Research Solutions, Inc. (NASDAQ:RSSS) Q4 2023 Earnings Call Transcript

Research Solutions, Inc. (NASDAQ:RSSS) Q4 2023 Earnings Call Transcript September 13, 2023

Research Solutions, Inc. reports earnings inline with expectations. Reported EPS is $0.01 EPS, expectations were $0.01.

Operator: Good afternoon, and welcome to the Research Solutions Fourth Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Steven Hooser, Investor Relations. Please go ahead.

Steven Hooser: Thank you, Gary, and good afternoon, everyone. Thank you for joining us today for Research Solutions’ fourth quarter and full year fiscal 2023 earnings call. On the call with me today are Roy W. Olivier, President and Chief Executive Officer, and Bill Nurthen, Chief Financial Officer. After the market closed this afternoon, the company issued a press release announcing its results for the fourth quarter and full year of fiscal 2023. The release is available on the company’s website at researchsolutions.com. Before Roy and Bill begin their prepared remarks, I would like to remind you that some of the statements made today will be forward-looking and are made under the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those expressed or implied due to a variety of factors. We refer you to Research Solutions recent filings with the SEC for a more detailed discussion of the risks that could impact the company’s future operating results and financial condition. Also on today’s call management will reference certain non-GAAP financial measures which we believe provide useful information for investors. A reconciliation of those measures to GAAP measures is included in the earnings press release issued this afternoon. Finally, I would like to remind everyone that this call will be recorded and made available for replay via the link on the company’s website. I would now like to turn the call over to Roy W. Olivier. Roy?

Roy W. Olivier: Thank you, Steven, and thanks to everyone joining us for our fourth quarter and fiscal 2023 results. Our results for the full year were positive in several respects, and we accomplished several things that lay the groundwork for continued progress in FY or fiscal ‘24 and beyond. I’ll review these in detail after Bill’s full report on our financial results. I’m proud of the team’s efforts in generating nice organic growth, completing and integrating an acquisition, generating GAAP profitability, and generating record adjusted EBITDA and cash, all while continuing to deliver new products and new features to our customers. In addition, on July 31st, we announced the acquisition of ResoluteAI, an advanced search platform with knowledge management tools powered by AI and NLP technologies.

We’re excited about the medium and long-term prospects of this acquisition in terms of expanding the number of solutions we can sell to our customers, expanding our TAM and growing ARR through cross-selling ResoluteAI’s capabilities into our broad base of customers. I’ll speak more about our accomplishments and the unique opportunities this acquisition provides shortly. But first, I’d like to pass it over to Bill to walk through our fiscal fourth quarter and 2023 year-end financial results in detail. Bill?

Bill Nurthen: Thank you, Roy, and good afternoon, everyone. I will begin with a recap of our results for the fourth quarter of fiscal 2023. Our total revenue was approximately $10 million, a 16% increase from the fourth quarter of fiscal 2022. In the last two quarters, we have now generated over $20 million in total revenue. Our platform subscription revenue increased 22% to $2.3 million, primarily driven by upsells in our existing customer base and a net increase of platform deployments from last year, including a net gain of 20 in the fourth quarter. We ended the quarter with $9.4 million in annual recurring revenue, or ARR, up approximately 4% sequentially and 19% year-over-year, reflecting continued but slower growth in the economic environment where we are currently experiencing a few customers tightening their budgets and some elevated churn within our existing customer base.

Please see today’s press release for how we define and use annual recurring revenue and other non-GAAP terms. Our transaction revenue increased 15% to approximately $7.7 million from $6.7 million in the fourth quarter of 2022. A little over 9% of that growth was organic, and the rest of it was coming from customers acquired as part of the FIZ transaction. Our total active customer count for the quarter was 1,404 compared to 1,213 from the same period a year ago. The increase in customer count is primarily related to the acquisition of certain customer contracts from the FIZ transaction in the second quarter of fiscal 2023, which became effective in our third quarter of fiscal 2023. Gross margin for the fourth quarter was 39.4%, a 110 basis point improvement over the fourth quarter of 2022.

The increase was due to the ongoing revenue mix shift towards our higher margin platforms business. The platform business recorded gross margin of 88.1%, an 80 basis point improvement from the prior year quarter as we continue to be able to service more customers with proportionally lower labor costs. Gross margin in our transaction business increased 20 basis points from the prior year fourth quarter to 24.7%. The increase was primarily related to, again, our ability to service more transaction revenue with proportionately lower labor costs. Total operating expenses in the quarter were $3.7 million, a slight decrease from the prior year quarter. We experienced lower cost in pretty much all operating expense categories which were offset by an increase in stock compensation expense related to the new long-term executive restricted stock plan implemented in the second quarter of this fiscal year.

Recall that the long-term stock plan is one which restricted shares only vest if higher market prices for the company’s stock are attained. Net income for the quarter was $376,000 or $0.01 per diluted share compared to a loss of $438,000 or $0.01 per share in the prior year quarter. This represents two consecutive quarters of positive GAAP net income and three quarters in the last four with such a result. Adjusted EBITDA for the quarter was $825,000 compared to a negative $121,000 result in the year-ago quarter. Now turning to the full fiscal year 2023, total revenue increased 14.5% to $37.7 million compared to $32.9 million in fiscal 2022. As mentioned in the press release, this growth rate is the highest the company has experienced in over a decade and is the first double-digit growth rate since that time as well.

Our platform subscription revenue for the full year increased 28% year-over-year to $8.7 million. ARR was $9.4 million compared to $7.9 million at the end of fiscal 2022. Total platform deployments as of June 30, were 835, a net increase of 102 deployments or 14% from a year ago. As I mentioned in my remarks regarding Q4, we did experience some slowing in overall platform growth as we moved through the fiscal year, primarily due to elevated churn, which was more pronounced in certain customer segments like biotech. However, we continue to believe that this is more macroeconomic related as we are not experiencing a material change in losses to competitors. It is more situations where customers are either being acquired, going out of business, or simply choosing to do without a third-party product to manage their research process.

Transaction revenue for the fiscal year was $29 million, an 11% increase from fiscal 2022. The FIZ acquisition contributed to this growth, however, the growth was primarily organic. This is exciting as we’ve been speaking about an inflection point in our business where the amount of new platform customers onboarded would be such that our transaction revenues, which have been flat to down historically, would start to grow again. We appear to be in a place now where transactions can grow, and as we experience that growth, we are doing it at slightly better margins. As we look at gross margin, for the full fiscal year 2023, gross margin was 39%, a 250 basis point increase from the previous year. The result was due to the ongoing mix shift of platform revenue.

However, it was also due to expansion in gross margin in both our platform and transaction business lines. Gross margin for the platform business was 88.2% compared to 86.2% in fiscal 2022. This was primarily due to lower software costs and proportionally lower labor costs in servicing this revenue. Gross margin in our transaction business was 24.3% compared to 23.6% in fiscal 2022. This was due to lower labor costs to services revenue as well as some pricing initiatives which serve to expand our copyright margins. Total operating expenses in fiscal 2023 were $14.5 million compared to $13.7 million in the prior fiscal year. Excluding stock compensation expense, operating expenses were essentially flat compared to fiscal 2022, and this includes roughly $200,000 in recruiting expenses in fiscal year 2023 that are not likely to repeat going forward.

Net income for fiscal 2023 was $573,000, or $0.02 per diluted share compared to a loss of $1.6 million or $0.06 per share in the prior year. This was the first time since 2015 the company recorded a GAAP profit and it was a true operational profit, whereas in the past, such profit typically related to some unique or one-type items. Adjusted EBITDA in fiscal 2023 was $2 million compared to a negative $374,000 in the previous fiscal year. The result of over $2 million in adjusted EBITDA for fiscal year 2023 is a company record. Turning to our balance sheet, the aforementioned profit and cash flow did lead to an increase in cash. Company generated $3.4 million in cash flow from operations in fiscal year 2023, which is also a company high achievement.

Cash and cash equivalents as of June 30th, 2023 was $13.5 million versus $10.6 million on June 30, 2022. There were no outstanding borrowings under our $2.5 million revolving line of credit, and we have no long-term debt or liabilities. On July 31st, we announced the acquisition of ResoluteAI for a total closing consideration of $2.9 million, which includes certain holdback items related to working capital. The transaction had an earn-out based upon 3.5 times the level of ARR on the date that is 18 months from the close date, less than enterprise value of $3.2 million. At close they had $1.3 million of ARR. As we look ahead, the proxy matter we are presently navigating through is definitely clouding our near-term outlook, as the expenses related to it are material and to some extent, hard to quantify at this time.

In addition, we closed the Resolute transaction in July and as previously disclosed, we are continuing to work on two additional pending transactions. These items will all serve to increase our legal and professional service related expenses quite materially in Q1. As a result, I would not expect us to be adjusted EBITDA positive or cash flow positive in Q1. Keep in mind, we also pay our executive bonuses for the prior fiscal year in our Q1 and last year we only had $100,000 of positive cash flow in the first quarter. When we report our Q1 numbers, we will provide a breakdown of proxy-related and M&A-related expenses to help give a clearer picture of our operational performance. All of that said, I do not see anything that has fundamentally changed the profit or cash flow profile of our business.

The things that I have mentioned are unique items impacting our business, and while material and expensive, they do not change the core of what we do or alter the long-term momentum of the business that we saw as we exited fiscal year 2023. We will put the proxy issues behind us and feel strongly that the foundation we are building through M&A in the early part of fiscal year 2024 will serve the business well as we move in the back half of that fiscal year and beyond. I’ll now turn the call back to Roy. Roy?

Roy W. Olivier: Thanks, Bill. As mentioned in my comments a few moments ago, there’s been a tremendous amount of progress in several areas of the business over the past year. Some show up in our results, and some are laying the strategic groundwork for future results. I’ll quickly walk you through some of those. On the transactional or DocDel side of the business, we completed the customer acquisition of FIZ, which helped to build on an already strong and profitable transaction business and is laying a foundation for new platform customers via cross and upsell. FIZ had about 400 customers, 300 agreed to move over to Research Solutions, and over 200 of those have purchased documents from us in the past six months. As a reminder, that acquisition was a small upfront payment and is primarily funded through an earn-out, which essentially pays for itself.

In addition, the incremental revenue from those customers is being serviced by our existing DocDel team. Our overall headcount in that area has declined as revenues have gone up. We recently reported the Royal Danish Library customer win, which is a symbolic — which is symbolic of the success of our Article Galaxy Scholar or AGS workflow solution that academic libraries worldwide expect to provide documents not covered by their entitlements and to reduce their overall costs. The increase in hybrid OA or open access publishing titles may be partly responsible for opening this market niche for us. And we are working on several other opportunities in this segment. As a reminder, this will increase our DocDel revenue in the short term and provides a platform upsell opportunity to the participating libraries in the long term.

Over the past year, we’ve also focused on building our B2C capability directly and through partnership to drive traffic to Article Galaxy. We believe this is a key step along our product-led growth strategy to onboard individuals and leverage them as top of funnel for enterprise deals and as a growing user base for upsells, cross sells of new individual and enterprise relevant products in both the corporate and academic space. We have approximately 20,000 B2C users landing on the platform monthly and are working to convert them to a DocDel sale and eventually a platform customer. We recently updated our guest checkout workflows, which have increased DocDel revenue and have helped us identify those guest users. We believe that over time, a material percentage of those B2C users will upgrade to our SAS product, based on the conversion rates we have seen in fiscal year 2023.

Regarding the platform products, we continue to make progress on the product side, delivering new features, including several new AI-based features. Over the past year, we have added PICO label recognition, an AI-based recommendation engine and ChatGPT capability to our platforms. PICO label recognition allows users to accelerate screening of documents by searching and highlighting PICO terms in the documents. As a reminder, PICO stands for Patient Population Intervention Comparison and Outcome. The AI-based recommendation engine allows users to see a list of documents like the one they are reviewing without them doing manual screening. Finally, our recently released ChatGPT solution allows for users to ask for summaries of an article or a group of articles in a few seconds, thus providing users a fast and easier way to gain confidence that the articles they then access are what they need.

We will continue to see headwinds in the new sales, upsells, and churn parts of our business, but we have continued to invest in sales and marketing believing that the economy will recover in the foreseeable future and we want to be positioned to take advantage of that upswing. In late fiscal year 2022, we invested in rebuilding the marketing department and have seen some impressive improvements including doubling our website traffic from fiscal 2022 to ‘23, doubling our B2C DocDel revenue from ‘22 to ‘23, reducing our platform average days to sale from 79 days at the beginning of the year to 34 days at the end of the year. We increased our email open rates by over 8x during the year. We improved our sales funnel conversion from a lead to a book demo by 48 percentage points.

We grew demo requests by 68% during the year. We also improved our demos attended by double during the year. And lastly, we increased our B2C signups by 87%, our social media following by 22%, and traffic to our blog by 130%. While we continue to see a challenging environment in terms of platform sales related spending, we think the groundwork and progress we’re making in these areas will help us bounce back as the economy improves. We also made several investments and operational improvements during the year that we think line us up well to grow ARR in the future. Some of those are, we moved the company into one CRM platform that services our new sales, upsell churn, and marketing teams. As part of that, we implemented a configure price and quote tool, or CPQ tool, for the new sales team and expect to launch that for the upsell and churn teams in October.

We expect that tool to improve our close rates and the software acquisition journey for our customers. We also moved to a single more flexible software engineering team while also increasing our development capacity. We formally moved the company to a Scrum Agile methodology for both product development and software engineering teams. And this has resulted in increasing the number of software releases we do per year and will allow us greater flexibility and adaptability when needed. For FY ‘23, we also implemented OKRs for the full year for the first time to make sure the entire company is aligned around executing our operational plan. FYI, we’ve been working under Andy Grove’s OKR framework. On the acquisition front, we’ve also stayed very active.

As mentioned above, we successfully completed the FIZ customer acquisition and in July announced the acquisition of ResoluteAI. This will bring a variety of AI technologies and expertise to research solutions, growing product ecosystem that will increase our ability to provide solutions to a much larger range of users in the entire innovation value chain in our current markets, as well as new markets that we have typically not pursued. In addition to providing solutions and verticals we do not serve today, the ResoluteAI solution can provide solutions in the 13 areas of the innovation value chain versus the four that we service today. This materially increases our total addressable market or TAM as we roll out these solutions. In the short term, which we define as six months post-closing, we plan on integrating document delivery into the ResoluteAI platform, integrating Resolute’s advanced search into our platform, and rolling out five new or improved workflows to cross-sell into our customer base.

Those include clinical trial, key opinion leader, competitive landscaping, and technology landscaping modules along with enhancing our capability with our systematic literature review product, Curedatis. In short, ResoluteAI provides the foundation for expanding our SaaS software offerings, our AI capability, and our advanced search capability, all of which is critical to our ability to execute our long-term strategy. As mentioned in our press release a few weeks ago, we have two additional acquisitions in the LOI stage, which could add about $4 million in recurring revenue. Both are growing and are generating positive EBITDA and cash flow, and will deepen our ability to serve search and discovery, as well as knowledge management use cases while extending market share in both corporate and academic markets.

We expect to have more to report on those soon. While we continue to see what we think are short-term headwinds in the business, we’re excited about the progress we are making in many areas that will result in continued improvements in the business going forward. Regarding the proxy issue, other than Bill’s comments earlier, we have no news to report at this time. Management and the independent Board members believe in our strategy and we are continuing to make excellent progress in many areas. I remain very excited about our future. With that, I’d like to turn it — turn the call back over to the operator for Q&A. Operator?

Operator: We will now begin the question-and-answer session. [Operator Instructions] Our first question is from Richard Baldry with Roth Capital. Please go ahead.

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Q&A Session

Richard Baldry: Thanks. In the recent past, the seasonality in Q1 revenues has oscillated from a little bit up to a little bit down. Can you talk to, given the acquisition impact and sort of macro backdrop, how should we think about the likely sequential seasonality impact on the revenue side?

Roy W. Olivier: Bill, do you want to address that one?

Bill Nurthen: Yeah, sure. I think we will see the same seasonal trends that we have seen in prior years with respect to each quarter. But I think our expectation is, from a transaction perspective, the growth rates we’ve seen sort of in Q3 and Q4, I still think we’ll still get — we can still achieve double digit growth rates on transactions. But those double digit growth rates will just be off what they were in the prior year Q1, which as you know is usually a little bit of a step down from Q3 and Q4 just due to being in the summer.

Roy W. Olivier: In terms of acquisitions, the Resolute product is much more expensive than our typical Article Galaxy product, so it’s a larger lumpier sale. We don’t a expect material impact from Resolute in Q1 in terms of new logos or new sales. So I wouldn’t expect a big uptick on Resolute in our Q1.

Richard Baldry: Then in terms of modeling on the sales and marketing side, it came down sequentially, fairly materially. Was that more productivity-driven, bonus type driven, over-accruals, any reversals, or was there a meaningful change to headcount or marketing strategies that drove that, that we should factor in going forward?

Roy W. Olivier: Yeah, there wasn’t a meaningful change to headcount and strategy, but Bill can comment on the accruals.

Bill Nurthen: Yeah, so I would not use Q4 as kind of a run rate, Rich. We definitely, as we go through the year, conservatively accrue for a number of our reps to hit over-attainment and accelerators and things like that. And we just — this year with some of the slowness in the back half of the year on the platform sales, they did not hit those accelerators. And so a number of those accruals reversed in the fourth quarter. I will say this, as Roy said, there’s nothing fundamentally changed there. So it’s not like expenses are going to go back up above where you’ve seen them before. But the effect in Q4 was more [accrual] (ph) reversal.

Richard Baldry: Thanks. And then, without obviously talking too directly about what you’re looking at under the LOIs, would they be market extensions or TAM expansions again or more similar to what you’re doing now, more consolidation oriented?

Roy W. Olivier: I think if you — we did a three-part advisor conference about a month ago. There’s a webcast of my presentation which kind of reflects the new strategy and explains this in a little more detail. But basically it will add some new capability we do not have, even post-Resolute. It will materially enhance the capability that we have today with Research Solutions products and Resolute’s products. And at least in one case, it expands us into another segment materially. And when I say segment, I mean we typically derive a majority of our revenue in corporate, but there is also an academic and a government segment, both of which are combined, less than 10% of our revenue. And one of these has a fairly significant academic footprint, which is very interesting to us because of the cross-sell opportunity, not only of their product into corporate, but our product into their academic base.

Richard Baldry: Got it. Thanks for your help and congrats on the record adjusted EBITDA numbers.

Roy W. Olivier: Thank you.

Bill Nurthen: Thanks.

Operator: The next question is from Allen Klee with Maxim Group. Please go ahead.

Allen Klee: Yes, hi. Good afternoon. Starting with ResoluteAI, you said it does around $1.3 million in ARR. Should we be assuming that it’s going to be overall losing money, that it will have a negative impact on the bottom line? And if so, how should we think about that? And second, when you were talking about the earn-out, did you say that while it’s around $1 million now, that they get the earn-out, if it gets to around $3.5 million? Is that what you meant or did you mean something else? Thank you.

Roy W. Olivier: By the way, before I turn it over to Bill, FYI, we did file an 8-K that has an FAQ attached that goes into a bit more detail about the ResoluteAI acquisition and addresses some of your questions. But Bill, do you want to go ahead and take those?

Bill Nurthen: Yeah, I’ll just start with the acquisition terms question just real quick just to clarify something. So yeah, it’s basically 3.5 times, the earn-out is basically 3.5 times their ARR, 18 months after the close, less an assumed enterprise value of $3.2 million. So that’s how the math will work on the earn-out for Resolute. With respect to how it will impact performance, I do think as we put in that 8-K that Roy disclosed, we should expect it to be a drag on performance in the near term. We did disclose in there that when we did do the acquisition, they were burning about $125,000 cash per month. I would say two things about that. One, we are working to basically improve that. On the cost side, there is already a number of steps that we have taken.

We have cut about $130,000 sort of — in the first week of the transaction, we cut about $130,000 of discretionary costs out of the business. And then there’s a big component of their costs related to how they service their revenue in the cloud that we think we have some ideas to bring down that we will be working on as well. The other important aspect of this is we are, as Roy mentioned, working to get our cross-sell activity up. Those cross-sell products will not be ready probably for six months. You are talking about January, February timeframe to start selling them. But again, that is another piece we are working on, and that is where we really feel the value in the transaction is. The last thing I would say is that that transaction is one of, sort of, an acquisition strategy which involves the other two deals that Roy discussed.

And those deals are, as you mentioned, profitable and cash flow positive. So this one just sort of happened to come first. We do have some other steps that we think we can execute on, that in addition to our operational improvement of Resolute’s performance was, accretively from a cash flow and profit standpoint as well.

Allen Klee: Thank you. In terms of — so the other — okay, how do you think about how you’re budgeting — how you would like to think about operating expense growth in fiscal ‘24 relative to revenues, like, excluding what I’m viewing as kind of one-time costs related to the proxy and acquisitions?

Bill Nurthen: Sure. Yeah, the answer to that is we’re basically not in the core business budgeting high growth rates and expenses. We essentially give our employees raises which on average amount to about 5%, so payroll would probably go up 5%. But otherwise in the core business, there is not sort of new investments we’re launching or additional expenditures of headcount that are material to the business. What I will say is, the costs related to getting the acquisitions done from a legal perspective as well as all the costs associated with the proxy issue we’re dealing with are very material. And so, we will — when we report Q1, we’ll itemize this stuff out and give everybody a clear picture and be transparent about sort of what is operational versus what we think is unique.

But it kind of goes back to my comments in the script. Core business really hasn’t changed, but there are some material things we’re dealing with on the acquisition side. I think that will prove out to be wise investment in the legal spend in the long term to get these deals done and in-house. But they will impact us in the short term.

Allen Klee: Okay, great. And then in terms of quarterly adding of ARR, how do you think about the actions you’re taking? Do you think that’s kind of the run rate for the last two quarters of incrementally added ARR, that’s probably a reasonable rate going forward, or is there any reason to think that either macro or things that you’ve done might change that?

Roy W. Olivier: Well, I don’t know how to answer that. We do remain concerned about some of the macro environment we’re seeing. We are continuing to see a lot of companies that have spending freezes in place, others that want to reduce their spend through reducing number of seats and that sort of thing. So, I am concerned about that, but I don’t know that I have any data to support a specific number.

Allen Klee: Okay, I have a housekeeping question. Can you tell us what your current share count is and maybe what the average share count was for the fourth quarter?

Roy W. Olivier: Bill?

Bill Nurthen: Yeah, sure. Current share count is probably, it was 29.5 million at quarter end. We’ll put our K out for filing shortly, and that will probably show about 29.6 million shares outstanding. As far as the average, I think that is — for the — basically for the year, I think it was around 29.1 million on a diluted basis — 29.1 million shares.

Allen Klee: Okay, great. Okay, thank you so much.

Roy W. Olivier: Thank you.

Operator: [Operator Instructions] The next question is from Peter Rabover with Artko Capital. Please go ahead.

Peter Rabover: Hey, guys. Well, first I’d like to make kind of a statement on the proxy battle. I think it’s incredibly embarrassing for Peter and Paul to even engage in this. And Paul’s presence as a shareholder has been more negative than positive. And so, Paul, if you’re listening, we’re more than happy to help buy out your stake. So I would highly encourage for this matter to be settled as soon as possible and to stop the very expensive stuff that’s going on. So like I said, very embarrassing and I hope you guys stop it. With respect to questions, Bill, you have mentioned that there was an inflection point with new platform customers increasing transaction growth. And I was wondering if you could elaborate on that a little bit.

Bill Nurthen: Yeah, so I mean, and I think — what we’ve historically seen on the transaction side of the business is pretty low growth and sometimes even negative growth rate on transactions. And that was basically historically, again, the company moving a lot of its existing transaction customers to the platform. And then when they go on the platform, they are typically experiencing cost savings which is one of the huge sort of benefits of our — that the platform offers to customers, a savings on their transaction spend. And so basically, transactions have been a headwind for us to overall company growth because typically each year they are flat to down. The analysis that we did was basically saying, hey, if we continue to onboard new customers at material rates which we did, especially in fiscal year 2022, and then again to a lesser extent, but still materially in fiscal year 2023, that those transactions — those customers who tend to spend three times their annual fee on transactions are going to start to offset the transaction savings that the older customers are getting.

And I think that’s what we’re seeing here as we look at the growth. Now that growth as we see in Q3, Q4 is a little bit exaggerated because of FIZ, which I talked about, but more of the growth rather than less of that growth is organic and we expect that organic growth can continue as we move into this fiscal year. So that’s just a trend where I think we sort of have turned the corner, whereas in the past it’s always been hard to predict that. And in some cases we’ve been, again, like down or flat.

Peter Rabover: Okay, great. That was very helpful. I’ll jump off now. Thanks.

Roy W. Olivier: Thank you.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Roy Olivier for any closing remarks.

Roy W. Olivier: Well, thank you. And thanks, everyone, for joining us on our call today. We look forward to speaking to you in November to discuss our first quarter fiscal 2024 results. Have a great day.

Operator: The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.