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Presentation

STRATA Skin Sciences, Inc. misses on earnings expectations. Reported EPS is $-0.04 EPS, expectations were $-0.00727. SSKN isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Greetings, and welcome to the STRATA Skin Sciences’ Fourth Quarter 2023 Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Rich Cockrell, STRATA Investor Relations. Thank you, Rich. You may begin.

Rich Cockrell: Thank you, operator. Good morning, everyone, and thank you for joining us for the STRATA Skin Sciences Fourth Quarter and Full Year 2023 Earnings Conference Call. Earlier today, we released our financial results for the quarter ended December 31, 2023. You can find a copy of the press release on the company’s website. Before we begin, I’d like to remind everyone that this call may include forward-looking statements. These statements are not guarantees of future performance and involve risks and uncertainties that could cause actual results to differ materially. We encourage you to review the SEC filings, which highlight these risks and uncertainties. The company does not commit to updating any forward-looking statements as new information becomes available.

Now, today on the call, we have Dr. Dolev Rafaeli, our CEO; and Christopher Lesovitz, our CFO. Each will provide an overview of the company’s Q4 performance and discuss the strategic outlook. After their remarks, we will open the floor for questions. And with that, I’d like to turn the call over to Dolev. Go ahead, sir.

Dolev Rafaeli: Thank you, Rich, and good afternoon, everyone. Reflecting on 2023, it’s evident that it was a pivotal year for STRATA, characterized by strategic leadership adjustments, product innovation and substantial market expansion. The strategic change in leadership at the end of the year, which saw my return to STRATA in October, marks a significant commitment to our proven strategic vision that drives growth and operation excellence. A robust reinvigorating of the direct-to-consumer, DTC recurring revenue model has been a cornerstone of our strategy. Proving to be a vital element of our success, especially evidenced during my previous tenure as CEO for our core XTRAC business between 2011 and 2015 and from 2018 to 2021.

It was these periods that marked a transformation in STRATA, steering the business towards positive cash flow from operation, expanding our footprint both domestically and internationally, streamlining operations and sparking innovation through a launch of new product and service. Central to our plan has been the focus on our flagship products, the XTRAC, VTRAC and TheraClearX. A key highlight of the year was the success of introduction of our TheraClearX Acne Therapy System in January of 2023. By year’s end, we placed 92 devices under the recurring procedure model. During 2023, STRATA also significantly increased its domestic and international recurring revenue installed base to 964 XTRAC devices as of December 31, 2023. This expansion underlines our capability to innovate and efficiently respond to market demand.

Just last month, we took an important step to secure our future growth through the amendment of our credit facility with MidCap Financial Trust. This adjustment in our financial strategy ensuring alignment with the company’s current and future business projections in supporting operation and capital needs is crucial for our continued growth and further expansion of assets. More recently, we have initiated a campaign to extend insurance coverage to essential dermatological conditions, aligning with our mission to enhance patient access to vital treatments through the improved insurance practices and broadly inclusion of CPT codes. Initially, our efforts are concentrated on securing payer coverage for XTRAC treatments for multiple indications, including vitiligo, CTCL, alopecia areata and atopic dermatitis.

This initiative is a testament to our commitment not only to increase the accessibility of our treatments but also to advocate for the well-being and quality of life of those affected by these conditions. I note that not all of these conditions are currently approved indications, but we are in the process of moving forward to see if such use may be approved in the future. Leveraging our best database of over 270,000 pest XTRAC patients, we are actively collaborating with prominent patient advocacy groups in the Blythe dermatology key opinion leader community. STRATA also commenced targeted advocacy with legislators to enhance access to the XTRAC fleet. As we continue to ramp up the DTC revenue model in 2024, we remain laser focused on executing our key strategic priorities.

First and foremost, we are working diligently to drive utilization and rationalizing placements of both our XTRAC and TheraClearX devices. This involves leveraging our strengthening balance sheet to rebuild and expand the DTC capabilities and stimulate patients demand. By bringing patients directly to physicians’ offices, we can increase procedural volumes and device utilization thereby generating incremental high-margin recurring revenue. Let’s now pivot to review to the review of our financial landscape from our CFO, Chris Lesovitz, and then I will explain a little bit more on the operational side. Chris.

Christopher Lesovitz: Thank you. Dolev. Let’s dive into our financials for the fourth quarter and full year 2023. Our total revenue for the quarter was $8.7 million and $33.4 million for the full year. This decrease from the prior year is reflective of the decline in recurring revenue for the company, which we are now shifting back to in 2024. A crucial element of our approach involves risks centering our efforts on our foundation foundational business, collaborating with doctors’ offices and driving customers to them. This is a return to our roots, a strategic maneuver to enhance the utilization rates within our recurring revenue model, and we are confident that these efforts will start to show a tangible impact in 2024. Breaking down the total revenues.

Our global recurring revenues for the full year 2023 were $21.5 million, as compared to global recurring revenues of $23 million for the full year 2022. Equipment revenues were $11.8 million for the full year 2023, as compared to $13.1 million for the full year 2022. Looking forward to 2024, we are building upon a launch of the TheraClearX system, in which our emphasis on recurring revenue has started to shape our revenue mix. This strategic pivot is designed to enhance long-term sustainability and profitability with an emphasis on TheraClearX being reimbursed from CPT, and continuing our focus on the recurring model for XTRAC. Turning our attention to our operational efficiencies, particularly within our selling and marketing and G&A areas.

I’m pleased to share that we’ve taken deliberate steps to refine our cost structure. In the latter half of 2023, we implemented reductions in sales and marketing expenditures, which are expected to come to full fruition in 2024. This is part of our broader strategy to return to a leaner expense structure as previously seen in 2019. In addition to the cost savings above, we intend to eliminate non-productive accounts, not only by reducing the costs associated with servicing but also repurposing those materials. On the G&A front, we have experienced a slight increase in expenses to $10.5 million, driven largely by one-time legal and accounting costs and transitions within our executive team. Our strategic plan for 2024 will optimize the utilization of our devices, maximize operational efficiency, and ultimately, improve our bottom line.

These adjustments reflect our proactive stance in ensuring STRATA operates at a sustainable and competitive cost base, allowing us to invest more deeply in growth and innovation. The full financial impact of these changes is anticipated by the end of 2024. Finally, despite a net loss for the quarter, which included the $2.3 million goodwill impairment recognition, mentioned in our earnings release, we are confident in our strategic direction. Our balance sheet remains strong with a solid cash position to support our growth initiatives. Cash and cash equivalents and restricted cash at December 31st, 2023 were $8.1 million compared to $6.8 million at year-end 2022. With this stronger position, combined with the anticipated revenues from the sale or use of our products, operating expense management and our amended credit facility with MidCap Financial, we believe we are well-positioned to continue growing into 2024.

I’ll now hand the call back over to Dolev to discuss our strategic outlook and operational priorities.

Dolev Rafaeli: Thank you, Chris. As we conclude the fourth quarter, we remain focused on aligning our operations more closely with the evolving market demand and our long-term vision for STRATA. This quarter has been a foundational in setting the stage for the reinvigorating of our DTC marketing and business model, an approach we believe is critical for sustainable growth and enhanced profitability. Our journey towards this strategic realignment highlights our commitment to leveraging the inherent strengths of our business, particularly our close relationship with physicians and our robust clinical support infrastructure. These elements are pivotal not only in driving utilization of our devices, but also in creating valuable opportunities for both STRATA and the healthcare providers we partner.

Our goal is to significantly improve our margins through highlight — heightened device utilization, generating substantial recurring revenue in the process. The core DNA of the DTC approach is providing unparalleled support at every touch point; the patient and provider insurance benefits support, the patient co-pay support, and provider clinical support and patient advocacy. It’s important to acknowledge that shifts of this magnitude require time to fully manifest in our financials. The previous focus of our efforts, the direct-to-provider marketing has laid a solid foundation, yet the move towards a more DTC-centric approach marks a return to a proven strategy that has historically driven our growth and success. As we advance, our primary focus will remain on maximizing the economic efficiency of each device placed.

In the coming quarters, we anticipate the impact of these strategic shifts to become increasingly evident in our performance metrics. The XTRAC partnership represents a cornerstone of our strategy to enhance recurring revenue streams. Usage is driven by both STRATA, facilitating a patient appointment utilizing DTC, as well as by the provider prescribing their own patients. The DTC approach fosters a halo effect in which patients are driven both directly as well as indirectly to the procedure. As a reminder, the XTRAC procedure benefits all; the patients received a side effect-free clinical effective procedure; the cost for the insurance payer is the lowest of all alternatives; and the partner clinics generate incremental revenue. This slide encapsulates the past ebb and flow of patients’ engagement within our practices, punctuated by the influence of our DTC marketing efforts.

The initial needs marked in blue show cases patient interest in our XTRAC Excimer Laser treatment. Dark gray highlights the scheduled appointments, a direct result of our targeted marketing campaigns. The green bars are our RDX charts, reflects the translation of leads and appointments into actual new patient charts ready for the treatment. As we started ramping up our DTC efforts in 2024, we have focused on four geographic areas; New York City, Florida, Texas and Illinois. We’ve selected these areas to validate our historical cost per lead which is around $30 to $40. And our historical cost per in-clinic patient appointment which is approximately $300. Each of the patients whether driven by DTC or provided or provider generated generates a patient chart in STRATA proprietary RDX system, which allows the tracking of insurance benefits and supporting the providers and patients in fully realizing this.

As a reminder, during 2019 and 2021, we were able to drive 5,000 and 6,000 thousand patient appointments respective contributing about 25% of the overall new patients [indiscernible]. As the value of full course of treatment of an individual patient to STRATA and to the partner clinics is more than $1,200 in $2,900 respectively. Successful capture of these patients in the clinic and into procedures is critical and our key monitors as these newly generated appointments are underway. For 2023 with DTC underutilized, STRATA had a total of 185 leads, 23 appointments and 11,787 RDX charts. These numbers represent our baseline as we reinstate our DTC. Our DTC campaign started ramping up in the second half of January 2024 and we’ll continue expanding as we increased the number of targeted periods.

The unit economics for each individual XTRAC device is the best measure — is best measured by an average revenue per device. Prior to the pandemic in 2018 and 2019 when DTC was the core focus, we saw significant growth in the number of XTRAC devices deployed as well as an increase in the average revenue per device. In 2019, each of the 820 partner clinics generated on average $7,200 per quarter. Post-pandemic, while the business has mostly returned they are company focused its marketing resources on direct to provider initiatives increasing sales and marketing expenses from $12 million to over $15 million, while reducing the DTC initiative and its costs. The impressive 13% growth in domestic installed base from 820, 2019 to 923 in 2023 was coupled with a lack of DTC driven appointments and its associated halo effect resulting in a reduction of 25% — sorry, 28% in the average revenue per device per quarter to approximately $5,200 per device per quarter for 2023.

The expansion in the installed base lays a robust foundation to revitalize our DTC initiatives aimed at boosting procedure volumes, enhancing device utilization and driving up the average revenue per device per quarter all while being able to rationalize the size of the installed base. The TheraClearX system represents a parallel success story with 92 devices already active in clinics focusing on cash-paying patients yet the substantial opportunity lies in integrating the TheraClearX into our clinical dermatology network where the focus shifts to insurance reimbursed treatment. This pivot not only reduces the financial burden on the patient, but also promises improved clinical outcomes thereby potentially increasing patient volume and device utilization.

Late in the fourth quarter of 2023 we have started transitioning existing accounts and adding others to the insurance reimbursement cuts. To date, our insurance benefits team has processed several hundred individual patient charts resulting in 86% payer pre-authorizing a course of our treatments for patients and providers all across the country. The CPT treatment code average Medicare payment rate is approximately $120 with private payers sharing. STRATA already owns approximately 200 TheraClearX devices and each additional patient represents approximately $500 and $1,200 of potential incremental revenue for STRATA and provider, respective. Internationally as we expand into new markets, our installed base of over 1,400 XTRAC and VTRAC devices continues to provide a robust and reliable revenue stream.

In closing, I want to emphasize the strides we’ve made in 2023 as we recommit to our DTC model and capitalize on our expanded installed base. The strategic efforts are integral to our mission of enhancing the patient and physician experience and are the driving force behind our anticipated growth and margin improvement. Looking ahead, our commitment to operational excellence and strategic marketing will elevate STRATA’s profitability and shareholder value in the near-term. We thank you for your support and look forward to navigating the future with confidence and clarity. Let’s now open the floor for questions. Operator?

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Operator: Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Jeffrey Cohen with Ladenburg Thalmann. Please proceed with your question.

Jeffrey Cohen: Hi, Dolev and Chris. How are you?

Christopher Lesovitz: Hi Jeff.

Dolev Rafaeli: Hi Jeff.

Jeffrey Cohen: So, firstly, could you talk about how you’re planning on defining nonproductive accounts and perhaps give us a sense of what percent of accounts out there are currently either hauling beneath that nonproductive line?

Dolev Rafaeli: Absolutely. I’ll start with that and Chris can then ad on more metrics if you wish. So this initiative is not new. This was already discussed by a previous management going into the third and fourth quarter of last year. However, as you’ve been following this business for several years now, you know, that probably the most important metric in how this business becomes profitable is how much revenue we generate per device, because almost every other expense is fixed. So for reference in 2018, our average revenue per device was in the range of $5,000 per device per quarter and we were able to push that up with all of our initiatives in D2C to almost $7,500 per device by the end of 2019, so 2019 represented about $30,000 per device.

In 2019, we have 820 devices, the same installed base of net, the company at the other hand are almost the same installed base met the company at the other end of pandemic coming into 2021 as the company started extending the installed base. Coming out of pandemic in 2021, the business or the year was a story of two halves. In the beginning, offices were coming out of the pandemic and started starting their businesses back up. But then by the end of 2021, we were back at the same run rate. So if you look at 2021 as a whole, the average revenue per device for 890 devices by the end of 2021 was approximately $25,000 per device. Now fast forward to 2023, we have over 900 devices in the market, 923, however, the average is about 21,000 for the whole year.

And that gives us an opportunity. The opportunity is either reviving existing devices or removing them and using them instead of building new devices when we start expanding again. The threshold metric would be obviously how much revenue this device is generating or how much this device can generate. But as a whole, if you look at this as an install base, every one of these devices that does not generate in excess of — on average, in excess of $15,000, $16,000 is not contributing to the bottom line. And that’s the target. So the target is going to be to optimize the install base on the one hand and increase utilization on the existing install base on the other hand. I would not anticipate very strong moves in the install base either way. If you look back into the company’s disclosures in the past, we have every year removed in the range of 100 to 120 devices.

And in the years that the company was expanding, we’ve placed more than 100 or 120. And in the years that the company was shrinking, we’ve placed less than 100 or 120. So it’s not going to be the complete stop of expansion, but it’s going to be somewhat of a shrinkage of non-performing devices just in order to replace them with accounts that can be more productive as we reintroduce DTC. Chris, do you want to add something?

Christopher Lesovitz: No, I think you nailed it pretty much there. As Dolev mentioned, the main goal here is to get these non-productives out and use that excess inventory for us internally at the warehouse. And then, we redeploy them to actual producing dermatology offices. Exactly. Yeah, Dolev pretty much summed it up pretty good.

Dolev Rafaeli: So Jeff, it’s more a movement within the balance sheet. So instead of having to recreate additional devices, new devices and move them into PD&E, we already have them. We’re moving them away from non-productive accounts either into other productive accounts or into the warehouse so that these can be utilized into productive accounts.

Jeffrey Cohen: Got it. Okay. Could you talk about alopecia a little bit as far as what’s the recommended number of treatments over what duration and are there any current data points or studies ongoing?

Dolev Rafaeli: So, great question. Alopecia and some other indications are indications that have extensive clinical data. I will make sure to follow up after this call and send you clinical data for that where the eczema laser is used for the treatment of these conditions. Specifically, I was talking about alopecia areata, which is the hair loss patches caused by autoimmune diseases. And I was also talking about CTCL, which is another autoimmune inflicted disease. These conditions are and have been used by clinicians or the extract has been used by clinicians to treat them. And these conditions are being treated from the company’s perspective, they’re being treated off-label because the FDA labeling of the device is for the treatment of psoriasis, vitiligo, atopic dermatitis and leukoderma.

However, these conditions are being treated, have been treated over multiple years and are being paid and accepted by the commercial payers. What we are trying to do is we’re trying to bridge that gap. We cannot actively promote anything that’s not labels. So that’s firmly on the FDA front. And so we’re in actively promoting it. We’re providing clinical data, but we cannot promote the use of the device. I can look — and we can also — it’s very hard for us to have to negotiate with the payers if it’s an off-label indication. However, we have very solid track records of these conditions being approved by and paid by the payers both Medicare as well as private payers.

Jeffrey Cohen : Okay. Got it. On next question could you talk a little bit about some of the clusters out there OUS as far as direct and growth in say LatAm, Europe as well as Asia?

Dolev Rafaeli: Yes. So our biggest clusters of users have always been in Asia, China, Japan, South Korea — China, Japan and South Korea as well as in the Middle East. These markets are different from each other in the sense that in some markets, like, Japan and in South Korea, this procedure is covered by the insurance company, healthcare insurance companies. And we have been accepted — as a brand, we’ve been accepted as the leading brand in these markets and we do take a leading position in that market in terms of the market share of providers using this, where the other markets are either more aesthetically driven. So China, where it’s mostly cash pay or state healthcare insurance driven, like the Middle East, mostly the Kingdom of Saudi Arabia and the other countries there.

We have north of 1,500 devices in these markets and we had them for over 14 years. We started doing this 14 years ago, and the sales into these markets is broken into three components. We sell capital equipments, we sell new devices and that is used for replacement of existing devices and going into new accounts. We sell parts and consumables into these markets, which represents about one-third of the revenue, where the excimer laser requires gas and other components to maintain it. We’ve seen this — in these markets as well as in the domestic markets that the lifespan of these — of the XTRAC device has been, well, north of 10 years. We have devices that have been in the market for 14, 15 years, but it does require [indiscernible] gas and parts.

And the third component, which is something that we’ve introduced in 2021 is the placement of devices and basing on recurring revenue, which is started at the end of 2020 and grew to the extent of about $1.5 million in revenue annually as of last year. This was true for all of the Asian markets. One of the Asian markets, China, decided to move away from that, mostly because of their limitations on maintaining devices in the market that are not owned by them, but we continue having placement devices in Korea as well as in Japan. This allows users to commit to the therapy without having to commit to hundreds of thousands of dollars in the cost of the capital equipment.

Jeffrey Cohen : Okay. Got it. And then lastly for us, if I may, ask you a little bit on 2024. So firstly, I’m wondering how many therapy or devices you aspire to have in at the end of the year? And then secondly, no guidance on top or bottom line. You did mention growth. Are you referring to 5% growth or 20% growth or any idea there that you can now provide that does it for us?

Dolev Rafaeli: So let me start with the second question. The key initiative in 2024 is to — is to bring the company back into a growth mode and the recurring side, while maintaining the other components of the company. Now I’ll vote to parse the referring side. So the recurring side has three components. One, I just spoke about which is the non-US and as I said there are some there are — it’s an existing and growing market, very stable. We’ve been in these markets for many years. We are the leading brand. And — it’s very and I want to say easy, but it’s a very efficient transaction for us as well as for the distributors and the customers on that side. And in 2023, as I said it was — I mean, you can see this in the 10-K, but it was approximately $1.5 million for these markets.

The second component and you touched upon this is the TheraClearX. So the Company owns in terms of have acquired about 200 devices. So without having in that investment sits in the PEG and in the beginning at balance sheet and the deployment of these devices and getting them to utilization was the prime target of the changes we’ve made at the end of Q4 2023 when we decided instead of continuing to pursue cash-paying patients or cash-paying physicians or physicians who are collecting cash for procedures. We have pivoted towards going after clinics where the insurance reimbursement is the main target. And as I have explained in the third quarter earnings call in November, this is the goal. And we’re first going to be tracking through. Can we get these clinics to use the procedure?

Can we get patients are cleared through insurance? And then can we get on the other — on the other hand can we get the clinics to collect on the procedure, as they’re being reimbursed. As I said in my prepared remarks, but now we had several hundred patients submitted to insurance. We handle very high percentage of approval rates, very nominal non-approval rate. And now we’re on the back end of that, looking at them at providers of treating the patients, submitting for reimbursement and getting paid. And as I said in my in my remarks what we see is that, the average Medicare rate is about $120 and the private payers are paying them on average that amount, but it but in some areas it’s much higher than that. There are some areas it’s lower than that.

As we said now we have hundreds of patients in the process of being treated and of payments being collected. And I would assume by the end of the first quarter, we’ll be able to provide actual guidance on what would we anticipate, recurring revenue per device to be grow too and what would be the number of devices we anticipate having by the end of the year. I can say this is a sizable for the first quarter. We are seeing a growing acceptance of the usage of the reimbursement and that is happening in light of two trends. One is there was another device in the market too that, took a lot of attention in the last couple of years and there is disappointment from that device lots of it’s technology. It’s a different company and lots of its technology of the inability of driving patients for cash pay and realization those patients can get covered by insurance and their exposure is there out-of-pocket co-pay and having done that now in all regions from the country with a very large number of payers gives us a lot of confidence that by the end of Q1, we will be able to provide guidance on our quality targets as revenue.

And I hope that explains that. On the extra video, I did speak about where we want to be. So, we are we’ve ended 2023 at just over $5000 doors, as of if we could get by the end of 2024 to be where we were at the end of 2021 which is the range of $7000 — $7200 per device for the fourth quarter. This is going to be this is going to be a great outcome because it’s going to provide a meaningful upside on the recurring run rate. I’ll just as a reminder, the recurring revenue for the company has been in decline for the past several quarters. So, being able to get to a softwood have declined let’s start seeing the decline in my eyes would be public.

Jeffrey Cohen: Perfect. Okay. That does for us Thanks for taking the questions.

Operator: Thank you. [Operator Instructions] Our next question comes from the line of Jonathan Lawrence with [indiscernible].

Unidentified Analyst: Hey Dolev and Chris, how are you doing? My question was answered. Can you hear me?

Dolev Rafaeli: Yes.

Unidentified Analyst: Okay, great. I was just curious on the direct to consumer business. How is that going as far as the traction in both extract and also on TheraClearX? What you saw previously when you were doing this and kind of if anything’s changed or it’s the spend dollars and getting the leads?

Dolev Rafaeli: Well, great question. Thank you. I’ll just point out to a few things I said through my prepared remarks. When STRATA left off DTC which was the beginning of 2022 via a video detection standard direct-to-consumer spend for the year of 2021 was in the range of approximately $2 million. That’s $2 million generated about 6,000 enforcements which were approximately 25% of the new patients introduced into the clinic. So, if you wish the Company subsidizes about 25% of the patient growth into the clinic. In 2022, the company our stopped doing DTC and then in 2023, it moved most of its resources towards our direct to provider marketing and promoting the new therapeutics. By going back to DTC, we would like to see the restart of getting these leads and getting these sales.

And the most important first step was to reestablish where are we in terms of costs? Because two years have gone by, the cost of media has changed. The rules on online advertisement have changed. The available solutions are being promoted through social media and online have changed to different of pharmaceutical companies. So we wanted to see where we stand. We started doing DTC in the second half of January of 2024, with only four territories as I mentioned in my remarks, in anticipation to see where we stand in terms of results, and we were happily surprised to see that our cost per lead in the range of $30 and our cost per appointment in the range of $300 remains stable. We have since extended to additional categories, which I will be happy to provide more details as first quarter ends.

And we’re seeing a growing number of leads, a growing number of appointments being scheduled into a clinic. And by that we should see the results of the DTC in the range of two to three months into the campaign because it takes time for the time of the year. We have fortunately scheduled, the first appointment happens. The procedure is prescribed and then the patient starts getting creative around then there is construction of treatment codes and we see occurring our wait [ph]. We — I would like to be at the end of 2024 in the position to say that in Q4, we spent as much as we spent in Q4 of 2021. And I would also like to be in a position to say that at the end of Q4 2024, we’ve generated as many appointments as we had at the end of 2021. I provided in my remarks, the baseline, so that a subsequent conference calls, people will be able to follow through the success or the progress of this initiative.

But I am confident that with these levels of cost per lead and cost per appointment, we will be able to expand the efforts meaningfully through the end of Q1 and well into Q2

Unidentified Analyst: Okay. Thank you very much.

Dolev Rafaeli: Thank you, John.

Operator: Thank you. There are no further questions at this time, I would like to turn the floor back over to Dr. Rafaeli for closing comment.

Dolev Rafaeli: I would like to thank everyone for showing up for our earnings call. We will be back at the end of the first quarter to provide further updates. Thank you very much.

Operator: This concludes today’s teleconference. You may disconnect your lines at this. Thank you for your participation.