Good day, and welcome to the TransAct Technologies Second Quarter 2021 Earnings Call. Today's conference is being recorded. And at this time, I would like to turn the conference over to Ryan Gardella. Please go ahead, sir..

Thank you. Good afternoon and welcome to TransAct Technologies second quarter 2021 earnings call. Today, we'll be discussing the results announced in our press release issued after market close. Joining us from the company are Chairman and CEO, Bart Shuldman; and President and CFO, Steve DeMartino.

Today's call will include a discussion of the Company's key operating strategies, progress on these initiatives and details on the second quarter financial results. We will then open the call to participants for questions. As a reminder, this conference call contains statements about future events and expectations, which are forward-looking in nature.

Statements on this call may be deemed as forward-looking and actual results may differ materially. For a full list of risks inherent to the business and the Company, please refer to the Company's SEC filings, including its reports on Form 10-K and 10-Q.

TransAct undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances that occur after the call. Today's call and webcast will include non-GAAP financial measures within the meaning of SEC Regulation G.

When required, a reconciliation of all non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance with GAAP can be found in today's press release as well as on the Company's website. And with that, I'd like to turn the call over to Bart..

Thank you. Ryan, and thank you to everyone joining us on the call today. Before I jump in some details, I wanted to take a quick moment to recognize the life and contributions of Thomas R. Schwartz. Tom was the best, and a huge contributor and loved here at TransAct. He was an incredible mentor to me, and he is sorely missed.

We are forever grateful to the contributions he made to the company. God speed, Tom. I miss our talks and your steady insights and perspectives, and I miss you every day. Now on to our second quarter 2021 results.

Wow! Our second quarter results continued to build on our early success in 2021 as TransAct is perfectly positioned to capitalize on the domestic reopening. America's food service operators and restaurants are facing incredible challenges from ingredient inflation to food safety concerns to a major labor shortage.

Our BOHA! platform provides a solution to these pain points, and we are seeing more operators choose us quarter-after-quarter as demonstrated by our positive results in the second quarter of 2021.

From originally doing outbound calls during the height of the pandemic, to now receiving and answering inbound calls, the reopening of the U.S economy is having a very positive effect on our FST market.

Our food service technology market experienced a record quarter with our highest ever revenue of $3.1 million, up 155% from the second quarter last year. We added 933 paid terminals in the second quarter of 2021 for a total of 7,942 in the market.

Importantly, we also crossed the $2 million mark in FST recurring revenue with $2.1 million in the quarter, which is also a new record for TransAct. Growth in FST recurring revenue came in at a strong 214% increase over the second quarter 2020 and a 71% increase over the first quarter of this year.

We continue to expect strong results from our industry-leading BOHA! solutions and are confident in our positioning as virus related headwinds continued to subside domestically.

As Steve will discuss in detail later, our preliminary second quarter total net revenue was $9.3 million, and we recorded an EBITDA loss of $2.5 million and an adjusted EBITDA loss of $2.1 million. Let's now discuss results by market, starting with our food service technology or FST market.

As I just mentioned, we experienced a record quarter with $3.1 million in revenue, which was up 155% over the prior year period. Our recurring FST revenue which includes software subscription, labels and service was also a record at $2.1 million or $8.4 million on an annualized basis.

Previously, we had guided to $5.5 million to $6 million in recurring revenue by the end of 2021 for the whole year.

As a result of our continued success in both expanding ARPU as well as adding new terminals to our base, we are raising our guidance to at least $7 million in recurring FST revenue for all of 2021, which also includes the $1.2 million we did in the previous quarter.

Speaking of ARPU, we experienced a very positive uplift, mostly due to increased usage in our currently installed terminal base. In the first quarter, our newly adjusted ARPU was $875. And I'm pleased to announce that this quarter, it grew to $1,179. I will let Steve discuss the calculations in more detail.

As I have mentioned on previous calls, hardware sales and the number of paid terminals in the market are the lifeblood of our recurring revenue stream. And as we increase the number of terminals in the market, our recurring revenue will grow exponentially.

Our second quarter numbers in this regard were very solid, resulting in an additional 933 paid terminals being added to our base, bringing the total to 7,942. As a reminder, we are currently guiding to between 10,000 and 11,000 paid terminals in the market by the end of 2021.

As our paid terminal base expands, our recurring revenue will also grow, fueling consistent results in a predictable stream of FST revenue. In addition, as I have said many times, I expected our ARPU numbers to increase once the U.S economy opened, and it did.

Last quarter I called out labels as being able to drive an increase in FST recurring revenue as volume and transactions return to our customers businesses. This quarter, I'm pleased to announce that our label sales were up 273% year-over-year.

As I’ve also mentioned, we have a strong relationship with the convenience store chain 7-Eleven, and they continue to order more terminals to be installed in the stores as they focus on expanding their fresh food initiatives.

Each store requires some construction changes to add fresh food capabilities, and includes the installation of the BOHA! terminal.

While we will not be providing a quarterly update on the penetration, we will remind you that the terminal install opportunity for 2021 is about 2,000 terminals, and the total remaining 7-Eleven opportunity includes more than 7,000 additional stores.

In addition, however, our other convenience store customers are now expanding, adding more stores and therefore purchasing more BOHA! terminals from us, very positive. I also wanted to touch on our small medium business or SMB food service technology initiative that we highlighted in the press release in July.

To address this large and growing opportunity, we have created a dedicated inside sales team to target small chains and individual operators. Between rising inflation and pressing labor shortage, this market is in dire need of our BOHA! solutions to help manage these ever increasing costs.

And we have seen some early success with 16 new SMB accounts, ordering 69 new terminals in the second quarter. Additionally, due to the nature of small businesses, these purchasing decisions are typically made quickly. And we're seeing a much shorter sales cycle here than in the enterprise space.

With our significant marketing effort underway, which we started in April after we launched BOHA! ROP at the Apple event. The amount of new SMB business opportunities in the FST market is growing exponentially. Finally, I want to provide an update on our FST pipeline.

As a reminder, we only include qualified leads in our pipeline, and expect to see our pipeline numbers shift as we convert opportunities into wins, remove them from the pipeline calculation, but also add the new.

As we remove the wins out of our pipeline and add in the additional new prospects, our sales pipeline for the FST market now stands at over $150 million. This is calculated over a 3-year period for a prospect as almost every contract to date has been 3 years. In addition, Apple related customers represents over 50% of that $150 million.

The Apple sales team continues to bring new opportunities into our pipeline, and I could not be happier with our relationship. Now quickly moving on to our casino and gaming business. Revenue in the quarter was $3.5 million, up 155% year-over-year and up 21% sequentially.

This was largely due to the return of our domestic sales, our international market continues to show signs of recovery as well and we expect that business to track upwards for the remainder of the year.

In the U.S., many states have fully reopened and are allowing venues to return to 100% capacity, which is beginning to drive investment on the gaming floors. We believe there is significant pent-up demand on both the casino and guests side of the equation. We cannot be more thrilled to see the positive momentum here.

And as our sales improved in this highly profitable market, we also expect to see a corresponding rise in our gross margin. We are well-positioned to capitalize on the return to normalcy and leisure activities in the casino and gaming market. With that, Steve will review our second quarter 2021 results.

After which I'll make some final remarks before opening the call up for questions.

Steve?.

Thanks, Bart. Let's turn to our second quarter results in detail now. Total net sales were $9.3 million, up 76% from $5.3 million in the second quarter of 2020. As a reminder, we experienced the highest level impact from COVID during the second quarter of last year.

Sales from our food service technology market or FST were up 155% to a record $3.1 million from $1.2 million in the second quarter of last year. Our FST hardware sales increased 85% to $1 million from $545,000 in the year-ago period.

And as previously mentioned by Bart, we ended the second quarter of '21 with 7,942 paid terminals in the market, which was an increase of 933 units during the quarter.

Our recurring FST sales, which includes software and service subscriptions, as well as consumable label sales came in at a quarterly record $2.1 million, which was up 214% from the $659,000 we reported in the year-ago period.

As Bart mentioned, our recurring revenue is a function of how many paid terminals we have in service and transactional volume of our customers. And as those numbers continued to trend upwards, so will our label sales and our other recurring revenue.

As we mentioned last quarter, given that we're in the early stages of building our installed base of terminals, our ARPU will likely fluctuate quarter-to-quarter based on the size of individual software, label and service orders and the timing of terminals shipped.

In addition, what a terminal shifts towards the end of a quarter, we don't get the full effect of the recurring revenue from the terminal, while still having to factor that terminal into our ARPU calculation. These late quarter deployed terminals have an impact on our ARPU numbers.

With this in mind, we're adjusting the way we calculate our ARPU going forward to remove the effect of terminals deployed late in the quarter. So now we analyze the current quarter's recurring revenue, and then divide that number by the number of paid terminals and service at the end of the previous quarter.

Using this new method, our ARPU for the second quarter '21 was $1,179, which was up nicely from $847 in the first quarter of '21. Casino gaming sales were $3.5 million, an increase of 155% from the second quarter of 2020.

We're seeing the pace of domestic sales increasing quickly and recovering to near pre-COVID levels this quarter, which accounted for sales of $2.4 million, which was up 151% from the prior year quarter. Meanwhile, we're seeing a more muted recovery internationally with sales of $1 million, up 164% from $390,000 in the prior quarter.

We continue to expect these numbers to trend upwards as the year progresses. POS automation sales were up 161% to $1.3 million from $481,000 in the prior year period. The increase was due to substantially higher sales of our Ithaca 9000 printers to McDonald's, as their sales recovered from the COVID impacted low point of the second quarter last year.

Moving on to Printrex, revenues were $112,000, up from just $8,000 in the year-ago period, as the price of oil rises in the oil and gas drilling activities of our customers are beginning to resume. But we continue to deemphasize Printrex sales.

We still expect to receive additional orders from our legacy customers as the industry recovers from the impact of COVID. Finally, Transact Services Group or TSG. sales were flat at $1.4 million from a year-ago period.

Sales of paper rolls for our legacy POS printers were hired due to recovering transactional volume of our customers, but were offset by lower sales of aftermarket products for our legacy printers, including spare parts for our lottery printers, and service contracts on our legacy banking printers. Our sales remained flat.

We are no longer focusing on the products in this market and expect our TSG revenue to decline over time. Moving down the income statement, our second quarter gross margin was 35.7% compared to 43.3% in the prior year period. Our gross margin the period was negatively impacted by higher terminal sales.

As a reminder, we decided to reduce our margin on both hardware products to accelerate the growth of our installed base of terminals to drive more lucrative FST recurring revenues such as software subscriptions, service and labels.

This was partially offset by 76% higher overall sales volume, including higher casino gaming printer sales as well as increase in our recurring FST revenue, which is at significantly higher margin than our hardware sales. We should see a favorable impact on gross margin over the longer term.

As more lucrative recurring revenue grows to become a larger percentage of our overall sales. Total operating expenses for the second quarter of '21 were $6.1 million, an increase of $1.1 million or 21% from the prior year period.

This increase was a result of higher engineering expenses due to additional hiring and outside development expenses to support our BOHA! efforts, as well as increased selling and marketing expenses due to the return of travel expenses and hiring new sales staff.

Our G&A expenses also increased due to higher recruitment and share-based compensation expenses. Keep in mind, our second quarter of last year represented a low point in our operational spending due to COVID. As we move through '21, we expect to incur higher expenses as trade shows and travel return.

And we expand our marketing efforts and ramp up the build out of our team to support BOHA!. The further breakdown our operating expenses in the second quarter, our engineering costs were up 32% to $1.8 million. Our selling and marketing expenses were up 25% to $1.7 million and our G&A expenses were up 12% to $2.5 million.

We incurred an operating loss of $2.7 million for the second quarter of '21, or 29.5% of net sales, compared to an operating loss of $2.7 million or 51.8% of net sales for the second quarter of 2020.

The bottom line, we recorded a net loss of $2.1 million or $0.24 per share in the second quarter of '21, which compares to a net loss of $1.9 million or $0.25 per share in the year-ago period. Adjusted EBITDA for the second quarter '21 was a negative $2.1 million, which compares to a negative $2.3 million in the year-ago period.

And finally turning to the balance sheet. We ended June with $8 million in cash and $2.2 million in long-term debt, which was all from the PPP loan. And some good news regarding the PPP loan. In early July, we're notified by the SBA that our PPP loan was formally forgiven.

With this in mind, we expect our long-term debt to return to zero for the third quarter of '21. And with that, I'd like to turn the call back to Bart for some closing remarks..

Yes. Thanks, Steve. As you can see, we're very excited about the second quarter and what lies ahead of us. At this point operator, I'd like to turn the call to questions-and answers. Thank you..

We will now take the first question from Chris Howe of Barrington Research. Please go ahead. .

Good afternoon, Bart and Steve. That was a fantastic quarter..

Thanks, Chris..

Thanks, Chris..

Hey. So you went through the change to the ARPU calculations.

If we think about the incremental terminal growth, that we saw in the quarter of over 900 terminals added, any terminals coming at the end of the quarter? How should we think about the timing in the quarter?.

The biggest issue we faced, Chris, we do get orders all through the quarter and we do get some orders in the third month of the quarter. The bigger issue is we shipped some terminals to what's kind of like a distributor.

Some of our customers who put the systems in that like might have to put some other hardware in or something like that, used a middle person. So we shipped to that middle person, they staged the equipment and then shipped to the restaurant. So even if we shipped the terminal in May, it might not get deployed to July.

And we see that because every terminal that goes online, they have to log in with their credentials, and we have to accept it in our back end system. So it's not just the fact that they're shipping all the way through the quarter, it's some of them take a month or two just to get out there in the market, as they staged them at a distributor.

And that happens with a couple of our customers. So it's just to be more realistic to what we're seeing as ARPU. We decided to take the noise of the current quarter out of the equation, and then divided into the yearly -- by projecting the yearly amount of FST recurring revenue.

Over time a couple years from now, when we get that many terminals out there, and we've got that much FST, it might not matter. But even 1,000 terminals can change the calculation, and a fair amount of them are just being deployed as we begin the following quarter..

That's great color. Thanks, Bart. And I don't want to discount some of your comments or overlook some of these. The label growth of 273%, year-over-year is great.

And can you talk more about this label opportunity as the reopening gets further down the road? And some of your other comments, you mentioned other convenience stores expanding their store count, both of these seem like great opportunities for growth in the upcoming quarters..

Yes, so let me tell you what's going on with labels. So clearly, the country is opened up. So there are more transactions, more transactions mean more food, more food means more labels. So our label volume is clearly rising as the volume of transactions rise.

I mean, if you just follow what's going on in restaurants today, they're all talking about higher revenues and all that. So the more food that gets prepared, the more food safety labeling they need. With our convenience store customers, meaning that if there's more people going out, there's more fresh food they're selling.

But some of the other things that are happening, Chris, is some of our customers are basically, especially on the grab and go, they're asking us to put together a label that's very custom that will have their colors and their logo on the label. And that's a nice business for us. It's good high margin business.

So we're seeing some of that also as customers are coming out of this pandemic. They're trying to brand their brand more, and they're asking us to actually craft a more -- actually, it's a more expensive label for them with colors and their logo on it. They also tend to be longer labels, because they wrap around the packaging.

And as you know, we have a pretty good sized sushi company that we won, and they're now in full mode of using the terminal in all 1,100 stores that they have. And they're expanding also. And we're actually producing a label for them that wraps around almost, call it 60% of the package.

So with them on board, and now more people going out and them selling more sushi, our label sales continue to rise. In regards to the C stores, we are seeing our existing customers add more stores. So they are opening additional stores around the country. As they open up more stores, they need the terminal.

So we are seeing incremental business from our existing C stores. Chris, the way to kind of look at our business right now is we've got this very nice convenience store business that’s going to continue to grow. 7-Eleven is going to continue to put more product out there. We've actually got some new convenience stores that we're bidding right now.

And that's kind of just going and it's adding more revenue, it's adding more terminals, and it's adding more recurring revenue, which really interesting to us though, now. So on the other side of the business is the restaurant business, which really did not exist in the pandemic.

And let's be honest, we went through a very rough time for about 14, 15 months there. Well, that's changed dramatically. And almost all of our big opportunities are restaurant companies now, and that has just started since May. And that's been wonderful. Our SMB business closed 16 deals in a couple of months.

We're doing a lot of advertising those that are following national restaurant news and some of the other news that are out there, we're advertising a lot more than we ever have. Our hit rate is up by like 15x. It's very interesting because we track the calls coming in, and we can track what ad, where they came from.

And so that business has become quite exciting right now..

That's great. Certainly with the restaurant optics improving, as we look forward as well as your existing penetration within the C store channel, the terminal target is 10,000 to 11,000 to give a boundary. But certainly there's plenty of upside for the business, and plenty of opportunity. We'll just see how it plays out for the remainder of the year..

Thank you, Chris. Thank you. Couldn't agree with you more..

We will now take the next question from Jeff Martin at ROTH Capital Partners. Please go ahead..

Thanks. Good afternoon, Bart and Steve.

How are you?.

Good, Jeff.

How are you?.

Well, thanks. My condolences to you on the passing of Thomas Schwartz..

Yes..

Yes. Miss him. Thanks..

Bart, could you expand on the pipeline update a bit? I believe last quarter on earnings call, you mentioned 30% of the prospects in the pipeline were in demonstration mode or further along.

Is there an updated figure to that? And then, with $150 million in the pipeline, I assume that is roughly equivalent to $50 million of revenue a year if it's over 3 years. I’m trying to back into a potential terminal count. If you use $1,500 per terminal, that's roughly 33,000 terminals.

Is that the right way to think about it?.

$1,500 -- I'm not sure -- I'm not sure I understood the question in regards to the $1,500.

What was the $1,500?.

ARR. I assume ….

Oh, you mean the annual on revenue?.

Yes, it's going to be interesting. Yes, it's going to be interesting. Look, we had originally projected, $1,500, $1,400 of recurring revenue for terminal. I mean, clearly, we watched it drop significantly, because of the pandemic. Now we're seeing it up at around $1,100, $1,147.

As we close more restaurant deals, that number is going to be much more predictable, because it's going to be probably 80% software, 20% label, where our convenience store, it's just the opposite. So I'm interested to seeing how we get to the close of some -- we have some very large opportunities.

And that are in trial, we have a bunch over the next couple of weeks that go into the trial, that go into evaluation. And then we got to get into the negotiations and see where we end up. I think we're comfortable in the $1,000 to $1,200 per terminal range right now.

As we are opening up the country and we want to make sure that with the Delta out there that it doesn't slow things down. Again, we're very pleased to see the $1,147 number much closer to what we thought. And a lot of these calculations were done during the trial.

So it's not like we pulled the number out of the air, we actually saw how much either label business they were using, or how much software they were using. The nice thing about the restaurant industry is they buy the package, right. They buy all of ROP. And we know exactly what that's going to sell for and what the recurring revenue will be from that.

The additional will be on their food safety side, or if they can do any grab and go, what the additional label revenue will be. But you're in the ballpark of terminals, Jeff. You're definitely in the ballpark of the type of volume that we're looking at. So, I'm not uncomfortable with your question and agreeing to it..

Okay. That's helpful. Thanks.

And then what would you consider a successful conversion rate of pipeline, say over -- if we got 2 years, would you be -- would you consider 40% success? Would you consider a number much higher than that? I mean, I know it's very early and it's difficult to say, but my gut would say a lot of these larger restaurant organizations, if they can get the labor savings and the efficiencies out of it, potentially that conversion rate should be well over 50%.

I'm just curious what your ..

Yes, I would be -- look, here's what's going on in the market, right. We just found out that if a restaurant wants to take a loan out which most of them do, banks are starting to ask them for -- they’ve added a clause for food safety.

So that's become very apparent to banks, that because of having to add so much new people, so many new people to the restaurant, that food safety is becoming a concern to the bank. And we smack up that directly with our food, with our labeling program, our temperature taking program, and actually our temperature monitoring program, right, so an ROP.

And that just came to our attention from a restaurant company, that they're having to sign something in regards to food safety in their bank loans. There is no doubt that labor is a big issue. And it's not just getting the people back in.

It's -- you're talking about the back of the restaurant, it's not sexy, it's hot, it's dirty, how do you attract people, and there's very little technology back there.

Every restaurant company that we've worked with to date, and we have a lot more that we're going to be trialing over the next couple of weeks, have said that their employees are much happier to using the technology, right.

They're not going to a book and opening it up and trying to figure out what the food temperature needs to be, and fooling around with paper and the rest. They're given technology to use. So, look, there's no doubt that restaurants are facing significant headwinds. And that's why our phones are ringing.

One of the things that we're able to track, some people are contacting us by phone. And of course, in our ads, you can email us. So people say, hey, do you do this? Do you do this? Because we need that. And we track that. And you could just see what people are asking. It's, hey, I've got a problem, I've got to get my food safety under control.

Hey, I've got a labor issue, can you help me on temperature taking. And temperature taking being a big thing right now, we could see it in the emails that we're getting. We see the questions or the -- or why they want to contact us. I would be extremely disappointed if it was at -- even if it was at 50%.

We're good at what we do, and we've got the full package. We still are the only one with the full package out there. With an enterprise system with a single portal, we actually have -- our hardware is made just for the marketplace.

We're very happy with Apple's efforts in the restaurant industry, I don't know if you followed it, but Square just announced that they're going to use the iPad with their POS terminal. They’re being very successful in getting their iPads out there. That makes our solution almost inexpensive, right, on the hardware side.

If they already have the iPad, they can use our workstation and it just connects wirelessly so they can print labels. So I would be very disappointed if it was as low as 50%..

I’ve a couple more real quick, if I could..

Yes, take your time..

Any indication from 7-Eleven with respect to Speedway? I know that transaction is closed on whether or not they intend to roll out BOHA! to the Speedway locations, as well?.

Not yet. Not that we can talk about, not yet..

Okay. Okay. And then with respect to the sales and marketing initiatives, you're going to continue to step that up over the balance of the year.

Where are we at in terms of needing to build out additional sales resources and support resources? And what kind of timeline should we look for, for that build out?.

Yes, so clearly on the implementation side on our onboarding team, I think we've reached critical mass in regards to what our people can do. So we're adding one or two people there. We're expanding our sales force. Our contract food business looks great. We're getting a lot of inquiries.

And if you think about it, schools are going to reopen, universities are going to reopen. So contract food managers are starting to call in. That's one new ad location that we put our ads, which was food management magazine. Everything is online, by the way, so it's not a magazine. It's an online thing.

So we're going to be adding a couple more sales people and a couple of onboarding people. The other thing that we're looking at Jeff is adding an executive that's just in charge of what we call customer success. We want our sales team to hand over to a customer success team.

Once the customer is on board and starting to roll out, so our sales people can focus on new orders. We actually have a group doing that. We just don't want to -- we need somebody just to run that because it's starting to get much bigger. And following up on label orders, and signups, resigning up for our software and all that.

So you'll see us ramp up our spend this quarter. And mostly on the onboarding side and sales and -- more sales people, I think -- I don't think it's shocking to say that when May started and got into June, the reopening of America, I think shocked almost every industry.

I just came back from Vegas, I happen to spend the weekend there after being there for a Board meeting. And it's packed and some of the best casinos are having a hard time with service and getting enough people to work. Getting people on board has been tough.

I think restaurants are running quickly to figure out how to handle this labor shortage, how to deal with some of these new bank covenants that they're being asked. And the rush of new opportunities, how quickly it came out was a little shocking to us, how quickly they approached us.

So we have the bandwidth now, but we're going to have to add more, no doubt..

Okay. And then a lot of your inventory has been purchased some time ago, there was no inventory issues heading into this.

How do you feel with respect to BOHA! related inventory today? And when might you step up additional purchasing there?.

Our inventory level is low, Jeff. It's lower than what it normally would be. We've been dealing with all the supply issues that you've probably read about in the news the other larger companies are experiencing. We just were able to solve them. So we're good. I think we're good Through q3. I think beyond Q3, we could run into potential issues.

But we're in good shape through Q3. I mean, we are dealing with the same chip shortages that everybody else is dealing with, the same shortages of all electronics and sensors and those sorts of things. We've been able to manage our way through really well actually. I'm really proud of the operations team, how they've been able to deal with it.

So we're doing good. Not to say that we couldn't have any issues going forward, but right now we're in good shape..

Great. Thanks for taking my question..

Thanks, Jeff..

It appears there are no further questions at this time. Bart, I'd like to turn the call back to you for any closing or additional remarks..

Yes, thank you, operator and thank you everybody for attending the call today. For those that can travel and all that, we've got a couple of trade shows coming up. Hopefully they stay open. G2E is going to be in Las Vegas, the first week of October -- right around the first week of October. And we also have the Convenience Store show coming up.

So if anybody wants to attend and say hello to us, some of our people will be there. We thank you again for your investment in TransAct and we'll talk to you in the next conference call. Thank you very much..

That concludes today's call. Thank you for your participation. You may now disconnect..