Unisys Corporation
Q2 2021 Earnings Call Transcript

Published: 3 Aug 2021

[Operator:]

Good day, everyone and welcome to the Unisys Corporation Second Quarter 2021 Earnings Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note that this conference is being recorded. I would now like to turn the conference over to Courtney Holben. Please go ahead.

[Courtney Holben:]

Thank you, operator. Good morning, everyone. This is Courtney Holben, Vice President of Investor Relations. Thank you for joining us. Yesterday afternoon, Unisys released its second quarter 2021 financial results. I am joined this afternoon to discuss those results by Peter Altabef, our Chair and CEO; and Mike Thomson, our CFO.

[Peter Altabef:]

Thank you, Courtney, and good morning, everyone. And thank you for joining us to discuss our second quarter results. We achieved double-digit year-over-year revenue growth and significant year-over-year improvements to profitability and cash flow. We executed against our strategy for sustainable growth and margin expansion that we described during our January investor presentation, which was enabled by our strengthened balance sheet. Progress in the quarter against our key strategic goals included advancing our DWS transformation, broadening our cloud capabilities and expanding our enterprise computing solutions. I would note that enterprise computing solutions or ECS is a new name for the segment previously referred to as ClearPath Forward. This is a change to the segment name only. not to the ClearPath Forward product line. Mike will provide detail on our financial performance and accomplishments, but first, I will give some insight into the business. Starting with Digital Workplace Solutions or DWS. Our goal has been to transform this business to focus on higher growth and higher margin solutions to broadening our offering portfolio and increasing our focus on experience solutions through a build, partner, buy approach. Our recognized leadership position in the DWS market supported by our InteliServe platform, world-class delivery capabilities and NPS scores consistently and significantly above IT services’ averages positions us to achieve these goals. The second quarter continued our work, laying the foundation for a sustainable growth to execution against the strategy, with a focus on maturing and enhancing our solution portfolio. Speaking of organic developments, we are building out additional solutions to support cloud-native virtual desktop interface within Workplace as a Service and hiring new consults to resources to expand our transformation services capabilities, all within DWS. We also continue enhancing the automation and artificial intelligence capabilities in our solutions, including completing the migration of all service desk clients to our cloud contact center platform as of April, allowing for increased usage of conversational AI solutions in voice and chat and expanded deployment of all of our InteliServe automation capabilities for these clients. Automation as a percentage of service desk ticket volume increased 500 basis points sequentially and 300 basis points year-over-year in the second quarter. With respect to partner developments, we enhanced our modern device management capabilities, including by entering into several new partnerships during the quarter. We are already leveraging these new partnerships to create more powerful end-to-end solutions for our clients.

[Mike Thomson:]

Thank you, Peter, and good morning, everyone. In my discussion today, I'll refer to both GAAP and non-GAAP results. As a reminder, reconciliations of these metrics are available in our earnings materials. As Peter highlighted, we made continued progress in the second quarter against many of the key strategic goals that we outlined at our Investor Day earlier in the year, while also achieving strong financial results, including double-digit year-over-year revenue growth and significant year-over-year improvements to profitability and cash flow.

[Operator:]

Thank you. And we will now begin the question-and-answer session. Our first question today will come from Joseph Vafi with Canaccord. Please go ahead.

[Joseph Vafi:]

Good morning, and great results here. Really kind of a breakup quarter, I think for Unisys. So at a high level, I thought maybe we could discuss, it sounded like there was a lot of good, strong new deal activity, if you could, maybe parse what that may be kind of as a result of post-COVID reopening versus maturity in the products? And I have a couple of follow-ups? Thanks.

[Peter Altabef:]

Yes, Joe. This is Peter. Thanks very much for being on the call and for the question. When we laid out our plan in early January to the investor group including you, and thank you for attending that, we really laid out the year in kind of two sections. We knew that we had just reorganized the company on January 1, effectively. We also knew that as part of that, we were bringing in a number of executives that would help us in specific business units and in fact to lead several of the business units actually. And so, that all took place. With that change, we thought that the momentum around new sales and new opportunities would really begin to pick up in the third and the fourth quarter. And so, what you're seeing in terms of the pipeline beginning to grow in July, what you're seeing in terms of the TCV beginning to grow in the second quarter is really kind of momentum going into the back half of the year. Now, we've already had strong momentum in terms of our cloud business. And you can see once again the cloud portion of cloud and infrastructure grew 28% in the quarter for us year-over-year, which we think is a very strong number for us. But importantly, we think that the digital workplace services business is going to get increasing momentum in the second half of this year and going forward in next year and the year after. So I think what you're seeing is we're being invited to more deals to larger deals, the strategy, the capabilities we've laid out in DWS are being appreciated in the marketplace with third-party advisors, as I mentioned and also with existing clients and with prospective clients. So we're really kind of getting momentum for the second half and for next year with respect to sales, as you know, it will take a while for sales to translate into revenue. But that's always been our plan and that's what we laid out in January.

[Mike Thomson:]

Yes, Joe, and if I could just add one element to that as I noted in my remarks as well, a very significant new logo DWS, client was signed in July, right, so we talked about the backlog slightly down sequentially, but again, we were expecting to sign that particular contract, but it's a great proof point to the momentum that Peter was talking about and pretty big significant new logo from our perspective that we're really excited about. So as we talked about last quarter, we were spending a lot of Q2 with our go-to-market messaging and again to reiterate Peter's point around the dialogue that we've had with industry analyst in the light in regard to that go-to-market messaging, it's really seems to be resonating from our perspective and we're seeing that sequential increase in the pipeline as well.

[Joseph Vafi:]

That's great. And then one on C&I. And you mentioned a couple of times the 28% growth in the cloud piece. Clearly if that kind of pace continues for a while, it's going to accelerate the whole segment, and I was wondering, how big, potentially that piece of C&I is now? Just to get a feel for, as cloud continues to strong uptake, what I mean overall segment acceleration?

[Peter Altabef:]

Yes. So Joe – correct me if I'm wrong, Mike, but I think that piece is 31% of total C&I revenue at this point. Is that right?

[Mike Thomson:]

That's correct, Peter.

[Joseph Vafi:]

Got it. And then just one final one on your enterprise computing segment, clearly strong and it seems like we've had more pull forward on renewables than delays in renewals over the last couple of years. Wondering if you could kind of just give us a feel in a segment, what – it was really strong clearly, probably a lot of that was renewables, but x renewals, how much was there kind of just kind of core growth, excluding the ClearPath renewals and other pieces of enterprise computing. Thanks a lot.

[Peter Altabef:]

Yes. So thank you, Joe. So let me take the beginning of that, Mike, if you take the end of that. And so, again, as we put the performance of ECS into context of what we were expecting and what we received, the expectation continues to be during the course of the year and for the next couple of years, that the growth we're going to see out of ECS will be largely from the services side of that ledger. With the licensing side predominantly renewals that's – if you noted in my remarks, I said, that's the near-term plan. I think that with the changes we've had with the ECS team with some leadership really reviewing the art of the possible in ECS in the mid to longer-term, we're looking at what are the opportunities we have to grow, whether it's a SaaS pricing or straight licensing more of the technology piece of that business. We don't see that in the near-term and it's still under development for the mid to long-term. So that – so more to come on that, still very much work in progress. We do expect the momentum we saw in the quarter, which was a 2% increase in services to increase over time. And as I said, in the near-term that's where we expect the majority of the increases to come from. Mike?

[Mike Thomson:]

Yes. Look I certainly would echo that, that's part of the strategy here. I think we mentioned in Investor Day, Joe, that we only had about 13% penetration on the services side of the coin, so we do see some real upside and potential in regards to that continued services growth. As you know, the renewal schedule is lumpy, right, and last year was really very heavy in the fourth quarter. Not necessarily that they were delayed or accelerated, it's just that's when the renewal schedules kind of indicated that those contracts would be signed. In this case, the second quarter was a strong renewal scheduled quarter from our perspective, we've got good line of sight into that. So we obviously know when those things are going to anticipate and the lumpiness is really whether something slips a week or a month, or it gets accelerated a week or a month and how that impacts any given quarter. But overall, our retention rate on those clients is at 95%-plus and we're really happy with that. We've done a lot of work as you know to get that particular license cloud enabled and we think that that's going to drive additional volume as well. So right on plan as we've expected to be, and as Peter noted really focused on the services side of that segment for growth.

[Joseph Vafi:]

Great. Thanks, guys. Perfect.

[Peter Altabef:]

Thank you, Joe.

[Operator:]

And our next question will come from Jon Tanwanteng with CJS Securities. Please go ahead.

[Jon Tanwanteng:]

Hey, good morning guys, very nice quarter. My first one, just on the DWS contract that pushed out into Q3. Can you just close how big that was?

[Peter Altabef:]

We don't disclose the general size of those contracts. I'll say it was above $50 million and below $1 million in TCV.

[Jon Tanwanteng:]

Okay. Fair enough. And just to clarify, on the ClearPath services, where you saw the growth? Was that from new customers or was that existing customers that have expanded their agreements with you?

[Mike Thomson:]

Yes, Jon, I think – I’m sorry Peter.

[Peter Altabef:]

No, go ahead.

[Mike Thomson:]

I was going to say Jon, our focus in the services are largely based on our existing client base and that's where we have an opportunity for penetration and that's where we think we've got obviously longstanding client relationships, we're on average, just under 20 years relationships with those particular clients and that's our primary target market for that services growth.

[Jon Tanwanteng:]

Okay. Got it. About a month ago, one of your largest competitors had signal weaknesses in one of its segments. I was wondering, is that something that has any read through to you either negative or positive? It seems like you're on track into the channel expectations. So I'm wondering, if there is any correlation or impact on your business at all?

[Peter Altabef:]

Yes. No, Jon. I don't see a direct correlation again, we are – we like it when our industry does well. And so, we don't celebrate when any of our competitors has a bad quarter or misses any of its numbers, because we think the health of the industry is good for us. I will tell you that and from our strategy in January that we've reiterated on these quarterly calls. It is our focus to really double down in some of the areas that not all of our competitors are focusing on, or that our competitors are focusing less on than they did in the past, so we have a whole segment on digital workplace services and that's a very significant part of our – of our company. DWS is now 28% – expect that to increase over time. In the cloud and infrastructure space, we are really doubling down on the public sector of cloud. So, I think over time you might see us making advances in our areas of focus that are greater than increases in market growth. And it is certainly our intent in those areas of focus to grow faster than market and effectively take market share away. So that's our plan.

[Jon Tanwanteng:]

Okay, great. And thank you for that. Last one for me, I appreciated the color on the operating margin by quarter going ahead. I was wondering though, if you could – if it was possible for second half operating margins on an adjusted basis to be greater than the first half, even with ECS being a little bit heavier in the first quarter – in the first half, excuse me?

[Mike Thomson:]

Yes. Peter, I'll take that if that's okay. Jon, I think really a tough compare, especially as I mentioned, we had 40% of ECS license revenue for the full year coming in the fourth quarter, and that's at 60% margins, so that's a really tough item to deal with. But as I also mentioned, we'll see the benefit of the continued execution against the savings initiatives that we put in place. We saw about $35 million of that come through in the quarter and we'll continue to see that compounding through the rest of the year. So again, I think we'll be right on plan in regards to that, hence the reaffirmation of that guidance and I think that's a pretty consistent view from us.

[Jon Tanwanteng:]

Okay, great. Thanks and great quarter again, guys.

[Peter Altabef:]

Thank you, Jon.

[Mike Thomson:]

Thank you, Jon.

[Operator:]

And our next question will come from Rod Bourgeois with DeepDive Equity Research. Please go ahead.

[Rod Bourgeois:]

Great. Hey, I want to talk about the workforce management given all of the supply challenges occurring in the industry. It was good to hear your metrics and your progress on the workforce front. So I wanted to ask if you can talk a bit more about the investments and the leadership that you're applying to the workforce management, and if you have an outlook for where metrics like attrition will be going in the next several months, given some of the supply and talent crunch that's happening around the industry? Thanks.

[Peter Altabef:]

Yes, Rod. This is Peter. I'll probably start on that, and thanks for the question. I think it's fair to say workforce management is taking up a very significant part of our leadership's attention from our President and COO, Eric Hutto to Katie Ebrahimi, our Chief HR Officer really up and down the entire leadership chain. And when I mean leadership, I mean everyone who manages more than three people, because this is all about how do we attract and how do we retain folks. Some of the data that I gave on my remarks and I'll repeat and elaborate on some of it, our last 12 months of voluntary attrition for the quarter was at 12.9. That was an increase from 10.4 for the last 12 months for the quarter before, but that's somewhat seasonal. You pay bonuses in the first quarter and you historically have a higher second quarter of attrition, so that's not related to COVID and that’s not necessarily related to the – what is called in the industry, the war on talent. That 12.9 number for us is lower than the level it has been in either 2020, or much lower than 2019, which was the pre-pandemic number. So the bottom line is, we think we are managing to the slightly higher sequentially numbers. But it's not – we don't expect this to be an easy ride, we expect to have to do more and more to retain and attract talent. And that's actually the right long-term mechanics for the company. We think it's the right long-term mechanics for the industry. I mean, IT services as an industry is expected to have, I think 4.3 million unfilled vacancies by 2030. So, while some of the current focus might be, people are moving around more and there is an increase in demand because of COVID that's not the big driver long-term. Big driver long-term 2030 is, this is a growth market, we expect to be a growth company, our competitors expect to be growth companies, and although, we expect what we call nonlinear growth, which is we don't expect to be hiring people in the same proportion as revenue going up, we are still very, very dependent on bringing in great people. So whether that is a focus on DEI issues, whether that's a focus on ESG issues with our people care about, whether it's about career development, which we are massively increasing our view to let associates understand what kind of careers they can expect, what they have to do from a training and certification standpoint to make their careers actually happen. Making sure they've got an understanding of where they are and where we believe as a leadership team their development is. This is really an all hands on deck focus to create a people environment that is attractive and that people want to work for. So far, I think we have been successful with the focus on so far. But this is going to be an effort every single day. And I think it's going to be an effort for the entire industry every single day. I'm just glad the wakeup call occurred now and not in 2030 by the time we have 4 million unfilled jobs.

[Rod Bourgeois:]

Great. Thanks. Thank you. And you're clearly making progress in your three major focused markets. At the same time, you have the subsegment of public APAC and Latin America, where your growth right now is relatively weak. So I wanted to ask if you're positioning for improved growth in those segments and what the opportunity set is there to get the growth in those areas up to par?

[Peter Altabef:]

Yes. So let's just take those geographies one at a time. U.S. and Canada is clearly the strongest geography we have, I would say for the year, you had a stronger growth in EMEA this quarter, but that was largely because of ECS wins. I think we're making great progress in U.S. and Canada that has been, if you will almost a test bed for some of our new solutions and we think that test bed is working out well. We also have as you know a really good tax position Rod in the U.S. and Canada. And that makes it more advantageous for us to kind of focus first there. When we look at the other regions, obviously we had a lot of success in EMEA, this – for this quarter and really for the year. We expect some good progress in EMEA, although not obviously at the rate of this quarter, but we expect good progress in EMEA over the course of the year. APAC and Latin America are a little different. And we really kind of have to look into those areas. For APAC, we expect this to be a slight down year, but that is mostly because of some ECS licensing issues. We had a very large ClearPath Forward license renewed in 2020, so that is – that really is causing unfavorable compares in Asia Pacific. We expect Asia-Pacific to be flat or down very, very slightly without that compare. In Latin America, we expect our revenue to be up this year and revenue to be up pretty significantly. So again, we expect some success in Latin America. So that's kind of how we think of geographies with our focus right now where our primary P&L is based off those solutions, whether it's DWS or whether it's C&I or whether it's ECS. What we're really doing is, is allowing those teams to run as a business and allowing those teams to focus in the geographies with they believe they will be most successful and then supporting them in those geographies. It's heartening to see that as they have done that, they have really found countries and areas in each of the regions where they think we have advantages. And we think that our global growth will be better because of that, but it's not random, it's really targeted growth that is targeted based off each of those solutions in each of those regions. Mike, further on that, please.

[Mike Thomson:]

Yes. I'd love to, I think you hit basically all the points, Peter. The only thing, Rod that I would add is, we've seen some good post-COVID recovery specifically in Asia-Pac and actually was up, roughly 10% in the quarter. So our solutions are I'll say regionally agnostic, right. So they apply the board and can be applied to global companies. So I don't think it's directly accretable to which region we're approaching. I think Peter hit it, our target here in public sector, specifically in USMC is just really advantaged from our tax positioning. So make sense to attack that market first, get that proof point and then roll that out to some of these other markets. So I don't – it's certainly not a strategic viewpoint to say we're not addressing these other markets at the same time. And so again, we have a little heavier, I'll call it BPS presence in Asia-Pac and that's still slightly impacted from the COVID perspective. But other than that, we're – everything else that Peter gave you, I think was spot on.

[Rod Bourgeois:]

Perfect. Thanks guys.

[Peter Altabef:]

Thank you, Rod.

[Mike Thomson:]

Thanks, Rod.

[Operator:]

And our question will come from Ana Goshko with Bank of America. Please go ahead.

[Ana Goshko:]

Hi, thanks very much. So first of all, I have a couple of questions on the cost side, so it's good to hear that you have achieved the high end of the cost save target. Could you talk about the areas for reinvestment and kind of the magnitude of reinvestment of those savings? And then secondly, you've given the operating margin outlook for the second half. So I guess, third quarter sort of in line with second, fourth quarter down year-over-year, but sounds like that segment related. Could you talk about if you're seeing or feeling any inflationary impacts and in what areas and to the degree that you may be shielded this year from kind of contracts if any of that might creep into next year as – for the forecast that you've got right now.

[Peter Altabef:]

Yes. Ana, so thank you for this question. Mike, let me just take a couple of quickly upfront and then I think you've got most of it. For the first of your questions, which I think was about reinvestment. As we said in January, we’re very, very consistent with this. We think we will be reinvesting about 30% of the savings or the efficiencies from that program into the business. And that 30% number that can go up or down based off opportunities. But we think that number is still largely correct. With respect to the operating profit numbers and in fact, all of our numbers what you're hearing from us on this call is us reaffirming our full year numbers. So there certainly has been uncertainty in the year. But we believe that we are within the ranges that we laid out in the beginning of the year. And then finally, with respect to efficiencies and kind of nonlinear growth, we are expecting that really in each of the business units. So we're really asking each of those segments to make sure that we are going to be able to increase margins. And that comes in part from nonlinear. I mentioned earlier in my call that when we think of DWS, we should – I'm hopeful that you hear, InteliServe, which is our platform for driving DWS offerings. Now InteliServe has some of our intellectual property. It has more of our intellectual property after the acquisition of Unify Square, which we're incorporating some of the great capabilities into the InteliServe platform, but it also has third-party intellectual property that we are integrating into our platform, same thing for CloudForte in the cloud world. And in fact, the same thing has been true for a long time for ClearPath Forward, which although the majority of it is our IP contains third-party IP as well. So we are focused on making sure that we have, if you will nonlinear growth and with respect to the numbers, that comes across in our labor as a percentage of revenue. We had the lowest percentage of labor versus revenue this quarter, at least through 2016. And I'm not sure that we have – we even kept that statistic before 2016. And we expect to drive that percentage down in each of the next several years. So I hope, Ana, that was a quick oversee about some of what you asked. And then Mike, over to you.

[Mike Thomson:]

Sure. Thanks Peter. And thanks Ana for the question. Just a couple other things. I think Peter gave you a good synopsis on kind of our build, partner, buy and where that investment is coming or going to. The other elements that I would note to you is, there's investments beyond that in the go-to-market resources, as an example to support growth. We talked a little bit about the investment in our associates, getting them certified and train allowed us to ultimately fill 39% of our reps internally because we're investing in those people. So all of that plus one of my remarks was about the fact that part of the protection of the resource base that we have, we've increased some salaries in certain regions to, again, support the organization and really invest in the people. So it's not just capital investments in the context of IP and software and development of things. It's also about the resources, skilling of those resources, which is also protecting our associate base from poaching and other things. So that's pretty helpful. You've got it right, Ana, on the margin side, Q3 being in line with Q3 of the prior year and Q4 actually being a growth quarter from our perspective against the sequential growth, but not necessarily against the prior year due to the license renewal structure that I mentioned earlier. I don't think we're going to see a whole lot of impact from our perspective from an inflation point of view, which I think was the last part of your question. Our contracts are usually three to seven years, so they're somewhat protected in regards to inflation. And frankly, I think what we're seeing from our pipeline is a willingness now to get out and spend. And I think people are really reinvesting into their infrastructure clearly with a hybrid workforce being a primary focus, obviously, cyber being a primary focus and digitization being a focus. So we feel pretty good about where we're positioned and don't expect to see inflation really cause any oscillation in our projections for next year.

[Ana Goshko:]

Okay, great. Lucky you, I wish I had the three to five year contracts on my cost base. So second question just on the M&A environment, could you just characterize, what's that like for you right now with regard to opportunities and activity for additional tuck-ins and in particular with the positive free cash flow outlook and the low interest rate environment, is that further kind of embolden or enable you on the M&A front?

[Peter Altabef:]

Yes, Ana, that's a great question. I think I would categorize the M&A environment as expensive for buyers. And of course, we are a buyer in this market but we are also acknowledged that this is an expensive market for buyers. So we're being very careful. We would always be careful at an M&A environment, but I think this current pricing environment makes everybody or at least makes us look two or three times and make sure we have the right acquisition. Unify Square is a great example of that. It was an expensive acquisition in the term of purchase price, but it fit our strategy perfectly. The capabilities that it brings to our digital workplace services team are immediate and apparent. That's coming through in terms of the pipeline that's coming through in terms of new clients. We only share one significant client. So the cross-selling opportunities are also immediate and the team there is a team that is working really well with our existing team and certainly is bringing additional skills. Beyond Unify Square, as I mentioned on the last earnings call, we have reviewed over 200 other opportunities. I can tell you that we have several opportunities that we're looking at. There are – in that tuck-in – up in the tuck-in size and they are largely currently in the digital workplace services space and in the cloud space. Those are the two areas that we're really looking at. Those include capabilities, those include consultants and advisory assistance in those spaces. We feel good about the opportunity to find some of those but they are really needles in the haystack. And so when we find them is very much, kind of we'll find them when we find them. And if we can agree on the right terms and conditions, but we're actively looking in the market, there are things in our strategy we can build. But we think that it would behoove us to buy some of those capabilities instead. But we're not going to do it unless we find that the price is right. Mike?

[Mike Thomson:]

Yes. And look, I think you hit all the pertinent points, Peter. Ana, you talked about the financing aspect of that. Yes, the rates are good now and then certainly if the right opportunity presents itself, we think we're in a strong financial position, both cash wise and certainly from a credit rating agency and our ability to borrow. There's no barriers on that front from getting the acquisition that we want. It just needs to be the right fit from our perspective. As Peter noted, we're actively working that pipeline.

[Ana Goshko:]

Okay. Okay, great. Thank you so much. That's very helpful.

[Peter Altabef:]

Thanks Ana.

[Mike Thomson:]

Thanks Ana.

[Operator:]

And our next question will come from Frank Jarman with Goldman Sachs. Please go ahead.

[Sienna Mori:]

Yes. Hi, this is Sienna on for Frank. Congrats on the results. And thank you for taking my question. I just have one on the pension liability. You achieved your target of $1.2 billion gross liability reduction this quarter, but the recent rate moves though. How should we be thinking about the size and the funded status of your plan today? Thank you.

[Mike Thomson:]

Sure. Peter, I'll take that one if you don't mind. Look, I don't think from a funded status perspective, we're in really good shape. We're not anticipating to make any contributions to the U.S. defined pension plan as we've noted. And is obviously why we undertook what we did. That does not mean we're not going to continue to look at opportunities as it pertains to removal of pension liability. Certainly with the way rates are moving, there can be some rate arbitrage. We are in a fiscally very sound position to take advantage of that. We are also in a defensive position in the sense that we're protecting our return on assets because that's obviously funding future contribution. So we're really just in a really good spot, the funded status has improved. We've seen a decline in the overall deficit, obviously a sequential decline and a pretty significant decline year-over-year. And we'll continue to look for opportunities to remove gross liability, similar to what we did over the course of the last year and a half with a $1.2 billion of reduction there. We think there will be some opportunities specifically on the U.S. plans in 2021 and certainly in 2022. And we think there's some opportunities perhaps in 2022 for some of the foreign plan. So again from our perspective, the cash contributions is no longer a concern, and it's really just being on the front foot and taking advantage of any rate arbitrage to continue to de-risk by removing that liability and continuing to invest wisely in regards to the return on assets. So those are the two aspects that we'll continue to focus on.

[Sienna Mori:]

Great. Thank you.

[Mike Thomson:]

Thank you.

[Peter Altabef:]

Sienna, thanks very much for your question. Greatly appreciate it.

[Operator:]

And this will conclude our question-and-answer session. I'd like to turn the conference back over to Peter for any closing remarks.

[Peter Altabef:]

Thanks very much, operator. And I want to thank Mike for being really an extraordinarily positive force in our company. And I think that shows in these calls but that's also true of our leadership team. Our leadership team, I mentioned Eric Hutto, earlier in this call; Teresa Poggenpohl is responsible for leading the marketing and communications function. You'll see a lot more from us around our marketing efforts, as we really kind of make sure that the buying elements of our clients and prospects are aware of what we have and appreciate, I think the strength of our capabilities and solutions. So last quarter, for instance, you saw on this call, me ask everybody to pay some attention to our new investor relations website, which as a last quarter was brand new. We have followed that up by creating an entirely new corporate website this quarter. It went live about two weeks ago and it is new from the ground up. We've got a new engine behind it, which will provide us added flexibility going into the future. But it is a different look and feel, it is a different way for clients to interact with us. It is very much our storefront. That doesn't mean that everyone who buys services from us will do it digitally over the web. Although, we do have a digital purchase engine that is spooling up, but it does mean we think almost everybody from a client or prospect standpoint will interact with us by looking at our capabilities through some of those web descriptions and tools and assets. So we really would hope that everybody on this call spends a little time on that new website. Any questions about it or comments, please feel free to send them to me, send them to Mike or send them to Courtney Holben. And you can rest assured that we're going to pay attention to it because one of the audiences we think that is looking at that broader website, not just our investor website are the people on this call. And so we thank you for doing that. With that, we look forward to our next call and in the meantime, as you know, from our client – our investor relations team and for all of the team at Unisys, we stand ready to have a continuing dialogue with each of you. So thank you very much.

[Operator:]

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines at this time.