NewAge, Inc.
Q4 2020 Earnings Call Transcript

Published: 16 Mar 2021

[Operator:]

Greetings. Welcome to the NewAge Inc.'s Fourth Quarter and Full Year 2020 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note this conference is being recorded. I will now turn the conference over to your host. Riley Timmer, you may begin.

[Riley Timmer:]

Thank you. Good morning and thank you for joining NewAge Inc.'s fourth quarter and full year 2020 financial results investor conference call. I'm Riley Timmer, the Global Head of Investor Relations of NewAge and I'm pleased to be with you all today. On today's call we have Brent Willis, our Chief Executive Officer and Mark Wilson, our Group President.

[Brent Willis:]

Thank you, Riley and good morning everyone. NewAge is now a $0.5 billion company and pro forma revenue from really just an idea four and a half years ago. Essentially from near zero to in mid-2016 to this scale right at $500 million in a relatively short period of time and now our first profitable quarter with $2.9 million of EBITDA. We said all along that as we reach the initial scale we intended which we've now hit that the profitability will come. And that this commitment has now materialized, so we expect to methodically and systematically improve on this profit base from this point forward. Now, why will the bottom line further improve from here? Well, it's just the math. Financially, now we have the scale and the associated resources. We don't need more SG&A. And we believe we have the right infrastructure for a multibillion-dollar-sized multinational. We have the market breadth and access; we've got the people, the systems, everything you need to capture the benefit of more scale whereby a disproportionate amount of that growth will accrue to EBITDA margin and bottom line performance. Now even though we have the scale and profitability as a result, much of our success still depends on the quality of our team and people. It always does. But with historically smaller companies like ours, it depends on them and their unwavering perseverance for success.

[Mark Wilson:]

Hey. Thanks, Brent. As the Group President at NewAge, my focus is to -- the leadership of our markets, all the people around the world in our regions, our hundreds of thousands of brand partners and customers and directing our global sales strategy. In addition, I am leading the team that is responsible with the execution of our successful convergence and integration and synergy capture with the now combined companies. And I'm happy to report, we are seeing better-than-expected results in our first 100 days or so. Now three things are happening that we are pleased to report. First, we identified around $20 million in synergies that would accrue from the combination of the first 12 months to 18 months coming together. We have already captured over $15 million alone in annualized savings in our first 100 days and we know there are additional benefits potentially even beyond the $20 million commitment as we dig deeper. Second, we continue to experience organic growth in a number of our regions. Pro forma last year we did right at $500 million as Brent mentioned in net revenue. Brent has previously guided us to a high single-digit or low double-digit revenue growth, which we are confident we can meet and even exceed this guidance. Oftentimes with mergers you see a slight softening in sales. However, it's been just the opposite for us as we actually see accelerating sales and leaders from companies join us for even bigger opportunities. The third thing that I'm pleased to report is that we are coming together as one company and creating a new culture of performance and collaboration.

[Brent Willis:]

Thank you, Mark. Great job and keep it going man. Let me review some of the detailed financials before we close it up and open it up to questions. In 2020 in Q4, we reached $90.4 million in revenue, an increase of 53% versus prior year. Driving the result was the performance in the regions and respective divisions as Mark reviewed, and the consolidation of ARIIX in the last month plus of the year. Gross margin reached 66.8% versus 54.3% in the same quarter last year. This 12.5 percentage point increase was driven by higher net revenue from our direct social selling division and the addition of the new businesses, which were all margin accretive. Net loss was $4.0 million, an improvement of $61.8 million, compared to a loss of $65.8 million in the fourth quarter of the private year -- prior year. And we believe our most important and relevant metric was adjusted EBITDA, where we reached $2.9 million for the fourth quarter of 2020, compared with a negative $17.4 million for the fourth quarter of 2019, an improvement in adjusted EBITDA of $20.2 million for the quarter. I know we communicated that we would be around breakeven less than a month ago so to exceed that more conservative guidance is a step in the right direction. And we believe this is just a starting point in terms of bottom line profitability. We only had ARIIX and the other companies consolidated for a little over a month's period of time. And going forward throughout 2021, we will also have the benefit of all the synergy and cost reduction capture translating directly to net income and free cash flow. For the full year for the period ending December 31, 2020, net revenue reached $279.5 million for the year ended versus $253.7 million in 2019, an increase of 10.2%. Pro forma combined revenues for the full year was right at $500 million a near doubling of our scale, and almost 10 times the size of the scale we were in 2019. So we would say another step in the right direction. Gross margin for the year reached $177.5 million or 63.5% of net revenue, compared with $152.7 million or 60.2% of net revenue, an increase of $24.8 million or 3.3 percentage points. Gross margin increase was driven by higher relative sales, the additions of the new businesses, as well as the divestment of the low and negative margin retail brands. Net loss was $39.3 million for the year, compared to a net loss of $89.8 million for the year ended December 31, 2019. The improvement at $50.5 million was a result of improved operating performance and a significant non-recurring impairment expense in 2019 related to the now divested retail brands. Switching to the balance sheet and cash flow statements. We finished the year with $65.2 million in cash of which $11.5 million was long-term restricted, $10 million was short-term, and $43.7 million was unrestricted. And as investors know as a subsequent event, we added in another just over $53 million in February to put us in a very strong cash and financially flexible position. For the period ending December 31, 2020, total assets were $451.2 million, an increase of around $200 million versus prior year. Now on all the financials we are still working to finish our 10-K with our auditors Deloitte. And given we closed in the end of November and completed the audit and filed our 8-KA and the combination in the beginning of February, it's just not enough time to complete all the required testing and procedures. So we will likely be filing a 12b-5 to provide us that additional time needed to complete the work and the final testing and procedures. So, to summarize, here is what we believe are the most important takeaways from today's call. There are six of them and we'd like to just give you the facts as we see them. Number one, we are becoming an organic growth company with industry-leading net revenue growth. We see the trends that are happening in Q4 carrying over to what looks to be shaping up to be an excellent Q1 as do the underlying drivers of those trends. Number two, we have exposure to growth markets and category segments and have a direct-to-consumer home route-to-market and are confident that these tailwinds will continue to support industry-leading growth. Number three, we have a clear vision to become a social selling machine. And we have a competitive advantage of more than 400,000 brand partner distributors that we are earning with what we believe is differentiated and competitively advantaged sales tools. Number four, we are now profitable and free cash flow generating and will continue to build EBITDA margin from here accruing from the core existing business. Number five, beyond the core we can do more. We see an incredibly target-rich environment in what is a very unconsolidated sector where there are few if any players that either know how to effectively consolidate and integrate or have the financial wherewithal to do so. The decisions we made in 2020 both in terms of additions and subtractions are normal course of business in these types of companies at this stage in their journey. It was exactly the same in a previous company I used to work for AB InBev. And finally number six, we have the real financial flexibility and the investment capital to put us in a position to address that truly plethora of both organic and external growth opportunities in front of us. Like I said, no one would have believed us four years ago, if we said we were going to add in $0.5 billion in revenue and get to over 65% gross margin with positive EBITDA. And despite that track record and performance, no one is going to believe our next threshold. No problem. We're just going to methodically grow our top and bottom line showing consistent improvement year-over-year and quarter versus quarter in organic revenue and EBITDA. We're going to take advantage of what we see as a very attractive set of opportunities in front of us. And no, we know we have the right direct-to-consumer business model an increasingly strong management team, the portfolio of healthy products and the execution capabilities to capture our fair share of the opportunity and deliver superior return for our value-added shareholders, our brand partners and the NewAge associates. And with that I'd like to open up to questions with the operator.

[Operator:]

Our first question is from David Bain with B. Riley. Please proceed with your question.

[David Bain:]

Fantastic and congratulations on the strong 4Q and execution. The first question I had, obviously, Brent you just laid out your intent to become the largest social selling distribution company. And I guess obviously you have the organic growth, which you pointed to and you did speak to some opportunities in front of you. Assuming there are some potential acquisitions, I mean we look at the traditional comps not social and they're selling over 10 times on 2022. The last announced acquisition looked like it was done at one time. I mean, I guess I'm trying to understand maybe that was an outlier, not sure, but how can you or can you consistently close additional targets below trading multiples? And outside of price, what do you look for in terms of dynamics in an acquisition? Is it geographic diversity, number of reps, growth, can you help us calculate that?

[Brent Willis:]

Yes, that is a multi-faceted -- multi-part question, Dave. But look, I mean, we have both a set of financial criterion that our Board has been really stringent upon and a set of strategic criterion. And there's about seven or eight components in each one of those. And on the financial side the fundamental answer is number one, it has to be accretive for shareholders pre-synergies and the synergy capture that we frankly think we've got the competitive advantage and how to develop that frankly we learned from the 3G group. That is incremental benefit on top for shareholders. So, from a financial criterion standpoint, we're really stringent upon those metrics to ensure accretion for shareholders. And potentially alive and at one times EBITDA is an outlier potentially Morinda that we did in 2018, that is essentially, when it was all said and done a little bit more than one times EBITDA. Potentially those are outliers. But, the bottom line is a lot of these companies in a sea of increasingly choppy COVID Waters need a bigger boat and they need a safer harbor and we represent that, right? And they all want access to the growth and the potential in the NewAge stock, right? So, we're going to be very careful I think, going forward in terms of that word dilution. And we have a range of vehicles at our disposal from our cash balance that we have debt opportunities, earn-out opportunities and selectively stock and equity to enable these companies to attractively come into the fold. But, we also think we've got the processes down where we can really bring them on and integrate them. And from the strategic standpoint, we are focused on those core markets of Western Europe, China and Japan, and the Americas. So, those are probably where we look first from a market standpoint. And we also look at further penetration to those few emerging markets where we are investing, which includes the kind of the southern tip of Africa or the southern cone of Africa, potentially the CIS countries, potentially Mexico and parts of Latin America and potentially Korea. So, we look at the emerging market opportunities where we believe we can develop a scale and competitive advantage position that would be accretive for us. And then, on the brand side, we'll just never compromise on the brand or product side in terms of healthy products. It's what we stand for. And it's where we believe we've got some competitive advantage too in terms of our functional differentiation across our three product platforms. So, those are some of the criterions that we look for. But there are, a wealth of external growth opportunities. But, I think as you see and we expect investors will see the organic growth opportunities, boy, they're really coming. And Mark and team have just done a superb job of capturing that organic growth opportunity and realizing it. That doesn't always happen when you bring these companies together. But, all the brand partners and all the regions are just doing a superb job on their organic growth opportunities, and we're going to continue to invest in those.

[David Bain:]

Yes. That hopefully was going to be my one follow-up. That's one thing we're excited about is sort of that transformation from face-to-face direct selling to the social selling platform that you've discussed having an acute focus on. We look at that as early innings. What -- and Mark spoke to this, but I'm hoping we can get a little bit more specific. When you have a 400,000 IPC force, and you're training all over the world. And I know that the demographic shift is younger, and they're more acclimated to the technology. But, how do you work the different geographies and attacking the technology and the opportunities as an organization? How specific is it to geographies? And is there something that you see that you're willing to reveal that you're doing different than some of the other platforms that have reported?

[Brent Willis:]

Mark, you want to try to hit it first.

[Mark Wilson:]

I would love to. So, great question. With social selling and social commerce, there are so many platforms, so many different options out there. You really need to kind of specialize to the demographics in the region where, for example, we're approaching China slightly different, because of the WeChat and other platforms that are more popular there versus some markets are using more of an Instagram, TikTok, and a little bit of Facebook still. And so, we're making sure that we're diversified in those areas and making sure that we're attracted to the kind of predispositions that our leaders would have. The – we will be announcing, and we're working on some new tools that will be coming out in the next few months. So we have in the next several weeks, we'll be launching some platforms to make it easier for the average person to be social selling to be inviting individuals to take a look at their products and attract the consumers, because one of our goals here is to have – certainly, we want hundreds of thousands of great influencers and leaders, if not millions, but tens of millions of customers. And the whole game now is to make sure that you make it easy for them to attract those customers through the social selling. We are also working on a new program that will come out. Probably late second quarter, we'll be kind of rolling it out, and that will make it even easier and a new approach in social selling. So we'll talk more about that in the coming months. And I think that's going to drive – we're budgeting that to be close to 20% of our growth through the end of the year in social selling. And it's just an easier way to attract individuals, who are interested in this new model.

[Brent Willis:]

Thanks Mark. And I was going to add to it is different as you know Dave, the social selling and platforms and tech that is used in China. And it's much more direct versus I would say, more lifestyle in Western Europe and then in North America. So not only is some of the technology different, but the level of overtness of selling is also very different. But we at the same time recognizing those differences, we believe that there are a lot of things that we can rinse and repeat. And when we say, we intend to be the world's leading social selling and distribution company our direct selling route-to-market is just our route-to-market. It is not the entire company, right? So the social selling technology much more Etsy marketplace and some of the leading social selling and e-commerce companies is much more of what is driving the company going forward. And think about it converting this competitive advantage of these 400,000 plus brand partners that we have converting them all to the influencers that they are becoming and giving them all of that as Mark talked about new tools and new social selling tech worldwide, really will accelerate the kind of company, we expect to be which is much more on the social selling side e-commerce marketplace side. And as Mark talked about, tens of millions of consumer database side in addition to the hundreds of thousands of brand partners that we have. So we've really got that potential to transform the company going forward on top of this. It is the foundation, but at the same time, it's a huge springboard that's now throwing off the organic growth and the profitability as we expected.

[David Bain:]

Yeah. We find that to be really transformational. All right. Thank you so much guys. Appreciate it.

[Brent Willis:]

Thanks, Dave.

[Operator:]

Our next question is from Aaron Grey with Alliance Global Partners. Please proceed with your question.

[Andrew Bond:]

Good morning. This is Andrew Bond on the line for Aaron Grey. Thank you for taking our questions. Could you provide an update on the timing around potential top line synergies from the ARIIX acquisition? You previously mentioned timing as dependent on product registration, inventory levels and system integration. Just wanted to see, if there were any updates to your expectations on when you might be able to realize those benefits? Thank you.

[Brent Willis:]

Yeah. It's really Mark that's leading all of those initiatives for the company and the entire convergence team that we call it that included representatives from both sides. So Mark, can you give an update on where we are in both the cost synergies? And to Andrew's question, what's happening too on the revenue synergy side from cross pollination?

[Mark Wilson:]

Yeah. Sure. Thank you. And first of all, I think as I mentioned earlier, we've already seen $15 million in realized opportunities, but we're taking a second swipe at that. And so you'll see, rather than a one big fail swoop, we're looking at it more by department and by region, as we're coming together. So during the convergence process, which is going very, very well. We're looking at as offices, you have your leases coming up, you have opportunities as we're coming together in convergence. We've already started some markets that are already converged together. Other markets will be converged together in -- probably the majority of our markets will see a timing around June and some will trail out through the rest of the year. So as those come together, we'll continue to realize additional benefits through this convergence process, which will drop through. Including our operations, where we've already identified so many opportunities and working with the operations team of efficiencies, everything from shipping to purchasing, manufacturing, other opportunities that we see that will contribute to this. So as I said previously, we're very confident that we'll hit the $20 million that we committed to. And I would not be surprised, if we don't go substantially beyond that in the opportunities that we're seeing. And for example, just even with -- even a little company like Aliven that we've announced the merger coming together with those will allow us and afford us even greater opportunities in the future moving forward, as we converge these, because the model is getting more and more efficient all the time. We have our IT investing a lot in technology right now. We're putting a lot of time and effort in this. And in fact, programming currently something that's never been done in the industry, where we can literally run multiple compensation plans for a time to allow people the time to get used to us, to blend the family at the right time rather than forcing issues, which is going to afford us some other unique opportunities in the industry that I've never seen before and allow some of those profits to drop through. So we're very encouraged with where we're at. But stay tuned throughout the year, you're going to see additional profits and revenues coming from the convergence.

[Brent Willis:]

I would just add to -- thanks, Mark. On the further upside quotient of synergies is some of those revenue synergies. And so one of those -- just one of those products for example is our Noni + CBD shots in Japan, where in some independent third-party research that we were just surprised with this showed that we were the number one selling CBD supplement in all of Japan, right? So we had first-mover advantage there. We still have first-mover advantage. And now we're translating that to the other components of our different businesses, whether it's ARIIX or Zennoa in Japan to enable them to sell that too given its early level of success. And that's just one example, but we're doing cross-pollination of our different brands to enable all of our different units to sell those -- to sell that broader portfolio and capture that -- the benefit of the revenue synergies.

[Andrew Bond:]

Great. Great. Thanks for that color. And as a follow-up, I know you just touched on it, but just to dig a little deeper. Could you talk about the integration process with ARIIX, specifically around the commission structure and how you're looking to create eventually uniform commission structure within the umbrella organization? Thank you.

[Mark Wilson:]

Sure. Do you want me to take that Brent?

[Brent Willis:]

Yeah sure.

[Mark Wilson:]

So with that we -- it's a very complex process, as you can imagine in all the different markets and bringing this all together. And as I mentioned, we've already taken some of our smaller markets. For example, Brazil, we have several markets around the world that are already starting the integration process Mexico, Colombia, some of these that we've used as kind of a first test as we're bringing that together. The majority of those markets will see some conversions and the timing is around June that we're planning and slating for working with our IT on. And that would mean that we would be converged together into one compensation plan in many of these markets during the June, July phases. So that would give us some facility to make things a little simpler and rather than run too separate you're going to run one. It brings the teams together. We're seeing a blending and convergence of our team leadership. We've already had a number of events and meetings, both virtual and even a few live events, as COVID is starting to kind of open up those opportunities for us to have some in-person meetings again. And see this blending of these leaders coming together into one and they're very, very excited about the ARIIX compensation plan becoming kind of the staple as we move forward. But as I mentioned, we're not going to push this. We're going to make sure we take the time. And our key is just to keep the growth and keep the sales moving forward and to listen to our leaders and work with them. So with the uniqueness of something we've developed in our IT, we're able to run those for whatever kind it takes to make sure that that convergence comes together. So I think Japan and some of the other markets will be probably later in the year, if not towards the end of the year. And again we're going to take that in baby steps as we move forward.

[Mark Wilson:]

Andrew it's a really insightful question too because it is one of the hurdles that a lot of -- let's just say, direct selling companies -- it's why they can't consolidate. It's why they can't merge because of the differences in the compensation system. But as Mark pointed out our IT group we think is outstanding with some outstanding leadership and people and team that and we've been able to figure out how to run multiple compensation systems concurrently and still be SOX compliant right? So that's a real trick to be able to get done. But having that flexibility and allows us to move at the right pace of when our leaders want to do it right? So that's why Mark said we're just not going to push this. We're going to do what's right for our leaders what they want to drive their income which we're absolutely committed to and our livelihood depends on their success and their motivation so we're not going to do anything that's going to challenge that.

[Andrew Bond:]

Great. Thank you for the detail and congrats on a profitable quarter.

[Operator:]

And our next question is from Mike Grondahl with Northland Securities. Please proceed with your question.

[Mike Grondahl:]

Yes, thanks guys. Is it possible to break out brand partners for each of the combined companies and kind of how you think they're going to grow over the next year or two?

[Brent Willis:]

We sort of Mike, but and it's a really good question because what people don't know is there is about a 93% R-square correlation between your numbers of brand partners the engagement and motivation of those brand partners and net revenue. There's lots of things that matter and there's other correlated factors, but a lot really does come down to today the -- your numbers. And so as we go forward, we communicate 400,000. Our number is actually in terms of brand partners and customers and subscribers and affiliates actually substantially larger than that. And we expect to build and get to millions of brand partners in the next few years because we know how important that is for revenue. But just like Mark said, we want hundreds of thousands let's say of brand partners. But at the same time, we are building tens of millions of consumers and a database there. So -- and it's hard to break out of how many brand partners, we have on the ARIIX side versus on the Zennoa side, versus LIMU side, versus the Morinda side because we don't manage the business that way. It's really in most markets really all one and one management team, one leadership driving and communicating with them. And we're what less than six months into the merger really a couple of months a little bit more than 100 days into the merger. So going forward, it's just going to be one team. And so we don't really look at it as separate. But I don't know Mark what else would you add to Mike's very good question.

[Mark Wilson:]

Yes. The other thing I'd add is, you know, certainly as we were going through the merger, we were watching this. But to Brent's point we've tried to blend them together and create one team. So, for example, North America our area leader here Rick Redford has done an amazing job of blending the two cultures together especially at the leadership level, which are now operating under NewAge. And even though you, kind of, had your tribal heritage so to speak of -- I came from ARIIX or I came from LIMU, or I came from the Zennoa or Morinda they're really coming together and excited about working together as one group and one force. And so we just had an event in Florida that showed that and demonstrated the, kind of, working together. They were on the stage together. They were presenting together. They broadcasted with their teams around the nation together. So we're really trying to blend that together into one group. And as you attract new leadership groups on a weekly basis, they come from all, sorts of, backgrounds and companies in past histories, and so we as fast as possible try to bring them into the NewAge culture. And that's what we've created and bringing this together rather than this is an ARIIX culture or this is a Morinda culture. It's -- we've done I think a really good job of blending that together. So I like to bring them all together into one group and keep them that way. So we really don't identify them separately.

[Mike Grondahl:]

Mark, can I follow-up on Mike's question actually with you is what would you say is really driving that organic growth for us, because as you know it doesn't typically happen right? Typically there's a pullback, because we've seen in other companies but what's really driving it? Is it that because ARIIX in terms of…

[Mark Wilson:]

It's a great question. The real excitement here is several things. First of all, when you have growth and then you have this merger coming together people -- our field really see an opportunity with our brand partners that not only is it exciting to be part of the public company and the growth and participate in that element of growth along with their growing commissions and their individual businesses but they're seeing the convergence coming together offering new markets. It's offering new potential products and brands. And as your part of an exciting group, let me take Europe for example. Europe is growing so well that it just is encouraging new people to take a look at this who may have been on the sidelines watching. And so you have brand partners now that are joining us because they see the growth, they see the excitement and the success. And let's face it people love to hang out with successful people or a successful organization you want to be part of that. And when you get that momentum like we're experiencing in France and Italy and other markets in Europe, it becomes contagious so to speak. And the talk is out there. So you become known as that is the new growth opportunity that's there. And I think all of these things combining this with the excitement. We've seen this in North America as we're coming together our leaders have been as excited as they are right now with the potential. And I think some things are spurring that with the current economy, the current situation that COVID threw us into. People are looking for a home-based business a side hustle in addition to probably more concerned with health and taking preventative actions than they've ever been. So it made it easier for it. But I think the combining of everything coming together at the same time, they are so excited about this company and the growth and the potential that they can be a part of versus a company that's declining. In fact we've seen a whole new group in Morinda that are igniting and kind of reengaging that probably, we're living more of a concern of where we're in this decline over time. And now that they're part of NewAge and they're seeing the opportunity to win, they have a whole new attitude. And I think that's why we're attracting companies like Aliven and others that want to be part of this. So, I think you've only seen the tip of the iceberg on that.

[Mike Grondahl:]

Got it. And then, with Aliven, I think that's under an LOI right now. Is there any update there or any thought when that could go to definitive and when it might close?

[Brent Willis:]

Yes. The definitive agreement is with SEC Council and it really mirrors the LOI in terms of consideration no surprises. So, I would say imminent Mike and we want to bring it in because Osan, who is their leader and founder has just got such tremendous government relationships, tremendous leader and it's going to be a tremendous ambassador for the combined group. And we'd love to incorporate and consolidate in that $20-plus million in revenue and $3-plus million in EBITDA. So we'd love to consolidate that in as soon as possible. But we've got to get through our 10-K first. We've got a lot of stuff that we got to do because, the 8-KA on the NewAge and ARIIX merger was just done on the 1st of February, right? So our hands are busy from compliance and SOX and audit and integration standpoint. But what's nice about Aliven is, it's really seamless to integrate in our -- and purely our Japan operations. So I would say that the definitive agreement is with council and it mirrors the LOI. And I would say it is imminent. So shareholders should expect that coming I would today in March or shortly thereafter.

[Mike Grondahl:]

Got it. Okay. Thank you.

[Brent Willis:]

Great question.

[Operator:]

And we have reached the end of our question-and-answer session and I will now turn the call over to Brent Willis, for closing remarks.

[Brent Willis:]

Thanks, everybody. Hopefully everybody can start to hear the excitement that we see in the business. And when you have these kinds of growth opportunities, when you have this kind of now financial health and financial performance, when you have these organizational capabilities and people and team and infrastructure that can really perform that's all focused against one common goal. And underpinning all of that, you've got the financial flexibility. It gives you a lot of confidence of delivering superior return for shareholders, which we're on the same boat as shareholders. ARIIX definitely is given a 80% 90% of the consideration for that combination it's all based on stock and stock price growth. So, we are all 100% committed to equity price appreciation for shareholders. So -- and we've taken those decisions to achieve that in a very significant way for the long term. So, we're very pleased with the quarter. Frankly, we thought our -- the Q1, 2021 would be our first profitable quarter. So, we're happy to gain EBITDA profitability in Q4. So -- and we're just not going to look back. So, thank you very much for the continued support and stay tuned.

[Mark Wilson:]

Thanks everybody.

[Operator:]

And this concludes today's conference. And you may disconnect your lines at this time. Thank you for your participation.