AstroNova, Inc. (NASDAQ:ALOT) Q4 2022 Earnings Conference Call April 14, 2022 9:00 AM ET
Company Participants
Scott Solomon – SVP, Sharon Merrill Associates, IR
Gregory Woods – President and CEO
David Smith – VP, Treasurer and CFO
Conference Call Participants
Samir Patel – Askeladden Capital
John Deysher – Pinnacle
Tom Spiro – Spiro Capital
Operator
Good day, and welcome to AstroNova’s Fiscal Fourth Quarter and Full Year 2022 Financial Results Conference Call. Today’s conference is being recorded [Operator Instructions].
I would now like to turn the conference over to Scott Solomon of the company’s Investor Relations firm, Sharon Merrill Associates. Please go ahead, Sir.
Scott Solomon
Thank you, Diana. Good morning, everyone and thanks for joining us.
Hosting this morning’s call are Greg Woods, AstroNova’s President and CEO; and David Smith, Vice President and Chief Financial Officer. Greg will discuss the company’s operating highlights. David will take you through the financials at a high level. Greg will make concluding comments, and then management will be happy to take your questions.
By now you should have received a copy of the earnings release that was issued today. If you don’t have a copy, please go to the investors page of the AstroNova website www.astronovainc.com.
Please note that statements made during today’s call, that are not statements of historical fact, are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1934. These forward-looking statements are based on a number of assumptions that could involve risks and uncertainties. Accordingly, actual results could differ materially except as required by law. Any forward-looking statements speak only as of today, April 14, 2022. The company undertakes no obligation to update these forward-looking statements. For further information regarding the forward-looking statements, and the factors that may cause differences, please see the risk factors in AstroNova’s annual report on Form 10-K and other filings the company makes with the Securities and Exchange Commission.
On today’s call, management will be referring to non-GAAP financial measures. AstroNova believes that the inclusion of these measures helps investors gain a meaningful understanding of changes in the company’s core operating results and also help investors who wish to make comparisons between AstroNova and other companies on both the GAAP and a non-GAAP basis. A reconciliation of non-GAAP financial measures to their most directly comparable GAAP measures is available in today’s earnings release.
With that, I’ll turn the call over to Greg.
Gregory Woods
Thank you, Scott. Good morning, everyone. Thanks for joining us to review our fiscal fourth quarter and full year 2020 financial results.
I want to start today by acknowledging the outstanding work of our more than 360 team members around the world. In what was an extremely challenging year, they worked tirelessly to keep themselves and those around them safe while continuing to provide outstanding service to our customers. While COVID-19 has gradually receded into the background in certain regions over the past several months, the economic consequences of the pandemic, including supply chain disruptions, price increases and rising transportation costs continued to have a pronounced effect on our business in the fourth quarter.
In round numbers, we estimate that we would have shipped an additional $2 million in products during the quarter but for delays in receiving the parts necessary to fill those orders. The backlog in our supplies business which normally is about five days has recently been running in the neighborhood of 15 to 20 days. And that’s despite significantly beefing up our supplies inventory in an effort to help mitigate any potential delays.
We’re also seeing steep increases in transportation costs. To put those increases into context, freight-in charges were up more than $600,000 on a sequential basis in Q4, and more than $700,000 year-over-year. We are taking steps to address these cost dynamics in a number of ways including leveraging our pricing power to mitigate the impact of inflation and the increase in transportation costs. We expect to begin realizing benefits of these actions as we move into the second half of our fiscal year.
With that as a backdrop, let me briefly review our results which included higher total revenues for the quarter and full year periods, despite the macroeconomic challenges. Total revenue was up approximately $260,000 for the fourth quarter to $29.7 million, as a 20% increase in Test & Measurement revenue more than offset a 4% decline in Product Identification. Total revenue for the year increased 1% to $117.5 million. Increases in supplies and service revenue were key drivers in both periods.
In both the quarter and full year, we continued to deliver robust recurring revenue streams. Supplies accounted for approximately 62% of revenue for the fourth quarter and the full year. Hardware comprised 28% and 27% of revenue for the quarter and full year periods respectively, while our Service/Other accounted for 10% of revenue for the quarter and 11% for the year.
Bookings were strong at $32.9 million in the fourth quarter, up 12.4% from the fourth quarter of fiscal 2021. Bookings for the fiscal ’22 came in at $128.6 million, up 13.2% year-over-year.
Turning now to our segments, fiscal 2022 marked the Product Identification segment’s ninth consecutive year of revenue growth. We continue to be very pleased with the strong performance of our direct-to-package printing solutions such as the T3-OPX, which had a record year in fiscal 2022. Exponential growth of the e-commerce channel over the past two years plays directly into the strength of the T3-OPX.
With more and more goods being delivered to customers’ doorsteps, the demand has increased for the use of secondary packaging, both to protect the goods during transport and to provide another branding opportunity for the retailer. The T3-OPX is a best-in-class system designed for overprinting or post-printing on a wide variety of materials and packaging substrates. By using renewable substrates, the T3-OPX also enables package printers to meet the customers’ sustainable packaging preferences. Sustainability is a megatrend that is driving a sea change in the packaging industry. Trivium Packaging’s 2021 Buying Green Report found that 67% of consumers find recyclability of packaging important, while 73% are actually willing to pay more for eco-friendly packaging.
Our T3-OPX system also plays directly into another mega-trend influencing the direct-to-package printing market, and that is brand experience. WestRock’s Pulse Packaging Survey shows that for a majority of consumers packaging influences product satisfaction. The survey also demonstrates the importance of key sustainability features such as environmentally friendly design and the ease of recycling. So there is a clear link between sustainability and brand experience.
The third packaging megatrend that is relevant to our business is supply chain agility. Manufacturers want a package design that is not only e-commerce friendly, but also cost-effective and rapidly adaptable to the changing regulatory environment and rapid shifting in consumer preferences. Supply chain agility also requires packaging that is digitalization-ready by enabling automation, real-time tracking and other benefits that boost consumer confidence. We believe that the value proposition of our direct-to-package printing technology creates sustainable competitive advantage for AstroNova.
Looking ahead in the PI segment, we expect to release two new products that build on our leadership in the label printing and direct-to-package printing markets in the next few months. We believe that these new products will make it even easier for our customers to develop full color, high-quality labels and packaging that distinguishes their brands. Stay tuned for more.
Switching now to our Test & Measurement segment, with an ongoing rebound in the commercial air travel in the U.S., Europe and other regions, the segment delivered improved results. Revenue increased 20% in the fourth quarter and 3% in the full year versus the same periods of fiscal 2021. T&M segment operating margins also were up nicely, particularly in light of the higher manufacturing and transportation costs that we have experienced. One need only look at the daily TSA checkpoint travel numbers to see the significant improvement in passenger traffic from calendar 2021. And while domestic passenger traffic has rebounded faster than other routes, the airline industry expects to see a return to pre-pandemic levels in 2023 and 2024.
Consistent with the ramp up in air traffic, we are seeing an increase in both printer supply sales as well as repair services. At the same time, the multi-year backlogs at both — for the Boeing 737 MAX and Airbus A320 aircraft are growing, which both portend well for the sales of our aerospace products in the future.
With that, I’ll turn the call over to David.
David Smith
Thank you, Greg, and good morning, everybody. I’ll launch right in. Our fourth quarter cost of goods sold and gross margins were adversely affected by the supply chain and the inflationary headwinds that have impacted us as well as so many other industries over the past year. While total revenue was up slightly in the quarter, gross margin in Q4 was down 450 basis points to 32.8% from 37.2% in the prior year quarter. And gross margin was down 320 basis points from the third quarter this year. The decrease was due to both higher cluster of goods and to a lesser degree unfavorable mix.
For the full year, gross margin improved 160 basis points to 37.2% driven primarily by our favorable gross margin comparisons to the prior year in the first nine months. In the fourth quarter comparisons to the prior year, we’ve been hit by higher labor costs, higher material costs and significantly higher freight costs which spiked significantly in the fourth quarter as we were forced to pay for expedited shipping to get parts on time, sometimes even by airfreighting them over the top of the same goods being shipped, and the rates we’re paying are a lot higher as well.
In the quarterly comparisons to the third quarter of the FY22 year, all of the same factors were apparent. Again the freight cost spike was dramatically higher in the fourth quarter.
Looking at revenue by type, we continued to have good robust recurring revenue. Hardware accounted for 28% of revenue in the quarter compared to 31% in the quarter last year. Supplies accounted for 62% of revenue in the quarter versus 60% last year. Service and other revenue was 10% in the quarter, approximately flat in percentage terms, but up about of $0.25 million compared to the fourth quarter of fiscal ’21.
For the full year hardware accounted for 27% of total revenue compared with 29% in fiscal ’21. Supplies revenue was 62% of revenue for both fiscal ’22 and fiscal ’21, and our service business accounted for 11% of revenue in fiscal ’22 versus 9% of revenue in the prior year. As Greg suggested, this reflects the rebound in the Aerospace portion of our T&M segment.
Turning to revenue by geography, domestic revenue comprised 57.3% of the total for the quarter compared to 55.9% in the fourth quarter a year ago. International revenue was 42.7% for the quarter down from 44.1% a year earlier. For the full year, domestic revenue accounted for 58% for fiscal ’22 versus 60.1% in fiscal 2021. International revenue came in at 42% for the year up from 38.9% in fiscal ’21.
Revenue from Europe, Canada and Asia was up double digits while the U.S. revenue declined 4% for the year. Operating expenses increased 1.5% in the quarterly comparison or approximately, $145,000 to $10 million reflecting higher R&D expenses related to the new product development that Greg mentioned, partly offset by modest reductions in the SG&A and selling and marketing areas.
On a full year basis, OpEx was up 1.4% or $557,000 to $39.5 million, which again primarily reflected on higher R&D. This year, operating expenses did increase from last year’s COVID induced sales and marketing expense cut back period, but I should note, not very much. Adjusted EBITDA, which is earnings before interest, taxes, depreciation, amortization and share-based comp was $773,000 for the fourth quarter this year, and $13.2 million for the full year periods this year. This compares with $3.1 million and $10.9 million for the same periods in fiscal ’21.
On the bottom line, this quarter, we reported a net loss of $758,000 or $0.10 a share compared to net income of $837,000 or $0.12 per diluted share in fiscal ’21. For full year on a GAAP basis 2022, we generated net income of $6.4 million or $0.88 per diluted share, compared with net income of $1.3 million or $0.18 per diluted share in fiscal 2021. This year’s net income included about $4.4 million or $0.60 of diluted earnings per share from the PPP loan forgiveness.
Looking at segment results, Product Identification reported a fourth quarter segment operating profit of $1.5 million or 6.5% of revenue. This compares to $3.1 million or 13.2% of revenue in the prior year fourth quarter, again reflecting higher manufacturing and procurement costs. On a full year basis. Product Identification segment operating profit was $10.4 million or 11.5% of revenue versus $12.9 million or 14.3% in fiscal 2021.
Test & Measurement segment operating profit improved in the quarter, coming in at almost $0.5 million or 6.8% of revenue compared with $282,000 or 4.6% of revenue a year earlier. The improvement underscores the accelerating level of activity within the Aerospace business that Greg noted. On a full year basis, the T&M segment had an operating profit of $3.4 million or 12.8% of revenue in fiscal 2022, compared to an operating loss of $1 million in fiscal 2021. As Greg noted, the order momentum exiting fiscal 2022 is strong with full year bookings in the T&M segment running 50% ahead of fiscal 2021.
Turning to the balance sheet, cash and equivalents at yearend totaled $5.3 million compared to $11.4 million at the end of fiscal ’21. The decline is directly linked to uses to support operations, in particular, inventory. Inventory is up $4.5 million over last year largely to counteract shortages and procurement delays. But our financial position remains very strong.
Before I hand it back to Greg, I’ll just mention that the new ERP system for domestic operations went live successfully at the beginning of the fourth quarter. This would be a major undertaking and accomplishment for a company of any size and particularly for us during the COVID era. The ERP investment has consumed substantial resources over the last few years, both people and capital. It’s working effectively, though we’ve experienced some natural adjustment pains. As with any ERP technology, it will take a bit of time for us to perfectly harmonize the entire system, but certainly the heaviest listing is out of the way. We remain extremely enthusiastic that this will enable efficient growth as we scale the company over time.
Now, I guess I’ll turn the call back to you Greg for closing comments.
Gregory Woods
Great, thanks, David. So we enter fiscal 2023 in strong shape financially and operationally. We continue to execute on our strategy to grow organically through the development of new products and through complementary M&A that enables us to build on our leadership positions. Next month we will be presenting and hosting one-on-ones at the Sidoti Microcap Virtual Conference. Please check the Events & Presentations section of our investor’s page for the presentation time.
Now David and I will be happy to take your questions. Operator?
Question-and-Answer Session
Operator
Thank you. [Operator Instructions] And we will take the first question from Samir Patel from Askeladden Capital.
Samir Patel
Hey, good morning, guys.
Gregory Woods
Good morning.
David Smith
Good morning.
Samir Patel
So I guess, let’s start on the inflation piece. So I think you mentioned in your prepared remarks that you were expecting to kind of see some benefit from your actions there in the second half of the fiscal year. I was curious kind of why you think it will take that long? Is it because of you’re still using some of that expedited freight? You mentioned kind of like fuel surcharges and things that some of your suppliers had put on. I guess, I’m wondering why it’s taking longer to pass those along to year-end consumers.
Gregory Woods
So we’re being a little conservative on that, Samir, but a couple of things. So price increases, it depends on what kind of agreements we have with our customers, right. So sometimes there’s blanket agreement. So it isn’t like we can raise the price today, and tomorrow they pay a higher price. That is true for a number of our products, but some of them are restricted that way. So we have to wait for time-outs of those existing agreements. So that’s one part of it.
And the other is, these other operational things we’re doing that would mitigate that. We have things that are coming by sea, but also in the meantime we’re flying them by air, because sea is taking much longer than it used to. So we expect to be on mainly a sea delivery schedule for some of our heavier and larger purchases from different parts of the world, yeah, by the end of Q2. So that does kind of all plays into that.
Samir Patel
Okay. That makes sense. And I think you talked about $2 million worth of orders that you did manage to ship in the quarter. Did you break out, were those mostly Product Identification or Test & Measurement?
Gregory Woods
It was kind of a mix. I didn’t breakout which ones were which, but it really affected both groups. And sometimes, it’s some minor things like solid-state drives that we expected a month before the end of the quarter and they came in basically a month after the end of the quarter. So yeah, affected PI too. There is — you might be aware of that in Finland, there is a strike, which a lot of the paper materials, they’re used for our supplies. So we found alternate supplies for that, but there’s a lot of jumping around you have to do, if the supply chain gets broken. So we do have alternatives for that now, but that did impact us as well.
Samir Patel
Okay. All right. I have a few more, but I’ll get back in the queue and I’ll ask if someone else has anything.
Gregory Woods
Okay, great.
Operator
[Operator Instructions] We will now take the question from John Deysher from Pinnacle.
John Deysher
Good morning. I just have a couple of quick questions. Is there any inventory left on the 737 MAX that has to be worked through before they can start producing new ones?
Gregory Woods
They’re actually doing that in parallel. So the production line we’re following continues to ramp up for a new aircraft. And in parallel, I don’t know exactly where they are on the units that they hurt [ph] as far as those deliveries. But that is a kind of a parallel function.
John Deysher
So do you –?
Gregory Woods
One before the other.
John Deysher
All right. But do you know what the inventory is of the existing 737 MAX at this point?
Gregory Woods
I don’t know that exactly right now. I know it’s been — I know, they have been ahead of their schedule on those, but I don’t know exactly what the remainder is.
John Deysher
Okay, fair enough.
Gregory Woods
But and as we mentioned before those already have our printers on the new course.
John Deysher
All right. I was just going —
Gregory Woods
It’s hard for them.
John Deysher
Right. Okay. The other question is, I think a lot of plane manufacturers, Boeing and Airbus specifically rely on Russia for a fair amount of their titanium. And I’m just wondering with the situation there, whether there is any talk of titanium shortages or bottlenecks or anything like that.
Gregory Woods
I haven’t heard that. I’m actually in Europe right now. I was at Airbus yesterday and there was no concern that they had — the team I was with anyway, it was more of, they really talking to us about can you ramp up fast enough to meet their schedule. They have pretty aggressive schedules. So there wasn’t any discussion at all about them having issues with deliveries. It’s more a matter of, can you guys, us being suppliers, deliver to us as fast as we want you to grow.
John Deysher
Okay. All right. That’s my questions. Thank you.
Gregory Woods
Sure.
Operator
[Operator Instructions] We will now take the next question from Tom Spiro from Spiro Capital.
Tom Spiro
Hey, Tom Spiro, Spiro Capital. Good morning.
Gregory Woods
Hi, Tom. Good to hear from you. Good morning.
Tom Spiro
Yes, indeed. Yes, indeed, good to be on the call. On Product Identification, I see that for the year, sales were up $600,000. You mentioned that the T3-OPX had a record year. That’s wonderful news. I wondered given that the segment sales were up modestly, I wonder how the other printers are doing, all of the other stuff we sell.
Gregory Woods
Yeah. So it’s a mix. They’re all kind of moving in the right direction, but not fast enough. We’ve had some — a little bit of overlap on some of the products. We see a little bit faster movement in the tabletop in the last couple of quarters to be honest with you, as opposed to some of the larger ones. I think the — in the Trojan line, the T3-OPX kind of really run out there and we’ve got more people interested in that and placing multiple orders. We also landed number of nice OEM deals for the T3-OPX which helps to accelerate those sales as well.
One thing that’s kind of still slowing down, bit of a drag on the PI business in general still is the — in Asia, obviously there is a lot of issues in terms of just getting out and doing any kind of sales activities, as well as trade shows. But just through the end of the year, we got — well, there was an uptick and then they shut down, then back up again in terms of the trade shows. So that’s one of our biggest sources for lead.
So that did impact kind of good chunk of the year, but they seem to be back pretty well right now in the last several months. We’ve done a number of shows, all with good results, good turnout. And the one thing I would say about those is that the people that are attending the shows now are really more active buyers. People who really have strong interest as opposed to dealers kind of looking around to see what’s there. So —
Tom Spiro
I see, and I note from the press release, the unusually high warranty charges in PI. What’s that all about?
Gregory Woods
So we had a couple issues with — I won’t name who the suppliers are, but they delivered poor quality product to us and it got into the supply chain and we had to essentially go back and retrofit, repair and replace, depending on what the item was to get those units back up and running in full production mode. So it was certainly an unplanned event and it did take a fair amount of time and a bit of cost to actually address that. But yeah the solution has been put in place and we’re kind of putting that behind us as a few maybe, take down 100% of the repairs out there. But it’s a known solution.
We didn’t get to the bottom line there in terms of what the root cause was. We were able to trace it back. And in some case we did pre-emptive upgrades or replacements. So mainly want to do is make sure our customers always have a great product experience and we kind of jumped on that right away, but it’s a bit costly to do.
Tom Spiro
I see, I see. And when you say that $2 million in sales were pushed from Q4 into next year, is that hardware, I would guess or is it supplies or everything, what is that?
Gregory Woods
Yeah, it’s hardware and supplies. So supplies, mainly on the media side. I mean there were some, some kind of — some ink and toner bits to that. Some people want complete shipments, you can’t do one without the other. But our media group, it was just — the nice part obviously is the orders are ramping up. It’s just a matter of keeping up with it. And even in Q4 we did have some of these, I guess we call it the COVID quarantine lockouts where one person in a work group for example test positive, and then our role internally is that anyone who has contact with that individual. In the Rhode Island, it’s mainly in Rhode Island, they have to stay out for five days, then be retested before they can come back.
So we had some manpower issues on the media side as well. I think I mentioned in my comments, we’re kind of in that 15 to 20 day range right now. And normally we’d like to deliver our media five days or less.
Tom Spiro
And when you speak of supply chain difficulties, is that principally on the hardware side and the supply side or again it’s both?
Gregory Woods
It’s actually, yeah, it’s both. Yeah. The transportation costs are killers. Some of the toughest things though is to get a quick replacement for would be obviously is right [ph], so some of these are complicated circuits. FPGAs and things like that. We really do is kind of go out to –sometimes if the supplier doesn’t have it, or our main wholesaler doesn’t have it, we have to go through third-party sources. In most cases, we’re successful in getting those products, but not usually in the time we want and usually we have to pay these guys, where we end up finding the parts.
I think [indiscernible] was looking for me to tail off to different.
Tom Spiro
I see, and a while —
Gregory Woods
Relatively a lot. Yeah.
Tom Spiro
I see. I see. And lastly, while back you suspended the dividend. Your balance sheet is in pretty good shape now. What are your thoughts about reinstating a dividend of some size?
Gregory Woods
Something that comes up at Board meetings. In fact, we have a Board meeting later on today. So it’s always a topic that we cover and the Board will take a look at that and decide what’s the best allocation of capital. So stay tuned, if there is something like that. We had a preliminary Board meeting already. We have a follow-up one today. Yeah if they decide to do it. It will be up via 8-K and we will announce it.
Tom Spiro
Okay. Well, thanks much. Good luck.
Gregory Woods
All right. Thanks, Tom.
Operator
[Operator Instructions] We will now take a follow-up question from Samir Patel from Askeladden Capital.
Samir Patel
Hey, so at the close of your comments, you mentioned M&A and I was wondering if that was something you were closer to than you had been at any point over the past few years.
Gregory Woods
Well, Samir, yeah. Yes. With respect to — we are kind of out of the ball game, because for banking reasons and whatnot.
Samir Patel
Right.
Gregory Woods
So we did restart kind of filling the funnel and engaging in conversations again really in the fourth quarter. So what I can say is we have some things in the funnel. Some look good, some we’ve already washed out. I mean I think I mentioned before that really more than 90% of the things we’ve take a close look at, we end up not going forward for one reason or another. But the activity level is definitely up in terms of our group that does take a look at these acquisition opportunities. And I can say, we have quite a few that look interesting. So ideally, we can close one or more of those this year.
Samir Patel
And would you be focused more on Product ID or T&M?
Gregory Woods
It really kind of depends which one surfaces first with the right numbers to be honest with you. We have good opportunities with both. It’s a matter of what deal can we move first, and depending on the size, we may be able to do both depending on what the deals are and what the timing is in size and so forth. But yeah, we can use — there’s things that we’re looking at, that would be great to add in both camps.
Samir Patel
Understood. That sounds fairly concrete. So I guess it sounds like it’s more a matter of price or diligence as opposed to whether or not an interesting acquisition?
Gregory Woods
Yeah, that’s how we do it. We’re relatively conservative about it. So we want to make sure that it’s accretive relatively fast and that it’s a good fit, and that we feel, it gels well with doing so. It needs to be directly in one of those three product groups that we currently have or kind of a close adjacency that uses similar technology. We’re not looking to go too far afield. I mean we get things over the transom from our bankers all the time, but we’re not going to go very far afield from where we’re already planning.
Samir Patel
That makes sense. And then following up on the previous caller’s question about plane production, so obviously MAX production is ramping up pretty nicely as you mentioned with Airbus. That’s also they have a pretty aggressive ramp schedule for the 320neo family. I know I’ve asked you this before, but I just want to confirm, kind of, if anything’s changed based on the current environment. Like the orders you shipped in Q4, like, how does that relate to kind of Airbus or Boeing production rates in Q4? Are you kind of ahead of them, behind them, just trying to figure out kind of how we should think about those revenues ramping over the course of this fiscal year?
Gregory Woods
Yeah. So depending on the particular program and whether it’s SFE or BFE where the airlines purchase it and then ship it to the manufacturer. It depends on which plane, we’re talking about. But typically we are looking at three to six months ahead of time that we will be shipping product. This is going to go onto a plane. I would say, don’t want to cut it too close. So that’s typically the range that you look at. So we probably like be on average three, four months from, if you look at the production numbers.
Samir Patel
So you lag or lead those by three to four months.
Gregory Woods
We lead, and then with the production numbers that come out, we will ship those three months before, probably maybe four months before.
Samir Patel
Okay. So you should —
Gregory Woods
[Multiple speakers]. Go ahead, sorry.
Samir Patel
I was just going to say, you should sort of see the benefit pretty materially over the next quarter or two from the ramp-up that’s going to happen, kind of, towards the end of this year.
Gregory Woods
Yeah. It looks — I mean, in both camps on those two aircrafts, you mentioned, we do have their production schedules and they’ve been bumping them up and not back. Like I said my Airbus meeting yesterday was very aggressive, but we’re a small part of the plane, but we get to enjoy that ramp up.
Samir Patel
Got it, okay. I appreciate it. That’s all I had. Thank you.
Gregory Woods
Sure. Thanks.
Operator
And as there are no further questions at the moment, I will turn the call back to Greg Woods for the closing comments.
Gregory Woods
Thank you. All right. Well, thanks everyone for joining us here this morning and we look forward to keeping you updated on our progress. Have a good weekend. Bye now.
Operator
This concludes today’s call. Thank you for your participation. You may now disconnect.
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