MIX Telematics Ltd (MIXT) 2018 Q3 法說會逐字稿

Good day, everyone, and welcome to the MiX Telematics Fiscal Third Quarter 2018 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Paul Dell, Interim Chief Financial Officer. Please go ahead.

Good day, and welcome to MiX Telematics's earnings results call for the third quarter of fiscal year 2018, which ended on December 31, 2017. Today, we will be discussing the results announced in our press release issued a few hours ago. I am Paul Dell, Interim Chief Financial Officer, and joining me on the call today is Stefan Joselowitz, who as many of you know him, Joss, who is President and Chief Executive Officer of MiX Telematics.

During the call, we will also make statements relating to our business that may be considered forward-looking, pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For a discussion of the material risks and other important factors that could affect our results, please refer to those contained in our Form 20-F and other filings with the Securities and Exchange Commission available on our website at www.mixtelematics.com, under the Investor Relations tab. Furthermore, we will also be referring to certain non-IFRS financial measures. There is a reconciliation schedule detailing these results currently available in our press release, which is located on our website and filed with the Securities and Exchange Commission.

With that, let me turn the call over to Joss.

Thanks, Paul. I would like to thank you all for joining the call today. I'm proud to announce that in Q3, MiX Telematics delivered the strongest quarter in the company's history. This is evidenced by the over 21% annual subscription revenue growth on a constant currency basis and the addition of 24,700 net new subscribers. In addition, we delivered record adjusted EBITDA of ZAR 115 million at a margin of close to 26%. This was the sixth consecutive quarter of margin expansion and continues the great progress towards our longer-term goal of 30% plus.

A few months ago, we marked the 10th anniversary of MiX's listing on the Johannesburg Stock Exchange, and I wanted to take a moment to reflect on some of our accomplishments in the last decade. Just prior to listing in 2007, the company was primarily a provider of record tracking and fleet management services in South Africa with annual revenue of roughly ZAR 277 million. Since then, through a combination of hard work, passion, persistence and consistent execution, we have built the business into an industry-leading, geographically diverse global provider of fleet and mobile asset management solution. This year's total revenues are expected to be approximately ZAR 1.7 billion, representing compounded annual growth rate of approximately 18% over the past decade.

Our commitment to innovation, as evidenced by investment in research and development over the years, has enhanced our competitive advantage, enabling us to deploy one of the broadest product offerings in the industry. We have also driven efficiencies in our operations by investments in next-generation platforms, such as DynaMiX and MiX Lightning, as well as a new range of premium fleet hardware that we will be releasing later this year.

These platforms have all been designed to provide a common foundation upon which all applications in the group are developed. This has significantly improved the speed and quality of our software releases, as evidenced by the 11 software updates and 6 mobile app releases completed during this last quarter. In regards to MiX Lightning, this highly scalable back-end platform leverages the leading edge technologies and architectural best practices to support exponential growth in our subscriber base.

Our persistent focus on our customers has resulted in our retention rates being 95% with our large premium fleet customers, and some of these relationships extend well beyond our average customer lifetime of approximately 8 years. This highlights our commitment to customer service as well as our ability to consistently deliver an attractive, easy-to-understand and easy-to-measure return on investment, which also drives long-term customer retention.

As a final point, our ARPU has materially improved over the past decade, driven by a combination of our ability to sell a range of solutions on top of our core application as well as our focus on bundling deals to our premium fleet customers. As a reminder, bundled deals deliver significantly more cash over average customer lifetime and contribute almost $1,000 more in cash compared to an unbundled deal. The progress we have made with ARPU can clearly be seen in Q3, given the over 21% year-over-year growth in subscription revenue on 10% growth in subscribers.

Now turning to a summary of our third quarter performance. Our subscription revenue of ZAR 376 million was above our guidance and grew over 21% year-on-year on a constant currency basis.

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Ladies and gentlemen, I apologize. I believe the line dropped at some point. The problem is I don't know where it stopped. So I hope -- at the risk of boring you, I'm going to start my section again.

So I would like to thank you all for joining the call today. I'm proud to announce that in Q3, MiX Telematics delivered the strongest quarter in the company's history. This is evidenced by the over 21% annual subscription revenue growth on a constant currency basis and the addition of 24,700 net new subscribers. We also delivered record adjusted EBITDA of ZAR 115 million at a margin of close to 26%. This was the sixth consecutive quarter of margin expansion and continues the great progress towards our longer-term target of 30% plus.

A few months ago, we marked the 10th anniversary of MiX's listing on the Johannesburg Stock Exchange, and I wanted to take a moment to reflect on some of our accomplishments in the past decade. Just prior to listing in 2007, the company was primarily a provider of record tracking and fleet management services in South Africa with annual revenue of roughly ZAR 277 million. Since then, through a combination of hard work, passion, persistence and consistent execution, we have built the business into an industry-leading, geographically diverse global provider of fleet and mobile asset management solutions. This year's total revenues are expected to be approximately ZAR 1.7 billion, representing a compounded annual growth rate of approximately 18% over the last decade.

Our commitment to innovation, as evidenced by our investments in research and development over the years, has enhanced our competitive advantage, enabling us to deploy one of the broadest product offerings in the industry. We have also driven efficiencies in our operations by investments in next-generation platforms, such as DynaMiX and MiX Lightning, as well as a new range of premium fleet hardware that we will be releasing this year. These platforms have all been designed to provide a common foundation on which all applications in the group are developed. This has significantly improved the speed and quality of our software releases, as evidenced by the 11 software updates and 6 mobile app releases completed during the third quarter.

In regards to MiX Lightning, this highly scalable back-end platform leverages leading-edge technologies and architectural best practices to support exponential growth in our subscriber base. Our persistent focus on our customers has resulted in our retention rates being 95% with our large premium fleet customers. And some of these relationships extend well beyond our average customer lifetime of approximately 8 years. This highlights our commitment to customer service as well as our ability to consistently deliver an attractive, easy-to-understand and easy-to-measure return on investment, which also drives long-term customer retention.

As a final point, our ARPU has materially improved over the past decade, driven by a combination of our ability to sell a range of solutions on top of our core application as well as our focus on bundling deals to our premium fleet customers. As a reminder, bundled deals deliver significantly more cash over the average customer lifetime and contribute almost $1,000 more in cash compared to an unbundled deal. The progress we have made with ARPU can clearly be seen in Q3, given the over 21% year-over-year growth in subscription revenue of 10% growth in subscribers.

Now turning to a summary of our third quarter performance. Our subscription revenue of ZAR 376 million was above our guidance and grew over 21% year-on-year on a constant currency basis. I want to point out that our reported and constant currency growth rates were pretty close in Q3, given the average rand-dollar exchange rate during this period. However, in mid-December, the rand started strengthening dramatically against major currencies.

I'd like to be explicit about this. I've always said I prefer a stronger rand to a weaker one. The United States is my home, and I always look at the business in U.S. dollar terms. The stronger the rand is, the more dollars I see from our significant South African business and the more dollars are earned from our rand dividend. In fact, the day may very well come when we are reporting our business in U.S. dollars. However, for the time being, our functional reporting currency is the South African rand, so a stronger currency means we report less rand for our significant U.S. dollar, euro and British sterling revenues. So optically, the strengthening rand does offset some of the revenue growth we are expecting to experience in Q4 in rand terms while adding to our growth in U.S. dollar terms. At the bottom line, however, the impact is almost negligible since we have foreign currency costs in all of our operations, which come down in rand terms with a stronger currency.

Ultimately, I believe our business valuation will be driven by our performance both at the top and bottom line, measured in U.S. dollars, rather than in South African rands. We obviously have no control over exchange rates, which are cyclical, and there are pros and cons whichever way you look at it. But on balance, I love a strong rand the way Warren Buffet loves cheap hamburgers.

During the quarter, we added 24,700 net new subscribers, taking us to a total base of over 664,000, up 10% year-over-year. Given the strong pipeline of committed orders and sales opportunities globally, we remain confident in our ability to maintain the momentum. From a regional perspective, the strength of the business was broad-based, as we saw record new additions in the Americas as well as ongoing momentum in South Africa, Europe and the Middle East.

We secured a few sizable customer wins in Mexico and Brazil, including a bus fleet of over 800 vehicles in the Brazilian City of Salvador. I am pleased to report that in the Middle East and Asia, we are now seeing renewed activity within our energy sector customers, a rebound which has lagged that of the United States since the recovery of the oil price.

Paul will provide more details in a few minutes, but we are raising our fiscal 2018 total and subscription revenue guidance given our very strong performance this quarter. In addition, we are increasing our full-year adjusted EBITDA margin guidance to 25.3% at the high end of the new range, up from our previous guidance of 25%, which is a nice step up closer towards our long-term target of 30% plus.

Finally, I'm pleased to say that during the quarter, we generated positive free cash flow, while at the same time executing our bundling strategy. We believe this highlights our ability to efficiently operate the business and report strong subscription revenue growth at the same time.

So in summary, we are very pleased with our strong third quarter results as we continue to see broad-based traction and growth across all geographies. MiX Telematics remains well positioned to maintain the momentum for the remainder of fiscal 2018 and beyond, given the ongoing strong demand from existing customers as well as the growing pipeline of opportunities worldwide.

And before I hand it over to Paul, I'd really like to take this opportunity to thank our teams in the United States, in Europe, in South Africa, in Brazil, in Dubai and in Perth for their hard work and focus over the past 3 quarters to deliver these great results. I love it when a plan comes together. Well done, guys.

With that, let me turn it over to Paul to run through the details.

Thanks, Joss. Let me walk through our third quarter fiscal year 2018 performance, and recall that our reporting currency is the South African rand. For convenience, we have translated our results into U.S. dollars, both for the 2018 and 2017 periods, using the December 31, 2017, spot rate. You can find these conversions in our press release. In addition, please note that our results are presented on an IFRS basis unless otherwise noted.

In the third quarter, total revenue came in at ZAR 442 million. Of this total, subscription revenues were ZAR 376 million, up 21% and above the high end of our guidance range. On a constant-currency basis, subscription revenues also grew over 21%. This strong performance was driven by the ongoing positive traction from our premium fleet customers across all geographies and vertical markets, including the energy sector.

Hardware and other revenue was ZAR 66 million or down 28% year-over-year. We continue to see significantly more bundled contracts, which is a positive for our business longer term, as the larger subscription engagements are more profitable. Subscription revenue now represents 85% of total revenue, an improvement compared to 77% in the third quarter last year. Looking forward, we expect the ongoing shift towards bundled deals to increase our subscription revenue as a percentage of total revenue, which will provide us with both improved visibility and higher margins.

Our gross profit margin in the third quarter was 65.3%, relatively consistent with the previous quarter. The gross profit in Q3 again included additional depreciation charges related to in-vehicle devices and hardware and peripherals used in certain of our bundled fleet contracts. These contracts generate higher ARPUs and, as they go through contract renewal cycles, are expected to drive an increase in gross profit margins, which we expect to trend towards 70% in the long-term.

Operating expenses were 53% of total revenue, compared to 55% in the third quarter last year, which again highlights our ongoing commitment to cost controls and scale in the business. Recall that our general and administration costs include research and development costs not capitalized. For those of you interested to see our historical capitalization and development cost expense, we have provided a table in our earnings press release.

To provide investors with additional information regarding our financial results, we disclosed adjusted EBITDA and adjusted EBITDA margin as well as adjusted earnings for the period, which are non-IFRS measures, so we have provided full reconciliation tables in our press release.

Third quarter adjusted EBITDA increased 30% to ZAR 115 million or 25.9% of revenue compared to ZAR 88 million or a margin of 21.9% last year. As Joss mentioned in his remarks, we are very pleased with our adjusted EBITDA margins, highlighting our steady improvement towards our long-term target of 30%-plus.

Adjusted earnings for the quarter was ZAR 0.07 per diluted ordinary share, which was consistent with the third quarter of fiscal 2017. From a cash flow perspective, we generated ZAR 110 million in net cash from operating activities and made ZAR 92 million investments in capital expenditures, including investments of approximately ZAR 64 million in in-vehicle devices. This led to a positive free cash flow of ZAR 17 million for the third quarter, compared to ZAR 24 million during the same period last year.

Capital expenditures were ZAR 18.9 million higher than in the third quarter of fiscal 2017, primarily as a result of increased investments in in-vehicle devices due to the continued increase in the number of bundled subscription contracts. As Joss mentioned, we are very pleased with our ability to generate cash, given the ongoing investments in in-vehicle devices driven by the demand for our bundled offering.

Now turning to our financial outlook. Due to our strong third quarter as well as our expectation for the momentum in subscription revenue growth to continue, we are increasing our expectations for fiscal 2018. Specifically, we are raising our guidance of total revenue to the range of ZAR 1,690,000,000 to ZAR 1,695,000,000. We are raising full year subscription revenue guidance to the range of ZAR 1,432,000,000 to ZAR 1,436,000,000. This would represent growth of 15.5% to 15.8%, compared to our previous guidance of 14.5% to 15.5% growth.

On the topic of subscription revenue, we also provide quarterly guidance targets, as this is where we have the highest level of visibility and predictability. Subscription revenue is the largest, fastest-growing and highest margin component of our business. For the fourth quarter of 2018, we are targeting subscription revenues in the range of ZAR 371 million to ZAR 375 million, which would represent year-over-year growth of 15.3% to 16.6%. As Joss mentioned earlier, during the fourth quarter, we have seen a dramatic strengthening of the rand versus the U.S. dollar, which at current levels will be a headwind on the upcoming quarter's performance. However, on a constant currency basis, our fourth quarter subscription revenue growth will be over 19%, at the high end of the range compared to last year.

In terms of adjusted EBITDA, we are also increasing our annual guidance given the better-than-expected quarter 3 results and our expectation of the margin accretion to continue. Specifically, we are now targeting adjusted EBITDA of ZAR 417 million to ZAR 428 million in fiscal 2018, up from our previous guidance of ZAR 403 million to ZAR 421 million. At the high end of the new range, this represents a margin of 25.3%, up from our previous expectations of 25%.

In regards to adjusted diluted earnings per share for fiscal 2018, we are increasing the range to ZAR 0.231 to ZAR 0.248 from our previous guidance of ZAR 0.22 to ZAR 0.235. Our new guidance is based on 572 million diluted ordinary shares and an effective tax rate of between 28% to 31%.

In summary, we are very pleased with our strong execution during the third quarter as we continue to benefit from the broad-based momentum of our premium fleet business. In addition, our ability to improve adjusted EBITDA margins for the sixth consecutive quarter is further evidence that our margin accretion strategy is working.

I will now hand it back over to Joss for some closing remarks.

Thanks, Paul. Apologies again for the transatlantic technology glitch during this call. I'm sitting today with Paul in Johannesburg, reporting these results. I would just like to reiterate that MiX is running on all cylinders as we reported our strongest quarter in the company's history on both a top and bottom line perspective, while at the same time generated strong free cash flow. We continue to make great progress towards our long-term targets and remain fully focused on maintaining the momentum for the remainder of fiscal 2018 and beyond.

With that, we will turn the call over to the operator to begin the Q&A session.

(Operator Instructions) And we'll go first to Brian Peterson, Raymond James.

So the average revenue per vehicle was up double digits, and it looks like you're on pace for that metric to be the best figure in quite some time. So Joss, if I were to think about the long-term pipeline and the mix of opportunities in front of you versus what you have today, how should I think about that revenue-per-vehicle figure? And what should we think about that over the long term as a growth factor?

Yes, it's -- in terms of the pipeline, we certainly see nice opportunities, nice deals, in fact, both in our premium fleet business and in our lower ARPU asset tracking business. So it still remains a difficult one to model because it is driven largely by the mix of products that are deployed during a quarter. So what's very evident in this quarter we are just reporting is we saw a very -- a large percentage of premium fleet deals being implemented from a ratio perspective. And you'll recall, 4 or 5 quarters ago, that ratio was apparently much lower because we were doing much higher ratios of the lower-ARPU asset tracking deals. So we are planning for a reasonably balanced year. This quarter was particularly strong from a higher-ARPU perspective. And not to say we don't expect to see that going forward, but all the best we can do when we're modeling our year going forward is using our best judgment based on information that we've got in front of us. So it -- we still expect to see quarterly variations, both up and down, from a blended ARPU perspective.

Got it. And just one more from me. I know you're not giving guidance on fiscal year '19 today. But if you had to call out a few key factors that investors should pay attention to for next year, what would be the top 2 or 3?

Thank you. No, we are -- as I mentioned in the call, we are firing on all cylinders. We are pleased with our pipeline, our focus is clearly on finishing this year with a flourish and beyond. So we are very focused on delivering our strategy, executing on our strategy. And I'm pleased that all of our geographies are contributing. So despite some regional challenges, we're seeing a nice contribution from each one of the regions, and that's always a good sign from my perspective. Of course, the energy sector is our biggest vertical, 20-odd percent of our revenue and probably growing a little bit now because we're seeing much stronger activity globally now out of that sector. So it's another thing I would bear in mind that we have noticed a lag between the rebound in the energy sector that we've seen in the United States versus the Middle East and Asia, et cetera. We're starting to see a rebound happening in those regions as well. So I think bear those factors in mind.

We'll go next to Matt Pfau, William Blair.

First, just wanted to touch on the cash flow a bit. And I think you stated that the incremental cash flow with a bundled deal over the lifetime versus an unbundled deal is about $1,000. But when do you sort of see that inflection point over the course of a deal? How many years or months does it take when a bundled deal becomes more cash flow accretive than an unbundled deal?

Certainly. Yes, it's basically from contract renewal onwards, on the assumption that there's no need to potentially roll out new hardware at that stage. So we started driving this exercise quite aggressively, as you know, post our capital raising on the New York Stock Exchange. So our initial -- our early contracts are now going into renewal cycle stage. So that inflection point will certainly be starting around about now if it hasn't already started. But of course, we're investing cash in new deals. But there's no doubt that we're further into that cycle than we were when we started. And I would imagine, we're probably 1 year to 18 months away from being a cash machine again. I would imagine that that's the kind of time. Although we are generating positive free cash, and I'm pleased with that performance. I'm thinking back to what we know we are capable of achieving. And certainly, as these deals cycle through, as they become fully amortized and we're renewing higher ARPU deals without having to allow cash for hardware, that's when the real magic starts happening.

Got it, and then just one more for me. In terms of the ARPU, I'm guessing that the bundled deals are really the biggest contributor to the increase in ARPU. But other than bundled deals, are there any specific products that are sort of driving the most incremental ARPU that you're seeing currently?

Yes. So it's certainly not only bundled -- I mean, bundled deals are a big contributor, but higher value peripheral add-ons that we're doing are certainly part of that picture now. So Hours of Service, we've got tens of thousands deployed, and that adds more revenue, subscription revenue. We've seen ongoing improving traction out of MiX Vision, as I've reported in previous quarters. And that carries on, and we're enjoying additional revenues out of that. So it is a combination of factors, which is really the bundled deals being part of the picture, another part being add-on modules or peripherals that drive ARPUs up.

We'll go next to Joshua Reilly, Canaccord Genuity.

Josh on for Mike here. You mentioned the new hardware platform that's potentially going to be coming out later in the year, is that going to be at a lower cost than the existing one? Could you talk about benefits to that?

Yes. The -- it's certainly the -- it's going to replace our premium fleet platform, so it's got -- it's a bunch -- there are a bunch of benefits, both in terms of the kind of modularity in terms of things we can add on. It also enables a lot of additional features that we could potentially offer to a customer without deploying additional hardware. So it's got -- it's more self-sufficient than, I guess, our existing platform is. And it's also got new technologies, new architecture in it that enables it to communicate more efficiently and more effectively with -- in terms of how it interacts with other peripherals and with our back office. So it's an important component. We're not in the hardware business, and I've made this clear from the beginning. We're in the subscription service, service revenue business, software business. But this is certainly a -- we're also one of the few companies that see benefit in sort of controlling our whole ecosystem and we continue to see that benefit. So this is an important enabler for us and we think it's going to enable us to do more things for customers at a more effective price, ultimately, as well. So it's a combination of both competitiveness and driving additional ARPUs potentially.

Okay, great. And then I think you mentioned there was a record number of net adds in the U.S. That's one of the more competitive markets. And I was just wondering, is there any verticals driving that beyond energy at this point?

Yes, we've got -- it's not -- in terms of the traction we saw in the Americas in this quarter, it's a combination of verticals. But there's no getting around the fact that energy still remains a very big part of our U.S. business, and it's something we are working very hard to build other verticals to ultimately reduce our reliance on that sector. And we're not yet satisfied with the ratios, with the diversification we've achieved. It still remains a work in progress. It is progress, we're making progress, but it's a work in progress.

Okay, great. And then last one for me. We didn't get the geographic breakout this quarter. But I'm just curious, how are you thinking about scaling other regions' margins up to the level that you have currently in South Africa?

The -- we will give another breakdown. I think we do it twice a year, so we'll do it at the full year, the Q4 results. So you'll get a feel of that. But we're making progress. The -- I'm absolutely delighted with the margin accretion trend that we're seeing in our business over the last 6 and 7 quarters now. And that's come really from all of our operations, pulling together both at the top line, driving towards scale, and a very big focus on making sure that our cost accretion percentage remains below our top line accretion. And that's where the magic really starts happening. So we know what is achievable with scale. We see 40%-plus out of our African business, and that's ultimately our vision really for all of our operations. Now well, realistically, can we get all of them there in a relatively short timeframe? Probably not, but we think we can get 1 or 2 others of them there. And we don't need to get them all there to get them -- to get to our target of 30%-plus EBITDA margin. We need to get really another one of them there. And for the others, to continue focusing on their efficiencies. And as a group, at a Central Services function, to continue to get more efficient. And the team has been doing a great job in achieving that. So I -- I'm expecting to see that trend continue.

(Operator Instructions) We'll go next to David Gearhart, First Analysis.

So for my first question, I wanted to revisit the mix of additions. It sounded like again that there was a nice strong mix of premium fleet. But in past quarters, I think you said 2 quarters in a row of premium fleet increasing as a percentage of the mix. Did that hold for yet another consecutive quarter?

Certainly, I would -- off the top of my head, the answer would be yes.

Okay. And then in terms of the gross margin profile, I know that with the depreciation of hardware from bundled deals, we've seen a little bit of a decline in hardware that's been ongoing. And this morning, you reiterated your target, long-term target of going back to 70%. Just wondering how we should think about the trajectory of margin, at least near term. When do we start turning back upwards towards going to the positive territory and on a positive trajectory for gross margin?

Yes, we've had a combination of things. The one -- I guess, the most significant is a couple of large deals we did, nice ARPU deals, but that have third-party -- high-cost third-party hardware peripherals that we've bundled. And the margins are very slim on those third-party pieces of equipment. So during the initial term of the contract, before we go into a second cycle, it's had the impact of muting our gross profit margin. And we expect that those kind of deals are reasonably unusual. So we've done -- some of the larger deals we're doing now are our traditional kind of deals. It's our hardware -- we're bundling our hardware without third-party peripherals, which is certainly -- doesn't -- which returns us to a margin trajectory back towards our stated goal. So it does get influenced by these larger deals, which are attractive for us. So I'm not -- I don't want to turn away from that.

We're also looking at internally getting some of these hardware providers to actually come to the party in terms of how we handle that bundling. As you know, our box is a $100 box. And we're doing some deals where we're paying $500 for other people's hardware to bundle into a transaction. And we certainly can't make anywhere near the kind of margins that -- the deal wouldn't work for a customer on that basis that we make on our own box. Anyway, we recognize it's having this impact, and we remain focused on our targets. So I made it very clear to the team. We have to get our direction back the right way and get to where -- get to the destination that we set for ourselves, and that's where we're heading.

Okay. And then last one for me. One of your competitors -- actually, a couple of them were acquired in the U.S. and we're getting a little bit further out from when those transactions took place. Just wondering if you're seeing any change so far in the U.S. market in regards to competition with one of your biggest competitors being acquired. Just wondering if they've revitalized or if you're seeing any change in the balance.

No. If it's the one I think you're referring to -- it's -- my view is that there's a way for them to go in terms of getting them -- in terms of getting them to be, I guess, a more serious competitive fit than they were, I suppose, in the first place. So I've observed telcos doing these kind of deals in the past and globally, and they haven't been generally particularly successful at doing them. So time will tell. As I've said, we are focused on our business. We are focused on driving our strategy. Clearly, what we're doing is working. We're seeing good traction in our operations, in just about -- in fact, in all geographies. We are winning nice deals and we've just delivered on balance the strongest quarter in our history. So I still sleep with one eye open. I'm never going to turn a blind eye to a competitive threat, particularly one -- the kind of sizes that are developing in our industry. But we can't do much more than what we're doing, which is focusing on what we do.

That will conclude the question-and-answer session. I would like to turn the call back over to management for any additional or closing remarks.

Yes, I appreciate it. Thanks again for joining us today. Just a reminder, we will be presenting at the Raymond James conference in Orlando, Florida in early March, and excited to see some of you there, if any of you are attending. And for now, really appreciate your attention and your questions. Have a great day. Thanks very much.

Again, that does conclude today's call. Thank you for your participation.