Art's Way Manufacturing Co Inc (ARTW) 2011 Q3 法說會逐字稿

Good morning, ladies and gentlemen. Today is Thursday, October 13, 2011. Welcome to the Art's Way Manufacturing Company, Inc. third-quarter financial results conference call. At this time, all participants are in a listen-only mode. (Operator Instructions) Your call leaders for today's call are Jim Drewitz, Investor and Press Relations Representative and J. Ward McConnell, Jr., Executive Chairman of the Board of Directors. I would now like to turn the call over to Mr. Jim Drewitz. Mr. Drewitz, you may begin.

Thank you, Ross. Good morning, ladies and gentlemen. Before Mr. McConnell begins, I would like to draw your attention to -- except for historical information contained herein, the statements in this conference call are forward-looking and made pursuant to the Safe Harbor Provisions as outlined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties which may cause Art's Way Manufacturing's actual results in future periods to differ materially from forecasted results. Those risks include, among other things, the loss of market share through competition or otherwise, the introduction of competing technologies by other companies, new governmental safety, health and environmental regulations, which could require Art's Way Manufacturing to make significant capital expenditures.

The forward-looking statements included in this conference call are only made as of the date of this call and Art's Way Manufacturing undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances. Important factors that could cause actual results to differ materially from the expected results reflected in the forward-looking statements include, but are not limited to, factors described under the Risk Factors in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission. With that completed, I would like to turn the call over to Mr. Ward McConnell. Mr. McConnell?

Good morning, ladies and gentlemen, and I would first like to thank you and I do appreciate you taking your time to hear this. I'd like to report on the third quarter and the 9 months both. As you probably know by now, the ag business is pretty good around all manufacturers, as is ours. Our sales were up in the 9 months $2.1 million over a year ago and our earnings are up in ag sector over a year ago as well. The third quarter and the year-to-date on the Scientific sales are down $3.4 million. I'll address that in a moment.

Our Vessel sales are about level with last year. This particular call, I'm going to be more optimistic than I've been with you people in the past. I see the ag staying the same for another year. It looks like the ag machinery business will continue to be pretty good for a year. We feel like we've stabilized Vessels. Our losses have stopped, basically. We're very close to a break-even now. We do have Management in place and the place is functioning like a place should function and our costs have been reduced and we just feel like we're under control and we make money on whatever we sell. That's been true now for a couple of months, but earlier in the year, it wasn't quite so good.

Scientific, going forward, I'm extremely optimistic because even though we just couldn't put an order together, or very many orders together, in the first 9 months, we're negotiating some pretty large contracts at the moment, which we think will break within days, that look very good. In addition, we have 1 in particular, we have a contract to do the engineering on that particular job and we've completed that satisfactorily and we expect that job is going to go forward. It's a large job for us and would mean a lot to our year next year. There are many smaller jobs. We got a job yesterday that was not big, but it was a help, and are beginning to break for us. Leasing has come in and we're getting some benefit from the leasing now, which we've only gotten in the last couple of quarters.

I think that, overall, we look pretty darn good going forward. We have some very good people in place that we didn't have. We had terrible manufacturing problems at Vessels. We now have that cured with a very, very good person. We'd had some problems with our Art's Way in West Union where we bought the new building and we have moved the auger production from Salem, South Dakota to West Union, Iowa. We've closed the facility in Salem and put it on the market for sale. We have, just a few months ago, put a man to work there that knows this business inside out and I'm just extremely optimistic about what result we're going to get from that as we go forward. They were in West Union making part of the products that were originally in Armstrong.

Ag continues to look good, so I think that we just look forward to a pretty good year, much better, I think, than we have had up until now. With that brief introduction, I'd like to invite any questions you want to ask.

(Operator Instructions) Nick Halen, Sidoti.

The first question I had was just on the product mix on the ag side in the quarter. I was wondering if you could give us a little insight to what that looked like?

Well, first of all, sales were up $2.1 million. The increase in sales was primarily due to -- the market's strong, but we have a new product that we introduced around the first of the year, an advanced product in our grinder/mixer, and that's where most of our sales increase has come from. That product is selling very well, well ahead of last year, and it continues to have a bright future, I think. We just have introduced it in the export market and we expect some orders in from there now. They haven't ordered this new product yet, but they're ready to and they're coming to visit us, in fact, next week.

The beet harvester is similar. We also have a new prototype in the field this year, which we think will stimulate sales. But there is a problem with sugar. The crop is very, very light up in Minnesota and North Dakota, and we don't know how that affects us, even though sugar prices are very high. It was reported in the press that 19% less production in Minnesota for the fall harvest. Will the price make up for it? We don't know. But we're watching it very carefully and we do believe that the new machine that we have out in the field is performing well in North Dakota, very nicely in Minnesota. But it's an advance and every time we put an advance on these machines, we do get increased sales.

Okay.

I think that looks pretty good. Some of our other products, and fortunately the ones with less gross margin and much more competitive, we struggle getting price increases on, normally. But it stayed about level this year and I see no reason for it to decline any.

Okay. You mentioned that you currently have, I believe, 3 lease facilities and you plan on building more.

Yes.

Can you give us a number on how many more you plan on building and how much you expect to spend building these out?

Well, we haven't sold any of the leases. We're holding them. A year ago, our Board of Directors okayed us to put a $1 million into them. I feel like if it would explode, that we would certainly have more available to us, or we could sell the leases off. We've not taken any bad leases and the ones we've taken are quite good. They're with the US government and so on. But it's taking us -- with the budget constraints as they're going on throughout America, we're having a hard time with the universities getting money.

The 1 I mentioned earlier is from a trust -- it's not a government grant situation. We've looked at what's available in that market moreso too now. But we think leasing is something they like, too. So we just presented a couple weeks ago in San Diego on our leasing and we've got quite a play on that. We think that will grow. But we had to test it a bit. We only put the first ones out this year. I think maybe we put 1 out last year. But I think that looks good, too.

Okay. If you guys see demand start to ramp up because of the leasing option now -- on average, how long does it take you to actually build 1 of the modular buildings?

Well, most of them are like the 1 we're dealing in, I believe it's 28 units. Most of these have more multiple units. So it's not a unit. They are multiple. They vary so much in scope and numbers and so on. How long does it take? Of course, it depends on what we have in the shop loaded. At the moment, it's pretty light. If we close this 1 out that we're pretty sure we're going to close out, we're going to be very, very busy. That would put us down the road a ways. A hard thing to answer.

Okay.

But from start to finish, without any other obstacles, it would be probably 3 months.

3 months, okay. Just lastly, just 1 more question, just kind of a housekeeping question for the model. I know you guys had a lower tax rate in the quarter, but going forward, would that return to more normalized mid-30s level?

Well, probably some, but we still haven't used all that up and those are R&D credits, primarily.

Okay, so you could still use those in future quarters?

Yes.

All right. Great. Thank you for taking my questions.

Roger Miller, Foggy Daze.

My first question deals with a product that was made in the past. On either the last conference call, I believe it was, you had produced a potato harvester. Have you done any engineering to update that or looking forward to produce more potato harvesters?

Perhaps. We did some minor engineering on it. We didn't make them for 10 years. The customer came back and said he wanted to buy 10 units from us, which was a $1 million order. He wanted it tweaked in certain ways and we did that tweaking. They're still using these machines and they went to North Dakota. They're still using them for this year's harvest. I talked to him yesterday and I'm trying to get a reading from him on what the future holds. But we haven't had our exit meeting with him yet. So we really can't answer. I don't know. But we would be glad to, if he wants more and then we did not do anything about getting orders in any other areas this year on that harvester. But we would look forward to that, providing he's got to be positive for it.

Now, I wasn't quite clear on the costs of this unit. You said something about 10 units, $1 million order.

That's right.

So--

But there's a caveat there. He bought it less certain things on it. It was not a whole unit, I guess I'd say.

So what would a whole unit cost?

I don't know. Probably -- I think he sold them for near $200,000 a piece after he added another maybe $50,000 to it. I'm guessing at that, though.

So this would really add to the ag line, if you could ramp up production on these.

Yes, it would.

Competition -- is there any competition in potato harvesters anymore?

Plenty. Plenty. There's a couple of companies -- Lockwood has been around forever and Double L has been around a long time. They're in Idaho. Yes, there is competition.

But obviously, they wanted to buy from you for some reason.

Well, I don't think it's Art's Way's expertise or anything. We really have an awful good dealer up there. He's our good beet dealer, as well. What he sells, he services very thoroughly and his customers like him. I think they like him better than they do us, probably. That's my thought.

Well, that's an interesting statement.

Kind of the truth.

Let's talk about acquisitions. In the past, you've talked about acquisitions and we had an acquisition that you dropped -- the Imperial Steel Tank. This last quarter you just reported strong earnings. The quarter before, they were exceptionally weak. You had a loss and you were pretty negative overall. The stock kind of reflected it, going forward. First of all, did you learn anything from the Imperial Steel Tank deal? Anything you might want to comment on, from helping out Vessels or just the Company in general?

Well, we spent a long time working on that. We started in January and it ended in August. We thought we had a deal worked out and people didn't show up to close, so we went home.

You mean they just left you hanging?

They phoned us and said they weren't going to be at the closing. We were at the closing the designated spot. But did we learn anything? I'm sure we must. You can't do those things without learning something. But I thought that Imperial Tank would fit us. We needed sales. We're at the point now we need sales at Vessels. We didn't need sales last year. We took some terrible jobs on last year; none of which is going on now, and [dubbed] them through manufacture, but that's over, too. We thought they could bring some sales to us.

Well, yes, it seemed like a perfect fit for the company at the time. So I don't think the market understood that they walked away from the deal. At least, I didn't. There's very little information out there about Imperial Steel Tank.

Well, it's, it's an old tank company, but had quit manufacturing and were brokering only. We had done a couple jobs for them. In fact, we had 1 in the shop at the time this went away. They felt like they needed a manufacturing facility and we had 1 and they didn't. But it was mostly a sales organization and we could have used the sales. But no remorse on my part. It's over.

Going a different direction, there's been a significant drop in some commodity prices. I don't believe steel is that case. But is that affecting you any?

Yes, the price of the steel has affected our earnings this year.

Yes, but it was in a negative way, wasn't it?

Yes. However, the latest forecasts are that steel prices are going to drop later this year.

Well, that would be a big positive.

That would be a positive for us.

How about any other commodities that you use?

In Art's Way Manufacturing Armstrong, the biggest portion of what we do is steel. It's our biggest cost. But steel crawls into other things, too. Steel crawls into hydraulic cylinders and bearings and so on, too. So steel is really our biggest commodity to be concerned with.

I presume Joe's on the phone here, though I don't know, from LSGI Advisors. Is that true, or not?

I don't know.

Okay. Well, I don't want to preempt him. In the past, he was highly positive about Scientific and you've stated some news about Scientific that seems to be very positive. So at this level, it appears -- can I believe that Scientific is going to be at least break-even going forward?

I'll be very unhappy if it isn't wildly profitable. I think it's going to be very profitable in the coming year.

Hopefully Joe will write some more about that. I'm sure that's going to go to the bottom line, because that's been the drag on the Company, that and Vessels.

This year it has, yes.

As you know, there's been shareholders, or I'm not sure if they were even shareholders, people on the message boards wanting you to divest these 2 divisions of the Company. I wouldn't agree with that, because I don't think their fruits have ever been picked off the vine.

No.

So, you're happy with everything the way it's going?

I'm very pleased, yes. As I said, I think we're going to look awfully good going forward. Ag has been good and we show that. We're up a little over 10% on sales and the earnings are up. But ag has awfully high peaks and awful low valleys, in my experience over a lot of years I've been doing this. In my heart of hearts think that Vessels and Scientific may be on the other side while ag goes down and it'll diversify us.

But back in the '80s, there was farm equipment companies that went out, falling out like flies. It was terrible and I've seen that. I've seen when the bank told me to go sell my inventory and there was no way. I couldn't sell it for $0.50 on the dollar. And that's going to happen, in my opinion, sometime. I hope it's a long ways down. But when it does, it might just be the time that Scientific and Vessels are on the other side of the equation. So you're right in 1 way. I do want to keep them.

Okay.

When Scientific does turn profitable, it turns very profitable.

Well, that's what we were obviously looking forward to over the past 2 years, or year-and-a-half, with some of the predictions that were out there. I myself have been accumulating stock for years now and actually picked up over the last year.

There was something else I wanted to get into -- with acquisitions, is it safe to say that the Imperial Steel deal must have cost the Company maybe $0.01 a share in earnings? Is that true, or not? Or am I shooting off the hip? From expenses, just everything that is involved in that.

Well, mostly attorney fees.

They've all been paid, I imagine, right? They were all in this last quarter's earnings.

Yes.

So there won't be any of that going forward, will they?

Not on that deal. It's not tremendous. I think we probably spent $20,000 or something, maybe $25,000. But that's pretty minor compared with what it can cost to do those. Everything other than my time and Carrie Majeski's time and Mark's time, which we don't consider very valuable, probably $20,000, $25,000 worth of attorney's fees is what it cost us. Maybe an airplane ticket. I don't know. It's just not wild.

It wasn't a major impact at all?

No, no.

Now, going forward, would you like to announce anything else at this time?

No, I haven't got anything to announce, other than I'm looking.

So there is a possibility you could purchase something?

That's right.

In the ag industry or something else?

Well, probably near the ag industry.

Because people are always interested if you're trying to expand in Vessels or Scientific -- which you've done nothing there in expansion -- and I guess it pretty well runs on its own. It doesn't really have any competitors, does it? Scientific?

Well it does have, yes. But we feel like we're strong in the market. Dan Palmer, who has been on these calls, is extremely well known in the industry and is 1 of our seminar speakers and so on. He sort of has an in on it anyway through that, and I think that we sit awfully well on this stuff that goes on.

But we were really are hurt by the government. Government's got to put some money out there for research and they're not doing it. And so we've had to search a way around it and this leasing is helping us right now. It contributed during the third quarter. But it's too small to get too high on, but it's an angle and we're quoting in leasing. We've been quoting very short-term leases and it's my opinion that we've got to figure out how to do longer term ones. That means probably selling the leases. But it's out there and we really did the first presentation on it in San Diego a couple weeks ago. He presented it and he had some literature and so on on it, and we're kind of ready to go. We've had a little experience with it. We have the 3 buildings out now. We've kind of figured out how we're going to handle it.

Well, in-- (multiple speakers) reinforcing this, Beazer homes reported a significant increase in sales and revenue today.

Which one?

Beazer.

Yes.

Now, that's a major home builder and we haven't seen any of that in a number of years since the housing downturn.

Yes.

Of course on the other side, you got the Tea Party and the candidates running that want to eliminate government spending and that's another story in its own.

Yes.

But you presented us with positive information on Scientific. The ag industry appears that it's going forward. You're not making any moves, so you won't impact earnings at that point. And Vessels, according to you, is stabilized and may be profitable in the next year?

Yes.

Okay. Well, that's all I wanted to hear. Thank you.

Joe Dancy.

I want to follow up on some of Roger's questions. I know you were talking about Dan. Have you done any shows or any -- you said he made some presentations recently for Scientific, or for that matter, have you guys been out attending any shows for the ag sector?

We are doing both. The [ELAS] show is the one that Dan likes the best and it was just in San Diego a couple weeks ago. He came back very, very positive about that, particularly on the leasing side. But as far as ag shows, we have 5 or 6 a year that we go to regularly. Farm Progress Show, there's a show going to be next year, Ag Connect show in Kansas City that we're going to and there's a Wisconsin show that was on World Dairy Expo in Madison, Wisconsin, was last week. We may go to more than 5 or 6. We go to several regionals with the dealers, but the ones we go to are the larger shows. Farm Progress is a very, very large show. Yes, we do.

The leasing model, as you note -- Dan's feedback with regard to leasing, I'm involved with a couple of educational institutions that are state-funded and, as you note, and federal-funded with the research, technology-related universities. The federal grants in certain areas have really been cut back, but especially for a building. But with the lease program, I really think this might be a very interesting business model.

The question I have for you is, going forward, if we don't get any sales, can we make Scientific viable just on a lease basis alone? Do we need more financing, or can we get financing, or do you have any comments on that? Or have you looked much further on just leasing as a business model?

Well, Joe, I can tell you a little bit about it. We have attempted in our first leases on these to recover our costs and to profit. That's a little bit tough on a 2-year lease. I mean, it's scary. We have not even ventured out of the area where we didn't get recovery on the first lease. Well, that's kind of tough. However, we don't want to carry 7-year leases, or 10-year leases and we're fishing now for money to sell those leases. But we've had some inquiry. We've talked to Wells Fargo and so on, but we haven't really found anything that fits us.

There's questions about the residual values, but we didn't worry about the ones we've leased. We just got paid for the entire thing during the first lease. We got more work to do in the area to get really wound up with it, but we've had some taste of it with these first couple leases and we like what we've found. But I don't think we can sell them continually and do much volume with our model without getting it changed to some longer-term leasing.

That makes a lot of sense. I can just see from an institutional standpoint, the leases -- even if they cost you more, you can run them and get them funded easier, from the feedback I've gotten, then capital expenditures, which unfortunately with the government, both state and federal issues, it's difficult to go forward. I'm certainly excited. I'm glad we haven't gone hog wild on the lease program and getting some feedback on the initial leases as to where we're at.

One of those leases is to the Veterans Administration. We've learned a lot on that 1. It went to Puget Sound Veterans Administration. But I think we're getting our feet wet and more confidence in it and more ability to work out what the residual should be; if we have to bring it back, or offer them, or bring it back and re-sell it or re-lease it. We haven't cycled that, you see. We've got to look forward to that.

All right. That's a kosher answer. You talked about your West Union facility a little bit in the opening remarks. How's the integration going with -- I know you were ramping up some stuff at West Union and we've been moving some stuff down from Armstrong. I know we were stocking the West Union plant with all the basic materials that we need to get it up and running with the basic expenditures you need to get everything in line. How is the integration going, the personnel and the product and everything? Can you just comment on that?

Sure. We didn't have it staffed correctly from the management side. We now do. That's going to be all the difference in the world. But we're all moved. We did move the augers in there this summer, which completes what we're putting in there, and we are producing there now. It's a limited staff, but we are producing. We think about moving a couple of other products from Armstrong, but not right now. We're trying to stabilize it. I guess I like that word.

We're awfully pleased with what we have for management there now. We weren't before. We have to go through a cycle of that to find out what we have, I guess. I'm pleased with it right now. I was in there a couple of weeks ago. I'm going in there again on the 24th. Very pleased.

Is it cheaper to manufacture out of that plant than Armstrong, or is it about the same? Or is there a cost differential, just with regard to cost?

There's a cost differential, depending on the volume.

Okay.

Our utilities and what have you were heavy there last winter and we weren't producing anything hardly there last year at all. We just were moving and so on. We had a lot of utility bills and so on that will get spread a little bit better this year. But they're not going to get spread wildly better. We're producing more there, but not that much more.

Okay. So essentially the cost is about the same between the overhead and the utilities and everything else, it's pretty similar?

We're not in bad shape with overhead there, except the fixed costs.

Right, right, okay. You talked--

Meantime, we saved some fixed costs, too, when we got out of Salem, because we had overhead over there and we had about 15 people over there.

That makes sense. You talked about the product mix a little bit and the grinder/mixer. The grinder/mixer, as I recall, is mainly the dairy market, is that right?

Yes. Dairy -- well, all animals, but dairy strongly.

I was actually on a plane up to Minneapolis about a month ago and the guy sitting next to me with us a dairy farmer and he said how bad prices were 2 years ago. He almost went out of business. He goes, dairy prices are much firmer now, he feels much more comfortable. Actually, I asked him about Art's Way equipment and he actually had some positive things to say about the grinder/mixer. He said, yes, for dairy, are you finding that the market -- in the past, it's been a year or 2 ago, you mentioned that dairy prices were real low, especially in Wisconsin. We had a hard time with equipment. Apparently that's, that area--

Well, it's corrected.

Okay.

We were in a farmer's yard in Iowa a week or 2 ago and he was saying that he was getting $22-plus for his milk now and 18 months ago, I think, he was getting $9.

Exactly. It was single-digit for a while, which is brutal.

So I think, yes, milk is up pretty good right now.

Okay. Following on Roger's, too, Roger was asking about the Vessels acquisition or whatever, and I guess let me focus, are you looking versus buying companies or whole organizations? Or are you looking at any new product lines, just single-line stuff that's hanging out there that you might be able to pull into Armstrong or West Union and make at a profit, or is there anything out there that's worth looking at?

There's quite frequently things, but I haven't got any on the radar now. 1 of our difficult parts of that is, like we had last year we bought the M&W Baler. Well, the M&W Baler needs a lot of R&D. We didn't pay much for it, just got a parts business. So it's not a burden. But at the same time, we haven't got enough engineering to bring out a new baler. I studied that market last year and found that marketplace has changed a lot and it's going to a large square baler. They were baling corn stalks and so forth. From the ground up, I talked to an outside engineering firm about that, for example, and from the ground up, it's going to cost us a hell of a lot of money and I couldn't get excited. There's a lot of competition and so on. But, yes, I would like to find something that we could bring in that was engineered and ready to go. Our current product lines require constant engineering, too.

Yes.

So we're actually short of engineering.

Okay. Yes, actually, I remember your website a year or 2 ago, you were looking to hire some engineers. Overall, as a Company, are we looking to hire or are we maintaining or are we reducing staff or is there a trend, Ward?

No, we're about the same.

We're about the same?

But we are looking for engineers.

Okay.

We're still looking. We hired 1. We had 1 leave us last week, made us cry. We thought he was a very, very good man to have and for some reason, we weren't able to hold him.

Okay.

We are searching engineering, ag engineering and of course, Armstrong is in the middle of nowhere.

Right.

We're having a little bit of a recruiting problem.

But when you go up -- I know John Deere is actually at 1 of the universities I deal with, they are hiring people left and right, and they pay General Motors unionized wages-type stuff. It was pretty impressive. So if we have to compete, yes, it might be tough.

Right in our area, AGCO is currently advertising to hire 200 people for a place about 30 miles away from us.

That's actually -- it's not good for us. It's great for the economy, though.

Not very good for us, is right.

I'd just comment, too, Roger had asked and you talked about the business model and I like your strategy, both with regard to the Vessels and Scientific and I mean, you are right. All of them are sort of cyclical and when 1 wave's cresting, the other seems to have worked okay. But it would be nice to see Scientific and Vessels. And Roger's correct, Scientific, if we get that running, Ward, it's the gold mine behind the barn. But it would be nice to see. You're positive on Scientific?

Well, it looks awful good right now.

Okay, but I mean, you never know until it sings.

That's true. You never though until the signature's on the line. But it looks awfully good, Joe.

All right. We'll see. Well, it will be curious to see with Europe and everything and the economy. Actually, just looking at the correlations between stock prices and the indexes, Ward, it doesn't matter how good your Company's looking, everything's moving together, which is I'm sure -- frustrating from my standpoint, but from your standpoint, building a business, moving forward, if you build the business, sooner or later, it will be reflected in the share price. Interesting. Well, those are my questions and good call. I'm glad you're optimistic and look forward to the next quarter.

Sam Rebotsky, SER Asset Management.

I would also reiterate, I'm happy that you feel optimistic. As far as the module of buildings, you have a $0.5 million leased as of May 31. What do you have unleased? Do you have -- are you closer to the $1 million, or have you fully utilized the $1 million of assets held for lease at this point, or what kind of room do you have to get to that?

We've got about half of it out on lease.

Okay, so you did not increase the number from May to August, as far as the assets held for lease?

No, I don't think so.

Okay. Now, the customer deposits, you had $2 million as of May 31. Is that a similar number now? I assume--

No, no.

No, so you've--

That comes as a result of sugar beet harvesters. We always, every year, put on a program in November and take our orders basically between November and February 1. We give a substantial discount for payment then. The sugar beet growers, we've got them trained and they respond to this annually and it's sort of a long-term. Then we ship the sugar beet harvesters to them May, June, and sometimes July, but we got the money last November or December.

Okay. That's good. I guess the real significant key is to try to tie up this leasing and find some money to do more leases, or hopefully the government will put some more product, more money into that. Even though you say your backlog is lower -- I know, in the past, you've talked about you had bids out there for rather substantial numbers. Are your bids on projects, are they lower number of projects you're bidding on, or is that different at this point?

Well, if you would have asked me that 6 months ago, I would have said probably yes. But currently there's a lot of stuff out. We've got a lot of stuff out for bids. I can't tell you the dollars this morning. I don't know.

Yes.

But I know that we've had a real pickup in this in the last couple months. They take a while to develop, but we have some that are in the process of developing.

Are you exploring any type of separate corporation or somewhere, some financial institution might want to get involved?

Well, I think so. In the leasing thing, I think we are exploring financing. We want to get some longer term leasing.

Yes.

We're going out there now with leases at $25,000 a month, numbers that are pretty onerous, and if we could make that $7,000 or $8,000 a month, put them out 7 years, say, I think it would be a lot more palatable. These first ones we did, we did to make sure we got recovery. We don't want to carry 7-year leases. It's okay to carry a couple years, but I don't want to carry 7-year leases. I need to sell those.

Well, it sounds good. Hopefully your optimism will come to fruition and we'll be more steady and stable.

(Operator Instructions) And, Ward, at this time, there appears to be no further questions.

Well, I again want to thank everybody for calling in today. We'll try to keep the thing running better and better and better, and so I really appreciate you investing and staying with us. Thank you.

This concludes today's conference call. Thank you for attending.