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spk04: Gary Lafredo, Chief Legal Officer, Secretary, and Senior Advisor for Cineverse. Please go ahead.
spk07: Good afternoon, everyone. Thank you for joining us for the Cineverse Fiscal Year 2025 First Quarter Financial Results Conference Call. The press release announcing Cineverse's results for the Fiscal First Quarter ended June 30, 2024. is available at the investor section of the company's website at www.cineverse.com. A replay of this broadcast will also be made available at Cineverse's website after the conclusion of this call. Before we begin, I would like to point out that certain statements made on today's call contain forward-looking statements. These statements are based on management's current expectations and are subject to risks, uncertainties, and assumptions. The company's periodic reports that are filed with the SEC describe potential risks and uncertainties that could cause the company's business and financial results to differ materially from these forward-looking statements. All of the information discussed on this call is as of today, August 14, 2024. And Cineverse does not assume any obligation to update any of these forward looking statements, except as required by law. In addition, certain financial information presented in this call represent non-GAAP financial measures. And we encourage you to read our disclosure and the reconciliation tables to applicable GAAP measures and our earnings release carefully as you consider these metrics. I'm Gary LoFretto, Chief Legal Officer, Secretary and Senior Advisor at Cineverse. With me today are Chris McGurk, Chairman and CEO, Eric Opica, President and Chief Strategy Officer, Tony Wiador, Chief Operating Officer and Chief Technology Officer, Mark Lindsay, Chief Financial Officer, Mark Torres, Chief People Officer, and Yolanda Macias, Chief Content Officer. all of whom will be available for questions following the prepared remarks. On today's call, Chris will discuss our fiscal year 2025 first quarter highlights, the latest operational developments, outlook, and long-term growth strategy. Mark will follow with a review of our results for the fiscal first quarter ended June 30, 2024. And Eric will provide some details on our streaming business results and operating initiatives before opening the floor to questions. I will now turn the call over to Chris McGurk to begin.
spk01: Thanks, Gary, and thanks everyone for joining us here today. This was a transition quarter for Cineverse. Consistent with the prior four quarters, we again generated significant savings in SG&A during this quarter of $1.3 million, or 17% versus the prior year. Reflecting our previously reported cost savings initiatives, most importantly, our offshoring of domestic employment positions to Centiverse Services India. We've now reduced our domestic headcount by 57 positions, or 39%, since we began consolidating operations after we completed our acquisition activities two years ago. That offshoring of domestic positions to a battle-tested, efficient operating division of Centiverse in India was the driving factor behind the $8.9 million in SG&A cost savings we recorded in the last fiscal year. And this quarter's results demonstrate the continued success of this key initiative. Those cost savings were the main factor that enabled us to beat our direct operating margin target again this quarter, recording a 51% margin versus our stated target of 45% to 50%. Our revenues in this quarter were impacted by an almost $2 million decline in digital licensing due to the timing of digital content releases between quarters and the comparison to non-recurring revenues in our legacy digital equipment business that we booked in last year's quarter. Another key timing and transition related issue that impacted revenues in the quarter is that we did not yet begin to report any upsides from our new sales teams and SaaS sales initiatives for our proprietary MatchPoint technology David Miller, AI based products and omni advertising programs, most importantly, direct ad sales, however, we've now built a very robust pipeline in all those areas that Eric will talk about in just a minute. David Miller, And based on that we fully expect to begin to record revenue upsides over the next few quarters as we close multiple fields that are already in the sales queue. Eric will also speak to the skyrocketing growth in viewership across our channel and podcast portfolio, which obviously bodes very well for a significant rebound in our advertising business, as well as an even more expanded sales pipeline. In addition, we remain very optimistic about the release of the next installment of our Terrifier horror franchise, Terrifier 3, which is on target for an October 11, 2024 theatrical release. We are marshalling all the resources of the company to maximize profits from that release. We're concentrating not just on theatrical, but also on the highly profitable ancillary distribution markets, including video on demand, DVD, Blu-ray, and particularly our screen box for our streaming channel, where we saw a substantial increase in subscribers following the release of Terrifier 2. If we are successful in all of this, the film should provide a substantial cash inflow to support the rest of our business, particularly in building the content pipeline. Importantly, we also extended our $7.5 million line of credit with East West Bank another 12 months to September 2025. This further strengthens our financial flexibility. We also updated our digital library valuation with the same third party appraiser that valued it in 2023. This valued our library of more than 66,000 titles as of March 31, 2024, at approximately $39.8 million, a substantial increase over last year's valuation and several large multiples above the book value of our library, which was just $2.6 million as of June 30, 2024. This library valuation alone excluding all our other assets, is by itself significantly higher than our current market capitalization, which we believe significantly undervalues the company. Reflecting that significant disparity, we purchased approximately 184,000 shares of Cineverse Equity through June 30th, 2024, and are continuing to use our previously reported stock repurchase program as appropriate since we believe repurchasing shares is a value-creating investment opportunity for the company. And with that, I will turn things over to Mark for our financial review. Mark?
spk06: Thank you, Chris. For the quarter ended June 30, 2024, Centiverse reported total revenues of $9.1 million compared to $13.0 million in the prior year period. As a reminder, the first quarter of fiscal year 24 included material non-recurring revenue of approximately $1.2 million related to our legacy digital cinema business, which is not present this quarter. When excluding the impact of the legacy digital cinema business, the decrease in revenue was primarily driven by approximately $2 million decline in the company's digital distribution revenue, mostly resulting from a delay in content releases during the quarter compared to the prior year quarter, and an approximate $500,000 decline in advertising revenues due to our channel optimization efforts. We expect this trend to reverse for the remainder of fiscal year 2025 as the economy improves and our new direct advertising sales team continues to ramp up. Despite these top line revenue results for the quarter, we remain cautiously optimistic for double digit revenue growth in fiscal year 2025 as the economy improves, interest rates decline, with the expected improvement in the advertising market in a political year as realized, and revenue growth from our technology offerings. Eric will provide additional details on the operational drivers behind our financial results. As Chris mentioned, our direct operating margin for the quarter was 51%. which is in excess of our previously provided guidance of 45 to 50% for fiscal year 2024. Our improved direct operating margin is a direct result of our cost optimization initiatives referred to earlier. We expect our direct operating margin in future quarters to be in line with our previously stated target margins of 45 to 50%. SG&A expenses decreased $1.3 million or 17% for the quarter compared to the prior year quarter. Again, this improvement is a result of the cost optimization initiatives discussed previously. We expect our SG&A expenses to remain relatively flat dollar-wise and to continue to decline as a percentage of revenue for the remainder of fiscal year 25 as we continue to leverage offshoring efforts in Centiverse Services India. Adjusted EBITDA for the quarter was negative 1.4 million compared to negative 1.5 million for the same quarter last year, reflecting the continued impact of our cost savings initiatives even in a down revenue quarter. We had 4 million in cash and cash equivalents on our balance sheet as of June 30, and 4.7 million outstanding on our working capital facility, down from 6.3 million as of March 31, 2024. As we noted in our last call, we have extended the maturity date of our working capital facility with East West Bank to September 2025. As you recall, two quarters ago, we also expanded the size of our facility from 5 million to 7.5 million. We appreciate our relationship with East West Bank and the confidence they are showing by extending the maturity date and expanding the size of our credit facility, which increases our financial flexibility and liquidity and is a testament to our improving financial position and credit worthiness. During the quarter, our cash flow used in operations was $1.7 million, of which $2 million was related to investments in our content portfolio via advance and or minimum guarantee payments. When excluding our content portfolio spend during the quarter, our cash flow provided by operations was a positive $271,000, showing just how close we are to being sustainably cash flow positive. We expect to be operating cash flow positive for the full fiscal year 2025. I also want to remind everyone that our board of directors recently approved a one-year extension of our stock repurchase program. The program to purchase 500,000 shares now expires on March 1, 2025. Through June 30, 2024, we've repurchased approximately 184,000 shares under this program reducing our shares outstanding from year end. With a book value of 29 million and a market cap of approximately 13 million, we continue to believe our stock is significantly undervalued and will continue to repurchase shares under our program during open trading windows and as cash availability permits. With that, I'll turn the floor over to Eric to discuss market environment and our growth initiatives.
spk03: Thank you, Mark. This quarter, we've made significant strides in moving forward our strategic initiatives, particularly in our streaming technology, content distribution, and monetization efforts. First, let me highlight our streaming performance. We achieved remarkable viewer growth with 2.26 billion minutes watched in Q2 2024, up 73% year-over-year. The surge was driven both by our established brands and successful new channel launches. For example, our Bob Ross channel saw over 800 million minutes watched, up 33% year over year. New channels like Dog Whisperer and Yu-Gi-Oh! have shown impressive growth, with Dog Whisperer experiencing nonstop growth for five consecutive months and Yu-Gi-Oh! up 132% in June over its May launch. The surge in inventory comes at the right time as we ramp up in direct sales and go into our busiest time of the year. In terms of our subscriber base, our subscriber count stands at approximately 1.39 million, down approximately 3.5% sequentially, but up 10% year-over-year. This decline is attributed to the summer seasonal churn we typically see, and we expect to see this number to see appreciable increases in subscriber count on the back of the TerraFire 3 release later this year and the usual surge in subscribers that occurred during Q3, our fiscal Q3, rather. Keep in mind, we saw triple-digit subscriber growth following the release of TerraFire 2 in late 2022. It's worth noting that our year-over-year comparisons in digital transaction sales were impacted by substantial revenues that came in from several one-off licensing deals, TerraFire 2, and other content in the prior fiscal year, which we didn't have this year. However, we're extremely excited about the upcoming release of TerraFire 3. its impact on revenue revenues across all company lines of business unlike its predecessor which began as an event release terrifier 3 will have a wide release on more than 2200 screens and we expect to see considerable revenue from this release including theatrical est transactions rentals and licensing which will likely suppress substantially surpass the patterns we saw with terrifier 2. regarding our ad sales during the quarter We've been holding our programmatic price floors for connected TV at higher levels to support our direct sales efforts, which have had an impact on our programmatic revenues in the short term. While this represents a significant portion of the year-over-year decline in ad revenue, we believe this approach will yield better results in the long term. We expect this to be corrected significantly as direct sales come online, and we focus on improving yield management and bid density with our inventory for programmatic during the quarter alongside those direct sales. Our efforts to streamline operations and focus on higher margin activities are paying off in terms of improved margins. Our direct operating margins of 51% signal that our business model of building deep fan bases and popular verticals and providing scale volumes of relevant library and low cost first window content is working. We will continue to optimize our streamlining efforts and we currently have plans to further reduce our OpEx by another 5% to 7% over the next two quarters. Combined with our focus on higher margin technology and licensing sales, we believe we can maintain gross margins in the mid 50% range for the streaming business and show sustainable profitability going forward as revenues increase. On the sales front, we've made considerable progress in building our content advertising and match point sales units, which has been the focus of the first part of the year. We've added six seasons digital sales executives nationwide. We're already delivering results. Our match point efforts have been particularly promising. After just a few months, we built a pipeline north of 6 million of potential customers. We expect to significantly increase that once our inbound and outbound marketing efforts are fully underway. I'm pleased to announce we proposed our first SaaS-focused deal worth a quarter of a million dollars in annual contract value. We believe this is on the lower end of the kind of deals we'll be seeing moving forward, indicating significant potential for growth in this area. Our licensing sales have also seen substantial growth, and we expect to generate low millions of dollars in new licensing revenue from our sales team in the current quarter alone. This is a testament to the value of our extensive content library. Looking ahead, we anticipate being sold out of inventory on several verticals in the next quarter and expect significant acceleration in digital licensing and match point revenues from deals currently in negotiation. On our podcast network, we continue to see exponential listener growth, yielding a 49% revenue surge over the last 60 days. We're extremely focused on monetizing our podcast inventory, which we believe is currently being monetized at just a fraction of its full commercial value. Our current sales team has ramped up their direct efforts, and we're engaging with numerous third parties to help us rapidly fill the inventory over the next several quarters. We're also expanding our efforts to bring in additional popular shows that further enhance our podcast offerings. Turning to our technology initiatives, we're in the final stages of Phase 2 development for CineSearch, our AI-powered content search and discovery tool. We expect a full consumer release within the next quarter. We're also preparing the product for B2B licensing and are already in discussion with several Tier 1 OEMs. This innovative platform, developed in partnership with Google, addresses the biggest consumer problems in streaming search and discovery by providing an enhanced AI-driven search experience that we believe will be a game changer in the industry. We're also exploring some exciting new opportunities in AI. We're in early discussions with multiple parties to license parts of our extensive content library for AI training purposes. Additionally, we're in talks to represent AI training rights for other content owners, which could potentially add hundreds of thousands of titles to our existing library for this initiative. These developments position us at the forefront of the rapidly evolving entertainment technology landscape in AI. As we move forward, we're focusing on four key areas to drive top-line growth, expanding our distribution of SVOD, AVOD, and fast streaming channels to our OEM and tech partner network, expanding our licensing of library to those same partners, growing direct ad sales on our own and operated channels, and growing our new key revenue driver businesses, Matchpoint and podcasts. We believe this diversified approach will be the foundation for a unique, profitable streaming business with best in class margins. In conclusion, despite some temporary headwinds, we're seeing positive trends across our business overall. Our strong direct operating margins, growing viewership, expanding sales team, and innovative technology initiatives position us well for future growth. We're excited about the opportunities ahead, particularly as we approach key revenue generating seasons, continue to roll out new products, and partnerships and prepare for the release of Terrifier 3. With that, operator, let's open it up for Q&A.
spk04: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, press star one. And as a reminder, if you are using a speakerphone, please remember to pick up your handset before asking a question. And we will pause here briefly as questions are registered. The first question comes from the line of Brian Inslinger with Alliance Global Partners. You may proceed.
spk05: Great. Thanks for taking my questions. I wanted to start with getting a better understanding of the revenue trends. First, if you could explain the drop in digital distribution. What were the content delays? Specifically, if you could, I think you guys mentioned that a few times. And then is this a one-time event, an anomaly, or is this something we should expect going forward, and this is kind of the base of where your revenue is going to start to grow from.
spk01: Hey, Brian, this is Chris. I think that Eric addressed that a little bit in his remarks, but I think Yolanda and Eric, if you want to field that question.
spk00: Sure.
spk03: I'll get it started. So if you kind of look at the uh, the, the bulk of that number, right. It's probably about, so if you take it, taking out the non-recurring revenue from projection systems, which, uh, was, you know, about a million dollars or so, uh, and you take out the about 500 K, uh, on the ad supported side, I believe it's about a million and a half dollars. Um, we had, uh, in the prior year, uh, We had some large specific licensing deals that in aggregate were around a million dollars of that, that we didn't have that same licensing occurring in this quarter. Those were opportunistic one-time licenses that happened in the prior year that we just didn't have this year. We do have content to license. We had deals that were pending. They just were not closed during this particular quarter. Um, we'll see those deals, uh, in, in the current order that we're in. Uh, so, um, that's that. And then the second is we, you know, we had, uh, in that quarter in the prior year, we had, uh, multiple titles, uh, that were new release plus, uh, plus sort of the back half of the terrifier bump, uh, that we didn't have this year. Um, we did go through a gap, uh, in the calendar and the releasing year. Yolanda can give a little more color on, you know, to the extent of how many titles moved. But, you know, we had titles that moved out due to production delays and other things that were on the schedule. Yolanda, I don't know if you have any additional color for Brian on that.
spk01: Here's the question, Eric. And I think, Brian, you know, it is an anomaly. We don't expect that going forward. But you just have to realize that in the licensing business, you know, we're subject to the content pipeline. And there are a lot of timing issues that occur. And we expect to see substantial growth in that business going forward.
spk05: Let me just take a step back. I want to understand what's going on excluding digital distribution. Your revenue for streaming and digital is at a three-year low. You've got more channels that are taking with consumers. You've got 73% increase in viewership. You've got wider distribution you keep announcing. You've got several new products and services you've announced for the last year and a half. So what am I missing that excluding digital distribution that revenue seems to be, you know, I would expect it to be growing and needs to be headwinds to growth or offsets to, you know, higher growth, maybe a higher level picture.
spk03: Yeah, I would say, you know, most of our salespeople just started within, you know, the last quarter to quarter and a half. You know, the typical ramp period for those salespeople is, you know, usually around two quarters where we really see them start to hit their stride, which we are starting to see that now. Match point is the same thing, right? We have a very robust pipeline. We closed our first deal. I think we're about to close our second deal any day now. And there's many more deals like that in the pipeline. It just took longer than we had anticipated to get those sales processes and systems stood up. So I think in terms of the viewership, you're right. We've had a pretty significant surge in viewership. In the last quarter or so, and really starting in last year, we had been less aggressive on squeezing monetization out on programmatic to sort of protect our CPMs for the oncoming direct sales team. And so it's really a delicate balancing act, right? We could either, you know, we could short-term really increase revenues and, you know, lower our CPM floors and goose revenue. But that comes at the expense of higher margin, higher CPM revenue from packages the sales team sells. Conversely, if we keep them, you know, if we keep them too high, we, you know, in the short term, we have revenue, revenue, you know, challenges out of our programmatic business. So I think we're trying to strike a balance. You know, we, I think we were maybe a little too aggressive in protecting CPMs early on as that team was ramping. So I think we're finding the good balance now. That team is selling broad-based omni-channel packages, so we're less CPM sensitive. And so we're playing with that and increasing the revenue there, being more opportunistic on CPM. So I think if I want to sum all this up, it really comes back to we had a lot of sales teams ramping up and getting on board We have good pipelines of revenue coming, and I truly believe we're bouncing off the bottom of revenue now and going into a pretty robust period of growth.
spk05: Okay. One more question for me, I'll get back in the queue. Dog Whisperer obviously has been, it sounds like a home run for you guys, and I think you're almost as equally as excited about GoPro if I have the two channels right that are catalysts right now. I mean, you have others. How much revenue can someone in a range reasonably expect from a top earning channel of yours these days when fully ramped and distributed, you know, widely?
spk03: So typically, generally speaking, you know, a high-end successful channel of the type that we're doing, you know, would be in the low to mid-seven-figure range. I think Dog Whisperer is a unique property because we, in addition to having channelization rights, we have licensing rights. We have, you know, some other consumer goods rights. We have digital distribution rights. So I would say that one would be on the higher end of that scale. For things that are channelized only, you're looking at probably lower seven figures on the revenue front. That varies, obviously, depending on the success of the channel, the rate of distribution, and so on. But that's, generally speaking, where these things perform.
spk05: OK. Thanks so much for all the information.
spk04: You're welcome. The next question is from the line of Dan Kernos with Benchmark. You may proceed.
spk02: Yeah, thanks. Good afternoon. Eric, I just want to follow up on your commentary just around the marketplace. The upfronts are over now, by and large. And yeah, we all know that programmatic CPM floors got slashed. And, you know, I totally appreciate what you're trying to do with direct sales, which we've seen a lot in the industry. But obviously, you know, Netflix and Amazon and others have been pumping a ton of supply into the marketplace. And so, you know, we're starting to see some of the monetization out of you guys. It's obviously early, probably you would like to be a little bit further ahead than where you are, but I just want to understand what gives you confidence, knowing that you have more niche properties, but what gives you confidence that you're going to see sort of this nice rebound with this consolidated, you know, direct sales and programmatic effort going forward?
spk03: Sure, sure. Well, so if you think about, you know, if we were just competing on spots and docs, you know, just selling ad inventory, you know, look, we're not Netflix, right? We're a specialty enthusiast player. We have some compelling verticals, but we're not competing with the big scale general entertainment streamers on a connected TV inventory to inventory comparison, right? What we are doing is working with brands and developing, um, I I'd say more bespoke, uh, and more custom campaigns that involve things like in addition to inventory involved omni-channel podcasts, uh, display, uh, other forms of audio, email, social. and even things like events and other things. So we think that approach is, you know, protects us because those kinds of initiatives are important to brands, especially to entertainment brands like gaming, movies, and so on, which is, I think, our bread and butter. So those brands really are less, we're not really looked at as a place, hey, let's go in and buy CTV inventory for this, that, and the other. that's a piece of the mix, but our direct sales teams are really selling comprehensive packages of opportunities that include things like sponsorship and everything else. So when you look at it from that perspective, you know, you can't buy that kind of experience for your brand or your film release or your video game on an open exchange. You just can't do it. And we, so that's why we think and, you know, the demand for that is increasing and, We're going into arguably our busiest season of the year. We're probably one of the top brands in the horror vertical, for example. We'll be sold out of all available inventory for that market to Fortune 500 brands, movie studios, you name it, that are focused on that. We're getting sponsorship revenue for some very large brands for events and things like that. So I am... Very optimistic about that approach. If we were just competing on programmatic, it would be, I think you're right, that would be a much harder battle. But we're starting from a much lower base, and I think we can do lots and lots of sales and lots of growth for many years focused on this part of the industry that our team is just incredibly experienced and has been selling for collectively for you know, over 100 years of experience among everybody that's going to be doing it.
spk02: Got it. That's really helpful. And speaking of off a smaller base, I mean, the podcast is break a million a quarter this quarter. And how do you how big do you think that gets? And you mentioned political in your commentary? Is that something you guys can actually tap into? Because this year is obviously going to be bonkers.
spk03: yeah yeah so i think we're we're we're approaching that number our our podcast and we have a podcast and other bucket that we break out um uh in terms of that uh i think that that number is pretty close to that number if not exceeding it at this point um you know keep in mind right i think and i think we've we've discussed this uh previously that You know, the amount of monetization that's happening out of the podcast business today up until very recently was 100 percent programmatic. We've just started to get our first campaigns online. So we've been doing, you know, campaigns with, you know, the usual direct consumer brands, the movie studios and other things. So that business is just starting to lift off. If I had to be conservative, I'd say we're probably monetizing, you know, one directly less than 10% of that total inventory today. So there's a tremendous amount of upside growth out of that. We're also, you know, we're in the process of changing programmatic partners. We believe that could, you know, have a substantial material increase on the programmatic piece alone, right? I think we, you know, our growth, rates in that business have sort of, we've outgrown our current programmatic partnerships. And I think we're looking at expanding those and taking them to the next level. So I think you'll see a lot of growth there as well. And political piece, Eric? I'm sorry. On the political side, we are getting political through programmatic. You know, most of the, if you kind of look out there at the marketplace, this market is really probably one of the most focused demographically and regionally that's ever been done before. So, you know, I think local markets, are tending to take a big chunk of the lion's share of this election. It's less about swaying independent voters. But we are seeing our piece. We are getting a piece. We'll see a lift from that in programmatic particularly. I don't know that we'll see the same lift that you would see out of, say, you know, the broadcast conglomerates or others that are far more about regional targeting. But we will get a decent lift. I think internally we've been forecasting that, you know, we looked at prior years and I think we saw something like a, you know, 10 to 15% lift out of that. Don't know exactly how that's going to go this year because it's anyone's guess. how much is spent and where it's spent, how it's spent. But we should see a lift like that, like we did in prior years.
spk02: Got it. And just have you embedded, does your guidance include any monetization from CineSearch at all? And then lastly, on the OpEx side, obviously a lot of progress there. You said 5% to 7% more. Just curious if that's just from the offshoring and if there's sort of any other plans after that, or there's more of a balance? I think Chris has said a balance of reinvestment going forward once the revenue scale.
spk03: Yeah, I think so. If you kind of look at our optics today, you know, I mentioned during the remarks about 5% to 7%. That's identified already of things that are already underway. That's predominantly switching a variety of technology vendors. I think we've, you know, We recognize somewhere in the neighborhood of $1.6 to $1.8 million of OPEX savings, which should equal that percentage range. Those are identified. A good chunk of it's underway already, and so we would expect to realize that over the next two quarters or so. There's infrastructure changes and other things that we need to make. But this is from heavy iron compute systems, SaaS products, and other things that are core infrastructure that we're just migrating. Just due to the scale we have, we're getting cheaper prices on things. So those are already underway. The other piece of that, and I think you heard that in Lindsay's remarks, is we're holding fast on SG&A. We think we can maintain and operate our business for the foreseeable future at sort of the SG&A percentages we're at. So really, we'll see SG&A decline as we hold this as revenue increases as well. So all in, you know, I think the gross margins are looking very strong for this business with the 5% to 7% change. I think we'll be comfortably into the low 50s on the streaming side of the business, which is now the bulk of the revenue.
spk02: All right. Thanks for bearing with me, Eric. Appreciate it.
spk04: You're welcome.
spk02: Thanks, David.
spk04: There are no further questions remaining, so I'll pass the conference back over to the management team for closing remarks.
spk01: Hi, this is Chris. Thank you all for joining us again today. And please feel free to reach out to Julie Milstead with any additional questions you might have. And we look forward to speaking with you all again on our next quarterly call. Thank you.
spk04: That concludes today's conference call. Thank you for your participation. You may now disconnect your line.
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