GP Strategies Corporation
Q4 2016 Earnings Call Transcript

Published: 28 Feb 2017

[Operator:]

Good morning. My name is Diane and I will be your conference operator today for the GP Strategies’ Fourth Quarter 2016 Earnings Conference Call. All lines will be placed on mute, preventing any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded. Thank you. I will now turn the call over to Ann Blank, Director of Investor Relations. Please go ahead.

[Ann Blank:]

Thank you. Good morning and welcome to GP Strategies’ fourth quarter 2016 earnings call. On the call today are Scott Greenberg, Chief Executive Officer; Douglas Sharp, President; and Sharon Esposito-Mayer, Chief Financial Officer. Before we begin, I would like to remind you that today’s comments will include forward-looking statements, which are subject to certain risks and uncertainties that could cause our actual results to be materially different from expectations. For a complete discussion of these risks, we encourage you to read our documents on file with the SEC, which are posted on the Investors section of our website at gpstrategies.com. A replay of this call will also be available on our website later today. And at this time, I’d like to turn the call over to Scott.

[Scott Greenberg:]

Thank you, Ann. Good morning and welcome to our fourth quarter 2016 conference call. Today, we will follow our usual quarterly format. To initiate the call, I’ll provide a brief overview of the results in the fourth quarter 2016 then Sharon will present an in-depth financial analysis and Doug will give key updates on our global initiative. After Doug’s presentation, I’ll provide a final summary and then will conclude with the Q&A session. However, I’d like to start the call with some positive news. GP Strategies have signed a significant contract to provide global learning services for our large pharmaceutical customer. GP Strategies will provide a global man learning service program. The agreement has a term of three years with two one-year options. Under this agreement, GP Strategies expects to help the client drive global consistency and efficiency while enabling the learning function that have become more responsive to the needs of employees and managers. We are pleased to be selective for this critical initiative to take primary responsibility for managing their learning suppliers. These initiatives allowed GP Strategies to provide the client with a global view of the learning and development supply chain with complete visibility of consolidated spend across all supplier types. Having single thought learning and development vendor information will help the client facilitative effective account management and spend consolidation. We believe we’re at an inflection point. This win clearly demonstrates that our previous investment in our global platform differentiates our company in the training industry while we originally believe that this contract would have generated revenue Q1 of 2017, it will now start in the second quarter, so some big moves in GP Strategies. This morning before the market opened, GP Strategies announced its earnings for the fourth quarter of 2016. Fourth quarter revenue increased despite the 5.4 million impacts of foreign currency exchange rate declines. This reflects increased revenue in three of our four operating segments with particularly strong growth in Learning Solutions which grew revenue to 55 million during the fourth quarter in 2016 from 52.6 million in the fourth quarter of 2015. This occurred despite a $3.9 million negative impact of foreign currency. While we’ve continued to see a year-over-year downturn in our Professional & Technical Service segment, it is revenue stabilized in a sequential quarterly basis. Excluding the Professional & Technical services, revenue grew by approximately by 5% without adjusting for currency and 9% adjusting for constant currency. In addition, we recently completed the acquisition of McKinney Rogers, giving GP Strategies further inroads to assist clients at the C-level suite to execute their business strategies. In the fourth quarter, the Company achieved EBITDA of 10.5 million compared to 11.8 million for the fourth quarter of 2015. However, the fourth quarter included approximately 500,000 of expenses related to currency conversion and 300,000 of expenses related to the McKinney acquisition. In addition, while stable from the last quarter, there was a gross profit reduction from Professional & Technical services of 1.6 million compared to the fourth quarter of 2015. Some companies and analyst add back non-cash compensation to EBITDA on a pro forma basis. These expenses for the quarter were approximately $1.6 million. In 2015, the Company announced an additional share buyback program of 15 million and repurchased approximately 340,000 shares or approximately $8 million of GP Strategies stock and the open market for the year-ended December 31st, 2016 and has approximately 6 million remaining under the program. There are approximately 2% less shift currently on a fully diluted basis compared to the fourth quarter of 2015. In 2013 through 2015, we invested heavily in building our global reach, and we anticipate seeing the returns of these investments in years to come. We added approximately 13 global offices to the Company and our revenue in the Asia Pacific region exceeded $25 million in 2016, which is a multiple of over five where it was just five years ago. Today, we are currently doing business with approximately 25% of the global 500 customers worldwide. Our goal is to continue to establish GP Strategies brand in this highly fragmented industry. We routinely get asked on the market of the training business which we estimate to be over $100 billion globally, and our largest competitors actually the in-house companies training departments. We understand that we are playing in a highly fragmented industry, and we look forward to continue the execution. On previous calls, we discussed initiatives to expand into the financial insurance sector. We've started this initiative approximately five years ago and for the fourth quarter our revenue in financial services was over 21% of our total revenue. We are not only investing in financial services in automotive, but as you can see from the announcements today, we are making a major push into the pharmaceutical sector. This industry has the same positive attribute to GP Strategies service such as high spend regulatory requirements. With that being said, I'll now turn it over to Sharon, who will give a detailed financial presentation for the quarter.

[Sharon Esposito-Mayer:]

Thanks, Scott, and good morning, everyone. We reported fourth quarter revenue of $127.3 million, which represented and approximately 1 million or 1% increased over the fourth quarter 2016 revenue of $126.4 million. During the fourth quarter, we experienced a 5.4 million reduction in revenue due to a decline in exchange rates compared to the average exchange rates during the fourth quarter of 2015. This decline contributed to a 4% decrease in revenue over the fourth quarter of 2015, revenues in Learning Solutions segment increased by 2.4 million or 5% over the fourth quarter of 2015. The JenCal acquisition completed on March 1, 2016, contributed 1.3 million of revenue in the quarter. The results show a 5 million net increase in e-learning and training outsourcing services. These increases were offset by a 3.9 million decrease in revenue due to a decline in exchange rates compared to the fourth quarter of 2015. Organic revenue growth in the segment, excluding the effect of currency was 10% in the fourth quarter. The Performance Readiness Solutions segment revenue increased by 1.85 million or 9% in the third quarter. The Maverick acquisition completed on October 1st provided 2 million of revenue in the fourth quarter. The results show a 1.2 million net increase in training, consulting and implementation services. These increases were offset by a $500,000 decline in revenue due to a decline in exchange rates and a $900,000 decline in leadership services. Sandy’s fourth quarter revenue of $26 million represented a 400,000 million or 2% increase over the fourth quarter of 2015. This increase was largely due to a 3.3 million increase in automotive and training services offset for a 2.9 million decrease in publication revenue largely due to a portion of the publications shipping in Q3 of 2016, compared to fully shipping in the fourth quarter of 2015. We are projecting a total of 5.5 million of publication revenue in the first quarter of 2017, which compares to 5.6 million of publication revenues in the first quarter of 2016 and 6.9 million of publication revenues in the recently completed fourth quarter. Professional & Technical Services revenue decreased 3.88 million or 13%, contributing to a 3% decline in overall company's fourth quarter revenue. The decline was due to a 1.7 million decline in training services from oil and gas clients, a 2 million in services from energy clients, and a $900,000 decrease in revenue due to unfavorable changes in exchange rates. These declines were partially offset a 900,000 increase in alternative fuels revenue. Total year 2016 revenue was up slightly at 490.6 million compared to 490.3 million in 2015. There was a 14 million revenue decrease in 2016 due to a decline in exchange rates was contributed to a 3% reduction in revenue over 2015. Excluding the effects of currency Professional & Technical Services revenue decreased 14.5 million or a 3%. These two items contributed to a combined 6% negative impact on 2016 revenue results. Over 90% of our 2016 total year revenue was derived from clients that existed in the prior year, and over 90% of our top 25 clients have used our services for five or more years. The automotive sector was our largest sector in 2016 and comprised 22% of revenues, up from 19% in 2015. The financial and insurance sector comprised 21% of 2016 revenue consistent with 2015. We have revenue concentration every single financial services customer which accounted for 16% of our 2016 revenue, and a revenue concentration within automotive customer was comprised 13% of our 2016 revenue. Revenue earned from operations outside the United States represented 31% of revenue up from 31% in 2015. Gross profit decreased in the fourth quarter by 500,000 or 2%. The decrease in gross profit was largely due to 1.6 million, decline in gross profit in the Professional & Technical Services segment, primarily due to the revenue decline discussed. This decrease was partially offset by gross profit increases in our other three segments despite an $800,000 decrease in gross profit due to a decline in foreign exchange rates was primarily impacted the Readiness Solutions segment. The acquisitions completed in 2016 contributed 700,000 of gross profit in the quarter. SG&A increased by $500,000 in the quarter. Fourth quarter 2016 SG&A expenses included 300,000 of legal fees related to the recently completed McKinney Rogers acquisition. A $100,000 increase in non-debt expense and a net $100,000 increase in labor incentive expense over the fourth quarter of 2015. In the first quarter of 2017, we began implementation of a new global ERP system that we plan to go live on in 2018. The license and implementation cost will result in approximately $3 million of additional SG&A cost in 2017 above the normal estimated annual SG&A increased of approximately 5%. The estimated cost in Q1 related to the implementation effort is approximately $700,000. There was a $400,000 restructuring charge in 2015 that was non-recurring in 2016. Interest expense increased in the fourth quarter by 200,000 primarily due to an increase in borrowings outstanding during the quarter. Other expenses included 200,000 over the fourth quarter of 2015. Foreign currency loss increased 100,000 and total 500,000 in the quarter compared to 400,000 in the fourth quarter of 2015. And the remaining increased was due to a $100,000 decline in joint venture income compared to the fourth quarter of 2015. Tax expense was 1.7 million in the quarter for the rate of 20.3% compared to 3.3 million or 34.6% in the fourth quarter of 2015. The 2016 tax rate was 32.6% compared to 36.6% in 2015. The decrease in the fourth quarter tax rate and the full-year of 2016 rates was due to a change in the mix of income to lower tax jurisdictions. Approximately 53% of our 2016 income was from operations tax outside the United States compared to 37% in the 2016. We are currently projecting a tax rate of approximately 34% to 35% for 2017. Fourth quarter net income was $6.7 million, compared to $6.3 million in the fourth quarter of 2015. And fourth quarter earnings per share were $0.40, compared to $0.37, in the fourth quarter of 2015 or a $0.03 per share increase. Moving on to the balance sheet, our cash balances were $16.3 million at December 31, 2016 compared to 21 million on hand at the end of 2015. These cash balances earned deposits in jurisdictions outside the United States. In 2016, we spent 8.7 million on share repurchases, 2.2 million on contingent consideration payments for previously completed acquisitions and 6.8 million on acquisitions completed in 2016. We generated $6.2 million of cash flow from operations in the fourth quarter and a totaled of 18.1 million of cash flow in 2016 compared to 25.6 million of cash provided from operations in 2015. 2016 cash flows from operations include 20.2 million of income plus non-cash tax to net income including depreciation and the amortization of 6.5 million. Non-cash compensation expense of 6 million offset by a 12.8 million increase in tax from changes in the other operating items, primarily due to an increase in accounts receivables and a 1.8 million decrease in differed income taxes. 2016 fixed asset additions were 1.4 million down from 2.4 million in 2015, and we generated free cash flow of 16.7 million in 2016 compared to 23.2 million in 2015. We had total borrowings and term loan debt outstanding of 57.7 million at December 31st and 76.6 million of available borrowings under our revolving credit facility. At December 31st, backlog was 285 million in comparison to 239 million at the end of December of 2015. Approximately 34 million of year-end backlog is for a contract with an international oil and gas customer that will be performed over the next five years. With the exception of this contract, approximately 95% of the backlog will be recognized as revenue within the next 12 months. At this time, I will turn the call over to Doug who will discuss some operational highlights.

[Douglas Sharp:]

Thank you, Sharon, and good morning everyone. Given the foreign exchange headwind and the disruption in the oil and gas services market, we still manage to grow the quarter including growth in three operating groups and Q3 to Q4 stability in our Professional & Technical services group as mentioned by Scott. Further, our balance sheet and backlog that were yet to be performed remained strong. I will spend a couple of minutes and add some color to the numbers by sharing with you some of our corporate initiatives. On previous calls, we had discussed the building of a global platform for our services. We have also announced on our call last July that we had initiated a focus on the pharmaceutical market sector. Like the financial market sector, the large pharma companies are highly regulated, performance driven and have ever changing product mix and had global workforce that requires consistent high quality, fast and efficient enterprise-wide workforce development and training. Putting now words quickly across the global, their global operations, it is paramount to their future. I am pleased to announce Scott Green and we are having a great success to our strategy. Ranging from targeted project awards for human capital technology applications to the recent award of a multi-year managed learning services contract. It is however a thorough dimension to our strategy. In addition to growing our global footprint and our focus on high demand market sectors, we also continue to build our capabilities. In 2016 and carrying forward in the 2017, we continue to invest in both back-office and customer facing technology, processes and people. We have built required new capability for global management of learning resources, tools for managing vendors globally, adding consulting services to operationalize C-suite strategies, added strength to our success factors human capital support, added training and expertise for cloud-based Oracle ERP products. Strengthened our plant performance offer services, build tools for managing our order to cash processes and continue to innovate on award winning training delivery including recent industry awards for our work with Lows, MasterCard and Merck. The point here is that we are doing all we can do to build GP Strategies into an ever bigger powerhouse in the corporate learning space, a powerhouse which services global companies with their knowledge, performance and innovation requirements. I am seasonally consulting and coaching to day-to-day transactions. Our focus remains on our customers and we meet our demands. I might add with an eye towards the barriers for the market with potential competitors. So, with that, I will turn it back to Scott.

[Scott Greenberg:]

Thank you, Doug. The next part of the agenda is I’d like to go over a few items and then we’ll turn it over to Q&A. I would like to make a comment on Sharon when she discussed about backlog in that presentation. Now, we’ve done an analysis and if you look at GP Strategies due to 90% of our business comes from acquiring clients and we have backlog and work that we typically do for our customer base, we did an analysis that basically shows that between backlog and historic work that we do for customers over 70% of next year’s revenue is seeable. So, we could see that in our customer base, which is a very strong item to enter any yield and with this. The next area I would like to talk about of acquisitions, GP Strategies historically have significant success both building organically and sub-planting that with an acquisition strategy. When we went on major financial service award, we had a build out of global structure, we had to open up office all over the world and our acquisitions strategy took a backseat in 2014 and 2015. I am pleased to report that in the second half of 2016, we started actively looking for add-on acquisitions, and we closed two transactions in the second half of ’16 and beginning of ’17. We closed Maverick which gives us the Oracle-based cloud solution, and we closed McKinney Rogers that gives us entree into the C-suite of major corporations. With that entree, we would hope to be able to sell other services of GP, getting into the C-suite of major cooperation. We will continue on with our acquisition strategy. We’ve been able to use our significant cash flow for funded in the, past but in addition just have dry powder based upon the success of GP Strategies. We were able to get a new revolving credit and term loan facility with Wells Fargo bank at rates that are consistent with our facilities in the past. So, it gives us plenty of availability as we enter into 2017. The next area I’d like to talk about is our shareholder base and also the Investor meetings coming up. Our largest shareholder of the Company in the fourth quarter, they filed that they actually increased their position, so that was nice to see. In addition in the beginning of the year, we had a well or end of last year, we had an Investor meeting where we led all our investors meet a lot of the management at GP Strategies and spent the full day with the Company, and we had that at the New York Stock Exchange and those were very well attended, and I am glad that those you that attended fourth quarter was a successful day. Lastly, we are now entering for GP Strategies at least our investor season where we have a lot of conferences. So, all three of the companies that do research on GP is having their conferences in the next few months. So, we’ll be at the ROTH Conference in March, and we’ll be at both the B. Riley and Barrington Conference at during the month of May. So, we will be out there meeting with you and hopefully you could provide some time to meet Sharon and myself there in these days. With that being said, I’d like to thank you for participating on the call, and we’ll now turn it over to Q&A.

[Operator:]

Thank you. [Operator Instructions] Our first question comes from the line of Alex Paris with Barrington Research. Please go ahead.

[Chris Howe:]

Good morning, this is Chris Howe sitting in for Alex Paris. I had a question in regard to the new contracts, Kuwait Petroleum, then also the pharmaceutical company that you announced on today’s call. Are the timing and amounts of revenue run rate for the Kuwait Petroleum the same as previous expectations which were 2 million to 2.5 million revenues per quarter run rate? And in regard to the pharma company, are your expectations still in line with the 10 million a year or more which will begin in Q1 of ’17? Thanks.

[Scott Greenberg:]

Yes, I mean in the past, we said that Kuwait would be between $7 million and $8 million per year. 35 million was more of a ramp up at the beginning, and we still believe that to be the case. We haven’t achieved that million in three quarters to $2 million a quarter yet, but we’d like to achieve that in 2017, but all the other criteria are remaining the same. As far as the large pharmaceutical win, you know it’s good to have it signed, so we announced the potential before. Again, I do believe that the minimum type of revenue we could generate from this contract is north of $10 million per year. It will ramp up in 2017 however there is a significant upside to that number if we perform correctly and that is too early to predict but it could be significant.

[Chris Howe:]

Thank you. And I have one follow-up just in regards to the financial and insurance. You've highlighted the different sectors within their as automotive and now the pharmaceutical sector. Are there any additional sectors that will make sense here that could add potential upsides in the next year or things generally speaking that you are looking at internally?

[Scott Greenberg:]

While GP Strategies has involved in a lot of sectors, so while we're putting effort in resources into those three, you shouldn’t assume that we are ignoring the other sectors of the Company. So I think that the major opportunities we have if you look to the last five years and while we've been able to build are in those three sectors, but even though we are working for example in the oil and gas business internationally to try to win work. We are working in the energy space as well. So, there are a lot of other industries we are involved in, but we're focusing on those three to put in major resources. And then just to add one thing historically we've been very successful in apprenticeship programs in the UK, which is about 5% of GP Strategies revenue, and we've been very active builder there an making acquisitions in the past.

[Chris Howe:]

Okay, thank you for the additional color and I actually have one last one just in regards to some comments you've made last quarter in regards to the potential for additional opportunities and projects within the financial services customer. I guess what's the -- how do you see the potential for this playing out this year?

[Scott Greenberg:]

We think this potential we received one of the awards from our large financial services customers that we're staffing now, which will add a significant amount to people to GP Strategies. We're also working with them on some leadership opportunities. So, I continue to believe that their opportunities. If you look at the customer itself, the revenue growth hasn’t been is great because of the lot of the revenue has been delivered in British pound. But if you are looking constant dollars, the revenues stream has grown every year since we were awarded initial contract.

[Operator:]

Our next question comes from the line of Kevin Liu with B. Riley & Company. Please go ahead.

[Kevin Liu:]

I guess first question just holding in on the Learning Solutions gross margin for Q4. It sounds like maybe you were already ramping up some cost there either for your large financial customer or also this pharma contract. I am so just curious if that was a case and whether you would expect margins to start off fairly low coming into the year given some of the larger words you secured now that for ramping back up over the course of 2017?

[Scott Greenberg:]

Well, we did have some cost related to the large pharmaceutical customer in Q4, and it was a diversion of some talent. Typically, if you look historically somewhat seasonal in Q1 and if you go back again year-to-year there is a seasonality in Q1 that provides us with lower margins with that being said when we have this ramp-up later on in the year reached by a typical ramp-up in margin and it could be supplemented by these additional revenue streams or it's been revenue in margin.

[Kevin Liu:]

Got it. And on the pharma contract that you've already secured, would you expect to be at kind of the full and your run rate exiting 2017? And then more generally, could you just speak to strength of the pipeline in pharma whether you expect to add other meaningful customers over the course of the year?

[Scott Greenberg:]

I would say that this contract could be significant to the point that we will not been fully ramped-up by the end of 2017. So, this will be a larger ramp-up. We do have, if you look at now we are probably dealing with seven to eight pharmaceutical customers; and we hope that this win will encourage them to do more services with GP Strategies. Now that they see the level and the scope of services we could do, but we are dealing with some of the major pharmaceutical companies in different areas. This hopefully opens really pushes open to the door for us, Kevin.

[Kevin Liu:]

Great. And just lastly, could you just talk about the expected revenue contribution from the McKinney Rogers this year along with kind of their EBITDA profile?

[Sharon Esposito-Mayer:]

Yes, I mean the revenue profile for them is revenue or probably somewhere around in 8 million or so annual run rate, and their EBITDA is it's definitely a little bit slightly higher than our EBITDA profile right now so I would say from that you could expect it to rise about 1.2 million or so of EBITDA on an annual basis.

[Operator:]

[Operator Instructions] Our next question comes from the line of Jeff Martin with ROTH Capital Partners. Please go ahead.

[Jeff Martin:]

Could you us an idea of what's sort of performance metrics would need to be achieved in order to achieve some upside on the pharmaceutical contract and are we talking upside that is similar to what you accomplished with HSBC from its original expectation or is it more muted in that? Thanks.

[Scott Greenberg:]

Well, there is two elements of the contract and then somewhat different than HSBC, but positive just the same. On the vendor management and running the vendors that type of work would be very similar to what we do with the HSBC. However, they have a lot more development and outside vendors, so in this case the key to this job is doing more work that is currently being done by their outside vendors as opposed to taking over a workforce of trainers. So, it's slightly different model than our financial service contract but it has great opportunity.

[Jeff Martin:]

And then on the credit side, you mentioned in the past additional contract opportunities there. Is there any progress to report on that and if so what kind of timing it might be prior to that?

[Scott Greenberg:]

Well, right now, we are seeing request for information and we're in discussion stages. Any additional opportunities there are in Kuwait would probably happen in the second half of the year, but we are seeing some opportunities in other areas of energy and oil and gas. And one of the areas that we're seeing opportunities in is in South Africa, and another area we're seeing opportunities is in Columbia as well. So, I think with the Kuwaiti contract, we're looking that opportunities in the second half of the year.

[Jeff Martin:]

Okay, great. And then in terms of the ERP system roll out is that 3 million all going to hit the operating expense line or is some of that can be capitalized?

[Sharon Esposito-Mayer:]

Jeff, we'd really be honest with you we are not sure right now. The rules have changed significantly and because we are implementing a cloud-based solution, it limits what we are able to capitalize. We're still trying to look very closely at that. So, I would say to be conservative right now, I assumed that it is going to hit the operating line and we'll give further guidance on that in Q1 as we are able to continue to dive in into our research on it.

[Jeff Martin:]

Okay. So that's all in 2017 that you expect that to hit. Would that be fairly linear, you guided the 700,000 in the first quarter which is suggested fairly linear?

[Sharon Esposito-Mayer:]

Yes, I think there will be some uptick in Q2 and Q3 and then it's down hit in Q4, but what I would try my best to do is to get some guidance quarter-to-quarter on that figures, so that there are no surprises. But they were a little higher in Q2 and Q3 and then a little lower in Q4.

[Scott Greenberg:]

But the one thing we are expecting, Jeff, is ones we get by the initial installation on ongoing years the expense will actually not go up from what its current running at. So it's best to implementation that it's going to be more closely not the ongoing system expense.

[Jeff Martin:]

Right, sure. Okay. And then in the past, Scott, you've walked us through each segment in terms of what's your high level expectation is for the year. Could you do that for 2017 I think that would be helpful for everybody here?

[Scott Greenberg:]

Sure. I mean there is only as we know, but right now I would say that if you look at the four sectors. There is optimism that each one will grow organically in 2017. We don’t see any sector having an organic revenue downturn. We do have to make it through the currency headwind that we had in 2015 and 2016, but if you look at the club businesses, we believe that they all do have the opportunity to grow organically. We’re not seeing anything really negative to affect that at this point. It’s a little too early to talk about the percentages but historically when you look at the businesses in the last few years the higher growth has been Sandy and Learning Solutions. When Learning Solutions get this new pharmaceutical contract and some of the other things as working on, ramping up that will -- that could be material not just for learning solution, but the whole company.

[Jeff Martin:]

And then could you narrow down on Performance Readiness, that’s been an area -- I am sorry, not Performance Readiness, Professional & Technical. What sort of things could turn that segment around? And are there things beyond just the coding contract that you’re optimistic about?

[Scott Greenberg:]

Well, the good news is that we are spotting from a low point and that’s the good and the bad news and if you look at the business that’s starting from the low point, they have work available outside of Kuwait, they’ve been very active pursuing work, and as I mentioned earlier in Columbia in South Africa of people that they historically do business with and Peru. So a lot of their opportunities are coming from international work. In addition, we are starting to see which historically has been a good industry for GP but the last few years have seen a rapid decline on some of the manufacturing industries including the steel industry and heavy manufacturing. So, GP has been a historic provider of training and documentation in steel businesses with heavy manufacturing and I spoke to him just two days ago and he’s saying there are opportunities in that area as well. So I think that those are two of the key areas that we say and we’re starting to get some positive feedback.

[Operator:]

And we have no further question at this time.

[Scott Greenberg:]

Thank you, moderator. Thanks for participating on the call. We look forward to seeing you in our presentations. And like usual, if you have any additional questions, please contact the Company. Thank you very much.

[Operator:]

Ladies and gentlemen, this does conclude the conference call for today. We thank you for your participation and I say you please disconnect your lines.