Park Aerospace Corp (PKE) 2010 Q1 法說會逐字稿

Good morning. My name is Celeste and I will be your conference operator today. At this time, I would like to welcome everyone to the Park Electrochemical Corporation fiscal year 2010 first quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) Thank you. At this time, I will turn today's call over to Brian Shore, President and Chief Executive Officer. Mr. Shore, you may now begin your conference.

Thank you, operator. Good morning, everybody. This is Brian Shore, and welcome to Park's first quarter conference call. With me as usual, Matt Farabaugh, our Vice President and Controller. We'll start as usual with our introductory remarks and then we'll go into Q&A. Matt, why don't you get us started with some initial commentary.

Okay. Thank you, Brian. Certain statements we may make during the course of this discussion which do not relate to historical financial information may be deemed to constitute forward-looking statements. Any forward-looking statements are subject to various factors that could cause actual results to differ materially from our expectations. We have set forth in our most recent annual report on Form 10K for the fiscal year ended March 1st, 2009, various factors that could affect future results. Those factors are found in item 1A and after item seven of that Form 10K. Any forward-looking statements we may make are subject to those factors. I would first like the to summarize the financial information included in the news release for the first quarter ended May 31st, 20009.

Net sales for the 2010 fiscal year first quarter ended May 31st, 2009, were $36.7 million, compared to net sales of $59.8 million for the prior fiscal year first quarter. Net earnings for the 2010 fiscal year first quarter were $3.1 million compared to net earnings of $7.6 million for the prior fiscal year first quarter. Basic and diluted earnings per share for the 2010 fiscal year first quarter were $0.15 compared to basic and diluted earnings per share of $0.37 for the prior year first quarter. Now I'd like to review some of the significant items in our first quarter P&L. The Company's sales as a percentage of total net sales worldwide were: 54% in North America, 36% in Asia, 10% in Europe for the fiscal year 2010 first quarter, compared to 51%, 36% and 13% respectively for the first quarter of the prior year. Sales of high temperature laminate and prepreg materials comprised 100% of of total laminate and prepreg materials sales during the first quarter of fiscal 2010 and the prior year's first quarter.

Sales of Park's high performance printed non[rf4] circuit materials which are a subset of high temperature printed circuit materials were 67% of total laminate and prepreg sales in the first quarter of fiscal quarter of 2010, compared to 60% in the first quarter of the prior year. Sales of Park's advanced composite materials in Park's products comprised 17% of total sales in the first quarter of fiscal 2010 compared to 11% in the first quarter of the prior year. The gross profit percentage for the first quarter of fiscal 2010 was 25.1% compared to 24.4% for the prior year first quarter. Selling, general and administrative expenses were 16.1% of net sales for the 2010 fiscal year first quarter compared to 10.6% for the prior year's comparable period. Stock compensation expense was $288,000 for the 2010 first quarter, compared to $352,000 for the prior year first quarter. Investment income for the first quarter was $688,000, or 1.8% of net sales, as compared to $1.672 million or 2.8% of net sales for the first quarter of 2009. The effective tax rate for the 2009 first quarter was 22.7%, compared to a 23.8% effective tax rate for the prior year -- prior fiscal year first quarter. Earnings before income taxes was 10.8% of net sales for the 2010 first quarter, compared to 16.6% for the prior year first quarter.

Turning to Park's balance sheet, cash and marketable securities were $229.8 million at May 31st, 2009, compared to $225.3 million at the end of the prior fiscal year. We continued to invest the available funds on a conservative basis in highly rated fixed income securities and money market funds. Working capital was $242.4 million at the end of the 2010 first quarter, compared to $239.6 million at the end of the prior fiscal year. Capital expenditures were $.8 million for the 2010 first quarter, compared to $5.8 million for the prior year comparable period. Depreciation and amortization expense was $1.7 million for the 2010 first quarter compared to $1.9 million for the prior year first quarter. Stockholders' equity was $297.7 million at May 31st, 2009, compared to $295.7 million at the end of the prior fiscal year. Finally, stockholders' equity per share was $14.54 at May 31st, 2009, compared to $14.45 at the end of the prior fiscal year.

Thanks a lot, Matt. It's Brian again. It sure is a pleasure to do Q1, especially when there's no special items, DO items or anything like that because the comparison's all very simple and Matt's script -- Matt's introductory remarks, I should say are -- tend to be more concise as a result. Also, remember that there's a transcript of Matt's introductory remarks that are posted on our website. I think they're posted by 8:30 this morning. Offer a lot of detail, percentages and things like that, so if you want to check you can always look it up on our website. However, I think that in this environment, maybe Q4 to Q1 type comparisons are somewhat useful to get perspective as well.

The Q1 to Q1 comparison, I mean, the big story I think would be the top line. Sorry, got to get my glasses. Q1 of last year, the top line was pretty close to $60 million. Q1 of this year, a little less than $37 million. I guess you could say that's a story in itself. However, there's another story that I hope you noticed, which is the gross profit in Q1 of last year, I think was 24.4%, that's on about $60 million of sales. Q1 of this year, 25.1%, at $36 million, $37 million of sales. I believe when we had our first -- correction, fourth quarter conference call, which was just not even two months ago, maybe about two months ago, one of the analysts asked if we had any upside potential with our gross margin, our Q4 gross margin I think was about 22.9% and we said well, our objective certainly is to improve the gross margin. And I think we did, if you look at the numbers.

I want to get back to that because there's another factor involved with the gross margin that you should be aware of but before we talk about that, let's just focus on what I would consider to be important comparisons between the -- let's say Q4 and Q1. And this actually is a Q1 to Q1 comparison as well, hope you're following what I'm saying. But look at interest income. There's a story there, isn't there? In Q1 of last year, about $1.7 million, Q4 of last year, $1.6 million, $3 million, something like that, down to $688,000. You get basically a $1 million delta. That's not annualized. That's per quarter. So that might explain something of the differences because that's a big number in terms of what people are thinking about or expecting. I would say it's a pretty big number for one quarter and there's really no hidden message there, except what's going on in the world with interest rates.

As Matt said, we always invest very conservatively. We continue to do that. But we also are keeping our investments pretty short, and as some of the investments we have mature, and we roll them into new investments, we keep them pretty short. Our reasoning for that is that we know if we went longer, like a 10-year treasury or something like that, it would be fairly safe, but the interest rating would be considerable. With what's going on in the world and the country, our concern is that interest rates will be spiking up. We might be wrong about that, but we're probably as good a guesser as anybody else. I don't know about you, but I spend some time watching the financial news and reading the financial news and all these guys are so brilliant in terms of explaining what happened in the past, but they're all almost completely incapable of explaining what will happen in the future. So our guess at what interest rates is probably as good as anybody's, but my concern is that they'll start to spike up based upon all the money that the country's spending that the country doesn't have. So we're keeping our -- we always keep it secure. We don't mess around with credit.

But we're not willing at this point to move it out into longer maturities. So what we're saying is our returns are going to be pretty thin for a while and I would expect, I think Matt would agree, that next quarter or the second quarter that we are in now, probably not going to be very much different in terms of the interest income. Let's see, tax rate, Q4 to Q1, not much of a difference there. Sometimes that's something we need to talk about because that tends to jump around a little bit too.

The other thing I want to bring to your attention is our Kansas plant. When we spoke last time I explained that we're having some difficulty bringing to of our treaters up to it, two of our new treaters. We have four manufacturing lines in Kansas, and the two solvent treaters that are new treaters are really critical for that facility, because those machines would accept if you will the transfer of the work that's currently being done in Waterbury. The plan is to transfer the aircraft related work from Waterbury to Kansas and we're hoping that over the next year or two we'll develop more nonequip work to Waterbury, so that Waterbury will also have its own kind of basis for having a future existence. But that has been stalled out because we're having a heck of a time getting these treaters online and it's been an issue for us with our supplier. I can assure you, we spend what's required to get the best treaters money can buy. That's not the issue here, not that we're cutting back on our expenses in terms of our investment for the future.

So we have a pretty all hands on deck effort here, because obviously we need to get these treaters up and running so we can go forward with our plans for the Kansas plant. It's been consuming and a little distracting, and I'm just telling you this because it affects our P&L. I'm not trying to give you any kind of -- not trying to signal anything other than that. I'm not trying to signal that we don't have the same hopes and expectations for the plant. But just so you know in Q1, $1/2 million impact and that's just a direct cost of operating that plant without having any revenues. We staffed up because we're preparing for the future. We're depreciating some of the assets now. And Q2, we're expecting maybe a $700,000 impact. Again, with really no revenues of any consequence to offset that. So the sooner we can transfer the work from Waterbury, the better off we'll be.

But we're kind of stalled out here for six months, I guess, with this additional expense. We always expected there to be an overlap but this overlap's being extended by this problem. So look, let me be clear again. I just wanted you to understand the impact of Q1 is probably the impact of Q2. That's the reason I'm discussing this with you. But I want to make sure you're not thinking there's any hidden message because there is none. There's no other message about, well, we don't have the same optimism for the future in this plant or our plans have changed. That's not what we're trying to say. If that was what we're trying to say, we'd come out and say it. We don't talk in code and sign language. We just lay things on the table, as I think you probably know by now. I want you to be aware of that. Of course, $1/2 million, much of that goes into cost of goods sold.

We've talked about gross profit, at $25.1 million. A logical question would be well what would the gross profit be if we didn't carry that $1/2 million of expense in the first quarter? And I'm not going to answer that question except to say it would definitely be better. We're not going to quantify that. You people can figure it out. Some of that cost is SG&A but most of the $500,000 would be in the cost of goods sold line. And you know what, we just spoke a couple months ago, so I don't think we need to reiterate all the strategic things that we talked about then, because none of them really have changed. The emphasis continues to be the same in terms of the Company thrust and focus. By the way, the annual report which just came out I think a couple days ago, our annual report to shareholders, if any of you are not registered shareholders or don't get a copy of the report, just give us a call, be happy to send you one. Because that goes into a little more of kind of a systematic explanation of what we're doing, what our objectives are, and for those of you who are really interested in the Company from a fundamental perspective, it's something that I would recommend you read. I really don't have anything else to tell you. So like I said, the first quarter's always easier because there's less comparisons, and of course we don't have any special items of any consequence, so that makes it easier from that perspective as well. Operator, why don't we go right into the Q&A portion of the call.

(Operator Instructions) Our first question comes from the line of Sean Hannan with Needham & Company.

Yes, good morning.

Good morning.

So Brian, is it possible if I can ask just quickly around the revenue run rate today, what it is that you're seeing now that the quarter has closed? And then separately, if there's a way to perhaps just give us a little color around what you saw as trends during the course of the May quarter?

The May quarter was flat, but since you asked, we have three weeks in the books and the revenues and the bookings are up to some extent, as compared to the average for last quarter. Maybe -- I always got to caution you about this because we're not forecasting anything. I just want you to understand that all we do is talk about the facts that we know. We're not good at forecasting. But the revenues and bookings are up in the first three weeks of the second quarter. Unfortunately, the fourth week is reported tonight so we can't give you the fourth week yet, but they're up compared to the third quarter by let's say 10% or 15% or something like that. That's booking revenues. I don't know if that's a trend, but those are the facts.

That's helpful. Is there a dynamic that you're seeing in terms of on the electronics side versus within your advanced composites, is there one that's actually sticking out more in that bookings rebound?

Okay. I'm not going to (inaudible) rebound. I just told what you the facts are for the first three weeks. I think that it's really not useful to dig into those numbers any further, because I'd be concerned that we would be overlooking at them. But the general answer is that there's nothing unusual in terms of the first three weeks in terms of the electronics versus [airline] product line revenue and bookings.

Okay. Well then perhaps if I could ask a little bit around the advanced composites business in the May quarter, on a percentage basis, obviously this was a very strong result. And so the first question, was this essentially a flat performance year-over-year on a dollar basis? And separately, were there any notable changes in contribution from some of your Nova business?

Matt, could you answer that question about on a dollar basis? I mean, I guess we all go back, do the math, just you just do percentages?

On a dollar basis, we're probably up a little bit. I'm sorry, we're down a little bit versus last year's first quarter for the composite parts.

Wait. Hold on. Composite parts and material.

And materials, yes.

So --

And then in terms of your Nova business, can you provide a little bit of commentary around how that's performing?

Parts. That really I think is -- to have the parts product line as I said before has been important for Park. It seems like that in terms of a lot of the development work we're doing and a lot of the RFQs we're quoting on, a lot of them relates to parts. It seems that once we brought parts into our product portfolio, we started to get a lot more attention and recognition. That could be coincidence, of course, I don't know, but it just seemed that things changed at that point pretty significantly. But in terms of the actual revenues for parts, we still don't have any break-outs. We have a lot of qualification programs we're on, but of course now we're talking about new programs and the aircraft industry is quite slow right now, and even though it's nice to be on programs, it still doesn't translate into revenues in the immediate future.

So we don't have any break-out in terms of revenues or even bookings, I don't think, in the parts product line. As far as the product line in general, the aircraft product line including the parts and materials together, obviously the percentage has been creeping up and that's I don't think an accident. I think that's because of our efforts. I don't believe I would say, I don't think it would be correct to say either that the end market is more healthy in aircraft as compared to electronics. It might actually be the opposite. I think it might be true. The aircraft industry has just gone into some kind of tailspin it seems like in the last six months with massive layoffs and massive order cancellations that are a matter of public record, so we don't have to go into a lot of detail about that.

I also have this funny feeling that the aircraft industry is not handling the global economic downturn as well as the electronics industry is. Electronics industry is I think more flexible, more you agile, and I think more accustomed to dealing with this kind of thing. So I wouldn't say that the fact that our revenues as a percentage of sales are moving up in the aircraft area, I wouldn't say that's an end market story at all. I think it's probably just that we continue to work on it and continue to work on it. Of course, 17% is much better than 10%, but that's I hope you understand is not our objective. Our objective is to grow that area dramatically. So is there any other color that I can give you regarding that question?

That's helpful, Brian. I can jump onto another question that actually does relate to your advanced composites, are actually your location in Kansas. I think that you've talked a little bit in the past around hiring on some engineers or some folks within the engineering side and that there are perhaps some opportunities due to the downturn in the aircraft industry. Is this something that we should expect to continue as kind of an incremental investment to your operations, or visible in your OpEx line through the remainder of the year, or is this really more of a longer-term strategy and not something that we should really be modeling toward?

Well, I think you could model toward the $700,000 number that I gave you for the second quarter as compared to the $500,000 number. Most of these people that we'ere looking to hire have been hired, so a lot of them were probably hired during the first quarter, so the first quarter was kind of a mixed quarter. But as of the beginning of the second quarter, most of the cost is in place. There's still one or two positions we're hiring for. But most of the engineering staff that we were looking to bring on is now on, and that was both actually not only in Kansas but also in Washington, we hired engineers in Washington as well as in Kansas. But we're really looking at that as kind of one business for the future anyway, Kansas and Washington.

Okay. That's helpful. And then just lastly, if I could just ask around the dynamics that you've seen from a pricing standpoint as well as any contributions or headwinds for copper.

Yes. Well, it continues to be a challenge and I guess the economy doesn't help either because it's kind of the whip-saw effect. As I was saying, you talk to the best financial economic forecasters, and one month we're going into a depression, the next month well, it's not so bad and of course that you affects all of the commodity pricing too because a lot of that is based upon expectations for the future and attitude and everything. So it's been very difficult, although we wouldn't guide you toward anything in particular for the first quarter or second quarter regarding the impact from those events. We're just continuing to manage them.

Great. Thanks very much, Brian.

Okay.

Your next question, if I'm pronouncing it correctly, comes from the line of Jiwon Lee from Sidoti & Company.

Yes, good morning.

Hi, Jiwon.

Just a few questions. First off, in terms of your annual cost savings that you have quantified as $17 million, just finishing up the first quarter, are we fully there yet in terms of realizing this benefit?

Yes, we are. And I just wanted to add a couple things to that, because that $17 million wasn't cost savings only. It was P&L impact. So part of it's cost savings, part of it's consolidation. So -- but anyway, so I just want to go back and explain it. That $17 million was quantified at a point when the business was at a certain level and all of the benefits are still there, but of course they're offset by the difference in the outside environment and a difference in our revenues. So from that perspective, it's not a static item. I think you understand that, but I just want to emphasize that. The short answer to the question is yes, all the benefits in Q1. There's no additional benefit you'll see from those events in Q2 or in the future.

Okay. And Brian, when you talked about perhaps the revenues and bookings up since May by about 10% to 15%, you were commenting both the printed circuit materials as well as the (inaudible) side of the business.

I intentionally avoided doing -- giving you the answer to that question. I don't even know it off the top of my head, actually. I think at that point if we start getting into breaking down three weeks of revenue into components it gets to be potentially -- it would just be very misleading to do that and I'm really avoiding doing that. What I said is I'm not really aware of anything in particular in terms of a trend in the first three weeks based upon the allocation between the electronics and the aircraft revenues, but we didn't give a specific breakdown and I would rather not do that.

Okay. And is there any specific timetable as to when these new treaters or the treater transfers in Kansas City will be done so that the run rate will be going as your previous expectation was?

Yes. It's not Kansas City, of course. It's near Wichita which is about three hours from Kansas City. See, this is the problem. The treaters were supposed to be operating in January. So we were supposed to be out with samples in January. We're still not there. Now, I just want to make sure you understand, there are four manufacturing lines in this plant. The other two lines, one is a small tape line, that's located in Kansas. Now that was actually one line that was not a new line that was transferred from Waterbury and that line's being put on board. There's a new hot melt line which is produced in Europe, which is a very nice line and we're very happy with that, and we are actually in production with that line.

Now, the key point about that is that's all development work because, see, we didn't have that capability previously, Jiwon. It's different with the solvent treaters. That's a transfer from -- in addition to the development work which we're doing all the time anyway, right, that's transfer of the work we have in Waterbury to Kansas. There is nothing to transfer to the hot melt line. So that's development work. So while we're in production, while we're actually operating that machine, the revenues are very, very low because that's all, again, development work, and that's the type of thing that will grow over probably a couple years. The key thing for us is to be able to transfer the work that's at Waterbury to the Kansas facility so that we can avoid this overlap of cost as much as possible, and we really have five of six months now of additional overlap that we weren't expecting to have based upon the expectations we had from our equipment supplier.

Okay. So I don't know if I heard your answer as to when you expect that --

You're right. Let me just address that. I don't have an answer for you. I think we're a little more optimistic now than we were a few weeks ago. We put kind of a tour deforce effort on it. It's all hands on desk because we realize it's so critical. I'm sure that I don't really have doubts as to whether we'll solve the problem, but I'm reluctant to put a stake in the ground and say it's going to be by next week or the following week, but I think we're a lot closer. Let me put it that way, anyway. I think we're a lot closer.

We kind of see the light at the end of the tunnel now, but there's still a lot of work to do, but I think we see the light at the end of the tunnel relating to when we'll be able to actually start producing samples and actually transferring work from Kansas to Waterbury. There's going to be that -- I think you know this. Let me make sure everybody understands. In the aircraft industry in particular there's going to be an overlap because the aircraft industry is very slow. Even though these programs are already in production in Waterbury and qualified, the aircraft customers and OEMs will still want a plant qualification in Kansas. There will be come overlap. It's just that the overlap has been prolonged now and that's just money down the drain. We don't get anything back for that money with the prolonged overlap. So I wish I could give you a hard answer. I don't think I'm in a position to do that because we certainly had our surprises with this project, except to say that I think the light at the end of the tunnel is pretty clear, and I'm optimistic that we'll be producing samples and starting to do the transfer work in the near future.

Okay. Well, that's helpful. And your CapEx for the quarter was fairly low. Is there sort of a new goal for the fiscal 2010?

Matt, did we give any indication last quarter? I don't think we did. I think we're thinking it's going to be lower than last year by quite a bit. Just be the timing differences. I think we spoke last quarter, which is just a couple months ago, about the fact that we're -- actually at this point we're pretty much finishing up our planning work regarding the expansion of our Kansas plant, so we'll be able to make parts there as well, and I don't have a number for you yet. It's nothing near the $15 million we spent in the original facility, but it's probably going to be pushing $5 million I would think of additional spending. Some of that spending may end up actually moving into the next year.

I think in the next couple of weeks we'll be in a position to put a stake in the ground and say, yes, we decided on what we're doing. We have our equipment list. We have our layout. We have our contractor, and of course there's always the finishing touches that we do on these plans, but at that point, I think, may even announce something, I don't know, just let you know, yes we're going forward. I think that would be the big impact that we can see anyway this year. Of course, there's other things that we don't anticipate including acquisitions that could affect our spending as well.

Okay. And lastly for Matt, the top 5%, 10% and 20% of customers, percentage of sales, and who the top five were, please?

Sure. The top five customers were about 45% of our sales for the quarter. The top 10 was about 60%. The top 20 was about 72%.

And the list of top five customers, please?

[San Nina], TTM, Pegasus, [TopCo] and [Moltok].

Okay. Were there any 10% customers there?

Two of them, [San Nina] and TTM were 11.9% Nina, and 11.5% for TTM.

Okay. Great.

The top two are pretty neck-in-neck I guess at this time.

Okay. That's all from me. Thank you.

Thanks, Jiwon.

(Operator Instructions) Your next question comes from the line of Richard Dearnly with Longport Partners.

Good morning. Taking a long view as in back to 2000, could you talk about the basic supply/demand situation in your industries, and where are we in terms of overcapacity or the capacity that was generated in 2000 or 1999 and 2000 going away or getting rationalized?

Are you referring to the electronics industry, really?

Yes.

The industries are completely separate of course. You're referring to electronics?

Yes.

Yes. Okay. I don't think that we're in a position to give you an intelligent, qualified answer to that question. The industry's so dramatically different than it was -- electronics manufacturing industry than it was around 2000. As you pointed out, a lot of capacity was being put online, and importantly not just in Asia but still in Europe and North America, people were building plants ever where and spending money everywhere. The western manufacturing supply chain, I mean, has been decimated. There's hardly anything left of it. It's very, very small at this point. In my opinion I don't think there's going to be a lot of new investment in Europe or in North America for electronics manufacturing.

I think a lot of the companies that are still doing electronics manufacturing in the western world are kind of living off the investments they made back in that time frame. Some of those investments have been written off too, so the thing is that are they really in a position to reinvest because there really hasn't been a lot of capital put in in recent times. Now, Asia is a completely different story and Asia in the last three, four years, there still has been massive investment, maybe it's been slowed down quite a bit in the last year of course with the global economic crisis, but my guess is that there's still significant -- there's significant excess capacity in Asia at this time. And like I said, I'm not really in a position to quantify that for you. As of a year ago, before the economic crisis really took hold, it was my feeling that even then there was excess capacity but people are still building more. I guess that's typical of the electronic cycles. When things are good, people are overbuilding, and when things are bad maybe they're overcorrecting on the negative side. Right now, I would have to guess that there's significant excess capacity in Asia. Of course, we stopped playing that game many, many years ago. We're not really interested in that kind of thing about capacity and excess capacity.

We just have to focus on technology because what we learned is even in good times and bad times alike, if we start trying to compete against Asian companies, especially Asian companies that are focused on more commodity, volume type work, they're always going to find a price lower than ours, no matter what, whether their capacity is fully utilized or not. So from that point of view it's not something we focus on too much anymore because we think it's a trap, and our pricing from our perspective doesn't change, and we don't adjust our pricing based upon market conditions, up or down. We've been consistent with that for many, many years now. So our whole future electronics is going to really be based upon our ability to continue to roll out new products. The Asian companies have very good quality, very capable companies, so in the old days when you tried to compete on the basis of lead times and quality and responsiveness, it's not such an edge anymore.

It's really technology. And as I mentioned in my annual report commentary, we don't spend a lot of time talking about electronics, but more than half of our R&D activities are still in electronics because that's really key to our future. We're not big on press releases and announcements. I know some companies, every time they -- well, won't be crude about it, but they do a lot of announcements and press releases about new products.

Right.

And we just don't do that. But at the end of the day, our business will be based -- our future will be based on what we actually deliver, not about what we talk about. So we have a couple of products, and I'm not saying this by way of PR or anything or promotion, just we're talking about it if you're interested that we feel that our -- what we're pretty happy about is they're still going through some final testing. You never know. You can get 99% of the way and everything's perfect, and the last test that's the one that fails and you're back to the drawing board. We've been through this so many times that we're reluctant to get ahead of things. Our sales guys are come on, come on, let's get it out there. We don't want to do that because we don't want to be embarrassed. So all I can say is please stay tuned and hopefully we'll have some good things to talk about as we have the ability to come out with some of these new products, but it's really -- R&D is certainly we do a lot of development work with the aircraft product line, maybe more in design activities, but in the formulation area it's really mostly electronics. Because that's really the only way we'll have a future, in our opinion.

Good. Thank you very much.

Sure, you bet.

(Operator Instructions) And you have no further questions at this time.

Okay. Well, thanks, operator, and thank you all for listening. It was nice talking to you. Matt and I are here the rest of the day, so feel free to give us a call if you have any follow-up questions, and also let me take this opportunity to wish all of you a happy Independence Day, at least people who are of American persuasion. And we'll talk to you again soon. Thanks for everything. Good-bye.

Ladies and gentlemen, this concludes today's conference call. You may now disconnect.