Marcus Corp (MCS) 2011 Q1 法說會逐字稿

Good morning, everyone, and welcome to The Marcus Corporation first quarter earnings conference call. My name is Omika, and I'll be your operator for today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of the conference. (Operator Instructions). As a reminder, this conference is being recorded.

Joining us today are Greg Marcus, President and Chief Executive Officer, and Doug Neis, Chief Financial Officer of The Marcus Corporation.

At this time, I would like to turn the program over to Mr. Neis for his opening remarks. Please go ahead, sir.

Thank you, and welcome to our fiscal 2011 first quarter conference call. As usual, I need to begin by stating that we plan on making a number of forward-looking statements on our call today. Our forward-looking statements could include, but not be limited to statements about our future revenue and earnings expectations, our future RevPAR, occupancy rates and room rate expectations for our Hotels and Resorts Division, expectations about the quality, quantity, and audience appeal of film products expected to be made available to us in the future. Our expectations about the future trends in the Business Group and leisure travel industry, and in our markets, expectations and plans regarding growth in the number and type of our properties and facilities, expectations regarding various non-operating line items on our earnings statement, and our expectations regarding future capital expenditures. Of course, our actual results could differ materially from those projected or suggested by our forward-looking statements. Factors, risks and uncertainties which could impact our ability to achieve our expectations are included in the risk factor section of our 10-K and 10-Q filings, which can be obtained from the SEC or the Company. We will, of course, post all Regulation G disclosures when applicable on our website at www.marcuscorp.com.

So with that, let's talk about our fiscal 2011 first quarter results. The positive trends in our Hotels and Resorts Division continued in our first quarter, resulting in substantial year-over-year improvements in that division. Thus, even though our Theater business reported reduced operating results, we were able to report increased revenues, operating income, and pretax earnings this quarter. So, we're pleased with that.

Before we get into the quarter results, however, let me first briefly address any variations in the line items below operating income versus last year. As you can see, there really weren't any significant variations in most of these line items. The activity in our investment income, gains and losses on dispositions, and equity earnings and losses lines was very limited, with no significant variations compared to last year. At this point in time, I don't expect we'll see significant variations on these same line items in future fiscal 2011 quarters as well, barring any unforeseen dispositions or anything along those lines during the year.

Meanwhile, our interest expense was down over $300,000 during our fiscal 2011 first quarter compared to the prior year, due primarily to reduced borrowings. As you know, during the Summer, we're at the peak of our cash inflows, while at the same time, we generally refrain from significant capital spending. As in the past, we'll likely see our debt level rise in the future periods, now that the Summer's behind us. Our overall debt to capitalization ratio at the end of the quarter was a very strong 39.5%, down from 41% at our recent May year end, due to the aforementioned strong cash flow Summer for us.

And finally, the only reason that our net earnings for the quarter were slightly lower than last year was because of a higher effective income tax rate during fiscal 2011. Our effective income tax rate during the first quarter this year was approximately 40.2%, compared to an effective income tax rate last year during the first quarter of 36.5%. This is really all about last year. Last year's rate benefited from a decrease in the amount of unrecognized tax benefits, as a result of a lapse in the applicable statute of limitations. This year's annual tax rate is expected to return to our historical 38% to 40% range, excluding any further lapses in statutes of limitations, or potential changes in federal or state tax rates.

Shifting gears, our total capital expenditures during the first quarter of fiscal 2011 totaled approximately $2 million, compared to just under $7 million last year. Of course last year, we were in the midst of the ongoing renovations at our Grand Geneva and Hilton Milwaukee properties. As I noted earlier, we generally tend to limit our capital spending during our busy Summer time period, and the amount we did spend this year was spent equally between our two divisions.

At this early stage of our fiscal year, despite the low CapEx number during our first quarter, I have no reason to adjust our previous estimate for capital expenditures for fiscal 2011, of an amount in the $40 million to $60 million range. In fact, as you saw yesterday, we announced an acquisition of a theater in Appleton, Wisconsin. We're also still finalizing the scope and timing of the various requested projects by our two divisions, and we anticipate proceeding with many of these projects as the year unfolds. The actual timing of various projects currently underway or proposed will certainly impact our final capital expenditure number, as will any currently unidentified projects that could develop during our fiscal year.

Now, before I turn the call over to Greg, let me provide a few additional financial comments on our operations for the first quarter, beginning with theaters. Our box office revenues were down 2.7% during the first quarter, with concession revenues down 5.6%. These decreases are entirely attributable to a decrease in total attendance at our theaters of 6.6% for the first quarter. Now, while we had a mix of both up and down weeks throughout the 13-week quarter, I will tell you that the entire decline in box office receipts can be attributed to the first two weeks of our fiscal year. Our overall box office revenues actually increased slightly over the span of the last 11 weeks of the quarter.

This year's Memorial Day hold-overs, and films released in early June, which included Shrek, Sex in the City, and Prince of Persia, just did not perform as well as the comparative pictures last year, which included Night at the Museum 2, Up, and the surprise hit The Hangover. The impact of our overall attendance decrease was partially offset by an increase in our average admission price for these theaters of 4.2% for the quarter, an increase in our average concessions, and food and beverage revenue per person of 1.1%. Premium pricing for our digital 3D attractions and UltraScreens contributed to the higher average admission prices. Our operating margins for this division decreased to 22.5%, compared to 24.4% last year, with approximately half of that margin decline related to favorable real estate tax adjustments made last year during the first quarter. The remainder of that decline, the other 1% or so, is really due to the impact of the reduced attendance on our fixed costs.

Shifting to our Hotel and Resort Division, as we note in our release, our overall hotel revenues were up 14.1%, and total RevPAR was up 15.7% during the quarter, compared to the same period last year. As we've noted in the past, our RevPAR performance did vary by market and type of property, but all eight of our Company-owned properties reported increased RevPAR this quarter.

According to the data received from Smith Travel Research, and compiled by us in order to match our fiscal year, comparable upper upscale hotels throughout the United States experienced an increase in RevPAR of 8.7% during our equivalent fiscal 2011 first quarter. So, for the second quarter in a row, we have significantly outperformed the national average. Our fiscal 2011 first quarter overall RevPAR increase was a result of an overall occupancy rate increase of 12.6 percentage points, and an average daily rate decrease of 2.2%.

With that, I'll now turn the call over to Greg.

Thanks, Doug. I'll begin my remarks today with our theater division. I think it has been pretty widely reported in the national press that this Summer's film slate didn't create a lot of excitement amongst the movie-going public, continuing a trend we saw in the last two months of fiscal 2010. While we had several films that performed well during the period, led by the outstanding Toy Story sequel, the latest Twilight film, and the well-made original film, Inception, we didn't have a lot of depth to the film slate this time around.

Our indication of this is the fact that last year we had seven films produce at least $2 million of box office receipts for our circuit during our first quarter. This year, we only had five films reach that mark. That second tier of films can make the difference between the record revenues we reported last year during the first quarter, and a good, but not great, quarter like we just reported this year. As Doug pointed out, partially offsetting our decreased attendance this quarter was another increase in our average ticket price, driven once again by the premium associated with 3D films, and the fact that we have more 3D screens and more 3D films to show this year versus last year.

Three of our top six films during the quarter were exhibited in digital 3D, including Toy Story 3, Despicable Me, and Shrek Forever After, with approximately 50% of our revenues from these films coming from 3D screens. In addition, as our press release notes, we were pleased with the customers' response to our new UltraScreen X L3D screens, and we are proceeding with the addition of large screen digital 3D to three more of our existing UltraScreens. Once installed, 11 of our 13 UltraScreens will have digital 3D capability, and we will have digital 3D in 65, or approximately 10%, of our screens. And, with 30 or more 3D films currently scheduled to be released from now through December 2011, we will not be lacking in product for these 3D screens.

Having said that, it is also no secret that not every 3D film performs like Avatar and Alice In Wonderland did. Done well, it is clear that 3D can have a positive impact on our results, and will be well received by moviegoers. And certain types of 3D films seem to do better than others. But it is also clear that 3D does not guarantee success, as evidenced by a number of films that did not perform well in recent months. Frankly, this really shouldn't be a surprise to anyone.

Many elements go into a movie's success, story, acting, directing, special effects, et cetera. And the fact is that 3D alone will not make a subpar movie a hit. So time will tell what the long-term impact of 3D will be, and whether the current ticket price premium is sustainable. We remain bullish on the impact it can have on our business, but would suggest that 3D alone is not some sort of magic elixir for the movie business. We're happy with the investments we've made, and look forward to a number of potential 3D hits over the coming months, as highlighted in our press release.

We have mentioned it in passing, so I also want to note that we are pleased with our just-announced opportunity to purchase a theater in one of our existing markets, the College Avenue 16 Cinema in Appleton, Wisconsin. Purchasing this theater from Regal is in keeping with our express desire to continue to grow our circuit by considering selective acquisition opportunities as they may arise. We obviously know the market well, and we look forward to closing on this theater next week, and having it contribute positively to our results in future periods.

With that, let's move on to our other division, Hotels and Resorts. You have seen the segment numbers, and Doug gave you some additional detail. Certainly, we were very pleased with the significant year-over-year improvement we have reported for two straight quarters now. And as Doug shared with you, it is also gratifying to see us continue to outperform the industry during the early stages of this recovery.

As I noted during our last call, it is not surprising that as we continue to lap the time period when revenues were declining last year, we would see our RevPAR trends continue to improve. But what I continue to find most encouraging, was the improvement in our trends compared to two years ago. During our first three quarters of fiscal 2010, our RevPAR was down approximately 20% each quarter compared to the same quarter two years prior. This trend finally began to turn during our fiscal 2010 fourth quarter, with our RevPAR down 8.2% compared to fiscal 2008 fourth quarter. I'm happy to say that we maintained that trend, and our recently completed first quarter RevPAR was down approximately 8.8% compared to two years ago.

I think there are a couple of take-aways from this. First, it should be clear that while we are extremely pleased with our year-over-year improvement, we have a ways to go before we can expect our operating results to return to pre-recession levels. The industry was hit hard, and we remain in a very fragile economic environment. So we certainly expect continued challenges in the future.

Secondly, as we have previously pointed out, all of our RevPAR increase was predominantly the result of increased occupancy. Our average daily rate, or ADR, was still down versus last year in many locations. In the short term, we believe the trade-off between occupancy and rate is worth it, particularly at properties like the Grand Geneva, where the ancillary spend by the typical guest more than makes up for the decreased average rate. But until we can begin to consistently increase our ADR, full recovery cannot occur.

Increased occupancy is a wonderful thing, and we worked hard to achieve the significant increases we reported today. But keep in mind that increased occupancy also puts a lot of pressure on our operating margins. Additional guests drive additional costs, while additional rate falls more directly to our bottom line. So the challenge in the months ahead will be to begin realizing year-over-year increases in our ADR. This will not be an easy task, as we continued to experience a strong pushback on rate during the quarter just completed.

Our leisure business was very strong during the Summer, but this is one of our most price-sensitive customer segments. The leisure segment also generally requires a greater use of alternate internet channels, which further erode our effective average rate. And meanwhile, the customer segment that has traditionally produced the highest ADRs for our hotels, the individual corporate traveler, continues to be relatively soft. Our group bookings, while not back to where they were, continue to improve. We've had five straight months now of consistent progress with this customer segment.

So, if I had to summarize my remarks, I would characterize our current view of the hotel landscape as one of cautious optimism. On a year-over-year basis, we are off to a very good start, and we are hopeful that the trends we have seen in the last two quarters will continue in the near term. Many challenges remain, and our visibility remains limited due to our continued relatively short booking windows. But the trends are encouraging. Whether the current positive trends continue, will depend largely upon whether the economy continues to show signs of gradual improvement.

We remain concerned about the fragility of our current economy, as well as the uncertainty that is arising out of our current political environment. We as an industry have expressed disappointment in the past with comments of some government officials regarding travel, and the federal government's recent announcement that it was reducing their travel per diems. This puts further pressure on an industry trying to recover from the worst downturn in recent memory. But regardless of what additional challenges lie ahead, I'm glad to have had the chance to share some more good news regarding our hotels and resorts business today.

Finally, we continue to look for opportunities to grow our hotels under management, through a variety of different methods. While transaction activity remains very limited at this point, with a strong balance sheet and credit availability, we remain poised to explore and follow through on potential growth opportunities that may arise in the coming months. And, as I wrap up our prepared comments, I would be remiss if I didn't note, as our press release indicated and I shared with you during our last call, our great balance sheet allowed us to repurchase some shares during this quarter, pursuant to an existing Board authorization, while still leaving us plenty of room to consider growth opportunities in both of our businesses. With a debt to capitalization ratio under 40%, over $120 million in revolving credit availability as of quarter end, and a $150 million universal shelf registration statement on file and effective with the SEC, we have the flexibility to explore and follow through on potential growth and value creation opportunities that may arise during the months and years ahead.

We will continue to manage our balance sheet very carefully in the future, but we are committed to executing the strategies necessary to provide value to our shareholders. We look forward to celebrating our 75th anniversary on November 1, and hope you share our excitement for the opportunities that lie ahead for the Marcus Corporation. With that, at this time, Doug and I would be happy to open up the call for any questions you may have.

Thank you. (Operator Instructions). We'll go first to David Loeb with Baird. Please proceed.

Good morning, gentlemen. I wonder if we could start on theaters. Can you give us a little color at least on the Appleton acquisition? If not explicitly the purchase price, what kind of returns you expect. Purchase price would be great.

Eventually David, you'll probably see the purchase price. At this point in time, we're not disclosing it. The transaction hasn't closed yet. But, it's -- we've done a couple of other acquisitions. This is just a single theater. It does include real estate, which would tell you that the multiple is a little higher than if it was a lease. And our past acquisitions had kind of a mix of real estate and a few leases. It's Appleton, Wisconsin, so it's from a -- certainly, we know the market well. We've been there. We're already there. From kind of a market perspective, it's not Milwaukee or Chicago, and so from an average box office perspective, it's probably a little less on average. But for the market, it does very well and it's been a very consistent theater and we certainly applied our usual metrics in terms of how we've evaluated the investment, and feel that it certainly will be an accretive investment for us. And, we're pleased to have it.

Good theater and good piece of real estate.

Yes.

Given that it's perhaps lower box office, is it fair to say this is likely somewhere below what we've seen as kind of an average of $500,000 a screen?

Now you're talking on a purchase price standpoint now?

Yes, but just kind of general, not explicitly. We think $500,000 a screen may be around the going rate. So, given what you just said, is this likely to be less than that?

Well, I've shared with you in the past that when including real estate, we can't build a theater for $500,000 a screen.

Right.

And so depending on -- in Appleton the land cost is not going to be as much as if we were building in Chicago. So, in the past we've typically built a theater from anywhere from $750,000 a screen to $1 million a screen, or more in some cases. So, I would suggest that because there's real estate involved and the past average you saw had a mix, you've got to build that into it a little bit.

Okay. That makes sense. Thanks, [Doug]. Greg, on the 3D, I've asked you several times about the business model. Are you still kind of in the same place with the distributors, where the revenue splits are running around the same for 3D, even though it's a higher ticket price and you have to put in additional capital? Or, has there been any movement on that?

Have the distributors decided to let us have more money?

That they really want you to show these movies in 3D.

They are eager to have them shown, but not that eager. The margins continue to be the same and we face -- look, these guys have got a lot of pressure on their end. Their business is really quite challenged. Their whole model is challenged. And so, they're pushing on every end, and they're pushing on us. So, the answer to your question is, no, the margins are no better. The only --

The [incremental] revenue makes it worthwhile to make this investment. Could you -- you continue to roll it out to more and more locations.

The positive, David, is that there is incremental revenue because we still get to keep 50% or a little bit less than that of the increase in price. So, yes, a chunk of that goes to cover our investment and the operating costs of 3D. We pay through realty a fee, so we've got that going on. But there is increased margin. The thing that catches our eye is, which is no secret, is that we're seeing the box office -- you're seeing increased box office and less people, just industry as a whole. And for us, that's not the equation we like a whole lot because we make money when we need more people coming in the door. How is 3D impacting that? I'm not quite sure yet. The jury is still out. We have to be very careful, as we pointed out in our prepared remarks. Movies that are not very good, but are 3D and are being rushed to 3D so that they can sell them for more money, that's very short-term thinking. And, we're concerned because we don't want that to happen too much because it can negatively impact us in the long haul.

So, it may sell fewer tickets, but certainly sells less popcorn.

Got it.

Yes, okay. That's bad for everybody.

David, I would just jump in. The only caveat I'd put would be that on the film cost issue, and we actually mentioned it briefly on our last conference call, is that with our UltraScreen XL3Ds, we have found, and this is not enough to move the needle enough that you'd notice it big picture, but we have found that those are desirable screens. And so, we have had some situations where the studios have been willing to negotiate a little bit more on the film rental if they can get that screen, which puts us in a position of, as more product comes out, saying well, how badly do you want that screen?

Yes.

And so in fact, the ones we're putting out, the latest announcement was just three more of the UltraScreen XL3Ds. So --

And this will get you to 85%. I'm guessing that you'll hit the last 15% in time as well? For every location --

Yes. For the rhyme and reason as to why we picked these three, but I certainly would think -- I mean, we're heading that way with all the screens ultimately, in general at least.

Yes, okay. That makes perfect sense. On the hotel side, I guess as you come into the fall, particularly a time as you said that's a little more group dependent, a little less leisure dependent, is occupancy getting high enough that you are comfortable with some kind of rate increases? And, what have you locked in for group going forward? Is that going to hold back rate increases?

I guess I'll respond first. The last half of the question, I mean, as we've indicated, the bookings pace has been better. Not what it was, but it's been better. The rates that we're locking in, that we're booking here, are still lower. I mean, there's been a little bit of movement there, but in general, there's still just as much pressure on that group booking rate as there is elsewhere right now. And so, that still is a challenge. Is it -- certainly lower than where it was. On a year-over-year basis, we're making a little bit of progress. As it relates to the fall itself, and even it really reflects how we tried to manage business this past summer as well, as Greg indicated, it wasn't across the board. I mean, on average, overall, as indicated we were down 2.2% in ADR, but it wasn't all eight properties. We have a separate strategy for each property.

Yes.

And in that market. And so, we're trying to approach it from a market-by-market basis. And Greg gave the example of a Grand Geneva, where in the summer, it was important to have people on campus. And so, that was our approach with that property. But, we are dealing with it on a property-by-property basis and trying to push the rate a little bit in a couple of these properties.

Yes, but that's been the -- David, as you know, in this business right now, everybody's seeing a big occupancy drives, and not getting the rate. Now -- we're pushing to get the rate. That's what we've been telling our guys. Let's go out and get some more rate. I don't think that we've got -- it's not as -- It's [inelastic]. There seems to be a clip with the leisure guys. Push the rate, sure, let's turn off the faucet.

Right.

That's very frustrating, not so much with the group. And we're pushing for it. We'll see how we do over time.

That makes sense. Last topic is capital allocation. You've spent on keeping your hotels fresh, which clearly is paying off. You've spent a little bit in this most recent acquisition and you've been buying back stock. How do you view looking ahead, let's say, the next year, how do you view your opportunities for investment? Do you think your stock is still likely the best use of your capital at this point?

Well, the stock that we bought, you saw the numbers, basically the same as what we talked about in July. So it was earlier in the quarter. Our remaining focus on trying to look at some opportunities to grow the two businesses, that certainly would be our preference. But having said that, nothing's off the table in terms of -- Buying back stock could be in the mix. Dividend policy, we've talked about that in the past, that could be in the mix. We're not excluding any of the options at this point in time. An acquisition of a single theater came along, we wanted to make sure we have the ability to do that. Clearly, right now with our balance sheet, we've got the ability to do more than that. And, we're focused on seeking some of those opportunities right now.

Are you seeing a lot -- I'm sorry. Go ahead, Greg.

We look at these issues virtually every day. And, I think what you'll see is what we continue to do, is we keep making just -- we take measured steps as we go along, and we'll just keep doing that. So, if the stock is appropriate, we'll buy the stock back. Probably not going to make, as I said, we're just going to keep making measured steps. That's what we do with our Company, that's sort of always operated. And that's what we'll continue to do.

Are you seeing interesting opportunities out there? It does look to us from our vantage point that the major urban market hotels are well bid. There's a lot of buyers out there for them. But, in some of the secondary markets, it seems like there's less, and it does seem like there's some distressed situations that are beginning to percolate up and be disposed of. Are you seeing more opportunities there?

Yes, the volume has picked up a little bit. It's not excessive, but stuff's happening. And we are -- we keep looking at properties and you're right. In the good urban markets, it's not surprising to see 15, 20 bids on something. But, we keep looking at it, and we're looking at all markets.

Yes, and I assume the same in theater, that you're still looking and talking to people, but it's just a matter of when opportunities arise.

Yes, theaters are completely different. There's nothing driving that necessarily. It's just -- it's just somebody -- it's more personal motivation, what's going on with a family member. Certainly, given the business' robust nature over the last few years, there's not really anybody pressed to sell anything.

Okay, great. That's what I had. Thanks.

Thanks, David.

(Operator Instructions). Your next question comes from the line of Herb Buchbinder with Wells Fargo. Please proceed.

You actually kind of answered my question. I thought there were enough properties out there in the hotels that you might be able to do something this year. And maybe you can just give us an idea if you thought there's a good chance you'd be able to acquire a hotel property in 2010 or even 2011. Do you think that's in the cards?

Herb, as Greg said, we've got a decent list of projects we're working on. To be clear, and as Greg said in his prepared remarks, we're looking at this in a variety of different ways. And so, it might not necessarily mean acquire a ninth Company-owned property that would be structured that way. We're looking to expand our management business. We're willing to co-invest. And so, there's a variety of different ways that we're looking at trying to grow that. And, the project list that our development guys are working on right now is maybe a little bit longer than what it was previously. But, as Greg said, it's not excessive. So, it's hard to tell if we'll have several of them hit or if we'll have one of them hit. We certainly have some dollars set aside in our capital budget for something to happen.

Do you typically have an equity interest when you manage a property? What percentage of the managed properties do you have an actual equity interest in the whole property?

Today, we have, of the 11 managed properties that we have, we have an equity interest in two of them that are just traditional equity interests. We have a 15% interest in two that we're managing. However, another two of them are those condo hotels that we certainly have a financial interest in as well. It's not structured the same way. So, four out of the 11, we have some sort of financial interest in. The others ones are straight management contracts.

As you look at some of these deals in the future, is that something that you like to do? [Is] it have the equity interest, or it's not a major consideration when you look at doing a management deal?

We're willing to do both. We think it's a strategic advantage for us. Not every management company can do what we can do in that perspective. So, we think that in some cases it does provide us with a competitive advantage. But, some of the deals that we're pursuing may just be straight management as well.

All right, thank you.

Your next question comes from the line of Marla Backer with Hudson Square. Please proceed.

Thank you. I was hoping we could get a little bit more color on the 3D footprint that you're growing. So, in your markets where you've upgraded to 3D, what percent of the total 3D footprint do you comprise? Are you it, or are there other 3D players?

There's other 3D players. It depends on which markets you're talking about, Marla. But, in some markets we're it. In some markets, there are other 3D players. Again, with the caveat that in general, we have the vast majority of the screens in our specific markets. Now, if you're going define the market as Chicago, there are lots of 3D players. If you're going to be a little more narrow about the definition of the market and talk about the various zones in Chicago, then we tend to be -- our 3D competition would just be in an adjacent zone, where someone would be driving theoretically kind of out of their normal territory to go see a film. So, but, local here in Milwaukee there's a theater kind of in the center of town that has an IMAX 3D.

And, in your theaters where you have the 3D screens, are you providing side-by-side 2D screens on the same title?

Depends on the title, Marla. It depends on what the distributor's preference is, what our preference is.

All the major titles, the answer will likely be yes. But, Piranha 3D?

Right, nobody shows that in 2D.

Right.

And then, has there been any change for you in terms of the day-to-day operations of the Screen Vision, given all of the potential changes with management there?

No. We had a good summer for our advertising ancillary income,and the operating folks have been consistent. And so, the short answer is no.

Okay, good. And then my last question, is just so that I understand when you're talking about on the hotel business, the group bookings. Is that also corporate, but it's unrelated to convention business? Is that how I should think about that?

Yes, two of our hotels are convention hotels in Milwaukee and Madison that have convention centers, where they are getting city-wide type activity as well. So, group business is a sub -- convention business is a subset of that. But, on the broader sense, Grand Geneva does lots of group business. The Milwaukee Hilton, which is a convention hotel, also does its own group business that's not associated with the convention business. So yes, it's corporate group business that's the vast majority of that business, with convention, city-wide type activity being a subset.

Okay. Thank you.

You're welcome.

Thank you. At this time, it appears there are no other questions. I would like to turn the call back to Mr. Neis for any additional or closing comments.

All right. We certainly want to thank you once again for joining us today. We hope to see some of you at our annual meeting on Wednesday, October 13, at the Northshore Cinema on Mequon, Wisconsin. For those of you who cannot attend, we will be webcasting that meeting. We also look forward to talking to you once again in December, when we release our second quarter fiscal 2011 results. Thank you, and have a great day.

That concludes today's call. You may disconnect your line at any time.