ENGlobal Corp (ENG) 2007 Q4 法說會逐字稿

Greetings, and welcome to the ENGlobal Corporation year end 2007 earnings conference call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (OPERATOR INSTRUCTIONS) As a reminder this conference is being recorded. It is now my pleasure to introduce your host, Natalie Hairston, Vice President Investor Relations and chief governance officer. Thank you, Ms. Hairston. You may now begin.

Thank you, operator. Good morning, everyone, and thank you for joining us today. With me on the call are Bill Coskey, Chairman and CEO of ENGlobal Corporation and Bob Raiford, Chief Financial Officer and Treasurer. In a moment I will turn the call over to Bill Coskey who will highlight management's perspective on our financial results for the year ended December 31, 2007 and review other financial points of interest for the fourth quarter. Then both Bill and Bob will be available to answer any questions.

Before I begin, I would like to remind everyone that some of the information discussed on this call will contain forward-looking statements that involve risks and uncertainties. These statements are based on current expectations. Actual results may differ materially from those set forth in such statements. Additional information concerning factors that may cause actual results to differ is contained in the risk factor section of our previously filed form 10 K. and 10-Q. All of those filings are available at the Investor Relations page of ENGlobal.com. Our filings with the SEC are also available on the SEC website at SEC.gov.

In addition, non-GAAP measures may be referenced during this conference call. EBITDA is provided for information purposes only and is not a measure of financial performance under GAAP. It is frequently used as one of the basis for comparing businesses in our industry. However, our measure may not be comparable to similarly [compiled] measures of other companies and it does not represent and should not be considered as an alternative to net income, operating income or other measure for determining operating performance or liquidity calculated in accordance with GAAP.

Per usual, the Q&A, please limit yourself to one question and then one follow-up as necessary. Now we would like to introduce our Chairman and Chief Executive Officer, Mr. Bill Coskey. Go ahead, Bill.

Thank you, Natalie. Good morning. I appreciate the opportunity this morning to give you my perspective of ENGlobal, both the status of our current business and also progress on several subjects that we have been focused on over the last year. More importantly I will be spending some time this morning discussing our Company's vision for the future.

By most any measure 2007 was a record year for our Company, and everyone at ENGlobal can take pride in the fact that our business produced record net income, $0.45 per diluted share for the full-year. In terms of recent history and when it is looked at on a full-year basis this annual earnings result has to be considered significant. Mainly because it represents a big turnaround from our loss of $0.13 for the full year 2006. But in addition, the $0.45 of earnings per share reported today exceeds by a wide margin our previous high water earnings mark, which was $0.19 per diluted share in 2005.

However, our enthusiasm over results for the full year has been tempered by a seasonal downturn during the fourth quarter and also effects of winding down and demobilizing certain projects late in the year. The biggest shortfall in the fourth quarter came from our construction group which failed to replace revenues from one project and dropped roughly $2.5 million of gross margin going from the third to the fourth quarter. Adding to all this was a net effect of several fourth quarter financial items, and these will be discussed in more detail later.

The major focus of our Company has been to improve in the area of collection and management of our working capital. We have recently seen some success in this area. As of 12-31-07 our days sales outstanding or DSO was 61 days, down from a high of 70 to 71 days at the end of the first and second quarters 2007, and 66 days at the end of the third quarter. Our goal for DSOs continues to be in the mid '50s, which we hope to accomplish during 2008.

I am proud to announce that our operations provided $7.7 million in cash during the fourth quarter and the outstanding balance under our $50 million working line of credit was reduced from $36 million at the end of the third quarter to $28 million at year end. These are positive trends that we hope to continue. As to the fourth quarter specific financial items, first on the positive side we have been able to reach settlements with both of our clients on the 2006 fixed-price projects and these settlements together resulted in a positive adjustment of $2 million in the fourth quarter.

Our client on the larger project is currently in the process of commissioning and starting up that facility and the most important thing here to note is that we have little fixed-price EPC work in our backlog. The biggest part of our EPC work is now being done on a cost-plus basis.

The second item I would like to discuss relates to a $3.2 million fourth quarter reserve taken against a note receivable from a Louisiana ethanol claim. As you might remember we suspended work on this project early in the fourth quarter of last year and ENGlobal is owed approximately $14.6 million from this client. The decision was made at the end of the third quarter to convert the related accounts receivable into a note, and in the fourth quarter we have elected to write the value of this note down to $9.2 million, which is the estimated value that could be expected in the event of a forced liquidation such as a foreclosure.

But based on my recent discussions with the owner and their lendor, I am optimistic that all parties will be able to work together to avoid a forced liquidation. A more orderly sale process through an investment banker should be preferable for all parties and would provide ENGlobal with a better recovery in future months than what would be provided via a foreclosure. Obviously the Company has been and will continue to work very hard to see that we are paid everything we are owed.

The third financial item relates to a $432,000 non-cash charge we took in the fourth quarter for impairment of goodwill in our automation group. The associated goodwill is related to the fabrication business unit of our automation group, what we used to refer to as our systems segment, which mainly fabricated remote instrument and closures and process analyzer systems in a shop environment.

Major action we have taken here is to bring back a successful operations manager and based on recent financial trends is resulting cost reductions and streamlining of this unit appear to be paying off. Pro forma of these three items just discussed our earnings for 2007 would have been $0.49 per share on a fully diluted basis. In addition, if you add back our non-cash stock compensation expense for the year along with these three items on a pro forma basis our 2007 earnings would have been $0.52 per share fully diluted.

Going into 2008 there are many reasons to be encouraged. Our backlog is up approximately 51% year-over-year to $289 million at year end. Most all of our businesses are currently hiring in order to staff recently awarded work. I am also encouraged by the number, variety and overall potential of the new client relationships that have recently been established. Both our business development staff and operations people are doing a great job of working together to sell ENGlobal's wide range of capabilities.

It sounds like a minor point, but to me it is a really major one. It is important for you to know that we have entered into what I would call a new era for ENGlobal's branding strategy. Many of you remember us when we were called by 8 or 10 different business names. Then in 2002 we adopted Global but still sold our services as many different companies. Now in our third generation, so to speak, we will market our services as one name and one company, ENGlobal. Under this one name we have now organized as four businesses or groups; these being engineering, construction, automation and land.

Over the years we at ENGlobal have put together an impressive list of capabilities that span much of the projects life cycle. The mission is for all of our employees and for all of our clients to understand and be able to utilize ENGlobal's full range of services. I believe that this new way of thinking about ourselves as one company is a big positive step in that direction. In addition, if you haven't seen our new website, at ENGlobal.com, please check it out. I think it does a much better job of explaining to investors all that we do and also this new way we are presenting our company.

As to our vision for the future, my rough expectation and goals for ENGlobal in 2008 is to increase our staff by approximately 8 to 10%, which is about what we did last year. We would expect to see our top line grow around 15% plus or minus. But the quality of the mix of revenues and earnings per share is what we are going to continue focusing on. Our expectation for improving margin and some overhead leverage should allow earnings to grow faster than our top line, hopefully about twice as fast over time.

We as a company need to do nothing else than to continue focusing on getting our operating margins to the 8% plus level in 2008. And if we can show some discipline and do that, then the results for the year will be very good.

In terms of external growth, ENGlobal over the last couple years has looked at several significant acquisition opportunities. One up to $150 million in enterprise value, and also a number of ones just a fraction of that size. For us I would categorize as a significant acquisition as those that exceed $30 million in enterprise value. At this time it is unlikely that we will pursue such a large acquisition simply because it wouldn't seem to make sense for the company to take on a large amount of debt together with the significant dilution to our stockholders that would likely be required to complete such a transaction.

However, we intend to continue pursuing smaller tuck-in acquisition opportunities that present good values, especially those that provide new capabilities that can be offered to our core energy-related clients or those that provide us a good start in new markets we would like to serve. We believe that a plan of continued organic growth together with selected smaller acquisitions will provide a good total and balanced growth opportunity for our stockholders without the risk that would come with a much larger deal.

We have and will, however, consider a large strategic merger as long as this type of transaction doesn't result in a lot of debt for the resulting company. That there are efficiencies to be gained that can be identified in advance; and as long as the strategic reasons for doing the combination are easy for everyone to understand. As I will soon reach my one-year anniversary as the company's CEO I would certainly like to thank all of our investors on this call for their confidence. With this milestone it would be wrong of me not also to thank our valued clients for their support and also your business. It has been my pleasure to meet with many of you over this last year to learn about your operations and also to hear some valuable feedback.

Finally, I sincerely thank everyone at our company for being part of what we are doing and also to stress that each of you play a big part in making ENGlobal successful. 2008 is going to be another great year, and together working now under one banner we are going to achieve even greater things. Thank you for this time this morning. I will now turn the call over to the operator.

(OPERATOR INSTRUCTIONS) Richard Wesolowski, Sidoti & Co.

Thanks a lot. Good morning. Bill can you elaborate a little bit about some of the comments you made at the top of the prepared remarks about the seasonal downturn in business? And also $2.5 million drop from gross profit from the construction segment in 4Q?

What happened to a company like ours that bills hours is in the fourth quarter people obviously have holiday benefits. People utilize the vacation they have accrued during the year. And so the fourth quarter we just normally bill less hours as a company. And I think that was added to that in effect was the fact that this year we had a project rolling off, which was the Louisiana ethanol project. And it was a large project especially for our construction group. And we failed to replace that work. We probably, my guess is we held some people on overhead and we dropped some gross margin. I think I said $2.5 million in gross margin from one quarter to the next, which was really the most significant dynamic thing that happened one quarter going to the next.

So you say you kept extra people on overhead. That is overhead reflected in the cost of sales and not in the SG&A?

Not in the SG&A, it would be variable overhead that is in the direct cost.

Right, and along the same lines, the SG&A you guys showed a lot better leverage here in the December quarter then you had in September. I am just curious how those costs can fluctuate so widely from one period to the next. Can you help me understand that?

Bob, can you help me with that one?

Some of it I guess in total, Rich, the write-down of the note as a bad debt expense, but also the write-down on the goodwill impairment went to amortization expense, bodes down in SG&A. We have I guess made some considerations going forward trying to flatten out our SG&A with our budgeting process going forward so you won't see material variances in our SG&A numbers. And everything that is associated with our reimbursable work is going to be up in our variable charges.

Right, I wasn't curious why it was so high, I was curious why it was so low because if you strip those costs out you look at it through the year, you had basically an average of $7.5 million in every quarter but September which was $8.6 million, a good deal higher. I was just curious what exactly can prompt that kind of volatility in that line item.

With SG&A going up like that?

Just in September and then again coming down in December.

It would have to be the primarily our salaries is the most prominent thing in our SG&A number unless we had an adjustment. And I don't have that number. I will have to get that for you. And the extreme volatility will be in that.

Okay, and lastly, the cash flow was a big -- (multiple speakers)

I would add to that, that we hope to maintain a target of $30 million of SG&A going into this year, as well. We've kind of stuck by that number and hope to be around there somewhere for the full-year.

That's a big help. Lastly on the cash flow you had a big rebound there. I know you have been making strides at getting payments from the accounts that are way overdue but I have to assume that the current operations generated cash, as well. Is that correct?

Yes.

Okay, thank you.

Craig Bell, SMH Capital.

Good morning. Just wanted to touch on your collection there first. Obviously you had the good improvement there and I know you've been working on the past due one, is this something that we should think of that you can now sustain going forward? You've had some difficulties over the past year or longer with collections but you feel like you've really turned the corner on that now?

I think the biggest culture -- and I will let Bob speak as well -- but the biggest cultural change we made is to get operations involved in the collections process. In talking with our corresponding project managers at our client company and I believe we've made a lot of efforts to improve the cycle of our billings, getting our invoices out the door. And so I think those two things is primarily -- operations being actively involved in collections and improving our billing cycle has been the two major things. Bob, would you like to add to that?

And I would agree. And I think Bill's focus on that with the operations, and they have really taken the charge to jump in and help that effort and Bill mentioned the turnaround in getting our billings out the door as quickly as possible. And also in following up with clients in making sure we get paid promptly. And I would say that I would think we would be able to continue the, I guess the effort we've maintained in the fourth quarter into the future quarters. And we still as Bill said, we look to improve our -- bring our DSOs down. We're still shooting for a target in the mid '50s.

Okay, and Bill, on this ethanol project last quarter you were talking about the possibility of the owner getting new financing on it and then proceeding ahead with it and now it sounds like it is more trying to get a sale of the project. Just wondering if there is any larger concerns out there beyond this project; is this just specific to this one project, one owner, or do you see any broader concerns out there?

We haven't seen any broader concerns, but we mostly operate with -- do business with large companies, and so it is not a concern. I think a small part of our business is from developers. It's probably a growing part of our business, the developer business, but it is still small.

On the ethanol project they are continuing their financing efforts, and they are continuing to seek out equity partners. It's just that we are losing patience, and we feel like the best result for all parties would be to go hire an investment banker and put a book together and go sell the plant. And we have a very specific timeframe for when that process has to be started. Otherwise our only alternative is to go into a foreclosure process, which we don't see would be beneficial to any of the parties.

And you can proceed with that because of the lien you have on it, correct?

Yes, we have several legal opinions from Louisiana Council, and we know exactly where we stand from a legal standpoint and we could proceed on those, yet.

And then back to your construction business how is that looking in terms of your backlog going forward? Is there a significant amount there? Do you think you are going to sort of get back on track in the coming quarters here?

Actually it turns out if you look at the way our backlog went from last year to this year gain, I think I forget the exact numbers but maybe $100 million of gain in backlog or something like that. About half of that came from our engineering group and half of that came from our construction group. So the construction group has done a good job of adding backlog. My guess is they continue to be a little, and from what I hear anecdotally I think their business continued to be a little soft in January but now I understand in the last couple months they are putting people out into the field and gotten everybody busy again. So that is my understanding about our construction business.

And then just real quickly last one on the tax rate in the quarter was quite a bit lower than it has been; was that in any way related to some of the charges there or how should we think about that tax rate going forward?

I think it is going to probably continue at that level. Hopefully we can continue to keep it under the numbers starting with a 4, and a lot of that had to do with some tax planning that we implemented. And we think that is going to continue. We expect it to be under 40%.

Okay, so as we look at fourth quarter numbers then, does that sort of imply you had over accrued earlier in the year for that on the rates?

Right and some of that had to do with the write-down of the note and the losses we took there.

Okay, great. Thank you.

Megan Bissell, FIG Partners.

Wanted to just check on something. You in the past few 10earnings releases you guys have pointed out your biweekly billable hours, but that was omitted from this press release. What was that number in the fourth quarter?

I don't think we have that for the fourth quarter -- we will put it in our 10-K -- I am sorry that it was omitted.

Okay.

Oversight on our part.

I guess then looking at the employees that you guys had at the end of the fourth quarter, 24 43, that is down about 65 people sequentially from the third quarter, and honestly is below second quarter's level, too. Was there anything in particular that happened in the fourth quarter? Can you just kind of talk about that?

I think it was probably kind of destaffing in our construction group primarily again as a result of this one project that we demobilized and our failure to be able to replace that work in a timely manner. It took us a few months to replace that work.

So you probably destaffed right at the end of the quarter, then, since you pointed to the fact that they were still on board as being part of what drove gross profit down?

That was going on right at the end of the third quarter and the first of the fourth quarter. And I just had some -- I have some fiscal year -- the full-year numbers on billable hours. During 2007 Global averaged 189,700 billable hours for a two-week period, a 35% increase when compared to the 140,000 billable hours in 2006.

Okay.

We've reached a high during the year of 212,300 in a two-week period, which I think happened in early November. So our 2006 high was 162,700. That is the data points I have on our billable hours.

Okay.

(multiple speakers) I guess at the end of the third quarter when we suspended the work on that ethanol project there is some residual work that has to be done; we can't just pull the plug so there is some carryover. So from a timing standpoint of the numbers of employee headcount probably kind of created a problem because it just didn't happen clean cut off at the end of the third quarter. So we had the demobilization that we had to experience on that project, keep our numbers up for a week or two and then we drop off considerably.

But it was the fact that you guys still had them on the payroll and that was the overhead that drove the gross margin down in the fourth quarter. But the fact that the employee count is for the end of the quarter, you had already let the people go by the time you recorded that number?

That's correct.

Okay, a couple of housekeeping items. What did you guys have for DD&A for the quarter?

I'm sorry.

For depreciation, DD&A?

I don't have that here in front of me.

Or the annual number is fine. I can back into it.

Hang on just a minute.

And while you're looking for that I welcome the increased transparency in the different divisions and the gross profit levels, the operating income levels in those divisions. Are we going to be getting a quarterly breakouts so that we can kind of look at trends as far as being able to forecast our '08 quarters?

Yes. We will have those in our K.

That will be in the K?

Yes. Depreciation was right at a little less than $5 million; depreciation and amortization.

For the year?

Yes.

And in that number is going to be the $432,000 goodwill write-down?

That's correct.

Okay. All right. Thanks so much, guys.

J.D. Padgett, The Boston Company.

One, the 15% growth that you talked about in the script, is that I would take away it, organic target for '08?

Yes, that is what you should think about.

So a little bit better than I think you had been looking for in the past.

We've been saying 12.5, I guess we experienced -- tell you how I arrived at that number is that we had 20% growth for 2006 to 2007. We have a staff that roughly 75, 76% of that growth came organically. We increased our staff about 10%, so I put all that together and I say we should be about a 15% organic growth rate. Basically we have the staff like I talked about.

And then previous questioner was talking about the headcount; is that something that is built back up now? Because it sounds like you put on some additional jobs and are putting people back out in the field.

I think a fair statement is that we are in the process of building that up. I know that I've talked to all the operation managers and everybody I talk to is in the process of adding staff and hiring to staff up new work, so I think we are in that process right now.

How are you finding the hiring environment?

It is difficult as always; probably one of the biggest hurdles we jump everyday.

Nothing new though, right?

That is nothing new. It really hasn't changed. We have an excellent recruiting staff. We've put together -- that's something we had to do in the last couple years is really build a top notch recruiting staff as part of our business.

Can you just remind me as well the new revenue segment, what is in each one?

We have an engineering group, and the engineering folks provide work both in our offices and also [secund] personnel to our client locations or outsource personnel to our client locations.

And the old P&C is going to fall in there, right?

P&C?

Procurement and construction?

Yes, I would say so.

Okay.

We have a construction group, which is inspection activities, construction management, commissioning of plants, turnaround management -- really again we are not a construction company. Everything involved on a construction site doesn't involve construction contracting, along with inspection. We have an automation group that designs and programs and also fabricates control systems and process analyzer systems.

So that is some of the old systems business plus the (inaudible).

That's our old system segment plus some of the engineering group that we broke up.

Okay.

Our land group is a result of the acquisition we did in June of 2006, which is roughly 300 right-of-way agents that require right-of-way for pipelines and some cases power transmission lines.

Was that WR?

WRC, yes.

Okay, so that's the only thing that is in there?

That is correct. That's right.

And there was a -- what was the acquisition you did in Colorado?

That's it. That is what used to be called WRC in Broomfield, and we actually now renamed that legally to being Global Land Inc. We refer to it as our land and regulatory group.

Okay.

For short for this purpose we call it our land group.

Okay, thank you.

Tom Judson, Husic.

Could you just review again -- you talked about some acquisition opportunities, and I was kind of looking at a couple different things and I may have missed your conclusion there. You talked about a larger opportunity, 150 million enterprise value and I wasn't -- it wasn't clear. Is that off the table due to dilution issues or if you could just review the acquisition strategy again.

We looked at that situation. I really liked it. It was an excellent company. But to get there with them it would have required $100 million of debt and issuing lots of stock. And I just didn't feel like -- our board did not feel that was the right thing to do for our stockholders. So while it was a fine company that is off the table. But what is on the table for us is smaller tuck-in acquisitions, and we do those for a lot of different reasons. We might like to geographically expand around the country, into new markets. And really two things, geographical expansion around the country and then, which for us would be West Coast, Midwest, East Coast. And then also to add new capabilities, to find little specialties that we can cross sell to our existing clients. Those are the two reasons we do smaller acquisitions.

And again, what is the timeline on potentially going into foreclosure on these guys? You talked about the --.

I would be happy to say I've given them a deadline of April the 30th this year to have the sale process under way. And we are working with the bank and the owners to get that going. And I don't think we get to foreclosure. I think we are going to do this orderly process.

So again that means selling the plant and getting that process in place by April 30th, sell the -- upgrading the facility, that is all been put aside and now we're just going to try to sell the plant. Is that correct?

It is about 40, 45% complete. And so we would sell the uncompleted plant to someone probably in the ethanol business if he wants to complete it. We may or may not be involved in the completion of that project. I can't say at this point.

Another scenario, they might find an equity partner or financing in the interim, but we've just pretty much drawn a line in the sand as to how we're going to go with this thing.

Great. Thanks.

Richard Wesolowski, Sidoti & Co.

How much revenue did the ethanol contract contribute to 2007?

Bob, you're going to have to help me with that.

It is -- I will have to get you a number, Richard. It was in excess of 10 million, I think.

It was -- I have in my notes 15 to 20 through the third quarter. Is that too high, or does that sound like a right number?

It's probably in that neighborhood, and I can get you a number on that exactly.

Okay, so if you plan to grow 15% from 2007 to 2008 that really means that everything ex ethanol is growing at a 20, 22% type of rate. If that is indeed the case, why would you destaff at all and take the pains to rehire people in a tough labor market?

I think that's just the point. I don't think we did destaff to a large extent. I think some of the construction people we had on the site we did destaff the professional engineering folks; the design folks we did not. We reassigned them to other projects as we could. And that's the whole deal. We didn't want to lose those folks.

Okay, and that is why the margin was up. Okay, I understand. Aside from the reporting of the segments, what management changes have you made in connection with that move?

Other than our automation group, our system fabrication business where we brought in a prior manager there who's doing a great job for us, all the Presidents are still in place at the business units. (multiple speakers)

Okay, just looking in the releases it says I think the reporting in the management of these businesses -- I was making sure there wasn't any drastic changes to how the org chart looks.

No, the org chart looks exactly the same; it is more just our branding and presentation to the outside world.

Okay, great. Thank you.

[Chad Woodford], Paradigm Capital.

Could you guys comment a little bit on the process that you guys undertake to assess the credit worthiness of say clients or on a project by project basis?

Sure, we have a process that is in place to do both, review of risk and to assess the credit worthiness. And it is a joint effort between operations and business development and our financial group, our accounting group.

So does that involve say getting in if it is a smaller private company, getting inside and looking at their balance sheet and cash flows and kind of what these guys are capable of undertaking, and being familiar with covenants and all that kind of stuff?

(multiple speakers) yes.

In a lot of cases with the newer clients we will get a short cash -- in sort of a normal net 30, we may get a net 15 or a net 10 until we can build up some credit worthiness of the client. So we don't get overexposed but most of our clients in the past have been Fortune 500 companies, and (inaudible)

Thank you.

(OPERATOR INSTRUCTIONS) J.D. Padgett, The Boston Company.

Just one quick one with respect to the ethanol project where it wound down in Q3 but it sounds like you couldn't just pull the plug on it, you had to do some additional work in Q4. Why do that work if they are not paying you?

It costs money to demobilize a project. You just don't flip a switch and say we're done. It costs money to get people off the site and back home, wind things down in a fashion. And we expect that is part of the money we expect to be repaid from this client, and we (inaudible) them for that.

So it wasn't a matter of you doing more work for them. It just takes some expense to demobilize?

Yes, and they have been endorsed for that demobilization.

J.D., a lot of the costs that were incurred following the suspension of that were equipment costs that had come in, things that had been ordered and had not yet been delivered or things that had been ordered and were in kind of a pre manufacturing state that hadn't been completed. Just to cancel that out some of it is cancellation charges; most of it is more equipment related than labor related. I was going to say earlier someone called and asked about the project, the project even though it may be 40% complete from an equipment standpoint all the major tagged equipment is either on site or in associated laydown yards so the major equipment is there to complete the facility.

Thank you.

[Howard Hoost], private investor.

Good morning. I think it was last year you received a contract to do a feasibility study for a new refined or small refinery in North Dakota. I'm just wondering how this is coming and if it is a positive, with a go ahead with it. If you would expect to get a pretty good amount of the work with the engineering and building of this.

I'm sorry to say but that project isn't on my radar screen, unfortunately. So obviously it hasn't turned into a significant project for us. I do remember doing a study, and I think we completed that study, but I haven't heard any further action on that project so I have to assume from our standpoint there is no further work. It is probably not material to our business.

Okay, thank you.

I wish I could help you more there.

Thanks, Harold.

There are no further questions in queue at this time. I would like to turn the floor back over to management for closing comments.

Thank you, operator. Hello, again, everyone. I will be able to answer any follow-up questions this afternoon or you can always email me directly at IR at ENGlobal.com. Thank you for being on the call today, and thank you, as always, for your support of ENGlobal.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.