Summit Hotel Properties Inc (INN) 2013 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2013 Summit Hotel Properties, Inc. earnings conference call.

My name is [Erica], and I will be your operator for today.

At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of this conference. (Operator Instructions).

I would now like to turn the call over to Dan Boyum, Vice President, Investor Relations. Please proceed.

Thank you, Erica, and good morning. I'm joined today by Summit Hotel Properties' President and Chief Executive Officer, Dan Hansen, and Executive Vice President and Chief Financial Officer, Stuart Becker.

Dan and Stuart have prepared comments related to our fourth quarter 2013 release and filing. And following these comments, we will have an opportunity to address any related questions you may have.

As a reminder, this conference call is the property of Summit Hotel Properties. Any redistribution, retransmission or rebroadcast of this call in any form without the expressed written consent of Summit is prohibited.

Please also note that many of our comments today are considered forward-looking statements as defined by federal securities laws. These statements are subject to numerous risks and uncertainties both known and unknown as will be described in our 10-K for 2013 and our other SEC filings.

These risks and uncertainties could cause the results to differ materially from those expressed or implied by our comments. Forward-looking statements that we make today are effective only as of today, March 17, 2014. We undertake no duty to update them later. Our earnings release contains reconciliations to non-GAAP financial measures referenced during this call. If you do not have a copy of our release, you may view and print it from our website, shpreit.com.

Please welcome Summit Hotel Properties president and Chief Executive Officer Dan Hansen.

Thanks, Dan, and thank you all for joining us today for our fourth quarter 2013 earnings conference call. On the call today, I will update you on operating and Portfolio results. And then, turn the call over to Stu Becker, our CFO who will provide more detail on our financial performance for the quarter and the full year 2013, and discuss our balance sheet and liquidity and then finish up with a review of our initial outlook for the first quarter and for the full year 2014.

Let me begin by saying we are very pleased with the performance of our portfolio in the quarter, which finished above our prior expectations. Our same store RevPAR growth for the quarter was 6.1% compared to the fourth quarter 2012, continuing the trends we experienced in 2013. As you may recall, our third quarter conference call, we had exhibited some concern about the potentially softening in RevPar growth in the fourth quarter; which we attributed to the government's shutdown.

In addition, we had difficult fourth quarter comparisons in several of our southeast hotels due to nonrecurring FEMA and insurance related travel post Hurricane Isaac in 2012. Given these factors, we are obviously delighted with the fact we were able to accelerate our pro forma RevPar growth to 6.9% and again achieve RevPar growth ahead of the Smith Travel reported growth of 5.3% for the upscale segment as well as the overall US growth of 5.4% in the fourth quarter.

Summit's pro forma RevPar growth in the fourth quarter was driven by a combination of a 4.8% increase in pro forma average daily rate to $110.68 and a 141 basis point increase in average occupancies to 69.7%. Following a couple quarters in which our New Orleans properties had extremely difficult comparisons to the prior year and some softness in demand across the market. The fourth quarter was excellent for these hotels. And we're thrilled with their performance.

Our five hotels in New Orleans as a group posted RevPar growth of 19% in the quarter. We recently completed renovations on three of those hotels and are expecting steady improvement in this market in 2014 and 2015. Our recently acquired portfolio of four hotels located in Indianapolis and Louisville also had a strong fourth quarter posting RevPar growth of 12% as a group. As we discussed on some of our previous calls, our asset management team has been working diligently with these properties to fix the mix. We are already seeing the positive results of these efforts with less reliance on group demand. And we expect these trends to continue into 2014.

Moving on to acquisitions, we have deployed the capital rate last fall into additional high quality hotels. And continue to be patient, selective, and measured in our pace. To that end, in the fourth quarter, we acquired three hotels comprising 436 rooms for a total purchase price of $63.4 million or $145,000.00 per key.

Specifically, in October we acquired 115-room Hampton Inn & Suites located in Ventura, California for $15.8 million including the capital improvements we plan to implement. This hotel was built in 2004, and is conveniently located near several large corporate demand users including Verizon and Lockheed Martin; as well as leisure demand generators such as Hollywood, Beverly Hills the Pacific Coast Highway, and Malibu's pristine beaches.

We plan to invest approximately $1.4 million in capital improvements over the next 12 months with the estimated forward capitalization rate in the range of 8.5% to 9.25%. We also acquired a 108-room Hampton Inn & Suites in San Diego, California for $15.2 million including the planned capital improvements. This hotel benefits from both strong weekday business as well as weekend leisure demand given its convenient access to most of San Diego's major attractions. The hotel was built in 2008, and we project an estimated forward capitalization rate in the range of 8.5% to 9.25%.

In December, we acquired the 213-room Hyatt Place located in Minneapolis, Minnesota for $32.5 million. This hotel is located in the core [CBD] and is within blocks of major corporate and leisure demand generators. It is also connected to the city's skywalk system, providing convenient access to office towers, restaurants, and retail stores. We anticipate an estimated stabilized capitalization rate in the range of 8% to 9%.

In total for the year 2013, we acquired 19 hotels, adding 3,033 rooms while increasing our presence in an additional eight markets and ending the year with 89 hotels. Our acquisition pace has continued into 2014, as we have already acquired four hotels for $126 million.

In January, we acquired 182-room Hilton Garden Inn in Houston for $37.5 million; a 98-room Hampton Inn in Santa Barbara for $27.9 million; and a 101-room Four Points by Sheraton in San Francisco for $21.3 million.

In addition, we closed on the recently announced 210-room DoubleTree by Hilton in San Francisco for $39.1 million last Friday. Regarding our dispositions, in the fourth quarter we sold seven hotels and three parcels of land for a total of $23.9 million. For the full year 2013, we sold 15 hotels with a total of 1,143 rooms and five parcels of land for total proceeds of $58.6 million. And so far in 2014, we have sold another two hotels; the 89-room American Hotel & Suites and the 57-room Aspen Hotel & Suites both located in Fort Smith, Arkansas.

In 2013, we exited four markets that did not fit the Company's growth profile while redeploying capital into hotels and larger markets that should provide better long-term growth. Our capital recycling program is now largely complete. But we'll continually review our portfolio for additional dispositions on an opportunistic basis.

Turning to our renovation programs, in the fourth quarter of 2013, we invested $18.4 million and for the full year 2013, we invested $46.9 million. During the year, we completed 17 significant renovation projects encompassing such improvements as lobby and public space upgrades and guestroom renovations. The renovation of the legacy portion of our same store hotels is nearly complete. The additional renovation projects in the same store portfolio for 2014 are acquisitions that we've owned over a year and are now staged for the renovation.

We remain excited about the work we've done to improve the quality and cash flow of the properties and ultimately the value we're creating throughout our portfolio. To provide a sense of the type of projects included in our renovation program, I'd like to provide some detail on a couple of our larger recent projects. In 2013, we commenced an upgrade program for two recently acquired Hyatt Place Hotels in Orlando.

These hotels were updated to include redesigned lobbies and common areas with an expanded amenity package. In addition, all guestrooms were updated with new beds, carpeting, and wall coverings; and completely renovated the swimming pools at both hotels. Finally, the fitness centers were renovated and updated with new equipment including a new roof and fresh exterior paint, renovation expenses totaled $3.7 million and were completed in the fourth quarter of 2013.

In New Orleans, we completed a full renovation of the Courtyard by Marriott at the Convention Center. The guestrooms were updated with the newest Marriott package featuring the new color palette, the new furniture, beds, wall coverings, lighting, bath tile and wall paint. The exercise room was updated with all new finishes and fitness equipment. The hotel common areas were updated to include new lighting, hallway carpet, tile, and wall coverings, which complemented the lobby and bistro improvements that were completed in 2012.

With the total cost of approximately $2.8 million, we completed this renovation program at the end of the third quarter 2013. These two examples should give you a sense for the type of projects we've completed in our ongoing effort to improve the quality of our portfolio. Going forward, our renovation program will continue as a core initiative. We look forward to providing continued updates on future calls.

As we look ahead, we're committed to working diligently to unlock additional value from our portfolio through strategic and thoughtful investments. Focus asset management and selectively adding resources to better support the growth of our company. We expect to continue to execute our strategic initiatives to create and harvest value for all shareholders in 2014 and beyond.

With that, I'll turn the call over to our Chief Financial Officer, Stu Becker.

Thanks Dan. Good morning, everyone. I will provide further detail on our financial and operating results for the fourth quarter and full year 2013. Then, I will update you on the balance sheet and liquidity position both at year-end and currently including the effect of our transaction activity thus far in 2014. I will conclude by providing some perspective on our outlook for 2014.

Beginning with our quarterly results, for the fourth quarter 2013, we reported adjusted FFO of $0.14 per share. For the full year 2013, our adjusted FFO was $0.81 per share which was at the high end of the range of guidance we provided on our third quarter conference call. Pro forma hotel EBITDA for fourth quarter 2013 was $24.1 million, an increase of 13.2% as compared to fourth quarter 2012. Hotel EBITDA margins for the quarter were 30.9%, which represents an expansion of 165 basis points compared to fourth quarter 2012.

Moving on to the balance sheet; maintaining a strong capital structure with multiple sources of available capital has always been a hallmark of our company. And we entered 2014 in an excellent position. At year-end 2013, we had total outstanding debt of $436 million with a weighted average interest rate of 5.03%; and a weighted average term to maturity of 5.6 years. During the quarter, we closed on a new $300 million senior unsecured credit facility to replace our $150 million secured revolving credit facility.

The new unsecured credit facility is comprised of a $225 million revolver and a $75 million term loan. The credit facility has an accordion feature which allows us to increase the capacity by $100 million subject to certain requirements; in either additional revolver capacity or term loan. As a result, we were able to reduce our all-in funding costs by approximately 50 basis points. During the quarter, we repaid $35 million -- or excuse me -- $37 million of secured debt with no associated prepayment penalties. And we ended the quarter with net debt to trailing 12 month EBITDA of 4.2 times.

Incorporating the effect of acquisitions completed subsequent to year-end, we currently have $86 million outstanding on a revolving credit facility; including available current capacity on our line and cash and cash equivalents on our balance sheet, we have available capacity of approximately $140 million to fund growth initiatives. On January 30, 2014, the Company declared an $0.1125 per share quarterly dividend on its common stock. It was paid to shareholders of record on February 28, 2014.

Turning to guidance for 2014; in our release this morning, we provided guidance for full year adjusted FFO of $0.84 to $0.92 per share. For the first quarter 2014, we provided guidance for adjusted FFO of $0.17 to $0.19 per share. Metrics supporting our guidance are provided in our release.

But let me summarize a few key points. For 2014, we assume pro forma RevPar growth of 5% to 7%; and same store RevPar growth of 4% to 6%. We have incorporated renovation expenses of $35 to $45 million as well as the benefit of acquisitions closed year to date. We have assumed no additional acquisitions going forward.

Finally, as disclosed in our release and also in our 10-K that will be released later, you will see reference to a material weakness, which management identified in our year-end examination of our internal systems and controls. This issue relates to our controls at the individual hotel's balance sheet. And it resulted largely in a reclassification of entries within certain balance sheet line items.

We are in the process of resolving the issue to the satisfaction of our Board of Directors and auditors. With that I will turn the call back to Dan.

Thanks, Stu. We are pleased with our results for the fourth quarter and full year 2013 and we look forward to 2014. We ended the year with many freshly renovated hotel properties. We have dominant leading brands and an asset management team continuing to work to drive the performance of our hotels. With our strong balance sheet and ample capital, we are positioned to support the continued execution of our growth strategies. With that, we'll open the calls to your questions. Operator?

(Operator Instructions) Our first question comes from the line of Ryan Meliker with MLV & Co. Please proceed.

Hey, good morning, guys, and just a couple of quick ones here for you. First of all, with regards to your 2014 outlook. Your RevPar numbers look solid. But FFO is coming in all -- I think lower than we, and it looks like consensus was expecting. Is that driven by property margins coming in not as robust as maybe The Street expected? Or, is there something else that might be impacting FFO that we don't necessarily include in our numbers?

Yes, I think relative to consensus; as you know, we're reporting just on in place hotels at this point in time. I think several of our analysts have probably built in some additional acquisitions. We've been very active over the last year. Some of the analysts work --

Got you.

...Assume some additional acquisitions. So that distorts the numbers a little bit.

Can you give us any color on what type of margin growth you'd expect at the low end and the high end of your RevPar ranges?

Yes, we ended up with a hundred basis points of margin expansion on a pro forma basis last year. We thought that was a solid year. I think there is a few -- a couple of items that might have impact this year. A little bit more on the taxes, the real estate taxes. We're starting to see some more impact from that. That will hurt some margins to some extent.

Also, we saw a few brand initiatives, some push on some costs that will be brought out about by the brands that will have some impact. But I would think that, that 25 to 75 basis points of margin expansion is sort of built into those FFO expectations.

Great, that's helpful. Then the second thing was can you give us a little more color on the material weakness that the new auditors found and whether that's going to have any implications going forward?

Sure. We don't see any implications going forward. Our team discovered the individual hotel balance sheets didn't match our consolidated balance sheet. So it did require numerous reclassifications. It did not result in a restatement. We feel good about the process and working with our new auditors to tighten up the controls and reporting.

All right, that's helpful and that's all for me. Thanks a lot, guys.

Thanks, Ryan.

Thanks, Ryan.

Your next question comes from the line of Chris Woronka for Deutsche Bank. Please proceed.

Hey, and good morning, guys. Dan, maybe you could talk a little bit about kind of the size of the pipeline you guys look at right now. Then, maybe in the context of your current balance sheet capacity and maybe also how many hotels you might consider non-core. Just trying to get a sense for how the buys and sells might potentially stack up this year.

That's a good question--this is Dan. I think that the size of the pipeline for us hasn't changed materially. There's still quite a few one-offs and a small two asset and maybe three asset portfolios that we see and we get a look at. As we have talked about before, we're very tight with not just the brand companies but the hotel owners.

I think the size of the pipeline hasn't changed materially. I think it's really a result of the capacity that we have. Maybe $140 million to $150 million is where we see a capacity. That could -- you'd likely to see as we have in a more steady and measured pace. As far as dispositions, we've kind of gone through the recycling of the nonstrategic hotels now.

There could be maybe one or two throughout the year that we'd consider selling. But on an opportunistic basis, if there's a local owner or operator that brings us an offer of something that we feel is compelling, we would certainly entertain those offers. I think you could -- I wouldn't think to build a whole lot into the disposition side if that's the question.

Okay, I got you. Then, you guys obviously acquired the Hyatt Place Minneapolis late last year. You're under contract for that -- for another hotel in Minneapolis.

Then, you recently bought two in the San Francisco airport area. I guess are those -- is that part of a newer, the clustering strategy? I guess are there any other markets specifically you're looking at? Or, would you go deeper in some of the existing markets?

This is Dan again. I think that those are opportunistic where the deals came about. I don't think we've had a target list on either Minneapolis or San Francisco. They both fit the criteria that we look at which are top 50 markets that have multiple demand generators.

We've been fortunate through a lot of work to be able to bring opportunities to the company. I wouldn't say that we are more or less inclined to grow in either one of those markets. It's just that we like those markets. Those are -- if other opportunities present themselves, we would not be afraid to add a few.

Got you, and then just finally for me. With all of the additions and subtractions you had throughout 2013, and some of the market changes in terms of ones becoming more important than others. How should we think about seasonality this year? Has it changed dramatically since maybe 2012 or 2013?

Dan?

I think -- it's Dan again. I think the seasonality is always going to be an issue just because of the nature of the business. You've got November, December, January, February are going to always be the four months that are the slowest for the majority of the country. I think it won't be -- it will be a slightly less seasonal, but not on a material basis.

Okay, very good, thanks.

Thanks, Chris.

Your next question comes from the line of Gaurav Mehta with Cantor Fitzgerald. Please proceed.

Thank you, good morning. A couple of questions on external growth. As you think about acquisitions in 2014, can you talk about the kind of volumes that you're seeing in the markets, specifically your product type? And also, can you comment on the buyer and seller profile in the market?

Sure. The volume, I think as many of you have seen has been quite high. It was several billion dollar portfolios coming to market. I think that's a result of portfolio purchases done during the last cycle that maybe need coming to the end of the term of many of the private equity funds that bought them.

I think that the sheer volume is pretty enormous right now. It doesn't change a lot for us. We're not huge portfolio buyers. We're one-off real strategic buyers. But the buyer and seller profile I think is a little bit bifurcated between the large portfolios, which are predominately private equity groups. Then, well a lot of what we see is the owner operator that might own one, or two, or five hotels. Those would be the typical sellers.

The buyers are a mix of public REITs like us. Some that have a nationwide platform like Summit. Then, some that may be more focused on the coast. Then you also have the new private equity funds out there. Some owner operators; or some management companies, rather that have partnered with private equity. It's a pretty competitive environment on a portfolio basis. But there is a lot of volume out there as we discussed.

Then, the second question I have is on the cap rates. Are you expecting any movement from the cap rates in 2014?

I think we're always pushing for the greatest return we can for our shareholders. I would think at the margin, we should see some movement in cap rates. But I don't think at the levels we're buying at, we would expect a whole lot more.

Great, thanks for the questions.

Thank you.

Your next question comes from the line of David Loeb with Baird. Please proceed.

Good morning.

Good morning, David.

If I can talk, I'll ask you a question. The tax in the 2014 guidance, that's noncash. Is that right?

Correct, the tax in the guidance for '14 would be... We've provided a guide of $2 million to $3 million of tax. We would anticipate that -- if you recall for the last three years, we've been in a benefit position. We didn't anticipate paying tax in '14. But regarding the tax, we -- GAAP requires us to, after we've had three years of benefits to -- actually, we've accrued again an NOL -- an asset on our balance sheet for almost $5 million.

We essentially set up a reserve to reduce that down to zero. In the future, if we show -- if we have tax obligation in '14 and beyond -- on the face of our income statement we may not show tax, because we're using reserve to offset it. But we would adjust in our AFFO presentation the results that we would in fact -- be paying taxes in the year.

But not actually paying cash taxes in the year?

Not to be paying to the cash taxes, correct.

Okay. Dan, just one more on acquisitions. What would motivate you to pull the trigger on an acquisition today?

Well, I think creating value for our shareholders. I think we have still good capacity to continue to add value in the portfolio. But it really is a filtering process from the market, the quality of brand, the location of the brand; and the return that we can get for our shareholders. We have become even more selective and more patient. There really has to be something that rises above much of what you're --much of what you see in the marketplace today to peak our interest at this point.

Okay, and thanks.

Your next question comes from the line of Wes Golladay of RBC Capital Markets. Please proceed.

Hey, good morning, everyone. Looking towards the renovations. Will most of your acquisition PIPs be done by the end of this year?

I would say we've telegraphed the $35 million to $45 million per capital spend this year. It has materially moved into the PIP work on the newer acquisitions. Those hotels we bought over the last 12 to 18 months. As we clear through quite a bit of impact in the first quarter here and then some more impact on fourth quarter.

If you recall, as our slow periods tend to be the end of the year and early in the first part of the year. We'll continue to do more renovations in those periods. But as we complete the CapEx work at the end of '14, I would anticipate unless we would happen to make more acquisitions, then there would be more PIP work to do, that you would continue to see a slowdown in CapEx expend on '15 and beyond.

Do you have any kind of I guess ballpark range for how '15 will look just for the existing portfolio barring any other acquisitions? Could that fall to the [20 to 25] range, or even lower?

Yes, I haven't. I have not (inaudible) provided guidance on that. I'm not going to speak to that today. But I do and anticipate there would be a fall off from the pace of the last couple of years.

Okay. I don't know if we can talk about this online or offline. But do you have any kind of gauge about the EBITDA impact of the PIP work this year?

The impact for -- I'm sorry, for renovations this year?

Yes, for the renovations; I'm trying to get like a normalized valuation for this year. I know you guys have some material disruptions at some of the properties.

Yes. We provided some guidance language in our release regarding impacts both from RevPar and from EBITDA impact. If you look back in the release there we've provided some information regarding that. I think we had anticipated in the first quarter of '14, somewhere between $700,000 and $900,000 of EBITDA impact result of disruption from renovations. We did not speak to the full year. But that would be the impact in the first quarter.

Okay, thanks a lot.

You bet.

(Operator Instructions) Your next question comes from the line of [Matthew Dodson] from [Jay West, LLC]. Please proceed.

Hey, Dan this is [Jonathan]. I was just curious maybe if you could delve in a little bit deeper to the first question. Obviously in your guide, your RevPar is in line kind of with the industry. But the margins are less. I guess can you just help us understand why you would perform so poorly on the margin side?

Because no one else has really guided that poorly on margins that's already come out. I'm sure everyone else has taxes, et cetera. Could you help us understand a little bit better? Because you guys profess that you run these hotels really well. I'm just trying to understand how.

Jonathan, I think it's a lot of factors that go into that I guess question. Margin expansion is just not always linear. There are things that factor into that. One is some property tax; another are there are some brand initiatives from the franchise companies that can come in. that take a while to recover, a rate to offset those whether it be a new top sheet program, or a new Keurig coffee makers for Hilton Garden Inn.

There are a number of things that come in. We also have as we discussed some RevPar disruption in the first quarter that is fairly meaningful, 150 to 200 basis points of RevPar. I think there's -- those components are one of the things that put us in the position where we want to make sure that we get numbers out there that make sense.

Dan, could you maybe help us all think about, since you guys kind of continue to disappoint. Can you help us think about when you think we'll start to see the elusive margin expansion? Is that in '15? Is it '16? Is it -- when? Because I'm sure other people have to buy coffee makers?

Sure. I think that we did have margin expansion last year. We've had 165 basis points. I can't say that there hasn't been any margin expansion. I think that our process is one similar to others where we make changes, add resources. We have the ability to push rate in certain markets more than others. But we're certainly no less confident that our margin expansion will continue through the balance of our cycle and still get us to the levels that we've been talking about for the last several years.

This is Stuart.

Okay, yes.

This is Stu. I might be able to jump in there as well and help a little bit. Just from a relative to margin expansion, we did 250 basis points of margin expansion in 2012. We did 100 basis points of margin expansion in 2013. We think there's a little bit of -- perhaps a little bit of headwinds.

We're somewhat conservative in our guide. But we would anticipate that when we finish up the renovations here in '14, that if we do in fact get an elongated cycle where we're pushing exclusively more rate than occupancy, we think that we have got a good runway of two to three years of additional margin expansion.

Okay. Can you just help us understand? In the RevPar guide that you've provided, what are you expecting for occupancy versus rate this year? Then the other question I would have is just you've given us when about the disruption in Q1. When does the disruption start to go away relative to the remodels? I mean, do we start to see this potential margin expansion happen in Q3, Q4, or is it Q1 of next year?

Yes, to your first -- this is Stu. To your first question I think the mix is probably 75%, 25%. Somewhere between 50%, 50% and 75%, 25% rate versus occupancy, heavier on the rate side.

On the second part of your question each hotel is a little bit different depending on how deep the renovation is and the work done. But we always figure that six to 12 months post renovation. We should see complete stabilization and results thereof.

Okay. The last question I would have for you is just kind of relative to the thoughts of the Board. Obviously, you guys have made a lot of missteps with your -- the timing of your secondary, et cetera. You profess to be very shareholder friendly, but if you look at your stock, it's trading below NAV.

It's been a disappointment relative to the group. I'm just curious, how do you think you right that at all? Maybe your thoughts relative to increasing the dividend or buying the stock back. Heck, do you go private? It seems like the stock might be worth in the private value than it is in the public markets.

That's the question that we do spend a lot of time reviewing as far as what tactics we can take to continue to create shareholder value which is obviously in moving the stock price. We can continue to invest in our portfolio. We can continue to evaluate the dividend. The dividend is a big part of total return. For the stock, it's still at the higher end. But it is something that we discuss with our Board every quarter. If the stock doesn't react...

We get to the point where we would legitimately look at stock buyback as a strategy. If our stock is at such a level where that is the best use of our shareholders' capital, we'd definitely be in favor of doing so. As far as the plan and strategy, we're not in a position to raise capital. We've got a great portfolio. We've accomplished a lot of work and putting consistent numbers out and executing our strategy. We think we'll get our stock back in line and with the peers and provide a good return.

Do you find at all -- I mean, is the Board disappointed in management's execution? Did you guys get any heat at the end of the year? Or does everybody think everything is hunky-dory?

Well, I don't know that this is speaking for the Board. I think I'll speak for the Company as a whole. We're not particularly pleased at the stock price performance. We've got strategies and plans implemented and things that we're doing as we've discussed that we think will drive shareholder value. We've got a great Board that's very supportive. But as far as Board discussions, that's nothing we'd get into on the call.

All right, thanks and have a nice day.

Thanks, Jon.

Thank you.

We have no further questions. I will now turn the call over to Dan Hansen for any closing remarks.

Thanks everybody for dialing in today. As we talked about several times we're very proud of all the work we've done over the last 18 months and especially over the last several quarters and really looking forward to a great 2014, and discussing our results again next quarter. Have a great day.

Thank you for your participation in today's conference. This concludes the presentation. Everyone may now disconnect and have a great day.