Balchem Corp (BCPC) 2014 Q2 法說會逐字稿

Greetings, welcome to the Balchem Corporation second quarter 2014 Earnings Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions). As a reminder this conference is being recorded. I would now like to turn the conference over to your host, Bill Backus, CFO of Balchem Corporation. Thank you, Mr. Backus you may now begin.

Ladies and gentlemen, thank you for joining our conference call this morning to discuss the results of Balchem Corporation for the quarter ending June 30th, 2014. My name is Bill Backus, Chief Financial Officer, and hosting this call with me is Dino Rossi, our Chairman, President, and CEO.

Following the advice of our Counsel, auditors, and the SEC, at this time I would like to read our forward-looking statement. This release does contain or likely will contain forward-looking statements which reflect Balchem's expectation or belief concerning future events that involve risks and uncertainties. We can give no assurance that the expectations reflected in forward-looking statements will prove correct, and various factors could cause results to differ materially from our expectations, including risks and factors identified in Balchem's Form 10-K. Forward-looking statements are qualified in their entirety by this cautionary statement. The financial information that is referenced in this meeting was disclosed this morning in our quarterly press release at 9.30 AM Eastern Time. I will now turn the call over to Dino Rossi, our Chairman, President, and CEO.

Thanks, Bill. Good morning ladies and gentlemen. Welcome to our conference call. This morning we reported record quarter consolidated net sales of $132.2 million, which resulted in net income for the quarter of $9.7 million, or $0.31 a share. As disclosed in this morning's press release, these second quarter results include items relating to the acquisition of SensoryEffects that impacted our results. As a reminder on May 7th, Balchem acquired SensoryEffects, a privately-held supplier of customized food and beverage ingredient systems. We are happy to provide additional details for you on these items as we proceed through the call.

As mentioned for the second quarter we reported earnings of $0.31 per share on a GAAP basis. This result includes several certain non-operational items that I would like to highlight. The largest item is a pre-tax charge of approximately $4.7 million relating to the fair value of SensoryEffects inventory acquired and sold during the quarter. Business combination and accounting rules require us to value inventory acquired in connection with our acquisitions at fair value. Therefore, the cost of goods sold for the acquired finished goods is higher than what would have otherwise been recorded as if produced ourselves. Most acquired finished goods inventory was sold during the quarter, inventory produced by us is valued at a lower cost of market, which will result in higher margins. Amortization expenses of $4.6 million for acquisition-related intangible assets are also expensed in our GAAP financial statement. These charges are significantly impacted by the timing and valuation of the acquisition. Consequently our non-GAAP adjustments exclude these expenses, to facilitate an evaluation of our current operating performance in comparison to our past offering performance. We also incurred transaction and integration costs related to the acquisition totaling $1.5 million, which were expensed in our GAAP financial statements. I am happy to report that we believe that we believe the transaction-related expenses are substantially behind us. Our second quarter sales of $132.2 million were 58.7% greater than the $83.3 million result for the prior year comparable quarter, excluding the impact of the SensoryEffects acquisition, net sales were up 15.1% compared with second quarter 2013, and grew 11.4% on a sequential basis. In the quarter our Specialty product segment generated second quarter sales of $13.6 million, and grew 3.2% over the prior year quarter. Animal Nutrition and Health sales at $69.4 million were up 20% over the comparable quarter. Sales in the ANH ruminent ingredient sector were very strong, increasing approximately 46% from the prior year comparably year quarter, primarily due to higher volumes sold. While monogastric feed grade choline product sales were up 13.2%, primarily due to increased volume sold of choline products sourced from our Italian operation into the European and other international poultry markets.

Sales of industrial grade products were up approximately 17% from the prior year comparable quarter, as volumes sold of various choline and choline derivatives for industrial applications, notably for shale fracking increased appreciably. SensoryEffects formerly Food, Pharma and Nutrition segment net sales were $49.2 million, an increase of $37.1 million from the comparable prior-year quarter. Net sales from the newly-acquired SensoryEffects business contributed $36.4 million to the overall increase. We also realized double-digit growth in sales of encapsulated ingredients for the baking and food preservation, where end markets remain strong. US GAAP reported earnings from operations of $16.5 million declined $100,000 from the prior year comparable quarter, even as our earnings result was negatively impacted by transaction and integration costs relating to the aforementioned acquisition of $1.5 million, an inventory valuation adjustment relating to the business combination accounting principles for the aforementioned acquisition of $4.7 million, a $300,000 methanol surcharge from a key supplier due to mechanical failures at their feedstock supplier, and product mix. We will talk further about all of these items in the individual segment discussion. As previously noted, consolidated net income closed the quarter at $9.7 million, down from $11.6 million in the prior-year quarter. This quarterly net income translated into diluted net earnings per share of $0.31 as compared to the $0.38 we posted in the comparable quarter of 2013. On a non-GAAP basis as detailed in our earnings release, our diluted net earnings per share were $0.53 as compared to $0.40 in the prior year quarter, or a 33% increase. Our consolidated gross profits were $32.3 million. or 25% of sales in the quarter down from 30% in Q2 of 2013. Gross margin for the combined SensoryEffects statement was reduced primarily due to the valuation of acquired inventory to fair value, which increased cost of sales by $4.7 million, and made product mix more heavily weighted toward the powder and flavor systems of SensoryEffects which generates a lower gross margin. Gross margin percentage declined to the animal nutrition and health segment by 1.1%, primarily due to a heavier weighting towards choline products, as well as the higher distribution costs related to customer mix.

Consolidated operating expenses for the three months ended June 30th, 2014 were $15.8 million, or 12% of net sales as compared to $8.3 million, or 9.9% of net sales for the three months ended June 30th, 2013. The increase was primarily due to increased amortization expense of $3.5 million related to the acquired intangible SensoryEffects assets, as well as acquisition and integration expenses of $1.5 million. Looking forward we expect to leverage off of our existing SG&A infrastructure and exercise tight control over all controllable operating expenses. Interest expense for the three months ended June 30, 2014 was $1.3 million, and is primarily related to the senior secured term loan of $350 million, and revolving loan of $100 million. The term loan and $50 million of the revolver in combination with cash on hand were used to fund the acquisition of SensoryEffects. The Company's effective tax rate for the three months ended June 30, 2014 and 2013 was 36.4% and 30.6% respectively. The increase in the effective tax rate is primarily attributable to the impact of new jurisdiction related to the SensoryEffects acquisition. A change in apportionment relating to state income taxes, a change in the income proportion towards jurisdictions with higher tax rates, and the timing of certain tax credits and deductions. As outlined in our earnings release our second quarter results generated approximately $30.9 million of adjusted EBITDA in the quarter, which translates into approximately $1 per diluted share, or 23% of sales, and is a 54% increase over the comparable prior-year quarter adjusted EBITDA. Our balance sheet continued to strengthen, and our cash flow remains strong as we closed out the quarter with approximately $60 million of cash. I have mentioned a lot of moving parts, and will be happy to answer questions in a few moments, but first in an effort to detail our consolidated results better for you, our shareholders, I am now going to have Bill Backus discuss the ARC Specialty Products and Animal Nutrition and Health segments.

Thanks, Dino. The ARC Specialty Products segment posted quarterly sales of approximately $13.6 million for the three months ended June 30th, 2014, as compared to $13.2 million for the three months ended June 30th, 2013. An increase of $423,000, or 3.2%. Increased sales volumes of ethylene oxide products used for medical device sterilization were partially offset by lower sales volumes of propylene oxide for industrial applications. Our quarterly earnings from operations were $5.5 million, an increase of $184,000, or 3.5%. This increase is principally due to the noted increase in sales. During the quarter we did realize increases in the cost of certain petrochemical commodities, and we continue to incur additional expenses pursuing other new end market applications. In the Animal Nutrition and Health segment, we realized sales of $69.4 million, as compared with $57.9 million for the three months ended June 30th, 2013, an increase of $11.5 million or 19.8%. Sales of product lines targeted for ruminant animal feed markets increased by $3.7 million, or 46.1% from the prior year comparable period. Strong dairy economics supported increased sales volumes of our products, particularly ReaShure, NitroShure, and AminoShure. Milk prices have remained strong and are currently forecasted to remain so. Expectations of moderating feed prices along with strong export opportunities are positive indicators that show support for greater utilization of our products, which will maximize results of production animals. Global feedgrade choline product sales increased $3.4 million, or 13.2% primarily due to increased volumes of choline products sourced from our Italian operation and sold into the European and other international poultry markets. Sales of feedgrade choline sold into US market were up approximately 3.6% in the quarter. Volumes sold in these markets are strongly influenced by the various dynamics of our customer base, predominantly the poultry production industry, but also swine and agriculture markets. North American choline volumes sold typically track closely with broiler chick placement and egg sets. The current USDA forecast for broiler meat production continues to forecast modest growth for the balance of 2014. Sales for industrial applications comprised approximately 37.7% of sales in the segment, as compared to 38.5% for the comparable three months ended June 30th, 2013. Industrial sales grew $3.8 million, or 17.2% over the prior-year period, principally due to volume increases of various choline and choline derivatives for industrial applications, most notably for shale fracking. The noted first quarter softness due to weather-related issues has passed. And resulted in sequential quarter growth of approximately 30%. Our success in this space continues to attract competition from offshore producers. We do, however, remain confident that these products will continue to show strength in 2014, driving steady to increasing levels of sales, as we believe the North American end market will continue to grow. We also continue to evaluate industrial opportunities with existing technology, and with other technology determine how we may drive more innovative solutions into this and other markets. Our earnings from operations for this entire segment were $9.7 million, an increase of 19.5%, primarily due to higher net sales which were partially offset by the previously-noted raw material surcharge, an unfavorable product mix with the heavier weighting towards choline, and higher distribution costs. We continue to see raw material price volatility and seek to implement price adjustments within our contractual guidelines. I will now turn over the call to Dino for him to discuss the SensoryEffects segment.

Thanks Bill. This has been a very busy quarter for this particular segment, as you know on May 7th we completed the acquisition of SensoryEffects, where we acquired all of the outstanding capital stock of SensoryEffects for $567 million, before working capital and other adjustments. SensoryEffects was a privately-held supplier of customized food and beverage ingredient systems. The transaction was financed with existing cash and a new senior secured credit facility consisting of $100 million revolver, and $350 million term loan.

SensoryEffects provides customized technology-driven food and beverage solutions including ingredients bases and finished food systems for multinational and emerging high growth food and beverage customers. SensoryEffects management team continues to lead the food, beverage and ice cream ingredients business which is now merged with Balchem's Food, Pharma and Nutrition reporting segment strengthening its market leadership position. The acquisition of SensoryEffects accelerates Balchem's strategic growth plans into health and wellness markets. Both Balchem and SensoryEffects have strong foundations in innovation, customer focus, and cost efficient business models. The expanded team delivering SensoryEffects solutions and Balchem's functional based offerings will be a powerful combination. Some additional facts relating to SensoryEffects are, that they have 6 manufacturing sites, all in North America, three R&D sites with pilot plants, 20 R&D scientists, 480 employees, geographic focus on North America, and early development of South and Central America. For the quarter sales of our SensoryEffects segment were $49.2 million, an increase of $37.1 million from the comparable prior-year quarter. Net sales from the newly-acquired SensoryEffects business for the period May 7th to June 30th contributed $36.4 million to the overall increase, as we saw strong volumes in both the powdered and flavored systems sector. We also realized double-digit growth in sales of encapsulated ingredients for the baking and food preservation, where end markets remain strong.

Earnings from operations for this segment were $2.9 million, versus $3.3 million in the prior year comparable quarter. Excluding the effect of noncash expenses associated with amortization of intangible assets and one-time inventory revaluation adjustments relating to acquisition accounting, non-GAAP earnings from operations for this segment was $11.2 million. These positive results were achieved with increases in sales in the food sector and our human choline products for nutritional enhancement. We continue to focus on building consumer awareness of the benefits of choline, positioning choline with food and nutritional supplement companies as an essential ingredient utilizing the structured function claims awarded to Balchem by EFSA in Europe, supporting additional external scientific research, and we are excited with the recent FDA proposal that an RDI recommended daily intake for choline be accepted, acknowledging that choline is a nutrient of public concern. We are also working on a number of new projects targeting choline inclusion using SensoryEffects technology. Our pharmaceutical delivery development efforts continue, as previously noted the licensee of our technology being used for treating autism, has conducted a successful pre New Drug Application meeting with the US Food and Drug Administration, and is currently filing its New Drug Application. We continue to work closely with them in support of this filing. In the near-term the sector remains a net expense to the business segment. We remain committed to organic growth, as we are always looking to expand our product offerings and move into new geographies. We expect to strengthen our global growth platform, particularly in the food and animal nutrition markets, and are confident that more business can be generated based on the unique portfolio of products that we offer. Our business continues to create good balance, yielding profitable growth opportunities across the served value chain.

We also remain focused on helping our customers generate reinvestment level returns, while maintaining our own operating discipline. We continue to build the financial strength of the Company managing the working capital base aggressively, and yielding solid financial results to be a quality supplier. Near-term we remain focused on integrating SensoryEffects, which we are very excited about, while maintaining operational and logistic improvements, new product development, and new product introduction across all business segments.

We will continue to explore alliances, acquisitions, or joint ventures, to build and leverage our strategic direction, technology, and strong human asset-base, which now has more than doubled with the SensoryEffects acquisition. These efforts can and will impact operating expense levels beyond the normal levels we have incurred in the past, but is consistent with a noted strategy to complement our organic growth. This now concludes the formal portion of the conference. At this point I will open the call for questions.

Thank you. We will now be conducting a question-and-answer session. (Operator Instructions). One moment please, while we poll for questions. Our first question comes from Mike Ritzenthaler from Piper Jaffrey & Company.

Hi. Good morning and congratulations on a super quarter.

Thanks.

On SensoryEffects, so the growth was pretty tremendous, and I was wondering if you could just delineate a couple of the different drivers for us in the growth of the core business, and maybe just an update on how the cross-selling is coming together, the revenue cross-selling?

So the delineation of, Mike, that you're looking for is on which piece?

Well, just on the core business, it didn't really contribute a whole lot to the year-over-year growth. I was just kind of curious a little bit about those particular products, and then just curious about the revenue synergies between the legacy FPN business and SensoryEffects?

Yes. Okay. So I think on the core food business, if you will, we did note that we saw about 15% growth on the straight up end cap business.

Yes.

So we did see some nice uptake there. And probably I'm going to say a little softness but not really softening maybe flat on the choline side of the business, and really those are the two splits that we look at on that business. I think it was just a little bit of softness because of order timing of orders, and what not. Nothing of major concern there from our standpoint. As I mentioned, we're pretty excited about this RDI status ruling from the FDA, and expect to positively embrace that, and see that move forward.

As to the cross-selling question, we have completely integrated what was the Balchem food sales effort and the Application Labs into and with the SensoryEffects group. Where our sales managers are going to be relocating to St. Louis. St. Louis will be the headquarter for that group, and also we're in the process of relocating our application lab from here in New York to St. Louis as well. People have been trained up in particular, I would say what were legacy Balchem people have been trained up on inclusions, which were in the SensoryEffects product offering, and they are actively taking the inclusion story to market, to existing accounts as well as new accounts, and we're seeing real good recent activity among the existing accounts for sure, when our sales people tell us they have this inclusion line now, so that has been the growth, very, very positively received. Kind of the next step is going to be train up, if you will, more of the sensory folks on encapsulation technology, but that's been kind of the next step of the plan. Honestly I think it is progressing pretty well here for all of ballpark 60 days, and overall I think coming together pretty neatly. So we're pretty pleased with that.

Okay. Great. Switching gears a bit to the ruminant growth in the quarter. I guess I'm just kind of wondering what the runway looks like that for that, with strong milk prices, low feed prices, it would be helpful to get kind of your current view on the penetration within dairy for example?

Yes. Well, as you note, the dairy economics, they have been and they remain quite strong, and so that certainly helps drive if you will the growth of our products into this space. So certainly the expectation is through the balance of the year that's going to continue, and I'm going to speculate a little bit it will even continue correspond that, especially with feedstock prices coming down, I'm sure you guys watch corn prices that are near all-time lows right now. The expectation is that those economics are still going to be very favorable. Export sales of milk, dry milk continue to be strong, so our view is that this market is going to continue to be strong.

The development of our products and the growth of those products. In North America-wise, I would say that our penetration level is still definitely below 20% so a lot of upsell opportunity there, but we're also exploring other international opportunities as well. South America, Europe, Middle East. I would say a little bit in Asia, not a lot but a little bit as well, so I think we're finding more and more opportunities outside of the North American borders that are pretty exciting as well.

We're deploying more of our people technical people in particular to work with either distributors or managers in those locations getting real good positive receptive there. As we noted, we saw ReaShure, which is the choline product grow, NitroShure grow, our AminoShure products were growing quite nicely, chelated minerals as well growing very nicely, so it's nice to see those get that many good hits in any given quarter. And yet I think that overall, the drivers are very solid that are in place today, and near-term I don't see any major change there.

Okay. One last Q1 one for Bill if I could just squeeze it in here, just a housekeeping item, I am a little bit confused because I am not an accountant, why not back out amortization of intangibles from the adjusted EBITDA number?

Why not back it out?

Yes.

We added it back in because it was an expense item for non-GAAP purposes we put it back in to show the EBITDA. Are you looking at and thinking it's not added-back?

Yes. Maybe we can follow up on that offline if I've got something crossed.

We absolutely can do that.

Okay. Thanks, guys.

Thank you.

Thank you. Our next question comes from Daniel Rizzo from Sidoti and Company.

Good morning, guys just a quick follow-up on what we just talked about with demand from the dairy industry and to a lesser extent poultry. With Russia banning some foods, like dairy and more, you have a poultry ban in place, do you think that might be somewhat of a hindrance for the dairy industry, and less end demand for some of your products?

I think straight up dairy, I mean it's possible and clearly I have read where they have already shifted on beef, if you will, to more Brazil than they are US. But from a dairy standpoint I think that those economics a lot of that export-wise is being driven by China, rather than Europe and/or Russia. So I think our view, at least our early view is that we don't see much interruption to that dairy space happening because of that. But I will say certainly on the poultry side, not that we're selling much product today to South America but it clearly appears that finished birds are going to be redirected, from going to Russia, from the States to them pulling product from Brazil as well which certainly has grown as a poultry producing country here over the last couple of years. But straight up on the dairy side, I don't think we see that as a major concern today, but I don't know that sanctions are over yet either.

And then with industrial choline sales I guess the thought process is that the foreign competition hasn't gone away it still exists, but the market is strong enough, or growing large enough to support that competition, and what your growth is as well? Would that be accurate?

Yes. I think so. I think that's kind of what we speculated along the way here. Our expectation is that market is going to continue to grow, and I think it's still a long ways from hitting its peak. So the fact that there is additional volume coming in not surprising, perhaps consistent in any given month there are pluses and minuses, and we do track that pretty closely, but I think the strength of that overall market certainly allows for uptake including the performance of our product very, very strongly.

And Tamiko is still expected, the JV is supposed to be online and Tamiko is going to be in the market next year, correct?

Yes. I think we're looking at best case maybe Q3 of next year.

Okay. And one final question. You mentioned the RDI for choline being a driver. Is there like a time frame when that might be or is it, did I miss when you said that is going to possibly--?

Yes. So yes they are still in the commentary period and that's about as far as I think early indications have been simply positive. No real negatives. And then the time for compliance labeling and everything is if this does happen as timely as it's going right now, we're probably looking at September or October of next year, where compliance would come into place.

Alright. Thank you, guys.

Thank you.

Thank you. Our next question comes from Andrew O'Conor from Bank of Montreal.

Morning, Dino, Bill. Congratulations on the quarter.

Thanks.

Guys, I wanted to know, how would you characterize the market and pricing trends for tromethamine looking ahead through the end of this year?

Yes. We made a little commentary there about the issue of feedstock. I think our view right now, methanol drives natural gas. We have what I think is a pretty good contract in place with our major supplier there so our outlook here is generally stable, with the exception of the surcharge situations that we have been nicked with not once but twice this year order magnitude in our results is somewhere between, about $600,000.

Okay.

$330,000 in Q2 alone, which is a bit frustrating for sure, but short of I'm going to say those unusual events, we're looking for it to be pretty stable, maybe even down. On a global note methanol prices seem to be coming down. I think there are long positions out there. You have new capacity coming online from methanol producers that should go online here sometime next year. In the States capitalizing on cheap gas, so our view of that particular feedstock for us is to be relatively stable, and like I say with the exception of the exceptional events.

Okay. Alright. Thanks for that. And then wanted to know if you can elaborate from prior comments, what impact do declining prices for grain, corn and soybeans have on the pricing for Balchem's products, into the dairy, the poultry, the swine end markets?

Yes. I don't know that it has a direct correlation to our pricing. Certainly I think to the utilization of our products absolutely. With declining prices on those feedstock certainly that helps to drive good economics, if you will, and to be sure dairy producers, bird producers, when they have the opportunity to produce more milk they're going to produce more milk, and they're going to make more money. So they will leverage off of that, low cost position look to capitalize I would argue with products that are going to give them even better performance in terms of milk yields, and look to utilize more of our products. So I wouldn't say it's necessarily a direct correlation to our price, but certainly to the consumption.

Okay. Alright. That's helpful. And then lastly what interest rate has the Company paying on the borrowings used to execute the purchase of SensoryEffects?

Normally it's about 2%.

2%?

That's correct.

Alright, sir. Thanks again, guys. Good luck.

Thank you.

Thank you.

Our next question comes from Tony Polak from Aegis Capital.

Good morning.

Morning, Tony.

The tax rate going forward is it going to still be at this high rate that second quarter was, or do you perfect it to come down?

I expect it to normalize here at about 35% going forward.

Okay. You talked about R&D in SensoryEffects, and I guess other R&D. Could you give us an idea how much that was in the quarter, and what kind of R&D that would be going forward?

Tony we'll get back to you with that number in the actual R&D spend. I don't have that, we don't have that right at our fingertips but we will have it here perhaps before the call is over.

Okay.

Straight up, Tony, on l P&L the R&D for the quarter was $1.1 million for the three months.

Okay.

But that, Tony just to be sure that's a partial quarter for Sensory.

Right.

That number will go up some.

Right. And could you give us an idea of what going forward that is going to be spent on, what type of products or into what particular industry?

Yes. We alluded to even some projects here on the ARC business. I see it going to every one of the businesses, and some of it definitely is organic molecule work, other is applications, which would probably be more on the human food and nutrition side. External projects, testing of products, animal trials if you will, with universities and other research centers. So it's going to be touching pretty much all of our segments.

Okay. Could you give us an idea what the depreciation and amortization is going to be going forward, like in the next quarter, because it was a partial quarter on the D&A?

Yes. Tony it should be about $10.2 million going forward.

$10.2 million annualized?

That's per quarter.

Per quarter. That much?

Yes.

Okay.

I mean keep in mind here, with Sensory the impact so just to give you some idea, quarter here was about $7.2 million. Last quarter Q1 was $2.6 million. So it's all related to the step-ups in fair value accounting related to the acquisition.

Alright. Okay. Thank you. Great quarter.

Thanks.

Thank you. (Operator Instructions). Our next question comes from the line of Yi Chen from Aegis Capital.

Hi. Thank you for taking my questions. Could you give us an update on the status of the autism drug candidate partnered with Curemark?

Well, yes. I think so we're the producer of the product, we're not the marketer. We continue to work with Curemark as they look to file their NDA, and given that we are not the marketer or the owner of this product, there are some arm's length things that, so we don't know everything that's going on, but clearly I would say there's progress being made, and we're doing everything they need from us as a supplier of the product, and I'm reluctant to go further, just because I'm not involved day to day with all of the activities that are going on there. But certainly I think the expectation is that early next year they expect to have the product on the market. That's intelligence from them, but that's pretty much what I can tell you right now.

Okay. Could you also give us a perspective on the use of choline in environmentally friendly fracking?

You mean how much we sold into that space?

Or how much is, I mean just a general perspective on the use of choline?

Yes. Well, clearly, we talk about the growth that took place both sequentially and quarter-over-quarter. As we alluded to in Q4, and certainly Q1, I think there was some slowness in the market mostly because of weather. I really do believe that was the case and certainly as the weather cleared up, consumption has continued to grow very, very nicely. In terms of additional penetration into the existing market, I do believe there's a bit more of that going on. Still there's no mandatory requirement, if you will, at a state or federal level to disclose, all of the components going into the frack fluids. There's definitely some volunteer reporting going on in the market, but it's still a little bit difficult to get an overall handle. Our rough numbers are that maybe we're at 20% of the market in terms of penetration, and I think we're excited about that in terms of upside opportunity, the market is growing at a pretty good clip right now.

Thank you.

Thank you.

Thank you. At this time we have no further questions. I will turn the call back over to our speakers for closing comments.

Okay. Well, I just want to thank everybody for attending the call today, and look forward to reporting the hopefully clarified, more clarified numbers as we go forward here. So thanks for your support. We'll talk to you soon.

This does conclude the conference. You may disconnect your lines at this time. Thank you for your participation.