Dolphin Entertainment, Inc. (NASDAQ:DLPN) Q1 2025 Earnings Call Transcript

Dolphin Entertainment, Inc. (NASDAQ:DLPN) Q1 2025 Earnings Call Transcript May 13, 2025

Dolphin Entertainment, Inc. misses on earnings expectations. Reported EPS is $-0.21 EPS, expectations were $-0.15.

Operator: Greetings, and welcome to the Dolphin Entertainment First Quarter 2025 Earnings Call. At this time, all participants are in a listen-only mode. And a question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Mr. James Carbonara of Hayden IR. Sir, you may begin.

James Carbonara: Thank you, operator. Good afternoon. Before we begin, I’d like to remind everyone that during the course of this conference call, management may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and beliefs and involve risks and uncertainties that could differ materially from actual events. Please refer to the cautionary text forward-looking statements contained in the earnings release published earlier today as well as the most recent SEC filings and reports. During the call today, management will also discuss non-GAAP financial measures, including adjusted operating income or loss. The company believes that these will provide helpful information for investors.

Reconciliations to the most comparable GAAP measures are provided in the earnings release. Now I would like to turn the call over to Bill O’Dowd, Chief Executive Officer of Dolphin. Bill, please go ahead.

Bill O’Dowd: Thanks, James, and welcome, everyone. As usual, I’ll start by reviewing some of the key financial and operating highlights from our first quarter. And then Mirta will provide a more detailed financial overview before we open it up for Q&A. So starting with the financials. While total revenue came in at $12.2 million for the quarter, compared to $15.2 million a year ago. It’s important to remember that last year’s Q1 included a significant contribution of $3.4 million from our Blue Angels documentary. If we set that aside, our core entertainment publicity and marketing revenue actually grew 2% year-over-year, which is a testament to the underlying strength of our platform, especially as we manage through the lingering impact of the LA wildfires and a correspondingly lighter award season.

We believe that fires impacted our 42West and Special Projects subsidiaries most significantly. Fortunately, the impact of the fire was limited to Q1 for us. And on personal note, we are very fortunate none of our team lost their homes to the fires as we continue to give our thoughts and prayers for many of our industry colleagues who are not so lucky. On the bottom line, our adjusted operating loss was approximately $600,000 and very comparable to last year, if you backed out the movie as well. Obviously, any lost revenues from the impact of the fires flows through to our bottom line. And we believe this is measured and contained result demonstrates that our cost discipline remains intact even as we make strategic investments for future growth.

Q&A Session

Speaking of investments, I want to highlight two areas where we’ve made strategic investments in Q1. First, we’re big believers in the future of women’s sports, our women’s sports management firm, Always Alpha, co-founded by the incredible Allyson Felix has taken a leadership role in this multibillion-dollar and rapidly growing market. Our new partnership with Deep Blue Sports and Entertainment now positions us as the largest and most comprehensive management firm in the women’s sports space. We marked this milestone in style by ringing the NASDAQ closing bell on International Women’s Day alongside some of the most inspiring women in sports. That was an extremely fun moment for Dolphin and really brought the momentum we are feeling to life.

We now represent more than a dozen female athletes and sports casters, including several Olympians, in addition to Allyson herself, of course. We will continue to invest in this business throughout 2025. We want to expand into women’s soccer and basketball with dedicated management teams for each of these two most popular women’s sports in the United States. In doing so, we would expect that our active roster of represented athletes and sports casters will double by the end of the year. Second, our digital department has officially launched a dedicated affiliate marketing division as the influencer economy continues to grow and evolve. Affiliate marketing is quickly becoming one of the most important revenue streams globally, now estimated at over $17 billion.

By building out this vertical, we’re one of the rare agencies able to offer every major influencer marketing revenue stream under one roof, making us a true one-stop shop for creators and brands alike. And just like with Always Alpha, we will continue to invest in this area. We have two dozen influencers on our affiliate roster today, and we expect to more than triple that number by the end of the year. In order to achieve this growth, we will be hiring affiliate managers at a steady pace throughout the rest of the year. As you might expect, we believe that these investments in Always Alpha and the affiliate marketing division of the digital department will pay increasing dividends for us in 2026 and beyond, both in revenues and profits. Turning to the incredible work our agencies have delivered this quarter.

42West had fantastic showing at Toy Fair, a champion declines both the Sundance Film Festival and the South by Southwest Festival as well as the Oscars and drove major campaigns at the Super Bowl, including bringing Wayne Brady and produced Wingin’ It campaign to life and increasing media buzz for the Puppy Bowl and DC Studios. Puppy Bowl being James Carbonara’s favorite aspect of Super Bowl Sunday. And he’s just a long-time supporter of the Puppy Bowl, we’re big supporters in general. Shore Fire Media saw its clients win big at the Grammys, celebrated longtime client Cyndi Lauper’s induction into the Rock & Roll Hall of Fame, Go Cyndi and orchestrated memorable Super Bowl moments from Trombone Shorty and Lauren Daigle’s pregame performance, which was awesome to Fred Minnick Live and campaigns for Dove, Uber Eats and more.

The Door continues to cement its authority and culinary lifestyle branding, unveiling a major new chef roster and running creative Super Bowl campaigns itself, like Not So Fast, Not So Furious with Vin Diesel and friends. Those friends include Michelle Rodriguez, Ludacris, it was a fantastic commercial plus the cross-country Dazs Drive activation, excuse me, for Häagen-Dazs. The team at The Door just continues to crush it. A lot of, as you can see, Super Bowl activations for our PR firms. Speaking of our PR firms, Elle, our newest addition to the Dolphin family service over two dozen clients across both its lifestyle and impact divisions, and it’s just doing great work. The Digital Dept. set a new record with our highest-grossing BRANDEdit influencer experiencehighest-grossing BRANDEdit influencer experience in LA the past month and as mentioned earlier, kicked-off the new affiliate marketing division, expanding our reach in the creator economy.

And finally, Special Projects strategically brought together top celebrities and cultural influencers for Max, Warner Bros., and Louis Vuitton events among many others, I might add, enhancing brand impact and residents. On the content side, the Blue Angels collected another industry award for sound editing and returned to IMAX theatres with a stunning new 3D version in January. Our Youngblood feature adaptation has now completed principal photography and is tracking toward a fall festival debut. We’re excited for Youngblood very much. All of this activity has not gone unnoticed. We were honored to be named Agency of the Year by Observer’s 2025 PR Power List, a major milestone that validates our strategy and the depth of talent across all our agencies.

And on a personal note, I continue to put my money where my mouth is. I see tremendous upside in our shares, and I’ve started weekly purchases through a 10b5-1 plan, which began in the first week of April after we filed our 10-K. I believe our current valuation does not reflect the strength of our team, our brands or our long-term growth prospects. Looking ahead, we are building on a powerful foundation with clear leadership in high-growth categories. We believe that our investments in women’s sports and affiliate marketing are broadening our addressable market and will provide sustainable growth opportunities for us for years ahead. As we stay focused on execution and innovation, I’m confident that 2025 will be another year of progress for both our clients and our shareholders.

With that, I’ll hand it over to Mirta for a deeper dive into the financials. Then we’ll open it up for your questions. Mirta?

Mirta Sanchez Negrini: Thank you, Bill, and good afternoon, everyone. Let me walk you through our financial results for the first quarter ended March 31, 2025. The Total revenue for the quarter was $12.2 million compared to $15.2 million for the same period in 2024. As Bill noted, the year-over-year decrease is primarily attributable to last year’s Blue Angels production revenue of $3.4 million. Importantly, if we exclude last year’s one-time film production revenue, our core entertainment publicity and marketing segment revenue grew 2% year-over-year to $12.1 million demonstrating the underlying health and resilience of our agency businesses despite the impact of the Los Angeles fires and lighter award season wins. Operating expenses for the quarter were $13.9 million compared to $15.1 million in Q1 2024.

This included depreciation and amortization of approximately $600,000 and non-recurring or non-cash expenses of $600,000. Our operating loss for Q1 2025 was $1.8 million compared to operating income of $200,000 in the prior year period. Adjusted operating loss was approximately $600,000 for the quarter as compared to adjusted operating income for the same period in prior year of $1 million. If we reduce the revenue of $3.4 million and the amortization of capitalized production costs of $1.8 million of the Blue Angels for the first quarter of 2024, our operating loss would have been approximately $600,000 comparable to the first quarter of 2025. Net loss for Q1 2025 was $2.3 million, including $600,000 in depreciation and amortization and approximately $600,000 of non-cash or non-recurring expenses.

This compares to net loss of $300,000 for Q1 2024 including $600,000 of depreciation and amortization and $300,000 of non-cash or non-recurring expenses. Net loss per share was $0.21 per share based on 11,162,026 weighted average shares outstanding for the first quarter of 2025 compared to a net loss of $0.04 per share based on 9,238,913 weighted average shares outstanding for basic loss per share and 9,302,851 weighted average shares outstanding for fully diluted loss per share for the first quarter of 2024. With that, I’ll now turn it back to the operator to open the floor for questions. Operator, would you please poll for questions?

Operator: Thank you. [Operator Instructions] We have a question from Allen Klee with Maxim Group. Your line is live.

Allen Klee: Yes. Hi. In Always Alpha, you talked about potentially doubling the roster by the end of the year and adding soccer and basketball. How a couple of things, like talk about how it works when you grow in terms of how to think about would you have to invest ahead of time versus the revenue potential? And then how to think about the opportunity in this segment? Thank you.

Bill O’Dowd: Sure. Yes. The similar businesses that we’re expanding here with the affiliate marketing TDD, which I may be anticipating your next question, too, Allen, but on Always Alpha managers that will help you sign new talent or we’ve been signing at a very steady pace since we launched the company in October. Very proud of the roster that’s been built by Cosette and Allyson primarily, Allyson Felix. And they’ve done a great job bringing in talent. So now to expand and keep going, you need more managers. And we’re looking at managers that would be in those verticals of soccer and basketball because we’ve built a really nice practice of clients with the Olympics – Olympium excuse me, and sports casters. And typically, when you bring in an experienced manager and then we can go recruit talent athletes in this case, you want to be managed by us and have us bring brand deals.

There’s a lag between you bring in the manager, they’ll sign talent, they’ll start signing talent, hopefully, week one, right, month one, certainly. And we can help them recruit that talent, and then they’ll start making brand deals and we’ll bring brand deals to that talent. And then typically, in these types of endorsement deals, a little bit of a slower turn than in influencer marketing. So you could sign a brand deal to say, get athlete x going to the Winter Olympics to be sponsored by picket – Delta Airlines and they’ll run a campaign in Q4 of this year and Q1 of next year as an example. Well, so that’s all well and good. And then of course, but of course you’re recognizing that revenue, and you’re receiving it in Q4 and Q1 of next year.

So there’s usually on the athlete side, there could be you’ll start seeing some revenue in the first three to six months after bringing in a manager, but it really hits a run rate or hitting revenue targets usually six to nine months after you make a hire I would say. So as we – what we talk about in 2025, then is we’re hitting our benchmarks that we wanted both in terms of speed at which we’re signing clients, which has gone very well. And then, of course, the deals that we have in the works or that we’ve closed. But the – if we’ve closed revenue through Q1 for Always Alpha [ph], I think probably it’s fair to say that 90% of that revenue will be sometime later in 2025, and then that will be true in Q2, too. So and of course, eventually you’ll hit a stable revenue rate that should be quite profitable for you.

In terms of the potential of this division, well, I mean sports could be easily as big as aspects of entertainment. How big is big. So we’ll see as we go over the next year or two, it will certainly be a profit center for us in the future. And if we can take advantage, we believe of our first-mover advantage, and the great story, it’s Always Alpha. I mean because that’s a seasoned executive and Allyson Felix is a legend. So with the momentum that we can bring that business through their hard work on the brand deals they bring and then hopefully some synergies across all of our other companies that have many, many brand clients. And what is the, hopefully, five years from now the preeminent women’s sports athlete management firm worth we’ll find out together, right?

But I don’t want to set a ceiling that may turn out to just be a floor for them. They have great potential. So that’s what we’re doing in 2025, and it will pay big dividends for us, we believe in 2026 and beyond.

Allen Klee: Thank you. And so it’s very clear and understandable what your strategy is and not that it’s not understandable, but affiliate marketing, you said you could triple the influencers, but just to explain this a little more about where is it targeted in particular areas? Or how are you just trying to find people who are very good at it? Or how does it work?

Bill O’Dowd: Sure. Sure. Yes. And its little bit more of a black box to some people than say, female soccer players, people understanding that right as we have soccer and basketball. By – we’re trying to do it responsibly this summer, so when we get on Q2, by the way we’ll see what updates we have in the sports field for everyone, right? Affiliate marketing, good news is that it’s usually a quicker turn. You can have a team of affiliate managers, same thing, you bring in talent managers and you recruit a roster of affiliate influencers. The good news for us is we have a backlog of affiliate influencers that would like to work with us. And we’re hiring and training affiliate managers in some cases. So we’re trying to do it on a measured pace throughout the year, bringing in a new team of managers, let’s say, every couple of months, every eight weeks or so, it takes a while to train, it takes a while to add the roster upload and et cetera.

But they can have a quicker turn. A team could be cash positive within a shorter period of time, a couple of months after it being fully ramped-up. And obviously, if our main roster of brand influencers, now we have over – I believe, over 300 creators on roster. What’s the growth potential of affiliate? Well, right now, we have a couple of dozen, which is a fantastic sign-up rate since we just started this in Q1. I’m indicating to us out there that if we have everyone on this call can do that math, right? So 2,000 become 6,000 by the end of the year or more. We’re on a path in one-year to having affiliate be 25% or even 33% size of our core business. That’s tremendous growth in 12 months, right, and I don’t know that we’re going to stop there.

So it will be a profit center for us by the end of the year, and we’re in a position to have it be a solid profit center for us in Q4, which is already our best quarter for influencer marketing anyway. But affiliate marketing is also very appealing to us because it doesn’t really have as much of a seasonality. So whatever we do in Q4, we can hope similarly somewhat in Q1 of next year, and as it rolls through into 2026 and beyond. So well affiliate be as big as our core creator representation business. Again, we need a crystal ball and let’s see where we are in three to five years, but as a meaningful, it could be and is a meaningful contributor to our bottom line at TDD, absolutely. And strategically, it allows us to offer both services to individual influencers.

As I indicated on the 10-K earnings call, both of our companies before we merged on Be Social and Socialyte, did not offer affiliate services and neither do almost all of our competitors. So to have that in-house to go along with the brand campaigns, gives us a market advantage as the market disrupt, market is settling down into half a dozen firms or so that have are in positioning to be a market leader. We certainly are one of those. We think this gives us a major competitive edge to attract very good influencers who can make money both from brand campaigns we bring them, but also from affiliate links. So we’re excited for and very appreciative of the hard work of the team that’s building it out.

Allen Klee: But just so I understand it a little better, an affiliate influencer, if – did they come with leads for businesses or is that generated by kind of your managers or how does that work?

Bill O’Dowd: Sure. Yes, absolutely. So typically, what separates us, and I think a misperception in the market I’ll explain what it is and first to hopefully explain what it is, right? I think even people that understand influencer marketing well, often don’t realize that when the digital department brings insert here Crocs to insert one of our top influencers to do a campaign and maybe that influencer is going to get paid, let’s say, $100,000 to post Crocs products or talk about Crocs products or whatever the campaign would consist of either on Instagram on TikTok, on YouTube, whatever it might be for that money, that we bring the deal together to the talent, and we get paid a commission on what the talent earns and typically 20%.

So in that case, we get 20% of $100,000. If the influencer were to link to for their followers to be able to purchase Crocs shoes, typically, many brands will offer commission to that influencer. That service of managing the links and knowing where to link to either directly to the brand or most often through influencer sites like a ShopMy or LTK that service, which takes a lot of back-end support and also coordinating where to link to because it’s not a brand direct, then you want to get – you want to link to the affiliate platform that’s going to pay you the highest commission. One platform may be paying you 20% of the sale and another platform may be paying you 10% of the sale. You want to link to the one that pays you more, right? That service is called affiliate marketing.

And we – similar to the core service, we take 20% of whatever the creator makes on those links. Of course, that’s only if people buy the product through those links. So some influencers are very strong at both brand campaigns and in what’s called converting into affiliate sales that they do affiliate links. But the overwhelming majority of influencers do not do affiliate links. And some of our biggest influencers, our highest earners don’t do it, they will, and with us offering the service, they could turn out to be high earners. But it’s no joke to people that have followers that will buy what they’re posting or be curious about what they’re posting and click on it and go through and buy a product. They can make hundreds of thousands of dollars a month.

We have one on roster currently that does that. So it’s a business we can grow. So – but many people think that you just do both at the same time, but that’s just not true. And the overwhelming majority of influencers don’t do affiliate.

Allen Klee: Do they not do it because they don’t understand it? Or can you take your current roster of influencers and then just kind of upsell this to them instead of only bringing in because that sounds like a lower cost of having the – well, you tell me, yes.

Bill O’Dowd: Yes, it is, and it’s low-hanging fruit, too. And why it often isn’t done because you could have influencers that would only make $30, $40, $50, $100, $200 a month. If their follower accounts don’t typically think of them as somebody to click on and go through to the link. However, the other thing about building that type of practice or that type of content, I should say, is there’s some back-end work to it. And bringing in Kate Steele and that team and watching people that do this every day, all day. It can meaningfully change even influencers that do an affiliate work. You could go from making $15,000 a month to making $30,000 a month. We’ve got case studies on just that ratio within 30 days, why? Because the influencer often doesn’t have the time to shop across different platforms, know how to link, get certified to link into all these different platforms, know when the ratio changes.

You sit there and say, “Oh, okay, Amazon pays 20% for this pair of shoes today.” That’s better than LTK’s 10% hypothetically but then LTK runs a special this weekend and they’re offering – to clear out inventory, they’re offering influencers 30% on the same pair of shoes, do you switch the link? Are you savvy to know that or Amazon is going to do the Black Friday specials. Not only do they lower the price to the consumer, they pay many times influencers a higher percentage of the sale. Those are dream situations if you’re an affiliate influencer, right? So doing that, knowing how to handle that, working the links on the back end, there’s a lot of science to go with this art. And – but if you can do it at scale, and that’s where having a leading influencer marketing agency, one with 300 creators on roster.

Now you have – you can build out this type of practice and offer it to influencers, even if their core work, their brand works, not done with us. So it’s a major competitive edge. And it can be a selling point to our brands division or work with brands that have or want to have affiliate links, especially depending on the type of consumer product they sell. So you can see a flywheel there, right? And having an influencer marketing agency like the digital department that has all four ways to make money or traditionally make money in the influencer economy between core creator representation, affiliate marketing, brand representation, which we’re very proud of, Ashley Finch, and that team do a great job. And then influencer events, that’s Belinda Strom [ph].

That’s the BRANDEdit. That’s the one that I mentioned in our prepared remarks, just had their highest grossing brand out of showroom to date in LA in April. Let’s see if Nashville in June breaks that record. TDD is the – the digital department is definitely a growth company for us and very proud of the leadership of Ali Grant, Kirsten Weinberg and Sarah Boyd for that company. So that was a long answer to a short question, Allen, but hopefully, that answers why affiliate is different than the core brand representation and how we can monetize it.

Allen Klee: Got it. Thank you. And then for the movie Youngblood, you said you’d like to get it at a fall festival. Remind us what does that mean in terms of your target for getting it in the theaters?

Bill O’Dowd: Yes. We’re hoping for a February release of next year as it’s a streaming platform premier. We’ll see when we get to the market and the reason for that is – it’s – it will be time to the Winter Olympics. Hockey’s one of the most popular sports at the Winter Olympics. It’s in the middle of the NHL season. The playoffs right now are very exciting for the NHL, that’s a popular sport that’s growing. It’s also the 40th anniversary of the original. So it’s kind of a marketer’s dream when you have a confluence of events like that. So we would like that in that time next year, and the film is shaping up to be prepared for that because we’re – as I mentioned, we’re editing it now. And we will – in a perfect world, just would we have the film screening in Toronto where we shot the movie.

Sure, Toronto Film Festival. That’s one of the big fall film festivals. Whether it’s in competition or not is not as important to us as much as just a special screening there. And that’s also traditionally the time that these fall festivals, whether it’s [indiscernible] or Toronto, when you talk about ticking off to Oscar season, I am not positioning Youngblood for Oscar. But what I am saying is buyers, whether it be studios or streaming companies, streaming platforms, they often buy movies out of one of those three festivals that they will launch even before year-end and make them Oscar eligible. So buying something at Toronto, which always starts, of course, right after Labor Day every year and having it ready for release in February is not considered rushed in any way.

They do things faster in the normal course. So we feel good about that. And hopefully, that’s the timing that the market will allow us to exercise.

Allen Klee: Thank you. You have a lot of things on your plate. What would you say your top priorities are for 2025.

Bill O’Dowd: Growing Always Alpha. I’m trying to make a theme of it on a Q1 earnings call because we just spoke to the market six weeks ago. So trying to reiterate where we are. Grow Always Alpha because we have such an opportunity there. Grow the affiliate division of TDD because we see such a big opportunity there. And then after that, as you said, both films – have Youngblood ready, get the next one in the queue behind that, increase the frequency of our productions because they’re – if they all worked out like Blue Angels, they’ll be geniuses, but Blue Angels was very lucrative for us. We hope the same for Youngblood, obviously, and then having them behind it and then also our ventures expanding and increasing the number of ventures because now that the super group has been built now, as I mentioned, we see ourselves at the starting line, right, not the finish line.

And we’re starting to do what? We’re starting to expand, grow our services and grow our ventures. And that’s what we’re going to measure whether we had a good year or a bad year in addition to increased revenue, increased profit, of course. Are we setting ourselves up for some major successes in 2026 and 2027. And that’s how we’re going to measure ourselves this year.

Allen Klee: Okay. My other – sorry, I think – I mean, those are my main questions. Yes, I mean, is there anything about the financial outlook. I know you just qualitatively – I know you’re not providing specific guidance, but anything qualitatively you might want to comment on?

Bill O’Dowd: I think I probably alluded to it in the prepared remarks, too. Our – we’re past it and sometimes you forget sometimes things that occur four months earlier. I’m a kid from Miami. I remember hurricanes, right? They stick with you. The people that live through those fires. It’s terrific. And my hearts and our prayers, excuse me, go out to the – those affected. Business-wise, we’ve had to return to normal and continue to work very hard, but it did have an impact on us in Q1. It’s not true if I said anything different, but it was no pun intended contained within Q1 and really by early March. So we’re excited to kind of return to normal in Q2 here and going forward. We expect to still have as strong a year as we thought we were going to have it start.

Our businesses are growing and no loss of confidence for this full year for us. So, yes, we feel great, honestly. And it really is a test – sorry, I jumped on my own conclusion there. To go up 2% in revenue with that – in our entertainment marketing segment with that type of impact, that’s really a testament to – so the team is working very hard and recovering. So – and our growth in general. So very, very proud of both the business development activities of our companies, especially those that were more affected and the cross-selling that we just continue to get stronger and stronger at each successive year. And so yes, I feel very good about the rest of this year.

Allen Klee: Well, thank you. I mean your revenue – I mean we were – our estimate was for $10 million in the quarter. So you came in much stronger than that. So with all the headwinds that you did have. So kudos to you. Okay. Thank you.

Bill O’Dowd: Thank you, Allen. Appreciate the kind words at the end.

Allen Klee: Thank you. Thank you. As we have no further questions in the queue at this time, I would like to hand it back to Mr. O’Dowd for any closing comments.

Bill O’Dowd: Sure. Well, thank you and long-time listeners. No, the Q1 call is usually the shortest because we just had our big 10-K call six weeks ago, but I always like to try and look ahead a little bit. Q2 in August, we expect to be able to provide updates on the progress we’re making and with Always Alpha, soccer and basketball, I will provide an update on the progress we’re making with the affiliate marketing. We just brought in team number two started yesterday. So we’ll see where we are even on team number three by the time we get to our Q2 earnings call. We’ll have an update on Youngblood, although I don’t expect. Well, we would know where we would be taking it out in the fall film festivals when we do Q2.

So that’s exciting, provide an update for sure on our ventures work. And as I say, we’re growing organically on the base businesses, and we’ll continue to report that. But we’ll judge years going forward now, not just on that growth, but also on the optionality or the lottery tickets or whatever you want to call, things like films or ventures because that will certainly factor in, in future years to the valuation of Dolphin as a whole as we build those opportunities for ourselves. So – thank you, everyone, for listening, and I appreciate time, and look forward to picking it back up in the middle of August in Miami. It’s a ball me time to come down here. Okay. I’ll talk to everybody soon.

Operator: Thank you. Ladies and gentlemen, this does conclude today’s call. You may disconnect your lines at this time, and we thank you for your participation.