StoneX Group Inc (SNEX) 2011 Q4 法說會逐字稿

Good day ladies and gentlemen. Welcome to the INTL FCStone Fourth Quarter Fiscal 2011 Earnings Conference Call. Today's call is being recorded. (Operator Instructions). At this time, I would like to turn the call over to Mr. Bill Dunaway, CFO. Please go ahead, sir.

Good morning. My name is Bill Dunaway, CFO of INTL FCStone. Welcome to our earnings conference call for the fourth quarter of fiscal 2011, ended September 30, 2011.

After the market closed yesterday, we issued a press release reporting our earnings for the fiscal fourth quarter. The press release is available on our website at www.INTLFCStone.com, as well as the slide presentation which we will refer to on this call in our discussions of both the quarterly and year-to-date results.

This slide presentation is available by clicking on the Investor Relations link on the website and then going into an Events and Presentation page. You will need to sign onto the live webcast in order to view the presentation. Both the presentation and an archive of the webcast will also be available on our website after the call's conclusion.

Before getting underway, I would like to cover a couple of housekeeping items. On these conference calls and in Management's Discussion portion of our SEC filings, we present financial information on a non-GAAP basis in order to take into account marked-to-market adjustments in our commodities business. As discussed on previous conference calls and in our filings, the requirements of accounting principles generally accepted in the United States -- which I will refer to as GAAP -- to carry derivatives of fair market value, but physical commodities inventory at the lower of cost or market value may have a significant temporary impact on our reported earnings.

Under GAAP, gains and losses on commodities inventory and derivatives which the Company intends to be offsetting are often recognized in different periods. Additionally, in certain circumstances, GAAP does not require us to reflect changes in estimated values of forward commitments to purchase and sell commodities. For this reason, we believe that the GAAP numbers do not reflect the commercial results of our commodities business and therefore the Company as a whole.

Instead, we assess all of our businesses, as do our banks, on a fully marked-to-market basis in our daily and monthly internal financial reporting. We also calculate commodities trader bonuses on the basis of fully marked-to-market results, not the GAAP results.

Readers of our Form 10-K filings should look at Item 6 in our Selective Summary Financial Information for a summary of both GAAP and non-GAAP information. This section also gives the reconciliation between GAAP and non-GAAP information required by the SEC.

Please note that whenever we talk about an adjusted number on this call, we're talking about a non-GAAP number. Secondly, we're required to advise you and all participants should note that the following discussion should be taken in conjunction with the most recent financial statements and notes thereto, as well as the Form 10-K to be filed with the SEC.

This discussion may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. These forward-looking statements involve known and unknown risks and uncertainties which are detailed in our filings with the SEC. Although the Company believes that its forward-looking statements are based upon reasonable assumptions regarding its business and future market conditions, there can be no assurances that the Company's actual results will not differ materially from any results expressed or implied by the Company's forward-looking statements.

The Company undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Readers are cautioned that any forward-looking statements are not guarantees of future performance. With that, I will now turn the call over to Sean O'Connor, the Company's CEO.

Thanks, Bill, and good morning everyone. In our view, the adjusted net income of $4.7 million for the fourth quarter was slightly below our expectations. Although this result is 27% higher than a year ago, it was down 49% from the immediately prior Q3.

Operating revenues were up 35% from a year ago, despite generally less favorable market conditions earlier in the year. While our performance is not what we would like it to be, they once again stand in market positive contrast to the weak results reported this quarter by the financial industry in general.

Our full-year fiscal adjusted non-GAAP earnings from continuing operations were a record $31.9 million, up 106% from the prior year. Adjusted EPS was $1.72 per share and represented an ROE of 11.5%, below our target of 15%. Adjusted operating revenues were up 51%.

GAAP fiscal earnings from continuing operations were a record $37.3 million, higher by some $5 million in our marked-to-market earnings as some of the timing differences between GAAP and marked-to-market reversed.

Excluding one-off and exceptional items, which are disclosed in our filings, our fiscal year ROE is slightly over 15% and perhaps gives a better indication of the true underlying operating performance of the Company. These exceptional and one-off items include non-cash accounting charges for changes in acquisition-related contingency payments, one-off legal expenses related to acquisitions and exceptional bad debt, related largely to the hangover of the 2008 liquidity prices which have now worked their way through the system.

Bill will take us through the earnings in more detail in just a moment. We'll be using our financial dashboard which highlights the key components of our results, and is color-coded to indicate where we're achieving our objectives and where we are not. This dashboard found on our website under the investor relations section, and will be referred to by Bill later on. As is probably obvious, the green highlights indicate a result or trend that is above our internal target, red is below and yellow is acceptable but trending negatively.

The recent collapse of MF Global, one of the larger players in the FCM space, represents both a challenge and an opportunity for us. And many of the longer-term impacts of this are still to be realized. On the positive side, we are one of the FCMs chosen by the CME to take bulk transfers of customers from MF. We were selected -- selective, ensuring that our risk standards would not be compromised and acquired close to 2500 new accounts, which will have an immediate and positive impact on our revenues.

In addition, we've seen a dramatic increase in inbound customer calls especially from midsize commercial customers that used to deal with MF. These commercial customers are our sweet spot.

In a more general sense, we see that a significant amount of FCM capacity has been withdrawn from the system with the MF collapse, combined with a much more defensive stance by some of the European competitors due to the financial crisis over there. This has created a significant opportunity for well-capitalized and profitable firms such as ours to make inroads in expanding our customer footprint.

In addition, pricing of the available remaining capacity is likely to change, allowing the FCMs to make better margins generally. We welcome this, as it has been our view that the industry has generally mispriced the risk and resources provided to the FCM customers.

The biggest news on this front occurred after our fiscal year-end when we were fortunate to acquire the MF Metals team. This business was generally regarded as the jewel in the MF crown, and has constantly been known as one of the top London Metals Exchange or LME franchises. More importantly, this teams shares our philosophy and belief in providing high touch, value-added, strategic hedging services to mainly midsize commercial customers.

We're excited to welcome the team to INTL FCStone and believe that they will reestablish themselves in short order as one of the leading franchises in the industry. The addition of the FM Metals team has allowed our London office to reach critical mass, with over 120 people and a growing reach into Europe where we now have important beachheads in Italy, Germany and Spain through exclusive introducing broker relationships.

On the negative side, the MF debacle was a black eye for the industry, and many customers have had their faith in regulation and their belief in the sanctity of segregated funds destroyed. The full facts surrounding the demise of MF are still to be made public and the final results for the MF customers are still unknown.

However, this has weakened customer confidence and the long-term impact on custom activity and our revenues is unknown at this point. It is likely that there will be response from the regulators in due course, and the impact of this is also uncertain. Hopefully sensible changes from the regulators might assist in restoring customer confidence, while an overreach by regulators could potentially have a negative impact on our earnings.

At this stage it's probably worthwhile to make some comments on how we manage customer deposits -- the so-called segregated customer funds that have been the topic of so much discussion recently.

We are glad to see that the CFTC has implemented some changes to the permitted investments for seg funds, and has now eliminated repos with affiliates and investments of these seg funds in foreign and sovereign assets. We take a very conservative approach to our seg funds and invest almost exclusively in short-term T-bills and appropriately rated money market funds. These assets are of the highest quality and are also the most liquid.

While the seg funds rules have generally permitted investments into longer dated treasury, sovereign debt, less liquid agencies and also repos with affiliates, we have refrained from doing this. We take our responsibility as custodians of our customer assets seriously.

Outside of the MF related events in the fourth quarter, we announced the acquisition of the Coffee Network, which we intend to use as a platform for most of our commodity verticals to provide a leading news and research capability.

Dealing now with fiscal 2011 as a whole, this represented the first full year for the Hanley, Hencorp and Provident acquisitions. Looking back at these acquisitions, I believe we made enormous progress in integrating these new capabilities into our growing business and they had a material and positive impact on our results in 2011.

Hanley was able to quickly leverage its unique and cutting-edge OTC and structured product capability throughout our broker and sales network. This is always easy in theory, but a lot harder in practice to achieve. The results have significantly exceeded our initial expectations at the time of the transaction.

Not only are the revenues for the first year higher than anticipated by a wide margin, but we have been able to expand our relationships with customers and internalize margins that have previously been lost to external product providers. While Hanley had a fantastic year, we still see the potential for medium and long-term growth and expansion as we take this capability into new verticals and new geographies.

Hencorp brought us a key expertise in coffee and other softs, a deep and diverse customer base and a focus on the broader Latin American market. The Hencorp team has also significantly exceeded revenue expectations and has been instrumental in leveraging all of our capabilities into their customers.

During the year, Provident provided an investment banking and corporate finance capability and have managed to successfully leveraged our customer base, and now have a very full pipeline of active mandates. Although the corporate finance advisory business has long lead times, we are now starting to see some success and fees coming through.

Despite the growth in revenues and increased customer activity, we remain very liquid. On a marked-to-market basis we now have long-term equity capital of just over $300 million, with total bank facilities at quarter-end of $375 million, of which $75 million was [broad]. And we also held unrestricted cash of $221 million.

I will now hand over to Bill Dunaway for a more detailed discussion of the financial results.

Thank you, Sean. Let me remind everyone, as I said at the outset of the call, that the fully marked-to-market numbers are not in accordance with GAAP. The difference between the GAAP and fully marked-to-market numbers arise in our Commodities and Risk Management Services segment. In all of our other business segments, GAAP results and marked-to-market results are the same.

I would like to start my discussion with a review of the quarterly results and will refer to the third page of the slide presentation entitled Quarterly Financial Dashboard. This slide lays out the quarterly operating results as well as related balance sheet information in comparison to the prior-year period, as well as in some cases the internal target which Management has for our operating results.

Adjusted operating revenues were $103.5 million for the current period, up 35% from the $76.7 million in the fourth quarter of 2010. Every segment of the Company experienced growth in adjusted operating revenues in the fourth quarter as compared to the prior-year period. Operating revenues for the fourth quarter include a marked-to-market loss of $600,000 on interest rate swaps entered in to manage a portion of our aggregate interest-rate position, as discussed on previous earnings calls.

At September 30, 2011, we had $1.1 billion in notional LIBOR-based interest rate swaps outstanding. The objective of these interest rate swaps is to invest the bulk of our customer segregated funds in high-quality, short-term investments and swap the resulting variable interest earnings into a more stable medium-term interest stream at the Holding Company level. From a cash flow standpoint, ignoring the marked-to-market effect of these swaps which may result in volatility in earnings, they had the effect of increasing our pretax income by $1.4 million for the fourth quarter.

Adjusted operating revenues in our core commodity and risk management services segment increased 44% from the prior-year period to $58.9 million in the fourth quarter of 2011. Exchange traded volumes were 740,000 contracts, which was a 38% decrease over the prior-year period, which had been a record quarter for exchange traded volumes. Fourth-quarter volumes decreased 17% as compared to the third quarter of fiscal 2011.

Over the counter or OTC volumes increased 105% over the prior-year period. OTC revenues increased over the year-ago period driven by continued soft commodity volatility and worldwide demand for agricultural commodities. In addition, the acquisition of the Hanley companies in the fourth quarter of 2010 has led to an increased offering of structured OTC products for our commercial customers which, combined with strong demand from Brazilian customers for structured products, has contributed to a significant increase in operating revenues in the fourth quarter of 2011.

Average investable client balances increased 50% in this segment over the prior-year period to $900 million, driven primarily by increased margin requirements.

Adjusted operating revenues in our Precious Metals product line increased 44% to $4.6 million in the fourth quarter as compared to the prior-year period as a result of an increase in the number of the ounces trading.

Base metals adjusted operating revenues decreased from $900,000 in the fourth quarter 2010 to $600,000 in the current period.

In our Foreign Exchange segment, operating revenues in the fourth quarter totaled $17.5 million, representing a 50% increase over the prior-year period of $11.7 million. The volumes of trades in the Company's Global Payments business increased as the Company experienced continued growth in the number of financial institutions utilizing the Company's treasury services.

In the current quarter, the proprietary foreign exchange arbitrage desk, as well as both of our customer speculative and hedging businesses, experienced significant increases over the prior-year period, driven by volatility in global foreign exchange rates.

Operating revenues in the Securities segment increased by 18% from $6.2 million in the fourth quarter of 2010 to $7.3 million in the fourth quarter of 2011. Within this segment, operating revenues in our Equity Market-Making Business increased 14% to $4.8 million as compared to the prior-year, driven by 156% increase in volumes traded from increased levels of activity in the global equity markets.

Revenues in our Debt Capital Markets business increased to $2.5 million in the fourth quarter of 2011 as compared to $2 million in the prior-year period, primarily driven by the acquisition of Provident Group at the beginning of the current fiscal year.

In our Clearing and Execution Services segment operating, revenues were $14.8 million for the fourth quarter of 2011 as compared to $14.3 million in the prior-year period. This increase in operating revenue was driven by a 5% increase in exchange traded volumes over the prior-year period. The prior-year quarter was affected by a $600,000 loss related to open commodity positions acquired from an under margin customer.

Interest income, which is a key component of this segment, continued to be constrained by the effect of historically low short-term interest rates, decreasing 33% to $600,000 in the fourth quarter of 2011 on flat average client investable balances of $900 million.

The Other segment, which contains both our asset management and commodity origination and financing product lines, increased 143% to $5.1 million driven primarily by an increase in committed credit facilities available to the Company to finance customer inventory, as well as the expansion of our fiscal origination business, into the feed ingredient industry.

Overall, operating revenues continue to be constrained by historically low short-term interest rates. However, interest income increased 14% to $2.5 million for the fourth quarter as a result of increased activity in our commodity financing product line, as well as a 17% increase in overall average customer assets on deposit to $1.7 billion.

Moving onto the expense side of things, noninterest expense were $92.9 million, up 36% over the fourth quarter of 2010 primarily as a result of the increase in variable compensation associated with the increase in adjusted operating revenue, as well as the four acquisitions made during the calendar year 2010, the acquisitions in the current year of Hencorp Futures and Ambrian Commodities, and the geographic expansion in South America, Europe and Asia which has led to a 22% increase in fixed costs in the fourth quarter of 2011 to $38.8 million as compared to the prior-year period.

During the fourth quarter of 2011, noninterest expenses included bad debt expense of $500,000, which is down from the $3.5 million recorded in the prior-year period. The prior-year period included a $2.5 million bad debt expense related to a commercial customer to whom we had consigned gold.

Internally, the Company targets the key variable expenses as a percentage of total expenses in excess of 50%. During the current period, the majority of the noninterest expenses were variable with 58% of the total noninterest expenses being variable in nature as compared to 53% in the prior-year period.

As discussed earlier the acquisitions made during the last 18 months, as well as geographic expansions in South America, Europe and Asia, have led to an increase in fixed costs in the current period primarily in the areas of fixed compensation, communication and data services as well as occupancy and equipment rental. In addition, in the fourth quarter of 2011 the Company recorded $900,000 of expense related to revaluation of contingent payments due related to acquisitions made in the last 18 months. In addition, professional fees increased over the prior year by $1.8 million, primarily related to increased legal expenses.

The Company targets to keep total compensation expense as a percentage of operating revenues at less than 40%. However, with the acquisition of the Provident Group, which is just beginning to ramp up as well as other growth initiatives, total compensation related to expenses represents 45.4% of total adjusted operating revenues in the current period, above our internal target.

The average number of employees increased to 901 for the fourth quarter of 2011 as compared to 696 in the prior-year period.

Adjusted net income from continuing operations for the fourth quarter was $4.7 million, representing a 27% increase over the $3.7 million in the prior-year quarter. Looking at the trailing 12 months, adjusted net income and adjusted EBITDA increased 106% and 90% respectively over the prior-year period. The Company looks to achieve a minimum return on equity of 15% or greater on its adjusted shareholders equity. The return on equity for the fourth quarter was 6.2%.

The increase in investable customer funds of 17% discussed earlier in the segment discussion drove the increase in total assets on the balance sheet of 30% to over $2.6 billion, while adjusted stockholders' equity closed the period at $301.7 million, a 20% increase over the prior year.

Another key metric the Company focuses on is keeping a one-to-one ratio between revenue-generating employees and administrative or operating revenue -- operating employees. Along these lines, the Company targets to have at least $500,000 in annualized revenues along the entire employee base. For this current period, this metric increased by 4% to $460,000 per employee. However, we're still slightly below the Company's target.

Finally, in closing out the review of the quarterly results, the trailing 12 months results has led to an increase of 13% in the book value per share, closing out the quarter at $16.17 per share.

Moving onto the next slide of the presentation, I will speak briefly on the year-to-date results for the fiscal year. Adjusted operating revenues increased 51% over the prior-year period to $404.8 million. All of the Company's operating revenue segments realized growth in revenues over the prior-year period, with the Commodity and Risk Management segment and Securities segments growing at 80% and 47% respectively.

As with the quarterly results, the total noninterest expense has increased 46% to $352.4 million, primarily as a result of both the acquisitions made during the last 18 months and geographic expansion.

Variable costs represent 57% of total expenses, keeping in line with the Company's goal of having a primarily variable expense model. Total compensation expense as a percentage of adjusted operating revenues was slightly over the Company's target at 42.6%.

The adjusted net income from continuing operations for the 12 months ended September 30, 2011 was $31.9 million, a 106% increase over the prior-year comparable period. For the year-to-date period, the Company achieved 11.5% return on adjusted stockholders' equity, below our target of 15%.

Through the 12 months of the fiscal year, the annualized revenue per employee increased 18% to $500,000, which is the Company's stated goal, while the average number of employees increased to 829 for the full fiscal year.

With that, I would like to turn it back to Sean to wrap up.

Thanks, Bill. We believe that our current performance continues to stand in stark contrast to the industry in general, which seems to be struggling to adapt their business model to a new reality of low interest rates, reduced leverage and less speculative activity in general. The markets have become a lot more difficult for most financial players as serious financial pressures mount in Europe.

It is increasingly difficult to forecast or predict how these changes in the overall financial markets will play out or even how they will affect our business. The environment remains challenging for the industry, us included. The impact of the MF demise on our customers' confidence in our revenues is unclear at this point, and in addition we face a changing regulatory environment which will have some effect on our financial results.

Our short and medium term results could be affected by all or any of these external factors. That said, we believe that our business model and strategy is sound, profitable and growing fast. We have an unwavering commitment to provide a value-added, comprehensive financial intermediation or facilitation service to our customers.

Commercial entities globally have a growing need that is driven by structural changes to improve their bottom line by managing price volatility. We are uniquely placed to satisfy this need and have the capabilities, the product suites and the international footprint to capitalize on it. Our strategy is sound and our course is clear.

We have a profitable Company and thus do not feel pressured to do anything different or to take any imprudent risks to make money. We do not take speculative or directional views on the market. We provide execution and facilitation for our customers.

We are modestly leveraged, and have total bank borrowings that are more or less equal to our permanent equity. During the last fiscal year I believe that we have validated the strategy and highlighted the long-term earnings potential of the Company.

We're on the early stages of an integration process which, combined with an aggressive custom expansion initiative, should provide a medium and long-term revenue growth as well as margin expansion, which in turn should provide attractive earnings growth. Having assembled all the key components, the management team has a simple plan to achieve the medium and long-term potential we see inherent in our business.

First, expand the customer footprint and relationships. There are huge markets and customers available to us, but our value-added model takes time and requires patience. Two, leverage all of our capabilities into every customer relationship. Make each relationship more valuable to us and hopefully represent a deeper and more valuable relationship with the customer.

Three, internalize and maximize margins on all of our products. We have successfully proved the power of internalizing margin on structured products with Hanley, but see lots of opportunities to do things smarter and retain more of what our customers pay to us. And four, watch fixed costs and overhead.

With that, I would like to turn it back to the operator to open the question and answer session. Do we have any questions, operator?

(Operator Instructions) Graeme Rein, Bares Capital.

I was hoping you could talk a little bit more about the MF Global Metals team acquisition. Was that -- did you just bring that team on? Was there a purchase price? Who else was bidding for it? Can you just kind of talk in a little bit more detail about that?

Okay, well, it was a pretty quick process, and the circumstances were not exactly easy or transparent. So, I believe that there were other people talking to the liquidator about trying to secure the team. I'm not sure who they are.

I think the team, at the end of the day, had some sway over that decision. I mean, without them being agreeable to join someone, I mean there's really nothing anyone could do, right? So I think it was a fantastic match with our business model and our philosophy.

And we've always believed that with the MF team, because we know a lot of the folks there. In fact, some of them used to work with me. So, I think it was a good match and I think that sort of drove the deal at the end of the day.

There was a very nominal price paid, really to secure a transfer of the key documentation we needed to give us a jumpstart on rebuilding the business. They have an enormous client base. There is lots of customer documentation that is required, and transfer of that documentation allowed us to make a much quicker start on the business and probably saved us six months of work. So, for that, there was a nominal consideration paid.

I would like to make it clear, though, that the MF accounts that the customers had were either frozen, liquidated or moved out. And so, while we have the customer documentation, we have the relationships, we have the key people, we really have to reestablish those relationships with the customers from scratch. We did not buy a book of business and we did not buy the business as a [growing concern].

So it is essentially a rebuild, but I think we're fairly confident that that rebuild will happen because we have, A, the customer documentation in place, which gives us a quick start. We have all the people in place. They have come over as a coherent team. Those are all the positives.

Okay. And how does that impact the Ambrian Commodities transaction you did earlier in the year?

Well, the Ambrian transaction -- well, if you sort of go back maybe a year ago, we identified as a key strategic opportunity the fact that we needed an LME capability. We just didn't have one. We had a lot of metals customers who we deal with on the physical side.

We're very active in Comex. We're probably one of the top three, top five clearers on metals on Comex, so clearly a missing part of our franchise. So we decided we were just going to apply for a license.

During that process we came across Ambrian, which was really closing their business down. That allowed us to kind of fast-track a license, and we acquired with that a small business and a small team. That was a fantastic deal for us. We were growing that business, and then along comes MF Global.

Now, we could not have executed the MF Global business if we didn't have the Ambrian platform. Because we were already members of the LME, we had a base level of systems in place and we had some people in place and processes in place. So that really allowed us to layer on MF.

Now, we have combined those two into one team, one business. And I think we've taken maybe a ten-year jump or a five-year jump in terms of how long it would've taken us to build that business organically.

Okay. And what does the ring one -- the Category One ring dealer status get you in terms of the services you provide your customers?

Well, there are only 12 ring dealers on the LME. These are the guys who actually sit on the LME. Everyone else ultimately has to deal through them at some level.

It is kind of the inner market, if I can describe it that way. It's a little bit like being a prime dealer in the treasury market. So, that of itself is interesting.

It is money-making of itself. I mean, the ring dealing part of their business is very profitable. They have a very well-known team. They were always regarded as sort of the one of the top three ring dealing members.

And I think to a lot of people, particularly in places like China and elsewhere, the fact that you are a ring dealer in the center of the market, sort of the inside market, I think confers upon you some status and credibility. But it is a profitable entity in its own right, the ring dealing team.

Okay, great. And then the last question, can you talk a little bit about the Equity Market-Making business? I guess I probably would've expected a little bit better performance given the volatility in some of those markets. Can you kind of talk about how that performed?

Well, I think the Equity Market-Making business, firstly in terms of the overall segment it's smashed together at the moment with our investment banking business which is in the early stages of a ramp up. So, at the moment lots of costs, some revenues and a very small positive or negative variance on the bottom line. So, you need to pull those two things apart.

Our Equity business has definitely ticked up over the last six months, as you envisage. I think it's been a long sort of down cycle for them over the last two years as volatility and volumes have dried up.

And bear in mind, they are really picking up ultimately retail volume in the US. We don't deal with the retail customers, but ultimately that volume finds its way to us. And I just don't think a lot of people have been trading as much as they did prior to the financial crisis. So that is been one of the major problems.

Additionally, as volumes go down, we always find people compete harder for the same volume, so it has a negative impact on your spreads as well. So it's sort of a double whammy.

What we started to see more recently is potentially a stabilization in spreads and perhaps a slight tick up, because we now are starting to find a number of people exiting the market. We certainly believe that our market position is stronger than it has ever been in that business.

And what is interesting is we are starting to find new markets that we think we can access with some of the technology and capabilities we have built up. And it's early beginnings, but we think we have now found some ways to expand that business going forward.

So I would say, I think we have turned the corner; modest tick up in that business. We're very comfortable with that business. We think it's a franchise business for us. We certainly are well known for that. We have a very good market position for it, and we've now found some other ways to bolt on and hopefully increase that business.

If and when retail volume starts to pick up, we're going to get more of it. So, we are in a good place there. The business is very profitable, even at current levels.

All right. Well, congratulations on a great year and I look forward to the next one.

All right, thank you. Operator, do we have any more questions?

At this time, no one else has signaled. (Operator Instructions).

Okay. Well, if there are no more questions, I think we will close the call. So, thanks everyone for participating and we look forward to speaking to you in February. Thank you.

Thank you. Again, ladies and gentlemen that does conclude today's conference. Thank you all for your participation.