Q2 2019 Earnings Call Transcript

Published: 14 Aug 2019

[Operator:]

Good day and welcome to the CynergisTek Second Quarter 2019 Earnings Call. Today’s conference is being recorded. And at this time, I would like to turn the conference over to Mr. Bryan Flynn, CynergisTek Investor Relations. Please go ahead.

[Bryan Flynn:]

Thank you, operator. I want to welcome everyone to CynergisTek’s second quarter 2019 earnings call. Joining us today from the company includes Mr. J.D. Abouchar, Chairman

[J.D. Abouchar:]

Thank you, Bryan and thanks everyone for joining the call today. Mac’s vision, thought leadership and focused commitment to the healthcare industry grew CynergisTek into the leading healthcare focused cybersecurity, privacy and compliance services company in the U.S.I want to thank Mac for his dynamic leadership and look forward to his continued support throughout the remainder of the year and into the future as a member of our Board. One of the most important jobs as a Chairman is to also ensure that a strong leadership succession plan is in place. After significant and thoughtful due diligence, Mac and the Board found in Caleb Barlow the perfect candidate to lead CynergisTek through the next stages of our growth.I want to welcome Caleb to the CynergisTek team and we’ll give you an opportunity to ask him questions during the Q&A. With that, I’ll hand it over to Mac.

[Mac McMillan:]

Good afternoon, everyone. Before I start around my remarks, let me first say thank you to J.D. and to our Board for all of their support that they’ve provided to our company. I also want to say thank you to Bryan Flynn, who many of you have come to know, who works tirelessly to make sure these meetings are a success and in keeping you informed. Congratulations to Bryan and his wife, they had their second son yesterday. Welcome Henry, James, Humphrey Flynn, and thank you for letting us have your dad for a little while today.I’ll start with a few highlights of the second quarter before I provide more details on the real story today, the arrival of Caleb Barlow. The company continued to execute on its business plans, seeing a 17% year-over-year security growth, revenue growth and slight improvement in margin quarter-over-quarter for Q2. Looking forward to Q3, we expect to be down year-over-year as a result of both fluctuations in delivery caused by client delays, and budget constraints and in comparison to Q3 of 2018 where we also experienced a significant amount of remediation work from a very large professional services contract.That said, we continue to see positive indicators overall. This marked the 10th consecutive quarter of revenue growth and the 9th of double-digit growth for the company. Continued consistent growth in managed services are primary focus, and this quarter we achieved the highest managed services customer penetration to-date with approximately 40% of our total clients now in one or more managed services.We also took important steps to position CynergisTek for the future success with the addition of the seasoned Director of Managed Security and implementing the leadership transition plan with the selection and appointment of my successor, Caleb Barlow. While changes like these are never easy, this succession represents a critical next step in the company’s strategic plan and its evolution which I’ll expand on later.We’ve seen increased demand for Medical Device Security services and success in our first several projects. The Medical Device Security assessments offerings have driven growth in consulting revenue and is building a great pipeline for both assessments and managed services. The recent signings of two of our current CAPP clients into their second managed service medical device security management after completing an assessment is a good sign of that our strategy of expanding our offerings will translate to increased recurring revenue from our current installed base. We believe we will continue to see growth in this area as clients complete these assessments giving them a better understanding of their medical device risks.We saw of both early renewals within our CAPP programs or Management Security Service to support cybersecurity program development as well as requests for expanded services within those agreements at multiple existing managed service clients. Our recent press release which you may have seen spoke about one of our current clients expanding into its third managed service. This client who now has a CAPP Patient Privacy Monitoring and Vendor Security Management services is also in discussions around adding Medical Device Security which would be its fourth managed service. This client is an example of one of our long-term relationships adding them with us for more than 13 years expanding its program which is a testament to the quality of our managed service.Continued adoption of our expanding offerings highlights our clients’ recognition of the value and importance of having a strategic partner to aid and identifying, addressing and managing cybersecurity threats and risks.As I said earlier, we have taken important steps to ensure the success and the future growth of the business. This first -- the first was the appointment of Carrie Whysall as the Director of Managed Security Services. Ms. Whysall will be responsible for executing strategic business initiatives and driving the company’s growth strategies for Vendor Security Management, Managed Security Service and Medical Device Security. The healthcare veteran with over 20 years of experience in IT leadership, her most recent position was with Ascension Health, the largest not-for-profit health system in the United States with more than a 150 hospitals. Whysall was part of the leadership team that implemented Ascension’s security operation center or SOC as well as the company’s e-forensics security training and awareness, medical device security management and incident response programs. Her knowledge and expertise will be invaluable to aiding the growth of our recently launched Medical Device Security management, Managed Security Service offerings or SOC as well as other managed services.The next big step in our strategic plan was the execution of our leadership succession plan which culminated in the appointment of Caleb Barlow as President and Chief Executive Officer beginning August 1. Two years ago, we implemented our strategic plan recognizing that leadership succession and a strategy to do that thoughtfully and deliberately was a top priority. With the disposition of the MPS business determined and the launch of our new managed services, I thought the business was headed in the right direction and position for growth. I knew it was time to make sure we have the right person at the helm, who would secure and prepare the business for the next stage of growth.After a 10 month executive search with interviews by myself, our Chairman, members of the Board and the executive leadership team, we landed on our candidate. We all unanimously picked Caleb as a number one choice to lead CynergisTek. There are a plenty of things that attracted us to Caleb, the four stand out in my mind.First, he has held in high regards and has a credible presence in the industry. He has testified in front of Congress, has been a keynote speaker at many conferences around the country and is consistently in the news discussing cybersecurity. He is positioned well to become the new face of CynergisTek.Second, his knowledge of cybersecurity is at the forefront of the industry. He has the ability to do a deep dive into the technical aspects of the business, while also being able to translate that to the Board level. Additionally, Caleb has lead teams in product development, product management, strategy, marketing service delivery and acquisition integration giving him a broad range of experiences across the industry. He will be credible in front of customers, investors and our employees, who all want to know that he knows his stuff.Next, he is focused on the current relationships with customers and employees. He wanted to make sure he completely understood what our customers and employees needed to be successful. You heard me speak many times that the long and close relationships we have built with our customers and others in this industry and how important that is to our success, Caleb shares that appreciation.Finally, he has an extensive background in partnerships and M&A activity, which has given him experience in leading both small and large organizations. As CynergisTek grows as a business, M&A will become increasingly more important. Having someone with the knowledge to integrate acquisitions successfully into the company will be critical to our success. This is the experience that Caleb possesses and we will need moving forward.I know that, many did not expect this day to come for me so soon but we develop and execute strategic plans to accomplish organizational goals and succession has always been an important part of that plan. Fortunately, we were able to attract a leader who has the necessary background and experience that will position us well to execute on our growth strategies that we’ve put in place 2.5 years ago.As I hand it off to Paul for the last time to give a summary of the Q2 financials, I would first like to publicly thank him for all of his support for me and his dedication to what we're building here at CynergisTek.Paul, go ahead.

[Paul Anthony:]

Thanks, Mac. The financial information I'm about to provide is for the continuing security business only unless specifically mentioned that it includes discontinued operations. Security revenue for the second quarter increased $0.7 million to $5.1 million. Breaking down the revenue for Q2 2019 versus '18 Managed Services revenue was $2.8 million, an increase of 13% and Professional and Consulting services increased 23% to $2.2 million.Gross margins were 41% for the second quarter of 2019, compared to 43% in 2018. As we've mentioned over the last couple of quarters, the slight decline in gross margin is reflective of our investment in attracting and retaining talented cybersecurity employees, costs associated with ramping up new services and the implementation of advanced systems to support the business.Non-GAAP adjusted EBITDA loss was $0.4 million or 8% of revenues for the second quarter of '19, compared to a loss of $0.8 million or 18% of revenues for 2018. Non-GAAP adjusted loss was $0.5 million of $0.05 per basic and diluted share for the second quarter of '19 compared to a loss of $1.1 million or $0.11 per basic and diluted share for 2018. The company had $10.8 million of cash and cash equivalents before taking into consideration approximately $4.3 million tax liability driven primarily by the gain on the sale of the MPS business.We saw an increase in deferred revenues of about $4.4 million. The full financials and reconciliation of GAAP to non-GAAP information can be found in the earnings release that came out yesterday.I'd like to provide an update on a few additional financial items, versus in regard of the sale of the MPS business in Q1. The $1.5 million subject to future sales activity did not materialize reducing the consideration paid $28.5 million before working capital adjustments.Additionally now that we are solely focused on cybersecurity privacy and components, I’d like to break down the 2018 revenue and gross margin for the security business to give investors a complete financial picture for Q3 and Q4. For security revenue in Q3 of ‘18, Managed Services was $2.7 million, Professional and Consulting was $2.9 million, Equipment and Software was $0.1 million. Gross margin for the same period was 49%. For security revenue in Q4 of 2018, Managed Services was $3 million, Professional and Consulting was $3.8 million and Equipment and Software was $0.2 million. Gross margin for the same period of ‘18 was 51%.Lastly, we’ll see additional general and administrative fees of approximately $0.2 million in Q3 for the executive recruiting fees associated with the hiring of our new CEO. As a result going into next year, we expect our G&A expenses to decrease.This concludes the financial for Q2. I’d now like to hand the call over to our new CEO, Caleb Barlow. Caleb?

[Caleb Barlow:]

Thank you, Paul, and good afternoon. I’ll start by saying that I'm excited to be part of this incredible company. Over the last three years, I’ve spent a bulk of my time working with and leading intelligence services and incident response teams all over the globe, on both the breaches that you’ve heard of and the ones that never make the news. What I noticed from that experience, is a real trend away from the attacks of the past, where bad actors exfiltrated personal data for financial gain, to an increase in destructive attacks led by organized crime, requesting ransom payment or another cases a political desire to destroy and cripple a company.In these cases, you come in the office, on an idle Tuesday and it’s all gone, all of it, including backups. These destructive attacks require an all of business response and an understanding of how we get the business back to resiliency. A proper response not only requires multiple security experts, but more importantly, requires individuals who understand the business domain, and the growing regulatory environment. We can help prioritize and execute remediation actions.Just to give you an example, here in the U.S. alone, there are 52 different breach disclosure laws and you do not want to go sideways with any of them. As I look at this problem, and approach the opportunity with CynergisTek, I saw a company that had all of the components in place to address these coming challenges of responding to these more destructive attacks.CynergisTek was operating and succeeding in one of the most complex regulatory environments out there, healthcare. They became the trusted advisor for their clients, not just by the security team but in many cases, the CEO and the Board of Directors. All of which are required to respond in an infinitive magnitude. As vulnerabilities grow, will it be on your server and work station, to IoT and other devices, CynergisTek is leading the way not only to identify but the monitor the complete picture.CynergisTek not only has the capability to look at company’s security vulnerabilities but also the ability to understand the likelihood of an incident and the impact that it will have on the business. Did everything necessary to help a company plan for their worse day. Knowing how to response to a large scale security incident is not a skill you’re going to learn from reading a book. It’s much more analogous to learning how to swim. To be successful you’re going to need to jump in a pool with an instructor or coach. If you’re just reading a book on swimming, you’re likely going to drown. Respond to the coming attacks is not any different. CEOs, boards and security executives are going to need a different type of trusted partner by their side, one that has a thorough understanding of their security posture, the risk to the organization and the regulatory environment in which they operate, a partner that knows how to help them build plans for their worse day and make decisions in crisis if it occurs.I came here to take what I’ve learnt and to build the company that can solve this problem and I believe CynergisTek has the right DNA to do it. Now, I may be coming from a very large company, but even with a very large company big ideas start small. My focus over the years has been on driving teams to innovate quickly, that’s running small businesses in the large organizations. I see a tremendous opportunity to expand on what CynergisTek has built by adding another layer to the assessment to managed services that help clients to be more resilient in a cybersecurity incident.Now I’ve only been here for two weeks, my initial plan is to visit our clients around the country, engage our teams throughout the company and work with the leadership team and Mac to solidify a smooth transition. One thing I’ve noticed in my short time is that CynergisTek has built a fantastic team that’s full of leading cybersecurity and privacy experts. I look forward to working with them all in the future.In closing, I want to extend my congratulations to Mac on his career, his leadership both here at CynergisTek and in the industry as a whole.This concludes the prepared remarks. Operator, please open the floor for questions.

[Operator:]

[Operator Instructions]. And we’ll take our first question from Matt Hewitt with Craig-Hallum.

[Matt Hewitt:]

Mac, it’s been a pleasure working with you these last couple of years and best wishes and future endeavours, and then Caleb Barlow welcome to the team. A couple of questions, first consulting. Professional and Consulting came up a little bit short of our expectations. I’m just wondering if that was a function of timing or what you’re seeing from a demand perspective for that piece of the business?

[Caleb Barlow:]

Well, it’s certainly an area that we’re paying a lot of attention to and that the advantage of professional services obviously is its revenue that we can recognize in the short-term. So it is a continued area of focus and one of the things we need to do there is continue to bolster sales to get those numbers up.

[Matt Hewitt:]

Got it. And then gross margin, nice sequential improvement. And I’m sure there is some mix components to that. But how should we be thinking about that metric trending say over the next couple of years?

[Caleb Barlow:]

Paul let me defer that to you.

[Paul Anthony:]

Yes. I mean I think at least in the short-term as we’re at these revenue levels in that 5 million, 6 million a quarter range I think we’re going to be sitting in that low 40 range. That’s probably pretty consistent. But as we start to see the ramp up in the revenue and we start getting in that high 6 -- 6 plus and in the 7 range, we’re going to -- it's our expectation we will see those margins start to uptick back to the middle of the high 40s is what we’re expecting Matt.

[Matt Hewitt:]

Understood. And then maybe one last kind of more of an open ended question for you Caleb. In the press release and even in your prepared remarks today, you commented on other areas for -- or other areas where you’re seeing opportunities to expand the current service offerings. Are you looking more from people and consulting or are you thinking that there is opportunities to maybe attach hardware, software, bring that into the mix and maybe just a kind of a high level overview of where you see opportunities for the company going forward? Thank you.

[Caleb Barlow:]

So, Matt I think that the biggest areas of focus will certainly be professional services and our associated managed services which are predominantly people faced. There is a couple of things here that are very intriguing and this goes frankly to more of why I came here. The first thing you have to realize is that, when you run into these more pervasive, more destructive attacks, it’s no longer just the security team that's responding, it’s an all of business response. And what that ultimately means is that, if you're just a tool vendor, you don't understand the business environment in which you're operating. You can't provide that guidance and be that trusted advisor. And the thing that CynergisTek has done is very unique, because of their heritage in providing the assessments at a very deep level, they understand the business in which they're operating in. And I believe that is part of the secret sauce that's going to help many companies, not just in healthcare, better be prepared and better respond to an incident. So, if you look at the opportunities and the potential areas of expansion, it all centers around doing two key things. The first, continuing to focused on our growth in healthcare segment and the good base we have built there. The second is in bringing forward services at across industry and move us beyond just healthcare.

[Operator:]

We will take our next question from Andrew D'Silva with B. Riley FBR.

[Andrew D'Silva:]

And I'd like to echo previous comments, Mac, this might be the last time we join on a conference call. It's been a pleasure. And Caleb great to -- finally get a chance to talk to you as well. So, first question just related to customer retention rates. Can you maybe break it down a little bit? Historically it’s been very good customer retention. Has that maintained throughout 2019 thus far? And then maybe a little bit of a break out between how that works between managed services and in consulting and professional?

[Mac McMillan:]

So, Andy, the good news is, is that retention rate has remained strong across the board. And what you heard me talk about in my opening remarks was that we're now tracking that in many different ways. And one of the ways we're tracking it is just -- if you look across all of our customers, how many of all of our customers have at least a managed service and that for the first time picked up over 40% for the total number of customers we have.And then secondarily, we look at, if you heard me talk about in the past, how many of our managed service customers actually have two or more managed services and that number is ticking up as well. You heard me talk about the one customer that added their third and is already talking to us about adding their fourth. And it’s absolutely our goal to have as many of our customers have as many of our managed services as we can possibly sell to them. So, that is still a very strong focus. And the good news is that, all of those statistics are trending in the right direction and remain strong.

[Andrew D'Silva:]

Okay. Great. And just moving over to gross margins I know you talked a little bit about this on previous caller’s questions. But in the back half of the year for '18 you are about 50%, obviously the labor market has been getting tighter in your segment. How much of the kind of gross margin compression is related to that? And then how much would say is just related to economies of scale, back half of the year being stronger in '18 than is expected to be in '19?

[Mac McMillan:]

Yes. We estimate around 1%, may be in a worse case 2% is when we tie it to some of the -- in the headcount, some of those new service, the new tools that we’ve implemented as well as the additional managed services, is what we’re looking at as the impact primarily from that side of it. So the balance is associated with the revenue levels, so.

[Andrew D'Silva:]

Okay, okay perfect. And Caleb, maybe run me or just a little bit expand -- pardon me, it’s a question you already answered, but run me through what first brought you to the company, what was the initial attraction obviously, a big shift from the size the company you were previously at and your position and role is changing dramatically as well. And then, I'm also just curious on how you view M&A as it can be very accretive if done correctly, but can obviously be a huge headwind if not done correctly. So just your actual fundamental thought process would be useful versus particular avenues might go down?

[Caleb Barlow:]

Okay. So, the first thing you have to understand is that, in my past role I was literally sitting at the epicenter of most major breaches as they would occur. And the thing I tell people often and this obviously isn’t a scientific statement but I really believe it, if you look at most major breaches that hit the headlines, the response to the breach actually causes more damage than the breach, executive not knowing what to do. And if you think about it, it’s the first time -- and well many of them point to business school right and at no point along the way you learn how to take on a human advisory, right? I mean it’s kind of metaphorical equivalent of getting punched in the face and you’re going to keep getting punched in the face until you punch back. That is a very foreign concept for your average corporate executive that you’re up against a human that can see what you are doing, kind of pivot, kind of job, and can come actually in different ways.And as I started to see this and worked with CEOs and boards during these breaches, I really started to realize that two things were required. One, you got to plan for these things way in advance. So, one of things such as IBM and if you’re interested in this you can Google it, I’ve built out the world’s first commercial cyber range, we’ve built on in an environment, in building and we even built one back in the truck. And these things were incredibly successful because you could exercise what was going to happen. But the missing link that I still couldn’t get to was actually getting in front of it and to not only understand the security weaknesses, which every company has, but also understanding how those weaknesses impact the business. So that connection between the risk that you’re taking on with our cybersecurity vulnerabilities and how the business is going to operate, if those risks were exploited. So, that was first of all, where I got interested is this.But then the second part of your question is kind of around M&A. And one of the other great opportunities I had was to work many different acquisitions, IBM Security is actually a combination for our 20 acquisitions. And one of more interesting roles there is what they call an integration executive, where you actually are the lead executive on the acquisition, you work it all the way through the process and then working either hand-in-hand with the CEO, or in many cases if CEO leaves, actually running the company.And exactly to your point, there are many acquisitions that meet their business case and many acquisitions that you struggle and you have to try to figure it out. You have to try to figure out how to scale. So it’s interesting, I used a lot of that same discipline in evaluating CynergisTek and of course the great thing about CynergisTek is, it’s public. So you can see a lot of this information, a lot of it isn’t hidden away in ego and other things. But I think to your point, M&A is something that very well maybe part of our future along with organic growth, but you have to be very carefully about picking the plays that are going to give us the synergy needed to grow. Not just driving towards revenues but actually helping us get that 1 plus 1 equals 4 advantage off of the work that we’re already doing.

[Operator:]

And we’ll take our next question from William Gibson with ROTH Capital Partners.

[William Gibson:]

Thank you. A question for Caleb and it relates to, you talked about moving into new areas beyond healthcare. And I think I know what Mac thinks about it. But what’s your sense of the Medical Device Security and how big that could be?

[Caleb Barlow:]

Well, I think if you look at the IoT space in general, we have to all realize that if you look at the typical company maybe with a 1,000 employees that might mean you’ve got 2,000 workstations, but you might have 10,000 devices connected to that network. And the challenge with any type of IoT device is the opportunity for kinetic action to actually impact more than just the data in a database but actually impact a building or a pump or a valve. And of course then you’re adding medical devices on top of this, and you can have a real kinetic impact on people. Now combine that with the fact that these things often last 15, 20 plus years, are they may be running at older operating systems, they may not be well protected.So what is intriguing about this space is that if we focus on medical devices, it not only has a large threat landscape, it has a significant impact, it has a large regulatory framework. But think about this it this way, if we can figure that out and harness that opportunity it also opens a door for us to address the larger space of IoT in general which is a bit less complex, a bit less regulated, but totally the wild west.

[William Gibson:]

Thank you. And then second question follow-up is, in the early statement, Mac I think you went over breaking the street potentially of 10th consecutive quarters in the third quarter of ‘19. Could you go over that again?

[Mac McMillan:]

Yes. I can take that. Yes, I mean last year if you remember we had that large customer who had the large remediation effort and in which Q3 and Q4 saw significant professional services revenue. And so this year or at least this third quarter we don’t have the same level of remediation effort that are going on right now. And so we will see a drop in that Q3 number. We’re still looking at Q4. We still got a lot in the pipeline. And so we still got our finger crossed, at least at this point, we are looking at a drop that’s entirely a function of the professional services in comparison to large deal we had last year, so.

[William Gibson:]

And so, that’s a drop from 5.7 million correct?

[Mac McMillan:]

Yes, that would be right. Yes.

[Operator:]

[Operator Instructions]. And we will take our next question from Tim Clarkson with Van Clemens Capital.

[Tim Clarkson:]

I'm kind of new to this call. So, I'm just going to ask a more basic question. How would you define the difference between Managed Services and Professional and Consulting services specifically in terms of which ones are repeatable and which ones were one-time and are they involved with cybersecurity?

[Caleb Barlow:]

So, professional services, of course, is exactly what it sounds like, right. However, the Managed Services model here at CynergisTek is very unique. In that, there very analogous to a software-as-a-service model, what you're doing is having a company sign up for a subscription. Now remember, in the healthcare field, these assessments that are done are required. So, every year you've got a go in and assess your cybersecurity business potentially even more often than once a year, which certainly be healthy. So, what CynergisTek has done is packaged these up as a repeating service so a couple of things kind of benefit with that. One, you don't have to go, take it out to RFP and find a vendor and we don't have to go sell it every year. The second -- and you also get some consistency year-over-year because you got the same vendor doing this. And of course what you're hopefully doing is the vulnerabilities you find in the year one assessment, you're looking to go fix those in your next assessment. And you even better the assessment after that. So, a packaging that as a Managed Service, but where this also gets interesting is in monitoring the posture that we find. So, for example the patient privacy monitoring service, we're also going in now operating in an environment where hopefully all those controls are in place and helping a company to validate if those controls are in place. Like effectively continue with monitoring on top of that environment to see what the posture is. So, I think from a -- if you look at this from a financial perspective, think of this as very analogous to a SaaS based service in that you contract with us, we take care of all of the aspects you need and we're coming back to constantly continue to monitor and reassess that environment.

[Tim Clarkson:]

Sure. Would you say that, on both the Managed Services and also the Professional and Consulting services in terms of what you’re doing yourself involve with cybersecurity?

[Caleb Barlow:]

Yes. So now this is a pureplay cybersecurity company and of course this is a big part of our transition, right, and frankly a big part of what interested me in coming here is that as all of those other businesses that moved out it allows us to be a pureplay cybersecurity company that start to take that on from a brand messaging perspective as well as not have any distraction to any other parts of the business.

[Mac McMillan:]

I'll add a little bit to that, as it relates to Managed Services that's where we consider our recurrent consulting and consider repeatable. So your consulting services in many cases are the same types of services that are done on a one-off basis, but there traditionally services that are still contracted for annually. And so, the people still are coming back repeating those services with us. So consulting has that aspect to it.

[Tim Clarkson:]

So, the Managed Services would be even more predictable and could...

[Mac McMillan:]

Yes. It’s a three year contract.

[Paul Anthony:]

And obviously the revenue recognition is very different on those versus professional services contract as well.

[Mac McMillan:]

Exactly.

[Operator:]

[Operator Instructions]. And there’s no other questions at this time. I'd like to hand the call back over to Mac McMillan. Please go ahead.

[Mac McMillan:]

Thank you, operator. Today is my last time within our company, which represents better-sweet moment for me as I'm extremely proud of this company and humbled by the success that it has become. No asset is successful on its own and there are generally many stakeholders to thank. But today belongs to our shareholders, past, present and future. I want to thank you for your support, for your genuine interest in our success and for the many of you who were thoughtful enough to engage and share your thoughts with me along the way.I did not know what to expect when I transitioned from the private company world to the public one, but I can honestly say now looking back at our shareholders like our clients and our employees, are a valuable component of our business and a tremendous source of experience, wisdom and advice. As I mentioned on several occasions, I rose everyday focused on growing value of this company and I'm confident that the team I leave behind will do the same.Caleb, Paul and I look forward to speaking with you all in the future. Thank you and have a great day. Thank you, operator.

[Operator:]

That concludes today’s call. Thank you for your participation. You may now disconnect.