MDC Holdings Inc (MDC) 2011 Q4 法說會逐字稿

Good afternoon. We are ready to begin the MDC Holdings Inc. fourth quarter 2011 earnings call. I would now like to turn it over to Bob Martin, Vice President of Finance and Business Development. Sir, you may begin your call.

Thank you. Good afternoon, ladies and gentlemen. And welcome to MDC Holdings 2011 fourth-quarter earnings conference call. On the call with me today I have Larry Mizel, Chairman and Chief Executive Officer. Also, for the first time, I'm pleased to welcome John Stephens to our conference call. As many of you know, John will be taking over as Chief Financial Officer on February 13,. And we are thrilled to have the benefit of his leadership and experience at MDC. For today, we invited John to attend our call but he will not participate in delivering prepared remarks or responding to questions.

At this time, all participants are in a listen-only mode. After finishing our prepared remarks we will conduct a question-and-answer session, at which time we request that participants limit themselves to one question and one follow-up. Please note that this conference is being recorded and will be available for replay. For information on how to access the replay, please visit our website at MDCholdings.com.

Before turning the call over to Larry, it should be noted that certain statements made during this conference call, including those related to MDC's business, financial condition, results of operation, cash flows, strategies, and prospects, and responses to questions, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties, and other factors that may cause the Company's actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. These and other factors that could impact the Company's actual performance are set forth in the Company's 2011 Form 10-K which was filed with the SEC earlier this morning. It should also be noted that SEC Regulation G requires that certain information accompany the use of non-GAAP financial measures. Any information required by Regulation G is posted on our website with our Webcast slides.

And now I will turn the call over to Mr. Mizel for his opening remarks.

Thank you, Bob. Good afternoon, everyone and belated happy new year's. I'd like to start off and recognize and thank the ladies and gentlemen that work at MDC. This is the report for the shareholders but I want to start off with recognizing the achievements that we attained. Especially the back half of last year and the fourth quarter. Would not have been possible without the unbelievable hard work and effort and dedication to the people that work here. It is a real special recognition that we're communicating with our shareholders, with not only our press release and our comments, but also having our K out. And having the achievements, that I urge all of you to read the short K. But I consider it really important in our ability to communicate to each of you what has been achieved.

I'd like to start off with, it's obvious that we were profitable in the fourth quarter, excluding the debt extinguishment and the land-related charges. This accomplishment supports our belief that we can achieve our goal for 2012, which is to be profitable for the full year. Our overhead continued to be a key factor during the quarter, as evidenced by a 33% year-over-year reduction in our general and administrative expense. One of the biggest drivers of this decline is our G&A headcount, which is down 33% over the past year, and 11% for the fourth quarter alone. These reductions have been directed at bringing greater efficiencies to our business, including the centralization of our accounting operations and eliminating positions that were no longer viewed critical in running our Company.

We're also in the process of decreasing the operating cost associated with our home galleries, reducing our overall rent expense and adjusting our compensation programs. As we evaluate different opportunities to decrease expenses, we want to simplify aspects of our operations that have become overly complex. We should make it easier to run our business with fewer people.

During our second quarter call, we announced a change in our strategy on starting unsold homes. Since then, we have seen our gross profit margins improve by 200 basis points, as more of our closings have come from the homes we sell before construction is started. We expect to further benefit from this strategy in 2012. Also, we completed our previously announced plan to reduce our debt by $500 million, which decreased the Company's annualized interest incurred going forward by $30 million.

We are continuing to work on ways to improve our results throughout 2012. To start this year, we implemented changes to our sales process and product offerings across our Company. The large-scale national promotions we used in 2011 have been replaced by marketing targeted to individual divisions and projects. We're also adding many of the upgrades chosen most frequently by our customers to the base home we offer in many of our subdivisions. This approach should give our home buyers a better understanding of an all-in sales price as they look to compare our homes with those of our competitors. At the same time, unlike many of our peers, we will still provide our customers with the opportunity to customize their homes with a broad selection of available upgrades.

In January 2012, our net orders increased approximately 30% from January 2011. It is too early to tell if this improvement is attributable to our recent actions or an improvement in overall market conditions. And we cannot be certain, but net orders will continue to show a year-over-year improvement in 2012. We are nevertheless encouraged by these results. At the end of 2011, we began to see signs of a possible recovery in the housing market and for the US economy as a whole. Hopefully, our industry has reached a bottom and is now starting to recover. Given the recent changes we have made in our operations and to our overhead, we believe we can still be profitable in 2012 even if market conditions do not continue to improve.

Before we move on to the call, I also would like to take a moment to welcome John Stephens to our team. Given his broad experience in our industry, and his character and enthusiasm, we are delighted that he has agreed to lead our financial organization. We have no doubt that his contributions will be invaluable as we work towards achieving profitability in 2012. As we have announced, Raymond Baker, a highly regarded business leader, has agreed to serve as director of MDC. He fills a vacancy created by the passing of Bill Kemper who served our Company and its shareholders for more than 30 years. We expect to benefit greatly from Ray's experience in business and real estate.

Thank you for your interest and attention. I will now turn the call back over to Bob for more specific financial highlights of our 2011 fourth quarter.

Thanks, Larry. Turning to the next slide. The chart you see here shows the metrics that typically are the major drivers of our income statement. During the 2011 fourth quarter, we saw an 8% decrease in closings, which drove our total revenue down by 5%. In addition, our gross margin percentage declined by 200 basis points year-over-year, from 17% in the fourth quarter of 2010, to 15% in the fourth quarter of 2011. This decrease, combined with the decline in revenue, resulted in an $8.3 million decrease in our gross margin. Note, however, that excluding warranty adjustments and interest, our gross margin percentage improved slightly year-over-year. And I'll get into more of the details on that in a moment.

Offsetting the decrease in gross margin was a $17.9 million decrease in our SG&A expense, reflecting what we've done over the past few quarters to reduce overhead. SG&A as a percentage of revenue also came down significantly, and now stands at 18.6% for the fourth quarter of 2011. We are continuing to focus on SG&A and may make further adjustments, if necessary, to drive profitability. During the quarter, we recognized a $20.2 million charge for our previously announced debt extinguishment which we completed in November. However, we incurred only $2.7 million of asset impairments and project abandonment charges, compared with $19.2 million a year ago. Overall, our reported pretax loss for the fourth quarter was $19.8 million, compared with a $35.1 million loss during the same period last year. After backing out the charges from both quarters, we showed a $3.1 million profit for the 2011 fourth quarter, which is a $19 million improvement from $15.9 million loss a year ago. Our reported net loss was $18.8 million or $0.40 a share, compared with a net loss of $30 million or $0.65 a share a year ago.

Moving on to the next slide. We closed 792 homes during the quarter, which is down compared to the 865 closings we had during the same quarter of 2010. Typically, we would have expected closings to be higher as we started the quarter with backlog that was 10% higher than a year ago. However, the percentage of our beginning backlog that was under construction to start the quarter was much lower than a year ago, 66% to start the fourth quarter of 2011, as compared with 80% a year ago. Said another way, the number of units in our backlog that were under construction to start the quarter were actually down slightly versus the prior year. We had 871 at September 30, 2011 versus a year ago when we had 955 as of September 30, 2010. As a result, our backlog conversion rate was 60% for the fourth quarter, down from 73% a year ago. While a 60% backlog conversion rate is low when compared with some recent quarters, it's in line with our 10-year average for the fourth quarter.

The drop in our conversion rate is a direct result of our change in our policy on specs, which has driven our sales volume away from speculative inventory and into dirt start units. We believe the margin we gain by shifting away from speculative inventory more than offsets the decline in our conversion rate. The average selling price of our closings was flat year-over-year at roughly $291,000. And just one more note. New subdivisions, which we define as those acquired from 2009 forward, accounted for about 77% of our closings in the 2011 fourth quarter, which is a significant increase from 45% a year ago.

Moving on to home gross margin. This slide shows the quarterly figures from the fourth quarter of 2010 to the fourth quarter of 2011. As reported, the graph you see in the upper left corner of this slide, our margins were 15% in the fourth quarter of 2011, compared to 17% in the fourth quarter of 2010, and 16.8% in the third quarter of 2011. This would lead you to believe that our margins decreased both year-over-year and sequentially. But when we dig a little bit deeper we do not believe that this gives a complete picture. We believe that home gross margins, excluding the impact of interest and cost of sales and warranty adjustment, shown in the lower left corner of the slide, gives us a clearer picture on margins. On this basis, you can see that our fourth quarter margins were 16.8% in the fourth quarter of 2011. Up slightly compared with 16.5% in the fourth quarter of 2010, and 18.9% in the third quarter of 2011. However, recall that our third-quarter margin had approximately $6.4 million of benefits that we disclosed last quarter. On both graphs, the impact of that benefit is shown in light brown. And if it's taken out of our third quarter gross profit margin, we would see about a 300 basis point decrease in both these graphs for Q3. The 13.7% as reported and 15.8% before warranty adjusted and interest.

Considering these adjustments, looking at the bottom, our analysis is that, one, our Q4 2011 gross margin is actually at its highest level in the past five quarters. Two, we have now seen two consecutive quarters of sequential improvement. And three, margins have improved by almost 200 basis points since we first announced this as an area of focus during our second quarter call. The improvement, again, is largely the result of decreasing our exposure to spec inventory. In the fourth quarter, only 50% of our closings were from homes sold as spec inventory. And that's the lowest percentage of specs that we've closed in these past five quarters.

One other note. We continued to see some sequential improvement for the home gross margin in our backlog during the 2011 fourth quarter.

Next to selling expenses. Overall we're down 18% year-over-year. Commissions expense was $8.2 million for the quarter, down from $9.4 million a year ago. The decrease is related mostly to our decrease in home sales revenue. Marketing expenses decreased by 22% from $11.6 million in the fourth quarter of 2010 to $9.1 million in the fourth quarter of 2011. The decrease here was the result of a decline in product advertising costs, most notably the costs we incurred for signage. While our selling costs are largely variable, it's important to note that we have not ignored these expenses as we have looked for ways to reduce cost. We have reviewed the compensation programs for our internal and external sales personnel, and have made adjustments as appropriate. We have evaluated our advertising spend and cut back on programs that were t not meeting our expectations. And we are working to reduce the cost associated with constructing and decorating our models and sales offices without sacrificing the quality of our presentation.

Turning now to G&A. The $28.7 million we incurred in the 2011 fourth quarter is down from the $42.9 million we incurred in the fourth quarter of 2010. The primary reason behind the year-over-year improvement was a $10.3 million reduction in compensation-related expense. A significant part of that decrease is attributable to our 33% year-over-year reduction in general and administrative headcount, which I will talk about in more detail in the next slide. However, we are not only focused on headcount as we look to reduce our overhead costs. We are decreasing the costs associated with running our corporate and division offices, as well as our home galleries, in large part by reducing the size of the space we lease. Or by simply renegotiating the contracts. We also have put tighter controls on travel and entertainment costs and have reduced consulting costs. We'll continue to adjust our overhead as we see opportunities to do so, especially if we believe that our goal of reaching profitability for 2012 is in jeopardy.

On the next slide, I've given you, for the second time, a graph to show where our headcount has gone over the past two years. And here I'll focus on the lower line on the graph which isolates the employees who are charged to our G&A account. We were down to 475 G&A employees at the end of 2011, which is down 42% from the recent peak 18 months ago, and 33% over the past year. Many of the reductions were carried out over the last six months of the year. And in the fourth quarter alone we were down 11%. Keep in mind that we accomplished these reductions even as we added more than 50 individuals to our team as a part of our entry into the Seattle market in April of 2011.

We have made reductions top to bottom. In doing so, we've removed layers of management, thereby simplifying our organization and putting key decision makers closer to the day-to-day operations. And in some cases, we've consolidated the departments to avoid redundant or inefficient functions. Ultimately, we don't believe we are compromising our ability to operate. We are simply focusing on the core of our business, and de-emphasizing those functions that aren't critical to our success. And we aren't afraid to hire for key positions, if necessary. We've already talked about John on this call. And last time, we told you about our new operations leader, Liesel Cooper, who brings 25 years experience in home building to our Company. We firmly believe, especially in light of the hiring of these two talented individuals, that we have more than enough leadership and experience to manage a profitable enterprise.

Moving on to orders. In the fourth quarter we received 523 net home orders which was a 1% increase from the same period in 2010. This is an improvement compared with the considerable year-over-year decrease in orders we reported in the third quarter. However, given that our active subdivision count increased 26% year-over-year, we are not satisfied with our fourth-quarter results in this area. As Larry mentioned earlier, we have taken action to drive continued improvement here, both with our products and our sales process, starting early last month. We are encouraged to see January sales up 30% year-over-year, but it's really too early to conclude if the increase is at all attributable to our efforts or if it is ultimately sustainable. We ended the quarter with 1,043 homes in backlog, up 24% from the same time last year. Our average price in backlog of $316,400 at December 31, 2011 is about even with the $319,500 average price in backlog at December 31, 2010.

On the next slide, taking a closer look at our cancellation rate, our as-reported cancellation rate in the top left corner, which is total cancellations divided by gross orders, decreased slightly both year-over-year and sequentially. However, when looking at our cancellations as a percentage of beginning backlog, which is the graph at the bottom left, you can see that the rate we experienced in the fourth quarter was at the lowest level we've seen in the past five quarters. This points to the improving quality of our backlog. As further evidence, note that the percentage of our backlog that is contingent, meaning that the buyer must sell a home before closing on ours, has fallen by more than half over the past year.

Our final slide takes a look at our balance sheet. Given the $500 million of debt extinguishment that we completed in the fourth quarter, our debt has fallen back in line with our current inventory. Which will allow us to substantially reduce or eliminate the amount of interest that is directly expensed to our income statement. The extinguishment did cause us to incur a charge of $20.2 million during the quarter. After reducing our debt, our cash and investments balance exceeded our total debt by $70 million. The fourth quarter was the 16th consecutive quarter that we've maintained cash and investments above our debt. Continued proof of our dedication to maintaining one of the industry's strongest balance sheets. That concludes my prepared remarks.

At this time, we will open the line for any questions you may have.

(Operator Instructions) Michael Rehaut with JPMorgan.

First question on the performance that you had in January. Certainly a great turnaround from the last couple of quarters. Certainly, you've pointed to a change in sales process. Larry you went into a little more detail in terms of allowing marketing to be a little more custom by division, and also, trying to create more in the base. It would seem to me like that would be a big driver of the improvement. I'm surprised in terms of you being a little bit more on a wait-and-see approach, in terms of what's really driving it. I was hoping if you could just expand on the changes. To the extent that it actually is driving improvement why we wouldn't see that more going forward. Also, if you think it has anything to do with the easier comps that you're facing, as well.

You know, Michael, you ask a great question. I want to reiterate the following. We cannot guarantee future results. January orders were achieved without a national sales promotion. Starting in January, we have been more careful about what we accept as an order. All of the above comments, Michael, apply for this observation that we're sharing with you, to give you an insight of what we believe is the start of changing market conditions by a change of process, procedure that we have initiated. Over the next couple quarters we'll all be able to measure the results of the hard work that everyone has done to be able to put this forward.

Second question on the gross margins. Certainly, you've been able to identify some of the improvement as you've moved away from spec. Is it safe to assume that given that the trend will continue in terms of your mix of spec and your newer approach, that we can use the recent margin performance in the fourth quarter as a springboard for the fourth? Or would you expect some seasonality to occur in the first quarter, given typically lower sales and volume levels?

I think you can use Q4 as a springboard. In Q4, we were at about 50/50 spec versus dirt in our closings. We've said before on these calls that we would probably expect to get to more of a 70/30 dirt versus spec. So, there might be some upside there. Certainly, in a very volatile market, a lot of different things can happen. So, I would caution you to consider that, as well, as you look to the future.

Dan Oppenheim with Credit Suisse.

Thanks very much. I was wondering, in thinking about, you're talking about the orders and being much more careful on how that's going. There's some caution talking about the full year. Wanting to understand that in light of the results for January. Is there something that's making you a bit more cautious, as you think about the year?

Yes, four lawyers. (laughter)

I think one of the other things, it's just one month worth of data. We thought it was very appropriate to share with you that month's result, just because of the emphasis we've put on the subject. But we do have to take a step back and realize it's just one month.

Okay. Was the January comparison from last year, any issue with that?

I didn't exactly understand the question. But we might be able to circle back around on that one.

Nishu Sood from Deutsche Bank.

I wanted to ask about gross margins. Gross margins in, let's say, late '09, first couple quarters of 2010, were in the 20% to 21% range. After the difficulties and the strategies, the strategic missteps after that, they fell. They've made a nice recovery here. You mentioned that they're stronger, even in the backlog than they were at the beginning of the quarter. Investors, as we talk to them, are still concerned that your portfolio of communities as it's constructed now is impaired and it's not capable of getting back to those margin rates. So, I just wanted to ask the question straight out, is that correct? Is your current mix of communities capable of getting back to that more normalized rate of 20% to 21%?

I don't really want to comment on where the ceiling is or where we're going to go to in the future. I would say we're very happy with the portfolio of communities that we have. As you mentioned, there were some things we've done in the past that didn't serve those communities well. That is new communities and old communities alike. It's not just limited to the new communities. Now, we're making improvements to those items that were at issue in the past. I think that gives us the opportunity to improve margins in the future. But I don't want to tell you to what degree exactly. I don't think that's appropriate at this time.

Okay. Second question, I wanted to ask, the new sales procedures that you are implementing here, I think you mentioned them last quarter. Now, have taken effect at the beginning of the year. Should we see a decrease in the cancellation rate? Because that seems to be the main driver of the difficulty in the year-over-year order numbers you've had the last couple quarters here. Is that what you saw in the first of the month? I know, there's been a couple questions about that already. But just about the can rate, was that the driver of the lower can rate? Should we expect that to stabilize with these new procedures you've implemented?

Nishu, let me answer it this way. We don't want to give any more specific information about just the month of January. But what I will say is, with respect to what Larry mentioned before, being more careful about the orders that are accepted, that would in turn lead to a lower cancellation rate, typically.

Adam Rudiger with Wells Fargo Securities.

I wanted to ask about two questions on the cost cutting front. The first was that these were very significant cuts, more so than I probably expected. I was wondering if there was anything in there that was more one-time in nature for the quarter, compensation-related or anything? Or is this a good new run rate to go off of going forward?

What I'll tell you, Adam, is there was a lot of stuff in there. But when you take what you call the unusual expenses against the unusual benefits, I think they about equalize. So, I think the fourth quarter number is close to a pure number. Of course, recognizing that decisions we make in the future can move it one way or the other.

Okay. Then Larry, following up on that, the cost cuts this quarter and the debt reduction, to me is a real difference in the way that you're thinking about things. It suggests a lot more aggressiveness and urgency than I think, if we listened to your call a year or two ago, you might not necessarily have had that same sentiments. So, I wondered if you agreed with my assessment of that, and if so, talk about what changed for you.

The markets continue to change and we continue to try to do a better job. I think in '09, the back end we thought things were going to get better. The first part of '10, it looked like things were improving. But by the time we finished 2010, it was obvious things were not improving. In 2011, I think will prove to be the bottom of the cycle, certainly for us. I would guess for the majority of the other large builders. Accepting the fact that the economy and the housing market deteriorated over '10 and part of '11 -- accepting the inevitable. We, as I said, I think it was in the second quarter call, I said we're going to do whatever we need to do to become profitable, period. Accepting that one direction you're going in isn't necessarily the best, I'm not afraid of making changes as new information we receive. We endeavored to go in a direction that we thought was very good, and we worked aggressively and hard at it.

When I saw that what our expectations were, were not being met. Both on the capital basis by having, at one point, substantially more liquidity than we could deploy appropriately, we adjusted on the capital. We adjusted on our procedures. We adjusted on our staffing. We are aggressively focused on not only being profitable but making appropriate returns in the future for the benefit of all of our shareholders. That's why I started off the call with thanking everyone that's here because the people that are here are the ones that are making it happen. It's really hard, but we're doing it and expect to do better in the future.

Ivy Zelman with Zelman & Associates.

I just wanted to focus on, if I could, guys, realizing you've changed, and shown some real positive improvement in operating leverage, one of the concerns I have is just that community count in the fourth quarter. Obviously, you're still up year-over-year. But your lots controlled by year-end were down 20%. Given that you've slowed your land buying in recent quarters, and earlier on the downturn you had a lot of land that you were purchasing with smaller communities, do you have a lot of active communities that have less than 20 or so lots? That at some point, we could see a pretty big drop in new community count in the coming quarters as these projects close out? Then, where is the pipeline that will replace them?

Yes, Ivy, I think it's certainly a risk, if we don't get into the land acquisition market at a greater level. It's certainly possible that in 2012 we could see a drop-off in communities. However, we do and are still actively pursuing a pretty big pipeline of land that you don't see in that option number. As we get a better feeling for where we're at with the market, we will potentially make a decision to pursue those transactions. But it's an excellent point.

Joel Locker from FBN Securities.

Just was wondering what your customer deposits were at the end of the fourth quarter.

Customer deposits at the end of the fourth quarter, I believe were $14 million. I'm sorry, I'm sorry, I'm thinking of different deposit number. I don't know if I have that number offhand. If you want to go to your next question, I'll look that up.

Sure. Just on the labor and material expense expectation in 2012, do you expect that similar to 2011 or higher? Or do you see some pressure there?

I think as the market improves, we would expect to see pressure of costs going up. I would also, hope that there will be a better tone in pricing. I think as you look out amongst the builders, you will observe that incentives are decreasing, which is another number that you will see come through in the future. But I do expect some cost increase that we'll see during the year.

In response to the other part of your question, $5.5 million was the dollar amount of customer deposits.

Stephen Kim with Barclays.

I had a quick question for you about your decision to change your sales recognition or your activity. I just want to make sure I understand what it is. Is it a difference in what you're choosing to recognize as an externally reported to analyst sale? Or are you changing something operationally or both?

It's a little bit of both. The former is accurate. We are not counting it as a sale. We're doing a little bit more front end diligence before we recognize it as a sale. I think that would be the way to say it. I think it's also, important to note, though, that we're still trying to put as many of these buyers as we can under contract. So, they're not going to the next location and contracting there. But we are doing a little bit more diligence on the front end before we actually show it as an order.

Does that mean you're basically waiting until you get the mortgage approval or is there something more complicated than that?

It's not 100% criteria across the board. But we've driven that message down to our division leadership, that they need to be looking that much more carefully, before they report it to us as an order.

Alex Barron from the Housing Research Center.

I think you guys have done a nice job here in the last couple quarters and it's finally showing through. I'm just curious, you've done a good job on the SG&A front. I'm just curious, do you feel you've already gotten to where you need to be? Or do you think that there's still room for improvement? I just ask that because relative to your peers, I think your SG&A rate is still a little bit high.

We think there's still room for improvement.

Okay. On the debt front, I think you guys took the right step of reducing your capital base. So, the question now is -- that's the other question -- do you feel that you're going to start to step on the accelerator on the land front if this is the real bottom? Or do you feel you still have some room to pay down some more debt?

I think our focus will be growing the business.

Joshua Pollard with Goldman Sachs.

I wanted to follow up on the previous question. You've been very clear, Larry, in your view on the market via your land purchases. Selling in '05, '06, buying back in '09 and '10. It sounds like you're more positive on the market. But in your slide deck you guys are highlighting how you haven't bought as much land. I'm wondering, if you guys are changing your approach to the land buying -- whether you guys are going at it after more finished lots, if you feel like you guys need to get a little closer to the development. How we should expect you guys to scale up your land position over the next year or two.

I think historically, what we tried to do is to have two years of inventory under control. Two began to look like three, and three looked like four as sales slowed down. If one was to see an increase in velocity of sales, then you should assume that we will increase the velocity of the land buy. We've always been opportunistic. One of the things that the sellers know is that we have adequate resources to participate at any level. We feel comfortable that we will be able to participate to the extent necessary to have the land to execute what the plan is. I remember once making a comment to some analyst, I don't remember which one it was. It was, if you had plenty of money you'd have plenty of land. Nothing's changed.

Thanks for that. Then when I look at your balance sheet, what is the right level of leverage that you think about as you make your way through the cycle? You guys have been pretty solidly in the net cash position, for quite some time. Do you feel like now's the point in the cycle where you, or at some point in the next year or two, where it's safe to be in a net debt position?

I think, as we all know that if the market improves -- or as it improves and you start growing again, you'll use capital. That's what we have the capital for, is to use in our business. When we believe on a risk-adjusted basis that's the best place to have it. We've waited patiently and we look forward to being able to execute as the market confirms itself.

Alex Barron from the Housing Research Center.

Larry, to my recollection, over the last 10 years you've never given any intra-quarter comments or future outlook. So, given that 30% number for January, would it be possible to get a sense of what the quarter a year ago looked like? In other words, how many orders are we talking about happened in January? What was the progression last year, so we get a sense of what it was this year?

Alex, we're not going to go into any further details other than what we've given you. Again, it's just a month's worth of data. We just got it in yesterday and we're going to leave it at that.

Okay. Thanks.

There are no further questions at this time. I'll turn it back to Mr. Martin.

Thank you all for being on the call. We look forward to talking with you again for our first quarter call.