Helen of Troy Ltd (HELE) 2013 Q2 法說會逐字稿

Good morning and welcome, ladies and gentlemen, to the Helen of Troy second quarter conference call for the fiscal year 2013.

(Operator Instructions).

Our speakers for this morning's conference are Gerald Rubin, Chairman, Chief Executive Officer, and President; Tom Benson, Senior Vice President and Chief Financial Officer; John Boomer, Senior Vice President.

I would now like to turn the conference over to John Boomer.

Please go ahead, sir.

Good morning, everyone, and welcome to Helen of Troy's second quarter conference call for the fiscal year 2013.

The agenda for this morning's conference call is as follows.

I will have a brief forward-looking statement review; followed by Mr. Rubin who will discuss our second-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 Tom Benson, our Chief Financial Officer; and finally, an open question-and-answer session for those of you with any further questions.

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

Generally, the words anticipates, believes, expects, and other similar words identify forward-looking statements.

Forward-looking statements are subject to a number of risks and uncertainties that could cause anticipated results to differ materially from actual results.

This conference call may also include information that may be considered non-GAAP financial information.

These non-GAAP measures are not an alternatives to GAAP financial information and may be calculated differently than the non-GAAP financial information disclosed by other companies.

The Company cautions listeners to not place undue reliance on forward-looking statements or non-GAAP information.

Before I turn the conference call over to our Chairman, Mr. Rubin, I would like to inform all interested parties that a copy of today's earnings release has been posted to our website at www.HOTUS.com.

The earnings release contains tables that reconcile non-GAAP financial measures to their corresponding GAAP-based measures.

The release can be accessed by selecting the investor relations tab on our homepage, and then the news tab.

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

Thank you, John, and good morning to everybody and thank you for calling in.

Helen of Troy Limited today reported record net sales revenue and record operating income for the three- and six-month period ended August 31, 2012.

Fiscal 2013 second quarter net sales revenue increased 3.6% to $287,411,000 from $277,420,000 in the same period of the prior year.

Our fiscal 2013 second quarter net sales revenue in the Housewares segment increased $722,000, or 1.1%, to $64,570,000 compared to $63,848,000 for the same period last year.

Fiscal 2013 second quarter net sales revenue for the Personal Care segment decreased $2,932,000, or 2.5%, to $112,364,000 compared to $115,296,000 for the same period last year.

Fiscal 2013 second quarter net sales revenue in the Healthcare/Home Environment segment increased $12,201,000, or 12.4%, to $110,477,000 compared to $98,276,000 for the same period last year.

The net income for the second quarter of fiscal 2013 was $22,968,000, or $0.72 per fully diluted share, compared to $23,593,000, or $0.74 per fully diluted share, in the prior year's second quarter, a decrease in net income of $625,000, or 2.6%.

The operating income for the second quarter of 2013 was a record $30,841,000 compared to $30,349,000 in the same period last year, an increase of 1.6%.

During the second quarter, we achieved record net sales revenue and record operating income.

Similar to other global consumer products companies, we face many challenges in light of continuing consumer uncertainty and global economic problems.

We are pleased that we were able to achieve growth in net sales revenue, operating income, and EBITDA.

As a Company, we continue to have a very strong balance sheet and generate a significant amount of cash, which can be used to further innovate our business and make further acquisitions.

We are firmly committed to executing our strategic vision for Helen of Troy even as the worldwide economic environment remains challenging.

Under our previously approved share repurchase program, our Board of Directors has authorized us to purchase up to 3,019,071 shares of our outstanding common stock.

We will continue to be optimistic in both exploring future business acquisitions, as well as repurchasing our common stock.

And as of August 31, 2012, our stockholder equity was $26.81 per share.

I now would like to turn over our conference call to Tom Benson, our CFO, for the financial review.

Thank you, Jerry, and good morning, everyone.

In the second quarter, we experienced a year-over-year net sales revenue increase of $10 million, or 3.6%.

Gross profit margin in the second quarter improved by 0.2 percentage point year over year.

Second quarter selling, general, and administrative expense as a percentage of net sales revenue increased by 0.5 percentage point compared to the same period last year.

Operating income increased 1.6% year over year in a challenging economic environment.

Tax expense increased $1.9 million, or 6.5 percentage points as a percentage of pretax income, due to the impact of the PUR acquisition on the mix of income tax (multiple speakers) higher tax rate jurisdictions.

Second quarter net income was $23 million compared to $23.6 million for the same period last year.

Diluted earnings per share for the second quarter was $0.72 compared to $0.74 for the same period last year.

Second quarter EBITDA without share-based compensation grew to $41.1 million compared to $39.6 million for the same period last year.

Second quarter net sales revenue increased $3.6 million year over year.

Net sales revenue in the second quarter of fiscal 2013 was $287.4 million compared to $277.4 million in the prior year's second quarter.

This is an increase of $10 million, or 3.6%.

The increase in net sales reflects incremental sales from the PUR acquisition of $26.3 million, organic growth in the Housewares segment of 1.1%, offset by sales decline in Personal Care and Healthcare/Home Environment core business of 2.5% and 14.3%, respectively.

Foreign currency fluctuations decreased net sales by $3.3 million for the quarter, which mostly impacted the Personal Care and Healthcare/Home Environment segments.

Operating income for the second quarter of fiscal 2013 was $30.8 million, which is 10.7% of net sales, compared to $30.3 million, which is 10.9% of net sales, in the second quarter of fiscal 2012.

This is a dollar increase of $492,000, or 1.6%.

The year-over-year increase in operating income primarily reflects the impact of the PUR acquisition, organic growth in the Housewares segment, and an improvement in operating margin in the Personal Care segment.

Net income for the second quarter of fiscal 2013 was $23 million, which is 8% of net sales, compared to $23.6 million, which is 8.5% of net sales, in the second quarter of fiscal 2012.

This is a decrease of $625,000, or 2.6%.

Diluted earnings per share in the second quarter of fiscal 2013 was $0.72 compared to $0.74 in the second quarter of fiscal 2012, a decrease of $0.02, or 2.7%.

The second quarter net income and diluted earnings per share decline primarily reflects sales and operating income declines in the core business of our Healthcare/Home Environment segments, which I'll describe in more detail shortly.

An overall increase in SG&A expense as a percent of sales and a 17.2% effective tax rate for the quarter compared to 10.7% for the same quarter last year, due to shifts in the mix of taxable income as a result of the PUR acquisition.

EBITDA without share-based compensation in the second quarter of fiscal 2013 was $41.1 million compared to $36.9 million in the second quarter of fiscal 2012, an increase of $4.2 million, or 11.3%.

The increase in EBITDA without share-based compensation is reflective of the acquisition growth in the Healthcare/Home Environment segment, organic growth in the Housewares segment, and an improvement in the operating margin in the Personal Care segment.

EBITDA without share-based compensation is a non-GAAP financial measure, which is presented in a table accompanying our press release along with a reconciliation to its corresponding GAAP-based measure presented in the Company's consolidated condensed statements of income.

Now I'll provide a more detailed review of various components of our financial performance.

Products in our Personal Care segment include hair dryers, straightening irons, curling irons, hair brushes and accessories, liquid haircare and styling products, men's fragrances, antiperspirants and deodorants, foot powder, body power, and skincare products, among others.

Key brands in this segment include Revlon, Vidal Sassoon, Hot Tools, Dr. Scholl's, Pro Beauty Tools, TONI&GUY, Brut, Ammens, Infusium 23, Pert Plus, and Sure.

Personal Care net sales in the second quarter of fiscal 2013 were $112.4 million compared to $115.3 million in the second quarter of fiscal 2012.

This is a decrease of $2.9 million, which is 2.5%.

The decrease in Personal Care net sales revenue primarily reflects a difficult US retail sales environment; challenging macroeconomic conditions in our international markets; increases in competitive trade promotion activities, including a major haircare launch by a significant competitor; the impact of inventory reductions and shift in category emphasis by certain retailers; new distribution initial orders with a key retail customer shipped during the same period last year, providing a difficult year-over-year comparison; and the impact of foreign currency fluctuations on US dollar-reported net sales.

Our Housewares segment consists of the OXO business.

OXO is the leader in providing innovative consumer product tools in a variety of areas, including kitchen, cleaning, storage, and organization.

Brands that we sell include OXO Good Grips, OXO Steel, OXO Softworks, OXO Touchables, and OXO Tots.

Housewares net sales revenue in the second quarter of fiscal 2013 was $64.6 million compared to $63.8 million in the second quarter of fiscal 2012, an increase of $722,000, or 1.1%.

Modest second-quarter sales growth was a result of the difficult retail sales environment, increased competition from competitors offering heavily promotion price discounts to capture market share, loss of distribution volume due to pricing, and the impact of our first-quarter aggressive seasonal closeout sales.

Our Healthcare/Home Environment segment consists of the Kaz business acquired on December 31, 2010, and the PUR business acquired on December 30, 2011.

Kaz is a world leader in providing a broad range of consumer products in two primary product categories, consisting of healthcare and home environment.

Kaz markets a number of well-recognized brands, including Vicks, Braun, Febreeze, Honeywell, Kaz Softemp -- I'm sorry, Smarttemp, SoftHeat, Duracraft, Protec, Stinger, and NOsquito.

PUR is one of two leading water filtration brands in the United States.

PUR products include faucet-mounted water filtration systems and filters, pitcher system and filters, and refrigerator filters.

Healthcare/Home Environment net sales revenue for the second quarter of fiscal 2013 was $110.5 million compared to $98.3 million in the same quarter last year, an increase of $12.2 million, or 12.4%.

Of this increase, $26.3 million relates to the PUR acquisition.

The core business in this segment declined 14.3% for the quarter due to difficult US and European retail sales environments, the impact of high seasonal inventory levels at retail due to the previous warm winter and mild cold and flu season, lost shelf placement on key products due to competitive pricing pressures, and the impact of foreign currency fluctuations on US-dollar reported net sales.

Consolidated gross profit for the second quarter was $117 million, which is 40.7% of net sales, compared to $112.3 million, which is 40.5% of net sales, in the second quarter of fiscal 2012.

This is a dollar increase in gross profit of $4.7 million, which is 4.2% in dollar terms.

Gross profit margin as a percent of sales increased 0.2 percentage points.

The increase in gross profit margin as a percent of sales is primarily due to the favorable impact of the PUR acquisition.

Gross profit was unfavorably impacted by foreign currency exchange rates on sales and general product cost increases.

Selling, general, and administrative expense for the second quarter of fiscal 2013 was $86.2 million, which is 30% of net sales, compared to $81.9 million, which is 29.5% of net sales, in the second quarter of fiscal 2012.

This is a dollar increase in selling, general, and administrative expense of $4.3 million, which is a percentage increase of 5.2% in dollar terms.

SG&A expense increased as a percentage of sales by 0.5 percentage points year over year.

The year-over-year increase in SG&A as a percent of sales is primarily due to higher overall media advertising costs, transition service fees incurred in connection with the PUR business which we did not incur during the same period last year, higher incentive compensation expense associated with the new performance bonus plan for our Chief Executive Officer, higher depreciation as a result of an upgrade of our enterprise resource planning system, and higher amortization and intangible assets as a result of the PUR acquisition.

Interest expense in the second quarter was $3.1 million, or 1.1% of net sales revenue, compared to $3.3 million, or 1.2% of net sales revenues, in the same quarter last year.

Income tax expense for the second quarter of fiscal 2013 was $4.8 million compared to $2.8 million in the second quarter of fiscal 2012.

Second quarter income tax expense was 17.2% of pretax earnings compared to a 10.7% effective tax rate in the same quarter last year.

The fluctuation in our effective tax rate is primarily due to the impact of the PUR acquisition on a mix of income tax in higher tax rate jurisdictions.

I will now discuss our financial position.

Our cash and cash equivalents balance was $21.8 million at August 31, 2012, compared to $25.1 million at August 31, 2011.

Receivables were $208.3 million at August 31, 2012, compared to $200.6 million at August 31, 2011.

Receivable turnover improved to 61.1 days at August 31, 2012, from 63.5 days at August 31, 2011.

Inventory at August 31, 2012, was $318.7 million compared to $257.6 million at August 31, 2011.

Inventory turnover decreased to 2.7 times at August 31, 2011 -- I'm sorry, 2012, compared to 2.8 times at August 31, 2011.

Stockholders' equity increased $126.5 million to $852.4 million at August 31, 2012, compared to $725.8 million at August 31, 2011.

We will now turn it over for questions.

Thank you.

(Operator Instructions).

Jason Gere, RBC Capital Markets.

Thanks.

Good morning, guys.

I guess the first question I have is really on the guidance, so I see that the EPS is coming down for the back half of the year and I guess, one, with the sales not being changed at all at the outlook, can you break down a little bit behind is this more SG&A costs?

Is this a tax rate being higher?

But secondarily and more importantly, if you're talking about the weak retail environment and seeing what we saw in this second quarter, I guess the outlook for organic sales is something like mid to high single digits just to hit that $1.3 billion to $1.325 billion.

So can you kind of walk us through a little bit of what gives you the confidence that organic sales can heroically reaccelerate in the back half of the year to kind of hit those numbers?

Why not take down the sales expectations as well when you took down the EPS guidance?

Jason, this is Tom Benson.

I'll start with the second question, which is the sales.

Last year in our Healthcare/Home Environment area, we had very soft sales in the third and fourth quarter, and it even bled into the first and second quarter of this year, due to the cough/cold/flu season was extremely weak.

I don't have in front of me, but it was like the weakest in over 20 years.

So our assumption is we're going to have a normal cough and cold and flu season, which should result in much stronger sales year over year in that area.

The other thing, and it's in the Healthcare/Home Environment, was last year's winter not only in the United States but also in Europe was seasonally warm.

So that had a big -- that had an impact on sales of heaters.

It was also dry in Europe, so it had an impact of on dehumidifiers and stuff.

So our assumption is for a more normal cough/cold season and a more normal winter season.

So that's one of the key impacts on sales of why we expect that the sales can do better in the second half.

(Multiple speakers).

I was just going to say, so you're talking about something that's more double-digit growth, then, in the back half of the year?

For --

For that segment.

For that segment, yes.

Okay.

Okay.

For the -- on the profits, the gross profit margin is -- has been stressed the last few quarters due to rising cost of goods sold.

And a lot of our products are sourced out of China, where costs are going up not only due to the currency, labor costs are going up also, so our gross profit margin has been under pressure due to rising costs.

In this environment, we have selectively increased some prices to the retailers.

We've had some success.

We've also -- as a result of increasing some prices, there's certain business that we did not get, due to price increases.

So it's a very tough retail environment to increase prices.

Also, our tax rate is higher, and that's due to our two recent acquisitions.

The structure of the acquisition and where their -- the majority of their profits are coming from are in higher tax rate jurisdictions.

So with the tax rate, should we expect 17% as kind of the go-forward rate that we saw in this quarter?

I would expect it would be in the range of 15%, I mean, so around that area.

Okay.

The second question, I guess, just -- so a little bit more color back on the sales.

So thanks for the clarification on the cold season.

I'm already sick, so I'll probably be helping your sales.

I guess from the personal care side, can you break down liquids versus appliances in the quarter because I guess by our calculation, organic sales were down modestly.

Last quarter, it was more of a liquids issue than the appliances.

So can you talk, I guess, one, about what the breakdown was in the second quarter sales, year-over-year trends in both those businesses?

And two, as you look towards your guidance for the year, how do you think Personal Care will hold up?

Will it be more of what you saw in the second quarter, or do you think that will be better and that's kind of built into the sales expectations as well?

Jason, this is Jerry.

In the Personal Care area, we don't break down between our appliances and our liquids business.

But overall, we were down 2.5%, and it was pretty much across the board in both divisions.

And your question of what's going -- in the future, I think we were going to probably in the second half look for the same 2.5% decrease for the second half.

Until we see a turnaround in the third quarter, I would predict that it's going to be down about the same 2.5% for the Personal Care category.

Just maybe to ask in a different way, last quarter I think the liquids business was down significantly, I think because of what your competitors launched out there.

So did you see trends improve from the first quarter to the second quarter?

And conversely on the appliance side, I think it might've been up modestly in the first quarter.

Did the appliance business get a little bit weaker?

Can you -- I'm not looking for numbers.

I'm just looking qualitatively or directionally how things are trending.

As far as the liquid division, Idelle Labs, yes, the second quarter did show improvement percentagewise over the first quarter.

And you're right that there was some new launches from major competitors that kind of impacted the business.

But that's already out and they're selling it.

But we did have an increase over -- in the second quarter over the first quarter.

So on the bright side, things are looking better.

The appliances, I just think they are what they are.

I think we will show somewhere around a 2% decrease in sales in the appliance division.

So that's why I was -- overall, I would say 2%, 2.5% is probably realistic right now until we see how the third quarter comes in.

Okay.

And then, just when you talk about the inventory reductions, I think you were talking about some retailers, which businesses are you speaking more about there?

Is that across the board or is there any -- I'm not asking for the retailer, but which categories are you seeing a little bit more of that pressure?

I think it's across the board in the Personal Care area.

I'm sure -- it also happened in the Healthcare/Home Environment because of the reasons that Tom gave you that because it was a warm winter season last year, warmer than normal, the stores didn't sell as much merchandise of the seasonal merchandise as they should have, so they have higher inventories also so they've cut down on some of their sales.

But as you heard, we're looking for normality to come back in the cold and flu season and also in the warm winter season.

I'm sure you read the reports that this past year has been one of the hottest -- or warmest temperatures in the history of keeping records, so that affects our business.

But hopefully, everything will get back to normal next year on the cold and flu season and the warm winter will be a little colder and our business will increase, and that's what we're expecting.

Okay, and then the last question and then I'll jump out of the queue, so you have the age-old dilemma of buying back your stock or making acquisitions.

I guess if you have the authorization in place, you've probably seen some of your Smid competitors out there being more aggressive with buybacks.

Look at what Jardin has done with using their balance sheet to do that and look at the stock performance.

So the last couple of quarters where the results have been up and down, you've seen your stock take a hit as it is today, so what stops you from getting more aggressive out there and just buying back your stock?

I can imagine there would be a lot of accretion with doing that.

Of course there's always accretion over time with doing an acquisition, but why not put buybacks ahead of acquisitions at this point?

No, I agree with you, Jason, and I'm sure, as you'll see in the future, we will be more aggressive in buying back the stock.

I can't divulge what we're planning on doing because we haven't publicly announced it, but definitely stock buyback is one of our priorities, but also we're not neglecting the acquisitions also because we think we need to grow by acquisition, and certainly stock buyback will help the price of the stock, so we're working on both of them.

Okay.

Thank you for entertaining all my questions.

Okay, thank you, Jason.

(Operator Instructions).

Lee Giordano, Imperial Capital.

Thank you.

Good morning.

Just following up on the Housewares segment, can you talk about how much of the sales shifted from the first quarter or, I should say, shifted into the first quarter from the second quarter and how that impacted the second-quarter numbers?

And then, secondly, you talked about how competitors are offering discounts to capture share in this segment.

Is this a trend that you see accelerating and continuing, and is that baked in your expectations?

Just want to get more color on that.

Thanks.

As far as the Housewares area, if you look at our six-month sales report and not look at the first quarter, you'll see that we increased our sales 6.9% for the six months, and that's more or less what we project for the whole year.

So the answer to your question is yes.

In the first quarter, there were sales that were in the first quarter that could have and should have gone in the second quarter, but if you look at the whole six months as one period, they were up 6.9%, which is what we're projecting for that division for the whole year.

And as your question on competition, no, I think the competition is going to be what it is.

It's something we have to live with, certainly for the next six months.

It just depends on which division you're talking about.

There is -- in the liquid division, there are new entries that are coming in to the marketplace with strong promotions.

We've already had some; there's more coming, so I think -- I've already gone through the percentages that I think that we'll be down and I hope that we can do better.

David Starkey, Morgan Stanley.

Hi, guys.

My question was similar to one that was already asked, so I won't elaborate too much, but I would just want to impress that certainly Jardin is in a relatively similar business in some of their businesses and they're doing some amazing things for their shareholders.

And it seems to me with record low interest rates here, with your cash flow, rather than focusing on acquisitions you should literally sort of buy yourself here, and it just looks like kind of a no-brainer in my view.

So I just wanted to kind of impress that upon you guys.

That's what your shareholders, I think, are looking for here, and hopefully you'll do that.

Good luck.

Steve Friedman, Wells Fargo Advisors.

Good morning all; I just had a quick question.

Jerry, you're partway through the third quarter and you have adjusted your guidance to $3.50 to $3.60.

I was wondering, at the lower end of your range, that implies about an eight multiple on your stock.

The previous callers have talked about the buybacks, but how optimistic are you on the second quarter -- or, excuse me, second-half guidance going forward?

And with part of the third quarter a month and a little less than a half done, do you have a pretty good read on the overall?

I know your Personal Care, you indicated, would be off.

But how do you view the rest of the year, given the environment and elections, politics, and so forth?

I'm not going to get into the election (multiple speakers) but we believe the $3.50 to $3.60 that we did come out with was just not a number that we just pulled out of the air.

We analyzed every business that we have by customer, by SKU, and we're confident that right now it should be $3.50 to $3.60.

Unless something terrible happens about the cold and flu season or the weather or whatnot, we believe that, based on historical data we have in all the divisions, we came up with the $3.50 to $3.60.

So our challenge is certainly always to try to beat that number, and hopefully the cold and flu season and the warm weather and customers will all cooperate and we'll do okay for the second half.

All right.

Well, once again, though, looking at you're fairly confident even at the lower number, I may look at the competitors again and their multiple versus you.

Do you see any reason why our multiple continues to be sub their P/E multiples?

No, I wish I had the answer for you, Steve.

It's something that we wonder about all the time.

We have a great Housewares division that has historically had 15 years or more of growth.

Our Personal Care division is suffering a little bit now, but we think we can, long term, turn that around.

And of course, the Healthcare/Home Environment, a lot of it is dependent on the weather.

So once that weather and cold season corrects itself -- just to be normal; we're not looking for everybody to get sick, just to be normalized cold and flu season, we think we'd do very well, and I think that -- I agree with you.

The market should give us a bigger P/E than what we're getting.

Okay, thank you very much, Jerry.

Okay, thanks, Steve.

(Operator Instructions).

Jeffrey Matthews, Ram Partners.

Hi, thanks.

I think shareholders -- or real shareholders, rather than people wanting a quick fix, are more interested in the basic business itself and whether there's been any change in your competitive positioning either at OXO or at any of the acquisitions that you've made recently.

And that's what I'm most interested in.

I don't think that we're hurting competitively.

We do get data from our customers, the retailers, to see how we're doing compared to others, and in a lot of cases we're doing better.

It's just the retailers are having a tough time.

I know that we may be down the 2%, but if you talk to some of the major retailers, they're down 4% to 7%.

So I guess we're holding our own, we're doing better, and it's just retail and the traffic and what's happening in the retail business.

But as far as losing, I can't tell you that we've lost all this business because of the competition taking it.

No, it's just the way business is and the way retail is going today.

Got it.

And then, in terms of the shift towards the Internet, which I think you've seen a lot, mostly in OXO, does that continue?

And does that pressure your big-box retail partners?

The Internet, you know, is here to stay.

We do have customers on the Internet, and yes, they are doing very, very well.

Hopefully it's not taking away from the brick-and-mortar retailers, but it is what it is.

If they increase their sales, we ship them more merchandise and we're happy for that.

Are you neutral as to whether it's sold at Zappos or Bed Bath & Beyond, or would you rather see one versus the other?

No, to us, every customer is a good customer.

It's just that we can't control whether the retail customer is going into a store or they're buying over the Internet.

Just hopefully they're buying our products.

Sure.

And then, finally, it sounds like the cost pressures out of China seem to be a little more persistent than in the past, and I wonder if there is any further change in your thinking about your supply chain and shifting more, say, to Mexico or elsewhere.

I know you've been doing that, but --

Well, the Chinese government has instituted, which they started last year, increasing their wages, the minimum wages, over the next five years, and that's true for anybody that makes in China.

On the other hand, we are producing a lot of product in Mexico in several different factories, so that's going to continue.

We are looking at and analyzing the difference between making in Mexico versus making in China, and I'm sure over time, based on cost and freight cost, that we can do more outside of China.

But for right now, the majority of our product is purchased in China.

Okay.

And as it stands now, that's not a competitive disadvantage for you?

No, definitely not.

Good.

Okay, great.

Thanks very much.

Thank you.

There are no further questions.

I'll turn the conference back over to Gerald Rubin to conclude.

Thank you, everyone, for participating and listening in to our second-quarter conference call, and I'm looking forward to visiting with everybody on our third-quarter conference call.

Thank you again.

Thank you.

Ladies and gentlemen, that does conclude today's conference.

If you wish to access the replay for this call, you may do so by dialing 888-203-1112.

The replay passcode will be 237-8064.

This concludes our conference call for today.

Thank you all for participating.

Have a nice day.

All parties may now disconnect.