Crown Crafts Inc (CRWS) 2010 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Crown Crafts, Incorporated, investor conference call. At this time, all participants are in a listen-only mode. Later we'll conduct a question-and-answer session with instructions being given at that time. (Operator Instructions). As a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Ms. Olivia Elliott, Vice President and Chief Financial Officer. Please go ahead.

Thank you. Welcome to the Crown Crafts investor call for the first quarter of fiscal year 2010. With me today is Randall Chestnut, President and Chief Executive Officer of Crown Crafts, and Amy Vidrine Sampson, Vice President and Chief Accounting Officer.

Good afternoon.

Hello.

A telephone replay of this call will be available after two-thirty p.m. central daylight time today through the end of the day on August 19th. A web replay of this call will be available for 60 days. You can access it by visiting our website at www.CrownCrafts.com.

Before we begin, I would like to remind everyone of the cautionary language regarding forward-looking statements contained in the press release. That same language applies to comments made in today's conference call. I will now turn the call over to Randall.

Thank you, Olivia. Good afternoon and welcome to the conference call. Earlier today, the Company reported results for the first quarter FY 2010, which ended June 28th, 2009. The following are the highlights of the results. Net sales for the first quarter were $17.7 million as opposed to $19.8 million, same quarter previous year. Net income for the first quarter was $538,000, as opposed to $619,000 the same quarter last year. And EBITDA for the quarter, earnings before interest, taxes, depreciation and amortization, was $1.6 million this year as opposed to $1.8 million in the previous year.

The decline in sales can be attributable to several factors, and I will touch on a few of those. We had a decline in point of sale of one major retailer as a result of weakness in the economy, which we had not experienced prior to this quarter. We also had several retailers who were adjusting inventories in light of the economic downturn. In addition, at one particular major retailer, we experienced a shift from fourth quarter -- excuse me, from first quarter back to fourth quarter of last year. More specifically, what had happened, the retailers, their year ends, usually at the end of January, this particular retailer had pulled inventory down at the end of January, and then in February and March, which happened to be our fourth quarter, they beefed up their inventory. Then as the economy, the downturn set in and hit them, they adjusted the inventory downward in April-May, which happened to hit us in the first quarter. So that -- therein lies the shift that, looking back, we can see from quarter to quarter, but in our case, it happens to go from one year to another.

Moving on, earlier in the quarter we announced the acquisition of Neat Solutions. We haven't had a conference call since then, and I'd like to touch on that. We're excited about a new product category and diversification for the Company.

The main product that the Company makes is a product called Table Topper. It's a single-use placemat for toddlers that you use if you're dining out, and you use it basically as the plate for the child to eat on. And it has adhesive on the back and sticks to the table, and once you finish using it, you can take it, and you can throw it away. And it gives the child a sanitary place to use when they're dining out.

The second largest customer in Neat Solutions presents a new opportunity for us. It's a selling directly to a restaurant chain which uses this product, and they give it away in the meals for the children, and in some of the locations, they also dispense the item, where as you come into the restaurant, you can secure it. Logistics on this is that we are incorporating the Company into one of our companies, Hamco, which is located in Louisiana. But the inventory will be relocated and has been relocated from a public warehouse facility in Chicago, to our facility in Compton, California. That was done immediately following the acquisition. We shut it down, took inventory, and as soon as we took the inventory, relocate the merchandise, and we were back up and shipping in less than two weeks after we concluded the acquisition.

The operations of the Company are being merged in with Hamco's location here in Louisiana, and the financial accounting, payables, et cetera, are being incorporated also with corporate here in Louisiana. As we reported, the acquisition will be accretive to earnings immediately and will improve as we get the full integration done. It's a new product category, and it's new for us and something that we're very excited about. We continue to be excited about the development of our Nojo brand, and we've continued to develop that product.

As we've reported to you a number of times, we began two to three years ago putting a major emphasis on recreating, reinventing the brand, and we continued to gain success at many of the major retailers, and the designs have placed us in a very strong position. We feel very strongly that the Nojo brand, which includes Nojo bedding and accessories, is gaining market share in the marketplace. The last item I will touch on is our balance sheet, which remains very strong, and we're very proud of a strong balance sheet in these economic times.

As I say, we're excited about our future, we're excited about the Company. And with that, I will turn it over to Olivia, and she will touch on a few more of the financial details.

Thank you, Randall. I'm only going to give financial highlights for the quarter. For more detailed analysis, please refer to the Company's Form 10-Q filed with the SEC earlier this morning. Sales of bedding, blankets, and accessories decreased $1.7 million for the three-month period of fiscal year 2010 as compared to the same period in fiscal year 2009. Sales decreased $5.7 million due to discontinued programs and lower replenishment orders, which was offset by $4 million in shipments of new bedding and blanket programs. Bed and bath sales decreased $286,000 for the three-month period of fiscal year 2010 as compared to the same period in fiscal year 2009. Sales decreased by $2.6 million due to programs that were discontinued and lower initial program shipments, which was offset by an increase of $2.3 million related to sales of new designs and promotion.

Gross profit decreased in an amount in relation to the decrease in net sales, but increased as a percentage of net sales for the three-month period of fiscal year 2010 as compared to the same period in fiscal year 2009. The increase in the percentage is due primarily to the absence in the current year of $243,000 in charges incurred in the prior year, related to transitioning away from the warehousing and shared services agreement introduced to you in conjunction with the Springs Global acquisition.

Marketing and administrative expenses for the three-month period of fiscal year 2010 decreased slightly in amount as compared to the same period of fiscal year 2009. In the current year, the Company did not incur costs comparable to those incurred in the prior year that were associated with the governance and standstill agreement with Wynnefield Capital. The $131,000 decrease in interest expense for the three month period of fiscal year 2010, as compared to the same period in fiscal year 2009 is due to lower balances on the Company's revolving line of credit and term loans and lower interest rate.

I will now turn the call back over to Randall.

Okay, Laurie, thank you very much, and we appreciate it. Olivia, thank you very much. Laurie, we'll call you back up, and you can open it up now for any questions that any of the investors may have.

(Operator Instructions). And one moment, please, for the first question. Our first question from the line of Arnold Brief with Goldsmith and Harris. Please go ahead.

On the sales line, was that all organic, or were there any acquisition numbers in there?

There were no acquisition numbers, Arnold, in there for this year. The Springs acquisition, we had done in the previous year and already circled around. So we were comparing apples and apples with that. And the Neat Solutions acquisition occurred after the quarter began, just the first day, actually, of the new quarter.

After the quarter was over.

Yes.

Have have you given sales of Neat Solutions?

We have not projected any sales numbers at this point, no.

Going back, did you give historic numbers?

No, we did not.

Could you give us some idea of how consumer spending is proceeding in the third quarter and what the inventory positions -- your major retailers are taking for the third quarter, has that situation improved?

It's a mixed bag, Arnold. It's improved at some places -- so it's not just a straight answer. We are still seeing some consumer spending hold back and downturn at some of the retailers. We are seeing retailers still holding back on inventory, even though that has gotten a little better of recent, but it's a mixed bag as far as the economy is concerned.

Okay. You also -- you gave some indication, but I'm just wondering to what extent, the trends that we saw in the fourth quarter and the third quarter of last year differs from the first quarter. Was there any relationship to placing inventory of Nojo in some of the new accounts, which helped the sales, which is sort of that initial placement -- benefit has sort of ended in the June quarter?

No, I mean, if you compare June quarter over June quarter, year over year, Nojo did increase. It had an increase of -- I don't have the exact numbers in front of me, but about 25%. So it have a strong increase year-over-year.

Has Nojo replaced some of your product and other product in the same accounts?

So far, no. It's all been accretive. It's been additive to our numbers.

One comment or question, however so you want to take it. I notice that you announced a program for buying in your stock. Just as a comment, one of the problems with your stock is the lack of liquidity. I would think any buyback program is sort of moving in an opposite direction of where you want to go in terms of improving the marketability of your stock.

Arnold, we've heard that from a few sources, and I appreciate your input, I really do.

Our next question from the line of [Buzz Hike with Hike Company]. Please go ahead.

Your sales were down $2 million, down 10%, but your inventories rose 28%, or $5 million and also your receivables dropped quite a bit. They dropped $5 million, and so I want to ask you about that.

The inventory increase is the -- the majority of it was planned and is planned for future programs in the fall, where we took some goods in a little earlier than we should, and also, as retailers have adjusted inventory, it has pushed some of that inventory out for delivery later. but we feel good about the inventory situation. Olivia, you want to address the receivables?

You're comparing year end?

Yes, but it's not apples-to-apples.

It's not apples to apples. I'm trying right now to find -- if you look back to June of 2008, you're comparing -- inventories were $17.8 million, last June, compared to this year, and then last year's receivables were $15 million compared to--.

I've got that. I want to ask you about the new business. Can you tell us what you paid for it?

Yes, we disclosed that purchase price at the time we did it, $4.4 million.

I want to ask you, you're dealing with this one restaurant chain. Is this something that they've got exclusive, or can you expand that to other possibility restaurant chains in other places?

The answer to that is a little bit complicated, but I will answer it, it's that their particular design exclusive, but the concept is not exclusive. It can be expanded, and I emphasize one major restaurant chain, it's a number of other restaurants that are small. Don't have as many stores, but the concept is absolutely transferable from restaurant to restaurant.

Is it something also that could be sold in stores?

It is sold in stores.

It is.

It is, Buzz. The largest account is a major baby retailer.

Okay. Then the last question, you've said you are looking at maybe making some acquisitions. Do you only want to stay in, say the clothing area, or pretty close to the clothing area? I know this is a little bit different.

Really, we're not in clothing at all. That's sort of a little bit of a misnomer. We're in infant bedding, blankets, accessories and bibs, and now the feeding area, disposable feeding. We want to stay in something that we know, which relates to the baby/infant/toddler side of the business, but it would not necessarily be in the same product categories we're in, we would very much like to, as we did with Neat Solutions, look at expanding into new product categories.

That will be accretive to earnings starting the quarter we're in right now?

Yes.

I'll let you go. Thank you very much.

Have a good day.

And our next question from the line of Nelson Obus with Wynnefield Capital.

Hi there, Randall. You're the third of the three pure plays to report in the infant and juvenile arena, and the other two had up sales and up earnings, and also shared with their investors on the call a desire or more to increase their market share at Wal-Mart. So I guess the question is, are we -- are you seeing some market share decline at Wal-Mart, or is this just the vagary of dealing with a very large customer?

Let me answer your questions one-by-one, if I might, Nelson. I have seen the numbers of the other two pure players, and I would ask you to look at combining their six months versus our six months. Doing ours, you've got to take fourth quarter of last year and first quarter of this year, and in their world, it's first and second quarter, but it would be the same six-month period. And if you look at it that we, you'll see the numbers, we stack up very well, as a matter of fact. So we know we had shift from four and a quarter. Second, Wal-Mart. We have not experienced any deterioration to any of the players that you're referring to at this point. Wal-Mart is one of the customers that has adjusted inventory and that does affect us.

Okay, thanks.

Our next question, from the line of Ralph Maresh with First Manhattan Company. Please go ahead.

Good afternoon.

Hey, Ralph, how are you?

Good. I just had a couple of quick questions on the financial statements. The intangibles on the balance sheet are down slightly. I was just curious why.

From which period?

In the Q that you published today, intangible assets are down by $0.5 million.

That's the amortization.

Okay. And is there any significance on the cash flow statement to the fact the accounts receivable, that you got paid more this time than a year ago. You collected more.

No.

Just a timing thing?

Just a timing thing.

Okay. And just to go back to Nelson's question about market share, just overall, would you feel that your market share is about the same or more or less than say, six or eight months ago?

It depends. In certain categories of our business, particularly in the Nojo area, I think it's increased. We've said that on pretty much every call, so that one has increased. We don't see any slippage in market share otherwise, and I do see an increase there.

Okay, thanks.

Thank you.

And we have a follow-up question from the line of Arnold Brief with Goldsmith and Harris. Please go ahead.

Two questions. One, it was my impression that the seasonality in this business is pretty minimal. You mentioned the June quarter as being your weakest quarter. Is there something in your mix or customer base that makes it more seasonal than the industry in general? What am I missing?

Not really, no. It's really more related to when retailers restock their shelves, redo planograms, et cetera. It's not really that seasonal, although this year it appears there it has been, because you've had retailers adjusting inventory, you've had retailers affected by the economy, but there really is not a seasonality to it.

Second, and last question, you mentioned Nojo was up 25% year-to-year.

Quarter-to-quarter and year-to-year.

And overall, your sales were down. I don't have nojo numbers in front of me, I don't know that they're available, but just making some guess, it would indicate that the rest of your sales are down considerably more than the inventory reductions, which have taken place at retail. Would you comment?

Yes, I will comment on it. It really is not, it's really related to the inventory adjustments and the economy, and, obviously, being down 10%, we had to be down in some places. But it really -- it's not a loss, it's just a matter of the economy and the shifting of inventories. Arnold?

Thank you.

Okay. Thank you.

And we have a question from the line of Charles Levy with Morgan Stanley.

Hi, Randall.

Hey, Charles, how are you?

Okay. What's the effect going to be if CIT files bankruptcy?

I mean, Charles, it's pretty widely known that, it's on our balance sheet and it's been on our disclosures, we hedged our bet and protected ourselves, and we drew down all of our availability on CIT, and we've held that for quite some time. Now, it's an insurance policy we've got invested with a third party bank, another bank, so the amount they're paying for the interest versus the amount we're earning on the interest, it's a couple of points that we're losing, but it's pretty darn cheap insurance. We've run doomsday scenarios that says if they went bankrupt and went to liquidation, we'd still be okay. We can still function. And that's assuming that they went straight through bankruptcy and next day went to liquidation, which I don't think there's much of that happening, there's too many good assets there. So we're in good shape and we're protected, and a few weeks ago when they had the bankruptcy scare, we were one of the companies that we'd already protected ourself, and we have the cash pulled down. We've had it for quite some time.

So could you try to explain what the maximum loss could be, if they went to an orderly writedown?

Maximum loss ? To us?

What could the Company lose? Is there anything exposed other than the net interest which you had talked about?

No, and then the cost of refinancing with another lender, obviously, if they go to bankruptcy, we've got to go to another lender, but I don't know of any other cost it would cost us, Charles, except the fact, just to get out and get into a new one.

So the spread on the interest rate is the net exposure.

That's pretty much the net exposure. And we've been suffering that for over a year, Charles. We've had it pulled down for over a year.

okay. You know what, I'd like to mention might be helpful for all of us, is next quarter, when Neat Solutions has been part of the Company for a full quarter, if there would be some way to give us sales volume for Neat Solutions, maybe sales volume for Nojo, because those are two of the potential, rapid growing parts of the Company, and by knowing that, you might get a better growth rate applied to the Company, as opposed to the old standby business, which, there's a growth rate that we know about, so these new growth rates might get the stock a little better.

I appreciate that, and we will do that, Charles, and we did, I think in the last conference call at year-end, we gave some Nojo numbers. Year-over-year.

If we get them consistently then we'd be able to see the true growth, what's going on inside the Company.

Thank you.

And a question from the line of Bobby Melnick with Terrier. Please go ahead.

I had a question, but first I'd like to preface it with a comment, just because it was raised on this call, I think it's important for management and the board to recognize the important distinction between stockbrokers and long-term shareholders. Stockbrokers, just to sound pedantic, are compensated based upon volume and commissions, whereas long-term investors who think like owners are compensated based upon management's delivering increasing intrinsic value in the shares in the hope that that will ultimately be recognized.

Patient long-term shareholders, which is what I think this Company is looking for, want the management to allocate capital prudent and efficiently. Sometimes that means acquiring companies, sometimes that means shrinking your debt, sometimes that means returning cash to shareholders through dividends, sometimes it means shrinking your equity capitalization which is a function of having the wherewithal to do so, having excess capital, and importantly, having equity trade at a substantial discount to that intrinsic value, so I hope you take this all into consideration, rather than to try and create liquidity for the shareholders, because true-owners don't actually care about liquidity, we care about the increase in the value of the shares.

So that's my comment, and I hope you would take that prudently given your long-term urgency, your long-term perspective, and your hope that you would find long-term owners who think as you do rather than people who, again, are looking for high commission volume. So that's my comment.

My question has to do with your SG&A. And the question is, why isn't it dramatically lower, specifically, it's not that unusual in this climate to see a lot of companies reporting soft sales, which you acknowledged they were today and were disappointingly soft. What is unusual is to see companies in this climate showing pro forma increase in SG&A of 5% which you did in this quarter. Last year, you had unusual expenses associated with the standstill agreement of one of your shareholders. Those are really non-recurring and if you adjust for that, on the same basis, which is to say, you had no incremental companies in this quarter, it was the same base of operations, and Randall, yet your SG&A was down $20,000, pro forma was up $160,000 on a base of $2.9 million or so. And just to give you some illustration about the importance of that --

Bobby --

Had you had had flat SG&A this quarter, your pretax income would have been up, your income from operations would have been up, your net income would have been up, and your earnings per share would have been $0.08 or $0.09 versus $0.07 instead of the $0.06. So I don't understand why it wasn't lower.

Can I explain it?

That's why I asked.

Bobby, first, let me go back and address your comment at the beginning about the cash. Well noted, we'll make note. Second, let me answer your questions. It's related to two areas, Bobby. There was an accounting change that takes place with every public company, and it took place at the beginning of everybody's new fiscal year. So it changed with us effective April 1. That was the first day of our new fiscal year. We're in the process of doing an acquisition called Neat Solutions. Under the new accounting standards, you have to expense your acquisition costs as you go. You do not capitalize acquisition costs. So in the quarter, we had acquisition costs related to the acquisition of Neat Solutions, which we didn't conclude the deal until the beginning of the next quarter. One, two, the rest of the SG&A is factoring fees. As you know, we factor all of our account receivables, and in these uncertain economic times, the factoring fees, there's been some surcharges placed on certain accounts, and that's really the SG&A.

So how much was the increase associated from those two variables?

Acquisition costs were approximately $50,000. And factoring the -- it was an increase -- let me look real fast. We'll have to get back to you on that one. I have this year's total costs. I don't have last year's costs.

What was the total cost?

That's not going to tell you anything, Bobby.

if the total cost was $1 million, was it $2 million?

Oh, no, and that's actually why -- none of these were such large expenses to really call out in the differences. Let's see.

Right, because typically when something significant, you disclose it. You do disclose $180,000 with the Wynnefield last yar. The reason I ask, Randall, is because if it's not over $130,000 then your SG&A, with still, even adding any factors was still flat in a climate in which most companies are showing declines. I would point you to one item that I think a lot of the shareholders probably, if they focused on it, would be as riled as I am, and that is that your compensation for your board members. This is a very small Company.

Last year, Randall, this Company did $4.5 million in net as you know, pro forma, adjusting for the write-downs and the goodwill writedowns. $4.5 million dollars. You've got a board member on this Company who earned $104,000 last year. That's $2,000 a week. I assure you that this guy is not spending more than a day a week on this Company, which is to say pro forma you're paying this guy about $400,000 or $500,000 on an FTE basis for advice, advice that has not boosted sales or earnings this quarter, parenthetically, and has not really boosted the share price from where it was two, three, four years ago. You guys on this board make $82,000 a year, $68,000 a year.

Rick Wasserman's compensation last year went from $40,534 to $65,491. Rick is a great guy. I've known him a long time. He's a very nice guy. He's on six boards of directors, Randall. He's not spending that much time on this Company to substantiate paying him the equivalent of $500,000 a year, $400,000 a year full-time.

This Company needs to aggressively take out costs on the SG&A line the same way that you expeditiously look at reducing your product costs. You need to do the same thing on some of your SG&A costs. It's just too high.

Bobby, noted. Okay. But there's been nobody in this industry more tenacious than we are at taking costs out.

Your board costs are too high, and they go up every year. Every single one of these guys on the board, with the exception of Verbrugge, went up substantially, $63,000 to $68,000, $30,000 to $41,000, $77,000 to $82,000. $40,000 to $66,000 as quoted, $78,000 to $86,000. You're just paying these guys way too much for a tiny little company. You shouldn't have a board of directors cost $500,000 for seven guys. $70 grand is just too much to average for these. You need to make a statement to the owners.

Bobby, the issue has been the board gets paid as they meet, and we've been dealing with some very, you know, with some difficult situations over the last couple of years. And I'm not going to debate that with you on this call. I'll talk with you separately at a different time, but you know we're tenacious on costs. I mean, okay, fine, maybe that cost went up. Nothing else has gone up. Factoring fees did, I explained to you why. And the rest of it is related to the acquisition costs and the accounting change. And we can give you the factoring fees. We'll send it to you later.

Actually, it was an increase of 60,000.

So even if you add in the factoring fees your SG&A still went up. That's just math. You've confirmed that, I didn't say that. It's your math. But it's $110,000 between the acquisition and the factoring fees, but your SG&A was up $160,000. I'm just suggesting that in this climate, it's not unique for companies to have soft sales, most companies have soft sales, but they've made it up through cost cutting. And the way they've done that is that many companies from Fortune 100 to Russell 2,000 companies have taken salary cuts, cuts at compensation, cuts at the board, cuts at every single, they've taken a machete to every single expense, C & E, budget, entertainment, you name it. Taking cuts. And this Company's went up. That's just math. So I strongly suggest you take a more aggressive look at that because we're not making it on the top line.

Got any more comments, Bobby? I appreciate your input, I really do.

Thanks, Randall.

Thank you.

And we have a follow-up question from the line of Ralph Maresh with First Manhattan Company.

I wanted to follow up on C IT. I think your contract with them expires next year, is that right?

It does, Ralph, it expires in July of next year.

So I'm assuming that there are no elements of default on their part that are like toll come up at this point. So in other words, you're kind of stuck with them for a year? Would that be an accurate way to put it?

Ralph, there is an exit that we can do. There would be some penalties, that we would have to pay, but at this point those fees are not exorbitant. They were in the early days, and are with most lenders, in the early parts of the loan, if you terminate, but then as it moves on in time, it gets less and less. So, no, there would be no early termination fees. Of any appreciable degree.

So is the Company looking at other financing options?

We are, yes. We are for two reasons. One is, we want to be sure we are with the lender that's going to be in for the long term, as best we possibly can determine, in this market, and two, as you pointed out, the CIT agreement does expire next July. So yes, we are looking at other options.

But in your industry, I'm assuming that factoring is a way of life and that your thought going forward would be to factor with CIT or someone else.

Ralph, it's not -- not all of our competitors factor. We choose to because we don't want a credit department, and we run conservative. So it's not to say that we couldn't take it in-house in the future, but at this point, factoring looks better.

Okay, thanks.

Thank you.

(Operator Instructions). And we have a follow-up question from the line of Arnold Brief with Goldsmith and Harris.

I was going to pass, but I was just curious, since most of your business is done with Wal-Mart and Target, and another major chain, why is factoring such an issue for you? I would think you would be better off, since most of your business is done with major financially secure companies.

It is, Arnold. I mean, Wal-Mart, obviously, and a few others are financially secure. There's a few others down the food chain that's not quite as financially secure. But we chose many years ago, or I chose to not run a credit department, not take any credit risks, and, we factor with C IT, they take the risk, and it's all on a nonrecourse basis. So if you go back to back in the early 2000s, when K-Mart filed bankruptcy, we had a large exposure with them, but we lost nothing. So it's paid off for us over the year. We don't run the back end. They do the collection.

Is it really a function of your size? If you were bigger could you afford the department, and this way it's -- the fixed cost of a credit department versus the costs of factoring?

Has nothing to do with the costs. It's really the convenience and the protection.

Your method of operation.

It's our method of operation.

Okay.

Some choose to, and we don't take advances from the factor, so it's not financing arrangement. It's strictly credit. So our factoring fees are quite small, and they're disclosed in the annual reports. So our factoring fees are quite small because we don't take advances. It's only really insurance.

And I just -- I don't want to get into a pissing contest, but I am an analyst, not a broker, number one. Number two, from my experience, purchase of treasury stock has a very short term impact on a Company's value, and the longer term impact is much more enhanced by accretive acquisitions in addition to working capital that you grow, so I'll let it go on that one.

Arnold, thank you.

Thank you. I will turned back to our presenters for any closing remarks.

Okay, Laurie, thank you very much, and Olivia and Amy, thank you for your help. We appreciate everybody's interest and everyone's time and attention, and we appreciate the shareholders, and we look forward to speaking with you in a few months whenever we post the results for Q2. Thank you, and have a good day.

Thank you. Ladies and gentlemen, this conference call will be made available for replay starting today at 2:30 p.m. central time. The replay of the conference runs for one week until the date of August 19th at midnight central. You may access the AT&T teleconference replay system by dialing 1-800-475-6701. Please enter the replay access code 108976. Again, that number 1-800-475-6701. The replay access code, 108976. That concludes your conference call for today. We thank you for your participation and for using AT&T's Executive TeleConference service. You may now disconnect.