Ion Geophysical Corporation (IO) 2011 Q4 法說會逐字稿

Welcome to the Ion Geophysical fourth quarter 2011 earnings conference call. During today's presentation all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. This conference is being recorded today, Thursday, February 16, 2012.

I would now like to turn the conference over to Mr. Jack Lascar. Please go ahead.

Thank you, Alicia. Good morning and welcome to Ion Geophysical Corporation fourth quarter 2011 earnings conference call. We appreciate your joining us today.

Your hosts today are Brian Hanson, President and Chief Executive Officer; and Greg Heinlein, Senior Vice President and Chief Financial Officer. Before I turn the call over to Management, I have a few items to cover.

If you would like to listen to a replay of today's call, it is available via webcast by going to the Investor Relations section of the Company's website at www.IONGEO.com, or via recorded instant replay until March 1, 2012. The information was provided in yesterday's earnings release. I should also point out that we will be using some PowerPoint slides to accompany today's call. They are accessible via a link on the Investor Relations page of Ion website. Information reported on this call speaks only as of today, February 16, 2012, and therefore you are advised that time-sensitive information may no longer be accurate as of the time of any replay.

Before we begin, let me remind you that certain statements made by Management during this call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations, and include known and unknown risks, uncertainties, and other factors, many of which the Company is unable to predict or control, that may cause the Company's actual results or performance to differ materially from any future results or performance expressed or implied by those statements. These risks and uncertainties include the risk factors disclosed by the Company from time to time in its filing with the SEC, including the annual report on Form 10-K and in quarterly reports on Form 10-Q. Furthermore, as we start this call, please refer to the statement regarding forward-looking statements incorporated in our press release issued yesterday, and please note that the contents of our conference call this morning are covered by those statements.

I will now turn the call over to Brian Hanson.

Thanks Jack, and good morning, everyone.

First I'd like to spend some time discussing the overall market, and then I'll get more into specific on our 2011 accomplishments. We covered some of this material in our December call, but I think it helps investors understand how we're thinking about our business both for 2012 and the longer term. Looking at commodity prices, we expect oil prices to remain in the current trading range of $80 to $100 per barrel for 2012. The world has approximately 2% spare capacity, which is extremely thin when considering the turmoil in North Africa, the Middle East, and Iran. In addition, the aggregate natural decline of the large oil reserves around the world is approximately 10%, and has been slowed to 5% to 6% thanks to new technologies designed to extend reservoir life. Reinvestment will need to increase just to offset the rate of actual decline, without taking into account growth in emerging economies such as India and China.

With oil production at approximately 85 million barrels per day, we're looking at the need to discover and bring on line approximately 5 million additional barrels a day just to keep pace. And finally, when we consider the social cost to maintain stability in places like North Africa and the Middle East, it appears that $80 per barrel is a required floor price, which has gone up approximately $20 per barrel over the last few years. Therefore, we're assuming that oil prices will remain at levels necessary to support continued frontier exploration in deep water, the arctic, and other hard-to-reach places.

Looking at natural gas, the precipitous drop in prices in North America over the last several quarters is clearly an issue that is likely to give pause in the near term to the way capital spending is allocated in North America. We're seeing this in most North American E&P earnings releases this past quarter. This could slow our data library sales of our North American ResSCANS this year, as two of our three programs are concentrated in the Marcellus, which is predominantly a gas play. The good news is, our Geoventures Business is a global portfolio, so we should be well-positioned to fill any softness in North American data library sales. For example, this year we have solid programs in both the equatorial margin offshore Brazil, and in anticipation of their next licensing round; and are actively shooting a land program in Poland.

In the marine space we expect seismic spending by oil companies to increase 8% to 11% in 2012. The seismic fleet is projected to continue to grow approximately half a dozen vessels this year, with four being high-end 3D. As the total number of active vessels has grown substantially over the years, our marine group now enjoys a healthy and growing repair and replacement business, which provides a stable revenue and earnings stream. We also expect both streamer count and length to continue to increase going forward, and we're observing a move towards higher-end 12 to 14 streamer vessels. We are starting to see capacity tightening in the marine-towed streamer sector, and anticipate the day rates may start increasing in the back half of 2012. In addition, seabed is a nice growth market.

In the past five years, total seabed spending has increased 150%, from $420 million in 2006 to $1.4 billion in 2011. We are seeing increased ocean-bottom cable activity for 3D and 4D in the North Sea, West Africa, and the Middle East. The seabed market has been driven by the need for higher resolution imaging, to better characterize reservoir, an area where recording the full wave field brings significant advantages. Today we believe that Ion is the leading provider of full wave processing, and we expect this to continue to be one of the growth engines in our processing business. In addition, efficiencies are being driven by new generation or next generation ocean bottom systems, which include more productive cable systems and nodes. We believe that Ion is well positioned to take advantage of these current technology trends, with our version of a next-generation integrated platform for towed streamer, and a new generation ocean bottom cabled system.

The land seismic equipment market remained slow through 2011, as the events in the Middle East and North Africa this past year forced many crews to shut down. We currently estimate that one-third of global land crews remain stacked, with many of those located in Russia, China, and the troubled areas in North Africa and the Middle East, such as Libya. Land has still not made a full recovery, but very large contracts are being negotiated in the Middle East and North Africa. Unless additional turmoil breaks out, it is expected that activity in those regions will increase in 2012.

In summary, our market outlook is as follows. We believe that we are in an expanding exploration cycle driven by the need to meet growing international energy demand, which bodes well for the geophysical and seismic industry. Globally, shell exploration of production should continue to grow its share in the energy mix, which creates significant opportunities for oil and gas service and technology companies. In addition, we believe that frontier exploration is where much of the E&P spend will be aimed, including the arctic.

Now more specific to Ion, as we indicated in our December call we're concentrating our focus on four key areas. First, challenging environments, such as shooting seismic in the arctic -- we have developed a leading reputation for performing seismic surveys in the arctic, including programs in the US Beaufort and Canadian Chuckchi Seas, and offshore Greenland. The second area is in complex and hard-to-image geologies. For example, the deep water subsurface salt in the Gulf of Mexico, West Africa, and Brazil. Our data processing group is a leader in depth imaging, including reverse time migration, and we expect our technologies to represent significant opportunities for Ion.

The third segment is unconventional reservoirs. Over the years we have gained significant experience in China, where our technology has been successful in unravelling deep fracture tight gas sands. We are currently developing our offering in the North American oil and gas shale place, with a solid start in 2011, where we spent approximately one-third of our Geoventures capital expenditures. Our goal is to have a highly differentiated shale offering, which we call ResSCANS, centered around unique measurements, such as recording the full wave field, and also proprietary processing and reservoir characterization services. We are well positioned to participate as the play migrates to other parts of the world, with Poland being our next spot.

The fourth segment is based on exploration, which is our legacy multi-client business. Frontier exploration starts with a regional understanding of the geology, and that is where our BasinSPANS have been so successful. This business started in 2003 with our GulfSPAN in the Gulf of Mexico, and has grown over the last several years to an extremely robust data library that covers virtually all of the frontier basins of the world, including such hot spots as East and West Africa and Brazil. We expect the BasinSPAN Business to continue to be a significant revenue producer going forward, and recently announced the addition to our data library of another 8,000 kilometers of data shot on the Equatorial Margin offshore Brazil.

Specific to 2011, I'm pleased to report that we had a solid fourth quarter and a good year. As we had anticipated and previously communicated, we saw our business build as we closed out the year. Our system segment revenues increased 34% over prior year, driven by strong towed stream and other main equipment sales, including recognition of the 12-streamer systems sold to BGP. Our marine business saw 40% year-over-year revenue growth. Our concept systems navigational software business experienced another solid year, aided by subscription model. We continue to invest in R&D to focus on new integrated streamer, seabed and navigational acquisition technologies. Our Solutions Business comprised of our new ventures, data library, and data processing Businesses, saw continued improvements in 2011, despite a slight year-over-year decline in revenues, primarily due to lower data processing revenues.

It has been a transformational year for our new ventures Business, increasing our customer count by 33%, our highest count ever. The Solutions Business delivered robust full-year revenues of $263 million, and our multi-client Business achieved a milestone $1 billion of sales since its inception. We made significant progress in acquiring 3D multi-client seismic in the Marcellus Shale via our new ResSCANS, and we have made further inroads with our marine multi-client BasinSPAN projects in the arctic, Brazil, and in East and West Africa. Since 2003, we have delivered over 300,000 linear kilometers of data, and we ended 2011 with record Solutions backlog for both data processing and new venture Businesses.

Our library revenues have been solid and our level of multi-client investment has never been greater, with a record investment of $144 million in 2011. Our data processing business is almost back to pre-Macondo levels, and continues to see sequential improvements each quarter, including improving Gulf of Mexico trends. We recently signed the biggest single data processing contract award in our history, with PEMEX, and we believe we now have a market leadership position in full wave land and OBC processing and interpretation. And on a preliminary basis, INOVA is expected to report its first profitable quarter since the joint venture was formed, and we continue to expect them to be breakeven for 2012.

I will now turn the call over to Greg Heinlein, who joined us in November as our CFO. Greg brings to ION a proven track record of building and leading the financial operations of global, public and private companies across a number of industries, including life sciences, energy, semiconductors and chemicals. He will now cover the financial results in more detail.

Thank you, Brian. Good morning, everyone.

Regarding the fourth quarter, Ion delivered $0.15 of diluted earnings per share, on net income of $23 million, excluding special items, as the strong performance by our Systems segment and another steady performance by our Software segment offset lower revenues from our Solutions segment. System segment fourth quarter revenues of $67 million improved 58% over the prior year period, driven by continued strong demand for towed streamer and other marine products. Our Solutions multi-client business delivered fourth quarter revenues of $83 million, down 22% from the same period last year. Our Software segment delivered $9 million of fourth quarter revenues, consistent with same prior year period, due to the strength of its subscription-based model. We also achieved the 51st ORCA Software installation during the fourth quarter.

With that overview, let's take a look at full year revenues, followed by an in-depth look at each of our segments. Excluding our legacy land business, revenues increased 6% to $455 million for 2011, compared to $428 million in 2010. System segment revenues increased 34% over the prior period, with strong demand for towed streamer and other marine products. Software segment revenues were flat in local currency, and increased 4% in US dollar terms. Solutions segment revenues decreased 5%, primarily due to lower data processing revenues, and more to come on that later.

Systems segment revenues increased 34% to $153 million in 2011, compared to $114 million for the prior year. This increase was primarily due to increased sales of our towed streamer equipment and other marine products. One highlight for the Systems segment this year was the recognition of revenue from the BGP 12-Streamer System in the fourth quarter. Our Systems segment continues to maintain its R&D spend, as we invest in the next generation seabed and towed streamer technologies. Our sensor geophone Business delivered its best quarter of the year, with fourth quarter revenues exceeding the combined revenues for the previous three quarters. The land seismic Business has been slow to recover from the negative impact of geopolitical events in North Africa and the Middle East. However, we believe that this uptick in geophone string sales in the fourth quarter indicates healing in the land seismic market. This improvement, together with our migration to low-cost manufacturing, should set the stage for improved results from our sensor geophone business in 2012.

Our Solutions multi-client business delivered another solid performance, with full-year revenues of $263 million compared to $277 million last year. This 5% decrease in revenues was primarily attributable to the lagging data processing revenues after the Macondo oil spill, partially offset by robust new venture revenues. This was the first decline in our data processing Business after several years of year-over-year growth, and represented an approximate $0.12 negative pre-tax impact from the prior year.

During the fourth quarter, the Gulf of Mexico sales pipeline increased sequentially, in line with similar increases for the previous two years. While activity in the Gulf of Mexico continues to show signs of improvement, we also remain focussed on international growth with data processing centers around the world. Our Solutions backlog ended the year at $134 million, which significantly exceeds the historical range of $80 million to $100 million. We believe this record level of backlog for our Solutions business, provides an indication of the strength of our sales pipeline, and should positively impact our Solutions revenues as we move into 2012. This next slide illustrates the relationship between our Solutions backlog and the associated data processing and new venture revenues. Our solutions backlog includes both data processing work that has been contracted by our data processing business, and new venture activity of our Geoventures group that has been underwritten.

As you would expect, there has typically been a one- to two-quarter lag between when data processing work is contracted, and when the processing occurs, triggering revenue recognition. Similarly, there has been a lag between when new venture projects are underwritten, and when the seismic data is acquired, which is when the majority of new venture revenues are recognized. Over the past three years, on average, backlog levels have tended to hover at 2.3 times the associated revenues. As you can see, periods of backlog growth have usually preceded increases in revenues. While the length of time it takes to convert the backlog into revenue varies, we believe that the growth of our solutions backlog is a good indication of future revenue growth. In particular, we believe our record level of backlog at the end of 2011, which was predominantly due to new data processing contracts, bodes well for our data processing group, which we expect to see return to its normal historical growth rates during 2012.

This next slide takes a closer look at the relationship between our investment and our multi-client data library, and the associated new venture in data library revenues from our multi-client business. As this slide illustrates, the level of new venture revenues has been consistently correlated to the annual level of new multi-client investment, with revenues from data library sales rising above and beyond this investment level. As you can see from the size of our 2011 investment, we believe that our opportunities are strong, reflecting continued confidence that 2012 will be another good year. Similar to the annual trend, this slide illustrates how the relationship between multi-client revenues and investments has been evident by quarter on average.

It's important to point out that our multi-client investment reached record levels this year, with a significant portion of this investment made during the fourth quarter. As you can see, the fourth quarter investment for 2011 significantly outpaced the historical fourth quarter average, predominantly due to our ResSCANS programs and continued multiple base and span opportunities.

Historically, our third quarter has enjoyed the highest average multi-client investment, attributable to our BasinSPAN work in the arctic, where the season for acquiring seismic data generally occurs from July to September due to ice conditions. With increasing new venture activity on land, including the completion of our first ResSCAN in the Marcellus Shale play in the fourth quarter, we should now be able to take advantage of new venture acquisition opportunities after we are timed out in the arctic. As we continue to diversify our BasinSPAN multi-client projects regionally, and grow the land ResSCANS component of the multi-client business, we believe we will experience a more even distribution of multi-client revenues throughout the year. In fact, we believe our significant investment in our new venture projects in the fourth quarter, which is continuing into the first quarter, will enable us to generate approximately 25% of annual results in the first half of the year.

Software segment full year revenues remain consistent at GBP24 million compared to 2010, as steady subscription sales of ORCA Software continue to demonstrate consistent demand for concept systems command and control software platforms, with approximately 41% of the total market share.

Moving now to a couple of special items, our fourth quarter results were impacted by three pre-tax adjustments. The first item relates to a $7.7 million charge, representing our 49% share of a write-down of excess inventory by INOVA Geophysical. This charge reflects an adjustment to inventory values for older products, given INOVA's launch of Hawk, and a new version of FireFly. The second item is a $2.9 million restructuring, as we moved our geophone manufacturing operations from the Netherlands to lower-cost centers in Asia. The last item is a $1.3 million impairment of one of Ion's investments. Excluding these special items, fourth quarter net income increased by $11.2 million over the fourth quarter 2010, and diluted earnings per share increased by $0.07.

Moving on to the balance sheet, the asset side of our balance sheet continues to demonstrate our asset-light strategy, with our most significant investments in working capital and oil company-funded multi-client projects, resulting in a data library with a net book value of $176 million. Total cash on hand was approximately $70 million, which was $35 million less than our total outstanding debt balance of $105 million. At the end of the fourth quarter we had $170 million of liquidity, comprised of $70 million of cash and $100 million of undrawn credit on our revolving credit facility. Operating cash flows, including cash flows from working capital, were consistent with the prior year. However, given our investment of $144 million in our multi-client data libraries, free cash flow is negative for 2011, and we expect to monetize these investments in 2012.

Now turning to INOVA, full year revenues increased approximately 39% over the same period of last year, with the leanest inventory levels of the year, and a credit line capacity of $27 million to support 2012 growth. INOVA estimates fourth quarter revenues to be in the range of approximately $58 million to $62 million, with operating income of approximately $5 million to $8 million. As we previously mentioned on our December outlook call, we expect INOVA full year results for 2012 to be breakeven. Similar to last quarter, we would expect to book 49% of INOVA's estimated fourth quarter net income in our first quarter results. INOVA's fourth quarter numbers are estimates, which we believe offer some visibility into the impact we expect the joint venture to have on our financial results. However, these are not final audited numbers.

As mentioned last quarter, INOVA announced the launch of its next generation land seismic products last September, and field testing of these new products is progressing, paving the way for sales opportunities in 2012. We believe these new and improved technologies will attract significant customer interest, because they are designed to deliver improved image quality through more productive delivery systems. Meanwhile, INOVA experienced notable sales of its current technologies, such as vibrator trucks, various cabled systems, and FireFly sales and rentals in the fourth quarter.

Finally, I will reiterate some of the key assumptions related to 2012 that we highlighted in our December outlook call. It is not our intention to give guidance on revenue or earnings; however, I will speak to some of the more transparent elements of our Business. We see 2012 as a year of growth across all of our Businesses. In addition, with the increase in activity of Geoventure land projects, we expect our earnings to be less skewed to the back half of the year as compared to 2010 and 2011, as we anticipate approximately 25% more of our annual earnings to be in the front half of the year.

We believe the data processing business has almost recovered on a quarterly run rate basis from the decline in 2011, and will grow at normal historical levels. 2011 was a good year for the Geoventures group and we expect 2012 to be strong as well. Multi-client investments, which highly correlate to new venture revenues, are expected to be in the range of $130 million to $150 million for 2012. Data library revenues are difficult to predict, but our data library portfolio is more robust than it has ever been, and all indications are that oil company CapEx budgets are rising from 2011 levels, which is a good indicator of our future data library sales. For the marine Business, we expect to sell at least two large-ticket systems, either towed streamer or OBC, in 2012, in addition to a growing repair and replacement business.

During 2012 we would expect operating expenses to remain flat as a percentage of revenue, interest expense to be in the $4 million to $7 million range, and our effective tax rate to be between 22% and 25%. In summary, we are pleased with the results of the fourth quarter and the momentum this represents as we head into 2012. We would like to thank our customers for their continued faith and dedication to Ion, and our employees who make the difference as we compete in the marketplace everyday.

And with that we'll open up the call for questions.

(Operator Instructions) Our first question is from the line of James West with Barclays Capital.

Quick question on the Data Library business. Sales were up sequentially, I think you did $27 million in the fourth quarter, but they were down a lot from kind of year-over-year levels, at least I believe they're down from the year-over-year levels. I'm curious, is there something that's changed in the mix of your Data Libraries that would cause you not to have the same type of year end budget flush earnings that we get at the Schlumberger and the TDSs of the world, or is this just an odd quarter for that?

Yes, James, I think it is a little bit of an odd quarter. If you went back and looked at the year end finish of 2010, that fourth quarter was extremely strong with Data Library. And that was really a reflection of pent up demand given what happened with Macondo in the Gulf. 2011 what we saw was a couple things.

Obviously we saw a strong level of activity on the new venture side of the house, but when we get into the fourth quarter we observed more competition for that budget flush money in the short term with 3D datasets that were really focused more around development decisions, versus, you know, later stage exploration type decision-making. So, I think there was some competition for that funding. I think it is a little bit of an odd quarter. But it was still a fairly, a good strong Data Library quarter.

Okay, fair enough. With respect to the new technologies that INOVA has just rolled out, could you maybe provide some color on what your customer feedback has been so far with FireFly and Hawk, and others, and when we should start to see sales come through of the new technologies?

Sure, there were a number of products that were introduced. We started with Whisper Suites in the spring at the EAGE. We continued and openly rolled out some products at the SEG, we also held some Whisper Suites on some, a specific product on the cable side that has not been rolled out.

And to date, the response from the customers has been extremely good. There has been a -- I'd almost have to get into each individual product, but in general, there has been such a redesign of these systems, both from a cost orientation, and from a feature and functionality perspective, that the reaction has been very positive. So, we believe that we're very well-positioned as that market heals and the Land Equipment Sales business comes back, that we've got a very, a very good offering.

Okay. Fair enough. Thanks, guys.

The next question is from the line of George Venturatos with Johnson Rice & Company.

First question was on the Solutions side of the Business. You know, obviously through '11 it looked like new venture revenue recognized was around $98 million, and you had spent upwards of $140 million. Obviously, historically, we've seen those two pretty well correlated. It looks, if you look back on the slides, looks like the '09 to '10 period kind of saw a situation similar to what we've seen in '11. So, could we potentially see something in '12 where the revenue recognition, not only more closely matches the spend in '12, but maybe exceeds?

Yes, George, you know, the way I'll look at that Business, we are investing heavily in that Business, and it is on an increasing basis every year. And the second thing that I think it's pertinent to observe is that as we move into land plays, these land plays are long in duration in that they require considerable upfront capital, as well. So I think what you're seeing, especially in the fourth quarter, what we're seeing is a disconnect between the amount of capital that is flowing out and the revenue that is being recognized, because of that.

And you'll probably see, my guess is we'll see more of that through 2012, just because land is a big part of our Business. We have a number of large land projects in play, and now we're going to be doing a significant sized project in Poland. So there may be a little bit of a disconnect compared to historical levels. Ultimately I do believe that makes itself up. It is more of a timing of ins and outs.

Right. I appreciate that. And then on the margin side, the margins for the Solutions business were ahead of our expectations and up nicely year-over-year. If you can maybe speak to some of the underlying drivers there. Obviously, you have some benefit seasonality at year end on the New Venture and Data Library side, but maybe speak to the data processing margin improvement, maybe the help there.

Yes, George, this is Greg. I wouldn't get too hung up on quarterly margins, you know, at the end of the day, a lot of this stuff, you know, transcends over a couple of quarters. So for us it is more about long term, you know, LTM margins over a 12-month period. So, you know, we do expect to see margins, you know, trend up over time, but certainly the fourth quarter was a strong quarter, and I wouldn't focus purely on that quarter as you look at 2012.

Okay. Great. And then just lastly with relation to INOVA, sounds like you had some good sales in Q4 and you're looking for a profitable quarter. Is there any sense of conservatism in terms of looking for a breakeven year for '12, or do you think that is just kind of how the year progresses, in terms of maybe seeing a good bit of sales in Q4?

George, I think our comments aren't necessarily specific to Q4. They are fairly consistent and, you know, over a period of time, what we're observing is a slow healing of the Land business. You know, a couple of the indicators, as Greg indicated in the script, one is increased activity on the Sensor side of the house. The second is the Vibe side of the Business is fairly strong. And we're seeing activity levels pick up in North Africa and the Middle East.

So, fundamentally, our assumption is as activity resumes in North Africa and the Middle East, without a melt down there, we ought to see a healing in the Land Equipment business, good enough that it produces a breakeven Business for INOVA in 2012. So it is more of a general statement around the overall trending of that sector. Now, of course, if there is another repeat of 2011 in the Middle East, it could continue to have an impact on it.

Right. Understood. Appreciate it, guys.

(Operator Instructions) The next question is from Novid Rassouli, of Sidoti & Company.

Two questions. First to kind of touch on what the last caller was discussing. The Land business, I was just wondering if could give us any color or data points on what gives you confidence in it breaking even in 2012. We have seen the losses tick up over the past three quarters, I just wanted to see your thoughts. Pricing improvements internationally, or just any color you could give us there?

Yes, Novid, I'm not sure I can give you much more color than, you know, the last response I just had on that. Our impressions are based on the overall trending of the Business, and the healing that is sort of the healing of North Africa and the Middle East. And watching what I would call our early indicators, sensors, and vibes, in that Business.

And the sales of those are fairly robust. It is not really about are we getting pricing leverage or anything that specific. It's, you know, the more commoditized products are moving, and we're positioned well with a good product set, if activity levels pick up to purchase equipment in the Middle East markets, we're well positioned to sell. So time is going to have to play that one out.

And are you expecting the stacked crews to be fully functional by the end of '12, or any ideas there?

No, I would not predict that all stacked crews would be functional globally by 2012, but I would expect that there would be a decrease in stacked crews and it will be more geographically focussed. So if you look at where activity levels are very strong, right now we're seeing North America and South America activity level high.

It's hard to actually secure a crew in North America right now. Crew levels were significantly stacked in the Middle East and North Africa, but there is some significant projects kicking in there. I would expect, just based on our knowledge with BGP's activities there, that they're deploying more crews through 2012. I think the yet to see is really Russia and the former Soviet Union. At this point in time I don't think there is really any great indicator that their area is healing.

Okay. The other question I have for you guys, do you guys break out how many channel of FireFly 3 or Hawk that you have sold in this past quarter, or demand there, or traction you're getting, especially with Hawk?

No, we don't break that out.

Okay. Thanks, guys.

Thank you. There are no further questions at this time. I will turn it back over to management.

Okay. Well thank you for taking the time to attend the conference call, and we look forward to talking to you during the first quarter call in early May.

Ladies and gentlemen, this does conclude the conference call. You may now disconnect and thank you for your participation.