L.B. Foster Company (FSTR) Q3 2015 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen and welcome to the Q3 2015 L.B. Foster Earnings Conference Call. My name is Chris, and I will be your conference moderator for today. At this time, all participants are in listen-only mode. Later we will conduct a question-and-answer session [Operator Instructions]. And at this time, I would now like to turn the conference over to your host for today Mr. David Russo. Sir, you may proceed.

Thank you, Chris. Good morning, ladies and gentlemen. Thank you for joining us for L.B. Foster Company's earnings conference call to review the Company's third quarter 2015 operating results. My name is David Russo and I am the Chief Financial Officer of L.B. Foster. Hosting the call today is Mr. Robert Bauer, L.B. Foster's President and CEO. This morning, Bob will review the Company's third quarter performance and provide an update on significant business issues as well as Company and market developments. Afterward, I will review the Company's third quarter financial performance and then we will open up the session for questions. During today's call, our commentary and responses to your questions may contain forward-looking statements, including items such as the Company's outlook for our businesses and markets, cash flows, margins, operating costs, and other key business metrics. These statements involve a number of risks and uncertainties that could cause actual results to differ materially from statements we make today. These forward-looking statements reflect our opinions only as of the date of this presentation and we undertake no obligation to revise or publicly release the results of any revisions to these statements in light of new information, except as required by law. All participants are encouraged to refer to L.B. Foster's Annual Report on Form 10-K for the year ended December 31, 2014, as updated by any subsequent Form 10-Qs or other pertinent items filed with the Securities and Exchange Commission for additional information about L.B. Foster and to learn more about the risk factors that may affect our results. In addition to the results provided in accordance with United States Generally Accepted Accounting Principles, our commentary includes certain non-GAAP statements including the EBITDA and adjusted EBITDA as well as results that exclude certain non-recurrent charges including an impairment charge and charges related to the Union Pacific Railroad Warranty Claim. Reconciliations of U.S. GAAP to these non-GAAP measurements have been included within the Company's 8-K filing. Statements referring to EBITDA, adjusted EBITDA, adjusted gross margins, and adjusted net income are considered non-GAAP measurements and while they are not intended to replace the presentation of our financial results in accordance with GAAP, the Company believes that the presentation of these metrics provides additional meaningful information for investors to facilitate the comparison of past, present and forecasted operating results. With that, we will commence our discussion and I will turn it over to Bob Bauer.

Thank you, Dave, good morning, everyone. Thank you for joining us today. This is particularly important call for us as it's critical that we explain the news of this quarter's results in enough detail to make sure that you understand the discussion that’s in our press release. There are a few points I wanted to make before discussing the details. There is a lot of action that's taken place in the Company as we adjust the volume changes, they're associated with the rail industry business, climate as well as the rapidly changing patterns taken place in the energy market. We're placing an extraordinary amount of attention our financial forecasts in light of these fluid market conditions and it's been a particularly challenging year as we have had the react to change in direction that was taken by Union Pacific Railroad to move their business to other suppliers, along with the commodity cycle that is promoted a lot of volatility and produced some of the lowest prices seen in a long time for oil, gas, steel, agriculture products each of which has had some impact on our business. So we're always attempting to be as accurate as possible in our forecasting despite the uncertainty that persists with some of our markets and customers and will continue to do so. We dealt with a number of issues this year which we recognized as risks as the year started that have caused us to fall short of our original projections for year. We will attempt to provide as much information as possible to help you understand both current and the projected business environment that's influencing our results which as I said earlier still very fluid as this year comes to an end. And while we're not making the original full year projections, we released earlier in the year we have a number of areas with very good results and action plans that are already in place intended to restore the lost sales volume and to help us maximize cash flow. And I am going to comment on those later. So let me turn specifically to comments on the third quarter. We released news today with third-quarter results that included an impairment charge which is a non-cash charge that will reduce the goodwill that's been accumulated from acquisitions. As noted in the press release, its impairment -- we've brought our impairment test forward and that was conducted in a manner that I would consider to be conservative in terms of discounting our forecasted future market recovery and the resulting value of the Company's assets. We then wrote down approximately $80 million of goodwill associated with the acquisitions of Chemtec Energy Services and Inspection Oilfield Services even though very little time has lapsed since those acquisitions. And it's important to the say that a number of factors led to accelerating the impairment test starting with our revision and guidance back in August which was followed by continued reforecasting of the energy market recovery as well as a significant decline in our market cap. We are also facing energy market valuations that have become more conservative as they take into consideration the sharp market decline that have occurred and the anticipated risk and energy recovery forecast. This is led to a high risk profile and subsequently a high discount rate on future forecasted cash flows which ultimately makes it a pretty high hurdle for the goodwill to pass an impairment test as it places even greater emphasis on near-term forecasts. So while this is obviously significant news and we take it very seriously, it should not overshadow the fact that these are businesses that are positioned to help us grow in a market where their business models will drive long-term value creation. We still firmly believe that and our management team is already acting on opportunities and restructuring to address weakness in certain markets and as well as the loss of Union Pacific Railroad sales volume across several of our rail business divisions. So I am going to turn each of the operating business units briefly discussed, what I think are some of highlights in our business segments. I will start with the rail business segment. Our rail business had declining sales in the quarter year-over-year, but still managed to improve adjusted gross margins by 10 basis points on a year-to-date basis, adjusted gross margins are 100 basis points better than prior year period in the rail segment and we’ve done a great job managing through an environment where volumes have declined taking actions to adjust cost and facilities that were affected by the volume reductions. I feel like our teams have done a very good job managing price in the declining steel price environment. We’ve completed some automation projects that are reducing product cost and most of which will benefit the products with lower anticipated sales volume. And we’ll deliver another large complex stringent projects it’s already underway in the second half of this year that’s connecting the Dallas airport with Washington DC. So while year-to-date pretax margins aren’t running at prior year levels as we haven’t been able to overcome the deleverage from lost volume and our acquisition cost, at 8.4% pretax segment margins I feel pretty good about what this team has been doing. Turning to the construction business, I think our construction business is having a pretty good year. The market hasn’t been robust although our third quarter sales are up 8.4%, our year-to-date sales are up 15.8% construction business has also realized margin expansion in the third quarter and in the nine month year-to-date period. Most impressive for me I’d say are the programs that our concrete products businesses launched that have really driven the year-to-date sales growth, and I am also very pleased to see that Piling business continues to maintain solid profit margins during the time with steel pricing pressure as well. The depressed steel price are certainly putting pressure on Piling sales revenue as well however we’ve been very disciplined in managing price to maintain margins. We are booking less business in pipe Piling and some of the more commodity Piling products where the impact of lower steel prices is making it more competitive. But I believe overall construction business has turned in a pretty good quarter. Turning to tubular and energy services, our significant sales growth of course is all acquisition driven. This segment has more than doubled in sales in the nine month year-to-date period which is really what’s behind the 8.8% year-to-date sales increase for the Company. Unfortunately there has been pressure on gross margins in this segment as price pressure and low volume in our upstream services markets are having the greatest unfavorable impact on gross margins, our credit products business it also continues to suffer from what conditions in the southeast agricultural market, which is also led to reduced sales for that product line. And our joint venture business which largely serves the oil country tubular goods markets is no longer contributing to bottom line profits this year. Sales are up considerably for that business. So while it’s obvious that there have been substantial headwinds in certain energy markets I think it’s important to draw clear distinction between the businesses we have that serve the upstream oil and gas markets including our joint venture which makes those OCTG products and those divisions that serve the pipeline transport markets that serve all applications from upstream to midstream as well as downstream applications. The business climate and the need for infrastructure is being driven by completely different economics between these two. Our businesses that are serving the pipeline applications such as coded products and our precision metering systems that Chemtec makes they’re continuing to see good demand and indications of continued long term spending. For example coded products is building backlog right now with some significant projects that are already booked and a number of it are in the proposal stages. Right now it looks like we’ll start 2016 with somewhere in the neighborhood of 75% of planned production sold. And Chemtec is booking precision metering and custody transfer systems in areas that need lower cost because production companies are still transporting oil by truck or by rail and there are a few sizeable projects where investment is continuing in midstream applications due to a lack of infrastructure. Now the upstream segment it remains less clear, we’re seeing continued volatility and uncertainty on the timing from market recovery; sales in our upstream services business which is largely inspection oilfield services business for more than 60% below what they were at the peak. We were expecting around 40% to 45% decline, but not upwards of 60% decline, so some operators have taken very drastic steps to reduce the need for even test and inspection services that are often considered very critical. We’ve taken significant steps to right size the business to compensate for this reduction as a service business it’s largely headcount related actions to take. We’ve reduced our centralized support costs, but there is some deleverage as facilities available for consolidation are really limited due to the need for maintaining a local presence where the service work is being performed. We have undertaken several steps already to compensate for the current environment, but we're also going to be mindful of what’s needed to be the primary source to serve customers when this market recovers and we obviously believe it will. We want to maintain our footprint as this is the competitive advantage. We want to be located where the leaders in the industry are. We want to have our assets in the right place and responsive to requests that need fast factions as the business picks up. And we want to have a best cost position but also the best talent for high quality services that customers depend on. This is very important in this marketplace. So these are assets we're going to protective as we make some of these restructuring decisions. So I will conclude this topic by reminding everyone that our acquisitions for cash flow positive last quarter. They're also cash flow positive this quarter in Q3. And we will have a continued sharp focus on cash flow going forward. So turning the subject to going forward, we are very much aware of our stock price and the need to restore value as quickly as possible as we have always maintained, we're focused on a strategy that first and foremost built shareholder value and our move into the energy infrastructure this year was done with a long-term value creation plan in mind. As we capitalized on an environment where acquisition prices were falling, we knew there was some risk that the bottom of the upstream energy market was still ahead of us. However, we thought we could move into this market without of dilutive impact to EPS. We will be focused more intense fully on driving programs that can restore our stock price while still positioning us to benefit as markets improve. We are already identifying rail product solutions from our recent acquisition this year with great growth potential that can help reduce some of the lost Union Pacific business. And in the meantime and more specifically we plan to accelerate cost reduction initiatives related to integration activities of the energy businesses in an effort to improve profit margins while revenue remains at depressed levels. We have new product programs and integration activity underway in our rail businesses that should create growth opportunities. We will be very aggressive moving these programs forward which also include moving products to underserved market today. We want to take advantage of those opportunities. We plan to maintain investments in our modernization programs, in our facilities, and in our business systems projects that we believe can bring long-term efficiency gains that will favorably impact profit margins and cash flow; however, we will monitor the spending on these very closely and we're going to prioritize projects very carefully based on return. And there are other restructuring programs on the drawing board across our business that we've identified, that are intended to drive lower-cost and we will continue to look for opportunities along those lines from a capital spending standpoint the capital spending is being reduced. Then in 2016 we're planning for even lower levels of spending as cash flow really becomes a more significant focus for all of our business managers. And finally, we want to exit 2016 with a balance sheet and liquidity measures that reflect a meaningful progress to paying down our debt and that's going to be one of our top goals for the coming year. So I'm going to end with a few comments here on the outlook for the quarter that we're in Q4 of 2015, kind of wrap up for the year which we included in our news release. Our outlook for the balance of the year has a lot of language around uncertainties, we obviously realized. However, we felt it was important to give you as much insight into what we’re seeing is possible. We typically have a good idea of what to expect in the quarter that we're in however as we have businesses that run with very little backlog, the current environment that is rapidly changing from time to time as certainly made this more difficult. We are hearing upstream market customers talk about possible shutdowns for the last few or several weeks of the year, and we expect some companies will deploy year-end cash flow preserving strategies. So we're closely monitoring the messages and forecasts that are being provided by the end-users and supply chain partners that served this market segment to stay on top of the changes that may affect us. So as a result we felt that was appropriate to include in our outlook the risk of some very short-term actions that might affect us in the fourth quarter resulting in EPS that could be $0.10 to $0.20 below the $0.30 forecast that we have for the quarter. I will finish by saying, at the same time we might have areas where we benefit from year-end spending where either expense budgets or capital spending budgets need to be depleted before year-end deadlines, but at the moment we recognize there is not a whole lot of optimism in this particular camp but it has happened. So maybe some favorable things will go our direction as well. So hopefully that gives you a really good idea of the climate that we’re facing. With that I’m going to turn it back to Dave and he’ll go through a lot of specifics in the third quarter results.

Thanks Bob. As disclosed in our earnings press release L.B. Foster's third quarter operating results include the following items, the first is $0.7 million adjustment to our warranty reserve related to concrete ties. We review this reserve ever quarter, we look at historical results as well as our expectations in the future and actively manage and adjust this reserve as we see -- as we conduct estimate and forecast. The second was an impairment charge that Bob discussed we recorded an $80.3 million charge related to acquisitions. L.B. Foster's typically performs annual impairment testing in the fourth quarter of every year. This year number of factors indicating a possible impairment might exist during the third quarter led us to accelerate such testing into the third quarter. Our internal accounting team along with a valuation consulting firm went through an involved process to determine that two businesses were impaired. Chemtec Energy Services was purchased at the end of 2014 for little less than $67 million creating goodwill of around $22 million, $10.4 million of that goodwill was deemed impaired. Inspection Oilfield Services or IOS purchased in March of this year for approximately $167 million, created goodwill of $69.9 million, all $69.9 million was deemed impaired for that business. So these two totaled $80.3 million, there was a lot book tax benefit on this charge as not all the goodwill is deductible for tax purposes. The after tax impact was $69.3 million or $6.23 per diluted share. We also tested other intangible and tangible assets and found no issue regarding those assets. We do remind everyone that this charge is considered a non-cash charge that does not impact our operations, bank covenants or cash flows. Bob spoke to the future strategy regarding these businesses and the continued expectation that they will be solid contributors in the future. Most of my discussion will exclude these costs to facilitate a more meaningful comparison of operating results. With that, net sales for the third quarter of ’15 were $176.1 million compared to $167.8 million in the prior year a 4.9% increase. The sales increase was due to 115.4% increase in tubular and energy services segment sales and an 8.4% improvement in construction segment sales partially offset by 13.8% decline in rail products and services segment sales. The tubular and energy services segment sales increase was due to the sales contributions made by the acquisitions December 2014 Chemtec Energy Services and the inspection Oilfield Services acquisition partially offset by decline in coated and threaded product sales. Excluding the acquisitions, tubular sales declined by $1.6 million or 10.4%. The construction product segment sales increase was due to increased sales across all divisions in this segment, most notably our precast concrete products division and Piling product sales. The decrease in rail products segment sales was due to reduced sales in concrete ties, Rail Distribution, Allegheny Rail Products, and Rail Technologies businesses, partially offset by an increase in transit products as well as the contribution from our January 2015 TEW Engineering acquisition. So the reductions in rail were due to a number of factors including the largest being $12.2 million reduction in Union Pacific sales in Q3 of ’15 compared to the prior year quarter. We also had a $1.3 million reduction in sales due to fluctuation in currency rates as compared to the prior year and overall sales reductions to the freight rail customers occurred this quarter due to lower volumes as evidenced by Class I commodity car loadings reporting a 6.2% decline for Q3 and 4.4% decline on a year-to-date basis. As a percentage of the third quarter of 2015 sales tubular accounted for 19%, construction was 31% and rail totaled 50% of sales. As mentioned in our earnings release, third quarter bookings were $145.5 million, an increase of 2.2% compared to last year’s third quarter due to a significant contribution from acquisitions completed since the third quarter of 2014. Tubular bookings increased 231% excluding recent acquisitions tubular bookings would have increased still by 73.7%. Rail products, bookings declined by 31.4% in the current year quarter. On a year-to-date basis, rail bookings were down by 19.8%. Construction product bookings increased by 10.3% principally due order improvements in the bridge products business partially offset by reductions in the concrete products business. Order backlogs stood at 174.3 million at the third quarter, down 21.9% from the third quarter of last year. The decrease was principally due to reductions in our piling products, rail distribution and concrete ties businesses partially offset by the increased backlog of our coated products and concrete products businesses as well as the businesses acquired after the third quarter of 2014. Gross profit margin was 20.5% in Q3 after excluding warrantee related charges of $0.7 million, in the third quarter adjusted gross margin was 20.9%, 10 basis points lower than the prior year. Rail margins were up by 10 basis points over the prior year and construction segment expansion had -- margins were up principally due to increased bridge products and Piling products results. Moving onto expenses, selling and administrative expenses increased by $1 million to $21.6 million or 4.7% in the third quarter of 2015 due to the inclusion of cost of our acquired businesses, excluding the S&A of companies acquired after the third quarter of 2014. Cost declined by $2.4 million or 11.7%. Third quarter selling and administrative expense represented 12.3% of sales in the third quarter of 15, flat with the prior year quarter. Third quarter adjusted pretax income was $10.8 million or 6.1% of sales compared to $13.9 million or 8.3% of sales in the prior year. As Bob discussed at length, we have many concurrent cost reduction activities occurring as we speak. As mentioned in our earnings press release, the effective tax rate for the third quarter of 15 was 18.2% compared to 34.2% in the third quarter of 2014. The Company’s effective income tax rate was significantly impacted by the goodwill impairment charge which related to both the tax-deductible and nondeductible goodwill, excluding impairment charge the Company's effective tax rate for the quarter would have been 36.2% which is higher than the prior year quarter primarily due to a less favorable global mix of income. Adjusted third quarter net income was $6.9 million or $0.67 per diluted share in 2015 compared to $9.1 million or $0.88 per share in the prior year. The $2.2 million reduction in net income was due principally to the dilutive impact of the IOS acquisition as well as the reduction in rail segment revenues and related profitability. Adjusted EBITDA was $19.2 million for the third quarter of 2015 compared to $17.1 million in the prior quarter, an increase of 12.1%. On a year-to-date basis, adjusted EBITDA was $47.9 million compared to with $42.9 million, an increase of $5 million or 11.6%. Turning to the balance sheet, working capital net of cash was essentially flat compared to the second quarter of this year. Accounts receivable increased by 7.6 million during the quarter. Our core business DSO increased to 50 days from 49 days at June, but our consolidated DSO was up 53 days as compared with 51 days at June 30. Inventory was reduced by $7.1 million as compared June and accounts payable and deferred revenue declined by $2.1 million, while these results are fairly typical of our seasonal third quarter results, they are also unacceptable. We are redoubling our focus on working capital efficiency going into Q4 and for all of 2016. Our cash provided by operating activities in third quarter was $15.6 million compared $18.1 million in the prior year quarter. On a year-to-date basis, cash provided by operating activities was 13.7 million compared to $49.7 million in the prior year as we have discussed on previous calls that prior year numbers was favorably impacted by a significant reduction in accounts receivable which was anticipated as we resolved slow collection issues on various projects and customers that built up in the second half of 2013. Our capital expenditures were $3.4 million compared to $3.9 million in the prior year quarter and year-to-date we've spent 11.6 million compared to 11.6 million last year, so flat with prior year. We anticipate spending approximately $13 million to $15 million in capital for all 2015 which includes our ERP program. The 2015 anticipated capital programs have been in all three business segments and focused at providing new and expanded manufacturing capabilities, improve service and product availability to the customer and increase manufacturing efficiencies in future periods that we do believe will improve shareholder value on a longer term basis. Based upon our recent results however we have scaled back numerous 2015 capital programs and we intend to cut deeper into the 2016 programs by an additional 30% to 35%. While our capital allocation protocols have been solid potential returns on projects in softer markets become less attractive and much easier to cancel or defer. Except for a couple of capital programs that we expect will have swift paybacks due to their tie in to business we’ve already one or another driven by longer term strategic growth in addition or as well as our EPR implementation project. We look to keep capital in check save from minimal necessary maintenance items. We did repurchase 80,500 shares of L.B. Foster stock during the third quarter for a little under $1.6 million. We anticipate that full year cash generated from operating activities will exceed capital expenditures, debt service payments, dividends, and share purchases in 2015. Our debt at the end of September was $207.5 million compared to $218.5 million at the end of June a reduction of $11 million. Maximizing our free cash flow for the remainder of this year and for all of 2016, will be a primary focus of this management team. All excess cash flow generated will be used to pay down debt and de-lever the Company. That concludes my comments on the third quarter I will now send it back to Chris to open up the session for questions.

[Operator Instructions] And our first question comes from the line of Beth Lilly with GAMCO Investors. You may proceed.

I have several questions, so you talked about the $12 million reduction in sales in the quarter as it pertains -- in the rail division as it pertains to the UP. So can you just talk about what’s the -- there is couple of different questions within that. One is what’s going on with the UP and the legal battles over the ties? And are you planning now going forward for 2016 with no business with the UP?

That is correct. We now have removed Union Pacific sales from our current forecast for the balance of this year we’re substantially not doing any business any longer and they’ve determined this supply contract for concrete ties which we had announced in our last earnings’ conference call. So we are currently not expect any further sales of concrete ties as well to Union Pacific.

And then you also have other products with them, but they’re buying other stuff from you besides ties. So are you finding that business going away?

Yes, we have described that one before. So to cover that again, they have decided to move that business away from L. B. Foster to other suppliers, so the business that we were doing with them in other rail products has also stopped.

And has the issues that the UP on the tie side, has that led into other relationships with other customers that buy ties from you, and if they pulled businesses from you as a result of this?

We believe it has not and we have not seen our concrete tie business with other customers affected by what has taken place with Union Pacific up to this point.

I’ve two other questions, so you bought Chemtec and Inspection Oilfield Services within the last nine months, and you spend a total of $230 million or $240 million and you took at $80 million write down on those two companies that you’ve acquired. That seems like an enormous write down. And I am wondering can you shed a little more light onto what you paid for those businesses and now nine months later you have to take a write down and it’s disconcerting.

You want to know what we paid Jay and [multiple speakers] on your sheet there the exact number is I think.

I did I mean IOS was right around $167 million and Chemtec was about $66 million.

And so --.

And so those businesses for those values paid were based on forecast and business models that we have put together at the time of the acquisition that we felt were pretty solid and accurately valued the Company and since the time we have made adjustments in their 2015 forecast and the process -- well step back and say that a fair amount of that price paid when into goodwill as you would normally expect that it would and Dave spoke about what those numbers were. And so the process of us going through the impairment testing was accelerated due to certain factors in the market, the fact that our forecast had changed, the fact that we made a downward revision in our earnings projections earlier in the year, our market cap fell below the book value of the Company. So there are a number of things took place and that coupled with the fact that we are using a very high discount rate on forecasted cash flows for those companies now a much higher discount rate than was originally used on their valuations caused them to be deemed goodwill impaired.

So let me ask you, do you think that, did you pay too much in light of having to take the write-down and everything, do you think you paid too much for these businesses?

I’m not going to suggest that. I think that the circumstances in terms of how they were valued, the landscape has changed a bit throughout the course of the year and while our forecast had changed, I believe that there is good long-term value in these companies. Obviously, any sort of write-down in goodwill someone might suggest that, that was the case. But there's a lot of different ways to the value businesses and I am not going to have I think a conversation about that we pay too much for hem at this point, in fact I think it's very early and very little time has elapsed as I said earlier to even go through this test, but there is a lot of conservatism that is taking place right now with companies in the energy market and the values that the market is placing on energy companies given what has taken place are getting more and more conservative all the time and those factors have influenced us.

Okay last question is, you've talked, you’ve made a comment earlier on in the call, that you are very aware of the stock price and they need to increase value, so when you make that statement what is that mean, Bob?

I certainly don't want anyone on the call to think that we have not paid attention to that and that we aren't taking these issues that the Company is facing seriously. So we are placing an intense focus on the things that we think can continue to drive earnings improvement, EBITDA growth, the things that we know will drive and restore the stock price. And we're prioritizing these things in that manner. For example, the capital spending comments that we have that will drive better cash flow than we would've spent more than we are going to, so we are beginning to make decisions about certain levers that we're pulling in the Company and at the top of our list as we make decisions about things that we are doing are going to be the fundamental drivers to financial improvement and EBITDA growth and EPS growth for both the acquired companies and the based companies that will restore and improve the performance of the entire company.

Okay, I have one last question if you don't mind, so in terms of the UP and the status of the tie, I mean, you've put out your Q and there was nothing -- there was no new real information in there in terms of the status of that, can you give us any update on where things sit in terms of your liability and any light you can shed on that?

Yes, we didn't -- right Beth, we didn't have an update in there because really nothing has changed since the last quarter and our report on that. We continue to have the dispute over the warrantee of Grand Island concrete ties. There is a litigation process that is underway as customary with those sorts of things. We don't make any projections on the litigation process. So that process started to unfold really earlier this year and it will continue for the next several quarters. At this point, we do continue to address warrantee issues and we have people that are devoted to working on those particular issues and tracking what is going on with our product in track. But beyond that, there is really nothing that has changed with regard to that situation.

[Operator Instructions] And we have no further questions at this time.

Alright, we’ll go ahead and close the session then. We appreciate everyone support and attention and we will look forward to improved results here and continuing to work on the things that are priority for the Company and for our shareholders. And we’ll talk to you next quarter. Thank you.