TransAct Technologies Inc (TACT) 2018 Q3 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to the TransAct Technologies Third Quarter 2018 Conference Call. (Operator Instructions)

As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Jim Leahy of JCIR. Please go ahead.

Thank you, Sarah. Good afternoon, and welcome to the TransAct Technologies 2018 Third Quarter Conference Call. Joining us today from the company are Chairman and CEO, Bart Shuldman; and President and CFO, Steve DeMartino. Today's call will include a discussion of the company's key operating strategies, progress against these initiatives and details on the third quarter financial results. We'll then open the call to participants for questions.

As a reminder, this conference call contains statements about future events and expectations, which are forward-looking in nature. Statements on this call may be deemed as forward-looking and actual results may differ materially. For a full list of risks inherent to the business and to the company, please refer to the company's SEC filings, including its reports on Form 10-K and 10-Q. TransAct undertakes no obligations to revise or update any forward-looking statements to reflect events or circumstances that occur after the call.

Today's call and webcast will include non-GAAP financial measures within the meaning of the SEC Regulation G. When required, a reconciliation of all non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance with GAAP can be found in today's press release as well as on the company's website. At this time, I would like to turn the call over to Bart Shuldman. Bart?

Thank you, Jim, and welcome to everybody joining us on this afternoon's conference call and webcast. We're delighted to speak with you today about our 2018 third quarter in which we set several records. We generated net sales of $15.8 million, operating income of $3.2 million and adjusted EBITDA of $3.6 million; and delivered quarterly records for gross margin which was 50.5%, operating margin which was 20.3% and diluted EPS which was $0.33 per share.

Steve will review the results in more detail in a few moments. But I'd like to begin by providing some high-level comments about our business and where we're taking it. Overall, TransAct's strong third quarter is a clear indication that our ongoing efforts to transform our business continues to drive improved results. TransAct today is successfully leveraging the healthy cash flow generated by sales of our industry-leading casino and gaming printers and software solutions to self-fund the development and evolution of our restaurant solution products ahead of what we believe is a significant long-term and highly profitable market opportunity.

For a number of years now, the company's success has been tied to the casino and gaming market in which we sell the world-class Epic products. Our Epic 950 is a cornerstone for casino floors worldwide, delivering unmatched reliability and stability. At the same time, our Epic roll-fed printers are a critical component for many of the world's gaming needs and our Epicentral promotional and bonusing system continues to gain the attention of operators looking to differentiate themselves in what has become a competitive industry. I'd also like to point out that our decision to take control of our sales in the European casino and gaming market has proven to be a home run.

Steve will go through our great results in the gaming and casino market with our business. But I'd like to spend my time talking about the very large software and hardware opportunity for TransAct and our shareholders in what we call our restaurant solutions market. We entered what we originally called the food safety market back in 2012 when we first began to sell our AccuDate 9700 to McDonald's and their franchisees. Back then everything we sold centered on a food safety terminal that provided our customers with the ability to label food with use-by labels and also label grab-and-go sandwiches and the like with sell-by dates and nutritional labels.

At that time we did our research to determine the total available market for such a terminal and determined this was a wonderful opportunity for TransAct to grow our revenues and profits. Wow, have things changed. What we once thought was going to be a big opportunity for hardware sales for TransAct has what we believe is a much larger, much bigger opportunity. What we once thought would be an opportunity for hardware sales has expanded beyond hardware into the even larger opportunity for recurring software revenue, recurring label sales and recurring maintenance and support agreements. Put simply, TransAct's total available market in the restaurant solutions market has exploded.

Now before I get into more details, I have to ask our shareholders to be patient. Things in the restaurant solutions space are moving very rapidly and we have some more work to complete, which may adversely impact our results in the short run. Every TransAct team member not needed for our casino and gaming market is now working to complete our restaurant solutions market, including our sales and marketing, and engineering and programming personnel.

So what is happening? First, we have no doubt that this identified market needs automation and digitized solutions for the back of the house. Wages are rising to $15 an hour and food costs are escalating. While restaurants and other venues have tried to increase their prices, they're not overcoming the rising costs. Just look at what some publicly traded restaurant companies have been saying over the past couple weeks in their earnings releases and the message is clear. As we previously said, the introduction of our latest terminal, the XL2e, began a migration away from just hardware sales and towards the addition of more software to our sales offerings, and we believe the software apps we're offering and will soon offer will become the major component of our potential opportunity.

We also introduced TEMS, the TransAct Enterprise Management System, to address our company's needs as they sought a solution to lock down the terminal and let users only access those programs and applications they need as part of the work in the back of the house. Importantly, TEMS allows TransAct to send out software updates over the air to every terminal in the field, just like you experience with apps on your cellphones every day. Over time, the XL2e and its robust software platform positions our solutions to become a kitchen hub that will play a critical role in managing the expected proliferation of Internet of Things devices, including devices of our own which we expect operators will leverage to manage and bring enhanced efficiency to their increasing complex operations.

Now we are beginning to add more software apps, so we can supply customers with an end-to-end solution, an ecosystem for the back of the house. What does that mean? As we add up all the applications and software solutions we can provide, we believe that the recurring software sales we could receive would be 2 to 3x the original terminal price every year. Yes, we are beginning to sell SaaS-based software solutions that we believe will ultimately grow our recurring revenue.

Some of the apps we're beginning to offer are now fully finished, as we integrate the wonderful feedback and market intelligence provided by our current and prospective customers. We will have much more to say over the next 6 months. But it is our customers that are driving our software development since it is these customers that need these solutions for their businesses. Food safety, our original focus, is just one of the applications we are pursuing. And let me tell you, when we add up all the opportunities for software sales, we could not be more excited about TransAct's future.

As always, I will put some caution around what I just said. We have work to do and contracts to close. I ask you to be patient with us as we get through the programming, testing and field trials and progress closer to closing the many potential opportunities we have in front of us right now. The time that we need to devote to these processes will likely negatively impact our revenues in the short run but should position us well for future success. I believe we have just started to scratch the surface of these opportunities and their benefits for TransAct.

Going forward, our restaurants solutions team is working on a number of large projects that have the potential to deliver significant hardware and software sales for the company in the coming years. We will have more to say about these opportunities as they manifest themselves in the year ahead.

In summary, we're extremely pleased with the company's performance in the third quarter. We continue to make progress in establishing our restaurant solutions business as an industry leader and significant long-term growth driver for TransAct, as we believe this opportunity will dramatically transform our company and its financial profile. At the same time, our casino and gaming business continues to grow and take share, while we introduce new innovations to the market.

With that, I'll turn the call over to Steve for a deeper review of the 2018 third quarter results, after which I'll make some summary remarks before opening the call to questions and answers. Steve?

Thanks, Bart. Good afternoon, everyone. Taking a look at our financial results, our third quarter 2018 net sales were $15.8 million, up 2% from $15.5 million in the third quarter last year. Looking at our third quarter sales by market, casino and gaming sales were up 62% or $3.2 million year-over-year to a near-record $8.3 million in the third quarter of '18. Domestic casino gaming sales grew 63% over the prior year, inclusive of the benefit of a significant one-time shipment of replacement printers to a large domestic casino operator, as well as the overall continued health of the domestic casino market.

Sales to international markets were up 58% over the prior year, reflecting the success we continue to see as a result of our decision last year to sell the Epic 950 direct to international customers, as well as the benefit of a large non-recurring order for VLT printers in Europe. We're also working to build on the success of our Epic 950 with our new Epic Edge casino printer, which we debuted at G2E in October. The Epic Edge brings next-generation technology enhancements to the market, such as 300 dpi print resolution to deliver sharper barcodes and better ticket acceptance, as well as improved graphic image printing for bonusing applications, such as our Epicentral system. We received a great reception at G2E a few weeks ago from casino operators around the world and expect the Epic Edge to solidify our leadership position in the market for years to come.

Restaurant solutions sales declined 27% year-over-year to $1.3 million. The decline was driven by lower sales of our AccuDate 9700 terminal to a large existing customer and to our former distributor. Despite the decline in 9700 sales, we experienced higher sales of our newest AccuDate XL2e terminal to 3 large customers across a broad spectrum of both the restaurant and food service industries. Along with higher sales of our AccuDate XL2e, we also saw our first sales of our SaaS-based solution TEMS, the TransAct Enterprise Management System, in the third quarter. While we're just starting off and it will take some time for sales of TEMS and our other SaaS-based software solutions to materialize and become predictable, we expect these offerings for the restaurants solutions market to become a meaningful contributor to our recurring revenue stream over time.

POS automation and banking sales were up 6% to $1.9 million in the 2018 third quarter. The increase was driven by continued near-record sales of the Ithaca 9000 POS printer to our large quick-serve customer for these printers, though we expect that these sales will slow somewhat in the fourth quarter. On the banking side, sales have become a rounding error for us, as we continue to wind down this business and finally exit the market entirely by the end of the year.

Lottery printer sales of $655,000 were down from $2.2 million in the prior year quarter, as we saw a large decline in shipments to our primary lottery customer compared to significant shipments in the third quarter of '17. As we noted last quarter, we're shifting our focus away from the lottery market towards what we believe are our higher growth markets, which we expect will result in continued lower sales of lottery printers going forward.

Printrex product sales were $451,000, up 26% from $358,000 a year ago, as the oil and gas industry continues its modest recovery. TSG sales were down 25% year-over-year to $3.2 million, on a 44% decline in domestic spare parts sales to our large lottery customer, as well as continuing decline in sales of our legacy consumable products, such as POS paper and ribbons and HP Inkjet cartridges that we use in our banking printers. Despite these declines, sales of our new line of labels used in all of our AccuDate terminals grew fourfold from the prior year. We continue to expect that AccuDate label sales will grow in line with our AccuDate terminal shipments and view these consumables as well as service contracts for our terminals, as key growth drivers for TSG, particularly as we move into 2019 and our installed based grows.

Gross margin for the third quarter expanded by 210 basis points to an all-time quarterly high of 50.5%, reflecting strong casino and gaming sales and declining sales of lower margin lottery printers. Our gross margin performance also demonstrates the power of the future TransAct business model, which is built around sales of our new technology-driven solutions such as our AccuDate terminals. In fact, though it will take some time, we believe there is room for even more margin expansion as sales of our AccuDate terminals and related recurring sales grow and become a more significant portion of our overall business.

Total operating expenses for the third quarter of '18 were $4.8 million, down 3% year-over-year. Engineering design and product development expenses declined $41,000 or 4%, as lower contract design costs were largely offset by increased hardware and software engineering staffing to support our new restaurant solutions and casino and gaming product offerings.

Selling and marketing expenses for the third quarter were down $97,000 or 5% compared to the 2017 quarter, due to cost savings from the termination of our Suzo-Happ distribution agreement late last year, offset in part by higher trade show expenses and the hiring of additional staff to support our new direct selling model for casino and gaming sales in Europe. G&A expenses for the third quarter were essentially in line with the prior year.

Our operating income for the third quarter of '18 was $3.2 million, reaching a quarterly record high of 20.3% of sales, compared to operating income of $2.6 million or 16.7% of sales in the year-ago quarter. This again demonstrates the operating leverage of the new TransAct business model built around our new technology-driven solutions.

We recorded net income of $2.6 million for a record $0.33 per diluted share in the '18 third quarter, compared to net income of $1.8 million or $0.24 per diluted share in the year-ago period. As with last quarter, the Tax Cuts and Jobs Act resulted in a nice benefit to our effective tax rate, lowering it to 18.4% in the '18 third quarter from 29.8% a year ago. Adjusted EBITDA for the third quarter of '18 was $3.6 million, which was up 19% compared to $3 million in the third quarter last year.

And finally turning to the balance sheet, we ended the 2018 third quarter with $3.8 million in cash and no debt. We returned a total of approximately $665,000 of capital to our shareholders in the third quarter through our quarterly cash dividend of $0.09 per share. And through the first 9 months of the year, we returned approximately $4.1 million to shareholders through a combination of dividends and share repurchases. And as of the end of the third quarter, we have about $3 million remaining under our current $5 million stock repurchase authorization.

Overall, our third quarter showed strong financial results that we're very proud of. But more importantly, it gives our shareholders a glimpse at what the future of TransAct holds as we transition our business towards technology-driven software solutions. That means gross margins in the low 50% range, operating margin above 20% and quarterly EPS of $0.30 plus. While our third quarter was exceptional, we will likely experience some near-term lumpiness quarter-to-quarter as we make the transition and move restaurant solution customers from trials to active deployments. We remain optimistic about our success and believe this is where TransAct's future results are heading.

At this point, I'd like to give the call back to Bart for some closing remarks. Bart?

Steve, I couldn't say that any better. As we conclude 2018 and plan for the year ahead, we're making consistent progress and achieving success even as there is some exciting work to do in our restaurant solutions market. We believe that our casino and gaming offerings will continue to lead the market, while our restaurant solutions gain increasing traction with customers across the large and highly complex restaurant and foodservice industry.

I truly believe the future for TransAct has never been brighter and think that the remarkable evolution of our restaurant solutions market into what it is today and what it promises to become, will create significant new value for our shareholders. The entire TransAct team thanks our shareholders for their unending support as we grow and evolve our business, and know that each one of us is dedicated to delivering on the trust our shareholders place in us.

In closing, I'd also like to express my sincere thanks to the great work our TransAct team continues to do. It's a major transition for TransAct. It is your passion that makes TransAct what it is and what it will become.

Operator, we're ready to take some questions.

(Operator Instructions) Your first question comes from the line of Kara Anderson from B. Riley FBR.

This is actually Marc Wiesenberger on for Kara. With respect to the spare parts lottery business and the kind of record Mega Millions and Powerball, do you expect to see a bump in that business in this quarter?

You know, we never complain when one of them hits a couple -- a half a billion, billion dollars. We never complain. It's really up to our customer to place the orders. But it does tend to have a positive impact on us. I mean when you watch something grow by $20 million and when it went from I think Wednesday to Saturday, grow by $200 million, you know our printers are printing a lot of lottery tickets. So we'll be waiting to see the orders come in.

(Operator Instructions) Your next question comes from the line of [George Merma from Pariso Ventures].

Very nice quarter, great to see the gross margins going up. I had a few questions. One, I noticed your inventory uncharacteristically sort of went up this quarter, up to $13 million from $11 million, which sort of suggests some near-term -- I'm trying to understand that versus your commentary.

Sure, a couple things. So on the casino side, we saw some very good business in the third quarter and ended up buying some extra 950s to cover us. But there's also a fair amount of terminals at TransAct, as we work on these test and trials and look out forward to installations. Our lead time out of our manufacturers overseas can be 4 or 5 months. And when you're going through what we're going through, which is a serious amount of software development, there's a lot of customization that we're doing for our potential customers. It's really up to them to tell us when they roll it out, but we have to have the terminals. And the amount of terminal sales is quite significant. And like I said, our software sales will be 2 to 3x that. So it's best being that we have cash to have those terminals here. And like we said, in the short term, we don't know what it's going to be like in regard to these orders coming in. But we are making significant progress with the potential customers that we're working with right now, and we have to have those terminal ready. So we went out and bought them. That's -- give you a sign of some of the confidence we have in the business. But if we have to wait 4 or 5 months to get the terminals once they agree to move forward, that's not going to be acceptable. So those terminals are waiting for those customers right now.

That sounds really exciting. So I want to understand and make sure I'm doing the math right here. So it sounds like you have some folks with some big logos that have thousands or tens of thousands of locations. And I assume each location at full rollout will need 1 or 2 terminals per location. Is that about right?

Yes, sir.

And then let's say you have 10,000 installed base and are you saying that software sales could be -- I mean if I'm doing the math right, it seems like $20 million to $30 million a year in software revenue potential on 10,000 terminals sort of. Is that -- am I thinking about this correctly?

I can't see you're thinking about it wrong. You know we don't give projections. But what's happened -- let's talk about what's happened to the market. So let's talk about what's happening to us. As we went into to talk to customers about a food safety terminal which they loved and we sold a lot of them, tens of thousands of them; they started talking to us about automating the back of the house. And when you look at what's going on in the back of the house of the restaurant, there's a lot of different things that go on there. So when you start looking at all the different applications that we could develop for them and that they've asked us to develop, each one comes with a monthly fee. And as we add up those monthly fees to the amount of terminals that will be sold, I told you. Based on the projections I have in front of me, which literally sit in front of me right now, on just a couple of the accounts that we're working very closely with, the software sales are 2 to 3x the original price of the terminal sale yearly. So you're not mistaken.

So I imagine if your software sales start to get into those sort of ranges, would the gross margins go even higher? I mean I'm trying to understand what gross margins may do at certain levels of software sales. But if a third of your business is software sales down the road, would gross margins go even higher than where we're at today?

Yes, that's what we were referring to with the margin expansion that software sales ramp up and take hold. The margin can climb even higher.

You know, look, what you should do is you should look out 2 to 3 years because it's going to take time to roll out the terminals. We're not going to roll out that many all at once. But when you look out 2 to 3 years and think about the terminals that are out there, and the interesting thing is some of these accounts want to start with 1 or 2 apps. But clearly, they're talking to us about the third app and the fourth app being added. When you look out 2 to 3 years, which is what I would suggest you do; you are starting to understand the excitement that we have in the business regarding the opportunity at TransAct. And one of the things that I talked about on the call was TEMS, Transact Enterprise Management System. And why is that so important? The reason why is we will see every terminal in the marketplace. So if XYZ restaurant company says -- and they have 1,800 terminal in the marketplace, let's say -- and they want to start with 2 apps. But they want to add 2 more apps. Through TransAct Enterprise Management System, we can locate all of those terminals. And once they agree to roll out those apps, we just download it over the air. That's called OTA, over the air. So we'll add those apps to every terminal over the air at say 2:00 in the morning. So if you think about everything that we had to create, we had to create a terminal that could go online. We had to create TEMS, not only to lock down the system but also to do over the air updates. We had to be able to do Android service updates, clearly for security reasons. But you can see all the pieces that we had to do that are coming together and now we're in real trials. And now we're talking to real customers about rolling this kind of software out. And even with some of the customers that we're talking to that want to start potentially with 1 app or 2 app, they can go to the third app or the fourth app, because we have TEMS now. And that was the beauty of TEMS. And we needed that. So now you can see how we can take one customer that's at one level, and take him to a second level in sales and a third level in sales, as these apps become available and as they want to automate more of the back of the house of the restaurant or food service provider.

Okay, and then what's your pipeline of terminals? I think last quarter you said there's like 7,000 -- I'm not sure if you used the word pipeline. But what sort of terminal opportunity or pipeline do you have right now?

So I don't remember ever saying 7,000. So we don't -- 2 things we can't do. One, we can never mention customers, because whatever competitor that could be out there and right now we don't see somebody doing what we're doing. But we don't talk about customers. But we don't talk about size of potentials and all that. Internally we know what it is, and that number is growing dramatically. One of the things that we do in this office is we track all the opportunities. And we used to track it just by terminal sales and label sales. But now once we add the software sales, when we look at that opportunity, it's now gone up by 2 to 3x. So it's pretty significant. So we don't give exact terminals out there, how many. But we're working with a fair amount -- a good potential number of customers right now.

How many logos do you have signed today?

That's a great question. I don't know. I don't know off the top of my head. I don't know. We have a few. With the 9700, we won a lot of business or won enough business to be successful at this business. But what's important is the capability that TransAct has developed is to be able to go into a restaurant company and not hand them a software program that they have to then try to configure or use. Our software platform is customizable. And why that's important is every restaurant company runs the back of the house differently. They do different tasks differently. They produce product differently. They might temperature monitor products differently. And it's important that TransAct customize the solution for that restaurant company. Now why is that important? One, it gives them exactly what they want. But two, and Steve likes to say this in our meetings, it becomes very sticky. Because now we've developed a solution using our software platform that is customized just to their production needs, just to their back-of-the-house needs. All that takes time and that's what we're doing. All of that takes time. We're sitting down and having direct meetings with these restaurant companies, understanding exactly how they run their business so that we can make sure that the software is customized to the way they run the restaurant. And all that takes time, but it's quite exciting.

Your next question comes from the line of Jeff Bernstein from Cowen.

Just a couple more questions, so I guess just to frame what's going on here a little bit more. So it sounds like you have a few big customers. They have things that they want before they're ready to roll out in a big way and that you're focused on satisfying those needs before you're out looking for other customers or just frame that up for us a little bit.

Yes, yes. No, no. We have developed a software platform and applications that go with it that are designed so that we can customize the solution per customer. So we have customers on the hook right now that we're working very closely with. But we're out hunting every day. A lot of this has just come together over the last couple of months. And some of it still has work to do. One of the things that we're learning, Jeff, when we have an idea of how to handle a certain aspect of the back of the house, and what I would like to say, Jeff, we will have a lot more to say over the next 6 months. So I can put this in better color for you, so you understand what the apps do. I just don't want to give it away right now. I think it's important that we teach and tell our shareholders what's going on. But I need a couple more months before we tell you exactly what it's all about. But when we go in and say, we believe that this automation is good for you. Or they say to us, hey, could you automate this? And we come back with an app. There's a lot of fine-tuning to the overall program of the app because we try to understand how that operation will be done in every restaurant, not just that restaurant. So we create a platform for that app and then our customers are helping us fine-tune that so that we can cover the whole restaurant industry and the whole foodservice industry. It's not just restaurants anymore. This thing has moved into a lot of different verticals. It's not just restaurants looking to do a lot of this work. So we are out hunting every day. We have a number of them sitting in front of me right now that we're going through trials. We're going through demonstrations. We're getting more information. We're doing more customization. But the list that we have of potential customers will continue to grow -- I wouldn't say every day -- but it will continue to grow. We're not stopping. It's just we have customers that we are directly working with right now that we feel comfortable that have the potential of closing.

And so I guess there's 2 aspects of this, right? There's the revenue side and then there is some cost. And it sounds like you're saying, hey, look. We're going to have to invest in the cost side. But just on the revenue side, when do we think we're going to be growing on a year-to-year basis in a restaurant vertical?

So let me handle the cost side first. Jeff, what we did is we're shutting down some of our old businesses and taking every available person that we have and putting them on this. We've made the decision that we don't want to be in some of these low-margin businesses that suck up a lot of people's time when we've got an opportunity like this. So the costs are pretty much there. I mean there will be some wage inflation. There will be some medical and all that kind of stuff. So we've moved bodies around to be able to attack this market the way we want to attack it. From a revenue standpoint, look, I believe we'll have more color to give on our next call. I believe we will close some of these in 2019. We're in deep, deep conversations and meetings with these customers. When they close in 2019, I'd rather give more color to that on the next call. I do believe that some of these will close next year.

Got you. And then on the apps, you're not separating from your-- you had a couple app partners that you were going to market with. These are above and beyond what the other guys do?

Yes. They have nothing to do with them.

Got you.

Look, we're still partners with CrunchTime. And CrunchTime has got a great system. And CrunchTime is a production system. We're not doing a production system. There are many, many other things that go on in the back of the restaurant, and nothing to do with production. We like what CrunchTime is doing. They're very smart people, have a very good application. Clearly, our terminal is the only one that's integrated with their platform. But our customers have taught us, there's a lot more that they'd like to get done. There is things like Internet of Things that they want to do that can clearly be added as an app to our terminal. And we believe we're going to be offering some Internet of Things devices. Because there are things that we can do to help them. But the existing partners we have are on one side of the restaurant in what their application does, and there's a lot more open that the restaurants need.

Got you. All right, and then just on the casino and gaming side, Epicentral, Epicentral SE coming out at G2E; any wins there? What's the year look like or next year look like for Epicentral and Epicentral SE?

Look, we had really successful G2E. First of all, our Epic Edge was there and we believe that over the next year or so, casinos are going to migrate away from the 950 to the Edge. And nobody else has what we have. So it's an exciting time for us to gain more market share. The nice thing about Epicentral and we've always said it, as casinos prepare to potentially use it, they start only buying our printer. And now with the Edge, we can really produce fine graphics. We think coming out of the show, we feel good about it. We've got a couple of big prospects on the hook right now. We'll see if we can close them. We've made a lot of changes to the software. SE was sold between us and Aristocrat to a customer and they're very, very pleased with what went on and continue to sell that solution as part of their solution. So we feel very good about it. This is an industry that takes a long time to turn. But it has clearly helped us grow our printer sales. And we believe that 2019 we'll continue to have some wins.

And I'm showing no further questions at this time. I would like to turn the conference back over to Bart Shuldman.

Okay, thank you, everybody, for joining us on the call this afternoon. We look forward to reporting back to you on further progress of our business when we report our fourth quarter results in early March. So thanks for joining us. I know it's Election Day. Please vote, very important, no matter what party. And we'll talk to you in March. Thank you, everybody. Have a happy Thanksgiving and for some of you that I won't get to talk to, a happy and healthy New Year. Thank you, operator.

Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for your participation and have a wonderful day. You may all disconnect.