Aviat Networks, Inc. (NASDAQ:AVNW) Fourth Quarter 2022 Earnings Conference Call August 23, 2022 5:00 p. m. Eastern Time
Participating companies
Andrew Fredrickson – Director, Corporate Development and Investor Relations
Pete Smith – President and Chief Executive Officer
David Gray, Senior Vice President and Chief Financial Officer
Conference Call Participants
Scott Searle – Partners at ROTH Capital
Tim Savageaux – Northland Capital Markets
Erik Suppiger – JMP Securities
Theodore O’Neill – Litchfield Hills Research
Orin Hirschman – AIGH Investment Partners
Operator
Have a nice day and thank you for being here. Welcome to aviat Networks’ fourth quarter of fiscal 2022 earnings convention call. [Operator Instructions] Please note that today’s lecture is recorded.
Now I’d like to talk to your host, Andrew Fredrickson. Continue.
andres frederickson
Thank you and welcome to Aviat Networks’ conference call and webcast on fiscal 2022 fourth quarter results. You can find our updated Form 10-K, press release and investor filing in our IR segment in www. aviatnetworks. com, as well as a repeat of today’s call in about 2 hours.
With me is Pete Smith, Aviat’s president and chief executive officer, who will begin with a keynote address on the company’s fiscal fourth quarter, followed by David Gray, our chief financial officer, who will review our 2022 quarterly and fiscal financial results. Pete will then provide closing remarks on Aviat’s strategy and perspectives, followed by a Q&A session.
As a reminder, during today’s call and webcast, the control could make forward-looking statements related to Aviat’s business, including but not limited to statements regarding monetary projections, business drivers, new products and expansions, which will affect COVID-19 and economic activity in other regions. These and other forward-looking statements reflect the Company’s prospects only as of the date of this call and webcast and involve assumptions, dangers and uncertainties that may also cause actual effects to differ materially from such statements. Additional data on the points that may also cause actual effects to differ materially from statements made during this call are found in our Annual Report on Form 10-K filed with the SEC. The Company assumes no legal responsibility to review or publish. disclose any revisions to those forward-looking statements as a result of new data or long-term events.
In addition, in today’s call and webcast, the control will refer to GAAP and non-GAAP monetary measures. Please see our press release, which is located in the IR segment of our online page in www. aviatnetworks. com and the tables therein, which included a GAAP to non-GAAP reconciliation and other additional monetary information.
At this point, I would like to address Aviat’s President and CEO, Pete Smith. Pete?
pierre smith
Thank you Andrew and good afternoon everyone. Thank you for joining us in reviewing the effects of Aviat Netpaintingss for the fourth quarter of fiscal 2022. The company continued and executed its key long-term objectives of expansion, margin expansion and staggered effects, despite persistent supply chain headwinds and inflation. Challenges. For the fourth quarter of fiscal 2022, the aviation team’s hard work and commitment generated revenue of $77. 4 million, representing an expansion of 8. 0% compared to the fourth quarter of last year; Adjusted EBITDA of $9. 1 million, an accumulation of 31% from the same was last year; increase in non-GAAP EPS up to 52%; a strong and debt-free balance sheet; continuous percentage buybacks of $0. 75 million.
For full year 2022, Aviat reported a 10. 2% earnings expansion to $303. 0 million, which also represents our consecutive year of double-digit earnings expansion; Adjusted EBITDA of $38. 3 million, an accumulation of 17% over last year; non-GAAP EPS expansion of 24%; repurchased $5. 4 million of Aviat shares. These monetary effects reflect the continued demand we see for our products in the market.
In FY22, we increased our overall call percentage and added 175 new customers. This shows that we have a differentiated offer to take into account the festival and grow. In North America, in FY22, we increased our market share to 6% and are now No. 1 in the region as a whole. Additionally, in North America, the fourth quarter was our most productive booking quarter in more than a decade. And in the rest of the world, we continue to gain ground and publish encouraging effects and reservations.
We see five number one drivers for our good fortune in fiscal year 2022, the strength of personal networks; innovation of our multiband solutions; proceed to evolve our software offering; pull and expand with Aviat Store; and our ability to meet supply chain challenges. Let me deal with them.
Our pricing proposition for personal networks remains unmatched. Our reliable, high-powered radios, visitor services and comprehensive solution offerings, adding application software, controlled services, routers and now wireless responses through our acquisition of Redline on the first day of the existing quarter, are time to none.
We are the leading provider of microwaves in personal networks in North America and increased our market share in this segment in fiscal year 22. Please note that, for the first time, the percentage demand of our personal networks is higher than that of the next two competitors. Combined. Private network profits grew 11% this fiscal year, and fiscal 2022 was the highest booking year in our history in this segment, which included, among other things, six new winning networks across the state involving not only microwave products but also routers, software applications, and controlled services. Our strength in this segment is unrivalled and with our portfolio expansion initiatives, our personal networking clients are exciting.
In FY22, we recorded significant contracts and renewed orders for our unique WTM 4800 multiband solutions. Aviat is the supplier that will provide a one-piece multi-band radio and a long-distance multiband solution, all providing very high capacity long-distance shipments, with a total charge of ownership up to 90% lower than that of fiber.
FY22 saw significant advertising successes from our industry-leading multiband solutions, adding a year-over-year backlog in multiband sales of over 80%; network penetration of two Tier 1 accounts in West Africa; a new Level 2 cellular operator in Southeast Asia; a new Tier 1 cellular operator in China demonstrating Aviat’s competitiveness over Huawei; a new Tier 2 cellular operator in East Africa; a giant service provider in Germany with a 14,000-kilometre fibre optic network; many new ISPs and broadband networks in the U. S. In the U. S. and around the world.
The fourth quarter, the highest quarter of bookings to date for multiband, with more than 60% of those bookings coming from EMEA. Oconsistants in countries with higher microwave spectrum rates have quickly recognized the benefits of implementing aviat multiband as an option to classic wireless links. In countries like the Philippines, Nigeria, and Kenya, Aviat’s multiband links can save up to $20,000 consistent with year-consistent links on spectrum pricing alone.
In countries with moderate spectrum tariffs, consistent operators have followed Athrut’s multiband systems to achieve the following goals: first, to build a capacity of up to 10 gigabits according to the moment through software; two, reducing energy consumption; and third, reduce the scale of the tower and site to prices compared to multi-channel microwave links that are scalable to only a fraction of capacity. Multiband is widely identified as a key solution for building or preparing 5G networks, network deployments and Athrut is the industry leader in this field.
Switch to software. During the year, we improved our frequency assurance software, or FAS, with new reporting algorithms and interference detection. We incorporated a new fitness insurance software or HAS to improve the overall physical condition of the network and reduce downtime. And we’ve evolved our ProVision Plus platform with enhanced IP/MPLS control capabilities. All of those investments resulted in an increase in application and control software sales for FY22 of more than 50% compared to FY21. A key victory here was with a giant state government where we achieved the first sale of our hosted HAS software, which is a software-as-a-service provider and will give us an annual recurring software profit stream. This contributed to the fourth fiscal quarter of 2022 being our largest retention quarter of control software since it was founded. We are just getting started with recurring software and expect much more from this business in FY23.
Another vital thing in Aviat’s good fortune in FY22 is the Aviat store, which was originally introduced to cater to rural broadband ISPs in North America, the store is now expanding globally and we added 72 new accounts in FY22. In the North American ISP area, Aviat occupies the first position of legal radios for operations. Obviously, our pricing proposal is working.
The store accounted for more than 8% of our FY22 revenue and we anticipate the opportunity presented through vital investment resources that will present itself in the coming quarters and years. This includes the $20 billion Rural Digital Opportunity Fund (RDOF) and one billion from the Bipartisan Infrastructure Fund, which has yet to have an effect on our business. For the future, we can provide data about the RDOF program. Some customers began restricting their spending in opposition to RDOF this quarter before getting the actual allowable budget.
Our clients’ budget will be distributed at the end of this calendar year or early next year. If the program follows CAF’s investment profile, we estimate that the peak expenditure would be in 3 years. We continue to hope that RDOF will be a positive catalyst for us. . However, as with the government’s maximum allocations, the plan is subject to change. We believe we deserve to share the color we have with you. To increase our readiness for this catalyst, we are implementing a new e-commerce platform, which will develop our ability to meet this demand in the U. S. In the U. S. and for consumers with similar shopping features around the world.
Let’s move on to the origin chain. While the supply chain was challenging throughout the year, our team worked tirelessly in the face of issues and disruptions to ensure we met our customers’ expectations. to cushion source disruptions, they have allowed us to deliver products and effects consistently.
In some cases, this has resulted in accelerated pricing to lessen bottlenecks and delays. In the fourth quarter, we have not yet had any effect on revenue due to the scarcity of sources. This is despite the fact that semiconductor chips remain in the allocations. along with more than a hundred other components. Our prices were adversely affected due to COVID lockdowns in Asia. These blockades have led to significant delays. Vfinish or ejections and disengagements at the end of the quarter are still a factor, but the team managed to triumph over this factor throughout the year, adding six of those events in the last quarter.
Overall, we continue to see some improvements in the supply chain, but the dangers remain. Specific innovations come with stable delivery times. The amount of critical scarcity is no longer increasing. The number of force majeure occasions has recently been reduced to 0. The total number of assigned parts is still high, but we see that we have surpassed the peak of the allocation environment.
Lately, the key dangers come with shortages of semiconductor wafers and third- and fourth-tier suppliers related to COVID lockdowns. Our effects for consumers and shareholders would not be imaginable without all Aviat employees. year. We remain focused and continue to execute and those collective efforts are reflected in our monetary and operational effects. We have continued to demonstrate our ability to grow and participate in demand.
Aviat’s core values come with visitorArray As part of our visitor process, we have complexed our visitor voice. 9% compared to last year. Our 3 expansion drivers, 5G, personal networks and rural broadband, position us well to capture significant opportunities through our differentiated product, software and service offerings.
Finally, at the beginning of our new fiscal year, we closed the acquisition of Redline Communications, which is expected to generate approximately $20 million in earnings and contribute to fiscal 23 gross margin and earnings. We are very happy that Redline is part of Aviat and are very happy with the opportunity to further demonstrate the price of Aviat’s operating system.
With that, let me give the floor to David to review our finances before returning for some final comments. David?
david gray
Thank you, Pete, and good afternoon, everyone. In my remarks today, I will review some of the monetary highlights for the fourth quarter and fiscal year 2022. Noting that our detailed financial statements can be found in our press release filed this afternoon. As a reminder, all of the comparisons discussed today are between the fourth quarter and fiscal year 2022 and the fourth quarter of fiscal 2021, unless otherwise stated.
For the fourth quarter, we reported overall revenue of $77. 4 million, compared to $71. 7 million for the same time last year, a cumulative of $5. 7 million or 8. 0%, driven by strong expansion in Europe, Asia-Pacific and Latin America. North America, which accounted for 63% of total fourth-quarter sales, $48. 8 million, a cumulative of $2. 4 million or 5. 1% compared to the same time last year, driven primarily through our personal networking business.
International revenue was $28. 6 million in the quarter, a cumulative of $3. 6 million or 13. 3% compared to the same time last year. four-quarter order-to-turnover ratios above 1, which began in fiscal 2018. Gross margins for the quarter were 35. 5% and 35. 7% on a GAAP and non-GAAP basis, compared to 36. 1% and 36. 2% a year earlier. Gross margins remained under pressure from inflationary winds and accelerated prices similarly to supply chain disruptions. We’ve also incurred more prices to triumph over Covid-like Asian lockdowns, which have basically impacted our transportation prices.
Our group this quarter leaned towards our long-standing projects in the order book. As a result, our past value movements have had less of an impact. GAAP operating expenses for the fourth quarter were $22. 2 million, an increase of $0. 1 million. compared to the previous year. Non-GAAP operating expenses for the fourth quarter, which exclude the influence of restructuring charges, stock-based reimbursement and transaction costs, were $19. 5 million. This represents a low of $0. 9 million from last year due to general price controls and profits from past restructuring measures.
GAAP net revenue source for the fourth quarter $4. 3 million, up from $2. 8 million last year. GAAP PRE-TAX EARNINGS $7. 3 million, an accumulation of $3. 6 million or 95% year-over-year, driven through an advanced operating revenue stream and a $2. 6 million gain in marketable securities, partially offset through currency costs and mergers and acquisitions. The fourth quarter tax provision was $2. 8 million, compared to $0. 9 million last year. As a reminder, expanding the tax provision from one year to the next will not be to accumulate our monetary taxes paid. The company has more than $500 million in NOL that will continue to generate shareholder value through minimal monetary tax bills for the foreseeable future.
Net non-GAAP revenue stream for the fourth quarter, which excludes restructuring charges, stock-based compensation, M&A pricing and non-cash tax provision, $7. 8 million, compared to $5. 3 million for the same period last year. Non-GAAP EPS for the fourth quarter $0. 67 consistent with the percentage consistent on a fully diluted basis, compared to $0. 44 consistent with the consistent percentage of the same period last year, a cumulative 52%.
Adjusted EBITDA for the fourth quarter $9. 1 million, a cumulative of $2. 2 million or 31% year-over-year. Adjusted EBITDA margins were $11. 8 million for the quarter.
Let’s move on to the balance sheet. Our money and marketable securities at the end of the fourth quarter were $47. 8 million, compared to $33. 8 million in the prior quarter. We are still debt-free. Operating money for the fourth quarter was $13. 5 million. The strong money generation is the result of a moderation in the current capital increases induced by the supply chain that we experienced earlier in the year.
We executed $0. 75 million in percentage buybacks in the quarter. Our balance sheet remains very strong, which puts us well placed to execute our long-term plans. With that, I’ll reach out to Pete for some final comments. Pete?
pierre smith
thanks david Just a few more comments before opening the Q&A session. Fiscal year 2022 is a significant year for Aviat Networks. The business continues to grow. We announced our first acquisition in over 10 years and are well on our way to achieving the expected synergies. We announce our partnership with MaxLinear to expand the next generation, System on Chip, which will set us apart for years to come. It will be a more capable advertising option based on a new generation of generation than competing chips.
The new generation will allow us to obtain very high capacity payloads over longer distances with the lowest total ownership charge imaginable. In addition, this chip will consume less power and generate benefits in terms of load, formula design and source chain. Our strategy is a few years ago was to work with MaxLinear as a strategic partner of chip progression and innovate in formulas. This strategy has resulted in significant product differentiation, as you can see from our good fortune in the market and our existing product offering.
With the new partnership agreement with MaxLinear, we are convinced that we have the right strategy for the future.
Based on the Company’s outlook, we are forecasting for 2023, the redline Communications business: revenue for fiscal 2023 is expected to be between $330 million and $340 million and adjusted EBITDA is expected to be between $43 million and $45 million.
That said, operator, let’s pick up the call to make some comments and then open the questions.
Operator
Thank you. Pete Smith, your line is now open. Continue.
pierre smith
We just wanted to take stock of Ceragon’s Extraordinary General Shareholders’ Meeting. We are disappointed with the results. We remain interested in the transaction. However, for there to be a transaction, there will have to be a compromise. And to date there have been very few. And since this is a public offering, the data is in the public domain, and we don’t think there’s much more to say.
That said, I would like to go back to the operator and start the consultation and response period.
Q&A session
Operator
[Operator Instructions] And the first comes from the Scott Searle line of ROTH Capital.
scott searle
Pete, Dave, smart paintings about the neighborhood. Maybe just to dive into the gross margin front. Certainly, the headwinds on this front related to the availability of inflationary tariff components, blockades in China and shipping tariffs. Could you quantify the effect you saw during the June quarter?And we had, I’ll call it, a thaw on that front. What do you see in the short term when we look at the September quarter and the current part of the calendar year?
pierre smith
Oui. Je needs to avoid rapid quantification, but it had a pretty big impact on our margins during the quarter, likely at 60 basis points, 70 basis points diversity. What we’re seeing, looking for later, is really an absence of those headwinds, and we expect margin expansion to be pretty smart as we move into fiscal 23. Therefore, it is a unique occasion in which we plan to continue the trend of improvement that we had noticed in the last quarters starting in 2023.
scott searle
And maybe looking at the facilities aspect of the equation, I think it’s a very smart quarter, whether it’s from a profit and gross margin perspective. I wonder if you can give us an idea, was there anything about it in terms of one-time earnings And especially now in the future, is this a normalized point to think about gross margin performance, especially now that we start to see Redline’s contribution coming?
And Pete, a high level too, I know you gave the $20 million forecast for Redline for the existing fiscal year. But how do you think this will trickle down to P?
pierre smith
Maybe you’ll pass first.
david gray
Yes, I’m going to start with the service margin query. Yes, we had a very smart margin quarter on services. This was driven across North America. We had some very, very smart projects. But we have also focused on executing and reducing the cost of our service offering. So we’ve made smart progress there. Do we plan to keep the ones that have this service margin point?Probably not at this point, but we don’t see a return to where we were historically. We expect overall service margins.
pierre smith
It is ok. And then, in the Redline component of your question, we’ve been competitive in the way we control our supply chain. And Redline, we’re starting to run this popular operating procedure on Redline. that $20 million, they will build the year. And we will also be able to install our operating formula there and start cutting costs.
As for how, in the ready comments, we said that we were ahead in our planned synergies and it is on the SG front.
scott searle
Gotcha. And if I may, just the last two. Just because of the recommendation you have given, recommendation for the year. I wonder if you can calibrate sequentially, how do you think about things on the front?It looks like gross margins are starting to come back. But if you were in Redline, how do you see the September shape?And then this macro view for FY23, Pete, what’s the thinking in terms of RDOF’s contribution to this and all sorts of other government investment initiatives?
And finally, and I in advance, ceragon’s mandatory consultation in terms of, is there any next step for you?And that said, are there other things and opportunities on the way that you’re starting to see spark your interest?
pierre smith
It is ok. So there are 3 questions. So, on our board, we don’t have RDOF on our board. So we would say it’s a positive catalyst when it materializes. When it comes to progression, we are an assignment-based company. In our ready remarks, we said he had a public safety record. So, that would mean we’re on the July-June calendar where you’d see the ramp of the year. The way our order book is, I would expect expansion to build up as we go through the year.
And then, in terms of Ceragon’s next steps, I would say there is: if there’s a compromise, there are next steps. If there is no compromise, there are no next steps. The positive end result for us is to increase our visibility and there are more opportunities for us to grow through acquisitions than before. Therefore, we did not achieve the effects we were looking for in the ordinary shareholders’ meeting, it was net-net positive for Aviat.
Operator
And the next one comes from the Tim Savageaux line of Northland Capital Markets.
Tim Savageaux
I tried to communicate about the strength of the reserves in the quarter, which they discussed in terms of several years or a maximum of ten years. Maybe let’s focus on North America and the engines that were there during the fourth quarter. And to what extent did rural broadband in general play a role in the strength of this order?Or can we characterize personal networks as much as possible?And I have a follow-up.
pierre smith
Yes. Tim, it would characterize personal networks to the maximum, and that is why we gave it the color of six state networks.
Tim Savageaux
Is it for the quarter or for the year?
pierre smith
It’s for the year.
Tim Savageaux
And also to stick to some of the victories of the carriers. Well, I searched to see if maybe you could throw a book at the fourth quarter bill, either in general or in North America, just considering the superlatives you put to the numbers in terms of the year. And I was also interested in the Tier 1 victory in Huawei’s backyard, I guess. And what does this mean from an income source attitude and also for potential long-term gains?
pierre smith
It is ok. So I think we — because we have a corporation based on irregular projects, we don’t like the book-to-bill, and that’s why quarterly, and that’s why we said our backlog year after year is up to 9%. The victory in China is a demonstration of our ability to supply our multiband, which is very differentiated, and we use it where spectrum prices are higher in China or the charge of connecting the towers between them is the most expensive.
And I would say that we need to build the directives on this. We talked about that because it demonstrates our ability to compete in Level 1 and huawei’s backyard.
Tim Savageaux
Maybe one more follow-up for me, if I may. You’re coming out of a few years of double-digit biological expansion here. And looking for a biologically more conservative start to the year this year and mentioning that you don’t have a lot of government-subsidized profit or the RDOF or anything in your forecasts. Can that itself Array suppose, if it materializes moderately, put you back in two digits by 23?And that’s it for me.
pierre smith
Oui. Je means it’s right. I mean, Tim, you’re probably doing mathematical calculations about what it is. And if that happens, it may actually put the core business at that point of growth, yes. financing or the Construction Infrastructure Fund, or BIF, H. R. 3684. So, we’re following those things very closely. And if we have the push, then it will be a positive catalyst for us.
Operator
And the next one comes from the line of Erik Suppiger of JMP Securities.
erik speciger
Can you tell us a bit about the call you see in Europe? And to what extent is it similar to the war in Ukraine?
pierre smith
Our largest call is in the UK, and it is a personal network assignment similar to the peak of our business in North America. And in the past we revealed that we only have one entrepreneur in Russia and we only have one possible business opportunity in Ukraine. Therefore, the war between Ukraine and Russia has had minimal effect on us. Most of the expansion was driven through private networks in the UK, but we regained some Tier 2 in Europe and some ISPs in particular in Germany.
erik speciger
Can you talk about. . . obviously, did it have a pretty powerful expansion physically in Europe?Why. . . why are you so interested in personal networking?
pierre smith
So if we went about five quarters later, we renewed our business leadership because we weren’t doing very well in the EMEA team. And we’ve improved the team, the groups that manage our voice client, and our sales funnel process. now I would say that with that leadership, we perceive our price proposition. We are looking for opportunities we can win and our conversion rate is higher than five quarters later.
erik speciger
It is ok. And Africa down year after year. Is there anything noticeable that caused this?
pierre smith
Oui. Je think so: we think Africa is well placed for growth, and it’s actually just a low point in the CapEx cycle. And I think you’ll look at that area in the next few quarters and see a rebound there.
Operator
And the next one comes from the lineage of Theodore O’Neill of Litchfield Hills Research.
Theodore O’Neill
Backlog, can you give us data on the combination of products and services?What if you see a more powerful expansion in any of these?
david gray
So yes, we definitely had a skewed mix towards facilities this quarter. It’s regular, it’s probably 6 percentage issues or 7 percentage issues more than it normally is from a combination perspective. And we’ve also had, we’ve already talked about the strong execution that has higher margins there. We do not know that there is a basic substitution in the combination of products and facilities.
As Pete said, a project-based company that’s going to be a little spotty, and we’re going to have this kind of variability quarter by quarter, turned out to be a counterfeit quarter for Array along with positive margins where they were smart for us.
Theodore O’Neill
It is ok. And in terms of profit and market share in North America, it’s very strong here. Is it a specific product domain that creates this for you?Or is it widespread?
pierre smith
So, I would say that our WTM high capacity radio is a key product. But one of the reasons we win in personal networking around the world and especially in North America is our end-to-end offering. So we do the network design, the network plan, the hardware supply, the software and services, the installation. And we carry out an uninterrupted monitoring of the network. And this core skill, as well as the elements of price, are the parts of the winning price proposal.
Operator
And the next one comes from the lineage of Orin Hirschman of AIGH.
orin hirschmann
Congratulations on the result. I just wanted to delve into Redline again. How was Redline’s turnover in the last year?
david gray
Last fiscal year approximately more than $19 million.
pierre smith
Yes. So yes, $19 million. . .
orin hirschmann
. . . [does this Redline number apply?]
pierre smith
We’re at about $19 million. We are committed to nominal expansion as we restructure the company and put our voice into practice of the visitors and sales funnel process. That’s right: we need to make sure we get the cost, that the company leaves the Canadian inventory exchange and that resources are deployed and we execute our visitor voice and sales style process. That’s what we’re doing with Redline in the first 12 months.
orin hirschmann
It is ok. What I get to with the consultation is only to perceive the rate of biological expansion, even without Redline, given that the order for e-books has grown and the order-billing ratio has been positive. It would seem that, again, I don’t know the momento. de ordered in the eebook to invoice, however, it seems to give you some leeway, especially not to mention anything about RDOF or the construction of the infrastructure.
pierre smith
Therefore, we must ensure that we give a recommendation that can be implemented. You’re right that we have an RDOF merit if we can resolve the delay, we can, and while we do that, we’ll review our direction over the course of the year.
orin hirschmann
It is ok. And the last one is about software. I know you discussed that there are more software offerings that you alluded to. Can you say more about it or even just the moment?
pierre smith
So we introduced about 1. 5 or 2 years ago our FAS, frequency guarantee software. Then, in the last quarter, we introduced our fitness insurance software. And we’re looking at some more insurance software to expand our software suite and support network operators manage their networks at a lower total cost of ownership. And we would say that the year we will release our next insurance software and build our merit there.
Operator
This concludes today’s Q&A consultation on the program. I would like to give the program to Pete Smith for any comments.
pierre smith
I want to thank everyone for their continued interest and appeal: their presence on the call. We would like to thank our suppliers, customers, workers and shareholders, and we look forward to speaking with you at the end of the first quarter and offering you an update on our progress.
Operator
This concludes the convening of today’s convention. Thank you for participating. You can now log out. Have a nice day.