Cavco Industries Inc (CVCO) 2014 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Cavco Industries' fourth-quarter fiscal year 2014 earnings call webcast. (Operator Instructions). I would now like to introduce your host for this conference call, Mr. Joe Stegmayer, Chairman and CEO. You may begin, Sir.

Thank you, Kevin. Welcome, everyone. We will begin with Dan Urness, our Chief Financial Officer, reading the disclosure and providing a financial review. I will come back and make a few comments and then we will be happy to take your questions. Dan?

Good day, everyone. Before we begin we respectfully remind you that certain statements made on this call either in our remarks or in our responses to questions may not be historical in nature and therefore considered forward-looking.

All statements and comments today are made within the context of Safe Harbor rules. All forward-looking statements are subject to risks and uncertainties, many of which are beyond our control. Our actual results or performance may differ materially from anticipated results or performance.

Cavco disclaims all obligation to update any forward-looking statements made on this call and investors should not place any reliance on them. More complete information on this subject is included as part of our earnings release filed yesterday and is available on our website and from other sources.

And now for our financial review.

Net revenue for the fourth quarter of fiscal 2014 was $131.2 million, up 20.6% compared to net revenue of $108.8 million during the fourth quarter of fiscal year 2013. Net revenue for the full fiscal year was $533.3 million, up 17.9% compared to net revenue of $452.3 million last year.

The quarter and tangible net revenue improvements are mainly from increased home sales activity. Consolidated gross profit in the fourth fiscal quarter as a percentage of net revenue was 21.8%, which closely approximates 22.1% from last year's fourth quarter. For the full fiscal year, gross profit as a percentage of net revenue was 22.4%, up 1.2% from 22.2% in fiscal year 2013. The increase is from the incremental construction leverage on higher sales activity. Home sales increased 13.6% to 9,537 homes sold during fiscal year 2014 compared to 8,398 homes sold last year.

Selling, general, and administrative expenses in the fiscal 2014 fourth quarter as a percentage of net revenue was 16.3% compared to 17.4% during the same quarter last year. For the full fiscal year SG&A as a percentage of net revenue improved approximately 100 basis points to 16.5%, down from 17.5% in the prior fiscal year. The benefits were from greater SG&A utilization on the higher sales volume.

Net income attributable to capital stockholders for the final fiscal 2014 quarter was $4.2 million compared to net income of $1.4 million reported in the same quarter of the prior year. However the prior year fourth-quarter amount was net of $1.6 million of net income attributable to redeemable noncontrolling interest as previously reported, capital purchase to noncontrolling interest during the second quarter of fiscal year 2014 whereby Cavco now owns 100% of its consolidated subsidiaries.

Thus, all of the fiscal 2014 fourth-quarter consolidated net income is attributable to capital stockholders. Net income attributable to capital stockholders for the full 2014 fiscal year was $16.2 million compared to net income of $5.0 million in the prior year.

Fourth-quarter net income per diluted share was $0.47 versus $0.20 during last year's comparable quarter. Net income per diluted share for fiscal year 2014 was $1.94 compared to $0.71 in fiscal year 2013. Comparing the balance sheets for March 29, 2014 to March 30, 2013, cash was approximately $73 million at the end of the fiscal year, up from approximately $48 million one year earlier.

Accounts receivable grew $2.1 million from increased overall sales volume. Approximately $3.1 million of book value was moved from held for sale to property, plant and equipment, the result of changes in expected timing of ongoing asset dispositions.

Current deferred income taxes are higher by $5.6 million on the reclassification certain deferred tax assets the current, primarily resulting from the noncontrolling interest buyout during fiscal year 2014.

Consumer loans receivable and securitized financings are both lower from the ongoing maturity of underlying loan portfolios. Accrued liabilities are approximately $10.8 million higher, pertaining mainly to accrued wages and benefits, unearned insurance premiums, and home warranty accruals at fiscal year end.

Finally, stockholders equity grew 64.2% to approximately $290.4 million as of March 29, 2014 compared to approximately $176.9 million on March 30, 2013, primarily from the buyout of all noncontrolling interests during fiscal year 2014 and supplemented earnings from operations.

Joe, that completes the financial report.

Thank you, Dan. Total industry shipments of manufactured homes for the January through March period, Capco's fourth quarter, were 13,576 homes. That's 6% above the comparable period in 2013.

This quarter began with a 3% increase in January, followed by a 6% improvement in February and a 9% increase in March. As with many other industries and businesses, manufactured housing industry shipments were hampered by the severe winter weather in many parts of the country.

Those of you who follow this industry may know that home shipments have been 60,000 units or below for each of the past five years, the worst shipment levels of the industry's history. In 2013, the industry realized a 10% increase in shipments from the prior year.

While welcome, a repeat of this growth rate in 2014 would still be a small number of units in the overall housing market.

So, why can we be optimistic in an environment that has been quite tough for our industry? How can we be positive about the future of Cavco? A couple of reasons are -- I will go through them and take your questions on them -- first of all, we build homes that are not likely to go out of style. They are in fact, [assisted built] homes are in greater demand than they have been ever before. And I think the trend and that score will continue because the advantage of building a home in a factory -- less waste of raw material, better use of labor, better quality control.

For the past 20-year period, including these most recent five years I just referenced, the average annual number of manufactured homes built is 183,000 units. So clearly, there has been greater demand during more stable times in the US economy.

The entry-level homebuyer has not been a driver in the overall housing market in recent years. Several housing analysts predict this will change during the next couple of years. The entry level for first-time homebuyer is a major market segment for factory-built homes. Household formations are at an all-time low, significantly below the Harvard Joint Center for Housing Studies forecast.

Yet, the demographic data suggests there is pent-up demand. Job growth has been slower than we need, but progress has been made with recovering jobs lost during the downturn. As the number of nonfarm employees increases there should be an increase in household formation.

The number of shared households has risen considerably since 2007 to unprecedented levels as tough economic conditions force many people to move in with family members. But we think this is not a sustainable living strategy.

Job growth for the millennials -- those under age 34 -- as a share of all jobs created has grown during the past year. This bodes well for the start of new households.

Lenders are lowering credit score requirements providing debt to income and loan to value level as coming back by the borrower. This is positive as many of our buyers are in the range that these lenders are expanding into.

The populations of consumers in the 600, 650 score range and 650 to 700 range have increased since 2009. This could induce more buyers for our homes.

And finally, rental rates are rising as vacancy rates are falling. Oftentimes consumers discover that the payment on a manufactured home is less than their apartment payment. They can live in greater square footage, share no walls with neighbors, lock their door and enjoy the benefits of building equity in their home.

When and to what extent these indicators and trends have a meaningful impact to our industry, we cannot say. However, we believe the outlook is better than it has been for some time.

Meanwhile, we must make the most of the moderate improvement in the general economy and the housing market in particular we have witnessed. We will do so by continuing to execute on our long-term, long-standing operating strategies by maintaining strong financial condition to enable flexibility and by exploring ways to expand upon our existing lines of business.

And now, Kevin, we will be pleased to take some questions.

(Operator Instructions) Daniel Moore, CJS Securities.

Good morning, thank you for taking my questions.

Good morning, Dan.

It looks like revenue per manufactured home jumped up a bit in Q4, relative to the trend over the last few quarters. I'm wondering if there was anything in terms of mix or perhaps regional mix that might explain that and what your expectations are for pricing and average revenue going forward?

Thanks, Dan, for the question. And it's not uncommon for that average price to move around a bit. In fact, if you look over the last nine quarters, the average has been about $50,000 But the reality is that because of our mix and the variety of the product we build, combined with the special multiunit projects and the seasonality, that that average sales price has fluctuated up to 10% on both sides of that average.

So I think we can only outline that we expect normal fluctuation, in that range at least, and that it's a mixture of wholesale and retail prices which further makes it difficult. So we can't read too much into that quarterly fluctuations in that average.

Very helpful. And then looking at the segment of financial services -- up a little bit, relatively flat year over year. Can you talk about the outlook there, your expectations? Are rising interest rates having a little bit of an impact on that segment of your business?

The rising interest rates had an impact in housing overall and I think this industry was no different; although it was very modest. So those businesses in our financial services segment continue to perform well and contribute continue to be solid contributors and we expect that that will continue going forward.

Dan, I would add to Dan's comment that historically speaking our industry has not been as affected by rising interest rates as the general housing market and particularly the site built housing market. Because our price points are lower the impact of rising rates does not have quite as much of an impact on the consumer's payment and to say some of this industry has had some of its better years when interest rates were relatively higher.

Very helpful. And one last one, and then I will jump back in queue. Joe, thank you for the detail and the color in the industry. By our calculations, manufactured housing has started to regain some of that lost share over the last several years that it had lost in the prior 10.

Is that a trend that you see continuing? Or do you expect it to sort of level off? With these details I know it's sort of a crystal ball type question, but what are you seeing in the outlook over the next couple of years?

Right. And, Dan, for the benefit of others I will just mention that I think what you're referring to is the manufactured home shipments as a share of all new single-family homes sold perhaps and/or sometimes people compare it to housing starts -- in either case, you're right.

We have been improving a little bit the past couple of years, as an industry. And we do think that will continue. If you look historically over a 20-year period our industry has typically had a 20% share or certainly in the high teens as a percent of all new single-family homes sold.

And in recent years we've been in the 10% to most recently 12% sort of share. So we do think we have an opportunity to regain a larger share of the housing market. And in fact as the housing market increases we will have the multiplier effect of larger volume at the same time.

Does that answer your question?

It does, indeed. Yes. Thank you. I will jump back in queue.

Brendan Lynch, Sidoti.

Hi, Joe. My first question is on your volume growth. You had about 13% volume growth during fiscal 2014. I was just wondering if you could give us some color on what subsection of buyer you are seeing the most strength in? Whether it's first-time buyers or retirees or some other subgroup?

Yes. That's a good point and I think we are going to have to answer it that it's pretty much across the board because we are not seeing it necessarily in any one segment. I think we are seeing a fair number of first time and move up buyers.

But having said that I could automatically add that the 55+ market is improving although the 55+ market has been fairly soft in the last couple of years, particularly in the winter seasons when they are typically out looking to buy. We are starting to see that improve somewhat.

Most of the 55+ market buyers have been reluctant to make a purchase -- they have been renting oftentimes in planned age qualified communities in the Sun Belt areas. But they have not chosen to buy and we are starting to see that turn a little bit which will be a good sign for us.

Again I think in terms of demand, it's been a wide range of markets. And I think as Dan pointed out in the average selling point price, that's why that will fluctuate somewhat. We see some project work for workforce housing, we see multifamily in addition to our traditional residential single-family business.

So, it's been a kind of a basket of a lot of different niche markets we have been serving. I don't think we can reference any one that's been particularly accounted for our revenue growth.

That is certainly helpful and broad-based recovery is constructed for the business. You touched on this a little bit but maybe if you could just give us a bit more detail along the same lines in terms of your product offering and where you are seeing growth in terms of HUD code homes or Park Models or modular units or commercial structures, if there is any section or subsection of your product line that is seeing greater growth and others?

Sure. And I think the statistics are fairly clear on that one. The HUD growth has been somewhat higher although of course by no means robust. But it's somewhat better than the growth of modular home shipments. So modular homes tend to be at a higher price point than HUD code homes. That could be one reason for that.

Modular homes are also more popular -- I would say more prevalent -- in the Midwest, the Northeast, the Mid-Atlantic states than they are out in Southwest and in states like South-Central states like Texas.

So and those particular states have been slower to recover at least from a housing standpoint if not the general economy than some of the states in the South-Central market. So, and I think Cavco's performance kind of mirrors that improvement. We've seen some improvement in modular sales but it has not been as good as HUD code improvement.

Park Model industry is a very small niche. As you know, there is not many Park Models built in the entire country. Cavco is the leader in that field and we did see an improvement this year. But it's not something that has a major impact on our overall revenue growth.

Commercial business and the multifamily that I mentioned, that has had some impact. We've seen more projects in workforce housing, particularly with respect to the petroleum industry. But we've also seen it in the mining industry and some other areas. And we have seen multifamily just for traditional investors building multifamily homes for rental.

So that's been a help to us to kind of augment the lack of improvement in our traditional markets.

Great. Thank you for the color.

If I could squeeze one more in, you've got about $8 in cash per share. Can you just go through some of the things that you would be considering using the cash for? I'm particularly interested in your appetite for expansion or acquisition into competitors and entry into new markets.

Okay. The gradual improvement in our cash position is not new to us. We saw this through the early 2000s and we accumulated our cash from our business operations. And we were seeing that same kind of question back then; that is, what are we going to do with this accumulation of cash?

And we said at that time we will look for opportunities to expand the business. We didn't see them right away; we couldn't find the right opportunities. But of course we eventually did with the acquisitions of -- the assets of Fleetwood Homes and subsequently Palm Harbor homes and then subsequently our Financial Services businesses.

I think the same can be said today. We'll continue to look at ways to expand and probably, as I said in my comments, to expand upon the pace of business we already have. So we will look at expanding our manufacturing presence, expanding our Financial Services involvement in the industry and we'll look at kind of related businesses, related product lines, for example. But that would be kind of secondary.

In other words, we could look at more commercial kind of activities, small commercial buildings which we do some now. We could look at related businesses but I think we will focus primarily on our core operations.

Beyond that, obviously over time the Board I'm sure will consider other uses of cash such as dividends and share buybacks. We've learned not to be impatient with our allocation, our application of our cash position and that will be the case now.

We will be, I think, very deliberate about how we deploy that cash and we won't let it, so to speak, burn a hole in our pocket. We'll wait for the right sorts of opportunities.

Great. Thank you very much for the color.

You bet.

Lloyd [Jerner] with Jerner Capital.

It's Lloyd Connor. Congratulations on the great results and for winning Manufacturer of the Year for the fifth year in a row. Great.

Thank you.

If you could just give us some basic insight into your CapEx spending. Just let us know, are you building new plants? Or is this for existing plants or existing assets?

I will let Dan get into some of the specifics of how we spent the CapEx this past year. But generally speaking most of ours is mild, modest expansions -- you might say -- of existing facilities, adding equipment in some cases; adding some square footage. And then going forward, we will continue to look at -- we have several idle plants, Lloyd, that we could start up as demand increases. It would not take a lot of CapEx but we would probably have to equip some of those idle facilities a little bit better and certainly get some tools in vehicles and so forth to operate them.

So, we think that the CapEx needs would be fairly modest going forward. We do employ some capital in our lending operations. It's not obviously really CapEx, but it's a use of cash and we've been doing that for several years and that's proved to be beneficial.

Dan, if you want to give any specific color on the CapEx, go ahead.

Sure. And, Lloyd, our CapEx did come up this year compared to last year. We were this year at about $2.3 million and we expect that in the coming years it will range from there up to possibly $3 million in the near out years. And a lot of that has been in the -- what we maybe call maintenance CapEx area where we are improving our facilities but not adding to them substantially. And that's with modest improvements in some facilities and some equipment going forward, that's the reason it might get a little bit larger as our production increases and as it has increased; that's the reason that we have come up to the levels we are at right now.

And our depreciation rate comparatively is -- when we look at the depreciation run rate at about $2.6 million -- it's right about at the same level that we have our capital expenditures running currently.

Great.

Lloyd, I'm sorry. I would just add to that to point out that just above depreciation, kind of maintenance CapEx as Dan says, is not because we have deferred needs. I think we have kept up very well with our equipment and we will continue to do so.

It does mean, though, that we haven't been adding any significant brick and mortar to the operation at this point.

Great. Thank you both for the detailed answers.

Thank you, Lloyd.

Mike [Davidoff], Sidoti & Company.

Thanks very much for taking my question. I just wanted to ask, with the industry downturn we know the industry lost dealers and I'm just wondering if you can comment on the state of the industry dealer base. Is there any chance of it growing as the housing environment improves? Do you view that as a necessary component for the industry recovery?

Very excellent point. And it has been a challenge for the industry. We did, as you say, lose a lot of retail distribution points during this recession downturn. And to your question whether we will see a return of those, I think the answer is yes, as demand improves.

We are starting to see on a spotty kind of basis some stores opening up again. We just opened a new dealer in the Houston, Texas market, for example; a brand-new store. So we are seeing some of that. Not a lot of it.

The reason we think it will come back is that the barrier to entry for a retailer is not great. They do have to come up with inventory financing, which has been a challenge in recent years.

But the other CapEx for a retailer is not significant. It's not tremendously prohibitive. They have to find land, which they generally lease. And set up an office and then display homes, train some people. So there are some start-up expenses but it's not a terribly capital-intensive business to enter -- unlike even some other kind of retail operations or franchisee operations.

So I think as they see the need for housing improve -- the market improve -- some experienced people will come back into the business or even more likely and probably more quickly you will see existing retailers expand their operations. So those that have one or two or three retail distribution points might expand that. Just as they did collapse their footprint as times got tougher, they can move back and expand again.

So you had many retailers who might have had 10 or 12 stores -- they scaled back and as things get better and they might be down to one or two or three they will quickly expand back in markets where they see improvement or opportunity.

So, you are right, it's an issue. If we don't see that improvement in distribution that would be a challenge for us but we think that we will see that coincident with the improvement in housing, in general.

And then I also wanted to ask about in terms of your initiatives for direct sales into housing communities, that seems important -- especially in light of the state of financing for manufactured homes. What are you seeing from communities that you deal with? Are they doing more replacement of older homes and communities in general? Can you just give us a feel for what's happening at the community level and some of your initiatives there?

Sure. The community operators have been doing quite well in recent times and they have been a good market for us; very good customers. Ranging from very large-sized community operators to the smaller family-owned community people -- people who might own one or two or several communities.

And this has been a good market. It's been, I guess, particularly improved because of their propensity in recent years to buy homes for rental. So that has really helped. I don't think their sales have been as strong as they would like or as we would like. I think it has kind of mirrored what's gone on in the economy, in general.

But they have found that there is a great need for housing and whether people are unable to qualify to buy a home, they choose to rent. For as I mentioned earlier in my comments the 55+ have the wherewithal and the good credit to buy a home, they have chosen not to because of the consumer confidence levels have been -- well, at historical lows in recent times.

So the community operators have taken a position that they would rent homes in many cases. Figured they would convert these renters to buyers once the renters get accustomed to living in their community and benefiting from all the features and safety and good lifestyle in those communities.

And in fact, they have done so. They have converted a number of these renters to buyers and I think more of that is going to go on.

So, yes, the community operators have been important to us. They have always been important to Cavco because Cavco, being a Sun Belt-based company for 40+ years, we've always served the community operators and so we know how to do it very well. We know how to service those customers in high-density communities and we know how to take care of community operators.

So, that improvement in community business has been a good extension of what we've traditionally done. And I think it's been a very important part of our business these last couple of years.

Okay. And just one more, if I can. On the financing side of the business I'm just wondering has Dodd-Frank impacted how you operate CountryPlace? And what changes are you hoping for in terms of that legislation and where the industry initiatives stand in terms of that legislation?

Right. A big complicated area there. Dodd-Frank -- particularly the Safe Act -- have had an impact on our industry, I think certainly since January when some of the new rules went into place.

But the problem they really didn't consider as they were promulgating some of the rules they didn't consider the impact of manufactured homes. I think it was just got overlooked or ignored -- probably not intentionally. But what we are trying to do as an industry now is introduce and promote legislation that would correct some of the unintended consequences of Dodd-Frank rules and allow somewhat higher interest rates to be charged for manufactured home loans than are presently allowed before they are considered high-cost mortgages.

And this is needed -- I guess I better be careful and don't give too much detail here and take too much time but this is needed because the cost of originating servicing of a $250,000 site built mortgage loan and a $25,000 loan that might be in the manufactured home industry in terms of real dollars are the same. And the cost of servicing the loan and originating it, providing 1099 information, all those things is the same. And yet obviously the interest income generated on that $25,000 loan is not nearly what it is on the larger balance loan.

And so, of course, lenders to manufactured home buyers at lower mortgage balances need to get a somewhat higher interest rate to make up for that difference, and that's what we're trying to get fixed. We've had pretty good success recently and there is a House Bill 1779 has 110 House members on both sides of the aisle supporting and cosponsoring this legislation and its companion bill has been introduced in the Senate.

So we are hopeful that we will make some progress -- we've been working on it for some time as an industry -- make some progress on improving that -- those rules. And it really needs to happen because I think it's only penalizing affordable home buyers.

It's not a partisan issue. It's not a liberal or conservative or political issue at all, it's just an unintended consequence that has hurt not only new buyers for manufactured homes but it can hurt those people with manufactured homes already because they go to try to resell their home but there's not a mortgage market for their product, their equity will suffer in that home -- it could suffer.

So I think that's, Mike, what we're doing about it and I think we'll see -- hopefully we'll see some improvement.

Okay. Great. Thank you very much. I appreciate your time.

And, as Mike parts, I would just like to focus on one other thing he brought up that I should've mentioned. In retail distribution I mentioned that the probable entry of more retailers in the business improves, I should also point out that our Company has 50 Company-owned stores which are doing increasingly better through these improving times.

If we choose to we could also expand our presence with our Company-owned operations and we're doing that in a very small way currently -- we are involved in a couple of stores here and there. But if we did not see the return of independent retailers we could also look at expanding our presence in Company-owned stores.

Kevin, if there is another question we would be glad to take that.

Wyatt Carr, Monarch Bay Securities.

Hi Joe and Dan, and congratulations on the great year, a great quarter.

A couple of questions -- in the beginning remarks you commented about the seasonal impact and the weather impacts and I think it was 3%, January; 6%, February; 9%, March.

What do you see going forward as kind of a normalized without the weather impact? Sequentially you were off a little bit from the December quarter. Would you attribute most of that to weather impact?

Well, we alluded to -- we, of course, have not traditionally made forecast but from an industry standpoint I think most of the people involved or who follow this industry kind of expect the 10% improvement in shipments for the calendar year 2014. Now we don't disagree with that. We think that's probably a reasonable number. As I said, it's not expecting a lot -- it's only 6,000 units in a much larger housing market. So we would expect that to be a reasonable number and I think that would imply, of course, we have to see somewhat greater improvement in the last three quarters of the years than we have seen in the first quarter.

But that's not without precedent, as the winter quarter is typically a tough quarter. It was particularly tough this year with the unusual weather we had. So we do see that improving somewhat.

Okay. And I think you answered my next question. Total industry shipments you said were up 6% and you are saying you see the industry is kind of looking for 10% this coming calendar year?

That's right. So for the next three quarters we have to see some improvement above what we have been seeing to reach that 10% overall.

Okay. Great. And then you also mentioned, you have 50 Company-owned stores. Is that count up, year-over-year?

It's been basically static the last year or two.

Okay. And the independent retailers, you didn't give a number there but the sales -- at least the units were up pretty nicely. Is that due to the number of independent retailers? Or is that just each one is performing better?

Wyatt, it's really the latter. Generally retailers are seeing improved volumes, which they need badly. They have been suffering for some time.

So gradually their unit volumes per store are improving and we think should continue to improve.

Okay. And then last question I have is on the consumer loans, sequentially they were flat and they have been rolling off but do you see this kind of bottoming out? Or do you see this continuing to roll off?

You are referring to our loans in our CountryPlace Mortgage subsidiary?

Yes. I believe so. The $78 million.

Okay. Sure.

Those loans are continuing to pay down. So those securitizations occurred in 2005 and in 2007, and those are the balances we see on the balance sheet.

So you will see that that has dropped. There's two pieces on the balance sheet. One is current and that's relatively flat, but that's just because that is what we expect to pay down in the next year. But if you look in the long term for noncurrent portion for asset you will see that that is where the real decline shows in our balance sheet year after year. And the same with the secure securitized financings that are tied to those securitized loans. That's working its way down, as well.

Okay. Great. And final final is on CapEx, you spent a good portion of it within the fourth quarter. Do you see that spending over -- kind of evenly over the quarters or could there be some lumpiness there?

It will be relatively even. It's ramped up just a little bit as our production has increased so you saw that a little bit more in the fourth quarter, but it will be fairly even throughout the year.

Okay. Great. Thank you, guys, very much.

Daniel Moore, CJS Securities.

Thank you, again. Just wondering if you could give the trends for Q1 over Q4 -- January, February, March. Any sense of what April will look like?

Not yet. Of course I think you realize this, Dan, but I want to make sure everybody else on the call recognizes -- those numbers I was quoting were industry shipments, not our Company shipments.

Indeed.

And the industry shipment number won't be out for another couple of weeks yet for the month of April. It generally lags about 45 days or so, and I really can't give you any indication. There is no way of knowing really. I certainly expect that it will be better than last year's number but by how much I don't know.

Okay. And just housekeeping, Dan. I can wait for the K but do you have what cash flow from operations was in Q4 or for the full year?

Sure. For the full year cash flow for the Company was $25 million and operations you have to offset against the securitized debt or else it gets a little bit mixed up. So it's best to look at the overall cash flows for all the components of the cash flow statement. But it will be in the $25 million range for the year.

Perfect. Thank you, again, and we look forward to seeing you at our conference in July.

I am not showing any further questions at this time. I would like to turn the conference back over to our host.

Thank you, Kevin. Thank you all for joining. We will be in New York in White Plains for our Securities Conference as Dan just mentioned -- CJS in July 10, I believe. And we will also be available here by phone for any of those of you who have follow-up questions.

Again, we appreciate your support and look forward to talking to you in a few months. Thank you.

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.