Earnings Call Transcript - RMNI Q3 2022

Operator, Operator

Good afternoon ladies and gentlemen, and welcome to the Rimini Street Earnings Conference Call. At this time, all participants will be in a listen-only mode. Later, we will conduct a question and answer session. I will now turn the call over to Dean Pohl, Vice President of Investor Relations. Mr. Pohl, you may begin, sir.

Dean Pohl, Vice President of Investor Relations

Thank you, operator. I would like to welcome everyone to Rimini Street third quarter 2022 earnings conference call. On the call with me today is Seth Ravin, our CEO; and Michael Perica, our CFO. Today, we issued our earnings press release for the third quarter ended September 30, 2022, a copy of which can be found on our website under Investor Relations. A reconciliation of GAAP to non-GAAP financial measures has been provided in the table following the financial statements in the press release. An explanation of these measures and why we believe they are meaningful is also included in the press release under the heading about non-GAAP financial measures and certain key metrics. As a reminder, today’s discussion will include forward-looking statements that reflect our current outlook. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from statements made today. We encourage you to review our most recent SEC filings, including our Form 10-Q for a discussion of risks that may affect our future results or stock price. Now before taking questions, we will begin with prepared remarks. With that, I would like to turn the call over to Seth.

Seth Ravin, CEO

Thank you, Dean, and thank you everyone for joining us today for our Q3 2022 results. Our global macro environment challenges, including currency exchange rate headwinds, negatively impacted third quarter financial and operating results. We achieved multimillion dollar sales wins in diverse industries, strong subscription renewals and extensions, a continued increase in cross sales of our expanded solution portfolio to existing clients, and we maintained our excellent industry-leading client satisfaction rating for support cases and onboarding. We believe Rimini Street’s new broader portfolio of IT solutions provides the services many organizations need today around their enterprise software systems and provides industry-leading value, ROI, and proven engineering capability. We grew our client base by 7.8% year-over-year to more than 3,010 active clients. Since our inception in 2005, we have signed over 4,900 clients, including over 180 Fortune 500 and Fortune Global 100 companies. We estimate that we have helped our clients liberate more than $6 billion that they were able to save or reinvest in their strategic priorities. In the sales environment, as I noted in our second quarter earnings call, we believe the current global macroeconomic environment is forcing organizations to refocus their businesses in the short term, including their IT investment and staffing plans. It has led to some frozen and delayed IT and IT service procurement decisions. However, as we have already seen with key sales wins in the third quarter, there is increased movement by organizations to optimize their IT spend, and we believe Rimini Street is well-positioned with its new broader portfolio of services to ultimately benefit from the background environmental challenges with growth in both new client acquisitions and cross sales. In terms of market demand and execution, we continue to see strong and growing global interest and demand for our expanded portfolio of services from new and existing clients as we achieve increasing cross-sale wins. We are now implementing our successful cross-sale strategies to guide and focus our hunter sellers on new client acquisitions to assure we have a balance between new client sales and cross sales as our go-to-market strategy matures for growth in both opportunities. Our quarter sales wins included large support transactions against SAP and Oracle, and significant AMS wins against IBM and other providers. As I detailed in our last quarterly call, I’m now dedicating a majority of my time to improving global sales execution, maturing our service offerings, and delivering innovative new marketing campaigns to build deeper pipelines of new client and cross-sell opportunities globally. I have already made changes that improve global marketing of our broader service offerings, ramped up a stronger global demand generation engine for pipeline, and equipped our more than 300 global revenue team members with a greater set of lead and opportunity development and closing skills. We even accelerated our 2023 annual global sales kickoff event from its planned early 2023 date to October 2022. I was very pleased with the leadership cohesion, new marketing messages, focus and energy of the entire team at the event, and I believe it will lead to improved sales execution and sales growth in the coming quarters. In conjunction with the sales event, we formally implemented a stronger go-to-market roadmap and strategy for our emerging Application Managed Services, referred to as AMS, as well as for our security products, integration and interoperability products, monitoring services, and our global professional services. We are seeing continued pipeline and sales growth across the portfolio. Since our last earnings call, we also completed enhancements to our portfolio solutions such as the launch of Rimini Protect that adds additional depth and layers to our existing security offerings and provides the full suite of security solutions that prevents breaches and provides zero-day speed of remediation of identified vulnerabilities before they could be exploited. Rimini Protect services include security assessments, broadening and configuration guides, security roadmaps, and a security vulnerability analysis report. To reach clients and prospects with pandemic travel restrictions nearly eliminated globally, our senior executives, including myself, have restarted heavy travel to participate in a growing number of successful in-person Rimini Street and third-party events at executive sales meetings with hundreds of clients and prospects and to collaborate with local Rimini Street management teams to set strategy for accelerated sales growth. I continue to be impressed by how favorably Rimini Street is viewed by existing clients and prospects, who have spent time getting to know our expanded breadth of services, engineering talent, and IT capabilities available with our unique Smart Path IT solutions. We have a significant asset in our people and the company is closing very high-quality transactions with well-known local and global brands. We believe an increased volume of transactions will drive accelerated growth. Our high client satisfaction, strong subscription renewals and extensions, and strong growing cross sales are evidence that Rimini Street clients are leveraging Rimini Street as their trusted vendor to support, run, secure, connect, and drive more value out of their enterprise IT investments. To highlight how clients are leveraging Rimini Street services globally to achieve their strategic goals across different industries, I would like to share two case studies from the third quarter sales wins. First is the University of Technology Sydney, one of Australia’s leading universities with around 45,000 students and 4,000 staff. UTS has switched from Oracle to Rimini Street for improved support and security of its Oracle database and technology platforms. The University faced challenges relating to the pandemic, including a massive shift to online learning and remote work and a growing IT skill shortage. UTS’ Head of IT operations, Brian Kelley, stated that skilled staff are only getting more expensive to hire, and retaining these employees just to work on support and operational tasks for their enterprise software is no longer sustainable. Kelley goes on to say, thanks to Rimini Street, they now have time and budget to spare, and they are now looking at developing and deploying additional security measures utilizing a cloud-first strategy. The UTS team is no longer worried about how long a patch or an upgrade will take to put into effect, how long it will take to get issues resolved, or how many hours they will have to dedicate to something routine. Rimini Street is taking care of that for them and having such a quick turnaround for support has really eased up their workload. Next is Lotte Mart, based in South Korea, a large scale hypermarket chain that switched their Oracle application maintenance support to Rimini Street. Lotte Mart wanted to focus resources on strategic projects related to business growth and needed a more practical ERP support to better manage its rapidly changing distribution business. Lotte Mart system strategy leader Jung-soo Pyo stated that Rimini Street made a detailed analysis of Lotte Mart’s current goals, including the necessity to cut costs and resolve service issues with the software vendor support program, and has instead provided a tailored support service that better meets their needs. The supplier goes on to note that after the switch to Rimini Street, they have been able to break free from vendor-oriented support policies and focus on business-oriented service needs, and the work efficiency of their IT services team has been maximized with a swifter response and support to issues when requested. Regarding the Oracle litigation update, Rimini Street and Oracle have been in litigation for more than 12 years. While the U.S. courts have confirmed long ago that third-party support is legal, we presently have two active proceedings with Oracle, the injunction compliance dispute and Rimini II proceedings, both of which relate to the manner in which Rimini Street provides support services for certain Oracle product lines. Rimini Street is not prohibited from providing support services for any Oracle product. With respect to the injunction compliance dispute, Rimini Street filed an appeal to the Ninth Circuit of the United States Court of Appeals relating to certain rulings of the U.S. District Court. We expect oral arguments to likely take place in the first half of 2023. However, the appeals process could take another nine to 12 months to receive a ruling, but a ruling could come earlier or later. With respect to Rimini II, the case Rimini Street filed against Oracle in 2014 and Oracle filed counterclaims. The case remains in a pretrial stage. However, on October 21, 2022, Oracle withdrew certain of its counterclaims and all of its claims against Rimini Street and against me personally as CEO for monetary relief of any kind under any legal theory in this litigation. Rimini Street’s remaining claims and Oracle’s remaining counterclaims seeking only equitable relief are presently scheduled to be tried in the United States Federal Court for the District of Nevada on November 29, 2022. The trial will now only be in front of a judge, known as a bench trial instead of a judge and jury, since there are no longer any financial damages of any kind for a jury to decide in Rimini II. Please see our disclosures in the latest 10-Q filing for additional information regarding litigation with Oracle. In summary, over the past two years, we have placed the company in a materially stronger strategic position by achieving three key goals: strengthening the balance sheet through a series of key capital market transactions, delivering major wins in our protracted litigation with Oracle, and successfully launching an entire portfolio of new IT services and solutions. We are now focused on sales, execution and growth, and we are confident that we are taking the right actions and making the right investments to reaccelerate growth and enhance shareholder value. Now over to you, Michael.

Michael Perica, CFO

Thank you, Seth, and thank you for joining us everyone. Revenue for the third quarter was a record $101.9 million, a year-over-year increase of 6.6%. Annualized recurring revenue was $399.8 million, a year-over-year increase of 6.2%. The revenue retention rate for service subscriptions, which makes up 98% of our revenue, was 94%, with more than 80% of subscription revenue non-cancellable for at least 12 months. For the third quarter, clients within the United States represented 52% of total revenue, while international clients contributed 48%. Third quarter aggregate year-over-year revenue growth in the United States was 5.8%, while growth for international clients was 7.4%. We note that our total revenue growth on a constant currency basis was negatively impacted by 2.1% due to FX fluctuations. Billings for the third quarter were $49.7 million compared to $73.7 million year-over-year, a decrease of 32.5%. Despite challenges with new client acquisitions and reduced deal size in U.S. dollar terms due to FX headwinds, we achieved strong client renewal and expansion sales and growing cross-sales to existing clients, as Seth noted. In addition, client advanced support services payments beyond first-year fees were substantially lower year-over-year, leading to difficult comparisons for billings where such advanced payments have historically been a material component of billings. DSO also lengthened in the quarter. We believe the global economic challenges, the end of low interest rates, and an ability to earn increased interest income on short-term fixed-income investments are significant drivers of this shift by clients towards tight cash preservation. Gross margin was 61.5% of revenue for the third quarter compared to 65.1% of revenue for the prior year third quarter, and 62% of revenue on a non-GAAP basis, which excludes stock-based compensation expense, compared to non-GAAP gross margin of 65.5% of revenue in the third quarter of last year. Gross margin declined as we continued investing in our service delivery resource base for both our core support offerings and expanded portfolio solutions we are selling and delivering globally. The gross margin decline was also impacted by the higher cost of labor, which has been successfully offset in part by our efforts to methodically expand efficiencies and leverage through technology, process control, and use of lower-cost labor geographies. Nonetheless, for full-year 2022, we continue to guide gross margin to be in a range of 62.5% to 63.5% of revenue on a GAAP basis and 63% to 64% of revenue on a non-GAAP basis. On operating expenses, like other organizations globally, we are experiencing cost pressures due in large part to increased labor costs and inflation in all labor categories. We continue to aggressively leverage all options available to ensure we are able to acquire the talent we need to achieve our profitability and growth targets. Sales and marketing expenses as a percentage of revenue were 35.3% for the third quarter compared to 34% for the prior year third quarter. On a non-GAAP basis, which excludes stock-based compensation expense, sales and marketing expenses as a percentage of revenue were 34.5% during the quarter compared to 33.2% in the year-ago period. We remain focused on making the appropriate investments needed to capitalize on our growth opportunities, and thus we see full-year 2022 sales and marketing expenses, including the pull-forward of the 2023 sales kickoff event into 2022, to be in the range of 35% to 36% on a GAAP basis, and 34.1% to 35.1% from a non-GAAP standpoint, up 50 basis points from prior guidance ranges. General and administrative expenses as a percentage of revenue, excluding outside litigation costs, were 18.1% for the third quarter, compared to 16.3% for the prior year third quarter. On a non-GAAP basis, which excludes stock-based compensation expense, G&A was 17% of revenue versus 15% in the year-ago period. Outside of the one-time expenses that occurred in the period, the G&A line continues to be higher than our peers, due in material part to costs for in-house legal and compliance teams and other costs made necessary by our ongoing Oracle litigation and our decision to continue making investments in the systems, processes, and talent infrastructure needed to support our growth objectives. As such, we now see full-year 2022 G&A expenses to be in a range of 18% to 19% on a GAAP basis and 16.5% to 17.5% on a non-GAAP standpoint, up 150 basis points from prior guidance ranges. Net outside of litigation expense was $6.2 million for the third quarter compared to $6.6 million for the prior year third quarter. This year’s third quarter, and the prior year third quarter both had elevated costs due in part to Oracle litigation costs and other litigation matters. Our outside litigation spend is not linear and can fluctuate each quarter based on timing and the nature of litigation activities. As Seth noted, the Rimini II case is currently scheduled for trial on November 29, 2022, resulting in material litigation costs that we had expected to incur during fiscal year 2023 being pulled forward into fiscal year 2022. Accordingly, we expect full-year 2022 outside litigation expense to now be in the mid-$20 million range. For the third quarter, the net loss attributable to shareholders was negative $0.4 million, or breakeven per diluted share, compared to the prior year third quarter loss attributable to shareholders of negative $6.7 million for a loss of $0.08 per diluted share. On a non-GAAP basis, net income was $8.3 million or $0.09 per diluted share versus $13 million or $0.15 per diluted share in the prior year third quarter. Adjusted EBITDA was $10 million or 9.8% of revenue for the third quarter. Our non-GAAP operating margin, which excludes outside litigation spend and stock-based compensation, remained in the double-digits at 10.5% of revenue. As for our balance sheet, we ended the third quarter with a cash balance of $119 million plus investments of $11 million consisting of short-term treasuries and national securities, totaling readily available cash of $130 million compared to $103 million for the prior year third quarter. On a cash flow basis for the third quarter, operating cash flow declined by $24 million and year-to-date, we generated $36.8 million compared to $47.8 million for year-to-date, third quarter 2021. In addition to the FX headwinds noted that have impacted our cash flow, we have also experienced lower advanced payments from clients, both new and existing, as the overall inflationary environment is leading to a broad base shift towards aggressive cash preservation. Deferred revenue as of September 30, 2022, was approximately $248 million compared to $244 million for the prior year third quarter. Backlog, which includes the sum of billable deferred revenue and non-cancelable future revenue, was approximately $533 million as of September 30, 2022, compared to $553 million for the prior year third quarter. During the third quarter, we repurchased 200,000 common shares with a market value of approximately $992,000 with an average price of $4.96. I would like to note that on October 10, 2022, all 14.7 million of the $11.50 exercise price warrants expired. Business outlook: we are currently providing fourth quarter 2022 revenue guidance to be in the range of $103 million to $105 million while tightening our full-year 2022 revenue guidance to be in the range of $404 million to $406 million. This concludes our prepared remarks. Operator, we will now take questions.

Operator, Operator

And our first question comes from Brian Kinstlinger from A.G.P. Please go ahead.

Brian Kinstlinger, Analyst

Thanks so much for taking my questions. I didn’t hear much about booking trends. If I think back one year ago, a new sales team had trouble closing deals, and this led to a drop in your growth rate. Can you discuss at a high level, at least how bookings during the third quarter of this year compared to last year? How did the sales force execute? Was it much better, just a little bit better, and how much did delays play into or freezes that you discussed play into these trends?

Seth Ravin, CEO

Excuse me. Hey, Brian. Thank you very much, Seth here. So we actually executed very well on the sales side, and I was pleased with the numbers. The percentage close of the pipeline was good. As you know from last year, we have to hand it to SAP. They handed it to us pretty well in the third quarter on any deal size over $0.5 million for us. They really won all of those deals. This year, we said we would work our messaging. We would come back to the market much stronger, and we did. We did multimillion dollar SAP deals in the quarter. Some really, really nice strategic wins around the world. So that was number one, was getting those SAP deals done. We didn’t get enough of them over the line, but it wasn’t really losses. It was a lot of issues with delayed deals. We just didn’t see the transactions closing at the rates and the numbers that we had hoped for the quarter. We had sufficient pipeline globally to make the numbers that we wanted to get out there and do, but those deals just didn’t all get over the line. Qualitatively, we have excellent deals around the world with big brands. We just didn’t have the volume that we needed to make the numbers that we wanted to make. A lot of it was macroeconomic. We were able to get some of the customers that were even delayed from Q2 over the line in Q3, but we had a lot of Q3 that slipped. In fact, one of them slipped by two hours, seven figure deals which slipped into Q4 just because of signature and other processing issues while people were dealing with other matters in the company. So I think again, I would say salesforce executing well; the challenge was not enough depth of the pipeline to make the numbers. We normally run a four times preference for our pipeline of opportunities to close that we need, and we didn’t have that depth globally in all markets, which didn’t allow us to close all the deals we wanted.

Brian Kinstlinger, Analyst

Great. I have one follow-up, and then I will get back in the queue. Given what you have said there, probably the lack of pipeline that got actually executed wasn’t your fault, it just were delayed. Is that why when I look at the fourth quarter guidance, it implies, I believe, at the low and midpoint, another deceleration of revenue growth compared to the last two quarters? Should we assume that is kind of the starting point for how to think about the next few quarters?

Seth Ravin, CEO

I think, again, visibility—same thing we said at the end of Q2, visibility with all of the economic challenges. Our customers are some of the largest in the world, the ones you hear about in the news that are having serious supply chain shortages, shipping costs, parts, FX issues, all these things. They are inundated with challenges. Those still represent challenges to us to get the deals done, but we are very well positioned with the products and services. That is why I even mentioned on the AMS side, the fact that we are newbies in this area, we are one of the youngest players in the AMS space, and we are replacing top-tier companies like IBM. We are making progress, we are maturing it, and I think that the pipelines continue to grow in those areas. I just don’t have the full confidence of visibility about getting these deals over the line as well as we did in prior years. Right now, we don’t know whether something is really going to come in a particular quarter. Timing is much trickier.

Brian Kinstlinger, Analyst

Great. Thank you so much.

Seth Ravin, CEO

Sure. Thanks, Brian.

Operator, Operator

And our next question comes from Derrick Wood (Cowen and Company). Your line is open.

Andrew Sherman, Analyst

Great. Hey, guys. Thanks. It is Andrew on for Derrick. Maybe, Seth, just walk us through the change you have seen in the past couple of months. It sounded like it has improved—macroeconomically it seemed to improve so far a little bit in Q3. You talked about some loosening or increased movement to optimize IT spend. Maybe just any more color on that would be helpful.

Seth Ravin, CEO

Yes, certainly. The point being that our broad products and services allow us to say we will not just do your support; we will run your system, we will protect it, we will connect it. These are all really big things to our customers who are looking for us to take a wider scope of services off their plate, providing a larger wallet share for us. They want to give us more and more responsibility. The demand environment is very good. The challenge is execution at the customer level because they have so many different competing priorities. We have been truly sometimes just pushed to the side with a— we love this, we want to do it, but we have got three other bigger fires we have to put out first, and that is causing some delays. It wasn’t that we lost deals in the third quarter; we lost them to other priorities. Overall, I’m very pleased with the progress we have made in sales and organization. It takes a while for changes to work their way through when you have a six to nine month sales cycle. So it will take probably through the fourth quarter for these items to take effect, but I do think the training we have done, the additional work that we have done to provide better skills to the sellers could yield some upside in the fourth quarter coming into 2023.

Andrew Sherman, Analyst

Thanks. And maybe just an update, Seth, on how the Americas specifically—the changes you made there—how those are going and when do you think—will the transition be done by the end of the year or early next year? Can we start to see that U.S. growth accelerate, assuming macro is somewhat stable?

Seth Ravin, CEO

Yes. Taking macro out of the picture, I would expect to see acceleration in North America in 2023. But I expect that from all the markets globally. We are well-positioned, and if we can just make sure that we are one of the higher priorities that our customers are dealing with, I’m pretty confident about getting these deals over the line. We were not only moving deals north of half a million dollars; we did one transaction alone on the SAP side where they are committed to $10 million plus over a five-year contract alone non-cancelable.

Andrew Sherman, Analyst

Great. Okay, thanks guys. I will pass it on.

Seth Ravin, CEO

Sure. Thank you.

Operator, Operator

And our next question comes from Jeff Van Rhee (Craig-Hallum). Your line is open.

Jeff Van Rhee, Analyst

I want to follow up on the sales thread here. You have obviously dove in and are in there trying to get things aligned the way you want them. Now that you have had a little more time to look at sales, get a better sense of what was and wasn’t working, why was sales execution as weak as it was? And when do you think you can get billings growth back in that business? I think you said you would start to see some improvement in execution in Q4, but trying to push it a little further—when can we really start driving some billings growth here?

Seth Ravin, CEO

I think again, if you just follow the flow-through of a normal six to nine-month sales cycle, you make changes upstream. It really takes six months to push that through. Looking at all those changes, I detailed in the prepared remarks, moving the kickoff up to October, which was an amazing event for 300 people—a true training event for the week block and tackling, we went back to figuring out what all the products in our bag are that we can sell, why people buy them, and how to sell them. It was a true training event, not a PowerPoint presentation. It was fabulous to reground the global revenue team in all these messages. Even our marketing team was a little sketchy on some of the products and how they fit together. I pulled back in Q3 to get everybody back to basics. Let’s make sure everybody is grounded in what we are selling in this big new portfolio of services. I will give you an example for the Institute of Management— a big support customer who we brought on board a couple of years ago. We talked to them about a much bigger vision of running their systems, taking over, and helping them redesign and refresh their entire student administration system to meet current needs. They told us, look, we don’t want to deal with a hundred vendors anymore. We hear this a lot; we can’t deal with a hundred IT vendors. We are going to consolidate down the number of vendors we work with. We are going to build deeper, more strategic relationships with them, and you guys are one of the ones that we want to do that with. I feel very bullish about what I’m seeing on the ground. It is simply volume. We need more transactions closed, but we are closing quality transactions for what we are getting done. I think we are going to see it in 2023. I feel very optimistic about that.

Jeff Van Rhee, Analyst

That is helpful. Based on all the years of experience, when you look back at prior recessions—the argument of higher level of service at 50% off and now a much broader portfolio of products to even sell—but when that value proposition has been pitched in past recessions, how long did it take for the buyers to go from sort of year-end headlights—we are in a recession—to, okay, we need to see Rimini as our go-to and we should move ahead on this? I’m trying to get a sense of timing of when this might actually become a tailwind as opposed to something that is delaying the cycle.

Seth Ravin, CEO

I think if you look back, we have all been through 2001 with the dot-com meltdown, then 2007-2008, again a very unique environment. No one knew where the bottom was. I think it took six to nine months for people just to wrap their heads around what was going on. Our best years were 2007-2008 in terms of high yield growth. Once people got a foothold, I do think when I see the deals that got done in the third quarter—that we said at the end of Q2, we were not sure whether this cycle of deer in the headlights, while they were trying to figure out the new world they were working in- would go into the third quarter. We saw roll-through in the third quarter still for a lot of players. I was just down in Orlando, giving a keynote at the Gartner Symposium. I had 1200 registrations for my session; it was the largest they have ever had for a vendor. We had a great turnout with 500-600 people in the room alone. People are really focused on how to optimize the current operating budget—to get that into innovation and things that move the needle. We are exactly placed where they need to be, and the interest levels are high. We have had overwhelming response at events like Gartner. This gives me millions of dollars of transactions that I potentially expect coming out of those events alone. My number one goal is recognition. If I can get our teams and our value proposition in front of more CIOs, CFOs, CISOs, and chiefs of procurement, I’m convinced that we would see tremendous pipeline growth that would assure some very strong growth numbers in 2023 and beyond.

Jeff Van Rhee, Analyst

That is helpful. If I could sneak one last one in there, Michael, you bumped the outlook there up 150 basis points. What is - can you slice that a layer or two deeper as to what’s comprising the bulk of the change compared to the thinking last quarter?

Michael Perica, CFO

So Jeff, as I highlighted in the prepared remarks, we made a conscious decision to bring on incremental investments versus deferring those. We want to have our structure in place to re-accelerate our growth as we have highlighted. There were some one-time items as well, but they were various. We are beefing up our compliance efforts a little sooner than previously planned with these efforts. A whole host of issues—a conscious decision to put those in place—we feel good where we are now regarding our investments.

Jeff Van Rhee, Analyst

Will that level the persistence you gave obviously the outlook for Q4, but are we looking at things that are kind of one-time in nature to get ahead of the game, build infrastructure that is leverageable, and other things that might fall off as we get into 2023? How do you think about the G&A levels going into 2023?

Seth Ravin, CEO

I think you are characterizing it accurately there, Jeff. Yes, their recurring expenditures, but one-time-ish in nature from a baseline perspective. I think you are looking at the outlook appropriately.

Jeff Van Rhee, Analyst

Alright, thanks for taking my questions. I appreciate it.

Seth Ravin, CEO

Thank you.

Michael Perica, CFO

Thanks Jeff.

Operator, Operator

And we have no further questions in queue.

Seth Ravin, CEO

Great. Well, thank you very much everyone, and I want to thank you for joining us for the call. I just want to remind everyone, while we live in a more comfortable place, there are many in harm’s way, many troubled folks who really need help out there, with which we are glad that we can participate with our foundation to make a difference. It is always a good reminder to think about those in need, and we hope you guys all are too. So with that, guys, thank you very much and appreciate you attending the call today. Take care.

Operator, Operator

That concludes today’s conference call. Thank you for attending.