Consolidated Water Co Ltd (CWCO) 2008 Q3 法說會逐字稿

Hello, welcome to the Consolidated Water Company third quarter FY 2008 conference call. All participants will be in listen-only mode. There will be an opportunity for you to ask questions at the end of today's presentation, an operator will give instructions on how to ask your questions at that time. This conference call may include statements that may constitute forward-looking statements usually containing the words, believe, estimate, project, intend, expect, or similar expressions. These statements are made pursuant to the Safe Harbor provisions of Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include but are not limited to continued acceptance of the Company's products and services in the marketplace, changes in this relation with the government in the jurisdictions in which it operates. The ability to successful secure contracts for water projects in other countries, the ability to develop and operate such projects profitably and other risks detailed in the Company's periodic report filings with Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revision or changes after the date of this conference call.

(OPERATOR INSTRUCTIONS). Please not this conference is being recorded. Now I would like to turn the call over to Rick McTaggart.

Thank you, Keith, good morning, ladies and gentlemen and thank you for joining us this morning to discuss Consolidated Water third quarter operating results. David Sasnett our Executive VP and Chief Financial Officer is also on the call this morning from our Florida office. Here in Cayman over the weekend we had a bit of excitement with the passage of Hurricane Paloma, but fortunately the storm did only minor damage on Grand Cayman and we did not experience any service interrupts on our retail water system which I'm sure made the tourists who were stuck on the island during the storm much more comfortable. Our operations staff executed our storm prep plans without a hitch, as usual, and we are back to normal operations as of 7:00 a.m. on Saturday morning. With the 2008 hurricane season coming to an end on November 30, I'm hopeful that this will be the last storm prep drill that we have to go through for this year.

I'd like to start out by talking about our operating activities for the quarter and then David will provide some additional financial information to you. Management is generally pleased with the operating results of the Company's core operations, with the notable exception being a loss we recorded from our equity investment and our BVI affiliate because of our affiliate's dispute the BVI government over owner ship of the Baughers's Bay plant. Investors should note that exclusion of the BVI affiliated impact to our equity earnings and profit-sharing income excluding that, the Company's consolidated operations recorded a 42% increase in net income compared to the third quarter of 2007. And we believe that this demonstrates continued strong demand for our product in these uncertain economic times. Our retail revenues in the Cayman Islands were essentially flat in the third quarter compared to the same quarter last year on sales by volume that increased by about 3% over the same quarter last year. However, we were able to improve retail operating income by more than $400,000 for the quarter by increasing gross margin and reducing SG&A costs. Work continues on our new 1MGD desalination plant at our Governors Harbor sight in Grand Cayman and we expect this plant to be on line to replace containerize production units in the second quarter of next year, which has historically been one of our best retail quarters because of drier weather and higher numbers of tourist visitors. Bulk segment revenues grew by approximately 32% in the third quarter when compared to 2007, because of higher energy pass-through charges in our Cayman and Bahamas bulk operations, which resulted from steep rises in diesel fuel and electricity costs over the past year, and also because they were higher because of higher sales revenues on our Blue Hills plant in the Bahamas, which we are now able to bill to our customer after sign-off earlier this year on completion of the non-revenue water project in the Bahamas.

We have reported previously that we have taken steps to reduce operating costs in our Bahamas operations through a comprehensive capital improvement program which includes the installation of new feed water wells and piping at our Windsor plant and replacement of RO membrane on two out of four production units at that same plant. I'm pleased to say that we completed these capital works in September and preliminary data indicates that we have improved energy efficiencies at the plant to the extent we anticipated. We also implemented a membrane cleaning and rotation program at our Blue Hill plant in the Bahamas during this past quarter, which has improved energy efficiency at that plant. We expect to maintain these efficiency improvements which should translate into better financial performance of our Bulk segment going forward. However, we need to operate the plant with these improvements for a period of time to ensure that they can be maintained. Our Cayman Bulk operations continue to perform well with all three plants operating within design performance parameters. We're presently involved in two bulk segment projects in the Cayman Islands, the first one being the construction of the new 2.4 MGD desalination plant near Northside Grand Cayman for the water authority. We expect this plant to be completed in early 2009, after which we will operate the plant for 10 years under a design/build operate transfer type agreement. We also were recently awarded a contract extension for the Red Gate plant in Grand Cayman which was constructed by us in 1989 for the water authority. The existing operating agreement was set to expire later this month but the terms and conditions -- the terms -- under the terms of the extension we will retrofit the Red Gate plant with new state-of-the-art equipment and continue to operate the plant for an additional seven-year period.

Operating income from our services segment in the third quarter was consistent with the prior year on higher revenues resulting from the winding down of Phase I of the Bermuda project and ramping up of construction of the new 2.4 MGD plant I just spoke about for the water authority. We are also constructing Phase II of the Bermuda project, which increases the production capacity of that plant to 1.2 MGD and this work is expected to be completed early next year. Phase I of the Bermuda plant is now being commissioned, but had been delayed because of electrical power supply issues that were outside of our project scope. The plant is operating satisfactorily and our engineering team has been working through the construction punch list and commissioning procedures for about two weeks.

Now, I'll turn the call over to David to talk about a couple of key matters affecting our financial statements.

Thanks, Rick. I'll not go through the press release information or 10-Q information here on the call, anyone listening to the call probably has those documents in front of them. I do want to talk briefly about our financial position and cash flow. We continue to enhance our financial position, we grew assets from the end of the year by another $5 million or so and we continue to pay down debt. If you look at our working capital ratio, remains very consistent from year-end at $45.9 million. If you look at our cash flows there might be, the first glance some concern because, for the nine months ended September 30, 2008, we were generated only little over $3 million in cash flows from operating activities as opposed to $8.3 million for the last year. But this is strictly due to the issue that we have regarding the collection of the receivable in the Bahamas from the Water and Sewage Corporation. That receivable amount to $8.9 million as of September 30, and as we disclosed in our Q, the non-payment really relates to issues within the Water and Sewage Corporation itself and does not relate to any kind of a dispute with our Bahamian subsidiary. We have had discussion with the Bahamas Government and in October they sent a $2 million lump sum payment and we believe that they are continuing in good faith to attempt to bring us current on our receivables and we would expect sometime in the next six months to be fully current with that receivable.

In today's tough credit times we really believe we have sufficient liquidity for our business. We're very stable from a cash flow perspective, and so that's something that I guess gives Rick and I comfort given how difficult it these days to raise cash if you need it. With that I want to turn things back over to Rick and talk about some other key issues affecting our numbers for this quarter.

Thanks, David. We would like to give you a brief update on the BVI issue, and I will talk about various projects that are under way. We reported previously that the BVI Government had invited our affiliate to meet to discuss the possibility of supplying water from the Baughers's Bay plant to the east and Long Look area of Tortola and our affiliate has subsequently met several times over the past three months with the Government Cabinet Committee to negotiate the terms and conditions of such a supply agreement. We continue to be closely involved with our BVI partners and the government negotiations, and would like to think that the parties might be able to come to some acceptable ash arrangement to commence supply of water to this very water-short area of Tortola.

We are also presently awaiting a decision from the eastern Caribbean Court of Appeals, which will determine whether the Baughers Bay plant disputes are resolved through arbitration or whether they remain in the Courts. And our affiliates' attorney has advised us that we might get a decision on the appeal within the next four weeks. Our affiliate continues to operate the Baughers Bay plant on a shoestring budget until the disputes are resolved, and the government has been making intermittent payments that have been enough so far to keep the operations going. However, we are concerned about the condition of the Baughers Bay plant because our affiliate has been forced to defer maintenance and key capital equipment purchases because of severe funding constraints and we're unsure how much longer the plant will be able to reliably produce its rated production capacity. And David is going to talk a bit more about the financial implications of the BVI issue on our statements.

Well, if you've read our filings there are several moving pieces relating to the evaluation of our investment in OC-BVI. The first and foremost is the receivables issue, our affiliates billed approximately $12.1 million gross to date which has not been paid. On our financial statements we have elected to adopt the cash basis of accounting and we have adjusted our affiliates results to an effect not recognized any revenues that aren't received in cash. So by adjusting those OC-BVI books we have $2.6 million in accounts receivable on their books of which our Company would have have 43% interest. So OC-BVI filed a claim against the government for approximately $7.6 million back in May and that number has grown. The courts have not looked at this claim, yet. There is some -- our understanding is that they may fold the resolution of this claim into the case regarding the ownership of the Baughers Bay plant. But obviously the resolution of this claim would have a tremendous impact on our financial statements to the extent the government was required to pay at least $2.6 million in outstanding receivables that would have no impact on the amounts we reflected to date. If for some reason the Court ruled that the government did not own any more money OC-BVI would have to write off a portion of $2.6 million. There is an upside here, though, to the extent the Courts ruled OC-BVI was due more than $2.6 million that we have reflected for them in our books, perhaps up to $12 million gain, that would be additional revenues and profits for them.

We are in discussions, we are, our affiliate are in discussions with the BVI Government on the ownership of the Baughers Bay plant. But this, to the certain extent will be affected by the negotiations on the Bar Bay plant. Our affiliates had discussions with the government. I don't know if we can -- we've had some progress made. I don't know if we've reached the point of if there is anything we can say there is any resolution. Our affiliate has been talking to the government for some time now, and from a accounting perspective, if the Baughers Bay plant negotiations do not result in a new contract for OC-BVI, this would have implications for the Bar Bay plant. In our accounting treatment we assumed certain probabilities related to the successful resolution of the negotiations on the Baughers Bay plant and possibility that OC-BVI could reach an agreement out of Court with the government. If OC-BVI is unable to reach an agreement on the Baughers Bays plant, we feel here at management that we would have to lower the probabilities that an agreement can be reached on the Baughers Bay plant and OC-BVI interest in the Bar Bay plant could only be resolved through litigation. So as I said there are a number of moving pieces here. The next time we report numbers will be in March and by that time there should be movement on all of these issues and possibly we may be required to record some impairment loss for OC-BVI, and we have disclosed this fact in our 10-Q. With that I'll turn it back over to Rick and talk about some of the opportunities we have in the marketplace for us.

Thanks, David. I'll just mention that negotiations continue with the Government, of the Turks and Caicos Islands for retail water franchise for five islands in the Turks and Caicos group. However, you may have heard that the Turks and Caicos Islands were severely impacted by Hurricane Ike in September and the government has been focussed on recovery efforts for many weeks after that, which have unfortunately delayed our franchise negotiations. Shortly after the storm Consolidated Water sent three senior technicians to Grand Turk, which is one of the hardest hit islands in the group to assist with restoration of water supply to that island. Our relief efforts were very successfully and we were warmly received by the Turks and Caicos government. We're back at the negotiating table with the management contingent from Consolidated Water visiting the islands a little more than a week ago to begin working out the details of the franchise arrangement, and we're hopeful that we would be able to sign the franchise agreement and commence construction of this project early next year. Trinidad continues to be a very hot market for sea water desalination with bids being sought for a 10 MGD government owned refinery project and 20 MGD municipal projects on Trinidad and its sister island to Tobago. The refinery project which we bid earlier this summer is likely to go to rebid later this year using much tighter specifications and bid documents. Apparently they got quite a spread of pricing for this, which was bid on very basic specifications, so they have decided that they would like to open the project up for bid again. There are a number of firms from around the world interested in these projects. I think it was 12 or 14 firms that expressed interest in the municipal projects and I'm sure that the bidding will be extremely competitive. I'd like to open up the call now for questions. Keith.

(OPERATOR INSTRUCTIONS). First question comes from Ryan Conner from Boenning & Scattergood.

Good morning, Greg, David.

Hey, Ryan, how are you doing?

I'm pretty good, thanks. I wonder if you could spend a few minutes talking about the credit environment and what impact you think that may have, if any, on the level of requisition and bidding activity in your target areas in the short-term. Specifically, are there any projects, that you're aware of, that you know will be postponed or delayed because of the issues in the capital markets? And then I guess more generally, do you anticipate that the availability of capital or lack thereof will have any impact on, the pipeline of new business opportunities the Company is going to see in the next six, 12 or 18 months?

I'll just say something briefly and then let David maybe talk a bit more about it. But at the present time, I mean, for the projects that we have under way, as David mentioned, we don't require any additional capital to complete these. So we would not be going to the credit markets. Sizes of -- size of project that we typically deal with, we think that we can still raise required capital, the 30 to $40 million project range through equity and credit. Talking to the bankers in the region, I mean the Caribbean banks do not have the types of problems that banks are having in other parts of the world. They didn't have exposure to some of these bad assets and most of them are continuing business as usual as far as I can see. We haven't had an opportunity to really go to -- to a bank to try to raise money in this market, so that's about all I can tell you at this point. We're optimistic, we think we can raise the money but we haven't had that tested at this point.

Okay. Okay. And then I wondered if you could just back on the BVI issue and just more from an accounting perspective, I guess, David, can you talk about the thought process behind the cash accounting treatment for OC-BVI? I mean, obviously, you weren't collecting, and so, therefore, the accrual method was painting too rosy a picture at one point in time. But one could also argue unless you plan to operate the facility without compensation indefinitely, the cash method kind of paints too negative a picture in that it's showing a big loss and sort of obfuscating the positive results from the rest of the company. So I'd just be interested in our rationale going behind that cash method and whether that was driven by an internal decision or whether that was auditors that, you know, that had forced that, and what your perspective would be on how reflective that cash accounting treatment of OC-BVI is of the Company's consolidated earnings power overall.

Well, the accounting rules are very clear on this, Ryan , at least those promulgated by the SEC. As we disclosed from our Q, there are issues regarding revenue recognition because when the customer must have a willingness to pay. Obviously, while we think the BVI Government has the ability to pay OC-BVI they clearly have demonstrated willingness not to pay them. If we had allowed our financial statements to continue to reflect revenue recognition under full accrual basis then right now we would have a huge amount of an investment in OC-BVI with a possibility that the courts could come back and say, well, we have ruled that the government really has an equity interest in the plant, therefore, you're not entitled -- you being OC-BVI -- you're not entitled to full recognition of revenues and OC-BVI is not going to receive payment on all of those. From an accounting perspective our Company would recognize revenue and income from this affiliate and then have to turn around and book for a very large loss. Accounting principles are by nature conservative and they're structured so that it's better to recognize a loss now than income in the future, then to recognize a lot income now than have to recognize a loss in the future. While it seems punitive to adopt the cash basis, I think it is the most appropriate methodology here. If you wanted to look at our financial statements you could say there is some upside here, what is the likelihood the Court will decide that the OC-BVI is not entitled to any payment on these receivables. It is a nature of conservatism and policies and general are conservative. Those adopted by the SEC.

Just as a follow-up to that, I guess what I'm getting at, even if one would have to assume that the worst case scenario that you walk away from BVI completely and, therefore, it's showing ultimately no revenue and no costs and it's basically a -- becomes a zero versus the current negative number. I mean--what is sort of the worst case scenario if in terms you didn't get the resolution you wanted, would the facility sort of go back to them and then you just walk away? Or is there sort of a cost--

The worst case scenario is, if our affiliate was not able to negotiate a contract with Baughers Bay, that plant will be marked down to salvage value. Whatever loss occurred on that plant, we, being Consolidated Water, would recognize 43% of it. (Inaudible) and I guess the receivable would be written off also. The biggest impact would be $15 million worth of investment on our balance sheet would be written off and that would be a non-cash write-off directly against equity and there would be no more money going out of our Company to help fund those operations. But essentially the losses we're showing would disappear so you can take that line completely off of our balance sheet. There is one we're recognizing revenue from OC-BVI for our management contract with them, because we have received enough in cash payments from OC-BVI to not have to put that contract on the cash basis. And there are -- there's a small amount of revenues that OC-BVI is earning from its contract, (inaudible) the government has continued to pay OC-BVI for those monies. But essentially you're looking at a $15 million write-off, non-cash write-off.

Okay. That's helpful. Thanks for your time today, guys.

No problem, Ryan.

Thank you. And the next question comes from Heike Doerr at Janney Montgomery Scott.

Good morning, just to follow up on Ryan's line of questioning, so am I to understand that for OC-BVI the way we should be thinking about it looking into 2009 is that we'll continue to see these losses because you'll be continuing to do the cash accrual accounting?

Up until a point where there is some type of resolution on the ownership of the plants. And some type of resolution on the negotiations for contract for the Bar Bay plant. I mean, once all that happens, it sort of changes the dynamics here. Because even though we're not recognizing revenues on a cash basis we have not recognized any type of impairment loss on our investment in OC-BVI because of the relative probabilities assigned to the obtaining a new contract for Baughers Bay and obtaining a contract for Bar Bay. This will wind down as the Court starts to look at the claims and the appeal and determines whether OC-BVI goes to arbitration or the Courts for their dispute over Baughers Bay. So all of this -- accounting for all of this could come to some type of resolution as early as the fourth quarter this year, at May.

They -- can they update that filing to account a more current gross receivable, or will they need to file a full separate--

I think they would file another claim for the receivable that occurred since the previous claim was filed.

Okay. Switching gears for a moment , Rick, I know you mentioned some efforts are being made to improve the operating efficiencies at Windsor and Blue Hills. How should we look at where those gross margins end up. I know a few years back they were in the mid-20's. Do we get there again?

If you look at the numbers we put in the Q we actually identify the amounts that we can't pass through in energy costs to the customer, so that would give you a good idea in dollar terms of how it would impact our profitability, and of course if diesel fuel continues to decline in price, I mean, that would also reduce those costs that we can not pass through. So I would just look at the Q and you can pull the numbers right out of that.

Okay. I'm sorry, David, did I interrupt you?

No, I was just going to say, we don't project margins, so I think Rick gave you all the information we can give you on that particular point.

One last quick topic. I know that for some of the business there is a tourism economy angle. Can you make any comments as to what you're seeing as we start to ramp up with the cold weather here on the East Coast?

I don't have any information, yet, on that. I mean, usually mid-December is when we start seeing the tourists come down to Grand Cayman, and that's really the market that sales are impacted by tourist numbers, our retail markets. So when you get into January, February, certainly by the March call, there should be some more information on that. But there is nothing out there at this point. We know that it -- there has been a couple of hurricanes that came close to the island over the last few months, and we believe that's somewhat impacted tourism. But we think that the weather really is the key factor that impacts our sales here in Grand Cayman. And it's been quite rainy here for the last two months, really. So we think that that's going to have some impact on our fourth quarter earnings.

Thanks, that's been helpful.

Yes.

Thank you. And the next question comes from Neil [Berlin] of PFW Water Fund.

I have a couple of simple questions which makes me the simpleton in this one. What happens, you are talking about marking the valuation of the plants down to zero because of the contest of paying, and so forth. But who actually owns the plants, and what happens if it's now valued at zero and they get shut down?

Well, the plants are actually owned by OC-BVI, which is our affiliate. We own 43% of the results of that subsidiary. So the write-down will occur on their books but we have a $15 million investment in that affiliate on our balance sheet.

But it is a financial write-down. Does it alter the operations or does it imply that the plant is shut down and no water is produced?

No, if the plants were awarded to the government, the plants would still continue to produce water , but we wouldn't receive revenues from the plant.

The Baughers Bay plant is the one that could go to the government depending upon the outcome of the Court case. The Bar Bay plant would be retained by our affiliate. Over, we would have to examine the value of that, probably mark it down to salvage value, because if we didn't get a contract to produce water from that plant, then obviously there would be no revenues.

Right.

We just have to salvage what equipment we could get out of it.

Okay. One other question. What is really driving growth or the lack of growth at the present time? Is it a byproduct now of the economy being slow, and tourism being slow, and development being slow? Or are there other issues that aren't really obvious?

Well, if you're talking about retail, one of the things that we're aware of that's impacted sales this year in Grand Cayman, is, this -- if you look at the nine-month figures, the Ritz Carlton hotel, irrigation water, which has dropped significantly in demand compared to last, compared to 2007, the first nine months of 2007, and also demand from a large commercial customer here in Grand Cayman, that has affected the first nine months, I suppose people are just being more conservative with water usage generally, because prices have gone up. The energy pass-through charges have gone up. So I think people are just more aware that it is an expensive commodity. But, that's basically the factors that we've identified that affect Cayman. Now, if you're looking at our bulk segment, those are all large take or pay contracts. So you're not going to see growth in those numbers except when, as we noted energy cost pass-through increase, where there is specific changes in the contracts. I hope that answered your question there, Neil.

But realistically, and to look at it from a very big picture, from way up high, looking down, this is a question of timing. It's not a question of whether or not the output of all of this gets purchased eventually and people use more water, and so forth. It's all really related to where we are at the present time and what's going on in the economies.

Yes, I suppose so. Not necessarily the economies, but , just real-world situations. I mean, sometimes you have big customers that go away for a while and hopefully they will come back. But, we haven't really identified the economic downturn as a major factor so far in our retail sales here in Grand Cayman.

I mean, if you look at the big -- the big picture, people use water. In our marketplace the populations are going to continue to grow, their projected population increases throughout the Caribbean. The impact on our business is accelerated when the economies are good and these governments are funding development, which brings tourists to the islands. But the bottom line is, as the population grows, the demand for water will then increase, and hopefully we'll be the ones there to provide it to those local populations.

Okay. Thank you very much.

Yes .

Thank you. And once again, if you have additional question from Ryan Connors from Boenning & Scattergood.

You mentioned in your new business opportunities outlook, Trinidad and Tobago contract and you mentioned a dozen or more competitors will bid on that and it would be competitive -- very competitive, I'm just wondering is that a trend that you're seeing generally, things getting more competitive and is that a concern for you in terms of margins, and so forth? Or is that sort of just a function of the magnitude of that particular contract that it attracted so many -- so much interest?

Yes, I think it's just the scale of -- of these project, Ryan. I mean, these are -- I think they have announced 320 MGD plant and five MGD plant on Tobago. Plus [PetroTrend] which is the petroleum refinery there is going to bid again for a 10 MGD plant. So these are very large projects for the Caribbean, and I think that's really what is attracting the number of competitors from around the world. We haven't seen that sort of interest on smaller projects, yet.

Okay. Thanks again.

Sure.

Thank you . Once again, please press star and then one if you would like to ask a question. We do have a question from George [Whiteside] from SWS Financial Services.

Good morning. Back to the BVI situation situation. Maybe I've missed it, but what has been the reaction of your partners in that entity?

Well, I mentioned that we're working closely with them to get the matter, or to get the issues resolved there. Certainly there is concern -- they are concerned as we are about the ongoing business there, and resolving these issues. So I mean essentially we're working very closely and in tune to work through these problems.

Well, it sounds as though perhaps they were blind-sided, even though they're part of the system, and entrenched in governmental activities, is that a accurate perception?

Well, there was a government change last August which, they got a new cabinet there, a new premier, and we're sure politics have affected the situation to some extent. It's a very small place, everybody knows each other there, the population is less than 40,000. So the politics play a big part in life there. So I wouldn't say they were blind-sided, but, certainly the elections last year had some effect on the situation.

I can certainly understand that having sailed in the Bahamas and watched things develop over there at times. And so what I hear you saying, which is very logical, that being embedded in that situation, the tendency is to sort of adopt the Jamaican attitude, no problem, mom. And not to be forceful about digging out information, before we build a second plant, how about making sure we're all on the same page. But I understand the political change that occurred. Any comment?

No, I don't have anything to say on that.

And I wonder if, in other settings you may not encounter a similar situation where, the citizens of that particular nation, are pretty well going to stick together and that you are viewed as, perhaps, an outside influence.

Well, to be honest, we try to counteract that sort of perception in the way we do business. Excuse me. By working with local partners , wherever we go, and developing business relationships with local businesses. I don't think that it was necessarily Consolidated Water that came up on the wrong side of the fence, so to speak, after the elections. I think, there were other factors that were involved, and we don't -- we don't -- certainly don't pick political sides when we do business, and in the various countries we try to be very neutral and governments change pretty regularly in the Caribbean, and sometimes that's good for us, sometimes it's bad, or it takes some time to recover. So I think in BVI it is just one of those situations where it will take some time to recover. And we really want to preserve, if possible, the business relationship there in BVI. I mean, we're trying to work through this cordially and we would like to continue to operate in that country in the future after we get this resolved, and perhaps, prevent our reputation in the region from being tarnished by this. So we're being careful about what we do, we're taking our time. Unfortunately it's taking quite a bit of time, almost two years now, to work through these issues. But we think in the end, it's the best thing for our business, the way that we're conducting ourselves.

Sounds like a very rational approach and everything that I've heard and seen from you, I see nothing that would indicate that you have taken advantage of the situation, or acted at all inappropriately, or disloyal to the local environment that you've operated in. I don't see that you share any blame, quote, unquote, in terms of the way that situation has developed.

Well, thank you, I appreciate that.

Thank you .

We show no further questions at this time. I would like to turn the conference back over to management for any closing remarks.

Yes, thanks, Keith. Again, I'd just like to thank everybody for joining us on the call. We hope that you found the information useful and look forward to speaking with you, again, early next year. Thank you.

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