Q1 2020 KLDiscovery Inc Earnings Call Jul 14, 2020 (Thomson StreetEvents) — Edited Transcript of KLDiscovery Inc earnings conference call or presentation Friday, May 15, 2020 at 2:00:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Christopher J. Weiler KLDiscovery Inc. – Co-Founder, CEO & Director * Dawn M. Wilson KLDiscovery Inc. – CFO ================================================================================ Conference Call Participants ================================================================================ * Gregory Thomas Gibas Northland Capital Markets, Research Division – VP & Senior Research Analyst * Jerry Wang The Carlyle Group Inc. – Principal ================================================================================ Presentation ——————————————————————————– Operator  ——————————————————————————– Ladies and gentlemen, thank you for standing by and welcome to the KLDiscovery Q1 2020 Financial Results Conference Call. (Operator Instructions) I would now like to hand the conference over to your speaker today, Dawn Wilson, Chief Financial Officer. Thank you. Please go ahead. ——————————————————————————– Dawn M. Wilson, KLDiscovery Inc. – CFO  ——————————————————————————– Thank you, operator. Welcome to KLDiscovery’s Q1 2020 Conference Call. Certain portions of our discussion today may contain forward-looking statements, which involve risks and uncertainties that may result in actual results differing materially from such statements. Important factors that can cause actual results to differ include, but are not limited to, those stated in KLDiscovery’s May 14, 2020, press release on our 2020 first quarter results in the company’s filings with the SEC, including our Form 10-Q, which we plan to file later today. All forward-looking statements are based on information available to KLDiscovery on the date of this call. KLDiscovery assumes no obligation to update these statements, whether as a result of new information, future events or otherwise. Reconciliation to the most directly comparable GAAP measure to the non-GAAP financial measures discussed on this call, including EBITDA and adjusted EBITDA, are shown in detail in our press release issued last night along with definitions for those terms. Please refer to last night’s press release on how to access the replay of this call. I will now turn the call over to our CEO, Chris Weiler. ——————————————————————————– Christopher J. Weiler, KLDiscovery Inc. – Co-Founder, CEO & Director  ——————————————————————————– Thank you, Dawn, and thank you very much for joining KLDiscovery’s First Quarter 2020 Financial Results Conference Call. My name is Chris Weiler, and I’m the CEO and Co-Founder of KLDiscovery. Like it or not, we live in interesting times. They are times of danger and uncertainty, but the times are also more open to the creative energy of men than any other time in history. I came across this quote by Robert F. Kennedy, which has resurfaced given recent events. In 1966, he said these words whilst speaking at the University of Cape Town in South Africa. This applies to KLD today. During this global pandemic, we are seeing market stress all around us. And we’ve had to contend with many factors in how we run our business, but we have been up to the challenge and has given us the opportunity to empower the creativity of our people throughout our global footprint of 19 countries. The current global crisis has provided us with an opportunity to gain competitive advantages while greatly strengthening bonds with our clients and employees. We do so while also delivering strong financial results, adding new clients and expanding existing contracts. In the future, I believe our learned experiences during this time will lead to longer-term material reductions in traditional operating expenses, such as real estate, business travel, licensing costs and collaboration tools. KLD will get better across every business services group, shared services and back-office functions. With COVID-19 forcing the business to operate completely from a work-from-home mode, these past few months have proven to us and to our clients that we can operate in even more proficient client-facing business virtually in all 19 countries. For those of you who are new to KLD, I want to provide you with some background about the company and our people. We started the company in 2005 as a regional eDiscovery provider. And today, we have grown into a leading global provider of electronic discovery, information governance and data recovery services operating in over 40 locations in 19 countries. KLDiscovery provides technology-enabled services and software solutions to help law firms, corporations, government agencies and consumers solve complex data challenges. We are a global market leader in e-discovery, information governance and data recovery in industries with the total addressable market of over $22 billion. This market is growing and expanding as companies generate increasing amounts of electronically stored information. In the eDiscovery industry, KLD is unique. We are the only technology-enabled service provider who operates its own proprietary end-to-end technology platform from data collections, processing data, analytics and review, KLD offers a custom and proprietary solution to both law firms and corporations. Our competition relies upon third-party technology and only provides the wrappers that daisy chains these disparate tools together. Our technology is outstanding, but what truly makes us different from our competitors is our people. The global KLD family is dedicated to excellence, customer service and innovation, all delivered with teamwork and humility. Since the founding of KLD, our team has built an amazing culture of dedicated professionals who deliver 24/7, 365 client service excellence. Before getting to their extraordinary performance and commitment during this global pandemic, let me talk briefly about the financial results. In a few minutes, I’m going to let Dawn Wilson, our CFO, talk to you in detail about our financial results. But first, I want to highlight some numbers for you. In short, we’ve had a very good quarter, especially given the global pandemic we are operating under. I am very proud of such positive numbers in such challenging times. Revenue was up 4.3% year-over-year in the first quarter of 2020 as we generated just over $78 million in the quarter. This is comparable to the second, third and fourth quarters last year, which also saw similar revenue levels, so there has been no fall off from the pace of revenue we have been delivering. This demonstrates the stability of the revenue that we have generated over the past 4 quarters. Our net loss was down from $13.5 million in Q1 of 2019 to $12.5 million in the first quarter of 2020 and was down nearly 28% compared to the fourth quarter of 2019. We also expanded EBITDA by 11.4% year-over-year in the first quarter of 2020. I think that is particularly impressive given global market conditions. From a new business perspective, activity is strong as we are actively signing on new customers. By way of example, in the past 2 weeks, we picked up a large second request that we are supporting a major international company that is facing a variety of COVID-related actions, and we have achieved other significant wins with new clients in the legal, financial and fashion industries during this crisis. Our proprietary Nebula platform also reached several milestones during this crisis, and we are proud to announce that we are servicing over 415 firms, 4,500 total users with over 100 terabytes hosted in the platform today. While many law firms are instituting cost-cutting measures to mitigate the financial fall-out from COVID-19, the number of litigations is beginning to rise as a result of the global pandemic. And I believe we are at the beginning of a significant upward trend. We have also taken proactive actions to improve our cash position that will provide us with the capacity and flexibility to operate into the foreseeable future so that we can create long-term value for our stakeholders through disciplined capital allocation. This includes implementing discretionary cost-saving measures and deferring certain capital expenditures when possible. Long before the world was hit by the COVID-19 pandemic, we have been preparing for the changing realities in the market that our professionals needed to be mobile and have the ability to work from anywhere in what has traditionally been at minimum a quasi-virtual business at KLD. During this time, we’ve been able to build upon a proprietary technology, proven processes and outstanding people around the world to deliver great service to our clients on a fully virtual basis. During this crisis, many of our competitors were not and are not able to have as many of their employees around the globe and deliver services remotely or continue to communicate on such a high level of clients and prospects. In a business that is all about trust and confidence, KLDiscovery has offered clients a service that they can rely on during this uncertain economic environment. As a result, we have picked up many new clients and strengthen relationships with existing ones. Virtually all full-time employees are working from home, and we have taken precautions to protect the safety of the small number of employees who do come into the company’s offices. I am proud to say that under the most unique operating environment we have ever seen, our global team of over 1,200 professionals had elevated their game and have performed extremely well over the past few months. The global KLD family has been incredibly flexible and have maintained an inspiring level of positivity and productivity. Most importantly, they have been laser-focused on delivering tremendous client service in a time when some of our competitors, both large and small, have struggled. At KLDiscovery, culture is king, and this global pandemic has made it stronger than ever. Most importantly, our senior leadership team has performed and communicated during the crisis in such a way as to build on the team’s commitment to KLD and strengthen confidence in senior management by our employees worldwide, truly a longer-term benefit and outcome for all. I am pleased to report that morale is positive. As I mentioned at our last financial results call, in May of 2018, I made a commitment to meet with or talk to every global KLD teammate. Throughout the past 1.5 years, I fulfilled that commitment. I’m continuing to interview people who joined the company. Most recently, I’ve conducted interviews with employees from Poland, the U.K. and several locations in the U.S. Everyone was enthused and comforted by the embrace and handholding shown to them by their global teammates. Our global communication and connectivity have actually strengthened during these times. At the onset of the crisis, I started doing daily videos with the global team and have continued to do so every single day throughout the past 10 weeks. I provide general corporate updates on both business lines and also congratulate team members on their birthdays, anniversaries and new team — and new project wins. That’s a great way to keep the team engaged and aware of how the company is currently performing. At KLD, our employees are very invested in the company’s success, and I have received many e-mails thanking me for our transparency and level of connectivity at a critical time. We have also begun sharing more insight into the business as a result of the crisis. As we are aggressively tracking and reporting daily on KPIs, our executive management team has high visibility into a variety of performance metrics, including daily, weekly and over the prior year, and they review our updated liquidity position each morning. The management team has also stayed in close contact with our Board of Directors. For the past few months, we have all joined weekly video calls to discuss the company and our offerings. We will continue this cadence on a biweekly schedule moving forward. I referenced creativity earlier and have certainly witnessed this internally as COVID crisis has unfolded. I’m proud of our team’s innovation and our ability to adapt. Departmental leaders are holding more calls to stay connected with their teams over video. We have Employees Spotlight podcast posted on our sites so that employees can get to know their peers better. Our EMEA sales team actually does a daily internal happy hour called the Stay in Touch. Our billing and sales operations team have done a Trivia Night to stay connected. Our U.S. sales representative held a unique virtual happy hour for a major law firm client and their KLD project management team to get to know each other better in a relaxed environment. Each person on the call covered what they have done during quarantine, worst meal they have had, famous person they would like to be stuck with, one thing you more appreciate now, et cetera. Some reps are also ordering their clients lunch deliveries and having virtual videos — virtual lunches on video. We are putting on corporate webinars in an attempt to help our clients earn CLE credits and stay in touch. I can confidently say we truly possess a deeply loyal, committed and talented global workforce. At the end of the day, this is a people business, and I’m extremely proud of our team’s hard work, accomplishments and the unique culture that we have at KLD. From a human resources perspective and the transition to the world getting back to normal, we will not rush people back into the office. In fact, social distancing in some form is something that may be with us for a long time. As I told you on our last call, we employ a large number of temporary contract employees for our document review business. In the past, KLD has always conducted document review on-site at one of our global facilities. While many of our full-time employees work remotely before COVID-19, and the company has always maintained a secure and scalable architecture to support these employees, work from home review is a new dynamic for our document review business. When the pandemic broke, we successfully executed a plan, which allows our document reviewers to securely connect to our systems and continue working from home. Using processes and systems already in place, we adapted our document review business to fit within a new remote model, allowing the service to operate continuously and seamlessly in a manner that keeps our employees’ best interest front and center while maintaining the highest level of security possible. Essentially, our approach has reviewers connected with secure 2-factor authentication to the same environment they would otherwise work out of if they were in the office, with controls in place to prevent downloading and printing documents locally and a full-time KLD review managers maintaining constant connectivity to the reviewers via phone calls, daily huddles and collaboration tools. We will continue to evaluate other ways in which we can enhance the security and productivity of our review — our remote review offering. Overall, I’m very pleased that we are continuing to meet our high security and quality standards while safeguarding the well-being of our global workforce and customers. Exiting the COVID-19 crisis, I believe, the more time working from home will become the norm for global contract attorneys. For our full-time employees, I can see a future where employees do not come to the office every day. This could help us further decrease our global real estate footprint by instituting more of a hoteling concept, which would allow multiple employees to use the same square footprint. Each of these steps can have a positive effect on potentially reducing the amount of physical space we will need going forward, which, in turn, positively impacts our bottom line. We currently spend approximately $15 million annually on physical office space, so this can have a real positive impact on profitability. As COVID-19 restrictions are eased and global businesses work towards resuming normal operations, we believe there will be a marked increase in new business opportunities. In addition to pent-up demand due to the closing of many courts, there will likely be a material amount of litigation and investigations, which occur as a result of the COVID-19 crisis. Marsh and Skadden recently noted to date that there have been more than 125 COVID-19-related class action suits filed in the U.S. In addition, there are many more individual lawsuits, regulatory and criminal matters and other proceedings that have been initiated. As companies continue to make critical and difficult decisions about workforce management, insolvency and restructuring, contractual commitments, public disclosure and employees return to the workplace, they face the risk of numerous types of litigation. I believe activity will increase significantly. And in April 2020 thought piece from Wall Street firm William Blair entitled Professional Services Analysis Near and Medium-term Impact of COVID-19, they predict in the medium-term that litigation and investigations will surge. Litigation tends to be countercyclical. So the recent economic downturn should not adversely affect the long-term demand for our services. In fact, lawsuits have already begun and will lay on top of the already strong secular demands of growing electronic data in litigation and at the corporate level. I believe that demand for our services can see a significant tailwind as we may be gearing up for a significant surge later this year and beyond. It’s no surprise that litigation will be increasing on many levels as the world begins to recover. The William Blair thought piece states that professional service firms will now outperform their peers if they are market leaders with a global presence, have a strong employee culture with differentiated industry knowledge, IP, service a large base of repeat customers with long-term engagements and deliver technology that is embedded into solutions provided to clients. I believe KLDiscovery meets all of that criteria. So I’m really looking forward to what the future can bring as our demand for our unique services offering increases. We have a proven track record of tuck-in mergers and acquisitions. Unfortunately, during these times, there are not many deals getting done, but I believe this will pick up in time. We continue to constantly assess opportunities to identify, integrate and grow revenue with cost synergies by acquiring companies that give us access to quality people, excellent clients, geography and technology. When the opportunities present themselves, we will be ready to move swiftly. In conclusion, this has been an extremely challenging yet amazing team building experience for us as our global family has done an excellent job navigating this global pandemic. I am very proud of our team and their incredible focus on delivering outstanding customer service and performance throughout this global pandemic. The fact that we have been able to deliver revenue growth and expand EBITDA in these awful conditions is even more impressive. Because of the strong first quarter, I am even more optimistic about our future as we are positioned exceptionally well for growth and innovation. I’ll now turn the call over to our CFO, Dawn Wilson. ——————————————————————————– Dawn M. Wilson, KLDiscovery Inc. – CFO  ——————————————————————————– Thank you, Chris. As Chris mentioned, we achieved very good financial results in the first quarter of 2020. This in spite of operating in the challenging macroeconomic conditions that all companies and individuals are facing as a result of the global pandemic from COVID-19. Revenue for the first quarter of 2020 grew 4.3% to $78.3 million compared to $75 million in 2019. This growth was boosted by a 7% increase in eDiscovery revenue primarily driven by higher managed review revenue in January and February. Data recovery revenue decreased by approximately $1 million over Q1 ’19 primarily due to lower volume of larger jobs. As a reminder, eDiscovery is approximately 85% of our revenues and data recovery is approximately 15% of our total revenues. From a regional perspective, we saw growth in both the Americas and APAC with a decrease in EMEA, which was driven by the decrease in EMEA data recovery revenue. The Americas account for approximately 80% of our revenues, with 17% in EMEA and 3% in APAC. We have now had 4 consecutive quarters of revenue about $78 million and continue to perform well in spite of the current global market conditions. We had strong sales in the first quarter of 2020, with some nice new client wins in the legal, financial and retail industries. Our customer base still remains very differentiated across all industries. Net loss improved year-over-year by $1 million to a loss of $12.5 million. EBITDA for the first quarter of 2020 was a positive $12.5 million and grew 11.4% compared to the first quarter of 2019. Adjusted EBITDA was slightly lower year-over-year, mostly as a result of approximately $1.4 million in public company costs that were incurred in 2020 that did not exist in 2019. In the first quarter of 2020, operating expenses as a percentage of revenues decreased to 48.6% compared to 51.7% in the first quarter of 2019. Our gross profit as a percentage of revenue for the first quarter of 2020 was fairly consistent at 49.5% compared to 50.1% in the first quarter of 2019. Moving on to liquidity. As of today, we have approximately $52 million in cash on hand. As of the end of the quarter, we had $50.6 million in cash on the balance sheet. We improved our cash flow from operations by 34% in Q1 2020 compared to Q1 2019. Q1 is typically a quarter with large vendor cash outlays for annual software agreements. So historically, Q1 is a large cash used quarter, followed by future positive cash flow from operations quarters. We have taken actions to improve our cash position to provide capacity and flexibility. These actions include implementing discretionary cost-saving measures and deferring certain capital expenditures. Additionally, as we had previously mentioned on our March financial results call, we expanded our cash position by $29 million as we drew down our revolving credit facility. This draw, along with existing cash balances and reductions in cash outlays, provide us with the capacity and flexibility to withstand a prolonged economic disruption and create long-term value for our shareholders through sensible and disciplined capital allocation. As Chris discussed and as we stated in our financial results press release last night, we are currently limited in our ability to accurately predict the financial impact of COVID-19. While some states and countries where we operate are beginning to slowly reopen and there appears to be an increase of litigation as a result of the pandemic, it is still too soon to know what effect that’ll have on the remainder of 2020. So consistent with what we discussed in our last earnings call, we are continuing to not provide guidance for 2020, and we do not anticipate giving guidance until we get more clarity from the existing challenging macro conditions. From an operating perspective, we remain well positioned for 2020 and beyond. We believe that we can still have a good financial year in spite of the current market conditions, but we will have to wait and see how the situation evolves. We will now open the call to questions. ================================================================================ Questions and Answers ——————————————————————————– Operator  ——————————————————————————– (Operator Instructions) And our first question comes from the line of Greg Gibas from Northland Securities. ——————————————————————————– Gregory Thomas Gibas, Northland Capital Markets, Research Division – VP & Senior Research Analyst  ——————————————————————————– It’s nice to see the business hold up pretty well despite the difficult backdrop and that your teams are adapting well from working from home and everything. Chris, you mentioned in your prepared remarks about the impact COVID will potentially have on litigations and legal disputes. And I know you also previously discussed there being more litigation activity during economic downturns too, but was just wondering how you think that will translate to a potential opportunity from COVID relative to maybe a typical economic recession. And then with the courts being closed, how do you weigh the benefit from COVID-related litigation relative to the impact to your business? So I mean, would you say there’s a net positive or net negative there? ——————————————————————————– Christopher J. Weiler, KLDiscovery Inc. – Co-Founder, CEO & Director  ——————————————————————————– Yes. Greg, I think it’s too early to tell exactly what the counterbalance is going to be. I think that’s one of the things that we’ve talked internally as a management team and our Board of Directors to try to pinpoint whether or not the surge in litigation due to COVID is going to counterbalance economic downturn, cutbacks, bankruptcies and things like that. So I think we’re still premature to state one way to another how that’s going to work. I mean the only thing I will say is we started to see some COVID-related litigation that we’re winning. Now whether or not that can be imbalanced to some of the other things that we’re seeing this quarter, it’s — I think it’s too early. ——————————————————————————– Gregory Thomas Gibas, Northland Capital Markets, Research Division – VP & Senior Research Analyst  ——————————————————————————– Okay. Fair enough. I guess I would just ask too if you could provide a little color on the degree to which you saw a drop-off in revenue kind of in the mid-March time frame, maybe relative to pre-COVID levels and how that’s maybe trended into April and early May? And maybe if you could disclose the impact that you think maybe COVID had on Q1 revenues. ——————————————————————————– Christopher J. Weiler, KLDiscovery Inc. – Co-Founder, CEO & Director  ——————————————————————————– Dawn, I’ll throw that over to you. I do know from — anecdotally speaking that when you take a look at our geographic footprint, we started to feel an impact in APAC in February and then certainly expanded over into Italy in our data recovery business and throughout Europe and the U.S. So it sort of, at some point in time in February, it just kind of gradually steeped into the business throughout the rest of the first quarter. ——————————————————————————– Dawn M. Wilson, KLDiscovery Inc. – CFO  ——————————————————————————– Yes. In fact, I can provide a little more detail on that. So in March, we did see a drop-off on the managed review and then we also saw a drop-off on collections and processing. But I will note for the quarter, when you’re looking at our subscription or our recurring revenue streams, the hosting, the subscription, the software for the data recovery business, the quarter — Q1 was actually higher than Q4 ’19. So we do have that recurring base. But we did see the lower margin managed review drop down a bit in March as well as collections and processing. And then to Chris’ point, we did see in EMEA or internationally more of a drop in February, and then it actually crept back up in March. ——————————————————————————– Gregory Thomas Gibas, Northland Capital Markets, Research Division – VP & Senior Research Analyst  ——————————————————————————– Okay. Great. That’s really helpful. And then we previously talked about the eDiscovery landscape being very fragmented, which has led to a lot of your attractive opportunities on the M&A side in the past. But M&A aside, is it kind of a fair assumption that some of the smaller players that you compete with that are probably less capitalized than KLDiscovery might have a difficult time remaining a going concern here? Do you think — would this maybe make the competitive landscape a bit more favorable as we eventually see a return to normal activity post the shutdown? ——————————————————————————– Christopher J. Weiler, KLDiscovery Inc. – Co-Founder, CEO & Director  ——————————————————————————– I definitely think there’s going to be some smaller firms out there that will struggle through this. That could present some good opportunities for us to partner with them for sure. Again, I think it’s — we’ve noticed on the data recovery front that there’s a lot of folks that furloughed their entire companies who are shut-downing business and that — so we know on the data recovery, as things get back to normal, when people get back to work, we’ll certainly see, I think, a nice uptick in business just because there’ll be less competitors out there. On the eDiscovery front, I think it’s too early to say. But certainly, depending on what your liquidity position was entering into this, you’re certainly going to be challenged going through this. So we think there’s going to be some of that, and we’re certainly working hard with our team to pinpoint those folks and start talking to folks as quickly as we can. ——————————————————————————– Gregory Thomas Gibas, Northland Capital Markets, Research Division – VP & Senior Research Analyst  ——————————————————————————– Okay. Got it. And then I guess the last one from me was just wondering if you could elaborate on some of the actions that you’ve taken near term to reduce your expenses. You talked about that in your prepared remarks, just mitigating maybe the impact on profitability in Q2, and maybe how much flexibility do you have in the business to reduce those nonessential spending areas during this time where revenue might see a slowdown. ——————————————————————————– Christopher J. Weiler, KLDiscovery Inc. – Co-Founder, CEO & Director  ——————————————————————————– Yes. Dawn, I’ll kick that one over to you. ——————————————————————————– Dawn M. Wilson, KLDiscovery Inc. – CFO  ——————————————————————————– Sure. I mean, in anticipation of future customers’ slow pace and the general unknown impact of the pandemic, we implemented cash reductions, including, among other things, reduced marketing, overtime, reduced travel, obviously, reduced certain bonuses and some other benefits as well as deferring capital expenditures. And in addition to that, we’re constantly monitoring all of the legislation that’s out there. We did take advantage of deferring payroll taxes, and we’re constantly monitoring it across all countries and we’ll implement or as applicable. ——————————————————————————– Operator  ——————————————————————————– (Operator Instructions) Our next question comes from the line of Jerry Wang from Carlyle. ——————————————————————————– Jerry Wang, The Carlyle Group Inc. – Principal  ——————————————————————————– Just had a few. I think you mentioned maybe you’ve won 3 or 4 cases in the quarter. Would you mind just quantifying how large those cases were? ——————————————————————————– Christopher J. Weiler, KLDiscovery Inc. – Co-Founder, CEO & Director  ——————————————————————————– The cases I mentioned probably were $1 million opportunities, somewhere in there. ——————————————————————————– Dawn M. Wilson, KLDiscovery Inc. – CFO  ——————————————————————————– But Jerry, remember that we have a very, very differentiated — we have a lot of cases, right? So these aren’t — we have many cases rolling on and off at all times. ——————————————————————————– Christopher J. Weiler, KLDiscovery Inc. – Co-Founder, CEO & Director  ——————————————————————————– Yes. I think the point that I was making in my prepared remarks was just that we have seen an uptick in some of the COVID-related litigation. And when you think about this business, second request and anti-trusts are nice cases to win. They’re usually very large. And just kind of sharing some information that those all haven’t gone away. So those opportunities that I mentioned are pretty significant. ——————————————————————————– Jerry Wang, The Carlyle Group Inc. – Principal  ——————————————————————————– Okay. Your data storage and recovery business, can you just remind us what percentage of that is kind of still that complex repair versus mobile repair or like noncomplex repair? ——————————————————————————– Christopher J. Weiler, KLDiscovery Inc. – Co-Founder, CEO & Director  ——————————————————————————– That business is — there’s probably about 20% of that business. It’s recurring software revenue. And then you have another 30% or 40% that’s the complex high-end server restores, ransomware recoveries, and then the balance would be lower-end devices such as mobiles or laptops. ——————————————————————————– Jerry Wang, The Carlyle Group Inc. – Principal  ——————————————————————————– Got it. That’s helpful. The — on the recurring side, what exact — what types of software are you providing to your clients? ——————————————————————————– Christopher J. Weiler, KLDiscovery Inc. – Co-Founder, CEO & Director  ——————————————————————————– It’s a platform called PowerControls, and it allows to do very surgical extractions of PST and other files and people’s data infrastructure. So it’s been a product that contracts that for quite some time, and it’s got a very faithful following. ——————————————————————————– Jerry Wang, The Carlyle Group Inc. – Principal  ——————————————————————————– Great. And then just last one. The — what is your U.S. to rest of the world split currently? ——————————————————————————– Dawn M. Wilson, KLDiscovery Inc. – CFO  ——————————————————————————– We have 80% of our revenues in the Americas and 17% in EMEA and 3% in APAC. ——————————————————————————– Operator  ——————————————————————————– We have no further questions in queue. I’ll now turn the call back to the presenters for closing remarks. ——————————————————————————– Christopher J. Weiler, KLDiscovery Inc. – Co-Founder, CEO & Director  ——————————————————————————– Yes. I just wanted to thank everyone for jumping on the call this morning. Obviously, we’re very excited about the future of the company. And the employees of this business have done a phenomenal job and just extremely proud of the work people have done during some very challenging times. Dawn, would you like to add anything? ——————————————————————————– Dawn M. Wilson, KLDiscovery Inc. – CFO  ——————————————————————————– No. I concur with what you said. Thank you, everyone, for joining. ——————————————————————————– Operator  ——————————————————————————– Ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect.
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