Quarterhill Inc.

Good morning and welcome to QuarterHill's Q4 and Fiscal Year-End 2021 Financial Results Conference Call. On this morning's call, we have Brad Kidd, President and CEO, and Steve Thompson, Interim Chief Financial Officer. At this time, all participants are in listen-only mode. Following management's presentation, we will conduct a question-and-answer session during which analysts are invited to ask questions. To ask a question, please press star 1 on your touch phone to register. Should you require any assistance during the call, please press star zero. Earlier this morning, Quarter Hill issued a news release announcing its financial results for the three and 12-month periods ended December 30, 2021. This news release, along with the company's MD&A and financial statements, will be available on Quarter Hill's website and will be filed on CDAR. Certain matters discussed during today's conference call or answers that may be given to questions could constitute forward-looking statements. Actual results could differ materially from those anticipated. Risk factors that could affect results are detailed in the company's annual information form and other public filings that are available on CDAR. During this conference call, Corder Hill referred to adjusted EBITDA. Adjusted EBITDA does not have any standardized meaning prescribed by IFRS. Please refer to page 3 of the company's fiscal 2021 management discussion analysis for full cautionary notes regarding the use of forward-looking statements and non-IFRS measures. Finally, please note that all financial information provided is in Canadian dollars unless otherwise specified. I will now turn the meeting over to Mr. Kidd. Please go ahead, sir.

Thank you, and good morning, everyone. Thanks for joining us on today's call. In terms of agenda, I'll start with a look at business highlights for Q4 and the year, followed by a discussion on our strategy and priorities for 2022. After which, Steve will take a look at the key financial results. Then we'll open it up for questions. Looking at the numbers at a high level, Q4 consolidated revenue was $51.2 million, while revenue for the year was $125.7 million. Adjusted EBITDA was $878,000 in Q4 and $5 million for the year. Q4 results include a full quarterly contribution from ETC, which is reflected in the strong performance of the segment, which generated revenue of $46.5 million compared to $17.6 million in Q4 of last year. Adjusted EBITDA and ITS in Q4 was $4.1 million. For the ITS business, 2021 was characterized as a year of M&A, with a completion of three acquisitions, ETC, SensorLine, and BDS. The $150 million acquisition of ETC brought about transformational changes for Quarter Hill. It immediately scaled Quarter Hill's ITS business. It established Quarter Hill as a leader in tolling. It provided a second platform in ITS for tuck-ins and organic growth. It delivered a good integration partner for IRD, and it also onboarded a deep and experienced ITS team with a sales pipeline of more than $4 billion and strong organic growth potential. ETC completed some of the largest contracts in its history in 2021, resulting in a record year for order bookings, and the momentum has carried over into 2022 with two new deals announced already this year. In Q3, just prior to the acquisition, ETC signed a contract to provide back office ERP solutions to the Ohio River Bridges Joint Board. The base value of the 10-year agreement is approximately $100 million, with options to extend it another six years beyond that. In December, ETC announced a contract with the Central Texas Regional Mobility Authority, or CTRMA, also valued at approximately $100 million over a six-year base period. Options on that agreement could extend it another four years. BTC's track record of securing option years has been very strong, so we would expect the total value of these contracts to be much higher over their lifetimes. In 2022, so far, we have completed two new agreements. First is a nine-year, $60 million subcontract agreement with WSP USA to provide our back office system for the 405 express lanes in Orange County, California. Second is a two-year, $5 million contract to implement and operate express lanes in Alameda County, California. This is a short-term interim solution while the toll agency finalizes procurement plans for the expansion of the roadway network and integration of a permanent tolling solution. Another key development at ETC in 2021 was the appointment of Kevin Holbert as CEO. Kevin is an accomplished leader with more than 30 years in the ITS industry and almost 20 of those years at ETC. He knows both the industry and the ETC business inside and out, and has been an instrumental person in bringing new business and new talent to the company. He is the right person to lead ETC today as it seeks to capitalize on its large pipeline and explore collaboration with IRD. IRD has also had a record year for order bookings in 2021, with new contracts in New York State, Illinois, Idaho, Oklahoma, and Hawaii, among others, resulting in a record backlog at the end of the year. On the implementation front, considerable work was done in Indiana, which has been the company's largest project over the past 18 months. IRD is deploying its way and motion systems to promote safer roadways and with an eye to using its data collection expertise to facilitate direct enforcement capabilities in the future. Earlier this month, IRD announced another $5 million contract with Indiana, further extending this relationship. Way and motion systems were also deployed in Ohio in 2021. with the potential for IRD's technology to be used in the future to enable weight-based tolling for trucks. In Virginia, IRD's tax system, which is used to identify unsafe tires at highway speeds, was responsible for removing 13,000 faulty tires from the road in 2021. Tax is now deployed in 12 states, and these results in Virginia have garnered interest from several other neighboring states. IRD made two tuck-in acquisitions in 2021, SensorLine and BDS, which have expanded the company's enforcement offerings as well as their presence in Europe. The transactions led to the establishment of IRD Europe and the hiring of HIMO HALB in January to lead the organization. HIMO's priorities for 2022 are integration and growth. They'll have to further integrate processes, functions, and development across the European business while driving growth into safety and enforcement products in the IRD portfolio, such as red light and speed cameras, sensors, and traffic intersection control solutions. Looking now at YLAN, our licensing business, it was a year characterized by a number of licensing and patent acquisition successes while contending with challenges posed by the pandemic. Throughout the year, COVID was a hurdle for licensing and business development travel, preventing in-person meetings. and the courts experienced continued COVID-related delays and rescheduling as they worked through their backlog of cases. Despite this, Wyland completed several licensing deals with the likes of LG, Motorola, and Marvell, among others, and generated positive adjusted EBITDA for the year as a whole, which was Wyland's fourth positive adjusted EBITDA in the past five years. Wyland's new subsidiary, Universal Connectivity Technologies, Inc., acquired a portfolio of patents in Q4 2021 from a leading semiconductor company. The acquired patents relate to a wired connectivity, including various USB-C technologies used in applications such as desktop and laptop computers, tablets, mobile phones, gaming consoles, and smart TVs. This new portfolio establishes a new licensing program addressing several mid-market segments. In terms of ongoing litigation subsequent to 2021 near end, We received a decision from the Court of Appeals for the Federal Circuit, or CAFC, in the US in the case against Apple Incorporated. As noted in our press release on February 4th, we view that appeal decision as favorable to YLIN. The CAFC has remanded the case back to the district court for another trial focusing on the amount of damages payable. Alaris Innovations Incorporated, a YLIN subsidiary, also has pending litigation against Apple in Germany. There are three infringement hearings scheduled during 2022 corresponding to the three patents in suit. In addition to these cases, Y-Land and Ford subsidiaries have several other litigations and ongoing licensing discussions that it expects to move forward with in 2022. In December, we announced the strategic review for the Y-Land business, and we're encouraged by the inbound interest that we've received since the announcement was made. Wyland is one of the licensing industry's leading companies, having established a strong track record over the past 15 years. Wyland has a diverse collection of patent portfolios that have been successfully licensed to many companies around the world by a focused and experienced team of IP professionals. The process is underway, and Stout has been hired as the financial advisor to run the review. Stout is a global investment bank and advisory firm that has served companies in more than 80 countries over its 30-year history. With its substantial experience in IP transactions, we believe that Stout will be an excellent advisor to assist with the YLAN strategic review process. Turning now to our strategy and priorities for 2022 and beyond. For several years, we have spoken of our focus on ITS, and in 2022, we'll continue to transition towards that of a pure-play ITS business. In my opinion, there has never been a better time to be in ITS. The industry has multiple market tailwinds, including first, the simple need for new and upgraded infrastructure. Second, an inadequate funding from traditional sources like the gas tax, which will be increasingly supplemented by newer tech-based user-driven solutions like tolling and enforcement. Third, the U.S. federal government's infrastructure bill, which will see it allocate billions for new infrastructure projects in the coming years, which is a trend that we're seeing worldwide. Finally, policy initiatives related to Sustainability objectives, traffic management, and enhanced safety are driving governments at all levels to look at tech-based infrastructure solutions. These tailwinds are having the effect of increasing the industry outlook for growth into double-digit percentages. Historically, IT has screwed a rate in the neighborhood of 5% per year, but over the next several years, it is expected that the industry could throw out a CAGR of up to 15%. Cordero is well-positioned to capitalize on this growth. We have two strong platform businesses in ETC and IRD. Both have talented teams and a strong reputation in their respective fields, which for ATC is tolling and priority is commercial vehicle operations and enforcement. Both are coming off record years in terms of new order bookings, having ground backlogs and sales pipelines, and both have internally generated pipelines for M&A to go with the external deal flow sources. So against this backdrop, our key priorities in 2022 are Our first to drive organic growth with the execution on new project implementations and sales pipeline conversion. Second, execute on our M&A opportunities. And third, integrate further our ITS businesses. On the M&A front, we have previously spoken of a commitment to deploy $400 million over five years on M&A. And we continue to work towards this goal. In 2021, we deployed $160 million of capital on M&A. And in the fall, we added a $57.5 million capital added $57.5 million to the balance sheet with a convertible dev insurer financing. Along with our working capital and additional flexibility in our debt facility, we have a strong balance sheet to deliver on our M&A objectives, and we have good deal flow with transactions of all sizes. Our M&A will focus on three areas. First, scaling existing businesses, which could be either international or North America. Second, adding product service capabilities, including technologies or operational assets that reinforce the markets we're already in. Or a third, diversifying into new customer bases or in markets, which typically will also leverage our existing solutions. On the integration front, while IRD and ETC will continue to operate with their unique branding, we see lots of opportunities for the businesses to work together and leverage one another's strengths. With cost synergies, there are some savings to be had in certain administrative areas, But by and large, the businesses are in fairly unique verticals and operating independently. With operational synergies, we are already starting to get some talent benefits between the two companies. Project implementation timelines for either IRD or ETC can lead to a spike in the need for engineering or other skill sets that can then tail off over time. The businesses are thinking about that talent pool collectively and how they could start to harmonize the need for these specialized skill sets. Regarding technology roadmaps and product plans for the two businesses, even though they are focused on different areas, there are some foundational types of technology that if developed together can benefit both. Computer vision is one example. It is expected that over time the industry will move away from transponder reading to using more intelligent cameras to identify vehicles. Broadly speaking, computer vision can enable this. Both businesses had plans to make investment in this technology so we can work together to better maximize that investment. On the revenue side, there have been times in the past when ETC partnered with IRD, and we'll see more of that going forward. Already, there are a number of international deals that IRD has insights into for which ETC could potentially play a role. In the U.S., we are seeing some places where there is overlap in the customer pools with select state or local entities. And it's still in early days, but ETC is starting to see opportunities where IRD's traffic management solutions could form part of a more holistic offering to the customer. In summary, we're very pleased to see how the relationship between the two businesses has developed so far, and we have only scratched the surface of the potential collaboration between the two. Our recent contract lens and ITS suggest we see growth in 2022 revenue from our Q4 2021 run rate level, with the new revenue coming on board more than offsetting a few projects that are rolling off this year. In addition, we think that adjusted EBITDA margins in 2022 should resemble those in Q4 but will expand in subsequent years towards a targeted level of 15% as some of those major projects move into the operations phase. Finally, as our business continues to evolve, we'll look to add leadership and expertise to help us execute on our strategy and capitalize on the opportunity in IPS. Along these lines, at this year's annual meeting on April 21st, we're looking to add two new board members, Rusty Lewis and Pamela Steer. Rusty is a veteran with the ITS industry and played an instrumental role in creating and leading Transcore, one of the industry's leading tolling companies. Pamela has more than 20 years of experience in accounting and finance from a variety of public and private corporations and professional services providers, including C-suite experience and transaction processing, which makes her well-positioned to provide insights into our tolling back office systems and interoperability opportunities. More information on both can be found in our circular, which is now available on our website. We look forward to their contributions as we pursue both organic and acquisition-related growth opportunities for the business. With that, I'll turn it over to Steve to take a closer look at our financials.

Thank you, Brett. Good morning, everyone. I'll take a look at key consolidated numbers as well as numbers from our ITF and licensing segments. Starting at the top line, consolidated revenue in Q4 was $51.2 million and $125.7 million for the year. ITS revenue in Q4 included a full quarter of contribution from ETC and was significantly higher at $46.5 million compared to $17.6 million in Q4 2020. Q4 2021 revenue also included revenue from SensorLine and VDS, which were acquired earlier in 2021. The Central Texas and Orange County contracts represent two of the three opportunities mentioned on Quarter Hill's last conference call where ETC has been selected as vendor of choice but had not yet signed a contract. At the time, we were either in the standard protest period post-election or we're in the final contract negotiating stage. Regarding the third opportunity, we're currently in contract negotiations and expect to announce completion in due course. Licensing revenue was up in Q4 compared to Q4 last year, but down year over year due to significant licensing activity in Q3 of 2020. Despite the headwinds related to COVID-19, Wyland continues to show it can complete agreements in a challenging environment while simultaneously planning for the future and adding to its patent portfolio. Consolidated gross margin was 24% in Q4 and 30% for the year. ITS segment gross margin was 28% in Q4 and 34% for the year. Gross margin in ITS can fluctuate depending primarily on the nature of the projects underway during the period and their related margin profile. In addition, since more than half our ITS revenues are denominated in U.S. dollars, currency volatility between the U.S. and Canadian dollar can impact margins. As we move through the initial implementation phase of projects with Ohio River Bridges, Central Texas, and Orange County, margins in 2022 will reflect that in the initial implementation years. Usually the first two, revenue tends to have a lower gross margin in a range of 10 to 15%, while in the subsequent operational years of those contracts, revenue has a higher gross margin in a range of 30%. to 50%, with the higher end largely dependent on the level of change orders involved. The gross margin at Weiland will fluctuate depending primarily on the level of litigation and contingent legal and partner costs incurred in a respective period relative to revenue generated. For the full year, Weiland had gross margin of 15%. Total consolidated operating expenses were higher year over year in both Q4 and the full year period. The increase in operating expenses was primarily driven by the addition of the cost base of sensor line, BDS, and ETC, as well as by special charges which primarily represented acquisition-related costs. During 2022, we will take steps to establish an optimal cost structure for the business as we continue the shift towards more of an operating company structure versus that of a whole cove with operating entities beneath it. 2022 will be a bit of a transition year in that respect. Consolidated adjusted EBITDA in Q4 was $878,005 million for the full-year period. On a segmented basis, the ITS business generated adjusted EBITDA of $4.1 million in Q4 and $12.7 million for 2021. Adjusted EBITDA benefits from the addition of ETC, sensor line, and BDS via acquisition. However, those increases were offset by a high-margin project in Indiana, which occurred during the second half of 2020. Government expense relief programs that were in place in 2020 due to COVID-19 and foreign exchange fluctuations, which negatively impacted revenue and margins in 2021. Weiland's adjusted EBITDA for 2021 was 1.2 million, demonstrating its ability to generate positive margin on more modest levels of revenue and which reflects the leaner business model put into place in recent years. Cash generated from operations was $794,000 in Q4, and cash used in operations for the year was $13.3 million. Cash, cash equivalents, and short-term investments were $72.6 million at December 31, 2021, compared to $141.3 million at the end of the prior year. During 2021, we used appropriately $88.2 million of cash, including transaction costs. from the balance sheet on the acquisition of ETC, SensorLine, and VDS. Working capital stood at 105.7 million at year end. We had several positive developments regarding our capital structure in 2021, which were the addition of a debt facility totaling approximately 82 million, of which 75 million was used for the ETC acquisition, the filing of a preliminary shelf prospectus with capacity to raise up to $200 million, million over a 25-month period, and we also raised $57.5 million of convertible debentures in October. Collectively, these give us further flexibility and resources to pursue M&A. Regarding the return of capital to shareholders, we continue our quarterly dividend payments in Q4, and in our March 10th press release, we announced details of our next dividend payments. The Board of Directors has declared an eligible dividend of 1.25 cents per share payable on April 8, 2022 for shareholders of record on March 18, 2022. In closing, we remain well-positioned to continue to execute our M&A strategy. We have a strong balance sheet today with cash and working capital, and we have three operating companies capable of generating cash to further support the ITS acquisition strategy. ITS revenue comes with a more steady and predictable profile, which we believe should result in Quarter Hill elevating its profile in the investment community, receiving a valuation consistent with other public ITS companies at scale, and ultimately unlocking growth in shareholder value. This concludes my review of the financial results, and I'll now turn the call over to the operator for Q&A. Thank you.

Thank you, sir. Ladies and gentlemen, will we now conduct the question and answer session? If you'd like to ask a question, press star, then the number one on your telephone keypad. If you'd like to withdraw your question, press star, too. If you're using a speakerphone, please leave the answer before pressing any keys. One moment, please, for your first question. Your first question comes from Steve Lee with Raymond James. Please go ahead.

Thanks, guys. A couple of questions for me. First on licensing. So now that the sales process is underway, are you still out there signing licenses and therefore 2022 is going to be a normal year for licensing? Or should we expect licensing activity to be down substantially? Thanks.

Hi Stephen, thanks for joining. What I'll say is that we did announce the strategic review and the process is underway, but YLAN is being run as the strong business that it is. So we'll continue to seek licenses and work the business as we always have historically. All right. That's good to hear.

And on ITS, so we did a margin in the quarter with a full quarter of ETC. It was high single digits. Given the number of new contract wins and your prepared remarks about lower margins early on, so is that high single-digit, is that a good margin level for the entire year, or you still expect quarterly progression through the year?

Yeah, we do think that the numbers that you see in Q4 on the margin side are probably indicative for the overall year. There's a couple of things that relate to that. One is that with the new WINS, we do have a much higher proportion of implementation revenue in the ITS business, which as we indicated tends to be lower in margin. And then there are still some of those headwinds that we're looking at on the supply chain side and or wage inflation. Over time, as we were talking about, we see 15% EBITDA margins as the right target and expectation in the coming years and as those contracts mature.

Thank you.

Thank you. Your next question comes from Gavin Fairweather with Cormac. Please go ahead.

Oh, hey, good morning. I thought I'd start out just on the infrastructure bill. I guess it's been about 100 days since that was passed. Curiously, you know, to what extent that's changing your conversations with customers, whether it's, you know, changing any activity in the pipeline. Just curious for, you know, how that's influencing the demand picture there.

Yeah. Hi, Gavin. It is starting to work its way through, as you might expect. These sorts of bills do take time to reach the ultimate states. Although, Some of the states that we've talked to already had provisions in place, plans ready to go and ready to move out the door. So I think especially on the IRD side of the business, we're seeing more activity as it relates to it because the funds are now more available. The ETC pipeline was already very strong prior to the infrastructure bill and will just be reinforced by the activity that's underway.

Got it. And then maybe on ETC on the new contracts, you know, obviously 160 million is a big number. How should we think about, number one, the revenue ramp of these new contracts and the timing of revenue starting to flow? And secondly, to what extent is there front end loading on these contracts related to implementation services? I think if I did the math right, you know, if it was steady across all years, it'd be 20 million a year. But I suspect that the, you know, the early years will be a bit higher.

Yeah, it's a good question, and actually there's variability amongst the contracts on the revenue profile. Generally speaking, you will see some amount of front-loading over the first couple of years around implementation, but there are times that programs and implementation itself will be spread across several years if we're talking about multiple roadways or different phases of the project. So it will vary a bit. But I think the average that you're talking about there over time is probably the right one to think about, and given some of the variability in the programs, probably not a bad assumption. We are working through, as it relates to timing and ramp-up, there are always some things there to manage, but we've got notice to proceed on all those contracts and are getting underway with each.

And then lastly for me, obviously with the strategic review of YLAN and becoming an ITS pure play, the plan is to reduce the corporate office and kind of dissolve that whole co-structure. Have you quantified the cost reductions that you'd be looking to achieve as that plays through there?

Excuse me. We haven't yet. I think what I can say is that we We'll be looking to reduce the size of actual dollars, but also even more so the percentage of revenue as the ITS businesses grow organically and as we continue to do M&A there. I think we will see... perhaps some modest dollar reduction in 2022. But given that we will, assuming a successful result on the YLM process, which we do expect that we will still hold them for a good portion of the year, And so a number of things that still have to take place as a result of that. And plus, we're still underway on the implementation, or sorry, the integration planning side to quantify some of the other areas, which will also, some of those will take some time, especially if you're looking at different kinds of support contracts and things like that that would be renegotiated. So don't have numbers to share yet for 23, but for 22, we would expect to see, again, some some modest declines in the overall cost. And then what we'll be doing from an integration standpoint is looking across, obviously, all the components and trying to optimize and have the right degree of support and overhead across all the units. So that will include looking beyond the corporate structure and into the units and how they operate as well.

Great. That's helpful.

I'll pass the line. Thank you.

Thank you. Your next question comes from Doug Taylor with Canaccord. Please go ahead.

Yeah, thank you. Good morning. One primary question for me. I'm just trying to understand your comments about the margins in the ITS business relative to the original expectations for ETC to contribute, I believe it was $95 to $120 million in revenue and $12.5 to $15 million in adjusted EBITDA. Are you signaling here that with the recent contract wins, perhaps revenue is maybe higher than your original expectations but margins lower given the mix of new contracts and implementation work? Can you help me with that?

Yeah, it's a good question, and I think probably – probably a good way good way to say it i think that we feel good we feel good about the growth that we're going to see as we indicated in the upfront comments um you know we would expect um you know some some modest growth off of the uh off of of an annualized version of q4 uh in 2021 uh related to um you know to the new contracts that are being signed and then as it relates to you know to ebitda the um Yeah, that mix combined with some of the other areas that I referred to on supply chain and wages are forming a little bit more of a constraint on the margin side. Does that help?

Yes, it does. So are you saying that it's still possible ETC will generate $12.5 to $15 million, but it'll be a different margin profile than what might have been laid out at the outset?

Really don't want to get into specific guidance along those lines because of some of the moving parts that we talked about before in terms of the timing of ramp up and then some of the other variables that are coming in. But I just go back to the kind of modest growth off of an annualized Q4 and then a similar margin profile.

So then taking the Q4 kind of run rate that you've established here, I mean, would you still expect, you know, seasonally stronger Q2, Q3 in terms of the IRD business? And so to use this as a baseline and a little bit stronger through the middle of the year, but arriving at the same margin profile and then expanding in the year and the years to come after that, is that the right way to think about it?

Well, I have to get back to you on the seasonality piece for IRD. I need to take a closer look at some of the incoming deals and the timeframe associated with it. So I don't know if there's necessarily a pattern to interpret there, at least for this year and given the amount of signings that they had as well. So not sure if I can confirm that, but we can get a better sense to you from a closer look at the deals we've signed in the backlog.

Okay. Thank you. I'll pass the line. Thank you.

Thank you. Your next question comes from Todd Copeland with CIBC. Please go ahead.

Hi. Good morning. I just follow up on that margin question, if I could, and then I had a couple of follow-ups. When you say similar margin profile, what is that actually referring to? To what we achieved in Q4. I see. So you're saying... Modest growth off the $51 million annualized and a relatively comparable margin given inflation, supply chain, et cetera. That's essentially the message? Yeah, that's right. Okay. And that includes all these new contracts that you've spoken about as well, whether it's $20 million a year or spread out or front-end load or anything like that. That's all embedded in that discussion. Yes, that's right. Okay. Thank you for that. In terms of the balance sheet for all acquisitions and capital activities, is it up to date as of the end of the year? Are there any pro forma adjustments or cash and debt as presented? That's essentially where it is now.

I'll let Steve jump in on this, but what I will say just from a balancing standpoint and kind of capacity as it relates to M&A, we feel good about the position that we're in. We've got a strong balance sheet overall and that we've got cash and debt facility and other things that we can do to act on the pipeline that we have. And then I'll let Steve kind of refer to the more detailed parts of the question.

Yeah, hi, Todd. It's relatively the same right now as the structure you're seeing at 2021. There's been no major material events in that area.

Okay, that's great. Appreciate that, Culler. And then just on YLAN and strategic review, it sounds like you've had some interest in the business, so our takeaway should be you feel pretty good about, uh, the chances of, of selling, selling that business, uh, at a, uh, at a price you, you, you, you, you deem to be fair. Is that, is that the messaging on strategic review?

Um, yes. I mean, we, since we announced in, in December, we, we had, um, we've had, you know, very nice inbound interest in it. And, uh, in the conversations we had in the selection of, uh, of an advisor and got a lot of good insights from them and especially Stout as to the attractiveness of the business. So we do feel good about a positive outcome there for lots of different reasons. Again, Wyland has a track record of performance. They're one of the best licensing companies in the industry and have a history of generating very nice financial returns. So when you look at that, the processes they have, of course, the portfolio of patents that they have and the team that's in place, we just believe that there's a lot to like in that business. And then look at the broader market activity as well, the money that's looking for attractive assets like that. And in this particular IP space, we just think it lines up well for a successful outcome.

Okay. This is... by no means, this is more of a sort of editorial observation as opposed to drawing the parallel specifically to YLAN. But I thought of the BlackBerry patent sale, you know, I wouldn't have necessarily described that as a pristine outcome. It was fairly slow and dragged out and the price was just okay. this seems like, you know, you're getting a lot better interest than they ended up getting, or at least that's my perception of what happened at BlackBerry. So take that for what it's worth. But appreciate your answers here. Thanks a lot.

Yeah, and I will say, yeah, thank you, too. I appreciate your joining and, yeah, and the One thing to stress there kind of relative to BlackBerry is that YLN, a complete business with team and strong portfolio and processes and methodology for optimizing returns. But, yeah, certainly appreciate the questions there.

Yeah, that's a good point on the business being established. If PE or other types of financial firms are considering it, that's certainly a very important point. Thanks a lot.

Thank you. As we have no further questions at this time, I will turn the call over to Mr. Kidd for closing comments.

Okay. Thank you very much and thanks everyone for joining and for the questions today. Again, just want to reiterate some things that I said before about the attractiveness of the space that we're moving into as it relates to ITS and this transition to a pure play in that regard. As I mentioned before, I just don't think there's been a better time to be in ITS. And having seen a number of different industry verticals over time, I rarely see anything as attractive as what we're seeing here in terms of the tailwinds on the market side and really undeniable trends that we just don't see changing. And then we've got some great platforms to build from that have very strong momentum in the market, strong technology, and strong teams as well. And then we will expect to see some growth here in 22 as we were talking about before related to the new business signings that both IRD and ETC have had. And then margins on the ITS business similar to what we're seeing on the Q4 ITS margins as well. So we see a lot of momentum going into this year in ITS. and just even bigger and better things to come down the road. So appreciate everybody joining again today and look forward to talking to you again very soon.

Ladies and gentlemen, this concludes your conference call for today.

We thank you for participating and ask that you please disconnect your lines. Have a great day.