ABM Industries Incorporated (ABM) Q2 2016 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen and welcome to the ABM Industries Second Quarter Fiscal Year 2016 Conference Call. At this time, all participants are in a listen-only mode. Later, there will be a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the call over to Susie Choi, Head of Investor Relations. Ma'am, you may begin.

Thank you all for joining us this morning. With us today are Scott Salmirs, our President and Chief Executive Officer; and Anthony Scaglione, Executive Vice President and Chief Financial Officer. We issued our press release yesterday afternoon announcing our second quarter fiscal 2016 financial results. A copy of this release and accompanying presentation can be found on our corporate Web site. Before we begin, I would like to remind you that our presentation today contains predictions, estimates and other forward-looking statements. Our use of the words estimate, expect and similar expressions are intended to identify these statements. These statements represent our current judgment of what the future holds. While we believe them to be reasonable, these statements are subject to risk and uncertainties that could cause our actual results to differ materially. These factors are described in a slide that accompanies our presentation. During the course of this presentation, certain non-GAAP financial information will be presented. A reconciliation of those numbers to GAAP financial measures is available at the end of the presentation and on the company's Web site under the Investor tab. I would now like to turn the call over to Scott.

Thanks, Susie. Good morning and thanks to everyone for joining today's call. By now, I am sure you all had a chance to review last night's press release discussing our fiscal 2016 second quarter results. Before I get into the details of the quarter, I want to share with you where we are on our 2020 Vision journey. I am happy to report that we are tracking extremely well on our transformation plan which we presented at our investor day in October of last year. Last month we officially completed what we have communicated as the first phase of our 2020 Vision transformation. Phase one's primary focus was to design an organization that would support our new go to market strategy by industry group rather than by service line. What that means in real terms is that the organizational design is complete. We have people in seats and we have officially established our industry groups with new reporting lines and roles within each group. With the completion of phase one, we have now delivered on our 2020 Vision's savings target for the first half of 2016. Actually, we are at the high end of our projections with approximately $6 million in savings realized year-to-date. This shows that we are already seeing benefits on the cost side of our organizational restructure. This positions us to achieve realized savings at the higher end of the $10 million to $20 million target for the full year and we continue to expect to achieve our $40 million to $50 million run rate margin improvement by the end of 2017. Additionally, as part of phase one, we commenced several foundational activities that will accelerate in the coming months. This includes initiating our shared services infrastructure and beginning our procurement activity. Both have begun to develop and will bring long-term value to the business. We are now entering phase two where we will create the uniform sales and operational framework that will be codified across the enterprise. This includes developing account planning programs to each of our clients, implementing detailed labor management methodologies creating process tools and providing enhanced learning and training for our people. The timing of phase two activities will extend well into fiscal year 2017 as planned. One key activity I would like to highlight in phase two will be a focus on full account migration into our newly defined industry groups. In essence, aligning accounts that were in our onsite business into each of the individual industry groups. We will be transitioning accounts over the next several months so we are fully operating and serving our clients within our new structure. The account migration process is anticipated to be fully completed by the first quarter of fiscal 2017. I mentioned this on our last call but I believe it's important to reiterate that our transformation requires a tremendous amount of effort and diligence from our employees and our leadership team. I am so proud of how we continued to prove our ability to grow our business and execute financially while simultaneously managing this transition. Before I get into our operational performance, I want to discuss the increase of our full year guidance outlook to $1.55 to $1.65. Our increase is due to timing of savings associated with 2020 Vision and other strategic project investments that have not yet occurred. I would like to give you a bit more clarity on what that specifically means. As we were going through our organizational design process in phase one, we identified areas of investment in order to support our new structure and goals. Some of this was difficult to pre-determine and some projects were purposefully put on hold prior to the organizational design being completed. As an example, we have created and designed a learning and development organization within our HR business function. We do not have those specific skill sets in-house and will need to go to the outside to source that talent which could take time. This was no way able to be anticipated prior to the outset of the transformation. While we will proceed with all of our identified investments, it's difficult to determine exactly when some of these expenses will be incurred. We have raised our guidance outlook to account for the timing associated with these investments. That being said, we are moving forward in many areas including bringing on new talent. And on that note, I am very excited to announce that we have been able to fill several important roles this quarter. This includes our new Chief Information Officer, Bill Popper. Bill joins us from W. P. Carey where he was the CIO of that $10 billion global real estate investment trust. We also have brought on Richard Chalker, who joins us as Senior Vice President of Strategy and Transformation. Richard was most recently the co-head of global corporate real estate for Morgan Stanley. Both two great hires for the firm. Now let's discuss our second quarter. Anthony will go into more financial detail in a minute but at a high level, I am pleased with this quarter's execution. We demonstrated strength in the top line, primarily driven by organic growth and supported by incremental revenues from our technical services acquisitions. For our janitorial segment, we saw expansion of business with several of our top clients. We had new customer wins in education at South Carolina's Anderson County school district and at Paradise Valley unified school district in Arizona. We also had a terrific win in our sports and entertainment business with Nationals Park, which is the home of Major League Baseball's, Washington Nationals. Our ABES technical services business demonstrated an outstanding quarter with strong revenue growth and we expect this performance to continue throughout the remainder of the year. However, keep in mind that going into Q3 and Q4, year-over-year comparisons may not be as material as ABES performed extremely well in the second half of 2015 as opposed to the first half of 2015 where they had a slower start. In our Air Serv business we continue to see double digit revenue growth. Some of this growth was due to expansion in our major markets and not unlike a startup of a new piece of business this takes time to properly staff and scale, so we had some impact on short-term margins this quarter. Regarding our overall profitability for the firm, when taking into account the estimated impact of insurance and one extra working day during the quarter, we are delivering on our internal expectations for the first half of the year. So our business is performing well. We are on track with our transformation plan and we are managing the growth and profitability of our business as we progress. All key indicators that our 2020 Vision strategy is beginning to take hold are coming to fruition. Lastly, I would like to share a personal note. Two weeks ago, we held our first 2020 Vision planning conference with the senior leadership team that emanated from our organizational redesign of phase one. I was genuinely moved by the excitement and commitment our employees have for our 2020 Vision. I was also able to share with them that we have entered the Fortune 500 for the first time in our company's history, a true milestone for a 100 year old firm. I have always communicated that we are transforming our business from a position of strength and being included in the Fortune 500 underscores that fact. I have been at the firm just over 13 year now and I can tell you that I have never seen such enthusiasm and hearty discussion around the future opportunities for this company. It is clear to me that we have the right strategy, the right team and over time we will be even more aligned with our client's needs to help them solve their problems. So, thank you again and with that I will hand the call over to Anthony for further details on our financial performance.

Thank you, Scott, and good morning, everyone. As Scott described, we have now created the organizational design that will enable us to fully realize our 2020 Vision strategy. We are all excited to begin operating under this new structure and I look forward to sharing our progress with all of you moving forward. Today, I will review our performance for the second quarter and discuss our revised guidance. I would like to remind everyone that I will be referring to the results from continuing operations which exclude the sale of our security business. Now for a review of the second quarter, which is described in today's earnings presentation that I will refer to periodically. Revenues for the quarter were up 6.9% versus last year, driven by organic growth of 4% and roughly $34 million of revenues from acquisitions, which are primarily reflected in our building and energy solutions segment. We ended the quarter with adjusted EBITDA of $46 million and an adjusted EBITDA margin of 3.7%, which we believe was a strong end to the first half of the fiscal year, given the expected impact of insurance and one extra working day during the quarter. Higher margin tag revenue and janitorial and higher revenue contribution from the ABES business, partially offset these additional expenses. The quarter also benefitted from the 2020 Vision savings which Scott referred to earlier. Adjusted income from continuing operations was $17.7 million, or $0.31 per diluted share compared to $19 million or $0.33 per diluted share last year. While I will discuss the revised guidance outlook shortly, I would like to note that we remain on track to achieve a run rate of $40 million to $50 million and operational efficiencies related to our 2020 Vision by the end of 2017. However, we are currently benefitting from savings related to phase one and other strategic project investments that have not yet occurred. Therefore, while our long-term projections remain intact, we expect to realize greater in-year savings in 2016. Before I discuss our segments results for the quarter, I would like to note that the results of our operations were negatively impacted by insurance and additionally for janitorial we had one extra working day. As we have discussed extensively in the past, we have made structural improvements to our approach to risk and safety, which is now under one common leadership. We also created an executive risk and safety committee and risk and safety metrics are now a component of our incentive compensation plan. We are fully committed to managing insurance cost going forward. Now turning to Slide 5 of today's presentation. To note, 2020 savings positively contributed to segment operating results. For janitorial, revenues increased 4.1% versus last year and operating margins were 5.1%. Margins benefitted from the increased scope of work at some of our top clients including additional tag revenue. Facilities services revenues decreased 1.9% or $2.8 million and operating margins were 4.8% versus last year, benefitting from an improved contract mix. Parking continues to demonstrate good top line growth generating over 7% increase in revenues versus last year. Similar to last quarter, this segment continues to experience some challenges. Operating margins decreased 3.8% versus last year due to higher cost associated with certain clients and contract conversions for managed to lease location arrangement. Before I dive into the greater detail of BESG, I want to remind everyone that BESG is comprised of ABES, our technical service business, healthcare and government. Much of the momentum in BESG is being driven by our ABES business, which continued to perform well in Q2. I do want to point out though that this business experienced certain challenges during the first half of last year and ramped up to a very strong second half of 2015. Therefore, while on a full year basis we continue to expect growth in ABES based on a strong pipeline of project related work, we expect growth rates to normalize in the back half of this year. Building and energy solutions revenues increased 25.9% versus last year which included $32.1 million of revenues related to acquisition. Operating margins were impacted by specific reserves established for client receivable that is no longer considerable probable of collection and lower equity earnings from unconsolidated affiliates, which are both related to our government business. Finally, revenues for our Air Serv increased by $13.9 million or 14.5%, driven by strength in our U.S. operations related to passenger assist and cabin clean service. Operating margins increased 10 basis points to 3.2% versus last year primarily due to lower amortization expense. Turning to liquidity. For the quarter, our cash from continuing operations increased $20 million. The improvement in cash flow was primarily due to timing of collection and taxes paid. We ended the quarter with total debt including standby letters of credit of $336.5 million and our total debt to pro forma adjusted EBITDA was roughly 1.65. During the quarter we repurchased approximately 300,000 shares of common stock for $10 million and as of April 30, 2016, there was approximately $167 million of availability remaining under our $200 million share repurchase program. And finally, the board has approved ABM's 201st consecutive dividend of 16.5 cents per share, payable on August 1, 2016 to stockholders of record on July 7, 2016. Now I will turn to our guidance outlook. As I referenced earlier, due to the timing of actions which also assumed a said amount of expected attrition and investments related to our 2020 Vision and other strategic enterprise-wide projects, for the remainder of the year we expect to realize savings in excess of what was originally planned. While we anticipate these expenses to materialize in the future, it is difficult to determine exactly when these expenses will be incurred. Operationally, we are pleased to have delivered solid results for the second consecutive quarter during which we designed our new organizational structure. There was an immense amount of transition as we all prepared to operate under this new design in 2017. We are pleased to be closing the first half of the year in a continued position of strength and we look forward to demonstrating additional progress in the coming months. As Scott highlighted earlier, we are raising our full year 2016 guidance range for adjusted income from continuing operations to $1.55 per share, compared to our previous guidance range of $1.50 to $1.60 per share. Operator, we are now ready for questions.

[Operator Instructions] Our first question is from David Gold with Sidoti. You may begin.

A couple of questions for you. First, on the Janitorial side, pleased to see the 4% growth there and it looks like nice pickup in tag work. Can you speak a little bit to trends there as far as two things, really, one, on the growth, how much of it is existing clients versus say new wins or whether you'd consider market share gains? And then second, if you can give us some insight as to where we are on tag as far as any sort of goal post you can give us there as to how to think about how that's progressing?

Yes. Sure, David. So the way I think about this in terms of contract expansion versus -- again, the organic versus existing it's a mix of both. I don’t think there is anything that really sticks out as making a trend one way or the other. I think for us it's more about a heightened awareness with our team that tags, generally speaking, higher revenue, higher margin opportunities for the enterprise and just people are tuned to it. And so I don’t necessarily think, again, there is any real trend in terms of whether it's new wins or existing contracts.

And for tag, just to add on that, for the first half it was up 7% year-over-year but really it's a Q1, Q2 benefits from event driven activity like snow removal, year-end event. So we expect a slowdown overall in the second half traditionally but still a focus and it's safe to consider tag what we like to target is roughly around 4% of overall revenues to come from tag that’s historically kind of in the benchmark, so we are trending very well to that benchmark.

Excellent, excellent. Thanks. And then if we can shift gears for a second towards the transformation. Sounds like some very positive early signs of success. Just curious there, if you can speak a little bit more towards, in your tone and in your commentary, very positive on seeing the upside or the high side of the upside. Where did we see the, let's say what were the positive surprises, if you will, in there that helped give us the confidence?

You know what, I think the good news is there weren't any major surprises, you know. And I would say that positive or negative, I think for us it's about discipline and planning and execution and we were as expected. And we have high standards for ourselves and we are executing on it. I think that’s, if anything Dave, I think that’s the big story here, is that we are executing without surprises.

Perfect. One last, if I can sneak it in. Anthony, there was commentary in there about a receivable that you're now viewing as, let's say, more negative than reserved for. Can you just give some color? Was that a bankruptcy or a dispute or just...?

No, that was actually a receivable from a work that we performed many years ago. Actually it was in 2011-2012 timeframe that we were in litigation with the customer around the collectability of the receivable and the payment of receivable based on contractual terms. So it's a write-off non-cash associated with it. We thought that that was a conservative position to take as part of the overall enterprise.

Got you. Okay. So it's not something that we should see -- we shouldn’t see many more of those, presumably?

No. But I think if you look at our cash flow for the quarter and for the year in the first half, we are still laser focused on DSO and we feel really good about the cash flow, so.

Thank you. Our next question is from Joe Box of KeyBanc Capital Markets. You may begin.

I appreciate the commentary on the investments that haven't occurred. Anthony, can you maybe just give us a little bit more color on how much the tailwinds from the lack of investments could be to the 2016 guidance? I'm just trying to parse that out relative to the strong quarter that you guys posted.

Sure. So in the first half we realized roughly $6 million of savings associated with 2020 and as we look out for the balance of the year, obviously we have a cadence of hiring and execution on some of the projects that Scott articulated earlier. And we expect roughly $20 million realized by year-end with the run rate heading into FY '17 above what we initially expected. But, again, it's really a pull forward from a timing perspective. So I think the balance of the year we feel good about where we are overall and with the cadence of our investment and hiring we expect to be where we put out from a guidance standpoint.

Maybe I'm not fully understanding the commentary then. To me, it sounded like there was an investment that was supposed to be made in the back half of the year and that would have been a drag to earnings and that's not happening now?

No, it's happening. Yes. So I think from...

It's just not happening to the same degree?

Yes. So it's just timing. So if you can envision when we embarked on the 2020 Vision, a lot of it is based on when we expected the organizational design to be complete. The investments that we are going to make. Scott mentioned investments in learning and development. That’s all planned out. So we still anticipate making those investments but when we initially provided guidance back at the end of the last year, we had a timeline associated with both the exits out from an organizational cost perspective and the investments in and it's just a timing in terms of the investments in. So we are fully committed to making those investments and with those investments it matches where we anticipated the margin increase overall for 2020 as it relates to organizational design.

Yes. And a more tangible example of that is we were searching for new CIO and that took some time. So until Bill Popper came on, we weren't going to start with some of the IT investments that we may have planned until we got our new CIO in place which we just did. So it's generally things like that, Joe.

Okay. And would that generally comprise the full $0.05 increase to the guidance?

Yes. Yes.

Okay. Perfect. That's what I was looking for. Thank you. And then you guys mentioned tough comps in BESG and the expectation for it to normalize. Is the expectation that it settles back into a normal growth rate or are we looking at tough comps from the prior year and it's potentially down on an organic basis and you think...?

No. I think tough comps is probably too harsh of a word. If you recall, last year our first half results for BESG, specifically on the ABES, that’s what we are really speaking to, is the technical service side. They had a tough first half and they over-achieved the second half. So what we expect for the second half is still growth but on a year-over-year basis that growth is going to be less than what we have seen in the first half but still growth. So we are still very committed to the plan, the pipeline is strong. It's just the second half year-over-year growth is not going to be as dramatic as the first half.

With still kind of the actual nominal results will be really strong.

Perfect. Thank you. And then last one. Solid free cash flow or cash flow in the quarter, some nice debt pay down, looks like your leverage ratio is now below the historical target range. Can you maybe just give us an update on priorities for cash as you guys navigate through the restructuring process?

Yes. So I think we still remain committed to investing in the business. Obviously the 2020 Vision and the execution, it will have a timing component as it relates to cash flow. We are still looking at targeted acquisitions as part of a complement to our portfolio and then from a distribution standpoint we laid out a fairly disciplined approach to share buyback depending on the cadence of the cash flow and the cascading of the waterfall where we deploy that cash flow. We may accelerate the share buyback but at this point we still feel pretty good about what we put out back at investor day.

Thank you. Our next question is from Jeff Kessler with Imperial Capital. You may begin.

Can we drill down a little bit into BESG? A little bit between the divisions and whether or not you see any areas in which you could expand that business into some other vertical markets?

Yes. So if you look at BESG and what it's composed of, it's government, healthcare and ABES, which is our technical services. And you know how high we are on our technical services, ABES business, with that growth. So we are feeling great about that. Healthcare is broken out now into one of our key verticals as is government. And I think there is just a lot of trajectory. If you think about our healthcare business which is between the $100 million and $200 million range in revenue, there is a whole host of competitors that are in the billion two billion dollar range. And the trends in healthcare with outsourcing and finding value, unlocking dollars, I think really plays in our favor. So I think that the economics around being in the healthcare sector are really strong and in our favor, especially as we go into our new industry [indiscernible] vertical. And government, government is doing well. They have their bumps because of a lot of timing related to how the government procures services in a cycle and we are feeling good about that too. But we just feel like in each of these verticals as part of 2020 vision, that’s where we are going to get our true acceleration. That’s why we tip those industry groups.

And then from an ABES perspective, technical services, we had phenomenal organic growth in the quarter of roughly 25%. And if you look at where that growth is really coming from and who their end-users are as it relates to some of the project level work, energy efficiency related work, it's really strong in the education sector. So as we move into the verticals, our industry groups and we define education, we see great opportunity for the ABES pull-through in that market place. So that’s...

That's kind of what I wanted to drill down into is that the technical services, what areas specifically are driving that growth in technical services? You've just gone into education and that's what I'm trying to get to is what other areas. What other areas could support -- I'm not so interested in the year-over-year comps because the comps get tougher, but to maintain that level of trajectory for technical services, what other verticals are appearing for you that look strong?

So for us we think, aviation could be really powerful. We have not cross-sold into that industry group yet so I think that’s big. Government is a big piece of the ABES business right now and we haven't done cross-selling in that as well. And then hi-tech. With the Silicon Valley relationships type firms that we have, we think there is great opportunity with all the data center work that they do. So we think from a cross-selling standpoint if you look at each of the industry groups are unique and have unique needs. But the way we structure this is that -- and the way you should think about it, for each industry group they have a single point of content, with an ABES single point of contact just working on cross-selling and accelerating the revenue base of technical services.

Okay. I just wanted to follow-up on the question on your leverage. Obviously, the leverage is below your long term target and you've talked about the priorities of where you're going to spend the cash. On the acquisition front, is this going to be a continuation of finding niches or just opportunities in various areas or are there certain new fields or certain verticals that you do not have right now that you are looking at?

Yes. So what we did, we took a deliberate pause as part of the 2020 vision. As you can imagine, going through this process we had a lot of transition both from a people standpoint and also from a market standpoint. So our objective with M&A is to continue to build our technical services capabilities by defined markets and we have an internal heat map around where we would like to grow the technical services business by geography and also be service line. As it relates to the industry group, at this point we do not expect to continue to add additional services. However, when we go through the industry group analysis and we really stand them up and begin to operate in that industry group, we will see if there is a gap in our portfolio for a service that we may not have today and whether we should look to grow that organically or growth that through acquisition. But it's too early to tell at this point.

Yes. I think this is going to end up being a pretty dynamic process for us as we develop our business plans and our strategies go to market and see where we have gotten in services but also in geographies.

Thank you. [Operator Instructions] Our next question is from George Tong with Piper Jaffray. You may begin.

You indicated that some investment projects are being put on hold. Can you discuss whether the delays in investments may result in timing delays in terms of realized cost savings?

Yes. It's not so much timing delays in realized cost savings. So when we set out our plan we had defined specific areas where we knew we had to invest. So as far as part of the timing, we are getting the benefit of both potential delays. So it's really a full forward of savings. As we deploy and as we continue to build out our organizational structure and make those investments, it will normalize and go back to our original range of savings and range of targeted margin improvement. So there is no anticipated increase or decrease overall, it's just a timing delay.

Yes. And I think the way you have to think about it with timing, we started on this journey a year ago and we put up kind of our anticipated spend, and a lot of it was aspirational, a lot of it was early planning. So to get to the specificity of quarter by quarter deployment, is really hard, especially a year ago. So I think we are thinking more long-term and making long-term investments, medium-term investments and we are on track for that. But on a quarter by quarter basis, it would be a tough time for us to kind of navigate that and answer to that quarter by quarter. So it makes it difficult.

Makes sense. So phase two of your 2020 Vision plan includes actions around account planning and labor management. Are you anticipating or do you anticipate, any potential sales force disruptions as accounts are transitioned and as you continue to push forward with your verticalized strategy?

So, look, the execution, we always said there is execution risk in phase two because you are migrating accounts and relationships and people that were in charge of a particular account at ABM are now transitioning to other folks. And that’s not happening for every single account, maybe it will affect a smaller portion of accounts but it's what we are used to. We happen to be good at this. It's not unusual even before 2020 Vision for people to change accounts as we have grown our business and we shuffle. So it's something that, again, I think we happen to be good at. But this is a different scale, right, because it's happening across the entire enterprise. So for us it's all about planning and being deliberate about each step in the transition. So we are hoping and we deeply believe that we will be able to execute as flawlessly as we have in the past to get us to this point. So we are very confident in the team.

Got it. And then lastly, as you push forward with your transformation plan, can you discuss the amount of potential increase in cross-selling? Particularly with your janitorial segment versus your other segments as under your more verticalized strategy, how much increased scope of work and cross-selling we may see in revenue performance?

I think it's early days. Right. We just got into your industry groups a couple of weeks ago so it's hard to tell. I think over time we will be able to define that better. But if you think about the organizing concept around moving to industry group, so I think it's really two things, right. It's getting closer to our customer, understanding their business but it's just a better vehicle for us to deploy all of our services. Because before if you are in the janitorial division, there wasn’t as much incentive to cross-sell different services. Now, if you are in business and industry, you are not thinking of yourself specifically in a service line so you are thinking about your customer, you are thinking how do you deploy all of our services for a customer. And it will be the first time in our history, right, that we have had this approach. So I think there is going to be great cross-sell opportunities but to put an actual number to it, I think, again, it's early days as we just stood up these industry groups.

Our next question is a follow-up from Jeff Kessler with Imperial Capital. You may begin.

Just one quick question. A cleanup question on your taxes. Is there a differential between your cash taxes and your provided for taxes?

Yes. I think one of the things from a cash tax perspective you have to take into consideration is the captive. So that’s going to generate $15 million to $20 million of cash tax benefit that won't reflect necessarily in the effective tax rate.

Thank you. Our next follow-up is from Joe Box with KeyBanc Capital Markets. You may begin.

Yes, just one quick follow-up for you. Do you have the number or the percentage of sales for relationship managers that were allocated new accounts? Just trying to understand, is it 50% of your sales people that were allocated new accounts? Is it 25%? Maybe how that number typically trends?

Yes. We just don’t track it that way, yet. And this is all new days for us as we moved into the industry groups but historically we haven't tracked it.

In our dedicated sales people. So when we talk about accounts, we are really referencing the operators. Our dedicated sales people have been historically agnostic to service line or agnostic to industry. So that’s going to be less of an impact specifically. It's really the operators in some of the transition and as Scott mentioned earlier, there is going to be some of that but it's not 100% shift to [indiscernible].

I mean would you say directionally it's north of 60%?

It's hard to tell, Joe. To be honest with you. Effectively, we are going through this process, people are in their seats. We are providing the transition so some of the people that are new seats are going to be bringing over the client base in that particular industry group and others that are in new seats are going to be transitioning. So it's hard to say. I don’t think it's going to be as high as 50%. It's probably less than that but I do not want to give a number without more fact base at this point.

Thank you. I am showing no further questions at this time. I would now turn the call back over to company management for closing remarks.

Okay. Great. Thank you. Well, thanks everybody for joining. Hopefully, you are getting the sense that you have an enthusiastic and excited management team here. We are energized about 2020 Vision and where it's taking the firm. With that I would just say, enjoy your summer and we look forward to reporting back to you with our next quarter's results in September. Thank you.

Ladies and gentlemen, this concludes today's conference. Thank you for your participation and have a wonderful day.