EXHIBIT 99.1
TRANSCRIPT OF CONFERENCE CALL
INCENTRA SOLUTIONS, INCORPORATED
SECOND QUARTER 2005 RESULTS
AUGUST 16, 2005
OPERATOR: Good morning and welcome to the Incentra Solutions Second
Quarter and Six Month Results conference call. At this time, all participants
have been placed on a listen-only mode and the floor will be open for questions
following the presentation. You may put yourself into the question queue at any
time by pressing *, 1 on your touchtone telephone. It is now my pleasure to turn
the floor over to Mr. Rene Caron of Allan and Caron. Sir, the floor is yours.
RENE CARON: Thank you very much Alan (sp?) and good morning everybody, I
too would like to thank you for joining us this morning. Before we start today's
call, there are a few items that I would like to cover with you. First, in
addition to disseminating through PR Newswire this morning's news release
announcing the company's financial results for the second quarter and six months
ended June 30. 2005, an email copy of the release was also sent to a large
number of conference call participants. If any of you did not receive a copy of
the news release, please call our California office at 949-474-4300 after this
morning's call and we would be happy to email you a copy. Additionally, a replay
of the conference call will be available on the internet via a link provided on
the investor section of Incentra Solutions web site at
www.incentrasolutions.com.
Finally, I've been asked to make the following statements.
Certain information discussed on this call may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 and the Federal Securities Laws. Although the company believes that the
expectations reflected in such forward-looking statements are based upon
reasonable assumptions at the time they are made, it can give no assurance that
its expectations will be achieved. Listeners are cautioned not to place undue
reliance on these forward-looking statements. Forward-looking statements are
inherently subject to unpredictable and unanticipated risks, trends and
uncertainties such as the company's inability to accurately forecast its
operating results, the company's potential liability - inability, excuse me, to
achieve profitability or generate positive cash flow, the availability of
financing and other risks associated with the company's business. For further
information on these factors, which could impact the company's and its
statements contained herein, reference should be made to the company's filings
with the Securities and Exchange Commission, including annual reports on Form
10-KSB, quarterly reports on Form 10-QSB and current reports on Form 8-K. The
company assumes no obligation to update or supplement forward-looking statements
that become untrue because of subsequent events.
Now, on the call with us today from Incentra Solutions, we
have Tom Sweeney, Chairman and CEO, Paul McKnight, Chief Financial Officer and
Mike Knaisch, President of the company's Front Porch Digital Broadcast and Media
Services divisions. Management will provide a review of the results, after which
there will be a question and answer period. For those of you participating on
the call over the internet and who wish to submit a question to be considered
for the question and answer period, you can do so by clicking on the "Ask a
Question" button provided on the left side of your screen. Please submit your
questions as early in the call as possible. If questions sent in via email or
over the internet have not been previously answered in response to an earlier
question during this morning's call, they will be asked of management as time
permits.
I would now like to turn the call over to Tom. Good morning
Tom and congratulations on a very nice quarter.
TOM SWEENEY: Thank you, Rene. Welcome and thank you for joining us. Well,
we've had a terrific second quarter with improvements across the board. Revenues
are up, gross margins are up, costs are down and we've seen an increase in our
sales funnel as we enter the second half of the year. At the end of the first
quarter call, I mentioned that the company's near term priorities were to manage
the successful integration of Star and PWI and to continue to hire and train
additional professionals in sales and engineering. I'm happy to report that
we've completed the majority of the activities surrounding the integration of
Star and PWI; product and service lines have been standardized across the
company with contracts consolidated for purchasing and for First Call support;
sales and engineering professional have been trained on all services;
compensation plans have been unified; management objectives have been
communicated across the company and reporting against those metrics has been
implemented. We are now engaging the Enterprise market with a single consistent
message: Incentra is the premier complete solutions provider. We also made
progress in hiring additional professionals in both the Enterprise and the
Broadcast markets, though the Enterprise hiring was a little slower than
expected and continued into the early part of the third quarter. We are looking
forward to these new resources coming on line over the next few months and
beginning to contribute.
Finally, our Broadcast division continued to see increased
ordering during the second quarter, overall sales volume went higher than in
previous quarters, and we completed the installation of two large Diva Complete
sales. We also made the first sale of our new Diva Director product and are
quickly closing in on our first sales of our Diva Works product. Both of these
products were introduced in April. Most importantly, the company received
notification from the patent office confirming a large number of patent requests
we had filed. Mike Knaisch will provide a more detailed review of these
accomplishments. All of these activities have contributed to higher sales
volume. Revenues reached 17.6 million, a new high; gross margins improved to 29%
for the quarter and we saw increases in professional services and recurring
managed services for the Enterprise group. Along with this top line growth we've
continue to contain our costs and the only negative coming from the lower rebate
volumes on some products during the quarter.
Now I'd like to turn the call over to Paul McKnight to
review the financial performance of the company.
PAUL MCKNIGHT: Thank you Tom. Good morning. I will now walk through the
company's financial performance for the second quarter and the six months ended
June 30th, 2005 and I will give this on a pro forma basis only. I will not
discuss the GAAP comparative results because they are not as meaningful at this
point in time, due to the recent acquisitions we've had. Now the pro forma
numbers are not a substitute for the GAAP results and the GAAP results can be
reviewed in the 10-QSB we recently filed. I will remind you that the pro forma
numbers include all of the results of the acquired companies as if they were
acquired at the beginning of the period being presented. Now let's review the
second quarter results.
Revenues were 17.6 million, up 27% from 13.9 million the
previous year. Now, this increase in revenue is due to the growth across the
board of all our products, the third party product sales, our professional
services, Diva archive sales and the continued growth of terabytes under
management. The gross margins dollars were up 19% to 5.1 million from 4.3
million the previous year. The margin percent - as a percentage of revenue in
the second quarter 2005 was 29% compared to 31% the previous year. Now this
margin percentage is slightly lower and that's due to the volume of our third
party sales in the mix. Our operating expenses decreased from 6.9 million to 6.3
million, that's a 9% decrease. Now were pleased with this decrease, even though
we did not receive as much co-op rebate from Sun Micro System in the quarter.
Now this decrease is actually due to the elimination of the prior owner's costs
and it was an impairment to good will last year. Our net loss for the quarter
improved 33% from 3.6 million the previous year, to 2.4 million in this quarter.
Now I want to point out that included in this net loss are $1.8 million of
non-cash related charges, related to taxes, interest, depreciation and
amortization. Our adjusted EBITDA for the quarter was a positive 300,000. Now
this excludes a cash settlement of $135,000 that we actually received from an
insurance claim in the quarter. Our cash balance at the end of the quarter was
2.1 million, at the beginning of the quarter it was 2.2.
Now let's review the six months results. Revenues were up
21%, 34.1 million, versus 28.1 million the previous year. Our gross margin
dollars were up 13%, 9.6 million versus 8.5 million the previous year, 13%
increase. Gross margin as a percentage of revenue was 28% in the first half of
this year, versus 30% from the previous year. Our operating expenses were 12.7
million in the first half of 2005; compared to last year it was relatively flat.
Our net loss in the first six months of 2005 improved 32% from 6.2 million the
previous year loss to $4.7 million loss. Our adjusted EBITDA for the six months
was a positive $700,000; and again, this excludes the cash settlement of
$135,000 received from an insurance claim.
I'd like to point out a couple of other financial highlights
that are worth mentioning. We completed the reverse stock split of 10 to 1 on
June 9th. We also completed a debt consolidation with the Laurus Fund at the
close of the quarter. Now this replaced and enhanced our existing revolving line
of credit that we had with Wells Fargo. We have longer terms, increased fund
availability and less restrictive financial covenants now. We also held
additional investor meetings in Europe and in the US during the quarter.
So those are the financial highlights. Now I'd like to turn
it back over to Tom.
TOM SWEENEY: OK, thanks, Paul. I'd like Mike Knaisch now to take an
opportunity and walk through the Broadcast highlights for the quarter.
MIKE KNAISCH: Thanks Tom. During the second quarter, Front Porch achieved
another record performance in closing new contracts for future delivery. Our
quarterly total crossed the $4 million mark for the first time ever. Of this
amount, $2.4 million was in software, $1.2 million in professional services and
support and maintenance and only $640,000 in hardware. This revenue mix has a
significant and positive implication for margin on these deals. Twelve new
Archive systems were sold during the second quarter, and Europe and Asia
continue to drive the majority of activity, including the biggest second quarter
deal, which was worth $1.6 million. This transaction was signed with Thomson
Grass Valley as the systems integrator for a customer with four international
locations, including one in Washington, DC. The transaction included software,
professional services and maintenance and a minimum of hardware, again, driving
strong margins on the deal.
Two key North American deals were signed; a pilot system has
been sold to CBS Television City. Now, this is the first Diva Archive sale to a
major US network and we believe it's a signal that the US market is starting to
move. We also closed a transaction with TV-5 in Montreal; this is our third
Canadian customer, right in the backyard of one of our competitors. The second
quarter also saw 20 repeat purchases from existing accounts, and this is
evidence of continuing opportunity for revenue growth from satisfied and loyal
customers. Repeat deals were done with Discovery, Disney, MTV, and CBC among
others, but included in these deals was our first order for Diva Director; our
content management application that we launched at NAB in April. The product
will be installed at MTV Nickelodeon in Singapore, working with our channel
partner Assent Media.
Several staffing moves were made in the second quarter to
strengthen our North American capabilities. We hired two new sales executives in
the US to provide more coverage in the still emerging market and we hired a new
support specialist to support our US efforts, our customers there, which is very
important as we continue to provide First Call support for our Diva Complete
solutions.
As for the third quarter outlook, now this is a
traditionally a slow quarter in the global broadcast industry, yet we have $5
million in our sales funnel for August and September alone. We're competing for
27 individual deals that we close in the next few months. Six of these are for
Diva Complete Solutions, 3 are for Diva Works Solutions. We're starting to see
more opportunities emerge in the US as well as Latin and South America, new
markets for Front Porch Digital. We're looking forward to the International
Broadcasters Conference in September. This is the second largest show in the
global broadcast business and Front Porch will again have its own booth where
we'll be showing all of our new products that were also launched at NAB. We'll
also be showing in the booth of Thomson Grass Valley, a
very strong partner internationally, and we believe our presence at this show
will help us close out a strong third quarter, set up the fourth quarter and
reveal many new opportunities for 2006.
One last point worth noting; Front Porch recently received
important news from the US Patent office. Some time ago, Front Porch submitted
50 cases for patents on Diva Archive software. We've received news that 20 of
our claims have been allowed another 6 could be approved pending re-write and
re-submission of those plans, and we believe this is a very significant step in
our efforts to preserve the competitive advantages of Diva Archive and maintain
our position as the global leader in broadcast archive management. Tom?
TOM SWEENEY: Thanks Mike. I'd like to give an update now on the
Enterprise business. Our First Call support services have been rolled out to the
sales force and we have started signing new contracts at the higher gross
margins. This change will significantly improve our gross margins on maintenance
contracts, while add to our recurring revenue streams as we go through the year.
We've introduced our broader set of services, including one time professional
services, blank security audits and storage assessments and our recurring
services for monitoring and management. We have seen increased sales of
professional services already and we continue to pursue new opportunities.
On the negative side, we are informed by Solar Turbines that
we would not be continuing their contract for help desk support services beyond
July 15th. This will decrease our revenues by $150,000 per month, beginning in
August, with a corresponding reduction in gross margin of approximately $30,000.
This has been factored into our third quarter and balance of the year forecasts.
We are rolling out this quarter our enhanced First Call
services where we monitor the customer's environment, real time; eliminate their
need to call us. This service leads to faster problem isolation and improved
response times and asset availability for our customers. This is an industry
first; we plan to leverage this service to set ourselves apart from our
competitors. As you would expect, we've already signed our first customers under
EFS contracts and see increasing volumes through the balance of year. In terms
of expectations for the third quarter, we expect to see strictly increasing
sales of our First Call services and corresponding increases in our gross
margins. Product demand remains strong in the marketplace although we don't
expect the third quarter sales to be as high as the second, and we knew we had
some transactions that were accelerated into the second quarter that we
originally expected to close in the third. We also know we have some
seasonality, both in Europe and in the US in terms of the summertime months of
July and August when volume slows down. So overall, our revenues for the third
quarter should be between 14 and 15.5 million. EBITDA should be slightly
negative to neutral. Our overall sales funnel is higher than at the end of the
first quarter with more than $30 million of opportunity over the next six months
and we will continue to market aggressively with our distributors and
manufacturers to increase our market penetration.
That's all of our comments, thank you for joining this call
today and we'll now open it for questions.
OPERATOR: Thank you. The floor is now open for questions. If you have
a question, please press *, 1 on your touchtone telephone. If at any point your
question has been answered, you may remove yourself from the queue by pressing
the pound sign. We ask that while posing your question, that you pick up your
handset to provide optimum sound quality. Once again, if you do have a question,
please press *, 1 on your touchtone telephone at this time. Our first question
comes from Chris Moore of Bristol.
CHRIS MOORE: Good morning. I wonder maybe we could talk a little bit
about Star; I saw in the 10Q that you had defaulted on the payment, I just want
to get a little bit of sense as to, you know, kind of what was going on there?
TOM SWEENEY: Yeah, Chris, thanks for being on the call, this is Tom. The
only thing I can say at this time is that as we disclosed in The 10Q, we elected
to withhold the payment while we work through a purchase price adjustment as
relates to the transaction, and as you saw, we did not see a renewal for Solar
Turbines, that was a contract from that business.
CHRIS MOORE: OK, so that - that was part of Solar's?
TOM SWEENEY: Yeah. So, unfortunately at this time I can't - I can't make
any additional comments.
CHRIS MOORE: OK. On the Front Porch side, maybe we could talk a little
bit - Mike said that there's a $5 million sales funnel right now? Twenty-seven
deals, something like that, 6 of them are for Complete Solutions; I'm just
trying to get a better handle on how this all works out, I mean, Complete
Solutions can be for as high as in the million dollar range, is that fair?
TOM SWEENEY: Yes.
CHRIS MOORE: OK, so maybe we can talk about this - what this 5 million
sales funnel means and then, you know, how that factors in with the 6 complete
solutions which would obviously give more than that to begin with?
MIKE KNAISCH: Well of course, Diva Complete Solutions include not only the Diva
Archive software and other software that may go along with that solution; it
also includes professional services and First Call support on all of the
hardware, which we will also sell as part of that transaction. The size of those
deals generally ranges from somewhere between $500,000 and sometimes over a
million dollars and that's a fair characterization of the 6 Diva Complete deals
that are included in the months of August and September that we're tracking.
CHRIS MOORE: Gotcha. OK, all right guys, thanks a lot.
OPERATOR: Thank you, our next question comes from Mike Shonstrom of
Emerging Growth.
MIKE SHONSTROM: Good morning.
TOM SWEENEY: Hi Mike, good morning.
MIKE SHONSTROM: I think there was - the comment came out and I didn't get
the number specifically for the video side, the Front Porch side of - 4 million
in the quarter or in excess of 4 million?
TOM SWEENEY: Yeah Mike, that was, that was the volume of new contracts
signed.
MIKE SHONSTROM: I see, so, so do you have any segment information for the
quarter itself, for the 17.6?
TOM SWEENEY: We don't, we don't do a segment reporting today. We've been asked
that in the past Mike, and that's one of the things that we're hoping to
accomplish when we are able to consolidate all the financial reporting through
our Great Plains implementation.
MIKE SHONSTROM: I've gotcha. The, the sequential - I mean, you're
forecasting sort of a sequential decline in the third quarter, I'm just curious,
given your comments about pipelines and your showing at the International
Broadcasters, whatever it is conference, would you expect the fourth quarter to
be an improvement over the third or do you have any visibility in that at, at
this point?
TOM SWEENEY: Yeah, so let me give you a little more color on that,
because I think it'll help everybody. When we talk about the third quarter
having a sequential decline from the second quarter, the issue that we look at
most closely is the delivery schedule for both product and services during the
quarter, and of course, you may have higher sales volumes, the issue is are the
customers available to take delivery and do integration and implementation. So,
we expect the third quarter to be lower than the second and we knew we had
pulled in some transactions from the third quarter into the second. In addition,
when we look at the fourth quarter, we haven't put an estimate together yet, but
in general, the strength of our pipeline and our past history with looking at
fourth quarters, certainly would tell us that our expectations are probably
going to develop onto a higher level. As soon as we have a little more clarity
around that, we'll come back and give everybody a better feel for how do we
think we'll finish the year.
MIKE SHONSTROM: The - does the $14 - 15 million, does that - is that a gain
over the prior year's pro forma numbers?
TOM SWEENEY: Yeah, it's strictly a gain over the prior year's third
quarter.
MIKE SHONSTROM: So you experienced the same, sort of, the - in that year as
well?
TOM SWEENEY: Correct.
MIKE SHONSTROM: Great, I'll turn over the floor.
TOM SWEENEY: Great, thanks Michael.
OPERATOR: Thank you. Once again, as a reminder, if you do have a
question, please press *, 1 on your touchtone telephone. At this time, I show no
further phone questions. I will not turn the floor back over to Mr. Caron.
RENE CARON: Thank you, Alan. I now would like to review some of the
questions that have been submitted via the internet and via email during the
conference call this morning. I'd also like to remind people if any of the
questions you submitted were answered in all or in part during the Q&A question
here just a few seconds ago, we will probably only present the questions that
were not answered. So, the first question Tom, comes from an investor who says
"I see that operational break even looks to be a near term event. How long do
you believe it will be before we might see in addition to positive cash flow, a
bottom line net income achievement?"
TOM SWEENEY: Yeah, we've addressed this issue in the past and it's one
that's important to us as well. As we had talked about previously, the near term
objective is around generating both positive cash flow from operations and then
free cash flow from operations, that incorporates our investments into capital
development and any interest or debt payments that are being carried. After
that, we then have to overcome approximately $1.6 to $1.8 million of non cash
charges prior to becoming net income positive. So, we had said in the past that
we believe it's possible to get the net income positive during 2006. I don't
have a better timeframe for that today, but that it's certainly something that
is part of our planning processes to get there next year.
RENE CARON: OK, thank you. The next question has to do with sales and
the training of your sales force and the question that was submitted is "How are
you cross training your sales force to sell your proprietary products and
services, and could you give us an example of how you have sold some of your
higher margin products through this new cross-selling program to customers that
came along with the acquisitions you've done?"
TOM SWEENEY: Yeah, so the general answer is that all of the sales and
sales engineers across the company have been trained on both the products we
represent as well as the services that we deliver. In our Enterprise division,
that selling is done directly to the customers rather than through channels and
those direct sales have already occurred across the board. So, our Enhanced
First Call as well as our First Call Support for maintenance contracts, that's
occurring on a daily basis now, across our product line. On the Broadcast side,
the majority of all sales on the Broadcast side come through channels. We
certainly support that sales effort with our sales and sales engineers, but 90
plus percent of the transactions on the Broadcast side are done through our
systems integrator partners and we have already seen the sales of Diva Monitor,
Enhanced First Call and First Call Support for services there. So we're happy
with that progress today.
RENE CARON: Thank you, Tom. The next question is "What are the company's
plans for any additional acquisitions, both near term and long term?"
TOM SWEENEY: Well, today we have no specific plans but I think the answer
that's probably most accurate is that the company will continue to assess and
evaluate either acquisitions or mergers if we think the transactions have the
ability to both fit into our overall business plan and most importantly, if they
have the ability to create accretion, either in cash flow or in share price for
the shareholders.
RENE CARON: OK, thank you. We do have a question submitted by one of our
shareholders via the e-mail that had to do with our primary selling of our
products to prospects and customers, and I think Tom, you have already answered
that question in one of your previous ones, so we won't go back over that one.
However, we also have a question that relates to Sarbanes Oxley and the question
is, "How much do you estimate it's costing the company to become Sarbanes Oxley
compliant and secondly, the second part of that question is, what impact do
these costs have, do you think, on your timeline to becoming a profitable
company?"
TOM SWEENEY: Well, let me give a general answer and I'll ask Paul to
provide some more color. Our compliance wit SOX404, which is a very specific
element of Sarbanes Oxley, is one that has to be in place by the end of this
calendar year, December 31st and so that is an activity that's underway today
and in general, is being addressed by our implementation of a single accounting
platform across all of the business, both in the US and in Europe, because it
provides us some of the controls in reporting that are required. Now there's
other processes that go with that and procedures that have to be in place, most
of those have been addressed or identified and we'll finish working through that
process. Paul, any comments about cost right now that you could add or...?
PAUL MCKNIGHT: I don't have, I don't have a good idea yet as to the exact
costs, however because Tom spoke about the implementation of Great Plains, we
feel by implementing this single platform across all the entities, our cost to
adopt the Sarbanes Oxley will be definitely minimized by that adoption, that
unified software platform. So as we, as we get into the fourth quarter of this
year, we will begin to assess the cost issue of how much it will cost to do the
other implementation and, et cetera. So, we'll probably be able to provide more
color on that with the next call.
TOM SWEENEY: Yeah, and I think Rene, the thing to add then is that we'll
have a better feel for what the ongoing costs from a compliance standpoint will
be as we get into the fourth quarter and into next year, but I don't think it's
going to have a material impact on our view that we would like to get to net
income positive sometime in 2006.
RENE CARON: OK, thank you. That covers all the e-mail questions we have,
but I would like the Operator, Alan, to go back and re-poll the folks that are
on the telephone conference call, I understand there may be an additional
question or two with people queued up. So Alan, if you could do that and if
there are any additional people queued up, if you could present them to question
the management?
OPERATOR: Thank you, once again as a reminder, that it's *, 1 to ask a
question. We have a follow up question coming from Mike Shonstrom.
MIKE SHONSTROM: Yeah hi, again. The question has to do with customers in
the, in the non broadcasting side of the business, I'm just curious, you know,
what your customer base is, what kind of industries they serve, you know, your
acquisition information had a couple of industries general ... generally
addressed in that information but not specifically, could you go into that?
TOM SWEENEY: Yeah, I can give you a little bit of color, Mike. It's a
very broad customer base; extends from the Fortune 1000 all the way down into
small, medium, mid tier markets. It covers financial services, banking, health
care, biotechnology companies, pharmaceuticals, manufacturing, including IT
manufacturing as well as more standardized old line. That includes government,
municipal, state. It's, it's fairly broad so I think the right way to describe
it is that the business on the Enterprise side is primarily focused on the West
coast of the US today, from Seattle down to San Diego and out to Denver, and so
therefore doesn't really have a vertical concentration, it actually has a
geographical concentration.
MIKE SHONSTROM: So, you're not specifically targeting industries - how about
the disciplines that you're selling, is it a broad range of IT services or is it
specifically oriented towards storage centric installations?
TOM SWEENEY: Well, we certainly have a focus on storage, both storage
products across all manufacturers, the exception would be IBM, as well as
supporting products that include SAN, NAS, different types of switches, we sell
a lot of systems from Sun Microsystems as an example, so big server platforms,
backup software applications, security products, both hardware and software, our
professional services stretch from storage assessment to security assessments to
implementation integration projects. So, fairly broad but we have always said in
the past that this company has a really unique set of experience and
intellectual property that surrounds storage, data protection, deep archiving
and compliance and we'll continue to maintain that heightened discipline as we
go forward.
MIKE SHONSTROM: I mean these, so there is some differentiation when you go
to market, I mean, this is a fairly competitive environment in some respects
you're competing against the OEM's themselves in certain customer opportunities,
and I'm just curious whether that's a strong enough differentiation to enable
you to persevere in that market?
TOM SWEENEY: Well, I can give you just a quick synopsis of where some of
the differentiation is but before I do that, I'll just point out 85% of the IT
products sold around the world are sold through channel, not direct, and that's
not going to change very much I think in the near term. More importantly though,
our differentiation is significant. Today we manage over 1,300 terabytes of
storage capacity. So when we sit in front of a customer today, our operational
experience and the complexity of the environment we operate is more complicated
than 99% of the customers we talk to. That experience is of high value. In
addition, the fact that
we are willing to work across manufacturers and are not limited to just a single
technology, I think represents an advantage for us but just as importantly, our
introduction of our Enhanced First Call Service, where we will monitor the
products we sell, regardless of the manufacturer, means that we are the only
company that I know of in the world today that will monitor, track and alarm and
of the products that we sell to our customers, real time, and actually put them
in a position where we'll notify them of problems, rather than they're trying to
track it down and trying to escalate through vendors on their own. That's a real
distinction and we have seen the sale of that service take off immediately.
MIKE SHONSTROM: And that, how much has that penetrated in the PWI and Star
organizations?
TOM SWEENEY: Well, we're rolling it out commercially next week and so
we've just started signing contracts in July and August.
MIKE SHONSTROM: Gotcha.
TOM SWEENEY: That's just beginning.
MIKE SHONSTROM: Thanks.
TOM SWEENEY: You're welcome.
OPERATOR: Thank you. At this time, I would now turn the floor back
over to Mr. Caron.
RENE CARON: Thank you, Alan. We appreciate everyone's attendance on the
call this morning. I'd like to turn the call now back to Tom for any closing
comments. Tom?
TOM SWEENEY: Well again, thank you all for joining the call; we certainly
feel strongly about our second quarter performance, we're happy with it. I think
our expectations around the third quarter, I think, are appropriate, we'd
certainly love to be surprised but I think the right thing is to make sure that
we have a view that we think is consistent with past historical performance and
what we see occurring.
So as significant news events occur, we'll of course make
those announcements. Of particular note though, we are very pleased with the
activity that happened at the Patent Office; having 20 patents granted for our
Diva Archive Software product is a significant accomplishment, so that is
something that has been in the works over the last few years. And that's it,
thank you again.
RENE CARON: Thank you everybody, that concludes this morning's
conference call, we look forward to speaking to you again in the near future.
OPERATOR; Thank you. This does conclude the conference; you may
disconnect your lines at this time and have a wonderful day.