Gibraltar Industries Inc (ROCK) 2003 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Gibraltar conference call to discuss its third-quarter results and its outlook for the fourth quarter. We will begin today's call with opening comments from Ken Houseknecht, Gibraltar's Director of Investor Relations. After the company has concluded its presentation, we'll open the line to your questions.

At this point, I'll turn the call over to Ken Houseknecht. Please go ahead, sir.

Thank you, Patrick. We want to thank everyone for joining us on today's call. Before we begin, I want to remind you that this call may contain forward-looking statements about future financial results. Our actual results may differ materially, as a result of factors over which Gibraltar has no control. These factors are outlined in the news release we issued this morning, and in our filings with the SEC. If you did not receive the news release on our third quarter results, you can get a copy on our Website at www.GibraltarOne.com.

At this point, I would like to turn the call over to Gibraltar's Chairman and CEO, Brian Lipke. Brian?

Thanks, Ken. Good afternoon, everyone. On behalf of Walter Erazmus, our President, Jack Flint, our CFO, and Ken Houseknecht, our Director of Investor Relations, I thank you for joining us on our call today. This afternoon, we're going to focus our comments on four main areas -- our third-quarter results, which were released earlier this morning, an overview of current business conditions, our outlook for the fourth quarter and then some general comments before we open the up to any questions that you may have.

As you all know, our second-quarter sales and net income were the best for any quarter in our history, and we built on that momentum as we generated all-time record quarterly sales and our best-ever third-quarter earnings for the quarter ended September 30, 2003. These results are particularly important, since they were produced in an economy that, while showing some signs of improvement, clearly has a long way to go to get back to full health. We continue to operate well below peak levels, so there is considerable upside to our sales and our earnings potential as the economy resumes strong and sustained growth. Even with a struggling economy, Gibraltar has been able to produce solid results in the first nine months of this year, unlike many in our industry. This, in large part, is the result of strategic diversification and, most recently, the strength of our Construction Metals and Air Vent acquisitions. The critical mass that we have created in both Heat Treating and Building Products, which we are now beginning to utilize, will help us achieve our long-standing goals of 20 percent average annual growth in sales and earnings, double-digit operating margins and driving our return on shareholders' equity back above 15 percent. The ability to generate solid results in a tough economy is what separates the good companies from the great ones, and we believe that the steps we have taken over the last 10 years to broaden and expand our customer base, to move into many of the fastest-growing geographic and steel-product-consuming markets, and to shift a great share of our business into higher-value-added, higher-margin areas, like Building Products and Heat Treating, have put us in an excellent position to consistently generate best-in-class results.

As we reported in our release, sales in the third quarter were $208 million, net income was $8 million and earnings per share were 49 cents. For the first nine months of 2003, sales were $573 million, up 17 percent compared to the first nine months of 2002. Net income in the first nine months of 2003 was $21.1 million, up 10 percent from the same period in 2002. And earnings per share in the first nine months of 2003 were $1.31, an increase of 5 percent from 2002, with 5 percent more weighted-average shares outstanding, as a result of the completion of our secondary stock offering of 3,150,000 shares in March of 2002. As a result of solid asset management and cash-flow generation from operations, we are also able to pay down approximately $30 million of debt during the third quarter.

That's just a quick recap of our third-quarter results. Jack and Walt will provide much more detail in just a couple of minutes, but before I turn the call over to them, I want to give you an overview of current business conditions as we see them. As I mentioned earlier, even though we are all hearing more news that the economy appears to be getting stronger, we are not out of the woods just yet. While the business tone overall is improving, many areas, especially in the industrial sector, continue to struggle. The automotive market, which currently represents approximately 25 percent of our sales, is on pace for another good year, with a growing number of auto analysts and the automakers themselves forecasting 2003 sales of 16.5 million units or maybe even a little higher, which would make this one of the five best years in automotive history, but still off of the record levels of the last four years. We, however, are more interested in the number of cars built in a given period than sold, because that impacts our business directly. Unfortunately, with the big three auto inventories at higher-than-desired levels, production in the fourth quarter is expected to be below year-ago levels. Both General Motors and Ford, two of our largest automotive customers, expect to build approximately 5 percent fewer vehicles in the fourth quarter of this year than they did in the fourth quarter of 2002. While we spend a lot of time focusing on the historic domestic automakers, we are also focused on gaining business with all of the transplant automakers, as well. That way, regardless of who makes the cars in the future, our steel will be in them. So the auto market is a bit of a mixed bag, at present. Sales remain strong, but production is down from a year ago.

In the housing market, demand continues to be strong, due to demographics and in large part to interest rates that are holding near 45-year lows. A robust market for new and existing homes is providing continued strength for our Building Products business. The sales of new and existing homes were both near record levels once again in September. Equally important, major customers like Home Depot, Lowe's, Menards and Wal-Mart, which together account for nearly 40 percent of our Building Products business, all have aggressive plans to grow their business, which bodes well for us as a supplier to them.

As you know from some of our prior calls, the Building Products market is highly fragmented. We continue to look at acquisition opportunities similar to the CMI and Air Vent acquisitions that we made earlier this year, that would further expand our product line, extend our geographic reach into new markets, strengthen our relationships with some of our existing customers and forge new ones, and drive our sale of manufactured end products even higher.

Finally, our Heat Treating business, which serves a broad cross-section of industrial customers, has yet to see many of its markets bounce back to their normalized levels. There are some signs that the industrial economy is improving, and as it does, capital spending should start to revive, adding further impetus to a strengthening economy. The economy has to strengthen considerably before this business returns to its record profit levels of the late '90s and the early part of 2000. And like Building Products, Heat Treating offers many acquisition possibilities, and we continue to evaluate those opportunities.

That's just a quick overview of our business. We think that against that backdrop, Gibraltar's ability to generate record sales and its best-ever third-quarter earnings, and to position itself for record sales and earnings in 2003 in spite of a difficult economy, we believe, shows the strength of our Company, its strategy and its execution. Once again, we generated strong results in a quarter when most of our industry continued to struggle badly, validating the steps that we've taken to strengthen and differentiate Gibraltar.

At this point, I'll turn the call over to Jack and Walt, who will provide a more detailed review of our third-quarter results and give you a better sense of our outlook for the fourth quarter. Jack?

Thanks, Brian. Sales in the third quarter of 2003 were $208 million, the highest of any quarter in our history, and an increase of $34.8 million, or approximately 20 percent, from $173.2 million in the third quarter of 2002. Sales for the first nine months of 2003 were $573 million, up $83.6 million, or 17 percent, from $489.4 million in the first nine months of 2002. These increases were primarily due to including the net sales of Construction Metals, acquired April 1st of 2003, and Air Vent, acquired May 1st of 2003, which contributed approximately $32.7 million in additional sales to the third quarter, and $58.4 million for the nine months ended September 30, 2003. This was our first full-quarter results with both CMI and Air Vent. Gross margin, as a percentage of net sales, was 20.7 percent for the third quarter of 2003, compared to 20 percent for the third quarter of 2002. This increase was primarily due to higher gross margin percentage from the 2003 acquisitions, offset by higher raw material and employee benefit costs at existing operations.

For the nine months ended September 30, 2003 and 2002, the gross margin percentages were comparable, at 19.7 percent and 19.9 percent, respectively. Selling, general and administrative expenses, as a percentage of net sales, were 12.4 percent for the third quarter of 2003, compared to 11.5 percent for the third quarter of 2002. This increase was primarily due to the 2003 acquisition having higher selling, general and administrative expenses as a percentage of net sales. Additionally, employee incentive compensation expenses were higher in the third quarter of 2003, compared to 2002. Selling, general and administrative expense, as a percentage of net sales for the nine months ended September 30, 2003 and 2002, were comparable, at 11.8 percent and 11.7 percent, respectively. EBITDA increased by 15 percent to approximately $23 million in the third quarter of 2003 from approximately $20 million in the third quarter of 2002. In the first nine months of 2003, EBITDA increased by 13 percent to $62.2 million from $55.2 million in the first nine months of 2002. Interest expense in the third quarter of 2003 was $4 million, compared to $2.8 million in the third quarter of 2002. For the nine months ended September 30, 2003, interest expense was $10.2 million, compared to $7.7 million in the first nine months of 2002. These increases were primarily due to increased borrowings to fund the CMI and Air Vent acquisitions. As a result of all of the above, income before taxes was $13.3 million in the third quarter, compared to $12 million in the third quarter of 2002. For the nine months ended September 30, 2003, income before taxes was $35.2 million, compared to $32.2 million in the first nine months of 2002. Income taxes were $5.3 million in the third quarter, based upon a 40 percent effective tax rate. As Brian mentioned, net income for the quarter ended September 30, 2003 was a third-quarter record, at $8 million, an increase of 12 percent from $7.1 million in the third quarter of 2002. During the first nine months of 2003, net income was $21.1 million, an increase of 10 percent from $19.1 million in the first nine months of 2002. Earnings per share in the third quarter of 2003 were 49 cents, an increase of 11 percent from 44 cents in the third quarter of 2002, and approximately the same number of weighted-average shares outstanding.

As you know, we provided a 45 cent to 49 cent third-quarter EPS range during our last conference call on August 11, and our results came in at the high end of that guidance. During the first nine months of 2003, earnings per share were $1.31, a 5 percent increase from $1.25 in the first nine months of 2002, and there were approximately 5 percent more weighted-average shares outstanding as a result of the successful completion of our secondary stock offering of 3,150,000 shares in March of last year.

At this point, let me provide some additional detail on our asset management, including accounts receivable, inventory, CapEx and our depreciation and amortization at September 30, 2003. Accounts receivable at September 30, 2003, were $123.9 million, compared to $104.4 million at September 30, 2002, primarily due to the second-quarter acquisitions of CMI and Air Vent. Our average days sales outstanding approximated 51 days, the same as last year's third quarter. Our inventory investments increased to $113 million at September 30, 2003, compared to $106 million at December 31st, 2002, largely as a result of the 2003 acquisitions. However, excluding the CMI and Air Vent acquisitions, our inventory decreased by approximately $6 million, or approximately 6 percent, compared to the second quarter of 2003. Our inventory turnover for the quarter was 5.2 times, compared to 4.9 times in the second quarter of 2003. This turnover is calculated using only those operations which sell inventory. Our turnover, which is one of the best in the business, demonstrates our focus on maximizing our utilization of assets.

CapEx for the quarter was $6.4 million and $16.5 million for the first nine months of the year. We are anticipating CapEx will be approximately $21 million in 2003. Depreciation and amortization approximated $5.8 million for the third quarter, compared to $5.2 million for the same period in 2002, and should approximate $23 million for 2003, about $2 million above our CapEx for the year.

At this point, I'll turn the call over to Walt.

Thanks, Jack. I would like to start by commenting on the sales and operating income in each of our three business segments. Our Processed Steel Products segment had net sales of approximately 63 million for the quarter ended September 30th, 2003, down by close to 8 million, or 11 percent, from last year's third quarter of 2002. Net sales for the first nine months of 2003 were comparable to last year, decreasing by less than $1 million to 203 million. These decreases were primarily due to lower production schedules this year by the big three automakers, and reduced the sales in the service center processing part of our business, primarily processed steel for use in the commercial building industry.

Sales to the big three were down approximately 8.5 percent in the first nine months of 2003. However, our direct sales to automotive manufacturers, including Honda, were approximately equal to last year, at 55 million, 27 percent of the 203 million of total processed steel sales. Income from operations, as a percentage of sales for the quarter and nine months ended September 30, 2003, decreased primarily due to higher raw material and employment costs, including Workers' Comp, as a percentage of lower net sales.

Our Building Products segment had net sales of 123 million for the quarter ended September 30th, 2003, an increase of 42 million, or 52 percent, compared to 81 million for the third quarter of 2002. Net sales for the first nine months of 2003 were 304 million, an increase of 78 million, or 35 percent, compared to 226 million for the comparable period of 2002. The increases for both the quarter and the nine months were primarily due to the CMI and Air Vent acquisitions, 33 million in Q3 and 58 million year to date, increased sales production and penetration with existing customers and our success with new and redesigned product offerings. It is important to note that, excluding our acquisitions, our sales on a same-store basis are up approximately 9.5 million, or close to 12 percent for the quarter, and approximately 20 million or 9 percent year to date, compared to the same period last year.

Sales to Home Depot, Lowe's, Menards and Wal-Mart through September 30th of this year increased by 38 million, or 50 percent, to 114 million, compared to 76 million last year. Excluding acquisitions, same-store sales to these big-box retailers increased by 16 percent in the quarter, and 13 percent for the year to date, and demonstrates our ability to more effectively penetrate these customers with our product offerings. Income from operations, as a percentage of sales for the quarter and the nine months ended September 30th, increased primarily due to the higher margins of the CMI and Air Vent acquisitions, and sales increases, along with margin improvements and other operations. Our Heat Treating segment had net sales of 22 million for the quarter ended September 30, 2003, slightly higher than our 21.4 million for the prior-year quarter. Net sales for the first nine months of 2003 increased by approximately 6 million to 66 million, or 10 percent, from 60 million for the comparable period in 2002, primarily as a result of the BMW acquisition in July of 2002, which accounted for about 5 million of the increase.

Income from operations has decreased, primarily due to higher costs as a percentage of net sales at our Canadian heat treat operations, as a result of the power outage, higher energy and Workers' Comp costs and consolidation expenses relating to the closing of our Carolina office facilities, and costs due to the startup at the end of the second quarter of our Fairfield, Ohio brazing heat treat operations, which began generating operating profits during the third quarter. In regard to this operation, we will be brazing 100 percent of Ford Motor Company requirements for torque converters and turbines, which should add approximately 7 million each year to our heat treat sales over the next four years.

At this point, let me provide some information on our debt and credit facility. As of September 30th, our total debt outstanding was approximately 292 million, which decreased by approximately 30 million from the quarter ended June 30th. Approximately 160 million, or 55 percent, of total debt is fixed-rate financing, with the balance at floating rates, will help minimize the impact of any future rate increases. Strong cash flow generated from operations, including our acquisitions, our focus on inventory turnover, which is back over five times, and cash generated from the exercise of stock stock options were the major reasons for the decrease in debt levels. Our net-debt-to-total capital at September 30th, 2003 came down to 47.4 percent. This is lower than the debt-to-cap rates we experienced during '98, '99 and 2000, when we exceeded 55 percent as a result of acquisitions. At September 30th, 2003, 180 million of our 290 million credit facility was in use, leaving 110 million available.

At this point, let me provide some perspective on our outlook for the balance of the year. The fourth quarter has historically been the slowest period for Gibraltar, due to the reduced number of shipping days, as a result of holidays and plant shutdowns, by our customers in the automotive industry, and seasonal slowing in the building industry due to weather conditions.

Despite an announced decrease of approximately 5 percent in North American automotive production schedules for the big three for the fourth quarter of this year, compared to last year, margin pressures and escalating employment costs, we expect to generate our best-ever sales and earnings in 2003, which sets us apart from our competitors. Barring a significant change in business conditions, we expect our fourth-quarter earnings per share will be in the range of 24 to 30 cents, compared to 29 cents in the fourth quarter of 2002, on approximately the same number of weighted shares outstanding. It's important to note that, for the last seven quarters, our policy has been to provide earnings guidance only for the next quarter, due to uncertain economic conditions. We have not given any guidance previously for the fourth quarter of 2003. Gibraltar is also one of the only companies in its peer group that has consistently provided quarterly guidance throughout this period. In spite of an economy that continues to struggle, we are positioned to generate record sales and earnings in 2003 and future years.

At this point, I will turn the call back over to Brian.

Thanks, Walt. Before we open the call up to any questions that you may have, let me make just a couple of final comments. On November 4th, we're going to celebrate our 10th anniversary as a public company. And as we approach that milestone, we continue to focus on those same goals that brought us success throughout our first decade, generating consistent sales and earnings growth, shifting a greater share of our business into higher-value-added, higher-margin products, processes and services, diversifying and broadening our customer base, our geographic reach and our business mix, improving our returns on shareholders' equity and investments. We are also committed to keeping our gross margin above 20 percent, which occurred during the last two quarters in spite of continued weakness in the economy, and to driving our operating margin north of 10 percent. We believe that companies that generate consistent sales and earnings growth, along with improving their returns on equity and capital, will create shareholder value. And that's a clear focus of this management team. We are proud of our performance during our first 10 years as a public company, especially with the steps we took to make our company stronger, not just bigger. These steps allowed us to generate record sales and earnings 7 of the last 10 years, and we are well-positioned to produce record sales and earnings once again in 2003.

In spite of a severe and prolonged slowdown in the industrial economy that began in the early third quarter of 2000, our sales grew at a compound annual growth rate of 16 percent over the last 10 years, while net income grew at a 14 percent CAGR, clearly establishing Gibraltar as a top performer in our peer group during that period. Our strategic diversification allowed us to consistently generate profitable growth, even when the economy weakened, and today, we have more opportunities to strategically grow and strengthen our business, through our existing operations and with additional acquisitions, than at any point in our history.

As we look ahead to the coming year, we expect our automotive business will rebound and our Heat Treating business will benefit from the eventual strengthening of the capital goods market. We also see an increasing number of positives with an improving economy, interest rates hovering near historic lows, the housing markets showing sustained strength and aggressive growth plans from many of our largest customers (ph). Coupled with our focus on cost reduction, and as we further develop the synergies from our newest acquisitions, we look at 2004 with increasing optimism.

At this point, I have to say I'd be remiss if I didn't single out one member of our team for some special recognition. As many as you know by now, Walt Erazmus, Gibraltar's President, has announced his intention to retire at the end of this year. His tireless efforts and many contributions have helped us move toward our long-standing goals of generating $1 billion or more in annual sales, and having annual net income of $45 million or more. Over the last 30 years, Walt has helped us build Gibraltar into a much larger and much stronger company. Thankfully, Walt will continue to work with us in a consulting role post-retirement, to ensure a smooth and orderly transition into and to provide us access to his knowledge and experience going forward. I am also pleased that Walt chose a time to step down when the Company is in solid financial and operating condition, with a clear successor already in place. Henning Kornbrekke, currently the President of our Building Products group, will become Gibraltar's President upon Walt's retirement. Henning has overseen significant growth in our Building Products business during his first two years with the Company, and his manufacturing, marketing, distribution and international business experience made him the ideal choice to succeed Walt. Henning's involvement in larger organizations like Rexam PLC and The Stanley Works, where he was a group president of the $450 million hardware division, has given him insights into running larger companies which will be helpful in taking Gibraltar to our $1 billion and beyond objective. I want to congratulate Henning on his new assignment, and offer sincere congratulations and thanks to Walt on his well-deserved retirement.

I'd also like to thank the men and women of the Gibraltar team for their continued dedicated efforts at making this another solid quarter, and to all of our shareholders for their continued support.

That concludes our prepared comments, and at this point, we would be glad to try to answer any questions that you may have.

(OPERATOR INSTRUCTIONS). Michelle Appelbaum (ph), Michelle Appelbaum Research.

I wanted to ask you if you could talk a little bit about some of the trends in the steel processing business, in terms of some of the migration of manufacturing automotive to the Southeast. Can you talk about how you expect that to grow and how that is going to impact your business in the future?

Michelle, when you say the Southeast, do you mean the Southeastern United States?

Yes. I'm sorry.

Okay. There's been a lot of talk about China of late; that's why I needed to qualify that.

I know.

One of the things that we've focused on for quite a while is the fact that, while the number of cars being produced in this country has held fairly consistent, who is making them may be changing. And because of that recognition, we have moved aggressively to increase our sales to the so-called transplants and to the parts suppliers of the transplants. And on that score, I can say that we have been making very solid progress. Our intent is to make sure that, regardless of who is building the cars in this country, that our steel is going into them. And we see that as a trend that's continuing. But it's a focus of ours, and we don't see see it as having any detrimental impact on our business going forward.

Yvonne Varano, CIBC.

You had some pretty impressive numbers in your growth in the big box stores. I was wondering if you could give us a little more color on the steps you are taking there to increase your penetration?

I'll start with that one, Yvonne. When we brought Henning on two years ago, one of the main factors in his resume that attracted us to him was his experience through The Stanley Works in selling to companies like Home Depot. While the products that he sells are in some ways similar, the main qualification that he brought was his knowledge of the distribution chains and the way to approach selling those companies. And once onboard, he immediately began to, if you will, brand all of our Building Products under the Gibraltar banner, and take presentations out to all of the major chains, the big box stores, and to many of the other customers, and show them the total capability that Gibraltar has. This had been part of our plan all long, but Henning accelerated that. And as you saw from the numbers that Walt talked about earlier, we are now starting to get traction in this area. And our sales, because of this branding, the fact that we can take more products to these customers and the fact that we can do it on a national basis, is allowing us to get significant traction. Also, when you look at our business -- in past conference calls, you have heard me say that many of the Building Products operations that we have today, or those that we have acquired, have not been operating on a three-shift, seven-day-a-week basis. Quite the opposite, they have been operating on a one- to two-shift basis with some overtime, providing us with substantial additional manufacturing capability inherent within those operations, requiring only limited amounts of capital to be invested there to exercise that additional productive capacity. The trick was going out and opening the doors to sell the product. We are now starting to make good progress in that area.

Is most of this growth coming from selling additional Gibraltar products to the same stores that you were already in?

That's a good analysis. What we brought were smaller regional players with a limited product line who are basically selling and distributing, other than our mailbox products, on a regional basis. Our efforts have been to take all of our products to all of our customers on a national basis. And that's the direction we are headed in.

Joe Kennison (ph), Kennedy Capital Management.

Congratulations on a nice quarter. A question for you on the Heat Treating business. Understanding that there was some moving parts with the plant closing and one opening, could you give us a sense of what the capacity utilization rate in that business was through the quarter?

Capacity utilization was probably in the area of 75 percent. Lots of upside.

Tim Aquino (ph), McDonald Investments.

I'm not sure if you guys are aware of it today, but Steeltech posted better-than-expected results. And one of the main factors that they attributed to their performance was market-share gains at their Ottawa, Ohio facility. And regarding the business that you received from the closure of this facility a while back, I'm wondering if you could give us a sense of if you forfeited any marketshare back to Steeltech and, if so, how much?

We haven't lost anything to Steeltech.

Lloyd O’Carroll, BB&T Capital Markets.

Two questions, one pure numbers -- the SG&A, as a percent of sales in the quarter -- is that a reasonable level, going forward? And then, I will give a chance to answer the China question, which is where I thought Michelle was heading, and what portion of your customer base may have left the U.S. for China or may be heading to China, and how do you see that big picture playing out?

This is Walter Erazmus. On your first question, on SG&A expense, based on the level of sales, in terms of the percentage amount, we are probably going to be fairly consistent with the SG&A costs. But as I said, in terms of any fluctuations in our sales volume, since we do quite a bit in terms of incentive compensation based on the profitability, that will determine the swings in SG&A costs, even though sales may be up but profits may be down. So that will also have an important effect on our SG&A costs going forward.

Regarding the second part of the question, where we have seen customers picking up and leaving this country to go to China has primarily impacted the Heat Treating area of the business, and that's for companies that manufacture very small but high numbers of fastener type products that then require heat treating. That has been a part of the business that we have been de-emphasizing, because it's a volume-oriented, lower-margin area of activity for us. Overall, when I look at China and the potential impact on our business, I start by thinking about automotive, and I actually had a discussion with a senior executive in purchasing for one of the major parts manufacturers in this country. And I asked him that question, and the response that I got was that things like engines and things like transmissions and drive chains, for a number of reasons, are always going to be made very close to where the vehicles are assembled. The reasons for that are, of course, that they don't ship well, number one; and, number two, they are such an integral part to the assembly of the car that scheduling the arrival of those products is a critical element to manufacturing those cars. The reason I point out those two particular parts, those are where a substantial amount of all of the cold-rolled strip steel that we manufacture ends up going. So long-term, while this is something we're going to be watching very carefully, and we think our best defense in this case is to make sure that we are the low-cost, highest-quality producer of the steel that we make that goes into these various components, we're going to keep a close eye on it, and make sure that we don't see any trends developing that would alter that equation. And at present, we don't.

One of the other areas in terms of our heat treat operations -- we have seen quite a bit of the heat treaters in Chicago affected by the move to China, with heat treating and fasteners, and those type of parts, as Brian mentioned. These shipped ends (ph) basically are giving us future opportunities, because the other businesses -- or the other business that they have in the heat treat area has to go somewhere, and it gives us additional opportunities to grow our business in that area.

(OPERATOR INSTRUCTIONS). And it would seem that we have no further questions at this time, Mr. Houseknecht.

One quick comment. I just wanted to follow up on a comment that one of the callers made in asking his question. And I just wanted to say, while we did not exceed expectations this quarter, we met the ultimate high side of our expectations and, more importantly, we had an all-time record quarter.

Again, thanks to everyone for joining us this afternoon, and for your continuing interest in Gibraltar. And we look forward to talking with you again in three months, and updating you on our continued progress. Thanks.

Ladies and gentlemen, this concludes your conference call for today. You may now disconnect.