Intellicheck Inc (IDN) 2012 Q1 法說會逐字稿

Greetings, and welcome to the Intellicheck Mobilisa first quarter 2012 results. At this time, all participants are in 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, Ms. Erika Moran, Investor Relations for Intellicheck Mobilisa. Thank you, Ms. Moran, you may begin.

Thank you very much, and welcome, everyone. Thank you for joining us today for our first quarter 2012 conference call to discuss Intellicheck Mobilisa's results for the fiscal quarter ending March 31, 2012, and to discuss other business developments. In a moment I will call upon our CEO to lead today's call, and to introduce the other members of Intellicheck Mobilisa's Management Team who will be participating in today's conference call. Before I do that, I will take a few minutes to read through the forward-looking statements. Certain statements in this conference call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. When used in this conference call, words such as will, believe, expect, anticipate, encourage, and similar expressions as they relate to the Company or its Management, as well as assumptions made by, and information currently available in the Company's first quarter 2012 financial results, identify forward-looking statements within the meaning of Private Securities Litigation Reform Act of 1995.

These forward-looking statements are based on Management's current expectations and beliefs about future events. As with any projection or forecast, they are inherently susceptible to uncertainty and changes in circumstances, and the Company is under no obligation to, and expressly disclaims any obligation to update or alter its forward-looking statements, whether as a result of such changes, new information, subsequent events, or otherwise. Additional information concerning forward-looking statements is contained under the heading of Risk Factors listed from time to time in the Company's filings within the Securities and Exchange Commission. Now, with that out of the way, I would now like to introduce Steve Williams, Intellicheck Mobilisa's Chief Executive Officer, to preside over today's call.

Thank you, Erika, and welcome, everyone, to our Q1 2012 conference call. Let me begin by introducing our Board of Directors, our Chairman on the call, Dr. Nelson Ludlow; General Buck Bedard; Ms. Bonnie Ludlow; Mr. Mike Malone; Mr. Woody McGee; and Mr. Guy Smith. And the members of the Management Team; myself, the Chief Executive Officer, Steve Williams; our Chief Financial Officer, Bill White; our Chief Technical Officer, Mr. Russell Embry; and our Senior Vice President, Ms. Bonnie Ludlow. Let us begin by giving you a highlight of Q1 2012 results, and a brief overview of the trailing 12 months. Our revenues for the quarter are $2.7 million, approximately breakeven for net income. This is significant, because it's the first time in the history of the Company that we've reached that goal. It's the fourth quarter in a row that we have a positive EBITDA. Our commercial identity systems are up 40%. Net income for the trailing 12 months is $0.02 earnings per share. That's the best since the IPO in '99.

Trailing 12 month EBITDA change of $2.3 million. Let me briefly talk about the three business units. The Commercial Identity business unit continues to be one of our three major groups, with a focus on credit card issuance, loyalty, loss prevention, and most recently, our significant sales in hospitality. In Q1, we made announcements of banking operations. We've been working with banks for several years, but this is the first real movement into banking operation or teller services. We announced a deal with a major international bank, and in that press release, you saw our invitation, this is the first of what we hope to be a very large contract, much larger than our initial award. Our second business unit, Government Identity systems. Our focus continues to be on access control and military installations, and we'll move into other Department of Defense, as well as other agencies within the Federal Government. We'll expand into the state and local, and I'll briefly talk about that later. The announcements in Q1, we recently received an Authority to Operate from the Marine Corps.

This is significant because it opens up the ability to sell our system into Marine Corps bases. This is a new Authority to Operate, and includes a much more robust system than previously sold to these bases. We also made an announcement of a new patent. This patent allows us to compare multiple documents and features to make sure someone that presents those documents are who they say they are. So that's our new patent in the Government Identity space, and obviously, it would be applicable to the airport operations, or hopefully, TSA. In the Wireless Systems, our focus continues to be the same, an autonomous active sensor system, exploiting our capability of Wireless Over Water. It's a multi-use platform that provides both environmental and security detection. In this last quarter, we deployed at yet another buoy, and we have yet a third buoy to be deployed for an upcoming evaluation. We also participated in the Department of Defense active exercise that shows the capabilities of the buoy, which went quite well. With that overview of the three divisions, I'll now ask our Chief Financial Operator, Mr. Bill White, to give you the financial results for the quarter. Bill?

Thank you, Steve, and a good day to our shareholders, guests, and listeners. I'd like to discuss some of the financial information that was contained in our press release for the first quarter ending March 31, 2012, which we put out this morning. We anticipate that our complete quarterly report on Form 10-Q will be filed with the SEC this afternoon. I'm pleased to announce that the Company achieved positive earnings for the first quarter, with a net income of $15,000, as compared to a net loss of $708,000 for Q1 2011. EBITDA, which is earnings before interest, taxes, depreciation, and amortization was a positive $314,000, versus a negative EBITDA of $356,000 for the same period last year. This is an improvement of $670,000. The Company generated net cash flow from operating activity during the quarter of just over $1.063 million. This is also up from $241,000 in Q1 2011. Cash and cash equivalents were $1.394 million to begin the quarter, and $2.428 million at March 31, 2012. Revenues for the quarter ended March 31, 2012 decreased 5% to $2.711 million, compared to $2.856 million for the previous year.

Identity Systems revenues increased 29% to $1.931 million, compared to $1.502 million last year. The Company continues to see positive growth in the Identity Systems portion of our business. Wireless revenues decreased 42% to $780,000, from $1.354 million quarter over quarter. The decrease in Wireless revenue resulted from a general push in Q1 2011 to deploy one of our Aegeus buoys. Equipment purchased for the resale and billed labor were higher by $240,000 and $200,000, respectively, in 2011. As of March 31, 2012, our backlog was approximately $1.6 million, compared to $1.5 million at March 31, 2011, with quarterly booked orders of $651,000, versus $1.27 million in Q1 of 2011. The Company continues to maintain high-growth gross profit margins. Our gross profit as a percentage of revenues increased to 72.2% for the three months ending March 31, 2012, compared to 60.8% for the three months ending March 31, 2011. The Company historically has recognized higher gross profit margins on ID system revenue than the Wireless segment of our business. With ID systems revenue a greater portion of the overall revenue stream, we're realizing an overall lift in gross margins.

Operating expenses, which consist of selling, general, and administrative, and research and development expenses, decreased 20% to $1.943 million for the three months ending March 31, 2012. This is down from $2.441 million for the three months ending March 31, 2011. The Company restructured certain operating expenses in 2011, which decreased these expenses by approximately $2 million on an annualized basis. The $498,000 reduction in operating expenses in Q1 2012 reflects these reductions, the decrease in 2012 expenses, including lower legal fees, reduction in consulting and professional fees, and reduction of seven FTEs. We do not anticipate that these operating cost reductions will impact our expected growth, and we will continue to look for cost reductions and efficiencies that make business sense. The trailing 12 months revenue picture and financial summary look like this. The revenues trailing 12 months, 2011 over 2012 were down 1%. 2012, $12.339 million, versus $12.472 million in 2011.

Our gross margin trailing 12 months 2012 was $9.008 million, compared to $8.773 million in 2011. This is a 3% increase. Gross margins, 73% for 2012, versus 70.3% in 2011. Operating expenses decreased 21% trailing 12 months, 2012 versus 2011, to $7.597 million in 2012, versus $9.653 million in 2011. Adjusted EBITDA 2012, $1.548 million, versus a negative EBITDA of $881,000 in 2011. This is a 276% increase. Net income 2012, as Steve alluded to before, $432,000 for the trailing 12 months ending 2012, versus a negative $2.461 million ending 2011. That's 118% increase.

I'd like to change the focus for a minute to discuss the Company's liquidity and capital resource. As previously mentioned, as of March 31, 2012, the Company had cash and cash equivalents of $2.428 million. Working capital, as defined as current assets minus current liabilities, of $2.18 million, and total assets of $22.702 million. Stockholders equity at end of Q1 2012 was $19.794 million. The Company did not utilize any bank financing during the quarter. During 2011, the Company entered into a two year revolving credit facility with Silicon Valley Bank. The maximum borrowing under the facility is $2 million.

Borrowings under the facility are subject to limitations, based on percentage of accounts receivable as defined in the agreement, and are secured by substantially all of the Company's assets. We currently anticipate that our available cash, as well as expected cash from operations, and availability under the revolving credit facility will be sufficient to meet our anticipated working capital and capital expenditure requirements for at least the next 12 months. We currently have affected a universal shelf registration statement on Form S-3 with the Securities and Exchange Commission. Under the shelf registration statement, the Company may offer and sell from time to time in the future in one or more public offerings its common stock, preferred stock, warrants, and units. The aggregate initial offering price of all securities sold by the Company will not exceed $25 million, and pursuant to SEC rules, the Company may only sell up to one-third of the market cap held by non-affiliate shareholders in any 12 month period. Now, I'll turn it back over to Steve.

Thanks, Bill. Here's a quick market overview as of 8 of May. Our share price was $1.55. Outstanding shares still remains at 27.5 million. Market cap was $29.4 million. Management still retains 45% of Management holdings, and our average daily volume is now over 30,000.

Some growth initiatives. We continue to work on our sales and marketing efforts. We've added business development people on both East and West coasts to sell all of our systems. We've added additional sales personnel, and will continue to do so. The biggest move will be towards the distribution model. We'll ask some of our existing vendor retailers that have channels in excess of thousands of people that they will distribute our software, as well as our solutions, to increase top line, as I mentioned previously. Top line growth is our focus.

Many people have raised the question about cost cutting measures. I prefer to say cost restructuring. We didn't reduce overhead personnel totally. We actually are about the same, if not a little more personnel. We just redid the way our structures looked.

So to review Q1 and the trailing 12 months, it's the best EPS since the inception of the Company in '94. We are focused on top line growth to move from where we are to where we want to go. We had a significant change in EBITDA, with even flat revenue, $2.43 million change in EBITDA. And as I mentioned, we restructured our sales and marketing efforts to grow top line. With that, we'd like to open the line, and welcome your questions.

Thank you. Ladies and gentlemen, at this time we will be conducting a question-and-answer session.

(Operator Instructions).

Thank you. Our first question is coming from Sam Bergman of Bayberry Asset Management.

Good afternoon, everyone. Hi, Steve, how are you?

Great, Sam, how are you?

Good. Couple questions. In the Identity System division, can you give us a little bit more color on, perhaps, beta sites that are ongoing right now?

Sure. Let me expand a little bit on the Marine Corps ATO. That's a system we actually introduced some time ago. It gives the installations a much greater capability. So though we got an Authority to Operate, that doesn't happen overnight. In many cases, it takes a year or two years.

So that was a beta. That happened to be one of our military bases that had our previous system, Defense ID. They moved to Fugitive Finder, where we built a total solution that has a server. It gives them the ability to do a real background check, as I call it, where it is actually law enforcement data. So, that was a pilot.

In many of the cases, you've seen something called Transportation Worker Identification Credential. That law is still not in effect. That's supposed to go into effect this year, 2012. Frankly, there aren't a lot of people left in that space, maybe one or two of us. There were probably eight of us two years ago, when we all did our Initial Capabilities Evaluation.

So, we continue to support several pilots in sea ports, and hope to see some nice wins coming out of there really soon, as well as the rest of this year, because that law will go into effect. On the commercial side, we have the same kind of thing. We've talked about in the past, what we call behind the curtain, things we've developed. You heard us talk about the cell phone. In the briefing slide, you'll see a photo of the ability to drive the buoy from the cell phone.

We've come up with a way to make money on the cell phone app. That's what we've got to figure out. We know that people charge $0.99. If I told you -- Hey, look, you can add this app for $4,000 on your cell phone, you'd laugh. We think we've devised a plan on how we're going to make money in using cell phones. So we have lots of pilots going on in all three divisions, and we'll continue to do it. If you can't figure it out, I'm a little excited about all our pilots we've got going on.

On the transportation side, if you were to get several contracts, do you have any idea of the dollar amounts of these type of contracts?

Yes, sure. I mean, it's similar to what we do on the military bases. We're not really interested in doing $10,000 installs. It eats me up in overhead. We pride ourselves on support. So we would estimate it's going to be in $200,000 to $300,000. Some of the large ones will be $400,000 or $500,000. I believe you'll see some that will be in the $1 millions.

But understand one thing, that we kind of stumbled into. I'd like to claim that we planned it this way, but we now see that Transportation Worker Identification Card and the buoy system both work in security in the ports, so now we've created even yet a more robust solution. So let's say we get a port to buy a couple of TWIC readers. Now they start to trust us, and believe in us, and say -- Okay, these guys are real. Now they want the security system with the buoy, as well. I think this will be the year you start to see TWIC really start to move.

Have you seen any issues when presenting proposals on the balance sheet that you have for viability, even though it's gotten better?

We don't really -- on the balance sheet we wouldn't reflect those. We're very conservative. We don't really provide projections for that very reason. We're always a research and development trend, a technology Company, so we tend to not give those forecasts, because a lot of times we're the market leader, and we make the market.

We haven't really seen those fall away. TWIC took a little bit longer than we expected, but we've been in the government space a long time, and I can tell you, a lot of my competitors know that we're not going away any time soon, and the result of some of our recent TWIC wins, we're still there, and we're not going away. Frankly, for us, it was just another card that we can add to our existing systems. So TWIC wasn't new for us, it was just another card. It's created some new market space for us, the sea port, specifically.

And on the hospitality space, when you got that last contract, has there been any other interest generated from other hotels because of that reference site?

Yes, absolutely. We're trying to get through our completion. We've done all our integration with a Company you may know, called MICROS. It's a Company you see at hospitality and restaurants, they have the touch screen pads. We did all the integration with that some time ago. In order to complete and move into their distribution channel.

As I mentioned earlier, distribution, we have to do pilots at three major properties. I can't reveal who those properties are, but to your earlier question on pilots, once we complete those pilots, we'll be able to put out that we're certified to operate with their system, called OPERA. It's owned by MICROS. And then, we'll be able to go into their sales channel, so there's 35,000 properties around the world.

So yes, ACORE was the first one. I'm going to acknowledge my Chairman a little bit, here, on a book called Crossing the Chasm by Geoffrey Moore. There's always that person that's an innovator. In this case, I would say ACORE was the innovator. ACORE said, Well, let me be the first out of the box. The next question is the chasm. Either you're accepted or you're not.

The earlier adopter in the adopters. I would say MICROS and their properties are now the adopters. I think we're over the chasm. People understand the efficiencies that check in the hotel. Imagine if you go to a hotel, and a busload of kids get there before you, and they're all trying to check in. If you can do it in three seconds versus 15 minutes on each kid, you're going to be very happy to see our solution in that hotel.

It makes good sense. And, the last question. You said you moved around some people, and you hired some people on East coast, West coast. If you look at the press release, the press release certainly holds a lot of promise for the future for Intellicheck. What can you tell us about S&G going forward, or a combination of research, development, and S&G going forward for the next six months? Is there much cost increases that we should expect?

Absolutely not. A lot of the things that we've done in the Company, is we've been fortunate enough to get several government contracts, and in many regards, we're our research and development arm, and we retain the IP, intellectual property, after contract completion. One of the things I've asked Bill White to do as the Chief Financial Officer, when you look at our Q, really, R&D is a revenue generator, not a cost center. So, we actually use the government research and development on our own efforts to develop our product. So, you should not see increased expenses dramatically anywhere.

We have the infrastructure put in place, now, with our cost structure that, for instance, if another tier 1 retailer like a Target, Walmart were to buy an enterprise license, it's literally ship them a disc. I'm not going to have increased cost. The only place you could see a little bit of an increased cost, let's say we sold 10 buoys or 100 buoys. Obviously, we'd have raw materials. But other than that, you should not expect significant cost increases.

So, going back to the question of revenue increases, I know you don't make projections. What type of growth do you feel the Company can have going forward?

We don't provide projections, but obviously, we didn't used to have what I call a customer relations man, CRM system, but the pipeline is very full, and as of 1 January, all sales people have a revenue generation plan, they have a commission plan, they have a minimum floor sales. Those are all things that they know. In fact, I'm in the midst of reviewing all those with all salespeople, can't give you numbers, but we hope to have very significant growth.

Thank you very much for your time. Good luck in the upcoming quarter.

Thanks, Sam.

Thank you. Our next question is coming from Walter Schenker of MAZ Partners.

Hi, Steve.

Hey, Walter, how are you?

Good. Somewhat gratuitously, but it took a lot of work, obviously you've gotten the Company both financially and profitability stable. You've said -- so good to see that consistently. You've said you're not here to run a $10 million company with marginal profitability. There were a number of things, if we look back over the last 6 to 12 months, which might have quantumally really expanded revenues, some relationships in retail, which at least one of which is probably not happening because of their screwed-up situation, potentially some larger applications away in other applications, environmental for buoys.

If you look at this Business, though, at this point, are there, in fact, very large opportunities still within a 12-month time horizon, or is it going to be just -- which is not negative, and good growth, adding pieces, adding Marine bases, a few Marine bases, adding a couple more buoys, it all adds up. Are we yet at a point where you're confident we've got a fairly dramatic expansion, or is it still largely, not that it's not always there, blocking and tackling, and growing the business that way, since we haven't seen any of that yet?

Great question. You're right, I'm not happy, and I'm not going to be happy at $13 million. So, what we've done is, we've solidified the base. We now have the structure in place, and we've made everybody look at how they're contributing to the top line. I can tell you after the last conference call, I mean, we dial in, and all the employees listen in. The sales team gets it. They have got to get the top line to grow. And they know that. They feel that. And frankly, they're all stepping up.

So we've created the pipeline. I do not expect that we'll be having the same discussion a year from now. It just doesn't make sense, or we'll have to tweak some other things. So it takes a while, 12 to 18 months is normal. I mean, by and large, you alluded to the one tier 1 retailer. That one was in there for nine months. It's not over. I think that will still come back around, but they had some personnel changes, as you mentioned.

That's only one of several tier 1 on the commercial side. TWIC reading on the government side, as well as the new solutions we're presenting to military installations, and as well as the buoy system. So I'm very optimistic you should start to see that this year.

Okay. Thanks a lot.

Yes, sir.

Thank you.

(Operator Instructions).

Our next question is coming from Amy Norflus of Pilot Advisors. Amy Norflus, you may proceed with your question. Thank you. We'll go to the next question coming from Gus Allen of GA Financial.

Steve, Gus Allen here.

Hi, Gus.

One of the things that seemed to me most interesting in the video that you had produced was the discussion about the system for law enforcement personnel to use cell phones to reach the cloud, so to speak, and be able to check on verifying identities. This, to me, seems like an extraordinary opportunity, and I was surprised in the last answers you gave to questions, you didn't mention that side.

And one of my curiosities, obviously, is what sort of a revenue model that works out to be. And I think you kind of slid past it when you talked a little bit about selling a product for $4,000, and then charging some sort of a $0.99 per call fee to it. I'm just kind of curious, how big can that market be? How long is it going to take to develop it? Are you doing any trials with any enforcement agencies at the moment? Those sorts of questions.

Okay. Thanks. Let me explain to you why we moved into that space. It was capital expenditure versus an OpEx. So, a typical military base is $300,000, $400,000. We were trying to open up the state and local, and still trying to open up the state and local markets, and how do we penetrate that?

Unfortunately, they don't have the capital expenditure available to buy a $400,000 system. So what we're trying to do is, we've created an application that they can do the NCIC check, kind of the gold standard of law enforcement on the cell phone. We have it working on several different phones, iPhone, BlackBerry. Because we're trying to figure out how they can pay us on the transactional model, as you talked about, the cloud, so they can do the background check.

It will be a transactional model. They pay us, I don't know, a number, a quarter or something per transaction. We would bill them monthly. Obviously, if you think about the number of state and local law enforcement, and we're working with some of the big hardware guys, it's more a question of who has what phone and does that model work, and are they going to do it?

So we're seeing some -- we do have some pilots. We have a couple of devices here that are actually law enforcement devices. We can do it on the cell phone. We have a couple of very helpful law enforcement entities that will beta test anything we develop for them. That's relatively new product we've got out there. I don't want to put out any forecasts.

If it gets adopted or accepted by the law enforcement, that will be new for us. We have a public safety advisory Board that kind of advises on that kind of stuff. So, it's exciting. It's a new product. As with all new products, we're not sure how far it could go, but obviously we're very optimistic that it could be a great revenue stream at the state and local level.

We do have some state and local in Clermont County in Ohio. We had very good success in the courthouses there. We're trying to find a new product, so if a county sheriff says, I don't have the money. I can't buy a hardware system, but I've got these cool cell phones. If you can do the bad guy stuff here --

Where we're really seeing it, the guys with the cruisers, they're used to going back to the laptop and typing it. But the guy on foot patrol, or the guy on the bike, or a gal, understand, they don't have that. They have to call back on the radio. So it's new product. We're showing it off. We're taking it to shows. And we'll see how big the market -- we know how big the market could potentially be, just the sheer number of sworn officers.

The question is, is everyone willing to accept the technology? We find out some departments are very will to accept technology. Others are a little more technology averse. It's still a learning curve, but it's a very exciting product for us. Just the reading or parsing of the driver's license, actually taking a picture of the driver's license, sending it to our cloud, opens up a whole other area.

Imagine it's not only law enforcement. What if it's your online identity for one of the retailers. So the ability to take the phone, capture the bar code correctly, being able to parse it on our cloud creates market capabilities for us.

Sounds like an interesting product. Thanks, Steve.

You're welcome, Gus.

Thank you.

(Operator Instructions).

Thank you. We have a question coming from Amy Norflus of Pilot Advisors.

Hi, Steve. Congratulations on the great progress you're making. Can you talk a little more about the banking contract, and expand on that, and just give us some other visions of some more top line growth?

Yes, absolutely. So, the contract we announced was with a major bank, international bank. We all know that. We're not allowed to say their name in a public forum. But it's a major bank. It has thousands of locations around the US. It's really the first move into banking operations.

We have several other clients that sell into banks, but this is the first time we're really in the front end at the teller station. You will see your solution. It's branded. So you'll see Intellicheck Mobilisa. That's really new for us. Now, they've already asked us to move in other areas, like ATM banking and other capabilities. It's really exciting for us that we've finally made it into the transaction or the teller station.

For those of you that fly around the country, you're going to see our little box at many of the airlines. I know that Delta, United, Southwest, US Air, they all have it now. This is really a first move to banking operations, which is interesting, because we really didn't do a lot of software change. This is just like a core, this is really taking our core business, and then moving it into another area. And these happen to be customers of ours, Chase, Barclays, and GE, and the banking operations that have always been a partner of Intellicheck Mobilisa, but it allows us to expand.

What gets really exciting is, not only do we get to sell software, but we potentially could sell hardware, as well, that is valued at millions of dollars. Those are the kind of deals, specifically, in the banks, that get really exciting for us, and frankly, change the face of the Company relatively quickly. So that's a big one.

As I mentioned, other potential growth opportunities, we're working on export control in the buoy system. That opens up an international market, as well as in the US market, as we just commercialized that product. And then in the Government Identity space, the release of the law enforcement data, we're the only Company that we're aware of in the US that has the ability to integrate with what they call CJS, criminal justice systems, in all 50 states. We're doing the right things for exponential growth, and hopefully in the next quarter or two, you'll start to hear those stories.

Are these numbers already in the backlog?

They are not in backlog. This is one thing that the Board and I have a discussion on a regular basis. In most cases on our business backlog is inefficiency. What that means is, and the Board would agree with me, is that when you're delivering products, your backlog means you are not able to deliver, or they've asked for a delayed schedule roll-out. Our backlog does not reflect any of those business development opportunities.

Our backlog only reflects those things that we have signed contracts, and either they've delayed delivery, or in the buoys contract, the buoy contract, actually is an hourly basis. It's a 12 to 18 month contract. So, some of that's still in backlog. None of the other things, the opportunities we're talking about, are in backlog. We don't report those.

So this banking deal is not in the backlog, and we would see it in one quarter, or in three quarters, or how does that like flow in?

Obviously, we would hope in one or two quarters, but hopefully not beyond that. And we get pricing based on that. So obviously, we incentivize them to close quicker, and not carry too long a backlog. Time value of money. Money now is better than money in the future. So, it is not in backlog currently.

Great. Keep up the good work. Thank you.

Thank you, Amy.

Thank you. There are no further questions at this time. I'd like to hand the floor back over to Management for any closing remarks.

Thank you. We appreciate your time today listening to our earnings call. If you have any further questions or follow-ups, please contact IRG, and they'll be happy to answer your questions. Any questions they may not be able to answer, they'll notify Management, and we'll help respond. Thank you for your time, and have a great day.

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