Streamline Health Solutions, Inc.
Q4 2011 Earnings Call Transcript

Published: 23 Apr 2012

[Operator:]

Greetings, and welcome to Streamline Health Solutions Fourth Quarter 2011 and Year-End Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Landon Barretto. Thank you, sir. You may begin.

[Landon Barretto:]

Good morning. Thank you for joining us to review the financial results of Streamline Health Solutions for the fourth quarter of fiscal year 2011, which ended January 31, 2012, and for the fiscal year ended the same date. As the conference call operator indicated, my name is Landon Barretto. I'm with Barretto Pacific Corporation. We're the Investor Relations and consulting firm for Streamline Health. With us on the call representing the company today are Bob Watson, President and Chief Executive Officer; Steve Murdock, Senior Vice President and Chief Financial Officer; Rick Leach, Senior Vice President, Solutions Marketing. At the conclusion of today’s prepared remarks, we'll open the call for a question-and-answer session. If anyone participating on today’s call does not have a full text copy of the release, you can retrieve it from the company’s website at www.streamlinehealth.net or numerous financial websites. Before we begin with prepared remarks, we submit for the record, the following statement

[Robert E. Watson:]

Thank you, Landon, and good morning to all of you participating on today's call. We thank you for your time today and for your continued interest and support of our company. With 4 full quarters behind this management team, it is clear that we are making meaningful progress towards becoming a best-in-class healthcare information technology company, delivering solutions that improve our clients' operating and financial performance. Looking back at the fourth quarter, which ended January 31, 2012, we're pleased with our financial performance for the period. We achieved breakeven after accounting for the transaction cost associated with the December acquisition of Interpoint Partners. Absent the impact of that transaction, net income would have exceeded $400,000 for the quarter even with the cost of this important acquisition, we returned the company to profitability. As noted in our press release, the company achieved net earnings of $13,000 for the year. This is a $3 million improvement approximately over the prior year. This was accomplished on revenue with nearly 3% less than fiscal 2010 which was in line with our 2011 guidance. Adjusting for the revenue contribution from the acquisition in Q4, revenues for the year were down 5% on the core electronic content management business. Again, this was in line with our previous guidance for the fiscal year 2011. In our earnings release, we have included a table reconciling our net earnings to the non-GAAP financial measure of adjusted EBITDA. We defined adjusted EBITDA as net earnings plus interest expense, tax expense, depreciation, amortization of tangible and intangible assets and stock-based compensation expense. Given the relatively large amount of noncash charges included in our financial results, we believe that adjusted EBITDA is a more meaningful measure in understanding our underlying cash-based earnings. For the fiscal year ended January 31, 2012, adjusted EBITDA was $3.8 million, an improvement of approximately $1 million over the prior year. As we have noted previously, we will continue to provide this non-GAAP financial measure in future earnings releases. We believe that this is a very meaningful improvement which was achieved despite the burden of high severance costs in 2011, the cost of on boarding new executives and associates as part of the overall transition of our human capital talent and the cost of the Interpoint Partners acquisition in December. I also want to remind you that we shift our focus to SaaS or software-as-a-service transactions, revenue recognition will be delayed due to the time lag between contract signing and the implementation or go-live. We continue to believe that sacrificing near-term perpetual license-based revenue for the long-term predictability of SaaS-based revenue is the correct business model. Furthermore, the solutions acquired from Interpoint Partners are only available on a SaaS basis. We are particularly encouraged by the increase in the backlog by nearly $10 million during the fourth quarter. Backlog at the end of the year was $2.7 million, compared to last year's backlog. This is a 56% increase. Steve Murdock, our Chief Financial Officer will provide more detail on this in a few minutes. For those of you who have listened to these calls during 2011, you know that we were focused on 5 key strategies. Those 5 strategies were

[Stephen H. Murdock:]

Thank you, Bob. I'd like to highlight some of the more significant aspects of our financial results for the fourth quarter and year ended January 31, 2012. As we have discussed on previous earnings calls, we expected revenues to be slightly below or flat as compared to the prior year. Revenues for the fourth quarter were $4,518,000, the highest of any quarter this year, but 8% below the prior year's fourth quarter. As Bob noted, revenue for this fiscal year was $17.1 million, 3% below revenue from the prior fiscal year. The decrease in revenue was primarily a result of decreases in proprietary software, hardware and third-party software sales as we continue to shift from a standard perpetual license model to a software-as-a-service model. These decreases were offset by increases in maintenance and support revenue of approximately $1 million, and a 17% increase in software-as-a-service revenue over the prior year. Deferred revenue from our GE Healthcare relationship decreased 12% to $5.2 million from the prior year. Revenues from our Patient Financial Services solution, formerly known as Interpoint Partners, was $287,000 for the fourth quarter and year-to-date as that acquisition was completed on December 7, 2011. Total cost of sales for the fourth quarter was $2.2 million, a 36% decrease over the prior year fourth quarter and on a year-to-date basis, cost of sales was down 21% to $8.9 million from prior fiscal year, which resulted in a 30% increase in gross margin for the year. The decline in cost of sales over the prior year as a result of an impairment charge from capitalized software, which is taken in the prior year, as well as significant staff reduction in professional services, client support that took place in the second quarter of this fiscal year as we continue to rightsize the organization. The selling, general and administrative expenses for the fourth quarter were $1,835,000, which were comparable to the prior fourth quarter. For the fiscal year ended January 31, 2012, selling, general and administrative expenses were $6,577,000, a 2.7% increase over the prior fiscal year. However, the fourth quarter included approximately $370,000 in onetime costs associated with the on-boarding of new associates and the transactional costs related to the Interpoint Partners acquisition. On a year-to-date basis, there were onetime costs of approximately $739,000 associated with the Interpoint Partners acquisition, on-boarding of new associates and severances paid to former associates. Research and development expense for the fourth quarter was $345,000, a 7% increase over the fourth quarter of the prior year and on a year to date basis was $1,409,000, down 19% from the prior year. In examining research and development costs, it's important to compare R&D expense along with R&D capitalized. Total R&D costs, including capitalized cost for this fiscal year was $4,009,000, a 10% decrease over the prior fiscal year. As Bob noted, we believe an important metric for future revenue predictability is our backlog. We've been very successful this year in renewing client contracts and in many cases, extending the term of those contracts. This is reflected in our increase in our backlog. As of January 31, 2012, backlog was $27.4 million, compared to a backlog at January 31, 2011, of $17.6 million, an increase of $9.8 million or 56% over the prior year. Of the $27.4 million in backlog, $5.9 million is related to professional services, $10.5 million is related to maintenance and support, and $10.5 million is related to SaaS contracts. We expect to recognize approximately $7 million of the maintenance backlog in the next fiscal year. On a year-to-date basis, the company achieved net earnings of $13,000, which is approximately a $3 million improvement over the prior year. In our earnings release, we've included a table reconciling our net earnings to the non-GAAP financial measure of adjusted EBITDA. We define adjusted EBITDA as net earnings plus interest expense, tax expense, depreciation, amortization of tangible and intangible assets and stock-based compensation expense. Given the relatively large amount of noncash charges included in our financial results, we believe that adjusted EBITDA is a more meaningful measure in understanding our underlying cash based earnings. For the fiscal year ended January 31, 2012, adjusted EBITDA was $3,825,000, approximately a $1 million improvement over the prior year. We will continue to provide this non-GAAP financial measure in future earnings releases. Cash balances at the end of the current fiscal year were approximately $2.2 million, with no drawdowns in our $3 million line of credit. We continue to see improvement in cash as we generate cash from operations and we continue our focus on cash collections. We believe we have the appropriate capital resources available to operate our business going forward. That concludes my review of the financial results for the quarter and year ended January 31, 2012. Now I'll return the call back over to Landon Barretto, who will open the question-and-answer period.

[Landon Barretto:]

Thanks, Steve. Jackie, please begin the question-and-answer session.

[Operator:]

[Operator Instructions] Our first question is coming from Bill Bunn of Fort Washington Investment Advisors.

[William H. Bunn:]

I've got a backlog related question. I know that we were just given the breakdown $5.9 million for professional services and the rest between maintenance and SaaS. But could you go into that a little bit with a little more detail. How much of that, if any, represents backlog where you've already been paid but you haven't recognized the revenues? Or is there any of that in there?

[Robert E. Watson:]

There's very, very little prepayments. We have one maintenance customer which does generally prepay a year in advance, but with a couple of other customers, we build on an annual basis. But most of it is not in deferred revenue.

[William H. Bunn:]

So when you establish something as a backlog number, what degree of confidence do you need to have before you actually classify it as such?

[Robert E. Watson:]

It's really a function of having a signed contract with the customer. We have very few significant collections issues historically. We pull it into revenue on a monthly basis as appropriate.

[William H. Bunn:]

And in the revenue sections, system sales, you mentioned that you're certainly going to under emphasize that, but is that a thing of the past and to what degree can you control that? Is that just function of who your partners are and how they want to handle it, or do you guide people towards something?

[Robert E. Watson:]

I'm sorry, could you ask the question again? I was looking up a number for you.

[William H. Bunn:]

That's all right. System sales 2011, was much produced from 2010. I think you indicated in the call that, that's to be deemphasized because you'd rather have the recurring revenue model. To what degree can you control that line? Is that something that you dictate or does that -- do your partners dictate that? Do the customers dictate that?

[Robert E. Watson:]

I'd like to be able to dictate it. I can't. It's really a function of the client making the decision of which model they're most comfortable with. Maintain on a maintenance agreement or moving to SaaS, or in the case of new customers, coming on as a SaaS agreement or the more traditional perpetual license purchase model. Now what we have seen in the market this year is a relatively significant shift, both in current customers and in the new sales prospects of leaning towards the software-as-a-service model. We think ultimately, over time, in forward and net cost of ownership for our current clients and sales prospects. So we think it's a pretty attractive model going forward in terms of the receptiveness of the sales prospects and clients.

[William H. Bunn:]

Could you go into more detail about the acquisition? What was the fit there? What kind of synergies were you looking for? To what degree did that acquisition actually affect this year's revenue and cash flow and how do you see the next 12 months being affected by that acquisition?

[Robert E. Watson:]

The revenue impact was slightly under $300,000 for the quarter as it was closed mid-December and so we only really realized 7 weeks' worth of revenue from it. The synergy question in why this fits into what we're doing, is really very important. If you remember, one of our strategic points for last year was to gain a deeper knowledge of our client base and become more market facing. And as part of that process of engaging at an executive level broadly across our clients and frankly even with our, as we expanded our sales prospecting, one of the things that became clear to us is that the economic fire of the legacy Streamline Solutions, in many cases, as the Chief Financial Officer or the VP of Revenue Cycle and if you sit with those executives as this team did, one of the questions that we would probe them about is where there is gaps, what could we do better. Well one of the things that was quite clear to us is during the period after a bill is dropped and they're going to the collections process, the solutions that are available to them today do not have connectivity for the most part back to the EMR, back to the documents associated with that patient visit. We captured those documents as part of what we do and we have their interfaces in by directionally with the EMRs from all the major vendors. So the concept was that we would -- when the products become integrated, have for example, a simple documents tab, if you will, in fact it will be a little more sophisticated that when we get it done. But a documents tab inside the Interpoint Solutions, which allows collectors and financial officers to very quickly connect it back to the documents that relate to that particular visit by that patient. We really think it's a huge efficiency in driving the collections process. Is that helpful?

[William H. Bunn:]

Yes. What impact do you see this organic acquisition having for you going forward and are there other things that you need to fill in with in order to enhance that operation?

[Robert E. Watson:]

We think that, that segment of our business will have material growth rates as we move into 2012 and 2013. We announced a few weeks ago, the first sale of that solution set to one of our long-term streamlined customers, Albert Einstein in Philadelphia. We think the ability to cross sell that solution to our other legacy Streamline customers is a very, very important part of our strategy as we move into 2012. We also think there is an opportunity to cross-sell the electronic content management solutions of Streamline into the former clients of Interpoint, now our clients. So we think there's a significant and meaningful opportunity in cross-selling. We also find, as we go into the marketplace, that leading with the Patient Financial Services solution set or the products we've acquired in December, is really a key part of our sales process for 2012.

[William H. Bunn:]

This is my last question, and I'll pass the baton here, but your debt's up sharply year-over-year and that's largely due to the acquisition. Companies of your size -- for companies of your size, debt can be a double-edged sword, I guess, if using my expression. What level of debt are you comfortable carrying at this point? And to yourself, whittling this down, is that a priority?

[Robert E. Watson:]

I wouldn't put it as a priority for 2012 to use your word, whittle down the debt. Now, I do think we are quite comfortable the debt level or we would not have the transaction that way. I think the terms that we received from Fifth Third were very good. I think, you should also note that at some point, there's a high probability that the note that was issued to the Interpoint shareholders, because of its conversion features, will convert equity.

[Operator:]

Our next question's coming from Frank Sparacino of First Analysis.

[Frank Sparacino:]

Bob, can you just remind me where you stand in terms of converting the legacy installed base? I guess number one, to sort of the new version and two, I would assume that number is consistent with converting them to SaaS contracts, but that's my first question.

[Robert E. Watson:]

They actually are not consistent in terms of assuming they're going to go from maintenance to SaaS. Now where we are is that we've had 5 legacy clients commit to moving to the 5.1 platform. We've had several other clients that are on older versions, mid to moving to the 1.9 platform, which is the other platform that we are going to continue to support after July of 2013. That being said, we still have 20-plus opportunities to transition somebody from maintenance agreements to the software-as-a-service option and again, our account executive team, led by Mike Schiller, have been appropriately incented during 2012 to try to make that -- many of those transitions as possible. In fact, they're really a key part of our sales strategy this year as we go through the maintenance renewal process with folks.

[Frank Sparacino:]

And then secondly, just following up on the one cross that you talked about, to Albert Einstein. I was curious if you could give some more detail in terms of that sales cycle in terms of how competitive it was, et cetera?

[Robert E. Watson:]

Yes. First, in terms of sales cycle. One thing we learned last year in general, is when we are selling new solutions or advanced solutions, it could be our HIMs workflows on the legacy business or the PFS stuff and the new solutions, but this sales cycle is generally much shorter. It can be as short as 3 months, as it was the case of Albert Einstein, I think that's an outlier. Legitimately, they should be in the 6 to 9 month sort of cycle for those kinds of opportunities as opposed to a net new customer, which can be a 9 to 18 months sales cycle. So if -- we think the cross-selling opportunity this year across both client sets is significant for us.

[Frank Sparacino:]

And then, Bob, just was -- given it was an existing customer, was there a competitive solutions you guys were baked off against in that situation? Or maybe just talk about that.

[Robert E. Watson:]

Yes, I think -- let's talk about the competitive market in specific and I'll come back to Albert Einstein. So the competitive market on that side, you have the usual cast of characters that you'd expect to be there. Medifinance, MedAssets, Streamware, that pool. In the particular case of Albert Einstein, they were considering other solutions. We were able, frankly because of our role there as a trusted vendor, to essentially short-circuit much of that sales cycle. And we've seen that in other current existing clients where we're talking about the Patient Financial Services solution set that there is an ability because we are in this position as a trusted vendor. I mean one of the really significant drivers that we see in the marketplace today is that, that CIOs and CFOs, they tell us, is not only are they concerned about their cash flow in the economics, but they want to reduce the number of vendors they have. And you've been around health care long enough frankly to know that there's never going to be a single vendor solution. On the other hand, you can't sit there and run a billion-dollar enterprise supporting 250 applications from 155 vendors. That's woozy, and the CIOs are telling us that. And many of our Streamline customers and clients have been clients for 10 years or more. We are fully integrated into their operations so to the extent that we can go back to them with solutions that help them, not only improve their operation and financial performance, which is our overall goal, but also help them reduce the number of vendor agreements they have is very, very important. And we think a key part again, a key part of our strategy is we present to our current clients.

[Operator:]

Our next question is coming from Sam Rebotsky of SER Asset Management.

[Sam Rebotsky:]

I think it's a good accomplishment for the year. You've changed the company around dramatically. The pipeline went from $25 million to $35 million. Of the $25 million last year, how much did you close into sales?

[Robert E. Watson:]

Well, let's talk about -- the pipeline, well let's talk about -- pipeline versus -- we're talking about pipeline now, not backlog. Just confirm around this thing.

[Sam Rebotsky:]

Right.

[Robert E. Watson:]

Okay. So let's talk about pipeline. When we came in here last February, we essentially reset the pipeline to 0. So our view was, by the end of the first quarter, we had $4 million or $5 million in opportunities that we would, thought were legitimate. As we move through the course of the year, it started growing at the rate of about $6 million in Q2, $6 million in Q3 and then the big jump in Q4. That being said, across those opportunities during 2011, we did $7.2 million in new sales bookings for the year in that pipeline, which was significantly in excess of what we had originally forecast, to be honest. So I'm not sure there's a strong data point to take away from that at this point because we've only been through this process a year and we had such a material jump in the fourth quarter, but I do think as we go forward, we'll get more refinements of the sales pipeline reporting as we move into 2012 and 2013.

[Sam Rebotsky:]

So this $35 million that you currently have, assuming the bulk of them are new, it takes as much as 18 months to close, assuming you do close the transaction?

[Robert E. Watson:]

If they're net new customers. Now remember, in the sales pipeline, we include not just net new customers but identified opportunities to sell solutions into our current clients.

[Sam Rebotsky:]

Did you break down the new versus current in the $35 million?

[Robert E. Watson:]

I can't. I don't have it off the top of my head.

[Sam Rebotsky:]

Okay. Now, far as the Interpoint, you say that cost you $400,000 in the current quarter, what is your expectations? Is that contributing -- accretive now going forward?

[Robert E. Watson:]

It will -- through the first 2 quarters of the year, we did not expect it to be accretive. As we move through the end of the year, we expect it to be accretive on a cash flow basis. A slight drag on earnings for 2012.

[Sam Rebotsky:]

Okay. So are you comfortable the way everything is going with the Interpoint then? It's been your -- what your expectations and would you be ready to look at other acquisitions at this point or when would you be ready?

[Robert E. Watson:]

Well, let's talk about Interpoint first. If I had to grade us today on where we sit on the integration, I would put us in exceeding our expectations, frankly. We had to benefit it because there was a significant lag last fall from when we signed a letter of intent than we actually closed the transaction that our implementation and technology teams led by Gary Winzenread, were able to invest in a significant amount of time in the planning process so that when we hit the go switch on December 7, things were in place to start moving along. Now has it been perfect? No. But I think we're well down the path and we're quite comfortable where we are. From a sales and marketing standpoint, we are fully integrated at this point. The actual transfer of the technology from their former data centers into ours is in process now. It's in the timeframe in which we expected it to happen. So we're quite pleased with the status of where we are on the integration of that asset into this organization. On the question of other opportunities. When it's appropriate and situations arise that are economically appropriate and fit with the strategic plan that we have, we will certainly consider them.

[Sam Rebotsky:]

Okay. Now you projected $0.07 to $0.09 and $0.09 to $0.11 in sales increases, et cetera. Do you expect these profitability in sales to be flat or lumpy? How do you look at this on a quarter-to-quarter basis going forward?

[Robert E. Watson:]

I think there is some risk of some lumpiness and really reflective of timing of go lives and completion of implementation. So you get a little bumps there because we don't recognize any of the revenue from SaaS-based contracts until the client is live. So by default, if you have a one month delay or a 2-week delay on something it does have some potential impact on lumpiness. But I don't really think it's that material as we move through this year.

[Operator:]

[Operator Instructions] Our next question is coming from Mark Cahill [ph], a private investor.

[Unknown Attendee:]

I jumped on the call late, so I missed the initial comments. Forgive me if I ask something redundant. Regarding the FTI Consulting, what's their client base like? Large hospitals, small, domestic, international?

[Robert E. Watson:]

Their clients are primarily domestic. Generally, larger than 500 bed multi-hospital systems for the most part. It's just their business model.

[Unknown Attendee:]

When you approach a new opportunity regarding the partnership, is exclusivity an issue? And how do you prevent partners from stepping on each other?

[Robert E. Watson:]

Well, part of it is we've not had to address the exclusivity requests from anyone so far. I think part of it is making sure that the reason you select someone as a distribution partner is consistent with the relationships you have with your other distribution partners. To give an example, GE, because of the nature of our relationship with them, if it's a net new sales opportunity, it is only going to be an opportunity where the decision at the sales prospect is about changing out their core electronic medical record. So that's a very different. So in the case of -- and again, they are only going to be very, very large institutions because it's GE. In the case of FTI, the decision with the FTI guys is around how to improve their revenue cycle, which is not something GE would be involved into necessarily directly. So we sort of carved that out with that segment. And so we see our partner for the revenue cycle side of what we do in the larger size healthcare institutions to frankly, be FTI.

[Unknown Attendee:]

Regarding GE, Emergis, et cetera, do you expect much production out of them in 2012?

[Robert E. Watson:]

GE, we don't -- we really have no ability to forecast GE net new sales, none at all. I mean they'll call us if there's an opportunity. That being said, they made no net new sales that benefited us in 2011. Now, we continue to work with them, on as we noted in the call, our current clients we'd share with them. We had something over $2 million in new sales bookings into that installed base last year, which I think was frankly quite material given the turmoil that was going on. As it relates to TELUS, which is formerly Emergis, if we continue to be -- work with them in installing facilities in the Québec province, pursuant to our agreement that was announced a couple of years ago, we've not seen any significant net new sales opportunity from that channel.

[Unknown Attendee:]

Okay. In 2011, a lot of the sales involved Epic systems. Are you going to go after non-Epic system sales?

[Robert E. Watson:]

Well, let's talk about how those Epic systems arose. I mean virtually, actually, all of those Epic opportunities in 2011 were opportunities where the client had changed their core EMR from one of our distribution partners to Epic and elected to stay with us as opposed to transitioning to another content management solutions provider. Streamline had at lost a couple of customers in 2010 where the client shifted their EMR from another vendor to Epic and at that time, Streamline did not have its integration suite for Epic EMR in place. You'll note that we made that a priority, I think we said this on the very first call in April of last year and in fact, in April of last year, we announced the Beta availability of that solution and the uptick in our customer base where we moved from none at the start of 2011 to I think currently 9 contracts, to deploy that solution is quite material. So we will continue to see that as some of our current customers shift from their current EMR vendor to Epic. For the net new sales opportunity, it's not Epic-specific or Allscripts-specific or Cerner-specific. It's driven by a whole set of other variables about why we would be in there trying to sell them something.

[Unknown Attendee:]

Okay. At the end of the year, I saw the subscription announcement and I also noticed that Sharon Brightman sold a lot of stock, I never saw any of the hard numbers show up in the volume trading. Two questions. Did you need -- was there a pressing need for cash at the time? And were management and directors also involved in reducing Brightman's stock position?

[Robert E. Watson:]

As it relates to the stock purchases by the Board and management in December. During the December period, we felt that there -- as a group, had decided that we wanted to make an investment in the company. Not because cash was required but merely we felt we wanted to continue, as we have done every quarter, we were allowed to purchase stock. As you know some quarters we're not allowed for various reasons to do so. We wanted to take an opportunity, put a stake in the ground and send the message to our shareholders that this Board of Directors and this management team was committed to the strategies that we put forth throughout 2011. And it just happened to happen during the month of December around the fact that with the shelf registration we can take down some shares on. No other reason for it, Mark, other than sending a message to you guys.

[Unknown Attendee:]

What's the message?

[Robert E. Watson:]

We're in, as it relates to Ms. Brightman, we have no knowledge of her transaction other than the same Form 4 that you saw.

[Unknown Attendee:]

I saw the -- [indiscernible] hosting the summit in mid-May. Are you booked solid and have you established new offices in Atlanta?

[Robert E. Watson:]

Let's talk about the summit first. The attendance for the summit continues to grow each week as we get closer to be event. I mean the historic pattern is as you get within the first month before the event, registrations pick up. Now that being said, we're pleased with the level of registrations to date. And frankly, we have a really good representation of long term Streamline Health clients and also from the new clients that came to us through the Interpoint acquisition. We are fully sold out in all of our sponsor packages, which is a huge commitment from our technology partners and a significant increase in contribution from them compared to the summit in March or February of 2011. We have a really stellar lineup of client associates and external speakers and expect it to be accretive. As to the question about Atlanta, the Interpoint company was headquartered in Atlanta and we do maintain that office as part of that transaction.

[Unknown Attendee:]

Last question. Is the Interpoint product fully integrated now? Did Gary and his team work overtime?

[Robert E. Watson:]

Gary and his team are always working overtime. There's no other option here. I think I said this earlier in the -- answering one of the questions from I think the guy from Fort Washington, that the integration from a technology standpoint is in process. We're on a timetable to complete it. We are performing well against that timetable. The non-technology pieces of that integration have been completed successfully and we have a plan, we're sticking to the plan and over the course of the next year, the products will become integrated.

[Operator:]

There are no further questions at this time. I'd like to hand the floor back over to management for any closing remarks.

[Robert E. Watson:]

Thank you. My thanks to everyone for participating in today's call. In the past 4 quarters, we have taken demonstrable steps in implementing our strategic plan and we believe we are making significant progress. We are focused on delivering results for our clients and our shareholders. As each day passes, we make progress towards our goal of becoming a best-in-class healthcare information technology company. We have a lot to look forward to, as do our shareholders. We will speak with you again at the conclusion of the current quarter. Have a good day, and thank you for taking time to join us today.

[Operator:]

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you, all, for your participation.