Park Aerospace Corp (PKE) 2015 Q4 法說會逐字稿

Good morning. My name is Tonya and I will be your conference operator today. At this time, I would like to welcome everyone to the Park Electrochemical Corp. fourth-quarter fiscal year 2015 earnings release 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 Mr. Brian Shore, Chairman and Chief Executive Officer. Mr. Shore, you may begin your conference.

Thank you, operator. This is Brian Shore and I have with me, as usual, Matt Farabaugh, our VP and CFO. I'll go ahead with some introductory comments, then we'll go into Q&A. Matt, why don't we begin with the financial commentary.

All right.

Sorry, by the way, I should tell you this right up front. Matt's comments are already posted on our website if you would like to see a transcript of them. Sorry, Matt. Go ahead.

Okay. Thanks, Brian. Certain statements we may make during the course of this discussion which do not relate to the 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. As set forth in our most recent annual report on Form 10-K for the fiscal year ended March 2, 2014, various factors that could affect future results -- those factors are found in item 1A and after item 7 of that Form 10-K. Any forward-looking statements we may make are subject to those factors.

I would like to briefly review some of the items in the fourth quarter and fiscal year 2015 P&L which are not specifically addressed in the earnings release. During the fiscal year 2015 fourth quarter, North American sales were 48% of total sales. European sales were 5% of total sales, and Asian sales were 47% of total sales, Compared to 48%, 7%, and 45%, respectively, for the fourth quarter of the 2014 fiscal year, and 50%, 9% and 41%, respectively, for the 2015 fiscal year third quarter.

Sales of Park's high-performance non-FR-4 electronics materials were 91% of total electronics materials sales in the fourth quarter of fiscal year 2015, 90% in the fourth quarter of the 2014 fiscal year, and 92% in the 2015 fiscal year third quarter. Park's electronics revenues were $27.5 million or 76% of total sales in the fourth quarter of the 2015 fiscal year compared to $30.2 million or 79% of total sales in the fourth quarter of the 2014 fiscal year and $25.4 million or 73% of total sales in the 2015 fiscal year third quarter.

Park's aerospace revenues were $8.8 million or 24% of total sales in the fourth quarter of the 2015 fiscal year compared to $8 million or 21% of total sales in the fourth quarter of the 2014 fiscal year and $9.3 million or 27% of total sales in the 2015 fiscal year third quarter. Park's electronics revenues were $126.4 million or 78% of total sales for the 2015 fiscal year compared to $135.4 million or 82% of total sales for the 2014 fiscal year. Park's aerospace revenues were $35.6 million or 22% of total sales for the 2015 fiscal year compared to $30.4 million or 18% of total sales for the 2014 fiscal year.

Investment income net of interest expense for the fourth quarter of the 2015 fiscal year was negative $132,000 compared to negative $45,000 in the fourth quarter of the 2014 fiscal year and negative $139,000 in the 2015 fiscal year third quarter.

Depreciation and amortization expense for the fourth quarter of 2015 fiscal year was $906,000 compared to $782,000 in 2014 fiscal year fourth quarter and $890,000 in 2015 fiscal year third quarter.

Capital expenditures for the fourth quarter of the 2015 fiscal year were $50,000 compared to $344,000 in the 2014 fiscal year fourth quarter and $148,000 in the 2015 fiscal year third quarter. Capital expenditures were $430,000 in the 2015 fiscal year compared to $1.1 million in the prior year.

The effective tax rate before special items is 10.5% in the fourth quarter of the 2015 fiscal year compared to 11.3% in the 2014 fiscal year fourth quarter and 10.1% in the 2015 fiscal year third quarter.

Gross profit for the fourth quarter of the 2015 fiscal year was $11.3 million or 31.1% of sales compared to $10.5 million or 27.4% of the sales for the fourth quarter of the prior year and $8.6 million or 24.8% of sales for the 2015 fiscal year third quarter.

Before special items, selling, general and administrative expenses for the fourth quarter of the 2015 fiscal year were $5.6 million or 15.4% of sales compared to $5.5 million or 14.4% of sales for the fourth quarter of the prior year and $5.8 million or 16.6% of sales for the 2015 fiscal year third quarter.

Before special items, earnings before income taxes for the fourth quarter of the 2015 fiscal year were $5.6 million or 15.3% of sales compared to $4.9 million or 12.9% of sales for the fourth quarter of the prior year and $2.7 million or 7.8% of sales for the 2015 fiscal year third quarter. Before special items, net earnings for the fourth quarter of the 2015 fiscal year were $5.0 million or 13.7% of sales compared to $4.4 million or 11.4% of sales for the fourth quarter of the prior year and $2.4 million or 7.0% of sales for the 2015 fiscal year third quarter.

For the fourth quarter of the 2015 fiscal year the top five customers were GE, Sanmina, TTM, Viasystems, and WUS, in alphabetical order. The top five customers totaled approximately 37% of total sales during 2015 fiscal fourth quarter. Our top 10 customers totaled approximately 52% of total sales, and the top 20 customers totaled approximately 68% of total sales.

For the 2015 fiscal year, the top five customers were GE, Sanmina, TTM, Viasystems, and WUS, in alphabetical order. The top five customers totaled approximately 35% of total sales during the 2015 fiscal year. Our top 10 customers totaled approximately 53% of total sales, and the top 20 customers totaled approximately 69% of total sales.

Okay. Thank you, Matt. This is Brian again. Let me just add a few points and we'll get to the questions. First of all, I wanted to give you an update on our buyback. In January of 2015 of this year we announced a 1,250,000 share buyback authorization. As of yesterday we purchased 563,590 shares. That's 563,590 shares, average price of $21.38, average price $21.38. Total cost, $12.1 million, $12.1 million. That's an update.

Let's briefly talk about Q4 versus Q3. So the revenues were a little bit better in Q4, but let's comment a little bit about the bottom line. We may be a little bit better than expected as compared to Q3.

When you do these comparisons you have a list of 20, at least, items that move up and down. Obviously, we won't get into the noise level stuff. But a few things you might be interested in -- one is that, unfortunately, we did have a restructuring at the beginning of November of last year, and we unfortunately let go of some people out West in California, Arizona.

We are still struggling with business levels for electronics in the US. It's not good. We invited everyone to apply to relocate to Kansas, and only one person so far took us up on that. Our friend Leo, who is over there in Kansas doing a nice job -- that's kind of a heartbreaking thing. But nevertheless, it does have an impact, quarter to quarter close to $400,000 Q3 to Q4. But going forward it's probably, annualized -- I don't know what, $2.3 million, $2.2 million impact annualized going forward. The reason it's not at that level when you look at Q3 versus Q4 is that there's some impact in Q3 as well.

And other thing is the shutdown costs. We have a lot of holidays in Q4 -- Christmas, New Year's. And then also the Lunar New Year, which is a big thing. And we built up credits during the year and then we take those credits when a shutdown occurs, so that actually benefits the P&L by another $350,000, $400,000. That's something we do every year as normal practice. But I just wanted you to be aware of it.

And it actually makes the -- it depresses the Q4 revenue number because it's not apples to apples when you think of it that way, if you follow what I mean, because we achieved a little better revenue in Q4 but that is what the shutdown is included.

And the last thing is aerospace. Even though, as Matt indicated, the revenue was a little lower in Q4 compared to Q3, the bottom line was better and maybe about $500,000 better. I'm not saying that's a trend. These things go up and down based on a lot of different considerations quarter on quarter. I'm just telling you those are some of the factors you might want to think about.

So let's see. What else do you want to talk about? Oh, yes, in the third quarter conference call, which I think was in January, actually, the beginning of January, I mentioned that we were planning to introduce two fairly important products in the near future. And if you have been on your emails with your news releases you know that we have. We introduced Meteorwave 3000 and 4000. That's a, well, actually ultra low-loss product, I call it. And we feel like it's getting some pretty nice reception.

We were given a target of 0030 for loss by OEM community as the next generation of futuristic target in our product. We tested an 0028. And it's a commercial product, also. It has a UL commercial product. So I don't know, I think we are -- I'm not sure who else would be able to say that. But I'll leave that to others just to what they are willing to say or not say. I know there are products commercialized. And when we introduce a product it goes through extensive testing. And we often hold back products quite a bit longer than maybe others might. But that's just our -- how we run things at Park.

The other product that we introduced was an aerospace product. That's E-752-LT, and that's an AFP material. That's designed for AFP, automated fiber placement, which is a robotic methodology for making composite parts. That would be fairly cutting edge, I guess, in technology in the industry for making the composite parts. But it's a complement to our E-752 product. These are both 350 cure epoxy systems. E-752 is more conventional; it's for hand layup. And the sister product, which has to be modified for AFP applications, is the 752-LT, and that's the product that was just introduced, I don't remember, in the last couple months. But I think both in the fourth quarter, as we indicated would happen.

So AFP seems to be an important technology for the future, for aerospace. So that product is timely for us. And we are working with some of our largest customers on AFP applications, well into working with them, actually working with them before the product was commercialized so that we are way into that program.

Then just another little interesting update. I don't know if you noticed that there has been some news on the A320neo with a LEAP engine. They have produced the first unit with a LEAP engine. I believe that Airbus plans to fly that airplane soon; I think it has been taxing around in Toulouse. There's pictures of it out there.

They also have come out with a new forecast for the A320neo, and it's quite a big forecast for a long time. I'm not going to go into what it is because I'm not clear as to what we know because of our position and what's public. So I want you to look it up yourself. But I think there's a lot of public information about there -- out there, rather, about the forecast for the neo, the A320neo.

So I know sometimes you are interested in what's going on in Q1. Not a dramatic departure. The revenues and -- well, so let's -- obviously, we have eight weeks so far in Q1, which is -- our Q4, when we announced it before, we always have a lot more in the books for Q1 and so we are able to talk about Q1 more meaningfully. So that's eight out of 13, so that's more than half, obviously. So Q1 revenue is running just a little bit above the eight-week run rate, just a little bit above Q4. And maybe by 5% or so. The run rate is a little bit over $38 million for those eight weeks. As we tell you, we can -- when we do our Q4 announcement we can tell you the facts. We are not predicting what the quarter will be; we are just telling you where we are so far after eight weeks. We have eight weeks in the books.

The large majority of the difference, it looks like about a couple million dollars between top-line Q1 and Q4, is aerospace. And that's not saying anything other than that's just a fact. It doesn't mean that's a trend or anything else. Aerospace goes up and down a little bit based upon order patterns and programs. Electronics goes up and down, but that's for, often, different reasons. That's because of the often extreme cyclicality of electronics.

I don't think I have anything else, a pretty quick update. So operator, I think that includes our, Matt's and my introductory remarks. Why don't we go to the questions at this time.

(Operator Instructions) Sean Hannan of Needham & Company.

Brian, just to follow up on some comments you made a little bit earlier talking about some puts and takes, I think, that may have contributed to your results, it sounded like there may have been perhaps a $400,000 type of headwind related to the electronics group, perhaps $350,000 to $400,000 that may have benefitted in terms of shutdown costs and then maybe a $500,000-ish benefit as a consequence of mix within aero.

Just wanted to make sure that I captured those correctly and then, number two, as a follow-up, are there other contributors? Or what are some other variables that we should consider when we look at your gross margin results, because they were pretty strong improvement quarter over quarter? Any further color there would be helpful. Thanks.

Okay, Sean. As we commented, there's many, many items when you look at all of them. A lot of them are noise level. A lot of them kind of cancel each other out quarter to quarter. But the three ones that we highlight, which are the more significant, are -- I don't know if I was to call it shutdown, but we did a restructuring, so we laid off some people, unfortunately, in California and Arizona. And if you look at Q4 compared to Q3 there's about a $400,000 benefit in Q4 as compared to Q3. As we said, going forward, the annualized benefit is about $2.3 million. We didn't get the full benefit in Q4. And the reason -- well, let me make sure I'm clear about that. As a comparative matter we didn't get the full benefit because there's some benefit in Q3. But we got the full benefit of it in Q4, just in terms of the big picture, if you want to look at it that way. That's one of the components we talked about.

The shutdown -- that's an accounting mechanism where we accrue during the year for shutdown credits and then the credits were taken when we have a shutdown, a planned shutdown. This is not some shutdown that all of a sudden happens because, I don't know, let's say business is bad and we shut down the factory for a day or two. These are planned shutdowns for holidays. That has been our normal accounting practice and procedure for many years. The benefit there was, again, close to $400,000, and then aerospace maybe $0.5 million. And if you want to call it mix, that's fine. So those were the three items we highlighted.

Everything else is kind of noise level. There is some benefit from the additional revenue. And we strive very hard to focus on our cost line, whether it's SG&A or cost of goods sold, across the board, and especially when things aren't going so well. And we had a pretty rough third quarter, so we did pay attention to that.

Okay, that's helpful. And then to follow up also on some of the comments you had made earlier, Brian, regarding aerospace, there are certainly a good number of programs I think that you have won and are in hand that should be ramping a little bit more so here in calendar 2015. I do realize, of course, that perhaps spikier pieces of those wraps could be in 2016 and 2017. But is there a way that you could provide for us a little bit more detail around your expectations within aerospace growing from current levels beyond just what you're seeing a little bit in the very near term for us and some general demand? How do these larger projects start to contribute here this year and how does that trajectory move? Thanks.

Well, this year is pretty straightforward. The benefit of aerospace with the big programs is a lot of visibility. And we talked about GE. We are at the level we expected to be at this year with GE. So I wouldn't expect a big difference in this calendar year or fiscal year with GE. I think that the spike in terms of the forecast is more in the 2017 and 2018 year. And that's largely driven by the neo program, I think. We are on the 747, but that's a legacy program and it goes along very nicely. But as far as we know, we are not -- we haven't heard any reason to believe that there's going to be any kind of ramp up or spike in the 747.

And some of the other programs we talked about last time are smaller programs. And they haven't come online yet. GE is approved and therefore we are approved through GE when those programs come online, but there less significant in terms of what you are talking about in terms of revenue drivers. But the big one is going to be the neo LEAP engine from -- the A320 with the LEAP version. And that's 2017 to 2018 when that would spike.

Now, since you brought it up, I guess -- I don't think you were going for, but I probably should mention that this customer has been very helpful to us and they have put us in touch with three, maybe four but at least three other very significant OEMs. And we are working with them now on programs and qualifying. I don't want to mention names. I think that's not appropriate at this point. But you would know them; they are household names.

So we are not -- we are trying very hard not to only be about GE in terms of aerospace. And as I commented before, there are a lot of small customers out there that we just need to do better with. And we are working pretty hard and getting focus. I think we have a nice sales team at this point around the world and especially the US. And it's the job of our sales teams to go wear out that shoe leather and knock on some doors and get some of this other business from companies that you've probably never heard of. But nevertheless, you put 10 or 20 of those together, it's meaningful.

And in terms of short-term, meaning this year and next year, that's really where the upside is because the other stuff, the big stuff -- the forecasts are very obvious. And the upside with the big stuff, the big companies -- that's where you get into development stuff. And even with GE, and I mentioned before we do a lot of development work with them as well -- but usually you are talking several years out before those things become a factor in terms of revenues.

So in terms of the top line for aero, we really need to see business from those companies you are not familiar with in order to drive the top line over the next couple years. The rest of it will somewhat take care of itself. And then, like I said, there's other programs with GE. But these other companies that GE has helped us, introduced us to, let's say -- and more than that, actually, more than just an introduction, where we are talking seriously about -- with those companies about their programs as well including even MRO. I'll mention that as well. That's an area of interest for us that we would like to focus on. Some of our competitors may not really interested; they say it's too small. But we really like that idea of MRO. It's a little bit of a niche we're trying to develop. And if you know who is MRO -- and they are household names. These are very large companies that are doing MRO work.

Oh, sorry -- MRO, maintenance and repair operations. These are big facilities that do major maintenance for air carrier type airplanes. This is not like a place that you would -- I'm not referring to a place where you would bring a small airplane, a private airplane to. So I don't know if that helps but there -- at least a little more color.

Okay. So it sounds like maybe for this year we could perhaps think about operating in this $8 million to $10 million-ish type of range for some of the quarters, no drastic expectations in terms of that growth. But when we get to fiscal 2017 there are opportunities sets that would, in theory, allow us to be higher than that type of a range there.

I'm glad you said that because we are using fiscal and calendar. When I talk about the big programs ramping, spiking even, that's calendar 2017, not fiscal 2017. So that's still a couple years out, based upon the forecast that we have. The range you talked about -- maybe you want to talk $8 million to $12 million. You say $8 million to $10 million. That might be a range, you might think about that kind of range. And it's up to us, really, to go out and get the additional business. But it's not -- I don't think that we are talking about $10 million of business we are going to be able to achieve in a quarter, by the end of the year. That's -- even by putting together a number of the smaller opportunities.

Okay, that's helpful. And then last question here before I jump back in the queue -- you folks did a nice job in terms of managing SG&A there. Can you help summarize what other variables might have been in play that helped to keep that level down? What should we expect out of that cost containment moving forward? And would there be any type of new fiscal year cost adjustments where there's a bump up now as we move into this May quarter?

Bump up meaning -- I guess you mean improving or lowering our SG&A expense or -- I'm not sure what you mean by it, Sean, by bump up.

That could be salary adjustments.

You mean going up or down? When you say bump up in cost or bump up in margin?

Well, I think that the question is for you. Could it be a bump up in cost?

Okay. So I would say maybe. I [don't think it could be] significant. In other words, G&A for this coming fiscal year as compared to Q4. Some of us did take pay cuts in Q4, and that was really a solidarity thing with the people out West because some of our hourly people were working short weeks. We just didn't have enough work for them. So some of the salaried people felt, well, it really is not fair for just the hourly people to work short weeks. So some of the salaried people took some pay cuts as well during Q4. And that would have affected SG&A, of course, in Q4 as well.

And those salaries have been restored, so the salary cuts are no longer in effect. So in the terms of the SG&A, I don't think it's a spike but it could trend up. I think it could trend up during this current fiscal year as compared to Q4. But it's always our objective and our effort to keep our SG&A costs under control.

It's important for a Company like Park, because SG&A is significant when you are more of a niche company because you have to have the SG&A to develop the niches. If you are big-volume company making widgets, you don't have to have a lot of SG&A for that. So SG&A is going to be more significant for Park. But that's the reason we have to watch it more carefully as well and not let it get out of control. It's important for us in order to be able to develop opportunities. It's important for our future. But like I said, we are not a big-volume widget company that that makes a lot of stuff, the same stuff every time, where SG&A is not that significant. But because it's more important for us, we have to watch more carefully as well. Otherwise, if we let it go and don't pay attention to it, it will escalate too quickly.

Very good. Thanks, Brian, for all the color.

Morris Ajzenman of Griffin Securities. Your line is open, Morris.

Brian, during the presentation you spoke about the first eight weeks into this current quarter and the run rate being as close, [slightly over] $30 million. When you look at last year's first-quarter it was just over $49 million. So I presume the shortfall, obviously, is on the electronics side. The question is just can you put some color -- is anything changing out there for the better? It looks like clearly it's under a cloud everywhere you look geographically.

And secondly, in this current quarter that just ended gross margin has improved sequentially 31.1%. Last year the first quarter was 34.7%. Can you give us some sort of granularity with -- I know you don't give projections. But what can we expect as the trend in gross margins into this current quarter we are in?

Morris, you are comparing it to last year's first quarter? Is that what you're saying? Okay, so --

Initially, yes. Mostly the top line --

As we -- okay, let me answer. As we explained numerous times, last year's first quarter was very much an anomaly. It was one of those major inventory corrections in the electronics industry, which we paid for dearly in the second quarter and third quarter, as we know. Look what happened in the first quarter as compared to the third quarter. That's the electronics cycle. We've discussed that at length and especially when we announced our second-quarter call, we did our second-quarter announcement, we said the first quarter ended up being one of those inventory anomalies, inventory build which led to the corrections.

So from a electronics perspective -- that didn't affect aerospace; you are correct. From an electronics perspective, if you compare our first-quarter of this year to the first quarter of last year, it's not meaningful because that quarter is not a meaningful quarter. It wasn't a sustainable quarter. So really, when I give you my comments at the beginning, we are comparing it to the history, like fourth quarter, third quarter, fourth quarter, and then first quarter because we think that's a more meaningful comparison. So yes, we said the run rate for the first eight weeks is $38 million. We said that's up a little bit, as you know, because you have with the fourth quarter number is now. And the fourth quarter is up a little bit from the third quarter.

As far as the environment in electronics -- okay, good question. We think it kind of recovered but not -- recovery is not -- we don't want to see Q1 levels again. That's not a recovery, that's an excess. So we think things have kind of recovered and normalized. Actually, in Asia we feel pretty good. In the US maybe not so much. But I'm not sure -- we don't believe that's a cycle thing. We just think that's more the ongoing movement of electronics manufacturing in the Western world to Asia. That's more of an ongoing trend rather than short-term relating to a cycle. So as I commented, still not doing so well out West in California and Arizona in electronics. But as far as the industry is concerned, we think it's -- as much as you can never say normal, it's kind of normal. I think we also commented that we are not sure exactly how to see through that because some of what we see in terms of maybe optimism could relate to our new products more than just the industry in general. So those are my comments.

And can you just touch on gross margins, it improved sequentially, the quarter extended 31%, 31.1%? Is that sustainable? How does that play out?

You are asking about the fourth quarter in gross margins?

Yes. And looking sequentially into this first --?

Okay. Well, that should be sustainable. We explained some of the things that affected Q4 as compared to Q3. But that kind of margin should be sustainable. That, of course, assumes that the top line is sustainable. If the top line is sustainable, then the gross margins should be in line. There's nothing really unusual or extraordinary about Q4 gross margins. We just want to give some color as to why they came up from Q3 more than you might have expected, Morris, based upon the revenue improvement.

Thank you.

Sean Hannan of Needham & Company.

So in terms of the electronics side of the business, I think that as we look out there and observe some of the comments coming from some of the telecom carriers and expectations for spending, there, at least domestically, are some shifts toward more of the second half weight here. And just trying to understand if there's anything that you are hearing from your customers as that expectation or that thought process perhaps moves downstream. And are your customers commenting around any of this? And are there any aspects of anticipation or positive viewpoints that you have on the back half of this calendar year as a consequence of that? Thanks.

Okay, good question. I'm going to be a little cynical here, though. First of all, yes. As we mentioned, I think, on the last call, more than 50% of our electronics revenues go into what we call infrastructure, meaning telecom and Internet providers. So that's really a driver for us. And I think I would agree with that statement that that seems to be somewhat of a common theme. But the reason I'll be cynical is because the electronics industry is so bad at this kind of stuff. Let's go back to Q1. We just talked about Q1 of last year. And when things were very, very strong we were asking our OEMs and our customers daily, really, what's going on here? Is this sustainable? I think we reported in our Q1 conference call last year people say it's going to last. And what happened? Probably a week later it all fell apart.

So sorry for being cynical, but -- maybe I'm too old. But we've just in through so much work. It almost -- we have to discount, let me put it that way -- certainly not ignore but discount the input we are getting from the OEM community. And they are very smart people. They are smarter than we are. It's not that they are not smart. It's just that there something about electronics that it's just very difficult for people to really predict accurately what will happen and particularly in the manufacturing side, because the market is one thing.

And of course, Sean, the manufacturing side then that gets exaggerated by all the inventory practices. And we are in manufacturing. So it makes it even more difficult to see through to the end market and what's going to happen. But maybe that's too long-winded an answer. So I guess the short answer is, generally I think what we are hearing would be consistent with what -- your comment. But we are always just playing it week by week and trying to figure out what's going on from that perspective.

Okay, fair enough. Last question here, then. Perhaps this is for Matt. Sorry we haven't gotten you too involved here, Matt. Share count now -- should we assume for this next quarter roughly [20.4] or [20.5-ish]? Or how do we think about that? Thanks.

I think you are in roughly the right range. Like -- as Brian said, we purchased about 563,000. And that was over time. So before the first quarter the average will trend down the second quarter, assuming we don't have an extreme number of option exercises or something like that to drive it back up, should be -- trend down into something in that range.

Yes, some of those buys were into Q4 and some in Q1. And we don't have that breakdown for you. You can take the Q3 number and subtract the total, and that's what it will be at the end of Q1. And Matt said the only thing that will go the opposite way would be option exercises. But we don't think that would be that significant.

Fair enough. Thanks so much, folks.

I guess I should say, because I don't want to imply something contrary to this, we don't know. The authorization is still open. We are not saying whether we will buy more or not, but the authorization is still open, of course. And we are not predicting what will happen.

Okay. Operator, how are we doing?

I'm showing no further questions at this time. I'd now like to turn the call back to Mr. Shore.

Okay. Thank you, operator. Thank you, everybody, for listening. Matt and I are here today, so if you have any follow-up questions, please give us a call. And we look forward to talking to you again soon. Thanks again. Bye.

Ladies and gentlemen, this concludes today's conference. Thank you for your participation, and have a wonderful day.