REX American Resources Corp (REX) 2006 Q4 法說會逐字稿

Welcome to the REX Stores fiscal fourth-quarter earnings conference call.

During the presentation all participants will be in a listen-only mode; afterwards we will conduct a question-and-answer session.

(OPERATOR INSTRUCTIONS).

As a reminder, this conference is being recorded Wednesday, March 28, 2007.

I would now like to turn the conference over to Mr.

Stuart Rose, Chairman and Chief Executive Officer of REX Stores.

Please go ahead, sir.

Thank you, operator.

This conference call contains or may contain forward-looking statements within the meaning of the Private Securities Litigation Act of 1995.

Such statements can be identified by use of forward-looking terminology such as may, expect, believe, estimate, anticipate or continue or the negative thereof or other variations thereon or comparable terminology.

Listeners are cautioned that there are risks and uncertainties that could cause actual events to differ materially from those referred to in such forward-looking statements.

These risks and uncertainties include the risk factors set forth from time to time in the Company's filings with the Securities and Exchange Commission and, among other things, the highly competitive nature of the consumer electronics industry, changes in the national economy, weather, the effects of terrorism or acts of war and consumer spending patterns, the availability of certain products, technological changes, changes in real estate market conditions, new regulatory restrictions or tax law changes related to the Company's synthetic fuel investment, the fluctuating amount of quarterly payments received by the Company with respect to sales of its partnership interest in synthetic fuel investments, the potential for section 2945 tax credits to phase out based on the price of oil adjusted for inflation, and the uncertain amount of synthetic fuel production resulting in income received thereof from time to time from the Company's synthetic fuel investment.

As it relates to ethanol investments risks and uncertainties include among other things the uncertainties of constructing plants on time and on budget and the price volatility of corn, dried distiller grain, ethanol, gasoline and natural gas.

As far as our conference call now, retail sales for the year were at $347 million, comps down 5%, sales for the quarter were $104.4 million, comps were down 13.7%.

Earnings for the year were $11.4 million or $0.98 per share down from $28.3 million in sales -- or excuse me, in earnings last year or $2.31 a share.

On our balance sheet cash this year went up at the end of the year to approximately $43 million from $21 million and that was even taking into account a funding of $40.6 million in investments which are the bulk of our ethanol investments.

Our business now is divided into three distinct businesses; the first is -- the three businesses are retail, synthetic fuel and ethanol.

In the retail business we were hurt a lot in the fourth quarter by what I considered a very unanticipated huge drop-off in two television sets -- again, two television sets and big screens.

We expected a drop-off, but nowhere near the decline that we had.

It accounted for approximately 11.2% of our comps and, like I said, the biggest part was in tube and projection.

Our LCD business was up over 100% for the quarter, our plasma business was up over 40%, but that was not enough to make up for the large drop in the other areas where, again, we knew it would drop-off but it was way, way more than we anticipated.

And luckily we were able to cancel orders, do what we need to -- I would say cancel orders, but luckily we were able to keep our inventory in check and actually drop our inventory to a very comfortable area for us.

In terms of audio, that cost about 1.6% of our comp decline and that was caused mostly by iPod taking over large parts of that business.

We don't sell iPods and we suffered a little there.

Video was down 2.7%; a lot of that had to do with both DVDs now selling at a very low price and camcorders losing in my opinion some of their popularity being replaced by digital cameras.

Appliances were a good business, we're up, we were up 3%.

We actually had some price inflation, some price increases which we were able to pass on to the consumer and it was an area of business for us that was very stable.

In terms of synthetic fuel, all our plants are now back operating.

We earned approximately $2.1 million in the quarter.

We hope to have good income from that for this year.

We are dependent on the price of oil, the higher it gets the more possibility for a phase-out.

Right now everything is up and operating.

In terms of ethanol, we have five projects, the first one, Patriot, is funded and under construction with Fagen/ICM contract.

We put in $16 million in that plan.

The second one, Levelland in Texas, funded under construction, put in $16.5 million in that.

The third, Millennium and, again, Fagen/ICM plant.

For people who know that builder, we put in $5 million under construction.

Big River, we've now committed $10 million, that's an operating plant that's already up and running.

It also is going to expand and open more plants and, again, we're partners in that one which is up and running and making money.

In terms of our strategy, it's pretty simple, it's to continue to grow and retail the LCD and plasma side of the business.

We hope that the steep, steep declines are coming near a close in the tube and big screen business where we can start anniversary in less and less down comps.

And if we can keep the plasma and LCD growing like we have and I think we'll see with the price declines that are happening great increases in our markets in those products we have a chance to do a lot better.

We're also in agreement to sell 94 locations which, should that transaction close, will give us a lot of flexibility to keep the stores that are returning very good investments to us and close the stores that are not returning quite as much or losing money.

In terms of closed stores, we've closed 25 stores during the fiscal year, since the fiscal year we've closed 29 stores.

And again, we're trying to maximize -- the stores we're closing, we're trying to keep to the ones that are not returning a good return on investment and trying our best to go forward with the stores that are making the most amount of money.

In terms of ethanol our strategy is pretty simple; I think we do it better than anyone else.

We work with farmers as partners.

On a lot of the ethanol plants that are in existence we think might have problems with corn supply.

By working with farmers we think we're in a better position to take advantage of what could be a shortage or what could be a tough time in the area of corn supply.

And again, we think we're doing it better and we're going it right.

Our builders are Fagen/ICM which are universally acknowledged as the top builders -- or Fagen the top builder, ICM the top engineering firm in the field.

Again, we're very comfortable with that group -- with the ICM -- I should say ICM Technology and Fagen building.

So again, we think we're doing that right.

Give people a little indication of what this business could do.

We did have one operating plant; we had $5 million invested in it during the fourth quarter.

It returned approximately $498,000.

We did increase that investment to $10 million at the end of the quarter; it will become $20 million we expect by the end of the year.

Again, that's just one of the plants.

In conclusion, we're looking for retail to stabilize this year.

We don't expect the huge declines that we saw in television to continue.

We look for LCD and plasma to increase.

In synthetic fuel we should have one good year out of this, it's the last year and we hope to maximize our income in that category.

In ethanol we're real excited we're going to have plants coming online during the year.

And again, that should be based on the little bit we've done so far, we're hopeful that will show a very, very good return on investment.

I'll now open the call up to questions should anyone have any questions.

(OPERATOR INSTRUCTIONS).

Before that first question, I just wanted to mention that Doug Bruggeman, our Chief Financial Officer, is also on the line if anyone wants to direct questions towards him.

Thank you.

Rick Weinhart, BMO Capital Markets.

Good morning, Stuart.

Good morning, Doug.

My first question is on the inventory levels at the end of fourth quarter.

My calculation shows you were at a level of about -- down about 20% on a per store basis.

And that puts you at basically at least a 10-year low.

I'm wondering if the level of inventory, first of all, that you have was sufficient for the sales that you were seeing in the fourth quarter or perhaps maybe you were short in certain areas.

I would say that -- did we lose some sales because of inventory?

Probably.

Did we drop our inventory too far?

Maybe.

But again, we were very cautious because the prices were declining so fast we made a real effort to try and turn our inventory a little better.

And yes, we probably did miss some sales and we're probably maybe a little too cautious.

But our feeling was it was better to stay a little lean and be cautious than to get caught with big inventories in a very fast declining market.

Like I said, the tube business and big screen business just dropped off a cliff.

And LCD, plasma has had huge price drops.

So we were probably a little cautious, but we certainly are working now to bring the inventory back up a little bit.

Okay.

And also I believe you had underway a program to reduce some of the older items in your inventory and kind of refresh the inventory you had in your DCs and in the stores.

Have you completed that?

Was that a part of the decline we saw?

It's always part of retail to get rid of the older inventory, that's nothing new.

But I think with the amount of stores we closed we certainly had -- those were always the stores that were the lower performing stores and they were the ones that had the hardest time moving out that older inventory.

But by closing those stores we were able to do a good job on reducing that older inventory.

In terms of general retail you always have to have stuff when you get down to floor models, things like that, that's always the hardest stuff to move -- hardest goods to move.

Okay.

And Doug, do you have perhaps the percentage of the TV business that flat-panel was in the quarter?

The majority of our television business was either LCD plasma or light engine television.

Do you perhaps have the breakout though of that?

I'm curious because it sounds like the light engine business is declining pretty rapidly as well.

It is.

Yes, I can get that for you, Rick.

If you just want to continue on I'll come back with that.

I think I might have it for you, Rick.

LCD business went from $9.4 million to $19.4 million in the quarter; plasma business went from $12.9 million to $18.3 million in the quarter.

I'll give you an idea of how serious the drop-off was, just a couple of other categories.

HDTV went from $13 million last year down to $3.5 million this year and light engine went from $25 million down to $14.4 million.

Okay.

That's very helpful, thank you.

On the real estate, you mentioned that you closed 29 stores --

That by the way is on a comp store basis, not a total store basis.

The dollar amounts were comp store?

Right.

Okay, thanks.

You mentioned that you closed 29 stores after the fiscal year end.

That's not a part of the 94 stores that you're selling, right?

Some of them are.

Some of them are, okay.

Yes, some of them are.

And we have, like I said, full flexibility in that transaction.

Okay.

And regarding that transaction, with the store closures is there potential for savings related to any distribution center closings or is it --?

Not closings, but we certainly have excess space.

We're not planning on closing distribution centers, but we have access space and the plan will be to look for tenants to occupy that excess space.

And they have the ability to be split up should we choose and make some income on that.

In fact, we've done that with Pensacola in the past.

Okay, thank you.

And then just last question on the retail business.

We're about two-thirds of the way into first quarter and I'm wondering if you can give us any update on how sales are trending now or perhaps how margins are trending as well?

For the quarter so far we're doing better than we did in the fourth quarter on a comp store basis.

Right now though our focus has been on just getting the stores that aren't returning, closing those stores.

We've closed a lot so far this year.

And again, I think we're still up against some tough tube and projection business, but I think after this quarter's over we'll be able to focus on the moving forward stores and really show what we can do.

Okay.

And is the margin still under pressure at this point too just from the industry I'm assuming?

Yes, and the store closings.

Okay.

And then I have just one question on the other portion of the business, the ethanol.

You mentioned a $498,000 return on the $5 million investment, do you have any color you can add as to maybe what the margin was on the product or how much ethanol was produced to get that kind of return?

I'd rather not talk about -- it's one individual plant right now and I'd rather not.

It's not one that we're consolidating, Rick.

We're not consolidating their numbers.

Okay, great.

Thanks.

That's all I had.

Mike [Neary], [Neary] Asset Management.

I had a few questions.

It looks like your remaining ethanol funding commitments, if you go through with them, are about $35 million.

Correct -- is that right, Doug?

Yes, that's pretty close.

35 to $40 million.

And we had $9 million in net cash at the end of the fourth quarter and that's before the sale leaseback transaction?

Correct.

About $9 million in net cash, what are you netting?

I'm just netting --.

(multiple speakers) million in cash on the balance sheet.

Right, I'm just netting out your short-term and long-term debt.

Okay.

Let me say, part of that $43 million we've consolidated in Levelland / Hockley, and about $17 million of that $43 million is from Levelland / Hockley's consolidations.

Which we would not have access to a (indiscernible) to construct Levelland / Hockley.

And then the sale leaseback, you expect that to happen at the end of this month and that should net us, if it does happen, something in the order of $80 million after-tax?

Some of it will be used to pay off some of the debt that you just mentioned.

I think it's about $82 million pretax in prepaying off the debt.

It looks like after taking these transactions into account we'd end up somewhere around $30 million in net cash exclusive of the Texas ethanol facility.

So it would seem that even if the sale leaseback doesn't happen you would be able to fund your ethanol commitment somehow.

Without any problem, that's right.

We still have lots of property also that we could take mortgages again should we choose.

Okay, and so --

Without any problem we could fund our current ethanol investment.

How should we think about the remaining cash?

Are you reactivating the share buyback?

That's under -- were you saying the share buyback program.

Yes.

I didn't mean to read your mind but, yes, that's definitely something.

We still have authorization for some amount and that's certainly something we're going to consider.

We also think that we have probably the most unique relationship of all the ethanol companies in the United States with farmers and also a very good relationship with the builder of most ethanol plants, Mr.

Fagen.

And so between those two things we're not ready to say that we're not going to build any more ethanol plants or participate in the construction.

Something we look at and our plants at current market conditions can return a very, very good invest -- our feeling is they can return a very, very good investment.

We're not ready to talk about it yet, but assuming things -- and they never are going to -- a year from now it's going to be different, but if things were stable the way they are today we think we can make very, very good money in that business and we'd look at other ethanol investments.

Okay.

And I guess also you'd have the option to acquire any facilities if they were to run into trouble.

I mean, it sure seems --

But we have already taken -- we have the ability, if we exercise our options, in Levelland to take majority interest and what you're saying is absolutely true.

Okay.

And with regards to the sale leaseback, how should we think about the lease terms on those facilities?

I know they're not final yet, but if --?

If it happens I think we'll pick up -- and correct me if I'm wrong, Doug -- 10 and 20 stores that -- I think it's 12 and 20.

The initial term is I believe two and a half years and a little more than that.

And then we have options, should we choose, for many, many years into the future and there is another group of stores that will lease for about six months and go month-to-month after that.

And if they're doing well then we could consider what -- but it would have to be negotiated -- lengthening the lease on those.

And there's another group that most of these I believe have already been closed, but there's another group of the lower performing stores that they're just going to take over and market.

And will the leases be at market, above or below?

(indiscernible) opinion.

Their opinion is that they are below market and I guess at least the initial terms of the lease are below market.

Okay.

And how many owned facilities do we have now, owned stores?

After we complete the sale lease back if it would go through I think we'd still be operating roughly 40 stores that we own.

40 owned stores, okay.

Okay.

All right.

I would just like to say I know it's very hard to close stores, I deeply appreciate as a shareholder that you are doing so when necessary.

Thank you for saying that because you're right.

It's gut wrenching.

But again, we have to look at returns and they just weren't there in some of these stores.

Thanks.

Richard Dearnly, Longport Partners.

Good morning.

While we're talking about stores, have you now identified which ones you're going to renew, keep, close --?

We are still working on that and have not -- the bulk we have but there's a group in the middle that we look at even -- we're looking at even on a day-to-day basis.

And would that be the group that you're going to lease month-to-month?

Yes, well for six months and then month-to-month after that.

I see.

And the -- is it 113 stores that are not included?

Correct, approximately.

Are those -- is it a safe guess that those are performing above the corporate average?

Yes, we've tried very hard to keep the real estate on the ones that basically -- that both are geographically in good areas for us and are high performing.

Is it at all likely that you could do a sale leaseback on them as well?

Your time we could always do it, is it likely?

It's possible.

I don't know that we need the money right now.

And I want to point out again, of those stores there's only about 40 to 50 that we would still own, the rest are leases with outside parties.

And the stores I was talking about were the owned stores.

But we also own the three warehouses which I consider extremely valuable property -- very, very valuable property.

And all three are priced significantly more than what's on the balance sheet.

Is 113 stores enough for -- of course you have whatever you keep out of the sale leaseback stores.

But does that give you scale in any markets?

Well, we're mostly one store market.

So in every market that we stay in we have scale.

And again, I took this company, we probably had our highest return in the earlier years when we did have less.

I've seen the Company grow from four -- myself from four stores many, many years ago all the way up and we certainly know what it takes to operate any number of stores.

We're doing what has to be done to bring everything in line to operate at those levels.

Right, okay.

Then you mentioned a section 2945K tax credit phase-out.

Could you explain what that is and what effect it had?

Doug, do you want to talk to that?

Sure.

The section 2945 credits -- we previously received tax credits for those.

We sold those off in fiscal 2005 and were receiving investment income based upon the production and the monetized credits they get.

As the price of oil goes up then those tax credits begin to phase out.

So for calendar year 2006 with the higher oil prices that we had we've used an estimate of a 40% phase-out when booking our investment (technical difficulty).

And that risk exists again in the current year as the price of oil would continue to go up there would certainly be a risk for a phase-out again in the current year.

And then all of that ends at the end of '07?

That's correct.

As it's currently legislated that would end at December 31, 2007.

Right.

And if it ends what does that do to the two entries on your balance sheet, the future income tax benefits or the deferred income long- and short-term?

Does that trigger them or do something?

No.

The only thing we've got on our books at this point is we've got the receivable on the books for production that we've not been paid for yet.

And then, to your point, we've got deferred tax assets sitting out there.

The fact that the production ceases doesn't impact that at all.

That's just dependent upon earning future income.

They can be carried forward I believe to perpetuity.

And while you -- for book purposes you recorded an income tax.

Is it a safe guess you didn't pay anything or you paid minimal amounts?

No, we still have to pay alternative minimum tax.

We pay federal alternative minimum tax rate.

So --

You can only use the tax credits to get down to alternative minimum tax.

So for the year of the $5.4 million of provision for income taxes, what did you actually pay?

Do you happen to know?

I don't have that number in front of me, but it would certainly be something less than that.

I see.

Okay, thank you.

Arnold Brief, Goldsmith & Harris.

A couple of questions.

One, the last conference call I think you had indicated that if you take your equity participations and all the ethanol investments what accrued to you was basically 100 million gallons.

Is that still the number, has it gone up?

I understand how you -- you and I talked about that last time.

It hasn't changed since the last quarter, to answer your question.

Although again, it depends how you compute that.

A lot of people say these plants are $110 million, not $100 million each one.

We go back and forth 1 million different ways.

Okay.

And you still have further investments that would raise that gallonage so to speak before the year is over I gather?

Yes.

Could you give us -- you indicated a couple of plants, but could you run through all the plants in terms of when they're scheduled to open?

I will try to.

Again, I can only talk in approximate -- large, large plants under construction and it's just an estimate.

But my guess would be -- my estimate would be that we will get Levelland and Millennium open by the end of our fiscal year.

Which Big River, like we mentioned, is already open; Patriots will be sometime probably the middle of next year to the end of next year.

One Earth is still raising funds so I can't give you any estimate on that.

Okay.

Could you also give us -- it's not clear to me -- you had 207 stores at year-end, 94 involved in the leaseback, you closed 29 some portion of which is part of the 94.

Could you give us a rundown of your real estate?

How many stores do you expect to be operating when the sale and leaseback is completed?

How many stores -- well, you indicated you still own 40.

How many stores are closed but you're the tenant, you're the landlord that are sublet that you're not out of but you're getting [middle] income?

Could you give us a whole breakout of the real estate?

Doug, do you want to --?

I don't have all those numbers in front of me.

When we file the 10-K we'll have more detail available on that.

Just in general (indiscernible) we ended the year with 193 stores and, as we indicated, we have closed an additional 29 stores since the end of the year.

We're really not in a position right now because we're still analyzing these stores.

So we're really not in a position today to give you what that final number is going to be.

So again --

Can you give us a best guess on what you think the number of stores that you'll be operating at year-end?

At year-end -- again, that depends a lot of these stores we're going to go into and if they do for six months and see what happens.

So it's really difficult to tell you (multiple speakers)

Could you tell us how many stores are on a six-month lease?

That's one of the beauties of this transaction is it does give us that flexibility.

Could you tell us how many stores are on a six-month lease?

In the press release we've indicated we're going to lease back 40 and 23 to 30 of those could be terminated after six months.

Okay.

We're required to lease back a minimum of 40 and of those 40, 23 to 30 (multiple speakers) after the first six months.

So it would look as if the closings are scheduled to be over 50 additional?

(multiple speakers)

Again, you're assuming we're going to close those other stores.

I have every intention and every plan to make those stores profitable again.

If we can do -- and again, they're not profitable and now every one of those stores that we're leasing back is profitable on a stand-alone basis.

It just contributes to overhead at least.

And if we can -- it's been a terrible decline in tubes and big screen.

If we can stabilize that and continue to show the growth which we've done better than -- I would have to believe better than the industry in plasma and LCD.

I went over the numbers, we're talking about great growth if that can -- and also with television mandate coming up where people are going to have to replace or buy -- do something with their existing TVs -- they may not have to replace it, but they'll have to buy another piece of technology.

I'm not as pessimistic as the numbers would appear on the television business, let's put it like that.

Okay.

One of the things that you haven't done, I don't think, on any of your conference calls as you discuss your raw material sourcing and your investments in the ethanol plants, you haven't gone into the logistics of these plants, how they're positioned in terms of transportation, storage --?

I'll try and give you a quick overview of that.

All of them have to have access to a main line; they all are either on the main line or have a short line leading to the main line.

They're all -- there's three major functions in ethanol -- that's the price of ethanol, the price of DDGs and the price of natural gas.

And in almost -- the DDGs are sold to the cattle, the natural gas of course comes in from pipelines and ethanol is sold to refiners.

So in all cases in our plants we're either close to the cattle or we're close to the corn and we have natural gas prices have been pretty -- relatively stable and low this year and that's a good benefit.

Price of ethanol itself has been relatively stable and at a pretty good price.

The price of corn this year has gone through the roof.

Our edge -- and access to corn is something people worry about.

Our edge is that we have worked real hard and try our best to work well with the farmers who grow the corn.

We think that will give us an edge.

Everything being equal we think the farmers are going to sell to our -- if there is any type of shortage to our plant at prevailing prices versus an outside market company.

They like that they own the plants, we like that they own part of the plants.

And again, that's what makes us unique in this business and a lot different than some of the big corporations you see in the business.

A lot of the farmers have dealt with them for years, it's been their only market to sell their product, now all of a sudden they can deal with someone where they're part owners and deal with someone like their own plants.

There's a lot of optimism out there and I think with good reason.

Without asking you for projection, but just based on current corn prices, current ethanol prices, current natural gas prices, would it be fair to assume that your operating profit per gallon of ethanol runs in the $0.40 to $0.50 a gallon area?

You mean operating profit?

Yes, $0.40 or $0.50 a gallon.

I think I wouldn't use that number, but I've seen other people use that number on other plants and I wouldn't argue with it.

So if corn prices go down --?

Then we'd do better.

Margins widen and --

Assuming that ethanol prices -- the thing about corn prices when they go up, generally DDG prices go up which is the -- a lot of the food product of corn is still saved and can be fed to cattle and that's -- when corn prices go up you can get more for the byproduct.

Are you hedging at all in any of the markets?

We're not at this time.

Well, I shouldn't say that.

The one plant that's operating certainly does.

But considering that these are large construction plants, the last thing we want to do is hedge and find that our plant is not up in time.

And one last question, just to get you in the world of conjecture a little bit.

I would assume that the corn plantings are going to go way up this year.

If we have decent weather corn prices will probably come down.

But there's a tremendous increase in production in ethanol in '08.

Are you concerned at all about corn prices as you're looking to '08?

You mean about ethanol production or corn?

(multiple speakers) The price of corn in '08 because of the big increases in ethanol production.

With more supply obviously there are some worries that price could come down.

But again, we're just a small part of the gasoline market and it's much more tied to the price of oil.

In terms of corn, I think that there are many, many acres that as it comes off lease that the government pays people not to grow crops.

And it's my hope that some of that land will be loosened up and that's where I think there will be, my opinion, enough corn out there to support the projects that I really think will be built.

I think there are a lot of projects under anticipation that will never be built; only the good ones are going to get financed today.

I think all the good ones there will be enough corn in the future.

Could you sort of define the degree of your concern about Brazilian sugar based ethanol and legislation that may or may not occur and what could happen in that area?

Well, the farmers have always been one of the strongest lobbyists in the United States and I can't imagine -- the whole purpose of everyone working so hard is to make our country less dependent on foreign oil or foreign fuel.

So I cannot imagine that the government would do anything and especially with the farmers lobby, they'd destroy what everyone has worked so hard to help -- and including us to make us a little less dependent on foreign sources.

Could you tell us what the -- you had mentioned three warehouses.

Could you tell us what they're on your books for?

Doug, do you have that number?

I do not have that number in front of me.

Roughly?

I prefer not to speculate.

Okay, thank you.

Richard Dearnly, Longport Partners.

Why do you feel that the stores that are on the six-month trial can get better --?

Again, they're not a trial (multiple speakers) and I expect them to get better; I expect everything to get better.

It's my hope that if we can -- like I said earlier, if we can stabilize -- we've taken huge hits in the tube and projection business and have made huge gains in the LCD and plasma business.

If that business, LCD and plasma, keeps going through the roof and we don't have the hits that we did -- as great a hit they're going to decline, but if we don't have as great a hits in the other categories then we can start showing some comps again.

With comps we can turn around real quickly.

We've done this lots of times.

I see.

This isn't the first tough time in the TV business.

Thank you.

All right, thank you.

Mr.

Rose, there are no further questions at this time.

I will turn the conference back over to you to continue with your closing remarks.

I'd like to thank everyone for listening and, again, appreciate it and we're working -- we're optimistic on retail and optimistic on ethanol and also should make good money this year in synthetic fuels.

So again, thank you for listening and we appreciate it very much.

Bye.

Ladies and gentlemen, this does conclude the conference call for today.

We thank you for your participation and ask that you please disconnect your lines.

Have a great rest of the day, everybody.