Good day and welcome to the Regal Beloit fourth quarter 2018 earnings conference call and webcast. All participants will be in a listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]. Please note, this event is being recorded. I will now like to turn the conference call over to Mr. Rob Cherry, Vice President of Business Development and Investor Relations. Mr. Cherry, the floor is yours, sir.

Thank you operator. Good morning and welcome to Regal Beloit's fourth quarter 2018 earnings conference call. Joining me today are Mark Gliebe, our Chairman and Chief Executive Officer, Jon Schlemmer, our Chief Operating Officer and Rob Rehard, our Vice President and Chief Financial Officer. Before turning the call over to Mark, I would like to remind you that the statements made in this conference call that are not historical in nature are forward-looking statements. Forward-looking statements are not guarantees since there are inherent difficulties in predicting future results and actual results could differ materially from those expressed or implied in forward-looking statements. For a list of factors that could cause actual results to differ materially from projected results, please refer to today's earnings release and our SEC filings. On slide three, we state that we are presenting certain non-GAAP financial measures in this presentation. We believe that these are useful financial measures to provide you with additional insight into our operating performance and for helping investors understand and compare our operating results across accounting periods and in the same manner as management. Please read this slide for information regarding these non-GAAP financial measures and please see the appendix for reconciliations of these measures to the most comparable measures in accordance with GAAP. Now, I will turn the call over to Mark.

Thanks Rob. Welcome everyone. Thank you for joining our fourth quarter call and thank you for your interest in Regal. We will follow our normal agenda. I will make a few opening comments, Rob Rehard will provide a financial update, Jon Schlemmer will provide color on markets, operations and the performance of our three segments. After that, I will reflect on our total year 2018 performance highlights and then we will move to Q&A. Regal delivered another solid performance in the fourth quarter with organic sales up 5.2%, adjusted operating margin up 80 basis points and adjusted earnings per share up 23%. At a segment level, in commercial & industrial, organic sales were up 1.3% with strength in a number of end-markets including power generation, oil and gas and commercial HVAC, offsetting weakness in Asia, particularly China. In the climate segment, organic sales were up a strong 9.4% with strength in North American residential HVAC, both OEM and aftermarket as well as commercial refrigeration, partially offset by weakness in international markets. Finally in the PTS segment, organic sales were up a strong 9% for this quarter with robust growth in distribution and oil and gas. From an operating profit perspective, the adjusted operating margin improved 80 basis points year-over-year. The operating margin benefited from volume, incremental price and variable cost productivity, but was held back by commodity inflation and tariffs. The resulted adjusted earnings per share was up 23% and was based on strong operational performance with no benefit coming from the 2018 tax reform. For the quarter, free cash flow to net income was 169%. In the quarter, we repurchased $49.5 million of our shares. The fourth quarter was the sixth quarter out of the last seven that we have repurchased shares. Additionally, we also announced the divestiture of…

Thank you Mark and good morning everyone. Sales in the fourth quarter 2018 were $881.7 million, up 7.4% from the prior year. Acquisitions contributed 3.9%. The business to be exited was a negative 0.4% and foreign currency was a negative 1.4% in the quarter. Therefore, organic sales increased a solid 5.2% from the prior year with all three segments contributing. Our adjusted operating margin in the fourth quarter was 10.7%. Our margin was up 80 basis points compared to prior year. Margins benefited from both volume growth and productivity improvements. Price cost was slightly positive in the quarter. Additionally, we incurred $10.8 million in LIFO expense, which impacted all three segments. For your reference, I have included a table at the bottom of the slide showing the LIFO expense or benefit by segment for the fourth quarter of 2018 and the fourth quarter of 2017. Overall, it was a solid quarter with strong organic sales growth and continued operating margin improvement. Our fourth quarter 2018 earnings per share reported on a GAAP basis were $1.28. There were a number of adjustments to GAAP EPS in the fourth quarter. The first adjustment was restructuring and related costs of $2.2 million or $0.04 per share. The second adjustment was a gain on the sale of assets of $2.2 million or $0.04 per share. The third adjustment was related to the business to be exited of $800,000 or $0.1 per share. The fourth adjustment was related to CEO transition costs of $3.8 million or $0.07 per share and the final adjustment was related to the impact of the new U.S. tax legislation of $3 million or $0.07 per share. Net of these adjustments, the adjusted earnings per share for the fourth quarter were $1.41, representing a 22.6% increase from the prior year. Now,…

Thanks Rob. Good morning everyone. Before I cover the normal updates on the segments, I would like to talk about the recent AHR Expo in Atlanta and the upcoming FER regulation. At the tradeshow, we had the opportunity to highlight our latest HVAC and refrigeration technologies to both our existing customers and potential new customers. Consistent with our enterprise strategy, there were three key innovation themes to our booth. The first theme of energy efficiency is all about the new products we have introduced to help our customers meet upcoming regulations. The most significant is the upcoming FER regulation for gas furnaces, which goes into effect in July of this year. We showcased an entire lineup of new products developed to help our customers meet the new rule. We continue to expect $40 million in annual incremental sales in our climate solutions segment as a result of the FER regulation. We are forecasting a meaningful impact in the second half of 2019. By 2020, we would expect to see the full impact of the incremental sales. The second theme is around IoT capabilities of our new products. We had many examples in our booth to show our customers. A great example is the Ensite motor and control, our entry-level product targeted for FER. This new product features near field communication which allows our OEM customers to easily program the product on their production lines reducing inventory and improving productivity. We also believe that this IoT feature can simplify the commissioning and troubleshooting of HVAC systems. We were excited that our new Ensite motor and control was recognized at the show by receiving the 2019 AHR Innovation Award. And finally, the third theme was all about our disruptive axial technology. This technology delivers improvements in reduced size, weight, noise and increased…

Thanks Jon. Now before we go to Q&A, I would like to briefly reflect on our 2018 total year results. 2018 was a record year in both sales and adjusted earnings. Organic sales were up 5.7% and adjusted operating margins increased 60 basis points versus the prior year in spite of the significant commodity and tariff headwinds. Adjusted earnings per share increased 23% with most of the benefit coming from operations versus tax reform. And for the eighth consecutive year, we finished with free cash flow to net income greater than 100%. This year's free cash flow to net income was 116%. In 2018, we made a strategic acquisition of Nicotra Gebhardt to strengthen our position in the commercial air moving space. We repurchased roughly $128 million of our shares. And we reduced our net debt to adjusted EBITDA to 2.0. Over the last six months, we have put plans in place to exit or divested five non-core businesses with annual revenues totaling roughly $200 million. This will allow our management team to focus on and reinvest back in our core operations. Further, we have a healthy pipeline of potential core-related acquisition targets. Finally, Jon laid out the three-year performance targets we communicated at the March 2017 Investor Day, organic growth, operating margin, return on invested capital and free cash flow to net income. We are pleased that in both 2017 and 2018, we made meaningful progress on all four metrics and we believe that with our expected 2019 performance, the target range is still in sight. As we close 2018, we expect that the 2018 momentum will continue into 2019. Our 2019 guidance reflects low to mid single digit organic growth, a third consecutive year of margin improvement and a resulting 6% increase in adjusted earnings per share at…

[Operator Instructions]. The first question we will have will come from Joe Ritchie of Goldman Sachs. Please go ahead.

Hi. Good morning guys. This is Ashish Gupta, on for Joe.

Good morning.

So nice quarter and your guidance seems very reasonable. I guess just to start off, could you maybe talk about the differences in outlook between the three segments as we head into 2019? And maybe specifically also address the performance in climate in the quarter and whether there was some pre-buy associated with the regulation change?

Okay. I will take a pass at those questions and I am sure Jon will jump in. In terms of our guidance between the three segments, when we think about the commercial and industrial segment and the PTS segment, kind of serving many of the same end-markets and we are expecting low to mid single digit growth across those markets. The commercial and industrial business will have more of a headwind out of China and out of Europe. And then when it comes our climate segment, as we commented, we are expecting some lift in the back half of the year as a result of the FER law. As that law changes over, we expect some improvement there. And then relative to whether or not we saw any lift in the quarter as a result of FER, I think that was your second question, we don't believe there was any impact from FER as a pre-build in the fourth quarter. Jon, did I miss anything?

No. I would just add though that while we don't think there was an impact in the fourth quarter from FER, our customers are actively now talking about their needs for any potential pre-build. We are still pulling that all together. Our current assumption is that there will be a nominal pre-build in 2019 impacting the first half in the range of $3 million to $5 million and that's been factored into our guidance.

Topline, $3 million to $5 million on the topline.

Got it. Thank you. And maybe as a follow-up, I noticed that your guidance for 2019 doesn't include any impact of buybacks. So just curious on how you are thinking about capital allocation next year given the strong free cash and the cash that you will get from the asset sales?

Thanks Joe. Yes, you are right. We do not include any buyback assumption in our 2019 guidance. So as we think about capital allocation, we will continue to have a balanced approach. Looking at buybacks as an alternative. Obviously M&A, as I mentioned, we do have a healthy pipeline of targets that we are considering. And we will also look at debt paydown.

Got it. Thanks guys. Congrats on a good quarter.

Thank you.

And next we will have Scott Graham of BMO Capital Markets.

Yes. Hi. Good morning and very nice quarter, gents.

Thank you.

The couple of questions I have were really very end-market specific because I know, for example, you have a lot of your oil and gas in the upstream. And I am just kind of wondering what you are hearing, seeing order rate wise in that market, given some of the disruptive forces on the price of oil and some of these large upstream guys cutting back a little bit 2019? Can you just sketch that for us a little bit?

Sure Scott. This is Jon. I will add some comments there. So we called out, we did see sales strength in the fourth quarter from oil and gas in both the PTS segment and the C&I segment. We had overall good orders performance in 2018 in oil and gas. And you are right, more of our exposure is upstream. I will comment that, in the fourth quarter, we saw a little bit more choppiness in the order rates in oil and gas, but we were coming off some pretty strong orders in the first half of 2018. Coming into 2019, we still see order strength in oil and gas, but we are now coming up on some pretty difficult comparisons as we look at the orders there. Also I would say that overall for the company about 5% of our sales are in oil and gas. We have exposure in both upstream and midstream. And the divestiture of our engineered drives and control business will reduce this exposure a little bit, especially in the upstream demand.

By about 80 basis points or so.

Correct.

Got it. Thank you. And then on your HVAC markets, what are your OE customer saying on both the resi and the commercial sides for what they are expecting in 2019? And may be specify, if are going to respond, in sales dollars or sales volumes?

So I think what we would say, we are hearing from most of our customers for 2019 demand in HVAC is in the range of low to mid single digits is the expectation. That's pretty much what's built into our guidance. We will have a little bit of this dynamic of this nominal pre-build we talked about in our first half performance that will come out of the second half and that will then, of course, have a little bit of a delay in the timing of the FER transition just because of the pre-build that will be in the channel. But we don't think that will be a large amount.

Jon, are you saying low to mid single across both resi and commercial?

Yes. I would say that's a fair assessment of what we built into our guidance this year.

Okay. And then let my last question is about distribution, where C&I looked flat whereas I think PTS you said was strong. Could you kind of connect those dots for us?

Yes. So you are right. C&I was more flattish in the fourth quarter. PTS was strong. And climate was also strong in distribution in the fourth quarter. We think that for distribution in C&I, we had pretty healthy demand and distribution, but we had some pretty difficult comparisons in the C&I segment to prior year. Fourth quarter prior year was a strong quarter for C&I and in particular, distribution contributed nicely to that performance. So we think it was a bit more of a comparison issue in the fourth quarter for C&I.

So nothing changed the tone there. We had a couple of distributors saying that because of the timing of the holidays there was a little disruption but overall you would say that your distribution channel remains healthy for you?

Yes. I think that's how we would characterize it, Scott. And similar to the other comments on organic sales, we are going to have more difficult comparisons in 2019. But we still feel good about the performance of the market.

Got it. Thank you. Good job.

Thanks Scott.

And next, we have Mike Halloran of Baird.

Hi. Morning everyone.

Good morning Mike

So just kind of following up on that last point there. Maybe just talk a little bit about the underlying trajectory on the core industrial businesses as you look through the fourth quarter? Any real change in the trajectory from normal seasonality or from customer cadence that they talk about? And any change to start 2019 so far?

I would say that we are not seeing any big change, again, related to those kind of dynamics. I would say that, from an inventory standpoint, we would say that there is probably a slight increase in both industrial and HVAC in the distribution channels, but it's kind of difficult to understand what the difference is there or what the impact is given the variables on tariffs and price increase and whether this is a little bit of a normal inventory build or just some buying ahead of the tariffs. So that's a little bit of noise that would be in the inventory numbers right now.

Makes sense. And obviously some moving pieces on the price cost side with the two-way pricing formulas, the changes in the commodity pricing and some of the price actions you had last year. Maybe just help a little bit on how you think price cost cadence is as you work through the year? Slightly positive pre-ubiquitously through the year? Or are there some variances that we should look for?

I will comment and then Mark can add any anything he would like to add. So I will go back to 2018. We felt good about the performance in 2018 on price cost. We turned neutral in the first quarter and then we remained slightly favorable for the second, third and fourth quarter on price cost. We exited the year with a number of price increases that we implemented across all three segments either in the late third quarter or early to mid fourth quarter. So we are expecting to carryover from those price actions to carry over into 2019. That's what's in our guidance in our assumption around price cost. I think our expectation is that we will remain neutral to slightly favorable on price cost throughout the year.

I will just also add, copper started to turn somewhat deflationary in around the June timeframe and it's enough that we are seeing some of our two-way material price formulas cause a price reduction. Now it's still positive for us on a year-over-year basis. But it was enough to flip a few of those of formulas over in the first quarter.

Correct.

I appreciate the color. Thank you.

Thank you Mike.

Thanks Mike.

The next question we will have will come from Julian Mitchell of Barclays. Please go ahead.

Hi. Good morning.

Good morning Julian.

Good morning. Maybe a first question, maybe I had missed it, but it sounded like you talked about pretty healthy margin expansion at C&I and power transmission this year in 2019. I just wondered, in climate solutions, what the expectations on margins is relative to that 15.5% base figure? And what are sort of some of the main moving parts within that?

Julian, you are right. In 2018, we had nice margin expansions in both our PTS and our C&I segments on the full-year. And in climate, we finished the year at 15.5%. And I mentioned in my comments that the year-over-year change in LIFO expense, the LIFO expense versus the LIFO benefit, in 2017 was the headwind to margin expansion in our climate business for 2018. We are expecting margin expansion in climate in 2019. Our expectation would be that we will see margin expansion in all three segments. Climate will contribute to 2019. I would say, the key points there will be leverage on volume, some of the same themes we have talked about in 2018 benefits from productivity in our simplification efforts, neutral to slightly favorable price cost and then we will see a positive impact from mix, especially with the high efficiency products in 2019.

And I will just comment there to add in that if there is a pull ahead that's meaningful beyond what Jon already commented on, there could be a negative impact to mix in the front half the year and then a flip to a more positive impact in the back half of the year.

Thanks. And then maybe just my follow-up question around commercial and industrial systems. Are you expecting the first quarter growth rate to be roughly similar to what you saw in Q4, given what you have talked about in terms of flattish distribution and Asia weakness? Or do we see a bit of a pickup just because of the easier comp and maybe some of that inventory being flushed through?

I think we would be looking at a quarter that's probably more similar to the fourth quarter of 2018, Julian, as we look to the first quarter here.

Thank you very much.

Thanks Julian.

Next, we have Robert McCarthy of Stephens.

Good morning. Can you hear me?

Good morning. How are you doing Rob?

Good. Doing well. Mark, congratulations on a great run.

Thank you.

Yes. So you know what the next question is. So I guess I don't want to be impolitic in terms of the first question and it's not my intention to be. But in the context of this external CEO search, right, you have a very strong and talented deep management team. But going external seems to send a signal that there must be some concern among the Board around the portfolio or the position, not in terms of the cost position because you guys do a great job in terms of that and managing it but in terms of maybe the strategic vision of the businesses you need to be is. Can you expand upon what the Board is looking for in that CEO? And what that could mean for your portfolio to the extent you can?

I understand your question. I would say, we have great alignment between the management team and the Board around our enterprise strategy as we laid it out in 2017 and Jon talked about it today, focus, innovate, simplify. It's working for us, no question. You are always looking at the portfolio. I mean, obviously, we commented on that back in 2017 when we said we would divest roughly $200 million, which we did in that timeframe. And while we are not ready to set a new target, certainly you are always looking at the portfolio in terms of things that no longer are core or things that you would like to add that are core. So that's the headset that both management and the Board is looking at the business.

Okay. Thank you for taking my question by the way. And then I guess a couple of follow-ups. I guess in terms of thinking about the environment, it looks like definitely from what you are seeing now, pretty decent environment. But if you do see pricings under further pressure, volumes decelerate or we go into a bit of a slowdown here, remind us the counter-cyclical nature of the free cash flow, the net income conversion and what we should see given history and what you could maintain in terms of free cash flow to net income conversion, if we go into a bit of a meaningful downturn here?

I can take that one. So Rob, this is Rob Rehard. So I think you would expect to see free cash flow conversion through the quarters to be somewhat consistent with our historical trend in terms of how it trends relative to prior quarters. We do start out a little slower and then ramp up as we go through the year. I will remind you, we do have eight years over 100% on free cash flow conversion. In a downturn, we would still expect to see strong free cash flow conversion as we did during the downturn a few years back where we still converted over 100% despite the downturn and a lot of that came through trade working capital improvements as we moved through the year. So I think that would be how you would look at it.

I guess the final question would be just around price cost and obviously tariffs. And I apologize, I did have to miss a little bit of this call in the beginning. So I might have missed some of your commentary. So I apologize for that. But just talk about kind of ring-fencing the risks around, I mean you already alluded to the price cost being neutral to positive, right, but around the tariffs and how you are going to manage that impact? And could that drive you to the low end of your guidance? How do we think about, aside from revenue what drives you to the low end of your guidance range in terms of your cost structure and the pricing environment?

Rob, this is Jon. I will talk about the tariffs. So in the fourth quarter, we commented that price cost remained slightly favorable and that included the additional expense of the tariffs. So we were pleased with the price cost performance given those additional expenses. If you recall in our third quarter call, I talked about the two main actions we are taking to deal with the tariffs. The first is around our footprint, leveraging our global footprint and a number of product moves that we either have made or are making that will help us mitigate the impact of the tariffs. And then for the remaining products where we either don't have those options or it's not cost justified to do that, we have and will look at raising price. So we have been able to offset the tariffs. Our expectation in 2019 is that we will continue to offset the tariffs?

I will just add, you asked Robert, what would take us to the low end of the guidance? We are assuming low to mid single digit growth rates, a chunk of that coming from the markets we participate in. So certainly that could be a driver. Now I will also remind you that we talked about $10 million of restructuring for the year. So we are continuing our self-help efforts to get at margin improvement or offset the impact of a downturn.

Thanks for your time.

Thank you.

And next we have Jeffrey Hammond of KeyBanc.

Hi. Good morning guys.

Good morning Jeff.

So just on the long-term targets or I guess going into 2019, it looks like revenues running ahead. Do you think you can get into that zip code of 200 to 250? Or is that a stretch at this point, just given the last year?

No. I think we still have our eyes set on those targets on the low end. Obviously, on the low end of the target, but we still think there is a shot there. A lot has to go our way, but it's still in sight.

Okay. And then just any update on timing for the CEO search announcement?

Well, as I commented, we still believe it will be sometime in the second quarter.

And then just on the M&A side, can you just update us on the Nicotra integration? How it's going? And if you are seeing any change in valuation with some of the choppiness and macro worries? Thanks.

So first on Nicotra, the business is performing kind of the way we had thought it would when we acquired it. From an integration perspective, it just confirms that the business integrating into the company, I would declare victory there. We feel good about the integration. Still work to do on our synergies and there's still more to get there. So that will take us another couple of years and that's included in our guidance. But we feel good overall about what that business has brought to the company in the air moving space. And then finally on valuations, we would say that there's probably been a full turn down in valuations and targets and we see that both on what we are selling and in what we are considering as potential targets.

Okay. Thanks a lot.

Thanks Jeff.

God bless you, sir. The next question we have comes from Chris Dankert of Longbow Research.

Hi. Morning guys.

Good morning Chris.

Forgive me if I missed it, but any update as far as some of the manufacturing transition out of China into other lower production cost regions? Just kind of any progress there?

So Chris, this is Jon. We didn't really talk about it specifically, but we feel good about the progress we are making. We had commented on the third quarter call about one example of product that we were transitioning from one of our facilities in China to one of our existing facilities in Mexico. That transition has gone well. We are in production today on that product in Mexico and serving our customers in the US. So we feel good about that particular example. There is a couple of others that we are working on implementing in the first half of 2019. It's very similar to the one in Mexico, utilizing either existing footprint in Asia outside of China or footprint that we have in Mexico. So good progress and we feel good about the positive impact that could have to mitigate a portion of the tariff expense.

Got it. That's helpful. And I guess I assume a lot of your customers are trying to look at similar moves. Has that proven to be a net benefit for you guys? Or is it kind of a net neutral overall?

I would say today it's a net neutral. However, we have commented and we continue to believe that over time we would see this as slightly net positive for the company. We still feel that way today.

Got it. And one last one if I could, quick. Just any comment on labor cost into 2019? Is just similar growth from what we have seen? Just any kind of reminders on variable comp, any kind of impacts that might be out of the norm?

Are you talking about for our production workforce or is that what you are referring to, Chris.

Yes. Exactly, overall and then for 2019 for guidance. Sorry.

Yes. So I would say that in 2018 with pretty much a strong demand in the markets, labor availability and labor inflation has been and will continue to be an impact on the business. However in 2018, I would say we didn't see necessarily any meaningful increase in inflation. Kind of the normal inflationary pressures that we would see in the business. Going into 2019, one change that we are dealing with, it's in our guidance, but one change we are dealing with is the doubling of the minimum wage in Mexico in the cities along the border. So that's been a change that has been implemented in January, is impacting us and anyone else manufacturing in that region and we are looking at a number of actions to mitigate that, but that's some additional inflation that we are going to have to deal with in 2019.

Got it. Thanks so much and congrats on the results, guys.

Thanks Chris.

And the next question we have will come from Walter Liptak of Seaport Global. Please go ahead.

Hi. Thanks and congratulations on the quarter, guys.

Thanks Walt.

I wanted to ask about the C&I business in Asia and just maybe you could refresh us on the percentage of revenue for C&I that's Asia, how much of that is China? And then can you provide us with any other color, just kind of the tone of the market, pricing, et cetera, maybe how it trended during the quarter?

So I will start off and then Jon can jump in. So revenue overall for Asia is probably, I am going to say, 10% to 12% of total revenue and then the C&I piece of that is probably three quarters of that 10% to 12% is in the C&I segment. So yes, there is some headwind there, particularly in the China area. We are seeing nice growth, continued growth in India. But China, Middle East, Europe are headwinds for us. And then, the second part of your question again, Walt.

Just how it's trending? I mean do they come down and then stabilize? What are you hearing from your customers? I guess what are you expecting for 2019?

I think Walt, when we look at our China demand what we saw in the second half of 2018 was a step down in demand. If you look at our order rates, we had pretty strong orders in the first half. We saw a decrease in demand in the second half and it's been stable at that lower level. So if you looked at order since that drop in demand, it's been pretty stable. So we are going to see a difficult comparison in the first half of 2019 and then we will see a little bit of, certainly in the orders, we will see a better comparison in the second half, because we really haven't seen any further deterioration, but there was a step down in demand.

Okay. Good. That helps. And then just going back to the capital allocation question and M&A. With potentially a new CEO coming in, you are a little bit more careful about M&A and maybe size of the M&A or number of deals. And then you mentioned there's no buyback that's in your guidance. I wonder if you could refresh us on how much share repurchase authorization you have left, the timeframe remaining on it and buyback versus M&A, given the upcoming CEO change.

Thanks Walt. We will have Rob Rehard address the buyback first.

Yes. So Walt, we have about $200 million on our buyback authorized on authorization at this time. So that's what was remaining. We had a new authorization in place in 2018 at $250 million. We moved that down to about $200 million at the end of the year.

In terms of any M&A transactions, we have, as you know over the years, this organization, this company has done a lot of M&A and there is a core group of people here that know how to do it. So that wouldn't be the reason we wouldn't do M&A just because of the CEO transition. So we are operating like there's just every other day. So hope that answers your question, Walt.

Well, thank you, sir. At this time, we will go ahead and conclude our question-and-answer session. I would now like to turn the conference call back over to Mr. Mark Gliebe, CEO, for any closing remarks. Sir?

Thank you Michael. Just one last quick comment from me. In the event this turns out to be my last earnings call, it's been my honor to serve as Regal's Chairman and CEO and I appreciate the confidence and support of our investors and analysts. I have got to know many of you personally and I have enjoyed working with you and learning from you. I wish you all the best. Thank you for your questions and for your interest in Regal. Have a great day.

And thank you, sir, also for your time and to the rest of the management team. Again, the conference call has now ended. We thank you all for your participation. At this time, you may disconnect your lines. Thank you. Take care and have a great day, everyone.