Rekor Systems, Inc. (REKR) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to today's Rekor Systems, Inc. Conference Call. My name is John, and I will be your coordinator for today. [Operator Instructions] Before we start, I want to review the company's abbreviated safe harbor statement. I want to remind you that statements made in this conference call concerning future revenues, results of operations, financial position, markets, economic conditions, products and product releases, partnerships and any other statements that may be construed as a prediction of future performance or events are forward-looking statements. Such statements can involve known and unknown risks, uncertainties, and other factors, which may cause actual results to differ materially from those expressed or implied by such statements. We ask that you refer to the full disclaimers in our earnings release. You should also review a description of the risk factors contained in our annual and quarterly filings with the SEC. Non-GAAP results will also be discussed on the call. The company believes the presentation of non-GAAP information provides useful supplementary data concerning the company's ongoing operations and is provided for informational purposes only. And now I want to turn the presentation over to Mr. Eyal Hen, CFO of Rekor Systems. Please proceed.

Hi, everyone. Thank you for joining us to discuss our results for the first 3 months ending March 31, 2023. We are excited to share our continuing progress with you. Our President and COO, David Desharnais, is on the call with me today, together with our CEO, Robert Berman. David will brief you on recent developments in our business, and Robert will provide a summary and closing remarks. But first, I will go over some relevant metrics. As indicated in our comments last quarter, given current market conditions, we continue to prioritize our efforts and investments in near-term execution versus longer-range development and continue our efforts to accelerate growth in recurring revenue. This has resulted in continued growth in both nonrecurring and recurring revenue. While at the same time, our recurring revenue as a percentage of total revenue is increasing. This is a trend we believe will continue as we concentrate on the significant near-term opportunity we are focused on now. The percentage of recurring revenue reflected in total revenue was 68% for the 3 months ended March 31, 2023, compared to 57% for the 3 months ended March 31, 2022. This provides us with a solid foundation for strength and stability over the long term and is being achieved despite the streamlining measures we made during the last few months of 2022 and into this year. In the first quarter of 2023, we saw significant reduction in our cash used for operations from $12.3 million in the first 3 months of 2022 to $9.5 million in the first 3 months of 2023. Furthermore, in the first quarter of 2023, the company made onetime payments for accrued accounts payable from 2022 and professional fees, which resulted a true cash burn of approximately $7 million. In addition, the full effect of the additional reductions we made in the first 3 months of the year will be reflected in the second quarter of 2023. We also incurred a high level of research and development expenses in the period as we completed and began production deployment of our count, class and speed offerings for departments of transportation, as David will discuss later. Now let me highlight some other details in the financial results for the 3 months ending March 31, 2023 and some more recent developments. Revenue for the 3 months ended March 31, 2023, was $6.2 million compared to $3 million in the same period last year; a significant increase of 108%. In January 2023, we finalized a $15 million senior secured note transaction led by our CEO, Robert Berman. In March 2023, we finalized a $10 million registered direct offering priced at the market under NASDAQ Rules. As I mentioned earlier, our percentage of recurring revenue continues to increase. Recurring revenue for the 3 months ended March 31, 2023, increased by $2.5 million compared to the same period last year. This represents an increase in recurring revenues of 148%. Performance obligations increased to $24.3 million as of March 31, 2023 compared to $21.4 million as of December 31, 2022. Our adjusted EBITDA for the 3 months ended March 31, 2023, and 2022 was steady at $2.4 million. We continue to take a disciplined approach on operating expenses and are evaluating our results carefully. The first quarter of 2023 has an increase in operating expenses compared to the first quarter of 2022 due to higher depreciation expenses and the addition of key employees as part of our STS acquisition. However, adjusted gross margin for the comparable period improved an increase to 53.6% from 48.3%. We also experienced onetime expenses associated with professional fees, and we're making significant investments in the completion, deployment, and implementation of our new urban mobility offerings. We'll continue to measure our expenses and cash while investing in our growth and expect to see continuing effects from our streamlining efforts. The increase in our adjusted gross margin was primarily attributable to a higher mix of software revenue. We are continually working to improve our margin by implementing new technology to further drive down costs and increase our margins. I've also been providing you with enhanced key performance indicators to give you a more detailed view of progress and better insight into our business over time. We want you to be able to not only measure our success at winning new contracts, but evaluate the long-term value of those contracts in terms of their contribution to our performance obligation. During the 3 months ended March 31, 2023, we won $12.1 million of new contracts compared to only $1.5 million in total new contract value won during the same period in 2022. This represents an increase of $10.6 million or 692% compared to the 3-month period ended March 31, 2022. As of March 31, 2023, our remaining performance obligations amounted to $24.3 million. This represents an increase of $2.9 million or 13.6% compared to $21.4 million of remaining performance obligations as of December 31, 2022. We expect to recognize approximately 67% of the remaining performance obligations as of March 31, 2023, over the succeeding 12 months. Moving to our financial condition and liquidity. As discussed above in January, we completed the closing of senior secured notes in the aggregate amount of up to $15 million, led by our CEO, Robert Berman, with participation from other new and existing investors. At closing, $12.5 million was funded. In March 23, we also completed a registered direct offering for $10 million. These transactions gave us the liquidity we needed to continue and execute our strategy. Our cash balance on March 31, 2023, was $12.1 million, an increase from $1.9 million as of December 31, 2022. Our working capital as of March 31, 2023, was $7 million, up from a deficit working capital of $6.2 million as of December 31, 2022. The increase in working capital was primarily due to an increase in cash and cash equivalents and accounts receivable. To sum up, we are confident regarding recourse growth prospects because we are experiencing strong momentum in all of our key markets, and we have been addressing the most prudent ways to capitalize on those prospects by continuing to raise funds, pre-administrative expenses, and focus our investments in product on near-term revenue producing opportunities. As you will hear from David in just a moment, we are taking a strategic approach to our technology investments, focusing on rapidly increasing our margins to maximize profitability. Our revenue continues to grow, and our efforts to concentrate on sales with recurring revenue continue to be rewarded. Recurring revenue in the first quarter of 2023 was more than double the level in 2022. Much of this was due to our acquisition of STS and the synergies of this acquisition are becoming apparent. The first quarter of 2023 also marks the completion and initial customer deployments of a new set of offerings designed to meet the pressing need of large Departments of Transportation for roadway data that is more advanced and safer to collect. With proven success in this area, we are now well positioned to secure additional long-term contracts from large DOTs and expect to see sustained growth in recurring revenue during 2023. With this focus, we also fully expect to see significant improvement in our margins in the future. As such, we maintain our revenue guidance for the fiscal year 2023 to be in the range of $45 million to $55 million in revenue with EBITDA loss of $26 million to $28 million this year and profitability by the end of 2023. Rekor remains firmly committed to creating shareholder value and making decisions that will benefit our long-term shareholders. We are dedicated to delivering consistent growth and are excited about the opportunity that lies ahead. Thank you for your continued support as we work towards achieving our goals together. With that, I will now turn the call over to David. David?

Thank you, Eyal. Good afternoon, everybody. Rekor continues to make progress and build momentum across all 3 of our primary business segments. Specifically, number one is our Urban Mobility segment. This segment of our business includes our leading AI-based vehicle classification, count, and speed technology for Departments of Transportation, as well as our ability to uniquely monitor and measure transportation, greenhouse gas emissions, roadway volume, electric vehicle recognition, and multiple other real-time mobility analytics. Number 2 is our Transportation Management segment. This segment includes our AI-powered incident detection and traffic management capabilities, targeting Departments of Transportation's traffic management centers and metropolitan planning organizations. And third, our Public Safety and Licensing segment. This is where we first began our foundational and advanced work in AI, machine learning, and computer vision and where we license our vehicle recognition technology to public safety, tolling, transit, and commercial customers. During the first quarter, we achieved many significant milestones including advancing the state-of-the-art of our AI-based technologies, launching new breakthrough products, deepening our relationships and partnerships across the ecosystem and adding significant new customers across each of these business segments. First, starting with the Urban Mobility segment. In Q1, we rolled out our new Rekor Discover platform. Using our artificial intelligence, Rekor Discover fully automates the safe capture of federal highway administration of 13 vehicle classifications, vehicle counts, and speed, utilizing high-resolution video streams to deliver ground truth traffic studies. Our edge-based IoT network devices are deployed at the roadside, where they utilize AI and machine learning to automatically analyze live video streams of active traffic to provide powerful roadway intelligence. This is a big deal. Why? Because it's Rekor's immediate path to driving massive scale, revenue growth and profitability. Already in Q1, we were awarded multiple and multiyear DOT statewide traffic count and classification contracts with South Carolina, Florida, Pennsylvania, Mississippi, Alabama, and Ohio Departments of Transportation with strong forward momentum and a significant pipeline ahead. Switching gears to our Transportation Management segment. In Q1, we delivered and announced our new Rekor Command platform, setting a new standard for the future of roadway management with a breakthrough AI-driven roadway intelligence platform that provides Departments of Transportation and traffic management centers with real-time and holistic view of what is happening on their roadways. For the launch of our new platform, we were proud to be joined by AWS as a foundational technology partner as well as the state of Texas DOT, the fastest-growing state in the country, where they shared that our new Rekor Command platform is at the core to helping them absorb and adapt to significant increases in population and drivers and to more quickly identify and respond to incidences, enhance traffic incident management, improve traffic flow, minimize the risk of secondary accidents, and enhance safety for roadway users and emergency responders across what is by far the largest roadway network in the United States. In addition, this quarter, the North Carolina Department of Transportation secured a significant SMART grant award for the implementation of our new Rekor Command platform, along with our unique connected vehicle ecosystem for its Automated Actionable Road Anomalies project. And finally, when it comes to our Public Safety and Vehicle Recognition licensing business segment, we continue to see new and significant progress here as well. Some highlights from Q1 include deploying our technology with a large U.S. federal agency for public safety; occurring the largest scale, statewide vehicle recognition and roadway intelligence system deployment in Mexico's history; winning 6 Flags, one of the world's largest theme and water park operators as a customer across its properties; signing Las Vegas Palm Resort Casino as our eighth major resort casino customer, strengthening our position as the leader in gaming and hospitality segments; licensing our vehicle recognition solution to one of the largest parking operators with over 15,000 customer locations across all major U.S. cities and Canada; and entering into a multiyear licensing agreement with Safe Fleet for our AI-based vehicle identification and license plate recognition technology at the core of its next-generation violation detection platform for transit, law enforcement, as well as school bus arm violation detection. Working with Safe fleet, we are already being deployed in 2 of the largest metro areas in the United States. Thank you all for the opportunity to discuss Rekor's progress and potential. As you can see from my remarks, our Q1 achievements demonstrate the significant momentum and progress we are making in delivering new cutting-edge innovation and providing value to a diverse set of customers across each of our business segments. Thank you for your continued support and look forward to updating you on our continued future progress. At this point, I will turn the call over to Mr. Robert Berman, CEO and Chairman of Rekor for final remarks and Q&A. Robert?

Thank you, David, and welcome, everybody. Appreciate you joining our call. Before I open the call up for questions, let me underscore what David said earlier and add some context. Rekor Discover is, as David said, our path to massive scale and revenue. The demand over the next decade for new permanent data collection sites is estimated to be in the hundreds of thousands, which includes replacing tens of thousands of decades-old existing legacy systems, providing antiquated, limited, and adequate data. And in many instances, they are no longer even operational. Once our AI is deployed, in addition to providing highly accurate, always operating count, class, and speed, we become the IoT nodes necessary to build the roadway operating system and network. Now I'd like to open the floor for any questions you may have. Please don't hesitate to ask. We're here to provide transparency and clarity, and we're eager to address any concerns or inquiries you may have. Operator?

[Operator Instructions] The first question comes from the line of Zachary Cummins with B. Riley Securities.

Congrats on the solid results. First question I have is really, how should we be thinking about the revenue ramp in terms of getting to your guidance for this year in terms of just the overall mix of recurring versus kind of onetime in nature transactional revenue.

Zach, it's Robert. I'll take the first part of that. We are in all 3 segments moving towards, hopefully, 100% recurring revenue. That's what the products that we've launched do, and that's the way we price them. With respect to Urban Mobility, we have 2 pricing models. We have a pay for data model, which is where the DOTs pay for the data and we install and maintain the equipment that's roadside. The other way is that they can -- some states have to buy, their procurement only allows them to buy hardware, but then they pay a maintenance software fee. We don't yet know what the mix of pay for data versus purchasing the hardware and paying maintenance software fee. We have a feeling that it's going to skew more towards pay for data. So on the hardware sales side, the revenue would be higher upfront because they're paying approximately $18,900 for the system and then they're paying a few hundred dollars a month of maintenance and software. On pay for data, they're paying north of $800 a month over a long-term contract. So that can have an ebb and flow of what the time looks like, but both have recurring revenue components to it. With respect to Rekor Command, as David has repackaged what many of you on this call formally known as Waycare. That is a SaaS product now. We've backed the data out of it. We include the data, we charge a management fee, but the software is a SaaS product. And with respect to our licensing and product, which is primarily public safety and other is all SaaS. So I think the trend that you see this quarter will continue. And each quarter going forward, the percentage of recurring revenue every quarter we have moving forward, we'll increase from where it is today and along with the margins. Eyal, is there anything you'd like to add to that?

No, you hit all the points of it. So our recurring revenues moving forward. We anticipate this to increase. Again, it depends on the mix of play for data. We always have a part of nonrecurring by nature from other segments in the business, like licensing and other, where we do it a little bit differently. But the urban mobility, the pay for data, regardless of what that the DOT decides will have a significant recurring revenue component into it. So we anticipate this to continue, the growth and the recurring of it to continue.

And I think, Zach, to be frank, all the 3 segments, and they will not change. So everybody that's been following Rekor for time now over the last few years, this is what we are. This is who we are. There's no more evolution. These are the 3 segments. We expect that Urban Mobility will scale probably and outpace the other 2 home segments, although traffic management, likely in a year, 1.5 years' time will start to keep pace and licensing and product has been scaling well, which you can see from some of the contracts we signed in Q1 of this year.

Understood. That's helpful. And in terms of your path to profitability, I mean, it seems you continue to reduce cash expenses and streamline operations. How should we think about potential cash needs? I know at one point, you were considering strategic investment. Is that something that's still on the table? Or do you feel like you have enough cash on the balance sheet right now to make it to profitability and cash generation?

We think that we're on a good path here. I mean you can see the true cash burn in Q1 was a little bit under $7 million. And as Eyal said, the full results of some of the other cost-saving measures we had in Q1 were not going to be felt until Q2. So the delta between the cash we have and profitability is not all that great, it's shrinking. So we have a number of options that we're looking at, but we're very confident that we're going to be able to get there. I do want to say that we spent a lot of time talking to a lot of different companies and we came to the conclusion that we need to maintain our independency, and we work with over a dozen different very large, large multinational companies right now; primarily in traffic management. And we didn't want to foreclose the ability to work with others by choosing to work with one. So look, we've made it this far, we think we'll make it the rest of the way. It's trending in the right direction, and we're going to get there.

Understood. And finally, Robert, I mean, you were mentioning a little bit more about kind of the displacement of some of these legacy traffic data collection sites. Do you feel like that's really the greatest opportunity here in the near term is just replacing some of these legacy collection sites with your new platform? Or just talk about that a little bit more.

Zach, I'm glad you asked, right? So this is kind of like one of these more in buffer type of businesses. I mean, unless you're watching Rekor, or listening to this call, who the hell thinks about collecting traffic data. So the federal government for more than 6 decades now has been mandating the collection of what we call; count, class, and speed. And as David mentioned earlier, that's the FHW-13, there's a vent. And they have to do it year in and year out, and that's the way the federal government redistribute gasoline, excise taxes, and appropriates highway funding based on where the traffic is. It must be done. It has to be done. And the way it's been done for decades is using mechanical counters, which are dangerous and inaccurate and then induction loops which require digging up the roads and creating congestion and traffic in their own right. And they're very expensive, right? So this is an industry that is out there, the funding is there. It's not like we have to go convince somebody to buy a better mousetrap. This is something they're doing day in and day out. We're not asking them to pay any more for it. We're actually giving them a more efficient business model, and they must do it. right? And I think that that's the most important thing here. And there are literally hundreds of thousands of sites across the U.S. in every state, okay, that are not functional right now; that aren't being used. There are other places where the states have done portable counts, but because of the traffic on the road, it's no longer safe to do portable counts, so they'd have to put in a permanent site. And what we're really competing with is not other technology, we're competing with a 60-year-old induction loop system, right, which requires digging up the road and putting in this legacy system that's been around for ages. So this is a massive, massive opportunity. And we said earlier that there's demand for hundreds of thousands of these. And look, it's not just the U.S. I mean, countries around the world, there's some form of count, class, and speed. There's enough business in our backyard. We're not thinking about that, but that's the way it's done and it has to be done. And now with the transportation bill, the federal government is looking for even more information out of the states than they get from count, class, and speed. And that's the beauty. And for those of you that are familiar with Rekor, we've always said single system multiple missions well, we can do count, class, and speed. We can tell you what the emissions are in that roadway. We can tell you what the weight and motion is on that roadway. We can tell you where the electric vehicles are and a hundred other things without going back out to the site, right? So those of you that know our UVED program in Oklahoma; if states want to move towards contactless compliance or congestion pricing, we just turn it on. If they want something else, we just turn it on. And that's the beauty of it. And then if you think about the traffic management component of our business, it's the ground truth data that we pull into the Rekor One platform that adds the value to all the third-party data, which is what makes it all that much more accurate with regard to being an operating system for the roadways. So look, we've been for several years now, Zach, searching for how to get these IoT nodes on the roadway. And we went to law enforcement. We put systems out. We're putting systems out any which way we could. And we finally realized that this market for collecting traffic data for the DOTs was there, and it's just one of those things that most people don't think about, know about, care about, but it's done day in and day out and DOT spent hundreds of millions, if not billions of dollars doing this year in and year out. So it's a big deal. And we're not competing against any other technology. This is pure disruption. This is pure disrupt -- you're using AI and edge processing roadside and solar and a combination cloud, hybrid, edge, cloud device, transmitting metadata and you're giving the DOTs more. We can set a system up in 2 to 3 hours roadside where an induction loop takes maybe 2 to 3 months. And if you think about the cost in induction loop, which was done by the company we acquired STS that have put in hundreds of those through the years. They're $40,000, $50,000. Same thing with Weigh-in-Motion, okay, because our technology does that. A Weigh-in-Motion per lane on a roadway is $100,000, okay? And it takes a long time to install and it creates a lot of habit when you do it. So this is really a big deal, and it ties the pieces of our other business together, and that's what creates the operating system that's going to be necessary to deal with the advancement of how smart these cars are getting. So when you hear people talking about connected vehicle corridors, autonomous vehicles, and all these other things, the infrastructure has to play a part in that. It has to be able to communicate, okay, with the vehicle and the DOTs have to be in the middle of that so that they can make sure everybody is safe. So this is a big deal. We figured it out. We got there. We saw STS, we found them. They gave us the credibility to go into the DOTs. And we have adoption, okay? So we're installing units in South Carolina. We're installing units in other STS states. We're talking to over 40 DOTs right now. We can't even get to them, okay? So this is really a big deal for us. And Zach, that's what's going to scale and everything else that comes along with it is going to follow up behind, but it will have even more value a couple of years out when those things tie in. And because this is such an important question, I want David to add and fill in here. David, would you...

Yes, absolutely. It's something that we're seeing in terms of it being disruptive. The demand for the technology because it's safe to install because it's fast to install because the economics associated with doing class, count, and speed studies is wildly less than would be traditional methods. The demand has really been really unhindered. And so when we look at our pipeline, when we look at the technology, the ability to adapt and support what the DOT they're needing for today, so the here and now, but also the future proof for where they're going over the next year, 2 years, 3 years, as now they're being mandated to look at greenhouse gases. Now they're being mandated to look at total tonnage on a roadway and that the systems that are being deployed are already capable and can extend to meet the needs, again for today and also tomorrow. So as Robert said, it's quite disruptive, and we feel like we've got an enormous right to win with technology that's been crafted in home over the last several years. So it's a good spot to be in.

And Zach, one last thing that I'd like to add because I see name share of people that have been following the company for years. We wouldn't be here, but for the proficiency of learning to recognize the vehicle, okay, and then make modeling color, and accuracy and give the vehicle signature and figure out how to put that algorithm together with a processor and work roadside with low power so that it could be solar so that you're not inhibited by not having fiber or other types of power. So it's all of that, that led to this. That's where we were driving back then, and we were working towards this, but that's what gave us the proficiency to do what we do. This is not something that's easily replicatable. And there's really nobody else out there that's even thought about it, frankly. So I hope that answers your question.

And the next question comes from the line of Mike Latimore with Northland Capital.

This is Aditya on behalf of Mike Latimore. Could you give some color on what were the major driving factors behind the bookings in this quarter?

David, do you want to take a shot at that?

For the bookings in the quarter? Yes. I mean it's a combination of multiple things. And across our lines of business, we have a going concern and growing business in our public safety and licensing. So where we've seen continued growth is the bookings on multiyear deals and licensing agreements with a large U.S.-based companies that are ranging from theme parks that are looking to put a safety component and a customer experience component on their parking lots and roadways going in and out of their sites. We've looked also -- we were able to lock and load on additional gaming companies, so where we've had, I'd say, very good success from a gaming and casino market segment. Our retail or hospitality segment, we've seen continued growth in that segment as well, our multiyear bookings there. From our traffic management, the traffic management vertical or market segment for us, continued growth there as well and expansions of contracts. And then last but not least is in our Urban Mobility space with the addition of multiple states that have come on with multiyear contracts that -- against 3- and 4- and 5-year contracts, in the millions of dollars of performance obligations bookings, as you call it. And so -- I mean, it's really a combination of all of those factors. So each one of our business segments have seen significant growth in the quarter and again, continue to see that moving forward as well.

I think your colleague, Mike Latimore, met David out at ITS recently and had the opportunity to speak to one of the DOT officials from Texas. So he might be able to give you some insight to that. But one thing David didn't mention, and I just want to congratulate David for this because one of the things we were able to do in the last -- I would really say it's more like 9 months to a year since David's been here. But our software has been embedded in hardware being made by like companies like Safe Fleet and Hayden AI. But if you look at safely, they're fairly large U.S.-based, maybe Canadian based, they have over 1,600,000 devices out on the roadway across the U.S. and Canada, primarily public safety. And those are older generation products. Our software is in the new cameras coming off the assembly line that they're deploying now in places like Chicago and I think in some of the cities in San Diego and so on and so forth. In Urban Mobility, it's the footprint that we have within the existing STS footprint that we acquired that gives us the initial scale, right? And then we've got discussions going on now, I think, with close to 40 DOTs that we're trying to get to.

All right. Got it. And also, could you give some update on what's happening with the MasterCard drive-through initiative?

We always get asked about Mastercard, I always get e-mails and so do my colleagues here from shareholders that send this because they see this QSR did this, and that one did that. Mastercard is still working at their product that they call [ Julia ]. And [ Julia ] is a comprehensive replacement for the typical fast food operation drive-through. So it includes a lot more than just what we do, which is recognized in the vehicle pay by plate and so forth. It includes voice recognition, which is done by our colleagues SoundHound. But it also believe it not, includes mechanical devices inside the kitchen that help move things along in the kitchen. And we continue to work with Mastercard, and we're deploying pilots for them. They put a lot of time and effort in it, and we hope they're successful with it. And I know a lot of people are very excited about it. But I will say this, all the people a couple of years ago that saw Mastercard that were doing the math of tens of thousands of drive-throughs. Well, you can do the same math except it's larger when you talk about what we're doing with a very similar device, similar cost structures, similar business model because it's pay for data. We're actually getting more money out of it, right, with what we're doing now with the states. So we hope they make it, right? We're there. We're working with them. We support them. They're working hard at it. We have no idea, but it's not something we think about every day because until it turns into revenue, we can't really speak to it. Operator, I don't see any more questions. We don't want to leave anybody out here if there are other questions. Anybody?

Yes. [Operator Instructions]

Ask your questions now. We were always saying there's people wanted to ask questions that we didn't give a chance to so ask now, please.

Now, I would like to turn the floor back over to Robert Berman for any closing comments.

Yes. So look, first of all, thanks, everybody, again for joining the call. Thanks for your support. Thanks for your continued patience. Again, I see names here that I've seen for years. Thanks for staying with us. We're not going to let you down. Rekor is here. Rekor has developed its business segments. Our products now have been productized, thanks to the work that the team has done here, and we see a clear path to substantial scale and profitability and tremendous growth and just a really amazing future. And this is probably, since my being involved with the company, this is the most exciting time that I've ever seen for this company, and it's around the corner. So thanks again for joining the call, and we look forward to talking to you soon.

Thank you, everyone. This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.