Alamo Group Inc (ALG) 2015 Q1 法說會逐字稿

Good day, ladies and gentlemen. Welcome to Alamo Group's first-quarter 2015 earnings conference call. During today's presentation, all parties will be in the listen-only mode. Following the presentation, the conference will be open for questions.

(Operator Instructions)

This conference is being recorded Thursday, May 7, 2015. I will now turn the conference over to Mr. Bob George, Vice President of Alamo Group. Please go ahead, Sir.

Thank you. By now you should have all received a copy of the press release. However, if anyone was missing a copy and would like to receive one, please contact us at 212-827-3746 and we will send you a release and make sure you are on the Company's distribution list.

There will be a replay of the call which will begin one hour after the call and run for one week. The replay can be accessed by dialing 1-888-203-1112 with the passcode 2637152. Additionally the call is being webcast on the Company's website at www.Alamo-Group.com and a replay will be available for 60 days.

On the line with me today are Ronald Robinson, Chief Executive Officer and President, Dan Malone, Executive Vice President and Chief Financial Officer, and Rich Wehrle, Vice President and Corporate Controller. Management will make some opening remarks and we will open up the call for your questions.

Before turning the call over to Ron, I would like to make a few comments about forward-looking statements. We will be making forward-looking statements today that are made pursuant to the Safe Harbor provisions of the Private securities litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties which may cause the Company's actual results in future periods to differ materially from forecasted results. Among those factors that could cause actual results to differ materially are the following: market demand, competition, weather, seasonality, currency-related issues, and other risk factors listed from time to time in the Company's SEC reports.

The Company does not undertake any obligation to update the information contained herein, which speaks only as of this date. I would now like to introduce Ron. Ron, please go ahead.

Thank you, Bob. I want to thank everyone for joining us here today. We're going to begin the call with Dan Malone, our CFO, who will give the review of our financial results for the first quarter of 2015 and then I'll provide a little more color on the performance of the Company and our individual divisions. And following our formal remarks we look forward to taking any questions you might have.

So, Dan, please go ahead.

Thank you, Ron. Alamo Group's first-quarter 2015 that sales and net income for, again, Company records. Our results were significantly helped by the contributions of the businesses we acquired in 2014 from Specialized, Kellands, and Fieldquip, partially offsetting our acquisition driven growth was continued weakness in the agricultural equipment markets, as well as the negative effects of the strengthening US dollar on the translation of non-US sales and earnings. Our results were, again, impacted by non-cash charges, were related to sales of inventories acquired from Specialized, which were subject to a $5.4 million step up to fair value in the final purchase price allocation.

$1.8 million of this step-up was expensed during the first quarter of 2015, and $4.3 million has now been expensed since the acquisition. This leaves $1.1 million remaining to be expensed in subsequent accounting periods.

The large movements in foreign currency exchange rates have impacted our results, both at a local currency level and in the translation of non-US operating results into US dollars for reporting purposes.

Our local currency margins are largely protected by the fact that the cost of our business units are predominantly in the same currency as the revenue streams, though we do utilize forward contracts and pricing actions to mitigate currency risks to the extent that we have significant sales that are not denominated in local currency.

On the other hand, the translation of non-US operating results into US dollars for consolidation reporting purposes were significantly affected by the strengthening US dollar. This negative impact on our Company's first-quarter 2015 consolidated net sales was $7.5 million or 4% of net sales.

However because the mix of non-US earnings amongst the affected currencies, the net effect of changes in currency translation had less than a $0.01 impact on our first- quarter earnings-per-share.

Our year-to-year earnings-per-share comparisons also continue to benefit in the first quarter and should continue to benefit through the end of the third quarter from the repurchase of shares from a major shareholder near the end of the third quarter of 2014.

First-quarter 2015 net sales of $207.8 million represent a 20% increase over the first quarter of 2014. Excluding acquisitions, first-quarter 2015 net sales were $160.3 million, down about $12.3 million or 7% from the prior year quarter. However sales were down by about $4.8 million or 3% when the previously mentioned unfavorable currency translation effects are excluded from this comparison.

Net income for the first quarter was a record $7.4 million or $0.54 per diluted share compared to $7.2 million and $0.59 per diluted share in the first quarter of 2014, an increase of 2%. Excluding the previously mentioned non-cash charges relating to the inventory step up, net income for the quarter was $8.5 million or $0.74 per diluted share.

The operating results of our recent acquisitions, net of related interest expense and income taxes, contributed $1.9 million to first-quarter 2015 net income or $0.17 per diluted share. Without the non-cash charges related to the inventory step-up, these acquisitions contributed $3 million to the first quarter of 2015 net income or $0.27 per diluted share.

Industrial division first-quarter 2015 sales of $116.9 million represented a 50% increase compared to the prior year first quarter. Acquisitions contributed sales of $44.7 million to this division during the current year first quarter. Excluding acquisitions, first-quarter industrial division sales were $72.7 million representing a decrease of $5 million from the first quarter of 2014. The effect of the strengthening US dollar on the translation of sales by this division's non-US operations accounted for $1 million of this difference, while the remaining $4 million was primarily due to a large investor mower quarter that drove up prior year first-quarter tractor shipments.

Excluding the above this division's shipment of both whole goods and parts were slightly above the prior year quarter as weather disruptions and a slow start in mowing products substantially offset continued steady growth in our sweeping, vacuum truck, excavator, and snow removal product lines. And as Ron mentioned in the earnings release, we continue to see evidence of steady organic growth in this division's new orders and backlog.

Agricultural division sales were $48.5 million in the current year first quarter, a decrease of 5% from the prior year quarter. Excluding the Fieldquip acquisition 2015 first-quarter sales in this division were $47.7 million, or 6% lower than the first quarter of 2014. These year-to-year comparisons reflect the continued general slowdown in agricultural equipment markets as currencies did not significantly impact this division's sales.

European division first-quarter 2015 sales were $42.4 million, or 4% lower than the first quarter of 2014. So even excluding the Kellands acquisition this division's sales in local currencies grew by 5% over the prior year quarter. The unfavorable effect of the strengthening US dollar on the translation of this division's first-quarter 2015 sales was over $6.2 million when compared to average currency exchange rates in the first quarter of 2014.

Total Company margins continue to expand in the first quarter of 2015. Excluding the previously mentioned non-cash charges related to the inventory step-up, first-quarter 2015 gross margin improved to 22.8% and operating income improved to 6.7% of sales compared to 22.1% and 6.2% of sales, respectively, in the first quarter of 2014. The higher margins of recently acquired companies and continued margin improvement in the industrial division more than offset unfavorable margins in the agricultural divisions.

As of the end of the first quarter of 2015, our trailing 12-month free cash flow which we defined as net cash generated by operating activities, less than that of capital expenditures and retirements was $29.1 million, an increase of 49% over the comparable trailing 12-month period ended March 31, 2014.

Our average first-quarter 2015 effective income tax rate was 35.8% which compares unfavorably to the 33.8% effective tax rate for the first quarter of 2014, primarily due to the mix of where our earnings occurred during the quarter.

In summary, our record first-quarter 2015 results reflected highly accretive sales and earnings contributions from our most recent acquisitions and favorable local currency results in Europe, which helped us overcome headwinds created by the strengthening US dollar and continued weakness in agricultural equipment markets, as well as continued improvement in the Company's operating margins and free cash flow.

I'd now like to turn the call back over to Ron.

Thank you, Dan. As Dan said, we were basically, I think, pleased with the first-quarter results even though obviously there were a few headwinds that the Company faced during the first quarter. Acquisitions certainly played a big part in the record results, and I think it is evident that -- continued evidence that the Specialized acquisition is nicely accretive to the Company's results and has been since we acquired it late in the second quarter of last year.

So and that is continuing to be a good addition for Alamo Group. As I said also, even without the acquisition, I thought the results were reasonable given some of the challenges in the quarter especially the number one thing was there was some weather which caused some slowdowns and distractions, and as we lost a few production days at some of our manufacturing operations as well as things like people were thinking more about snow removal than they were about replacing mowers or street sweepers or some of our other types of products.

Even our industrial division which has certainly been the lead in our growth for the last several years, I think, is still doing well. Obviously it was up 50% based on the acquisition; but even excluding the acquisition, though the sales were off a little as compared to a very strong first quarter of last year I guess we don't see a lot to worry about in fact, as we felt that if you take out one big order from last year they would've been up a little bit. And that the bookings and backlog in the division were up and at healthy levels so I think we feel that bodes well for the rest of the year.

We had even commented in our fourth-quarter results from last year that this first quarter was starting off a little slow. But it was good to see the bookings and backlogs come in at healthy levels and that are up.

Even our ag division was certainly soft as the whole sector there is off, and I think we again -- while our sales were off a little, we are certainly holding up better than many of the other agricultural equipment manufacturers, with our sales being certainly not off as sales of some of the product specifically some of the row crop products, big-ticket items like combines and some of the big tractors. We've held up a little bit better there.

We held up a little bit better last year than many others, and I think even in first quarter, our sales were soft because, in general, ag incomes were down. But I think the diversity of the markets we serve with our products in that sector helped us not be off as much of some of the other products have. Things like ranching, hobby farming are all doing a little bit better than the big row crop farming and we have a good exposure to those other types of sectors which has helped us and so -- certainly, as I said, ag is soft and will probably remain soft throughout most of 2015.

But I think the long-term prospects for ag are still quite good and we feel we're in good shape to participate in that. And as Dan also mentioned, the strong US dollar also impacted our international results. As we said, European, our sales were actually up in local currency but down when we translated that to US dollars but we were pleased that our European sales have continued at a healthy improving level given that Europe itself is still in a bit of a challenging economic situation.

It's good to see that while it hurts with the strong dollar on the translation of those earnings, it has really not affected our sales on a day-to-day basis in Europe, since we have a bit of a natural hedge on our operations there from a currency point of view because most of what we sell in Europe we build in Europe. And so, we are not hurt from a currency point of view on day-to-day sales. Where we are hurt is strictly on the translation of those results back to US dollars.

But, again, that part of the translation is likely to impact results throughout 2015. But I think, as we have shown over the years, generally we've dealt pretty well with currency changes although it's all US companies engaged in international business are challenged when we see such big currency swings in a short period of time like we have with the US dollar in the last three or four months.

Also, we were excited in the quarter that we were able to -- we did a small acquisition in Brazil. It is a small one and oriented towards the ag market of Brazil but we think it has good long-term growth potential. Starting small but we believe that with some of our products and our technology that we can put into that operation it should do quite well, and Brazil is one of the major ag economies in the world. It's a hard one to export to so we mentioned before that we wanted to start a presence in that market.

And like I say, we may have started small but we're very -- even with Brazil economy being off right now, we are very optimistic that that should have nice growth potential in the coming years.

So, certainly, we're concerned about some of the short-term challenges we have. The ag markets, like I said, is going to stay weak. The dollar is probably going to stay strong.

I think there's still some weakness and some fragileness in the European economy but even some weaknesses in parts of the US economy with the oilfield slowdown, in addition to the ag. But I think we still feel we are in a good position -- or well-positioned for long-term growth and actually can do very well this year even with some of the headwinds we are facing we feel like we are being benefit by improving backlogs, sales levels are good and as long as the US economy doesn't take any further disruptions in the overall US economy we actually feel that we are poised quite well to have a good year.

The weather problems of the first quarter are pretty well behind us. There's a lot of moisture out there so vegetation is growing, which is good for us. I think the farms -- even if they are soft, the planting is going well and it should be a good production season on the ag side. So some of these headwinds we'll face, but especially with the contribution from the acquisitions we think we are in actually good shape and that this year should continue to be a positive one for our Company, even with some of the headwinds that we are facing.

So with that, I will finish our prepared remarks and would like to now turn it over to take your questions.

(operator instructions)

Brett Wong, Piper Jaffray.

I was wondering if there was any way you can provide more color on the backlog -- what are we looking at in terms of timing?

First of all, most of our backlog, especially at this time of year, should ship during the year -- like, say, some of it is spread out over the year but most of our products are in sort of the two- to four-month lead times and some of it should certainly go beyond that. But most of it should ship during this year.

As far as other color -- as I said, industrial was up. Ag is not -- they are down. Europe in local currency was up -- so, that's some of it. I can tell you in industrial, sweepers, excavators and all have done quite well. Some of the things like vacuum trucks have been off a little. Probably some of the oilfield activity there has impacted that a little bit, but more products were probably flat during the quarter. But like I said that's comparing almost to a strong quarter, a really strong first quarter last year. So I think they are still at a very healthy level.

But in general, like I say, ag products certainly have been soft. Ag incomes are down and we commented on that market.

Europe, I think, it's both been ag and industrial products that have -- a little bit of -- both of them has been up a little bit. So like I say, that's about all the color I can really give on the backlog situation.

That's very helpful. Thanks. About the weather, I was wondering and we kind of talked about this last quarter as we were kind of experiencing some of that weather maybe more than others being in Boston. But you talked a little bit in your prepared remarks around wet weather maybe helping vegetation grow a little bit.

Is there any benefits that you guys will receive from some of the weather conditions?

Certainly our snow removal groups did well in the first quarter in spare parts -- not much. Whole goods didn't see hardly any effect just because it was too late for people to start reordering.

But we're already starting to see some healthy levels of orders coming in for next season, and I think the big part of snow removal will be as we go into the next season. So the bookings for the next several months which will turn into orders -- sales in the late summer and fall months.

Okay. And then going on the acquisition front, any color there around -- are there opportunities that you see? Other regions that you are looking at or in Brazil and also places you would like to grow in the near-term?

Absolutely. Certainly, Brazil is a place we would like to continue to grow in -- both by organic growth, which we are optimistic on but further in we are still looking for complementary acquisitions there as well. Actually, the pipeline of acquisitions is fairly active right now but there's nothing eminent or of any size that seems on the horizon but we're looking at a number of items right now and, hopefully, some could even happen later this year.

Very good. I'll hop back in line. Thanks a lot.

Thank you.

Mike Shlisky, Global Hunter Securities.

Good afternoon, guys. Maybe we can just take a quick step back.

So since the last conference call back in March, broadly speaking -- has your tone -- has your view changed at all for the better or for the worse on how things are going as far as your growth outlook -- has it gotten worse? Has it gotten better? It's hard to tell with what was in the release. Any thoughts on that?

I'm sure I could give a lot but I wouldn't say my outlook is any better at all. Certainly not better. Is it worse? Not really. Probably the quarter ended up a little bit weaker than I think we anticipated but, like I say, with the backlogs where they are and with the prospects in general, I think some of the internal things we've got going -- we've got some new product introductions that have gone very well this year already.

I'm probably a little worried that the US economy in general is showing a few signs of weakness. But unless there some change overall I would say my outlook hasn't really changed for the year. I think we're in good shape and I think that, like I say, our backlogs and our product acceptance has been good. We think that we still feel good about where we are and everything.

Even I think when we were together then, I said the first quarter was off to a soft start and currencies are something that I said we really couldn't comment on that at that time. Who knows where they will be and how long they will be there? So I'm sort of assuming in all this that the dollar doesn't get stronger because like I say that, certainly as you can see, it does have an effect and it has. If it got any stronger like I say that effect could get multiplied.

So generally I think I feel pretty good -- I said the quarter was off to a soft start and that's the way it was. I'd say currency -- I don't know what's going to happen with currency. But other than that, I think we are -- probably no real surprises in the other sectors.

I would add that the dollar was pretty weak the first half of last year so those comparisons of the first half of this year versus the first half of last year are just going to be tough unless there is a huge recovery. It's going to affect our year-to-year comparisons.

Perhaps I can ask it a different way. Assuming all your deals you've done -- Specialized and so forth -- you have a pretty solid backlog it sounds like and you've got effects on the upside of it. I guess is it possible to grow revenues outside of your M&A in 2015? Is that currently on your radar screen?

Well, you just said excluding currency effects --

Including -- including currency effects.

Including? It's going to be tough. I think with the ag softness and with currency, like I say, currency which took growth -- like I say, we were up in Europe and after currencies we were down. Certainly I don't think internal growth can offset the softness in ag and currency. So I think we'll be lucky to hold our own on those fronts.

If we are talking topline.

Yes, exactly.

And topline -- one thing as he said of course we are at about the end of -- probably the next quarter will we substantially done with this writeup of inventory effects, so we'll have that one behind us and like I say a few things like that. But that could further help. And their margins continued to actually improve in the first quarter. And so I think -- I actually think we could fare better on the bottom line than the topline.

Got it. And then just was curious, I thought you -- you've got some accretion here in the first quarter. I was kind of curious, after you lapped Specialized and after you lapped that deal's anniversary, are there other ways you can get some more margin out of that deal after a year of being in your portfolio? Have you found different ways to kind of cut costs there or decrease your results going forward?

Yes. So, with the Specialized situation, there's sort of short-term, medium-term, and long-term synergies and certainly like we've already benefited from some of the short-term. We still -- by the end of this year we ought to have them on our operating system and we believe that will give us a little bit better control of things like inventory and take advantage of some of the things. And then, I think there's some longer-term things we want to do with their manufacturing, so no, we think we are certainly nowhere near the end of the synergistic opportunities that we can achieve with Specialized.

Great. And finally one last one, if I may, on the snow business given what happened in the first quarter -- pretty heavy snow throughout much of the country, how do you feel about the orders coming in for next winter's snow season which probably takes place a little bit later on in the year?

I think we're optimistic, but it's too early to tell. There are just still putting away of equipment from last winter. It's too early. I think we're optimistic but it's too early to really comment on.

Okay. Great. Thank you so much.

(operator instructions)

Ross Gilardi, Bank of America.

Good afternoon, gentlemen. Just a few questions -- just expanding on Mike's questions, so in the back half of the year clearly you've got pretty difficult comps -- you have a couple of gray quarters in the second half of the year. You're going to lap Specialized and you've got currency headwinds.

So, can you grow the bottom line in the second half of the year? Or do you need to see like a real acceleration in trends from where they are now?

I think we have the potential to grow the bottom line. I think like I say -- currencies and I think general economic conditions will certainly play a part. Ag, we assume, will be soft but not worse. So as long as things, I think, don't deteriorate in any of these fronts I think, yes, we feel that we do have a potential for bottom line improvement.

Okay. Great. And it looks like organically, including FX, you were down about 7% on the topline in the first quarter. Does that sound right?

Including FX, yes.

And then you set the FX impact was 400 [bips] so you were down 3% FX --

Correct.

Is that right?

Correct.

And then what do you think like the production today loss cost you and the other weather impact? I'm just trying to get a sense of -- as to quarter run rate, organic growth if you kind of take out the noise? If there's any way to do that?

That's real hard. Like we had -- I don't know -- we lost four or five production days in total and it was at a couple of different plants. It's hard -- those kinds of things are harder to quantify. So I really can't -- I don't think we have those kinds of numbers.

Okay. And then in Europe, there's some optimism that the economy is getting a little bit better. Are you feeling that in order trends in general or is it just sort of steady-state sluggishness?

As we pointed out, our backlogs ended up there and we saw 5% organic growth in local currency in the quarter.

As you said, I think Europe is improving but it's a real slow improvement. I think the UK is doing -- for us is doing much better in improvement there. It's been better that France but I'm sort of watching the UK elections this month and hopefully -- like I say, I think that election is going to be an interesting one to follow as to if there's going to be any change in tone in that market. But as you said, I think we are seeing some improvement but it's very gradual. Europe, I think, is still very challenged.

Okay. And then could you just address oil and gas and sort of what portion for North American Industrial business is in Texas and in other energy-producing states? And do you feel like you are seeing any slowdown? Tied to tighter state and municipal budgets and the energy states, you know, that you mentioned some concerns about the US economy. I don't know if that's more specifically what you were referring to?

Some of it -- like there's a little bit of concern about what it's going to do to budgets. Budgets in the US aren't growing as fast as they were the last couple of years. Definitely oil and gas has actually -- some of our growth in vacuum trucks has been -- we've had some good successes in some of the more oil and gas related -- the majority of our vacuum trucks goes to the governmental, municipal areas but -- as we've commented, some of the nongovernmental -- some of the more industrial users for vacuum trucks has also shown nice growth in the last couple of years and some of that has been in some of the oilfield related -- using vacuum trucks to clean up drilling sites or refineries or spills.

So we noticed that's softened a little bit but, again, the majority of sales there are to governmentals that our normal industrial type customers but it's the nongovernmental users that's been soft. And like I said, budgets in general are slowing down. The growth is slowing down. We think that's somewhat being affected by oil and gas but that one it's been way too early to see if there's going to be any continuing effect there.

Okay. Great. Then just ag. It's pretty clear that your business is performing and holding up better than large ag. I don't think anyone would deny that but it looks like you saw a deterioration in organic growth just from Q4 to Q1 and that's not long enough of a timeframe. Does it feel like it's gotten a little bit worse?

Certainly there have been some more concerns on theory and livestock more recently. So do you feel like there's been incremental deterioration in first quarter or would you still characterize that as sort of steady-state? [Lap] it down a little bit?

That's right. Really when we compare against the first -- last year -- our ag was down last year. It was actually flat in the first quarter; second quarter was when we started feeling the softness and I think some softness -- our second-quarter results last year were our softest. But the first quarter we were flat -- this year first quarter we were down single digits so compared to a little bit stronger one last year.

Certainly I'm not seeing any improvement in ag but I'm not ready to say it's getting worse or -- worse. I think from a manufacturer's point of view, inventories are getting into a little bit better shape at the dealer level I think so -- but it's still -- it's very soft in ag but like I say -- I'm certainly not saying it's getting any better but I'm not sure I would say it's getting worse.

It's really hard to compare like a fourth quarter to a first quarter because fourth quarter -- we have a lot of preseason program shipments being pushed out in the ag sector. So, it's such a highly seasonal business it's really difficult to compare like a second to a third or a first to a fourth -- it's hard to draw a conclusion.

I understand that -- I was just more curious. Your qualitative comments were helpful in just understanding kind of the tone of the market. Thank you. I'm all set.

Paul [Seron, Mizero] Financial.

Hi, good afternoon. So I wanted to follow up on the operating margins and as you mentioned they were up year-over-year although they were down from a good performance in the second half, which included Specialized as well so a bit of a cleaner comp. I know there were whether headwinds and other headwinds on top of it being a seasonally lighter quarter.

So can you kind of give us some color on the cadence of operating margins throughout this year and where you expect the full year to end up? And then, as a follow-up, where do you see the business going on the margin line over the longer term -- so, the next three to five years? Thanks.

We are continuing to see -- continued year-to-year sort of improvement. Again, with us it's dangerous to try to compare other than current year quarter to prior year quarter. And we see continued improvement. There are a lot of things moving in the right direction. We continue to see improvement in the industrial margins. We continue to see improvement in the European local currency margin. We have obviously negatively affecting us is agricultural and that's partly due to a product mix. In the current market the mix isn't as favorable as it is when the market is robust. A lot of higher end products move better when the market is robust.

So it's really kind of a hard question to answer overall but we have seen continuous improvement and I would expect that we will see continuous improvement.

As he said, I believe our margins probably are not where they should be and while they have been improving the last several years, and I believe the next several years they will continue to improve, as I said because I still think we are underperforming the margin levels we need to be at, the timing of how fast we get there certainly depends on a number of factors and things like currencies and all, as we discussed today. It also depends on some factors like ag, when that market turns which I think it will -- I can't say exactly when but the other thing that's going to help margins a little bit is some volume -- especially in ag, where we actually lost some volume. So I think those are two things.

Some of the factors -- but you've got to understand, so it's hard to compare a fourth quarter to a first or a first to a second. Second, our first and fourth quarters tend to be our weaker two quarters. Our second and third quarters tend to be our stronger two. It's just in general there's not as huge a sales difference as there is a mix difference and the second and third quarters tend to be higher amount of spare parts sales because more equipment is being utilized and consuming spare parts. So the mix of sales versus spare parts is a little bit higher in spare parts than the second and third quarters which is a much higher-margin item for us. So like I say you've got to be careful about what quarters you are comparing.

But, yes, I think in the next few years we believe not only should be growing the topline but our margin should continue to gradually improve. How fast? It depends on things like the economy, volume, currencies, and a few things like that which are very hard to predict right now.

And we will get some help from lower steel prices as well this year.

That's great. And just to make sure I'm hearing you correctly, when you say you expect year-over-year improvement that would seem to suggest that as we grow throughout this year, you expect to be ahead of the year ago quarter operating margin? And I know that's a lot of uncertainty with foreign-exchange.

That's right. Like I say we don't give guidance per se to say exactly where we think but I mean I think we feel that we should see some margin improvement but like I said, there's a lot of unknowns right now in currency and ag volumes and this kind of stuff.

Got it.

We have no further questions and the queue. We'll turn the conference back over to management to offer any additional or closing remarks.

Okay. Thank you very much for joining us today and we appreciate your time and interest and we look forward to speaking with you on our second-quarter conference call.

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