Good morning, ladies and gentlemen. Thank you for standing by. Welcome to today's Titan Machinery, Inc. Fourth Quarter Fiscal Year 2014 Earnings Conference Call. [Operator Instructions] Hosting today's conference will be John Mills of ICR. As a reminder, today's conference is being recorded. And now, I would like to turn the conference over to Mr. John Mills. Please go ahead, sir.

Thank you. Good morning, ladies and gentlemen, and welcome to Titan Machinery's Fourth Quarter Fiscal 2014 Earnings Conference Call. On the call today from the company are David Meyer, Chairman and Chief Executive Officer; Peter Christianson, President; and Mark Kalvoda, Chief Financial Officer. By now everyone should have access to the earnings release for the fiscal fourth quarter ended January 31, 2014, which went out this morning at approximately 6:45 a.m. Eastern Time. If you have not received the release, it is available on the Investor Relations portion of Titan's website at titanmachinery.com. This call is being webcast, and a replay will be available on the company's website as well. In addition, we are providing a slide presentation to accompany today's prepared remarks. We suggest you access the presentation now by going to Titan's website and clicking on the Investor Relations tab. The presentation is directly below the webcast information in the middle of the page. Before we begin, we'd like to remind everyone that our prepared remarks contain forward-looking statements, and management may make additional forward-looking statements in response to your questions. The statements do not guarantee future performance and therefore, undue reliance should not be placed upon them. These statements are based on current expectations of management and involve inherent risks and uncertainties, including those identified in the Risk Factors section of Titan's most recently filed 10-K. These risk factors contain a more detailed discussion of the factors that could cause actual results to differ materially from those projected in any forward-looking statements. Titan assumes no obligation to update any forward-looking statement that may be made in today's release or call. [Operator Instructions] The call will last approximately 45 minutes. David Meyer will provide highlights of the company's fourth quarter results, and a general update on the company's business, then Peter Christianson will discuss the company's international review and segment operating results. Mark Kalvoda will discuss the company's financial results in more detail, and its fiscal 2015 annual revenue, net income, earnings per share guidance and non-GAAP operating cash flow ranges, along with outlook modeling assumptions. Then we will open the call to take your questions. Now I would love to introduce the company's Chairman and CEO, Mr. David Meyer. Go ahead, David.

Thank you, John. Good morning, everyone. Welcome to our fourth quarter and full year fiscal 2014 earnings conference call. As John mentioned, to help you follow today's prepared remarks, we provided a slide presentation, which you can access on the Investor Relations portion of our website at titanmachinery.com. If you click on the Investor Relations tab on the right side of the page, you'll see the presentation directly below the webcast in the middle of the page. If you start and turn to Slide 2, you'll see our fourth quarter and full year fiscal 2014 results. Our revenue for the fourth quarter was – of $709 million was in line with our expectations, reflecting lower equipment sales due to the challenges in our industries, which we have discussed on previous calls. Our adjusted pretax income, excluding our noncash impairment charges of $10 million, exceeded our expectations and was $12.8 million. Adjusted earnings per share were $0.35. In addition, we exceeded our $90 million inventory reduction target that we discussed on our third quarter earnings call, and we reduced our inventory by $102 million in the fourth quarter of fiscal 2014. This is an important step in positioning our business to achieve much stronger cash flow from operations in coming quarters. For the full year fiscal 2014, we reported revenue of $2.23 billion, which is in line with our guidance range given on our last earnings call. Our full year adjusted pretax income was 24 -- $28.4 million and adjusted earnings per share was $0.78, which exceeded our previously issued guidance when excluding the noncash charges I just mentioned. Mark will provide additional detail on our financial results later on the call. Turning to Slide 3. This is the discussions points for today's call. First of all, we discuss some of…

Thanks, David. On Slide 8, we have an overview of our International segment, which includes stores in Bulgaria, Romania, Serbia and Ukraine. Farmers have been able to begin early spring planting resulting from the milder winter that most of Eastern Europe experienced. The mild winter also provided favorable conditions for winter crops in these markets. Current moisture levels are adequate to support crop development at this stage of the production cycle. Just like farmers in North America, lower global commodity prices are impacting our International customers as well. Our customers in Bulgaria and Romania may receive an extra benefit during the second half of this year from the European Union subvention funds, which provide subsidies for the purchase of equipment. We have not added this into our International projections, but this could be a meaningful benefit for those 2 countries' operating results. Based on many factors, including the growing awareness of our superior customer service and availability of equipment in the countries we operate, we expect our stores in Romania, Bulgaria and Serbia to achieve growth and improve operating results in fiscal 2015. Our European operations center in Vienna, Austria is now in place. This investment will provide leadership and continuity to operations and begin to consolidate back office functions from the different countries such as IT, accounting and inventory management. This additional cost of building out our distribution network will be more than offset as we ramp up the volume of business in this segment. On Slide 9, we're providing an update on our stores in the Ukraine. It's important to understand that although Ukraine represents a significant growth opportunity for Titan, it represents less than 2% of fiscal 2014 revenue. The current geopolitical and financial uncertainty is negatively impacting our customers and our operations. Our customers are experiencing…

Thanks, Peter. Turning to Slide 14. Our total revenue for the fiscal 2014 fourth quarter was $708.6 million, a decline of 9.7% compared to last year. The 13.4% decrease in overall equipment sales reflects lower Agriculture sales, primarily due to lower commodity prices being realized by our customers, partially offset by an increase in Construction sales and higher International sales. Our Parts and Service business performed well in the quarter, increasing 4 -- 14.7% and 6.9%, respectively, demonstrating the strength and stability of the recurring revenue from this area of our business. We also grew Rental revenue on a quarter-over-quarter basis due to our expanded Rental Fleet. On Slide 15, our gross profit for the quarter was $97 million. Our gross profit margin was 13.7%, an increase of 40 basis points compared to the same quarter last year. The increase reflects the shift in gross profit mix to our higher-margin reoccurring Parts and Service business, partially offset by lower equipment margins which declined to 8.7% compared to 9.5% in the prior year period. Our operating expenses as a percentage of net sales in the fourth quarter of fiscal 2014 were 10.9% compared to 9.2% for the same quarter last year. The increase in operating expenses as a percentage of revenue primarily reflects lower fixed operating cost leverage due to negative same-store sales in our Agriculture segment, higher expenses related to an expanding -- to expanding our Construction and International distribution networks, as well as higher occupancy costs associated with facility improvements to support growth of our higher-margin Parts and Service business. As David outlined, the realignment announced this morning will improve our cost structure as we enter fiscal 2015. In the fourth quarter of fiscal 2014, we recognized a noncash impairment charge of $10 million pretax, or $6.1 million after-tax,…

[Operator Instructions] We'll go first to Michael Cox with Piper Jaffray.

This is Amanda Durow on for Michael Cox. My first question is thanks for the detail on the inventory management. Can you please provide more color on how you're going to be achieving the lower inventory for fiscal '15?

Well, for fiscal '15, a big part of it is just on the -- we're looking at what the projections are, and we're adjusting the procurement side of it. As you can see on the chart, a good amount of the reduction is coming in the new equipment inventory. So we're adjusting our procurement based on what we're seeing fiscal 2015 to be from a sales perspective.

Okay. And then follow-up to that, have you increased or intend to increase any machinery write-offs?

We do a lower cost-to-market on our used equipment on a regular basis. We perform it every month. It's required by GAAP. We haven't -- we don't see anything unusual there at this time. We believe we're staying on top of it as we look at market conditions on a monthly basis.

We'll go next to Steve Dyer of Craig-Hallum.

Just as you step back and you kind of look at the big picture, what is your sense as to the OEMs' reaction to commodity prices and the slowdown? Is your sense that they are adjusting their expectations in production accordingly? How are you feeling about sort of the incentive level, et cetera?

Well, I think the manufacturers are -- I think they're being careful as we go through the year. The first half of the year, you're typically going to see a number of presales that get delivered from sales that are actually made in the preceding year, but I'm sure they're keeping some flexibility for what they're going to do in their third and fourth quarter production levels. As you probably noticed, CNH made a recent announcement of 200 headcount reduction in their Grand Island plant. I believe Deere earlier made an announcement of a 150 headcount reduction in one of their Waterloo plants. So I think they're trying to get ahead of this a little bit. But at the same time, I'm sure that they're conscious of their revenues and want to keep a certain amount of expense loads across their factories and their fixed expenses and to keep the production rolling.

Yes, okay. And then with respect to your used inventory that jumped pretty significantly even though you brought the overall number down, is that a level you're comfortable with or how are you thinking about used versus demand right now?

Well, I think as everybody saw, our revenue numbers for the fourth quarter ended up really strong, and so that was from a lot of sales of new machinery, which results in some trades. So as we go through the year here, we're going to -- these numbers are going to come down. We feel comfortable with the used that we traded in. And with some of the pricing and some of the Tier 4B introductions, they're happy right now, we feel good about our ability to lower that used. And basically, it's a normal cycle, trade in the new at the end of the year and then sell the used through Q1, Q2, Q3.

A lot of your competitors that we've talked to kind of throughout the last 6 months have in some cases just stopped taking trades at all. Is that -- are you just happen to be more selective with it or what's sort of your strategy as to how you think about kind of the trade-off between new and used?

No. I don't think that's the case at all that they stopped taking place. I think what you probably saw is a phenomenon happening over the last 2, 3 years, is they probably became more, we'll call these 1-year rolls, where people that normally maybe traded every 3 years started to trade every year. And actually, what happened is that some of the customers that were actually buyers for late-model used equipment, they flipped and started buying new, which took the used buyer out of market and also brought in another piece of used equipment. So I believe we're going to get back to a more normalized, where there'll be less 1-year rolls. So we'll get back to some normal trading sequences that customers are used to. So and I think we're seeing some of that happening. As you've mentioned, some of the competitors, I've heard a lot of chatter out there, the fact that, yes, there is probably going to be some of those less 1-year rolls going on out there.

Got it. And then Mark kind of alluded to the Construction realignment as being not recurring. Is this sort of what you feel like you have to do right now? Or is this -- I guess, anything more to come here given kind of the losses on that side of the business? Or do you feel like this was -- it sort of adequately addresses the issue?

We spend a lot of time analyzing the business, looking at our organization, and we wanted to make a one-time adjustment, and that's what we did here. We continue to look at the effectiveness of all our stores and all our positions in our company. But right now, we feel comfortable we are taking this in to harvest. The momentum seems to be changing in the Construction business so we feel comfortable where we are today in that segment.

We'll go next to Mig Dobre of Robert W. Baird.

I guess, I want to stick with construction here. So over the past year or so, we've seen several initiatives from you guys in trying to address issues in this business. This is obviously the most significant. I guess, from a big picture standpoint, what is the strategy of long-term vision for this business? How do you intend to expand it or do you intend to expand it further?

Well, when you mean expanding, we're anticipating significant same-store growth increases, especially with some of these activities we just put in place. The comment on the earlier question, some of these changes we took place, they take time to develop, and we are seeing the fruits of our labors. I think, right now, we're seeing the benefit from some of the things we put into place last summer, last fall. We made some major organizational changes with our Agri group, our Rental group, our government group, our industrial equipment group, putting major strategic account managers across our footprint. Those are really starting to pay off, and I feel optimistic, going ahead, in our Construction.

But are you saying that M&A is still a focus, Construction M&A is still a focus for you?

As we said on a couple of our calls last year, right now, we're more focused on operational improvements in the Construction stores, and we're not aggressively going after Construction acquisitions. That's not to say we're going to exclude those, but right now, we have been focused on the operational improvements.

Okay. Then, Mark, this is more a question for you, if you would. I'm trying to clarify a small accounting issue. When I'm looking at the statement of cash flow, I'm seeing the net transfer of assets to property, plant and equipment. Is this related to the rental fleet?

Yes, yes. So much of our rental fleet that we have is coming from our inventory. So it's coming from our inventory going into our rental fleet. So it shows up as a noncash item on our statement of cash flow.

Okay. And how exactly do you account for margins or profitability of any kind for that inventory? Is it a cost, is it markup?

No, when the inventory moves into our rental fleet, it goes over at cost. There's no markup. There's no sales recognized. It simply goes into our PP&E fixed asset and it's depreciated as it's being used in our rental fleet.

Very well. And the last question for me is really on the margin side in equipment. You're guiding for fairly flattish margins even though, obviously, there's some challenges with used equipment prices, and you're expecting a revenue decline. What sort of assumptions are you using in this guidance? Are you assuming stabilization in used equipment prices, improvement? Or how should I think about that?

Yes, I think -- the first thing I think is looking at it by segment, I think we see some strengthening there, some of the assumption there is some strengthening on the Construction side as we get into a better environment there. And then offsetting that a little bit, I think, is going to be some of the continued pressure on the used equipment margins on the Ag side. So those are kind of balancing…

Is that going to be enough for Construction to be actually be able to offset Ag given the size differential?

Yes, I mean so what that would allude to is that we expect a bigger pickup on the Construction side than what the Ag side decline would be. And because of the sheer size of Ag being larger, the Construction side is offsetting that.

We'll go next to Neil Frohnapple from Longbow Research.

The Construction segment growth of 10% to 15% on FY 2015, it's a sizable acceleration from 2% to 3% same-store sales growth you guys achieved in the fourth quarter. So does the step-up include market share gains or is it all underlying end market growth? And then how do you think about, we look at Construction segment consolidation, how do you think that impacts revenue this year? Have you guys had conversations with customers regarding this? And if you think you can retain all that?

Okay. To answer your first question within the Construction, you're going to see certain segments of the Construction issue that the industry is showing those type of gains. But I would say you're going to see a lot of large gain, not only from the industry, which so far has been stacking up for the first quarter. In addition to that, we feel like our share level is that we've got a lot of upside potential to grow share, especially a lot of these new startup stores that we've invested in over the last 2 years. We're starting to see that share improvement across our stores that we've been putting investment into.

Okay. So it does assume a little bit of a step-up in share then?

Right, right. But also, the industry is tracking very strong so far this year.

Yes. Neil, and I think your other -- this is Mark. Your other question was on the consolidation and how that affects kind of our assumptions for the [indiscernible].

Yes, you guys have a lot of...

Yes the consolidation [indiscernible].

I'm sorry, you guys have a lot of walk-in business.

Yes, when we consolidate those stores, the assumption that we made in our modeling is we will capture a lot of the sales that occurred at the location that's being closed in neighboring locations. So those are in our same-store assumption numbers. So that is lifting, and it is part of that 10% to 15% increase on the Construction side.

Got it. And then, Mark, does your guidance -- or just a clarification. Does the $0.70 to $1 EPS guidance include the $0.12 benefit from restructuring actions?

It does include the benefit going forward. It does not include the charge, the one-time charge that will occur in Q1.

Okay, great. And then just last one for me. I appreciate you guys taking the time. Does the guidance imply that the Construction segment gets back to breakeven in FY 2015 with the restructuring actions you're taking and the top line growth expected? Or is it just more you anticipate to moderate the losses, so to speak?

Well, with the guidance that we're putting out there, it would get us back to a breakeven on the Construction side.

We'll go next to Larry De Maria from William Blair.

If I heard you guys right, and missed part of it, but the transfer from inventory to PP&E was all rental, I believe. And that was originally intended to be sold, if I'm correct. But what was the number in the fourth quarter, I guess, first of all, and is there more of that to occur?

Well, so first of all, as far as more of it to occur, we'll always look at opportunities to kind of pull from our inventory if we need that item in our fleet. But we indicated on the call that we're not expecting our fleet to materially change this next year to grow it significantly. Offhand, I don't know what that fourth quarter number is. It wasn't significant because our fleet amount didn't change much. In fact, I think it actually went down a little bit in the fourth quarter. But yes, it's -- we bring out of our inventory whatever we feel that we can rent, and we can make a good margin and make a good business model out of renting it out of our Rental Fleet. We look at if it's in our retail inventory, we look at pulling it from there first, and if we don't have it there, we would look at procuring it from the outside.

Okay. Just because it was a big number in the third quarter, it's up by 200%. But you're saying your $100 million inventory reduction in the fourth quarter probably had no impact of transferring assets from inventory to PP&E in the fourth quarter?

That's correct. Very, very little, if any, of that improvement was from transferring to our rental fleet.

Was there a reason why it was big in the third quarter?

Back in the second and third quarter is when we built up our fleet, primarily in that Southwest part of our footprint, the expanded footprint in Arizona, New Mexico, Colorado markets, that's where we built -- that's when we built up that Rental Fleet.

Okay, that's helpful. And then secondly, obviously, commodity prices had moved up. We've gotten Farm Bill, there seems to be a little bit more stability than some of the concerns we had 3, 6 months ago. Is this being reflected at all in farmers' sentiment in your guys' opinion? Also, obviously, the weather, we don't know yet, but is there any change in sentiment in the farmers, given that we've got the Farm Bill, commodity price had poked their heads up because we have smaller carryouts? Or is this still a -- they're kind of more in the retrenching mode, and not likely to change much given you -- obviously, what your guidance is?

Well, I think the farmers' sentiment overall is it's business as usual. They're fairly pragmatic, and I think they're good business people, so I think they go about their business, and they look at their land improvement, how they can increase their yields, what their machinery can give them better productivity and expense management. So they continue to do that, and I believe they're looking more at this commodity over the long haul, and they're not reacting to every little weather. But it's early to tell. I think the markets will be driven by weather a lot, going ahead. But definitely in the first quarter, I think we're seeing some real resiliency in the market and some good gains, so that's a positive. But like I say, they're pretty pragmatic people, pragmatic, and go about their business, and you're not seeing these real high and lows, I don't believe, right now.

Okay. And then finally, I think you mentioned that used prices have improved. Just curious how you're baking that into your numbers and how you -- if you could just give some more color there. And then also, obviously, on the new prices, because we know that CNH has reported positive pricing, but you guys have had a maybe harder time with the new equipment pricing. So can you just give a little bit more color on the overall pricing, given this marketing transition and amount of inventory out there and what's going on, please?

So let's first talk about on the Construction side of the business, you're seeing used equipment getting back to the pricing levels we were between the big downturn in '08 and '09, so some of those 2007 levels. So that's a positive on the Construction side, some real strengthening in these prices. On the Ag side of the business, as we watch the wholesale sales, there's going to be situations where some of -- there's been some pullbacks in certain prices. Then the next week in a different sale, you're going to see good prices. Or tending to see some -- maybe some of the older machines, they're actually not -- actually getting better pricing in some of them. Some of the late models, used is just maybe a little more depressed. So but like I say, this time of the year on certain products, I mean, there's seasonal products out there. Like I say, we're still early in the game as to what weather is going to do this year. But I'd say we're not seeing any major changes on the Ag side of the business. And in a sense, the change, depending on where you are in geography, which region you're in, and what the products are, factors [indiscernible] especially still seem pretty good. In combines, like we've always said on all our calls, that's where the risk seems to be. But yet there's been some bright spots on combines here and there. So is that helpful?

Yes. No, that's helpful.

We'll go next to Joe Mondillo of Sidoti & Company.

My first question related to the Construction part of the business, and I know we've talked about this a little bit. But just trying to get an understanding on why the profitability has actually been getting worse on a year-over-year perspective over the last couple quarters? And I say that because it seems like the rental fleet growth you're seeing, maybe 20% type growth, new equipment may be sort of flattish and the total base is a higher from a year ago. So what are the factors that are weighing on that segment? And how does that turn around going forward?

Well, if you look at the pace of our acquisitions, we had a lot of recent acquisitions in that '10, '11, '12 timeframe. And with those acquisitions, I would say, we bought some -- probably some of these stores who were underperforming the market. I'll say some of them are fixer uppers. So we've been investing those dealerships to get them to the revenue size or the scale that we need, we think to be long-term profitable in those markets. So we've been investing in the businesses. And as a result, understanding they were real small players in many of their markets, they were not getting the type of returns that we think are acceptable. And that in addition with the investment that we're putting into them, we're -- we've had the negative financial results that -- and we think we've been through a lot of that. And in addition, I think, last year, there was a lot of publicity on the fact that the manufacturers probably overproduced the market in 2012, and a lot of that carried into 2013 calendar year, and we experienced that in addition that -- what we were investing in those new recent acquisitions.

Okay. So and for the most part, it sounds like you are comfortable saying that things are sort of in place going forward, and we should not see additional investments. And maybe some of the stores that you were seeing trouble with, you're consolidating. So as of right now, you feel comfortable, going forward, that you shouldn't see any additional sort of cost related to the stuff. We're in good spot going forward, is that correct?

We feel very comfortable with our locations, the markets we're in. Really excited about the people we've put in place, what we have in there for store managers, our executive team, our VP of Construction, people we have in our strategic accounts area, in industrial equipment, what we're doing on centralized inventory management, our aggregate, our rental. Across-the-board, we've just spent a lot of effort, a lot of time, and we drive quality people, good locations and good people to the stores. So definitely have a high level of confidence that you're going to see big contributions from our Construction going ahead. Definitely, we're going to be in the black this year, in my opinion. And there's even an outside chance, maybe we could outperform our expectations. So yes, I think everything, we're very confident.

Okay. And it sounds like you're pretty confident, given the fact with the headcount reduction and the fact that you should see decent growth this year that getting above breakeven is a possibility. How confident are you in that?

Well, we're very confident in the breakeven, and that's where we've given our guidance. But like in our business, we're always optimistic, and we have some stretch goals or targets. We're always trying to do better, but we're giving guidance on breakeven.

Okay. And then just lastly, the dynamic between new equipment and rental sales in that business, I don't know if you want to quantify sort of what your expectations are. But if you can just at least, qualitatively, sort of describe sort of what you're expecting versus last year, whether it's an acceleration on both sides of those businesses. I assume you're expecting rental to continue to stay stronger than new equipment, but any color there would be helpful as well.

Yes, this is Mark. The color I'd provide on that is, first of all, on the rental, so we kind of indicated we're not planning any significant growth in our fleet. So around that $145 million figuring, we indicated also in our guidance a 33% utilization. So that would imply Rental revenues right around that $50 million specifically coming from the fleet. So some improvement, some increase there, but that's driven more by utilization than additional fleet. And as to your question on new equipment sales, I think just based on what we indicated for the guidance, 10% to 15% on the revenue side or the same-store sales side for Construction, that gives you a pretty good range. New equipment's making up a pretty good chunk of that Construction same-store sale number. So new would be in that range, about 10% to 15%.

We'll go next to Joe Edelstein of Stephens Inc.

I would like to just come back and revisit on the M&A topic. I know that you are focusing more so today on the operations side. But I'm curious if your strategy might change going forward at all. Would you look to improve your network density to further improve results and get some efficiencies? Or perhaps as, David, you were just indicating that Construction performance that we've seen has really been more of a function of kind of the industry dynamics, and you do feel pretty good about where you are today and you'll just continue on with your M&A strategy in finding opportunities and adding new markets?

So to comment on your density question, if you look historically, the Construction equipment industry has consolidated into your, we'll call them larger metropolitan areas or regional trade centers. It happened to be that some of our recent acquisitions, when we acquired them, had some stores in some of these smaller markets, and for the most part, those are the ones we consolidated. So we think we're into the markets now, typical of what the industry consolidated to a number of years ago on the Construction side of the business. On the Ag side of the business, you see we've made one announcement. We had 2 stores, 18 miles apart, we consolidated those into 1 store, Oskaloosa into our Pella, Iowa from Oskaloosa, Iowa into Pella, Iowa, so we made that consolidation. And also on the Ag industry, there -- if you go back to the '80s, early part of the '90s, there was a major consolidation in the Ag dealership. In some markets today, there's one dealership. If we went back to, say, 1980, there could have been 15 dealerships of the same brand in that same marketplace, so -- and you see us consolidate. If you look at our revenue, our Ag stores, we think we're in good shape. We're getting good expense utilization, so we feel good about that. And as far as future acquisition on the Ag side of business, we are continuing to look at opportunistic acquisitions on the Ag side. Does that [indiscernible] your questions there, yes.

Great. That's very helpful. Yes, it does. And if I could also then just ask another question related to inventories, and you have made some progress there. But that total inventory level is still higher than a year ago, and it's contributing to the higher floorplan interest expense. I was curious though what percent of your inventory today was on a non-interest-bearing account. And would you expect similar support from the OEMs going forward or would that be just something for us to keep an eye on there?

Yes, our interest-bearing inventory is at about 55% -- not quite 55%, so it's right around that 50% that we found. And what's baked into our guidance for this next year is there would be a little higher percent interest bearing as we decrease inventory because it's less new coming in. So that will have an impact, and that's embedded in our numbers.

We'll go next to Tom Varesh of M Partners.

I just want to understand the mechanics of the relationship with the OEM in terms of the stores you've closed. If at some point down the road, and I'm thinking of maybe in the Flagstaff location or around Bozeman, if the OEM determines they want a location there, do you have a right of first refusal on that? Or are they -- is there some amount of time that has to pass before they can award that region to someone else?

Well, first of all, Tom, we have ongoing discussions with the manufacturer. We're talking about the market, the market size, our ability to cover them. So we went in on this hand-in-hand with our manufacturers, making them fully aware what our intentions were. I think what's important is the fact that ongoing share, our ability to service those markets. So we have mobile service trucks, parts drop-offs, sales or field marketers actually working that marketplace, that actually, if they're customers -- like I said, the Construction industry is consolidated years ago, and you look at where most of the competitors' footprints and they're in the larger metropolitan areas, where we've got the resources there, the expertise, the technology, the store hours, the tax, and like I said, with the parts drop-offs, the communication channels we have today and the mobile service trucks. And another thing to keep in mind is if you look at the contractors, many times, their operations are not only multistate, multi-geographies and multi-markets. So they're very attuned to finding out where the local -- the closest person is to service their equipment. And really, what we like about this is the scale. It works much better, not only from parts inventory stocking, be able to meet your –- to meet or exceed your customers' expectations in every area of the business, happens when you have scale and large revenue operations in these. And the fact that even attracting good, quality employees. So yes, definitely, we're doing this hand in hand with the manufacturers. And we talk about these markets, and like I say, in a real small market, the probability of someone wanting to go into a 50-unit, 100-unit, 80-unit market is very remote. And then I believe our relationship with our suppliers is to the point where if they really did feel there is a location necessary in that market, say that industry really, really improves, whatever, definitely, there would be proactive conversations with us in advance so.

We have no further questions. At this time, I would like to turn the call back over to Mr. David Meyer for any closing comments.

I want to thank everybody for being on the call today, and look forward to updating you on our progress on our next call. Have a good day, everybody.

That does conclude today's conference. We thank you for your participation.