McGrath RentCorp (MGRC) 2009 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the McGrath RentCorp (third quarter 2009( (sic) conference call. (Operator instructions). I would now like to turn the conference over to Geoffrey Buscher of SBG Investor Relations.

Thank you, Operator. Good afternoon. I'm the investor relations advisor to McGrath RentCorp and will be acting as moderator of the conference call today. On the call today from McGrath RentCorp are Dennis Kakures, President and CEO, and Keith Pratt, SVP and CFO.

Please note that this call is being recorded and will be available for telephone replay for up to 48 hours following the call by dialing 1-800-406-7325 for domestic callers and 1-303-590-3030 for international callers. The pass code for the call replay is 4166332. This call is also being broadcast live via the Internet and will be available for replay. We encourage you to visit the Investor Relations section of the company's website at mgrc.com.

A press release was sent out today at approximately 4:05 PM Eastern time, or 1:05 PM Pacific. If you did not receive a copy but would like one, it is available online in the Investor Relations section of our website, or you may call 1-206-652-9704, and one will be sent to you.

Before getting started, let me remind everyone that the matters we will be discussing today that are not truly historical are forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, including statements regarding McGrath RentCorp's expectations, beliefs, intentions, or strategies regarding the future. All forward-looking statements are based upon information currently available to McGrath RentCorp, and McGrath RentCorp assumes no obligation to update any such forward-looking statements.

Forward-looking statements involve risks and uncertainties which could cause actual results to differ materially from those projected. These and other risks related to McGrath RentCorp's business are set forth in the documents filed by McGrath RentCorp with the Securities and Exchange Commission, including the company's most recent Form 10-K and Form 10-Q.

I would now like to turn the call over to Keith Pratt.

Thank you, Geoffrey. In addition to the press release issued today, the company also filed with the SEC the earnings release on Form 8-K and its third quarter 2009 Form 10-Q. For the third quarter 2009, total revenues decreased 13% to $75.5 million from $86.3 million for the same period in 2008. Net income decreased 18% to $9.5 million, or $0.40 per diluted share, from $11.6 million, or $0.48 per diluted share for the same period in 2008.

Reviewing the third quarter results for the company's Mobile Modular division compared to the third quarter of 2008, Mobile Modular total revenues decreased $7.8 million or 16% to $40 million due to lower rental, rental related services, and sales revenues during the quarter.

Gross profit on rental revenues decreased $1.7 million, or 11%, to $14 million primarily due to 14% lower rental revenues with rental margins increasing to 62% from 60% in 2008. Rental margins increased as a result of reduced material and labor costs in our inventory centers, from lower business activity levels, and extensive cost reduction efforts.

Selling and administrative expenses decreased 13% to $6.7 million as lower personnel and marketing costs were partly offset by higher depreciation. Lower gross profit on rental revenues, rental related services, and sales resulted in a decrease in operating income of $1.4 million or 11% to $12.1 million.

Finally, average modular rental equipment at original cost for the quarter was $477 million, an increase of $11 million. Average utilization for the third quarter decreased from 81.1% in 2008 to 71.1% in 2009.

Turning next to third quarter results for the company's TRS-RenTelco division compared to the third quarter of 2008, total revenues decreased $7.5 million, or 24%, to $23.8 million due to lower rental and sale revenues. Gross profit on rents decreased $3.6 million, or 38%, to $6 million.

Rental revenues decreased $5.4 million, or 23%, and rental margins decreased to 32% from 40% as deprecation as a percentage of rents increased to 53% from 47%. Selling and administrative expenses decreased $1.6 million, or 25%, to $4.7 million due to lower personnel costs and lower bad debt expense. As a result, operating income decreased 50%, to $3.4 million from $6.8 million.

Finally, average electronics rental equipment at original cost for the quarter was $247 million, a decrease of $11 million. Average utilization for the third quarter decreased from 68.6% in 2008 to 60.4% in 2009.

Turning next to third quarter results for the Company's Adler Tanks Division, Adler Tanks was acquired in December, 2008, and so third quarter results are compared to the second quarter of 2009. Third quarter total revenues increased $1.5 million or 20% to $6.7 million due to higher rental and rental related services revenues. Gross profit on rents increased $1.1 million or 45% to $3.4 million. Rental revenues increased $1.2 million or 32%, and rental margins increased to 68% from 62% as depreciation as a percentage of rents decreased to 18% from 21%.

Selling and administrative expenses increased $0.2 million or 7% to $2.3 million. As a result, operating income increased $0.9 million for the third quarter 2009 to $1.5 million.

Finally, average rental equipment for the quarter was $63 million, an increase of $7 million. Average utilization for the third quarter increased from 53.3% to 61.4%. On a consolidated basis, interest expense for the third quarter 2009 decreased $0.8 million to $1.7 million from the same period in 2008 as a result of the company's lower average interest rates partly offset by higher average debt levels.

The third quarter provision for income taxes was based on an effective tax rate of 39.1%, compared to 39.2% in the third quarter 2008.

Next, I'd like to review our 2009 cash flows. For the nine months ended September 30, 2009, highlights in our cash flows included net cash provided by operating activities was $89.5 million, an increase of $8.3 million or 10% compared to 2008. The increase was primarily attributable to reduced accounts receivable and income taxes receivable changes partly offset by other balance sheet changes and lower operating results.

We invested $51.4 million for rental equipment purchases, compared to $82.6 million for the same period in 2008 partly offset by $22.1 million in proceeds from used equipment sales. Property, plant and equipment purchases decreased $11.4 million to $1.4 million in 2009. Dividend payments to shareholders were $15.2 million. Net borrowings decreased $44 million from $305.5 million at the end of 2008 to $261.5 million at the end of the third quarter 2009.

For 2009, third quarter adjusted EBITDA decreased $4.2 million, or 11%, to $33.7 million, compared to $37.9 million in 2008, with consolidated adjusted EBITDA margin at 45% compared to 44% in 2008. Our definition of adjusted EBITDA and a reconciliation of adjusted EBITDA to net income are included in our press release and Form 10-Q for the quarter.

Turning next to 2009 earnings guidance, at this time, based on the results for the first nine months of 2009 and our outlook for the remainder of the year, we are narrowing our previous 2009 full-year earnings guidance range of $1.30 to $1.40 per diluted share to an updated range of $1.30 to $1.35 per diluted share. At this point I would like to turn the call over to Dennis.

Thank you, Keith. Let's go right to our results for our modular rental business. Mobile Modular's rental revenues for the quarter decreased by 14% from a year ago to $22.5 million. Returning equipment continued to outpace new shipments for the quarter. Our results for the quarter are reflective of lower classroom booking activity throughout 2009 in Mobile Modular's legacy markets. In California, we have been negatively impacted by the state's balanced budget challenges and the resulting uncertainty of facility bond sales that support classroom rentals for school modernization work.

In Florida, state budget issues and resulting facility economizing by school districts, the delay in moving forward with the next phase of class size reduction, and flat to slightly declining student population hurt classroom booking levels.

Finally, in Texas, tighter educational budgets resulted in lower order activity as school districts look to fully utilize as much existing classroom space as possible. In our new Mid-Atlantic region, we are continuing to make progress in capturing new educational business, particularly in Maryland and Virginia with our innovative classroom products designed for these markets. We are seeing more challenging educational markets in North Carolina and Georgia related to reductions in student growth and budgetary issues.

During the quarter, residential and nonresidential construction business activity levels in all of our markets continued to be weak and remained highly competitive. In Texas, refinery and petro chemical related business activity during the quarter continued to be challenged due to decreased oil demand and pricing and general macroeconomic conditions.

As a result of the continuing challenges we faced across our modular rental division during the quarter, period end utilization fell to 69.5% compared to 74.1% at the end of the second quarter 2009. Operating income for the quarter fell by 11% to $12.1 million. The lower percentage decrease in operating income compared to rental revenues at 14% reflected reduced material and labor costs in our inventory centers and downsized sales and administrative staffing levels offset by lower gross profit on equipment sales. The significant inventory center cost reductions allowed gross margin on rents to increase to 62% from 60% a year ago.

There is no escaping the reality that our modular rental business isn't likely to see any sustainable recovery in its financial performance until the California classroom rental market shows improvement. But we believe it's favorable today to support higher classroom rental activity levels in 2012 in that the state is once again selling facility bonds in the public markets to fund various infrastructure projects. In addition, there are approximately $2 billion in voter approved bond sales authorized to specifically finance the modernization of public schools in California.

Lastly, school districts have been very successful over the past few years in passing both local facility bonds and parcel taxes to fund their portion of the price tag on modernization projects. Keep in mind that even with the potential for more favorable classroom rental environment in 2010 in California, due to the typical end of school year project commencement and shipping timeframes for classrooms, we wouldn't expect to see an impact to our earnings until the third quarter of 2010.

Now let me turn our attention to TRS-RenTelco and their results. TRS-RenTelco's rental revenues declined by 23% from a year ago to $18.5 million and income from operations decreased by 50% to $3.4 million. The higher percentage decrease in operating income compared to rental revenues is primarily related to lower rental revenues and gross profit on equipment sales for the same year over year period.

Sequentially from the second quarter 2009, rental revenues and income from operations were up favorably from second quarter 2009 at $17.8 million and $1.4 million respectively. The larger increase in income from operations versus rental revenues from the second quarter of 2009 is chiefly related to increased rental revenues from existing, underutilized equipment which resulted in the majority of the rental revenue dropping to the income from operations line, a decrease in depreciation expense, operations staffing reductions, and other cost cutting measures.

During the quarter we saw increasing rental revenue levels each month. The trend of higher business activity levels continued into the fourth quarter with October being our highest rental booking month thus far in 2009.

We continued making good progress during the quarter in selling underutilized equipment and reducing depreciation expense. Quarterly depreciation expense was $9.8 million compared to $10.2 million in the second quarter of 2009 and $11.3 million in the third quarter of 2008. Our gross margin percentage on equipment sales for the quarter was 37% and reflects healthy secondary sales markets.

Ending third quarter utilization increased to 61.8%, compared to ending second quarter utilization of 58.6%. Our average monthly rental rate increased to 4.13% during the third quarter from 4.01% during the second quarter. Both of these metrics are indicators of a more stable market environment during the third quarter of 2009.

Improvements in business activity levels and operating results over recent months have been encouraging, but we expect a normal seasonal slowdown in the business as yearend approaches.

Now let's turn our attention to Adler Tank Rentals. Adler Tank Rentals rental revenues and income from operations were $5 million and $1.5 million respectively during the third quarter. Sequentially from the second quarter of 2009, rental revenues and income from operations were up favorably from $3.7 million and $0.6 million. Adler experienced higher business activity levels as measured by units shipped in all of its regional markets during the third quarter. Higher business activity levels continued into the fourth quarter with October reflecting a strong month in rental bookings.

Average utilization for the third quarter increased to approximately 61% as compared to 53% for the second quarter of 2009. During the quarter we expanded into the Florida market. This is in keeping with our goal to roll out Adler operations to all of our existing modular inventory center locations in 2009 to support future growth.

2009 is nearly over and we are only one month away from our one year anniversary of having acquired Adler Tank Rentals. In spite of the extremely difficult macroeconomic environment we were faced with over the past year, we have been able to move our integration and market positioning agendas forward and from a low point in monthly rental revenue billings in May, we have seen increasing rental revenues each month since through the end of the third quarter. Looking forward, we are very enthusiastic regarding the overall prospects for Adler becoming an increasing contributor to McGrath RentCorp's earnings.

Now let me take a moment and update everyone on our two newest organic initiatives, environmental test equipment and portable storage. First, our environmental test equipment rental initiative continued to make good strides during the third quarter in growing its number of billing customers, opportunities, orders booked, and rental revenues sequentially from the second quarter. We have seen a significant increase in the number of opportunities during the third quarter and this has continued through October. We believe we can become a significant rental provider in this industry over the next few years.

Our portable storage initiative became profitable earlier this year and we have increased its profitability during 2009. Keep in mind that these earnings are very small relative to our other established rental businesses. We've now expanded our portable storage business into all of our modular inventory center locations. We've leveraged this existing infrastructure to reduce our cost structure in ramping our portable storage business. We are also benefiting in these new markets from synergies between our legacy modular building customers and their portable storage needs. We continue to seek smaller acquisition opportunities in our existing regions to accelerate the growth of our portable storage business.

I also want to mention that the expansion of our modular rental business into the Mid-Atlantic region at the beginning of 2008 became profitable during the third quarter of 2009. This is slightly ahead of schedule. We are continuing to make progress in capturing new educational classroom rental business, particularly in Maryland and Virginia, with our innovative classroom products designed specifically for these markets. We are pleased with the progress of all of our latest initiatives and are looking forward to building upon their successes.

Now for some closing remarks, we believe we are well positioned today to become a larger and more profitable company as economic conditions improve. Central to our overall earnings improvement is a recovery of our California modular classroom and commercial rental markets. Although less dependent upon the California market today than we were a few years ago, it should be less so as our newest rental initiatives grow. California's results are vital to our financial health. As a result, despite recent improvements in both our electronics and tank rental businesses, we anticipate continued downward pressure on earnings for the first half of 2010. This is primarily related to customary third quarter classroom shipping dates for schools in California.

2009 has been a year with many challenges. As a whole McGrath RentCorp has weathered the worst of the economic recession and its financial strength has remained intact. We owe this to the countercyclical nature of portions of our rental businesses, our strong cash flows, and low-leverage balance sheet. We also believe we have managed our expenses tightly and have taken costs out of our businesses as business activity levels have warranted. We will be continuing various expense reduction austerity measures in 2010.

As for the strength of our cash flows, during the first nine months of 2009 we generated $59 million in free cash flow while at the same time supporting our new tank rentals business, expansion, and the reduced rental equipment needs of our legacy rental businesses, decreased debt by $34 million, and increased our unused capacity under our lines of credit to $118 million. Our key borrowing metric of funded debt to EBITDA was at a healthy 2.0:1.0 ratio at the end of the third quarter.

With respect to the narrowing of our 2009 guidance range to $1.30 to $1.35, this is chiefly reflective of lower projected rental revenues and earnings from our modular rental business in the fourth quarter following a review of its third quarter results.

In closing, we believe that our strategy of investing in new earnings engines in more diverse business to business rental market segments will generate growth in income and share value while maintaining our financial strength, protecting our balance sheet, providing attractive dividends, and making the company more resilient to future economic cycles.

While we are working hard on increasing the value of our shares, our dividend provides an attractive yield of approximately 4% at today's share price. And now Keith and I welcome your questions.

(Operator Instructions) David Gold, Sidoti & Co.

Just a couple of questions for you. First divisional and then actually one just tied to the SG&A a little bit. So first, on the Mobile Modular side, Dennis, give us a little bit more of a sense -- it sounds like, if I remember correctly, really the booking season will start I guess as we get to January/February. So is that when we'll really have a sense for -- is that what it takes to really have a sense that the orders are sort of coming through? Or are there other incremental signs aside from say the capital raises and an easing budget that would say to you that we will -- that next year, at least the second half will be easier?

Well there's a number of factors that come into play with respect to the health of our classroom rental business. Obviously the ordering season that you had mentioned, yes, typically the ordering season, it's really January through about May when we get the bulk of the ordering There's a lot that can transpire, especially in the January through April window or March window. But as we look out into 2010, what's very favorable is that a couple items -- the state just apportioned about $700 million in projects. These are projects that had been approved and they've just gotten their monies. A lot of those projects are shovel ready from what we know and those should be coming into the marketplace over the next few months.

In addition to that, there is currently about $1.7 billion in what is termed approved but unfunded projects. These are projects that are waiting for apportionment based upon bond sales. A lot of those projects are also shovel ready. So when we look forward from a demand standpoint, there is plenty in the pipeline. And to the extent the state is successful at selling bonds, which it has been as of late, and we look at those as very positive indicators for our bookings in that January through May window that I mentioned earlier. And then those revenues would typically come into our income stream beginning sometime in the third quarter.

So the $700 million is definitely happening in 2010 and the $1.7 billion is potential?

They're both real -- these are projects that districts have. They put them into the state allocation board for approval, so these are real, live projects. And the dynamic on whether they come in 2010 is if they're sending them out, typically once you get apportioned your money, you have a maximum of 18 months in which to go out to bid for the project. Now a lot of these have been waiting for their approval monies. The 18 month parameter, I should say restriction, had been suspended, but now it's back on. So our sense is that a number of districts will be moving to get these projects done here in 2010.

Gotcha. And then when I look at period end equipment there for Mobile Modular, it's not huge, but it's actually higher than the average a little bit. To your point, lower utilization period. That equipment that you're buying there, is that equipment that's on demand let's say?

It's really Mid-Atlantic based to support that new market. And some portable storage included in there. There's very, very little -- certainly no classroom product being purchased for California or Florida at this point and very, very little commercial. Only on a specialized basis.

Gotcha. And then if we can, shifting over to TRS, there pleased to see what looks like early signs of a turnaround. Just curious if you can add some color on two fronts. One, any particular geographies or customer types? And two, the pricing pressure that you had been subject to, it looks like that's easing, too?

To your first question, the increase in business activity levels is very broad based, so it's really coming from a number of sectors. Communications area as well as general purpose. With -- I'm sorry, your second question?

Price.

Pricing stability, really there has been much greater stabilization in the market over the last quarter or two. There's more business activity and so that's all really very favorable. But also, too, some of that, a little bit of that, is potentially mix of equipment. If we're running more of the communications equipment it has a higher rental rate but a shorter life. And then there also can be a little bit of an impact from environmental test equipment sales which has a higher rental rate relative to general purpose than communications equipment.

Gotcha. And the last one if I can, just to make Keith do a little bit of work, on the SG&A side, A) -- well I was going to ask if this was a good run rate, but you mentioned that there was lower bad debt in there, so maybe you could give us a sense for sort of how significant that is and if it's sustainable.

Yes, I would say Q3 was a little lower on SG&A for a couple of reasons. Legal expenses tend to be a little bit lumpy and we had a little bit higher in Q2, lower in Q3 than average. And we had some lower personnel costs. And also some lower accounting and consulting fees. So when we look at the mix of things in SG&A, particularly some of the corporate costs, I would look at Q4 and expect it to uptick a little, probably closer to what we saw in Q2 than what we realized in Q3.

Okay, perfect. And just the bad debt piece of that?

I don't expect a significant change there.

Okay, perfect. Thank you, both.

Jamie Sullivan, RBC Capital Markets.

Question on the projects you mentioned in California, $700 million, $1.4 billion. Are these all classroom related projects that you're describing?

Those are classroom either modernization related or new construction. So they fall into both buckets.

Okay. And then on the TRS side, can you remind us what's the breakdown of communications versus general purpose?

It's approximately about two thirds general purpose and about one third communications.

Okay. And wondering what you're investing in terms of (inaudible) there, where you're focusing some of the capital right now.

Well we have -- this year we actually have bought a very reduced amount of equipment relative to 2008 and prior years. And that's really a function of the underutilized equipment that we have and needing to both sell more of that and rent more of that. And we typically buy to support a very broad range of communications and general purpose needs, so I wouldn't say we're spending in any one specific area as much as we're supporting the business product by product as inventory levels and technology warrants.

Okay, so it's pretty much demand has kind of evenly come back across that segment?

We're seeing fairly broad based demand, so we're very pleased about that. It's not coming from any one particular area.

Okay. Then I guess on Adler, is some of the strength we saw in 3Q some seasonal effects?

Well I think really what we saw in Q3 is the fact that Adler is finally getting its legs now. We entered that business in one of the most difficult economies that we've all ever faced. And quite frankly, the first six months of the year were tough. We were also going through integration which actually went relatively smoothly or has gone. And I think we've finally gotten our marketing efforts in place and sales teams and equipment where we need it in the country. So we're really starting to move forward now, so we're very optimistic about the ability to grow the business.

And a number of the new branches that we've opened are now starting to hit their stride and generate business.

That's correct.

Okay, maybe I'll ask it this way -- is there any seasonality to the Adler business?

There's -- yes, to answer that question, yes, there is, particularly in colder weather climates to where any kind of oil or gas field work there can be really during the real cold winter months there can be a stopping of those activities until the ground thaws. And then some other groundwater type work or construction work, especially in the colder climates can be seasonal.

Then last question on good cash flows thus far, are you going to focus on reinvesting that in the asset base that you have? Just your thoughts there on where you'd use cash going forward.

I think, Jamie, if you look at the first nine months of this year, it's a pretty good indicator. The business is definitely generating a lot of cash. We generated $89 million in cash flow from operations and we believe we're funding all the opportunities that we see in front of us. We spent about $51 million in rental equipment CapEx, so with the current business conditions, we're funding our new initiatives, we're moving those along nicely. The core business, while it's challenging in terms of the marketplace, it's generating a lot of cash and we have a lot of equipment in our major markets, both modulars and TRS, that is really less utilized than we'd like. So there's certainly room to grow the business and generate more cash flow without really up ticking the rate of CapEx.

Okay, any thoughts on acquisitions or would you focus on existing segments, look at another leg? Just your thoughts there?

Yes, I would say that we're very happy with the rental businesses that we are involved with today, so I don't think we're looking for another leg. And we're actively always entertaining opportunities for acquisitions in each of those rental businesses. So we are consistently looking at those types of opportunities.

And it sounds like you mentioned that probably smaller local acquisitions in portable storage is one of the things you're looking at right now?

Yes we are.

Okay, thank you.

(Operator Instructions). Jim Giannakouros, Oppenheimer.

Good afternoon, guys. You mentioned lower marketing costs. I was wondering if that's a reflection of just you taking some marketing costs off the table or just more attractive rates in the market. I think when you were commenting on modular?

You know, for the most part in modular, if you're talking about marketing costs, obviously we've economized our sales force basically based upon demand in the market. So there has been some economizing there.

Economizing as far as the sales force is concerned. Okay.

Sales force and various marketing efforts. If demand is lower then you're going to conserve your costs in various areas there.

Fair enough. And you touched on different geographies and on current trends, can you I guess go through that a little bit and give us a little more granularity as to where -- I know it's weak all around and you touched on the specific drivers of your markets, but I guess what I'm trying to get at is where you might see a pickup first and what would drive that in your select geographies.

Good question. We talked about the California classroom market and the positive items that are in place today that can support additional classroom growth next year. I would say that in the Florida market -- this year they suspended the next phase of class size reduction because of budgetary issues of going from meeting the ratios from the school level to the classroom level. That suspended a year. If that was to come back into being for 2009, that would be, for 2010, that would be very positive.

And then if you look at the oil industry and our Texas market, the sooner that there is greater demand for oil, which ties right to the macro economy, then that supports really growth in our business in both the refineries and other petro chemical related work. So those are items that I would look for. And then there's no getting by just the general macroeconomic lift in additional non-res and residential construction which is going to be market by market. It's kind of very hard to predict.

Mid-Atlantic is a new market for us so that's a new growth opportunity.

That's correct.

Small at present, but growing.

Okay, and finally, the -- just going into 2010, your comments that you're probably going to see some I guess intermediate term pressure on earnings, going by segment, I get the sense that Adler should continue to be strong and a positive contributor. Is TRS, is it reasonable to expect stability there? Or are you expecting maybe that to fall down another leg down there? And I guess modular you articulated your thoughts there, but I was just thinking how to model the other segments going forward.

Well I think your comments on Adler probably certainly have a very positive outlook as they are getting themselves established in various markets. So we've done a lot of work this year to get well positioned and we've actually had rental revenue growth each month since May and October was a very strong rental booking month. So we feel very god about that. There is a little seasonality to that business in the winter months as we mentioned earlier, but we feel that 2010 will definitely be an up year, nicely up from 2009 from what we are seeing today.

When you look at our electronics business, we've had just a very good three or four months here. We believe that we've come of the bottom in May and we feel our market position is very good today in terms of being able to capture more business going forward, so we're excited about that. They have a little bit of seasonality to their business in the late fourth quarter, early first quarter. But with that broad based demand there and what we're hearing from the Ciscos and the Intels and some of the other large electronics communications companies out there, is that 2010 looks much brighter than where we've been at in 2009. So we feel good about that going forward.

And so just to clarify that, there's probably upsized opportunity in 2010 in communications end market as opposed to general purpose? Or I should think about it that it's broad based?

I would look at it from a broad based perspective and again, we feel good about a variety of markets today moving forward.

Great. Thank you very much.

Thank you, and at this time I would like to hand it back over to management. I show we have no further questions in the queue.

I want to thank everybody for joining us today on our Q3 call for 2009 and we look forward to chatting with you again on our Q4 call in late February, 2010. Thank you so much for your support. Have a good evening.

Ladies and gentlemen, this concludes the McGrath RentCorp Q3 '09 financial results conference call. If you would like to listen to a replay of today's conference, please dial 303-590-3030 or 1-800-406-7325, using the access code 4166332. Thank you for your participation. You may now disconnect.