Oil States International Inc (OIS) 2006 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the First Quarter 2006 Oil States International Earnings Conference Call. My name is Angela, and I will be your coordinator for today. At this time, all participants are in a listen-only mode. We will be conducting a question-and-answer session towards the end of this conference. If at any time during the call you require assistance, please key star, followed by a zero, and a coordinator will be happy to assist you.

As a reminder, this conference is being recorded for replay purposes. And now I would like to turn the presentation over to your initial host for today’s call, Mr. [Robert Norris], Senior Analyst, Corporate Development with Oil States. Please proceed.

Good morning. Welcome to Oil States’ First Quarter 2006 Earnings Conference Call. Our call today will be led by Douglas Swanson, Oil States’ President and Chief Executive Officer, and Cindy Taylor, Oil States’ Senior Vice President and Chief Financial Officer.

Before we begin, we’d like to caution listeners regarding forward-looking statements. To the extent the remarks today contain information other than historical information, we are relying on the safe harbor protections afforded by federal law. Any such remarks should be weighed in the context of the many factors that affect our business, including those risks disclosed in our Form 10-K and our other SEC filings.

I’ll now turn it over to Doug.

Thank you.

Thank you for joining us, and welcome to Oil States’ first quarter conference call. Oil States International completed the first quarter of 2006 with record results, driven by the continued strength in North American land drilling activity, which drove high activity levels and improved pricing in our Well Site Services segment.

During the quarter, we reported $11.5 million non-cash pre-tax gain from the sale of our workover business to Boots & Coots International. This gain increased our EPS by $0.12 per diluted share.

Excluding the gain from the sale of our workover services business, net income was $0.92 per share, which increased by 84% when compared to the $0.50-per-share amount reported in the first quarter of 2005.

We significantly outperformed our previous guidance range due largely to contributions from our Well Site Services segment.

All of our business segments reported significantly improved year-over-year operating results and were up sequentially, except for Tubular Services, where we had record volumes and revenues but at reduced margins. Our Tubular Services segment was up sequentially in revenue 4.3% due to improved volumes, but EBITDA declined due to lower gross margins realized.

The mix of product shift during the quarter shifted to a greater percentage of carbon versus alloy due to the strengthening land-based drilling activity in addition to the lingering effects of the hurricanes and Gulf of Mexico activity, which resulted in reduced demand for higher-margin seamless alloy tubulars.

Our Well Site Services segment was up sequentially in revenues 24.8% and EBITDA 64.5%, excluding the HWC gain. This was driven by strong winter in Canada and pricing gains realized across all business lines.

Our Offshore Products segment was up sequentially in revenues 2.3% and EBITDA 2.9%, and the margins held firm at 16.3%. Our Offshore Products’ backlog increased dramatically to 220.8 million from the fourth quarter levels of 110.7 million, an increase of 121% year over year. The backlog increase was primarily attributable to the receipt of mooring system work from Noble, the Akpo Connector Products Award, as well as increases in our pipeline products and other drilling and marine equipment.

At this time, I’ll turn over the agenda to Cindy Taylor, who will discuss our financial results.

Thank you, Doug.

For the first quarter 2006, we reported operating income of $79.2 million on revenues of 496.2 million.

Our EBITDA totaled 104.5 million for the quarter, or 93 million when you exclude the gain on the sale of our workover business.

These results compare to 42.2 million of operating income on revenues of $331.9 million for the first quarter of 2005. The first quarter 2005 EBITDA totaled $52.5 million for comparison.

Our current-quarter performance represents a 49.5% year-over-year increase in revenues and a 99.1% improvement in EBITDA. Sequentially, our revenues were up 11%, while EBITDA increased by 44.3%.

Our net income totaled $52.9 million, or $1.04 per diluted share, for the first quarter of 2006. If you exclude the gain recognized on the sale of our workover services business, net income per diluted share totaled $0.92.

As Doug mentioned, our current quarter results reflect the benefits of improved North American drilling activity, a busy winter season in Canada, and strong results generated by our Offshore Products segment.

Well Site Services’ EBITDA was up $45.8 million, or 142.5%, year over year. When you exclude the gain from the sale of our Workover Services business, EBITDA in this segment was still up $34.3 million, or 106.7%. Key contributors to this significant growth were the acquisition of Stinger, added drilling rig capacity, pricing gains in all business lines, and a strong winter drilling season in Canada.

Our Tubular Services segment did very well during the quarter due to the impact of continued strong demand for oil country tubular goods and the impact of the Phillips Casing and Tubing acquisition, which we closed on June 2 of 2005. Our Tubular Services’ EBITDA was up 2.9 million, or 18.8%, year over year.

Sequentially, our revenues were strong, but our margins were negatively impacted by a mix change to a higher percentage of carbon versus alloy products sold. This shift occurred due to strengthening land-based drilling activity in addition to lingering effects of the hurricanes on Gulf of Mexico drilling activity, which resulted in reduced demand for higher-margin seamless alloy tubulars, particularly in the large OD ranges.

Our Offshore Products segment contributed EBITDA growth of $5.1 million, or 65.2% year over year, due primarily to increased activity levels and margins associated with continuing hurricane-related repair work. Our sequential margins held firm at 16.3%, and our backlog increased dramatically.

Stock-based compensation expense recorded during the quarter totaled $1.7 million on a pretax basis, or $0.02 per diluted share, which was all reported as SG&A expense during the quarter.

Our effective tax rate for the quarter was right at 39%, which was adversely affected by the sale of our workover services business. We do expect our rate to decline back to approximately 36% for the balance of 2006, which will result in a total annual effective tax rate of approximately 37%.

Our debt remained relatively constant during the quarter as strong cash flow from operations were offset by working capital builds, particularly in Canada, and by capital spending during the quarter.

Our capital expenditures totaled $26.5 million during the quarter, and our debt-to-capitalization ratio totaled 37.1% at the end of the quarter.

At this time, as we traditionally do, I will turn the discussion back over to Doug, who will take you through activities in a little more detail in each of our business lines and also provide you with our thoughts as to the outlook going forward.

Thank you, Cindy.

What I’d like to do is go through each of our three business segments, focus -- highlighting some of the significant items and focusing on a sequential basis.

First of all, on Well Site Services --

Revenue was 190.7 million, up 24.8% from the fourth quarter.

EBITDA was 77.9 million, and that included 11.5 million gain we spoke of earlier, and it was up 93% in total.

Excluding the HWC gain, the sequential increase in revenues and EBITDA occurred primarily due to the seasonal effects in Canada, coupled with strength in our land drilling and rental tool operations. Both activity and pricing were affected.

Our accommodation support for winter drilling activity exceeded expectations due to the extended duration of the winter.

Our land drilling operations were strong sequentially in both revenues and EBITDA due to strong utilization and improved pricing.

Our average daily revenues were up $1,200 per day on a sequential basis to $12,800 a day, and our daily cash margin per rig was up $1,300 to $6,400 a day, compared to the fourth quarter numbers.

Offshore Products --

Revenues were 78.3 million, up 2.3% from the fourth quarter.

EBITDA was 12.8 million, up 2.9%. Our EBITDA margins improved significantly year over year due to stronger activity levels, improved cost absorption, and higher margins. EBITDA margin percentages held firm at 16.3% due to absorption levels and higher margins received on hurricane repair equipment.

Backlog at the end of the quarter was 220.8 million, up 99.5% from the 110.7 million at December 31. This significant increase was primarily attributable to a receipt of a portion of the Noble mooring system work, the award of connectors for the Akpo project, and increases in our pipeline products and other drilling and marine equipment backlog.

In Tubular Services --

Revenue for the quarter was record revenue of 227.2 million, up 4.3% from the fourth quarter.

Our gross margins declined to 9.3% from 11% in the fourth quarter.

The tons shipped was 126,700 tons in the first quarter compared to 118,600 tons in the fourth quarter of 2005.

And our sales price per ton was $1,793 compared to $1,836, a small decline.

Year-over-year improvements in volumes were due to improved demand and the benefits of the acquisition.

Our book order remained strong.

Our backlog -- our parent backlog at the end of the quarter was 254.1 million. This compares to 296.6 million at the end of the year and 230.2 million at the end of the first quarter 2005.

Our inventory decreased by 8.4 million during the quarter due to the slight volume reduction and the average price decline due to mix. Our inventory was at 265.8 million, compared to 274.2 million at the end of December.

Our purchases prices declined slightly during the quarter due to product mix.

At the end of the quarter, approximately 60% of our OCTG inventories were committed to customer orders. Overall, industry inventories moderated somewhat during the quarter, and we believe that the supply decreased slightly. It’s now estimated to be about 5.2 months.

Looking at the outlook for 2006 --

For Well Site Services, our year-over results in Canada were strong during the quarter due to the extension of the cold weather and improved pricing but were hampered somewhat by losses incurred on facility installations. The long-term outlook remains very bright due to the opportunities for oil sands-related accommodations given construction activities in that area.

Land drilling utilization and pricing is strong and should continue throughout 2006. Our 28th rig spud its first well on February 18, and the 29th rig should spud in September.

Rental tool combinations -- contributions should continue to increase due to planned capacity additions, expected rig count growth, improvements in the capacity of our equipment, and benefits of price increases.

Overall, we expect continued strength and activity in the Well Site Services segment, led by land drilling, the impact of price increases, and strong contributions from our Canadian operations.

The outlook for Offshore Products --

First quarter revenues and EBITDA increased sequentially, evidencing improved activity levels and cost absorption.

Our backlog was up dramatically from year-end. Our mix of products in backlog is also improving, and the outlook for 2006 is robust.

Key projects added to backlog during the quarter included the Noble Clyde Boudreaux mooring system of about 25.4 million, one of the [Eva] mooring system upgrades for 8.3 million, and the Akpo connectors for 18 million. In addition, we had increases in our pipeline and drilling and marine equipment.

Key projects -- potential include the [Shengi] project for production facilities and additional mooring system upgrades for other rigs, particularly the remaining Noble work that is available.

As a result, our Offshore Products segment operating results should continue to improve given increased backlog and improved product mix.

With respect to Tubular Services --

Our sales mix shifted to a greater mix of carbon grade products in the quarter due to the land rig count growth, coupled with lower alloy sales due to the lingering effects of the hurricanes on Gulf of Mexico activity.

Offshore wells drilled were down significantly during the fourth quarter ’05 and the first quarter of ’06 compared to the one-year-earlier periods.

Prices were flat to slightly up during the first quarter for alloy grades.

Our margins contracted during the first quarter due to the mix of products sold. Again, that was more carbon versus alloy. However, the mills have generally announced price increases in the range of 50 to $200 a ton, which will take effect in the period of May through July.

We expect to continue to realize strong revenues during 2006 with current activity levels, the benefits of the Phillips acquisition; however, the second quarter is likely to remain competitive until the announced price increases take effect and alloy inventories on the ground decrease.

In looking at guidance for the second quarter, second quarter earnings should decline sequentially due to the normal seasonal activity declines in Canada, which affects our accommodation and rental tool businesses.

Our depreciation and amortization should total 14 million in the second quarter due to the CapEx incurred. Earnings guidance range for the second quarter is estimated to be 65 to $0.70 per diluted share. Our effective tax rate is estimated at 36% for the balance of the year, and our capital expenditure spending for 2006 is expected to approximate $125 million.

Now, we’d be glad to answer any questions you might have.

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Jeff Tillery, Pickering Energy Partners.

Within the accommodations business, knowing when -- mix towards -- there’s more rental activity in Q1, did the underlying manufacturing margins increase as well, or is this the overall margin improvement primarily due to just more rentals versus manufacturing?

The margin improvement is more oriented towards our rental activity, which as you see typically in the first quarter does get a lift with the rig count improvements that you have. And, in fact, Doug mentioned in his commentary that we have some installation losses on the manufacturing side. So, in fact, those manufacturing margins were actually lower or negative in the quarter. So most of the driver in the first quarter was clearly the strength of the rig count in Canada on the growth side of it.

Okay, thank you. In the land-drilling business, cash margins were up a little bit more than even day rate -- implied day rate was up. Is this kind of ongoing shift from footage work towards more completely a day rate profile?

That is correct. In our operations in the Permian Basin in Texas, we shifted over from day work contracts to -- excuse me, from footage contracts to day work contracts, and this had that impact. We have completed the transition of all of our rigs in that area to day work contracts, so we will not see the same effect in second quarter.

Great. And my final question is in the Tubular Services business. This is kind of the fourth consecutive quarter where you’ve seen a downtick in terms of percentage of inventory committed. Is this something -- is this a level that concerns you, or just how do you think about that committed percentage of your inventory?

Really -- this is Cindy -- we think of it as pretty consistent with what’s going on in the marketplace right now. You typically have more committed inventory on your large OD alloy program, less so on the carbon grade program. Our customers there, particularly like the Phillips customers, will give you indications of their needs, but they typically don’t lock up on a program basis or with fixed purchase orders and fixed commitments. So I think that shift is consistent with the rest of the scene, as you’ve heard throughout the call and throughout the quarter.

That’s helpful. Thank you.

Thiru Ramakrishnan, Simmons.

On Offshore Products, what’s the outlook -- besides Noble, what’s the outlook for potential further mooring system awards in ’06?

We are bidding on other mooring system packages, including the Noble ones that you’re aware of, that the Street is aware of, and they’re going out for bids on other [eva] projects, plus other Noble rigs we’re bidding on. In addition, there are other mooring systems or other contractors, both drilling contractors and construction contractors; we’re bidding on mooring systems for them. So there’s potential for additional mooring systems from Noble and other contractors that are out there.

If we look at your current backlog in Offshore Products, would you say that the average margin in your products backlog is in line or better than current EBITDA margins?

Well, obviously, our backlog margins are gross margins, and they’re better than your EBITDA margins, which are impacted by your SG&A and your fixed-cost structure in those businesses. And I think more importantly, you’ve got two drivers there. With the backlog, we’ll have strong activity really in all of our key manufacturing facilities, but we also are showing improvements just in the mix, if you will, and the gross margin that’s in backlog with those projects, particularly with the receipt of some of your high-end connector products’ work.

Okay, so on a gross margin basis, it’s probably a little bit better?

Yes, we’re seeing improved gross margins on our backlog.

Okay, great. On the Well Site Services, Doug, you talked about Q2. You’re probably not going to see the same cash margin expansion on the land rigs. What type of -- should we see any cash margin expansion?

I think we’ll see -- we will see an increase cash margin going forward, but by the nature of our contracts and the commitments we’ve made, it depends on the turn rate we are attempting to attain. Day rate increases whenever we have a change in contract and we will have some of those during the period, but of course, it won’t be of the same magnitude that we had in the first quarter.

Okay, last question on Tubular Services. What’s your -- have you started to receive more orders for Gulf of Mexico OCTG in the second quarter?

I can’t see that we’ve seen a -- we have not seen an increase in Gulf of Mexico quarters.

So do you expect the mix to stay the same?

For the second quarter. You know, Doug mentioned in his commentary that we kind -- the word competitive. If you really recount what happened, if you go back to the beginning or the first half of 2005, as you will recall, we report on every quarter month supply on the ground, and we were somewhere in the 4 to 4.5-month supply on the ground range, with particular tightness in those alloy grades. The hurricanes occurred, obviously, and we had some impact coming into Q4, probably more so into Q1, which sounds a little strange except that a lot of our customers had already made their commitment for inventory -- OCTG orders. They took them in the fourth quarter, but they couldn’t run them. There was too much disruption in the Gulf. The rigs were damaged if not total constructive losses. So there was a build. We reported that build to you at the end of both Q3 and Q4, and that has to work its way through the system. That’s the simplest answer.

And there are some anomalies. If you look at the mill report, some of the smaller ranges that are used on alloy that are used on broad-based land programs, as well as Offshore, did pretty well in the quarter, but your large OD seamless alloy had clearly been impacted. And if you look at any of the published statistics on wells drilled, the wells drilled from the reports that we get first quarter last year to first quarter this year in the Gulf of Mexico are down about 25%. That has its impact, and that alloy inventory’s got to work its way through the system. And so we see kind of a continuation of the alloy trends into the second quarter.

However, I think there are a lot of positive indicators and that overall demand is strong. We will get increased activity in the Gulf.

Inventory on the ground, as Doug mentioned, has declined on a month supply basis from what we saw at the end of the fourth quarter, and importantly, all of the major mills have announced price increases at this stage, which generally will take effect -- are announced or take effect in May/June and will impact the latter half of this year. So that’s kind of our best view of what is going on in the market and what we can expect to see in the back half of this year.

So second half ’06 margins should rebound?

All the indicators suggest that that’s likely to be the case at this stage, assuming inventory on the ground continues to improve for those alloy ranges.

Yes, thanks a lot, guys.

Ken Sill, Credit Suisse.

On the backlog, I would assume the mooring systems that you’re getting in the Offshore Products are going to roll into revenue fairly quickly this year. But on the Akpo side of some of the pipeline and drilling projects, how -- you know, what’s the rolling of that into revenues over the next (multiple speakers)

As a general rule, Ken, 80% of our backlog rolls in one year, and I think this is probably true as a generality.

Yes, it is true. I actually looked at that before I came in here, Ken, and we’re projecting to take 78% of that backlog into this year’s results, which is typically what we see. We’re going to have a lot of activity on the mooring side, but more importantly, again, we’re a little different than Cooper Cameron, as an example, in that we do use percentage-of-completion accounting for significant projects, both in terms of lead-time and dollar value. So as soon as we’ve got work, we will be booking a proportionate percentage of the revenue. So we don’t have maybe quite as much lumpiness as someone that does not use percentage-of-completion accounting.

Once we start the engineering on the project, we’ll be picking up some income.

Okay. And then on the Well Site accommodations business, obviously, the seasonal decline is there, but it seems like there’s been a pretty good ramp year over year on the amount of support work you’re doing for the tar sands. So I mean could you talk about what you might expect to see in terms of changes year over year in that business in Q2 and Q3?

Well, you’re right without a doubt. Some of the commentary and reactions are out there that we are still projecting a pretty significant seasonal decline, both in the accommodations business and -- what people -- some people forget about is that that Stinger acquisition and our rental tool business have fairly significant exposure to Canada as well. So it’s in two places.

With the growth and activity in the oil sands, we do think that we are moderating the impact of that seasonality; however, this particular quarter was extremely strong, as you can see if you compare year-over-year results to prior years on the rig activity side, and it’s probably a little more exacerbated in the second quarter because of just some timing issues in Canada. Syncrude has completed their UE-1 expansion, and they’re beginning to ramp up on other projects, but we don’t have quite as much activity with Syncrude right now from a timing perspective.

Suncor is sort of between projects, and Albion Oil Sands hasn’t started, but strategically, we are expanding our capacity presently in Canada for the oil sands accommodations, and we expect the capacity to increase significantly beginning in the third quarter of this year, so we will have greater capacity to service that market up there. But as Cindy indicated, in the second quarter, it will be down for the reason that we had such strong winter drilling activity and the actual contract situation with respect to the oil sands construction project.

And then a final question on that business. You know, you don’t really have that much Well Site accommodations business for the summer drilling up there. Is that true?

It’s particularly true in the second quarter because of breakup and road bands that are on, and as of last Monday, the road bands were still on in Canada. And you see that evidenced in the overall rig count coming out of Canada. And you talk about the summer months, that tends to begin improving in Q3, accelerating in Q4, and then you have the strength of the operations in Q1. And we see those same trends continuing. We do expect a strong summer, and going into next year’s winter drilling activity, extremely robust, but second quarter, you just don’t have many options given the breakup and the road band.

From an historical basis, we think that the drilling activity and our accommodation activity in the third quarter will be historically stronger, stronger than historical quarters.

Okay, because you know, somebody was saying yesterday at the OTC that they’d heard a rumor that some of the Western Canada activity might have to taper off in July and August because they’re going to be full on storage, also. And I would think that’s more of the stuff that you’re doing in the shallow zones in the places where you guys don’t work. But that’s (multiple speakers)

We think that’s true because we do know from our experiences that we’ve had several projects, large projects, that have extended on into the second quarter because they were not able to get all their program completed. And we’ve had indications from people that they want to complete these programs and will start them in the third quarter in order to get them done, you know, deferred drilling programs, construction programs, pipeline construction programs, things of that nature that we believe may occur in the end of the second quarter, early third quarter.

Okay. And then on a housekeeping question, did you give us what the ending inventory was in tons -- in cost per tons?

I’ll flip to that very quickly for you. The ending inventory value -- and, again, we’re talking specific to Tubular Services (multiple speakers)

Yes.

-- was 265.8 million, and the tonnage is 170 -- 746. So that’s kind of that. We do have -- if you look at our balance sheet, you’ll see that we actually had a build in inventory despite Tubulars being down modestly. That was really in our Offshore Products and our accommodations business, which, as you know, have been growing.

And I think I missed it, but the industry inventory months supply on hand?

We rely again on the OCTG situation report. The most recent report that we got out estimated months’ supply on the ground at 5.2 months, which is down from 5.8 months, as I recall.

I had 5.7 last (multiple speakers)

5.7 when we exited Q4.

Okay, thank you.

Thanks, Ken.

Stephen Gengaro, Jefferies.

Could you help us a little bit more, and I’m not sure how much you’ll want to say, but I think in ’02 and ’03, your Offshore Products margins got close to 20%. I think 19.1 or 2 was the peak. Is that a realistic objective? Should we think about them maybe going higher than that as we go into ’07?

Well, looking at our records here, I think the highest quarterly margin was 18.4%. I guess we’re down a couple percent from that. I think, depending upon the mix of product, if we have a greater mix of our connector products, that’s possible.

Okay. And then the second question I have was when you’re looking at the Canadian business and the oil sands developments, do you think -- are you at all capacity constrained from participating in the growth there? I mean when we look at it, or we try to quantify kind of the potential impact that has in ’07, can you give us any sense for where we -- how we should think about that?

Well, as I indicated in the earlier question, we are expanding our capacity in the oil sands area. We’re adding additional accommodations to service the construction workers for the oil sands projects. We’re adding an incremental 500-bed executive camp at this time that should be operational in the third quarter. We have the manufacturing capacity to add to our facilities, and we’ll be doing that going forward.

And, you see, I don’t know if you recall on our last quarter call, Stephen, but we announced our capital spending program to total approximately 125 million, and roughly 75 million of that was on activities which are essentially all expansionary in Canada, dedicated to the oil sands area.

Okay, thank you.

Karen David-Green, Oppenheimer.

Congratulations on a good quarter. Actually, all my questions have already been answered.

Thank you, Karen.

Thad Vayda, First Albany Capital.

I was wondering if you guys could give a little bit more color on what you term installation losses (technical difficulty) [manufacturing] side of the accommodations business, sort of the magnitude and what we should expect to see, if anything, going forward?

We think it’s clearly behind us, Thad, and if you’ll recall, a lot of our manufacturing activity last year was on a dedicated -- a huge dedicated camp for one of our customers in the region, and obviously, if we’re at the installation phase, you’ve already gone through the manufacturing process. But we do believe that any issues that we had on installation are behind us. And we think, clearly, the issues that we’ve had were the sides of the camp and labor shortages, particularly doing an installation in the busiest time of the year in Canada. But we don’t foresee that, and since it was a single dedicated camp, it’s non-routine in nature, if you will. Although we do installations at varying times, this was a much bigger one, and it’s more one-time in nature.

And, again, the manufacturing -- our manufacturing experience in manufacturing these facilities was approximately on plan. As Cindy indicated the variances were in the installation phase, which was driven by labor conditions and higher costs in the oil sands area.

Okay. And then on just cost increases in general, I mean I think we’ve heard from pretty much everyone this cycle how much costs have gone up. In your case, if you could kind of walk through each of your segments and identify where you are having no trouble passing them through to your customers, where it’s a little bit tough, and which segments are most at risk at this point in time for the second half of the year?

Well, I don’t think -- I think you understand Tubular. We don’t need to --

Right.

The Tubular price increases are favorable to us. The cost of tubulars have a favorable impact to us, and we’re able to pass them on to the customer very readily and, in effect, obtain higher margins in our other products.

With respect to Well Site Services, in drilling operations as the contracts turn, we’re attempting to get price increases, and we’ve been successful in doing that and recovering increases that are greater than our costs. I think this is also true in our rental tool business, where we’ve had some higher costs but we were able to pass that on with higher prices to the customer.

In the Offshore Products group, we factor in our bids to our customers, all of the costs, the known costs, plus escalation factors, so we think we’ve recovered all those costs in our bids.

Okay. And in the latter business, any shortages of raw materials?

We are experiencing problems with raw materials, as everyone else in the industry is experiencing, which results in ultimately delays of delivery to our customers, which we are programming in our bids.

Thank you very much.

Thank you.

[OPERATOR INSTRUCTIONS]

And at this time, we show no further questions within the queue. I would like to turn the call back over to management for their closing remarks.

Well, thank you for calling in. We hope you have a very nice day.

Thank you for your participation in today’s conference. This does conclude your presentation, and you may now disconnect. Have a wonderful day.