Chatham Lodging Trust (CLDT) Q4 2018 Earnings Report, Transcript and Summary

Greetings, and welcome to Chatham Lodging Trust Fourth Quarter 2018 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Chris Daly, President of Daly Gray. Thank you. You may begin.

Thank you, Shelly. Good morning everyone and welcome to the Chatham Lodging Trust fourth quarter 2018 results conference call. Please note that many of our comments today are considered forward-looking statements as defined by Federal Securities Laws. These statements are subject to risks and uncertainties, both known and unknown, as described in our most recent Form 10-K and other SEC filings. All information in this call is as of February 25, 2019, unless otherwise noted. And the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the company's expectations. You can find copies of our SEC filings in our earnings release, which contain reconciliations to non-GAAP financial measures referenced on this call on our website at chathamlodgingtrust.com. Now to provide you with some insight into Chatham's 2018 fourth quarter results, allow me to introduce Jeff Fisher, Chairman, President and Chief Executive Officer; Dennis Craven, Executive Vice President and Chief Operating Officer; and Jeremy Wegner, Senior Vice President and Chief Financial Officer. Let me turn the session over to Jeff Fisher. Jeff?

Thanks, Chris. Good morning, everybody. Earlier today, we reported very strong fourth quarter results as our overall portfolio RevPAR growth of 4% easily exceeded our original guidance range of negative one to up one. As laid out in our release about 250 basis points of this increase was attributable to demand from the residential gas explosions in North Boston. Having said that, the balance of the portfolio still generated RevPAR growth of 1.5%, which was better than expected as well. This strong performance allowed us to significantly beat our AFFO guidance to close out 2018. 2018 was a good year operationally. RevPAR growth of almost 1% finished above the upper end of our range of minus 1.5% to plus 0.5% for the year, which ironically is the same range that we're putting out for 2019. Adjusted EBITDA finished towards the upper end of our range and adjusted FFO beat the upper end of our range by a penny. Driven by acquisitions in 2017 and 2018, we grew EBITDA and FFO approximately 5% year-over-year. I'm particularly pleased with the results from certain programs and innovative tools that were implemented in 2017 and 2018 to drive incremental revenue or profits. These programs and tools were the result and product of collaboration between Chatham and Island Hospitality, and drives home the huge benefit we derive from working closely together. For example, we analyzed parking rates across the portfolio and successfully raised parking rates, generating a $1.5 million incremental parking revenue increase at our 40 comparable hotels. We introduced room amenity packages in 2018 that generated an additional $200,000 in revenue in 2018. We created tools to help our revenue management and operations teams identify occupancy opportunities and we will continue to look at ways to improve our top line and minimize margin erosion. On the corporate side, we improved our capital structure with the refinancing of our $250 million credit facility, reducing our credit spreads along with improving certain terms and extending our maturity. Additionally, we raised approximately $25 million through our share plans. In fact, since 2017, we’ve raised over $200 million of equity and along with proceeds from the sale of one asset to fully fund our acquisitions over that time. These events have enabled us to substantially reduce leverage and generate incremental cash flow. We continue to expand our Investor Relations function, participating in more events and non-deal roadshows than ever. Strategically, we’re very excited to add two hotels to our portfolio, investing approximately $70 million for the Courtyard, Dallas Downtown and the Residence Inn Charleston, Somerville, both high quality hotels opened in the second half of 2018, and it will take some time to ramp up but are going to be great long term investments and provide increasing FFO over the ramp up period. Shifting gears to 2019, our RevPAR growth range of minus 1.5% to plus 0.5% is adversely impacted by a few items. Demand from the Boston gas explosions of 55 basis points, additional displacement from renovations in Silicon Valley which is reducing RevPAR growth by 35 basis points and very tough fourth quarter costs at our San Diego Gaslamp Hotel that had a tremendous 2018 fourth quarter. This comp alone is reducing our growth by approximately 25 basis points. In our release, we laid out the key items driving the AFFO per share decrease in 2019. We try to be conservative, of course in our approach. So hopefully there's some upside to our estimates because we remain focused as I said on maximizing revenue and minimizing margin erosion. Chatham still generates the highest operating margins of all [indiscernible] REITs and we’re going to maintain our position at the top in 2019. In 2019, we're going to continue with asset sales with the intention of using those proceeds to invest in acquisitions or potential developments. The acquisition market is pretty thin, due to buyer seller pricing expectations, especially in our kind of assets. So we're going to look at a few value add opportunities as we've stated previously, and we may develop one or two hotels if the returns generate the proper risk adjusted return compared to buy an asset of similar quality in that same market. Additionally we will add value by converting existing space at some of our limited service hotels into income producing assets. For example, in 2018, we converted a seldom used meeting space at our Savannah Spring Hill Suites Hotel into a very cool bar called Toasted Barrow. The bar has limited food service, and it has only been open, as I said, for three or four months. However, we are substantially, outperforming our original expectations, taking space that otherwise produced no income and will produce substantial income in 2019. We're looking at opportunities like that in other hotels. We’re certainly finding new sources of revenue and profit as a result of adding bar components like we did about a year and a half ago in our Downtown Bellevue residents Inn, is certainly a very profitable way to go in an environment where RevPAR gains are hard to find we are going to double down on our efforts in terms of adding bars and facilities like that. Also looking at opportunities for example, with the pool in Washington DC at our Residence Inn that gets very little use to be able to convert back into a few rooms and generate substantial revenue as compared to what that space generated before. Our annual dividends expected to remain at a $1.32 per share, a level maintained since midway through 2016 and represents an attractive 6.1% yield. We remain comfortable in our current dividend and we’re producing free cash flow after dividends and CapEx in 2019. Of course our long term goal is to increase free cash flow and guide our strategic efforts to pursue incremental cash flow wherever we get. With that I’d like to turn it over to Dennis.

Thanks, Jeff good morning everyone. Our RevPAR growth of 4.1% in the quarter was driven by ADR gains of 1.5% to $161 and occupancy also rose 2.4% to 77%. Our six largest markets contribute approximately 60% of our hotel EBITDA and I want to spend a few minutes talking about each of those. Silicon Valley contributed 23% of our hotel EBITDA on a trailing 12 month basis and RevPAR in our four Silicon Valley Residence Inn was up 0.8% to $165, even though our 231 room Sunnyvale Residence Inn was under renovation in November and December. The RevPAR gain was driven by an increase in ADR of 1.6% to a strong $226 and a decline in occupancy of 0.8% to 73%. RevPAR at other three hotels at Montgomery [ph] was up approximately 3% when you take out the first Sunnyvale location. We remain encouraged by the depth and quality of the economic growth in the valley. In 2019 given the amount of renovations, and Jeff alluded to the 35 basis points impact on our overall portfolio RevPAR growth, but our RevPAR growth in the valley even with two of our hotels commencing renovations in ’19 is projected to only be down slightly to up slightly for the year. San Diego represents our second largest market, generating about 9% of our EBITDA and RevPAR was up 34% at our two hotels in San Diego. Mission Valley did benefit from an easy renovation comp last year but the real story is that our downtown Gaslamp Residence Inn had a huge quarter with RevPAR 35% to $171. A strong convention calendar as well as petrol-related demand which was about $300,000 of revenue to the hotel in the quarter drove this as the best fourth quarter performance in our history of ownership of the hotel and 22% higher than our second highest fourth quarter of ownership. With sub comps in the 2019 fourth quarter we are still expecting RevPAR to rise slightly in 2019 with a pretty strong first half of the year. And then you have the tough comp in the fourth quarter. In our third largest market Washington DC RevPAR declined 1.7%. Our Tysons Corner Residence Inn was undergoing a major renovation to its rooms and public space and its RevPAR was down almost 7%in the quarter. RevPAR of other two hotels was slightly down in the fourth quarter and feeling the impact from the government shutdown and increment weather, RevPAR of those two same hotels was down about 5% so far in 2019 as we sit here today. But those are forecast to rebound in March and our revised 2019 projection for our DC assets is RevPAR growth in somewhere in kind of a minus 2% to plus 1% range. Our three Northeastern Coastal Market hotels had a great quarter with RevPAR advancing over 17% driven by a massive 50% in RevPAR at our Hampton Inn in Exeter, New Hampshire which greatly benefited from demand related to the North Boston gas explosions. And really kudos to our team at Island who quickly seized the opportunity to book business in our hotels not only with our wholly-owned hotels but also certain of our other hotels within joint ventures as well as other our hotels that Inland operates. Not surprising given the huge close to 2018, 2019 RevPAR is expected to be down about 2% for the year. Going into the fourth quarter we knew that Houston faced difficult comps from Hurricane Hardy related demand in the fourth quarter of 2017. Houston contributes approximately 7% of our EBITDA. RevPAR for our Houston hotels was down 13% in the quarter which was actually much better than our expected decline of just over 20% going into the quarter. Looking ahead to 2019 a new Residence Inn is opening up in the Medical Center as well a large four star hotel the Intercontinental which is 354 rooms and it actually opened just a few weeks ago. Two of our hotels in Houston would be renovated in 2019, Hampton Inn Medical Center and Residence Inn, Houston-West University and we are expecting RevPAR to be down a few percent in our Houston four hotels in 2019. In addition to San Diego the LA market continues to be strong producer of RevPAR and LA Hotel driving 2.3% this quarter bolstered by our Anaheim Residence Inn, where RevPAR was up almost 4%. The sightseeing [ph] RevPAR in that market rebound and it's been up four of the last five quarters after being down eight consecutive quarters prior to that. The convention center is full opened after renovation which has helped to increase demand and the [indiscernible] closer to Disney also helps. 2019 should be a good year for us in our LA hotels, with RevPAR growth of approximately 2% to 4%. Other particularly strong markets for us in the quarter were White Plains, San Antonio and [indiscernible] all which saw RevPAR growth over 10%. A market which continues to be weak for us is Denver, which has been inundated with supply over the past few years and is still kind of in the top six markets with new supply coming, and RevPAR growth was down 8% in the quarter and for the entire year was down 6%. Just briefly on supply in our markets the good news is it continues to trend down in our direct markets. New upscale supply in our market tracked 3% to 5% in 2015 and has declined each year to 4% in 2016, 3% in 2017 and 2% in 2018. Additionally despite all this new supply we have been able to maintain occupancy levels. In fact over the last 5 year our occupancy has finished between 79.5% and 81.5%. It takes a while to absorb the new supply and to be able to drive ADR but hopefully we can start to get some pricing power and outperform our expectations in 2019. Now the 37 comparable Island-managed hotels, which excludes hotels acquired in 2018 and 2017, fourth quarter operating margins jumped 80 basis points. Total revenue at our 37 comparable hotels was up 4.8% driven by that 4% RevPAR increase and a 16% increase in other revenue. Our departmental expenses were up 3.9%, driven primarily by wage and benefits, which were up 3%. Payroll and benefits represent approximately 36% of our total operating expenses and almost 20%. For the quarter on per occupied room basis payroll benefits were up 3.4% in the quarter with wages up 4.3% and benefits up 0.4%. Really all other expenses were in check during the quarter and as most of you know we have been tracking the acquisition costs closely for the past couple of years and those expenses were down 27 basis points in the quarter and 13 basis points for the full year. Within our joint ventures, RevPAR was 2% for the quarter and also approximately 2% for the entirety of 2018. I will go and turn it over to Jeremy.

Thanks, Dennis. Good morning, everyone. For the quarter we reported a net loss of $0.2 million or $0.01 per share, compared to net income of %5.5 million or $0.12 per share in Q4, 2017. Our Q4, 2018 results included a $3.5 million write off of costs related to our previously appointed Silicon Valley expansions that we have decided to no longer pursue at this time. The primary differences between net income and FFO related non-cash costs such as depreciation which was $12..2 million in the quarter, one-time gains or losses over $3.6 million and our share of similar items within the joint ventures which were approximately $2.9 million in the quarter. Adjusted FFO for the quarter was $18.4 million compared to $16 million in Q4, 2017, an increase of 15%. Adjusted FFO per share was $0.39, which represents an increase of 8.3% from the $0.36 per share generated in Q4, 2017. Our $0.39 of FFO per share for the quarter was $0.03 above the high end of our guidance of $0.32 to $0.36. Our Q4 FFO per share benefitted by approximately $0.03 from demand related to gas leaks in the Boston area. Even excluding this unexpected one-time business, our FFO per share would have been at the high end of our guidance range due to better than expected performance of the rest of our portfolio. Adjusted EBITDA for the company was $28.9 million in Q4, which was up 9.9% for Q4, 2017. In the quarter our two joint ventures contributed approximately $3.6 million of adjusted EBITDA and $1 million of adjusted FFO. For fourth quarter RevPAR was up 3.5% in the Inland portfolio and 1.0% in the Innkeepers portfolio. Chatham received $0.8 million of cash distributions from the JVs in Q4. In December 2018, we acquired the newly constructed Courtyard Dallas Downtown for $49 million using availability under our revolving credit facility. At year-end, our net debt was $578 million and our leverage ratio was 34.7%, which is down from the 40% area where we have generally operated in the past. Our balance sheet remains in great condition and provides us with the capacity to pursue potential investment opportunities. Transitioning to our guidance for Q1 and full year 2019, I'd like to note that it takes into account completion of the renovation of the Residence Inn Sunnyvale 1 in Q1 and commencement of the anticipated renovations of the Residence Inn Dedham, and Residence Inn,,, San Mateo in Q1; the Residence Inn Houston and the Hampton Inn Houston in Q2; the Residence Inn Fort Lauderdale in Q3 and Residence Inn Sunnyvale 2 in Q4. We expect to spend approximately $32 million on our 2019 capital plan, which includes the renovations I mentioned as well as other planned capital expenditures. We expect Q1 RevPAR to be flat to down 1.5%. Our results in January and early February 2019 were impacted by the government shutdown, bad weather, difficult comps on our Homewood Mall of America hotel which benefited from the Super Bowl in 2018 and the renovation of our residents in Sunnyvale 1 hotel. We expect full year 2019 RevPAR of minus 1.5% to plus 0.5%. In addition to the challenging conditions based in Q1, our Boston area properties will face a very difficult Q4 comparison due to the surge in one-time gas leak business in Q4 2018. We expect that the impact of these challenging comparisons for our Boston properties will impact our overall 2018 RevPAR growth by approximately 65 basis points. And we expect the Silicon Valley renovations to impact our 2019 RevPAR growth by approximately 35 basis points. Our RevPAR guidance assumes the current trends of healthy GDP growth combined with elevated supply and the upscale segment will continue throughout the rest of 2019. Our full year forecast for 2019 corporate cash G&A is $9.6 million. On a full year basis the two joint ventures are expected to contribute $15.4 million to $16.4 million of EBITDA and $5 million to $6 million of FFO. On a full year basis, we expect FFO per share of $1.78 to $1.88, the midpoint of $1.83 in 2019. Given the $0.12 decline of our $1.83 midpoint from the $1.95 per share generated in 2018, I'd like to provide a little more color on the reasons for the decline. But previously I mentioned, our 2018 results benefited by $0.03 per share from one-time business in the Boston area and we expect to lose $0.03 relative to our 2018 performance in 2019. We expect same-store EBITDA on our non-Boston hotels to be down by approximately $2 million or $0.04 per share due to relatively flat RevPAR combined declining margin, primarily driven by increasing wages. We expect the FFO per share contribution from our JVs to decline by approximately $0.03 in 2019, primarily due to increase in interest expense from the JVs floating rate debt. The remaining $0.02 of the decline is due to increase in interest expense on Chatham's floating rate debt, increasing borrowing levels relative to 2018, a full year impact of the share assurance we did in 2018 and a slight increase in non-cash G&A, which is offset by a full year impact of the recently opened hotels, which we acquired in late 2018 and are starting to ramp up in 2019. I think at this point operator that concludes our remarks and we'll open it up for questions.

Thank you. [Operator Instructions] Our first question is from Anthony Powell with Barclays. Please proceed with your question.

Hi. Good morning, everyone.

Hey, Anthony, good morning.

Good morning. Just a question on supply growth, you mentioned that supply growth for your markets is down to 2% as of '18. How should number trend over the next couple years. So to stay at too early go to keep going down?

Anthony. It's just -- look, and I think, if you look at the Smith Travel [ph] reports in our market, it shows it trending upwards a little bit in 2019 and 2020. Now we have that data and we know there are projects that aren't going to hit that timeline, that are identified by Smith Travels. So I think it's probably going to say in the low-2% range, it's not going to go down much further than where it is today. I think it's still a manageable number, and I think what's a little bit confusing so if you look at, for example, Nashville, which is one of the top market for new supply are we have a hotel in Brentwood which is outside of Nashville, now it might not -- it's not going to be impacted like a hotel that's placed on downtown. But we'll probably feel a little bit of the penny. So for the most part we're pleased with the new supply in the directly competitive markets staying in kind of the low 2% range. But there also be some pressures from the surrounding areas that have a little bit more supply.

Got it, thanks. And can you talk a little bit more about the Dallas acquisition what cap rate are you underwriting, kind of ramp up you expect this year. How much EBITDA contribution this year and next, and probably some market attracted you?

Well listen, I think first just to talk about the numbers. Then I'll let Jeff talk about the market and where we like it to be. We've got essentially a ramp brand yet opened in late third quarter 2018. It's going to be ramping throughout 2019. And probably into 2020 because it is pretty closely tie to the events at the convention center and being able to get involved with the convention center takes a little bit of time to establish those relationships and be involved in their room block pricing. So if you go to kind of 2019, we expect Courtyard Dallas to contribute what seems to be about $3.1 million of EBITDA in 2019 and then ultimately ramping in 2020 to more of a midcap type range.

And as to the market, look, we know Dallas really well, this is consistent theme as we've talked about with acquisitions. We, at Island manage 809 hotels obviously Chatham Lodge, other hotels in Dallas. So we identified downtown as a market frankly that we weren't in and of course our favorite brands generally are going to be residential center at Courtyard anyway. We pursued this opportunity direct with the builder. And we saw an enormous amount of growth we think and demand coming late frankly, as compared to some other American cities urban with justification, but Dallas is definitely there and definitely come in. And this hotel was located perfectly and really is the only the purpose built live-in and service hotel in that downtown market to take advantage of that office growth and as Dennis was talking about the convention center too. I talked a little bit about also just looking at food and beverage opportunities particularly beverage opportunities in limited service hotels. Well, when we underwrote this deal, we had given some projected numbers for our rooftop bar, and they were pretty aggressive. We cut those to zero that they'll still look like a ACAP or better after a ramp up. And we decided that we would put some extra effort into that rooftop bar overtime and also used it as a facility rental opportunity in the market as well, because it's the entire floor that has adjoining meeting rooms as well as pre-function areas. So again, what's kind of looking at incremental revenue opportunities everywhere during this phase let's say of the cycle.

Great. That's it for me. Thank you.

Thank you.

Our next question is from Bryan Maher with B. Riley FBR. Please proceed with your question.

Yes. Good morning guys. You talked a little bit about kind of acquisitions and the widespread out there. But can you tell us is the spread narrow enough at least that you are still underwriting deals. And how do you think of 2019 from the prospect of bringing onboard another property or two?

Okay, Bryan I'll take that one. We are still underwriting deals. As a matter of fact we're probably even broadened our underwriting for deals that on surface we may not have underwritten before, only because we do have that dry powder. We did say that when we de-levered and raised the equity that we were going to try to acquire some more hotels than we’ve been, than we have since that de-levering event which of course has negatively impacted our FFO per share. So I think that the bid-ask spread is more coming on the market this year it appears. So therefore maybe that spread narrows a little bit and a little more focus I think in terms of underwriting deals and looking for the new losses in the deal that I think for us, A1 hospitality can bring the bear in more of a value add situation. So that’s the focus. It’s not a stabilized asset probably because in today’s world you buy a stabilized asset and with flattish RevPAR and declining margins you probably go on backwards faster than you go on forward right. So we’re looking for more of the value-add opportunity.

All right that kind of segues well into my next question on wages and benefits, still hanging out in the 3% to 4% range. Is there anything more than can be done there or is that just something we’re going to have to live with for the next year or two or three?

Listen unfortunately I don’t know about year two or year three but I think Smith Travel had a slide in their latest deck talking about almost a million open hospitality and food service jobs in locations we find themselves having to use casual labor more than we'd like to fill open gaps on a short term basis. It’s certainly hard to find that qualified labor in most of our -- especially our urban markets is really where you feel it the most. But I think [indiscernible] we projected to still be kind of in the upper 3% range for 2019 and I think that’s probably less than what others may feel this year as it kind of slipped throughout the country but it’s a challenge.

And then lastly we noticed the write-off that you talked about on the Silicon Valley expansion plans, is there any chance that you in the next year or two revisit that or is that just definitely off the table at this point?

Listen, I think yeah, we’ve invested a lot of time into those. We believe that expanding our presence in those markets is not a bad way to go. It’s one of the -- on the long term basis we love that market. So I think just given where construction cost and especially labor cost has gone over the last 36 months makes it very difficult to take a chunk of rooms out of service and to do those expansions right now. We still, like I said, I think we still love that market and would still like to increase our exposure in that market in some form of traction.

Yeah I think the accountants made us write that off frankly but we’ve got some pretty good plans and pretty good overall concepts for redeveloping those sites in different ways. So that money was well spend I think and certainly as we move down the road I can expect double-digit huge inflation in terms of construction labor being up forever Mountain Trail [ph] there and so yes, we’ve got great real estate and we’ll look at ways to enhance it.

All right. Thank you. That’s all for me.

Thanks Bryan.

[Operator Instructions] Our next question is from Tyler Batory with Janney Capital Markets. Please proceed with your question.

Hi, good morning, thanks for taking my question. Couple of things from me first I just want to circle back on the 2019 RevPAR guidance, if I could, and I appreciate you guys quantifying the impact of some of those one-time items but even if I add back some of that stuff, there’s still a gap between your guidance range and the industry range that was provided. So can you provide a little bit more color on what’s driving that delta, maybe anything else that might be negatively impacting your results?

Yeah, this is Jeff. I think I’ll start by saying, it certainly will be interesting for example to see what Marriott says about RevPAR guidance I think we all know the range the industry’s in and the range that most boats are going to put out. But do they take into account an separately state limited service hotel They take into account and separately stay limited service hotels particularly in the see first for example Courtyard Dreyfus Residence town place. Genre, because I think what you're going to find is that in our asset class you really are flat and I think when you add back our one-time adjustments we're flat or a little better than flat and I expect to be better than flat, but I think we need to position ourselves carefully with our guidance. We know our first quarter already has been negatively really impacted by the government shutdown. I mean, we got a couple of hotels that clearly have seen some numbers that just didn't produce what we expected them to produce because they do have a large component of government business like our Springfield Embassy Suites in Virginia just outside of DC or Tysons Corner and you know you'll hear a little bit of that probably from some others or maybe you won't but, we tend to kind of try to come clean early and look for upside down the road.

Okay, guys that's helpful and then on the follow up on the development side of things, any update there outside of what you were just talking about with the Silicon Valley properties?

No, update yet on that, I mean Tyler we're still working pretty diligently on a couple of things but hopefully we’ll have leads to report on that later this year.

Okay great and then maybe a last question for me, the customer acquisition costs and whatnot, can you talk a little bit about what was driving that in the fourth quarter and the full year and then your thoughts on where those could trends in 2019 as well.

Yeah, listen I think overall certainly the negotiations between Marriott and Hilton over the past couple of years have helped for us in terms of just the overall commission rate. So when you look at our productivity volume is still up slightly with our OTA type business but now as you kind of move into 2019 you know there's a little bit of a change in the way that Marriott is reimbursing its franchise -- franchisees related to guest reward cost and more reimbursement So, that is going to turn a little bit and we think it's a net benefit to us in 2019 by maybe a few hundred thousand dollars. But we'll have to see how that develops. But listen I think for us it's been a trend that has been down for the past kind of four six quarters and hope and again, hopefully given where Marriott is changing the program, it'll continue to benefit us a little bit in 2019.

Okay, great. That's all for me. Thank you.

And we do have a follow-up question from Anthony Powell with Barclays. Please proceed. Q – Anthony Powell: Hi, just one more for me, kind of on that Marriott topic. Have you seen any impact positive or negative from the loyalty program merger in August or the data breach and news in later in the year for did that have any impact on your bookings or revenues?

For us, no. For us Anthony it doesn’t. I mean, we've got such a little exposure to the Starwood side of things, it does impact a few hotels on the JVs, but for us it really hasn't -- we haven't seen any impact.

All right, thank you.

We have reached the end of our question-and-answer session. I would like to turn the call back over to management for closing remarks.

I think that does it for us. We appreciate all the callers, we appreciate everybody's attention and we're looking forward to a better year as we move forward. Thank you.

Thank you for participation in today’s conference. You may disconnect your lines at this time and thank you for your participation.