Rollins Inc (ROL) 2012 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by, welcome to the Rollins, Inc. second-quarter 2012 earnings conference call. During today's presentation all participants will be in a listen only mode. Following the presentation the conference will be opened for your questions. (Operator Instructions).

Today's conference is being recorded July 25, 2012. I would now like to turn the conference over to Marilynn Meek. Please go ahead.

Thank you. By now you should have all received a copy of the press release. However, if anyone is missing a copy, and would like to receive one, please contact our office at 212-827-3746 and we will send you our release and make sure you are on the Company's distribution list.

There will be a replay of the call which will begin one-hour after the call and runs for one week. The replay can be accessed by dialing 1-800-406-7325 with the passcode 455-1562. Additionally, the call is being webcast at www.viavid.com, and a replay will be available for 90 days.

On the line with me today are Gary Rollins, President and Chief Executive Officer, and Harry Cynkus, Senior Vice President, Chief Financial Officer and Treasurer. Management will make some opening remarks, and then we will open up the line for your question. Gary, would you like to begin?

Yes, thank you, Marilyn, and good morning. We appreciate all of you joining us for our second-quarter 2012 conference call. Harry will read our forward-looking statement and disclaimer and then we will begin.

Our earnings release discusses our business outlook and contains certain forward-looking statements. These particular forward-looking statements and all other statements that have been made on this call, excluding historical fact, are subject to a number of risks and uncertainties, and actual risks may differ materially from any statement we make today.

Please refer to today's press release and our SEC filing, including the Risk Factors section of our Form 10-K for the year ended December 31, 2011, for more information and the risk factors that could cause actual results to differ.

Thank you, Harry. I am pleased to report that following a very strong first quarter we posted solid performance in our second quarter. Revenue for the quarter rose 4.5% to $334.9 million, and net income rose 6.5% to $33.1 million.

Taking a closer look at our business, commercial pest control rose 3.2%; residential rose 7.8%; and termite was up 1.2% in this quarter.

As you may recall, due to the unseasonably warm weather in the first quarter we experienced early swarm activity this year, with our termite revenue increasing a very strong 10.5% than over the prior year. Overall we were pleased with our results for the quarter and the first-half of the year.

Our bedbug business also continues to grow. Companywide total bedbug service was up over 40% from the prior year. Commercial was up over 20% for the quarter, which represents approximately two-thirds of our overall bedbug growth.

However, residential revenues have been increasing significantly in recent quarters. For the quarter residential grew over 90%. Clearly bedbugs continue to be an expanding pest problem, and frankly we don't see anything at this time that would deter the increasing bedbug infestation.

Summer is also the season when other bothersome and potentially dangerous pests threaten our family and pets, which include mosquitoes, fleas and ticks. At the beginning of May Orkin reported inquiries concerning fleas and ticks at more than double nationally compared to the same time last year.

Further demand for our mosquito service remains strong having increased over 20% over the same quarter last year. At the same time Lyme ticks and Lyme disease continue to be an ongoing problem, particularly in the Northeast. You may recall that last year the Centers for Disease Control, CDC, asked Orkin to be the exclusive pest control provider for its Lyme and tick-borne disease prevention study.

At the time worked with the CDC and state health departments in providing one-time tick treatments to more than 1,500 participants in specific areas of New York, Connecticut and Maryland. The 2011 disease analysis is being wrapped up and the CDC expects to release their finding later this year.

In February this year the CDC again reached out to Orkin asking us to provide tick treatments for a second year to more than 1,000 properties. By the way, we are compensated for these treatments.

Their study is designed to evaluate the relationship between preventative tick control and incidents of diagnosed Lyme disease. Results from the earlier study show that preventative tick treatments do decrease tick populations.

As we have mentioned in the past, collaboration with organizations like the CDC, and leading universities such as the University of Kentucky, known for their bedbug research, keep us in the forefront, while maintaining a high level of knowledge concerning these two important and highly publicized insect pests.

Over the past year we have talked from time to time about our emphasis on continuous improvement of our commercial and residential customer service, and the initiatives we have put into place to achieve this objective. We are pleased with our progress in this regard, and we firmly believe that in business you are either going forward or backwards; there can be no comfort with the status quo.

This commitment to excellent service can be validated in part by lengthy customer relationships. Let me share a couple of examples of customers that illustrate the quality and dependability of our service delivery and our pledge to achieve long-term customer relationships.

Long before any of us were born, over 100 years ago, Bass Brothers General Merchandise had been an Orkin customer. Our relationship with this store located in Nashville, North Carolina, began in 1910. The store was actually established five years earlier but either because Mr. Bass didn't need pest control service, or more likely, because Orkin service was not available in Nashville at the time, we didn't come on board until later.

Now three generations afterwards Bass family members are still running the business and our association with them is still going strong. This same emphasis on customer retention and excellent customer service and lasting affiliations holds true for our residential pest business as well.

Let's go back to 1957. That was the year when Dwight Eisenhower was President. The average price of a home was $2,300. Gasoline was $0.24 a gallon, and McDonald's had fewer than 40 restaurants. That same year 55 years ago -- 5.5 decades, [Reese Greif] of Rockwood, Tennessee chose Orkin Pest Control to protect his family's home, and has been a customer ever since.

Needless to say, over the years these two customers have seen more than one service technician. However, Mr. Greif insists that our service has always met his expectation. He summed it up best when asked why he kept doing business with Orkin all these years. He said -- it is simple, no bugs. I have had bugs from time to time, but you always take care of them.

These are the type of customers and relationships that we strive for every day. In April we combined our technical services and training departments into one group led by Greg Baumann, a 25-year pest control expert and leader. The combination of these two units will enable us to better provide more coordinated and improved support services to all of our brands.

One of the reasons that we've been able to provide best-in-class service to our customers is the investments that we make in training. One of these investments to enhance our training and delivery capabilities is our movement from satellite-based training distribution system to a Web-based system. Today all of our brands, using either a desktop or laptop computer, can receive our sales, service and administrative training via the Web.

Additionally, our domestic and international franchises will be able to receive and participate in our training and broadcast as well. By the way, this is the first opportunity in this regard for our foreign franchisees.

Speaking of international franchises, we added three franchises in the second quarter. In April we established a franchise in Mexico City, one of the largest cities in the world. Orkin Mexico City will offer both residential and commercial pest control, however, focusing mainly on hotels, office buildings, food processing facilities, restaurants, hospitals and apartments.

In May we established an international franchise in Hainan Island in the People's Republic of China, our second franchise in China. Hainan Island is recognized for its tropical rainforest and beautiful beaches, making it a very popular holiday destination. Orkin Hainan Island will offer commercial pest control focusing mainly on the vast hospitality sector located there.

Also in May we expanded our presence in the Caribbean with the establishment of a franchise in Turks/Caicos, which will offer commercial pest control, also focusing mainly on the hospitality sector located there as well.

We are pleased with what we have accomplished in the first-half of this year, but we aren't slowing down. We will continue to serve and listen to our customers and take care of their pest needs, while protecting their health and property.

Likewise, we will continue to train and listen to our employees to ensure we provide them a great place to work and provide the support needed to excel in their jobs.

With that said, I will turn the call over to Harry who provide detailed information on our financial performance. Harry.

Thank you, Gary. Good morning and thank you for joining us on the call. The second quarter each year has long been considered our most important with the arrival of spring. But as you all know, this year in most of the US spring sprung sooner. Say that fast three times.

The good news was that we added pest control customers early in the year, enabling us to benefit due to the recurring nature of this revenue. A strength of our Company is its strong recurring revenue. Almost 80% of our revenue each month that is scheduled for service when we open the doors on the first day of the month.

At the same time, our termite business also came early with a tremendous influx of business in the first quarter. As anticipated, very little carried over to the second quarter. Termites live and are working year-round, but those highly visible reproductive swarmers, or flying termites, help drive the demand for the service when sighted by homeowners in their living rooms.

That certainly will get the customer's heart pumping and our phones ringing off the hook. Unfortunately, this is a relatively short period and once the swarm is over, it is over. And you then have to creatively find and sell the service.

Fortunately, the customers we added early, as I described in residential and commercial, only helped to build our recurring revenue for the second quarter. And as Gary has already noted, termite was up 1.2% in the second quarter after experiencing 10.5% growth in the first quarter. So you can see it was only the growth in the termite that was pulled forward, and year-to-date termite is up 5.2%.

For the second quarter total revenues for the Company were $334.9 million, representing 4.5% growth. Net income increased 6.7% to $33.1 million compared to $31.1 million. And diluted earnings per share increased 9.5% to $0.23 per diluted share from $0.21 second-quarter last year.

For the first six months of 2012 revenues increased 5.4% to $624.3 million compared to $592 million last year. Net income for the first six months of 2011 was -- actually 2012, was $56.2 million or $0.38 per diluted share compared to the $49.7 million or $0.34. This represents an 11.8% year-to-date increase of diluted earnings per share.

The fundamentals that drive our business remain strong. Leads for residential and commercial were up nicely in the quarter, but were off slightly in termite. We aren't seeing any significant changes in consumer sentiment as it relates to pest control. Closure remains solid with improved price realization.

Pest control retention continues to improve. Our occasional invaders, bedbugs and mosquitoes, are invading more frequently and continue to contribute to our positive momentum.

Last quarter we conducted testing, as we regularly do, in preparation for our annual price increase program, and the results showed little change in elasticity. As a result, Orkin implemented its traditional annual price increase program for eligible customers based on very selective criteria in the month of June.

Overall, the revenue realization should be similar in scope as last year's price increase. Its fluctuation in the second quarter this year versus last year is marginal. HomeTeam's price increase program will go into effect in the third quarter beginning July 1.

Gross margin for the quarter improved 20 basis points to 50.4% for the second quarter as a result of the Company experiencing more favorable claim development costs with regard to casualty in termite, which were partially offset by higher medical plan costs. The cost of gasoline moderated, but still averaged $0.06 per gallon more this year then prior-year quarter.

Depreciation and amortization expense for the quarter increased $300,000, totaling $9.6 million, remaining unchanged at 2.9% of revenue. Depreciation was $3.8 million and amortization of intangibles was $5.8 million.

Capital expenditures year-to-date totaled $7.4 million, of which our ServiceSuite branch operating CRM project represents a little more than one-third of that.

While I'm on the topic, I will give you a quick update on the project. We now have eight branches up and running on the software. The software is working for the residential portion of the business, and we are well into development for the commercial side. You may recall we have the largest commercial pest control company in North America and this software needs to be robust to meet the needs of these customers. We haven't planned for and do not plan to rollout any more branches over the summer because of our seasonal demand, plus we have plenty program tweaking remaining.

Sales, general and administrative expenses for the quarter decreased to 31.7% of revenues. The decrease in margin percent is due to reductions in professional services and improvement in bad debt expense.

Our provision for income taxes was 37.7% versus 37.3% a year ago. We dream endlessly of the day Congress agrees to rewrite the tax code that would lower corporate rates and further stimulate business investment in the economy.

As I've mentioned before, it is not the service companies in America that aren't paying Uncle Sam their fair share of taxes, that is for sure.

We continue to operate from a solid foundation. We have confidence in our fundamentals. The Company is forming well; the balance sheet is strong. As always, our first priority for our outstanding cash generation capabilities remains investing in what we know best, pest control and only pest control.

But at the same time we recognize our responsibility to our shareholders. Last evening we announced as part of the Company's active management of equity capital, our Board of Directors authorized the purchases of up to 5 million additional shares of the Company's common stock. The Company plans to repurchase shares at times and prices considered appropriate by the Company.

The share repurchase program is in addition to the Company's existing plan, of which 298,183 shares remained available for repurchases as of July 24.

With the year half over we are pleased, just never satisfied, but are well-positioned for a great 2012 and look forward to talking to you next quarter.

Let me express our continued appreciation to all the Rollins associates whose hard work is behind our outstanding results. We likewise are most appreciative of our customers, which makes us successful.

Thank you for your time and interest. And with that I will turn the call now back over to Gary.

Thank you, Harry. We are now ready to open the call for any questions that you might have.

(Operator Instructions). Joe Box, KeyBanc Capital Markets.

A question for you on the margin. If you were to go back over the last 10 years or so, it looks like you have typically picked up about 380 basis points of operating margin expansion in 2Q from 1Q levels, but whereas this year the margins only sequentially increased by about 340 basis points. Is that delta a function of just better volume in 1Q or were there any step-up costs in 2Q, like the CRM system, that would have dampened some of that sequential margin improvement?

Good question, and I think it is just more variability than anything really specific. And if you go and look at how we have improved margins over 10 years, it is not always the same items. We didn't see the productivity improvements that sometimes we see this quarter. And with the large influx of leads and new business coming from the residential, it is kind of hard to -- you want to get all those new customers started. That is certainly probably -- it is probably the biggest variable, but beyond that I don't have anything specific.

I think I could add to that. There is just a lot of moving parts in our business. I think margin improvement often is more art than science. The influx of termite business typically contributes to the margin because it is profitably quick, whereas pest control, it takes a couple of quarters to cover your initial cost when you start and your commission that you pay. So that affects the margin.

I think the positive thing that I can say is if you look historically, Orkin has had much better margins, and it would be in our intent to continue to work towards getting to those levels again.

I think ServiceSuite when functioning Companywide has the ability to do that because of the productivity and mileage improvement opportunities that exist with it. I think that is the real payoff of that, but we are a long ways from having that implemented throughout the Company.

Sure, sure. That is helpful. Maybe just a follow-up to that then. As we were thinking about incremental operating margins, those margins where elevated over the last couple of quarters, but this quarter it moderated to a more normal range in the mid-20%. How should we be looking at incremental margins going forward? Are we potentially looking at below trend due to some of the required spending or are we thinking a normalized type of flow-through?

Well, philosophically we are not expecting any margin cliffage. And Harry kind of turns pale when I say that. But you know, we -- as I mentioned there is just a lot of areas where there is increasing our pricing, getting a half account more a day from our pest control technicians. There are just a lot of levers that you can pull, and we really believe that we can continue to move our margins -- improve our margins as we go forward.

Okay. Can you talk a little bit more about overall retention rates in the quarter, and maybe specifically how the retention rates panned out for some of the newer customers that you signed up in 1Q?

Yes, the retentions and pest control, commercial, we saw improvement over prior quarter, over prior year. I don't have immediate information on what happened to our customers we have signed up in Q1. We do know our gross contact revenue grew from Q1 to Q2, so we feel pretty strongly that the customers that we added in Q1 are here in Q2.

That we continue to work with our Net Promoter Score. We are working to build that into the culture. We think -- and we have definitely seen it helping us on our retention. I believe it was mid-quarter, so it would have been May, we had one of our -- it was the best year performance to index on retention that we have ever had.

So things are working the right direction. We are focused on continuously improving customer satisfaction. And it is a good opportunity for us to grow the business by retaining the customers that we have.

I love the examples of our 100-year-old commercial customer and 57-year-old residential customer, and we hope to be continuing to add stories like that.

I think our survey programs are really the most powerful tool that we have had in a long time as far as improving retention. And we really learned that from HomeTeam, who, again surveying their customers, I think as long as 10 years ago, and then we saw the data that just showed how it had moved retention.

And one of the things it does is it really gives a branch a report card that they can look at and see how they are comparing to their peers and how they compared to the same previous survey that was done at the same time of the year. And you just get a lot more believability.

Sometimes it is hard to get your point across that you're not really doing as good a job as you think you're doing. But when the customer tells you that, you can't deny it. So I think that is -- we have been able to break through the clutter, so to speak, and really have a good tool to motivate our branches to improve the service that they bring.

Great, that is helpful. The last question and then I will turn it over. I think last quarter you talked about double-digit lead increases. Now that we are looking at a more normalized weather type of environment, can you just talk to lead generation this quarter, and maybe just segregate between the residential and commercial businesses?

Both residential and commercial had double-digit lead increases. They weren't as big double-digit, but they were both over 10% increases in leads.

Great, thank you guys.

Clint Fendley, Davenport & Company.

I wondered -- it is good news on the development there with the software program and getting eight branches up and running. I'm wondering would 2013 be too early to begin thinking about some of the leverage that we might be able to get from further implementation of the software through additional branches?

I would think so. Certainly those branches as they mature certainly will be improving their margins, et cetera. But at that time when you look at 400 locations, we are not going to have a large number of branches converted at that time. So I think that when it is all done, when it's all said and done, and you have got branches that have been on it for 18 months and 12 months and six months, and at that point you will see some -- I believe that you will see movement in productivity and movement improvement in fleet expense, fuel, number of vehicles, et cetera.

We had some -- as we talked about, the software is working real well on the residential side of the business. We do have commercial branches up and operating with the software. We have identified opportunities for improvement before we want to rollout further. We definitely see need to improve response time and have some greater functionality there.

So to really know how much leverage we will have in 2013 I think we have to have the game plan for how many branches we will be rolling out in 2013.

And the maturity of those --.

And the maturity of those branches. The big question is the -- how much development we get done over the next couple of months, over the summer, and whether we will be ready to start staging an aggressive rollout or not. So we should be able to answer that question fuller some three months from now when we see how well our programmers have done.

Do you have a rough plan now for how many branches you would like to deploy the system?

No.

Okay.

To just add to what Harry said, the reason you have a pilot is that you want to make sure that you really get the warts removed, so to speak, and have it running smoothly. I have been through several of these during my career, and the worst thing you want to do is step on the gas when you don't have an A plus system. And we're far from having an A plus system at this stage.

Okay, fair enough. I wondered with -- also with shifting gears a bit, with a little bit of broader uncertainty in the economy, how -- any update on how the pricing may be -- increases may be sticking at this point, or any views as to that?

We tested in the -- over the winter months, similar as we have done for each of the past four, five years. We really didn't see significant differences, so we rolled out our full-price increase program June 1 throughout Orkin, July 1 from HomeTeam.

The dollars that were -- customers say the increase the first time June 1, so we won't know until later here in July and August as to the sticking rate, whether we have to rollback prices or not.

We don't suspect, and we are not thinking at this time that it is going to be any different than in prior years, based on the testing that was done, so we think it is pretty much like it has been.

I think it might be helpful -- you know, we've been doing this for years. And I guess we brought Boston Consulting in -- what is that -- it has been three years ago? Just to make sure that we were using the most sophisticated testing that you could do.

And there was some refinements that we make. But we test the Sun Belt branches -- Florida, Southern Louisiana, South Texas -- it have really continued to have mild weather. So when we do this we are pretty much replicating the season, if you will. And we really didn't see a noticeable difference as far as retention is concerned. We just take different levels, we look at 6%, 4%, 0%, and 0% is our control.

And so we really don't feel like we are rolling the dice by any stretch of the imagination. Our people really consider -- our customers consider our service important. And keep in mind, we're not talking about hundreds of dollars per account. Typically you're talking about $4 or $5. So one of the advantages that we have when you go to raise the prices is you're just not going after a tremendously large amount of money as far as the individual residential customers.

Got it. Thank you guys. I appreciate the color there.

Jamie Clement, Sidoti & Company.

I was wondering if -- I wanted to ask a bedbug question, but not directly related to bedbugs. There are so many news stories out there that -- and have been for two years now -- how much do you think that just the paranoia about bedbugs is actually helping the rest of your business?

Well, I think bedbugs give you a wonderful opportunity to sell your regular home pest control service. Quite often when we are out there looking for bedbugs we find spiders in the basement or we find mouse droppings or whatever -- I mean, you get in the home. So you have a wonderful opportunity to take a bedbug call, if you will, and turn it into a regular annual pest control contract.

So there is no doubt that we are getting the benefit of that. And really as we continue to work with these universities and these manufacturers -- and I think we had mentioned earlier that we are experimenting with DNA testing to identify bed bug infestations with Auburn University. So there is the potential of having ongoing inspections.

If the homeowner doesn't really change their lifestyle -- and I'm talking about residential now -- if one or more of the members of the household have a job that requires travel and staying in hotels and motels throughout the country or --.

And particularly in the state of Ohio.

(laughter) Exactly. (multiple speakers).

Sorry.

But New York, I mean, New York is kind of scary -- the city. And many of the major -- certainly the northern major cities, like Chicago and Kansas City and so forth.

So there is a very likelihood that if you have a bedbug infestation, certainly from a residential point of view that you could have one again.

From a commercial point of view, if you are in a hotel, literally we could eliminate the bedbugs in the month of August, and a guest brings bedbugs into the hotel in September. So I think that there is a lot of opportunities as far as looking at ongoing inspection service, both residential and commercially. And the fact that we will no doubt sell other services to the residential customer once we establish that first relationship.

Okay, that is very helpful. And then the final question. It seems like over the last 5 to 10 years you all have experimented with different ways of marketing outdoor summer pest control services. Where does that stand now? And can you -- can you give me a little bit of a history lesson in terms of how you used to market, for example, mosquito services and how you're doing it now? And it seems like over the last couple of years you have done a better job of it.

I think we have reached out to our existing -- we do a better job today reaching out to our existing customers and making sure that they are aware of the fact that we do do mosquito service. I think that has been a big improvement. Not just the pest control customers, but reaching out to all of our customers -- our termite customers as well.

I think another thing is we continued to go out each year. It is so much like lawn care in that we continue to provide the service until the customers says -- I don't want any more service.

And the wonderful thing about mosquitoes is our service there is it really works. So I think, like anything else, we have gotten a little smarter as far as doing it. We are doing more direct mail as far as mosquitoe service is concerned. So I think just like any service line that has matured somewhat, we have just gotten a little smarter in the way we reach out to potential customers.

Okay. Thank you all very much for your time as always.

(Operator Instructions). Eric Hollowaty, Stephens Incorporated.

Harry, could you just quickly remind or quantify for us, how much incremental operating expenses you expect this year for the branch operating system implementation?

We have hired our first group of field trainers, and we brought them on the end of last quarter. That is going to add several hundred thousand dollars in the third quarter. We probably won't add any more trainers until later or late in the third quarter, once we get a good feel for the rollout for the fourth quarter.

So the total incremental cost that we will see in the P&L probably before the year is out, I would say would be less than $0.005. It won't be a significant drag this year.

Great, that is very helpful. And any sense you can give us for how HomeTeam has been performing of late, and maybe any commentary on the near-term outlook there?

Yes, HomeTeam has been a very good acquisition for us. We always wish we could control the timing and buy it at the bottom of the housing market, but then we missed by a year or two. But HomeTeam is growing. They had in excess of 6% revenue growth in the quarter. The number of -- what is really encouraging with HomeTeam is their new system installs. I believe their installs year-to-date this year are up nearly just over 30% over last year.

And that is a positive, because those installs will represent new customers -- pest control customers next year. The downside of the rapidly increasing installs is it puts pressure on their margins in the short term. We do lose money on the installs. But putting in a system -- and the cost of putting that system in for HomeTeam is really -- we look at it as customer acquisition cost.

So as long as we are getting good cooperation with the homebuilder, that we know who they are selling their homes to, and we're getting good penetration and activation of those systems, we are happy to take that short-term loss for that long-term customer.

The HomeTeam is performing well. The news you're reading about the home sales and home starts picking up and people being optimistic, we are definitely seeing it in a lot of HomeTeam's markets.

That is great. And just to refresh my memory, those customers -- those installs typically convert at around 70% or so?

Correct.

Well, great. And then just one final -- I'm sorry, Gary, did you have something to add?

It is kind of like planting a garden. You've got to plant it to harvest it. And if you really want to improve your margins in that business, don't grow it, which as Harry said, is certainly not the desired strategy. But once you get those recurring -- that recurring revenue stream built, then it goes to finance the installs -- the new installs that you're doing.

So this lull that we have had where we really didn't have the garden planted all that well, we're just having to overcome that by getting our installs up.

Right. It makes sense. And just one final one. I think it was Gary, in your remarks you talked about the bedbug business. And I just want to make sure we got the numbers correct. I think you said that the business during the quarter as a whole was up around 40%, and two-thirds of it was from commercial, which was up 20%.

That is right.

And the other one-third was residential, which was up 90%?

Yes, the other piece of it is residential, which is 90%.

Right.

So although the growth rate percentagewise is far greater, just the base is far smaller. But this is the first time that we've really seen a jump like this as far as residential is concerned.

First quarter.

Yes, so to us that is an encouraging situation. And as you would expect, if you are staying in these hotels and motels that are infested --

You bring them home with you.

You just bring them home.

Right.

And I think the press has done a good job as to educating the public as to what to look for, and the fact that the situation is out there. And we really -- we are encouraged by that. It is a smaller number than commercial, but the fact that we saw that kind of jump so far this year has been very encouraging.

We did nearly $11 million in bedbug business, of which $4 million is residential.

Great, you preempted my next question. That is great. Thank you very much. I will jump back in the queue.

(Operator Instructions). And I am showing no further questions in the queue at this time. I would like to turn the conference back to management for any closing remarks.

Okay, as always, we appreciate your interest in our Company, and we look forward to visiting with you again next quarter.

Ladies and gentlemen, this does conclude our conference for today. If you'd like to listen to a replay of today's conference, please dial 1-800-406-7325 or 303-590-3030 and enter the access code of 455-1562 followed by the pound sign. Thank you for your participation. You may now disconnect.