Modine Manufacturing Co (MOD) 2005 Q3 法說會逐字稿

Welcome to today's Modine fiscal 2005 third-quarter financial results conference call. Today's conference is being recorded. Now at this time I'd like to turn the conference over to the Director of Investor Relations, Dave Prichard. Mr. Prichard, please go ahead.

(technical difficulty) and nine-months earnings and cash flow conference call. I'm Dave Prichard, Director of Investor Relations for Modine. Hosting the call today and with me today as usual are Dave Rayburn, our President and Chief Executive Officer, and Brad Richardson, Vice President, Finance and Chief Financial Officer.

As you know, we issued our results after the close yesterday. We trust you have been able to review the press release and the tables which are available on First Call, as well as at the Modine Web site at www.modine.com.

A quick reminder that today's conference call will be available as an audio replay through the Modine Web site, as well as by telephone through Monday, January 31 by calling 719-457-0820 and confirmation code 299324.

We will follow our normal agenda for quarterly conference calls this morning. First, Dave Rayburn will make some opening comments to be followed by Brad Richardson, who will give additional perspective and greater detail on our financial results, including segment analysis. Dave Rayburn will then close our comments section with an outlook for the rest of the year and a brief comment about fiscal 2006 before we move to a Q&A session.

Before we get started I would like to read Modine's Safe Harbor statement. This conference call may contain forward-looking statements that involve assumptions, risks and uncertainties, and Modine's actual results, performance or achievements may differ materially from those express or implied in these statements. A detailed discussion of factors that could affect Modine's results are found on page 31 of the Company's fiscal 2004 annual report to shareholders and in recent public filings with the U.S. Securities and Exchange Commission. Modine does not assume any obligation to update any of these forward-looking statements.

I am now pleased to turn the conference call over to Dave Rayburn, our President and CEO. Dave?

Thanks, Dave, and good morning to everyone and welcome to the call.

Modine reported yesterday record quarterly sales of $418 million. We also reported an all-time record for third-quarter earnings of $18.9 million, or 55 cents per share, up 54 percent from prior year. It was our 10th straight quarter with year-over-year sales increase and our fifth consecutive quarter of record sales, driven by our Asian acquisition, strengthening markets and new business. It was also, most importantly, the fifth straight quarter of increased earnings per share.

Now I would like to cover some of the highlights of the third quarter. In November, we announced $333 million of net new OE business that will mature between now and 2009, with about two-thirds of that maturing in the first three years, split evenly between our businesses in North America and Europe.

We also are very active in the integration process of our Asian acquisition that we completed in the second and third quarter. We continue to feel very positive about our expansion into this region, as well as the products and the skills that we can leverage through this business for the rest of our businesses globally.

We are also enjoying positive contribution from new business programs with multiple engine customers in various components -- for various components both in North America and in Europe. The volume ramp up of a powertrain cooling system for the new BMW 1 Series is going quite well. New coil contracts for the refrigeration market were also launched, and new aluminum radiators for various off-highway applications started production.

Recovery in certain markets has certainly been part of our growth. The (indiscernible) in construction continues to be very strong as they are -- continue to a three to four-year up cycle, and strengthening volumes in the heavy truck market in Europe and especially in North America have been terrific in regards to driving earnings. Unfortunately we do see some impact due to component shortages at a number of our customers, but they are not radiators. We also have benefited from significant increased sales of our heat pipes from our recently expanded Taiwan facility to the electronics industry, primarily servicing the desk-top and lap-top computer market.

Offsetting some of these gains has been the reduced automotive volumes in Europe on selected platforms like the BMW existing 3 Series as it ramps down pending the new launch this next year of the new Series 3, which we have, plus a number of North American platforms that we are on that have had to take adjustments in their build schedules to reduce inventories at their dealers. We also continue to be impacted by rising raw material costs and the contractual delay pass-through to our OE customers, and inflationary impact of other commodities like plastics and purchased parts that, candidly, are difficult to recover.

The market challenges of our aftermarket continue. As most of you are aware, we signed a letter of intent in late October to spin-off our aftermarket business on a debt-free, tax-free basis, and then merge it with Transpro, as well as to acquire Transpro's Heavy-Duty business. We are making progress on reaching a definitive agreement, although it's taking longer than we originally expected due to the complexity of the deal. Given the delay of the definitive agreement signing, the transaction most likely will close now in early of our next fiscal year.

So with that, Brad, would you give them some details?

Thank you very much, Dave, and good morning.

Let me first start with our third-quarter results in total for Modine. As you look at our sales, as Dave mentioned, it was a record for the quarter; up 35 percent versus the previous year's quarter, or 31 percent when you exclude the net favorable currency exchange rates, as most of the year-over-year increase came from new business programs, market recoveries that Dave spoke to, as well as the first full quarter results from our ACC acquisition in Asia.

Earnings increased 54 percent, to 55 cents per share versus 36 cents per share in the previous year's quarter. Net income reached 18.9 million, the highest third-quarter results ever achieved, compared with $12.3 million last year when our growth momentum got underway. Gross margin as a percent of sales was flat versus our fiscal 2005 second quarter, at 22.9 percent, and down slightly from 23.3 percent a year ago due to mix, pricing pressure, and in part the lag impact of passing higher raw material costs through to our OE customers. As a reminder, raw material costs -- that is specifically copper, aluminum and steel -- are about 50 percent of our cost of goods sold. I would note that we have not experienced any supply disruptions.

With regard to our third-quarter income from operations, it was up 76 percent, to $25.1 million versus $14.3 million last year. Better conversion on increased sales, operating margins increased to 6 percent of sales versus only 4.6 percent in fiscal 2004's third quarter, essentially from improved SG&A leverage. I would note that positive currency exchange rates added $3.9 million to pretax earnings, primarily due to the strength of the Euro and the Korean Won.

Cost discipline and the impact of higher sales is evident. Our SG&A expense as a percent of sales fell to 16.8 percent, the lowest in several years, from 18.7 percent last year. We continue to leverage our SG&A base to support our higher sales level.

As it relates to our tax rate, the tax rate in the quarter was 37.2 percent, which was up from 32.2 percent last year, as a greater portion of the Company's revenue and earnings was once again generated in the U.S. and subject to a higher tax rate. This rate is in line with our guidance of 35 to 37 percent for the last three quarters of this fiscal year.

I'm very pleased to report that our annualized return on average capital employed as of the end of the quarter improved to 9.1 percent from 6.2 percent last year, moving Modine closer to its stated target of 11 to 12 percent through a cycle. Improved pretax margins, coupled with increasing our fixed asset turnover -- excuse me -- drove the improvement. And I would note for your reference that attached to the press release is the definition of how we calculate return on average capital employed.

This performance demonstrates the leverage that we are getting from margin expansion, our plant restructuring and rationalization initiatives, as well as working capital improvements. And as a reminder, as Dave mentioned, the spin-out of our Aftermarket division will further improve our return on capital employed by 1.5 to 2 percentage points.

Turning next to our segment results, which are included as an attachment to our press release. Starting first with the Original Equipment segment, it showed the largest year-over-year increase in both sales and operating income among our three segments on the strength of the Truck and Heavy-Duty Industrial markets. These results reinforce the benefit of our global market diversification strategy, as the Truck and Heavy-Duty markets had very strong growth, offset by a decline in our North American automotive business. Results include the first full quarter of operations from Modine Asia -- that is, the Korean and Chinese assets of WiniaMando's ACC business we acquired during the second quarter.

With regard to Truck as part of the OE segment it had triple-digit operating income improvements, and the Heavy-Duty & Industrial and absolute core market for Modine improved by a double-digit rate. Due to the reduced volumes for certain vehicle platforms we're on and continued pricing pressure, the North American automotive business had lower sales and a double-digit decline in operating income.

I would note that on a reported basis, our Asian acquisition is on track to add the previously forecast 7 to 11 cents per share to our fiscal year '05 results, due to higher-than-expected favorable currency exchange rates which are offsetting lower-than-anticipated operating performance from a softer Korean and Chinese -- from the softer Korean and Chinese markets.

The second segment, our distributed products, had another tough quarter, although slightly better than our second quarter. Sales fell 1.9 percent, with very weak aftermarket performance more than offsetting stronger refrigeration coil sales in the commercial HVAC&R business. The operating loss of 0.6 million in the quarter was reduced by 400,000 versus the previous year, as the impact of lower aftermarket performance was offset by a significantly lower operating loss in our Electronics Cooling business dye to rapidly increasing heat pipe production business in Taiwan and cost control programs, as well as slightly better profitability in our HVAC&R business.

Our third segment, the European operations -- the volume growth in the Heavy-Duty and Automotive business and positive currency contributed to a 26 percent increase in sales. Even more impressive was the operating income of 20.3 million which rose 68 percent year-over-year. A triple-digit increase in income from operations for the Heavy-Duty business, coupled with double-digit improvements in the Automotive business and the benefit of currency exchange rates, more than offset higher SG&A expense from accelerating new business programs.

In terms of our financial position, I would note that in the quarter we had very, very strong operating cash flow of $57 million versus $40.9 million last year, and nearly doubled the 29 million that we had in the second quarter. This enabled us to pay down by 22.5 million to the end of the quarter the debt that we used to acquire our Korean acquisition and brought our debt balances down to 127.9 million. We also built our cash balances in the quarter by about $16 million. And again, I would just note that we've now paid off nearly half of the $49 million we borrowed to finance the ACC acquisition.

Our debt to capital ratio of 16.6 percent fell from 19 percent at the end of the second quarter and compares with 13 percent at the prior year-end, again, due to the ACC acquisition. We still have extensive investment capacity and liquidity and we are assessing a number of acquisition opportunities here and abroad.

In terms of working capital management, due to a $68 million reclassification to current liabilities ahead of a planned refinancing in September, our working capital fell sharply, to 169.8 million from 229.7 million at the end of the second quarter and roughly the same level at the prior year-end.

Our inventory turns improved to 8.7 from 7.3 at the end of fiscal year '04 and 7.6 a year ago. Our DSO increased, however, to 56 days, versus 51 days last year and 49 at the end of the fiscal year '04. Both of the increases essentially result from the ACC acquisition customer base that we have in Asia. Our capital expenditures -- we still expect that those will be in line with the $70 million, which is in line with our depreciation rates.

As it relates to the fourth quarter, as Dave mentioned, we are certainly exceeding our original fiscal year '05 sales and earnings guidance, as well as our forecast for a stronger second half than the first-half's 81 cents. This is in spite of the fact that our Q4 results may be only in line or slightly below last year's 37 cents per share. And this is due to the absence of a 4 cent per share gain from plant sales that we had in the fourth quarter of last year, and some softening in certain economies such as Korea and China, as we have noted, the maturing of several platforms such as the BMW Series 3, and some weaker North American automotive volumes, and finally, the market challenges of our aftermarket.

I will now turn the call back to Dave.

Thanks, Brad. Certainly the fourth quarter had some challenges, and I'm sure you have heard from some other conference calls, but we are confident that we can bring home what Brad commented on.

In regards to fiscal 2006, we will be providing a more comprehensive outlook when we report our year-end results. But overall, we are encouraged that we will see earnings growth next year, driven by new business, stronger markets, and specifically, the ag and construction and heavy truck markets, and the impact of a number of the recent strategic acquisitions, notably the spin-off of the aftermarket, the acquisition of the OE business and Transpro, and the maturing of our Asian acquisition.

So with that, operator, we would be glad to take some questions.

(OPERATOR INSTRUCTIONS). David Siino, Gabelli & Co.

With other suppliers, as well as some market reports that we get, we have seen at least steel prices start to abate somewhat. Are you seeing that in your business?

I wouldn't use the abate, I would use the word flattening, that in our case where we had tumbled to spot buys we are now able to get buys with some horizon as much as three, and maybe even a couple of cases, six months. So that says that supply is loosening up. But as far as any reductions, no, but I would say flattening. I will comment, though, as steel significant in some of our segments like our heating business. But steel is not that significant as it is with a number of the other segment suppliers.

Just an update on Korea. Any new business won since I asked this question last quarter?

I would say from the Korean standpoint, and Brad already commented the fact that we are seeing some softening volumes both in Korea -- and that's pretty well publicized in regards to the automotive market being off -- as well as we are seeing a rather significant reduction in exports both in automotive as well as construction product that we ship into China. We are very encouraged about the -- with the activity we've been having with their current customer base and our customer base that's in the region in the areas of engine components, where we have, I think, differentiating technology such as EGRs and oil coolers, and powertrain products. But right now I would say it's courtship. No orders to report.

Just a quick question for Brad. On the refinancing that you're talking about, is there any premium involved there? And do you expect to realize some sort of savings of significance next year as a result?

David, in answer to your first question, no there won't be any premium because we're going to let the note mature out. There's no reason at this point to actually call the note early. In fact, there could potentially be a penalty if we called it early, so we're going to go ahead and let that note mature out. Certainly in terms of interest rates savings, there may be, based upon current rate, a slight reduction in our interest rate that we will refinance that with. But I certainly wouldn't build in any kind of significant number.

David Leiker, Robert W. Baird.

Just a follow-up on that note, Brad. What is the rate on that, that that matures?

Right now the rate on that, David, is just in rough numbers about 6 percent. So, again, I mean, you know where rates are today. We have not yet made a call as to whether or not we will refinance that with floating or whether or not we'll fix the rate. And we'll take a much closer look at that as we go through the summer.

And the acquisition in Korea -- what did that contribute in the quarter in terms of revenue?

In terms of our revenue contribution from Korea, I should have that number off the top of my head here.

We'll see how good a fumbler (ph) he is.

I know what it is in our full year; I've got all those numbers memorized. Hold on just one second here. Asia contributed slightly over $50 million in revenue.

Could you give us the profit number, too, or not?

I'd prefer not to give you the profit number. I think we said what we are prepared to say, David, in terms of where we see it on the full-year basis. And just to reinforce, the message is that we still feel like we're on track to deliver the 7 to 11 cents per share. But quite frankly, we have had the benefit of strong currency gains which have offset some of the operational softness that Dave referred to.

If we look at the OE business, that's where that falls, correct?

Correct. Most of it falls -- I mean, you have got -- most of it falls in the OE. Clearly the joint venture that we have in China -- that is part of the other income segment. And part of the currency gains that we have on some of the intercompany loans that were put in place to finance the transaction are also in other income.

So if we look at the profit drop in the OE segment, can you kind of give us some idea of the buckets? I'm sure the Korean acquisition is somewhat dilutive there on the margin. I would guess it is. And you have raw material costs on there. You have the North American business. Can you give us some color in terms of how -- what the contributors were to the margin decline?

You're talking about the margin because, obviously, the absolute is up. The margins dropped from about 13.3 percent to 11.5 percent. Really what is driving that is -- I think you're fair to say that the Korean has been slightly dilutive to the margins as a percent of sales. Also, the North American automotive business which as I mentioned has had -- which is under earnings pressure has also contributed to the margin dilution. And of course that has been offset by the impact of better performance out of our Heavy-Duty and Truck market. And then, again, just what is rippling through the overall margin again is -- for all businesses within the segment is this issue of the material costs, which we have estimated in aggregate for our corporation -- for the Company is depressing our margins by about a percent. And this is something that, again, we discussed in November with some of our analyst presentations that we made.

And I would say in comment also, we have the delay in the recovery with the OE businesses, but we're now seeing, as I mentioned in my comments, some inflationary increases in non-raw material, plastics and other components that are part of our modules. And David, this kind of marketplace -- although we're in front of the customer, those are more difficult to recover.

Lastly, and I will get back in the line here -- sticking on the OE margin percent. What would you think is a normal margin for that somewhere down the road? We're pretty significantly below what that's than in the past. Can you get back to those old margins again at some point?

I think it's going to be a journey, a tough, tough assignment. As I made a comment last night to a reporter from Milwaukee, the automotive business is not a bed of roses, and it certainly has its challenges. I think we're matched up with the right people, the right customers, especially BMW and others. But it's a tough market, and to get back to those traditional, I think, is going to be a real challenge.

I agree with that. One of the things that may start to clearly stabilize the margins is, clearly, if we have a period of more stable commodity prices. Clearly, this year we've seen such a significant increase in the areas of -- the lag effect as we're able to pass that through; those pass-throughs are now starting to kick in, which certainly should stabilize the margins. Again, the overall margins for the Company clearly are on the positive trend. And the one thing that we have significant control over is our overall SG&A costs for the Corporation, and therefore, we are getting very decent leverage out of our SG&A to support the growth in the business.

One other comment, Dave, on the new business -- because a large part of that is in the OE segment and the other piece is in the Europe segment -- is that with the incremental business that we are adding that I commented on, is that as we have said in our investor presentations, there's no new facilities to support that. So how well our organization can manage their capital appetite, we ought to be able to leverage some fixed costs with that new business. I guess we will see how we do.

And most of your auto business in this segment is Chrysler, correct?

In this particular segment, yes.

(OPERATOR INSTRUCTIONS). We will return to David Leiker.

I might just stay on here. The ROIC targets (indiscernible) up 11 or 12 percent, I think you said that's through the course of a cycle. Is it your idea that that's an average over the cycle?

Yes. Absolutely. What we would expect is at the top of the cycle to be slightly above that range and the trough to be slightly below. So, yes, that is what we're trying to imply. And clearly we're making great progress. And if you look at our results, excluding the impact of the aftermarket business, we will be comfortably -- as we'd previously disclosed, we will be up in the range of our target. But I would also say that we have more room -- more to deliver on that.

Dave, as we've stated in our prior calls as our long-term goal -- and we're very fortunate to have the diversification we have both in markets and customers. The more we can execute that diversification strategy, and even potentially into some new markets so long as it's heat transfer, hopefully we will have less of this cycle long-term. And that would certainly be one of my goals.

Going to the European operations, real nice margin gain there. You've got -- that's the 1 Series coming up to speed, with some offset on the 3 Series. If you launch that 3 series later this year and into next year, does that mean there's upside from that, that that rolls through as well, that 15 percent margin?

Certainly the margin improvement that we have seen in that segment is clearly also driven by the Heavy-Duty business, which is showing very strong margin performance there. The margins -- again, I wouldn't get carried away in terms of building rate increases in margins. We do have -- clearly, as the revenue base for both the automotive as well as the Heavy-Duty continues to come up and grow, the ability again to leverage, as Dave mentioned, our fixed costs, our manufacturing plants, should help.

Although I would say that we've put -- of the capital we were spending, a significant amount of the capital that we have been spending recently has been in Europe. And I believe you have seen that, that we are going to have some depreciation of the impacts in Europe in future months. So the good news is that we're seeing some nice growth in our EGR product, which comes out of Heavy-Duty, as well as some oil cooler products that we have in our lower-cost facility in Hungary.

On the other income line, I think you answered part of my question earlier. Some of that increase is China, correct?

Yes. China is in there. And again, some of the currency gains, again, on the intercompany loans that we've had is also in that line.

Okay. If you stripped those out, what would those -- what would that have looked like?

I think it's fair to say that it probably would have been down slightly.

I think that's a no answer, Brad.

Let me just clarify, though, it would have been down slightly because of slightly lower royalty income. But I would say that the earnings from our equity affiliate, which is really the core of our investments in those businesses, are up strongly. Our operations out of Brazil in particular have had a very, very strong improvement in their overall profitability. So, there are lots of moving parts, as you have seen in our 10-Q filing, in that other income line. But I think what matters in terms of the operations is that the equity affiliate earnings, in particular out of Brazil, are up nicely.

We have been real pleased with the Brazilian relationship we have and we've really moved that business aggressively into a number of OE customers that we needed to regional support. So we're real pleased with that management team down there and the progress they're making.

Turning to the fourth quarter then. (indiscernible) model this through to get to -- call it 36 cents for argument's sake. Do you see contribution margin and EBITDA margin putting meaningful deviation from the trend that you've seen in the last four or five quarters? I just want to get a better understanding of what is all behind what sequentially is a pretty meaningful change.

I think the -- it may get back to your earlier question on the European operations. I would say that most of the decline that we have from Q3 to Q4 in the earnings is a function of Europe. And so the question is why is that. And one of the reasons, rather mundane, but is we do record Europe on a one-month lag basis, and therefore, the number of manufacturing days that we have in the fourth quarter is about 10 percent below the number of manufacturing days that we have in the third quarter. So we have lower volumes due just to lower number of days of operations. But we also do, as we mentioned, the Series 3. The old Series 3 is on the decline, and so the revenue out of that business is also declining. So I think, David, it's probably those factors that you see that are pulling the overall margin performance down as you've modeled for the business.

When does that new 3 Series launch?

Not until late spring. It would be into our second quarter.

So presumably then, those will have continued to be an issue in your first quarter for fiscal '06?

Yes, and we've also seen some softening, candidly, in our -- with our French customers for oil coolers.

And then -- I'll run out of questions here eventually. That aftermarket business -- is that getting worse since you announced this spend (ph), or has it just kind of been treading along with the performance that we've been seeing before?

Without getting into real specifics, what I would say is that when you have a business that has gone through what is obviously a very significant transition that we are in right now, it does have an impact on the overall operational performance of the business. And I think what I would like to do is just kind of leave it at that, David.

A follow-up on that, though, is -- I'm sure you don't want to talk about this, but what is the risk that the terms get renegotiated, given what the performance has been on that business?

I'm very confident that we are going to be just fine. There may be a tweak in the journey, but we are very confident that this deal is going to be concluded, as we stated in the LOI. There certainly can be some changes on that journey, but from materiality of the benefit that this provides Modine, and candidly, the benefit that this is going to provide the new company -- the enthusiasm we expressed when we had the conference call on the spin-off and the acquisition still resides with both us and the new company.

David, let me just build on that point. The real opportunity for this company isn't kind of like the near-term performance of Modine or Transpro, it's really -- the real benefit of this company is created by bringing the two companies together and in unlocking the significant synergies, the $20 million worth of synergies that we have previously announced. That is really where the value is created, not really in the current operational performance of Modine's business.

Right. No, I understand that. Lastly, two numbers questions. Your capital spending number here has pushed $70 million in '04 and '05, meaningfully higher than the years before. Would we expect that to drop in '06?

What we have said in the past is that we think we will hold our capital at approximately our ongoing and depreciation level. So we don't see it to be much higher than depreciation, but that's probably a pretty decent target.

If the new business is going into existing facilities and your expansion in Europe is behind you, I would expect that $70 million number to fall.

Well, we still have ongoing requirements technically to support some of the new products. For example, yesterday the Board funded some rather large expenditures for Europe to expand both the facility support as well as some new EGR test equipment. So we are going to continue to spend the money to validate the product in our technical side. And even though we don't need brick and mortar, many of these programs drive capital. And candidly, we been more aggressive in taking labor and taking cost out by automation, and we get better quality as a result. And I think you've seen the (indiscernible) facility, although that's a new facility. But that's not untypical of the approach we're doing in capitalization of making sure that we are competitive in some of these higher-cost locations that we are located in.

And then the other number question is in the segment reporting. Brad, I don't know -- have you discontinued releasing the corporate expense and the elimination to get to an EBIT number? Are those available, or are you just doing it for the segment profit number?

We're just doing it to a segment profit number, David.

David Siino, Gabelli & Co.

Just having some question envy there. Dave, we haven't spoken about royalties in a while. Anything new on that front? What are they on a quarterly basis? Any potential for that increasing down the road?

I would say the general assumption is they're probably going to continue to be flat. We have some that may expire. We have others that we put in place. It's been a great income stream in the course in the past, but I wouldn't expect any major pluses or minus to our history, recent history.

If I remember correctly it's somewhere -- 1 million or 1.5 million per quarter in the other income line?

I think your estimate of about 1 million is probably pretty good. You know, it's maybe a little over that, David. But that's not too far off.

David Lowe (ph), Sidoti.

A lot of Davids. I like this. This is a David morning. I'm going to take everything from here out.

I guess I need to change my name.

You can call me whatever you want today if it makes you feel better. I just wanted to get back to the -- I think the OEM European questions have been covered pretty well by the other two gentlemen. Getting back to the distributed products segment. Looking to -- I don't know if you want to talk about this because this is going into 2006. But with the pending spin-off of the aftermarket, do you look for the building HVAC -- considerable ramp up of the building HVAC segment (indiscernible) business?

What will be left, David -- and I'll let the other David talk about the electronics -- but what will be left, clearly, in that segment is, for clarification's sake, will be the Electronic Cooling as well as our HVAC&R business. And we've always said the HVAC&R business is a very profitable business for Modine.

We are encouraged with the electronics business. And, certainly, our timing wasn't very good on that acquisition. And it's certainly been a real challenge and dilutive since we've had the business. But we are making real progress in the segment of that for computers. And I would hope that next year that we are in a position to not talk about red numbers in that business.

You're expecting some profitability from that segment?

That could be a fair expectation.

It appears that is our last question for today. I'd like to turn the conference back to the speakers for any additional or closing remarks.

Well, I just appreciate the participation and the questions, and hopefully we've brought some clarity to our release. And we look forward to talking to you after we finish the year and get ready to jump into a new one. Have a great day. Thank you.

Thank you.