CSW Industrials, Inc. (CSW) Q1 2019 Earnings Report, Transcript and Summary

Greetings, and welcome to the CSW Industrials First Quarter 2019 Earnings Conference Call. [Operator Instructions]. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host for today, Mr. Tom Cook. Please begin, sir.

Thank you, LaTonya. Good morning, everyone, and welcome to CSW Industrials' Fiscal First Quarter Investor Call. Joining me today are Joseph Armes, Chief Executive Officer of CSW Industrials; and Gregg Branning, Chief Financial Officer. If you have not received the earnings release, it is available on our website at www.cswindustrials.com. This call is being recorded. A replay of today's call will be available and details on how to access the replay are in the earnings release. During this call, we will be making forward-looking statements. These statements are based on current expectations and assumptions that are subject to various risks and uncertainties. Actual results could materially differ because of factors discussed in today's earnings release and the comments made during this call and in the Risk Factors section of our annual report on Form 10-K and other filings with the SEC. We do not undertake any duty to update any forward-looking statements. This call will also include an analysis of adjusted operating income, net income and earnings per share, which are non-GAAP financial measures of performance. These non-GAAP measures should be used as a supplement to and not a substitute for operating income, net income and earnings per share computed in accordance with GAAP. For a more complete discussion of adjusted operating income, net income and earnings per share, see our earnings release. I will now turn the call over to our Chairman and Chief Executive Officer, Joe Armes. Joe?

Thank you, Tom. Good morning, and thank you for joining our fiscal Q1 conference call. I'll start today by providing a high-level recap of our first quarter results, followed by an update on our capital allocation activities before touching on our end markets, and then passing the call off to Gregg for a closer look at the numbers. To start, our fiscal first quarter consolidated revenue of $89.6 million was slightly higher compared to the year-ago period. Higher revenue resulted from modest growth in our Industrial Products segment, partially offset by a slight decline in Specialty Chemicals. Our fiscal 2019 adjusted operating income from continuing operations was $15.9 million compared to the prior year period of $17.8 million. This decline was primarily driven by an unfavorable product mix, increased commodity cost driven by uncertainties surrounding tariffs, change in the revenue recognition accounting standards and increased spending to fund efficiency projects, which are expected to positively impact our profitability during the second half of the year. By segment, and beginning with Industrial Products, the underlying trend in commercial and residential construction remains positive, although our growth rate for the quarter moderated as a result of a cooler spring and a slower start to the HVAC season. Amplifying this effect in the quarter was strong preseason stocking activity by contractors and distributors in our fiscal fourth quarter of 2018, which led to elevated inventory levels at the distributors. As we look ahead, we do expect recent warmer weather will serve as a benefit in the balance of the year. In our architecturally specified building products business, the change in accounting standards affected our revenue and operating income. The change in the accounting standards adversely affected our segment revenue by $800,000 and our operating income by approximately $240,000. Gregg will walk you through the details in a moment, but it's important to note that this issue only impacts the timing and the optics of these revenues, and this decline will be made up as each contract progresses, and ultimately, concludes. Operationally, in our architecturally specified building products, project and bidding activity remains elevated, but we have noted several developing trends which have affected our run rate and profitability. On the sales side, we are seeing more projects slipping to the right as a result of labor shortages in the market. On the cost side, aluminum is up around 17% year-over-year, which is a primary raw material cost for Greco. And we have also been navigating through some higher rework as a result of staffing issues and turnover that parallels the labor shortages seen elsewhere in the market. While we closely monitor our raw material cost, we have not been able to pass through those costs with respect to previously committed contracts that's impacting us on the cost side. To mitigate this in the future, we are shortening the amount of time that a bid will be good for, and we're adding surcharges to our future contracts to offset the raw material absorption on our end. We are continuing to see an uptick in new quotes and backlog as a result of our sales integration efforts, which enables us to broaden our geographic reach and our product offering on each project bid. Turning to our Specialty Chemicals segment. Sales in the first quarter declined just under 1% compared to the prior year. Lower sales were driven by lower HVAC and mining, partially offset by energy and rail. Segment-level adjusted operating income was $ 5 million or 13.7% of sales compared to $6.4 million or 17.7% of sales in the prior year. Compared to the prior year, lower segment operating margin was a result of 2 discrete factors: firstly, negative product mix on the sale shipped; and secondly, upfront costs of efficiency programs. Importantly, we did see a nice sequential uptick from the 9.3% operating income margin reported in the fourth quarter, and we continue to view that as a low watermark for the segment as we work to gradually improve margins back above 15%. During the quarter, we executed several projects to expand segment margins that should benefit -- begin to benefit our results in the second half. First, we consolidated our Jet-Lube and Whitmore entities in Europe into one facility, and we've reduced headcount related to this. The bulk of this project has been completed, and we expect to begin recognizing marginal benefits in Q2, followed by a more pronounced improvement in the second half of fiscal year 2019. We also have been working to in-source and optimize our small fill products at Jet-Lube, where nearly all of our small packaged products has been packaged and distributed by a third party. By bringing this in-house, we will be able to optimize our freight and manage inventory more tightly. We expect to complete this process towards the end of Q2 or early Q3, with benefits in the back half of 2019. We are also reviewing our pricing on these products and we are adjusting them where appropriate. Next, I'd like to touch on our capital allocation initiatives. Our primary capital allocation objective is to direct capital to the highest risk-adjusted return opportunities. We continue to view inorganic growth opportunities as one of our better tools for return maximization, although our disciplined approach and lofty valuations have tempered our recent activity. Together with our board, we are actively working on a strategic plan, which is a comprehensive review of our opportunities to maximize returns through organic and inorganic growth, geographic expansions, product introductions and the return of cash to shareholders. As we continue to progress on this project, we look forward to sharing incremental results as they become available. During the first quarter, we returned excess cash to shareholders by repurchasing approximately 146,000 shares for an aggregate price of $7.3 million. As of the end of the quarter, we still have $26.5 million remaining on our board-authorized share repurchase program. Next, I would like to give an update on our end markets. Beginning with HVAC, while we enjoyed nice growth throughout fiscal 2018, the start of fiscal '19 was softer than expected. As I noted, we attribute this softness to a cooler spring compared to the prior year, with expected improvement over the balance of the year as weather has normalized. On a macro level, we continue to see strength in residential, driven by demand from aging systems installed during the peak housing construction in the early 2000s. We do not see any reason for a fundamental change in this area of sustained demand. Turning to plumbing. We are seeing modest growth for our broad-based product portfolio, driven by our unique offerings and our strong distribution channels. In architecturally specified building products, the commercial construction backdrop continues to remain strong. However, project delays across the industry have tempered our growth rates. We are continuing to execute on our Eau du Soleil project at Greco. And on a year-over-year basis, we are seeing strong bids and bookings as we have integrated our sales force and continue to emphasize cross-selling in our businesses. In our energy-related end markets, rig count was relatively flat in the first quarter, but we have seen a slight rig count increase as we began fiscal Q2. While the rig count was relatively flat in the quarter, we did experience improving demand for Jet-Lube products. We pushed through a price increase in the first quarter, and we should realize the benefits from that during the balance of the year. Finally, we continue to monitor the market to ensure that we fully participate in an improving energy backdrop. In our rail end markets, we saw strong growth, driven by share gains with new customers and their corresponding initial stocking orders. The share we captured was primarily within our consumable products, specifically our trackside rail lubricants. Although we will continue to enjoy growth from these new accounts, we do expect order rates to moderate as we shift from larger initial orders to normalized restocking based on our customers' consumption. While our results for the first quarter of fiscal 2019 contained some noise, we are committed to taking the right steps within our business to drive further shareholder value through our operational improvements. Several of these actions presented discrete headwinds to our margins this Q1, but we expect incremental improvements through the balance of 2019. In addition, today, we announced that we've closed on the divestiture of the Coatings business for an undisclosed amount. And with that, I'll turn the call over to Gregg for a closer look at our financials.

Thanks, Joe, and good morning, everyone. Consolidated revenue during the first quarter of 2019 increased 0.3% to $89.6 million. Incrementally higher revenue was mainly the result of increased volumes in the Industrial Products segment, and those were partially offset by slightly lower revenue in our Specialty Chemicals segment. As we look at our segment-level revenue and operating income, Industrial Products segment revenue was $53.9 million, up 1.1% compared to the prior year period of $53.3 million. The increased revenue was mainly the result of higher sales volumes to the HVAC and plumbing end markets, partially offset by decreases in our architecturally specified building products. As Joe mentioned in his comments, we have adopted ASC 606, the new accounting standard on revenue recognition, which also produced a negative impact on our architecturally specified building products, causing approximately $800,000 in revenue and approximately $240,000 in operating income to slip to the right. Without getting into a technical accounting answer, the adoption of this new standard resulted in a change in the timing for some of our projects that previously were accounted under the percentage of completion method. We adopted the standard on a modified retrospective method for transition, and as such, prior periods are presented in accordance with the old revenue recognition standard, and therefore, have not been restated. Also, as Joe mentioned, our fiscal Q1 2019 revenue growth was negatively impacted by the strong pre-stocking sales in our fiscal Q4 2018. In addition, we still expect our full year growth in HVAC to be strong, as we mentioned in last quarter's call, as this is simply a shift in revenues out of our fiscal Q1 into the balance of the year. Reported segment operating income increased 1.7% to $13.9 million, while adjusted segment operating income decreased to $13.6 million. Segment adjusted operating income, as a percentage of sales, declined 25.3%, primarily driven by the change in accounting standards and increased product cost. Now turning to our Specialty Chemicals segment. Revenue decreased just under 1% to $35.7 million compared to the prior year period of $36 million. The decreased sales were primarily driven by lower volumes in HVAC and mining end markets, partially offset by increased sales in energy and rail end markets. Our reported segment operating income was $6.5 million compared to the prior year period operating income of $5.5 million. Adjusted to exclude nonrecurring costs, segment operating income decreased to $5 million compared to $6.4 million in the prior year. Segment adjusted operating income as a percentage of sales was 13.7% compared to the prior year period of 17.7%, primarily due to unfavorable product mix on the sale shift and efficiency expenses made, which are expected to benefit future quarters. The unfavorable product mix was driven by prior year restocking orders, which did not repeat due to a cooler spring season, coupled with the negative mix shift between our mining and energy end markets. While our operating margin was down year-over-year, we did see the expected sequential increase from our fiscal Q4 2018, and we remain on path to achieve mid-teen operating margins in the segment, as we discussed in our last quarterly call. Turning back to our consolidated results. Gross profit in the fiscal quarter of -- in the fiscal first quarter of 2019 was $42.1 million and gross margin was 47%. Both gross profit and gross margin were flat when compared to the prior year. Consolidated operating expenses decreased to $24.4 million or 27.2% of sales compared to the prior year level of $25.2 million or 28.2% of sales. The decrease in operating expenses was due to increased professional fees and restructuring and realignment activity in the prior year period that did not recur in this period. Consolidated operating income for the first quarter increased to $17.7 million or 19.8% of sales compared to $16.7 million or 18.7% of sales from the prior year. Adjusted operating income was $15.9 million compared to the prior year period of $17.8 million. This decrease was driven by the negative product mix adoption of the new revenue recognition standard and upfront expenses on efficiency programs, as we previously mentioned. Our effective tax rate on continuing operations for the quarter ended June 30, 2018, was 22.6%, and we continue to expect our fiscal 2019 effective tax rate to be in the range of 25% to 27%, as we have said on previous calls. Consolidated earnings from continuing operations was $14 million or $0.88 per diluted share compared to $10.3 million or $0.65 per diluted share in fiscal 2018. Adjusting to exclude onetime expenses and applying a normalized tax rate, adjusted earnings in the fiscal quarter -- fiscal first quarter of 2019 were $12 million or $0.76 per diluted share compared to $11 million or $0.70 per diluted share in the prior period. Our net debt at quarter-end was $8.9 million, and we closed the quarter with $11 million of cash in our balance sheet and had up to $292 million of borrowing capacity on our revolving credit facility, which provides ample flexibility to fund our growth and acquisition strategy. Now I'll turn the call back to Joe.

Thanks, Gregg. In closing, despite some discrete headwinds in our first quarter, the underlying trends in end markets that we serve remain largely positive. We are well positioned to capture increased sales as we have seen temperatures return to normalized seasonal levels, supported by our initiatives to drive organic growth. We will also benefit from our recently executed efficiency programs in the second half of 2019. Let me take this opportunity to thank all my colleagues at CSW Industrials for doing a great job as we continue to serve our customers and steward well the capital entrusted to us by our shareholders. Thank you for your interest in CSW Industrials. Operator, we're now ready to take questions.

[Operator Instructions]. Our first question comes from Jon Tanwanteng with CJS Securities.

The first one is, is there anything left to sell in the Coatings business or did you give it as a whole thing? And did you get what you expected for it?

Yes, we're not going to disclose details on proceeds but I would say that there are some straggling assets that will remain to be sold.

Okay, got it. And then just on the preseason sales that you referred to, the strength from the previous quarter, is there any inventory left in the channel that still needs to sell through? Or are you pretty much through that and then should be more normalized going forward?

Jon, as we talked about on the last call, stocking orders, kind of preseason stocking orders were really, really strong. We were very pleased despite a cooler-than-normal spring. And we even had a question on the call, as I recollect, that while with such a great fourth quarter 2018, what can we expect in Q1? And we cautioned everybody and said, listen, the weather seems a little bit cooler than it's been in recent years during this is spring time period, and I would be very careful about extrapolating that into the next quarter. And so I think that's exactly what we've seen. We have very, very normal restocking orders now going on. And as Gregg indicated, we have not changed our forecast for the full year internally at all. And so we believe that this inventory is selling through in our normal rate and that we will see the same results that we expected. It will just be spread differently through Q1, 2 and 3 than we might have expected or we might -- what might be consistent with past years.

Okay, great. And just moving on to architectural business, you mentioned rising aluminum cost. What percentage of your COGS are -- I mean, what's the absolute value of aluminum that you purchased some kind of -- are the price increases you're putting through being well received by customers?

Jon, this is Gregg. I'll answer the first part. I'll let Joe answer the part on how it's being received by the customers. Don't know exactly what percentage of COGS. What I can tell you is it was -- the actual impact from a dollar perspective was a couple of hundred thousand dollars that we saw in the quarter. It's -- aluminum is primarily used on our architecturally specified building products railings, so primarily Greco, with a little bit of aluminum used in our Smoke Guard business, depending on how they're structuring the product. But the real increase that we saw was in Greco. And again, as we said in prior calls, I believe and Joe mentioned on the call is really, the impact there is because of the backlog that we already had where you won the projects at a set price. And what we saw there isn't so much that tariffs have kicked in and driven that up, but we believe the impact of tariffs were the threat, caused some disruption in the commodity market and caused some suppliers to take advantage of higher pricing as a result.

Yes. Jon, I think the good news is that it affects everybody equally. And therefore, the -- and obviously, it gets a lot of play in the press. So customers are not surprised by this and it's affecting everybody equally. So these are the kinds of cost increases that are more needed to pass through than anything would be particular to us.

Got it, that's helpful. And then just on -- going on to you mentioned tariffs. Obviously, everyone's dealing with them and inflation in general. Aside from aluminum, how are you dealing with input price increase in the tariffs across your businesses?

Well, as we said all along, we are absolutely committing to -- committed to maintaining our margin profile and not having erosion there. So we are reacting as quickly as possible when there is cost increases to pass those through. And we'll continue to monitor that very, very closely. I would say as we sit here today, tariffs are not affecting us. But some of the tariffs that have been discussed that could be enacted in the near future could affect us, not in a real material sense, but I think there are some things that could cause some cost inflation. So both on imports and exports, frankly. I mean, we have some items that we export, some products that we export to China and some of our competitors are European, for instance. And so we could be put at a competitive disadvantage. But again, that's not a material piece of our business. So from a financial standpoint, don't see a disruption, but it's something we absolutely keep our eye on and are highly focused on from a pass-through standpoint to make sure that we maintain the integrity of our margins.

Jon, the other thing I would add, maybe as a follow-up to your question on the aluminum cost, is one of the things we've looked at in Industrial Products is when you factor in those higher aluminum costs -- material costs, if you will, for Industrial Products, and then the impact of ASC 606, the revenue recognition standard. If you were to take our adjusted operating income and normalize, if you will, by the higher material cost and the loss margin on that revenue, our operating margin would be right in line with last year's operating margin.

Got it, that's helpful. And then just a higher-level strategic question that you mentioned a little bit in your prepared remarks, but your balance sheet is obviously in a very strong position. I think inorganic growth is something that you guys are focusing on, but it's been something you've been wanting to do for a while now. Just what are the prospects in a market that you're seeing where you're going to be focusing on? Why hasn't anything been done sooner than this?

Yes. I mean, Jon, it comes down to two things. One, I think is just making sure that we see all the opportunities that we should see. And as we mentioned the last quarter, we have added resources in that area so that we can be assured that we are seeing all the opportunities and really filling the funnel with quality opportunities, I think, is really key for our success because our disciplined process and our allocation of capital strategy and package around that really don't change, our philosophy doesn't change. But if we can increase the number of opportunities that we see, we think we'll have more success. As it relates to why are not -- why have we not been successful in closing acquisitions, again, I think so much of it comes down to valuation. I think that the valuations that are being paid right now are very, very rich. And we have elected to have a kind of a return hurdle that we want to reach that we have not been able to satisfy ourselves through diligence that make sense for our shareholders. And so we think our discipline is going to be rewarded, ultimately. And we're going to continue to maintain our standards on that but redoubling our efforts to make sure that we see every single opportunity that we should be seeing in the marketplace and turning over every rock, making sure that we don't miss any opportunities. Because if there's that one diamond in the rough that's out there that is available, that we can get at a reasonable price, we want to do that.

Our next question comes from Joe Mondillo with Sidoti.

Just blinked out there for a second, so I wasn't sure if it got cut off. But anyways, wanted to just dive in a little bit more in terms of the HVAC business, both at the industrial and the spec chem segments, and just trying to understand sort of the trajectory of the businesses throughout the quarter and then through the month of July. At what point in time, at both segments again, have you seen sort of normalized growth rates return? And what kind of growth rates are we talking about? I guess, just could you tell us if there's sort of a tough comp relative to last year? Or are you seeing similar type growth rates that you saw last year? And at what point in time did those return at both segments?

Well, I would say that the softness was certainly in April, immediately after the stocking orders. I mean, fiscal -- our fiscal year ends March 31. We're highly focused on pushing the preseason stocking orders, getting stuff out to the distributors for the close of our fiscal year as is any -- as you would be in any business. We saw softness in April, a little bit in May, June became stronger. And again, as we've said, all indications at this point are that those revenues have normalized. And so -- and again, I think it is correlated directly to the weather and the cool start to the season. And so I think that we feel good about our growth rates that we have mentioned for that business being high -- mid- to high single-digit organic growth. And we believe that for the full year, that's the kind of growth that we would expect to see.

And Joe, this is Gregg. I would also add to your question on the segment particularly. Within Industrial Products, we saw, as we mentioned in our prepared remarks, a slight increase in sales in HVAC. As you saw, industrial was up slightly. We saw a decrease in spec chem. Between the 2, they pretty much netted each other off to where HVAC in total was flat. Spec chem, specifically, we had a nice stocking order for one of our products last year in HVAC, which was our Leak Freeze product. And because that was a stocking order, it didn't repeat itself this year. And so that created some of the headwind as we saw from a revenue standpoint in Specialty Chemicals, but also a pretty large headwind from a product mix -- negative product mix standpoint within the segment.

Okay, great. I appreciate the color. My next question, just regarding some of the restructuring efforts, if you will, that you're doing at spec chem, the consolidated facilities in Europe as well as what you're doing with Jet-Lube and the packaging in-house and the pricing and such. Is there anyway you could help us sort of -- could you quantify any of the savings that we should be expecting just to try to understand what kind of a degree of benefit you should be seeing as the year progresses?

Yes, this is Gregg, Joe. What I would say is with the European consolidation, it's mostly headcount, a little bit of cost savings because we've gone from 2 facilities to 1. I think for a full year, we'll see savings between $300,000 and $500,000. And with the savings that we should see with the small fill, that's going to be somewhere in the $400,000 to $700,000 of savings for a full year. Again, I would -- as we mentioned last quarter, and I'll repeat, and we also said in our prepared remarks, we won't see that savings until well into the back half of this year for 2 reasons. One, as Joe mentioned in his remarks, we'll complete that somewhere towards the end of Q2 or early Q3, and then we have to turn through our existing inventory at a higher cost. We typically turn the inventory there about once a quarter. So somewhere in probably mid- to late Q4, we should start seeing that savings. And so it'll have a negligible effect on the full year -- or rather -- yes, in the full year. The savings in Europe, we should start seeing that immediately here in Q2. And as we talked in our prepared remarks, in last quarter, we saw the 9.3% adjusted operating margin for spec chem as our low watermark. And we see that -- we're on the right guide path going forward to get to that mid-teens with the various activities we're taking for the rest of this year.

Okay, perfect. That's very helpful. I also wanted to ask on the pricing efforts, the surcharges and such that you're implementing at the building products in industrial segment. Just wondering sort of the expectations on margin after implementing those. Do you anticipate margins should bounce back or should just sort of maintain and not fall further?

Well, I mean, we have said all along we think that we should not -- we shareholders should not suffer on margins because of inflation. And so that's our goal, is to maintain the margin. Now our Industrial Products segment itself is very high operating income margins. We're very proud of that. And so I think that maintaining those margins on a steady-state volume -- from a steady-state volume standpoint would be appropriate. And then to the extent that we can grow volume then, we will continue to spread fixed cost over a larger revenue base and continue to experience operating leverage.

Okay. And can you remind me of the timing of the price increases? I think you said but I didn't write that down.

Well, I mean, on the Industrial Products, as it relates to the aluminum, which is really the architecturally specified building products, those increases are -- have been instituted for new bids. The lag time there is bids that have been out that are good for 30 days, 60 days, 90 days, whatever the standard terms are, and/or contracts that have been awarded that, as we noted, the delivery on those can be anywhere from 3 to 12 months. And so that's where the lag time is. From a standpoint of new bidding today, those price increases have been included. On the spec chem side, we talked about price increases in the energy end market, and those price increases have been pushed through during Q1. And so we should see the effect of that, as Gregg said, as the inventory rolls through.

But that, we'll actually see in Q2. The cost will be the -- as the inventory rolls through, okay.

Okay, perfect. And then last two things from me. I'm just wondering sort of what the bidding pipeline or what the bidding activity looks like at the building products business? And then also I was just hoping to get an update on sort of your overall R&D strategy because I know that's sort of a long-term sort of focus that you've been doing.

Sure, sure. Yes, bidding is very strong. We're very pleased across the board. We have continued to see strong bidding activity. Bookings are good. And so we have not seen any slowdown there. We're very pleased with what we're seeing there. With respect to R&D, that is an ongoing continuous improvement process. We are committing some internal resources to efforts that will result in commercial products. As we talked about in the past, that the real focus for us is kind of force ranking those projects that are in front of us based on when can they get to market and what their value is. And so we do that kind of on a net present value basis so that we make sure that we're focused on the right things. But that will continue to be an important piece of what we do, but not huge resources, certainly not expenses -- large expenses allocated to that. It's really marshaling the resources that we have, making sure they're working on the right things, kind of renewed sense of urgency and a new kind of emphasis on that. And we've got some new products in the marketplace that we're very pleased with as a result of that. And I think that should be something that we would continue in the years to come.

Our next question comes from Liam Burke with B. Riley.

Joe, on the end markets in architecturally specified products, you mentioned projects are moving to the right. These are just referrals, you're not seeing any kind of inordinate cancellations, are you?

Absolutely not. We're just seeing deferrals due to labor shortages in particular.

Okay. And on labor shortages, you did report some margin or margin hit on rework related to your labor shortages. I can see how you could move prices on aluminum, but what can you do about the -- reducing the reworks and addressing the labor shortages?

Yes. What we have done today and we will continue to do is monitor very closely the competitive market, the localized market where we are competing for labor. We have increased some benefits, in particular with our Canadian operations, to make sure that we are very, very competitive in the marketplace. And it's really retention. It's training. And it's making sure that we've got the right people in the right seat. So a lot of attention is being paid to that. But there's no question, but that a robust economy with full employment can create some issues on the labor side. And so we just got to fight that, be very, very intentional about it every day with respect to our kind of skilled labor force.

And on input costs on Specialty Chem, are you able to get your pricing? It's, I imagine, a little shorter cycle there rather than contract based on the architectural side. Are you able to get your price increases?

Yes, absolutely.

[Operator Instructions]. There are no further questions in queue at this time. I'd like to turn the call back over to Mr. Armes for closing comments.

Great. Once again, we just want to reiterate our appreciation for your participation in our call today and your support of CSWI, and we look forward to speaking to you again next quarter. So thank you.

This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.