Pros Holdings Inc
NYSE:PRO
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
17
39.82
|
| Price Target |
|
We'll email you a reminder when the closing price reaches USD.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Pros Holdings Inc
You don't have any saved screeners yet
00:07 Greetings, and welcome to the PROS Holding Third Quarter twenty twenty one Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.
00:28 I would now like to turn the conference call over to Belinda Overdeput, Director of Investor Relations.
00:34 Thank you, operator. Good afternoon, everyone, and thank you for joining us. Our earnings press release, SEC filings, and a replay of today's call can be found in the Investor Relations section of our website at pros.com. Our prepared remarks will also be available on our website immediately following the call and will be replaced by the official transcript which includes participant questions once available. With me on today's call is Andres Reiner, President and Chief Executive Officer; and Stefan Schulz, Chief Financial Officer.
01:05 Please note that some of the commentary today will include forward-looking statements, including without limitation those about our strategy, future business prospects, and market opportunities, and our financial projections. Actual results could differ materially from such statements and our forecast. In particular, there remains significant uncertainty around the duration and impact of COVID-19. This means that results could change at any time and the contemplated impact of COVID-19 on the company's business results and outlook is the best estimate based on the information available as of today.
01:38 For more information, please refer to the risk factors described in our SEC filings. PROS assumes no obligation to update any forward-looking statements to reflect future events or circumstances. As a reminder, during the call, we will discuss non-GAAP metrics. Reconciliations between each non-GAAP measure, and the most directly comparable GAAP measure to the extent to which available without unreasonable effort are available in our earnings press release.
02:06 Before I hand the call over, I’d like to remind our investors and analysts about our upcoming virtual Investor Fireside Chat, taking place on November seventh from 1:30 PM to 3:00 PM Central Time during the twenty twenty one PROS Outperform conference.
02:20 With that, I'll turn the call over to you, Andres.
02:24 Thank you, Belinda. Good afternoon, everyone, and thank you for joining us. We ended the quarter with significant outperformance on our guidance ranges for profitability and cash flow and delivered revenue results in line with our expected ranges. We did see impact from the Delta variant in our Q3 results and our Q4 outlook. Stefan will expand on this later.
02:50 Our strategy is to accelerate market adoption of the PROS Platform, deliver an incredible experience and drive significant value for our customers. Despite the challenges we’ve faced because of COVID-19, our team continues to execute well against our strategy. We welcomed new customers across industries and from new market segments to PROS during the quarter.
3:14 We continue to drive incredible value for our customers, evident by our expanding partnerships and best-in-class gross revenue retention rates. We received industry recognition of our leadership in both CPQ and Price Optimization and Management. When I look at all of this and the progress of the recovery, I couldn’t be more excited for what is to come.
03:38 In Travel, we’re starting to see international restrictions ease, and some carriers are seeing significant increases in passenger demand as a result. For example, when the announcement was made that the Europe to U.S. travel ban would be lifted in November, carriers saw an immediate one hundred and forty percent increase in ticket sales in a single week for European travelers. This demonstrates the pent-up demand for travel, both leisure and business, and energizes us for the pace of recovery heading into twenty twenty two as more borders open.
04:16 In Q3, we welcomed two new low-cost carriers to the PROS family: Air Transat and Scoot. Historically, this market segment didn’t have access to the best-of-breed, AI-powered revenue management solutions. We designed our PROS RM Essentials edition on the PROS Platform to enable teams of any size to adopt to our industry-leading AI and grow with PROS over time. With PROS RM Essentials, customers like Air Transat and Scoot can forecast demand and dynamically priced to maximize revenue.
04:51 Now, moving to B2B. In the healthcare space, we’re seeing demand for our solutions as companies look to digitize their selling motions. We welcomed Korian, a provider of long-term care services, and Radiometer Medical, a manufacturer of diagnostic devices, to the PROS family as new customers. We’re also seeing momentum in transportation and logistics, where companies are looking to PROS to enable them to deliver a frictionless sales experience as demand continues to rise. This year, air cargo demand is expected to increase approximately twenty percent year-over-year.
05:32 In Q3, Emirates SkyCargo adopted our B2B Platform to empower their customers with a self-service buying experience to drive a higher conversion of sales using our omni-channel quoting capabilities and capacity-aware price guidance. Similarly, Marken, a division of UPS Healthcare Logistics that is essential in the delivery of vaccines globally, also adopted our B2B Platform to power digital selling across their enterprise.
06:06 Our latest innovations are also inspiring existing customers to expand their partnerships with PROS. In Q3, TE Connectivity, a PROS customer of eight years, chose to migrate to our cloud platform which allowed them to expand adoption across their business. TE Connectivity is a leading manufacturer of electronic connectors and sensors that powers vehicles, factories, and homes across the globe. With hundreds of billions of products manufactured annually, TE Connectivity is relying on the scale, speed, and precision of PROS Price Optimization and Management capabilities to drive winning offers.
06:49 Honeywell also expanded adoption of our Price Optimization and Management solution. Like many businesses today, Honeywell is experiencing the impact of rising commodity prices and the risk of inflation. To effectively manage volatility and continue to produce winning offers, Honeywell named PROS as their global pricing solution vendor and is actively rolling out our solution to all their strategic business units. Sheila Jordan, Honeywell’s Chief Digital Technology Officer will be joining me in my keynote at Outperform to share more on their success with PROS.
07:34 Now, I am excited to share that we have been named a Leader in the twenty twenty one Gartner Magic Quadrant for Configure, Price and Quote Application Suites. When we acquired our CPQ technology, we acknowledged that we were coming from behind and we set a bold strategy to become the leader in this space. This acknowledgement from Gartner recognizes our passion for innovation to drive customer success.
08:00 Our flexibility to support omnichannel selling, the combination of pricing and selling capabilities in a single platform, the performance, usability, and scalability of our platform were all cited as key strengths. We also had the honor of once again being named a Leader in the twenty twenty one IDC MarketScape Assessment of Worldwide B2B Price Optimization and Management Applications.
08:30 IDC emphasized the ease of use and transparency within our solutions as a key differentiator. A core part of our strategy has been making our AI algorithms accessible, explainable, and extensible, which allows companies of all sizes to adopt our market-leading AI-powered platform.
08:53 As an engineer at heart, I’m incredibly proud of the market recognition we’re receiving for our innovations, and I would like to express my deep gratitude to our amazing Product and Engineering teams. With these most current designations, we’re the only platform with a leadership position in both the CPQ and Price Optimization and Management markets.
09:16 In addition to our product awards, I am thrilled to share that PROS has been certified by Great Places to Work for the second year in a row. This year’s designation extends the company’s original certification to all eligible countries, recognizing our inclusive, people-first culture on a global scale. This award is based entirely on what current employees have to say about working at PROS, which is what makes this award so special to me.
09:52 Finally, in September, we announced Rob Reiner’s intention to retire from PROS. As Chief Technology Officer, Rob has been key in driving our culture of innovation forward. Rob joined PROS in twenty sixteen to lead our pivotal transition to the cloud. With his leadership, we transformed our Travel and B2B solutions into the most comprehensive and innovative SaaS offerings in their markets. I’d like to thank Rob for all his contributions to PROS and wish him the best in his retirement.
10:26 Succeeding Rob, Ajay Damani has been promoted to the role of Executive Vice President of Engineering and Sunil John has been promoted to the role of Chief Product Officer. Ajay and Sunil each have over fifteen years of experience with PROS and have been a huge part of our success. I look forward to working closely with them and continuing to accelerate our innovation leadership.
10:53 In closing, I’m proud of how our team is executing to drive adoption in the market, deliver industry-leading innovations through our platform, and create a culture that empowers every employee to reach their full potential. Thank you to our global team for making PROS an amazing company. Thank you to our customers, partners, and shareholders for your ongoing support of PROS.
11:18 With that, I'd like to turn the call over to Stefan to cover our financial performance and outlook.
11:27 Thanks, Andres and good afternoon, everyone. In the third quarter, we significantly outperformed our profitability and cash flow metrics and delivered revenue results that were in line with our expectations. Our team continues to look for ways to drive efficiencies as well as improve our customer satisfaction and collection processes. As a result of our strong operational execution, our outlook for the full year is now much better on profitability and cash flow.
11:56 As Andres mentioned, the ongoing impact from COVID-19 and specifically the Delta Variant did affect some of our travel customers in the third quarter. Examples of the impact during the quarter include: a travel customer declaring bankruptcy, a small number of contract restructurings, and some of our new opportunities and implementations being pushed by a few months.
12:17 Individually, none of these items significantly impacted our revenues, but the combination of these items did impact our subscription and services revenues slightly in the third quarter. These items will also impact our fourth quarter revenues and we expect total revenue for the year to be at the low end of our previous annual guidance range. All of these items impacting the second half of twenty twenty one are temporary in nature. We expect to recover most, if not all, of these amounts during twenty twenty two.
12:50 Now moving on to our results: Subscription revenue in the third quarter was forty four point one million dollars, up five percent year-over-year and total revenue was sixty two point seven million dollars, up two percent year-over-year. Our third quarter recurring revenue was eighty four percent of total revenue.
13:08 Our gross revenue retention rate for the trailing twelve months was approximately ninety one percent. As a reminder, we disclose gross revenue retention rates not net revenue retention rates. Gross revenue retention does not include bookings from existing customers which can mask real customer churn.
13:28 Our revenue retention rates have continued to improve throughout twenty twenty one and we anticipate ending the year at approximately ninety three percent. This returns us to world-class gross revenue retention rates and demonstrates the value our customers see in our solutions.
13:46 Our non-GAAP total gross margins improved sequentially again to sixty one percent, and our non-GAAP subscription gross margins were seventy two percent which are up sequentially from seventy one percent and also up year-over-year. We expect subscription margins to remain relatively constant in the fourth quarter of twenty twenty one.
14:08 We also continue to make steady progress on our services margins and were within two hundred thousand dollars of break-even in the third quarter. As I mentioned before, we continue to make progress on adjusted EBITDA and were very pleased with our performance this quarter. Adjusted EBITDA loss was four point four million dollars, as compared to six point two million dollars last year.
14:32 Revenue growth and reduced operating expenses led to this improvement. Total operating expenses declined by five percent in the quarter and six percent in the first nine months of the year. I am proud of our team’s strong operational execution and how we continue to look for ways to drive more efficiency into our business.
14:56 Our calculated billings decreased five percent for the quarter and for the trailing twelve months. And as previously mentioned, we anticipate calculated billings will grow in the fourth quarter which would result in full year growth of at least ten percent.
15:10 Our free cash flow burn was eight point five million dollars in Q3 and eighteen point nine million dollars year-to-date, a significant improvement over last year driven by a combination of operating expense efficiencies, strong customer collections, and better gross revenue retention rates. We exited the third quarter with three hundred eight point six million dollars of cash and investments.
15:38 We also made nice progress towards our year -end target of adding quota-carrying personnel, and we ended the quarter with sixty four. We were able to hire ahead of plan which allows our new team members to ramp up so they can be productive earlier in twenty twenty two. We do not anticipate growing this metric further in the fourth quarter. And as previously discussed, we expected to exit the year with sixty or more quota-carrying personnel.
16:06 Now turning to guidance. We expect Q4 subscription revenue to be in the range of forty five million dollars to forty five point five million dollars and total revenue to be in the range of sixty three million U.S. to sixty four million dollars. We expect fourth quarter adjusted EBITDA loss to be between nine million dollars and ten million dollars.
16:28 Using an estimated non-GAAP tax rate of twenty twenty two percent, we anticipate fourth quarter non-GAAP loss per share of between zero point twenty two dollars and zero point twenty four dollars per share, based on an estimated forty four point four million shares outstanding.
16:44 For the full year, we expect subscription revenue to be in the range of one hundred and seventy six million dollars to one hundred and seventy six point five million and total revenue to be in the range of two hundred forty nine point five million to two hundred fifty point five million.
16:59 We expect an adjusted EBITDA loss of between twenty seven point three million dollars and twenty eight point three million dollars. And a free cash flow burn between twenty two million dollars and twenty five million dollars. We also expect our ending ARR on a constant currency basis to be between two hundred fourteen million dollars and two hundred and seventeen million dollars.
17:20 In closing, I would like to thank our amazing employees and customers for their continued passion and support. We also thank you for your support of PROS and we look forward to speaking with you at our upcoming events.
17:32 I will now turn the call back over to the operator for questions. Operator?
17:27 Thank you. Ladies and gentlemen, at this time, we will be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Rob Oliver with Robert W. Baird. Please proceed with your question.
18:06 Great. Good afternoon, guys. Thank you for taking my question. A couple ones for me. So, first, just a question on the outlook relative to kind of previous expectations and some of what changed in the quarter. And Stefan, you mentioned does the -- some of the like or I think, Andres has mentioned in his prepared remarks, some of the commentary around additional bankruptcies or perhaps that was you. Can you talk a little bit about that? And was it all travel that was the swing factor or is there anything on the B2B side to call out as well? Would love to hear about some of the momentum there? And then I just had a quick follow-up question.
18:46 Yeah. Hey, Rob, This is Stefan. Yes, it was all travel related and it had to do with the direct effect of certain airlines and really we're talking about certain regions around the world that were still feeling the effects of really not having much in the way of their operations taking place in the third quarter. So we did see an additional bankruptcy as you pointed out. We also saw a couple of customers ask for some contract restructurings. And as I've pointed out, some of our opportunities in implementations got pushed out.
19:21 Now, just to put it in context, the restructurings that we're talking about here were much smaller than what we were talking about back in twenty twenty. And like I said, there were just a couple of them. But when you take all these things in totality and you look at it, did impact our total revenue by about a couple million dollars in the second half of the year, when you look at Q3 and Q4.
19:46 Got it. Okay. That's helpful. And then just one follow-up, Stefan, just on the free cash flow and profitability profile, obviously strong and you guys have been able to find a lot of -- you've always had a lot of leverage to pull and it sounds like you're pulling some of those on the operating expense side. So just curious does this represent a paradigm shift in terms of assets for you guys that we can expect to focus on free cash flow and profitability going forward and then of the operating expense improvements that you cited, should we assume that those are more sustainable even as we emerge from the COVID situation? Thanks a lot.
20:22 Yeah. So there's been a lot of work that's taking place by the teams around the company. And I think the ones that really impact our free cash flow really have to do with the folks and teams that are working on the collections and in building a much better process around how we work with our customers on timely collections and we've made a lot of improvements there. That's one area.
20:48 The other area is, I commented on our gross revenue retention rates. So as those continue to get better and as we guide into the nineties this quarter and ninety one percent and then we move into deeper into the nineties, going to three percent in Q4. That's also driving more or cash. So, from a cash standpoint, we're executing on the cash opportunities better.
21:13But then the third dimension to that is, how we're doing on expense management and being more efficient to your point and that's also driving the EBITDA performance. And yeah, I think it's something that you see us working on as far up the income statement line is the cost of subscription, that's been an area that we really focused on this year and we've seen those margins improve throughout the year. But we're also looking at ways in which we can operate our business in a more efficient way.
21:44 So, I think we want to continue to see progress on that, but I will stop and say, we don't want to do anything that's going to hamper our growth opportunities. We still feel like there's a tremendous amount of growth ahead of us and we will continue to make those investments, what we're doing with our quota-carrying personnel and really going beyond where we were thinking we'd be at the end of the year and making the investments where we see there's an opportunity. So we'll continue to make those investments to fuel that top line, but always with an eye on making improvements on the bottom line as well.
22:19 Great. Thanks, again Stefan. Thanks, guys.
22:22 Thank you.
22:24 Our next question comes from the line of Chad Bennett with Craig-Hallum. Please proceed with your question.
22:31 Great. Thanks for taking my questions. So, Stefan maybe thanks for the color on the restructurings and the bankruptcy and so forth, that impacted the quarter. So that was two million dollars for the second half. So if we just of -- I guess annualize that, and I'm just thinking in terms of like RPO and deferred revs, would that kind of have a four million dollars impact on that figure or how should we think about those secondary metrics?
23:01 Yeah. I think, Chad, it's a good point, because I don't think we'll see a four million dollars impact over a sequential fourth quarter period. What we saw here was more timing related. So, for example, we had some implementations and some deals that were pushed out by a few months. And that's we're feeling that impact in the third and fourth quarters. But we do expect to see that revenue come back online for us in the first part or I should say at some point in the -- for second, third quarters of twenty twenty two. And the same thing with the contract restructuring, so if you think about how we worked in the particular restructurings we're talking about, it was a bit of relief today for a future obligation in the future. And in these cases not in distant future, but near term future.
24:02 Right. Got it. Okay. And so from a RPO or deferred rev standpoint, that impact was much less. I take it.
24:11 Correct. That's correct. Okay. So from an RPO calculated billings, deferred revenue and from an ARR perspective, the impact was negligible from the contract restructuring standpoint. That's correct.
24:22 Got it. Okay. And then just curious, Andres, it’s maybe for you just on the travel side of the business. I mean, you talked about the Europe reopening from a travel standpoint. I saw something earlier in the week that business travel bookings are basically almost pre-pandemic levels at this point, which I think it’s good from a margin standpoint for airlines.
24:50 I mean, September obviously over, but just as you look at October and maybe even the end of September and November year, what are you seeing in terms of progress or pickup on the travel side of the business, if you are seeing that?
25:07 Yeah. I’d tell you still early from a sales perspective, I'm pretty proud of the team. If you see, we focused a lot on net new airlines that we've signed including Air Transact and Scoot this quarter as an example. So what I would tell you certain regions are recovering faster, North America obviously recovered much faster. We saw strength t in that market. Europe is starting to recover you commented even business travel is starting to pick up especially after the U. S. lifted the ban of travel, that's definitely helping we started to see bookings in October for November and beyond.
25:53 Now what they will want to see, is the materialization of those bookings to see because remember that now, you can cancel those bookings. So they're closely watching to see the conversion of those bookings to actually passengers traveling. So overall, I would tell you that from a booking perspective, eighty percent of our bookings have been B2B year-to-date. So, that's really driving the growth in the business.
26:23 I do expect travel to continue to improve and I would tell you that you are going to see probably Europe come next. Asia will probably be further out, and I would say that's the region that is still experiencing more of an impact compared to twenty nineteen. But the good news is that we're starting to see the wave continue to improve and we do expect that to pick up in twenty two and beyond.
26:54 Okay. No. That's a great color and fair point on the kind of late cancelation and wanting to see bookings actually translate to revenue. And then maybe just one last question for me, if I may. Just on the B2B side. Are you seeing just in terms of CPQ, RFPs, obviously, there's -- CPQ has been around for a number of years now, a number of competitors and so forth. The stuff you're seeing today on the CPQ front, is there still a fair amount of greenfield out there for you guys as you're looking at new logos or we are -- I can't imagine we're doing rip and replace, but is it still largely a greenfield underpenetrated the traded market? Thanks.
27:42 I believe it's very much greenfield. And I would tell you that I talked about several of the deals like Emirates SkyCargo, that includes Smart or Smart CPQ Marken as well as Korian and Radiometer. Many of our deals include, if not the only solution obviously, the areas of omni channel, commerce are resonating really well in the market and self-service commerce. I think what we're seeing with a lot of companies really change your view of CPQ of not looking at it purely from a sales lens and a direct sales lens, but looking at it from an omni-channel selling lens.
28:29 And one of the powers and greatest differentiations of our solution is being able to power both the digital and the direct sales and channel all with the same platform, same configuration, same catalog, same quoting object in a seamless way. And I think that's resonating. So we do see a lot of greenfield opportunities. We are seeing some replacements. I think there's the level of sophistication in our solution to handle scale configuration capabilities and obviously, our AI-powered guidance, I think bring another level of value for the market that is resonating side.
29:18 I'm very bullish. I'm also really proud of us getting to a leadership position in the Gartner market and being the third year in a row that we've advanced from visionary to challenger and now a leader and it's really kudos to our engineering team for their passion and innovation and the vision that we drove around the solution and getting to this point.
29:44 It makes sense. Thanks much for taking my questions
29:46 Thank you.
29:50 Our next question comes from the line of Scott Berg with Needham. Please proceed with your question.
29:56 Hey, guys. This is Josh on for Scott. Thanks for taking my questions. So starting off on the B2B side, if you look across the different ecosystems of opportunities for your business. Are you seeing a pickup in activity around the SAP, ERP ecosystem or maybe some other ecosystems like Microsoft Dynamics driving more net new business activity. Any color there would be helpful?
30:23 Yeah, That's a great question. Josh I would tell you SAP ecosystem is usually a very important target for us in the large enterprise. So yes, we see a lot of -- our customers are in the SAP ecosystem, and I would say that that's probably an area. Salesforce ecosystem is another one. And we are seeing even in the Microsoft ecosystem and Dynamics as well. So I would say those three are what's driving the growth.
30:57 Okay, great. And then moving on with the cash flow question, How are you thinking about and I know it's early, but how are you thinking about cash flow next year as travel returns, is there any chance for breakeven free cash flow next year? Or maybe give us a sense of what are the puts and takes could kind of get you into that kind of key breakeven level next year?
31:21 Yeah. So, Josh, I don't think we'll be getting quite to breakeven next year, but what we have signaled in the past is that be we'll be approaching that by the time we end twenty twenty two and looking for a free cash flow breakeven year in twenty twenty three. But our goal is to consistently improve to show progress from last year to this year and then this year to next year, but I don't think we'll get all the way there in twenty twenty two.
31:55 Okay, great Thanks guys.
31:59 Thank you.
31:59 Our next question comes from the line of Jackson Ader with JPMorgan. Please proceed with your question.
32:06 Great. Thanks for taking my questions guys. I was curious to hear whether any of the volatility in commodity prices was driving any incremental demand on the B2B side.
32:23 Hey, Jackson. We can't hear you very well?
32:27 Oh sorry.
32:30 Could you repeat it one more time, I heard about commodity and volatility, but I did not catch everything really well. So I want to…
32:39 Yeah, just curious, whether the commodity price volatility that we've seen kind of just whether it's lumber oil, it doesn't matter. But whether that led to any impact and increased demand on the B2B side for price optimization?
32:55 I would say that that's top of mind for pretty much every company we talked to. And I would say the overall this notion that the world we're living there's a lot of uncertainty and there's a lot of volatility and how you drive success with that. And the need from moving from an old manual static process to a more dynamic AI powered model that can adjust much faster to trends and changes is resonating really well.
33:31 I think that every company is facing with these changes think of the overall supply chain issues, costs changes, raw material inflation, and being able to drive appreciation precision and changes quickly and the faster you can drive these changes the better your business is going to be in terms of capturing revenue and profitability and winning deals, I think those are areas that are top of mind around all buyers.
34:07 Okay. Great. That makes sense. And then Stefan, in the past on kind of third quarter calls, you've given some directional or kind of preliminary expectations for the following year. Curious if you have any initial thoughts on twenty two or if that's a little too far out at this point?
34:27 Yes, Jackson, I have to tell you. I'd love to be in a market position where we could make a comment on twenty twenty two. I think there's some encouraging things that are happening in the marketplace that we discussed on some previous questions. And so we're very optimistic about what could be the case as we look into twenty twenty two. But at this point, just not ready to call what we see happening for our own business in twenty twenty two, but do expect to provide that type of color and guidance on our next call.
35:03 Okay. All right. Great. Thank you.
35:06 Thank you.
35:11 Ladies and gentlemen, we have reached the end of our question-and-answer session. I would like to turn the call back to Belinda Overdeput for closing remarks.
35:24 Thank you for listening to today's call. We look forward to speaking with you at conferences and events this quarter. We will be attending with Stifel twenty twenty one Virtual Midwest one on one Growth Conference on November eleventh, the Baird Virtual Bus Tour on November sixteenth and the Needham Virtual SaaS one on one Conference on November eighteenth. If you have any questions following today's call, please contact us at ir@pros.com. Thank you and goodbye.
35:54 Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.