Good day, and welcome to the Perion Fourth Quarter and Full Year 2018 Earnings Conference Call. Today's conference is being recorded. The press release detailing the financial results is available on the company's website at perion.com. Before we begin, I'd like to read the following safe harbor statement. Today's discussion will include forward-looking statements. These statements reflect the company's current views with respect to future events.
These forward-looking statements involve known and unknown risks, uncertainties, and other factors, including those discussed under the heading Risk Factors and elsewhere in the company's annual report on Form 20-F that may cause actual results, performance, or achievements to be materially different, and any future results, performance, or achievements anticipated or implied by these forward-looking statements. The company does not undertake to update any forward-looking statements to reflect future events or circumstances.
As in prior quarters, the results reported today will be analyzed both on a GAAP and non-GAAP basis. While mentioning EBITDA, we will be referring to adjusted EBITDA. We have provided a detailed reconciliation of non-GAAP measures to their comparable GAAP measures in our earnings release, which is available on our website and has been filed on Form 6-K. Hosting the call today are Doron Gerstel, Perion's Chief Executive Officer, and Maoz Sigron, Perion's Chief Financial Officer. I would now like to turn the call over to Doron Gerstel. Please go ahead.
Thank you. Good morning. I want to start at a high level. We made real progress in 2018 advancing the three-phase turnaround strategy that we commenced when I joined Perion almost two years ago. The plan was designed to reposition Perion for long-term growth. To do that, I knew we would face some short-term challenges along the way. We entered the year with a goal to strengthen our financial position, continue to rationalize our expense structure, and generate adjusted EBITDA in the range of $28 million-$32 million.
Our goals also included the reallocation of resources to invest in new technology that will serve as the catalyst to drive growth. I am pleased to report today that we have achieved these goals and delivered on our guidance projection. During the year, we generated $32.8 million in cash and reduced our debt by $20 million from $60.7 million to $40.5 million. During the third quarter, we reached a tipping point for the first time in four years by achieving a positive net cash position where our debt fell below our cash level.
We further reduced operating expenses by nearly $22.4 million and generated $29.6 million in adjusted EBITDA. On a year-over-year basis, adjusted EBITDA increased slightly despite an 8% decline in total revenues for the same period. This is a direct result of the automated system we've implemented throughout our operation, tight management controls, and the impact of the cost optimization initiatives we completed earlier in the year.
In parallel with the successful completion of phase I of our turnaround strategy, we have extended the runway to continue the second-phase investment in technology that are necessary to reposition Perion for a long-term goal. These investments are focused on further innovating Undertone's platform and differentiating our advertising and tech capabilities. We will also continue to manage our business for earnings and leverage our strong cash generation to craft our engine for future growth. As we saw in 2018 and expect to see in 2019, this strategy has a short-term negative impact on advertising revenue.
I believe it is necessary part of our evolution. Preserving the positive results we deliver to our clients and maintaining our reputation within the industry trumps the need for short-term revenues that could be damaging over the long term to our business. The solution that Undertone launched in early 2018, Synchronized Digital Branding, enabled brands to deliver sequentially relevant messages across all platform screens and engagement moments. Think of it as a brand telling consistent story on a social platform and display channels rather than delivering fragmented messages.
Delivering campaign that coherently tells brand stories across different channels is the next frontier in digital advertising. It is one which require a high degree of optimization using advanced AI and machine learning capabilities. Since we introduced Undertone's new narrative, we have increasingly gained significant traction from its performance. This narrative is pivotal to transforming Undertone from merely selling high-impact ad units to full solution selling. As evidenced, we increased the spend of million dollar plus accounts by 12%, which contributed $34 million of Undertone business in the past year.
We were so encouraged by the significant traction we gained that we made the decision to allocate additional R&D resources to further enhance Undertone's core technology in an ever-changing market in order to better meet the needs of our customer and all other partners. As we advance investment in advertisement technology, we believe there will be opportunities to integrate components of our advertising business with components of our search business, which would further differentiate our products in a unique and powerful way.
As such, we are taking steps to further embrace the one company, one platform mindset. As part of that, we're taking steps to streamline our operating team. Subsequent to the end of the year, Mike Pallad moved on from Undertone. We wish him the best of luck in his future endeavors. Regarding CodeFuel business, we're finding new revenue opportunity for our industry-leading platform while maintaining, and in fact, deepening a strong and strategic relationship with Microsoft Bing.
We are encouraged by the fact that despite the churn of our legacy product, we're demonstrating year-over-year new revenue growth. The fourth quarter of 2018 is the third consecutive quarter that we're showing quarter-over-quarter growth. CodeFuel continues to generate significant cash flow, enabling us to invest even further in our advertising business. The CodeFuel business has been resilient, and our strong relationship with Bing suggests continued strengthen and cash generation for years to come.
Looking forward, we expect 2019 to be a year of continued transitioning as we prioritize margin, profitability, and long-term client relationships over sales. We also introduced new capabilities as part of our offering that will ultimately be the catalyst for future growth. Based on our current visibility, we expect to increase R&D investment and expect to generate adjusted EBITDA in the range of $22 million to $24 million. Now, I'll turn it over to our CFO, Maoz, to review the quarter and annual results in further detail. Maoz?
Thank you, Doron. In the fourth quarter of 2018, revenue for Perion total, $72 million, comprised of $37.3 million of advertising revenue and $34.7 million of search and other revenue. Revenue was down 7% from $77.3 million in the fourth quarter last year. This was primarily the result of a 13% decrease in advertising revenue due to insufficient programmatic inventory to meet our demand for our programmatic high-impact ad units. Despite of the churn of our legacy products, search revenue increased by 1% due to higher revenue per CPM and the number of searches.
Search and other revenue represents 48% of revenues for the fourth quarter of 2018, with advertising contributing 52%. This compares sequentially to the third quarter of 2018, when search and other revenue contributed 54% and advertising revenue contributed 46%. Customer acquisition cost and media buy in the fourth quarter of 2018 were $36.6 million or 51% of revenue, compared to $35.1 million or 45% of revenue in the fourth quarter of 2017.
This increase was primarily due to the churn of our legacy products in our sales business and the shift in product mix in our advertising business due to the effect of the header bidding and Chrome ad blocker. Net income for the fourth quarter of 2018 was $4.9 million or $0.19 per diluted share compared to a net loss of $37.3 million or $1.44 per diluted share in the fourth quarter of 2017.
The net loss in the fourth quarter of 2017 included a non-cash impairment charge of $41.8 million to reduce the current value of goodwill and intangible assets related to our Undertone business and its fair value, which was primarily a result of industry trend at the time at the write-off. Perion non-GAAP net income in the fourth quarter of 2018 was $5.8 million or $0.21 per diluted share compared to $6.4 million or $0.24 per diluted share in the fourth quarter of 2017. Adjusted EBITDA in the fourth quarter of 2018 was $11.5 million compared to $11.9 million in the fourth quarter of 2017.
Turning now to our 2018 full-year results. Total revenue for 2018 was $252.8 million compared to $274 million in 2017, representing a decrease of 8%. This decrease was primarily a result of search and other revenue declining 9% due to a churn of our legacy products and the 2017 network cleanup, along with a 6% decrease in our advertising revenue due to insufficient programmatic inventory to meet our demand for our programmatic high-impact ad units. Search and other revenue represented 50% of revenue for the full year 2018, with advertising also contributed 50%.
This compares to the full year of 2017, when search and other revenue contributed 51% and advertising contributed 49%. Customer acquisition cost and media buy for 2018 was $128.4 million, or 51% of revenue, compared to $130.9 million, or 48% of revenue in 2017. In search and other revenue, the increase as a percentage of revenue is primarily due to the churn of our legacy product, while in advertising, the increase is mainly attributed to product mix and the effects of better bidding and Chrome ad blocker.
On a GAAP basis, full-year 2018 net income was $8.1 million, or $0.31 per diluted share, compared to a net loss of $72.8 million or $2.81 per diluted share in 2017. The loss in 2017 was primarily due to a goodwill and intangible impairment charges of $85.7 million related to our Undertone business. Perion's non-GAAP net income for the full year 2018 was $17.8 million, or $0.65 per diluted share, compared to $17.4 million or $0.72 per diluted share in 2017. Adjusted EBITDA was $29.6 million or 12% of revenue in 2018 as compared to $28.9 million or 11% of revenue in 2017.
Cash flow from operating activities for the full year 2018 was $32.8 million compared to $36 million for the full year 2017. As of December 31st, 2018, we had cash equivalent, and short-term bank deposits of $43.1 million, compared to $37.5 million as of December 31st, 2017. This concludes my financial overview for the fourth quarter and full year 2018. I will now turn the call back to Doron.
Thank you, Maoz. Where are we in our journey? I believe we are in a very good place, and I'm pleased with the trajectory. In 2018, we largely completed phase I of our turnaround, where we focused on cost optimization to reduce a bloated corporate structure, which decreased operating expenses and strengthened Perion overall financial position. Those were burning platform and require immediate attention. Upon completion, we advanced to the second phase of our strategy, which move us beyond fixing our company to advancing our core product capability.
We have also started to further differentiate our advertising capabilities and strengthen our product offering around Synchronized Digital Branding. This technology is essential for our competitive advantage, which will enable us to be focused on growth, our third phase. We're also developing a new and truly innovative advertising management platform that we worked on intensively in 2018 and continue to further develop this year. This platform integrates creative technology and advanced AI, and based on early feedback that we received from selected customer, it's inspiring.
As a result of all of this, I'm now way more optimistic than I was two years ago when I first joined. We have eliminated uncertainty and vulnerability and are proceeding with strength and purpose. We are nearing the moment where the enormous investment in technology that we made is close to reaching fruition. We are building a moat, and a good moat takes time. I have no doubt that it will be our core differentiator and springboard for future growth. By nature, I'm not a patient person. True innovation takes time, and I'm confident it will be worth the wait.
Before I open the call to question, I'd like to thank our employees, partners, and customers for their support during the past year. I'd also like to welcome our new shareholders. For those of you who may not track Perion 13D and 13G filings last month, Ronen Shilo and Dror Erez, Co-founder of Conduit, who became two of Perion largest shareholders in 2014, each lowered their stake in the company by selling a combined 1.8 million shares.
They were bought by buyers focused in the long term in an orderly fashion through an open market block trade transaction that was premium priced at $3.30. Perion didn't have any involvement in this transaction. With that said, operator, will you please open the call for questions? Operator?
Yes, thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question. We'll take our first question from William Gibson with ROTH Capital Partners.
Hi, Doron.
Hi.
Can you give us a little more color on the Publisher Network. Is that growing or what are the trends there?
Publisher Network definitely growing. That's one of our main KPI. It has to do two efforts. One effort is towards the tier one publisher. Another effort is tier two, three. We're definitely looking to enhance the Publisher Network more on what we call the local geo-targeting, as required from the campaign we're activating.
Thanks. Basically for your tier one and two accounts, how do they measure their return? Because you're basically across all the avenues here, getting the message across. Is there a particular measurement or criteria that they're looking at?
You're talking about the publisher or the advertiser?
Actually, now I switch to the advertiser on that question.
Okay. When it comes to the advertising, advertiser, first, we need to follow common KPIs that are in the industry. If it's click-through rate, if it has doability of the video. One of the unique things that we developed with one of our customer, it's called CPAC. It's very useful indicator, which is cost per attention. That's one of the indicators that combined a lot of others into one factor, which we are measuring at the end of every campaign and share it with our customer.
Thank you. Just lastly, do you think that's it for impairment charges or is there any potential for more this year?
Let me put it this way. We are doing this measurement on a yearly basis, and we did it this time, and the fact that we didn't announce impairment, it means that we are definitely fine.
Thank you.
Again, if you would like to ask a question, please press star one at this time. If you find that your question has been answered, you may press star two to remove yourself from the queue. We'll take our next question from Juan Noble with Taglich Brothers.
Hello, thanks for taking my questions.
Sure.
I'd like to know, last year, MakeMeReach had obtained the Google Premier Partner badge. I was hoping that you could explain the specific benefits associated with this, and could you give us a sense of your growth expectations for this segment now that you're in the U.S.?
First and foremost, at this point, we are mainly doing our efforts in Europe when it comes to MMR, and we are about to launch. The MMR condense or incorporate into what Undertone is offering in one holistic offering, which I described during the call, which is very much the essence of Synchronized Digital Branding.
This synchronization is going to be with social and display. Social from the MMR side and the display from the Undertone side. To your question, we are expecting definitely that this would be an impact on our revenue in 2019 that is doing through Undertone. In terms of the relationship that we announced with Google, the integration is definitely there. Okay. Thank you for that.
We are now working with initial customer, developing a use case, focusing on certain vertical, that we are being advised and guide by Google to show traction that consumer, and we follow a use case where they search first and then they're going into the social based on their results, and the idea is to amplify the results that they got in the Google platform into the social platform in order to get a better and higher engagement from the consumer standpoint. Far it's working well. We didn't scale it. We definitely need to test it and measure the results before we are selling this concept to advertisers. So far, we're very encouraging from this cooperation.
Okay. Thank you for that. Your CodeFuel platform, it's used in conjunction with the Chrome extensions. I was just curious if you knew what percentage of Chrome's extensions that are out there actually utilize the CodeFuel platform. Could you share your strategy for growth in this area?
Yes. I can share the strategy for growth. For obvious reason, I cannot provide more details as far as the split between Chrome and other platforms. In terms of the strategy, we are having, as I mentioned, a great strategic cooperation with Bing. I'm sure you follow the Bing announcement as far as their cooperation with Yahoo, that starting in the next month or so, all Yahoo advertisement, with no exception, are going to be Bing advertising.
That's a great news for us because Bing will have more demand, and we're, as ones who provide the supply, will definitely have more opportunity to grow within Bing as we are doing. In that sense, the discussion with Bing is finding all kind of ways how we able to drive more searches to the Bing platform. I must say that Bing developed a very interesting technology based on API that we are integrated with. We are close to announce the first joint product that we're doing together with Bing, and that will be great news for us. It's a month to two months away.
Great. I've noticed, obviously, for the full year, you're talking about increasing further your R&D spending. What is the current focus-
Yes
of your engineering team with all this money going into R&D? If you could really spell that out, what the current focus is.
Yes.
When do you believe this investment will start to pay off?
Yeah. That's a good question. First of all, the challenge that we took is elevate what is known in the market, where you are optimizing a single ad unit in your campaign. The challenge that we took upon ourselves is with the high-impact creative, we want to develop what we call an ad journey that will be aligned what advertisement are asking. The whole idea is how we able to get the multiple touchpoint of our consumer across channels, across platform. Across channel means it will be social, it will be the search, and of course, display and video.
If you think about it, that require highest degree of optimization because you have a grid of, let's say, nine boxes here, and you need to define which ads will go first, and based on what engagement, what ad I'm showing at second and third in order to get the maximum engagement from a specific consumer. Not trivial at all. It require a lot of data that will support this model. As I mentioned, a lot of try and error AI engine that is supporting it.
If this is not enough, one of our main challenges that if you start with kind of a pre-setup of kind of sequential advertisement as starting with, and you invest a lot about optimizing this initial plan, the whole point, and we call it a pre-flight type of planning, there is a very important element which we invest a lot, it's in-flight. As much as you can plan well, what you're able to get while you're in-flight and change again this permutation or setup versus those nine boxes in the grid I illustrated, that's very sophisticated technology that we're investing.
Everything is being measured on list. I mean, it's a great story what I told you, but if it's not being reflected on increase on CTR and in other KPI that I mentioned before, we didn't do much. Keep in mind that we want that it will be an optimized cost because we are adding more ads into the story in order, at the end, to get a higher engagement. That's the direction we are going. As I mentioned before, we are getting a positive indication. It's tuned for large customer.
That's why we mentioned at this call that we are targeting more with this concept large advertiser who are spending more than $1 million a year in campaigns with us. The number is growing, and it's growing very much to the sophistication that we are bringing with our technology. That's where the encouragement is coming from. To your question, with that investment, were we expecting a growth, a real growth on the Undertone business? I believe that it will definitely come in 2019, towards the second half of 2019, and even more than that in 2020.
Great. Thank you for that information. Obviously, you're in a transition period right now. I just wanted to get a feel for, one, that is going to benefit you. Oh, I'm sorry. I just have one further question.
Yes, please. Go ahead.
Yeah. You paid down a significant portion of debt. That's great. I'm just curious if you could tell us what you anticipate, what your plans are for 2019, how much debt to pay down?
As you know, we announced the refinancing. We get a new loan from Mizrahi of $25 million, but expected to pay at the next three years. If you're looking on 2019, we expected to pay another $60 million in 2019, another $60 million in 2020, the rest we'll pay in 2021.
Great. Thank you. Once again, thanks for taking my question.
Yeah. I just want to add one comment. Since you mentioned the transitioning, it's important to mention that transition in Undertone is, I read from my script, is from selling an ad unit, high-impact ad unit with the reach creative ad unit, to selling Synchronized Digital Branding, which is a full solution that's quite a transition.
We are encouraged by the results, but at the same time, we understand that it require massive training and massive changes in the operation, massive investment on automation that has to do with new challenges, that has to do with the operation. It's a long journey to do this transition and do it in a way that it scale and it generate significant margin.
Great. Thank you for that info.
Thank you.
We'll take our next question from Paul Thayer, private investor.
Yes. Hello, thank you for taking my call. I'm wondering about-
Hi.
Hi. The revenue, and the growth. It seems the revenue, we've been losing in the searches division, and I'm just wondering, can any of the other divisions pick up that slack? We need some growth here. Am I right?
Yeah. First of all, a very good question, and I think that I was trying to explain the strategy, and the strategy at this point is we believe that in order to drive growth, and I'm talking about real, predictable, sustainable growth, as someone who has a background on enterprise software, I truly believe that this need to be on the foundation of technology. When you're doing it, you are creating your core differentiator, I describe it as moat, which is the way I illustrate it to our engineering team, and that's what we have in mind.
It's very easy in our business to grow revenue by arbitrage between the buy side and the sell side. That's not what we're after. We are 16 years in business when it comes to our advertising arm. We are very much build the reputation on quality, high creative ads, and the service that we deliver to our customer. Now, with that in mind, we are moving to the next phase and developing here a full solution that we will sell to our customer. By doing it, you have to invest on the technology.
The way the growth will come is that in order to support the massive investment that you're doing in engineering, we definitely enjoy the EBITDA contribution that the search is doing, even despite of the decline in revenue, slight decline in revenue. That's our three phases turnaround strategy that I keep mentioning every call.
Yeah. Well, what about some acquisitions going forward? See, I was in business at one time, and when things got rough, I always looked for another company that served exactly what we were making. It always helped me out going forward. I cut an awful lot of overhead out doing that.
Yeah
I'm just thinking that might be a good thing for the future. An acquisition.
You're right on. I think it's a good thing for the future. Definitely, if you have technical spots that you want to accelerate the time to market, definitely, if you're looking at the revenue, which is need to be, in a way, integrated to what we are doing. Keep in mind, that even though we work really hard to be in a point where we have more cash than debt, we need to be really careful, and we need to really careful because the statistic is that most of acquisition didn't work out the way you anticipated.
Yeah, I know.
You need to find the right fit.
That's right.
the culture fit.
Right.
We worked really two years to be at the point where now we can look at it in a serious way, but at the same time, very cautious on what we're doing or how much we are paying and how the post-merger integration looks like.
Myself, I was always cautious, and that's the way to do it. You can get some help that way, I'm sure of it. Another question I'd like to ask also is on your debt. I think the last time you spoke, you mentioned that 2019, we're going to pay off the whole debt. We should be debt-free. I think you mentioned that last time around. In any case, these payoffs, could they be possibly earnings if we didn't have the debt? Do you follow what I mean?
No.
I mean.
First of all, as far as your first part of your question, I didn't recall saying that in 2019, we'll get rid of the debt. What we announced, I think it was two months ago, that we very much consolidate all the debt in one place. As Maoz mentioned before, a good 40% of the debt will be returned in 2019, the other 40% in 2020, and the remaining in 2021.
I must have misread that. Okay. I was just curious, the paying the debt, is that coming from our revenue? Is that how it's working?
Yeah. Paying the debt coming from.
This is Maoz. The company, as you know, derives positive operating cash every year. We're using part of this amount in order to pay our debt.
I see.
Our plan, same as we announced in the past, will be to keep on reducing the debt.
Okay. Well, thank you very much. Thank you.
Thank you.
We'll take our next question from Greg Gardner, private investor.
Thank you. In the quarter, how much was the revenue hurt by not having enough supply?
In the quarter, in Q4, the revenue hurt by between $5 million-$7 million.
Okay. The adjusted EBITDA of $30 million for the last 12 months was despite not having enough supply and additional expenses and investments in new hiring, new platform. The press release states 2019 is to be a year of prioritizing profits and margins. My question is, yet the guidance on EBITDA is lower despite having a priority on profits. If you would discuss how the priority can be on increased profits, yet the guidance is lower EBITDA.
Yeah. There is one element that we have in our press release, and we put it on the earning call, which has to do of increasing substantially the investment on engineering. Based on the encouragement of the sales that we did on the new narrative that we introduced in 2018, we show a plan to the board of what this additional, yet substantial investment will take us to, and in order to get even a greater growth in the future.
Okay. The R&D will basically go up around the difference between $30 million of EBITDA and the $23 million, about $7 million more research and development, pretty much?
Yeah, pretty much. You're very close in your estimate.
Okay. Well, a question on Bing, please. Bing has 30% market share in desktop search, but Bing has very little market share in mobile search. If Bing mobile search reaches the same market share it has in desktop search, would your search revenue basically double or increase significantly?
More than double. Yeah. More than double.
Okay. Does Bing have plans to go into search more? What has been their plan for Bing mobile search?
Since we are in a very strict NDA, I cannot share with you the plans, but I can tell you, and that's not a secret, that they're doing tremendous effort in order to be a search player in mobile, because mobile is growing way greater than desktop. As that such, they are working closely with us and with other Bing partners to contribute to this effort.
Okay. I have two more questions. They're very quick, I think.
Please.
The advertising division with Undertone, is the goal to convert the installed base to the new AI platform?
Yes.
Okay. If that's true, what is the average CPM of the AI platform, versus the average CPM of your traditional advertising revenue?
Hold on for a second. I think that at this point where we are doing some initial sales with the new platform and working with some design partner, I think it's too early for us to say what will be.
Okay
The implication on the CPM.
Okay. Following through on that, are the clients waiting for the new supply in order to use the new AI platform, and therefore, they're reluctant to use the traditional advertising services of Undertone, just because the AI platform is so much better for their ROI? They'd rather just wait for the AI platform instead of giving you business for your traditional advertising services.
Advertiser is not waiting for anything because they have their own calendar, if they plan to launch their product, they will launch their product regardless. This is most important because there are many at the enterprise that work for this moment, they will do what they have to do. At the same time, we definitely share with them our plans. We share with them what is the expected lift and the fact that they will able to get way higher return on their ad spend, in the future than they did before. They cooperating, they providing with us their insight as far as the new platform.
I must say that they're enthusiastic to be at this point because it gives them, as I explained, way more touch points and way more capabilities in order to retarget and in order to get better engagement with their audience. This is future outlook for them.
Okay. Thank you. Those were my questions.
You're welcome. Thank you.
We'll take our next question from Peter Merkle with [inaudible] .
Hi. Thanks for taking my question. The new loan facility, the $25 million, it was my understanding that the previous debt had buyback restrictions. Does this new loan facilities have that as well, or could that potentially be a possibility before all the debt has been paid off?
There's no connection to buyback. We just take one loan, replace with other, with different schedule and different terms. As I just explained, we just extend the payments for the next two years.
Okay. There is no current restriction. If the board decided that they want to institute a buyback, given that even with the lower EBITDA, it's about trading only about three times the value, that that could be a possibility?
Again, we're always looking for on our policy around buyback. We don't have any plan right now in place, but we don't have any limitation according to our loan right now.
Okay. Then, are you still planning on changing the name to Undertone? When does that actually take effect?
That's a good question. We have to get it through a proxy to our shareholders, and, once we got it, we will do it at the right timing.
Okay. Last question, the dual listing in Tel Aviv, it was my understanding that was mainly because of the previous debt. Is that still a requirement, or is that potentially now that there's kind of this shift to New York that you would delist from there and save those costs?
Actually, as a company that's rated here in Israel and also in New York, the different cost is not major. Right now, we're keeping trading also in Tel Aviv and in New York. We don't plan to change it at the near future.
Okay. All right. Thank you.
Welcome.
We have no other questions at this time. I would like to turn the call back over to Mr. Doron Gerstel for closing remarks.
Yeah, guys, thank you very much for participating. We'll see you on the next earning call. Thanks again.
This concludes today's call. Thank you for your participation. You may now disconnect.