TECSYS Inc.

Good morning, everyone. Welcome to Texas second quarter fiscal year 2025 results conference call. Please note that the complete second quarter report including MD&A and financial statements were filed on Cedar Plus after market close yesterday. All dollar amounts are expressed in Canadian currency and are prepared in accordance with international financial reporting standards. The company has added a companion presentation to today's call. which is available on their website at www.texas.com slash investors. Some of the statements in this conference call, including the question and answer period, may include forward-looking statements that are based on management's belief and assumptions. Actual results may differ materially from such statements. I would like to remind everyone that this call is being recorded on Thursday, December 5, 2024, at 8.30 a.m. Eastern Time. I would now like to turn the conference over to Mr. Peter Berriton, Chief Executive Officer at Texas. Please go ahead, sir.

Thank you. Good morning, everyone. Joining me today is Mark Bentley, our Chief Financial Officer. We appreciate you joining us for today's call. We continue to see strong SAS revenue growth, which was up 34% in our second fiscal quarter, and SAS bookings were solid across our market segments. This quarter, we also reached two key milestones that I want to highlight. First, our annual recurring revenue reached $100 million, reflecting the strength of our SaaS model. And second, our SaaS RPOs surpassed $200 million, a testament to the solid foundation we're building through bookings and renewals. We see these metrics as indicators of our business health, reflecting steady progress toward our long-term value creation goals. I'd like to take a moment to summarize the key events of our Q2 and first half results for fiscal 25. Mark will then walk us through the financial results in more detail. And finally, I will comment on our outlook, followed by a Q&A session. If you're following along on our companion presentation, I'll be speaking to slide three. In terms of SaaS bookings, we landed at $3.7 million for the quarter, matching a strong comp from Q2 of last year. This translates into year-to-date SAS bookings up 20% over last year and up 28% on a trailing 12-month basis, driven by participation across all of our key verticals. Healthcare drove our Q2 bookings activity, led by significant migration and expansion deals. This performance came despite major disruptions in the healthcare market, notably the saline shortage resulting from Hurricane Helen's impact on Baxter's North Cove plant in North Carolina. plant supplies roughly 60% of the saline in the U.S., and taking that plant offline has been a significant distraction to the healthcare market. In converging distribution, we recently announced that Atwoods Ranch and Homes selected Texas Order Dynamics product for retail order management, and we closed deals in the quarter across our geographical markets, including North America, Europe, and Australia. Our RPO is up 39% year over year, reflecting steady bookings and renewals. Adjusted EBITDA strengthened to $2.9 million, up significantly from Q2 last year, and up 32% year to date. Additionally, we've continued to buy back shares under our normal course issuer bid, spending $2.1 million on share buybacks in Q2. In October, we rolled out version 24.2 of our elite I believe our flagship product. This release focuses on tools that help customers solve real-world problems with better data. I'm highlighting this release because it captures what we're trying to do with our solutions, using data to deliver value in new and innovative ways. In a very noisy AI space, we're identifying and delivering what we call purpose-driven innovation with specific use cases that have a real impact on our customers' businesses. We believe that innovation with this lens makes our solutions essential to an organization's operations and opens doors to new business opportunities. The importance of these advancements was reinforced last month with our inclusion as a leader in the 2024 WMS Technology Value Matrix published by Nucleus Research, a global technology research and advisory firm. Also just released, Gartner's Top 25 Healthcare Supply Chains for 2024, We're proud that 40% of the providers on the list are Texas customers. We're also accelerating our market access across a thriving partner ecosystem. Co-marketing with Locus Robotics, OneView Commerce, Tracelink, Exotech, and Sedlac, along with our recent inclusion into the Shopify App Store, highlights our growing reach and value in the market. This effort is proving valuable, with about a third of our deals being partner-influenced over the last 12 months. Since our last results call, we've shared the stage with Vanderbilt Health, AdventHealth, TriVenture Logistics, and Australian retailer Forever New on joint webinars. Forbes also published a highlight or a spotlight on the work done at St. Luke's Health in Boise. You may recall from last quarter, I mentioned that we're ramping up user groups and industry workshops. I'm happy to share that our most recent pharmacy summer took place in Newport Beach, California in October. And it was a great success, helping to drive innovation in the pharmacy supply chain. We're working on our next summit taking place in spring of 2025 in Philadelphia. And so as we continue to invest in the products we sell and in our go-to-market strategy, Texas is proven to be among the best cloud-based solutions available in the markets that we serve. The steady growth we have experienced affirms our vision and strategy for shareholder value. Mark will now provide further details on our second quarter, and year-to-date financial results, as well as financial guidance on several key metrics.

Thank you, Peter. I'll start with slide four and focus first on SAS. SAS revenue growth was 34%, reaching $16.1 million. Highlighting the continued scaling of our SAS business, SAS revenue represented 23% of total revenue in Q2 of fiscal 2023. That was just two years ago. And now it represents 38% of total Q2 revenue. The strong underlying growth in SAS revenue is somewhat muted by year-over-year fluctuation in hardware revenue. It's important to note that when hardware revenue is excluded, our overall revenue growth rate in Q2 jumps to 13%. Professional services revenue for the second quarter was $14.1 million, up 10% from last year. We anticipate that professional services revenue will remain variable, influenced by the timing of project deliveries and the level of involvement from our integration partners. For the second quarter fiscal 25, gross margin was 48%, compared to 44% in the same period last year. The key drivers here are increasing SAS margins, as well as strengthened professional services margins in the current quarter. Net profit in the quarter was $758,000 compared to a net loss of $340,000 in the same quarter last year. Basic and fully diluted earnings per share were $0.05 in the current quarter compared to a loss of $0.02 in the prior year quarter. Adjusted EBITDA, as Peter mentioned, was $2.9 million in Q2 of fiscal 25. That compared to $1.0 million in the same quarter last year. Turning briefly to our year-to-date highlights, and that's slide five in the companion deck, SAS revenue for the first half of fiscal 2025 was $31.4 million. That was up 33% from the same period last year. Our total revenue reached $84.7 million, a 2% increase from last year. Excluding hardware, overall revenue grew by 11%. For the first half of fiscal 25, our adjusted EBITDA increased to $5.5 million. That was up from $4.2 million in the same period last year. And fully diluted earnings per share for the first half were $0.10 compared to $0.06 in the first half of last year. We ended the quarter with a solid balance sheet. We had cash and short-term investments of $28.3 million and no debt. As Peter mentioned, we use about $2.1 million of cash in the quarter to buy shares back under our NCIB. Additionally, the board yesterday approved a quarterly dividend of $0.085 a share. Turning to financial guidance on slide six now of the companion deck, Texas is maintaining fiscal 25 guidance on SAS revenue growth at 30% to 32%. as well as fiscal 25 and fiscal 26 adjusted EBITDA margins at 8 to 9% and 10 to 11%, respectively. Based on the ongoing unpredictability of hardware revenue and a rapidly evolving business model that's impacting professional services, Texas is revising fiscal 2025 total revenue guidance to roughly flat. I'll now turn the call back to Peter to provide some outlook comments.

Thanks, Mark. Texas second quarter results reflect the consistent execution momentum we've built. As mentioned earlier, our existing footprint in key markets reinforces our confidence that we're well positioned to upsell and cross-sell within healthcare. Our value proposition in pharmacy is compelling, and there is heightened interest in this area. We believe we are uniquely positioned to capitalize on this opportunity. We continue to see this as an important growth engine for us. Our converging and general distribution business also represents a substantial market opportunity. We are ready to pursue new marketplaces and geographies within this space. The current discussion around tariffs could impact some of the sub-segments we serve in general distribution, and we are following the developments closely. We believe, however, that most of the markets we serve will not be impacted, and we will focus on those unaffected markets. We will continue to invest to drive growth in a market that is changing. changes spurred by legacy systems, digital adoption, and a shifting geopolitical landscape. We often see change acting as an accelerant for supply chain transformation, so we will find those opportunities and capitalize on them as they emerge. We are pleased that our pipeline is robust and we continue to see strong buyer intent across our verticals. And so in summary, I want to remind analysts and investors of our key theme for fiscal 25. First, an emphasis on continuing to refine our SaaS software so that it is easy to use and upgrade, and even easier to recommend to peers. Second, a continued strategic partnership approach, allowing us to tap into new opportunities and fuel our scalability around the world. Third, we are committed to harnessing the full potential of data, to drive value and innovation across our solutions. A final point I'd like to stress across our markets will continue to prioritize customer satisfaction and success. We have long stood by the philosophy of customers for life. A big part of that formula is to deliver value quickly, stay connected, and expand on the value delivered. With that, we will open the call up for questions. Thank you.

Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press star, followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star, followed by the two. If you are using a speakerphone, please lift a hand up before pressing any keys. One moment, please, for your first question. Your first question comes from Amir Azad with Benetton Capital Markets. Your line is now open.

Peter and Mark, good morning. Thanks for taking my question. Good morning. Maybe the first one is unrelated to the quarter. In your updated investor deck this morning, I see that you guys have raised your projected SAS margins for fiscal 2027 and fiscal 2028 to 70% and 75%. And I believe the previous range was 68% and 70%. Could you walk us through the key dynamics behind this revision and what's driving that increased confidence?

Sure. I mean, as we've gone through the transition, you know, well, let's put it this way. We've invested pretty heavily in, you know, the back end of our whole product line, the whole sort of server side and, you know, the back end public cloud infrastructure side of our product. And as we have, and we're now in a position where we've got a substantial portion of our user base, you know, you know, public cloud infrastructure platform. We're already seeing margins on, you know, those clients, you know, in the 75% and even north of 75% range. So we've now sort of done an analysis to say, okay, and how long is it going to take the clients that are on the older infrastructure that are, you know, pulling down the average margins, how long is it going to take them to migrate forward into the newest infrastructure that is better for them and better for us. And as we've completed that analysis, we can see that, you know, over the next couple of years, we're going to end up in a position where the vast majority of the clients running on our SaaS platform are, you know, sitting in that more modern, more efficient infrastructure. So as a result, we can see, you know, because we already have a whole cohort of clients that's in that sort of 75% or above you know, margin environment, we can see that that transition to that, you know, for the rest of them is just going to, you know, move the average up there considerably quicker than we originally anticipated.

Thanks. That's fantastic, Colin. On the revised guidance, I think, Mark, you cited the hardware revenues, which I think everybody understands. Then you go rapidly evolving business model affecting professional services. Can you clarify why professional services are being impacted more than maintenance and support? I would have expected maintenance and support to be the culprit, I guess, as opposed to PS, and I see your number on PS for the quarter. It's not bad. It's, you know, like within the 14 to 15 that you said, like, last quarter.

Yeah, so two sort of parts of that question. One is around maintenance and support and ones around, in a way, around professional services. You're spot on on maintenance and support. You know, that decline we expect to happen just as the transition to SaaS continues and legacy maintenance support customers, you know, migrate onto the SaaS platform. And Q2 in that regard had a little bit of a blip in it in terms of some third-party maintenance recognition timing in a comparable quarter from the prior year. But if you look at the year-to-date, sort of trend on maintenance and support, you know, was down about 5%. And that's kind of how we think about, you know, that line kind of moving out in the future directionally, more so than that, you know, steeper 13% decline in the current quarter. But in terms of professional services, I think, you know, what's kind of changing in our world there is primarily a couple things. You know, number one, our partner ecosystem continues to evolve and we think that's going to continue. And that means some proportion of our professional services are going to be delivered by ecosystem partners. And we actually love that. We like that model. We want that to happen. There's a lot of synergy around creating that environment and opportunities arise and the word gets out broader. Some of these partners are quite entrenched with customers and prospects. And so it's just kind of a helpful way to develop growth in general for a platform, you know, for our top line SaaS revenue growth. So that's one thing, the partner ecosystem, you know, dynamic. The other thing I think, Emer, is that, you know, what we're learning and, you know, as we get better at this and invest more on the platform, as Peter was just describing earlier, as we invest more on that platform, you know, what we're finding is that it's easier and easier to uplift these customers. When they're on the latest technology stack in our mainline, you know, elite product offering, the upgrades are, yeah, they're much easier than, you know, the legacy upgrades of being on old legacy on-prem software that you're moving versions on where you had, you know, massive upgrade projects. And we actually see that as, you know, as a really good thing. Again, it's supportive of our top line SaaS revenue growth, but it will mean that, you know, there will be a moderation of professional services revenue growth going forward, we expect. We don't expect a decline, but we expect it to not be growing, you know, nearly as quickly as our SaaS revenue. Okay. Understood.

Understood. That's very good, Keller. Then I might have missed Peter's comments in the front end on health, the industry being, I guess, preoccupied. But there were notable clients that you guys, like, spoke to during the quarter in health, right? Sorry, what was the question? There were what? There were not any notable client wins that you could speak to during the quarter in health, right? You were mentioning, I missed the front-end comments on... Yeah, no, I would agree with that.

There were not. I mean, there were notable expansions, notable migrations. We're actually pretty pleased and, frankly, relieved with the overall activity we were able to book in health care in the quarter. But... You know, I mean, August is pretty quiet. And as we came into September, that Baxter plant got taken out. I mean, I was at a healthcare conference in mid-October. And, you know, quite a number, probably, I don't know, 50 or 60 heads of hospital supply chains were at the conference. And, you know, most of them were spending several hours every day trying to figure out how to navigate the shortage of signaling. You know, I mean, you may have read, they've literally gone to using gatorade in hospitals to... rather than using an IV drip because they just don't have enough saline. So Gatorade and a long straw, and you hopefully just wait for someone to rehydrate. So it is a tough situation. There's an overconcentration in the supply chain around certain key low-margin products, and saline is certainly one of them. That plant is expected to be back. It's coming back online now. They're already shipping product into that plant, but it's going to take another couple of months for that plant to really basically catch up in the supply chain. In the meantime, there's no question the market's somewhat distracted.

Fantastic. Thanks for taking my questions again. I'll pass the mic. Thanks, everyone.

The next question comes from Gavin Fairweather with Cormark. Your line is now open.

Oh, hey, good morning. Thanks for taking my questions. Maybe just on the political landscape, Peter, you referenced it in the prepared remarks a little bit, but maybe you could just expand a little bit in terms of what you're hearing from your distribution and healthcare clients, given the shifting landscape down south.

Yeah, the actual hospital market space seems to be pretty relaxed about sort of the changing administration. You know, last time Trump came to power, he was talking about tearing up the Affordable Care Act, there's no such talk this time. Like that time eight years ago really did distract the health care market. We had quite a slowdown for about a year. This time, there's really no talk of that. Mike Johnson mentioned once, you know, the potential to tweak that act. But, you know, in the last eight years, the Affordable Care Act has actually become quite popular in the U.S., so nobody really wants to touch it. So the hospital side seems pretty chill about it all. The general distribution side seems is more distracted. I mean, we're seeing, uh, you know, just, I think just while they wait to see how this settles out, you know, what are the tariffs going to do? Where are the tariffs going to land? Um, you know, my view is that marketplaces like electrical, we do a fair bit of business in electrical. That's not likely to be affected. Most of that stuff is made in the U S and used in the U S, um, you know, wine spirits, not that likely to be affected. You know, the U S is a major exporter in that market. Um, You know, but on the other hand, electronics, home furnishings, clothing, these are all markets that may be affected. And if, you know, suddenly costs go up anywhere from 10 to 25 percent, you know, you will see slowdowns in those markets. So we're watching it closely. We're seeing boards that are just sort of, you know, continuing searches and projects and whatever, but actually slow rolling the final signatures while they wait to see how this settles out. But as I say, there's lots of sub segments within general distribution that are, you know, in our opinion will be unaffected. And it seems in the opinion of those markets, they'll be unaffected. And those, those seem to be rolling ahead, you know, quite nicely. So it, it will be a, a bit of a game for a while on the general distribution side of making sure we're focused on the hotspots and not, you know, investing in marketing to the distracted segments. But we're, I mean, that marketplace is so big that we're quite confident it's not going to affect our numbers.

Okay, that's super helpful. Thank you for that. And you talked about the healthcare distractions in your Q2, and I think you also said that the pipeline was pretty healthy and buyer intent was healthy. So, do you expect to be able to maybe catch up a little bit in the back half of the year? Maybe we can just discuss kind of the overall pipeline.

Yeah, I mean, the overall pipeline looks very strong. I mean, the back half of our year is usually, you know, by far the strongest half of the year in terms of bookings, right? So, and, you know, we certainly anticipate that again. You know, that said, of course, at that point, I'm crystal ball gazing. So, it you know, you can't really count on that. But as we look at, I mean, even if you look at last year, you know, our second half was, I don't remember in total, I think it was about 60% of our bookings, maybe 65% of our bookings in the second half of the year. And that's not untypical. So, you know, we're looking at our year-to-date bookings up, you know, up 20% year-to-date compared to last year in spite of the distraction in healthcare. So we're actually feeling pretty okay about that. And the pipeline is very active, so we're pretty confident looking forward.

Okay, great. And then maybe just lastly on hardware, I mean, we've discussed kind of the chip shortage, backlog dynamic, and how that kind of unlocked last year. I'm curious if there's anything else going on. Like, are you selling less modules with hardware attached? Like, I'm thinking about point of use in particular. Is that ending up selling more pharmacy versus point of use, and that's also having an impact? I guess I'm just curious if there's anything other than that. tip shortage unlock.

Yeah, I mean, the problem with that, Gavin, is those are so lumpy. Like, we'll go, and it's partly why we just said, you know what, we're going to, you know, it looks like overall revenue is going to be close to a flat and just kind of leave it at that for now because it's so hard to predict. I mean, we've got deals in the pipeline that if they move forward, You know, some of them will come with, you know, one to two million bucks worth of hardware just tied to, you know, a single deal. On the other hand, as you're saying, if it's mainly pharmacy that moves, well, there tends to be less hardware sales associated with pharmacy. You know, there's other vendors that really sell direct a lot of the hardware for pharmacy, and we don't want to get into that business at all. So it is very hard to predict. And so, you know, we still have lots of opportunities that are buying our you know, our, you know, point of use hardware. And certainly in the WMS side, we've got, you know, we end up reselling hardware there for warehouses. So, but we're just saying it's going to continue to bounce around. It's not strategic for us. You know, if customers end up deciding they'd rather buy direct from us, you know, manufacturer, that's okay with us too. So, you know, our expectation is though that on average, it's going to kind of remain where it is, roughly where it is now.

Okay, helpful. And then lastly for me, just on the pharmacy summit, which is down in Newport Beach, can you talk about the attendance that was there? Were those all existing customers? How many prospects were there? And how are the follow-ups going?

Yeah, I mean, it was pretty exciting. You know, we had, I think in total there's about 100 people showed up, but there were clients that came from right across the, you know, clients and prospects that the country, literally east coast to west coast. They flew out there and joined us in California for that summit. We did have, you know, a number of existing customers were there. St. Luke's was there and Baptist Health was there and others to talk about, you know, what they were doing and how they were doing it and to take questions. We had an industry speaker that was there. She did a great job, you know, chairing the conference. So that was quite a success. I was The healthcare conference I referenced earlier that I was at in October was actually the week after the pharmacy event. And, you know, the feedback I was getting at that conference was also very positive. So we're seeing, you know, at this point, roughly a third of our pipeline in healthcare is pharmacy, which, you know, given the fact that we've, this thing really only started to pick up speed about, you know, 18 months ago, you know, we're pretty pleased to see the mixed, going to that level and the pace of the pipeline in that particular area. So all in all, pretty pleased. We're looking forward to the one in Philadelphia, which, you know, is also stirring up a lot of interest. There's some, I mean, some people couldn't make it to the California one just because of the distance and some just because of the timing. So I expect we'll also see a pretty good turnout in, in Philly. I would say, by the way, if, I know there's a number of analysts on the phone. If one of you wants to, you know, if a couple of you want to come to the one in Philly, let us know. We'd be happy to set it up for you to attend that summit.

That sounds great. I might ping you on that. Thanks so much. I'll pass the line.

Thanks. Thanks, Kevin. Your next question comes from Sutan Sukumar with DFL. Your line is now open.

Hey, guys. Thanks for taking my question. This is SA speaking on behalf of Sutan. I guess my question would be on partnering, really. How much do they contribute in the quarter? Is the strategy to expand the pool of partners or perhaps go deeper with the existing partner base? And maybe lastly, how are you investing in partner training and just overall how that is going? Thank you.

Yeah, I mean, our partner activity continues to go – yeah, good – well, your question's well put. We're tending to go deeper more than wider at this point. I mean, you know, we're already doing a lot of work with RISE now in the healthcare space, also some work with Deloitte, some with KPMG. We probably have – I mean, there's other partners that are doing more ancillary work as well, but those are the ones that we're sort of doing more in-depth work with – In a way, that's probably enough partners. We want our partners to really get to know our product line, to be really committed to the product line, and be able to run a substantial revenue stream against the product line. That's probably enough for now. We'll continue to see if there's opportunity that makes sense to bring in additional partners. The deals that are actually getting signed continue to be roughly a third, somewhere between 30% and 33% partner-influenced. Over time, I would expect that to continue to rise. I wouldn't be surprised if in a year or so, or over the next couple of years at least, we get that up to 50%, but it's somewhere in that 30-33% range now. On the general distribution side, we're working with Avalon mostly. They do a lot of work in the electrical space with us, and we need to broaden our in the general distribution space. We've got some interest from some partners there, but we really need to broaden that base and we'll continue to look for the right partners there.

Thank you. That's super helpful. Maybe just one last question from my end. Maybe if you can give us some color and I think you already added some color already, but maybe demand trends in ed markets and maybe some more color on, on sales cycles and how, and how deal sizes have been trending. Thank you.

Yeah. I mean, the deal size is more or less remaining pretty constant. I mean, you know, on the new account side, we tend to see average deal size of healthcare comes in around 650 kind of thing. And a little bit below that, probably 20% below that in general distribution is kind of your average deal size. Uh, that is, you know, overall, uh, you know, pipeline size and activity is pretty, pretty robust. I, you know, we don't give a specific numbers there. You know, I do think there was a, there has been some wait and see during the fall pending the results of the U S election with that behind us. And with it being quite a decisive result and, you know, uncontested and, you know, pretty clear in terms of who's going to be running things that sort of to a certain extent, you know, relieves, relieves, you know, relieves uncertainty. I mean, we can't, obviously, we can't predict at this point what the Trump administration is going to do, but at least we know who's going to be running what, and that gives a lot of businesses some degree of certainty in terms of being able to move ahead with some decisions. So, we do feel like the whole market sort of collectively took a breath a little bit during the fall, but activity right now is pretty strong. So, we're a I don't remember if I got all your questions there. That was kind of a compound question.

Yeah, it was, but answered on the left. Thank you so much.

Thank you. Thanks.

Ladies and gentlemen, as a reminder, should you have a question, please press star 1. Your next question comes from Steven Lee with Raymond James. Your line is now open.

Thank you. Hey, Peter. Just your healthcare comments. Just want to make sure I got it. It was all expansions. There was no new IDN wins this quarter, right?

That's right. No new IDN wins in the quarter. It was expansions and migrations. And, you know, we've actually got quite a number of new IDNs in the pipeline. But I think there was just flat out too much distraction. When you're running a supply chain in healthcare and you can't get saline, you can't really think about much else. So we're expecting that to sort of resume and catch up over the next few months. We'll see.

Got it. And then just for comparison, what was the IDN, number of IDN wins in Q1, Peter?

Mark, what was it? Was it one or two? I don't remember.

It was one. One. One AQ1, yeah. Perfect. Thanks. And in terms of pharmacy, the momentum in pharmacy, at this stage, how many of your IDNs has pharmacy? Is it still a small number, like less than five?

We're at seven right now.

Seven.

And interestingly enough, of the last sort of six that have signed, three of them were brand-new accounts to Texas that literally came to us for pharmacies. And three of them were base accounts that added on pharmacy.

Oh, wow. And the six that came to you just for pharmacy, did they, that's all they bought or they bought other stuff?

Sorry, just to clarify, there was, we've got seven in total, so six that have joined in the last couple of years. And of the six that joined in the last couple of years, three were brand new and came just for pharmacy and Three were existing accounts that added pharmacy. The three that came to us just for pharmacy, right now that's all they're doing. They're just doing pharmacy. It is end-to-end, so they're doing a consolidated pharmacy service center right through to hospitals, you know, to patient bedside. So it's a very comprehensive pharmacy project, but they are only doing pharmacy at this point.

Got it. Very helpful. Thanks, guys.

Thank you.

Thanks, Dan. There are no further questions at this time. I will now turn the call over to management for closing remarks.

Great. Well, thank you all for taking the time to join us. And as always, if you have additional questions, don't hesitate to reach out to Mark or I, and we will look forward to talking to you at the end of Q3. Thanks, and have a great day. Bye for now.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and I ask that you please disconnect your lines.