Dycom Industries Inc (DY) 2002 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to Dycom earnings call. At this time, all participant lines are in listen-only mode. Later, there will be questions and answers, instructions will be given at that time. If you should require assistance from an operator, press zero and the star. The call is being recorded. I would now like to turn the conference over to president and CEO, Mr. Steven Nielsen. Go ahead, sir.

Thank you, Rita. Good morning, everyone. I would like to thank you for attending our fourth quarter fiscal 2002 Dycom conference call. With me we have in attendance Marc Tiller, our general counselor, Richard Dunn, our Chief Financial Officer and Tim Estes our Chief Operating Officer. I will turn the call over to Marc Tiller. Marc.

Thanks, Steve. Statements made during the course of this conference call that state the company or management's intentions, hopes, beliefs, expectations, projections or predictions in the future are forward-looking statements. Forward-looking statements are subject to risks and uncertainties that may cause actual results in the future to differ materially from the results projected or implied in any forward-looking statements. Such risks and uncertainties include, business and economic conditions in the telecommunications industry affecting our customers, continued deterioration in the customers' financial condition, the adequacy of our reserve and allowances for accounts, whether the carrying value of our assets may be impaired, the anticipated outcome of contingent events, including litigation, liquidity needs and availability of financing and other risks detailed in our filings with the Securities and Exchange Commission, including our report on form 10-K for the year ended July 28th, 2001 and our reports on form 10-Q for the quarters ended October 27th, 2001, January 26th, 2002, and April 27th, 2002. You can obtain copies of our SEC filings by contacting us or the SEC. Steve.

Thanks, Marc. Yesterday we issued a press release announcing our fourth quarter 2002 results. Please note for that fiscal 2002 we adopted SFAS 142, which eliminated goodwill amortization. Consequently, in order to assure accurate comparison, all references to prior periods are pro forma as if we had not amortized goodwill. During the quarter, we reported charges reflecting increase in our allowance for doubtful accounts and write-down of goodwill and other intangible assets. These charges resulted from customer difficulties and have been excluded from the comparisons I will provide.

For the quarter ending July 27th, 2002, contract revenues were $148.2 million, versus $194.7 million in the year ago period, decrease of 44%. Net income for the period was $3 million, versus $15.3 million, decrease of 80%. Diluted earnings per share of 6 cents versus 35 cents, a decrease of 83%. Backlog at the end of the fourth quarter of fiscal '02 was $795 million, versus $1 billion 30 million at the end of the third quarter, a sequential decrease of $235 million. Of this backlog, approximately $390 million is expected to be completed in the next 12 months. Fourth quarter results were significantly impacted by challenges within the telecommunications industry. During the quarter, we announced on May 20th, that we had been notified by a major cable customer, Adelphia Communications, to suspend work on substantially all of our projects. Adelphia represented 18% of revenue during our third quarter, ending April 27th. June 25th, Adelphia and its subsidiaries, filed voluntary petitions under chapter 11 of the U.S. Bankruptcy Code. On July 27th, 2002, we had outstanding receivables of $40.4 million. We have filed liens on various properties to secure substantially all of the receivables and have undertaken analysis of the value of the receivables. Based on our analysis to date, we increased allowance for doubtful accounts by $18.5 million, or $10.9 million after-tax for these receivables.

On July 21st, Worldcom, Inc. and its subsidiaries filed voluntary petition for reorganization under chapter 11 of the U.S. Bankruptcy Code. On July 27th, 2002, we had outstanding pre-petition receivables from Worldcom of $2 million. At this time, we have determined that the likelihood of payment is low and accordingly have fully reserved this receivable. This reserve resulted in after-tax expense of $1.2 million. Adelphia was a significant customer of certain reporting units of Argus. Under SFAS 142, Adelphia (inaudible) triggered an interim review of goodwill and other intangible assets reported in connection with the Argus acquisition. We engaged a third-party specialist to assist in the evaluation process of the review. On completion of the review, we reported impairment charge of $45.3 million or 45.2 million after of had tax. In addition, during our annual SFAS 142 evaluation, we reviewed our Point to Point goodwill, as well. We engaged a third-party specialist in the evaluation portion of the review. Upon completion of the review, we reported impairment charge of $2-and-a-half million charge, of which 2-and-a-half million after-tax.

Backlog was significantly impacted during the third quarter of reserve of ongoing discussions with a specific customer. Although we are providing satisfactory levels of service to the customer, we have been unable to agree with the customer on an economic model that works with us. Consequently, after the quarter, we provided notice of our intention to terminate the contract no later than March 1, 2003. We are working together with the customer to develop a solution and if an agreeable solution is found, will continue to provide services. We felt it important to recognize the present status of the contract through reduction of our backlog.

We think these significant negative developments, our core business continued to perform well given the tough economic environment. Gross margin remained in excess of 42%. Liquidity remained ample with over $115 million in cash, even though we paid our outstanding bank debt of $6.7 million during the quarter.

We continue to(inaudible) demonstrated our business after Adelphia's abrupt suspension of work during the quarter. We continue to experience the effects of slow overall economy, reduced capital expenditures by telephone companies, the impact of Adelphia's withdrawal from the cable construction market place, offset in part by increasing return of AT and T broadband to the cable construction market place. These factors (inaudible) through the end of calendar 2002 and may potentially result in improving environment thereafter.

First, our overall economic activity is reported to be growing (inaudible) significant enough to encourage customers to reevaluate capital budgets. For telephone companies, capital expenditures by customers continue at stagnant levels and were reduced mid-year by the most financially stable companies. Approved spending was executed with less urgency and absent more noticeable (inaudible) regulatory release resulting in (inaudible) investments (inaudible) revenue. For cable operator, sales to AT and T broadband increased to over 17 million during the quarter, sequential increase of $6 million for the third quarter. This is the first time that AT and T broadband has represented more than 10% of our revenues since fourth quarter of fiscal 2000. A contingency to remove from the consummation of AT and T's merger with Comcast, we expect AT and T spending to continue to increase. In addition, we have begun several Adelphia post-petitions and (inaudible) court approval of restart of a portion of the projects.

It is too early to forecast the magnitude of the post-petition spending, it may be significant in certain markets. Finally, resolution of the specific customer issue no later than March 1, 2003, will likely improve our financial performance during calendar 2003. On balance, these factors point to continued soft environment for calendar 2002, with potential growth catalysts during 2003. To manage our near-term challenges we continue several initiatives to offset operating margins.

First, we will maintain reduced level of capital expenditures going forward, continued investment in information technology, which will have direct impact on our cost, and maintenance replacement of equipment. For fiscal 2003, capital expenditures net of disposals are expected to be less than $15 million for the year. (inaudible) significantly reduced investment with have little or no impact on operational expenses. Secondly, particularly in our telephone operations, we continue to sell assets, even those assets which retain significant use for us. Thirdly, we will continue significant reductions in general and administrative expenses to better align administrative cost with near-term and anticipated activity. We have recently decided to eliminate three reporting units. We sincerely regret the adjustment to headcount we are made and will continue to make, they are necessary to maintain substantial strength and better position Dycom for the current market.

While (inaudible) is down sequentially from the third quarter, we have maintained disciplined approach to this business, resulting in (inaudible). Our industry during periods of reduced demand, it is extremely important to avoid prolonging reduced margin through aggressively booking low margin backlog. We booked several new upgrade projects and notable contract expansion. From Qwest, we received anextension of master contract for upstate Oregon. During the quarter we were awarded contracts for cable system upgrades from AT and T broadband, from Palo Alto, California, Fort Lauderdale, Florida, Springfield, Massachusetts, and Eugene, Oregon. From Comcast, a contract from Delaware and Cable Vision a contract from New York.

As Dycom responded to a challenging environment demonstrated our continued stability. First and foremost, we maintain strong customer relationships throughout our [PHAO-RBG]ets, in particular growth with AT and T broadband was encouraging. Comcast remained ample. And the (inaudible) working capital position despite significant accounts receivable write-downs due to bankruptcies of Worldcom and Adelphia. Our banking environment remains tight. We remain focused on time tested cost control, productivity and treatment as we continually evaluate appropriate staffing for capital equipment staffing.

In these difficult economic times, we believe Dycom's superior financial health will increasingly allow us to differentiate ourselves from our competitors in the eyes of our customers, employers, employees and suppliers. Dycom's financial strength and is key to our belief that when growth opportunities return to the industry, we will be the first in the best position to take profitable advantage of that. We believe this advantage relative to other industry participants (inaudible) everyday.

After weighing all of these factors we have discussed today, we have updated our forecast as follows. For the first quarter of fiscal 2003, we anticipate earnings per share of 6 to 10 cents on revenue of $135 to $150 million. This outlook anticipates a continued economy in the U.S., post-petition projects for Adelphia and continued return to the market place by AT and T broadband and continued soft demand from telephone customers. Looking beyond the first quarter, we are not currently in a position to provide specific guidance for the second quarter of fiscal 2003, as macro economic conditions, capital market volatility and principle plans generally remain uncertain in the remaining term have reduced visibility. That being said, we have three observations as to what factors will be important during the next 12 months.

For telephone companies it appears that certain capital spending run rates will remain lackluster without a significant increase in overall economic growth for regulatory release. Eventually to the extent we form activity, are maintained in the near-term, we believe catalysts will ensure a more sustained be rebound in the future, with necessary expenditures can no longer be delayed. For cable operators, final resolution of the AT and T Comcast merger. AT and T or eventual owners continue to have a significant backlog of plans to upgrade. Finally, recent developments continue to indicate substantial competitive capacity may be less able to respond to increased future customer demand due to capital constraints. This trend may accelerate as larger more significant competitors have recently experienced difficulties. I will turn the call over to Dick Dunn, our CFO. Dick.

Thanks, Steve. Before I begin with my review, let me remind everyone we have adopted SFAS 142, effective for the first quarter of fiscal 2002. In accordance with the provision of the statement, we have not reported amortization charge for goodwill during the current year. In order to get a true apples to apples comparison, I will provide you with prior period information on pro forma basis, as if we had adopted SFAS 142 on last year's fiscal. During the current quarter, we reported net tax increase after tax increase in our allowance for Adelphia account of $12.1 million and after-tax charge of $47.8 million related to write-down of goodwill (inaudible).

These charges resulted in (inaudible). Cumulative affect of these items on income after-tax charge of 59.9 million. On EPS basis, cumulative effect for the quarter and the year were $1.25 and $1.33 respectively. Discussions will eliminate impact of these charges. The results of year-end July 27th, including after-tax (inaudible) of goodwill of (inaudible) were $1.96 per share. This goodwill impair cemetery cumulative effect of adopting accounting standard 142 and required thereby the first quarter will (inaudible). I will eliminate this charge.

With that in mind, I will give my overview of the (inaudible) performance, starting with the income statement. Contract revenue for the current quarter were 148.2 million, down 23.9% from last year's 194.7 million. Revenues per quarter on same-store basis were down 38.7%. Total revenue for the year ending July 27th, declined 24.5% to 624 million, versus fiscal year 2001 of 826.7 million. Organic revenue for the year was down 41.2%. For the quarter, top five customers accounted for 59.8% of total revenue versus 56.2% for the prior year. For the year ended July 27th, sales from the stock buyback were 53.3%, versus 52.1% from the prior year. The top five customers and respective (inaudible) for the first quarter fiscal 2002, BellSouth 17.1%, AT and T 11.5%, Charter Communications 8.7%. DIRECTV, 7.4% and Adelphia, 7.1%. Top five customers for fourth quarter of 2001 were Comcast 19.2%, BellSouth 18.6%, Qwest 6.6%, Charter Communications, 6.4% and Adelphia 5.4%.

Net income for the fourth quarter was 30 million versus 15.3 million for fiscal 2001, versus increase of 80.4%. Net income for the year ending July 27th, decreased (inaudible) to 23.8 million versus last year's 66.5 million. Diluted earnings per for the quarter was 6 cents per share, 82.9% decrease in last year's 35 cent per share results. EPS of 65.8% and 53 cents per share versus last year's (inaudible) of (inaudible). Operating margins for fourth quarter (inaudible) 897 basis points, coming in at 3.49% versus last year's 12.46%. This decrease is due to 400 million basis point increase in cost and revenue, 256 in general administrative cost and 294 basis point increase in depreciation and amortization.

Operating margins for the year declined 657 basis points coming in at (inaudible)%, (inaudible). This decrease is due to 233 basis point increase in cost in revenue, 208 basis point increase in general and admin costs and 216 basis point increase in depreciation and amortization. The effective tax rate for the quarter and year-end period was 47.4% and 43.2% respectively, versus 41.2 and 40.4% respectively for the prior year period. This increase was attributable to the mix of income among ourselves and impact it had on state tax rate and effect of certain scheduled activities.

Net income for the quarter and year-end were 590,000 6.6 million respectively, versus 964,000 and 4.5 million from the prior year. The interest income is generated to investment business and units (inaudible). Cash and cash equivalence at the end of the quarter was 116 million, down 19.3 million from the third quarter. The primary use of net cash were impairment of 6.7 million of Com debt and capex net of disposables of $4.1 million. During the quarter, net receivables decreased from 118 million to 86.4 million. This decrease was due to increase in (inaudible) and reclassification of certain receivables to other assets. DSOs at the understand of the quarter excluding revenue of associated with receivables were 67.(inaudible) decrease of 20.8 million. Net revenue balances in the quarter from 35.2 million to 32.3 million in the DSO of 20.2 days, increase of 2.9 days from Q4 figures of 17.4 days. On cumulative basis, (inaudible) increased from 76.4 million to 77.2 million, increase of 1 day. On July 27th, the accrual for (inaudible) 19.3 million from 18.7 million. Steve.

Rita, now, we will open the call for questions.

Thank you. Ladies and gentlemen, if you wish to ask a question, press the 1 on your touchtone phone. If using a speakerphone, please pick up the handset before pressing the numbers. You may remove from the queue by pressing the pound key. Steven Fox with Merrill Lynch. Go ahead.

Good morning, Steve. Can you talk a little bit about what prompted you to terminate the contract with what sounds like a major customer? Sounds like you don't want to get into specifics, if you can identify which type of market it is coming from? How tough was the pricing any color you can add?

Yeah, we have been in discussions with DIRECTV, that is the customer that we were eluding to. We are providing service in a good service. They wanted me to make sure I disclosed that. They are a developing company and they are developing their business model for providing our services and we just haven't been able to make the economics work out.

And so, we just felt like it had reached a point where we needed to get the economics to work for both of us or we were not adding value by maintaining that business.

You have had issues with this type of discussion with them in the past, is that right?

We have had discussions in the past we have talked about on prior calls.

Couple of questions. On receivables, is Adelphia fully - how would you characterize what is left in tomorrows of receivables that you reported after the charge with Adelphia?

On a nominal basis, we have 40.4 basis in receivables and the reserve was about 18 and a half. So, you can do the math and see what is left. You know, we did the best we could to take a look at the issues surrounding the bankruptcy, issues surrounding the liens and what our best estimate given current information was of what the - similarly secured assets were valued right now.

You think there is a decent shot you will see some of the balance of that or just you will have to wait and see?

We reserved it at what we think the current carrying value should be on the balance sheet.

If you look at receivables excluding Adelphia, is there any way to sort of - I think you mentioned DSOs were excluding all of that, is that what you -

Yeah, that was the 57 - let me make sure, 57.2, which removed the receivables and also removed revenue in the quarter, Steve, to make sure it was a pure number.

Have you aged the receivables? Do you feel like that is a comfortable number? We will not see another write-down given the competitive environment remains like it is?

I think we received receivables we feel have issues at the time and based our, assessment of the recovery on current market conditions and we - the DSO is consistent with what we have had.

55 to 60 days for accounts receivable DSO is where it has been literally for years.

Great. Two final questions. The tax rate for this current fiscal year, what type of number should we be using and SG and A in dollars, what type of number are you shooting for on quarterly basis?

On the tax numbers, we have been impacted as our income has come down. We have certain somewhat fixed unfavorable schedule amps with a larger impact as income comes down. That has been a factor. I think 47 is probably a high number. I would hope we can drop that back down to normalized 43 to 44 rate, based on our historical track record with that.

On G and A side, G and A for the quarter came down from about 20 million to about $17 million. Run rate for the quarter. We hit some - going forward, we will be addressing the G and A level to correspond with the revenue levels. In that quarter, there were reversals of bonuses as a consequence of performance not being what we anticipated. There were reversals to the expense in the quarter.

I think 17 to 18 million, Steve, is a reasonable number. But, if the business if we downsize the business, you know, we will take out more G and A.

Okay. Based on what you are saying, you are in bottoming. Those are the numbers you use?

Yeah. You know, we also did as I talked about, we closed couple of small business units and are going to restructure a third. We are doing that in part because of G and A reasons. So, I mean, we are working at it everyday.

Thanks for the detail.

(inaudible) Joe Glato with Chapman Company.

Could you give a brief overview of where you stand on some of your larger MSAs or renewals coming up? What is going on in that area?

We talked about renewal with upstate Oregon in my comments. We don't have anything significant that is coming up really in the next 6 months to a year.

Okay.

Pretty stable right now.

Are you doing post-petition work for any of the other carriers or anything that are in bankruptcy?

We are doing a small amount of post-petition work for Worldcom, very small amount. As we talked about on the call, there is potentially opportunity with Adelphia. We are doing post-petition work on projects that were underway when they filed for bankruptcy. They are going through an evaluation process right now to come up with an upgrade program for 2003 and '04. Depending on the financing and the position that the bankruptcy court takes, in some markets they may return with significant spending.

Thank you.

Next question Alex Ridgefield with Friedman Billings.

Steve, can you quantify the backlog by DIRECTV?

About 96 million and the Adelphia backlog that we had talked about, somewhat on our last call, was about 50 million. So, substantially - unfortunately, Alex, this release is essentially about Worldcom and Adelphia.

Great.

Richard Diamond Inwood Capital.

Could you take us through the bunny trail of how Adelphia plays out? I saw on Friday, the court approved the 1 billion dollars remaining of the 1.5 billion in DP financing and get a sense how much of that $1.5 billion will be used for maintenance and upgrade and could find its way to contractors such as Dycom?

We will do the best we can. It is hard to quantify it. Adelphia's regions have been in a month-long budgeting process to allocate capital for upgrade projects. That process is close to completion, but not complete. So, it would not be fair for me to kind of speculate, except to say that just anecdotal evidence it is several hundred million dollars spent on upgrades, or perhaps more, the question is what is the relative mix of material and equipment to labor services because they do have significant inventories that exist that were built up prior to their bankruptcy filing. So, you know, normal rules of thumb say roughly 50% of any approved spending would go to labor.

In this case, it may be higher. Based on the fact they have essentially zero cost basis inventory for equipment and material right now, my expectation is - and I am sure why the financing was provided, in certain markets if they complete upgrades, which would be substantial opportunities, that will in turn increase the value of the subscribers and only improve the value of the collateral that the creditors have.

So, there is every reason to think they will spend it once they get it sorted out.

My second question is that the major r-box are apparently spending at 80% of DNA. Is there any way they could further cut their maintenance without endangering their systems or do we feel that we are kind of bumping along the bottom here?

When you are bumping along the bottom, every bump has a down side to it. I mean, it is hard for us to say, obviously if we take longer term perspective, you would not think they can't at least spend capex to cover the depreciation expense. But, Our sense at the moment is that they are not provisioning any capacity in anticipation of the demands and only filling demand as it is evident today. I really think that there are some significant regulatory issues that they feel need to be addressed, particularly regarding kind of their high bandwilth deployment. Without more regulatory clarity at this point, we are hard pressed to say they will spend the money.

Thank you very much.

Line of Eric Warren with Costman Brothers.

Good morning. Just the question on some of the balance sheet issues. The other assets increase, could you go into detail on that?

Sure. Basically other assets increased because we moved receivable balances down into other assets because we feel they are not appropriately current assets at this time. Deferred taxes went up simply because while we will get a deduction for assuming we collect the assets at that level and don't do better than we set them up for, we won't receive that tax benefit. We will see the one we dispose of the receivables.

Okay. Could you review the economic model you have with DIRECTV now and I guess what you guys are talk being?

The DIRECTV model says in areas that are what they call DMAs, marketing areas we serve, in about 10 states with 15% of territory, that we provide the vast majority of labor services. We handle the service calls. We do installations. There is element of the business where we sell dish services or dish installations and provide the labor. We are really the maintenance arm of the company. The model has settled in, although there are refinements everybody is working on to make it better, the issue for us is really just simple one of compensation.

And service levels, as they rate us, we are where we need to be. We could be better, but it is not a service issue for us, it is just an economic decision about how much they are willing to pay and what you view as representatives and shareholders should expect us to earn.

Okay. What kind of work are you seeing from AT and T?

Upgrade work. You know, as they publicly announced, they are going to spend the money. Comcast indicated on their last conference call, they are looking forward to continuing that program once the merger is consummated. They are back in the market place.

Last question. Is Adelphia systems, do you have an indication of cash flow from systems? Are they using cash in the financing or systems spending off cash?

It is hard for us to analyze that. We are not on the cable side. We are doing both petition work. Not nearly what we did before, but more than euros. They are spending money.

Thank you.

Mark Hughes from Trust.

Thank you. How was the pricing on the Qwest extension in Oregon and when you face the rollovers or renewals of the MSAs what do you think the pricing environment will be like?

Tough negotiations. They took care of the interest of their shareholders. We have been there a long time. We are very efficient and think it was acceptable or we wouldn't have signed it.

Uh-huh. Okay. Are you seeing any MSAs coming on the market from one of your competitors who suggested smaller contractors are not able to handle the business? Is that getting any kind of business, rebids that you have a opportunity to take?

There are certainly those opportunities, Mark. We see alll of those opportunities also. We are being very cautious as we talked about and have talked about about locking in backlog at the bottom of the cycle with part 4 margins. We see potential for the cycle to turn next year. We don't want to prolong the current environment more than is reasonable.

Any more detail on AT and T, you say you were over 10%, how do you line up from a sitting standpoint between your traditional businesses with the cities they are getting geared up in? Can you give more detail?

We are in substantially all of the markets. There may be one or two we are not. Obviously, Mark, that was a key ingredient of the Argus acquisition was their presence overlap wide ours and gave us excellent coverage.

Right. Okay. Thank you.

Allen Metronny, (inaudible) capital.

What was your revenue to DIRECTV this past year?

I think it was about $35 to $40 million. And we will get you the number in a second.

Okay. If you can check the profitability on EBITDA basis to DIRECTV?

Pardon me?

I'm assuming higher margins than the other contracts you worked on?

No, I assume because of the situation we are in, it had lower margins than average and lower than acceptable.

Is that something that shifted - there was an issue a couple of quarters ago relating to the selling of dishes. Did it start out profitable and come down?

Somewhat volatile, Allen. But, we addressed all the obvious issues we could to minimize the volatility and improve performance. At this point, we don't have a model that works. It was about 38.8 million.

Okay. In your expectations for the coming year for the next quarter, you are including - are you including revenue from DIRECTV in the coming quarter?

Yeah. We are still working through the issues. We have good faith with DIRECTV. There is a meeting set up. So, it is in that forecast and the contract has a six month note of provision. So, as we mentioned in our call - or in our comments, we will certainly fulfill that agreement under - as long as they would like us to. We are hopeful that we will get it resolved. But given we had given official notice, we didn't think it was right to keep in backlog.

How much - you talked about right sizing capital spending and talking about selling equipment. How much equipment do you think you will sell this coming year and can you put a ballpark on revenue number - excuse me, sort of profit number you can get from that?

Tim Estes is here and your estimate is 2 million?

Yes.

Okay. Lastly, can you characterize the competitive environment? I think someone eluded to MasTec said July was bad, but things are getting better in August and toward the end of the year. You seem to be cautious towards the second half of this year and more positive into next year. Can you speak to that a little bit?

I think it boils down to continued improvement at AT and T. As they get closer to consummating with Comcast, I mean there is historical precedent there might be a hiccup there. We don't anticipate one and nobody indicated that. The level of the financing that will support the Adelphia post-petition work and then just in our view, and I talked to at least one of the larger business units this morning. We are just having a little difficulty seeing catalysts for the telephone company side of our business to accelerate from where it is now through the end of the year. It just doesn't seem to be there.

Given the reduction in guidance in July by the r-box, that would seem to be their view, also.

Okay. Did you plan on buying more stock back and where are you?

Do you have the numbers?

We have not purchased shares in the quarter. We have remained authorization of approximately $24 million.

We run the model everyday. And reserve the capability to do that given the cash that we have.

Okay. Thank you very much.

(inaudible) catman Company.

Can you give a breakdown of the fourth quarter revenue by the business areas?

Yeah. Joe, for the - on the telecom, we had 43.2%, cable T.V., 44.2, utility locating 10.7, and electrical 2%.

Okay. Thank you.

If you have additional questions, please queue up by pressing 1 now. One moment, please.

All right, Rita. There being no further questions, we appreciate everybody's time. We know this is somewhat of a dead week on the Street. We appreciate your attention and wish we had had better results. But, we are working hard to make them better everyday. Thank you.

Ladies and gentlemen, that does conclude your teleconference for today. Thank you for your participation. You may now disconnect.