Welcome to the Descartes update. My name is Sylvia, and I'll be operating for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. If you would like to ask a question during today's presentation, please press star, then one on your touchtone phone. Please note that this conference is being recorded. I will now turn the call over to Scott Pagan. Mr. Pagan, you may begin.
Thank you. Good morning, everyone. Joining me in the call today are Ed Ryan, CEO, and Allan Brett, CFO. I trust that everyone has received a copy of the press release relating to the Visual Compliance transaction issued earlier today. Portions of today's call, other than historical performance, may include statements of forward-looking information within the meaning of applicable securities laws. These statements are made under the Safe Harbor provisions of those laws.
These forward-looking statements include statements related to the potential closing of the Visual Compliance transaction and timing thereof, the expected purchase price and methods of funding the transaction, the ability to provide customers with additional products and services, and to strengthen the relationships with existing customers of both Descartes and Visual Compliance, Visual Compliance's domain expertise in this market, potential benefits and synergies associated with the combination with Visual Compliance, Visual Compliance's potential contribution to our revenue calibration, tax and other benefits of the acquisition and its structure, and other matters that may constitute forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties, assumptions, and other factors that may cause the actual results, performance, or achievements of Descartes to differ materially from the anticipated results, performance, or achievements implied by such forward-looking statements.
These factors are outlined in the press release issued today. We encourage all listeners to review those risk factors closely in considering any forward-looking statements that may be made during the call. We provide forward-looking statements solely for the purpose of providing information about management's current expectations and plans relating to the future. We caution that such information may not be appropriate for other purposes. We don't undertake or accept any obligation or undertaking to release publicly any updates or revisions of any forward-looking statements to reflect any change in our expectations or any change in events, conditions, assumptions, or circumstances on which any such statement is based, except as is required by law. With that, let me turn the call over to Ed.
Hey, great. Thanks, Scott. Good morning, everyone, and welcome to the call. Thank you for joining us today on shorter notice than usual. As you'll see from the press release this morning, it's a very exciting day for Descartes as we've signed a definitive agreement to acquire Visual Compliance, the content business with a focus on denied party screening, with the closing anticipated in February. The transaction details are included in the press release, we're thrilled to be on this call this morning to discuss the transaction that we believe will bring great things to both Visual Compliance and Descartes customers. I wanted to make some opening remarks, and then we'll open up the call to just a few questions from any analysts on the call.
As a note off the top, and as many of you know, we're currently in our quiet period as we approach the end of our fiscal year on January 31st. On this call, we will be limiting our comments to the Visual Compliance transaction, its contribution to our overall strategy, and some of the benefits that we expect our combined customer base of over 20,000 companies will see. We will not be discussing Descartes' financial results for the quarter and year ending January 31st or our expectations of financial results for any future fiscal period, including Visual Compliance's potential contribution to these financial results. We anticipate that we can provide you that type of information following the closing of the transaction when we announce our fiscal 2019 financial results, currently expected to be sometime in early March.
While our comments are limited by the quiet period, there's some great things to talk about in this transaction. As many of you who follow Descartes will know, we've made several past acquisitions in the trade data content space. In 2014, we combined with Customs Info, a business that provides tariff and duty data to power global trade management systems, including those of our valued partners, SAP and Oracle. In 2015, we acquired MK Data, a business that also provided data to fuel SAP and Oracle global trade management systems. MK's business was specifically focused on denied party screening, aggregating lists of people, companies, and commodities around the world where there are restrictions or prohibitions on doing business with them. In late 2016, we acquired Datamyne, the business that provides global trade flow information covering the global commerce of over 230 markets across five continents.
Each of these acquisitions had five common themes when we made the decision to invest in them that have continued since when they've been a part of the Global Logistics Network. First, they were each predominantly recurring revenue businesses. They provided their content and services on a subscription or transaction basis with good renewal and retention rates. Second, they were all very high-margin businesses. Our aggregate adjusted EBITDA margins at Descartes had historically been in the lower 30s as a percentage of revenue, but these businesses had margins that were significantly higher than that. Three, they had the ability to grow profitably. Each had a somewhat fixed cost of data collection that could be leveraged for high incremental margins on future sales. Four, they had large, satisfied customer bases that could be added to the Global Logistics Network and gain access to the powerful products and services we otherwise offer.
Finally, they had products and content that when made available in combination with our own products over the Global Logistics Network, enhanced the tools that our customers had available to them to manage the life cycle of shipments. Each of these businesses are now a key part of Descartes and the Global Logistics Network, supporting our customers and our partners around the world. Their success has encouraged us to evaluate other opportunities to combine with businesses who share this profile. That leads us to Visual Compliance, a business that follows the mold of our past data content acquisitions. Visual Compliance is a business that we've been following for a long time. Unfortunately, in recent months, the sole founder passed away, so the business needed to be sold.
A very tough time for everyone involved in the business and a situation for which we extend our sympathies to the entire Manucha and broader Visual Compliance family. The family's estate approached us about a potential transaction. We agreed with them that we would be the ideal steward for the business, and we're thrilled to be able to provide great continuity for the business, for customers, for partners, and for the Visual Compliance employee family. Visual Compliance's main business is in the denied party screening space. If the words denied party screening sound familiar, that's because I just described our previous acquisition of MK Data using those same words. Visual Compliance is even deeper into a business that Descartes is already successfully in. Looking at the same five criteria that we valued in our previous successful data content acquisitions.
First, Visual Compliance has a high degree of recurring revenues, with customers subscribing to their data, content, and services. As you will see from the press release, Visual Compliance had historical revenues for last fiscal year of approximately CAD 40 million. Subject to foreign exchange fluctuations, we anticipate about 75% of those revenues being revenues that could be included as part of our initial calibration of our business. Second, Visual Compliance is a high adjusted EBITDA margin business, consistent with our other trade content businesses and higher than Descartes' corporate margin rates. Three, Visual Compliance has grown historically with high incremental margins. As you see in the press release, Visual Compliance historical average revenue growth rate was 10% over the last four years.
Further, with both Descartes and Visual Compliance already incurring the cost of data collection, we anticipate that there may be synergies in data collection that will strengthen our incremental margins. Four, Visual Compliance serves over 2,000 customers who will be added to our Global Logistics Network existing 18,500 customer participants. That truly further entrenches the GLN as a powerful network for our carriers, logistics intermediaries, shippers, and governments to use as they plan, monitor, and execute shipments. Finally, Visual Compliance enhances Descartes' compliance applications footprint for denied party screening, denied party management, and workflow. It addresses some basic shipment compliance matters such as export license controls. We believe we can cross-sell this additional functionality to the entire Descartes customer base. The denied party screening business is one that we're excited to make even more of an investment in.
As we're seeing in the news every day, global trade has become even more complex, with new trade agreements, trade disagreements, and ongoing geopolitical activity resulting in increased levels of sanctions and enforcement. We need only look to the recent events in Canada and the U.S. relating to the Huawei executive to understand how big an issue trade sanctions and their enforcement has become for companies around the world. Denied party screening and sanction party screening has become a critical must-have for companies for every business dealing they have, whether it be for shipments of products abroad or relationships with new and existing customers, partners, suppliers, and employees. We anticipate that the future may include regulatory mandates on certain businesses to conduct these types of screening activities.
We're seeing demand for more screening services from our direct customer base, with businesses stepping up their compliance activities in the face of increased enforcement. This includes new customers and businesses that aren't logistics intensive, the screening of business relationships becoming as important as screening of product shipments. These aren't just our observations. As we support our own partners in the global trade management space like SAP and Oracle, we continue to see demand for more and more detailed screening data that captures the myriad of relationships and commodity shipments multinational companies can find themselves in. Like Descartes, Visual Compliance is an existing partner of both SAP and Oracle. Where there are opportunities to invest to support partners like SAP and Oracle even further, we want them to know that we'll be there for them.
It's great to know that we'll have even more team members in our business speaking the denied party screening and trade compliance language once Visual Compliance employee base joins. Visual Compliance brings over 100 people with expertise in logistics and international shipments to the Global Logistics Network team, all focused on serving our customers at an elite level. With the bulk of the Visual Compliance team being in Toronto, Canada, we welcome them as we did + earlier this year to a Canadian headquartered business with numerous team members already in Toronto, Waterloo, and Ottawa ready to support them as they integrate into the Descartes family. If you're wondering where Visual Compliance offices are, and you're from Toronto, you've probably seen their eCustoms sign on the building as you travel down the Allen Expressway towards the 401.
This will be one of the larger deals that Descartes has done over the past years. The purchase price multiples are similar to our previous data content acquisitions, though at the higher end of that range. At a price that we're very comfortable with given our historical success in the data content market, our existing experience in denied party screening, our belief in the efficiencies of data collection, and our belief in the distribution opportunities for Visual Compliance data and services over the Global Logistics Network and through our existing SAP and Oracle partnerships. Further, this transaction is structured on a tax-efficient basis for us with approximately CAD 80 million in tax benefit to us over several years, which significantly lowers the cash payback period for this acquisition for us.
As you've seen in the press release, we've also increased our existing revolving credit facility to CAD 350 million. With an accordion feature that allows us to take it to $500 million U.S. in the agreement with the lenders. We're using this increased credit facility in connection with the Visual Compliance transaction and at the request of the sellers, issuing about CAD 12 million in shares to personnel who will be continuing on with the business. We'll likely draw about CAD 241 million for the Visual Compliance transaction, leaving us plenty of room to access the line further for other active acquisition opportunities we'll pursue. We're very comfortable with our debt levels, especially since we're combining with a profitable cash-generating business that will allow us to pay down the debt in the ordinary course.
In short, even after the Visual Compliance transaction is closed, we will remain ready, willing, and able to compete with other acquisitions to complete other acquisitions as we have in the past. This is an exciting day for Descartes, an exciting day for the Visual Compliance team, and a great opportunity for our combined customer base. We look forward to welcoming all Visual Compliance customers, partners, and employees to Descartes and the Global Logistics Network. With that, operator, I'd like to turn it over for questions.
Thank you. We will now begin the question and answer session. If you have a question, please press star then one on your touch-tone phone. If you wish to be removed from the queue, please press the pound sign or the hash key. There will be a delay before the first question is announced. If you're through speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, please press star then one on your touch-tone phone. Our first question comes from Paul Steep from Scotia Capital.
Hey, morning Ed.
Hey .
You talk a little bit about in the script, just the integration and synergies. Could you just go over a little bit more of how we should think realistically about a timeline to sort of bring, I guess, your customs data sets maybe together for a holistic offering for clients?
Yeah, we're working on that. As we speak, during the acquisition process, we've spent some time with them doing that. We'll be doing it in a very matter-of-fact way. I don't want to give the exact timeline, but we're talking sometime in the next several months, we'll start making moves in that direction. Visual Compliance has an even broader data set than we have, so that's one of the things we're looking forward to is bringing that broader data set to our customers. We'll be spending the next several months talking about how we start to combine those activities. I wouldn't imagine it's going to take terribly long, probably a year timeframe, something of that nature.
Our focus, much more than even the cost savings associated with it, is going to be really making sure we have the best data set available for our customers and are able to bring an expanded data set to the entire customer base.
You also alluded, I guess, in the discussion about returning to M&A, I guess maybe get your feeling as to whether or not you're going to take a bit of a pause and digest this one, or if we should actually think that you might still be actively out in the market looking to do something soon, or wait till later in the year or next year.
I don't think you're going to see any significant change in our acquisition activity. We're aggressively looking to consolidate this market, I don't think anything about this particular acquisition is going to change that. It's a pretty high-quality business. You can tell from some of the things you may have seen in the press release. It's a business that looks a lot like ours. It's not going to be new for us to be working with a business like this. Even during the acquisition process, our teams spent a lot of time together, and they fit right in. I don't think you're going to see us have a ton of activity to do to combine the businesses as you might if you were buying something that was more of a fixer-upper. In this case, we're buying something that's very similar to what we do.
The employees all kind of know the businesses inside and out. As I've already watched them kind of sit in a room together, they quickly become friends and have a lot to talk about. I don't think any of that's going to put any stresses on our business that are abnormal. I think you'll see us continue to move forward to be a pretty rapidly expanding business in part through acquisition.
Great. Last one from me. Just in terms of the growth, you gave us a sense of what the CAGR was. Can you give us, without too much detail around it, a sense of how they've grown? Has it been broader usage, new clients, price lifts on the base, or have they got a new sort of data set that's incremental that they've seen growth on? Thanks.
Yeah. Just real quick on that. I think it's pretty similar to the way our business has grown, largely through new customer acquisition. Customers come in, they ramp up. They may expand in the business as companies that they do business with grow, and they need to buy access to more data sets. The vast majority of it comes from new customer acquisition, as you've seen in our business. Also as you've seen in our business, that tends to be pretty profitable. You already have the data set. Each new customer that comes on comes in at a pretty high incremental margin. One of the reasons we really like these businesses.
Great. Thanks, guys.
Thanks, Paul.
Our next question comes from Deepak Kaushal from GMP Securities.
Hi. Good morning, guys. Thanks for taking my questions. Ed, I just wanted to ask you a quick clarification on the level of customer overlap. Based on the math you said in your comments, doesn't sound like there's much overlap here. Is that a fair conclusion?
Yeah. There's not much at all. We serve very similar types of customer bases. If you were a customer needing denied party screening, you'd probably pick one or the other.
Okay. Does this open up any new geographies for you? Do they have any expertise in specific regions around the world or specific industries? Any kind of color you can shed on that?
Yeah. Nothing regional. We're both fairly fixated on North America. It does bring in some other areas, that we hadn't traditionally focused on. One is colleges and universities that have an increasingly high need for denied party screening, not only with applicants but also with professors and other people that may work on projects at that university, oftentimes coming from foreign jurisdictions that need to screen those individuals, anytime they show up in the building. They also have gotten into the business, you may have heard me mention if you've been out in the road with me, because a lot of times when I'm out with analysts, I'm going into buildings. Visual Compliance has gotten into the screen of individuals going into buildings in advance of them coming in.
Maybe a high-profile building has long queues to get into the building and they know that a lot of the people are coming in a day or two before, and they pre-screen those candidates.
Yeah.
Visual Compliance has done a real nice job of getting into those businesses, and we look forward to adding that to our portfolio.
Okay. Yes, I do recall those conversations. You mentioned a couple of times in your script, SAP and Oracle, I know you have a growing relationship with them. Is this a meaningful boost to your relationship with SAP and Oracle? How do we put this in the context of that growing relationship?
I think it'll help. Yeah, go ahead. Sorry.
No, go. Just at what point do you become more meaningful as a partner to these guys?
I think it'll help. Visual Compliance is a partner of SAP and Oracle as well. That's good. There's other services we can offer now that we have those two. I think we probably have a stronger partnership with SAP and Oracle in that our sales teams have been working together longer and selling more together. I don't think it's going to significantly expand the relations with them. I think it'll help. There's maybe some more lists that we have access to now. Maybe we can do some better screens over the coming years for SAP and Oracle customers. I don't think it's going to create a whole new relationship with them. It's pretty similar business.
Okay. Great. I appreciate you taking my questions. I'll pass along. Thank you.
Great. Thanks, Deep.
Our following question comes from David Hynes from Canaccord.
Hey, good morning, guys. Hey, Ed, what kind of fully integrated contribution margins should we be thinking about to support the valuation here?
Well, I think we've commented as much in my prepared comments and in the press releases as we'll go into on today's call, but just to go over that. Much like our existing content businesses, when we bought Visual Compliance or signed to buy Visual Compliance, they have a higher margin profile than our average net margin, much more consistent with some of the margin profiles you'd see with the MK Data business and the Customs Info and Datamyne businesses. It's going to increase our margin levels. I think I'll leave it at that until we-
Yeah
-get to release our numbers in March where we'll provide some more information then on the call.
Yeah. Okay. That's fine. I'm going to try one more question that I don't know if you can answer. Obviously, some unique circumstances that drove the timing of the acquisition here. I'm anticipating some investor questions that are, "Hey, these guys are having to make a large acquisition to take attention away or mask a decelerating core." I don't know what you want to say, but can you give us any kind of update on volumes or transactions that you're seeing on the GLN? Obviously, there's a lot of headlines out there around global trade. I just figured I'd give you a form to give us an update.
Well, I probably can't answer that question directly other than to say, if someone said that, I'd tell them that had nothing to do with why we bought it. We looked at this as a great opportunity. This was something that, business we've known for a long time, and because of some unfortunate circumstances on their end, we had an opportunity to buy a great business that we might not have had under other circumstances. We were excited about it. Nothing to do with any existing performance in our business or anything else.
Yeah.
We saw this happen, and we went, "Wow, that's great."
Yeah. I got it.
I'd do it every time.
Okay. Yeah. Obviously, the data acquisitions you've made in the past have been some of your most successful. Congrats on the deal. I'll pass along.
Great, thanks. Thank you.
Our following question comes from Steven Li from Raymond James.
Thank you. Hey, Ed. I think you said Visual Compliance has 2,000 customers. How many customers would MK have today?
I don't know off the top of my head. I don't know if anyone else in, Allan or anyone else knows, not as many as I can say that it's not as many as Customs Visual Compliance had. Customs Visual Compliance is a bigger business than MK by a bunch.
Okay. All right. If I remember, MK was in that 45% EBITDA margin range. So based on your comments, this would be similar range?
I don't want to say specifically because we're in a blackout, I try to keep the numbers mentioned to the ones that were mentioned in my prepared comments in the press release. Directionally, yeah, it's a higher profile margin business than ours and yeah, let's say similar to MK's.
Okay, great. One last question. Given what you see as synergies, what is more likely to happen with Visual? Is it their margins push even higher, or is it their growth accelerate within Descartes? Thank you.
Thanks, Steven. Yeah, I think similar to the rest of our content businesses, the reason we really like these businesses and a lot like our network, maybe even better than our network is they all have an absolute fixed cost to collect the data content. They're all growing at a nice pace given some of the things you just mentioned that are going on in the world, right? More and more companies think this is more and more important, and that's a nice combination for us, right? Every new customer that comes in, we make a lot more money, and a lot of new customers keep coming in because it's an important topic. Yeah, that's why we're excited about buying this business.
That's why we jumped at the chance when it popped up, and we're very excited about it, as we were when we bought Customs Info and MK Data and Datamyne. We think it's a big opportunity for our company and for our shareholders to take advantage of something that's going on in the market that plays right into our hands.
Okay, thanks, Ed.
Thanks, Steven.
Our next question comes from Blair Abernethy from Industrial Alliance.
Thanks very much. Congrats guys on the acquisition. Ed, I just wonder if you could tell us a little bit about the market space here. This obviously makes Descartes a much bigger player in the denied party marketplace. Are you guys going to now be the biggest player, if you will? Give us some sense of what your market share will be, and is there any opportunity down the road for potential pricing power?
It makes us a major player in it. I think probably the largest player in it. One of the things that was really exciting to us is they have a slightly different angle on this business than we do, and when combined, I think we have a great product footprint for the market. If you think about what MK was really good at, it was collecting this data. They had a very unique way of doing it, similar to Visual Compliance, funny enough. Once they collected that data, what they were really best at was putting it in a SAP and Oracle format so that SAP and Oracle customers could easily digest it. They were also good at something called bulk screening, which is you send me a gigantic list of all of your customers, and I'm very good at it.
MK Data is very good at doing one-time bulk screens. What Visual Compliance has been very good at is rapid transaction processing of high-velocity shipments. You're a customer that has a lot of partial shipments, let's say a lot of e-commerce shipments, which is kind of increasingly important in the world. Visual Compliance has a set of tools set up that makes that very easy for you to rapidly send individual screens to them. "Hey, I'm about to send this package. Before I do, let me make sure that this is a customer I'm allowed to send it to." Answering that question very accurately and quickly. Together, we think that's a great opportunity and creates the best company out there to do this with, and maybe with the widest footprint.
That was the part of this that was exciting to Descartes, and I think puts us in a very good position in the market competitive.
Okay, great. On their growth rate, the 10% that they've done sort of on average the last few years, where has that come from? Has that been mostly market, or have they introduced a bunch of new products? Just kind of give some color on that would be great.
I think it's largely going out and doing a good job of selling the product, much as we have with MK Data. They're in a market that knows that what they do is becoming increasingly important. The governments of the world are telling our customers that, "Hey, you better pay attention to this." Much as we have, they've done a pretty good job of going out and capturing that market, and as a result, have seen nice growth rates for a bunch of years now.
Okay, great. Just to Allan, just on the taxes, how many years do you think it's going to take you? Can you get the bulk of that benefit in the next, say, three years or so, that CAD 80 million? Ed mentioned the 75% of the CAD 40 million revenue run rate could be recognized next year. Is that accounting recognition? Is that what's setting that back?
I'll start with the tax comment. A lot of the tax benefits that we talked about we'll experience over the next six to seven years. There'll be additional tax benefits that carry on for a number of years after that. To your other question with respect to the revenue. I think what we're referring to there is that about 75% or so of the revenue to this business are in our core sort of services or recurring type of business revenues, and the rest come from other areas of the business. That's what we're referring to there as we talk about the split of revenue.
Got it. Thanks for clarifying that, Allan.
Our next question comes from Philip Wong from Barclays.
Hi, good morning. First question on the 10% growth rate on average. Can you maybe give us a sense as to whether that's been accelerating, decelerating, or it's been relatively sort of bounces around from year to year?
It's relatively consistent year to year.
Okay. On the synergy for the collection of data, sorry to keep coming back to this. Now that you've got such a You're the largest player in this sort of space, do you expect to have even higher margins than what you're able to obtain with MK Data, Datamyne, and the group of companies in this category going forward?
We expect the margins in this and all of our data content businesses to keep growing as we get more customers. That's the way these businesses work. That's why we like them so much. We didn't buy this because of the synergies. The synergies exist. They're not massive, but we both spend money to collect data content, and it's obvious to us that we could probably cut some costs in the process of doing that. We're probably much more focused in this case, given the way these businesses operate, and their high margin profiles for getting new customers to make sure that we have a great data set and that we only add to that data set by putting these two businesses together.
The cost benefits that we get from it are going to be nice to have. Certainly not the focus of or anything to do with why we really bought these businesses. Just another nice opportunity to save some money.
Got it. Okay. You mentioned, cross-selling is obviously a good opportunity. Are there any specific segments that you kind of see as easy cross-sells initially for the company? I know you mentioned expanding to colleges and universities. Was wondering if you'd talk about maybe some verticals that would be easy cross-sells.
I mean, look, Visual Compliance has 2,000 customers that now have, in a couple weeks, are going to have access to all the things that we do on the Global Logistics Network. That's exciting. That always works out well for us when we have a bunch of companies that are focused on logistics and supply chain type transactions, and we're able to come in, buy that company, and say, "Hey, I've got 250 more things that you could take a look at, that we all kind of built to work in conjunction with this." I think the obvious one is the Customs Info tariff and duty database, right? A lot of times people are thinking about what are the tariffs and duties, and who am I allowed to send stuff to at the same time.
I think that's the first thing you'll see us do, is go around to our customer base and say, "Hey, we also own Customs Info. Let me show you how that works." Much like we do to our customers, we'll be doing the same thing to the Visual Compliance customers.
Got it. Last one for me. You talked about the different strengths of each of the businesses compared to Visual Compliance. I was wondering if you can talk about some of the intangible stuff in terms of how the businesses are run, the cultures versus MK Data and Datamyne, Customs Info. Just thinking in terms of integrating the businesses, wondering if you could think about some of the key areas that you might focus on, so that you can realize all the synergies that you're talking about. Thanks.
Sure. It's remarkable how similar it is to MK Data. If you remember back when we bought MK Data, we made a lot of comments about how the cultures of the two companies were similar, how they were very focused on profits, just like Descartes is. I think a lot of those things are true for Visual Compliance as well. If you remember back with MK Data, we thought, hey, if there was anything to do here, it was maybe to spend a little bit more money on sales and marketing to try and get customers in the door faster. I think you saw us do that. I think we started to combine some of the sales forces of these content businesses together, particularly with Customs Info.
That had maybe spent a little bit more time, energy, and money on sales and marketing over the years and saw a lot of synergies between those two businesses to approach a customer as one group. I think you'll see us make similar moves with Visual Compliance to try to get the company growing even faster because it's so profitable to do that. With each new customer coming in being very profitable for us, it makes a lot of sense for us to make sure we can get every customer we can get our hands on. I think you'll see us make that move. Visual Compliance has done some of that, maybe a little more aggressive than MK had in the past, but I think you'll see us do it even more so.
Got it. Thanks very much.
Thanks, Philip.
We have no further questions at this time. I'd like to turn the call over to Ed Ryan for final remarks.
Great. Thanks, guys. As you can hear, we're very excited about this and look forward to giving even more detail on it in our conference call coming up in early March, where we'll announce the results for our fourth quarter and fiscal year 2019. Until then, have a great time, and we'll look forward to reporting back to you in a couple weeks. Have a great day.
Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.