RBC Bearings Inc (RBC) 2010 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the fourth-quarter RBC Bearings earnings conference call.

My name is Tehesha and I will be your operator for today.

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

Later we will conduct a question-and-answer session.

(Operator instructions).

As a reminder this conference is being recorded for replay purposes.

I would now like to turn the conference over to your host for today, Mr.

Michael Cummings.

Please proceed.

Thank you.

Good morning and thank you for joining us today for RBC Bearings fiscal fourth-quarter and full-year 2010 earnings conference call.

On the call will be Dr.

Michael J.

Hartnett, Chairman, President and Chief Executive Officer, and Mr.

Daniel Bergeron, Vice President and Chief Financial Officer.

Before beginning today's call 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 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, Mike.

Good morning.

I'm pleased to report that our fourth quarter showed major improvement in order volumes and sales in all major market segments over the previous quarter-leading periods.

During the fourth quarter our sales were $79.8 million, a drop of 4.8% from last year but a sequential improvement of 18% from our third quarter and more than 25% better than our second quarter.

Adjusted operating income was $12.9 million versus $14.3 million a year ago.

For the full year these comparisons were $274.7 million in sales for fiscal 2010 versus $355.8 million last year and an adjusted operating income of $38.7 million this year versus $62.9 million a year ago.

Cash flow from operations was a strong $41.1 million for fiscal 2010 versus $44.7 million during the same period last year.

Because spending on capital equipment was modest during this period, our debt less cash level, or net debt, was reduced to $9.8 million from $37.6 million last year.

We saw demand for our product bottom in the second quarter and turn positive late in the third quarter, with strong momentum into our fourth quarter.

As we discussed in our third-quarter call demand for our industrial products at the OEM level was up 30% on orders and this trend continued to strengthen through the fourth quarter, as our sales to the industrial OEMs were up 37% compared to the same period last year.

Industrial distribution followed suit with a year-over-year growth for the fourth quarter of 19%.

We continue to be encouraged by the industrial markets and the rate of expansion.

We see strong market improvements in large construction equipment, industrial distribution, semiconductor capital equipment, military vehicles and general industrial markets and machine tool products in Europe.

On the aircraft and defense side of our business, which represented 51% of the fourth-quarter total, our sales were off 24% from last year.

We did see a strong 6% sequential improvement in revenues for these products over the third quarter.

This year-over-year drop was mainly due to aircraft aftermarket destocking programs and the slowdown in the commercial jet business market.

Sequential improvement we saw during the quarter is a good harbinger for our fiscal year 2011.

Overall we saw an improvement in revenues of 19% sequentially.

Some could argue that some of this is attributed to seasonality and there is some strength to that position.

However sales were limited by capacity for industrial products.

They were also constrained by tight standard product availability.

These issues continue into our first quarter as we expand to meet these higher demands.

Because the aircraft and defense markets were not impacted to the same extent as our industrial sectors, we did not expect to see a rebound as dramatic as that demonstrated by the industrial products.

As I mentioned in the last call it's not unusual for volume expansion in industrial products to lead us out of a recession.

In fact, this has been the norm over at least the last two decades that I've been CEO here.

We expect that our fiscal 2011 the aircraft aftermarket and distribution demand will improve each quarter as inventory liquidations appear to have come to an end.

The strengthening economy, the renewed production of Boeing's 787 aircraft as well as the expansion of the 737 and A380 volumes and an improved outlook for business jets are favorable leading indicators for the next 12-to-18 months for our aircraft businesses.

Relative to Company margin performance, gross margin for the quarter on an adjusted basis was 32.3% compared to 35% last year.

Compared to the third quarter, this is an improvement of 1.1 percentage points and we expect this improvement to continue throughout next year.

We expect to demonstrate more historic levels of margin earned by RBC in past times.

Adjusted operating income for -- was $12.9 million, or 16.1% of sales, versus $14.3 million last year.

There's no question that plant absorption issues caused a few points of gross margin degradation last year as we reduced the size of the plants to adjust to volume, and this is always an expensive process.

We lost another percent or two in the SG&A burn rate.

Remember, in both cases most of these expenses are not fixed but elective and we elected to leave many of these assets in place to preserve our ability to respond to a more robust economy and larger volume demands under the theory that quick -- that the quick contraction we saw as a result of external forces could become an equally fast expansion.

We wanted to be in position to support the demand and continue with the development of our business franchise once economic conditions normalized.

Today, as we enter a much stronger economic period, most of the productive, administrative and engineering capacity is in place and we are in good position to respond to these increased demands.

Looking ahead we expect the first quarter of fiscal 2011 to look a lot like this -- the last quarter in fiscal 2010 in terms of revenues with slightly better margins.

We have good leverage in our cost base and should see noticeable improvements falling to the operating income line.

I'll now turn the call over to Dan, who will provide more color on the quarter.

Thanks, Mike.

Since Mike's already covered sales and gross margin I'll jump right down to SG&A.

SG&A for the fourth-quarter 2010 decreased $1.6 million to $12.7 million compared to $14.3 million for the same period last year.

As a percentage of net sales SG&A was 15.9% for the fourth quarter of fiscal 2010 compared to 17% for the same period last year.

The decrease in SG&A year over year was mainly due to personnel-related cost reductions and reductions in general expenses.

On a full-year basis, SG&A decreased $8.4 million in fiscal 2010 compared to fiscal 2009.

Other net for the fourth-quarter fiscal 2010 was $0.9 million compared to $4.7 million for the same period last year.

This is mainly comprised of $0.4 million of amortization of intangibles and $0.5 million of restructuring and moving costs associated with the consolidation of our Houston manufacturing facilities.

Operating income was $11.5 million for the fourth-quarter fiscal 2010, an increase of 15.6%, compared to operating income of $10 million for the same period in fiscal 2009.

The operating income, excluding costs associated with expansion to large bearing products, restructuring and moving costs, and disposal of fixed assets, was $12.9 million, a decrease of 10.2%, compared to adjusted operating income for the same period last year of $14.3 million.

For the fourth-quarter fiscal 2010 the Company reported net income of $9.7 million compared with net income of $6.5 million for the same period last year.

Diluted earnings per share was $0.44 for the fourth-quarter fiscal 2010, compared to $0.30 per share for the same period last year.

Excluding the after-tax impact of costs associated with the expansion to large bearing products, restructuring and moving costs, disposable fixed assets, the impact of foreign exchange and the tax benefit we received on the advance energy tax credit, net income was $8.1 million in the fourth-quarter fiscal 2010 compared to an adjusted net income of $9.6 million for same period last year.

Diluted earnings per share, excluding the after-tax impact with these items, was $0.37 for the fourth-quarter fiscal 2010 compared to $0.44 per share for the same period last year.

Turning to cash flow, the Company generated $6.2 million in cash from operating activities in the fourth-quarter fiscal 2010 compared to $12.2 million for the same period last year.

For the full year the Company generated $41.2 million in cash from operating activities compared to $44.7 million for the same period last year.

In fiscal 2011 we expect capital expenditures to be in the range of $9 million to $12 million.

The company reduced debt by $29.7 million in fiscal 2010.

Total debt minus cash and short-term investments for the period ended April 3, 2010 was $9.8 million compared to $37.6 million for the same period last year.

The Company ended the year with $28.6 million of cash and short-term investments on the balance sheet and borrowing capacity of $107 million under its credit facility.

At April 3, 2010 the Company's net debt to total capital was 3.4% compared to 12.8% for the same period last year, and our net debt to equity was 3.5% compared to 14.7% for the same period last year.

Right now I'd like to turn the call back to the operator for a question-and-answer session.

(Operator instructions).

Your first question comes from the line of Peter Lisnic from Robert W.

Baird.

Please proceed.

Good morning, gentlemen.

Good morning, Peter.

Morning, Peter.

I guess the first question, if you could, you had mentioned that there were some, what I'll call capacity limitations that you encountered because of the strong demand.

Is there -- I guess, one, could you help quantify what that may have cost you?

And then, secondly, maybe talk about just how quickly that's been rectified, or is that going to be an ongoing issue as you continue to see strengthening demand?

Okay.

I'm not exactly sure what it cost us.

It probably cost us a few million dollars in revenues for the quarter and I hope it never gets rectified.

But basically I think the economy is so strong.

When you see the Purchasing Managers Index up around 60 and you see the expansion of industrial production to the numbers that we're talking about there are only a few manufacturers that produce a lot of the products that we also produce and its very easy for the market place in a dynamic time to run right through everyone's inventories, and that's exactly what's happened.

It's just -- it's the lineup of the manufacturers that we compete with or share the market with.

I'm sure they're all -- they all have availability and service level problems.

As the market goes from one supplier to the next looking to satisfy its requirements nobody really builds out its inventory positions to adjust to a 60-level Purchasing Managers Index.

Okay.

And I don't -- I'm not sure.

As long as that index is around 60 we're probably never going to catch it.

Well, I -- yes, I guess that is a good thing to a certain degree.

But if it's a situation where you're potentially losing market share, which it doesn't sound like you are simply because everyone has the same high-class problem, that the right way to think about it?

That's exactly right.

Okay.

All right, that's fine, that's what I was wondering.

And then, Dan, if you could, you talked a little bit about SG&A but if I look at the quarter, revenue down 5% but you were able to hold SG&A -- or take SG&A down around 11% so very good deleverage there.

Can you maybe give us a sense -- you mentioned personnel and some general expenses, but is there anything in there that's permanent?

What drove that significant decline in SG&A relative to the sales decline?

Well, I think it was just in the overall reduction of expenses in SG&A so we expect that we can hold that number pretty tight during our fiscal-year 2011 so that we get the leverage off of the increased volume on the top line.

So we've always been in that range of 15% to 16% of sales for SG&A and that's our target, to be in that same change for fiscal-year 2011.

Okay.

And combined with higher gross margin would mean higher operating margin in 2011, correct?

That's correct.

Alrighty.

Thank you for your time, I appreciate it.

Your next question comes from the line of Edward Marshall from Sidoti & Company.

Please proceed.

Good morning, thanks for taking my call.

The -- my first question's based on the backlog here looking at a small sequential increase.

Coming out of the last quarter I thought we saw some pretty good trends through January, I would have expected that to continue throughout the quarter.

Can you share any comments or what you're seeing going on in backlog maybe so far through the first quarter here?

Yes.

I think we're seeing that the order volume and the momentum's continuing.

At the end of May our backlog is up probably about $10 million from where it was at the end of March so that's about it on --

Yes.

I think, Ed, part of the theory on backlog is when lead times are long people they're looking into your backlog to reserve the -- their position for product and right now lead times are not long so the market doesn't feel the need to book out more than they normally would.

In addition, the industrial products where we've seen the big surge are typically shorter lead time products than the aircraft products.

So has the -- the trends on the orders for aerospace have they began to pick up at this point or are we still somewhat spotty growth, or spotty order patterns there?

No, they've picked up and in that 6% quarter-to-quarter sequential improvement that we saw between the third quarter and the fourth quarter is pretty reflective of an increased order volume over that period.

Would you expect trends in the backlog to continue to trend upwards as we move into next year as sales increase?

That's obviously in the right direction but I just would have thought that number would have been larger based on what -- where the expectations -- or where our expectations were for --

Yes.

No, I would expect to see that trend expand, particularly with the announcements coming from Boeing and Airbus on increased production rates.

You're going to see lead times moving out and you'll see an expansion of the backlog if the economy is in the normal expansive mode that we all hope it is.

I guess maybe another way of asking it is, the supply chain, actually, have they become comfortable with the new production increases that are out there and have order patterns kind of normalized or are we still seeing some of that hesitant buying and so forth?

I'd say that -- I'd say right now there's a very -- is a very active period for new supply contracts under development, so there's a lot of quoting, there's a lot of rolling over of old contracts into new contracts that are currently being negotiated.

So --

Is that --

-- I think we're sort of at an intermediate point here, moving from one contract period to the next for much of the industry.

And that's on commercial, I'm assuming?

That's on commercial aircraft, right.

Okay.

Acquisitions, we've talked about in the past, upwards of $50 million or so, is that still in the range or --

Well, it's still in the range.

We have no active candidates to talk about today but we are speaking to people that are in that range.

And have multiples continued to come down, or have we stabilized here?

I don't think they ever really came down as much as it was published.

I think people just started to withdraw their companies from the sale process waiting for a better time.

Okay.

So I think multiples are historically normal.

And can you do me a favor, one last one, the -- can you repeat what you said for the first quarter what your expectations were?

Yes, let me just -- I said we expect the first quarter of -- to look a lot like the last quarter in terms of revenues, with slightly better gross margins and good leverage on our cost base, so we should see an improvement in operating income.

Good, perfect.

Thank you very much.

Yes.

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

Please proceed.

Hi, good morning, Dr.

Hartnett and Mr.

Bergeron.

Good morning, Walt.

Wanted to ask you about the guidance that you just read, so just a -- I know you're not giving official guidance but your quarter for the first quarter's probably for the most part baked and so it sounds like your revenue and the run rate of $80 million is doable and then you're expecting the operating profit to be at least slightly higher than in the first -- than in the fourth quarter, is that right?

Are you giving guidance for us here, Walt?

Well, I don't know.

I trying to --

I think that's a pretty close interpretation of that paragraph, yes.

Okay, and I wanted to ask about Europe.

Your rest-of-world exposure is I think is about 11% of sales, how much of that is Europe and what kind of trends are you seeing considering the sovereign debt issues?

Well, the our -- in [relation] to Europe, let me just --

Well, our European entities do about 10%-to-14% of sales for us but a big chunk of that is done in US dollars so there's no transaction risk to that business, so I'm sure we're going to have a little bit of ocean on the translation when we're translating the P&L's and the balance sheet in the first quarter, given the Euro dropped from 1.6 to 1.2.

But it hasn't impacted our ability to do business in Europe or to deal with any of our European companies that we normally do business with.

Okay.

What -- in the fourth quarter what was the -- was there an impact from foreign currency translation?

No, I think the rate was pretty steady in the fourth quarter.

I'm sure it impacted a little, Walt.

I don't have it in front of me but it wasn't -- it wasn't anything major.

Okay.

Okay, good.

And at this point are you seeing any trends that are discernible one way or another?

Things continuing to get better or slowing?

Well, in Europe?

Yes.

I think Europe is getting -- for us it's getting better.

It's much better than it was last year and we're resized to make our margins over -- off of that business.

But we are seeing a significant improvement over last year and I think part of -- I've tried to sort this out myself on exactly what's happening there.

A lot of the product that we supply to the Europeans are either going to the aircraft market, which has been steady and strong, or into the world high-speed train market, which has been very good and sort of independent of economic things, or into machine tools.

And the European machine tools are consumed in -- to a large extent in the United States and Asia, so we are seeing good demand for machine tool products out of Europe, although you would expect that not to be the case, but when you look at their end markets, that is the case.

And so we're happy with what we're seeing there right now.

Okay, good.

Sounds good and if I could just ask another one.

You mentioned [M-Rap] as being a driver impact in the quarter, how many M-Rap sales are you getting, either quarterly or annual, and is there a bubble of shipments as those M-Raps start getting produced and shipped over to Afghanistan?

Well, I didn't mention M-Rap, you did, but I'll let Dan answer those.

Yes, I don't have the breakout right now, Walt.

We can get back to you on it, but I'm not sure what the levels will be for FY 2011.

Okay.

Is there higher production levels for the June quarter or for your second fiscal quarter?

No, I think it's pretty even with what we experienced over the last six months.

Okay.

Okay, thanks, I'll get back in queue.

Your next question comes from the line of [Samuel Eisiner] from Sterne, Agee.

Please proceed.

Good morning, everyone.

Good morning.

Just had a couple of questions back to the orders in the backlog.

it seems as though orders were, I would say, up around 30% or so in the fourth quarter here.

Can you just talk -- should I assume that the breakout of the orders here is similar to the breakout of revenue in that it's about 50/50 still between industrial and aerospace?

Yes, I think the breakout between industrial and aerospace -- I probably went through it too fast but on the -- for the fourth quarter the aircraft defense side of our business represented 51% of the sales and so it's 51/49 and so we're seeing either pickup in orders -- a significant pickup in orders and volume in the industrial side of the business, and that's moving right through to revenues.

And the pickup that we saw sequentially in the quarters for the aircraft side of the business, which was 6% quarter to quarter, which is not a -- that's a pretty substantial rate improvement, that's turning right into revenues, too.

All right.

I guess can we assume -- or I guess how are you guys planning for the PMI for end of the year?

Are you projecting that it will around 60 around here or do you have an assumption of where you see the year-end number going to be.

For the PMI?

Yes.

Yes, I don't think it's going to stay at 60.

I'm not an economist here but it just -- that seems to be a remarkable -- remarkably strong number.

I would expect -- I would be happy to see that stay over 50 and we're sort of planning for a more normalized industrial growth this year in industrial production of something close to 4%.

And I expect when the report would happen in the fourth quarter -- or in our fourth quarter, the first calendar quarter of the year, that industrial production number's probably going to be closer to 6%.

So I definitely think this is going to back down but on the other hand the economy -- there's still 10% unemployment and there's a lot of -- there's a certain amount of stimulus that's active trying to get those people back to work, so it's a new era.

So we're planning for a more normalized year as the year matures.

All right, very good.

I guess just quickly on -- as far as restocking is concerned, I guess there's been a lot of talk recently.

I've been talking to a couple of people about how there might be a little bit of a slowing and you guys -- or probably a lot of companies saw in the first quarter there was a pretty significant restock, have you seen anything of that nature?

Have you seen anything on the industrial side that would suggest this 30% or 37% growth of the OEM and the 16% grow -- or 19% growth on the industrial is slowing in any way or should that continue on for the first half of your fiscal year?

I think it'll continue through the first half of our fiscal year.

I think what -- I don't have good visibility beyond that but I think for the first half of our fiscal year it's going to continue to be strong.

Any particular end markets in general or just overall?

Well, construction, mining, semiconductor, ground defense, general industrial, it's -- everything that we touch is -- all these major markets that we touch are doing very well.

I think it's -- I think class A truck is going to start coming back quarter to quarter, because the class A fleet is old now and will need to be repaired and people that study that market say that -- are projecting some pretty substantial increases in chassis production and we're not hearing or seeing any of that today so I think that lies ahead.

No, I would agree.

I think the preliminary numbers just came out, which were pretty strong.

But thank you very much.

Okay.

Your next question comes from the line of Mr.

Fred Buonocore from CJS Securities.

Please proceed.

Yes, good morning.

Good morning.

A quick question, just getting back to the 6% sequential increase in aerospace orders that you saw, can you break that out and tell me what you'-- re seeing on aerospace or on the aftermarket side of that, or was this mostly OEM related?

Just trying to get under the hood of what you're seeing in the aftermarket.

You know I don't -- Fred, I don't have those numbers in front of me but if I were to make a guess I would say that most of that 6% is driven by OEM.

I think the aftermarket didn't degradate during the period and probably contributed in a minor way but wasn't a major contributor to that 6%.

So then thinking about your fiscal 2011 that is another potential tailwind that we could see to the extent that that picks up?

Absolutely, that's how we're thinking about it.

Great.

And then with respect to the Houston facility, can you give us an update of where we are there and if you're seeing anything new on demand for large bearings for wind turbines?

Yes.

We -- we're not expecting to see much out of that facility in terms of revenue this year.

We don't -- we think the industry -- I think the conclusion on last week's conference in Dallas on the industry is that the industry is on the pause mode right now and needs some lead leadership.

I think -- we're working through sample programs with key customers and we continue to do that and we continue to -- we expect to see some volume building in that facility at the end of this year and we're reasonably certain that that's going to be the case for us.

Okay.

So do you actually have orders in hand or are you just -- you're in conversations that lead you to believe you'll have some at a certain point?

Well, we have orders in hand for sample and preproduction bearings.

We're in con -- we're in discussions with end customers on what their business outlook for fiscal 2000 -- or calendar 2011 looks like and how many turbines they're going to build and what their logistics are going to be relative to those turbines and where we fit into the logistics.

So all of that's sort of taking place right now.

Are these potential customers focused on any specific geographic area?

Are these --

US.

They're US.

US?

On the US.

Got it, okay.

And then can you talk about trends that you're seeing on various military programs?

I know that you had -- on some pretty attractive rebuild programs, can you talk about it, what you're seeing there?

Yes.

Well, we -- certainly the largest single military contract in the history of the world is the Joint Strike Fighter and we continue to work very hard on our content there and increasing contents not only on the Fighter but the engines and the weapons systems that go on the Fighter.

So there's a lot of current activity that's passing through our marketing and engineering efforts right now on -- focusing on that particular ship.

We are -- as sort of a major target area for us.

In terms of the other weapons systems having to do with helicopters, there's a certain amount of program out there that we are currently participating in and we expect to see expanded volumes in -- as the year matures in both the drive mechanisms, as well as the air frame.

And so I think the -- I think our participation in those basic defense platforms is good and is expanding.

Very good.

Thank you.

(Operator Instructions).

You have a follow-up question from the line of Walt Liptak from Barrington Research.

Please proceed.

Hi, thanks, I just had two follow ups.

Did you comment yet on any price, cost that might be impacting margins and I guess specifically have you raised prices yet this year?

Let's see, I didn't comment on it.

I think that there was a general price increase for industrial distribution announced by most of the major manufacturers that service that channel that went into effect January that was somewhere around 5% average across the manufacturers and we certainly participated in that aspect of it.

And as these new OEM contracts are renewed certainly there's price negotiations associated with every one of the contracts.

Okay.

And on the changes on the material cost side of the equation, do you see the price/cost relationship as a headwind this year or just a pass through?

It's -- there's no headwind there, it's pretty -- it's reasonably stable.

There's a few alloys that we have to watch out for that we have pass throughs and we just have to administratively make sure that we exercise our right to pass through these things, and sometimes we do that well and sometimes we do not do it as well as we should.

Okay.

Okay, and then just to switch gears back to your comments on acquisitions, I was wondering if you could provide a little bit more clarity because the balance sheet and the cash flow are coming through better, I think, than they have probably ever since you've been a public company and I wonder are -- how actively are you looking for acquisitions?

Are you focusing primarily on the bearings industry and are there deals out there, it's just that the timing of them is uncertain?

Well, there are deals out there and I have to confess, Walt, I'm looking for the easy ones.

Okay.

There's some really hard deals that are out there that are turnaround.

If --

And by easy deals you're looking for companies that are in good financial shape, that are well-run.

Well, that would be nice.

Companies that are in good financial shape that are well-run and affordable and accretive, we -- those guys are hard to find that are synergistic with the markets that we service.

Those are few and far between but they're out there.

There are a certain number of broken companies out there that fit to some extent the markets that we serve and could be very interesting acquisitions for us but would also be time sinks in terms of the amount of management capacity they would consume.

So I think the art of this is to find something that's maybe a little bit broken but easily fixed, synergistic with our end markets, that has good scale and would produce not only operating leverage but market leverage for us.

And so we -- there are people like that and we talk to them and we're just not in a -- in the right position today to say more about it.

Okay.

And I guess in lieu of acquisitions what's the use of cash?

Are there -- have you thought about a dividend or a share repurchase?

We have.

We've talked about both items and we actually like neither.

Probably the share repurchases that we do will just be done to [equalerate] the dilution of warrants that are issued to the management team, that sort of thing, and just neutralize it from the investor base so that they do not feel that.

But I don't think that we're going to do too much like that.

I think there's some better uses of cash going forward and it's up to senior management of the Company to identify what those better uses are.

That's what we're here to do.

Okay, got it.

And then if I could just go back to my first question again about the guidance and you're not giving guidance, but I wondered about the seasonality.

Typically your first quarters are the lowest EPS of the full year and with the -- the commentary on guidance that you provided suggests that it -- the number could be pretty decent for the first quarter.

Is there something that's changed about seasonality in your fiscal year that that wouldn't be the case?

No.

No, there's -- nothing seasonal has changed.

I think it's just the robustness of some of these end markets that we service has changed remarkably for these early quarters here in our fiscal year.

Okay.

Okay, thanks, guys.

Okay.

Since there are no more questions I would now like to turn the call over to Mr.

Mike Hartnett for any closing remarks.

Please proceed.

Okay, thank you.

Well, I'd like to take a minute and thank all of you for participating in the call today, and your support and interest in our Company and we will try to do the best job possible for our investors.

We look forward to talking to you late summer on our next call.

Thank you.

Ladies and gentlemen, that concludes today's conference.

Thank you for your participation.

You may now disconnect, have a great day.