宣偉 (SHW) 2005 Q1 法說會逐字稿

Welcome to the Sherwin-Williams Company's first-quarter 2005 earnings results conference call. Today's call is being recorded. At this time for opening remarks I would like to turn the call over to Conway Ivy, Senior Vice President, Corporate Planning and Development. After his remarks, Chris Connor, Chairman and Chief Executive Officer; Sean Hennessy, Chief Financial Officer; (technical difficulty) John Alt, Vice President and Corporate Controller; and Bob Wells, Vice President Corporate Planning and Communications will be available for questions.

Gentlemen, you may begin your conference.

Thank you, Megan. Good morning everyone. Thank you for joining us today for our review of the first-quarter 2005 results and our expectations for the second quarter and full year. As this conference call is being webcast simultaneously in listen-only mode by V-call via the Internet at www.Sherwin.com, an archived replay of this webcast will be available approximately two hours after this conference call concludes. It can be accessed at www.Sherwin.com and will be available until Monday, May 2, 2005, at 5 PM Eastern time.

Before proceeding, I would like to remind you that during this conference call we will make certain forward looking statements as defined under the U.S. Federal Securities laws with respect to sales, earnings and other matters. Any forward-looking statements speaks only as of the date on which (technical difficulty) and undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. A full declaration regarding forward-looking statements is provided in our earnings release transmitted earlier this morning.

After the review of the first-quarter results, we will open this session to questions. In order to allow more time for questions, we have provided balance sheet items and other statistical data on our website at Sherwin.com under Investor Relations first-quarter press release.

Going now to our results, I will summarize our overall Company performance for the first quarter of 2005 versus first quarter 2004.

Consolidated net sales increased 16.6% to $1.54 billion. These sales results include the revenues of four acquisitions completed at various times since the first quarter of 2004. Combined, the acquisitions accounted for $120.9 million, or 9.2% of the consolidated net sales increase in the quarter.

(technical difficulty) at 7.4% reflects primarily the continued strength in architectural paint sales and improved sales of industrial maintenance coatings and product finishes by our Paint Stores Segment.

Consolidated gross profit increased to 89.1 million for the quarter. Gross margin decreased to 42.9% of sales from 43.3% of sales for the first quarter last year. This was due primarily to increased raw material costs that were partially offset by a price increase (technical difficulty) and better factory utilization.

Selling, general and administrative expenses decreased to 35.2% of sales in the first quarter this year from 36.7% last year due to the increase in sales and tight expense control. Interest expense for the quarter increased by $2.6 million to $12 million as a result of short-term borrowings primarily to fund acquisitions.

Consolidated net income increased (technical difficulty) $31.8 million or 61.8% to 83.3 million from 51.5 million in the first quarter of 2004. Net income as a percent of sales improved to 5.4% in the first quarter this year, from 3.9% last year. This was primarily due to improved operations and a reduction in our effective income tax rate for the quarter.

Due to the timing of certain tax rulings, our effective tax rate for the first quarter of 2005 was 22.4% compared to 35% for the first quarter of 2004. For the full year of 2005, we expect our effective tax rate to be in the low 30% range, compared to 32% for the full year (technical difficulty) 2004.

Diluted net income for common share for the quarter increased 65.7% to $0.58 per share, compared with $0.35 in the first quarter of 2004.

I will now review our performance by segment. Sales for our Paint Store Segment in the first quarter 2005 increased 22.9% to $987.6 million. The acquisition of Duron, Incorporated increased sales for the segment 10.9% in the quarter.

Comparable store sales, sales by stores opened more than 12 calendar month grew 10.3%. Sales growth for our stores was driven primarily (technical difficulty) architectural paint sales to contractors and do-it-yourself customers and stronger industrial maintenance and product finishes sales compared to the first quarter of last year.

Regionally in the first-quarter of 2005, our Southeastern division led the sales performance followed by Southwestern division, Midwestern division and Eastern division.

Operating profit for the store segment increased 49% to 78.2 million in the first quarter of 2005. Operating margin increased to 7.9 (technical difficulty) to 6.5%. Higher raw material costs were offset by strong sales volume, tight expense control and higher selling prices.

The Paint Stores group ended the quarter (technical difficulty) stores in operation compared to 2691 stores at the end of the first quarter last year.

Turning now to the Consumer Segment for the first quarter of 2005, sales increased 3.3% to $327.8 million. Acquisitions completed since the first quarter of 2004 accounted for a net sales increase of 9.4% for the segment during the quarter. This increase was partially offset by sales declines due to the elimination of a paint program by one customer, and inventory adjustments prompted by sluggish sales at some of our larger retail accounts.

Operating profit for the Consumer Segment increased 3.7% in the quarter to $51 million from 49.2 million last year. The acquisitions added $7.3 million to the segment's operating profit for the quarter. Tight spending control and favorable manufacturing absorption related to the (technical difficulty) raw material cost increases.

In our Automotive Finishes Segment in the first quarter, sales in U.S. dollars increased 8% to $129 (technical difficulty) million. The impact of favorable currency exchange rates increased net sales by 1.3% in the quarter, while the acquisition of an automotive coatings company in China completed since the first quarter of 2004 added 3%.

Sales for the quarter were also favorably impacted by price increases implemented since the first quarter of last year. Operating profit for this segment increased 25.2% to $15 million for the quarter. Operating margin improved to 11.5% of sales from 9.9% last year. This improvement was mostly attributable to increased sales and expense control.

Turning now to our International Coatings Segment in the first quarter, net sales in U.S. dollars grew 19.7% to $91.4 million. Sales and local currencies increased 13.8% and the effects of favorable currency exchange added (technical difficulty) 6% to the segment sales for the quarter. The strong sales increase in local currency is due primarily to higher sales volume in South America compared to first quarter last year and also to selling price increases.

Operating profit for the quarter in U.S. dollars declined to $4 million from 4.7 million in the first quarter of 2004. This was due primarily to significant raw material cost increases that were partially offset by price increases, favorable currency exchange rates and a volume driven manufacturing efficiencies.

I would now like to comment briefly on some of our balance sheet items. Our working capital ratio, which is defined as accounts receivable plus inventories less payables to sales, came in at 15.7% versus 12.8% for the first quarter of 2004.

Our total debt on March 31st, 2005, was $996.6 million, this including total short-term borrowings of $498.1 million, most of which was used to finance recent acquisitions.

Total borrowings to capitalization was 38.5% at the end of the quarter, versus 26.1% at the end of the first quarter of 2004. Long-term debt (technical difficulty) was 23.8% at the end of the first quarter this year, compared to 26.1% last year. We expect our total debt to capitalization ratio will be approximately 25% at the end of 2005.

In the first quarter of 2005, the Company purchased 2.7 million shares of its common stock in the open market. At March 31st, 2005, the Company had authorization to purchase approximately 7.7 million shares of its common stock. We expect to continue from time to time our opportunistic purchases of Company stock for treasury (technical difficulty) continue to believe our stock is a good value.

In the first quarter of 2005 we spent $30.3 million on capital expenditures. (technical difficulty) expense was 29.6 million and amortization expense was $6.1 million. For the full year of 2005, our capital expenditures will be approximately $150 million. The predominate share of the incremental increase in capital expenditures over last year will go toward expanding our manufacturing capacity including the construction of a new emulsion plant in the western United States.

In addition, the increase in capital expenditures reflects the completion of the rollout of the automated color matching equipment in our stores, additional point-of-sale devices and investment in other systems.

Depreciation from the 2005 year will be around $120 million. Amortization will be 23 million.

I would like to now give you a brief update on the status of our lead litigation. In Mississippi, a suit brought by an adult painter has been scheduled for trial in June of 2005. This case will be heard in Federal Court. Since our last conference call, 15 adult painter plaintiffs in other suits have filed dismissal notices in various courts in Mississippi in cases filed against Sherwin-Williams. All other cases in Mississippi are in various stages of discovery and motion practice.

Turning now to Wisconsin, the appellate court in Wisconsin overturned the Circuit Court's dismissal of a public nuisance action brought by the City of Milwaukee against the Mautz Paint Company in NL Industries. Sherwin-Williams acquired the assets of Mautz in 2001. The court determined that there were materially disputed facts in the case that should be heard by a jury. The defendants have requested that the Wisconsin Supreme Court review the ruling of the Appellate Court.

In January of 2005, in an Illinois Appeals Court, unanimously upheld the Circuit Court dismissal of the City of Chicago's public nuisance lawsuit against former manufacturers of lead pigment. The city has asked the Illinois Supreme Court to review the railing of the Appellate Court. This review can be denied.

In Rhode Island, the retrial of the state's case against former lead pigment manufacturers is scheduled to commence on September 7th, 2005. Plaintiff appeals of trial court dismissals in the government case in New Jersey and a personal injury case in Wisconsin have been heard by the higher courts and we anticipate decisions could be rendered during the first half of 2005.

In California, the plaintiff's appeal of a lower court dismissal are still pending. As a reminder to date, we've had less than 100 lead litigation cases filed since 1987. Excluding the most recent cases, over 85% have been dismissed, none have ever been settled and only one -- that is Rhode Island -- has ever come to trial.

This completes my review of our results for the first quarter of 2005. I would like to now turn the session over to Chris Connor, who will make some general comments and highlight our expectations for the second quarter and full year. We will then open the call to questions. Chris?

Thanks, Conway. Good morning everybody and thanks for joining us. It probably goes without saying that we are pleased with our performance in the first quarter. Our consolidated net sales increase of 16.6% and earnings per share increase of 65 (technical difficulty)% on top of similar increases in the first quarter last year I might point out further demonstrates the underlying strength and sustainability of our business and our business model.

In our press release, we attributed a portion of our earnings improvement for the quarter to improve operating performance, a portion to acquisitions, and a portion to our lower effective tax rate. I think it is noteworthy that our results in each of these areas exceeded the expectations reflected in the guidance for the quarter.

I'd like to acknowledge the hard work and dedication of the entire Sherwin-Williams team in delivering these strong results in what remains a very difficult market environment.

Our sales, marketing and customer service teams achieved strong sales growth with compelling products and merchandising programs while simultaneously working to implement price increases necessary to offset the spiraling raw material costs (technical difficulty) our stores, consumer and automotive segments made significant progress in integrating recently acquired businesses with minimal disruption to their operations. And our entire Company stayed focused on managing expenses.

Last quarter we commented that we expected year-over-year raw material costs for the industry would be up in the range of 10 to 15% in 2005 with the most difficult comparisons coming in the first half. With the first quarter now behind us, we believe that this outlook is right on target. These higher raw material costs were only partially offset by higher selling prices during the quarter due to the timing of (technical difficulty) implement these announced price increases in the market. At the same time, we will remain diligent in our efforts to mitigate raw material cost increases to every extent possible through manufacturing efficiencies, higher fixed cost absorption, and tight expense control.

Earlier Conway reported that our working capital as a percent of sales defined as accounts receivable plus inventories, less payables of sales increased to 15.7% in the quarter, up from 12. (technical difficulty) 8% in the first (technical difficulty) due to a combination of the factors including the incremental working capital requirements of the acquisitions we completed over the past year; a buildup of inventory to support our aggressive sales plan for the year; and the impact of some raw material cost increases on inventory valuation.

Despite these (technical difficulty) working capital management is a fundamental discipline of this Company and we are on track to finish the year with our working capital ratio below last year's performance.

During the quarter we made meaningful progress in integrating the two important acquisitions we completed last September. For example, as of April 1st, Duron is up and running in Sherwin-Williams business management systems. This includes store point-of-sale systems, order management, manufacturing management and logistics. This relatively quick transition should enable us to begin realizing synergies from the acquisition primarily in the area of working capital management.

The primary focus of the paint sundries brand integration team is to continue to deliver the highest products and maintain high service levels of their existing customer base. During the first quarter, we also completed the rollout of an assortment of Purdy brand paintbrushes and rollers to all Sherwin-Williams Paint Stores. This important move will increase the exposure and market penetration of the Purdy brand and should drive market share gains by this brand for years to come.

Finally on Wednesday April 27th, our Company will celebrate a significant milestone with the dedication and grand opening of our 3000th store. We are proud of this accomplishment and believe that our long-term commitment toward organic growth through new store openings is an important key to our past and future success. I think (technical difficulty) segment for the first quarter clearly illustrates the power of this controlled distribution model.

During the quarter, we added seven net new stores, none by acquisition. This rate of new store openings will accelerate during the year and we are on track to open in the range of 80 to 99 net new stores for calendar year 2005.

I'll conclude my remarks this morning by reiterating our outlook for the second quarter and full-year 2005. We expect the second-quarter sales growth in the low to mid teens over the second quarter of 2004. With sales at that level, we'd expect diluted net income per common share to be in the range of $0.99 to $1.04 per share compared to $0.87 per share for the second quarter of last year.

Our original guidance for the full year 2005 was for sales growth in the low double-digits over last year, and diluted net income per common share in the range of $3.00 to $3.10 per share. We now expect sales to increase in the low to mid teens over 2004. Based on this revised sales range, we have raised our expectations for diluted net income per common share for the year to a range of $3.10 to $3.20 per share (technical difficulty) $2.72 per share last year.

Again, thanks for joining us, and now we would be happy to take your questions.

(OPERATOR INSTRUCTIONS) Ivy Zelman of Credit Suisse First Boston.

Actually it's Dennis McGill for Ivy. I'm wondering if you could review your recent price increases -- kind of how they are trending as far as realizing the increases in the channel? And also if you could break out in the quarter on a same-store side fee price versus volume growth?

I'll take the first part of your question, Dennis. Our pricing action has varied by segments but in terms of a recap, we announced two general price increases in 2004; one early and the year and one at the beginning of the fourth quarter. (technical difficulty) These announced increases range from (technical difficulty) 6%. On February 1st of 2005, we announced another increase across all segments ranging from 4 to 6.5%. I think in terms of the stores price and volume -- I think we --. Go ahead Sean.

For competitive reasons we do not comment on volume price action results price by segments. For the Company as a whole, our sales grew 16.6% in the quarter. We estimate that the volume increase in the low double-digits for the quarter. Less than 0.5 of percentage point of our sales increases resulted from (technical difficulty) essentially priced. That is for the whole company, not just for stores.

I think you talked about on previous calls how the announced price increases have been going. How much you have been able to realize if you looked at the looked at the February 1st one for us -- you are -- (multiple speakers).

I think we hit that for the Company. We have somewhere between 40 to 60% of the impact of the pricing in right now.

Of the 4 -- or the 4 to 6.5%?

40 to 60% of it. (technical difficulty) announced, we've been able to achieve in the marketplace.

That would really be looking at all those that I recapped. We still have more work to do as obviously you could see from our gross margins in the quarter.

I'm going to jump in for a second. If you look at your weakness at retail -- we're talking about the inventory that you had to have adjustments for -- do you think a lot of that was due to weather? And can you give us an update on how current demand is at retail for April?

I think, Ivy, we've read a number of retailers that have commented on the weather in the quarter. To your point, we have seen that pretty much universally across the board.

I think yes, as we mentioned, one of the largest impacts on that was the elimination of the paint program that also was sluggish sales and inventory corrections.

And has it improved since the end of the quarter?

I think it is just running -- we only have a couple of weeks here in April. It's probably running about the same in the Consumer Segment.

All right. Dennis, I don't know you have more questions?

Just one more if I could? You talked a lot about the cost controls that you use to offset some of the raw material pressures. Can you give us an idea of what type of costs you are kind reining in and give us an idea maybe going forward if you've done a lot of the tightening? If there is more that you could tighten if material costs go against you further? A little bit more further on how you look at that.

Well, I think in general that if you take a look at some of the productivity enhancements that we have continued to try to invest in our systems, and systems in our stores -- our DFCs (ph) and our plants, they work pretty well. We continue -- we've talked about Six Sigma on this phone call and at the financial community presentation in the past, but I think if you take a look at the investments we've made over the last few years, we are really starting to see some nice improvement. And we are making sure that we continue to follow those investments and that with productivity, (indiscernible) per employee and so forth -- we're following those. And making sure that we are taking those to the bottom line.

If you look at some corporate expenses dollars that you can control -- if you do see the need to cut further -- do you think you have a little bit more room to go?

(multiple speakers) Always more room to go.

Thanks.

Thank you, Dennis. Thanks, Ivy.

Eric Bosshard of Midwest Research.

You beat nicely on revenues for the quarter and you've guided as you have for the year. Can you give us a sense of what area and what is driving that? Is that better market demand? Is it better market share performance? Can you give us a little bit of insight into that?

Sure. I think both of those are playing a factor there (ph), Eric. We believe that given our store's environment, the market (technical difficulty) product and we believe we are gaining share.

Is there an end market? Is it more industrial that is doing better; is it more residential that is doing better? Can you give us a (indiscernible) on that?

All segments have performed very strongly in the quarter. We are seeing nice gains across all of them.

Can you tell if it is share more than your market share performance -- the market performance?

Well, you know share information always lags a little bit on that but we don't know that right off the bat. But we do know from some competitive releases that we are doing a little bit better in gaining some share.

Secondly, in terms of acquisition integration and the contribution we've seen to this point, can you just talk a little bit about what successes, what momentum you are having and if we should expect to see that continue or expect to see it an acceleration (technical difficulty) with the acquisition?

The acquisitions are pretty much right on target. We mentioned the contribution to earnings in the quarter were slightly ahead of our expectations -- maybe by a penny or two. We've been very pleased with the integration activity, the retention of customers and employees is a key measurement of that for us and all those things are tracking nicely for us.

Eric, I think it would indicate in terms of the -- our expectations for the year -- we are included in that are our expectations for acquisitions. And so that would reflect any improvement that we may be seeing.

And then the last question, within the upside on the acquisitions, is that being driven by perhaps upside on sales or are you getting better on sales than you thought or better on cost than you thought?

Certainly on the sales side is the significant contribution of the improvement.

Perfect. Great, thank you very much.

Chuck Cerankosky of Key McDonald.

First question is probably for Sean. Looking at your goals, getting to a debt to total capital ratio of about 25% -- you are still on a repurchased stack (ph) and you've got about 500 million of short-term debt. Sean, can you talk about those variables and what we might see happening on the balance sheet as you get toward that year-end market capital?

I think what you are going to see is a couple of things. Number one is, we've got some very nice goals and I think we are going to hit the working capital goal. And you take a look at the goal that we have, we do have a forecast on how many shares we're going to buy and depending on the -- how the stock price will perform throughout the year. But when you take a look at it, right now I'd say that we did buy 2.7 million in the first quarter. I don't see -- I don't think (technical difficulty) each and every quarter. I think that will slow down. And I think that we will start paying down the debt as the third and fourth quarter comes in.

One other thing, the reason why that debt in the first quarter also reflects the -- our seasonal buildup in working capital which is traditional and that would probably be that incremental amount seasonally is probably around 175 million. That's part of the reason why that short-term debt is higher in the first quarter than it obviously was in the fourth quarter.

That is great. Now looking at the tax rate, Sean, you've got some -- a number of factors in there. Could you perhaps break out the first quarter tax rate elements that are due to past year settlements, the legislation that took (technical difficulty) last year on top of whatever is the underlying base rate?

When you take a look at the effective tax rate for the first quarter, it was 22.4% versus 35% in the first quarter of 2004. The tax -- the reduction in tax rate was due to a number of several factors including the impact of the settlement, some on a federal and state audit issues, and tax benefits related to the foreign operations. I will tell you that when you take a look at the -- you look at discreet versus nondiscreet items, which discrete items you have to take in the current quarter.

I will tell you that on the ongoing effective tax rate we believe we are going to be right around 32%; 31 to 32% in the second, third and fourth quarter. So therefore I would tell you that when you talk about the foreign operations and so forth, the other long-term tax planning, that is what the tax rates -- back to your question -- what is standard tax rate going to be for the remainder of the year. The difference between that 31 to 32% and the 22.4% was really discrete items; the federal and state audit issues that were completed in the first quarter of 2005.

And Chuck, normally in the past those items would be (multiple speakers) blended over the year. And now under Sarbanes-Oxley they have to be reflected in the quarter in which they occur.

Yes. I think what Conway was mentioning there is that discreet versus nondiscreet (technical difficulty) you look at, the items that caused our one quarter to go down to 22.4%, those are definitely discrete items (technical difficulty) they probably impact if you watched us as well as other companies, there was a little more definition about what was discreet and nondiscreet and the nondiscreet would have been over the whole fourth quarter, not just the first quarter. I think that is a very good point that in prior years it was just probably had it considered nondiscreet and taken straight across the four quarters.

Okay, so if we could maybe say that a different way, if we would remove the discreet items in the first quarter, we might have seen a tax rate of around 31 to 32%?

Yes, we would have.

Okay. Any way to gauge next year's tax rate? Are we going to see it operate at the 31 to 32% rate going forward or is it going to be different from that?

I can tell you right now, we believe that next year we will be in the low 30s. We will definitely be in the low the '30s, Chuck.

Sean, you made some comment about the price the impacts -- the impacted price increases and the quarter -- I sort of missed that -- you were answering somebody else's question. But while you respond to that, could you sort of compare your realized price increases in the Paint Stores Segment relative to the Consumer Segment?

Chuck, just so you know, what we basically said is for competitive reasons, we really don't want to discuss price volume mix by segment. But what we said is that if you look at the Company as a whole, our sales grew 16.6% in the quarter, and that we estimate the volume increase in the low double digits for the quarter. And really the balance is essentially price for the Company as a whole.

Thank you.

Michael Morrisroe of Bear Stearns.

Just given the disconnect between consumer and same-stores and the outperformance that you alluded to earlier, could you just talk a little bit more about the dynamics behind that? Is it more (technical difficulty) same-store as the ones that were using contractors, just your thoughts on that? And do you expect this significant outperformance trend to continue?

Michael, the Paint Stores Segment, as you know, touches a lot of different coatings customer bases. And I think in earlier questions we had commented that all of those segments, commercial, architectural, residential, repaint, industrial, are all strong performance and I think that a lot with an improved DIY performance in our Store Segment will continue to drive the performance over the rest of the year. And that is the guidance that we have given.

On the Consumer side, we commented frequently about the loss of one significant customer and some sluggishness there. We expect that we will continue to work hard in getting compelling programs to shelf and help our retailing partners improve their performance.

I might add, as you know, in terms of our sales in the Consumer Segment where we are selling through other retailers, if there is a sluggish month in the market, maybe due to weather or that causes inventory corrections. And whereas in terms of our control distribution, we can control the inventory through the entire supply chain. There is a smoothing effect there.

That's fair enough. I guess I was under the impression that specifically architectural seemed like in the first quarter (technical difficulty) and --.

Yes. That's correct.

And on the same-store side, you guys seem to have some -- experienced very strong demand.

That's correct. For all of those reasons that we just talked about. Same-store was in addition helped by industrial maintenance and our chemical coatings product finishes.

Looking at same-store sales going forward, you guys have some tough comps and you are obviously doing very well there. Can you talk about what is (indiscernible) for this point going forward?

We've not given guidance on comp store sales growth at all.

Do you expect it to remain relatively elevated -- is that fair?

We expect it to remain strong but to your point, we are coming up against some pretty strong comparisons.

Thanks, guys.

Larry Horan of Parker/Hunter.

Sir, your line is live. Duffy Fischer of Goldman Sachs.

Good morning. Two questions. One, and this is just kind of general U.S. industry -- but if I'm a contractor and I walk into anybody's paint store today, how much more am I paying for paint than I was a year ago? And the same question on just a do-it-yourselfer and I'm walking into a big box -- not your numbers, but just general industry numbers, how much of each of those kind of moved up year-over-year in pricing?

Duffy, that is really hard to define to speak of that on an industry basis because of the different -- we believe almost all paint manufacturers have moved to increased pricing because everybody's faced with the same raw material cost. But the timing of those price increases has gone in at different times and so in terms of really coming up with an overall industry weighted average of what the cost to be either the contractor or the DIY-er has occurred is very difficult.

That is also -- that type of data is also exacerbated by a lot of the retail -- our retail customers and other paint manufacturers' retail customers, they also will follow different strategies for increasing prices to their final users. That is a tough number to come up with.

I guess my point -- I don't need an exact number but you guys are just much, much closer to it than I am. So your opinion or just gut feel about where we are would be very helpful as I kind of look at the model.

What we have commented about ourselves is that since January 1 of 2004, the Company through our stores has announced three price increases, each one has been in the range plus or minus of around 4 to 5%. And we commented that we've gotten 40 to 60% of that pricing effective in the marketplace. The math will tell you that that is about 15 points of price increase and we've gotten about half of that in pricing. The industry may be close to that.

Fair enough. Thank you.

Gentlemen, there are no further questions in the queue at this time. Do you have any closing comments?

Yes. As you all know, Bob Wells and I will be available to take your individual phone calls. I would also like to remind everyone that we will have here in Cleveland, our annual financial community presentation on May 3rd. And if for any reason any of you all have not received an invitation and/or information on that, if you would call my office and we would be pleased to supply you the details for our conference on May 3rd. And again if anybody has any follow-up questions, Bob Wells and I will be available to answer your questions.

Thank you all very much for joining us today.

Thank you, ladies and gentlemen, for your participation in today's teleconference. You may disconnect your lines at this time and have a wonderful day.