信達思 (CTAS) 2015 Q1 法說會逐字稿

Good day, everyone, and welcome to this Cintas quarterly earnings results conference call.

Today's call is being recorded.

At this time, I would like to turn the call over to Mr. Bill Gale, Senior Vice President of Finance, and Chief Financial Officer.

Please go ahead, sir.

Thank you for joining us this evening.

With me is Mike Hansen, Cintas' Vice President and Treasurer.

After our commentary, we will be happy to answer questions.

Let me remind you that the Private Securities Litigation Reform Act of 1995 provides a Safe Harbor from civil litigation for forward-looking statements.

This conference call contains forward-looking statements that reflect the Company's current views as to future events and financial performance.

These forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those we may discuss.

I refer you to the discussion on these points contained in our most recent filings with the SEC.

We are pleased to report first-quarter revenue of $1.102 billion.

Organic revenue growth, which adjusts for the impact of acquisitions and the Shred-it transaction was 7.2% for the first quarter.

This was a nice acceleration from the 6.2% organic growth in our fourth quarter ended May 31, led by a Rental organic growth of 8.1%, and a First Aid, Safety and Fire Protection Services organic growth rate of 10.1%.

Our sales force performance in both businesses was strong, and the pricing environment in the first quarter improved from our previous quarter.

We were a little disappointed with the negative 2.2% organic growth change in our uniform direct sale revenue, as we had a third consecutive quarter of year-over-year revenue decline.

While much of the declines in the last three quarters relates to large national account rollouts occurring last year and not repeating this year, we have seen some softness in our Fortune 1000 national accounts as well.

As we noted in today's press release, our first-quarter income statement was affected by a few items that are not representative of our ongoing operational performance.

First, as we indicated in our July earnings call, we had a $13.6 million gain, net of tax, on the sale of stock in an equity method investment during this year's first quarter.

Second, our FY15 first-quarter income from continuing operations did not include any Document Management Services operating segment results.

Mike will provide more details about the accounting for Document Management and its impact on the first quarter and the remainder of this FY15 year.

Third, we recorded an additional $4.1 million gain, net of tax, during this year's first quarter, due to receiving additional proceeds related to the Shred-it transaction.

We have identified these items separately in today's press release, so I will speak to the results as adjusted for those items.

Our first-quarter gross margin was $477.9 million, or 43.4% of first-quarter revenue.

As Scott Farmer said in today's press release, the gross margin improved in each of our businesses.

In fact, the first quarter's gross margins of 43.4% was the highest as a percent of revenue since FY06.

We continue to operate our businesses very efficiently, and are taking advantage of existing capacity in our infrastructure.

First-quarter operating income was $163.5 million, or 14.8% of first-quarter revenue.

We are very pleased with this improvement over last fiscal year's first quarter adjusted operating income as a percent of revenue of 13.4%.

First-quarter net income and earnings per diluted share, as adjusted, also improved nicely, compared to last fiscal year's first-quarter amount as adjusted.

First-quarter net income as adjusted was $92.4 million, which was 8.4% of revenue, and grew by almost 21% over last year's first quarter.

This fiscal year's first-quarter earnings per diluted share, as adjusted, was $0.78, which $0.78, which grew over 25% compared to last fiscal year's first quarter figure, as adjusted, of $0.62.

We're very pleased with the start to this fiscal year, and thank our employees, who we call partners, for their hard work and dedication.

I will turn the call over to Mike for more details on the first-quarter performance, and the impact of the Document Management business, and then I will provide a few comments on our updated FY15 guidance.

Thanks, Bill, and good evening.

I'll start with a few comments on Document Management.

We indicated in today's press release that we have changed our accounting classification of the document storage and imaging business to discontinued operations.

We are evaluating strategic opportunities for this business, and will provide more details as appropriate.

The classification of this business as discontinued operations means, under US Generally Accepted Accounting Principles, that we must condense all income statement impact from the business into one line on the income statement for all periods presented.

As a result, we will no longer show any document storage and imaging revenue, gross margin, or operating income, in either this year's or last year's income statement.

Instead, the entire results in both years are condensed into one line item on the income statement, entitled Income From Discontinued Operations Net of Tax.

Let's switch to document shredding.

Because we continue to have an ownership in the document shredding business through our partnership with Shred-it, US GAAP says we really haven't exited the business.

As a result, we will continue to include document shredding results in last fiscal year's income statement.

However, beginning with this first quarter of FY15, we will no longer record any document shredding revenue, gross margin, or operating income.

Instead we will simply show our share of the partnership income in our corporate operating segment.

During the first quarter of FY15, there was no impact from the partnership.

From a modeling perspective, the end result of these changes in Document Management accounting means that we will have no Document Management operating segment results going forward.

The easiest way to model the comparison of FY15's results to last year will be to exclude the entire Document Management operating segment results from last year.

So as a result of the changes I just discussed, we now have three reportable operating segments: Rental Uniforms and Ancillary Products, Uniform Direct Sales, and First Aid, Safety, and Fire Protection Services.

Uniform Direct Sales and First Aid, Safety, and Fire Protection Services are combined and presented as other services on the face of our income statement.

Before moving into the first-quarter results, let me remind you that there were 65 work days in this year's first quarter, which is the same as last year's first quarter.

Looking ahead to the remainder of FY15, we will have 65 work days in each quarter, for a total of 260 work days for the fiscal year.

These work day figures for FY15 are the exact same as in FY14, so we will have no work day differences or adjustments for the remainder of this fiscal year.

The Rental Uniforms and Ancillary Products operating segment consists of the rental and servicing of uniforms, mats, towels, and other related items.

The segment also includes restroom supplies and other facility products and services.

Rental Uniforms and Ancillary Products revenue was $857 million, which is up 8.1% compared to last year's first quarter.

Organic growth was also 8.1%.

Growth of roughly 0.5% was due to a contractual buyout caused by a change in government regulation that forced the customer to close one of its operations.

As Bill mentioned, the performance of our sales team continued to be strong, and first-quarter new business was better than last year.

In addition, the pricing environment improved relative to the fourth quarter and last year's first quarter.

We still have not seen much impact from net add-stops, which were down slightly compared to last year's first quarter.

Our Rental segment gross margin was 45.1% for the first quarter, an increase from 42.6% in last year's first quarter.

As Bill mentioned, we've continued to leverage our infrastructure and our operating very efficiently.

In addition, we continue to sell products and services that do not require additional processing capacity, such as our hygiene products and services, and our chemical dispensing services.

Lastly, the more favorable pricing environment helped drive incremental margins as well.

Our Uniform Direct Sales operating segment includes the direct sale of uniforms and other related products to national and regional customers.

Uniforms and other related products are also sold to local customers, including products sold to rental customers through our direct sale catalog.

Uniform Direct Sales revenue for the first quarter was $105 million, which was 2.2% lower than last year's first quarter.

As Bill indicated earlier, lower sales to our Fortune 1,000 national accounts has been the driver of the revenue decline.

Uniform Direct Sales gross margin was 29% for the first quarter, an improvement over last year's first quarter gross margin of 27.7%.

While our revenue was lower than last year's first quarter, our sales mix was more weighted towards our higher-margin hospitality business.

Our First Aid, Safety, and Fire Protection Services operating segment includes revenue from the sale and servicing of first aid products, safety products and training, and fire protection products.

First Aid, Safety, and Fire Protection revenue for the first quarter was $140 million, which is 11.3% higher than last year's first quarter.

Organic growth was 10.1%.

This business's sales team continues to perform well, and our national account business continues to thrive.

This segment's gross margin was 43.7% in the first quarter, which is fairly consistent with last year's first quarter of 43.6%.

Switching to selling and administrative expenses, total company SG&A was 28.5% as a percentage of revenue in the first quarter, compared to a total company SG&A in last year's first quarter of 28.8%.

When excluding the impact that document shredding had on last year's first-quarter SG&A and revenue, last year's adjusted total Company SG&A was 27.8% as a percentage of the adjusted revenue.

The increase in SG&A as a percent of revenue from last year's adjusted 27.8% to this year's 28.5% is due to two items.

First, our worker's comp and auto insurance-related costs were higher in this year's first quarter, compared to last year.

Second, as we mentioned in our earnings call in July, the contribution of the document shredding business to the Shred-it partnership leaves less revenue to cover our SG&A structure.

Specifically, certain corporate G&A expenses, such as the operation of our corporate headquarters, must now be allocated to our remaining three operating segments, instead of the four operating segments that we had last year.

We expect this headwind to continue for the remainder of this fiscal year.

Our effective tax rate was 37.4% for the quarter, compared to 37.2% last year.

The effective tax rate can fluctuate from quarter to quarter, based on tax reserve builds and releases, relating to specific discrete items.

We expect the FY15 effective rate to be 37.3%.

Turning now to the balance sheet, as a result of the classification of the document storage and imaging business as discontinued operations, our August 31 balance sheet now shows all assets associated with that business in one line item entitled Assets Held For Sale.

The balance in this line item at August 31 was $151 million.

There is also a line item entitled Liabilities Held For Sale, which incorporates certain liabilities associated specifically to the document storage and imaging business at August 31.

The balance in that line item at August 31 was $15 million.

Our cash and cash equivalents were $581 million at August 31, an increase of $68 million from the $513 million at May 31, mainly due to strong operating cash flow.

Accounts receivable decreased by $19 million since May 31, due to improved collection performance, and the reclassification of document storage and imaging related AR to assets held for sale.

New goods inventory and in-service inventory levels at August 31 were $250 million and $514 million, respectively.

These balances are relatively consistent with the balances at May 31.

Accrued compensation and related liabilities at August 31 decreased by $41 million from the May 31 balance, mainly due to the payment of FY14 bonuses and commissions.

Long-term debt remained at $1.3 billion, representing roughly 1.7 times EBITDA.

And finally, CapEx for the first quarter was about $68 million.

Our CapEx by operating segment was as follows: $61 million in Rental, including roughly $25 million related to the SAP project; $2 million in Uniform Direct Sales; and $5 million in First Aid, Safety, and Fire Protection.

We expect CapEx for FY15 to be in the range of $275 million to $325 million.

I'll now turn the call back to Bill for comments on our updated FY15 guidance.

Thank you, Mike.

We're updating our FY15 revenue guidance to be in the range of $4.4 billion to $4.475 billion.

This revenue guidance has changed from our initial guidance provided in July to reflect the elimination of document storage and imaging revenue, due to its classification as discontinued operations.

This updated guidance also reflects our first quarter revenue performance, and our thoughts on the US economic environment for the remainder of our FY15 year.

As Scott Farmer indicated in our press release earlier today, we believe the US economy remains inconsistent, and we believe recent global events increase the unpredictability of the environment.

We are also updating our FY15 earnings per diluted share guidance to be in the range of $3.20 to $3.29.

This guidance reflects a number of items: First, we have eliminated the benefit from the document storage and imaging business.

Second, we have incorporated the additional $0.04 Shred-it transaction gain.

Third, this updated guidance continues to assume no benefit from the Shred-it partnership, but does reflect the first quarter $0.11 gain on the sale of stock in an equity method investment, which was also in the initial guidance provided in July.

Lastly, the updated guidance reflects the first quarter performance, and also our thoughts on the US economic environment.

This concludes our prepared remarks, and we will now be glad to answer your questions.

(Operator Instructions)

John Healy, Northcoast Research.

Bill, I had this question come in to me.

I was hoping to get a little bit more color on the guidance.

If I think about the moving parts, the $0.11 item was already in the guidance.

And you called out the $0.04 gain.

So if I back that out, the guidance looks like it's moving up by about $0.10.

How should we think about that $0.10 from a contribution standpoint, in terms of how does your view on the economy change?

And the other item I thought that would be contributing to it would be, how do we think about the movements of document storage, now that it's in discontinued ops, if that's a net positive or how that impacted the guidance?

Well, the document storage and imaging business did have a minor contribution to our initial guidance.

It was about $0.03.

So basically you're backing that out.

I think you accounted for the $0.04 special gain in the first quarter, due to the Shred-it transaction.

So, but you are correct, that we are increasing guidance on the Rental, First Aid Business, and Our Direct Sale business, basically, primarily as the result of the first-quarter results, which were better than we originally expected.

And while we expect the rest of the year to be good, we don't expect it to be as robust as we saw in the first quarter.

Again, it could be a bit conservative on our part, but there has been ongoing inconsistency in the jobs reports.

We still are seeing a reluctance on the part of many of our customers to expand their operations, to add employees.

As Mike indicated, there was very little -- there was no help from add-stops in the quarter.

Basically continues to be from new business, and then again, as he said, a better pricing environment.

So I guess in summary, what we're saying is yes, we increased guidance from continuing operations, but probably not at the same rate that you saw in the first quarter.

Okay.

I appreciate that color.

And I wanted to ask, when I was taking notes from your additional comments, it sounded like you were at the margin, I would say, talking positively about the pricing environment.

I feel like it's been a long time since I've heard anything like that on a uniform rental call, so I was hoping you could talk to what you're seeing on that side of things.

Maybe what's driving it, is it a cost push in the business, or is it just more discipline from industry competitors, or just some more color that you're seeing there?

Well, I went back and looked at some of our releases last year and our calls.

And I think we did indicate that pricing environment was beginning to improve, even in FY14.

And I think what happened in this first quarter is, we saw continued improvement.

I think part of it is driven by a -- probably a better education on our part for our service providers and salespeople to go to our customers, and explain that we've had cost increases over the last several years, and have not really been able to pass those on to the extent that we feel justified that we should be able to.

So I don't want to create a belief that we just have really skyrocketed prices.

We haven't.

But we certainly have been able to get more of a price increase than we have since the end of the recession.

Okay.

Great.

Final question for me.

The discontinued ops.

Any thought, in terms of when we might see that realistically come to a close?

Is it a quarter out or two quarters out?

How should we think about that?

John, I really can't answer that question right now.

There's a lot of things going on.

So it would be premature for me to speculate on a specific timeframe.

Okay.

Thanks.

Manav Patnaik, Barclays.

This is actually Greg calling on for Manav.

I was hoping you could talk maybe about the specific industry verticals.

I know you said that the recovery's been inconsistent, but I was wondering if maybe you could talk to specific verticals that you've seen some strength in recently?

Well, as it relates to our performance, Greg, it's been relatively broad revenue growth for us.

Our new business still comes from customers of all different types.

We've been able to sell additional products and services into existing customers of all types.

And so I would say that it's been a fairly broad revenue growth stream for us.

As we look at the job performance, even in this first quarter, as well as the entire calendar year, we've generally seen a bit of a narrow employment improvement, and about a third of the employment growth coming from some verticals that don't help our businesses, particularly uniform rental, much, and that being professional services, fast food service, temps, education.

But having said that, we've been able to continue to sell to many different verticals, both in new business and in penetrating with additional products and services.

Okay.

Fair enough.

And then maybe on the M&A pipeline, how active has that been, and do you expect to ramp up post some of these document management transactions?

Well, we have remained active, Greg, in the M&A area throughout the last couple of years.

And as I've indicated in the past, it's not for lack of effort on our part.

It's for the appropriate valuation, that we feel an acquisition would make sense for our shareholders.

So at this point, we are still very much wanting to do some big acquisitions.

And we are continuing to work diligently for those.

But there's nothing at this point that has come to fruition, primarily because of valuation expectations.

Okay.

Thanks so much.

Scott Schneeberger, Oppenheimer.

This is [Daniel Hop] again for Scott.

Can you address some of the margin enhancing initiatives you are doing this year, that could provide potential upside to your current outlook?

Well, I think the first quarter was reflective of a lot of the things we've already been able to implement.

It's greater utilization of our plants and our routes.

It's more selling of products and services that do not require the processing through our laundry facilities, things like chemical dispensing, and hygiene services, et cetera.

I think it also is just an attitude on the part of the Company to continue to drive excess cost out of our business, and work toward improving the margins back to levels that we had achieved prior to the recession.

We had stable energy costs, so we didn't have to deal with that this quarter.

Better utilization of our stockrooms for our uniform business.

So I think it's just a number of different things.

As far as looking out for the rest of the year, I think as you look at our guidance, what we are saying is we would probably anticipate maintaining margins at relatively these same levels that we achieved in the first quarter.

As far as any significant upside potential, I doubt if that is really available.

I'd say it's more maintaining what we achieved.

Okay.

Great.

Thank you.

George Tong, Piper Jaffray.

Can you discuss how add-stop performance in the quarter compared versus your expectations, and what your views are for add-stop performance next quarter?

Well, we talked last quarter that net add-stops were slightly better than the previous year.

In this first quarter, they were slightly lower than last year, and so we really haven't seen much of a trend.

We've continued to bump along with net add-stops.

We haven't seen any change in that performance, or any discernible trends in September, either.

And so we are expecting that we'll just continue to bump along relatively inconsistently in net add-stops.

And don't anticipate that our customers will start hiring at any rapid pace anytime soon.

Got it.

In your updated guidance, does that incorporate improvements in add-stop performance?

Not really.

It pretty much just reflects a status quo where we don't really see any improvement over prior years in add-stops, but we'll see continued new business, which is basically new customers, increased penetration of different products and services.

And then, hopefully, a reasonable pricing environment continuing, as we saw in the first quarter.

That's very helpful.

And as you look at margin performance, how would you segment out contribution from pricing versus greater route and plant utilization, versus say, cost savings initiatives?

I really don't have a way of doing that very easily, George, and probably wouldn't be able to disclose that even if I had it, because of competitive things.

But I would say all of them are contributing factors.

And it's basically, you've got all sorts of different initiatives going on, from different levels of capital investment, from efficiencies.

Obviously the pricing helps, so it's just very difficult for me to be able to split that stuff out.

Got it.

And last question, this was a longer-term strategic question, but with respect to margins, how do you think about the path to peak margins, in terms of just how long it takes to get there and whether your success in pushing through pricing, whether that means you can break above prior peak margins?

I'm not sure I would commit to breaking above prior peak margins.

I'd love to be able to get back to those margins in the future.

And I think we're making very good progress toward that regard, but keep in mind the cost of doing business today is more than what it cost back in 2005 and 2006, when we hit those margins.

So we are attempting to get back there, but to exceed it would be a pretty difficult thing to do, I think.

Great.

Thanks very much.

Andy Wittmann, Robert W. Baird.

Bill, I don't want to make too find a point on it, but you made a comment that the margins you put up here in the first quarter might kind of continue through the balance of the year.

Are you referring to the year-over-year growth in margins on the operating line, which were the 140 basis points on the clean basis, or are you saying that absolute level, or is that a reference to the gross margins?

Maybe just a little -- again, not trying to make too fine a point, but I want to understand by what you meant by that.

Sorry for the confusion, Andy.

What I was saying, the absolute level of the margins should be relative, I would hope would be relatively close to what we achieved in the first quarter.

Okay.

Great.

And just on the revenue line, you kind of give us some help about the document storage business impact of $0.03 you talked about.

On the top line, what was your forecast for what that business can do?

We were modeling somewhere around $80 million, maybe $90 million on the storage side.

Is that about right?

Absolutely right.

Yes.

So then really, you do have a slight raise then on the revenue line if you adjust for that, so just a little bit, but a little bit of a raise on the revenue line?

You are correct.

Okay.

And as it relates to the government contract you highlighted, you said it's a half a percentage point like.

Should we see that basically as a one-time benefit, so you can make the argument that the segment growth of 8.1% could really be 7.6%, still very good, but not quite 8.1%?

That's right, Andy, but it's not a government contract.

It is a customer -- it was a commercial customer who, because of a government regulation was forced to close down some of their operations, and therefore, they bought out of their contract.

Oh.

Okay.

It was not having to do with the government, so just wanted to clarify that.

Okay.

No.

That's helpful.

And just as it relates to the asset for sale for the storage business, it's on the balance sheet, like you noted for $151 million.

I guess when you move things to discontinued operations and assets for sale, you have to at least do a valuation test there.

I guess, I think, is it true that if it would have been less than the $150 million, you would have marked it to market at what you thought it was, so can we assume that the $151 million would be a minimum for what you would get for it?

Well, you're absolutely right.

We have an obligation to impair it, if it were not going to get that value.

So this is all subjective, but our expectation is that those were fair values that are on the balance sheet.

To call it an asset for sale or to put it in discontinued, do you need a letter of intent or something more formal, or is it really just a subjective decision?

Just using this as maybe a way for investors to gauge where you might be along in that process?

It's a very complex set of analysis that one must go through.

And we decided to be conservative, and basically classify it that way, since we believe that within the next 12 months, we won't necessarily be operating those as we are today.

They'll either be part of a joint venture, or they'll be sold to another party.

Cool.

If you could just afford me one last question, I wanted to ask about the ancillary services in the Rental segment.

And I've asked this one plenty of times before, but maybe, Mike, can you talk about the relative growth rates of the ancillary services versus what you'd considered the core uniform rental?

And maybe, just as it relates to the longer-term trend, you've always talked about how the number of services that you can offer a customer increases your retention, but how has that number of services and products that you've been offering tracked?

Can you give us some sense about how that has improved over the last couple of years?

If it's improved?

Okay.

Regarding your first question about the growth of the different products and services, we have seen very good growth in our uniform rental business, and we have seen growth in our ancillary products and services, so the mat rental, the hygiene products and services, which is made up of air fresheners and soaps and towel dispensers, and the chemical dispensing, all are growing quite nicely.

We won't get into the specific level of growth on any of them, but they are all growing quite nicely.

And we continue to improve the amounts of products and services at our existing customers.

We still believe we have a long way and a great opportunity to continue adding those, but, but certainly, they have gotten better -- in terms of the penetration amounts -- have gotten better in the last few years.

Is there a measure --

That doesn't give you any specific numbers, but we don't really get into the specifics of any of those, but I can tell you that directionally, we're doing very well.

Okay.

Great.

Thanks.

I'll leave it there.

Andrew Steinerman, JPMorgan.

I just wanted to focus on the revenue guide of 4.9% to 6.7%.

I assume very little of that has acquisition, past acquisition baked into it, just like the first quarter had only 20 basis point differential.

And so my question is, assuming that point is right, and we did over 7% growth in the first quarter, is there anything other than a conservative view on the economy that suggests more like a mid-single digit, like a 5% growth for the balance of the year to get into that 4.9% to 6.7% range with the 7% start?

Your assumption first on yes, there's no real acquisition growth going forward, other than what you just saw.

And Andrew, I would say that is a pretty good summation of our view for the rest of the year, and that's what's reflected in the guidance.

Yes, again, we're being somewhat conservative, driven by and large by what we continue to see this inconsistency, and then all the different activity going around the world that seems to impact people's thinking on business.

So obviously, if we can achieve similar results in the rest of the year that we saw in the first quarter, we'll be at the upper end, if not exceed that guidance.

So obviously, if it goes the other way, we'll be down on the lower end.

And could you just mention how much storage, document storage revenues were in the previous guide, meaning what was taken out of the guide and put into discontinued ops for 2015?

About $84 million, $85 million.

Okay.

Thank you very much.

Last year's storage revenue was $82 million.

And so it was roughly that same amount.

Okay.

Perfect.

Thanks for your help today.

Greg Halter, Great Lakes Review.

Based on the cash flow statement, there appears to be about $61.4 million in the repurchase of common stock.

I just was curious as to the timing of that, and the number of shares.

Well, 700,000-some shares were a result of the share purchase program that we reported to you in July.

That was the culmination of the 4.2 million shares we bought, beginning in our fourth quarter.

Then the remainder of that was due to the fact, when we have restricted stock that vests with our partners, there is a tax obligation, as it is considered ordinary income, and so what we do, is we basically sell enough of the shares that they vest in to pay for the payroll taxes.

Okay.

So there really wasn't anything new in this fiscal quarter?

No.

Okay.

And probably 10 years ago I was in one of your plants for an investor day or something like that, and there was a great discussion and potential around RFID.

And just wonder if anything has occurred in that regard, in terms of making that a viable solution in some of the plants?

It really has not.

We continue to experiment with it, but it has not really proven to be beneficial, yet.

And we are certainly trying it, but it's nothing we've been able to roll out.

All right.

Thank you.

(Operator Instructions)

Dan Dolev, Jefferies.

Just really a macro question.

Bill, I'm just thinking about your comments today, and compare them to your comments in the last maybe quarter or two.

Am I misreading it, or are you incrementally more bearish on the US economy?

Or is this just over interpreting your analysis or has everything been the same really?

I think it's the same.

I don't think my view, our view, I shouldn't say it's my view -- our views have really changed from the way we felt the last couple of quarters.

We were obviously pleased with the first-quarter results, better than what we initially expected.

But has that given us confidence that will continue?

Not yet.

And we'd love to be able to continue to be able to surprise everybody on the upside, but I'm just not confident enough to give you that comfort.

Okay.

That's helpful.

I thought I sensed something, but I guess it was just over interpreting.

I appreciate it.

Ladies and gentlemen, that does conclude today's question-and-answer session.

I would like to turn the conference back over to management for any closing remarks.

Thank you, all very much again for joining us, and being interested in the results.

And at this point, we would expect to issue our second-quarter results sometime some time before the Christmas holiday, in mid to late December.

So until then, thank you again.

Ladies and gentlemen, that does conclude today's conference.

We do thank you for your participation.

You may now disconnect.

Have a great rest of your day.