ABM Industries Incorporated (ABM) Q2 2017 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to the ABM Industries’ Q2 Fiscal Year 2017 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, today’s conference call is being recorded. I would now like to turn the conference over to Susie Choi, Head of Investor Relations. Please go ahead.

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 2017 financial earnings result. A copy of this release and an accompanying slide presentation can be found on our corporate website. Before we begin, I would like to remind you that our call and 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 risks 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 call, 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 website under the Investor tab. I would now like to turn the call over to Scott.

Thanks, Susie. Good morning, everyone, and thank you for joining us today. By this point, I’m sure you’ve had a chance to review our press releases from yesterday. I’m really pleased with the quarter. Our operational performance was largely an expansion of the momentum we saw during the first quarter of this year. Total revenues for the second quarter were $1.3 billion, an increase of 4.2% versus last year driven by solid organic growth of 3.6% or 4.4% excluding the impact of foreign exchange. These results were propelled by strong topline performance from our Aviation and Technical Solutions segments in addition to the Government Service segment, which we exited last week. Our adjusted EBITDA margin for the quarter was 4.6% versus 3.7% last year. We had solid operational implementation, which was positively impacted by two less working days during the quarter. We also benefited from good management of expenses as well as our 2020 Vision procurement initiatives. These results led to GAAP EPS from continuing operations of $0.56 per share for the quarter and $0.49 per share on an adjusted basis. Given our operational performance during the first half of this year in addition to better than expected overhead savings and taxes, we are raising our full-year outlook to $1.63 to $1.73 per share on a GAAP basis and $1.85 to $1.95 per share on an adjusted basis. This compares to our previous guidance ranges of $1.40 to $1.50 per share and $1.80 to $1.90 per share respectively. Our new GAAP guidance also reflects the impact of our Government Services sale. I need to take a moment and commend our organization for so diligently executing during the first half of this year, especially given the amount of work that is required to carry out the current phase of our 2020 transformation. Our path to EBITDA margin improvement continues to take shape and the next 12 months to 18 months will give us good line of sight to where even greater incremental margin improvement could lead. I'd like to address our Chief Operating Officer succession, which we also announced yesterday. After more than 30 years of service, Jim McClure will be retiring. Jim has held many senior level positions with ABM up to and including his ascension to Chief Operating Officer. And on behalf of everyone at ABM, I want to congratulate him on all of his accomplishments during his amazing career and thank him for his guidance, management and stewardship over the years. He's had a profound impact on ABM and I will miss him a great deal professionally and personally. I'm truly pleased to announce Jim successor, Scott Giacobbe as our new Chief Operating Officer. As the President of our Technical Solutions Group, Scott has had a proven track record of growing businesses profitably and on an accelerated basis. He's been part of our team since our Linc acquisition nearly seven years ago and he deeply understands business process and sales growth. He will be a key driver of our 2020 Vision initiatives going forward. Scott as part of the continuing evolution of the firm from a service provider model to an industry focused solution provider. Scott and Jim will work together between now and the end of the fiscal year as we transition this very important role carefully and methodically. The ABM today is so very different from where we were at the start of our 2020 journey. Looking back, it's been exactly two years since Anthony and I greeted you all for the first time as we embark on a historic era of transformation here at ABM. Since then our entire organization has worked extremely hard to take our 2020 Vision from concept to reality. We’ve navigated tremendous change and learned so much along our path to achieving profitable growth. You remember that our first 18 months was grounded in strategy development and implementing Phase I of our 2020 Vision. It's hard to imagine how in such a short period we completely reorganized the firm from a services based business model into a vertically based industry group structure. We designed and built a shared service center in Houston to consolidate 11 accounting centers across the country and we initiated a procurement group to attack our close to of $1 billion in addressable spend. Against the backdrop of all of that, we continue to execute on our day-to-day business and grow the firm. And I think I could speak for everyone in the Company when I say how truly difficult it was to simultaneously deliver on a number of strategic work streams and still stay focused given the rigors of running a high volume service business. But now we're on to Phase II of 2020 Vision and momentum and the intensity continuous. As you know Phase II involves the optimization of our newly designed organizational structure by developing standard operating practices that are scalable across key areas of our business. We call the standard operating practices, The ABM Way and among other things they cover developing account plans for all medium to large clients, deploying consistent labor management protocols across the enterprise, implementing best-in-class safety and risk programs as well as building manage and development plans for our onsite project managers. We commenced deployment of The ABM Way during the first two quarters of the year by conducting pilots in three geographic markets as well as targeting now close to 350 underperforming locations outside of the pilot markets. We have already begun to capture savings and we’re confident that our financial projections for the current year will include benefits from The ABM Way. The learnings from the pilots have strengthened our resolve that The ABM Way is the path to our future success. I will say though, implementing The ABM Way is more complex than we originally thought. Operating based on standard practices is not only an operational change, it's a culture and this is not the first time you're hearing from us that ABM had an operating style that allow for independent approaches to the businesses from branch-to-branch across our entire 300 branch network. To implement real change across the distributed network, you need to have a dedicated change management plan that incorporates a communication plan, field-based training, a reporting and compliance model and financial incentives, and just as we're piloting The ABM Way, we have to pilot our change management plan and iterate that's exactly what we are doing, but it takes time and as I said it's complex. So am I more confident than ever that we will get there? 100%. Is it more complex and will take a little more time than we expected? 100%. For us, this isn’t about whether this will work. It's about how long until we get a line of sight as to how far 2020 Vision will take us above our 100 basis point margin journey. As you know by now, Anthony and I are pretty good about not getting over our skis with our projections. That's why my opening comments spoke to the fact that the next 12 months to 18 months of implementation will be important. What is hopefully coming through is my confidence in our 2020 Vision and our ability to build an infrastructure that will enable profitable growth, we continue to learn and refine our approach as we evolve and get stronger as an organization. Continuous improvement is the hallmark of everything we are doing at the firm. This is an exciting time to be at ABM as we move closer and closer to fulfilling our vision of being the choice in the industries we serve to engage people. Having a 100,000 ABM employees waking up every day, knowing that they are on a mission to make a difference is pretty powerful and will differentiate us among our competitors, I'm certain of that. With that, Anthony, I'll turn the call over to you.

Thanks Scott, and good morning, everyone. Before I delve into the results for the quarter, I’d like to give some additional details surrounding the divestiture of our Government business. As we saw on our earnings release, we close the sale of Government Services on May 31 for pretax cash proceeds of $35.5 million. The proceeds from this transaction will be used to pay down debt. The results we are discussing today include the impact of our Government operations for the second quarter as it did for the first quarter of this fiscal year. Please note the second quarter results for Government include the recovery of $17.4 million of previously impaired assets. As we move through the rest of the fiscal year, our topline results will reflect one more month of Government operation. In addition, our GAAP results may continue to reflect the impact associated with our retention of certain assets and liabilities. We expect this to occur for the next 12 months to 18 months. Now turning to our second quarter results from continuing operations, which are described in our earnings presentation. Total revenues for the quarter were $1.3 billion, up 4.2% versus last year driven by organic growth of 3.6% or 4.4% excluding FX. Acquisitions added approximately $9 million of incremental revenues during the quarter, which are reflected in our Aviation and Technical Solutions segment. Organic revenue growth was primarily driven by Aviation, Technical Solutions and are now sold Government Services segment. Our income from continuing operation was $31.6 million or $0.56 per diluted share versus $6.8 million or $0.12 per diluted share last year. On an adjusted basis, our income from continuing operations was $27.8 million or $0.49 per diluted share versus $17.7 million or $0.31 per diluted share. The year-over-year increase in the EPS was primarily due to two less working days during the quarter, higher revenue contribution and the impact of 2020 Vision or saving and procurement initiative. During the quarter, we delivered adjusted EBITDA of $60.5 million, an increase of 31.3% versus last year and adjusted EBITDA margin of 4.6% compared to 3.7% last year. Turning to Slide 6 of today’s presentation, I’ll now discuss our operating segment performance. As a reminder, these operating results reflect two less working days, which predominantly impacted – and the impact of our 2020 Vision initiatives. For B&I, revenues increased to $733 million versus last year primarily driven by organic growth stemming from expansion of jobs with existing clients. Operating profit for the quarter was $41 million, leading to operating margins of 5.6%, which in addition to two less working days during the quarter also benefited from cost control measures stemming from our 2020 Vision initiative. As referenced earlier, Aviation continued to see strong topline growth with revenue increasing 14.4% to $232 million. Domestically growth stem from expansion of our passenger services, cabin cleaning, parking and transportation services. Internationally, we saw new business growth in our UK operation. However, we were disappointed with our domestic aviation operating profit, which impacted the segment. Our overall operating profit was $7.6 million, which led to a blended margin of 3.3%. These results demonstrate the occasional bumps we face from running a complex and dynamic business. The institution of operational changes that Scott discussed earlier will benefit areas like Aviation, where we'll have a greater opportunity to normalize new win startup and expansion through the eventual implementation of standard operating practices. While we firmly believe the Aviation segment will yield rewarding results, it will take time to drive improvement as we continue our rollout. Moving on to emerging industries, we saw revenues of $192 million, which covered our Healthcare, Education, and High-Tech businesses. The decrease versus last year was primarily attributable to the loss of a high-tech janitorial contract in certain education facilities service contracts some of which we alluded to last quarter. Operating profit for the quarter was $12 million for a margin rate of 6.3%. So loss of the aforementioned contracts impacted the segment negatively. As both Scott and I discussed in detail last quarter, the Emerging Industry segment is composed of a highly concentrated portfolio of customers, which could lead to short-term volatility when we experienced losses or additions to contract. Having said that, we continue to target growth in this segment as we’ve – now we aligned our teams and management focuses on growing these industry groups over the long-term, we see tremendous whitespace for each of these industries. Moving to Technical Solutions, this segment recorded $110.8 million in revenue for the second quarter, growing approximately 10% versus last year with operating margins of 9.6%. Higher project revenues in addition to $3 million incremental revenue from acquisitions drove this performance. Speaking of Technical Solutions, I too would like to congratulate both Scott Giacobbe, on his appointment as our new Chief Operating Officer and Jim McClure, on his announced retirement following a long inspiring career. These next few months will be better suite for many of us as we wish Jim well, but also an exciting time as we work with Scott Giacobbe to scale his talent to the entire enterprise. Now turning to liquidity. We ended the quarter with total debt, including standby letters of credit of roughly $407 million and our total debt to pro forma adjusted EBITDA was approximately two times. Before I discuss our capital allocation activity during the quarter, I wanted to provide an update on the Augusta settlement, which we announced last quarter. In April, the Superior Court granted preliminary approval of the settlement, and we are currently anticipated final approval hearing by the end of June. Due to the impending settlement, we continue to reevaluate the timing of share repurchase. As such, we did not repurchase during the quarter and do not anticipate additional repurchases for the remainder of the year. During the quarter, we paid a quarterly cash divided of $0.17 per common share for a total distribution of approximately $9.5 million. And as stated in our release, I am pleased to announce the Board has approved ABM’s 205 consecutive dividend of $0.17 per share. Now turning to our guidance outlook. We now expect GAAP income from continuing operations to be in the range of $1.63 to $1.73, which is primarily driven by the impairment recovery related to our Government sale. In addition, we are raising guidance due to better than expected overhead expenses and the recognition of tax benefits related to tax incentivize, energy-efficient project in our Technical Solutions also referred to as 179B credits. On an adjusted basis, we are raising our guidance outlook to $1.85 to $1.95 per diluted share compared to our previous range of $1.80 to $1.90. As a reminder, our full-year adjusted EPS outlook did not anticipate a significant contribution from our Government operation. In addition to the revision, we made to our overall full-year outlook we are taking the opportunity to revise our Industry Group operating margin guidance to reflect our performance for the first half of the fiscal year and our outlook for the next six months. As you recall, we provided operating margin guidance at the end of last year to help you assess our business given all of the current year and prior year remapping that has taken place within our reorganization. Based on the year-to-date results of Aviation and Technical Solutions, which I discussed earlier, we are revising our expectations for these specific segments for the full-year. Overall, we are pleased with our results for the first half of fiscal 2017. As Scott discussed, we've embarked on the most critical phase of our 2020 Vision and we are more in line on our path to EBITDA margin improvement and how we will achieve those goals. Now that we are structured to focus on the needs of each customer, we have come to understand that priorities vary by customer. We have begun to – and we have tailored our solutions based on metrics and qualitative input. Through the institution of standard operating practices, we’ve recently launched an account planning process, which involved customer segmentation based on attributes related to revenue, margin and growth potential. There is no longer a one size fits all approach our business and we are beginning to put in place plans to prioritize retention, expansion and accounts that need quick fixes for underperforming. This isn't going to be linear or quick and easy, but we are establishing the foundational processes through standard procedures for near and long-term margin expansion. We are becoming more sophisticated on ways to drive long-term profitable growth. I am also acutely focused on empowering our teams with the tools and resources they need to execute. As you recall, when we first established our new structure last year, we benefited from timing related to investments in IT and HR because we were taking the necessary time to evaluate our investments to be sure our decisions were right for the newly realigned business. 2017 mark the year when we began to move steadily from the evaluation phase to the project base, which starts ramping up as we progress through the year. As such, we are revising our CapEx outlook for the full-year to a range of $50 million to $60 million compared to our original expectation of $60 million to $70 million. Taking a more prudent approach to how we look at our business has led to some exciting and promising decision. As we announced last quarter, we have kicked off the project with sales force, develop a customized solution involving software and applications to accelerate sales, monitor our pipeline, and manage our customer engagement. Moving through this year and into next year, we'll continue to focus on evaluating the evolution of our IT infrastructure and organization as we look further into opportunities with cloud-based solutions, such as Anaplan for planning, Human Capital Management for HR and other Software-as-a-Service among our IT initiative. As a result, our approach to building technology in-house will only be for instances where we cannot leverage a best-in-breed software package or where customization drive differentiation. So as you can see, we have a lot of work ahead of us that relies on partnerships across IT, Finance, HR, Risk and Safety, as well as operations throughout Phase II. So we are confident that all of our execution and implementation over the next 12 months to 18 months will ultimately unlock the true potential of our margin improvement and have the most powerful impact on our overall long-term success. I'm so proud of the partnerships I've seen across the organization and we remain committed to sharing our findings with you at each juncture and providing more insights as they become available, just as we've done over the past two years. Operator, we are now ready for questions.

Thank you. [Operator Instructions] And our first question comes from Michael Gallo of C.L. King. Your line is now open.

Hi, good morning.

Good morning, Michael.

Yes, my question is just want to dig in a little bit on the standardization of labor practice opportunity. I know you're kind of early stage there and I know there's a lot of complexity to that, but can you give us some sort of order of magnitude of how big an opportunity that is, how sort of far apart some labor management practices are from others, and how much of a spread there is between kind of the best practice management and the – let’s call it below average guys in terms of labor as a percentage of sales?

Sure. I think what I would say is it is early days. But in some of the pilots, Mike we’ve seen as much as a 400 basis points spread in some jobs. And it really depends on the market. It depends on the property itself, but I think what we generally see is when you're well organized, when you have your labor schedules, when you kind of re-ground and re-plan a building, you get opportunities and you get optimization, but it does – it runs – just moves the gamut and it's really early in the game to kind of start thinking about what the enterprise effectively. I could just tell you that we are really encouraged, really encouraged and we are working on this team cleaning concept and it has just so many benefits when you have people working together even just on simply, a safety and risk standpoint, right, which is something we're really focused on when you have people working in groups it tends to be more safe, people have each other's back. And there's also the knock on effect from a client standpoint because the quickly you get off the floor, the quickly you can shut the lights and there's an energy impact to that. So it's really – the labor management is not just about how do you cut labor expense and look at the exact labor line, it has this knock on effect again for things like safety and risk.

That’s very helpful context. And then just a follow-up for Anthony, I know you had the headwind in emerging industries. When would you expect that to abate and to actually return growth in topline in emerging industries?

Yes, as we kind of called out last quarter, the emerging industry given the highly concentrated portfolio customers in that group it’s going to always exhibit the volatility. We have a large win. It’s going to outstrip the historical pattern. So from a year-over-year comparison, we lost a large contract entering the year, which we identified in Q1, we expect that impact to continue up throughout the rest of the year, but they do have some good wins and good pipelines and expansions with the existing customers that we feel like the remainder of the year, they still have some bit of a headwind given the large contracts, but we feel pretty good about the outlook.

Okay. Thank you.

Thank you. And our next question comes from Jeff Kessler of Imperial Capital. Your line is now open.

Thank you. Can you talk a little bit about – firstly and just a quick question with the sale of Government solutions, is there any Government business left that you have, that you’ve retained because it's higher margin and will that be merged into Technical Solutions or what have you?

Yes. So when we sold the Government business, we exited the – what I would call the Federal Department of Defense type business and that was predominately working on military bases, the linguist, translation services internationally. What we've retained within the federal space is our energy services contract business, which is in Technical Solution and also we do a lot of work with state and local Governments. And there was a part of the business that was never really Government and that was a joint venture with an Aviation client internationally, so we also carved that business as part of the reorganization and sale.

Okay. Secondly, as part of your reorganization of the segments is given the broader base of Technical Solutions in the specific areas that you are in Emerging Industry segment, are there some overlaps between those two that where you can find some – if you want to call it, synergy squared or whatever given that there maybe some overlap in which the two businesses are performing similar tasks in the same vertical market –in a given vertical market?

I wouldn’t say there is any synergies from the cost side. I think there is a tremendous opportunity…

I’m sorry, I mean on the revenue side, excuse me?

Yes. On the revenue side there's tremendous opportunities for our Technical Solutions business to continue to penetrate the education market. That's a business where they've been able to succeed and win and we expect over the long-term that given our focus on education and our growth in that segment and the tremendous whitespace that there is a tremendous opportunity for Technical Solutions to cross sell into that space.

Okay. With regard to the loss of the contract, which you did talk about last quarter, is there – do you see – in many cases and I think you alluded to this I mean you get what you pay for when it comes to facilities management, facilities services, total broad-based solution. Are there parts of that contract that you think may come back to you over time and if there are – because I know it's a sensitive issue. If there are what areas given that this is a broad-based contract, are there areas which you think are more let's just say likely than others?

Yes. I think overall we've seen it – I wouldn't say that it happens all the time, but there are many cases where we lose a contract and it will be because a client made a decision on price and then the next thing and that could be three months later, it could be a year later we get a call back because we are a lower margin business, right, just generally speaking. So if someone is going to come in and say they can do with 15% less than us well, you know our margin is not 15% in it right. So sometimes it feels really good short-term for our client to make a price decision and for kind of the higher quality clients. We will get that call back and it's happened a fair amount of time. For us it's about being disciplined, sticking to the core tenets of 2020 Vision and not take revenue for revenue sake. So if the re-bid comes out and it doesn't match our margin profile, we've been making some really good decisions and we are really proud of our team for remaining disciplined. That's the real core tenets of the new ABM.

Okay. One final question that is now that you've been in place for a couple of years and you've been able to see through the reorganization of your business, where the value proposition is and how it's different than the way the Company was structured in the old way? Are you able to discern which – let's call it which verticals have the propensity to say it just good enough, we’re kind of stuck right now for margin and just good enough is going to make it for us whereas others are going to say, look we have no way out, we have to have best practices from a full solution provider and the price is not the important determinant. Have you been able to [assess out] which segments are more susceptible to that type of argument than the others?

Look, I think the way I would breakdown the question what I would say is like we've been really good about segmenting the market. And I think even if you look at how we restructured our 2020 Vision and we have our emerging industries. So there are some that are going to be higher growth than others on the topline. But I think the real key element here is when you look at profitability, our initiatives are enterprise-wide standard operating practices, developing account plans where you’re planning for the future of what an account could be down the road. That's enterprise-wide labor management plans, that’s enterprise-wide safety and risk, enterprise-wide labor, not just the labor sake, but in terms of managing our people and giving them the development programs enterprise-wide, so for us there is segmenting in terms of the revenue side and where the growth is, but from a profitability standpoint it's permeating the entire organization for standard operating practices.

All right, great. Thank you very much.

You bet.

Thank you. And we have time for one more question. And our last question comes from the line of Marc Riddick of Sidoti. Your line is now open.

Hi, good morning.

Hey, Marc.

Good morning, Marc.

I wanted to go over the – maybe if you could give us sort of a update on some of the progress on pursuing tag revenue and some of the processes and tools that you're working with there and some of the progress that you made and driving that growth?

So overall our tag revenue was in line with our expectations. As an enterprise, we've saw some good growth in tags and Aviation and tags vary by industry in terms of the profitability. So overall from a tag penetration standpoint was positive, but the mix was not what we expected slightly. So slightly down in our B&I segment, which tends to have a higher margin profile for tag and slightly up or significantly up in our Aviation segment, which has good margins, but not as good as B&I. So the overall tag in line with expectations and one of things I would just highlight is we're still operating under the same tag process. So the technology that we're implementing with sales force that will be fully engage beginning a next fiscal year should allow us to interact with our customers more, have better penetration from a tag standpoint. So we're encouraged that. We're still executing in tags under the existing model.

Yes and when I would say and when I'm so excited about. Right now when we facilitate a tag, it's a very manual process, right? And what's going to happen if you could picture a project manager going up on the floor and giving an estimates to a client and in fiscal 2018 it's going to be on a [PDA], we even be able to price it right on the spot generate a work order right on the spot and get sign off right on the spot. And so something that maybe a two day process could ultimately be a two minute process. So you don't technically lose the sale and you also become very efficient with your customer and makes a seamless and that's the sales force tool that were about to deploy and there couldn't be more excited about what it's going to do for the firm over the long-term.

Okay, great. And one thing I want to touch on a little bit if you can sort of give a bit of an update on that. You had mentioned that within Aviation some of the topline growth there being a combination of new business wins and expanding on existing customers. I was wondering if you could give a little more color in detail around maybe the new business wins, new clients that you can maybe highlight sort of where that's coming from and what's driving that in the quarter?

Yes, so I would say for this particular fiscal year and it's a dynamic business rate, so it changes. But to this year, we look at the new business wins is predominantly in the UK. We had expansion not only with clients, but with services. We're now in cabin cleaning in the UK, which is massive for us, because prior to that we were pretty much isolated to airport work and less with the airlines. Now we are expanding to working with airlines. So we had a pretty significant win or more than one significant win with airlines in the UK. So we're really encouraged by that. The U.S., although we did have a fair amount of new contacts, we had the majority being expansions with existing clients where we have density in an airport and the clients are coming to us and saying, well since you do this thing and this thing, why don't we give you this other service. And also with existing contracts as airlines are growing in airports, they're expanding our contract. So it's a combination of both, but in this particular year that happens to be UK is new growth, new service. U.S. expansion with existing clients.

Okay. And one last question for me, I was wondering if you could sort of give a bit of an update as to potential personnel changes and some of the things that you're looking at as far as highlighting a focus of some areas that you would like to show up over the next 12 months to 18 months? Thank you.

Well, I think you probably saw our release on our new Chief Operating Officer and we're really excited about the future. Scott he is someone who is really steeped in business process, which is going to play and so strongly to our standard operating practices that's going to just give us great trajectory in the future and Scott, is a growth guy. He was running our Technical Solutions group. I think if you kind of look at the Technical Solutions group over the last few years, you've seen the growth side and so that's going to be terrific for us. And we are going to miss Jim. Jim has been such a core person for this firm over the last few years, but this is just – its part of the evolution of what's happening at ABM and Jim can be more excited about Scott. So I think that's going to be terrific. As you know we had a new HR person who's been here for the last year and a half making some really foundational changes to our HR platform. And so we have no operational holes, we have all of our key positions filled and everyone knows their strategic priority. So we just feel really great about the future now and we will keep evolving in a really positive way, I believe.

Okay, great. Thank you very much.

Thanks. End of Q&A

Thank you. And that concludes our question-and-answer session for today. I’d like to turn the call back over to Company management for any further remarks.

So I just wanted to say thank you to everyone for your support and we’re excited about where the firm is heading and hope everyone has a terrific summer. We’ll see you in the fall. Thank you.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a great day.