Steve Mihaylo - CEO Jeff Korn - General Counsel Doug Gaylor - President and COO Ron Vincent - CFO

Mike Crawford - B. Riley Financials Kevin Dede - Wainwright and Company

Good day, and welcome to the Crexendo Fourth Quarter 2017 Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Chief Executive Officer, Steve Mihaylo. Please go ahead, sir.

Thank you, Rennin. Good afternoon, everyone. I am Steve Mihaylo, Chairman and CEO of Crexendo. I want to welcome all of you to the Crexendo fourth quarter and year-end 2017 conference call. With me today are Doug Gaylor, our President and COO; Ron Vincent, our CFO; and Jeff Korn, our General Counsel. I am going to ask Jeff to read our Safe Harbor statement. After that, I will give some brief general comments relative to the quarter and year-end. Ron will then provide some granularity to the numbers, Doug will provide a business and sales update, and then we will open the call up for questions. Jeff, would you please provide the Safe Harbor statement?

Thank you, Steve. I want to take this opportunity to remind listeners that this call will contain forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. The Private Securities Litigation Reform Act of 1995 provides a Safe Harbor for such forward-looking statements. All statements made in this conference call, other than statements of historical fact, are forward-looking statements. Forward-looking statements include, but are not limited to words, like, believe, expect, anticipate, estimate, will and other similar statements of expectation identifying forward-looking statements. Investors should be aware that any forward-looking statements are based on assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from those discussed here today. These Risk factors are explained in detail in the company's filings with the Securities and Exchange Commission, including the Form 10-K for the fiscal year ended December 31, 2016. Crexendo does not undertake any obligation to publically update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. I'd now like to turn the call back to Steve. Steve?

Thank you, Jeff. I am very proud of my team and I believe we have delivered on what we discussed and what was expected. The very positive results both for the year and particularly the fourth quarter shows me that we are on the right track and poised for future growth and positive results. The consolidated revenue in the fourth quarter 2017 improved 22% over the consolidated revenue of the fourth quarter in 2016. This is strong impressive growth and is testament to the work we have been doing to continue to improve the business, improve our sales and increase shareholder value. We expect to continue the growth and improvements in our business. Our most important segment the Cloud Telecommunications UCaaS service revenue has highly impressive increase of 27% for the year ended December 31, 2017 compared to the year ended December 31 2016. I am convinced this also shows we are clearly on the right track. Even with the substantial increase in revenue, we still manage to keep costs in line. I believe, we did a remarkable job of containing costs with only a very small increase in expenditures in Q4 2017 compared to Q4 of 2016. This ability to manage costs is due to the hard work of our team, who watch every expense. While we have and will make the necessary investments in our business and will run a highly effective and efficient business, we work every day to get the best value for every expense and investment we incur. Doug and I always impress to our team that we must have a commitment to increase our performance and to drive improvements to the business, the type of commitment and team effort is the reason we have achieved the results of being breakeven on a GAAP basis per diluted common share in 2004, compared to $0.04 loss in Q4 of 2016. This was an important step and it bodes very well for our being GAAP profitable in 2018. The results were even more dramatic on a GAAP to non-GAAP basis with a profit of $0.01 per diluted common share in Q4 of 2017, compared to $0.02 loss in Q4 of 2016. Again this is only one step in our continued drive to reach profitability and increase shareholder value. Our achieving GAAP breakeven and non-GAAP profitability on the timeline, we were expecting as very promising, it's a remarkable achievement that is essentially a Cloud Telecommunications UCaaS startup that we reached this milestone as quickly. Now we need to build on that and continue to increase our sales and profitability. I am very proud of our people, we have developed the best products and service in the industry. We believe we can win the business of any customer who has a need of between 10 and 10,000 telephones. When the customer compares our solution to that of our competitors we believe they will pick the award winning Crexendo Ride The Cloud solution. We continue to make improvement to our sales process and our procedures. We continue to work diligently on improving our partner channel and that resulted in some significant new partners being added to our team during the quarter. We expect to continue to add significant partners to help with our growth. This dedication is the reason I believe we were able to enter into a partnership with U.S. Cellular. I have high hopes our strategic partnership will impact future results positively. I also believe we will continue to build our new partnership, which should also be positive for the company. I continue to believe that very strongly in our company I'm convinced we will continue to drive the business organically. We are regularly reviewing potential accretive opportunities and believe if the right opportunities come along they will be a way to further accelerate our growth. With that, I'll turn the call over to Ron. Ron?

Thanks, Steve. As Steve mentioned, our consolidated revenue for the fourth quarter of 2017 increased 22% to $2.9 million compared to $2.3 million for fourth quarter of the prior year. Approximately 92% of the revenue for the quarter was contributed by our Cloud Telecommunication segment, which contributed $2.6 million for the quarter, an increase of 28% compared to $2 million contributed in the fourth quarter of the prior year. Our service revenue for the fourth quarter of 2017 increased 22% to $2.5 million compared to $2 million reported for the fourth quarter of the prior year. Product revenue for the fourth quarter of 2017 increased 24% to $380,000 compared to $307,000 for the fourth quarter of the prior year. Consolidated operating expenses for the fourth quarter of 2017, increased slightly by $27,000 to $2.87 million, compared to $2.85 million for the fourth quarter of the prior year. On a GAAP basis, the company reported a net loss of only $7,000 or a breakeven of diluted common share, compared to a net loss of $525,000 or a $0.04 loss per diluted common share for the fourth quarter of the prior year. Our non-GAAP net income for the quarter was $111,000 or $0.01 per diluted common share, compared to a non-GAAP net loss of $256,000 or $0.02 loss per diluted common share for the same period of the prior year. EBITDA for the fourth quarter was $8,000, compared to negative $473,000 for the same period of the prior year. Adjusted EBITDA for the quarter was $100,000, compared to negative $267,000 for the same period of the prior year. Now let's look at full year. And while we're pleased with the consolidated revenue for the year of $10.4 million that's compared to $9.1 million reported for the prior year, that's an increase of 14%. We continue to see tremendous growth in our Telecommunications segment. Cloud Telecom segment contributed 90% or $9.3 million of the consolidated revenue for the year, that's an increase of 20% compared to $7.8 million contributed in the prior year. Our service revenue increased 18% to $9 million, compared to $7.6 million for the prior year. Our product revenue decreased slightly to 9% to $1.3 million, compared to $1.5 million for the prior year. Product revenue can fluctuate significantly from one period to the next, product revenue is deferred until installations are complete and the service is commenced. Our average customer is installed within weeks of completing the sales cycle, large enterprise and multi-location customers seem to take a few extra months to get all the locations installed. We believe growth will initially be seen through our backlog. Telecommunications segment backlog which is anticipated to be recognized over the next 36 to 60 months increased 25% to $19.9 million at December 31, 2017 as compared to $15.9 million reported end of the prior year. Our entire management team is laser focused on scrutinizing every expense; we reduced our operating expenses for the year by $700,000 or 6% to $11.2 million and compared to $11.9 million reported for the prior year. These results ever more impressive when you consider the 14% increase in revenue for the same period. On a GAAP basis, after a year the company reported a net loss of $1 million or $0.7 loss per diluted common share, and that's compared to a net loss of $2.8 million or $0.21 loss per diluted common share for the same period of the prior year. Our non-GAAP net loss for the year was $112,000 or $0.01 loss per diluted common share, that's compared to a non-GAAP net loss of $1.7 million or $0.12 loss per diluted common share for the same period of the prior year. Our EBITDA for the year was negative $719,000 compared to negative $2.6 million for the prior year. Adjusted EBITDA for the year was negative $108,000, compared to a negative $1.7 million for the prior year. At year-end our cash and cash equivalents excluding restricted cash at December 31, 2017 was $1.3 million and as compared to $619,000 at December 31, 2016 report. Operating activities provided $294,000 increase in cash and cash equivalents, investments activities provided $252,000 increase in cash and cash equivalents, primarily from the sale of certificate of deposit, and our financing activities provided $117,000 increase in cash and cash equivalents. With that, I will turn it over Doug Gaylor, our President and COO for additional information on business and sales update.

Thanks, Ron. I am pleased to report that we had a very strong fourth quarter and the finish for the 2017 year. Our sales booking to the quarter and year were up significantly, and we had a 28% increase in sales bookings year-over-year with our fourth quarter sales registering as the strongest quarter of the year. The strong sales bookings resulted in the revenue increases that Ron highlighted and helped us post positive cash flow for the second consecutive quarter as well as doubling our non-GAAP income from third quarter, the reduction of our GAAP loss down to nearly zero. On top of these solid accomplishments for the quarter we were also thrilled to announce that we have teamed up with U.S. Cellular to provide our Crexendo Hosted Communications and UCaaS Solutions to the U.S. Cellular business and government customers and prospects. U.S. Cellular is the fifth largest full service wireless carrier in the United States and they have an extensive customer based that we will be introducing to Crexendo solutions. Since on-boarding the U.S. Cellular sales teams in February we have seen a tremendous amount of excitement from their team, they have our offering in their portfolio and have already started building a great pipeline of opportunities and we are already seeing sold opportunities being generated from the relationship. Our entire team has been diligently focused on increasing sales, managing expenses and improving our bottom-line and this quarter was a true testament to their efforts. In addition to adding the U.S. Cellular to our partner channel we also had our most successful quarter of the year in recruiting and adding new partners to our program. Many of these new partners where able to contribute sales results during the quarter, which is the strong testament to the fact that we are recruiting stronger partners and are focused on a quicker on-boarding process to help them get out of the gates strong with the Crexendo offering. Our concentrated effort to focus on larger more technical partners along with our training initiatives for our partners resulted in our partner channel having their strongest bookings quarter to-date. Our partners were able contributed multiple sales to the total contract value in the six figures during the quarter including our largest sale of the year, which was the large 120 location sale for regional retail organization. Our direct sales efforts were also strong for the quarter highlighted by five significant multi-site sales opportunities that contributed to the strongest direct sales performance for the year. The direct team is focused on larger major accounts and multi-location opportunities, continues to have successful results. Our strong sales bookings for both channels helped our contracted backlog increase nicely as we experience a 9% increase for the quarter and a 25% increase year-over-year. On the operations and engineering side of the house our focus on cost management, helped reduce our consolidated operating expenses by 6% for the year, compared to 2016 with 14% consolidated revenue growth during that same period. And our award winning in-house engineering department continues to impress, delivering new enhanced capabilities during the quarter, including text and chat functionality, enhance collaboration capabilities, enhanced ACD features and a new low-end Crexendo desktop offering. We're excited to be presenting at two upcoming investor conferences in March, the first conference is the Roth Investor Conference being held in Orange County, California next week on March 12th and 13th. And the second conference is the Sidoti and Company Investor Conference being held in New York on March 29th. Both conferences will provide us the opportunity to highlight Crexendo's growing success to the investor community. We post our presentations on a link on our website at www.crexendo.com/invesor and we will update that link later this week with the presentation that we will be presenting at both conferences. Finishing 2017 with a strong quarter in sales, revenue and cost management along with strong growth in our partner channel has positioned us well to continue building on that progress as we begin 2018. I'm extremely excited about the new partnerships with organizations like U.S. Cellular and others and the momentum that we are building will allow us to continue to execute our business plan for growth and profitability. I'm confident that Crexendo will be able to execute on our plans in the year ahead and now we are in better position now more than ever to deliver. I will now turn it back over to Steve for any additional comments.

Thank you. Said it all Doug and now I appreciate that you and Ron. Rennin, we'll now open it up to questions from the audience.

Thank you [Operator Instructions] And our first question comes from Mike Crawford with B. Riley Financials.

Good afternoon, Mike.

Hi, Steven. Would we do Ron and project 15,000 to 20,000 a month in monthly return in revenue growth or is that something that you would expect to accelerate now that you have the U.S. Cellular and other partners out there working for you?

Well, are you talking about sales growth or earnings?

Service revenue.

Recurring revenue?

Yes.

I think that's total achievable.

Because that's the way you have growing.

Yes, it's too early in the U.S. Cellular deal. We just kicked that up in the second part of February. So, we're just now - didn't started in that relationship, so it's too early to project what their volume of deals that we will be putting in.

Yes, but I think Mike was asking about total revenue, is that correct?

No, monthly recurring revenue?

Well, no, but I mean the increase in monthly recurring revenue month-over-month.

Right. So…

U.S. Cellular would be part of that.

And then or…

For you all U.S. Cellular…

He is asking are we going to still continue to grow at this rate or at a higher rate…

Well, it will start to accelerate, but U.S. Cellular, as Ron pointed that is brand new and we're getting them up to speed, but eventually probably mid second quarter or beginning of third quarter you're correct that we'll start to accelerate.

Okay. Thank you, yes that was my question. So then the other question is you said that there were kind of growth in both of your channels. So, could you maybe clarify a bit further on what percent of new sales you are generating from any internal sales organization both for new and existing customers as well as through the channel?

I am going to let Doug handle that one since those folks report directly to him.

Yes, direct sales is obviously the smaller percentage in our partner sales. Our partner sales is the majority of our sales by far and the majority of our sales are turning to revenue. So, as we look at our direct sales, our direct sales is a much smaller group and they really concentrate on multi-location and larger and major and national type accounts. And then our partner channel obviously is free to work anything they can get their hands on. So if we look at our partner channel, our partner channel is the lion share of our sales bookings for the quarter, and they continue to grow and had their best quarter in Q4 and I anticipate that growing tremendously in 2018, especially with the addition of U.S. Cellular.

Okay, great. Thank you.

You bet, Mike.

Thank you. Our next question comes from Kevin Dede with Wainwright and Company.

Good afternoon, guys.

Good afternoon, Kevin.

Yes, Steve, Doug, Ron, nice job, really nice job. It's great to see positive EBITDA.

Well there is a whole bunch of other folks that work very hard to accomplish these results and we appreciate your comment, Kevin.

Yes, well please pass it into all those that contribute. Just a couple of quick questions, I think probably the one that's most interesting is the pipeline on the M&A side and I am wondering what you're thinking, I mean, in light of U.S. Cellular and whether or not you think that may have sort of changed or postponed your tactical execution on trying to grow through acquisition.

Well, acquisitions is - it's a multi-faceted situation. We look at a lot of deals and because of our relative size and the relative size of the companies we look at, you have a very unsophisticated seller. And even though we are quite small, I think have a much higher degree of sophistication than the companies that we target. We currently have a few suspects or prospects, whatever you want to call them. But at our relative size, we're very, very particular. Obviously we are doing a good job of growing the company organically, but we understand that we'll grow a lot faster if we can do a few acquisitions. And that's our focus. But our main focus is on organic growth and I think our people especially with U.S. Cellular and some of the other deals we have gotten recently are starting to click on at least seven or eight of the eight cylinders, but we're very particular Kevin and we're very disciplined and we intent to stay that way. But we do have a few that are in the queue and a few that are looking more promising than anything we have had in the past.

Okay. Is that something that you think happens this year, or is it just going to be a function of your renegotiation?

Well, I sure hope it happens this year, but there is a lot of moving parts, there just are, I mean, stock price, analyst coverage, market makers, exchange were on how fast we grow organically, all of those things how well we manage expenses. You're going to notice one thing that our third and the fourth quarter we had a couple of extraordinary expenses, which go away and get reversed in the first quarter. So our margins look a little down compared to the previous sequential results, but that's going to improve and we'll probably surpass the 66% gross margins of third quarter. So we should see maybe 66.5% or even 67% in the first quarter. And I know my Chief Legal Officer is probably has witnessed finger nail soft by now.

To that point Ron, you mentioned backlog expanding and you also offered some criteria on how you define it, but you went pretty quick and I missed it, you said you should expect to realize it in 30 to 60 days or 60 to 90, I kind of missed that.

Majority of our contracts are over 36 to 60 month contracts. And so that's the - what makes up our backlog as well as uninstalled jobs from recent sales.

And also what Ron said is the smaller deals go in within a month of the time they are closed. The bigger deals in sometimes take and the multi-location deals can take up to two or three months to get installed. And I think…

Yes, that's definitely part of it. I just - to Ron's point, backlog was up nicely. So congratulations on that. I think the other sort of elephant in the room is the U.S. Cellular opportunity. If you guys have an exclusive with them, how would you characterize the way that they'll market you? How up to speed are they on the advantages that you offer to their enterprise customers? What sort of customer segment do you think they're targeting. As much color as you can offer on that would be helpful I think.

Yes, absolutely. So, exciting partnership with U.S. Cellular. So U.S. Cellular went out to a very detailed RFP process to solicit potential partners and through their total evaluation process picked us as their sole vendor to move forward with for their hosted telecom and UCaaS solutions. So they announced that and awarded that to us in December. We put out a press release in December. December is their busiest time of the year so they didn't want to kick if off with their sales teams until after the first of the year. So we actually did our kick offs with their sales teams in early February. And we're doing one more for their East Coast sales representatives and sales teams here this week. So that process is educating and getting their sales teams excited about having this into their portfolio. So their sales representatives handle primarily business accounts only. And so the sales team and the marketing focus that we have right now is for their complete direct business sales team to be out there looking for opportunities within their customer base along with potential prospects and future customers for them. We have been received extremely, extremely well, because again they're in these businesses on a daily basis, maybe not a daily basis, but they're in these businesses all the time. And so it's just another opportunity for them to have a revenue stream by selling a service that is complementary to what they're already selling. So the excitement is extremely high. We've gotten a tremendous amount of leads already in the pipeline. We've already made sales off of leads that have been generated just in the short time since we've done our training. So the excitement level on both ends is extremely high. They are marketing and soliciting the product to their customer base. And so they're going to be ramping that up, now that we've kicked off the product with their team. So we couldn't be more excited about the potential opportunities that exists. And this is just going through their direct channel right now. So we're excited that if we have great success here that we can roll this out even further to their brick and mortar stores and agent channels potentially.

And one thing you have to remember Kevin is, we intent to support this account with sort of the white club treatment. But it takes time, even if we got a rush of orders today as Ron pointed out it would take a month to install those orders. So the whole thing is growing and I don't expect to see an awful lot of impact in the first quarter. We may see some impact in the second quarter and then it will start to ramp in the third and fourth and into 2019 and so on.

Okay. Well thanks for the color, gentlemen. I appreciate it. How would you characterize, the size of the customer base that they're going to target with your services say versus - I know you mentioned one large deal on today's call, but just say with your, I guess, your core group of customers. Would you say they are a comparable size you think U.S. Cellular is going to go after sort of larger, we have got opportunities…

Yes, I think we have a very nice overlay with our demographics and their demographics and our average size customer today is about 21 stations. So as we look at growing that they definitely fit very nicely in there. Their core concentration is business customers, so any customers from obviously smaller end with three, four, five stations all the way up to large enterprise opportunities. But their core competency is in the markets that are not the major much call scenario. So they are going to have lot of customers that are right in our sweet spot. So we anticipate them being very complimentary for us because their customer demographic is very, very similar and very comparable to our customer demographic.

And, I guess, I am kind of curious to Doug do you think that - I know Steve mentioned that he is not expecting an immediate impact, but are you expecting to chase down more similar type of arrangements with some pretty high profile companies or how do you think is a best way to think about your partnering efforts going forward?

Yes, that's obviously the game plan as we look at our partner channel today, U.S. Cellular is now our largest potential partner size wise, but we have made some other nice inroads with other nice size organizations that have joined on to be partners over the course of the last six months not nearly as large in size as U.S. Cellular, but very nice regional type size organizations. But the approach to go after U.S. Cellular is not stopping there. So we have got a lot of targets that we have currently identified and we have some conversations and some good evaluations going on currently. So I am very excited that hopefully at some point this year we will have a similar type of announcement if not multi announcement of similar type arrangements.

And last question for me, Doug since have yet, would - in the U.S. Cellular type implementation would that customer expect you to bring your equipment in or would you work I guess on software support of a network that was already up and earning?

Obviously with our solution, our solutions are completely hosted solutions, so we are going in there and providing our equipment on their current internet platform. So for one of their customers we are going to provide our services over their current internet connectivity. We also have done testing and have the capability to put our solution over their seller network as well. So for customers that may not be in an area where they can get readily available service from the cable company, or the local exchange company, we have got our product and solution working on LTE and 4G for some of their remote areas as well. So it's going to be very complementary, I wouldn't anticipate that being the norm where we would be putting our services over their cellular network, but in some cases that might be the case. But it's also something that's a great solution for disaster recovery because they can offer the cellular network as a disaster recovery network, if case their main internet connectivity goes down so that their telephone service would never skip a beat. So again very complementary and good opportunity for us to work within their network, but the majority of the sales and the majority of opportunities would be riding on the customer's existing internet connectivity.

But I think you also were maybe alluding to what's on the desktop, Kevin?

Correct, yes thanks.

We also support JLINK [ph] , Cisco, Polycom and I think we just recently added grand streamer or we will.

We will, but one of the nice parts about a lot of the opportunities that we are currently working, one of the first opportunities we saw that actually has no desk phones and it's just a complete software and mobile application that Crexendo provide to the customer that doesn't have a need for physical desktop. So we are going to be installing our apps on their seller devices so that they'll have a complete mobile application running our solution in tandem with their typical cellular offering.

Okay, well, thanks very much for the color Doug. I really appreciated it. Congrats on that, congrats on the improved results to you and the entire team. And thank you so much for fielding my question, appreciate that too.

You bet, Kevin. Thank you.

Thank you. [Operator Instructions] And our next question comes from Private Investor Ken Cayman.

I am sorry, who is with.

Ken Cayman.

Ken Cayman.

Yes, good afternoon Ken. How are you?

I am doing great. So I have to say as a long time shareholder and I am sitting in traffic since the call started. I am leaving Philadelphia everyone is trying to beat the snow [ph] and I only moved three miles since the call started. But it's a pleasant car ride, because you reported breakeven and you're threatening to be profitable, it's a fabulous car ride. So congratulations to a lot of detail that you guys have put into making that happen. My question - I had a couple, the prior caller asked a ton of my questions about the U.S. Cellular deal. But does it require any investment on your part and as an adjunct to that, do you see the company needing anymore cash infusion from where we are now going forward?

No, it's purely a partnership arrangement with them. So it's not a capital intensive arrangement. So they are finding the opportunities, we are working the opportunities. So a cash investment will help us for marketing efforts and we have done some meet and greets by traveling to their kick-off meetings for their different regions. But it won't be a capital intensive endeavor at all and they have got a nice marketing program to get the message out to their customer base as well. So we are going to be working in tandem with them. So no, I don't anticipated being a large capital drain at all for us to have the partnership be successful.

But one of the things that you have to be aware of, we are continually improving our platform, 90% to 95% of it is software base and our engineers are improving it as we speak. About 5% of it is hardware based and that 5% we are making some incremental investments in that as we go along. But as Doug said, it's not going to be anything that's outside the norm.

Yes, word of my question is whether you needed to do anything internally to be able to ramp up for that business. Do you see the company needing more additional cash infusions over the next 12 months?

There are some things that we could use cash infusion for, but they are on the back burner right now. As we get a little bit bigger, the answer is yes. I would expect maybe in the next 12 to 18 months we're going to need a little bit more cash, but we will generate in cash flow next year, about $1.5 million to $2 million.

While you are trying to...

Well he is probably going not so in fact thinking, but no seriously on a non-GAAP or an EBITDA basis, we're generating significant cash over and above what we have budgeted for next year.

That's great. And then just one last one…

Go ahead.

I was just saying is there anything particular about the fourth quarter that help to be profitable that won't be in the first order or are you kind of expecting profitability now every quarter going forward?

Well we have been telling people that we would achieve non-GAAP income this quarter, the fourth quarter and probably GAAP income in the first quarter and we expect that to continue based on our current assumptions. But we have no control over the weather, the economy and a whole bunch of other things, interest rates you name it.

Well, great, thank you very much for everything you're doing to help me build my family fortune. Thank you very much.

Thank you, Ken.

Thank you.

Thank you. Your next question comes from Private Investor, Kevin Wills [ph].

Hey, Steve, how you're doing?

Kevin, how are you?

I am very good, I am particularly good after reading those our earnings report and listening to the conference call. Steve, I have got, I guess a follow-up question from our last caller, just to tie up a lucent. In Q3 the loan commitment you have to the company was extended to May of 2018. And I'm wondering if that's then rolled to May of 2019 or if it's going to be?

No, actually in 2018 it expires. Our auditors have taken all of the precautionary language out of our 10-K. They feel that company has made significant progress and adequate progress and they're quite pleased with our progress. So the answer is, no, it's not necessary.

That is great. Thanks, Steve. And thanks again for all you do for us. And keeping us to float and I hope all the naysayers who from our bulletin sold a year ago and aren't here to enjoy the turnaround. Take care and thanks again.

You bet, Kevin. And I'm going to comment on that. Everyone in this room is financially invested in our company. And our employees have for the most part have stock options. The senior management has stock options. And as a result of that, we have a group that's highly motivated and highly committed. And I see nothing to change that dynamic going forward.

Glad to hear it. And I wish you were running a few of my other companies. Take care, bye-bye.

Thank you.

Thank you. And at this time, we have no further questions. Mr. Mihaylo, I'll turn the conference back to you.

Well, I want to thank everyone. We have a little bit more participation than last quarter. And we would expect that to continue as our numbers improve and as we get a little bigger here. And we appreciate everyone supporting us. As you know the next quarter will probably be reported at the end of April or the first part of May. Are you shaking your head, yes. I'm a slight driver here. I basically get my whip out and crack it. Because this was year-end it takes a little bit longer to get the audit out, but we should we be able to report about 30 days after the quarter ends. And with that I will expect all of you to be here again, tell you friends. And thank you for joining us today. And we look forward to talking to you in a month and half, two months. Thank you and good day.

Thank you. This does conclude today's presentation. We thank you for your participation.