RBC Bearings Inc (RBC) 2010 Q1 法說會逐字稿

Good morning ladies and gentlemen, and welcome to the first quarter 2010 RBC Bearings earnings conference call.

My name is Erica, and I will be your coordinator for today.

At this time all participants are in a listen only mode.

We will be facilitating a question and answer session toward the end of this conference.

(Operator Instructions) I would now like to turn the presentation over to your host for today's call, Mr.

Adam Siegel.

Please proceed sir.

Thank you.

Good morning, and thank you for joining us today for RBC Bearings' fiscal year 2010 first quarter earnings conference call.

On the call today will be Dr.

Michel J.

Hartnett, Chairman, President, and Chief Executive Officer; and Daniel A.

Bergeron, Vice President and Chief Financial Officer.

Let me remind you that some of the statements made today will be forward-looking, and are made under the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those projected or implied, due to a variety of factors.

We refer you to RBC Bearings' recent filings with the SEC for a more detailed discussion of the risks that could impact the Company's future operating results and financial condition.

These factors are also described in greater detail in the press release, and on the Company's website.

In addition, reconciliation between GAAP and non-GAAP financial information is included as part of the release, and is available on the Company's website.

Now I would like to turn the call over to Dr.

Hartnett.

Thank you Adam, and thank all of you who are joining us this morning.

For our first fiscal quarter our sales were $63.7 million versus $92.3 million for the first quarter last year.

On a year to year basis, our industrial business was down 46%, while aircraft and defense was down 18%.

Clearly we are not immune to the effects of the severe downturn in the national economy.

I'm satisfied with how our team prepared and responded to the challenging market environment.

I think we did a reasonably good job in getting ahead of the downturn and maintaining margins at the plant level.

The contraction in industrial production nationwide is forecasted to be at the unprecedented levels of 20% and 10% for the first and second calendar quarters of the year, respectively.

For reference, we consider an industrial expansion of 2.5% to 4% normal, and anything less than that slow.

I doubt there is anyone running a company today who has experienced this level of decline in demand across these broad market sectors simultaneously.

I can report with confidence there's exponentially more experience in the nation today on managing through a severe industrial downturn.

These sudden changes in demand require quick and coordinated action by local management in order to maintain acceptable levels of profitability and service, which we achieved.

In this regard I would like to take a moment and thank the RBC team for their tireless efforts in achieving these cost reductions over this period.

We don't consider the contraction demonstrated in industrial production as normal, sustainable, or continuing over the longer term.

Rather, we expect a strengthening period of demand ahead.

In fact, we have seen some recovery in order rates in June and July.

For these reasons we have maintained a level of staffing and infrastructure that is representative of a larger scale than we demonstrated in the first quarter.

Hence, you can see that the SG&A expenses as a percentage of sales were 18.3%, a 3% variance from a 15% standard we expect will normalize later in the year.

Relative to our markets, there was, and continues to be, inventory de-stocking, both at the industrial and aircraft sectors.

We have looked into the mechanism driving these reductions, and it varies from large major distributors, whose businesses are off 25% or more, and are attempting to balance inventory turns with revenues; to small businesses who are constrained by their debt and often desperately attempting to improve the liquidity covenants imposed by their lenders.

In any event, we see this de-stocking coming to a conclusion this quarter or early next, and many of the channels we serve are currently reaching the point where they are very, very lean.

In addition to rationalizing our cost structure, we also took steps to strengthen our balance sheet by managing our liquidity.

We continue to prudently manage our capital while we work to sustain our margins in the near term, and pursue our long-term growth initiatives.

Dan will discuss this more later in the call.

Let me now share with you some of what we are seeing in our markets.

Sales in our aerospace and defense market declined 18% over last year from $41 million this quarter or 64% of total sales.

As anticipated, the effects of the Boeing strike lingered into this quarter, and the effect was now coupled with industry wide de-stocking initiatives and weakness in business aviation.

Many Boeing sub-suppliers anticipated a cut in the Boeing 737 production schedules, and reduced their purchases accordingly, further aggravating the problem.

Consequently, the channel is now very lean on parts today, and we are beginning to see increased demand for many items.

As you know, we have significant content in the 737 model, at approximately $80,000 per shipped set, and over $100,000 per shipped set on the 787 model.

As a result, we remain optimistic about our business expansion as we are in the later stages of product development for important new programs both at Boeing Commercial, and we can include Boeing Defense in that statement as well.

Relative to our product development agenda with others, including Airbus, Lockheed Martin, Rolls Royce and Raytheon, these are firms where meaningful new RBC bearing products are in the later stages of development.

They will continue as strong consumers of RBC bearings and we expect some of these products to effect revenues as soon as next year.

Our product development schedules for the areas of airframe, aero engine and defense also remain unusually active, despite the current economic climate.

Lastly, our industrial sales were $23 million, down 46% compared to last year.

This was 36% of our total sales.

Results are indicative of a broader slowdown in our key global markets, especially mining, construction, transportation, and energy.

Aftermarket sales were affected as well, as a result of the aforementioned de-stocking programs.

We fully expect to see a strengthening of this market ahead as a result of improved GDP growth, the conclusion of the de-stocking programs, and a phasing in of meaningful but modest new contract wins.

Next I'd like to discuss with you some of the more recent trends we are seeing in our order book.

In the final months of fiscal 2009 we experienced a significant drop in demand.

This was reflected by our declining book to bill ratio, as several customers rescheduled their orders beyond our 12 month backlog window.

However in the past few moths we have seen an up tick in orders, resulting in stability in the backlog.

As of the end of June, our backlog stood at $171 million, down from $179 million at the end of March.

The recent up tick we have seen is largely due to demand for new orders from historical customers and from some market share gains, a sign that the customer buying patterns are beginning to normalize, and our relentless efforts in the field are starting to show results.

Importantly this gives us some measure of confidence as we prepare for a more promising second half of fiscal 2010.

We also remain optimistic about our long-term growth initiatives in large diameter bearings to serve wind, oil, and construction markets.

We told you last quarter that our production plant in Houston was completed, and we expect to be in full production mode by late fiscal 2011.

This quarter I'm pleased to report that progress continues on schedule, the final machinery was installed this month, and we are proving and improving our manufacturing processes as we continue to provide sample bearing products to our wind customers.

While near-term demand for wind projects has temporarily slowed due to the economic crisis, we are taking this opportunity to move up the learning curve and perfect our manufacturing processes.

Longer-term we are still optimistic about the prospects of this initiative and the overall return on our investment, and we believe that our manufacturing expertise will serve us well in fiscal 2011 and beyond.

Looking ahead, we expect the second quarter to feel very much the same as the first quarter for RBC Bearings.

We've taken the necessary steps to prepare the business for another quarter of soft demand, but we are not compromising our ability to capitalize on what we expect to be a stronger second half of the year.

We will continue to manage our costs for optimal efficiency without damaging the long-term value of our business model.

Our balance sheet remains strong, with over $43 million in cash, and short-term investments on hand, and we have managed our debt appropriately.

Our capital discipline has afforded us financial flexibility, which is a competitive advantage in these difficult times.

We continue to see opportunity across the acquisition landscape, despite being faced with the obstacle of negotiating fair valuations in this environment.

But we have a track record of successfully selecting and integrating acquisitions in our business, and we'll continue to monitor the landscape for opportunities that fit our strategic and financial criteria.

Finally, and in conclusion, we are confident that our business strategy is sound, our balance sheet is solid, our liquidity is intact to support our goals, and our long-term prospects remain promising.

As many others in the industry today, we continue to adjust our business model to meet near-term challenges with the long-term view of achieving our business objectives.

Thank you, and I'd like to turn it over to Daniel Bergeron now, our CFO, for his discussion.

Thank you Mike.

Since Mike has already discussed sales and gross margin, I'll jump down to SG&A.

SG&A for the first quarter of fiscal 2010 was $11.6 million compared to $13.1 million for the same period last year, and $14.3 million for the fourth quarter in fiscal 2009; that was a reduction of $1.5 million and $2.7 million respectively.

As a percentage of sales, SG&A was 18.2% for the first quarter of fiscal 2010, compared to 14.2% for the same period last year, and 17.1% for the fourth quarter of fiscal 2009.

The decrease in SG&A year over year was mainly due to reduction in workforce and general expenses.

Other net for the first quarter fiscal 2010 was $0.5 million compared to $0.4 million for the same period last year.

This was comprised of $0.3 million of amortization of intangibles, and $0.2 million of restructuring costs.

Operating income was $7.8 million for the first quarter of fiscal 2010, a decrease of 54.4% compared to operating income of $17 million for the same period in fiscal 2009.

Operating income excluding the start up costs associated with expansion to new bearing products and restructuring costs was $8.5 million, a decrease of 51.7% compared to an adjusted operating income for the same period last year of $17.6 million.

Other non-operating income for the first quarter fiscal 2010 was $0.3 million, this was comprised of $0.3 million of foreign exchange gains on inter-company loans with our UK company.

Since these inter-company loans are not considered long-term in nature, the result in translation losses or gains are included as a component in that income.

Interest expense net for the first quarter of fiscal 2010 was $0.5 million, a decrease of $0.2 million from $0.7 million for the same period last year.

For first quarter fiscal 2010 the Company reported net income of $5.1 million compared to net income of $10.7 million for the same period last year.

Diluted earnings per share was $0.23 for the first quarter of fiscal 2010 compared to $0.49 per share for the same period last year.

Excluding the after tax impact of the startup costs associated with the expansion into new bearing products, restructuring costs, and the foreign exchange gain, net income was $5.3 million in the first quarter of fiscal 2010 compared to an adjusted net income of $11.2 million for the same period last year.

Diluted earnings per share, excluding the after tax impact of these items, was $0.25 for the first quarter of fiscal 2010 compared to $0.51 per share for the same period last year.

Turning to cash flow, the Company generated $16.8 million in cash from operating activities for the first quarter of fiscal 2010, and used approximately $4.3 million for capital expenditures.

In fiscal 2010 we expect capital expenditures to be in the range of $8 million to $10 million; total debt minus cash and short-term investments for the period ended June 27, 2009 was $24.7 million compared to $37.9 million for the same period last year, and compared to $37.6 million for the fourth quarter fiscal 2009.

The Company ended the quarter with $43.4 million of cash and short-term investments on the balance sheet, and a borrowing capacity of $76.4 million under our credit facility.

At June 27, 2009 the Company's net debt to total capital was 8.6% compared to 13.9% for the same period last year, and our net debt to equity was 9.4% compared to 16.1% for the same period last year.

I would now like to turn the call back to the operator to begin the question and answer session.

(OPERATOR INSTRUCTIONS)

And our first question comes from the line of Edward Marshall with Sidoti and Company.

Please proceed.

Good morning, Guys.

Good morning, Ed.

The first question is on the ability for you guys to sustain your high level of profitability and gross margin, in particular in the quarter.

Which I assume is due to your variable cost structure.

You know, is there any reason to believe it will get better or worse throughout the remainder of the year?

Knowing the fact that you guys aren't, you know, willing to give guidance?

I don't think it'll get any worse.

I think it should be a little better than it was.

But when you're doing a -- when you're downsizing your manufacturing operations, you run into certain inefficiencies in some cases.

The manufacturing operations run best when they're steady state, quarter-to-quarter.

And when there are any major changes, you introduce inefficiencies.

And so, some of those inefficiencies crept into the margin.

So I think, at these levels, that that should get a little better.

I see.

I know from some of the other aerospace suppliers that I cover they've been discussing that Boeing has been doing some rate readiness reviews to make sure that they continue shipping, you know, at the 31 737 ship sets per month.

Have you seen rate readiness reviews?

Or have you heard that from some of your customers, that Boeing's looking to sustain that level of production for at least the foreseeable future?

Yes.

I think the channel -- a lot of people that were supplying Boeing believed that there was going to be a downturn in the production rate of the 737 and so leaned out their purchases.

And Boeing is attempting, I think, to counter that in assuring the industry that the 31 per month rate is going to stay at that level for at 1east a 12 month rolling period.

So, I think that they've been concerned about some of the suppliers falling behind.

They have contacted us; they've made studies for us, not only there but in the defense area, to make sure that we're positioned to keep up with that rate.

That's good news.

You've mentioned about the trends from the suppliers, your suppliers.

Could you break it down a little bit further, maybe categorize it between the distributors and in OE?

Are you seeing the same kind of strength from both of those type of customers on both sides?

I'd say the OE is softer than last year but stronger than the distributors.

Thank you guys very much.

Our next question comes from the line of Walt Liptak with Barrington Research.

Please proceed.

Hi, thanks.

Good morning, guys.

I'm Walt Liptak.

Good morning, Walt.

I didn't see in the press release, inventories.

I don't know, maybe I missed but I wonder if we can get your inventory and receivable level.

Yes.

Receivables are at $49 million and inventories are at $137 million.

All right, so it looks like, sequentially, your inventories went up a little bit.

What do you attribute that to?

Yes, they went up about $3 million.

$1 million of that is really foreign exchange translation and $2 million is mainly in some of our aerospace and new development programs.

We're actually starting to bring in some raw material and inventory into our Houston wind plant and in some of these new programs that Mike was talking about.

But I would say, on most of our industrial businesses, our inventories are down.

Okay.

I guess, from a production point of view, what do you have to do in the second quarter with inventories?

Do you need to lower your production rate?

And, what does that do to absorption?

It's plant by plant, Walt.

I think the second quarter is always a curious one because of the numbers of holidays and production days and that sort of thing.

And superimposed on that, we have certain parts of our market where the demand is weak and other parts of the market where we're actually expanding.

So, I think, on balance, we're going to attempt to guess what the demand for the quarter is going to be and run most of the operations lower than that demand.

Okay.

And, I guess, going back to the first question about gross margin, I mean, wouldn't that weigh on the gross margin?

Yes, it will.

It's a matter of trading off what's left behind, in terms of fixed cost, versus how much inefficiency you suffered in the first quarter downsizing your operations.

So there's a little bit of a balancing act there.

I think the way we've rolled it up it looks like it should come out in our favor.

Right, so where the gross margin might be up a little bit sequentially?

Yes.

I mean let's just at least think it's flat.

Okay.

Then, Dan, the tax rate for 2010?

I think it will be in that 34% range.

Okay.

Thanks very much, guys.

Our next question comes from Steve Barger, with KeyBanc Capital Markets.

Please proceed.

Good morning; this is actually Joe Bach standing in for Steve.

Hi, Joe.

Hello, Joe.

One of your peers in the aero supply chain did a pretty good job of quantifying the de-stocking impact.

They noted in the back half of '08 that their shipments exceeded build rates by about 10%, whereas in the first half of 2009, their shipments undershot build rates by about 10%.

Do you think that this is a good barometer for the amount of de-stocking that you're seeing at RBC?

Or is this kind of off the market?

I think that's off the market.

Do you care to expand on --?

Yes, I think that's a little stronger.

What we've done, actually, is we've looked at the Boeing build rates and what we have per ship set at Boeing, where we know we're the only approved source for that particular product.

And then, we looked back 12 and 15 months on how much of that product was built and sold to the market.

So, how many ship sets were delivered by us to the market and how many ship sets were consumed by Boeing over that period.

Which led us to believe that the market is pretty lean on bearing ship sets of those part numbers or any proxy for our products in total.

But I don't think it was as strong as 10% and I was thinking it was maybe closer to 5%.

All right, that's fair.

You guys are going into a seasonally weaker quarter as you just highlighted but industrial trends appear to be stabilizing at this point.

How should we think about the typical revenue and operating margin impact of your fiscal second quarter in light of a stabilizing industrial market?

Well Joe, you know what?

We're not giving Q2 guidance and I think Mike, in his opening comments, made the statement that Q2 will probably look a lot like Q1.

All right.

Can you give us your ending backlog as of where you were at in July?

I know you provided that for June but can you give it to us for July?

I don't have that with me.

All right.

Last question for you and then I'll turn it over.

I know you'd commented on your large bearing capacity.

I'm just curious about your thoughts on the investment tax credit specifically.

In your view, is the investment tax credit enough to drive wind orders?

Or, do you think that your customers are going to need to see a federal renewable portfolio standard, in order to really start placing some orders?

You mean like cash for clunkers?

Not necessarily but --.

Oh, you need a new acronym; cash for the windy?

Yes, I think anything the federal government can do would certainly stimulate demand.

It would occur to me that right now it's more subject to financial constraints and lending requirements for some of the big wind developers that that's the bridge that people have got to get across.

I think the overall momentum, as a result of the green dream is just politically correct, that the money's going to head to that quarter as long as Mr.

O is in the White House.

So, I mean, is it fair to say that since the investment tax credit guidelines were put out a few weeks ago, activity levels, in terms of just, you know, conversations with your customers probably have not increased at all?

No.

We're sort of in a steady state program mode, with these customers.

And so, we're more into the nuts and bolts of execution than we are talking about expanding their business profile.

We have seen certain customers, though, make the decision to go forward and build plants in the United States that were on hold.

So, that's a positive reflection.

Thanks.

(OPERATOR INSTRUCTIONS)

Our next question comes from the line of Peter Lisnic with Robert W.

Baird.

Please proceed.

Good morning, gentlemen.

Good morning.

Good morning, Peter.

I guess first question, can you maybe talk about the pricing environment, given the volume pressures that you're seeing?

Whether things are holding up competitively or whether there's any pricing pressure?

Yes.

I think the pricing pressure, since a lot of what we do, Peter, is under contract and those prices were set last year or the year before or depending upon when the contract was consummated, we're not seeing pricing pressure on current contracts.

We are seeing innovative approaches by large OEMs to sort of roll back contract pricing.

It's not across the board.

It's just to a few select OEMs that you probably all know, who they are.

And we pretty much have avoided any major concessions there.

The after market pricing, there's been no change in after market pricing.

Okay and the expectation is that that sort of continues through the rest of this fiscal year?

Well, I think, as these contracts roll over, I think it'll be more competitive.

So I think it's more dependent upon when the contracts roll over and what kind of economic environment you're going to be in, to renegotiate those.

And so, I think that's where we are right now.

Okay.

And then, if you flip the question the other way and look at the cost side of the equation, benefits from lower materials cost flowing through, is that a material number, or kind of a wash at this point?

That's definitely a wash because the material costs are just getting back to normal, where they were three or four years ago.

And so, there's been no real benefit.

Most of our contracts have a collar in them and if the material cost basis changes, plus or minus 5%, we pass through the material pricing cost difference.

So we haven't had to do that part of it.

I mean that's because material has absolutely gone back to its old standard.

Okay, all right.

And then, just on the inventory question in aerospace, can you parse out what the inventory in the channel looks like, specifically on the 787?

Over inventory, there under and kind of where you're at in terms of --.

It's definitely over inventoried.

I think there're probably 50 ship sets out there.

That's a number.

I just don't recall the exact number but there's a large number of ship sets that are built and waiting to be consumed, that the industry knows about.

Okay.

And then, I guess, the last question on the green dream or the wind, I think, when we were talking about the initial investment that you were going to make in the large diameter facility, you were looking at, you know, something on the order of $500 million to $1 billion in terms of a large diameter wind bearing opportunity.

And that was before Mr.

O entered the White House.

So, is there any change in your thinking that that market dynamic or that market size is going to be smaller?

Or, is impaired relative to what you were thinking when you, you know, started to put the shovels into the ground to get that facility up and running?

Well I think that's the question the whole industry's asking, Peter.

And once somebody a lot smarter than me about wind has the answer, I'm going to be listening.

I think at least there's a two-year delay, a two-year pause in expansion of wind capacity.

And I think, whether there's a continuation of the run on developing wind turbines, it's very much dependent upon the federal government right now.

Okay, that is very helpful.

Thank you for your time.

Our next question comes from the line of Samuel Eisner with Stearn, Agee.

Please proceed.

Thanks, guys.

I just have a quick question, or two quick questions, regarding the aerospace markets.

I guess, what're you guys seeing on the after markets over there?

Well the after market, I think what we're hearing is that the distributor volume for our kinds of products to the after market, is stable to even perhaps going through a bit of a recovery right now.

On the other side of that, most of our customers in that after market, are small companies that are subject to these financial issues that a lot of small companies have to deal with right now.

So, they're constrained on the buy side but their business is picking up on the sell side.

Okay.

And I guess, you know, what're you hearing in terms of helicopter, or, as I think, EADS came out recently and said that light helicopter orders were increasingly being pressured.

Do you guys have any comment on that?

You know, that's not a market that we do very much in.

So, for commercial light helicopters, that's just not a place where very many of our products go.

How about on the defense side, then?

They're very steady.

Okay and lastly, I guess, is this just, in terms of orders that you've been seeing in June and July, is this just kind of the tip of the iceberg on the aerospace decline?

Or do you think there's more to come throughout fiscal '10?

No, I think it corrects itself in -- our fiscal '10?

Yes.

Yes, I think it corrects itself.

All right; appreciate it, thanks.

Our next question is a follow up question from the line of Edward Marshall, with Sidoti and Company.

Please proceed.

Guys, you touched on this a bit ago but maybe I can kind of get, directionally speaking, not guidance speaking but if you can comment somewhat on working capital for the balance of the year, how do you think it will trend?

And if you'd care to give it a range, that'd be great.

You know, Ed, I think in the second half, we'll start seeing some investment back, in terms of working capital for receivables.

And for payables, if we see a pick up in the business in the second half of the year.

And at the same time, we expect to see improvement in the inventory positions for the remainder of the year.

So, I'm not in the position to give you a range.

I didn't think so.

It was polite of me to ask, though.

The PIC Design contribution in the quarter, to sales?

$726,000.

Okay.

And then, expected moving costs again in the second quarter, or no?

What was that question?

In the moving costs that you had, are you expecting any additional costs in the second quarter?

No, restructuring cost is mainly severance related costs to headcount reductions.

So, right now in the second quarter, there's no expectation of that type of cost getting repeated.

That wasn't the move of a particular plant --?

Yes and on the PIC number, I gave you last year's.

It was $1.7 million and last year was $700,000 (sic - see above).

I see.

Okay and, I don't know if you said this or not; if you did I missed it.

Your customers on the wind side, are you feeling kind of the same?

I mean, is it -- are you seeing any pick up in discussions on potential orders?

I don't think that we had any orders last time we spoke on the last conference call.

Is that kind of the theme at this point?

Or have we seen a different trend?

Well, we have orders.

So, we're working through that with some of the customers now.

I would say that the industry lacks a sense of urgency right now.

Where they had it 12 months ago, they had an extreme sense of urgency and everything was in crisis and there wasn't enough of anything for their requirements.

That sense of urgency is completely lost.

It'll return.

It'll probably return with a vengeance because a lot of manufacturing capacity associated with bearings and gears and everything else was either delayed or just taken off line.

So, that's why the cycles re so extreme.

So, if you think it's going to return with urgency, is there any kind of commitment for process to additional capacity that we had kind of discussed in the past?

I mean, has that kind of come more to the forefront of discussions?

Or is it still kind of on hold?

No, that's on hold.

Okay, thank you guys.

Our next question comes from the line of Brendan Hartman with [Forrest] and Associates.

Please proceed.

Yes, good morning.

Thanks for taking my question.

With respect to your comments on the government's desire to fund some of these green initiatives, I think I saw something last week out of the Department of Energy where they announced $30 billion in loan guarantees for alternative energy.

It wasn't all for wind but a big chunk of it, I think, was.

And they put a 45 day deadline to apply for these government loans.

Is that -- I mean, that seems to me something that would spur people to act fairly quickly.

Have you guys heard any feedback on that from your customer base?

I have not.

I imagine that's going to be for US firms and US developers.

And so I would think that it would take some time to filter to the people that we're working with.

Okay so a couple of months before you'd really see any --?

Yes.

I think that's right.

Okay and the second question, I'm sorry if I missed it but did you guys comment on the M&A pipeline and thoughts on what you can do with your balance sheet in this particular downturn?

Yes.

We commented a little bit.

We're still active on the M&A front.

And it's an interesting time in the sense that companies that were very attractive to us previously now don't have any earning power.

So it's hard to give them a decent valuation that their owners feel is representative of all the effort they've put into it in the last 20 years.

So, you're reaching issues like that that people would rather just hang onto what they have for a while and work it into a better economy.

And then, you have the other type of folks that just can't make it through this economy.

So we are talking to a few people like that.

And we expect to do something small, in that regard in the next 60 days or so.

Okay and then the final question for you, Dan.

Can you tell us how much of that $171 million backlog is representative of the new large diameter bearing plant?

It's a very small number.

Okay.

Thanks a lot, guys.

There are no further questions at this time.

I would now like to turn the call back over to Dr.

Hartnett for closing remarks.

Well, I would like to thank everybody for joining us today in talking about the results of our first quarter and thank everybody for the challenging questions that they asked.

And we'll be looking forward to an improved economy and an improved discussion at the end of the second quarter.

Thank you very much.

Thank you for your participation in today's conference.

This concludes the presentation.

Everyone have a great day.