OTC Markets Group - Earnings Call - Q4 2020

Transcript

Moderator (participant)

Ladies and gentlemen, thank you for standing by, and welcome to the OTC Markets Group fourth quarter and full year 2020 earnings conference call and webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star one on your telephone. Please be advised today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Dan Zinn, General Counsel. Thank you. Please go ahead, sir.

Dan Zinn (General Counsel)

Thank you, Operator. Good morning and welcome to the OTC Markets Group fourth quarter and year-end 2020 earnings conference call. With me today are Cromwell Coulson, our President and Chief Executive Officer, and Antonia Georgieva, our Chief Financial Officer, whom I am very happy to welcome to our earnings call team. Today's call will be accompanied by a slide presentation. Our earnings press release and the presentation are each available on our website. Certain statements during this call and in our presentation may relate to future events or expectations, and as such, may constitute forward-looking statements. Actual results may differ materially from these forward-looking statements. Information concerning risks and uncertainties that may impact our actual results is contained in the risk factors section of our 2020 annual report, which was published yesterday and is available on our website.

For more information, please refer to the safe harbor statement on slide three of the earnings presentation. With that, I'd like to turn the call over to Cromwell Coulson.

Cromwell Coulson (President and CEO)

Thank you, Dan, and good morning, everyone. Thank you for joining us today. We hope all of you and your loved ones are healthy and safe. We are looking forward to the end of what has been a long winter and hope there are many sunny days ahead for all of us. The global pandemic has profoundly impacted our lives and brought unforeseen challenges to our communities over the past year. We are thankful for our healthcare workers and first responders who bravely served the people that suffered the worst of the COVID-19 crisis. They and all those who helped our communities through the crisis are our heroes. As I reflect on this past year, I am struck by the achievements of our incredible team. The commitment and hard work of our colleagues at OTC Markets was above and beyond.

Through it all, our people have remained connected and risen to the challenge of operating remotely. While experiencing unprecedented market volatility and trading volumes, our team delivered excellent results, served our clients, and stayed connected. To the entire OTC Markets Group team, thank you for your dedication and performance. I look forward to bringing more of our team together in the near term as conditions allow. We are fortunate that our industry and our company could safely work in a distributed manner while keeping our markets open and trading systems up and running. Access to capital across all markets has helped investors and companies meet their immediate challenges and adapt to a fast-changing future. In 2020, we delivered strong performance for shareholders, with gross revenues growing 13% and net income growing 22%. This contributed to significant earnings per share growth and an increase in our operating profit margin.

The more our clients find value in our services, the more earnings power we will deliver to shareholders in the years to come. I would like to formally welcome our new CFO, Antonia, to our team. Antonia will cover our financial results in more detail in a few moments. Over the course of the year, volatility in the U.S. equities markets led to record trade volumes on our OTC Link ATS and OTC Link ECN, particularly in the second half of the year, as we regularly broke daily records. The sharp uptick in trading volume drove much of the growth for the ECN's transactional business. We understand that system reliability remains paramount. Our markets must remain open and available, and I am pleased to report that we fulfilled that responsibility yet again in 2020.

It is a collaborative team effort that we focus on delivering every trading day, whether we are together in the office or connecting virtually. Adjusting to the unique conditions of 2020 did not interrupt our focus on longer-term goals. Our subscribers and market participants expect and deserve an innovative market with services, data, and technology that supports their evolving needs. Our management, product design, and engineering teams work tirelessly to grow and enhance our technology platform, and that in turn provides the backbone for our future growth and productivity. Our corporate services business provided the clearest indication of the impact of COVID-19. We experienced a fairly significant dip in OTCQX and OTCQB sales early in the year when the economy began to react to the pandemic.

Interest in our markets increased throughout the remainder of the year, reinforcing the vital role we play as a global gateway for companies to access the U.S. market in an efficient and cost-effective way. Companies on our OTCQX and OTCQB markets provide constant feedback on how we can continue to add value to their public trading experience. For example, increased use of our Virtual Investor Conferences highlights our ability to keep people connected in a remote working environment. Working with these companies and their investors deepens our commitment to a strategic vision for a future that is online, data-driven, and social. Our market data licensing business experienced robust growth in 2020, driven by a combination of price increases and user growth. During the year, we have introduced enhanced functionality, data sets, and new compliance-focused product offerings.

During the fourth quarter, we launched our Blue Sky Data product, which provides a comprehensive view of compliance data on state secondary trading rules for more than 16,000 OTC equity securities and 80,000 OTC corporate fixed income securities. Broker-dealers can use our Blue Sky Data to streamline and automate compliance with state securities laws for secondary trading. Our data-driven, automated approach makes trading more efficient, allows public companies to demonstrate compliance with securities laws, and improves compliance processes for broker-dealers. In September 2020, the SEC issued its final rule adopting amendments to Exchange Act Rule 15c2-11, with a compliance date upcoming in September 2021. We continue to work with the Commission and SEC staff on the creation of an expert market, a regulated electronic market for brokers and other sophisticated investors to continue interacting in securities that are no longer eligible for public broker-dealer quotations under the rule.

As we have advocated from the beginning, amended Rule 15c2-11 should protect the property rights of minority investors and allow sophisticated investors to continue to access opportunities through their regulated broker-dealer. We also remain engaged with the SEC, FINRA, and others on the ongoing implementation of the consolidated audit trail, or CAT. The CAT reporting construct was created for exchange-listed securities and still needs a reporting framework that better aligns with our unique market structure. We are committed to providing our regulators with the information they need in an efficient and understandable format. Our ability to thrive in a time of global uncertainty leaves us well-positioned to seize business opportunities in the short and long-term. Now more than ever, we rely on our core values and focus on executing on our strategic priorities. Three primary strategic initiatives will guide us through 2021.

First, we must successfully implement changes related to amended Rule 15c2-11, the rule that governs a broker-dealer's ability to quote a security on our markets. The rule offers us an exciting opportunity to enhance the level of disclosure available for investors, create efficiencies for broker-dealers, and bring more companies public onto our markets. This initiative requires collaboration from all aspects of our organization and will set the stage for us to execute on our mission in the years to come. Second, we will remain laser-focused on ensuring the reliability of our trading systems. Increased trading volume and innovation in our markets provides opportunity for continued growth, but we must continue to deliver reliable, efficient trading systems while rolling out new functionality and increasing the usability of our services for broker-dealers.

Finally, we have to support the issuers that rely on our OTCQX and OTCQB markets to inform their investors, be efficiently traded by broker-dealers, and demonstrate their own compliance with securities regulations. That support involves sales, issuer compliance, and technology working together to ensure an efficient onboarding process and continued outstanding service to our companies. In closing, I'm pleased to announce that on March 12th, our board of directors declared a quarterly dividend of $0.15 per share, payable later this month. This dividend reflects our ongoing commitment to providing superior shareholder returns. With that, I will turn the call over to Antonia.

Antonia Georgieva (CFO)

Thank you, Cromwell, and thank you all for joining the call today. I want to start by thanking our entire OTC Markets team for their continued commitment to supporting our clients and subscribers and delivering an uninterrupted service. I will now review our results for the fourth quarter and year ended December 31, 2020. Any reference made to prior period comparatives refers to the fourth quarter of 2019 or the year ended December 31, 2019. Our business delivered strong results despite the challenging macroeconomic conditions. For the fourth quarter of 2020, we generated $19.8 million in gross revenues, up 23%, with all three of our business lines delivering quarter-over-quarter growth. In our OTC Link business, revenues were up 73%, driven by a very active trading environment throughout the quarter.

Elevated market volumes, combined with the impact of additional subscribers onboarded over the years, drove a 429% increase in our quarterly ECN revenue. The average daily transactions executed on OTC Link ECN increased over five times from the prior fourth quarter and reached over 20,000 in the fourth quarter of 2020. OTC Link ECN ended the quarter with 73 subscribers, which was a net increase of 20 compared to the prior year-end. We have continued to see elevated trading volume in January and February of this year as well, in line with the broader U.S. equity markets. Revenues from our market data licensing business were up 18%, driven by growth in users and price increases which we introduced at the beginning of the year.

Revenues from professional users were up 18% from the prior year quarter, while revenues from non-professional users increased 73%, reflecting a 60% quarter-over-quarter increase in the ending number of users. Historically and in the normal course of our business operations, we have often seen significant fluctuations in the number of non-professional users, generally in response to volatility in the markets and increased retail trading interest. We have continued to also deliver revenue gains from our suite of compliance offerings, which is the result of continued growth in the number of subscribers. As previously noted, in September, we launched our Blue Sky Data product, and we began onboarding subscribers in early 2021. As market conditions normalized, the current levels of trading volumes could decline, and that in turn could affect our trading revenues, and we might also experience a decline in the number of professional and non-professional users of our data.

Turning to our corporate services business, revenues in the quarter grew 6%, mostly driven by our Virtual Investor Conferences and disclosure and new services products, which were up 372% and 14%, respectively. Revenues from our OTCQX market were essentially flat quarter-over-quarter. We experienced a significant slowdown in sales in the first six months of the year. However, we saw a strong rebound in the second half and finished the year with 34 QX new additions in the fourth quarter, up from 32 sales in the prior year quarter. We ended the current quarter with 461 companies on our QX market, which was up 19 companies compared to the prior year-end. OTCQB revenues increased modestly by 1%. Similar to OTCQX, QB sales began slowly in the first quarter and accelerated throughout the year.

We finished the year with 94 new companies added in the fourth quarter, which was an increase of more than two times the new companies added in the prior year quarter. As a result, we saw only a small decline in the number of QB companies at the end of the current quarter to 902 companies compared to 907 at the prior year-end. We continue to see these encouraging trends in terms of new sales and issuer engagement continuing in the first quarter of 2021 and also have a strong pipeline of prospects. In terms of full-year results, in 2020, we generated gross revenue of $71.2 million, which was up 13%. OTC Link revenues was up 36%, with a 239% increase in revenue from our OTC Link ECN as the primary driver.

Our market data licensing business delivered 15% revenue growth year-over-year for the reasons already discussed in the context of our quarterly results. Corporate services revenue were up 2%, with QX revenues up 1%, while QB revenues saw a 4% decline year-over-year. Strong growth in our VIC revenue of 160% and our DNS revenues of 7% offset the decline in QB revenues. During 2020, we hosted 27 virtual investor conferences with nearly 400 companies participating and reaching more than 21,000 investors compared to a total of 18 events during 2019. During 2020, we added 106 new QX companies, which was down from 123 in the prior year. New QB subscriptions, however, increased to 229 in 2020 versus 202 in the prior year, primarily driven by the strong sales we saw in the fourth quarter.

In September, we announced that we will be raising annual fees for our QX market and also annual and semiannual fees for our QB market effective January 1, 2021. For the annual QX subscription period, which began on January 1, 2021, we achieved a 94% retention rate, which was up from the 92% in the prior year. For our QB market, we continue to see more than 90% of companies renewing at the end of their service terms. Turning to expenses, on a quarter-over-quarter basis, operating expenses increased by 5%. The primary driver was a 62% increase in professional and consulting fees, in part due to an increase in clearing and regulatory compliance fees, which are related to the elevated volume of trading activity on our OTC Link ECN. Compensation and IT infrastructure costs also contributed to the increase, partially offset by a decline in marketing and occupancy expenses.

The increase in compensation costs reflects the impact of higher headcount, annual salary increases, as well as an increase in cash and equity-based incentive compensation related to our performance. On a year-over-year basis, operating expenses were up 5%, driven by growth in compensation costs, professional and consulting fees, and depreciation and amortization, offset by a decline in marketing, occupancy costs, and general and administrative expenses. Compensation comprised about 66% of our total expense base in 2020. In summary, we concluded 2020 as our 16th consecutive quarter of revenue growth. In the fourth quarter, we delivered 42% quarter-over-quarter growth in income from operations and 50% growth in net income. Our operating profit margin expanded to 35% compared to 30.5% in the prior year quarter. For the full year, income from operations increased 20%, while operating profit margin expanded 170 basis points. Net income increased by 22%.

In addition to certain GAAP and other measures, management utilizes a non-GAAP measure, or adjusted EBITDA, which excludes non-cash stock-based compensation expenses. For the full year, our adjusted EBITDA was $26.2 million, or up 19%. Cash flows from operating activities for the full year amounted to $26 million, a 21% increase, while free cash flows for the year increased 57%, reflecting a significant capital investment which we made during 2019, which did not recur during 2020. In the context of our investor-focused capital allocation policy, we return capital to investors in the form of dividends and through our stock buyback program. During 2020, we returned a total of $18.1 million, which was up 14% over the prior year. In closing, during 2020, we remained focused on efficiently navigating the challenging economic and business conditions and serving our subscribers and the issuers that rely on our public markets.

We were pleased to report strong revenue growth across all three of our businesses and robust earnings growth in both the fourth quarter and the year ending December 31st, 2020. We remain well-positioned to continue to invest in our business and to prudently deploy capital. During 2021, we will continue to focus on generating profitable top-line growth and delivering long-term value for our shareholders. With that, I would like to turn it back to the operator, thanking everyone for their time and opening the line for questions.

Moderator (participant)

Thank you. As a reminder, to ask a question, you'll need to press star one on your telephone. To withdraw your question, please press the pound key. Please stand by while we compile the Q&A roster. Our first question comes from Chris McGinnis with Sidoti. Your line is open.

Chris McGinnis (Special Situation Equity Analyst)

Good morning. Thanks for taking my questions next quarter. Antonia, congratulations on joining the team. If we could just start out with OTC Link, obviously really great growth in the quarter. You've talked in the past about kind of you got a certain amount or a finite amount of growth to go after there. I guess can you just talk about where you're at in terms of the market share, the gains on market share, where that can go from here? I think you announced also the NQB. How does that change? Does that open up additional market share opportunities with Link? If you could just help me with that a little bit. Thanks.

Dan Zinn (General Counsel)

Sure. Thanks, Chris. This is Dan. Maybe Cromwell, you want to answer the first part of that question?

Cromwell Coulson (President and CEO)

Yeah. Chris, thank you for that question. I look at it as the impressive part. Volumes are something we don't fully control in the market, but what's been more impressive is the continuing subscriber growth for OTC Link ECN. That is something that the team did a fantastic job throughout 2020 and has continued to do that. You can take a look at a limited functionality for a certain type of trade. Going into the space of the anonymous matching engine model, which is a tool to access liquidity and deliver best execution that broker-dealers desire, there will be other tools for us to add on top of that.

The skill set in this space and the ability to onboard new clients is a skill set that if we have a strong team and we can deliver, and this is really important, technology to broker-dealers at a competitive cost because both in the exchange space and some other ATSs in non-equity assets, things are pretty expensive. If we're good at being a cost-effective, very useful client-focused vendor, we'll find opportunities. On NQB, there's restrictions on how we can distribute our quote data if we're an anonymous ECN, OTC Link. It is a third business model, which is electronic auto X of orders, but fully disclosed. That creates a data feed for us, which makes our models better because we're putting the data out further and wider, the depth of book, not just the inside.

It creates some system reliability resilience, and it gives a third model for broker-dealers who want to be fully disclosed but do not want to put more liquidity on top of the execution. All different models of brokerage, and whether you are a dealer or an agency broker, and be able to bring them together and connect them in an efficient and cost-effective manner.

Chris McGinnis (Special Situation Equity Analyst)

I appreciate that. That's very helpful. I guess just turning to 15c2-11, it seems like to support initiatives, you're going to have to invest a little bit. Is that correct in kind of reading what you've put in the annual report that you need to make a bigger investment this year to support changes around 15c2-11? I guess just what are the opportunities that you're excited about? Are you excited about onboarding newer companies coming onto your markets, or has this made you think about maybe investing in other areas of the business to maybe support growth if some of it's hit? Can you just walk me through that a little bit?

Cromwell Coulson (President and CEO)

15c2-11 is the big transformation in 2021. It takes us from offering a regulated trading platform business under Reg ATS and having market data, which investors and brokers use to analyze value and trade securities, and a corporate services business, which has been market-driven. We built that whole business based on companies wanting to step up and really own their trading to provide the information out there so investors are informed and brokers can best, most efficiently trade securities. However, the market's moved forward, and 15c2-11 has recognized that we are the ones in the OTC market who set the standard for monitoring what level of disclosure and compliance and governance companies put out there. This has been recognized and continually recognized by the states as they've recognized us for Blue Sky.

There's one part that's really important is we're moving to be seen as the entity that broker-dealers can rely on for monitoring ongoing disclosure by issuers, that there's current information that's publicly available and ongoing. That's important. The second side is that it is because for the monitoring piece, the ongoing disclosure, we were about halfway there. The market recognized it, and then the regulators are catching up. The onboarding is exciting because it was really painful and complicated to bring a company onto our markets because you had a broker-dealer filing a 211 with FINRA. The FINRA information was hidden in FINRA. Investors didn't see it. It's a change to what really should be done today, is making sure that there's adequate current information publicly available when a security initiates trading. It's a big piece for us to, one, create the regulatory compliance infrastructure.

On the other side is, where's the commercial value? Because today, when a company would become traded OTC, there wasn't a great ability for other broker-dealers to see the information or understand the level of compliance, the financial strength, the securities issuance history, all of these pieces of information that brokers need to trade a security and put it out into the market. What we look at is 15c2-11 is providing the regulatory foundation for changing how companies can go public on our markets. We're going to build a commercial structure that gives value both to companies and broker-dealers to make going public on our markets much more valuable and efficient.

Chris McGinnis (Special Situation Equity Analyst)

Thank you for that. That's helpful. Just one last thing. I'll jump back to you and open up for other people. Just on the M&A opportunities you talked about in the annual report, do you see 2021 as maybe a bigger year? I think the last acquisition you made was in 2019, if I remember right, around the conference, if I remember right.

Cromwell Coulson (President and CEO)

Chris, I think this year is a year where we have the markets have been doing fantastic. That said, entities in our space that we could purchase are pricey. We have a big internal project with 15c2-11. We want to, for the long-term, and I think hiring of Antonia demonstrates where we want to go for the longer-term. In the short-term, we want to focus on our organic opportunities.

We are looking, and we will be opportunistic and strategic to, if anything shows up that we think really can add value for shareholders over the long-term and increase our per-share earnings power, which is, as I think about it, over the long-term, we want to grow the pre-tax earnings or EBITDA of just the ability to earn per share and both of the current amount, but then the potential ongoing forward by having a strong platform that delivers value to our client base.

Chris McGinnis (Special Situation Equity Analyst)

Thanks. I'll jump back on queue.

Moderator (participant)

Thank you. Our next question comes from Andrew Mitchell with Edison. Your line is open.

Andrew Mitchell (Analyst)

Thank you very much. Could I just follow up again on a couple of those regulatory points? I was wondering if you have any indication of potential timing for approval of the expert market given the September compliance date. I was also wondering on the consolidated audit trail, I think the next phase of that becomes effective in April. On both those fronts, I mean, can you give any sort of indication in terms of the cost side for OTC for implementation yet?

Dan Zinn (General Counsel)

Sure. Thanks, Andrew. I'll start with expert. You may have seen the SEC put out a proposed conditional exemption towards the end of 2020 for the expert market with a comment period attached to it. We and several others commented on it, and everything in the comment file is very positive. That comment file closed about a month ago. We continue to talk to the SEC about it. We are anxious to see it get approved. We understand that the commission is in flux a little bit right now with Gary Gensler. They're still going through the confirmation proceedings in order to potentially be the SEC chair. We'd love to see it happen any day now, but do understand that there are other considerations within the commission.

The best thing I can say is we have a really good open line of communication with the staff there. We are constantly getting feedback and providing as much information as we can. We are hopeful that it gets approved sooner rather than later. We will certainly be the ones shouting from the mountaintops when it comes out. We will not be shy about it at all. With respect to CAT, the next phase, phase 2C of CAT, becomes effective in April. CAT has been around for a while, and it has certainly been talked about for a decade, if not longer. The implementation that we focus on is really about supporting our subscribers and their ability to meet their CAT reporting requirements. That is something we continue to do. We are meeting with and talking to our subscribers pretty regularly.

It is not about sudden costs so much as the longer-term plan that we have had in place and that the industry has had in place. Similar, it is the same refrain there where we continue to talk to FINRA and the other SROs and the SEC about the ways to right-size how CAT works for a market like ours. We know that we have a unique market model and that people have not necessarily considered it in developing things like CAT that started so many years ago. Just working to make sure that they are considering all the unique aspects of our market structure is really the core and the key sort of initiative we have with respect to CAT.

Andrew Mitchell (Analyst)

Okay. Great. Thanks very much. On a question on the elevated trading volumes you've referenced, I wonder if you're able to, or there is an estimate of how important retail investors are within that. Obviously, you've seen a big increase in terms of the market data side, but just wondering on the trading side, how much of the high trading volume levels would you say are arising from the retail market?

Cromwell Coulson (President and CEO)

Andrew, the way I look at trading volumes is it's something we don't control. We have a diverse group of securities. I mean, people paint OTC with low-price securities. A lot of the retail speculation has actually been on NYSE and NASDAQ securities: GameStop, AMC, Hertz. This isn't to say that we don't have those same forces going through. The debate within the industry is really not, "Is this a peak volume?" but, "Has the floor gone up?" and, "Has there been more interest in stocks over time?" and, "Will?" and, "How will that stay?" and, "How will that transform that?" as investors get smarter. Investors that make mistakes will then be smarter, and then they'll seek out other opportunities. They'll do more research. They'll learn like every investor's coming to the market.

The most successful investors I've ever met, they talk about their history as early investors of not making great investments and then using that to learn and get better. We look at it as the volumes are fantastic. However, we want to last through both the good market cycles and the bad market cycles. We build our business around it, and we have transactional and subscription business. Our goal is to really keep improving the platform, keep increasing the capabilities for clients, and fulfilling our mission to create more efficient and better-informed financial markets.

Andrew Mitchell (Analyst)

Thanks. Following on from that neatly is the point about the system's reliability. That's one of your key points for the current year. I was just wondering if that does involve higher CapEx than one might have expected prior to the exceptional volumes that have been going on, or is that something which you'd still be having a sort of more normal level of investment in the current year?

Cromwell Coulson (President and CEO)

Andrew, I mean, we're going to invest where we need to provide the quality of service that our clients demand of us. We've got it is with volumes coming through and the business doing well, is a time to invest. That said, we're careful and thoughtful about when we make our capital spending and when we make our added costs to the business. We don't try to manage quarter to quarter or year to year. I mean, I think you saw that in 2019, we took our expenses up to invest in areas. In 2020, we were more careful, and we really focused on having the team and the platform that we had is running the business.

That cycle is we're going to try and be very thoughtful to think about how do we have a platform and a company and a level of service that has the right amount of investment to come out of every year better than where it started.

Antonia Georgieva (CFO)

Maybe to add to that.

Andrew Mitchell (Analyst)

Sorry, go on.

Antonia Georgieva (CFO)

Maybe to add briefly, in general, we expect our capital expenditures this year to be on par with 2020. To elaborate on Cromwell's point, system reliability has been a focus of ours, a core focus of ours for a long time. We continue to invest at the levels that ensure achievement of high throughput and high reliability every year, Andrew.

Andrew Mitchell (Analyst)

Great. Thanks. If I may, just one final small question just on the M&A point. Am I still right to think that your focus really is on incremental rather than again, realize your focus is more organic this year, but looking further out, you'd still be looking for more incremental acquisitions rather than seeking a larger transformational acquisition?

Cromwell Coulson (President and CEO)

Andrew, I mean, I think in the life cycle of our business is that we haven't, we've been incremental. We've been an organic growth story. We've been very focused on improving the areas where our core capabilities are. That said, we would like to acquire assets at attractive prices that are accretive per share for shareholders over the long-term. I'm a large shareholder, and I would like to, over the years, make the shares worth more throughout market cycles. That is what we will always be looking at, but we get to play a longer-term game.

Andrew Mitchell (Analyst)

Sure. Thanks very much.

Moderator (participant)

Thank you. As a reminder, ladies and gentlemen, that's star one to ask a question. At this time, I'm currently showing no further questions. I'd like to turn the call back over to Mr. Cromwell Coulson for closing remarks.

Cromwell Coulson (President and CEO)

Thank you, operator. I want to thank all of you for joining us today. As always, we remain committed to supporting our clients in this challenging time. As we acquire new responsibilities, we will continue to advocate for the thousands of smaller and international companies that rely on our markets, as well as the broker-dealers that provide liquidity and keep capital flowing. This work is core to our mission to create better-informed and more efficient financial markets. On behalf of the entire team, I would like to wish you and your families continued health and safety, and we look forward to connecting with you at our Investor Day on Monday, April 12th.

Moderator (participant)

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.