Jack Henry & Associates Inc

NASDAQ:JKHY

Earnings Call Transcript 2019-Q1

[Operator]

Good day, ladies and gentlemen, and welcome to the Jack Henry & Associates’ First Quarter Fiscal Year 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following management’s prepared remarks, we will have a question-and-answer session and instructions will be given at that time. [Operator Instructions] And as a reminder, this conference is being recorded today for replay purposes.

It is now my pleasure to turn the conference over to your host Mr. Kevin Williams, Chief Financial Officer. Please proceed.

[Kevin Williams, Chief Financial Officer and Treasurer]

Thanks, Haley. Good morning, and thank you all for joining us today for the Jack Henry & Associates first quarter FY 2019 earnings call. I’m Kevin Williams, CFO and Treasurer, and on the call with me today is David Foss, our President and CEO.

The agenda for this morning will be opening comments by me obviously, and then I will turn the call over to Dave he is going to provide some of his thoughts and the state of the business and the performance for the quarter. Then, I’m going to provide some comments regarding the 8-K that we filed last week for the new revenue recognition accounting standard codification or ASC 606 that became effective for us July 1.

And I will provide some additional thoughts and comments regarding the press release we put out yesterday after market close for our Q1 operating performance and then we will open up the lines for Q&A.

I need to remind you that remarks or responses to questions concerning future expectations, events, objectives, strategies, trends or results constitute forward-looking statements or deal with expectations about the future. Like any statement about the future, these are subject to a number of factors, which could cause actual results or events to differ materially from those which we anticipate, due to a number of risks and uncertainties.

The company undertakes no obligation to update or revise these statements. For a summary of these risk factors and additional information, please refer to yesterday’s press release and the sections in our 10-K entitled risk factors and forward-looking statements.

With that I will now turn the call over to Dave.

[David Foss, President and Chief Executive Officer]

Thank you, Kevin and good morning, everyone. We are pleased to report another quarter with record revenue and earnings. As always I would like to begin today by thanking our associates for all the hard work that went into producing those results for our first fiscal quarter.

As you are aware, this is the first quarter for us to report our financials using the new revenue recognition rules prescribed by ASC 606. All of the quarterly comparisons we discuss today will be in relation to the restated quarters from the 8-K, we published last week. Kevin will provide much more detailed analysis regarding the impacts of 606 to our business, when he shares his opening remarks.

For Q1 of fiscal 2019, total revenue increased 9% for the quarter and increased 10% excluding the impact of deconversion fees from both quarters. We again had a very solid quarter in the core segment of our business. Revenue increased by 8% for the quarter and increased by 11%, if you exclude the impact of deconversion fees from both quarters.

Our Payments segment performed well posting a 9% increase in revenue this quarter and a 10% increase excluding the impact of deconversion fees. We also had an extremely strong quarter in our complementary solutions businesses, posting a 13% increase in revenue this quarter and a 12% increase excluding the impact of deconversion fees.

Our sales team again had a very solid sales quarter. We booked 12 competitive core takeaways, including two new multi-billion dollar banking clients. We also saw very strong bookings in our Payments and complementary solutions segments. Several of our newer solutions, including our Banno digital suite, debit processing, the new credit processing solution and treasury management saw strong demand. We also booked five in-to-out deals between banking and Symitar.

Regarding our new debit and credit processing solution, we now have 166 customers live on the new debit platform, including 11 customers installed as new rather than as migration. We also have two new credit customers live on the platform. We have been focused on migrating more complex clients in the past couple of months to continue to prove the conversion model. So far, all of these migrations and new installations have been successful and our program continues to progress very well.

We will suspend our migrations during the holidays because banks and credit unions don’t like to implement changes to their card programs during this high volume time of the year. We expect to start migrating 40 to 50 customers per month in January and remain on track to complete the migration process sometime in the first half of calendar 2020.

As you know, within the two weeks following the end of Q1, we announced two acquisitions Agiletics and BOLTS were both very small, but very strategic acquisitions for our company. Agiletics brings us a liquidity management solution and a deposit escrow sub-accounting system designed to allow our banks to serve larger commercial clients, who require escrow collection and disbursement tools.

BOLTS provides digital account opening solution, which will be paired with our industry-leading Banno digital banking offering. Neither these acquisitions will impact our P&L in any material way, but both position us well as we compete for new and larger clients in the future.

Since our last earnings call, we have completed our two largest client conferences of the year, our SEC conference for our Symitar core clients and our JEC conference for our Jack Henry Banking and ProfitStars clients.

We had many prospects at each conference and our customers continue to be happy with our performance and extremely engaged with our prospective clients. Additionally, they continue to be optimistic about the coming year and their prospects for success.

With that, I will turn it over to Kevin for some detail on the numbers.

[Kevin Williams, Chief Financial Officer and Treasurer]

Thanks, Dave. First of all, I would like to provide some comments and color regarding the 8-K, as Dave mentioned, we filed last week for the full retro restatement of ASC 606 compared to ASC 605 and some of the larger impacts that impacted those recast numbers.

The largest impact obviously is backing out the bundled revenue line of revenue. Remember under ASC 605, we were not allowed to take any revenue on a multi-owner contract until the last product included in the contract was delivered.

And then 100% of the license implementation and the current year’s in-house maintenance was recognized into revenue ratably over the remainder of the fiscal year, when the last product was installed, which did then grew throughout the year like a snowball effect as other contracts have the last product installed. This is why revenue dropped each quarter in the recast numbers in the 8-K and the revenue decrease essentially grew each quarter.

Under ASC 606, we recognized the license imitation for each products separately even though they are part of a multi-owner contract which - this obviously spreads revenue for multi-owner contract products over quarters or potential even fiscal years. Another thing is deconversion fees under ASC 605 were recognized when the deconversion was complete and we received payment and it was received 100% all at one-time.

But under ASC 606, these deconversion fees are spread from the date of the notification to the date of the actual deconversion, which does can cause some swings between quarters and fiscal years compared to the old way of doing it because we are comparing this and recognizing it all at one-time.

We are required to recognize all of Banno software usage fees in the first quarter of the fiscal year or historically under 605 this was amortized over the fiscal year. This is part of the reason that revenue increased so much in this quarter last year in the recast numbers 8-K but then that is also why the Q2 revenue dropped off from Q1 sequentially, which you’ll see the same thing happened this year is because of the software usage fees that are recognized 100% upfront and that is because the license has been installed.

Also in future periods, there will be adjustments which fees will be based on estimates for our long-term outsourcing and processing contracts that could cause a carve out of the adjustment, which means percentage of adjustment would be allocated to license and implementation already delivered in previous quarters, which could cause an impact in any given quarter and this impact to actually positive or negative depending on the change in estimate.

In the 8-K, as far as cost, the cost of revenue the biggest piece is backing out the cost directly related to the bundled revenue. This is offset somewhat by the increase in labor costs for the actual products that were delivered in that quarter and direct cost of product related to the products installed also during the quarter.

The impact to the SG&A is primarily due to sales commissions and the related fringe benefits on those commissions having these spread out over a longer period of time under ASC 606 than we were doing under 605. That is a quick summary of the primary changes impacted our historical financial suggest and restate for ASC 606.

Now I will provide some comments about the quarter and as Dave stated, all of the numbers in the release and that we are talking about are restated for ASC 606. The service and support line of our revenue increased 9% compared to the prior year quarter.

Included in this line of revenue is the annual software usage fees, which we added quite a few customers on this offering last year and remember the difference is that under ASC 605, we amortized these fees over the fiscal year, but under ASC 606, a 100% of this revenue in the first quarter because the software has been delivered. And again this is the reason why the restate revenue in the 8-K we filed last week showed a decrease in total revenue in Q2 sequentially compared to Q1.

And it was potentially drop off a little larger this year because of the added customers last year. Deconversion fees were down $2.9 million compared to year ago quarter. As we have discussed previously, we had no control over these and remember under 606 these now must be spread, with all the deconversion fees in the quarter were in this line of revenue. Processing line of revenue was 9% compared to the prior quarter and had no impact from deconversion fees.

Our reported consolidated operating margins were down from 27% last year to 26% this year. As we discussed on the last call, there are two primary headwind impacts on operating margins.

First is the double cost of processing our debit or customer’s transaction that we have been talking for about 1.5 years until we get those customers migrate over to the new platform. And then, second the additional cost for the employee pay-for-performance plans that will be funded with a portion of the savings from the TCJA, that we talked about on our last earnings call.

Our segment operating margin continue to be very solid, but small fluctuations and the segment information was actually in the press release that we put out yesterday. The effective tax rate was obviously impacted significantly by the TCJA for the quarter. The effective tax rate for the quarter was 19% compared to 31% last year.

Our effective rate for the quarter was lower than we guided last quarter, which is due to the increased excess tax benefits from share-based payments related to restricted stock that vested in September of this year, which those are based on total shareholder return compared to our peer group.

For the balance of the year, our effective tax rate will increase and our projected total year effective tax rate is still expected to be slightly over 23%. For cash flow included in the total amortization, which is disclosed in press release in the cash flow review yesterday is the amortization of intangibles from acquisitions which increased to $5.1 million this year compared to $3.5 million last year.

Free cash flow which is defined as operating cash flow less capital expenditures, capitalized software and proceeds from sale of assets was $94.5 million, which represented about 113% of net income for the quarter.

The significant increase in capital expenditures during the quarter, I believe it’s $3 million last year and $24 million this year relates primarily to some data center upgrades that we discussed briefly on the last call, where I said that we did some year-end tax planning and acquired some assets and put in place for tax purchases at the end of the quarter to take advantage of the effect of the tax rate difference caused by TCJA, which gave us a multi-million dollar permanent tax savings.

These assets were accrued for at June 30, but the actual cash was paid out in this quarter for those assets. Just a reminder, ASC 606 requires us to recognize revenue and related costs differently than we have done in the past. However it does not change our billing to customers, it doesn’t change our collections, therefore 606 has no impact on our cash flows.

Our cash flows will still flow the same as they had historically with higher cash flow operating free cash flows in Q1 and Q4 due to the collection of annual in-house maintenance billings and neutral to slightly positive in quarters Q2 and Q3.

We invested $52.3 million back into our company through CapEx and developing products, which is up $30.1 million from a year ago, which almost all of this is due to the data center upgrades that we discussed.

We did not buy any stock back during the quarter and there were no quarterly dividends in the first quarter because declared dividend in Q1 was actually paid on October 2, in Q2.

For guidance for the rest of the year, we continue to [indiscernible] the revenue growth will continue to be in the high mid-single digits in FY 2019 similar to the restated FY 2018 compared to the restated FY 2017 in the 6% to 7% range.

As I mentioned, we will continue to face headwinds on our operating margins for the year, so operating income growth will be down as percentage compared to revenue growth.

We are still as Dave said, we are still on course, we done with our migration in the second half of FY 20, which is when the double cost will be eliminated and obviously, there would be a nice increase in margins at that time.

And obviously, we will anniversary the new pay-for-performance plans going into FY 20. Also right now it appears the deconversion fees for Q2 and probably the year will be down similar to Q1.

Now just a reminder for your models, as you update for ASC 606, you will need to adjust revenue down in Q2 as I mentioned, to allow for the decrease due to software usage fees, but revenue growth based on restated 606 should be in line with the full year guidance that I just provided.

Also you will need to adjust the impacts of TCJA out of Q2 and for the entire fiscal ‘18 year for the impact of adjusting our deferred taxes and our balance sheet, which flows through the P&L in Q2 last year, which obviously had no cash flow impact.

Then obviously with the 500 bps gain that we are predicting our effective tax rate this year to full year projected 23% from adjusted 28% effective tax rate last year, our EPS will still be up nicely for the year compared to last year. EPS will go down for ASC 606 for retro statement, but we will still have solid compared to restated net income.

That concludes our opening comments. We are now ready to take questions. Haley, will you please open the line up for questions?

[Operator]

Thank you. [Operator Instructions] And our first question comes from Peter Heckmann of D.A. Davidson & Company. Your line is now open.

[Alexis Huseby, D. A. Davidson & Company]

Hey, guys. This is actually Alexis on for Pete. So firstly thank you so much for providing the clarification on some of that ASC 606 impacts. I was wondering, if we could get a little more detail on the term fees maybe by quarter for 2018 under 606?

[Kevin Williams, Chief Financial Officer and Treasurer]

For the - the deconversion fees?

[Alexis Huseby, D. A. Davidson & Company]

Yes.

[Kevin Williams, Chief Financial Officer and Treasurer]

I apologize I do not have those with me.

[Alexis Huseby, D. A. Davidson & Company]

That is Alright. We can follow-up with that afterwards. So I think as just a little bit of a broader question. Do you think you could outline some of the customer’s main priorities for the next year that you are seeing in terms of upgrading any technology for digital banking, online lending or security?

[David Foss, President and Chief Executive Officer]

Sure. Alexis, this is Dave Foss. So you have pretty much get right there on some of the key priorities right now. Digital banking is on the top of mind for virtually any bank or credit union executive right now which is a key piece of what is fueling the demand for our Banno digital banking solution. And it’s part of the reason why we did the BOLTS acquisition because digital having a complete digital suite is key.

So we are getting lots of interest, lots of discussions currently on that topic. And I see that continuing through the year because if you look historically banks and credit unions would have an online banking solution and a mobile banking solution, and they were two different solutions.

And the goal right now is eliminate that difference in user experience bringing them together, so it’s a single user experience on a single digital platform that is a lot more fully function than anything that we had in the past.

So that is clearly, top of the mind and then lending and really specifically around commercial lending. Part of the reason, why we have highlighted so much our Commercial Lending Center suite in the past year or so is part of the reason why we did the Vanguard acquisition last year was to really create a very robust commercial lending offering because that is what is fueling a lot of growth for our clients today.

Certainly consumer lending is important, but commercial lending is where a lot of the focus right now. And then kind of tied to that is the topic of treasury management. So if you are going to serve large commercial customers with the commercial lending solution you also want to be able serve them overall with treasury management functionality which is why we develop can roll out the new treasury solution a year ago.

So those are all absolutely top of mind, and then of course, we have been highlighting the card conversion process that we have been going through part of what is spot [indiscernible] that originally was there were so much demand customers who want to bring that credit card portfolios back into their bank of credit union and prior to this new platform that we rolled out. We didn’t have a credit offering and so payments and having a robust payments platform is also a key driver for us.

[Kevin Williams, Chief Financial Officer and Treasurer]

I can actually provide to the deconversion revenue now restated under 606. Okay. So for Q1 of FY 18, it was $10.7 million; for FY Q2, it was $9.7 million; for Q3, it was $18.4 million; and for Q4, it was $7.3 million for a total under 606 of $46.2 million.

[Alexis Huseby, D. A. Davidson & Company]

Okay. Great. Thank you so much for that. And then maybe I will just sneak one more question, Kevin, guys thanks for the update on the debit and credit signing some customers and bringing live. I was wondering, if you could get something similar for Banno maybe just a number of banks that we have live right now and any contracted backlog?

[Kevin Williams, Chief Financial Officer and Treasurer]

We have 281 live right now. I don’t know that I have between mobile and online 281 customers live right now. I don’t know that I have a backlog number, but it’s continuing to grow.

[David Foss, President and Chief Executive Officer]

I think if I’m right, we contracted for 60 of them last year for the full suite.

[Kevin Williams, Chief Financial Officer and Treasurer]

62.

[David Foss, President and Chief Executive Officer]

And Q1 that actually ramped up. It was over 20 in Q1.

[Kevin Williams, Chief Financial Officer and Treasurer]

But I can’t give an accurate number what the backlog will looks like right now. But as we are managing the backlog and it continues to be robust, we will put it that way.

[Operator]

Thank you. Our next question comes from David Togut of Evercore ISI. Your line is now open.

[David Togut, Evercore ISI]

Thank you. Good morning. You saw a nice step-up in revenue growth ex-deconversion fees to 11% on the core and 10% on payments. And Kevin I recognize you are guiding to high-single digit for the year, but can you comment on the sustainability of this low-double digit organic revenue growth, which appears to be the highest we have seen in a while?

[Kevin Williams, Chief Financial Officer and Treasurer]

Well, David. I will tell you the Q1 that I mentioned in my opening comments, we had a large number of software usage clients install last year, when that revenue was basis spread which caused the increase in Q1 in the 8-K and that caused an even bigger increase in Q1 this year because even though it’s an annual software usage fee and they are using it for over the year because it’s already been installed, effectively July 1, you recognize that revenue for the entire year again.

So that caused Q1 to be grow a little faster. So we are not going to see that double-digit organic revenue growth for the rest of the year. It’s going to go back down to the mid-single digits and for the full year. I still think it’s going to be in the high mid-single digits.

[David Togut, Evercore ISI]

I see, so that impacted both core and payments in the first quarter?

[Kevin Williams, Chief Financial Officer and Treasurer]

Yes.

[David Togut, Evercore ISI]

Got it. That is helpful. Thank you. And then, Dave you gave a lot of commentary on the June quarter call about bookings. I think to the effect that new contract signings for the month of June were 150% of the previous monthly record. Can you give some - maybe some more qualitative commentary or quantitative would be even better about bookings in the September quarter, numerical commentary?

[David Foss, President and Chief Executive Officer]

I don’t know that I have that number right in front of me. The sales team, as I said in my press release quote, so the sales team’s exceeded their quota again this year.

I don’t have the exact number in front of me, but the most remarkable thing I think to what happened there was and you are absolutely correct in your summary of what I said about June, we were about 150% of the next largest month we have ever had in the history of the company.

Logic would tell you when you have a month like that, your pipeline is going to drop off significantly and you are going to spend months rebuilding that pipeline because you just had huge bookings month and a huge bookings quarter.

But in fact, we ended Q1, so just 90 days after that record, we ended Q1 with a pipeline that was actually and I did the math here this morning 16% higher than what the pipeline was going into the month of June. So we booked all this business took a whole bunch of sales out of the pipeline and yet within 90 days it was 16% higher than it was going into the month of June.

So for me that - and having a pipeline does not represent closed deals obviously, you have to get them to close. But after having many years of experience, managing a pipeline and managing the sales team without any major change in the sales teams to see that type of growth in the pipeline was pretty significant as far as I’m concerned and I think it sets us up well for the coming year.

Again, you have to turn those pipeline deals into closed signed deals and there is no way to 100% predict what is going to happen there. But I think it really bodes well for the future, for the sales organization when we have had such a tremendous increase in the pipeline for the combined sales organization.

[David Togut, Evercore ISI]

Understood. Thanks. That is helpful. Just a quick final question, if I could. You called out 12 core competitive takeaways in the quarter, are there any themes around those takeaways that we should be aware of, any specific competitors, any specific solutions within the core that are really gaining a lot of traction?

[David Foss, President and Chief Executive Officer]

No. I would say it’s consistent with what you have seen from us in the past. We tend to take competitive deals from all of our major competitors and from the solutions that they offer and we are continuing to see that. I think, we saw two multi-billion dollar banking deals in the quarter, which is significant.

They don’t come up for a core change all that often. They are not that many of them and so they don’t make a core change that often. So they book two in a quarter is significant and we are working several other deals of that size.

So I think maybe the only item of significance would be they tend to be several larger both banks and credit unions in the pipeline right now more than we have seen in the past and that is probably significant. But it’s not any change in, who are taking these customers away from.

[Operator]

Thank you. Our next question comes from Glenn Greene of Oppenheimer. Your line is now open.

[Glenn Greene, Oppenheimer]

Alright. Thanks. Good morning, Dave and Kevin. Just wanted to follow-up on the booking and the sales commentary. Maybe Dave you could give us a little bit of color across the key brands you have, cross community banks, credit unions, complementary products, what was the tone of sales activity and then each of the three product areas exceed quota?

[Kevin Williams, Chief Financial Officer and Treasurer]

Yes. It’s consistent this quarter with what I highlighted last quarter. So if you recall last quarter, I talked about the fact that you would expect when you have a blowout quarter like that, that it would come in one particular area, but in the June quarter, it was actually spread across the sales group.

So ProfitStars, Symitar and banking all three sales groups really had a very strong quarter. We saw the same thing in Q1 of fiscal 19, all three sales groups, but we didn’t have a record breaking month like we did in June, but all three sales groups really performed well. There was - everyone of them exceeded quota.

And so for banking and Symitar that tends to come when you are signing new core customers. And there is of course, follow-on business that comes with that core sales that can be significant, but it’s all driven by core sales. And then for ProfitStars of course, there are no core sales in ProfitStars. ProfitStars is only sales non-core solution and so that spread across a wide variety of product lines.

But I have highlighted a few of them already so digital and our lending suite and the Payments solution suite, we are seeing very good performance across all of those different product lines. So all three sales groups exceeded quota again in Q1 and are positioned well going forward.

[Glenn Greene, Oppenheimer]

Alright. Great. That is helpful. And then Kevin, just can you help level set offs on the fiscal 2019 outlook given the restated basis for ASC 606. And I know you gave us the growth rates and gave some commentary on margins, but the EPS base level is reduced pretty meaningfully for 2018. And it looks to me at least on first glance consensus is something like 15% growth at this point, EPS growth based on fiscal 2019 consensus and maybe you could help level set us and if the 403 street number for fiscal ‘19 is reasonable?

[Kevin Williams, Chief Financial Officer and Treasurer]

No. It’s not Glenn because obviously, when we gave that guidance, we were still trying to get the product reused, recast and restated. So that was based on what I knew at that time. So you only know what you know. FY 2018 adjusted for 606 and adjusted for the tax rate, so if you back all the deferred tax nonsense, the true tax rate for FY 2018 was 28%, which means the EPS for FY 2018 was basically $3.27, so that is kind of level set from there.

[Glenn Greene, Oppenheimer]

Okay. So basically take the revenue growth of the restated base had some margin degradation, the adjustment of the tax rate goes down at 23% or so for 2019?

[Kevin Williams, Chief Financial Officer and Treasurer]

Yes. And now I get you real close to the ballpark, Glenn.

[Glenn Greene, Oppenheimer]

Okay. Thank you.

[Operator]

Thank you. [Operator Instructions] Our next question comes from Dave Koning of Baird. Your line is now open.

[David Koning, Robert W. Baird]

Yes. Hey, guys. Thank you. I guess my first question. So I think we get the revenue base last year $1.47 billion that is what we grow the 6% to 7% off of. But one thing Q1 had some differences in the segments like complimentary was very strong some of the other ones were stronger than 6% to 7%, but not as strong as complementary. Is there anything that we should think about Q2, Q3, Q4 from a segment basis like the certain ones fluctuate more like this complimentary follow-up a lot more while payments and core kind of stay around that high-single digits. Just kind of walk through the second like how that is going to work?

[Kevin Williams, Chief Financial Officer and Treasurer]

Well, Dave, again, so 606 is so much difference than 605 because 605 and we talked about this a lot over the last few years. So you could have an in-house core customer either bank or credit union that you install the last pieces of multi-account which could be [iTalk] (ph) in August or September.

And all the software imitation first years maintenance might be $3.5 million. You don’t recognize the $3.5 million now over the next three quarters. And then the start of July 1, you just backed in-house maintenance, where 606 a lot of that $3 million plus is going to be in the prior fiscal year because it ties directly to win the products you delivered.

So, what this really going to advance some lumpiness. So for a like, when we do final installation of a multi-billion dollar apps as SilverLake, when we gave final install a 100% of revenue’s going to hit in that quarter, almost a way use to back before the restatement back in 2015.

[Dave Koning]

Okay. So your point is, it’s going to decelerate during the year because of kind of the change, but there is going to be new lumpiness that is going to - that just - it’s hard to predict how that each quarter is going to work?

[Kevin Williams, Chief Financial Officer and Treasurer]

Correct, which is why I pointed out on the call, it’s going to take a while, I think for you all and even us to get used to the slow of 606 because it is totally different than what we have done delivered in the past, but my point is, it has no impact on cash flow.

[Dave Koning]

Yes. Right. Exactly. Okay. In Glenn’s question, you went through some of the components, but is there another way to think of that - you guided before to something like a 394 to 404 was something like 10% to 12% off of your old EPS base. Is the new - do we take kind of the same growth rate but just apply it to the new EPS base?

[Kevin Williams, Chief Financial Officer and Treasurer]

Yes.

[Dave Koning]

Okay.

[Kevin Williams, Chief Financial Officer and Treasurer]

That is the reason.

[Dave Koning]

Okay. Good. Alright. Well, thanks guys. Appreciate it.

[David Foss, President and Chief Executive Officer]

Thanks Dave.

[Operator]

Thank you. Ladies and gentlemen, this concludes today’s question-and-answer session. I would now like to turn the call back over to Kevin Williams for any closing commentary.

[Kevin Williams, Chief Financial Officer and Treasurer]

Thanks, Haley. Again, we are very pleased with the results for ongoing operations even though they are little confusing until everybody gets used to 606. We want to thank the efforts of all of our associates that take care of our customers. Our executives, managers and all of our associates will continue to focus on what is best for our customers and our shareholders.

With that I want to thank you for joining us today. And Haley, will you please provide the replay number?

[Operator]

Thank you, ladies and gentlemen. The replay number for your conference is going to be 800-585-8367 and 855-859-2056. And the local number is 404-537-3406. This conference will be available starting today at 11:45 am. Eastern Standard Time and it will end on November 16, 2018. Thank you for listening in today’s conference and you may now disconnect. Everyone have a great day.