Sharps Compliance Corp.
Q1 2014 Earnings Call Transcript

Published: 23 Oct 2013

[Operator:]

Greetings and welcome to the Sharps Compliance Corporation First Quarter Fiscal Year 2014 Financial Results Conference Call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions). As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Karen Howard, Investor Relations for Sharps Compliance Corporation. Thank you. Ms. Howard. You may begin.

[Karen Howard:]

Thank you, Lithuania [ph] and good morning everyone. We appreciate your participation in our first quarter fiscal year 2014 financial results conference call.. You should have received a copy of the news detailing Sharps’ results that was released earlier this morning. We also issued a release regarding our sales team leadership that you should have. If you do not have the releases, you may obtain them from the Company’s website at www.sharpsinc.com. On the call with me today are David Tusa, Sharps’ President and CEO; and Diana Diaz, its Vice President and Chief Financial Officer. David and Diana will provide formal remarks, after which we will open it up for questions. If you are listening via webcast, note that you do have the ability to submit questions through the Internet. As you’re aware, we may make some forward-looking statements during the formal presentation and in the question-and-answer portion of this teleconference. These statements apply to future events, which are subject to risks and uncertainties, as well as other factors that could cause actual results to differ materially from where we are today. These factors are outlined in our earnings release, as well as in documents filed by the Company with the Securities and Exchange Commission. These can be found at our website or at sec.gov. So with that, let me turn the call over to David to begin the review and discussion. David?

[David P. Tusa:]

Thank you, Karen, and welcome, everyone to our first quarter earnings conference call. I’ll briefly review the September quarter results as well as discuss how we’re executing on our growth strategy and the progress we’re making in our targeted markets and the recent change in sales leadership. I’ll then turn the call over to Diana, who will review the financials in a bit more detail. We reported revenue of $6.3 million for the first quarter, up nearly 22% or $1.1 million over the prior-year period. I’m pleased to report that we achieved one of our key financial goals, which was break-even profitability at the $6.2 million to $6.4 million revenue level. We reported net income of $122,000 or a penny a share for our first quarter of the fiscal year 2014. Traction in all of our core markets focus, solid execution and our dedicated employees are the reason for the successful quarter. Now let’s go down to the key markets. The professional market billings grew about $470,000 or 47% in the first quarter, driven significantly by increases in both our inside an online sales channel its grew about $327,000, as well as our alliance related business, which grew about $125,000 in this market for the September quarter. As most of you know, because of quarterly fluctuations within many of our markets, it’s easy to use visibility of a longer term trends. So I want to point out that we realize consistent quarterly sales growth in our professional market, which has resulted in trailing 12-months revenue in this market that’s 31% higher than the prior year’s trailing 12-months. We believe this is evidence of our initiatives of working in a result are turning in a positive direction. Professional market customer billings totaled $4.3 million for the trailing 12 and now about 19% of our consolidated revenue. Since our recently hired Director of inside sales joined us, the professional market has been his primary focus. He is working closely with our marketing and IT groups to develop new solution offerings, technologies and marketing initiatives are helped inside sales team members generate believes and closed deals. We have our high expectations for this initiative and believe that such actions should contain to generate successful result. And also in the retail market, we realize strong sales growth over the prior year quarter, increasing almost $700,000 or 59% over the prior year. While the quarterly sales fluctuation due to timing of orders for flu shot related orders, this is another market where we’ve seen strong positive trend again on a 12-month trailing basis, representing 25% of our consolidated revenues, sales of the retail market for the trailing 12-months ended September 30, 2013 were $5.7 million up 42% compared to the prior year trailing 12-month period. Flu shots and other similar services provided a retail pharmacies had been very visible to consumers and industry forecast to continued growth as such alternative side healthcare administration which close very well for Sharps. The Home Healthcare market posted solid growth as well up 12% to $2 million for the quarter. We also believe this market should be possibly impacted by the administration of healthcare to the alternative side, which in this cases is the home. Additionally, we are seeing consolidation in the Home Healthcare industry which we believe could positively impact our sales in this market, as this trend reduce is a very fragmented nature of the business. Assisted Living and Pharmaceutical Manufacturer markets also posted revenue growth in this quarter of 15% and 8% respectively to $432,000 and $605,000 respectively. We are seeing a significant amount of sales activity in both Assisted Living gain Pharmaceutical Manufacturer markets and believe we should see additional growth in its markets in the future. As we’ve mentioned last quarter, we are beginning to see new patients support program opportunity for Pharmaceutical Manufacturers for new drug launches that have potential to possibly impact calendar years 2014 and 2015. To give an idea of the annual revenue opportunity, we are looking at as many as six potential good program that once fully rolled out could generate up to $5 million in annual revenue. It’s very exciting to see pharmaceutical manufacturers adopt our programs, which we believe improve the patient experience, drug compliance and medication adherence. Our business continues to be positively impacted by the changing demographics of the U.S. population as well as the change in the delivery of healthcare. As I mentioned last quarter, the National Institute on Aging cited one out of every five Americans will be 65 years or older by the year 2013. This increases the need for cost effective medical waste management solutions in many of our markets including Assisted Living and long-term care. This trend bodes well for our opportunities with existing and prospective customers, as well as market outside of Assisted Living and long-term care. Further as a result of the uncertainty created by the current state of healthcare, our perspective customers are looking for cost savings now more than ever. That’s very important to note, we don’t just differentiate ourselves with cost savings. We believe our excellent customer services, our obsession with responsiveness, proactive regulatory support and operational efficiencies associated with our solutions all play like key roles in the sales process. Before I turn the call over to Diana, I want to discuss the change of the leadership of the sale team. As you’ve seen Brandon Beaver has been appointed our Senior Vice President of Sales replacing Berkley Nelson. Brandon a Sharps’ team member for over three years is a proven leader in our organization, driving the actions needed to accelerate sales growth. He has an in-depth knowledge of our markets, he understands the value of our comprehensive medical waste and unused medication management solution offerings that consistently receives very positive feedback from our customers and prospects. Most importantly Brandon works very well and actually thrives in our fast pace ever changing and dynamic environment that we live everyday here at the company. So I’m excited about this move, Brandon into this role and look forward to his contribution to our continued growth. And with that I’ll turn it over to Diana, who is going to provide more details on the financials. Diana.

[Diana P. Diaz:]

Thank you, David. We are off to a great start in fiscal 2014. Gross margin was 37% in the first quarter up 700 basis points from the prior-year’s first quarter. The quarter’s margin improvement demonstrates a significant leverage we have in the business on the higher sales volumes. SG&A expenses in the fiscal 2014 first quarter of $2.1 million were comparable with last year and lower compared with the sequential quarter of $2.2 million. We have to maintain a quarterly level of about $2.2 million to $2.4 million in SG&A expenses over the next several quarters, as we hire more sales persons and increase our investment and marketing. Given the record quarter revenue level achieved, we’ve operating income of $130,000 in fiscal 2014 first quarter, compared with an operating loss of about $640,000 in the same period prior year and operating loss of almost $700,000 in the sequential fourth quarter of 2013. Earnings before interest, taxes, depreciation and amortization or EBITDA was about $400,000 for the first quarter of fiscal 2014, compared with an EBITDA loss of about $365,000 in the same period as the prior fiscal year. Net income as David mentioned, for the fiscal 2014 first quarter was about $122,000 or $0.01 per diluted share, compared with a net loss of $639,000 million or $0.04 loss per diluted share for the prior-year period. Our balance sheet remain solid was $15.3 million in cash and cash equivalents as of September 30, 2013. Relatively comparable with the $15.5 million balance at June 30, 2013 and we continue to be debt free. Our financial position is very strong and it does well for us as we invest to build the larger company. As previously disclosed we do have an authorized stock repurchase program in place for up to $3 million extending through 2014. During the September quarter we repurchased 19,000 shares at an average cost of $2.71 per share totalling approximately $52,000. This results in total repurchases of approximately 44,360 shares purchased for about 126,000 since inspection of the program in January of 2013. Our outlook for the business is strong and we believe repurchasing our stock at an appropriate price is a good use of available capital. And with that I’ll turn the call back to David.

[David P. Tusa:]

Thanks Diana. Before we move into the Q&A session, I just want to make a few comments. We feel the transformation of Sharps into a comprehensive provider medical waste and unused medication management solution has taken hold. Fiscal year 2014 is off to a terrific start and thankful to all of our employees for their contributions to this growth and their commitments to the company. We are all focused on growing a much larger company and taking advantage of the market opportunity that we have in front of us. So with that operator, let’s open it up for questions.

[Operator:]

Thank you. We will now be conducting a question-and-answer session. (Operator Instructions). One moment please while we poll for our first question. Our first question comes from Joe Munda with Sidoti & Company. Please proceed with your question.

[Joseph P. Munda:]

Good morning, David and Diana. Thanks for taking the question.

[David P. Tusa:]

Good morning.

[Diana P. Diaz:]

Good morning Joe.

[Joseph P. Munda:]

Dave, I’d like to start off real quick before we get into the numbers here. The departure of Berkley Nelson, as I recall I mean he was just hired recently in March, so he was on the job for a little more than half a year. A, What happened there and where did he go and B, this Brandon Beaver who has been with the company I read in the other press release for about three years. Why wasn’t he considered for the job when Claude Dance has departed and why all of a sudden the internal focus on hiring the head of sales?

[David P. Tusa:]

Okay Joe, I’ll be glad to answer your question. Doctor has started with the company back in February, among the many things that I have to do, the past that I have in the – and run the company is making sure we have all the right people in the right place. And I recognize in Brandon a talent over the last five months or six months as I have spent a lot of time working with him and I think that he is very well respected in our customer, all of our customer know him and he works extremely well in a kind of environment that we are a unique company fast paced, very, very dynamic, very flexible and it takes the unique person and – and I had to make a decision, I made the change and I think Brandon is going to be very successful in a role considering the kind of environment that we are in.

[Joseph P. Munda:]

Okay. And I think you said he was responsible for 4 million and 4.5 million – so his forte is in the professional market, is that…

[David P. Tusa:]

No, all markets, he is not only has been the person leading the charge on the sales side and landing many of the larger deals, but he manages significant book of business with our key customers and so really our staffs will have two jobs in managing large accounts as well as selling new ones. And I think Brandon very, very well understands a comprehensive offering that we have with the alliance with the Daniels alliance and being able to suspectively bolt-in the truck based pickup whenever we need that as part of the solution. So I’m confident in the change and the move and I think that that he is the best person to result a further growth in this business.

[Joseph P. Munda:]

Okay, that’s helpful. And then David, I guess in your prepared remarks you talked about the initiatives in the professional market. Can you give us a little bit more color as to what any specific initiatives that is leading the traction that you are guys are seeing in that space?

[David P. Tusa:]

I’ll tell you few things, for competitive reasons Joe, I’m not going to talk about a lot of details, but we’ve brought in a new head of inside sales, as a call center person and a person that has run call centers up to 800 people and one focused on selling and what Bob Peterson [ph] is basically changing our approach to make the sale as easy as possible, we are asking our professional market customers to do something different to move from a truck based pickup to a mailback solution. So I think that he has and is going to continue to a very good job of making the inside sales approach much more efficient and hope this could result in an acceleration of sales.

[Joseph P. Munda:]

Okay. And then in regards to the truck based pickup that you talked – that you just mentioned. I’m just wondering how much of the Daniels alliance contributed to A, the overall revenue in this quarter and B, the growth in the quarter that you guys saw?

[David P. Tusa:]

Well the specific growth that we mentioned was in the professional market of about 125,000 just for the quarter, but its really more than that because what we’re doing is where we are offering the pickup service to existing customers where it makes sense that some of the business that we utilize for pickup versus a mailback, I don’t have an exact number Joe. But just with respect to new opportunities that’s a 125,000 for the quarter.

[Joseph P. Munda:]

Okay and then just one final question here. You touched on the Pharma segment. Six potential programs, roughly $5 million in revenue opportunity, I mean is that spread out over a certain amount of time or do you expect them, let’s say you hit every opportunity that $5 million would hit when?

[David P. Tusa:]

Well it would start to ramp up in calendar 2014 and probably fully rolled out by as early as calendar 2015. These programs when they start slow and then they gained steam and it usually takes about 12-months for them to get fully rolling. I think it was important to what we see as important as market is as I think we are doing a good job of connecting pharmaceutical manufacturers, there is a lot of value for the patients for our program that includes the mailback to help them with – their patients with improved medication adherence and a drug compliance. It’s something new for the industry and we are the leader in it and we are proud to launch more and more of those these programs.

[Joseph P. Munda:]

And are you aware of anybody else competing for the same potential $5 million or…

[David P. Tusa:]

I’m sure there is some more – there is saw and I think the – these are going through or awarded through an RFP process and we’ve done very well in the RFP process, but I’m sure there is potentially one or two others out there.

[Joseph P. Munda:]

Okay. All right. I think that’s it and oh yeah started for the Houston, Texas. I’m wondering what your thoughts were.

[David P. Tusa:]

Well it made three quarters extremely well within the offensive live didn’t lay in the fourth quarter and experience a loss, other than that he did a very job. Thank you for the kindness.

[Operator:]

Our next question is from Brian Butler with Wunderlich Securities. Please proceed with your question.

[Brian J. Butler:]

Good morning and thanks for taking my question.

[David P. Tusa:]

Good morning, Brian.

[Diana P. Diaz:]

Good morning.

[Brian J. Butler:]

Just to step back on the alliance revenues, when you think about opportunity can you give a little update on the color what’s kind of in that pipeline or where you think that pipeline stands today?

[David P. Tusa:]

We’ve talked about this Brian before of a pipeline of at least the $30 million, now of course that’s many opportunities, a larger dollar opportunities where a portion of the opportunity is driven by the need for the combination of a pickup with the mailback. These are larger opportunity for the larger – longer sales cycle and you know we are just going to have to see over the next few quarters what we can do and what we can put on the P&L. We can talk about the pipeline all day along, but I would rather talk about it when we lay in the deals and you will see the P&L.

[Brian J. Butler:]

From your perspective it hasn’t changed and these opportunities are still out there and I guess what I’m looking at is, has your optimism or outlook on the partnership changed over the last six, since the partnership has started or is this kind of gotten more attractive?

[David P. Tusa:]

No it’s been more attractive, I’ve been very, very excited about it. We worked very well with the folks at Daniels and I was on the road for the last couple of days out with sale progress with major prospects and boy it sure is nice to be able to present yourself as a comprehensive provider of medical waste and unused medication management solutions instead of a mailback company. So it’s a much different presentation, and our marketing broachers are different. And I think it’s going to provide us the opportunity to land larger deals. And we can basically facilitate any deal, any national deal across the country. So very positive about it, again there is a significant pipeline, but let’s get some nice deals landed, let’s start showing up in the P&L.

[Brian J. Butler:]

Okay. And then on the Home Health segment, again really strong growth there, can you give a little bit more color on what was the driver there and just kind of thoughts on is that sustainable for a business that has typically been a little bit slower grower?

[David P. Tusa:]

It maybe a little bit high for the quarter, but I think 5% to 10% should be achievable for two reasons and maybe even higher. But for two reasons, as I mentioned in my remarks, there’s two things going on. One, there’s more and more healthcare move to the alternate side setting. So the home healthcare business is growing. Secondly, just consolidation is going on in the homes healthcare world, that’s a very fragmented business. And with consolidation that helps us, it helps us because it moves business into existing customers, it allows us to be able to launch mailback program with companies that are acquired by existing customers. So 5% to 10% I sure hope is achievable, but more importantly I think we have the opportunity potentially to do more than that.

[Brian J. Butler:]

And this quarter benefit anything from alliance revenues, or was this all just organic growth?

[David P. Tusa:]

You mean in the home and health care?

[Brian J. Butler:]

Yes.

[David P. Tusa:]

No, just this is all organic.

[Brian J. Butler:]

Okay and is that – was there any one item that was very – taken this quarter that would not repeat. I mean I know all these are kind of order driven, so?

[David P. Tusa:]

No, now it’s the existing customer base and again we did see an uplift with some of our customers are making acquisitions and we’re all in the mailback out and we’re helped from that.

[Brian J. Butler:]

And similar question on the retail side, with the strong flu shot, I mean, was any of that that you can piece out a pull forward from the second quarter or was this kind of a little bit of makeup from the lower than expected I think growth you saw in the fourth quarter of 2013?

[David P. Tusa:]

The ordering patterns in the flu shot business are erratic. That’s why when I spoke about the market, I talked about looking at it from a trailing 12. So from a training 12 standpoint, what was…

[Diana P. Diaz:]

The retail was at 21%.

[David P. Tusa:]

Okay so 21% retail, so 21% year-over-year – I’m sorry trailing 12 year-over-year. And that 21% represents – a 21% increase in flu shot administered in the retail setting. And that’s a beautiful part of that business is that we have a pretty significant lock on the retail clinic market and every year more and more flu shots and other shots and other healthcare administered in that retail setting. So we’re taking advantage of that and the numbers are increasing as a result of increased popularity with the retail clinics.

[Brian J. Butler:]

And is that – so then I guess thinking about it from a trailing 12 basis, I mean is that 20% kind of the right way to think about what the retail business can grow at or is that…

[David P. Tusa:]

I think so, I think that what we’ve seen, we've seen 20%, 25% increase, I think in the middle of over the last few years when you look at on year-over-year basis. So that’s the way we looked at it. And by the way that increase that we generated was consistent with our internal forecasting, so that was consistent with what we had expected.

[Brian J. Butler:]

All right great. And on the pharma business, you talked about the six potential programs in $5 million is that incremental to the programs you have right now, right?

[David P. Tusa:]

That’s correct.

[Brian J. Butler:]

Right, so when you think about the programs you have right now, I think you target was something around $3 million for the programs you have, I think on a trailing 12 you’re probably running somewhere around $2.5. is it still – is the expectation still to get to that $3 million or is this kind of $2.5 million really the right run rate for those three programs?

[David P. Tusa:]

No, no, we still think that it’s – that will ultimately generate the $3 million may be even higher. But the new programs are incremental.

[Brian J. Butler:]

Is there a step up somewhere going to happen in the future that at all that you guys have any visibility on or is that just really just waiting on the ordering patterns to kind of come together?

[David P. Tusa:]

It’s really opting of the patient level, and more and more patients are opting to the program, into the existing programs, it increase the volume and increasing the orders that we feel for that business. So you see – again you see a ramp up in the first year and than over the next year, so you see normal patients opting into the programs.

[Brian J. Butler:]

So that $600,000 the right way to think about that growing from the first quarter or if you think about the $2.5 million I guess on a trailing 12 probably better, that should just be incrementally increasing quarter-to-quarter as those rates of adoption increase?

[David P. Tusa:]

Right. That’s right.

[Brian J. Butler:]

All right and I think that was everything I had. Thank you very much.

[David P. Tusa:]

Okay. Thanks Brian.

[Operator:]

Our next question comes from Kevin Steinke with Barrington Research. Please proceed with your question.

[Kevin Steinke:]

Good morning, congratulations on the nice results.

[David P. Tusa:]

Thank you. thanks Kevin.

[Kevin Steinke:]

So SG&A expense was just a tad below your targeted level in the quarter of $2.2 million to $2.4 million, but it sounds like you expect that to pick up and maybe you’re looking to hire some people. Is that the way to think about it?

[David P. Tusa:]

That’s exactly right. We’re hiring, we’re hiring right now, we are hiring sales people as we speak and we’re investing more on the marketing side. And I think with a reduction of – what was that 2.2…

[Diana P. Diaz:]

2.2 to 2.4

[David P. Tusa:]

2.2 to 2.4 on a quarterly basis is most likely what you’re going to see, starting as early as December quarter.

[Kevin Steinke:]

Are you hiring on both the inside sales and the direct sales side? You are looking to hire?

[David P. Tusa:]

Yes both, both sides.

[Kevin Steinke:]

Okay the nice pickup in gross margin, I mean was that anything one-time in that or is that just purely leveraged as you talked about?

[Diana P. Diaz:]

There really wasn’t anything unusual in the margin this time and it was really associated with the increased leverage.

[Kevin Steinke:]

Okay great. The alliance contribution of about $125,000 in the quarter, is that a level that we should think of as sustainable over the next couple of quarters here?

[David P. Tusa:]

Yes I think so and then again we’re planning more deals and we should hope to see that increase, but that one should be at that level, maybe even potentially higher.

[Kevin Steinke:]

Right, okay. And similar to of the home healthcare market you saw some nice growth in Assisted Living, although that was more of a continuation of the nice trends you saw in fiscal 2013. So again what are you seeing in that market and do you think that this type of growth is pretty sustainable?

[David P. Tusa:]

You know on Assisted Living side to be honest with you, I was kind of disappointed in that growth.

[Kevin Steinke:]

Okay.

[David P. Tusa:]

Like we have much higher expectations for Assisted Living, I mean our solutions are just a perfect fit for Assisted Living and long-term care. And we have opportunities with existing customers, expand business with the existing customers, as well as new customers. So that scenario where we’re focused on and what we think we have opportunity to see significant growth, but I’ll tell you that number was below our internal expectations for the quarter.

[Kevin Steinke:]

Okay well, nonetheless, congrats again on the nice results. I’ll turn it over.

[David P. Tusa:]

Thanks Kevin. Thank you.

[Operator:]

Our next question comes from Nick Hiller with William Blair. Please proceed with the question.

[Nicholas Mark Hiller:]

Hey guys, good morning and thanks for taking my call. Most of my questions have been asked already, I just wanted to follow-up on the gross margin again. So as we look at the rest of the year, is that 37% kind of the go forward number now, or…

[Diana P. Diaz:]

I think really you got to look at the incremental revenue and we felt that incremental revenue comes in at the 50% margin. And so if you look back and see where our revenue comes in each time the margin will change, if the revenue is lower or if it’s higher. So hopefully for this revenue level you should see 47%, again.

[Nicholas Mark Hiller:]

Okay great. Thanks that’s all I had.

[Diana P. Diaz:]

Okay.

[Operator:]

Our next question comes from Joe Goldsmith with Goldsmith Asset Management. Please proceed with your question.

[Joseph B. Goldsmith:]

Yeah, hi good morning. Congratulations on a very nice quarter.

[David P. Tusa:]

Thank you.

[Joseph B. Goldsmith:]

Could you talk to seasonal factors in terms of how the December quarter will compared to the quarter just reported, in terms of potential kind of weakness that comes from doctor’s office closings and things like that in the Christmas season, versus the positive office and business from the full season?

[David P. Tusa:]

Remembered the only year where we see significant seasonality is going to be that retail sector going to be the flu shot business. And again it’s – the ordering patterns are can be somewhat erratic. But we will have flu shot business in the December quarter, most likely wont be as high as what it was in the September quarter, but we’ll still have some flu shot business that will come in. As far as the professional market doctors didn’t answer [ph] that we really shouldn’t see seasonality as result of that.

[Joseph B. Goldsmith:]

Okay. I just wanted to also say congratulations for giving your quarterly reports in so early. It is very unusual to see a small cap company report so early in the season.

[David P. Tusa:]

Well we are a small company that has a lot of folks here with much, much, much more experience than what you would anticipate or expecting the small company, because we are here to make it a big company and not a small company. So well we appreciate the comment, but that’s how we do everything everyday.

[Joseph B. Goldsmith:]

Okay, very good.

[Operator:]

(Operator Instructions) Our next question comes from George Walsh with Gilford Securities. Please proceed with your question.

[George Walsh:]

David, very good quarter on the revenues, growth in all segments and you hit that nice $6.3 million mark. Just as best you can looking forward to the balance of the year, do you feel like that’s a revenue above the mark you can continue to hit, or is it still the seasonality and lumpiness that will affect it going forward?

[David P. Tusa:]

George, I’m surprised that question didn’t come earlier. You win the prize for asking us, when these are question [indiscernible]. But we don’t provide guidance, we don’t make projections, but I will tell you that the markets, all of our core markets are very strong and we had a very good quarter for September. And we continue to see strength in all of our core markets. Yes the retail maybe down a bit, because of the seasonality on the flu shot side. So we see strength in all the other markets.

[George Walsh:]

And congratulations on that part, that’s a good thing to see and obviously the more consistent that is the better, but a good thing with this quarter is like you said you – as those revenue increases you see the leverage that’s involved in that. So the model is there and like you say it’s just a matter of closing those deals and booking the revenue. So congratulations.

[David P. Tusa:]

Well thanks George. Thanks for the comments.

[Operator:]

At this time, I would like to turn the call back over to Mr. Tusa for closing comments.

[David P. Tusa:]

Great thank you. We continue to believe that we can capture a much larger share of the medical waste and unused medication market through our comprehensive and customer focused offerings. Again, we transform from a mailback company into a comprehensive solutions provider. We’re a dynamic company that has a flexibility to address unique situations and we customize solutions for all of our customer’s requirements. And believe me, when I say that my excitement in the business and the future of the company resonates throughout the organization. So thank you everyone for participating in our call.

[Operator:]

Thank you. This does conclude today’s teleconference. You may disconnect your lines at this time and thank you for your participation.