Federal Signal Corp (FSS) 2013 Q4 法說會逐字稿

Good day, and welcome to the Federal Signal Corporation fourth-quarter conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Brian Cooper, Senior Vice President and Chief Financial Officer. You may begin.

Good morning, and welcome to Federal Signal's fourth-quarter 2013 conference call. I'm Brian Cooper, the Company's Chief Financial Officer. Also on this call with me are Dennis Martin, President and Chief Executive Officer, and Jennifer Sherman, Chief Administrative Officer and General Counsel.

We will refer to some presentation slides today, as well as to the news release, which we issued this morning. The slides can be followed online by going to our website, federalsignal.com, clicking on the investor call icon, and selecting the webcast. We have also posted the slide presentation to our website.

Before we begin, I would like to remind you that some of our comments made today may contain forward-looking statements that are subject to the Safe Harbor language found in today's news release and in Federal Signal's filings with the Securities and Exchange Commission. These documents are available on our website.

Our presentation also contains some measures that are not in accordance with US generally accepted accounting principles. In our news release and filings, we reconcile these non-GAAP measures to GAAP measures. In addition, we will file our Form 10-K today.

I am going to start by addressing our financial results. I will, then, hand the call over to Dennis, who will provide his perspective on our performance and direction. And then Jennifer will wrap up our prepared comments with an update on our corporate initiatives.

Our fourth-quarter and full-year financial results are provided in today's news release, and I will focus on fourth-quarter highlights. As you can see, our Q4 results were excellent.

Orders were up 14% and backlog remains healthy. Gross profit increased 13% on $220 million of net sales, and operating income was up 65%. Consolidated operating margin reached a recent high of 9.8%, compared to 6% in last year's quarter.

We also continue to benefit from lower debt levels and our March 2013 refinancing. Interest expense was $1.1 million, about the same as in Q3, and significantly lower than the $5.7 million in Q4 a year ago. On the bottom line, our adjusted EPS from continuing operations is $0.34 per share, up [238%].

Looking at the income statement, we can see positive contributions across the board. Although sales were up only 1%, gross profit increased by 13% on a consolidated gross margin of 25.5% for the quarter, which compares to 22.8% in the prior year. The gross margin improvement is primarily due to favorable product mix, volume, and pricing impacts in our Environmental Solutions Group.

Selling, engineering, general, and administrative expenses were 8% lower than last year, reflecting lower corporate and product liability expenses. This improvement was partially offset by some restructuring that we did in the fourth quarter, primarily to target efficiencies in our Safety and Security Systems Group. As a result of all of the above, the Company's operating income jumped 65% to $21.5 million.

I have already mentioned our interest-expense reduction, and we also recorded an income-tax benefit of $6.5 million during the quarter. This is primarily due to a $6.7 million benefit from a tax-planning strategy, which was executed during the fourth quarter, and which preserved some valuable expiring tax credits. Although we excluded this item to determine adjusted earnings, it is a real and significant benefit created during the quarter that will reduce future tax payments.

I would also note that our underlying income tax expense remains low in Q4. Although financial book taxes will increase in 2014, cash taxes will remain unaffected, at a tax rate in the mid-teens. We have discussed on previous calls, that our change in valuation allowance for income taxes will result in a financial book effective tax rate of about 32% in 2014. Compared to the fourth quarter of last year, income from continuing operations is up more than 5 times to $26.7 million.

I am going to touch only briefly on our group results because Dennis will talk to the specifics for our businesses. You can see from our slide that orders during the quarter were up by more than 20% at both the Environmental Solutions and Fire Rescue Groups, and down slightly at the Safety and Security Systems Group.

ESG drove our consolidated top-line growth, with a 14% increase in net sales compared to last year's quarter. The sales growth was driven largely by increased street sweeper and sewer cleaner shipments, and our parts business was also up. Leveraging the higher sales and a more profitable mix, ESG operating income more than doubled to $17.6 million.

At SSG, operating income of $10 million was up 9%, in spite of relatively flat sales and the restructuring charges we already mentioned. SSG's operating margin of 15.2% improved significantly, compared with the early part of 2013.

Our Fire Rescue Group, which is our Bronto business, experienced some softness in the fourth quarter, with sales down 26%, resulting largely from lower deliveries of units in comparison to a strong prior-year fourth quarter. Operating income of $1.6 million was down from $4.5 million in the prior-year quarter. FRG's results from quarter to quarter can be volatile because it operates in a competitive global market and its earnings continue to be subject to variability based on the mix, profitability, and delivery timing of specific projects. For the full year, FRG produced modest net sales and operating income improvement.

Corporate operating expenses for the quarter were $7.7 million, down from $8.9 million in the prior year. This primarily reflects reduced professional services and legal fees. We continue to benefit from a low level of trial activity and the associated costs related to our defense of hearing loss litigation. Reflecting all of these factors, Q4 consolidated operating income was $21.5 million, up 65% against the prior-year quarter.

Our adjusted earnings for the fourth quarter were $0.37 per share, up 278%, compared to $0.09 per share in the fourth quarter last year. Adjustments were made to reported GAAP earnings this quarter to exclude restructuring charges, a $6.7 million tax planning benefit, and other special tax items. I would note, too, that our strong performance this quarter brings us to adjusted earnings per share of $0.96 per share for the year.

Turning to the balance sheet and cash flow, cash provided by continuing operations was a very strong $43 million during the quarter. This is a 41% improvement over the prior-year quarter. For the full year, cash provided by continuing operations was $80.3 million, up 63% versus the prior year. This significant improvement in cash provided by operations resulted from strong positive contributions from earnings as well as improvements in primary working capital.

With this strong cash flow, we were able to reduce our borrowings by more than $36 million during the quarter. Total debt of $92 million at the end of Q4, was down $66 million since the beginning of the year, and our leverage ratio dropped to 1.1 times adjusted EBITDA. Our strong operating performance and this low level of debt obviously give us good liquidity and flexibility. In addition, our lower leverage drives lower interest rates, which averaged about 3% during Q4.

Before handing off to Dennis, I would also like to more fully describe how our changing tax picture affects our 2014 earnings. Although we discussed it on previous calls, it will be a significant change in appearance, even though it has no impact on cash flow or the taxes we actually pay.

Stepping back to Q2 of 2013, we removed our valuation allowance that provided a reserve against our US tax assets. As a result, beginning in 2014, we expect to reflect a tax rate of approximately 32% in our financial book results. Our cash tax rate will remain in the low teens. However, the change makes year-over-year comparisons of GAAP results difficult. They will not be apples to apples.

One way to facilitate comparison is to normalize our 2013 results with the same 32% income tax rate that we expect to experience in 2014. That is what we have done on this slide and in the final table of the earnings news release.

For comparisons against 2014 results, we would normalize our 2013 earnings to $0.67 per share. This excludes restructuring and debt settlement charges, which we typically adjust, and applies the anticipated higher financial book tax rate. Jennifer will talk later about our outlook for 2014, and we believe that this $0.67 per share is the appropriate comparison.

That concludes my comments, so here's Dennis.

Thanks, Brian. Let me add my welcome to our call today.

As you have seen, we have had a very strong fourth quarter, and I would like to provide some additional color. As Brian mentioned, our results reflect excellent performance from the Environmental Systems and Safety and Security Systems Groups, as well as a soft quarter at the Fire Rescue Group.

Let me focus, first, on the Environmental Systems Group. Our 14% increase in sales was broad based, as all of the ESG businesses were up in Q4, compared to last year. The increase was supported by strong demand in the marketplace for our products.

On the municipal side, this includes street sweepers and sewer cleaners. While municipal spending remains well below its peak in some of our businesses, we saw steady increases for our sales of these products through the year.

On the industrial side, energy and utility markets drove demand for our hydro-excavation units, vacuum trucks, and waterblasting tools. Our backlog is near last year's level. As we discussed previously, we have been adding manufacturing capacity to help us capture additional opportunities, while managing our backlog through appropriate levels.

In a few minutes, Jennifer will talk a little more about our initiatives in that area. ESG's record operating margin of 14.6%, in Q4, reflects work done over the last few years on 80/20 initiatives and pricing, but more importantly reflects incremental capacity that we have created already with the operating leverage we have been able to generate from it.

The story for Safety and Security Systems Group, during the fourth quarter, is a little different. Top line was down about 2%, compared to last year's quarter. Municipal market demand for SSG police, fire, and emergency products has increased gradually, and we believe that we have regained market share with a broader range of products for a more price-conscious market. We see these businesses as likely to experience modest growth over the next few years.

Meanwhile, our systems businesses, which serve both government and industrial applications, generate larger orders that are less frequent and less predictable. Our global industrial customers have generated a large pipeline of future commercial projects that we supply. However, more of the projects than anticipated were deferred beyond 2013.

This is a target area of growth for Federal Signal, and we are investing in engineering and a sales refocus to capture more opportunities in 2014. In spite of the flat Q4 revenue performance, SSG generated operating income of $10 million and a very strong operating margin of 15.2%.

The operating margin will continue to fluctuate from quarter to quarter due to seasonality and the timing of the large orders. I would note that SSG has recovered from the inefficiencies associated with implementing our ERP system during May, and we continue to benefit from our 80/20 and restructuring initiatives there.

Moving to Fire Rescue Group, the fourth quarter disrupted an improving trend during 2013. FRG had been making steady improvements in its products and efficiencies, but it is subject to large order volatility and its markets did not cooperate in Q4.

We saw a return of opportunities in Europe, but they tend to carry lower margins. As a result, sales, operating income, and operating margins were all down. The Fire Rescue Group's soft performance is likely to extend into the first quarter of 2014 as well.

Looking into 2014, Q1 is typically our slowest quarter because of the seasonal factors. However, all three groups have started this year more slowly than we had anticipated, due in part, to adverse weather impacts. We believe Federal Signal is well positioned for profitable growth, and we look forward to a strong 2014.

I will turn the call over to Jennifer to talk about our outlook and initiatives that we are pursuing to create profitable growth. Jennifer?

Thank you, Dennis. As we enter 2014, we have established a number of interrelated initiatives that we will pursue to create profitable growth. Our first initiative is to stimulate organic growth in our businesses. This organic growth will be complemented by targeted acquisitions that either leverage our core competencies, or give us access to adjacent or international markets.

We have refocused our engineering teams around new product development and implemented processes to fast track introduction of new products. For example, we have introduced a new innovation center, located within our corporate headquarters, a cross-functional team of engineers and sales and marketing individuals, who work to develop new products and identify new end users in adjacent markets for our existing products.

We expect that over the long term, these growth initiatives will deliver the following. First, consistent high single-digit annual operating income and EPS growth. And second, sequential improvement in the share of revenue from new markets and products.

Our second initiative is our commitment to leverage our invested capital to support profitable growth. We are in the process of implementing capacity expansion, within our ESG businesses, to meet customer demand and support growth.

This includes the addition of new production lines at Vactor and Elgin and the expansion of our jetstream facility to supplement its capacity. We have implemented a flexible manufacturing model between our Elgin, Vactor, and FS Solutions facilities that allows us to optimize manufacturing activities among the various sites in order to meet specific customer demands.

At our SSG facility, through various lean initiatives, we have consolidated operations and created additional capacity to support our growth initiatives. We have made a number of investments across the Company, in new paint systems and other capital equipment, that we believe will further improve our efficiencies. We will track our progress by measuring return on invested capital, and we will tie incentive compensation to these measures.

A third belated, longer-term initiative that we introduced in 2013 is our focus on diversifying our customer base. Historically, roughly 60% or more of our revenue is derived from municipal markets. While municipalities will continue to be important customers, our organic and M&A growth initiatives will help us expand our industrial customer base.

Industrial markets offer promise for global growth opportunities, improved operating margins, and market diversification. During 2013, we saw higher growth in US industrial orders, versus municipal and government orders. Specifically, the Company's US, municipal, and governmental orders increased 2% from 2012, while the US industrial orders increased 9% from 2012.

A number of our new product development initiatives are focused on the commercial industrial markets. It is our goal, over the long term, to grow our industrial businesses to 60% of our revenue through both organic growth projects and targeted acquisitions.

Our fourth initiative is to continue to build on the success that we have achieved by improving manufacturing efficiencies and optimizing costs. We have made meaningful progress reducing the break-even levels in product costs in of our businesses and improving manufacturing efficiencies at the majority of our businesses. We started our 80/20 lean initiatives three years ago, and they have been a critical part of our margin improvement.

At the same time, we introduced operating margin target ranges for each of our businesses. The target for our ESG and FRG businesses was 10% to 12%. On a full-year basis, our ESG business returned a 12.3% operating margin, up from 9.8% in the prior year, and we are increasing the target operating margin for ESG to a range of 11% to 13%.

Our FRG and SSG operating margin targets remain unchanged. Our FRG operating margin was essentially flat on a year-over-year basis. There can be considerable variability in the FRG operating margin on a quarter-to-quarter basis. In addition to improving manufacturing efficiencies, meaningful improvement in FRG's margin is contingent upon recovery in the European markets and continued penetration of the Asian and North American markets.

Our SSG operating margin target range is 14% to 16%. For the full year, SSG operating margin was 10.9%, down from 11.6% in 2012. The reduction is primarily driven by costs and efficiencies associated with our mid-year ERP implementation and by higher restructuring charges. As Dennis mentioned, we were encouraged by the improvement in the fourth quarter SSG operating margin, which was the highest it has been since the fourth quarter of 2008.

As we continue with our 80/20 lean initiatives, eliminate low-value tasks and products, become more efficient and optimize costs, we believe we can achieve a consolidated 10% operating margin at Federal Signal over the next three years. Critical to the success of all these initiatives is the ability to attract and develop highly qualified people and align the organizational structure to support our growth objectives. We made a number of organizational changes in engineering and marketing at the senior level in 2013.

In addition, a number of new executives joined our Company, and we believe that we now have a stable and talented management team that is committed to driving our growth. During 2014, we will continue to focus on our renewed talent management and succession processes. In addition, we are strengthening our training commitment through internal and external education, mentoring, and coaching.

During 2014, we believe the improving municipal markets and continued strong demand for our industrial products, particularly our Vactor product lines, combined with the strategic initiatives that I previously outlined, positions the Company for strong, improved financial performance.

As Brian indicated, to facilitate comparisons to 2014, we have presented normalized earnings for 2013. We currently estimate earnings per share of at least $0.79 for 2014, which represents an 18% or more improvement over normalized earnings per share of $0.67 in 2013. We believe there are opportunities for further EPS growth, assuming favorable market conditions.

At this point, I will turn it over to Dennis for concluding remarks.

Thanks, Jennifer.

In closing, I want to emphasize that we are committed to growing in our markets and leveraging the profitability of our businesses. Our outstanding fourth quarter and annual results are a product of the hard work of our employees, the dedication of our distributors and our dealers, and the depth of our relationship with our customers.

With that, we are ready to open the phone line for any questions that you might have.

(Operator Instructions)

We will take our first question from Robert Kosowsky with Sidoti.

Good morning. How you guys doing?

Good morning, Rob.

I was just wondering if you could talk about the sustainability of margins that we saw in ESG and Safety? Because, they obviously were very strong in this quarter. And, I'm wondering if there were any transient factors that really bumped them up, or how we should think about your ability to hit these margins again in the next few quarters?

I think, as Jennifer pointed out, we're looking at a potential 18% increase in earnings on a normalized basis for 2014, which clearly takes that into account, Rob. There was nothing unusual in the quarter other than very strong business at ESG and improved business at SSG. SSG is the one business that will go up and down by quarter because of the large orders. But, I think in the overall, we think it will sustain, as I said, the 18% growth.

Okay. That's very helpful. Then also, on the ESG side, backlog is near last year's levels. Can you talk about how much backorder vacuum truck, I guess, orders you had last year, versus this year? I am just trying to get a better gauge of apples-to-apples backlog growth, teasing out the fact you did have some backorder last year at this time.

We don't generally break out the exact numbers of vacuum trucks, but I will just say that the level of sustaining -- the level of the marketplace is sustaining what it has for the last year, so it's very strong.

Okay. And, is that both on the -- I guess, within the municipal side, is it both on the vacuum truck and street sweeper side are both good?

We are seeing better activity on the vacuum truck side for sure, and the sweepers, actually both, so the answer is yes. They are both doing better. They are not, certainly, at the peak levels of four years ago, but they are both stronger, and we think that municipalities are starting to release more funds.

So far, this year, we haven't seen any street sweeper activity, because as you know, up here, it's ice. So hopefully, pretty soon, we will see the street sweeper activity pick up. It's good. It's pretty balanced.

You need salt spreaders right now.

Salt spreaders, right, there you go.

Finally, just a numbers question, how should we look at the deferred taxes line item on the cash flow statement for 2014?

It's really, obviously, a non-cash item. There's a lot of things that are flowing through that this year. So, the simple way to say it is, we're reflecting all those tax items in the earnings, and then we're removing them to get to the cash flow. A lot of the taxes, certainly all of the US taxes that we would be paying, will end up flowing through that in the future, as we -- through use of our tax assets.

Okay, but I guess looking forward to 2014, I'm just wondering how big of a source of cash the deferred tax line item is going to be? Or, if it will be a source of cash, just given your tax structure right now, which it seems like it would be?

I can't give you a number on that. If you are trying to calculate something, it's really the difference between our sort of mid-teens cash tax rate and the 32% rate we expect to see on the financial books.

Okay. That's helpful. Good luck.

Thanks. Appreciate it.

(Operator Instructions)

We will go next to Steve Barger with KeyBanc Capital Markets.

Hello, good morning, guys.

Good morning, Steve.

Following up on that margin question, can you talk about capacity utilization in ESG in the quarter and the year? And then, given where your backlog is, do you think you can start to run the plants at a level where you have more stable absorption across the year?

Yes. Yes, how's that? As we worked our way through last year, we actually buffered the manufacturing capacity output at Vactor by utilizing the Elgin facility and by utilizing the FS Solutions centers. It actually picked up 17% or 18% in capacity last year doing that.

During this year, Steve, starting April 1 or so, we're actually opening a brand-new production line, an additional production line at Vactor, to produce and reduce the backlog, get it down to more normal activity. And, we've actually cleared a production line space, additional production line space in Elgin to produce Vactor products, or additional Elgin products that we need. But, that will utilize the Elgin facility better.

So, we'll be running a lot more efficiently at Vactor, again, pretty close to capacity. We still have third-shift capacity. But, with the new line, and then Elgin will come up because it really has more capacity than we're utilizing.

As you talk to the dealers on the ESG side, what is the kind of tone as they put together their forecasts for 2014? Are they more optimistic at this point of the year than they were a year ago? Can you talk about how they see the market shaping up?

Yes, I think that our 18% normalized increase that we're projecting for 2014 really reflects the feedback we're getting from the dealers. As we said, the market has not returned completely on the municipal side, but they certainly feel good. They see the same horizon we do. They can see, pretty much, nine months to a year, and they feel pretty good about that.

The wild card this year is going to be the return of the sweeping season on the Elgin side because it has been -- this is March and we're still covered with snow on the ground, so it will be interesting to see how that comes back. That has actually been a slow start. We are seeing it both in the parts business and in the machine business.

But, I think they feel good. I think nobody sees a straight up line. I think they feel like the cities are doing better, and they are willing to spend some of the money, we're doing some things to attract that.

Got it. When you think about the guidance, just starting at about $0.79 and then moving back up into operating income, how much price is contemplated in the year-over-year growth that you see in operating income?

We don't break it out like that, but obviously, price is always part of our 80/20 and other initiatives in the businesses, so that is a piece of it. It varies by business. In some businesses, we have more opportunities to work on additional content or other ways to improve our margins.

Yes, I think mix is a bigger factor, Steve. I would say 1%, 1.5% perhaps in real price, and materials are holding, and in some case, dropping. So, I think we will have a net effect of 2 points, maybe, in price, that's overall. But really, the mix of the products makes such a big difference, especially at --

Got it. So, when you say in the release that upside could be driven by market conditions, is that really a function of getting the right mix? Or is it just seeing a broader-based improvement relative to what your current forecast looks at?

I think a little of both. But an example, if Bronto really starts to peak up, there could be more upside there. And then, certainly the mix.

Okay. I don't have my model in front of me, but just kind of doing the quick math, it looks like working cap, as a percentage of revenue, is about 18% right now. Is that a sustainable number, or do you think you can even improve that going forward, or however you measure working cap?

It's a sustainable number for sure. I think the challenge in bringing it down will be, we are trying to grow businesses, we don't want to take inventories down too low in the supply businesses, and things like that.

Inventory is the biggest driver for us. The other things tend to flow from that. That's really coming out of our 80/20 efforts, as much as anything, so it really comes back to the operations. That's a gradual, steady sort of process for us.

And we still see, Steve, pretty good opportunity with 80/20 and lean, and as Brian said, flow of inventories, at Bronto particularly this year, because they just completed their expansion and now can get back to normal production. The Elgin team has gone to one-piece flow and really are accelerating the reduction of excess inventories. SSG has had tremendous operating improvements in flow and the cell layouts.

And, the new product line, as a production line at Vactor, will really flow products that we have been traditionally making in bays. So, we think that, as Brian said, while we're growing and going to be adding capital, we think it will be more efficiently used, perhaps, than we did in the past.

Yes, and one more thing, Steve. I think I should probably tell you, we have compensation incentives that are tied to our use of working capital. It is a focus within the Company and everybody knows that, so we're working on it all the time.

Got it. That's good. In the past, I think that there have been issues with having too many SKUs, I guess, or too much optionality on the production line. Have you been successful in trying to commonize the product line? I ask this in the context of talking about your flow manufacturing?

Yes --

Have you gotten rid of specials?

Right. The answer is, we've been a lot better at managing it. And, we have actually, on the ESG side, come up with a good strategy to produce specials for the customers that have that high demand, but not do it on the production line.

We have been able to produce high-quality specials, say, in our FS Solutions Houston facility. In this last year, we produced about 20 machines there that would have taken three or four times the build time in the factory, and just not disrupted the factory by building them in a single location.

The 80/20 management of the SKUs in all the businesses has really helped, and also, setting up the cells in a one-piece flow, and that kind of thing. We feel like we are making good progress on that, and there is still opportunity.

We have made significant progress on our SSG side, it's contributed to the improvement in margin. For example, in our PSS business, the number of SKUs is down on a year-over-year basis over 30%.

Wow. Okay.

So, it's a critical focus for our businesses --

And, I think it's down about 60% in two years, isn't it?

Correct.

It's pretty close to 60%. And, Steve, what we are doing is just focusing our customers on our high-volume, actually more innovative, better products. So, we are taking care of the customer need, we are just trying not to do quite so many variations.

Understood. Last one, and I will get back in line. I apologize, I don't have the slides in front of me because I am travelling, but I think you talked about targeted acquisitions. Can you -- is there anything in the pipeline?

And I guess, as you think about acquisitions, what are the metrics? Presumably, they would be accretive on an EPS basis, but do you have a metric internally to make it accretive to return on capital in the segment in which the acquisition takes place or anything like that? How are you thinking about making sure that there is really a value add here?

We're thinking about exactly that way as you point out. And to answer your question, when you do acquisitions, I think you know this from your experience, you might look at 100 before you even get close to 1. And, we have some good opportunities that we are thinking about looking at.

And, our real commitment on that is that we will stay within our core growth markets, if there is an acquisition that makes sense. I think we will demonstrate very strong discipline in making sure that it meets the return on the invested capital requirements for the Company. And, again, I think each one will be just weighed out on its own.

Very good. Thanks for the time.

Thanks, Steve.

(Operator Instructions)

We will take our next question from Robert Kosowsky with Sidoti.

A quick question on the specialty business, or safety business. Do you have any good outlook, or kind of, I guess, leads on bigger warning system implementations coming down the pipe?

Yes, there's a couple of different pieces to that business. We did a complete review with our global team on the industrial safety business, which provides the systems in refineries, oil rigs, and heavy process plants, and we reviewed with them the list of projects that our end users like Shell, BP, and others, have within the integrators and engineering companies they are working on. And, there is a substantial list of projects over the next 5 to 7 years.

So, we feel like it really plays in our sweet spot, but with those large projects, you just never know when they are going to release the money. Or, as we saw this week in Russia, things happen that slow things down or they speed up. So, there is a good, strong pipeline for those products.

Okay. That's very good. And then, finally, on the fire truck side -- or the fire rescue side, it seemed like Asian demand being weak was negative for you this quarter, and I'm wondering if that's something that you think is just weakness in China that's filtering in? Or, do you see that also having a decent pipeline longer term?

I am not sure we called out that Asia was weak for us. Just shipments were delayed just basically because of timing. So, it is a wild card, it is a big part of our business, and we watch it every quarter. We, so far, don't see any trend that would suggest a change in the business activity that we have had for the last few years.

Okay. Thank you very much, and good luck.

Thank you.

Thanks, Rob.

It appears we have no further questions in queue at this time. I would like to turn the conference back over to Mr. Dennis Martin.

Again, I want to thank everybody for attending our call and for the good questions. We look forward to talking to you in a very few weeks as we get on the call for the first quarter. Thank you very much, and have a good day.

That does conclude today's conference. We thank you for your participation.