ABM Industries Inc (ABM) 2011 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the ABM Industries Q4 fiscal-year 2011 conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. (Operator Instructions) As a reminder, this conference is being recorded.

I would now like to turn the call over to your host, Henrik Slipsager. Please go ahead.

Thank you. I am Henrik Slipsager, President and CEO of ABM. Joining me today are Jim Lusk, Executive VP and Chief Financial Officer, and Sarah McConnell, our Senior VP and General Counsel. Today, I'll provide an overview of the 2011 fourth quarter, which ended October 31. Jim will discuss the details of our financial results, and I will comment on the Company's operational achievements for the quarter, and highlights for the fiscal year. And Jim will conclude our prepared remarks with our guidance for fiscal 2012.

In addition, there is a slide presentation that accompanies today's prepared remarks. You may access this presentation now by going to our website at www.ABM.com. And on the Investor Relations tab, you will see the presentation tab on the left-hand side of the page. Today's presentation will be the first listed.

Sarah?

Thank you, Henrik. Please turn to slide 2 of the presentation. Before we begin, I need to tell you that our presentation today contains predictions, estimates, and other forward-looking statements. Our use of the words estimate, expect, and similar expressions are intended to identify these statements. These statements represent our current judgment of what the future holds. While we believe them to be reasonable, these statements are subject to risks and uncertainties that could cause our actual results to differ materially. These factors are described in the slide that accompanies this presentation. During the course of this presentation, certain non-GAAP financial information will be presented. A reconciliation of those numbers to GAAP financial measures is available at the end of the presentation, and on the Company's website under Investor Relations.

Thank you, Sarah. Now please turn to slide 3 for a review of our financial highlights for the fourth quarter. We delivered solid financial results for the fourth quarter. Revenue grew approximately 20% to $1.1 billion, marking our fourth consecutive quarter of revenue in excess of $1 billion. We continue to focus on adjusted EBITDA, as we believe it is one of the critical factors in evaluating our progress towards the long-term financial goals we established and communicated at the beginning of the fiscal year. I'm pleased that adjusted EBITDA was up over 7% for the fourth quarter, despite one additional workday, which adversely impacted our Janitorial segment by approximately $4 million.

Cash flow remains very strong. Cash flow from continuing operations contributed $74 million for the quarter. During the quarter, we also reduced outstanding borrowings by $65 million, and we continue to reward shareholders through the distribution of our quarterly dividends. Yesterday, we announced our quarterly cash dividend of $0.145 per common share, an increase of approximately 4%. This marks our 182nd (sic - see press release) consecutive dividend.

Now, I would like to turn the call over to Jim for a financial review of the quarter, and for the 12 months ended October 31. Jim?

Thank you, Henrik. Good morning, everyone. Turning to our fourth quarter of fiscal 2011, results on slide 4. As Henrik mentioned, revenues for the fourth quarter were $1.08 billion, up 20% from the prior year, primarily due to the companies we acquired, and revenues from new business. The Linc and L&R acquisitions combined contributed $169.4 million. Gross margins for 2011 fourth quarter grew to 11.3%, from 10.8% in the prior-year period. The year-over-year increase in gross margins is largely the result of higher margins at Linc, and a benefit related to a refund of health insurance premiums paid, partially offset by one additional workday. Our SG&A expense for the fourth quarter increased $23.6 million, to $82.4 million from $58.8 million. The year-over-year increase is primarily due to the expenses attributable to the acquisition and operation of the Linc Group, and a $2 million increase in IT costs related to the move of our data center.

Amortization of intangible assets for the fourth quarter increased $2.9 million to $6 million, primarily related to the amortization of intangible assets from the Linc acquisition. For the year, amortization was $23.2 million, up from $11.4 million in fiscal 2010. We anticipate a slightly lower amount in 2012, as the amortization from the OneSource acquisition continues to decrease. Depreciation for the fourth quarter was $7.7 million compared to $7.1 million in the year-ago period. For the year, depreciation totaled $29.4 million. We expect depreciation for 2012 to run $3 million to $4 million higher, reflecting the IT investments we have been making to drive future growth, and to seamlessly integrate our acquisitions.

Interest expense increased $2.2 million to $3.3 million, reflecting higher average borrowings and average interest rates under the line of credit as a result of the financing for the Linc acquisition. The average outstanding balance on the Company's line of credit was $346 million during the quarter ended October 31, 2011, compared to an average balance of $144.2 million in the prior year-ago quarter, due to the acquisition of Linc.

Our effective tax rate on income from continuing operations for the fourth quarter of 2011 was 41.8%, compared to 38.1% in the prior-year period, due to higher taxes from a reduced availability of employment-based tax credits. For the full year, the effective tax rate was 35%. For 2012, we anticipate our effective tax rate to be in the range of 39% to 41%. Our cash tax rate for 2011 was approximately 9%. For 2012, we expect the cash tax rate of 20% to 23%, as the effects of the OneSource NOLs diminish.

Adjusted income from continuing operations for the fourth quarter was $20.4 million, or $0.37 per diluted share, as compared to $22.6 million, or $0.43 per diluted share in the same period last year. The decrease in adjusted income is driven primarily by higher labor expense in the Janitorial segment, due to the additional workday in the quarter at a higher tax rate. Adjusted EBITDA, which excludes items impacting comparability was $51.3 million for the 2011 fourth quarter, compared to $47.9 million in the prior-year period. This is a 7.1% increase from the same period last year, and reflects our recent acquisitions, partially offset by the additional workday.

Looking at our financial results for the 12 months ended October 31, 2011, also on slide 4, revenues were $4.2 billion, up 21.5% from $3.5 billion. These revenues reflect in the success of the acquisitions we made in 2010. As previously mentioned for the fiscal year, revenues from government projects were adversely impacted in excess of $50 million due to the delay in passing the 2011 federal budget. Income from continuing operations for the 12 months ended October 31, 2011, increased 7.5% to $68.7 million, or $1.27 per diluted share from $63.9 million or $1.21 per diluted share in the prior-year period. The $1.27 is within the guidance we provided at the beginning of the fiscal year.

Adjusted income from continuing operations for the 12 months of fiscal 2011 was $75 million, or $1.39 per diluted share, from $70.5 million, or $1.34 per diluted share in the 12 months of fiscal 2011. The $1.39 is within the range of our revised guidance we gave in September, and reflects the higher state unemployment and fuel costs incurred primarily in the first three quarters, as well as reduced government project work in our Engineering segment. Items impacting comparability represent a total net expense of $6.3 million, or $0.12 per diluted share for the 12 months of the year, compared to a net expense of $6.7 million, or $0.13 per diluted share in the prior-year period.

Now, turning to slide 5. We ended the quarter with $290.6 million in working capital, a $15.7 million increase from $274.9 million at the end of fiscal 2010. The increase in working capital is primarily related to the Linc business. Net trade accounts receivable at October 31, 2011, were $552.1 million, versus $450.5 million at October 31, 2010. Days sales outstanding at quarter end were 48 days, down two days on a sequential basis and up one day compared to the fourth quarter of 2010. The year-over-year increase in DSOs is attributable to Linc, which has longer collection periods as a result of government receivables.

Cash provided from continuing operating activities was $156.8 million for the 12 months ended October 31, 2011, compared to $140.7 million in the comparable prior-year period. The increase is primarily due to continued focus on days payable outstanding, partially offset by the timing of collections received from Linc's government business and higher cash taxes paid. Total insurance claims, liabilities at October 31, 2011, were $341.4 million, compared to $348.3 million at the end of fiscal 2010. Self-insurance claims paid during the quarter totaled $20.4 million compared to $19.9 million in the fourth quarter of 2010.

I would now like to turn the call back to Henrik, who will provide his perspective on the fourth quarter operational performance and fiscal year.

Thank you, Jim. Turning to slide 6. All of our operating divisions posted year-over-year topline increases, primarily driven by the acquisitions we made. During the quarter, sales activity continued at a similar pace from prior periods. However, recently we have experienced a slight uptick, and are hopeful this trend will continue. Janitorial revenues were up 1% to $597 million, and tag work increased by 12% year over year, [Janitorial team] continues to follow in this key revenue source. Engineering revenue grew 149% to $241 million, benefiting from the business gained from the Linc acquisition. Revenue trends are starting to improve from earlier in the year. As we mentioned in previous calls, we lost a couple of lots -- contracts in the legacy ABM engineering business that occurred near the beginning of the fiscal year.

Before moving to Parking, I wanted to comment on backlog. We've been looking at providing backlog data from the legacy Linc business. In doing so, we determined to provide a backlog data for the entire organization would be much more meaningful, and give a clearer picture as to the type of annuity-based business, we have not only in our government vertical but also building in industry services as well as legacy ABM engineering. We will continue to refine these numbers for disclosure in 2012.

Parking benefited from the L&R acquisition, as well as seasonal patterns from parking lots associated with travel and entertainment. Year-over-year revenue increased 19% to $153 million; in the quarter, parking revenue related solely to the [full furnishment] of expenses from managed lots totaled $74.2 million. Security revenues grew over 3% as the segment benefited from the Diversco acquisition.

Now to operating profits on slide 7. Operating profit excluding corporate was flat from the same period last year as significant growth in engineering, 41%, and parking, 11%, were offset by the additional labor costs associated with the extra workday in the quarter. Before moving to guidance, turn to slide 8, which is our highlights for 2011. ABM surpassed $4 billion in revenue as our acquisition strategies combined with modest financial leverage and prior year's investment in our infrastructure, facilities, our ability to acquire and successfully integrate the Linc Group, L&R, and Diversco.

The acquisition of the Linc Group in December 2010 immediately positioned ABM as an integrated interim facility service operator with a broader suite of service and scale. The integration of our legacy engineering business with Linc has gone superbly. The first half of the year, the team spent on executing integration plans and building a future organization. Despite the unexpected impact on the delayed federal budget, Linc still managed to be slightly accretive excluding acquisition costs.

In our Engineering segment, the Building and Energy Service Group grew substantially, offsetting some of the shortfalls from the Government group. By the end of the fiscal year, the Government business showed improvement as sales activity began to increase. One of the areas I find most promising for the future is the amount of coordinated efforts taking place on cross-selling. We're already seeing successes with combining Linc business with our ABM services for clients in certain vertical markets. I'm hopeful as we head into 2012, this momentum will continue to build. In addition, we are launching key growth initiatives, which will strengthen long-term precision, and integrated facility services, which we will see as the driving force in our industry.

Cash flow continued to be very strong in 2011. For the year, cash provided operations was $160 million, a record year, while CapEx totaled $22 million. Subtracting the CapEx from the net cash generated borrowing activities yields free cash flow of $138 million, an all-time high for ABM. The strong cash flow enabled ABM to reduce outstanding debt from $452 million immediately after the acquisition of Linc, to $300 million by year end.

Our adjusted EBITDA leverage ratio at year end is approximately 1.6, down from a high of 2.5, which was immediately after acquiring Linc, which leaves significant capacity under the Company's $650 million credit facility that expires in September 2016. Adjusted EBITDA for the year was $184 million, a record, and up 18% compared to 2010. ABM has doubled adjusted EBITDA in just four years. When we unveiled our long-term strategy last December, we focused on how our growth strategy would enable ABM to generate double-digit returns long term. I am very pleased this year's results are consistent with our plans, and I'm pleased with how the team performed in what has been a challenging operating environment.

ABM continues to have one of the longest consecutive streaks of increasing dividends; fiscal 2011 was no exception. In total, ABM paid nearly $30 million for a payout ratio of 44%.

In summary, fiscal 2011 was a transformational year. The [Linc] acquisition has been leveraged our precision to increase sales, expand our service capability, and expand our market reach. We are very appreciative of the collective effort of all employees and the commitment from our shareholders.

Jim will now discuss guidance for 2012. Jim?

Thank you, Henrik. Turning to slide 9. Based on the current economic outlook, as well as a number of key assumptions outlined on slide 9, we expect income from continuing operations per diluted share for the 2012 fiscal year of $1.26 to $1.36. And our guidance for adjusted income from continuing operations per diluted share is $1.40 to $1.50.

There are a few key items I want to call out for the 2012 fiscal year. First, there is one more workday in fiscal 2012 compared to fiscal 2011, which occurs in the third quarter. We estimate a $3.5 million to a $4.5 million increase in pre-tax labor expense. Secondly, we have three strategic growth initiatives we are launching in 2012 to drive future sales. These are Unified Workforce, ABM Energy, and Public Sourcing. Combined, we anticipate spending $3 million to $4 million pre-tax on these strategic growth initiatives, and the expenses will go against adjusted income from continuing operations.

Thirdly, we are launching a branding initiative. The cost to rebrand will be part of items impacting comparability, and therefore, will impact only our GAAP guidance. We expect similar seasonality as experienced in 2011 between the first half and second half of the fiscal year. Operating cash flow will remain strong, but lower year over year as cash taxes will be approximately $24 million to $26 million for 2012. In addition, the effective tax rate estimate is 39% to 41%, up from 2011's 35%. As always, our guidance is exclusive of any new acquisitions.

At this time, we would like to open the call to questions. Operator?

(Operator Instructions) David Gold, Sidoti.

Couple of questions for you. First, when you think about 2012, can you give a little bit more color or sense of embedded in your guidance is what organic revenue growth would you be happy with?

What's in the number is organic growth of 3% to 5%. I would be happy with something higher than that but I'm cautious simply because I really don't know about the economy. The momentum in all of the [divisions] seems to be pretty good right now, as a matter of fact I haven't seen business this positive in a long time. And we also have [integrated] -- in 2011, we did concentrate on integrating these different companies into our existing services, that's done now in my mind. So in 2012, I think it will be much more [incorporated].

Okay sorry, the phone cut out as you said -- as you gave the number for organic that you were looking for.

I'm sorry?

You had given the percentage, the growth number and sorry, my phone cut out. I was just curious if you could repeat it?

Yes, I said somewhere between 3% to 5% is in our plan.

Okay. And then part two of that is on the investment initiatives. But essentially, a little bit more color on what the thought process there is? Are we trying to -- historically, 5% was a good number on the growth side, is it a matter of getting above 5% or is it more defensive or somewhere in between?

I think the -- what makes us cautious is the economy. We really don't know what's going to happen tomorrow. If the economy stays the way it is right now, I think we might have a better future than is in our plans but I think it's prudent to be cautious in this environment as we really don't know. One day, France is falling apart; the next day, Germany is falling apart, I don't know. I'm somewhat confused and I really don't want to predict about tomorrow. I think in a normalized economy, you'll see our growth of at least between 5% and 10%, primarily in the [Engineering] Group.

Got you. Okay, and then on the branding initiatives, tell us more, if you can, what you're doing there? Are we shifting away from the ABM brand or is it more to it?

Well, we're not shifting away from the ABM brand. We are trying to, say, make it a little more modern but also be unifying all our different acquisitions under the ABM brand. So Linc will be part of the ABM Facility Solutions Group and all our companies at one point in time in the next two years will be in ABM Company, which I think is very important. And we expect to launch that new brand in the spring of 2012.

Got you. Got you. Okay, perfect. And just one last one. When you think about 2012, how are you thinking about the effect of SUI? Could it get worse -- have you baked in there a worse outlook or do we think it holds?

We have baked in the little increase. You are right, it shouldn't be worse but it continues getting worse but we have baked in an increase in our forecast. And hopefully, that increase will be enough for what actually is going to happen to [the space] because we really don't know the rates of January, February of 2012.

Got you. Got you. Okay. Perfect. Thanks for taking my questions.

Andrew Wittmann, Robert W. Baird.

I wanted to just dig a little bit and make sure that we are clear on some of the guidance numbers, specifically, I guess it looks like the growth investments, the $3 million to $4 million are not in the $0.14 adjustment between the GAAP EPS and the adjusted EPS, right?

That is correct. We have that in our -- that's part of normal operations in my mind.

Okay but the rebranding initiative is added back so that is not part of normal operations? That's --

That is correct because that is a result of the acquisition.

Got you. So those charges, I don't think you've quantified them yet but can you maybe quantify maybe a range for that and is that going to show up in the corporate initiatives part?

It's going to be part of the corporate initiatives part -- do you have a range? Yes, probably somewhere between $4 million and $7 million is going to be the number.

$4 million to $7 million. So at the high end, maybe about half-ish the $0.14 [dealt] of it?

Correct.

Okay. And then just on the acquisition costs as they're related to fiscal 2011, it looks like $6.1 million. Is that the analog to the about $7 million synergies that you are expecting this year or, is that comparable to the synergies? Or how should we think about the level of acquisition costs that you recognized for the year?

No. The synergies have nothing to do with it. By the way, these [acquisition] results of the year was $7.2 million from (inaudible) and we feel pretty good about that. The acquisition cost is simply costs associated with the deal such as investment banker fees. Believe it or not, they want money. So, these are stated costs associated with the [view], legal costs and other.

And then in this most recent quarter, almost $800,000 of acquisition costs, are those still associated with deals that you've completed that we know about? Or is that potentially deals that you are working on today and maybe haven't fully consummated or will be consummated?

It's mostly related to the acquisitions we've done that as we publicly say, we are always out there looking.

Okay. Okay. That's helpful and then just in terms of the synergies, basically, Henrik, your view on -- did you hit the $7 million goal for this year and how are we looking for next year? Are you still seeing another, if you alluded to another $5 million of cost synergies from integration?

Yes, we exceeded our expectations by far because we hit $7.2 million so, we did very well in that area. And we still expect the annualized [statistic] impact to be somewhere close to $12 million, which means $5 million better than this year.

Okay. Just a little bit of your view inside of the 3% to 5% organic growth. Do you expect that the Engineering Group leads the way of the various segments that you are involved in today? Are you seeing some level of resurgence there maybe relative to the core Janitorial or the other businesses?

Yes, I do. If you really look at it, on a run rate, which you always have to be careful of because there are core impacts that go back and forth but it does indicate -- a good indication of direction. And if you take our numbers for Engineering for this quarter, it is around $965 million annualized. When we started with the merger between legacy Linc and ABM, (inaudible) growth was around $900 million so I had some implied growth in there of 7%, 8% which hopefully is going to carry into the new year. I feel pretty good about that. This is implied growth, in spite of issues with the government and others. It -- I think this is going to be year where it's going to trying to hit (inaudible).

Okay, but to be clear here this is a number that you are expecting to have outsized growth, notwithstanding the government? You're not necessarily baking in a lot of government resurgence in '12?

No, I am baking in growth in the government business but not based upon the (inaudible) contract, one of the big ones we won. If we get that, a big chunk of that will be in another press release, but that's not in (inaudible).

Okay, and then just a final technical question here. Jim, as we look ahead to 2013, already. I'm not looking for guidance but just looking for the calendar, plus or minus days in '13 relative to fiscal '12 just so that we can capture that correctly?

I've got to turn to a [tab] because I don't remember that off the top of my head. Just give us one second, I think it's -- I'm pretty sure it is one day less than '12.

And do you happen to have the quarter by any chance?

What we'll have to get back to you on that, we'll get back to you on that. But I just don't know off the top of my head, sorry.

Got you, thank you.

Michael Gallo, CL King.

Hi, good morning. A couple questions. Recently at a presidential memorandum implementing, I think, it was a $2 billion plan to upgrade federal buildings for energy efficiency over the next couple of years. I was wondering if -- this is the year we start to see things really break out on the energy retrofit side. Any signs that, that's going to uptick, or just your thoughts for this year and next year?

Again, learning from the past, Michael, we are not budgeting a huge uptick but of course, we hope to get it done. I think, by the way, since is $4 billion -- if we can get 1% of that, [life's] a little bit different than it does today but we do hope for an uptick in that area and we are making appropriate investments to make sure we get a [piece] of that.

All right. The second question is for Jim. I think you noted the expected seasonality in '12 to be similar to '11. I guess if I just look at the way the calendar worked in '11, you have one more day in the first quarter, in the first half, whereas you had actually the extra day obviously in the third quarter. So just tell me with the seasonality because it seemed to imply things were a little better, so just lapping the pricing pressure in Janitorial earlier in the year? Why wouldn't seasonally -- why wouldn't it be slightly more weighted to the first half next year given the extra day this year in the third quarter?

Yes, I think the day is obviously one factor that goes in the direction you're suggesting. You also have the SUI rates and all those things which create the same pattern we had this year plus with having Linc and the growing government business that also creates the more second half type of situation. So, I think while the one day does impact -- we've got the other factors and by the way, just one second, Andrew, back on your question, there is one less day in 2013, that's in Q2, since we are on that topic.

Right. In terms of just very near term, Jim, would you expect first quarter that you'll return to earnings growth given last year you had, I think, an extra day in the quarter? Or still too much uncertainty with SUI and some of the other stuff to be able to say that?

Yes, I think the latter part of what you said.

We really don't -- we stopped giving quarterly guidance, Michael.

No, I understand. I'm just trying to understand some of the factors.

I appreciate it.

Right. Okay, thank you.

Charles Redding, BB&T Capital Markets.

Hi, gentlemen. Thanks for taking my call. I just want to make sure I understand the specific components that would account for the expected increase in D&A for '12?

Sure, basically on the -- depreciation will be $3 million to $4 million higher year-over-year. We're building our own data center given the size of our Company right now. We had been outsourced to IBM. We did a press release on this so we are building our own data center that will create a little bit more. And we also invested in new systems for our Linc acquisition; we are doing a little bit of that next year. We got quite a bit done this year so that will drive some additional depreciation, amortization itself actually trails off a little bit but combined were up.

Great. Can you provide what your expectation for accretion on the Linc acquisition might be in '12?

I don't think we've talked -- we have a slightly accretive this year, which we (inaudible) -- it will be better next year given increased synergies.

Okay. And then lastly, obviously leverage has come down nicely. Can you give us an expected range of additional debt paydown potential in '12?

If we don't do any M&A, which we're obviously always out there trying to do. If we don't, we will be paying debt down with our free cash flow. And from a free cash flow perspective, as we said earlier, we did about $138 million this year. Our CapEx will go up in 2012 from 2011 due to the build out of data center so maybe between [$35 million and $40 million] on CapEx and cash taxes go up a little bit so, when you look at those incrementals over this year, we'll still have very good free cash flow, not the level of this year and net free cash flow will go into paying down debt unless we buy somebody.

It's our hope that it will be balanced those to one time.

Right.

Great. Thanks a lot.

Michael Kim, Imperial Capital.

Could you talk a little bit about what you're seeing in terms of the pricing environment in Janitorial, how competitors are pricing their business relative to yours and looking at market share?

Yes, it's -- if you go to our Janitorial Group, I am sure they feel the pressure and for sure, we felt the pressure in the third quarter of last year. I don't think the pricing pressure has changed that dramatically in the last six months, nine months, 12 months. Like in any other business, there are times where it seems like a lot of jobs are being priced and bid and then there are times where we're more calm. I think we are in the more calm period where we looking at a good opportunity versus big saves but the pricing pressure is there. But I think we have one great advantage compared to anybody else in that size. We have the size that is unique in this particular business. In today's environment with all the requirements that are for all companies to be a Company between $50 million and $200 million is not easy. And at the end of the day, I like where we sit in spite of the pricing pressures because I think there's going to be some great acquisition opportunities as a result of these greater pricing pressures.

And then switching to Tag revenue, do you see that turning back to more historical levels and sustaining those levels? Or did you see some unusual activity that drove some of the improvement in Tag revenue this quarter?

I don't think there was too many unusual activities that drove -- I think it was concentrated effort by the group to focus on it more than ever. I hope we can retain a level but, these levels, if you go into a tough economic quarter, the financial institutions, seems to be going through challenging times. It could, in fact, impact it negatively but it is our hope and goal that we will retain this level and this level is very close to those historical levels you're talking about.

And then, just switching to the government business, obviously, there is pretty significant budget uncertainty but do you have any visibility on when those projects might resume? And if we could expect that first half of this year or is it just too early to tell for you?

It's a little early to tell because one thing is you get some of those jobs and then it looks like we've done very well and we call the hunting season. But until the job starts, I'm not comfortable in giving you any expectations. It is our hope at the end of the fourth quarter we have a little more clarity of the year and for sure, it's an exciting time in the government business because it looks like we'll have a very, very strong growth year

Okay, and then just turning to your topline expectations for next year and earlier, you mentioned 3% to 5% organic growth. How much do you think of that might be driven by cross-selling activities with Linc? Is it a meaningful percentage or a component of that organic growth for next year?

No. It's not -- that is really not a meaningful -- I wish it was. But this year, we probably have seen I would say somewhere between $7 million and $10 million of annualized business generated through the combined effort and that is $7 million and $10 million more than I've seen in the past. So first, I feel very good about this direction and teamwork between the old Linc and ABM has been absolutely incredible so I am sure we are going to see a nice steady growth in that area but it's still too young for me to go out and put my leg out and say it's going to be $25 million. I hope but it's too early.

Okay. Fair enough. Thank you very much.

There are no further questions. I will now turn the call back over to Mr. Slipsager for closing remarks.

Thank you very much. I want to wish all our employees, shareholders happy holidays and I especially think our employees for a very, very, very good year. It's not been easy but a very good year and thanks for your efforts and due to your efforts, that's why we are sitting here in control of what I believe is a pretty good 2012. So thank you very much. Happy New Year.

Ladies and gentlemen, that does conclude today's conference. You may all disconnect and have a wonderful day.