Title

Presentation

OneSpaWorld Holdings Limited misses on earnings expectations. Reported EPS is $0.12 EPS, expectations were $0.17. OSW isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good morning, and welcome to the OneSpaWorld Fourth Quarter 2023 Earnings 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 Allison Malkin, Investor Relations at ICR. Please go ahead.

Allison Malkin: Thank you. Good morning and welcome to OneSpaWorld’s fourth quarter and fiscal year 2023 earnings call and webcast. Before we begin, I’d like to remind you that certain statements and information made available on today’s call and webcast may be deemed to constitute forward-looking statements. These forward-looking statements reflect our judgment and analysis only as of today and actual results may differ materially from current expectations based on a number of factors affecting our business. Accordingly you should not place undue reliance on these forward-looking statements. For a more thorough discussion of the risks and uncertainties associated with the forward-looking statements to be made in this conference call and webcast, we refer you to the disclaimer regarding forward-looking statements that is included in our fourth quarter 2023 earnings release, which was furnished to the SEC today on Form 8-K.

We do not undertake any obligation to update or alter any forward-looking statements whether as a result of new information, future events or otherwise. In addition, the company may refer to certain adjusted non-GAAP metrics on this call. An explanation of these metrics can be found in our earnings release issued earlier this morning. Joining me today are Leonard Fluxman, Executive Chairman, Chief Executive Officer and President; and Stephen Lazarus, Chief Financial Officer and Chief Operating Officer. Leonard will begin with a review of our fourth quarter and fiscal year 2023 performance and provide an update on our key priorities as we begin fiscal 2024. Then Stephen will provide more details on the financials and fiscal year 2024 guidance.

I would now like to turn the call over to Leonard.

Leonard Fluxman: Thank you, Allison. Good morning and welcome to OneSpaWorld’s fourth quarter and full year fiscal 2023 results conference call. The fourth quarter concluded an outstanding year of financial and operating performances for our company and continue to demonstrate the increasingly powerful impact of our strategies, innovation and scale across our complex business. The quarter was highlighted by records across revenue, income from operations and adjusted EBITDA, each of which grew at a double-digit pace versus the prior year fourth quarter. The period also marked our fourth consecutive record quarter resulting in our best ever performance in fiscal 2023. Our team continues to enhance our industry-leading business model, constantly innovating our unique value to our cruise line and destination resort partners and our delivery of outstanding experiences to their passengers and guests.

We continue to vet and introduce new and enhanced services product and facilities, while utilizing our strong cash flow to further invest in our powerful business model. We begin fiscal 2024 with strong momentum and expect to deliver another year of record performance and increasing value to our shareholders. Our confidence is further buoyed by favorable trends in the cruise line industry across our top banners. In fact our positive momentum has continued in the first quarter, as reflected in our guidance. Touching on performance highlights of the fourth quarter, total revenue was $194.8 million increasing 15%, from $168.9 million in the fourth quarter of 2022. Income from operations increased 18% to $12.6 million, even as we incurred a $2.1 million asset impairment charge for the expected closure of our health and wellness center compared to $10.7 million in the fourth quarter of 2022.

And adjusted EBITDA rose 13% to $23.4 million from adjusted EBITDA of $20.7 million in the fourth quarter of 2022. For the full year, revenue — total revenue increased 45%, to a record $794 million compared to $546.3 million in fiscal year 2022. Income from operations increased $39 million or 258%, to a record $54.2 million including the $2.1 million asset impairment charge, as compared to $15.1 million in fiscal year 2022. Adjusted EBITDA increased 77% to a record $89.2 million, compared to $50.4 million in the fiscal year 2022. And unlevered after-tax free cash flow increased 75% to $79.1 million from $45.1 million, reported in fiscal year 2022 with after-tax free cash flow conversion rate of 89%. We continue to remain highly focused on supporting our operations at Sea.

At year-end we had 4,120 cruise ship personnel on vessels, increasing from 3927 and 3,566 cruise ship personnel on vessels at the end of the third quarter of 2023 and the fourth quarter of 2022, respectively. Our ongoing initiative to retain onboard staff for additional contracts is exhibiting success. We continue to expect our proportion of experienced staff members in the first quarter of 2024, to surpass the level of experienced staff members in 2019. The growth in experienced staff contributed to the delivery of double-digit growth across certain key operating metrics, as compared to fiscal year 2022 and 2019. Along with the strong financial results, the year included noteworthy progress towards our key priorities. First, we captured highly visible new ship growth with current cruise line partners.

In 2023, we added 10 new health and wellness centers as current partners launched new ships. And we entered into new agreements with Crystal Cruises and Adora Cruises. In 2024, we expect five new ship builds by existing partners. Second, we continue to launch higher value services and products. We continue to focus on introducing exciting products and services, which are in various stages of implementation including IV Therapy and Immunity Protocols and Facial Toning Devices. During the last quarter — during the first quarter, we have begun the rollout of Cryo Body Services as well as introducing the new Cryo and LED Facial Services as part of the new Elemis BIOTEC 2.0 offering. Third, we focused on enhancing health and wellness center productivity as we introduce higher value services and products, driving double-digit growth in key performance metrics, including revenue per staff per day, pre-booking as a percentage of service revenue and average guest spend as compared to 2019.

As we have mentioned previously, guests that pre-book services spend approximately 30% more on average than guests that do not pre-book. The year, saw pre-booking available on 91% of the vessels that operate health and wellness centers and this is expected to grow to 93% in 2024. Initially, in 2023, the percentage of service revenue from pre-booked guests grew 10% year-over-year from 21% to 23% in 2023. Average guest spend also benefited by refinements in length of service and pricing architecture of certain services, which resulted in increases in service frequency and a mix towards higher-priced services and products. We also increased our medi-spa offering. At year-end, we had medi-spa services on 139 ships up from 128 ships in 2022. And in 2024, we expect to expand our medi-spa offering to 148 ships.

Fourth, we expanded our market share by adding new cruise line partners. We continue to believe we have to grow our 90%-plus market share in the outsourced Maritime health and wellness market, as evidenced by our 2023 contract wins with Crystal Cruises and Adora Cruises. First, we enhanced our capital structure and strengthened our already durable balance sheet while generating positive cash flow. To this end, in fiscal 2023, we fully repaid our second lien term loan and reduced the debt outstanding on our first lien term loan by $41 million. We simplified our capital structure through the completion of a warrant exchange and invested $9 million in cash to repurchase 789,046 million shares of our common stock. For the year, we invested a total of $65.1 million for debt pay down and share repurchase activity and still ended fiscal 2023 with total liquidity of $48.9 million.

In addition, on March 19, the approximately 4.7 million warrants that were issued and outstanding as of December 31, 2023, related to the business combination, are set to expire, which will further simplify our capital structure. Before I turn the call over to Stephen, I would like to personally thank the entire organization at OneSpaWorld for their continued dedication to advancing our strategy and the guests we serve. Combined, your contributions have increased our leadership position, contribute to the ongoing strength of our business and have us poised for continued positive momentum in the near and long term. With that, I will turn the call over to Stephen, who will comment on our fourth quarter and fiscal year 2023 results and guidance.

Stephen?

Stephen Lazarus: Thank you. Good morning, everybody. As Leonard mentioned, we were extremely pleased with our performance throughout the year. Even more impressive was our ability to deliver record fourth quarter revenue as we navigated turmoil in the Middle East and an unscheduled dry dock of a large cruise ship, which impacted our results. I would like to begin by highlighting two unusual items that impacted our fourth quarter results. First, our GAAP financials include a $2.1 million asset impairment charge related to the expected closure of a destination resorts or location, given the planned demolition of that hotel this year. This charge is excluded from adjusted EBITDA and adjusted net income, for the fourth quarter and fiscal year.

And secondly, our GAAP and adjusted financials include a onetime $5.4 million or $0.05 per share deleveraging payment fee that was required under the first lien term facility agreement due to our lower net debt leverage ratio at year-end. That is included and negatively impact adjusted net income and EPS for the fourth quarter and fiscal year. I will now share more detail on our fourth quarter and fiscal year results, that we reported earlier. Total revenue was $194.8 million in the current year quarter, increasing 15% compared to $168.9 million in the fourth quarter of 2022. The increase was attributable to our average ship count increasing 9% to 184 health and wellness centers onboard ships operating during the quarter compared with our average ship count of 169 health and wellness centers onboard ships operating, during the fourth quarter of 2022.

Additionally, our initiatives to drive revenue growth in each of our onboard health and wellness centers through enhanced guest engagement and experiences, service and product offering innovations, and the disciplined execution of our complex operating protocols by our onboard and corporate teams. Cost of service was $131.8 million compared to $114.9 million in the fourth quarter of 2022. The increase was primarily attributable to costs associated, with increased service revenue of $158.9 million in the quarter from our operating health and wellness centers at sea and on land, compared with service revenue of $139 million in the fourth quarter of 2022. Cost of products was $30.7 million compared to $24.3 million in the fourth quarter of 2022, with the increase primarily attributable to costs associated with the increased product revenues of $35.9 million, in the fourth quarter compared to product revenues of $30 million in the fourth quarter of 2022.

Net loss was $7.3 million or net loss per diluted share of $0.07 as compared to a net loss of $2.3 million or net loss per diluted share of $0.03 in the fourth quarter of 2022. The $5 million increase in net loss was attributable to firstly, a $3 million negative change in the fair value of our warrant liabilities. Secondly, a $1.8 million decrease in interest expense offset by the onetime $5.4 million deleveraging fee payable to our lenders, required under the first lien term loan facility due to our lower net debt leverage ratio at year-end. And thirdly, a $2.1 million long-lived asset impairment charge, which I referenced earlier posh assets [ph] by the $4 million positive change in income from operations prior to that long-lived asset impairment.

As you know the change in fair value of that and warrants during the three months, was a loss of $10.8 million compared to a loss of $7.8 million during the three months ended December 31st, 2022. The change in the fair value of the warrant liabilities was the result of changes in market prices of our common stock and other observable inputs deriving the value of these financial instruments. Adjusted net income was $12.5 million or adjusted net income per diluted share of $0.12, including the negative impact of a one-time $5.4 million deleveraging fee or $5 million per diluted share as compared to adjusted net income of $12.8 million or adjusted net of $0.14 in the fourth quarter of 2022. Adjusted EBITDA increased 13% to $23.4 million compared to adjusted EBITDA of $20.7 million in the fourth quarter of 2022.

And then briefly for the fiscal year, as mentioned, total revenue $794 million, an increase of 45% compared to $546 million for the prior year ended, adjusted net income more than doubled to $61.9 million or adjusted net income per share of $0.63 including that negative $5.4 million or $5 per diluted share one-time deleveraging fee. This compares to adjusted net income of $26.7 million or adjusted net income per diluted share of $0.28 in the year ended December 31st, 2022. And adjusted EBITDA increased an impressive 77% to $89.2 million compared to $50.4 million in the year ended December 31st, 2022. As it relates to the balance sheet, cash and borrowing capacity under the company’s line of credit at December 31st totaled $48.9 million. In the fourth quarter, the company repaid $5 million on its first lien term loan bringing total payments for the year to $41 million.

Since the second quarter of 2022, we have repaid a total of $74.1 million in debt instruments reducing ongoing interest expense. We ended the year with total debt net of deferred financing costs of $158.2 million and importantly, a debt leverage ratio of 1.48 times at year-end which compares very favorably to our year-end 2019 debt leverage ratio of 3.62 times. As a result of our deleveraging, we have substantially strengthened our balance sheet and reduced future interest expense. In the fourth quarter, unlevered after-tax free cash flow was $16.9 million compared to $19 million in the fourth quarter of prior year. And for the fiscal year, unlevered after-tax free cash flow increased 75% to $79.1 million compared to $45.1 million in the prior year.

The company expects to continue to generate positive cash flow from operations in the first quarter of 2024 and throughout fiscal year 2024. Moving then on to guidance. For the first quarter of 2024, we expect total revenue in the range of $204 million to $209 million and adjusted EBITDA in the range of $21.5 million to $23.5 million. Our first quarter guidance assumes operating on 193 cruise ships and to operate at 51 resorts. For the full fiscal 2024 year, we continue to expect total revenue in the range of $850 million to $870 million and adjusted EBITDA in the range of $90 million to $100 million. We expect to end fiscal 2024 operating on 197 cruise ships and at 50 resorts. Overall, we feel very confident about our business outlook as we begin 2024.

Our business momentum remains strong and we expect the ongoing implementation of our strategy to deliver another year of record performance and increasing value for all of our shareholders. With that we will open up the call to questions. Operator, please go ahead.

See also 13 Best Consumer Cyclical Dividend Stocks To Invest In and 12 Best Green Stocks To Invest In 2024.

Operator: Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Sharon Zackfia with William Blair. Please go ahead.

Sharon Zackfia: Hi. Good morning. I guess a quick question on the 2024 guidance. I know that the cruise lines kind of have an unusual amount of dry docks this year. Can you talk about how that — the impact of that on your revenue in 2024 and whether that’s kind of a onetime dynamic in 2024 and then we see maybe a tailwind from more normalized dry dock in 2025 based on your insights with your cruise partners?

Leonard Fluxman: Yes. Hi, Sharon, it’s Leonard. Look dry docks are part and parcel of I would say normalized cruising. So what we’re seeing this year might be a slight slightly higher level of dry docks just because they’ve been getting ships back into service. Some of the dry docks got pushed out a little bit, but they’re all scheduled now and they happen every single year. So even though these — this year might be slightly higher than average 2025 will be back to normalized dry docks which ships have to do and are scheduled and we take it into account when we receive the itineraries from the different banners that we serve. So all of the dry docks that we have been notified of clearly are scheduled and are included in our guidance.

Sharon Zackfia: Okay. And then Stephen I’m sorry my cell dropped for like a second there while you were talking. Did you quantify the dry dock impact of that large ship in the fourth quarter? Was it material?

Stephen Lazarus: It was approximately $1 million.

Sharon Zackfia: Okay. And then last question for me. The revenue per shipboard staff per day if I’m looking at it correctly did go down a bit year-over-year. Is that kind of — I know there was some pricing that you were able to take advantage of last year in the holiday period on services. Are you seeing some more normalization there? Or is that reflective of the unexpected dry dock? Just curious on that metric.

Leonard Fluxman: Yes. I think part of it is normalization Sharon to your point. Clearly some of the unexpected nuances of dry docks in the fourth quarter and some of the ships have been impacted by the Middle East impacted that number. But other than that I think we’re getting into a very normalized territory.

Sharon Zackfia: That’s great. Thank you.

Leonard Fluxman: Thanks, Sharon.

Operator: The next question comes from Steve Wieczynski with Stifel. Please go ahead.

Jackson Gibb: This is Jackson Gibb on for Steve Wieczynski. Thanks for taking my question. So we’ve heard recently from some of your cruise line partners and they seem to be focusing more and more on pre-booking as a focus for driving onboard revenues. I’m just wondering if you could give us an update on how pre-cruise booking metrics are trending as well as collaboration progress with the operators. If there are any tangible opportunities out there, what should options be further?

Leonard Fluxman: Yeah. So you’re absolutely right. I think across the industry we’ve seen an incredible amount of energy and focus around pre-booking across the entire onboard revenue platform that’s offered on all the ships, including us. Their focus is simply making customer choices easier, getting their crews more organized, planning. But at the same time, we have seen, as they have seen, the higher amount of pre-booked revenue going into the cruise pretends to a much better spend for that week. And we’ve seen it, 30% to 35% up. I think to your point, because they’re so focused on it, we are getting tremendous collaboration with them. And we’re going to be working on different types of campaigns, email campaigns to get them to pre-book, offering, marketing.

And I think the whole technology improvement reducing the friction around the pre-booking side, is starting to impact the level of pre-book, which we said got up to 23%. We believe that will continue to grow in 2024. We now have all of NCL onboard, which came on late in 2023, which I think will have a positive impact to 2024’s level. So I think with the collaboration, with us providing more imaging and marketing, we’ll be able to drive some additional pre-booking activity. And I think with the cruise lines supporting it and their focus on it, it’s a real positive turn for us.

Jackson Gibb: Okay. That’s great to hear. And just one more, if I may. So you balanced $5 million of debt pay down with $9 million of share repurchases in the fourth quarter. Is this an approach that we should expect moving forward? I just wanted to get your updated thoughts on capital allocation priorities between debt reduction, buybacks, and the potential interest.

Stephen Lazarus: Yeah. So as you noted appropriately, we did do two things in the quarter, debt payback and claim time from share repurchases. We’re in a good position now where we have reached our targeted leverage ratio as it relates to the debt and therefore have flexibility going forward as to how we proceed. So we’ll see how it plays out, how interest rates change and how we build cash will determine how we proceed on a go-forward basis. But certainly, I think it’s appropriate to consider those items, obviously, as we have said before, not being mutually exclusive and we don’t have to focus on just one or the other. We will look at both debt pay downs and returning cash to shareholders as appropriate.

Operator: Okay. Was there a follow-up, Mr. Brzezinski, sir?

Jackson Gibb: Nope. That’s it for me. Thank you.

Operator: Thank you. The next question comes from Gregory Miller with Truist Securities. Please go ahead.

Gregory Miller: Thank you. Good morning, gentlemen. I thought I’d start high level in terms of spend patterns by customer price point. Have you seen any recent deviation and trends between contemporary banner passengers and passengers within the premium and luxury banners? Are you seeing any weak spots among the mass market cruise passengers in terms of service or retail spend? Thanks.

Leonard Fluxman: Hey Greg. No, we actually haven’t seen any drop or any change or any levels of concern or any gaps across any of the different demographics. High end and mass and contemporary are all performing well. So, we’ve seen a sign of guest demand for our services and our ability to bring them into the spa.

Gregory Miller: Excellent to hear. As for my second question, I was about to ask you about the global minimum tax. Could you provide your current perspective on any anticipated impact to your company, if any?

Stephen Lazarus: Yes, Greg. I think everybody is obviously very aware of The Organization for Economic Co-operation and Development or OECD issued a model for implementing a 15% global minimum tax. The application of the rules relating to these taxes continues to evolve, and there are countries that are still in the process of issuing rules and regulations as it will relate to those taxes. The Bahamas included has not finalized anything in that regard. So, I believe there will be any impact to one forward until at least 2026. We will obviously, continue to monitor the Serena and implement the taking actions as feasible to minimize any potential future impact. At this point in time, that is where we stand.

Gregory Miller: Okay. I appreciate. That’s all for me. Thank you.

Operator: The next question comes from Max Rakhlenko with TD Cowen. Please go ahead.

Max Rakhlenko: Hey guys. Thanks a lot and congrats on really nice results. So first, can you remind us, did you incorporate hallmark pricing or any sort of pricing actions over the holiday period? If so, how successful was it? Did you see any elasticity or anything worth calling out? And then just, if you could remind us, are you incorporating any pricing actions into your 2024 outlook?

Leonard Fluxman: So Max, hallmark pricing obviously goes in every time we go through the Christmas newer period, and it continued as we did in 2022 across most of the banners and in fact, still stays in place on some banners. We’ve seen no resistance to the hallmark pricing. And clearly, where we do, we’re able to discount, but we’ve seen less discounting than we’ve ever seen before that we might have seen in 2019 and prior to that. So, the simple answer is, it’s working. Hallmark pricing has some stickiness and where it does across different services as we in place for as long as we can. With respect to the second question, we just — can you just repeat the second question that you had there in the back half of your question, Max? Sorry.

Max Rakhlenko: Yes, certainly. So, just curious if you’re incorporating pricing actions into your 2024 outlook?

Leonard Fluxman: No. No, we haven’t incorporated any pricing leverage or pricing or targeted pricing increases in the guidance. However, we do have places where we believe pricing leverage can be taken, but we have not decided when to move on that. We’re just going to continue as we have post year-end. And we’ll kind of see how the year filters out. But given the good start that we’ve had I don’t expect that we’ll have a problem in certain areas to move it up where we can and where the demand is strong.

Max Rakhlenko: Got it. Okay. And then switching gears. Where do you think your prebooking revenue mix can go in 2024? I think you previously gave a range with 30% potentially at the high end. So just curious what’s feasible over the next both years as well as over the medium term?

Leonard Fluxman: We’ve kind of set a target long-term of where we’d like it to be which is going to take a few years. But as one of the questions was fielded earlier on in the session here. I think given that the cruise lines are so hyperfocused on moving more and more people to the prebook platform we will continue to see collaboration and continued effort to improve and get attachment into prebook. We’re making certain refinements working with them showing best-in-class what’s working what’s not working and where they can improve their sites. So our targeted number ultimately is in the low 30s. When we’ll get there I’m not sure but I certainly believe given the focus and support we’re getting we’ll continue to move positively toward that number.

Max Rakhlenko : Okay. And then just last quick one for me. But unless I missed it can you walk through sort of what drove the pressure in your adjusted service gross margin? It was a little bit outsized this quarter. So is there anything that we should be cognizant of whether it was one-time or if something should continue into 2024?

Stephen Lazarus : No, we don’t believe Max if there’s anything that should continue. It’s just seasonality in the [indiscernible]. As we always say our focus is on driving total absolute dollars and it makes absolutely no sense for us to have therapists on board that don’t work at the time that they have the payment they have user application. So as appropriate and necessary there are many tools that managers use on board including discounting — to increase utilization which drives absolute dollars. And so we’ll always focus on the absolute dollars but nothing that sticks out per se in the quarter.

Max Rakhlenko : Okay. Great. Thanks a lot guys. Best of luck and we’ll speak to you soon.

Stephen Lazarus : Thanks.

Operator: The next question comes from Laura Champine with Loop Capital. Please go ahead.

Laura Champine: Thanks. Just a little housekeeping. With the warrant set to expire mark, do you expect any change in your share count that we should know about?

Stephen Lazarus : Good morning, Laura. On a treasury basis the warrants saw, included each quarter as we do the diluted share count calculation. The interesting part that will play out here for us is to these warrants are exercised on a cashless basis. As you know they have been [indiscernible] strike price and so to the extent they’re exercised on a cash basis some of which don’t have the optionality. By the way they do have to exercise on a cash basis. That will determine how much cash comes into the company. And then it may impact — it would impact the diluted share count, because it’s not on a cashless basis. So right now we have to wait and see, exactly how that plays out. And it’s literally two weeks — two or three weeks away March 19th is when it — so we’ll have more visibility then. But remember, just from a pure cashless treasury basis, it’s already included in the share count number.

Laura Champine: Understood. If this does generate meaningful cash, would the company use that to pay down debt? Or is it not an expected windfall of that magnitude?

Stephen Lazarus: I think it’s too early to make that determination. It really is a matter of cash comes in and then we’ll see how to move forward. But again, I would reiterate, as we exhibited in the fourth quarter that we don’t have to be mutually exclusive decision-making as it relates to shareholders.

Laura Champine: Understood. Thank you.

Operator: The next question comes from Assia Georgieva with Infinity Research. Please go ahead.

Assia Georgieva: Good morning guys. Stephen, maybe the first question is for you. Given this $5.4 million one-time charge, I think you said specifically, shouldn’t we exclude it from adjusted EBITDA? And then arrive at Q4 EBITDA of close to $29 million? And related to this, do you expect as you continue to pay down the first lien term loan that you may be incurring other such charges going forward?

Stephen Lazarus: As it relates to the second part of your question Assia, no. This is indeed just a one-time payment. Further reduction in our leverage ratio will not generate any additional charges. So there will be no additional charges similar to this. It is technically already excluded from EBITDA, because it’s recorded as an interest payment. So it is outside of the EBITDA calculation.

Assia Georgieva: Okay. Thanks for that clarification. And just kind of comparing Q4 to the Q1 cadence, in adjusted EBITDA guidance. And I understand that Q1 is the weakest quarter out of the year. And again, we probably have slightly more dry-docks versus Q4. Shouldn’t we expect EBITDA to be at the top end of your range the $23.5 million, as opposed to sort of a reduction versus Q4?

Stephen Lazarus: We obviously provide a range of EBITDA that encompasses what our expectation would be. I don’t think it would be appropriate for me to say we — should you expect it to be at the high-end of the range or not. Our expectation is that it will fall — as of right now our expectation is that it will fall within that range?

Assia Georgieva: I am sorry. Stephen, just one final…

Stephen Lazarus: I appreciate that.

Assia Georgieva: Just a question on the warrants to kind of follow-up on what Laura was asking. Can you give us just a rough percentage of what part of the warrants, are cash-only exercised?

Stephen Lazarus: It’s — I will tell you that, it’s not a simple calculation because depending on whether or not sponsor warrants were subsequently transacted, they lose that capability. So there is a nuance to how much will be cashless and how much will be non-cashless. I honestly don’t know yet. That’s why, I keep saying we have to wait and see what happens between now and March 19 in order to determine exactly how much cash might come in or in fact if any of the warrants may not get exercised, I wouldn’t be surprised if they suddenly just pull away and nothing happens with them. So, I don’t know just yet. I see it’s because of the nuance around whether they were traded or not. And once they get traded, they lose the right of the cashless exercise. So I don’t know at this point in time.

Assia Georgieva: I can’t wait for these three weeks to be over because, as you can imagine for us on the outside looking in, it’s even more complicated than sometimes confusing to figure out exactly, what would happen with those warrants. So, I’m hoping for the best outcome on March 19.

Stephen Lazarus: Yes. Look that’s five years, right. Believe it or not, five years since the destack.

Assia Georgieva: Yes, we’ve been waiting. Well, thank you, very much for answering my questions.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Leonard Fluxman, Executive Chairman, CEO and COO for any closing remarks.

Leonard Fluxman: Right. Thank you all for joining us today. We look forward to speaking with you when we report our first quarter results in May. Thanks for joining today. Talk soon. Bye-bye.

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