L B Foster Co (FSTR) 2014 Q4 法說會逐字稿

Good day ladies and gentlemen. Welcome to the fourth-quarter 2014 L.B. Foster earnings conference call. My name is Chris and I will be your conference moderator for today.

At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions). As a reminder, this conference is being recorded for replay purposes.

And at this time, I would now like to turn the conference over to your host for today, Mr. David Russo, Chief Financial Officer. Sir, you may proceed.

Thank you, Chris. Good morning, ladies and gentlemen. Thank you for joining us for L.B. Foster Company's earnings conference call to review the Company's fourth-quarter 2014 operating results. My name is David Russo and I am the Chief Financial Officer of L.B. Foster. Hosting the call today is Mr. Robert Bauer, L.B. Foster's President and CEO. This morning, Bob will review the Company's fourth-quarter performance and provide an update on significant business issues and Company developments. Afterward, I will review the Company's fourth-quarter financial performance and then we will open up the session for questions.

Means to access this conference call via webcast were disclosed in our earnings press release and were posted on the L.B. Foster Company website under the Investor Relations page. This webcast will be archived and available for 30 days.

During today's call, our commentary and responses to your questions may contain forward-looking statements, including items such as the Company's outlook for our businesses and markets in 2015, cash flows, margins, operating costs, capital expenditures, the legal action filed by the Union Pacific Railroad, and other key business issues. These statements involve a number of risks and uncertainties that could cause actual results to differ materially from statements we make today. These forward-looking statements reflect our opinions only as of the date of this presentation and we undertake no obligation to revise or publicly release the results of any revisions to these statements in light of new information or future events except as required by law. All participants are encouraged to refer to L.B. Foster's annual report on Form 10-K for the year ended December 31, 2014 as well as to other documents filed with the Securities and Exchange Commission for additional information about L.B. Foster and to learn more about the risk factors that may affect our results.

In addition to the results provided in accordance with US Generally Accepted Accounting Principles, our commentary includes certain non-GAAP statements which present operating results on a basis that excludes the impact of the second- and fourth-quarter 2014 adjustments related to warranty charges. A reconciliation of US GAAP to non-GAAP measurements has been included within the Company's 8-K filing. Statements referring to the exclusion of these items are considered non-GAAP measurements and while they are not intended to replace the presentation of our financial results in accordance with GAAP, the Company believes that the discussion of results before these items provide additional meaningful information to investors to facilitate the comparison of past and present operating results.

With that, we will commence our discussion and I will turn it over to Bob Bauer.

Thank you, Dave, and good morning, everyone. Thank you for joining us. It's always nice to report strong underlying Company performance in a quarter, but it is particularly nice to report it in Q4 when it's a strong finish to the end of the year. I was very pleased with the operating results. Underlying profit performance was strong despite the added costs associated with acquisitions in the quarter.

It was necessary to take a charge for concrete tie warranty reserves. The charge of $4.8 million relates to concrete ties made in Grand Island, Nebraska which had been undergoing replacement largely in track owned by Union Pacific Railroad. As we do every quarter, we review the replacement activity and the anticipated replacement forecast and then test the reserve in order to fully cover the exposure the Company has throughout the warranty period. I'll discuss this topic further once I complete comments on operating performance.

So turning to the highlights of Q4, sales in the quarter were $161 million. Our adjusted pretax margins were 8.7%. Our adjusted diluted earnings per share of $0.85 for the quarter was up 19.7% from prior year. We really had strong gross profit performance that was led by our rail business.

Our bridge business finished the year with very strong results carrying the construction segment. It was a record year for that business.

And we took our Birmingham coated products plant off-line in December to upgrade the facility using new technology. This is just one of the Company's facility modernization programs that are going to bring productivity and capacity improvements that we are really looking forward to in 2015. It is now operational once again.

So looking at the full year, the quarter really helped bring in a record year for us in sales. We reached $607 million. And again, on an adjusted basis, our EPS for the full year would be $3.02. So many of our divisions had a really good year helping the Company achieve these milestones.

I wanted to talk for a minute about orders. Turning to order entry in the quarter, there were large transit projects last year and blanket orders for concrete products that make the year-over-year comparison negative. This is driven more by timing than market activity changes. While the transit market doesn't have the same number of megaprojects as it did last year, the medium-term outlook for this market is still favorable.

So for the year, the consolidated Company orders were up 8% over prior year and that includes the impact from a full-year effect of acquisitions that we made. Without that impact, the order growth for the full year would be just under 5%.

The rail business have a strong year, 7% year-over-year order growth. Construction finished up right around 4.7%. In the tubular business, the reported number is up 31% but that's because it includes the full-year impact of the Ball Winch acquisition. So without that, it would really be 4.8%. So that leaves us with a year-end backlog that is roughly equivalent to what we had this time last year. So all in all, it really turned out to be a good year from a standpoint of the P&L.

But in order to spend time on some of the more important comments that I want to discuss, I'm going to skip over the detailed discussion about the P&L. I'm going to leave that to Dave. He'll cover a number of those items. But as I wrap up the business performance, I do want to make a comment on cash flow.

Our operating cash flow for the year exceeded $66 million. It's another milestone record for the Company. Our working capital contributed a significant amount of this result as the year-end performance was very good and we improved our average working capital throughout the year. So I'm particularly pleased with the fact that our teams really have gotten after working capital. And as we've made this a more important topic inside the Company, it is producing some good results.

So I want to talk about two other subjects. One, the concrete tie warranty charge and the other, recent acquisitions. So as I mentioned at the outset, we took a charge this quarter in order to establish the appropriate warranty reserve for concrete ties that are undergoing replacement. These are ties that were made in our former Grand Island facility, most of which were sold to Union Pacific Railroad.

As we've continue to work through the field replacement program that's been underway for over two years, we've furnished more than 500,000 ties toward warranty orders from Union Pacific. This is well above the original projections that we associated with a manufacturing defect issue when this issue first surfaced. Also taken into consideration the agreement we reached with Union Pacific on the method for establishing warranty eligibility and prioritizing the replacement activity.

We have asserted that we are entitled to a credit for over-supplying replacement ties. We provided replacement ties based on Union Pacific's ordering replacement of ties before we have the opportunity to evaluate the ties that are being replaced. Based upon our subsequent evaluation of ties, we have disputed that all of the ties they ordered as warranty replacements were in fact eligible as a warranty replacement.

UP recently has commenced a lawsuit against L.B. Foster and our CXT Concrete Products division over the Grand Island ties which we mentioned in both our earnings release and our Form 10-K. We are reviewing the complaint and we intend to defend L.B. Foster vigorously and believe the complaint is without merit.

We and Union Pacific have a number of disagreements over their claims from replacement activity and our agreement, including we and Union Pacific dispute the extent to which Union Pacific's warranty replacement decisions are authorized with respect to any tie with a small crack regardless of its type or location. And we and Union Pacific dispute whether they have been accurately considering track and other operating conditions within their control in categorizing failed ties and ties with cracks as warranty eligible. There are track and operating conditions which can cause a tie to fail or crack which are not covered by our limited warranty.

So, recent discussions with Union Pacific to resolve the matter have not resulted in an agreement between the companies, and there are comments in our Form 10-K that further describe details of this issue and will serve as further explanation. But because the matter is now in litigation, it is going to be difficult for us to take your questions regarding that subject matter.

Let me move now to acquisitions. This is a topic that we have been talking about for the last couple of years and we've had a fair amount of activity recently in the subject. In the last 90 days, we completed two key acquisitions that will, one, expand our presence in the European market, including automation solutions for railway and transportation industry applications, and two, expand our served market in the midstream pipeline space by adding products and services for metering and custody transfer systems that are critical to the transmission of oil, gas, and gas liquid products.

So, first, let me cover TEW Engineering, which is located in England and has a long history of providing high-quality engineered solutions that utilize automation and mechanical design skills to solve a variety of railway and transportation industry problems. TEW Engineering will be the catalyst in helping us significantly increase the scale in our European business in the coming year in addition to moving into more attractive solutions oriented products. With 2014 sales of approximately $17 million and pretax margins that they have that are roughly double the L.B. Foster Company average, we believe we have an asset that can help drive growth, improve our profitability, and it's anticipated to be accretive to earnings at the outset. So, we completed this acquisition in January and we are excited to have those folks as a part of our business.

The second acquisition is the acquisition of Chemtec Energy Systems which was completed on December 30. So, our year-end working capital reflects the addition of the company but there were no sales to report. Chemtec Energy Services, they have carved out an excellent position in the market for metering and custody transfer systems that include sophisticated measurement and control devices that are critical to the movement of liquid and gas products, and that's primarily in the midstream market. The company also supplies additive and injection systems on a smaller scale required for end use distribution of similar commodities. They have an excellent reputation for design, safety, and customer service, and they have relationships with some of the most significant energy companies that depend on their expertise. And these are some of the same customers that utilize L.B. Foster coated pipe services for their gathering and transmission applications. So, we are extremely pleased to make what I'd call a significant acquisition in this segment and add to the talent that we have in the Company serving energy market customers. Chemtec sales last year were in excess of $50 million and the impact to earnings is also expected to be accretive in 2015. So I want to welcome them also to the L.B. Foster family. I know they are excited as well as the folks at TEW Engineering about the growth plans that we have and the opportunities that it will present for everyone involved.

So, overall, I am very pleased to report that our divisions are doing a great job. I think our underlying results in the quarter were very good. I think they speak to the many accomplishments that took place not only in the quarter but through the course of 2014, and we are looking forward to 2015 and the exciting plans that we have in place for growth.

So with that, I will turn it back over to Dave, and he will cover a number of the financial results.

Thank you, Bob. As discussed by Bob, in the fourth quarter of 2014, we recorded a $4.8 million charge related to concrete tie product claims made by the Union Pacific Railroad that negatively impacted the Company's gross profit. This charge was derived based upon historical and expected tie replacement analyses and was not impacted by the legal claim filed by the UPRR.

Additionally, while I will be commenting on both GAAP and non-GAAP results, I will specifically indicate when the results are non-GAAP. With that, net sales for the fourth quarter of 2014 were $161.1 million compared to $156.5 million in the prior year, a 3% increase. The sales increase was due to a 13.3% increase in our Tubular Products segment sales and a 6.6% increase in rail segment sales, partially offset by a 3.5% decline in construction sales. The rail segment sales increase was due principally to improve sales in our rail technologies, concrete ties, and rail distribution businesses partially offset by a decline in our transit products business as activity related to the Honolulu transit project winds down.

The tubular segment sales improvement was due to increased coated product sales fueled by our fourth-quarter 2013 specialty coatings business acquisition partially offset by a decline in our legacy coatings business as we temporarily stopped production in our Birmingham facility during the last three weeks of December to install new equipment which we expect will improve capacity and efficiency of that plant. This improvement was completed in the first quarter of 2015.

The construction segment sales reduction was due to volume-related decrease in sales of piling products partially offset by an increase in fabricated bridge products and a contribution from our Carr Concrete Products acquisition which closed in the third quarter of this year. As a percentage of fourth-quarter 2014 sales, tubular accounted for 6%, construction was 37%, and rail totaled 57% of sales.

As mentioned in our earnings release, order backlog stood at $184.4 million at the end of the fourth quarter of 2014, up slightly from the fourth quarter of 2013. The year-over-year increase was due to the inclusion of the businesses acquired in 2014 and a 75% increase in our piling business backlog partially offset by reductions in our Spokane tie and fabricated bridge business backlogs.

Fourth-quarter bookings were $115 million, down 18.1% compared to last year's fourth quarter. The reduction from last year was due to a reduction in our Spokane tie business bookings and to a lesser extent to reductions in our transit business and our legacy coated products business.

Gross profit margin was 19.6% in the fourth quarter of 2014, basically even with the prior-year quarter. As discussed in our earnings release, the fourth-quarter results included a $4.8 million warranty charge related to a concrete tie warranty claim. Excluding this charge, Q4 gross profit margin would have been 22.6%, or 300 basis points higher than the prior-year quarter. This operating improvement was principally due to volume and operational improvements in our rail technology and Allegheny rail products businesses and possibly offset by lower margins in the tubular segment. The tubular decline was principally due to the coated products business where the previously discussed Birmingham facility upgrade necessitated a planned temporary halt to production for the last three weeks of December. The construction segment reported improved profitability driven by expanded margins across all product lines except for concrete buildings as well as a favorable product mix.

Selling and administrative expense increased by $2.9 million or 15.7% to $21.5 million in the fourth quarter of 2014. This increase was principally due to increases in acquisition related costs, personnel costs, expenses from acquired businesses not owned during the prior-year quarter, and costs related to the preparation for and the identification of a new ERP system.

Full-year selling and administrative expenses increased by 12%, so our fourth-quarter selling and administrative expense represented approximately 13.4% of sales in 2014 as compared to 11.9% of sales in the prior-year quarter. This increase is due primarily to the previously discussed increases on costs on slightly increased sales.

Our fourth-quarter pretax income was $9.7 million, or 6% of sales, compared to $11.6 million, or 7.4% of sales in the prior year. Excluding the previously discussed fourth-quarter warranty charge, pretax income would have been $14.1 million, or 8.7% of sales, which, considering the additional selling and administrative expenses incurred this year, is an excellent result.

As mentioned in our earnings press release, the effective tax rate for the fourth quarter of 2014 was 37.5% compared to 37% in the fourth quarter of 2013. The current-year rate compares unfavorably to the prior-year quarter due to non-deductible acquisition related expenses incurred in the current-year fourth quarter. The effective rate for the full year of 2014 was 34.3% compared to 33.6% last year, the increase mostly due to the nondeductible acquisition costs as well as the recognition of uncertain state tax positions within the prior year.

Fourth-quarter income from continuing operations was $6 million, or $0.58 per diluted share, in 2014 compared to $7.3 million, or $0.71, in the prior-year quarter. Again, excluding the Q4 warranty charge, income from continuing operations would have been $8.8 million or $0.85 per diluted share.

For the full year, diluted earnings per share were $2.48 compared to $2.85 last year. Excluding the warranty charges taken in 2014, diluted earnings per share would have been $3.02, which would be the second highest in Company history only behind 2007 when we recorded a significant gain from the sale of our interest in the DM&E Railroad.

Turning to the balance sheet, working capital net of cash decreased by $2.2 million in the current-year quarter and by $20.4 million for the whole year. Accounts receivable decreased by $1 million during the fourth quarter. Our DSO at December 31, 2014 increased to 50 days from 48 days at September 30 but improved from 52 days at December 31, 2013. Our inventory increased by $4.3 million for the quarter while accounts payable and deferred revenue increased by $5.2 million.

Cash provided by continuing operating activities, as mentioned by Bob, in our fourth quarter was $17 million compared to $11.4 million last year. For the full year, cash generated by operating activities was a record $66.6 million compared to $13.9 million in 2013. The improved performance for 2014 is attributable to significantly improved working capital management especially with regard to accounts receivable and accounts payable. Also adding to the favorable comparison were decreased tax payments.

Our strong cash flow was used for three acquisitions in 2014 as well as capital expenditures made during the year targeting a variety of growth and profit improvement initiatives. We anticipate spending approximately $18 million to $22 million in capital programs in 2015, which includes an estimated $5 million of expenditures on our ERP program. The 2015 anticipated capital programs are inherent in all three business segments and are mostly under an umbrella of growth and profit improvement in the coming years that we believe will improve shareholder value on a longer-term basis. As in prior years, we continue to forecast that cash generated from operating activities will exceed capital expenditures, debt service payments, dividends, and share repurchases in 2015.

Our full-year 2014 capital expenditures were $17.1 million compared to $9.7 million last year. The 2014 spend has been predominantly for buildings, yards, and equipment aimed at providing new and expanded manufacturing capabilities, improved service, and product availability to the customer and increased manufacturing efficiencies in future periods.

Cash at the end of 2014 was $52 million, down $34.5 million from September due principally to business acquisitions and capital expenditures, partially offset by cash generated by our operating activities and also by financing activities. Speaking of financing activities, we have drawn on our revolving credit facility for the first time in several years. We did borrow approximately $24 million to complete the Chemtec acquisition, which closed on December 30, 2014.

As our balance sheet and the earnings release demonstrates, our leverage is extremely low and we have ample liquidity to fund our strategic direction or we have access to additional liquidity, should that be necessary.

Before I turn it over to Chris, I'd like to recognize our team in Vancouver, British Columbia, where our Rail Technologies manufacturing plant was selected by Industry Week magazine for their 2014 Best Plants Award. So congratulations to that group.

That concludes my comments on the fourth quarter of 2014, and I'll now send it back to Chris to open up the session for questions.

(Operator Instructions). Robert Kosowsky, Sidoti.

I was wondering I guess first just on the UP issue, you mentioned something about warranty claims asserted in 2013, 2014 in the press release. Does that mean that more claims could be coming down the pike?

Yes. More claims could be coming in the future.

Okay.

Let me say it I guess this way. The replacement activity is not over or completed at this point and we continue to work with Union Pacific regarding all of that activity.

Okay. I just wanted to get the bad news out of the way. I guess on to the acquisitions, could you maybe talk a little more about the margin profile of Chemtec and just how this fits in with your sales approach now that you are hitting the pipeline from a few different angles? I'm wondering can you sell the house at one particular sales call or is this something you are still talking to different people throughout the whole pipeline construction standpoint?

I'd say, at this point, you should think of it as we are still talking to different people, although we do see a point in the future where we think that's going to start to come together. So, the people that are actually influencing and specifying the skid mounted metering and custody transfer systems are not necessarily the same individual that for example works on coated pipe that we sell into that particular marketplace. But the projects are basically the same kind of projects and the demand for the product is headed into the same project. So, we think that, in the future, while these activities are separate today, that we will see some benefit in being able to leverage the fact that we can share leads and possibly call on some of those same people down the road.

Okay. And then otherwise, I don't know if you mentioned it, but what was the margin profile of Chemtec?

I did not mention it. The margins, the EBITDA margins that the company makes are accretive to L.B. Foster Company. So, we aren't going to break Chemtec out and we are going to combine it with reporting of our tubular business, but the EBIT margins are better than the EBITDA margins of L.B. Foster.

So the EBIT of Chemtec is greater than the EBITDA of L.B. Foster?

Well, I would use apples and apples in both cases.

Okay.

Don't mix EBITDA and EBIT. As long as you don't do that, the answer is yes.

Their operating margins are stronger than the consolidated company.

Okay. Very good. Thank you very much and good luck.

Brent Thielman, D.A. Davidson.

Could you talk about trends, be it orders or kind of the quotation activity you are seeing in the oil and gas related business in tubular? And then what sort of trends is Chemtec seeing right now?

Well, in our own business, in coated products, the activity feels like it's remaining fairly consistent. Right now, in the midstream space and in the pipeline market, we haven't seen as much softness or downturn as people have talked about seeing in the more upstream segment and in the E&P area.

Chemtec's quote pipeline at this point looks as good as it did one and two quarters ago, although I anticipate that there will be potentially a little bit of weakness ahead. We factored that into our thinking as we went through this process. We don't think that the company is going to go through a dramatic change at this point; there aren't any signs regarding that. But with that said, I always remind people there is a bit of a disruptive atmosphere in the whole oil and gas space these days. But where they are actually serving customers at this point at the moment, it still looks like it's in pretty good shape.

Okay. And then the accretion from both deals presumably will be heavier in the back half that the first half? Is that the right way to think about it?

No, not necessarily, Brent. I don't think -- I was just prorating them from certainly when they were brought on board. There's a little bit of seasonality but other than that, it won't be that different first half versus last half.

Okay. And then if I missed it I apologize, but is it your intention to offer an outlook for the year as of next quarter? Or I guess just looking for a little more color there in terms of what you are thinking about for 2015.

Yes. We thought that we might wait until our next call in order to take that subject on.

Okay. Understood. Thank you.

(Operator Instructions). Cleo Zagrean, Macquarie.

Good morning and thank you for taking my questions. My first question does go back to the Union Pacific litigation. I understand that you would not comment on the litigation ongoing but just to clarify what you disclose in the 10-K where you say that you dispute their claim that they seek replacement for virtually all of the Grand Island ties. Is that 1.6 million ties? Just seeking clarification there.

And then the second part of my question there is whether this litigation may lead you to be more conservative on the M&A growth pipeline for this year, or at least until it is solved. Thank you.

Well, I'll take the second part of that first. At this point in time, the litigation is not impacting our thinking with regard to how we will manage cash in the Company. But that is always subject to change, but at this point, we are continuing to move forward with certain plans that we have that we've discussed and so we are not forecasting or describing any change to that effect today. But because the outcome and path of litigation can change and we can't speak to how that might unfold, those sorts of things are always subject to change.

We had pointed out what the scope of the warranty claims have been in the 10-K in some prior reports. We pointed out the number of ties that we have offered to Union Pacific. You are probably referring I think to the paragraph that says that approximately 1.6 million ties were sold during the period the Union Pacific Railroad had claimed nonconformance. We've attempted to categorize some of those for you of the total 3 million ties that were manufactured in this facility. All of those ties now come with a 15-year warranty that replaced a five-year warranty that we used to have. And based on the replacement activity that has taken place, there is substantially less ties in track at this point because, as I mentioned earlier, we have furnished more than 500,000 and the replacement activity we know that has taken place is well above that because Union Pacific has furnished some ties for replacement as well.

I'm sorry if I'm having trouble understanding. So then does this claim on their part to replace virtually all of the GRAND Island ties, do they seek replacement under warranty for the entire 1.6 million? So another two-thirds to go from here? Or am I misunderstanding that?

Well, we are attempting to review the claim at this point. We are in the very early stages of reviewing the claim and we have a number of things that we need to do to fully understand exactly what claims and demands they want to make with this lawsuit. I think that's really the only way I can answer that.

Thank you. I appreciate your help here.

My second question is with regards to your growth outlook. I know you are waiting for the next quarter for guidance for the year. But can you share with us just based on the year-to-date how you would describe the trends, especially in the rail segment which -- congrats for a very strong performance there. Thank you.

The trends in the rail business, if I start with taking the North American freight rail market, have been really very good. The capital spending that has taken place by all of the freight rails in North America has continued to increase. By and large, all of them continue to harden their infrastructure and continue to invest in taking up capacity as well as to try to boost performance in their entire networks. They continue to invest to do new things such as expand some of the crude by rail which is still being invested in. And intermodal is also another area gaining significant investment as well.

When you look at the transit segment, it continues to grow, ridership continues to grow, and the bulk of the metro networks that are out there throughout the US continue to have projects. But from time to time, a few of these megaprojects that I spoke of, they can kind of come and go and the timing can differ. And of course, we are winding down from the Hawaii project and that's creating year-over-year comparisons that are difficult for us.

And then finally, the market in Europe, largely in the UK that we serve, it started out the year just a bit soft. Network rail can have a lot of influence on that. They've kind of hesitated before placing a number of orders, so we are not getting out of the gates in as good of a start as we would like to see in that particular area. We are not worried about the marketplace in that, but it's off to a little bit slower start.

Thank you, appreciate it.

Brady Cox, Stifel.

I wanted to start quickly -- I know we belabored it a little bit, but I wanted to see on the UP lawsuit. In the 10-K, you guys called out a potential decline in business from UP as a potential risk for 2015. Considering the lawsuit, do you think that is a likely scenario in 2015, or have you seen any reduction already where UP may be turning to a competitor?

It is something that is very possible. There are some reductions that have taken place already. They are not significant at this point, but there is always the concern out there that they could take that business and direct it towards our competitors. As you probably know, we don't have any product lines really where we don't have other competition, so we defend those market positions every day. We also have contracts that renew from time to time all the time, some of which are with Union Pacific and will need to renew in 2015. So there's the potential that that will exist, but I can tell you, up until now, it hasn't been significant but there has been some losses.

Can you give any detail on timing of when those contracts with UP are up for renewal in 2015?

I believe that we have two of them that are up for renewal about midyear, around let's say between the July and September timeframe.

Great. Thank you for the detail. And then maybe just one more question on backlog. I know you all ended the fourth quarter roughly in line with where you stood year-over-year, but the sequential decline from 3Q to 4Q looked a bit steeper. I know there is generally some seasonality there. But is that about where you all would have expected it with seasonality or was the decline a little more than you might have expected going in?

Well, that's probably -- I imagine that that's a result of the order input, which we didn't book some of these blanket orders that we thought we would book, particularly in our concrete products segment. But there was a few other areas where some of the blanket orders didn't come in. We are anticipating that we'll get some of that here in Q1. In fact, we are working on it at the moment. So at this point, we didn't forecast it that way but that's really I think what's largely contributing to what you are looking at.

Great. Thank you very much.

And we have no further questions at this time. I will now turn the call back over to David for any closing remarks.

This is Bob. I think we are good. We appreciate everyone joining us here today. Thanks for your interest.

We are happy we had a quarter with great underlying performance, a nice strong finish to the year. And I'll just say that following up on Dave's comments -- congratulating our teams for doing a great work, the Vancouver team this year but everyone across our business has really been doing I think a fantastic job of helping move the Company forward. So we'll look forward to talking with you again at the end of Q1. Thank you very much.

Ladies and gentlemen, that concludes today's conference. Thank you so much for your participation. You may now disconnect. Have a great day.