Commercial Vehicle Group, Inc. (CVGI) Q4 2016 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to the Commercial Vehicle Group Incorporated Fourth Quarter 2016 Earnings 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, this call is being recorded. I would now like to introduce your host for today's conference, Mr. Terry Hammett, Vice President of Investor Relations. Sir, you may begin.

Thank you, Chenille and welcome everyone to the conference call. Patrick Miller, President and Chief Executive Officer of Commercial Vehicle Group, will provide a brief Company update; and, Tim Trenary, our Chief Financial Officer, will provide commentary regarding our fourth quarter and full year 2016 financial results. We will then open the call up for questions. This conference call is being webcast. It may contain forward-looking statements including, but not limited to, expectations for future periods regarding market trends, cost saving initiatives and new product initiatives, among others. Actual results may differ from anticipated results because of certain risks and uncertainties. These risks and uncertainties may include, but are not limited to, the economic conditions in the markets in which CVG operates, fluctuations in the production volumes of vehicles for which CVG is a supplier, financial covenant compliance and liquidity, risks associated with conducting business in foreign countries and currencies, and other risks as detailed in our SEC filings. And now Pat Miller will provide a brief company update.

Thank you, Terry. Good afternoon and welcome. In regards to 2016 it was an eventful year and one that positions the company well for future growth and improved profitability. We entered 2016 having announced SG&A reductions in restructuring plans to reduce fixed costs. Some of these initiatives were fully implemented in 2016 while others are being implemented now. Approximately half of the benefits were achieved in 2016. We also found ourselves involved in historic high number of new North American truck next-generation platforms launching over the next 12 to 18 months and we are looking forward to the benefits from the ramp up of these launches and new product development actions. Additionally, our Lean Six Sigma operational improvement efforts gained further momentum as we move through 2016, trained employees throughout the organization. We continue to implement continuous improvement projects across the company that are enhancing margins, improving safety, quality and overall performance. Furthermore, I'd like to announce the two winners of our internal CVG Presidents Awards. We are given awards for the best performing and the most improved lean value stream. These presidents' awards were established in 2015 to reward and reinforce the principles of lean value streams and continuous improvement. The performance ranges are measured utilizing an objective set of operational excellence metrics and cross-audited by multiple teams. There were several worthy nominations across the company. Our Chillicothe Ohio facility has been named the best overall performing lean value stream, and our Shanghai China facility has been awarded the most improved lean value stream. Congratulations to those facilities and the hardworking teams for their outstanding efforts. It's important to note that this lean program includes not only CVG employees but we have also welcomed employees from our key suppliers, furthering the reach and positive impact of this value driving program. We are pleased to report that we've exceeded our initial goal for the number of belts awarded in 2016, at year-end we have 549 awards of yellow, green and black belts exceeding our goal by more than 35%. In total this represents significant progress relative to planned objectives. Switching gears, our consolidated revenues for 2016 were down 20% for the full year as compared to 2015 challenged by tough market conditions. Global truck and bus segment revenues were down 26% versus prior here and global construction and agriculture segment revenues were down 7%. In spite of the sales reduction, both segments performed well managing the cost down to preserve margins. The adjusted operating income margin for global construction and Ag segment benefited from the initial restructuring and operational improvement actions implemented doubling the segments year-over-year operating income. As expected, our results were most heavily impacted by the North American heavy-duty truck production levels which were down 29% in 2016 to about 228,000 units. Net income for 2016 was $6.8 million, down slightly compared to 2015, primarily as a result of a decline in heavy-duty truck production; offset by the benefits resulting from previously mentioned actions, as well as a reduction in the 2016 income tax provision compared to the prior year. Full year earnings per share as adjusted for special items was $0.29 in 2016 as compared to $0.29 in 2015. Looking to 2017 and the global truck and bus segment, market forecasters such as ACT and FTR are projecting that the North American market for heavy duty trucks in 2017 has anticipated to decline by as much as 10% to 15% from the 228,000 units in 2016. However, we are encouraged by several positive signs including fleet order backlogs that have increased each of the last three months resulting from stronger than expected truck orders reported so far in the first quarter of 2017. Looking beyond this year, forecasts show heavy-duty truck production improving 20% year-over-year in both 2018 and 2019. Regarding the North American medium-duty truck market, Class 5 through 7 productions was slightly down in 2016 compared to 2015 although retail sales were higher year-over-year given a nominal increase to the backlog. Generally the medium-duty market is healthy and seeing consistent order patterns in line with the recent levels. ACT forecasts the Class 5 through 7 truck build in North America to improve in 2017 to about 246,000 units from 233,000 units in 2016 indicating the potential for 6% growth year-over-year. Now turning to the global truck and bus segment; as mentioned our team is fully engaged in North America with launch activities. For CVG our participation in these launches generally includes interior trim, seats, wiper systems, and cab structures. Our agreements with our OEM customers preclude us from commenting on specific wins and it can take several quarters for these sales to show up in revenue and earnings. But the programs are in place, we are positioned as a partner with our customers and look forward to the expected contribution these programs will make to our future financial results in the years to come. These programs typically ramp up fairly quickly and run for many years as new platforms come online. The majority of the North American truck launches represent replacement revenues for the current core business extending the business line, although many have incremental content and improved pricing which are additive. Regarding our global construction in Ag segment, the main driver behind our modest year-over-year GCS segment sales reductions was primarily attributable to continued softness in the North American construction and Ag markets while the rest of the world was stabilizing. For 2017 we currently see a bias toward strengthening of the construction markets we serve in Europe, Asia and North America. At this time our focus is to work closely with our customers to develop and rollout products for their local markets. In the fourth quarter of 2016 we participated in tradeshows in China and Italy launching a new generation of medium and large vehicle applications seats under the cap seating brand for the global construction and Ag markets this. This new seat line known as SCIOX is built upon our proven seat suspension technology and is reflective of our best-in-class performance, new styling and improved durability. The new seat line was well received and we are engaged with multiple customers in early development phases. The SCIOX line was also introduced in the U.S. earlier this week at the CONEXPO-CON/AGG Show in Las Vegas. We believe this new architecture has the potential to also open up the agriculture seat market and the light duty construction market for CVG where we've not traditionally participated. In the fourth quarter of 2016 the GCA team delivered another quarter of excellent financial results. I'm proud to say they continue to deliver improving margins on lower sales, strengthening their position to more fully leverage and improve cost position as volumes increase. In 2016, this group has increased margins in each successive quarter as compared to the comparable quarter in 2015. In addition to seating success is GCA's wire harness business continues to grow. In 2016 we want new share programs globally and are focused on finding opportunities in not only construction and military, our traditional core segments for wire harnesses but also agriculture truck power train which [ph] handling and power generation. We intend to continue to grow this business focusing our expansion on the segment that need technical solutions and complexity management as opposed to a more high volume commoditized wire harness business. One issue that we're currently working through involves our North American wire harness business. Our facilities are involved in numerous new launches, heightened seasonal orders and transferring products related to the restructuring. As a result, our employee hiring has been increasing at the same time, we are seeing a tight labor pool. Consequently in order to reduce high order backlogs and to protect our customers we are incurring unexpected inefficiencies in premium freight expenses. We don't provide financial guidance but wanted to share some color on this issue. These incremental expenses will impact our first quarter and part of the second quarter financial results as we implement plans to mitigate the situation and as agriculture orders nationally normalize early in the second quarter. Therefore we expect the Q1 results to be burdened with approximately $2 million to $3 million negative impact as we work through these production backlogs. The $2 million to $3 million relates to variance to normal expected drop as compared to the same quarter in the prior year. We will discuss this in more detail during the next quarter's call. Now I would like to bring you up-to-date on the progress being made on our overall restructuring initiatives which are delivering results. We've been reducing our fixed cost structure, making the company more capable to weather the market cycles today and going forward. In 2016 we've reduced our manufacturing footprint in North America, rationalized our capacity to better align with market dynamics. A little several of the plan changes are fully implemented we have a few initiatives still in process with the expectation to restructuring programs will be fully implemented in 2017. Overall, we are still on-track with our plan and look to generate the full breadth to anticipate savings by the end of 2017. As we realized the savings benefits of our cost reduction efforts, we are continuing to invest to expand our product portfolio. As we discussed, we've introduced a new generation of medium and large vehicle application proceeds for the global construction and agriculture markets. And we expect wire harness launches and increases to also contribute to our 2017 revenue. Our new launches include both replacement business for current product lines, as well as new products for expansion markets. At this time, as expected, investors are wondering about the potential impact of the new administration's future trade policy. We believe it was only about two months into the new administration, it's just too early to comment without knowing the specifics of any proposed actions but we continue to monitor the latest developments as they unfold and complete internal diligence on possible ramification. However, we are encouraged regarding the new administration's focus on the much needed infrastructure improvements across the U.S. and the stance that lower corporate tax rates would stimulate investment in growth. These types of infrastructure programs positively impact our business as well as that of our customers. Before So I turn it over to Tim to discuss our financial results in detail, I want to emphasize that I'm proud of the progress we're making in positioning the company for profitability through the market cycle as well as for future growth. We are energized about the near and longer term potential for the company. Tim will now cover the quarter and full year financial results. Tim?

Thank you, Pat and good morning everybody. Sales were down considerably period-over-period and for the year, primarily as a consequence of the decline in heavy-duty truck production in North America. But average income margin held up well because of our proactive cost reduction and restructuring actions, and our cash position improved by $38 million or by 40% year-over-year. As to our financial results for the quarter, consolidated fourth quarter 2016 revenues were $150 million compared to $184.7 million in the prior year period, a decrease of 19% primarily resulting from a 34% decline in heavy-duty truck production in North America period-over-period. Operating income in the fourth quarter was $3.9 million compared to operating income of $5.3 million in the prior year period. This decrease in operating income was primarily the result of lower revenues offset by operational improvements and the benefit of cost reduction and restructuring actions. Operating income margin before giving effect to the facility restructuring charges was unchanged period-over-period. SG&A in the fourth quarter of 2016 was $14 million compared to $18.7 million in the prior year period. Fourth quarter 2016 benefited from the various actions taken during the year to more closely align our business with the changing demand in our end-markets. Net income was $0.4 million in the fourth quarter or $0.01 per diluted share compared to a net loss of $2.3 million or negative $0.08 per diluted share in the prior year period. Net income in the fourth quarter of 2016 benefited from lower interest expense, other income from the realization of an insurance settlement, and a lower income tax provision. Fourth quarter 2015 results included costs associated with the optional redemption of $15 million of our senior secured notes. Shifting now to full year 2016 consolidated financial results; revenues for fiscal year 2016 were $662.1 million compared to $825.3 million in the prior year, a decrease of $163.2 million or 20% driven primarily by the decline in heavy-duty truck production in North America. Foreign currency exchange translation negatively impacted 2016 revenues by $8.6 million or by 1%. Operating income for the full year was $25.4 million compared to operating income of $38 million in the prior year, a decrease of $12.6 million. The operating income margin for the full year was 3.8% compared to 4.6% in the prior year. As adjusted for special items, the operating income margin for the full year 2016 was 4.5% compared to 4.9% in the prior year, that's just a 40 basis point decline in margin and 20% less sales. Net income was $6.8 million for 2016 or $0.23 per diluted share compared to net income of $7.1 million or $0.24 per diluted share in 2015. Net income in 2016 reflects an income tax provision near zero compared to an income tax provision of $9.8 million in 2015. The decrease in the income tax provision period-over-period was primarily the result of tax benefits arising from domestic pretax losses in 2016. With respect to 2017 we model an effective tax rate of 30% to 40%. Depreciation expense for 2016 was $15.1 million, the amortization expense $1.3 million and capital expenditures were lower than we had anticipated at $11.9 million, largely as a consequence of a handful of programs launching a bit later than planned. Our 2017 business plan contemplates capital expenditures on the order of $15 million to $18 million. We were pleased with our cash billed during the year, in part reflecting effective management of the company's investment and working capital. Net cash provided by operating activities in fiscal year 2016 was $49 million. We finished the year with $130 million of cash, $38 million more than a year ago. We had $38 million of availability from our ABL facility at year-end and therefore liquidity of $168 million. Accordingly, debt-less cash at year-end was $105 million; this puts the company's leverage debt-less cash at 2.3 times $46 million of adjusted EBITDA for the year. As you may recall, as indicated in the recent past the company intends to refinance the $235 million as senior secured notes when the time is right. The company's continuing operation for restructuring efforts and our focus on managing down selling, general and administrative costs has allowed us to protect our margins during the cyclical decline in sales. The credit markets are favorable at the moment. Our financial performance when taken together with the favorability of the leveraged finance market and our ability to redeem the notes at par beginning in April presents us with an excellent opportunity to refinance the company. Accordingly we intend to pursue the redemption of the notes will provide additional information in that regard soon. As regards to our segment financial results, revenues for the global truck and bus segment for the fourth quarter of 2016 were $91.6 million compared to $127.1 million for the prior year period, a decrease of 28% primarily resulting from a 34% decline in fourth quarter 2016 heavy-duty truck production in North America compared to the prior year. Operating income for the fourth quarter 2016 was $6.3 million compared to operating income of $13.7 million for the prior year period. The decrease in operating income period-over-period is primarily the result of lower revenues offset by operational improvements and the benefit of cost reduction and restructuring actions. For fiscal year 2016 revenues for GTB were $416.3 million compared to $565.3 million in the prior year, a decrease of 26% primarily resulting from a 29% decline in heavy-duty truck production in North America as compared to 2015. Operating income was $30.9 million compared to operating income of $59.3 million in the prior year. This decrease in operating income primarily resulted from the decrease in sales year-over-year offset by operational improvements and the benefit of cost reduction and restructuring actions. Results in 2016 and 2015 included restructuring charges of $2.7 million and $1.9 million respectively. Shifting now to the global construction and agriculture segment, revenues in the fourth quarter of 2016 were $60.4 million and consistent with the prior year period. Foreign currency translation negatively impacted fourth quarter 2016 revenue by $3 million or by 5%. Operating income in the fourth quarter was $2.5 million compared to operating income of $0.7 million for the prior year period. The $1.8 million improvement in operating income period-over-period on flat sales resulted primarily from operational improvements and the benefit of cost reduction or restructuring actions. The fourth quarter 2016 and 2015 results included restructuring charges of $0.2 million and $0.5 million respectively. The fiscal year 2016 revenues for the GCA segment were $254 million compared to $271.6 million in the prior year, a decrease of 7% primarily reflect the sought [ph] North American construction equipment end-market and foreign currency translation. Foreign currency translation negatively impacted 2016 revenue by $8.6 or by 3%. Operating income was $15.7 million in 2016 compared to operating income of $8 million in the prior year, that's a two-fold improvement on 7% less sales. Results in 2016 and 2015 included restructuring charges of $0.7 million and $0.5 million respectively. To wrap up, CBG associates have made a number of adjustments to the company's cost structure thereby allowing us to protect our margins in a cyclical decline in our two most important end-markets; North American heavy-duty truck and global construction equipment. In North America facility restructuring is continuing and is expected to further improve the company's cost structure. This improved cost structure should better enable CBG to create value throughout the cycle and positions us well for 2017 and beyond. That concludes our prepared remarks. Thank you for joining us this morning. And we'd be happy to take any questions you may have. Chenille?

[Operator Instructions] And our first question comes from the line of Mike Shlisky of Seaport Global. Your line is now open.

Good morning guys, can you hear me okay?

Yes.

Okay, great. Thanks. I guess I want to touch first on some of the labor cost issue that you just mentioned. Could you -- is this -- I guess one, it's just an opportunity to invest more automation at some of your plans going forward. Is that part of your CapEx for this year? And then kind of secondly, is the issue behind you now than we remarked ready or could this be going to the second or third quarter here as well kind of a problem?

Let me just clarify just a little bit, it is predominantly a labor pool shortage issue. So we've had difficulties hiring enough people in a very short period of time as some of the seasonal spikes that have occurred have been higher than and even previous years. At the same time we were launching new programs and coupled with transferring some programs; so it exacerbated the situation and that has driven us into some inefficiencies related to overtime and premium freight items like that have contributed to the issue. The issue is we've enacted several things, we're still -- we've got some plans that need to be put in place. We expect that it will begin to dissipate in early second quarter.

Okay, alright, great. Also wanted to turn towards the overall outlook here. I know [indiscernible] quarterly guidance, does it makes sense given when you've seen from the built plans of some of the OEMs and some of the order coming in that maybe -- you will be facing some of the same challenges that you faced in the third and fourth quarter -- in the first and second quarter of this year? Just some of them still -- you know, the client's year-over-year in production, probably in both segment and maybe seeing a better back half; is that the right way to kind of look at it?

I want to make sure I understood the question Mike. You're asking are we going to see -- even though the orders are coming in stronger; let's take it one at a time. You're asking me are we going to see the same problems we had in third and fourth quarter and the first and second quarter?

Yes. I didn't mean problems, I meant some of the same issues with definitely coming down and trying to match those up with some cost reductions and some better margins.

Yes. So what I would say to that is, the running rate -- we stabilized at the running rate that we had in the back half of 2016 just from a management standpoint of our variable cost. With the improvement in the order patterns that we've seen in the last four months talking specifically about North American truck, the backlog improvement; I think we foresee some pick up at least by the second quarter and the first quarter is looking okay and probably in line or the same as what we were seeing at the -- in 2016 back half. And the other reference to construction, I would tell you that we are seeing very positive order patterns and construction, more than we expected at least of our order book and we're seeing positive market reaction in Europe and in Asia, both and some indications that we'll see the same thing in North America on a full year basis. And that's for the first half of the year, I don't have a lot more visibility in the second half of the year at this point in either segment.

Okay, that's fair. It's been a while so can you maybe give us a refresher on if we end up seeing actual sales increases at some point earlier or later in the year or even next year, what would you say is your new level of incremental margins should things turn the upside here?

Mike, it's Tim. Thank you for your question. As you know the range that the company has historically converted in is in the 20% to 25% range. That's what we've historically sort of advertised and before the restructuring actions, you know that's generally what occurred. As you know over the last year and a half or so, the conversion on the upside sales before the downturn started last year was at the very upper end of that range and obviously last year and the decline in sales is way below the lower end of that range because of the restructuring actions. Most of those -- I wouldn't say most but many of the restructuring actions are fixed in nature. So I don't anticipate those changes to have a dramatic impact on the conversion range. So the answer to your question is, as we sit here today going forward in the normal course, absent any incremental restructuring actions which as you know are continuing and will still get benefit of in '17 but setting those aside for the moment we could continue to expect to convert in the 20% to 25% range.

Okay. And last one, just another one here -- from some thoughts behind here at the CONEXPO Show, we are here at the show right now. Some of the construction OEMs have been sort of trying to find new ways -- some of the bigger ones and then trying to find new ways to kind of tear their products by having a good, better, best type of tearing going forward. And some of it involves, they are already good or they were already better and now they are trying to more good or [indiscernible] lowest product line; and that involves having a bit of -- I want to say shift down but more simplify cab with less comfort features. Although it is supposed to be additive to some of those big company sales, not necessarily cannibalization -- I was kind of wondering if you have any thought as to your mix going forward in 2017 and 2018? And if there are any big OEMs putting out platforms, if you will be -- if you think you've got a good chance to kind of win those?

But I would comment that in two ways. One is, first of all, I think that there may be segments or regions in the market that some of the companies you may have talked to were looking to compete in and so they are looking at a product to do that at a lower price point. When we launched our new product line targeted at that segment, just recently and you may have had a chance to see why you're out there. It's intentionally designed to be modular and the modularity allows us to give flexibility of the customer so that they can order the product line and plug-and-play from a base product although we have high-end fully featured product without any repercussions and with some of the same base architecture and performance. So that's intentionally why we designed the product the way that we have. I would tell you that many of the customers we're working on with that advanced products are not reducing the content or performance and I would say they are actually looking to improve an increase not in the comfort but the durability and the types of features that they've put in the product. So I don't know how to balance the folks you talk to with the ones that I've been talking to but I think that probably our mix will not change appreciatively.

Super. Can I just squeeze one last one. And one last one here on after-market, you had mentioned the release to after-market orders but actually doing quite well recently. I didn't hear much color on that and too much -- discuss a little more on what color as to what's going on there, perhaps why we're doing so well and kind of give us your thoughts as to how that might go later on in the year?

Well, I can just say they had a good strong start to the first part of the year. I think there was some pent-up demand. You know, what we typically see which is contrary to maybe logic is; a lot of times when that when the truck builds come down it has a lot to do with -- maybe the economics for the fleets and what's going on in their business. And consequently, maybe discretionary purchases or replacement purchases for components can also be delayed and that tends to happen; so the aftermarket does tend to trend in some regards up as the truck builds trend up in some of the positivity. So as you're seeing some of these orders come back in the OEM side of the business, it's not surprising to me that some of the aftermarket orders are also trending up. And so that's probably all I can say with aftermarket because we don't have a real great ability to forecast aftermarket but we do obviously subscribe to one of the few indices that's out there. And so far at least amongst our peer group and in our segment, the market is also being reflected up in aftermarket in aggregate. So we're up in the market index that we subscribe to is up so far this year.

Okay, super. Well, I've got you guys enough. I will pass it along. Thank you.

Thank you. And our next question comes from the line of Douglas [ph] of DC Capital. Your line is now open.

Thank you, good morning. Thanks for the call. Two questions, first for Pat. Pat, I haven't gotten your arms fully around CVGI during the down cycle; how would you stress what it does exceptionally well? And how will those strengths translate into market share gains, both organically and inorganically going forward?

Well, I think that -- I think we've demonstrated successfully that we can manage through a down cycle as far as variable cost management and I think traditionally we've been pretty good at that. What we've been able to do this time is not only manage those costs down that are variable that have to come down but we've also been able to make gains and implement projects and systems that are driving our cost reduction even deeper and being reflected in the numbers which I think when you start to come back up as Tim had mentioned, as we've lowered some of the fixed cost levels; those are going to give us some leverage on the performance side once we have more sales across that fixed cost level. So I think that's part of it. I think the other thing I would say is, we have been actively engaged in renovating, refreshing, developing our next-gen products across the board, both on the truck and bus side and also on the construction and Ag side. And I'm very hopeful and we're seeing a lot of initial positive feedback that those products are going to be able to continue to drive us with existing customers and existing business in the future but also with new segments and other customers that we don't currently have. So I think that's probably what I'm pretty excited about is we've been able to manage in a downturn -- not reducing the amount of focus we've had on the future activities.

So the cost base is giving you a leg up you think on these new opportunities?

I believe so, for sure.

Okay, great. And Tim, on the -- looking at the capital structure and repayment of the note, what are your objectives I guess as you assess what you want to do next?

Well Doug, the objectives are first to refinance the senior notes which as you may know term out two years from next month. And therefore the redemption premium stuffs down to zero. So you know, assuming that our business is performing properly which it is and the capital markets are receptive which they are; we would have an interest in getting on with that. And furthermore, I believe that the actions the company has taken -- first of all with respect to the balance sheet managing our working capital and therefore, managing up our cash and therefore managing down certainly our net leverage and even our gross leverage over the last three years or so that performance taken together with the changes that we've made in the cost structure that positioned us at a point where we believe our end-markets are at or near trough levels. To be in a financial condition it's really very reasonably comfortable, so I believe that both of those demonstrated capabilities by this management team will be viewed in the favorable light by the leverage finance market. And so that's the second part of this which is entering the market when it's open and receptive; and I think we'll be favorably viewed.

Right. No, I think you've certainly set the groundwork to do that. Is the -- working capital has been a source of funds as revenues have declined; how much do you think it will absorb I guess on the way up incrementally? And then it looks like the CapEx is going to be up a little bit this year as well. Are those two new things on -- if you will the outflow to look forward -- you know, to look at as we look at the company?

Well, you might look at it this way. If you look at the Company's net receivables, inventory less the payables, it varies Doug but as we sit here today; and this has generally been historically true, it represents -- it's generally 18% of the company's sales and that will move over time to time but it's sort of in that range. We have taken a few actions recently to put us in a little better position absolutely with respect to receivables and payables, and to a lesser extent inventory; so there might be some modest fluctuation from that 18% but I don't expect it to fluctuate dramatically in the future as the sales come up.

Okay, great. Thank you very much.

Thank you. [Operator Instructions] And I'm showing no further questions at this time, I would now like to turn the call over to Mr. Patrick Miller, Chief Executive Officer for closing remarks.

Okay, thank you. Just wanted to thank everybody for your interest in Commercial Vehicle Group and your participation today. We are proud of the CVG team and the work that's been done so far to-date, helping us to become a more stable and value creating company for all key stakeholders over the long-term Thanks again everybody. Have a good day.

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