LSB Industries, Inc. (LXU) Q2 2016 Earnings Report, Transcript and Summary

Greetings and welcome to the LSB Industries’ second quarter 2016 conference call. At this time, all participants are in a listen only mode. A question-and-answer session will follow the formal presentation [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host Miss. Kristy Carver, Vice President and Treasurer of LSB Industries. Thank you Miss. Carver, you now have the floor.

Thank you Chris. Please note that today's call will include forward-looking statements and because these statements are based on the company's current intent, expectations and projections, they are not guarantees of future performance and a variety of factors could cause actual results to differ materially. As this call will include references to non-GAAP results, please reference this morning's press release in the Investors section of lsbindustries.com for further information regarding forward-looking statements and reconciliations of non-GAAP result to GAAP result. At this time, I would like to go ahead and turn the call over to Dan for opening remarks.

Thank you Kristy and good morning everyone. Thank you for joining this morning's 2016 second quarter conference call. I will first review the key events during the quarter, and provide an update on the markets we served, and then discuss the operational status of our manufacturing facilities. Mark will lead the discussion of our financial results and capital structure and then we will discuss our key objectives for the remainder of 2016. The second quarter of 2016 was a critical quarter for LSB and a strategic path forward is now being realized. We finalized construction, commission and then start to production of ammonia at our El Dorado, Arkansas facility during the quarter. We now have an ammonia plant at on operating rate at or above nameplate capacity. Over the next several months we expect to increase the operating rates to 110% to 115% of nameplate capacity. Another key strategic milestone was the sale of climate control business, which closed on July 1. We are currently exploring options to utilize net sale proceeds to reduce our total leverage and our total capital cost. However today we are not in a position to provide detailed specifics on the repayment of debt, redemption of proffered shares or combination of both. We are considering multiple options to de-leverage the company and are in various stages of exploring those options. As we noted in our press release late yesterday afternoon, our second quarter ammonia on stream rates at our Cherokee Pryor plants were excellent. Cherokee operated at 100% on stream and Pryor achieved 96% on stream rate. The operational initiatives we have been implementing yield a strong performance in the second quarter. During the first half of 2016, Cherokee operated at 96% on stream rate while Pryor was at 94%. These are strong improvements from a year ago. Currently Cherokee is undergoing of 3.5 week turnaround with some substantial additions to incoming electricity transformers that were 50 years old and at end-of-life service as well as a new cooling tower and other key process improvement activities. We anticipate restarted the facility next week. We planned to initiate the Pryor turnaround on September 10, we estimate this turnaround will last approximately three weeks. During these plan turnarounds, we will be making further process and equipment enhancements to ensure our on stream rates improve. In addition, as we earlier announced, we commenced our with our new Pryor UAN [indiscernible] resources during early June. We are pleased with progress to-date. Our sales for the quarter were approximately $110 million and we are largely impacted price declines despite the excellent on stream rates we noted earlier. As you likely know, we incurred significant start of expenses associated with El Dorado during the quarter and Mark will provide color around the [indiscernible] amounts in our financial discussion. Part of our immediate task is to review our historical corporate operations, and renew access costs that are not needed, now that we are pure play Nitrogen Company. This may also include sale of excess properties and Oklahoma City and footprint consolidation of administrative activities. As we indicated in the two most recent conference calls, we believe in the near term there will likely be periods when new production capacity comes online and provides a surge of product to the market, which may lead to sales price fluctuations. During the second quarter, we felt the impact of that lower pricing and the agriculture and selected industrial markets. We believe this modest price environment will continue, as additional North America capacity is broad online throughout the remainder of 2016 and during 2017. Our expanded distribution initiatives for agricultural ammonium nitrate are progressing well. We believe the market has shown that alternative suppliers for ammonium nitrate are welcomed. We want to increase our agricultural sales of this product form in 2017. We believe our plants are in key market locations and have a strong presence in those areas. We plan to utilize the existing storage domes at our Cherokee facility to position ammonium nitrate for the surrounding markets. This dome has been idled for the past several years, it is ready to go. Additionally we are readying an existing drive bulk warehouse at a prior facility to distribute ammonium nitrate into that market. This facility has been vacant for the past several years. It is an excellent facility for us to distribute product. We believe these actions will increase our volumes and so far, we have seen positive response from customers. Natural gas have supplies our plans and it should remain reasonable and should allow competitive product cost as compared to imported products. We anticipate chemical product volumes to the mining sector, will remain low in the near term, while other agricultural and industrial chemical products and volumes and pricing remains positive. Overall, we remain positive for product volumes into the market we serve. We do expect to see modest improvement in pricing as we move into 2017 as demand for fertilizer is expected to grow. Turning Page 7, as we noted earlier our operating rates at Cherokee and Pryor were excellent during the second quarter. Baytown also performed a selective turn around in April and resumed operations as schedules. Our Baytown turn around are coordinated with side key customer plant down time and there turn around and we have another selected turnaround plan for October. Our El Dorado ammonia is back to full operational mode and we expect the nitric acid plant will resume production at the end of this month. In summary, we believe we will continually make the operational improvements to increase our safety record, increase on stream rates and lower or overall production cost. We have the plan teams in place and with a recent addition of John Diesch, as our Executive Vice-President of manufacturing. We will continue to improve our plant operations. This is the key goal of ours for the remainder of 2016 and into 2017. And now I would like to turn it over to Mark Behrman.

Thanks Dan. Turning to Page 8 of the presentation. It provides the consolidated summary statement of operations for the second quarter of 2016 as compared to second quarter of 2015. Beginning this quarter we have classified our climate control business as a discontinued operation. And those results combines with any transaction cost related to the sale of that business, that were included in the first six months of this year and any tax implication related to the sale the business, are shown in net income from discontinued operations. The structure of the climate control business sale, allows for additional tax basis to be recovered that was previously recorded as a differed tax asset. This tax benefit was recorded in discontinue operations during the second quarter consistent with the period, that the climate control business was determined to be held-for-sale. Keep in mind that we close sale of the climate control business on July 1, and therefore any gain on the sale and all remaining cost associated with the transaction, will be included in the third quarter results. And reviewing our continuing operations, as Dan stated, total net sales and gross profit were down for the quarter as selling price across our key agricultural products groups all declined. Gross profit also declined as we incurred startup cost, that are El Dorado facility and increase depreciation expense related to the El Dorado expansion as compared to the second quarter of last year. While we benefited from lower feedstock cost during the quarter, those cost did not decline as sharply as product selling prices. I'll go into this, a bit more in the next slide. Consolidated SG&A was down approximately $3.6 million as compared to the second quarter of 2015 primarily from the absence of active shareholder expenses in addition to lower incentive compensation expenses. We will be focusing on rationalizing overall SG&A now that we have sold our climate control business and given the tough Ag in selling price environment that we are currently operating in. Adjusted operating loss, adjusted net loss and adjusted EPS were all down for the quarter versus the Q1 2015 to the decrease in sales and gross profit margins that I just discussed. Please refer to our reconciliation of non-GAAP measures beginning on Slide 16 for further information on one-time cost incurred during the period. Lastly, income from discontinued operations from the sales of climate control business of $22 million resulted primarily from the tax benefit I just discussed earlier. In order to get further clarity on the results of the quarter Page 9 bridges our consolidated adjusted EBITDA for Q2 2015 to Q2 2016. Lower selling prices for HDAN, UAN in ammonia negatively impacted EBITDA by more than $6 million compared to second quarter of 2015. That was partially offset by a pickup of approximately $8 million in EBITDA from lower average cost of natural gas and purchased ammonia. So the bad news is pricing had a negative impact on EBITDA for the quarter of almost $9 million. However there is some good news, improved on stream rates and production primarily at our Pryor facility El Dorado sale approximately 32,000 tons of additional UAN versus Q2 2015, and almost $4 million in additional EBITDA. We are very pleased with the operational progress being made at our Pryor facility and expect that to continue. Additionally, since we put our ammonia plant at El Dorado into operations during the quarter, it produced approximately 28,000 tons of ammonia during the back into the quarter, even in today's low price environment that added an additional $4 million in EBITDA as compared to the second quarter of 2015. Additionally, at current ammonia prices we continue to have an approximate $125 to $150 benefit from producing ammonia versus purchasing ammonia. There were many improvements in EBITDA relate primarily to lower SG&A cost, which are covered earlier. To summit up when comparing the two quarters on an apples-to-apples basis assuming that selling prices of our products and our feedstock cost will the same in the second quarter of 2016 as they were in the second quarter of 2015. EBITDA would have been $20 million for the second quarter of 2016 versus $8 million for the second quarter of 2015. Moving to Page 10, we outlined our free cash flow. Long net income for the first six months ended June 30, was marginal, we did have positive operating cash flow. However, we continue to have significant capital expenditures during the period with the majority being stent on completing the expansion project at El Dorado. That resulted in negative free cash flow for the quarter. Going forward, we expect the significant reduction in capital expenditures not with the expansion project that El Dorado was complete and we believe in improvement in operating results that our El Dorado facility both contributing to an improvement in overall cash flow. Page 11 outlines our capital structure as of 6,30, 2016. As June 30, total cash was approximately $23 million and we had approximately $31 million outstanding on our ABL facility, with $38 million of availability. As you will see on the next slide, the outstanding balance of our ABL was repaid on July 1. Total debt at the end of the quarter was approximately $565 million, excluding the unamortized discount and issuance cost associated with our debt. And we had outstanding preferred stock of $210 million with approximately $17.3 million a accrued and unpaid dividends. As you know this does not include the proceeds from the sale of our climate control business was closed on July 1. Please turn to Page 12, where we will discuss the proceeds from our sale of the climate control business. This page walks the gross sales price of $364 million down to what we believe in an amount, in a appropriate amount of cash available after obligations. It does not include any EBITDA that will be generated in the second half of the year. As Dan stated earlier regarding the semi-price environment, we expect the low level of product selling prices to continue into 2017. As a result, when we think about our plans for the use of the net proceeds from the sale of our climate control business, our first priority is to ensure, what we have ample liquidity to run our business and avoid becoming capital constraints as it relates to our working capital needs. However, we do intend to use a significant portion of the cash available after obligations to repay debt within preferred stock was a combination of both. We are currently reviewing all of our options to deleverage with a goal of reducing our overall cost to capital and fix charges, while maintaining maximum flexibility for the repayment of all our debt, should be decide to do that in the future. We will be providing an update on our progress one appropriate. Page 13 outlines sales volumes for the second half of 2016 and some key financial metrics for the year. Our sales volume outlook for the second half and full-year of 2016 is outlined. For the full-year UAN sales are expected to be approximately 50,000 tons higher then original guidance, primarily related to higher on stream rates of Pryor. Ammonia sales are expected to be lower by approximately 30,000 tons as the new ammonia plant at El Dorado started production slightly later than originally planned, coupled with down time associated with the power outage in July. The rest of the page outlines some few financial metrics. Depreciation expense is expected to be $62 million to $65 million this year and $70 million to $75 million in 2017, continuing operations SG&A expenses are expected to be approximately $44 million for 2016. Going forward capitalize interest will be minimal and therefore our current debt levels, interest expense will run approximately $11 million per quarter. Turnaround expenses at Cherokee and Pryor are expected to be approximately $8 million in total for the third quarter that is in addition to approximately $8 million of capital being spent during the turnaround. And finally, capital expenditures are expected to be approximately $30 million in the second half of 2016 including $8 million of capital being spend during the two turnarounds, that I just mentioned. Going forward we anticipate maintenance CapEx to run between $40 million to $50 million per year. Now, I’ll turn it back over to Dan to discuss the Company’s goals for 2016.

Thanks Mark, Page 14 describes our focus for the remainder of 2016. We have a very strong desire to improve our operating results, reducing un-planed down time is a key metric for our Company. We want build on our first half of the year progress. In this current tough operating environment, we are also looking at cost reductions in all aspects of our business. We plan on reducing our corporate cost as we sold the climate control business we are now pure play nitrogen company. We believe there are growth opportunities with expanded distribution sides, without the need of significant capital spending. This enhance distribution footprint should strengthen our marketing capability and increase our net back margins. long-term: That concludes our prepared remarks this morning, and at this point I'd ask Chris our operator to open the call up for questions. Chris.

Ladies and gentlemen at this time we will be conducting a question-and-answer session. [Operator Instructions] and our first question comes from the line of Mr. Joe Mondillo from Sidoti & Company. Please proceed with your question.

So just want to clarify one thing, in terms of the SG&A guidance that you provided is there any one-time items maybe in the first quarter, but maybe also on the second quarter, because it seems like the numbers that I’m looking at which guess are GAAP numbers for the first half of the year. You are about $37 million, $38 million and you are calling for $44 million for the full-year is that correct?

Yes, we run on continuing operations we run about $11 million a quarter. So that continuing operations would include SG&A from our chemical business, plus corporate.

I see, okay, so the continuing operations development in the quarter? Next thing I just wanted to ask you was just obviously pricing has been the biggest issues here with not only your company but the industry overall. Just wondering if you could provide some color or some insights and what your though are relative to demand and supply and what you are seeing with pricing and how you are thinking about the overall industry and pricing?

Well from the demand perspective we continue believe that demand is going to be there so we don’t see any decline in demand, in fact we are pretty pleased with our volumes. And I think other folks in the industry see things similarly, with respect to the pricing we are in a pricing environment right now historically the third quarter is the slowest quarter of fertilizer season, and we are in it right now. We expect that to continue this quarter and maybe early into the fourth quarter. I think with the additional capacity coming online and imports still coming in you are going to see very modest pricing environment for the rest of 2016. We do anticipate though going into the fertilizer season with some slight improvements, I wouldn’t say aggressive improvements, I would say slight improvements to the pricing in that market foot from the demand perspective we expect to sale everything that we can manufacture.

Okay and then just last question from me, just relative to the stock obviously has not received a valuation multiple relative to the peer group overall and sort relative to, sort of the EBITDA guidance that guys have given in terms of long-term potential. What are your thoughts on that, is that just kind take more execution on our per or it’s just seems to be, no one is really giving you for credit and quite frankly, I think a pretty good job in terms of getting operations up to on-stream rates of over 95%, pretty consistently over the last several quarters at least. Just wondering what your thoughts are on that, where the stocks trading?

Well Joes I think that’s a really good question. I think you also hit it on ahead consistent performance over a period of time, it’s what folks are likely looking for and we want to get our El Dorado facility up in running and performing well for couple of quarters. I think at point in time, we will see something reflected, in addition to that, we have two key turnarounds that are one of them is on going right now, we will be starting up to prior turnaround in early September. So I think we want to get through those and get the facilities up and running, and I think the proof is in the pudding and as you said, we did have good operating rates, where we were proud of those, the guys have done an excellent job and we just need to continue that track record. I think that’s where we are focused on and believe valuations will move up and it will be reflected in our stock price as execute and we are really focused on that, as I said earlier. So I think it will take here result as we performed and that’s what we intend to do as we go forward.

All right, great. Thanks a lot. I appreciate it.

And our next question comes from the line of Mr. Brent Rystrom from Feltl. Please proceed with your question.

So from a kind of thinking from a market prospective, with the summer sales season kind a going slower than normal, I guess the easiest way to look at the fall in spring seasons would be that, you are more exposed to the spot market. The opportunity of that is, if the volumes are there, it’s going to force more intense spot market purchases the greater volume in both of the fall and spring seasons and in theory that help should help balance out the weaker summer fall market is, that are reasonably , do you think about that?

I think that’s fair, I think you seen prices right now on the market, as you said that are fairly low, there isn’t a lot of product moving the moment although where we are moving our first share of it. But I think that’s probably a reasonable summary, we do expect to position product differently this year for the spring then we have in prior years as we have talked about with the ammonium nitrate. We are also engaging more in agricultural ammonia from El Dorado, which we really haven’t been able to do in the past, as we were purchasing ammonia and go forward at bit more on some sales. I think our sales approach and our marketing strategy is going to be different going into this, this winter end and the spring that it has been in the past. Looking at things a little bit longer and we are seeing really positive response from customer in that aspect. Because in the past, we have been able to go long on sales at El Dorado just due to the fact, that we were purchasing ammonia. Now we can lock down to gas and go forward on some sales, which will change the odd marketing dynamic from what we have done in the past. So we are feeling positive about it, but I think your synopsis is the reasonable one.

Thank you just a follow-on with that, Mark you had mentioned that the benefit of ammonia DC, right now it's still $125 to $150 a ton production versus purchase I’m assuming that’s the cash benefit?

Yes.

And I’m assuming you are using the price that make that benefits somewhere near 275?

Actually, If you think about Tampa 270.

270. Okay. And then can you give us a little granularity Mark as you guys build out the ammonium nitrate, how does the gross margin at present looking back compared to gross margin rid compared to ammonia?

Brent this is Dan, I'll jump in on that. I mean we historically haven’t separated individual gross margin rates ,but what I can tell you is that our ammonium nitrate margin should definitely be higher than selling ammonia into the pipeline, which is something that we do obviously out of El Dorado. So our desire is to upgrade as much of that product as we can and then that’s the push. While we aren’t providing the individual gross margin, the product lines what we can tell is it’s a better much higher margin than selling it under the pipeline.

Can you give us a little more clarity on some of the benefits of the CBR relationship; I know you are looking to get better net backs in your freight, can you give us a little more clarity on that?

As you know CBR is engaged in heavily in the UAN market in that market area. And they sell well over million and a quarter tons. And so our positioning with them and those are our tons, just like they their tons and they have a real familiarity and a deep bench of knowledge and experience in that UAN market. So I think just improving net backs, probably some better freight rates that they are able to get with moving that kind of volume of UAN. Overall, it’s just with the biggest positive relationship and as I made in my prepared remarks to-date its going very well.

We may want to mention, I mean we pay a distribution fee to distribute that product and we did negotiate a better distribution fee with CBR, ending result is a better net back to LSB right.

All right and then, can you give us some thoughts on your final slide probably to the appendix. You looking cost production expense control, so we do think about that $44 million run rate for SG&A in 2016. Should we think the implication of that what it should be lower than that in 2017 or should be about the same but on a bigger business, how should we think about SG&A in 2017?

That’s a great question. I think that we have a goal of reducing our $44 million by $4 million to $5 million annually. And we hope that we couldn’t begin the year in 2017 with that in place.

That’s great news. Congratulations on hiring John, that’s all I got guys. Thank you.

And our next question from the line of Mr. Daniel Mannes from Avondale Partners. Please proceed with your question.

A couple of quick follow ups first on El Dorado, can you may be just give us a little bit more color around the impacts of the down time on the third quarter, just given, what you will ask may be a weaker too, I know, you can talk about the product and cost and back from that?

Yes so did lose some down time from the Pryor average that we had. I probably say that’s probably a $2 million for EBITDA.

Got it, and that’s all in that includes sort of overhead had any repair cost excreta?

Yes.

Got it, okay. On the SG&A, I don’t want to mean to dig in too far, but in your second quarter disclosers, it looks like you are still picking up some strategic type cost. Ones that I get didn’t really to the sale of climate, can we assume those are going to go way over time or those are going to be there for a while, just given the multitude of things, you guys are looking at?

No I think you should see some reduction in that.

Got it, but on the other hand, you also had a reduction variable comp, I’m assuming that was basically a two quarter reductions, because you are backing off for the first quarter is well. So I’m assuming the benefit of the variable comp side will be less in future quarters.

Correct.

Got it, okay. As it relates to the balance sheet, it doesn’t sound like you are going to give us much more. May be can you, I don’t know if can scope out either more broadly some of the things you are looking at or may be some of the constraints you are leading to. I would have thought, we would already seen you guys making the offer for the senior under the indenture, has that already happened or do you spent more time there, just anymore color you can give us so, would be helpful?

Well Dan, on Page 12 of the materials that we put out, shows, I guess a walk from the sale proceeds to net cash remaining after obligations as we described on there. I think there are lot of different options that are available through us out there. We are currently scoring all of those options just to delever. But as we did say earlier, we are really not positioned to go into the detail on exactly how we use the net sale proceeds to delever, but we were actively involved in a process and as soon as we come to a conclusion with our approach. We will defiantly communicated to you, we want to, but I think, right now it’s just a little bit pre-mature to do that but as soon as we have our approach as I said, within the next reasonable period of time here, we should have that picture clarifying.

Understood, on the product sales side you obviously give a lot of disclosers that relates with volumes and pricing on Ag sales. On the industrial side, you give us the volume side, and I realize nitric gas may be tough, because of Baytown. But can we assume, number one that you earned a prize side is similar to what you are doing on the Ag side and two I don’t know if you can maybe describe firstly any difference in pricing on the AN side for industrial versus Ag?

There ammonia pricing for the industrial market, does have some dissimilarity as compared to the Ag market. Some of our ammonia contracts on industrial side or Tampa based or gas based, the gas industry so to speak. So all the pricing is different and our ammonia prices are, right now our ammonia prices for industrial are generally higher. The reason we don’t disclose pricing is some of more so, so customer or largely one or two customer driven and we are just not able to provide that without providing the effect of the general terms of the contracts, so that’s why we are not doing it. But in general our industrial business were pleased with the only area that we have said over the last couple of quarters that we would like to see improvement would be in the mining sector. But I think the reality of it is that’s not going to happen in the short-term or even in the intermediate term, but on the pricing side of things we feel pretty comfortable with our industrial pricing.

What about the pricing on AN is it similar I mean I realize you are selling a different density product, again we are just trying to just firm up the modeling side that and this is something obviously we can touch on later if this is wrong for them?

Its typically AN on industrial side is a gap based type of index.

I would say in thinking about it pricing and margins are really volume sensitive, all things being equal in a more normalized market the volume of the margins that we make on our Ag stand product are fairly similar to the ones that we would make on our AN product. But as Dan said because the low density An product is down now and our volumes are pretty low, clearly the margins on that are going to be lower than what we could make an Ag stand.

Understood and my final question, it sounds like you are considering some more rationalization, I don’t know if you can scope out is their material whether assets that can be sold off or footprints that can be reduce, or is that maybe more modest. I’m just trying to think through if there is another kind of big junk off of capital you guys can [indiscernible]?

No I think what we are suggesting in our account balance is there is other building and properties that we can sale I don’t think it's fair to say that it’s a material amount. But we are trying to clean up our balance sheet and things off to balance sheet that we no longer need or don’t anticipate using and really cleaning it off. So that’s really our process and that’s our message that we are sending, but I don’t think they are material proceeds they we are going to be obligate from disposal of those type of assets.

Understood. That’s helpful. thanks guys.

[Operator Instructions] our next question comes from the line of Mr. David Deterding from Wells Fargo. Please proceed with your question.

Just a quick question on - it looks like you paid down revolver $38 million availability pay down looks like roughly 32 but you still have $38 million of availability did the size of the revolver actually change with the asset sale or is it still the same size?

Right now the size is still $100 million, we are in conversations with Well Fargo to determine whether they are going to reduce that in that no point in paying unused revolver fee and availability that we will never get to.

And then in terms of [indiscernible] continued operations on three month and six month basis for us year-over-year. Can you bridges to what an [LPM] (Ph) EBITDA from the continuing offs might be?

No we don’t give out that information.

Okay and I think you said that 28,000 tons of ammonia were produced versus bought during the quarter a little over $4 million benefit. Is it fair to assume that if - that seems like about third of the volume so you can produce there is it fair to say that on an apples-to-apples comparison that we would see about three times that benefit going forward on the cost versus or the cost that making versus buying it?

Well keep in mind that 28,000 tons was in a real stop period for the quarter, it’s only a part of this. But as we say we have a nameplate capacity of approximately 1,150 tons a day at El Dorado, we do expect that to improve over the next several months increasing that to between a 110% to 115% consistently but that exit over the next several months. So we can kind work them out purchasing versus manufacturing, in clearly the manufacturing is providing significant cost advantage to us.

I would say that you are correct, 28,000 tons is for a partial period during the quarter, given where pricing moves and I think that’s the one caveat here because, we can’t really account for the movement in pricing but all thing being equal, taking $4 million and multiplying it by three is probably fair to do.

Right, and then just last question, it looks like the rating agencies haven’t moved on you guys, really since last year and one on has you on negative outlook, obviously big multiple 14 plus tons for the climate control business, lot of cash in the balance sheet, have you had a conversations with them about potential positive rating actions?

We talked to both SMP and Moody’s frequently and so I’m not going to comment on certainly what their thoughts are on our movements but we would certainly like to see some positive movement in our ratings.

I think the reality it is in, we need to get our capital structured settled and then we will have a chance to revisit those discussions at that point in time.

Ladies and gentleman, there are no further questions at this time, I’ll turn the call back over to management for any closing remarks.

Well thank you very for participating in this morning’s call. We do appreciate your interest in LSB and we look forward to proving you update’s on our refinancing and capital structure actions over the next period of time. And then we will look forward to speaking with you again at the third quarter conference call. Thanks so much and have a great day.

Ladies and gentleman, this does conclude our teleconference for today. We thank you for your time and participation and you may disconnect your line at this time. Have a wonderful rest of the day.