NV5 Global Inc (NVEE) 2016 Q3 法說會逐字稿

Good afternoon, everyone, and thank you for participating in today's conference call to discuss NV5's financial results for the third quarter and nine months ended September 30, 2016. Joining us today are Dickerson Wright, Chairman and CEO of NV5; Michael Rama, CFO of NV5; and Lauren Wright, Director of Investor Relations for NV5.

I would now like to turn the call over to Lauren Wright.

Thank you, operator.

Before we proceed, I would like to remind everyone that this conference call may contain forward-looking statements within the meaning of the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995, including statements concerning future events and future financial performance. The Company cautions that these statements are qualified by important factors that could cause actual results to materially differ from those reflected by the forward-looking statements contained herein. All forward-looking statements are based on information available to the Company on the date hereof, and the Company assumes no obligation to update such statements, except as required by law.

I would also like to remind everyone that this call will be available for replay through November 10, 2016, starting at 7:30 PM Eastern tonight. A webcast replay will also be available via the link provided in today's news release and on the Company's website at www.NV5.com. Any redistribution, retransmission, or rebroadcast of this call in any way without the express written consent of NV5 is strictly prohibited.

We will begin the call with comments from Dickerson Wright, Chairman and CEO of NV5, before turning the call over to Michael Rama, Chief Financial Officer, for a review of the third-quarter 2016 and year-to-date financial results.

Dickerson, please go ahead.

Thanks, Lauren, and thank you to everyone joining us for NV5's third-quarter 2016 conference call.

After the close of market today, we issued a news release announcing our financial results for the third quarter and nine-months ended September 30, 2016. We also issued a news release reviewing our results and announcing our recent acquisition of JBA on October 26.

We mentioned last week that our third-quarter results were negatively impacted by the delay of several of our major transportation projects in New Jersey, which we expect to resume after the election. We also mentioned that our gas pipeline business continues to recover slowly, but that we are making strides to improvement this situation.

Despite these challenges, our total revenues in the third quarter increased 26% year-over-year, and EBITDA increased 18%. And net income increased 13% year-over-year. We increased profit margins among all of our service lines in the third quarter. We've increased our backlog and, once again, minimized our use of sub-consultants.

As entrepreneurs and operators we believe strongly in evaluating our business based on cash flow, the strength of our balance sheet, and the performance of our shares. This is evidenced by the increase in cash generated from our operations year-over-year. We went from a cash use position of $400,000 to a net cash flow position of approximately $11 million this year.

We have continued to increase earnings even as our share count increases. We're close to achieving our published goal to exit year 2016 with $300 million in run rate revenues and a 12% to 15% EBITDA on net fees.

As we mentioned in our news release earlier today, we are currently at 15% EBITDA on net fees. We have succeeded so far with the same recipe for success, a flat organization and a focus on organic and strategic growth within our five key service lines.

In addition to our professionals in those five key business lines, we have been able to cross sell their services, keeping more revenue in-house and allowing us to expand the range of services we can offer our existing clients. Since August 2015, NV5 has booked approximately $13 million in fees as a result of our cross-selling initiative.

In the third quarter, we announced several big contract wins with the New York City Department of Design and Construction and the New York State Department of Transportation totaling almost $20 million in new fees. An increasing number of projects involve the interdisciplinary efforts of our engineers and experts across the country.

For example, between two of our most recent acquisitions, Weir Environmental and Dade Moeller. The team at Weir recently won a landmark contract with Louisiana State University for the health sciences center expansion through collaboration with NV5's existing environment services team. Also, Dade Moeller was again recognized by the National Institute of Occupational Safety and Health with an award for the outstanding provision of technical services. And NV5's infrastructure team in New York won the Diamond award for their Plaza of the Americas project, the highest recognition given by ACEC in New York.

On the West Coast, our infrastructure engineer group in San Diego has received two contracts with a major Southern California utility totaling $10 million in fees for power delivery services, and also a contract with the City of Oceanside for approximately $2 million in fees. NV5 continues to provide Caltrans with extensive services, and last month we won new work with Caltrans in the Central Valley region of California which is expected to bring between $7 million and $12 million in fees.

NV5 is positioned for organic growth for the foreseeable future. We believe organic growth is best supported by a flat organization which allows our leaders to be directly involved with our clients. To promote a flat organization, we have organized our infrastructure, civil program management, and construction quality assurance practices under the umbrella of infrastructure. And we have organized our environmental, energy, and building program management groups under the umbrella of building, energy and sciences, or BES.

We are only starting to see positive results from this new organization structure. For instance, in targeting of M&A opportunities and the integration process of new companies. Two of the acquisitions we made recently fall under the BES division. Weir Environmental based in Louisiana and JBA Consulting Engineers based in Las Vegas.

We closed the JBA acquisition last week. JBA is a mechanical, electrical, and plumbing company that also performs acoustics, technology, and fire protection services with annual revenues of approximately $33 million. JBA has more than 150 employees in 12 offices in the US, and 65 employees abroad in Asia.

Since the mid-1960s, JB has been serving some of the biggest names in the hospitality, entertainment, and casino industries, in addition to public projects. JBA's clients include Hilton, Marriott, Wynn, Caesars, MGM, the Crowns, Sands, Red Rock and Hard Rock. JBA has been instrumental in the development of the Cotai Strip in Macau which is home to two of the largest resorts in the world, Wynn Palace and MGM Cotai.

Since being asked by its clients to perform services there 10 years ago, JB has become the largest engineering consulting firm in Macau and the firm has a prominent presence in Hong Kong. JBA's Macau and Hong Kong operations have enabled the firm to perform work in Korea, Singapore, the Philippines, Australia and now in Japan where MGM announced it will be investing $10 billion in a new casino. JBA's continued interest from its legacy clients in developing large-scale resort and gaming projects throughout the Asia-Pacific region, and the Company is well-positioned to support these new development moving forward because of the deep relationships that's built in the region.

Shifting now to NV5's acquisition of Weir Environmental. The Weir team has provided consulting services in the wake of many major environmental incidents in the US since 2006 such as Hurricane Sandy, Hurricane Matthew, and the flooding this year in Baton Rouge. Weir's clients include government agencies, healthcare, education, residential and commercial facilities. And the largest portion of their clients base is represented by insurance companies. Weir's environmental services compliment our existing construction defect and litigation support business which also serves insurance industry clients.

I would now like to turn the call over to our Chief Financial Officer, Michael Rama. Mike?

Thank you, Dick, and good afternoon, everyone. I will now provide a more detailed overview of the Company's financial results for the third quarter and nine months ended September 30, 2016.

Gross revenues in the third quarter of 2016 were $60.1 million, a 23% increase compared to the third quarter of 2015. Net revenues for the third quarter of 2016 were $47.9 million, an increase of 25% from the third quarter of 2015. These increases were due to organic growth and the continued contribution of acquisitions closed during 2016.

Gross margins for the third quarter of 2016 were 46%, compared to 44.2% for the third quarter of 2015, which is the result of the increased use of our global professional employees. EBITDA for the third quarter of 2016 was $7.1 million, or 15% of net revenues, an increase of 18%, up from $6 million in the third quarter of last year.

Net income in third quarter of 2016 was $3.4 million, an increase of 13% compared to net income of $3 million in the third quarter of 2015. Third quarter 2016 adjusted earnings per share, which is earnings per share excluding the impact of amortization of intangible assets from acquisitions, was $0.41 versus $0.44 in the third quarter of 2015.

Third quarter of 2016 GAAP earnings per share was $0.33 versus $0.38 in the third quarter of 2015. Our third-quarter 2016 adjusted and GAAP earnings per share reflects the weighted average shares outstanding of approximately 10.4 million shares for the three months ended September 30, 2016, compared to the weighted average shares outstanding of approximately 7.9 million shares for the three months ended September 30, 2015.

Included in the weighted average shares outstanding for the third quarter of 2016 is the impact of 1.9 million shares issued from our secondary offering during May 2016. Our cash flow from operating activities was $4 million for the third quarter ended September 30, 2016, compared to cash flow used in operating activities of $1.4 million for the third quarter of 2015.

As of September 30, 2016, our cash and cash equivalents were $53.1 million. Now, we will review the year-to-date results for the nine months ended September 30, 2016.

Gross revenues in the nine months ended September 30, 2016, were $160.9 million, an increase in 43% when compared to the same period of 2015. Net revenues year-to-date in 2016 were $130.4 million, an increase of 47% from the same period of 2015. These increases were due to organic growth and the contribution of acquisitions closed during 2016.

Gross margin for the nine months ended September 30, 2016, was 47.7%, compared to 44.3% for the nine months ended September 30, 2015, which is result of the increased use of our global professional employees and decreased use of sub-consultants.

EBITDA for the nine months ended September 30, 2016, was $17.7 million, or 14% of net revenues. An increase of 48% from the nine months ended September 30, 2015. Net income for the nine months ended September 30, 2016, was $8.3 million, an increase of 43% compared to net income of $5.8 million for the nine months ended September 30, 2015.

Adjusted earnings per share for the nine months ended September 30, 2016 was $1.11 per share versus $1.01 for the same period in 2015. GAAP earnings per share for the nine months ended September 30, 2016, was $0.90 versus $0.84 for the nine months ended September 30, 2015.

Our year-to-date 2016 adjusted and GAAP earnings per share reflects the weighted average shares outstanding of approximately 9.2 million shares for the nine months ended September 30, 2016, compared to the weighted average shares outstanding approximately 6.9 million shares for the nine months ended September 30, 2015. Included in the weighted average shares outstanding for the nine months ended September 2016 is the impact of 1.9 million shares issued from our secondary offering earlier this year.

Cash flows from operating activities increased to $10.7 million in the nine months ended September 30, 2016, compared to cash used from operating activities of $400,000 in the nine months ended September 30, 2015. At September 30, 2016, the Company reported backlog of $205 million, an increase of 32% from $155.3 million as of December 31, 2015. Our backlog is an estimate of revenues to be recognized over a rolling 12 month period.

This completes our prepared remarks and we would like to open the call for your questions.

(Operator instructions)

Our first question comes from Jeff Martin with ROTH Capital Partners.

Thanks, good afternoon, guys.

Hello, Jeff.

Good afternoon.

Dick, could you talk about timing of recognition of some of these larger contracts you mentioned at the beginning of the call? It seems like they are fairly sizable relative to last year. Just curious when some of these should be kicking in and if they'll hit disproportionately in any given quarter in the first half of the year in 2017.

Sure. Those contracts that we mentioned, I am sure you are referring to the New York contracts totaling $20 million and the various contracts that we have had in California and additional contracts. Those range anywhere from 2 to 3 year period of time, the shortest 1 year. And we have not really started on any of those and so we are expecting those to be baked into the to 2017 budget.

Only caveat is in the areas of New York where there is some impact of weather, those projects may be a little bit delayed. And as you know, Jeff, I wish our business was linear. I wish that we could just say that it's just going to flow right through, but there's always a little bit of start and stops for various reasons.

And as we indicated, some of the revenue recognition for this quarter was impacted by the New Jersey DOT's gas impasse between legislators. I am happy to report that that has been resolved and those projects have started. They are ramping up slowly, but that revenue we will start to see an recover in this quarter.

So, anyway, the ones that you have mentioned, on the new ones, they will certainly -- we are very optimistic about the budget for 2017. So you'll start to see those come into effect more in 2017 than you will for the fourth quarter of this year.

Okay. And then, are you able to speak at all in terms of maybe a range of what kind of organic growth you might expect in 2017?

I haven't seen the budget yet so I'm not -- I cannot give you that exact number, but we would fully expect that organic growth to run the range of 8% to 10%.

Okay, and then the Matthew recovery work; is that something that you are seeing a lot of opportunity with? Are you close to closing any contracts there?

Well, yes, we have had both the positive and then some of the delay based on hurricane Matthew. I don't want to speak to specific universities because we haven't announced that, but we will now look for an acceleration of projects in North Carolina that we are ready to start and then were just delayed because of Matthew. But now it is on a very accelerated schedule, because they are understanding the need for emergency and standby power to, and as I say, I won't say the specific university.

As far as what is happening in Baton Rouge and what is happening as the effect of Matthew that you saw in the eastern seaboard, we are slowly recognizing that revenue and most of our work there is through the insurance claims process. So there is -- many of the clients are hesitant to begin that work until they are sure of the insurance funding. But we will start to see a steady stream of that, and I would look for that revenue to really start be realized in this quarter and spilling over to the first quarter of next year.

Okay. Do you foresee adding engineers to that group in the near future?

Staffing is always, always an issue. And we think that the environmental specialist is what we're looking for, and that is why we are so appreciative of the network that we are beginning to build with.

And I can tell you this, Dade and Moeller has been very supportive and influential, the Dade Moeller acquisition, in supporting Weir Environmental in Louisiana. Dade Moeller had an office there and they're really supporting that activity, as well as our operation in Tampa, Florida which is also involved in environmental support. Most of those professionals though are not engineers, those are mostly certified industrial hygienists. They are environmentalists, and they are people that would fit that bill.

As far as engineers, our industry is really -- it's a difficult -- our industry has an attrition of losing engineers between 10% and 12%. We are fortunate our interest -- excuse me, 8%. So we are always looking, always looking to staff people. And we bill according to time, Jeff, as you well know and there is no real inventory build up or shelf life on those services. We have the people. We bill for the people. So that's always an ongoing need.

To answer your question, the ramp up in environmental will not be so much for engineers, but they will be for environmental specialists. But for those other projects that we announced, we are doing active recruiting to make sure those projects get staffed.

Great, and then last question is: You're quickly maturing as an organization in terms of scale. You'll soon passing that $300 million run rate. Just curious, what is the buildout plan or the organizational structure plan as you may reach for a $400 million or $500 million revenue run rate over the next couple of years?

Good question. Jeff, being active a long time, the challenge has always been to have an organization that stays flat and has our best people looking out there. I think many organizations as they mature and they get bigger, they tend to get internalized. They get internalized with administrative, maybe over administrative support, and we really want an organization that is built to look out there.

So our first step, we think that the restructuring where we split our infrastructure group and our building energy science group, it helps flatten the organization. And we think that can take us to well over $300 million, significantly past $300 million, and still be flat, still allow our driving entrepreneurs to be the people that are building that business.

So the goal is, for me, and the challenge for me every day is how do we continue to have an organization that is built, that looks out to grow revenue rather than internalize itself. So we want to be flat. We want to certainly measure that quickly: measured by shareholder value, organic growth, cash flow of the business and operating efficiency. So, I think the model that we have now will take us well past $300 million and then it's another look that we will have to take as we get bigger.

Great. Thanks for your time.

Thanks, Jeff.

Our next question comes from Ryan Cassil from Seaport Global.

Hey, good afternoon.

Hi, Ryan. How are you?

Good. Thanks. Just to kind of piggyback on that last thought, any of the acquisitions -- would it be potential for a new vertical or a different way to kind of segment the business going forward from an operational standpoint? Is there any potential with the deals that you have been looking at?

Well, I think -- let me take a stab at that. I think acquisitions you do should always first densify and strengthen your existing platforms. So the acquisitions that we made, Weir is really strengthening our environmental vertical, as well as what Dade Moeller, of course, has done early in the year.

And we're very, very pleased with that acquisition. And the JBA acquisition now not only intensifies our energy platform but it brings us into something within what we call energy, fire safety and acoustics. It's something that is so -- has a much higher margin than typical MEP design work.

And so, those two will actually strengthen existing platforms that we have. However, I don't want to get it too far in front of us. We are always active. The pipeline is always there. We will be looking and moving very quickly on acquisitions as we speak. And this may lead to verticals -- other verticals as sure as we know that we have a platform in that vertical that can really service the client and we are known as experts in that vertical.

So there's a number of different ones we are looking at, but the acquisitions we have done now, recently -- every acquisition we have done this year has been to strengthen and intensify the existing verticals that we have.

Okay. Thanks. Thanks for that color.

And then, on the comments on 2017, I appreciate those as well for that informal outlook, or target of 8% to 10% organic growth. How much, if you could provide it; is there a way to think about the backlog, the $205 million? What of that is organic backlog? And what, at this point, is acquired revenue?

And then the second part of that is how much of that 8% to 10% do you think would come from an acceleration in infrastructure construction spending that maybe you have not seen yet but is on the cusp of occurring here late in the year?

Okay. First, backlog. In our business, we have found that a solid, strong backlog to budget revenues usually runs -- should be 65%.

So the $205 million backlog is a significant piece for what we feel will be at least the $300 million revenue run rate without being supported by additional acquisitions that we fully intend to do. However, the backlog would be recorded at $205 million has no -- it is only organic growth from existing companies, and it's contracts from existing. It does not include, for example, the JBA acquisition or any backlog that they have.

You would probably look for that to be realized in an announcement that we will do in the first quarter of next year. So the $205 million is purely organic. So that gives us some visibility of what we feel our organic growth will be going in for the year.

And as far as infrastructure, doing this for quite some time, I can tell you that we are finally starting to see actual need of infrastructure being recognized. I was listening today here in South Florida. Broward County is just at an impasse on use of roads and transportation. So we are in a very good spot.

And I think, Ryan, you have heard me say before, we love to be an industry that is a mandated need industry. We are not trying to have to -- having to develop a market of people, no matter what the economy is they need to drink clean water, they need to treat wastewater, they need to go through roads that are not going to fail, or bridges that are not going to fail. And what we are really seeing now both whatever your political persuasion, both sides, both -- both the political parties, both recognize the need for the neglected infrastructure improvements.

So we are starting to see a little bit of money in the FAST act, but I think as far as where you are really going to start to see the impact will not be immediate, but it is going to be as these projects go first through the proposal phase, the design phase to get funding, the request for proposal phase, then into the actual construction phase. We have a small portion of our work in support of the request for funds. We assist there, and in the design phase. But we, like others, will start to see more of that revenue stream and infrastructure come in from down the road.

What I would like to say though is what we really see a strengthening in the municipal service lines. Most of our business during the recession or slowdown was the state agencies. Now, we are starting to see an awful lot of business with municipalities and county and local agencies, and we think that is a real strength as a representation of the infrastructure business.

Okay. Is that pretty good margin business? Any kind of color there versus corporate averages? Is it better, worse, or just kind of in line with the rest of your events?

Well, I think it is -- I think it is in line with some of our existing business. However, what we like with municipalities, we really have the opportunity to be even more embedded with them. We support that staff. We become the building departments.

We become the department helping them in the Departments of Public Works. So we are not so much susceptible in that market to the big bid project stage. It is more of a continuity of earnings and a continuity of revenue, and that is what we do like about the municipal market. Although, we don't want to be too dependent on building permit process, which is more dependent on the residential side or housing side.

Okay. Great. I just want to clarify just on the backlog, the $205 million, that does or does not include bookings from Dade Moeller or Sebesta or those businesses? It is just pure organic or are some of those in there as well?

It includes Dade Moeller from the time we've owned it, which is May. And it includes Sebesta from February, and it is just measuring their wins or their organic growth that are measured into the backlog. But it does not include anything from JBA and I know if we have even recognized anything from Weir Environmental on backlog. We may have, Mike, but I doubt it.

So how we measure backlog, especially when you are an acquiring company, it is owning them over a period of time through a quarter and then what we measure as their wins as to what organic growth is.

So yes, it does include Dade Moeller from the period of time that they have been part of NV5 and Sebesta for the period of time they have been part of NV5.

Got it. Okay, I appreciate that. Is some of the Baton Rouge work that you're doing, would that be in backlog or is that a quick turns business (multiple speakers)?

Well, that backlog is measured more how we measure backlog in our CQA vertical, or construction quality assurance, where much of that work comes in over the transom or it is called in work and then it is bundled. Some of that service is for them is not in long-term, multiyear contracts, but it is for immediate service needs. So that backlog -- and that is why I asked Mike if we have even recognized any of the Weir work in environmental yet. And probably, we will get a very good feel for that in this quarter that we are in right now.

Got it. That is what I thought. So a lot of it is not reflected in backlog currently.

Got it.

And the last one for me, the ramp of the and New Jersey projects sounds like they are starting, based on your prior comments, which is great. Any sense -- and I know it is not that long since we chatted before -- if you are going to see some on an accelerated timeline versus -- since the delay, or do you think they just continue slowly ramping and you get some here in Q4 but a majority is booked into 2017?

I just earlier today spoke to our Chief Operating Officer of Infrastructure in the east and he told me that these projects are now starting slowly. We have already begun some of them. So we are going to see some revenue recognition there, and they are having a meeting next week to finalize and determine how the rest of those projects are going to be caught up. If the schedule is going to get extended or if it's going to be accelerated. For now, I just don't know. But the good news is that those projects are starting up.

Great. Thank you. I will turn it back.

Our next question comes from Jayant Ishwar with Singular Research.

Good quarter after the announcement.

Thank you.

One was on the backlog; how much of the backlog is directly applicable to Q4 of this year?

Well, I -- it is certainly not linear, but let me say this, we only measure backlog in a rolling 12 months. So we went into the quarter, and Mike may better explain this than me and so he can certainly correct me, but we went into the quarter at $195 million. Our revenues for the quarter were --

$60 million

$60 million. That meant the backlog was $135 million.

So we added $70 million or so in more new work that will be now through the rolling 12 months. So I cannot tell you exactly how much of that backlog will be billed in the fourth quarter, but I can any of the burn rate will certainly come off of that backlog.

And probably once backlog is recognized, we recognize the New Jersey Department of Transportation backlog before and that has only gone to builder backlog because of those project delayed; and now will be recognizing that revenue even though we didn't report it in the $205 million because we had already posted it before.

The other way to look at it is how much of the quick turns business was in the quarter? What is your experience?

I don't know what you mean by quick turn but --

It has been something that get --

I'll certainly try.

And you deliver a recognized revenue within the quarter.

How -- let me see if I understand your question. You are saying, how much of the backlog are we recognizing -- will we recognize in the fourth quarter? Is that your question?

That was the original question, but to follow on this; how much in any given quarter -- how much of those revenues on orders that you received during the quarter itself? So if you had $60 million revenue last quarter that you recognized; how much of that was from the backlog that you started with at the beginning plus whatever new orders that you got but you delivered immediately?

You know, we just don't track it that way, Jayant. We think the most conservative way is to deduct billed revenue from the backlog and then adding what has been won in that quarter to the backlog. But we just can't tell you -- I guess I could if we -- it would take quite a bit of time to go through every contract and figure out when that contract -- what revenue we recorded in that very contract for the quarter.

We would rather just say let's be very conservative, because a lot of these contracts if they are two or three years, we never record two or three years worth of revenue as the backlog. We only record what we know we are going to bill in a rolling 12-month period. But we have not reported on exactly what will come in of that contract in the quarter.

Okay, and then going into the second one is going into 2017, how much of a gross margin improvement do you expect by bringing work in-house or other means?

Well, you know, we expect perfection and then hope for the best. But I think our gross margin has been constantly improving. I will let Mike speak more definitively to that.

Yes, we should see a uptick on the gross margin as we bill into that a full year and full activities of the Dade Moeller, as well as the JBA acquisitions. Which their gross margins were a little bit higher than our overall averages. That will -- and then also some of the decline in the pipeline. That mix will show an overall improvement. We anticipate still to see upticks in each -- in each of the gross margins as the mix improves, if you will, of the gross margin recognized.

I think we had a 10% improvement in the gross margin in this quarter.

They were 44% and then we went to 46% gross margin.

So almost 10%.

But how many point improvement in gross margin do you expect over the 12 months? Because like you said, 44% to 46%. 46% to what would it go to in your opinion?

Well, I don't know but let me say this: The goal of our Company is, one, to be scalable. Our support services and our fixed costs will continue to go down as a percentage as our margin increases. As those fixed costs go down and we measure utilization rate, then our gross margin will improve.

But what, I can't -- first, I haven't seen the budgets. We will have a detailed on the 17th and 18th, very granular budget meetings and I would be much more knowledgeable on what we are expecting when I see those. But we will see an improvement and we are going to see improvement in our fixed costs. We are going to see an improvement in our scalability and we are -- as our backlog increases, we are going to be looking for improvement in utilization rates, and that is very important to -- utilization rate is very important to improve the gross margin.

Thank you. I mean at the conclusion I really liked the quarter and the fact that JBA acquisition came in and it looks like a good one. Thanks.

Yes, we are very excited about the JBA acquisition as well as we -- I'm hitting myself, knocking on wood. But we've made some very good acquisitions this year and we are very pleased with Sebesta. We are very, very pleased with Dade Moeller. We are very pleased with JBA. And although Weir is smaller, they are certainly making a synergy impact as measured by that very nice win they won.

So we continue to and we look at a lot of deals. Our M&A pipeline is very robust and we say no many more times than we say yes. So we try to get better as we go, and we try to bring in companies that we think can make immediate improvement to our platform.

Thank you.

And I am not showing any further questions at this time. I would like to turn the call back over to Dickerson.

Well, thank you, everybody and I really appreciate your continued interest in our Company. And I think that, going forward, our challenge continues to be a flat organization, organic growth, cash flow, and ever improving margins and efficiency.

So we are very excited about the balance of this year, and in 2017 we look for a very good year. We are going in with a very strong backlog. We continue to be very active in the M&A space. Our integration process is improving, so as companies join us, it increases our platforms, it increases our ability in the marketplace, and I could only assure you that we will continue to stay focused on growing our Company, but growing it profitably. And growing it so that's there is a continuity of earnings that our shareholders can expect.

So, thank you once again for listening and we will look forward to speaking to you next quarter. Thank you.

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.