Helen of Troy Ltd (HELE) 2002 Q1 法說會逐字稿

Good morning and welcome, Ladies and Gentlemen. to the Helen of Troy's 1st Quarter earnings conference call.

At this time, I would like to inform you that this conference is being recorded for rebroadcast, and that our participants are in a listen-only mode.

At the request of the company, we will open the conference up for questions and answers after the presentation. Our speakers are Gerald Rubin, Chairman, Chief Executive Officer and President,

Russel Gibson, Senior Vice President and Chief Financial Officer,

and Robert Spear, Senior Vice President and Chief Information Officer. I will now turn the conference over to Robert Spear.

Please go ahead, sir.

Good morning, everyone and again, welcome to Helen of Troy's fiscal year 2003 1st quarter earnings conference call.

I will review the agenda for this morning's conference call.

First, I will be reviewing a brief forward-looking statement, followed by Mr. Rubin, who will discuss our 1st Quarter earnings release and related results of operations for Helen of Troy, followed by a financial review of our income statement and balance sheet for the quarter by Russel Gibson, our Chief Financial Officer. Then finally, we will open it up for questions and answers from those of you with any further questions.

First I will cover the Safe Harbor statement. by saying

that this conference call may contain certain forward-looking statements based on management's current expectations, with respect to future events or financial performance.

A number of risks or uncertainties could cause actual results to differ materially from historical or anticipated results.

The words anticipate, believe, expect and similar words identify forward-looking statements.

The company cautions the listeners to not place undue reliance on forward-looking statements.

Forward-looking statements are subject to risks that could cause such statements to differ materially from actual results.

Factors that could cause those are described in the company's form 10K filed with the SEC for the fiscal year ended February 28th, 2002.

I will now turn the conference over to Mr. Gerald Rubin, CHairman, CEO and President of Helen of Troy.

Thank you, Bob.

Good morning, everyone and welcome to our 1st Quarter conference call.

As you know, Helen of Troy today reported record sales and record earnings for the quarter ended May 31st, 2002.

Sales increased 12% to a 1st Quarter record of $102 million versus sales of $91 million in the same period in the prior year.

This is the first time Helen of Troy passed $100 million in a 1st Quarter.

1st Quarter net income increased 44% to a record $6 million, 600 thousand, or 22 cents per diluted share, compared with $4 million, 600 thousand or 16 cents per diluted share for the same period a year earlier.

This marks our ninth consecutive year of 1st quarter sales increases., and

we're extremely pleased with the results for the quarter. Over the past 8 years, we have seen sales increases in 30 of the past 32 quarters, with net income increasing in 28 of those 32 quarters.

Sales for this year's 1st Quarter increased by 12%, driven by sales in every segment of our business. And leading the increases were sales in the retail hair care products category, especially our line of Ion products, our professional division sales our international division and sales from Tactica International.

Gross margins increased to 48.3% from 45.9% last year.

1st Quarter operating income increased 1.8% to 9.8% of net sales, from 8%. Helen of Troy currently has an extremely strong balance sheet with cash increasing $81 million to $88 million, from $7 million at the same period last year, and the stockholder's equity increased $33 million to $257 million, from $224 million over the same period of last year.

Accounts receivable up $66 million, increased only 4.6% from last year's level of 6.3%.

Our inventory decreased significantly by $57 million, or 40%, from $142 million to $85 million, while sales for the quarter increased 12%.

EBITDA for the quarter was $11.9 million versus $9.5 million for the same quarter last year.

For the fiscal year coming up ending February 28, 2003, we expect overall sales growth in the 10 to 15% range, and we are reiterating our earnings per share guidance of $1.15 to $1.20, or 15 to 20% ahead of this past fiscal year.

Last fiscal year our sales were $451 million and earnings were a dollar a share.

I now would like to turn over the microphone to Russel Gibson, our CFO.

Thank you, Gerry and good morning, everybody.

Thanks for joining us today.

As Gerry noted, our business continues to flourish, and importantly it does so in both our Helen of Troy core business and also with our subsidiary company, Tactica, as it has done throughout last year.

This year, we reported $102 million of sales for our 1st Quarter, which is a 12% increase compared to last year.

And at the same time, our net income rose 44% from $4.6 million last year to $6.6 million this year, while earnings per share increased 38% from 16 cents per share to 22 cents per share. On our net sales, our growth was driven by a healthy 5% growth in our Helen of Troy core business and that -- when I say the Helen of Troy core business, I'm referring to Helen of Troy excluding Tactica.

And then of course, our Tactica business also grew by a healthy 40%, as well.

Our core Helen of Troy sales were $76.1 million for the quarter and that compares to $72.6 million last year or a $3.5 million increase.

This 5% growth rate continues the trend that we experienced in the previous quarter.

As Jerry mentioned, the growth in the core Helen of Troy business was largely due to the sale of our new line of Ionizing products.

Secondly, the increased sales in our professional division led in our Hot Tools and Wego branded products.

And thirdly, we had increased sales in our international business, as well.

Tactica sales continue to improve as it reaches broader and deeper into the retail store distribution channel.

Tactica sales for the quarter were $26.4 million, compared to $18.9 million last year, or a $7.5 million increase.

And it's important to note that almost all of the growth in Tactica came from the retail store distribution channel.

As we talked about in the past, it's important that Tactica's product gained more brand and product recognition to continue to grow our business and also to provide a more stable business environment model.

And the fact that we have achieved greater sales in the retail store channel is really a strong indication that we're meeting that goal.

In fact, our retail store sales now represent 60% of total Tactica sales, whereas a year ago they were only about 40%.

Another important point about -- about Tactica is that its product mix has improved significantly.

Last year's 1st Quarter sales were almost entirely driven by the Epilstop product line, whereas this year, the Epilstop represents approximately 1/2 of total Tactica sales.

And it is important to state that while the Epilstop product is still an important product to Tactica, there are other products that Tactica has introduced that are being received quite well by the consumer.

In addition to our sales growth, we also improved our gross margins by almost 2 1/2 percentage points, going to 48.3% from 45.9% for the 1st Quarter of last year. I also want to point out that the gross profit margins that we experienced this 1st Quarter were better than the previous quarter of 46.9% and for the full fiscal year last year of 47.1%.

There are two primary reasons for the improvement in the quarter.

The first is that our Helen of Troy core business improved from 38.6% to 39.2% or a 6/10 percentage point improvement.

And then, secondly, and equally important is that the Tactica profit margins, which while they were stable, year-over-year, because of the -- the greater sales volume that Tactica experienced, it weights more heavily into the consolidated gross profit margin percents.

Looking at our SG&A, overall SG&A expense increased from 38.0% to 38.5% of sales, about a half a point improvement.

This increase was due to the Tactica operations, offset in part by reductions in Helen of Troy's core expenses.

The increase in Tactica's SG&A expense is driven primarily by the increased TV advertising costs that they experience that drove their increased sales.

And then the SG&A expenses for Helen of Troy exclusive of Tactica decreased as a percentage of sales this quarter, largely because of reductions in the inventory warehousing costs because of maintaining lower inventories, and not amortizationing any goodwill this quarter, whereas 1st Quarter last year, we amortized $515,000. And that's attributable to the adoption of the new accounting standard, which I will talk a little bit about after I get through the discussion of our financial position.

Interest expense remained relatively flat, simply because the -- the borrowings that we had were subject to only the $55 million turn debt that we had on the books and that we had no other borrowings under our revolver and that the term debt is a fixed rate interest facility.

Our income taxes are blended effective income tax increased from about 28.2% to 28.8% and this is the effect of the increased earnings of Tactica.

Focusing to our financial position, it continues to improve and remain very strong.

Our working capital as of May 31st, 2002, was $198 million, and that compared to $191 million at February 28th, 2002,

and $164 million one year earlier.

As Gerry said, our cash balances continue to increase and is currently at $88 million, which succeeds our long-term debt by about $33 million.

We had no balances outstanding under our working capital credit facility.

One year ago, our cash balances were at $7 million, with no borrowings outstanding.

The increase in the cash is largely due to cash generated from our operating activities as well as reductions in inventory.

Again, as Gerry stated, our receivables increased 4.6% year-over-year while our sales increased 12%.

Day sales outstanding compute to be 59 days this year versus 61 days a year earlier. We've also continued to reduce inventory levels and as Gerry pointed out, our May 31, 2002 balance is at $85.2 million, which is a 40% decrease from our balance of $141.6 million a year ago.

And finally, our debt to equity ratio stood at a healthy .21.

I'd like to make some remarks about the accounting for goodwill.

I think many of you are aware of the new standard regarding goodwill and the fact that it takes effect this year.

It first eliminates the amortization of goodwill, which we have done and I made reference to that earlier, the fact that we did not record any amortization in this period, whereas a year ago we recorded $515,000. Which is -the -- the effect is about a penny a share after tax.

But the accounting standard also includes at least an annual impairment review of the goodwill balance, and it states that any asset deemed to be impaired should be written down to the fair value.

In our recent, filed form 10K for fiscal year 2000, we estimated that the cumulative effect of adopting the new standard would be a non-cash, after-tax charge of approximately 15 to $20 million.

We are continuing the process of performing the analysis and as prescribed by the standard we'll complete the process by August 31st, 2002. Since reporting the effects in our 10K, we have further analyzed the facts and circumstances surrounding our goodwill, and we have now revised our estimates.

We now estimate that the impairment testing could produce consequences ranging from no impairment at all to an after-tax charge of $20 million.

And until this process is complete, we will not record an impairment charge in our financial statements. And that's why this 1st Quarter you saw no charge for any impairment that you would see.

Now, when we complete the process and if there is a write-down, that write-down would be reported as a non-cash charge and it would not affect operating earnings.

Another matter that seems to have gained a lot of attention is some proposed tax legislation that's going on in Congress. There's been a lot of publicity and discussion recently about companies who are currently inverting their corporate structure to a foreign status.

And as you know, our company did so several years ago.

We did it for the business purpose of putting us on the same, level playing field as other foreign companies doing business in other countries.

It made sense then and it continues to make sense today.

However, the -- the companies who are inverting today, they're creating a great amount of attention in Congress and in the Treasury.

And it does appear that Congress will act on some form of legislation related to inverted companies.

I think the point, though, is that this is a very debated issue.

There are lots of discussions about it.

We don't know exactly where this will end up.

However, there have been some recent discussions that seem to be heading away from any severe impact to Helen of Troy, but at this point in time, we just can't tell.

And a -- a third item that I'd like to bring up is the currency -- exposure on currency losses. I think many people have asked questions about do we have any exposure of changes in foreign currency? And the simple answer is: Yes, we do, but it is very minimal.

I think people have thought because we buy most of our product and source most of our product from the far east that our -- our contracts are denominated in foreign currency.

They are not.

They are denominated in U.S.

dollars and because so, we don't expose ourselves to any risk there.

The -- the risks that we do have is related to our business, principally in Europe and our international sales because we do sell product in the British sterling as well as the euro.

Now, that does expose us to some currency fluctuations, but the business is less than 10%, so, I really don't foresee any serious exposure in that regard.

And, as the business does grow internationally, we will look to potentially hedging those -- those exposures with -- with forward contracts.

That completes my comments, Gerry.

And I turn it back over to you.

Thank you, Russel.

I'd like to now turn the floor over for questions.

Operator, please?

Thank you. The question and answer session will begin now.

If you're using a speaker phone, please pick up the handset before pressing any numbers.

Should you have a question, please press star 1 on your push-button phone. Should you wish to withdrawal your question, please press star 3.

Your question will be taken in the order it is received. Please stand by for your first question.

The first question comes from Alice Longly.

State your affiliation followed by your question.

Hi, good morning.

Good morning.

My question is, some of this may be repetition, you gave out some of the numbers for Tactica versus Helen of Troy during the call.

Can you describe together by giving us the actual numbers.

I know sales for Tactica were 26.4.

What were the gross profits?

I think you said the ratio was the same as last year, is that what you said?

Yes, Alice, I did. And -- and Tactica for the quarter, for this quarter, was almost 75% gross profit margins.

And that's very similar to last --

Now, with the strong increase in sales, why wouldn't gross margins go up a little bit?

They did. They did on the -- are you talking about just relative to Tactica alone?

Yeah.

What I would tell you is it's a mix of sales at Tactica's level.

There is an increase, but the fact that they are now geared more toward retail sales --

And why would that be lower on the gross margin line?

Why would the mix be -- why are retail sales lower in terms of gross margins than direct sales?

The reason that the gross profit is higher when you do sales on television is because you have the additional costs of paying for the television advertising. So, the prices on television are higher than they are in the retail store.

Oh, the prices are actually higher on TV.

Yes, but you have a big expense for advertisement, which helps drive the business in retail.

You know, we believe 55% is an excellent gross profit.

I don't know too many businesses with that gross profit.

I don't understand your question, why you think it was, you know, higher than 75%.

I think 75% is -- is excellent and I don't know too many companies that can -- can say that.

I'm not complaining about it, just trying to understand. And what -- what's the average price on TV versus the average price at retail, so we have a sense of what's happening with pricing?

It depends on the product, you know --

Maybe take the most popular SKU and give us an idea?

It could be anywheres from, oh, $5 to $10 higher. But each product is different and I, you know, I don't have a list of what those differences are.

Okay.

And then what is the SG&A line for Tactica and then I can back out the other part of the company.

Alice --

Yes.

Why don't you call me back and I will get more specific on some of these figures.

Well, I guess my point is -- I'm just trying to figure out since you're shifting to retail, what's happening to the advertising ratio.

For Tactica and what's the them and maybe we can just do actual operating number for Tactica? maybe we can just go for that.

Yeah, I can certainly share that with you.

The operating number for Tactica was 12.8% in the 1st Quarter.

That's the percentage?

Yes, that's the percentage. It was $3.4 million.

Okay.

On $26.4 million in sales volume.

Okay.

And that implies, I guess, the SG&A ratio was up.

And what's the reason that the SG&A ratio would be up for Tactica considering you're going to retail where the advertising is less?

Well, as I mentioned in my presentation, it is the advertising, the percentage of advertising has relative to the sales growth has increased.

And why would that be since I think you just said that as you shift to retail you're moving away from direct sales where the advertising is already intense?

Well, yes -- advertising is still a very important part.

It's not only an important part of direct response business, but it also drives retail sales, so, there is a level of advertising that needs to be there regardless to drive the retail business. There is some trade-off and as I pointed out is that by placing our sales deeper into the retail business, we now bring more certainty and less volatility to the business and we think that's good.

Okay.

And then my final question is just, could you give us what your market shares are at retail for Epilstop?

And some of the other products?

We don't have that available to us right now.

Do you get Nielsen or any of those services to follow it?

Yes, they do, but their products are in so many, many different categories and I'd have to get those market shares if that's what you need.

Okay.

Thank you very much.

Thank you, Alice.

The next question comes from Jenny Hubbard, please state your affiliation followed by your question.

Avondale Partners.

Good morning. I wanted to know if you all could give me an indication of what of the new products for your core Helen of Troy operations are currently at on the shelves, and how those are selling at this point. I know you mentioned the Ionic hair dryers are selling quite well, but what else is driving the strong performance in Helen of Troy's core operations?

This is Gerry, Jenny.

As I mentioned, it is the Ion products. We have the number-one selling hair dryer in the United States with our Ion hair dryers.

We've come out with a line of products to go along with the hair dryers.

Not all of them are in 100% distribution, but we do have other derivative dryers and hot airbrushes and other products we're coming out with.

Also, in the in the hair curling products, flatners are very, very strong for us this year.

So, it's a combination of -- of the new products that we introduced in the January Housewares Show that are now finally hitting the shelves,

and the sales results are very strong.

And are the flatners in mass right now?

Yes, they are.

Okay.

Very good.

And what is your outlook for Helen of Troy's core operations growth prospects for the remainder of the year?

Well, based on -- on sales that we've had last month/this month, we believe they're going to continue to be very strong and hopefully will increase from the amount that we had in the 1st Quarter.

So, is 10% for the year a reasonable estimate?

That I don't know.

But it -- it sounds reasonable.

Okay.

And then secondly, you mentioned that Epilstop represented about 50% of the taxable sales, what are the new products that rolled out?

They have several that are on TV right now, a pore cleaner and they have abraiders. And they have three or four new products that they will introducing in August.

Which, until they hit television, I can't tell you what they are. But they do have a lot of new products in the pipeline and if any of them become big hits like the Epilstop, they will have a tremendous year this year. The Epilstop products, and everything they do have, is selling very well. Not just on TV, but because of the increased distribution they have.

As we mentioned, 60% of their business now is in retail stores. Which gives them everyday, day in and day out business, which they did not have a year ago.

Okay, and down here in the southeast, when I've been into the stores, the drugstores and Wal-Mart here, I've only seen Epilstop, are the other products on the retail shelves now?

They should be.

Okay.

Okay.

And have you added any new retail chains to the distribution channel for Tactica in the last quarter?

I think they have just added increased product distribution to the national chains.

You know, there's only a handful of national accounts out there and, you know, our job is to sell more product to them everyday.

I don't know if they've added new ones, but they certainly have increased their distribution with the ones that they do have.

Okay. And finally, on your cash position, can you talk about what you plan to do with that cash, is the buyback still in the cards at this point?

Well, the board is considering different avenues. One, of course, is the buyback,

or a dividend. But we are aggressively looking for acquisitions and we are spending a lot of time on that, and hopefully we will have some acquisitions. And that's where I'd like to see the use of our money going, is to acquire businesses that will help grow Helen of Troy's sales and earnings.

Okay.

Thank you.

Thank you, Jenny.

Operator: The next question comes from Charlie Jobson. Please state your affiliation, followed by your question.

Delta Partners.

I just want to focus on the international side and ask you, you know, what kind of rate of growth you were seeing there and did that come from U.K. or also Germany, as well?

Well, our international business is driven by, of course, the U.K. where the largest part of our business is, but we're also making inroads into South America and Asia. We're now starting to sell in Japan.

So, you know, we're looking for somewhere -- because their basis is less, of course, than the United States, of somewhere around a 20% increase in the international sales for this year.

Charlie, I think the -- we also had good growth in France.

I think my recollection, Germany was probably pretty flat, maybe a slight decline, but the greatest growth was in France, U.K. and as Jerry pointed out, the Pacific rim.

Okay, thanks for that. And back to Tactica for just a second, were there any particular products that came on real strong that, you know, you know, besides Epilstop that gave you the great growth there?

Was the Twist a great product, was that real hot?

Well, they have that, that's been selling. And they certainly have other products on television, if you watch television.

They have...

They have the Finally White, that's a tooth whitener.

And they continue to sell to -- the -- the Ionic hair dryer, that has always been a base for them.

They have an assortment of products and they're growing their product line.

So, you know, they don't have another product, if you're asking, that's 50% of the business. But they have a variety of products that make up the other 50%, and it is beginning to become a bigger part of the business. And I'm sure in future quarters we will be reporting that Epilstop, it will still be growing, but will be a smaller percentage of their total business.

Okay. And I'm just going to throw this out now, it probably doesn't make sense.

But, I know Sharper Image has an Ion Air Exchanger, or air cleaner. it's been a hot product for them.

Does it make any sense at all for you, or is that outside your area of confidence?

No, I think they're currently looking at that, also.

Okay.

All right.

Thank you.

Thank you.

The next question is from Jason [Batruba], please state your affiliation followed by your question.

Good morning.

UMB Investment Advisors.

You've had a nice trend of declining inventories.

I wondered if you can elaborate on that a little more and is that going to be sustainable going forward?

And what we can expect. Thanks.

Well, you know, if we continue the trend, we will be in a minus inventory level in about two quarters. So, the answer is no, it's not sustainable.

To be dropping the inventory $60 million or so, whatever it was a quarter.

Last year we were criticized for having high inventories.

We've worked all year long getting more turns, I think we've succeeded.

I think we probably have, probably the best turn over rate in the industry today -- I don't see the inventories dropping significantly.

Our inventory was $85 million.

I think to drive a half a billion dollar business, if anyone can do it in less than $85 million, I'd like to talk to them. I think that, you know, we've gotten our inventory down to where we feel comfortable and now it is just a matter of inventory turns.

Okay.

And have you changed your sources or how are you able to do that?

Just, you know, working closer with the factories, doing better forecasting and -- and a lot of things that we're doing in the company

Okay.

All right. Thank you.

Thank you.

Once again, Ladies and Gentlemen, if you do have a question, please press star 1 on your push-button phone at this time.

The next question comes from Jim Bison, please state your affiliation followed by your question.

Alpine Management.

Good morning.

Simply, did you gain shelf space on the retail side?

Well, you know, we have more products because of the introduction of the new products in January and the answer is yes, and [INAUDIBLE] nationally we have more shelf space.

On a percentage basis, what would it be? Was it like 5% or...

It's hard to say from store to store.

I mean if you have four products and you've been selling a chain and you add one, then you've added 25%.

If you have 10 and you sell on 12, you've added 20%. So, it's, you know, you know, we have some stores that have 30 of our products and they've gone to 36 of our products. So, it just depends on which national chain you're talking about.

Okay.

Fair enough.

What was your largest customer this quarter?

Wal-Mart.

And what percentage of sales did they represent?

I think it was probably 23%.

And one final, what were the inventory turns for this current quarter?

I didn't calculate that. I just now we're working hard to get it.

So we -- I guess we figured that out with the inventory turns are based on inventory.

Okay.

All right.

Thank you.

Thank you.

The next question comes from Steve Friedman, please state your affiliation followed by your question.

Steve Friedman at First Union Securities, now Wachovia Securities. Good morning, Gerry, Russel, Bob, congratulations again on another great quarter.

Thank you, Steve.

My question is the same I've had the last couple of quarter conference calls, and that is that with everything in the company going so well it appears that irregardless of the environment and the market and everything that the story that Helen of Troy has is -- is wonderful, ValueLine has you as the top ranking timeliness number one. Another report, I think from Avondale Partners, has you a strong buy.

First Boston has had a hold for quite some time, but I -- I guess my question would be, Gerry, is there any new research sponsorship on the horizon in view of the outstanding results and future for the company?

Okay.

You know, it -- as you mentioned, we did address this last time, at the last quarterly report.

We did acknowledge that Alice Longly, you know, certainly of First Boston, does have a report out on us. And since that time, we've added two more. Jenny Hubbard, who just called in from Avondale Partners, also has coverage on us --

Yes, I mentioned her.

And Jason Diamond of Frederick and Company also has coverage on us.

And, as you mentioned, ValueLine has us as the number one pick.

So, we have those and we are actually -- well, we think we can have two more coming up as soon as they write their research reports on us.

You know, we're planning on doing more financial P.R. road trips.

We also are going to be attending for those in the New York area that can attend, on November 12th, we will be in the Wall Street Forum in New York, on Tuesday, November 12th.

And also for those that are in the area, we're going to have our annual shareholders meeting on August 27th.

So, you know, we're actively working on P.R. because as we've mentioned in past quarters, we believe that -- that the P.E.s, that reported Helen of Troy are very low in consideration of the growth and the management and the sales of the company.

So, hopefully that could be and should be corrected during this year.

Thank you, Gerry.

I appreciate the input and congratulations again on a great quarter.

Thanks, Steve.

Uh-huh.

The next question comes again from Jenny Hubbard.

Please restate your affiliation followed by your question.

Avondale Partners.

My question was answered. Thank you.

The next question comes from Alice Longly.

Please restate your

affiliation followed by your question.

Alice Longly, First Boston again.

On the Tactica side, I think you said most of the growth comes from shipments into retail.

Just to clarify this, so, your direct sales were flat or down or up a little bit or...

They -- the direct sales were up, as well.

They were up about a million dollars over the previous year, which is close to about a 10% increase.

But like I said, most of the sales came from the -- the retail store channel.

Okay.

And then another number you gave, I'm just trying to clarify some things, you said that Epilstop is 50% or less of Tactica sales now and last year it was all of Tactica's sales?

No, but was much higher, like 75%.

75% a year ago.

Okay.

And the other question, again, these are all just housekeeping things, could you repeat how many stores you think you're in, and just so we can see the comparisons, you've got some very attractive comparisons year-over-year in the number of stores your products are in this year versus last year, how many stores at the end of, the quarter and how many at the end of the 1st Quarter last year?

I don't have the figures, but I know that they're substantially higher in the amount of chains that they are now in versus last year and I'm sure it's -- the number has to be in excess -- an increase of more than 10,000.

I think they're in --

How many stores are you in now?

oh, Tactica nationally, probably -- maybe 40,000 stores.

And do you remember, say, when did you get to 40,000, in the 4th Quarter?

I would say at least through the 4th Quarter, yes.

And so you don't recall where you were in the 1st Quarter of last year?

No, but was substantially below that number.

Okay.

Thank you.

Thank you.

Once again, if you do have a question, please press star 1 on your push-button phone at this time.

If there are no further questions, I will turn the conference back to Mr. Gerald Rubin to conclude.

Thank you, everyone, for calling in and listening to our conference call.

I certainly appreciate it.

And we'll be talking to you on our next conference call. Thank you again.

Operator: Ladies and Gentlemen, that concludes our conference for today.

Thank you all for participating and have a nice day.

All parties may now disconnect.