our new leadership, [Bruce Brandis]. The structure that has been put into place for '07 and then the product portfolio that we're taking to the market. So I feel good that we've been able to identify opportunities and prepare product for launch. Of course, we're disappointed that we're a little behind on turning the Company's focus from migration to implementation. And we're definitely feeling a little bit of pain throughout the Company, maybe a lot in some cases of supporting two platforms at one time. And trying to support customers through this change period. And that's definitely pulling a lot of attention of everything from customer care to the account management teams, the relationship managers, and is proving challenging. So, Vince, I would say that when we are through the migration, it will be a huge victory for the Company, a sigh of relief, and will allow us to turn many, many, many more resources towards growth again instead of just transition. So you're right to identify that it has been a consuming, consuming effort and not without its challenges. The good news is that we believe this new architecture will carry us for many, many years into the future, and we feel great about the product portfolio. And the interest level the sales teams are generating in the new products is just fantastic. So it feels like once we're through this by mid April and by the time we hit our summit, we'll be ready to beef up again the growth. And you can see that a little bit in our growth rates the second half of the year, there's a little bit of waiting towards the second half of the year.

Right, right. On the DSO side, the bump, the particular live event that caused this. Is this the progress in that payment -- is that kind of typical for what you see for that kind of deal?

Yes. I would characterize that historically we've been able to get a little bit more in grant funds and registration funds up front but are working to revise those customer relationships to make sure that we balance that a little more -- a little more accurately.

Okay. But you've seen something like this happen before?

Yes. We have in historical periods experienced this right over quarter ends, as well.

It's important to note that while the DSO is much higher -- much, much higher on the PMD side than the hospital side of the business -- the PMD side always pays, I can't think of many defaults that Merck or Johnson & Johnson, or any of those customers have had for us. So it's never been an issue of default, just timing; and the bigger they are, the little slower they pay.

All right. Nice quarter.

Thank you, Vince.

Sean Jackson, Avondale Partners.

Yes, I have a couple follow-ups. One, you mentioned the backlog of 100,000, I believe, is what it was. What's -- how does that compare to this time last year, perhaps?

Well, let's see. The -- let's look at the numbers here. I want to try to get the table up. The -- I believe it's about the same, Sean. Susan, the 180,000 -- so the contracted number year-over-year went up by 180,000. The number that were actually implemented went up by 180,000, and I believe those that are in the process of implementation --

180 --

That might be an issue -- I think is 100,000. Sean, we're going to have to look up that and get back to you to make sure that that's accurate.

Okay. All right. Fair enough. And just kind of recap, as well, the advantages you're going to receive from the new architecture. You mentioned a couple of reasons on the call. But just give -- give us an idea of why you guys are so excited about it. Are there new revenue opportunities, perhaps, with the new architecture? Just kind of give an overview of the advantages.

Sure. We believe that the architecture is going to be far more scalable, which is good as we continue to grow. So it's more -- it's modern in terms of the infrastructure it's built on, meaning it's a dot-net platform. It's been thought out much more carefully -- it kind of takes those 7 or 8 years of cumulative learning. And our team was most excited because they were able to clean slate the architecture, which is rare. A lot of times, software is incremented and incremented and incremented until it's a mess. And in this case, our team was able to develop in parallel fresh architecture that is planned from the get-go to be able to be more integrated with. So we believe we'll be able to launch new products like the Microsoft Virtual Class product much more quickly as we come up with concepts to extend the platform or partnerships where we need to integrate new tools. We believe we'll be able to integrate those tools more quickly and bring them to the market faster. So it's a clean architecture. It's considered a modern architecture, which separates out the business layer from the data base layers and the presentation layers. So it's a modern architecture approach to software. We believe it's more scalable. And because it's been so well thought out, we believe that it'll be more adaptable to new technologies and extensions.

Okay. Thank you.

Thank you.

Chris Blackman, Empirical Capital.

Yes, thank you. Hello, Susan. Hey, Bobby.

Good morning.

Couple of questions. One, Bobby, you mentioned that on April -- mid April -- April 15th, you hope to have the migration under your belt. Can you -- can you quantify how many hospitals you would expect to have by that time?

Yes. Well, what I can tell you is our current base is about -- we'll just say 1400 hospitals. Your average U.S. hospital has about 1,000 employees. We have 1.4 million contracted and 1.35 million implemented. So at a minimum we expect those 1.35 million to be moved over. And as of this morning, we're about half way there.

Okay.

Which means about half our customers, as of this morning, wake up and take courses on the next generation platform. And half of the hospitals remain on what we're now calling the classic platform. And both seem to be chugging along very well four hours into this. And by the way, about a month ago, we migrated our first 180,000 users, so they've been up for over a month. And while it's had its challenges, overall we feel like it's been a success.

Excellent. So essentially done by mid April, then?

That's correct. We have two more migrations scheduled. Essentially they're a month apart. So from today's date in about a month, we have another migration and then a month after that, a final migration.

Excellent. Can you speak any about what this is doing for your sales process also? Maybe making the sales process easier? Can your customers actually utilize online purchases then?

There is an ecommerce component to the old system that was more limited and the new one. So yes, there's -- there's a capability there for purchasing. The -- so just in general, all the general capabilities of the system are more robust. And throughout the time period of preparing for launch, our development team has been able to provide our demonstration sites, and we've had the ability to demonstrate the new capabilities and continue to take orders and sell. But built a little bit of a backlog as you may see in getting those customers live.

Right. Right. These new products you mention, the fetal monitoring, the BOS, and the advanced cardiac, I mean, obviously those are products that should have higher gross margin than your average business. Are -- can you speak specifically on those three, how you expect those to rollout throughout the year, or how you expect those to ramp up throughout the year?

Actually, Chris, on the content course for subscription offerings, given that we do have a content partner that we license that content from, we characterize that those have slightly lower gross margin than the platform component of our revenue. We have summarized in our disclosures the royalties range from roughly 15 to 50% of revenues. And those two products would be in the higher royalty percentage given the quality of the content and the leadership position of that content in the market. And we'd characterize that with regard to the Competency Center product and our introduction there that that would be more of a platform based product and would be reflective of a higher gross margin expectation.

Okay. On that Competency Center platform product, how do you expect that to ramp during the year?

As Bobby mentioned earlier, we anticipate most of the new order value associated with that product really during the second half of the year, anticipate launch at our summit in March of 2007. And then expect new order value to build during the second half of the year with really revenue recognition minimal for 2007 and reflecting more in 2008.

Okay. I recall him bringing that up, my bad. Your -- thank you. Your strategic accounts group, any comment on any developments there or success or how that process is going?

Sure. It's a strong team, a growing team. We just had another promotion into that team. [Glen Grove] was promoted and will be managing one of our larger accounts. So we're excited about the growth of that team and its success. I would say, though, that they've been somewhat occupied with managing the transition and helping manage the transition for our largest accounts. So the good news is we've had a dedicated team to keep those key accounts in form. The bad news is probably distracted them a little bit from the sales process or the growth process of those accounts. But the team is strong, the processes are strong, and there are written and well-developed business plans for the growth of all 15 of our top accounts on a month by month, product by product basis. So it's a well organized team with strong objectives in front of them that I think will execute well this year.

Still contained within the 15 accounts is what you all are concentrating on within that group that hadn't expanded beyond that?

That's correct, although the current plan does call to begin to add accounts throughout this year. So we do expect expansion of that group this year.

Okay. And in your -- you had several pilot programs underway on your Hospital Direct medical device training. I think you had like 10 -- maybe 10 pilot programs underway last time we spoke. Any change there? Or any update on those programs?

I would characterize on those programs, many of those have switched over from pilot programs to kind of ongoing components, although we'd characterize that we're still a bit behind where we'd like to be with regard to penetration into hospitals. It is becoming I'd characterize more of a component of the ongoing business for those medical device companies. However, the growth is still fairly slow with regard to the hospital direct platform.

Okay. All right. Any idea how long you expect that -- expect that to remain slow, or do you see a time when you expect it to start accelerating?

Yes, I'd characterize it from a forward standpoint. We've anticipated modest growth with respect to that product until we see some events that really reflect more of a change in adoption and penetration within that piece of the market.

Okay. All right. And then finally, are you seeing any regulatory movement that would benefit the survey side -- the regulatory, state, federal, institutional wise, any movement there? Anything happening that you speak of?

Yes, there is a very important, very significant set of requirements that is coming into action now. It's referred to as HCAHPS. And I guess it's both feared and hoped, strangely by industry, to potentially drive business. And there's some theories that it could hurt business. So the regulation is as follows -- The federal government has -- is requiring all hospitals to collect a minimal amount of satisfaction data and report it to the federal government in a standard format. So the fear side is that the collection of that data could replace some of the traditional surveying done on the satisfaction side on patients. Of course, the opportunity side is that this is the first time that the collection of that data is going to result in actual financial repercussions to the hospital industry. In other words, over time, the public reporting of this data and the relative performance of hospitals will impact their ability to get reimbursement premiums. And so the measurement of the satisfaction data, particularly of patients in this case, is going to be tied much more directly to the revenues of the hospitals, which we think will raise the profile and increase the need to further research problems you may be having with your satisfaction. And therefore also further intervene, which we think could drive our learning business to improve those scores on the satisfaction side. So for our company, we think it's an opportunity that will drive the need to survey further, to get insight into the surveys that are the standard government surveys. And furthermore, intervene through more education and training opportunities to bolster the scores of HCAHPS. Since this is the first time the reporting of that kind of data will have a direct impact on revenues of hospitals.

And when you say it's the first time, this is -- this reporting is due on a certain date, or is it -- what's the timing of this new set of requirements?

Well, couple things. One, that's interesting is that only a certain number of vendors are even certified to collect and report the data on [bav] hospitals. And of course, I guess hospitals themselves could become certified, but today I think there's somewhere between 70 and 85 certified vendors to collect HCAHPS data and report it. We're one of those. So that's a good initial gate. Let's see. Second, DMR, on the whole, believes that the collection of this data only results in the need to collect more data. So a standard survey is just 25 questions. And we don't think that that's enough questioning to get insight into the problems you may be having on those scores. And what I mean by -- it is the first time and I don't think they've yet tied the financials opportunity to the scores. So right now, they're just trying to figure out how to interpret all the scores and tie financial rewards and reimbursements to hospitals to those scores. And so that's going to take some time to work out. But the government and CMS has stated that they are going to tie those scores to premium opportunities on reimbursements.

Okay.

Within, I believe, the next year.

Within the next year, you think?

18 months maybe.

Well, we'll look forward to continuing to hearing developments on that front also. Congratulations on a good quarter.

Thank you much.

Take care.

Kevin Liu, B. Riley & Co.

Hi, good morning. Just had a question on the top line guidance for '07. Looks like you guys are heading into the year with pretty solid backlog. You guys have invested significantly in sales and marketing over the past year, and continue to do so. So just wondering if you could walk into some more of the factors that are leading to the reduced top line growth relative to last year? Is it primarily the HCA pricing or is there something more to that?

Kevin, I would highlight the pharma/med device component of the business. During the first and second quarter of last year, we did have one live event that was really biennial event that is not anticipated to repeat. And so that's reflecting a little bit of reduction in the pharma/med device side of the business during the first half of 2007. That is being partially replaced by continued growth in the hospital side of the business. But we characterize that given where we are on next gen that we've been -- we've tried to make sure that we take a very measured approach to executing on that growth and really reflecting that growth in revenue projections for 2007.

I see, thank you.

Vincent Colicchio, Noble Financial.

Two modeling questions. On the PMD side, can you give us a sense for -- it sounds like it's going to be declining year-over-year. Can you give us a sense for how much?

The expectations, Vince, that we've reflected there is that historically we've been roughly 80/20 and would expect that while we continue to grow that business that you'll see a couple percentage points improvement there on the hospital side, but not a significant swing during 2007.

Okay. And second question, depreciation and amortization is picking up in the 1Q according to your -- the press release. Should that level sort of continue through the year?

Yes. Full year guidance on that was approximately 900,000 of incremental amortization expense on a year-over-year basis.

That's all I have. Thanks.

Thanks.

I'm showing no further questions in queue at this time.

Then we'll go ahead and conclude the conference by saying thank you to everyone for listening in and thanks again to all of our employees and customers. We look forward to reporting our first quarter performance in the near future. Thank you, and have a good morning.

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