Sypris Solutions Inc (SYPR) 2014 Q3 法說會逐字稿

Good day, and welcome to the Sypris Solutions, Inc. conference call. Today's call is being recorded.

At this time for opening remarks and introductions I'd like to turn the call over to be President and Chief Executive Officer, Mr. Jeffrey Gill. Please go ahead, sir.

Thank you, Matt, and good morning, everyone. Tony Allen and I would like to welcome you to this call the purpose of which is to review the trends reflected in the Company's financial results for the third quarter of 2014.

For those of you who have access to our PowerPoint presentation this morning, please advance to slide 2 now. We always begin these calls with a note that some of what we might discuss here today may include projections and other forward-looking statements.

No assurance can be given that these projections and statements will be achieved and actual results could differ materially from those projected as a result of several factors. These factors are included in the Company's filings with the Securities and Exchange Commission. In compliance with Regulation G, you can access our website at Sypris.com to review the definitions of any non-GAAP financial measures that may be discussed during this call.

With these qualifications in mind we would now like to proceed with the business discussion. Please advance to slide 3.

I will lead you through the first half of our presentation this morning starting with an overview of the highlights for the quarter to be followed by a brief discussion of each of our two business segments. Tony will then provide you with a more detailed review of our financial results for the quarter.

Now let's begin with the overview on slide 4. The Company posted another positive quarter with revenue, gross profit and earnings per share all improving on a year-over-year basis, albeit not in line with our internal expectations, which were substantially more ambitious for the quarter.

Consolidated sales increased 18% to $90.2 million, up from $76.3 million for the third quarter of 2013. Gross profit rose 13% to $8.2 million, up from $7.3 million for the prior-year period while gross margin declined 40 basis points to 9.1% driven by a less favorable product mix and higher maintenance expenditures among other items.

The Company reported a loss of $0.06 per diluted share, which reflected a positive increase from the third quarter of 2013. Cash flow from operations remained healthy and reflected a positive increase when compared to the prior-year period.

As many of you may recall, last quarter we announced the award of a contract with NEC Asia Pacific to develop a cyber security lab for the Singapore government. The lab will be used to train homeland affairs and other personnel in the defense of and response to cyber security attacks on agencies of the Singapore government. NEC will provide the hardware for the platform including the Internet traffic generation equipment while we will provide the simulation and training software.

The value of our portion of the contract approximates $3.1 million, which does not include the value of options for annual licensing and maintenance fees that may be exercised in the future. The initial commissioning took place earlier this year with program deliveries to take place over the coming quarters. We expect to begin to recognize meaningful revenue from this important contract beginning in the second quarter of 2015.

New business opportunities accelerated across the Company with quoting activity for new programs increasing substantially during the quarter for both business segments. And subsequent to quarter close, we entered into a nonbinding letter of intent for the purchase of a company that we plan to merge into our industrial group. We will tell you more about this exciting opportunity shortly.

In summary, the results for the quarter reflected an improvement from the prior-year period but they were not consistent with our internal plans, which were much more ambitious. We have higher expectations for ourselves and we are committed to achieving these goals despite short-term disappointments.

Turning now to slide 5, revenue for our aerospace and defense segment decreased to $7.6 million from $9.6 million for the same period in 2013. Gross profit declined as a result of the drop in shipments, which were impacted by a series of supply chain and customer delays. It is important to note, however, that the quarter did not contain any contribution from the award of the Singapore cyber security lab contract, which will be recognized in future periods.

Bookings for the quarter were quite positive exceeding shipments for the period by more than 80%. We expect this momentum to continue in the current quarter and which achieved will help to established a positive foundation for future growth and a return to profitability in 2015.

During the quarter we maintained our investments in new product development the financial impact of which was reduced on the P&L when compared to prior-year periods due to the receipt of customer funding to complete the development of SYPHER, a field programmable gate array that will serve as the encryption core for future secure communications products. We also continue to hold discussions with potential customers to complete the proof-of-concept for another platform, SIOMETRICS, which is a breakthrough technology that utilizes unique characteristics in the silicon wafer for identity authentication rather than software-based identification. As we have discussed on prior calls, the potential for this technology is quite intriguing for a couple of reasons.

To start with, it eliminates the need to authenticate and store end-user passcodes thereby making identity authentication more easily scalable. The potential applications are numerous, ranging from the use of missile defense systems, UAVs and the smart grid to large-scale commercial networks and automobile electronic systems. It becomes even more interesting, however, when the SIOMETRICS technology is combined with our SYPHER encrypted processors, which results in a chipset that is exponentially less vulnerable to cyber attacks.

As I mentioned a minute ago, we are currently under review by several customers to fund the integration of the SIOMETRICS technology into an existing application. We believe it should take an estimated 18 months to complete this work.

In the short term any customer funding would serve to reduce the expenses that would otherwise be incurred by Sypris. In the long term, however, if successful the potential would appear to be significant.

The third quarter continued on a positive note for EMS bookings to customers with applications in severe environments including Northrop Grumman, Lockheed Martin, Magellan and Exelis. Business activity continued to grow in this area supporting our expectations for double-digit growth in 2015.

Our cyber security platform continued to generate a heightened level of customer interest. We conducted multiple demonstrations during the quarter and submitted numerous proposals for potential Cyber Range installations globally. We also successfully commissioned the latest version of our software, Cyber Range version 3.2 and commenced cyber security training on schedule with the Ministry of Home Affairs in Singapore.

Turning now to slide 6, we expect the impact of sequestration and other DoD funding related issues to continue to affect our business until such time as new programs, products and cyber-related services achieve sufficient traction to offset these issues. As we discussed, we are making important progress with our efforts to secure additional customer funding for specific research and development opportunities. Potential applications are quite diverse ranging from missile defense to the prevention of credit card fraud.

If successful these funds will help us to accelerate the introduction of these new promising technologies into the marketplace without negatively impacting our financial statements. We will continue to focus on successfully converting on the many opportunities that we have for the Cyber Range, which as many of you may recall serves as a platform for organizations to train their personnel to expertly identify, prioritize and respond to increasingly complex cyber attacks.

Recently we have been in discussions with leaders in the accounting and insurance industries who are interested in providing capability assessment and training services for Fortune 500 clients in response to pending regulations with regard to cyber security by the SEC and other agencies. The Range appears to be a perfect fit to meet these requirements.

Elsewhere, we are optimistic that we will make additional inroads with our secure communications product sales efforts in Canada, Norway and Germany, as we increasingly become the standard for key field devices internationally. We will continue to focus on EDMS sales for end-use applications that exhibit a high cost of failure and therefore require the unique pedigree, certifications and traceability standards that have long been an important part of our heritage. And we will pursue synergistic acquisitions as a means to both supplement our existing capabilities and to accelerate the replacement of revenue that has been lost or delayed due to the issues we mentioned earlier.

Now let's take a quick look at our industrial group beginning with slide 7. Sales increased 24% to $82.6 million, up from $66.7 million for the third quarter of 2013.

Gross profit rose 25% to $9.3 million, up from $7.4 million for the prior-year period while gross margin increased 20 basis points to 11.3%. EBITDA increased to $8.1 million, or approximately 10% of sales.

Despite the strong performance conversion on incremental sales fell below 12% of revenue for the first time in memory reflecting a less favorable mix of product sales and increased levels of maintenance, repair and overtime expenditures that were authorized to ensure that we continue to meet customer deliveries and to prepare for expanding demand during the coming quarters. Performance for the quarter reflected solid demand across all markets and the impact of TPS initiatives on operational efficiencies. Key metrics for quality and delivery remained at world-class levels.

Our investments in process improvements and the results from our partnering with Toyota are beginning to pay real dividends in terms of increasing manufacturing efficiencies and improving equipment uptime while simultaneously reducing cycle times and scrap. We remain optimistic that the Company will realize substantial additional benefits as we continue to implement the TPS tools and culture at all of our plants during the coming years.

Turning now to slide 8, the outlooks for the markets served by our industrial group continue to be positive for the coming year. The commercial vehicle market for Class 8 trucks continues to expand. The production of Class 8 vehicles is forecast by ACT Research to increased 21% in 2014 and by an additional 5% in 2015.

Recent conversations with several OEMs would support an even more aggressive outlook. The combination of an improving economy, aging fleets, rising freight pricing, growing trucker profitability and better fuel economy are all combining to create a positive environment for new purchases.

Demand for Class 4 through 7 medium duty trucks continues to grow along with the housing market. While the outlooks for our light truck and trailer markets as well as for our off-highway and agricultural markets also appear to be in good shape for the coming year. We are looking forward to another year of profitable growth from our natural gas, oil and petrochemical markets where global demand for our highly engineered closures, insulated joints and other specialty piping components continues to be quite strong.

With all of the operational progress that has been made in recent years it should be of no surprise that our quoting activity for new business is quite active. We last reported that our new business funnel had increased to the $140 million to $150 million range and we are pleased to report that we have since been notified of several new business awards including our first contract directly with an OEM. These two programs are expected to launch during the first half of 2015.

Our conversations with Dana continued during the quarter as we looked to explore alternative resolutions to our contract dispute with the objective of concluding a mutually beneficial agreement. We are also in the process of wrapping up discussions with another major customer, the result of which will add a new product line to our portfolio and extend the maturity for our existing supply agreements by several years.

As many as you may recall, we've developed a lightweight axle shaft for the commercial vehicle market that weighs 6 pounds to 7 pounds less than current designs, which translates into a 24 pounds to 28 pound savings for a Class 8 vehicle. The benefits are numerous from a cost standpoint for the design results in a meaningful savings in material, processing and freight while offering the end-user a less expensive and significantly lighter product.

The commercial reactions to the shaft have been extremely positive and the product is currently undergoing customer testing. We are optimistic that we remain on schedule for an early 2015 market launch.

We announced today that we have entered into a nonbinding letter of intent for the purchase of a company that we plan to merge into our industrial group. The company is located in North America and is expected to report sales of roughly $40 million in 2014.

The transaction is subject to the satisfactory completion of due diligence among other conditions with a closing scheduled for the first quarter of 2015. If completed, the transaction is forecast to be accretive to earnings in the current year.

We also expect to announce the formation of a joint venture for the manufacture and sale of driveline products in Asian in the very near future. Once we have executed the definitive documents, which we hope to conclude by yearend, we will be pleased to provide you with the details of this important strategic initiative. As we look to the future you can expect that we will continue to focus our efforts on three key strategic initiatives: investing to increase productivity and efficiency, driving process improvements through the use of TPS techniques to reduce cycle times and increase reliability, and selectively pursuing strategic opportunities to expand our customer and market share to leverage our fixed cost and organizational capabilities.

Turning now to slide 9, Tony will lead you through the balance of our presentation this morning.

Thanks, Jeff. Good morning, everyone.

I'd like to take you through the highlights of our financial results for the third quarter of 2014. I will begin with our consolidated results and ask you to advance to slide 10.

Q2 consolidated revenue totaled $90.2 million, an increase of $13.9 million, or 18.3% as compared to the prior year. Our industrial group reported a $15.9 million increase, which was partially offset by a $2 million decrease in revenue by our A&D segment. An increase in revenue of nearly 24% for our industrial group primarily reflects higher commercial vehicle volumes.

The reduction in the A&D segment revenue was primarily due to lower sales of our data systems products compared to the prior year. We expected revenues for the A&D segment to increase during Q3 but shipments planned during the quarter for certain electronic manufacturing service programs were delayed due to factors including customer redesign of circuit boards and the need to qualify certain components to vendor changes in our supply chain.

We were also impacted by funding allocations within agencies of the US government we serve as the government's fiscal year closed on September 30. Funds for certain of the programs we were targeting for award in the 2014 fiscal year were swept to other programs and although this doesn't signal a loss of the award it does shift the timing to the current government fiscal year.

Gross profit increased 13.1% to $8.2 million for the quarter from $7.3 million in the prior-year period. Our gross margin for the quarter was 9.1% compared to 9.5% in the third quarter of 2013.

Quarterly gross margin for our industrial group was up 20 basis points over the prior year from 11.1% to 11.3%. However, margins on our A&D segment declined reflecting both lower volume and a less favorable revenue mix.

Our profit conversion on the increased sales volume in the industrial group was impacted during the third quarter by increased investment in maintenance and repair costs on certain assets to support the industry outlook for continued growth in the commercial vehicle market through 2015. Our third quarter also included higher labor costs related to both productivity and overtime premium supporting the increase in equipment maintenance investments as well as meeting customer delivery requirements. The increased supply and scrap expense also impacted our margin during the period.

Our team worked diligently during the quarter to address these cost issues and we expect improved performance in these areas as we move into the fourth quarter. Earnings per diluted share came in at a $0.06 per share loss for the quarter versus a loss of $0.10 per share in the third quarter of 2013. We are disappointed to report the first quarterly loss of 2014 and are committed to addressing the operational issues that impacted the quarter.

Next we will discuss our aerospace and defense segments performance and ask you to please advance to slide 11. Starting on the left side of the slide we had a decrease in third-quarter year-over-year revenue of $2 million or 21% to $7.6 million for the quarter. On the previous slide we discussed the year-over-year decline in data systems revenue, which had a sizable order shift in Q3 of 2013 that did not repeat in the current period.

We also mentioned delayed shipments on EMS programs that impacted the quarter. We are supporting our customer efforts to expedite the resolution of the redesign and supply-chain efforts but since changes on these programs require extensive testing, qualification and approval processes, our ability to influence the timing is somewhat limited.

If there is a silver lining to this cloud it would be that the responsiveness and support by our engineering and operations team is problem-solving activities related to the program delays has been well received by our customers. We continue to await approval from a customer to begin production on a sizable EMS contract as discussed during Q1 and Q2. The delayed approval is related to the pending resolution of a technical issue between our customer and the end user.

A recent update from our customer on this issue indicates the end-user approval could be obtained during Q4, which would allow us to begin production early in 2015. However, the testing and customer approval on this program is subject to the results of in-flight testing by a branch of the US military and therefore the timing of production remains uncertain.

The deployment of the cyber lab program announced earlier this year continues on schedule and although revenue associated with this contract will be recognized in future periods based upon the applicable accounting guidance, we achieved contract billing milestones during the third quarter to generate the expected cash flow related to this contract. Our year-to-date revenue for 2014 of $25.5 million for the A&D segment is approximately $800,000, or 3.4% above the prior-year period.

Moving to the right side of the slide, our gross margin percentage for both the quarterly and year-to-date periods reflect declines from the prior year. The reduction in gross margin primarily reflects a change of mix in the A&D revenue profile.

Although our overall EMS program revenue increased in 2014 as compared to 2013, revenue derived from our higher-margin severe programs has been considerably less in the current year. We continue to pursue opportunities in the severe market that includes space and satellite programs and were recently awarded a program to produce satellite components that we expect will begin shipping in Q4.

A second revenue mix change from 2013 impacting our gross margin is the reduction in sales of the higher-margin data system products previously noted. A large order for this product line shipped in the third quarter of 2013 and while shipments during 2014 have been lower and more evenly distributed among the first three quarters as compared to 2013. Our challenge in the A&D segment remains winning new programs and driving top-line growth as our fixed cost structure leaves us below breakeven at current volumes.

Our near-term focus for revenue is to support customer efforts to eliminate EMS program delays, to execute on the Cyber Range deployment as well as our funded engineering programs and to deliver orders for our key management and data system product families. Our business development efforts also continue across all of our revenue streams in support of our objective of returning this business to profitability in 2015.

Let me now shift to our industrial segment performance and ask you to please advance to slide 12. Our team at Sypris Technologies delivered another quarter of strong results generating $82.6 million in revenue and $9.3 million in gross profit. On the left side of the slide we show the year-over-year revenue increase of $15.9 million, or 23.9% for the third quarter and the $30 million increase in revenue for the nine-month period of 2014 over 2013.

Our customer demand has followed the trend of the overall commercial vehicle market, which remained strong during the third quarter and continues to show a forecast in support of comparable period revenue growth for the industrial group in the fourth quarter. The recent industry forecast by ACT Research now shows full-year Class 8 production up 20.6% in 2014 over 2013 and Classes 5 through 7 up 6.1%.

The forecast for 2015 currently shows annual increases of 5.2% and 3.6% for the Class 8 and Classes 5 through 7 markets respectively. We believe our team is well positioned to meet this growth in demand as the market upturn continues.

Shifting over to the right side of the slide, you will see gross margin for the industrial group showed a year-over-year improvement of 20 basis points for the third quarter and an improvement of 160 basis points for the nine-month period. Gross profit for the industrial group for the third quarter was $9.3 million, an increase of $1.9 million, or 25.4% from 2013. Gross profit for the first nine months of 2014 was $31.8 million, an increase of $7.5 million, or 30.6% from 2013.

Our team remains focused on the daily execution in meeting customer demand while maintaining our quality, equipment uptime, on-time delivery and other operational metrics. Let me now close with a brief summary of our third-quarter performance and ask you to please advance to slide 13. Comparable period revenue growth for the Company continues to be led by the performance of our industrial group in meeting the upturn of a Class 8 market that is projected to increase over 20% for the full-year 2014.

Our aerospace and defense segments third-quarter performance was slowed by customer requirements to redesign circuit boards and the need to resource and qualify new vendors for circuit components on our EMS programs. Profitability during the third quarter was impacted by the need for our industrials group to invest in major maintenance and repair to support the ongoing market upturn, which also contributed to higher labor, supply and scrap costs during the period.

Our quality and on-time delivery metrics remained at target levels during the third quarter and we continued our deployment of the Toyota Production System in each of our industrial group facilities. We continue to develop the additional technology platforms for our A&D segment through both internal and external funding to support our long-term plans.

The industrial group was notified of its first contract award directly with an OEM customer serving the commercial vehicle market. We expect to sign the final contract documents for this award within the next two weeks and we have also been notified of additional contract awards as we continue to pursue the opportunities included in our business development pipeline.

We are also excited about the progress being made with our internally designed lightweight drive axle shaft and the attention this has received within our customer base. Customer testing of the axle shaft is underway and we are targeting a product launch in 2015. Our aerospace and defense segment posted the highest level of quarterly bookings in our trailing 12-month period, which supports the foundation for our 2015 business plan.

And finally, Jeff discussed two external growth opportunities, the first being the nonbinding letter of intent for an acquisition that, if successful, would merge into the existing footprint for our industrial group; and the second being the potential joint venture for the manufacture and sale of driveline products in Asia. This concludes our call today and at this time I would like to turn it back over to Matt so we can open it up for any questions that you might have for us. Thank you very much.

Thank you, sir. (Operator Instructions) Jim Ricchiuti, Needham & Company.

First off, just see if we could talk a little bit about gross margin, so the stepdown in gross margin first half to Q3. Is it fair to say that the issues that surfaced in the industrial business appear more temporary and that you could assume if revenues remain at these levels in Q4 that we would see margins recover somewhat in this business?

Yes, Jim. We do expect that. The issues largely that we experienced during the third quarter are behind us on the industrial group in terms of the major maintenance issues and we would look to -- for revenue to remain at the Q3 levels in Q4 and we would look for margins to return to something that resembles more of what we had in the first half.

Okay. On the electronics group, clearly with A&D it seems like it's just at least in large part an issue of volume and revenue.

Certainly mix plays into it but it doesn't sound like unless we see some improvement in the overall revenue picture in the electronics group that there would be much in the way of margin improvement in Q4? Is that fair to say?

Yes, I think that is fair. Certainly we are not expecting a significant change in the revenue level during Q4. The mix I think that we experienced in Q3 we could have some improved mix in Q4 that will benefit us but not a significant change in margins.

Got it. And if we could to switch gears a little bit, Jeff, can you elaborate, can expand at all on the acquisition -- the agreement that you have in place with respect to this acquisition?

You refer to it as an acquisition of a North American company. Is it a US company and I wonder if you could talk a little bit, if you can, about the end markets and perhaps customer overlap?

Pleased to, Jim. Yes, it is based in the US. It will expand our customer share in I think a very positive way with our existing customer base.

We have had the chance to inform our customers of the transaction and they were uniformly positive in their responses. And this business has done a very nice job of staying well up to date in terms of its manufacturing processes and technologies and so it will add a very very efficient operation to our existing industrial group.

Got it. That's helpful.

I will jump back in the queue. Thank you.

Tristan Thomas, Sidoti.

Just kind of a couple of follow-on questions just regarding the acquisition. Is this a higher-margin business than what you are currently in, could you maybe give us a little color on that?

Tristan, the margins are consistent with our industrial group generally.

Okay. Yes, any seasonality in that business we should be aware of, or is it pretty similar to your business?

Very similar.

Okay. Jumping back over to A&D just to clarify something.

He said bookings were 80% higher than the shipments. That's consolidated between EMS and cyber security, right?

Yes, for the segment.

Okay, great. And then Tony mentioned that you had a government order pushed back due to the government calendar year end. Is that something you're seeing a lot of or was that a one-time isolated event?

We have seen a number of programs get shifted, Tristan, and a lot of it happens to relate to what is going on around the world in defense spending generally by the US government. So it is something that we see that is common. It is not necessarily a one-time thing and we are certainly doing our best to manage what element of that we can control.

Okay. So we should just view that as really a continuation of the uncertainty in the defense budget that everyone is still trying to push things to the right?

I think that is fair.

Okay, great. Thank you, guys.

Alan Weber, Robotti & Company.

First regarding the acquisition, could you talk about how much you are paying for the acquisition?

We haven't agreed to disclose that at this time, unfortunately. But as we get closer and when the transaction is completed then I am sure a lot of that will be disclosed.

Okay, is it all-cash?

Yes.

Okay. And then do you have the -- you had the gross margins for both businesses, do you have what the operating income was for both businesses?

Yes, our segment disclosures that are included in the 10-Q -- so your question is, the operating income numbers for each business?

Correct.

Okay. The operating income for the industrial group for the quarter is $5.4 million and the electronics group is negative $3.6 million.

And what was it last year in the quarter? Industrial?

It was $4.6 million for industrial.

So the industrial operating income is actually higher this quarter versus last year?

That is correct.

Okay. And despite having lower gross -- okay, that makes sense. And then my last question was, can you just talk more about the Dana contract, which I guess technically expires at the end of the year?

Yes, that is correct. And we have had a contract dispute with Dana for quite some time now and we are in conversations to see if we can resolve that in a way that is acceptable to both parties.

I guess the question is, do you run the Company expecting that contract to be renewed?

Well, I would say this. I would say that the industry is at a very high level, that in several of the products that we produce we are the largest, or one of the largest if not the largest of those products in the world. And we would hope that the capabilities that we bring to the table are found to be attractive to all of our customers. So we are looking for a way for this disagreement to be concluded in a mutually satisfactory way.

Okay. I guess my last question on the acquisition, how many facilities does that company have?

It has a single -- it has two facilities.

Two facilities, great. Thank you very much.

(Operator Instructions) Justyn Putnam, Talanta Investment Group.

My question is, I just wanted to consolidate some of the other questions that have been asked about that A&D segment. Jeff, did I hear you correctly earlier in your discussion that you said you expected that segment to be profitable in 2015?

We have talked before on many occasions that we are looking for that piece of our business to return to break even during the coming year.

Break even at the gross margin level or break even operating income?

Operating.

Okay. Just wanted to clarify that. Thank you.

(Operator Instructions) Jim Ricchiuti, Needham & Company

Just regarding the Dana issue, just given the timeline on the contract expiration, is there any opportunity -- do you see the customer at all increasing inventory levels in Q4 perhaps to provide some buffer if the negotiations just get extended further?

Jim, I would only be speculating but I am guessing that Dana would take whatever precautions it felt was necessary to protect its interest for sure.

Okay, but there is no evidence of that yet?

Certainly, I haven't seen any reports that they have published that would do that. But again it would be speculation and I am confident that they are taking whatever steps that they feel would be appropriate to protect their customer interest.

Got it. And Jeff, just to switch gears for a second, the oil and gas market has remained -- appears to have remained fairly strong for you. You may have sized this in the past what percent in rough terms it represents of the industrial business.

Clearly it is a nicely profitable piece of that business. Do you see any change in the demand in that business just in light of the decline in oil prices?

No we haven't, Jim. And I think the key to this piece of the business is that the products that we provide typically go into projects later in their development.

So if it is for a natural gas pipeline or a petrochemical application, typically the products that we provide are installed later in the process. And so as a consequence, there is usually a substantial lead time on the breaking ground of the project, if you will.

And as we look towards the future, we have been reading a lot about increased emphasis on the exportation of natural gas. And so if in fact that becomes a reality for the United States, the expectation is that there will be substantial investments in the future to support the exportation of natural gas, which we would view as being a positive development for this part of our business.

Got it. And in Q3 can you say what percent this market represented of the industrial business?

No, we haven't broken our operations out that way at this time.

Okay. Thanks very much.

Mr. Allen and Mr. Gill, we have no additional questions. I would like to turn the call back to you for any additional or closing comments.

Thank you, Matt. Tony and I would like to thank you all for joining us on this call this morning.

We welcome your continued interest and of course your questions about our business. Thank you and have a great day.

And that does conclude today's conference. Thank you again for your participation.