Turtle Beach Corp (TBCH) 2017 Q4 法說會逐字稿

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  • Operator

  • Good afternoon, ladies and gentlemen, and welcome to the Turtle Beach Fourth Quarter and Full Year 2017 Conference Call.

  • (Operator Instructions) Before we get started, we will be referring to the press release filed today that details the company's fourth quarter and full year 2017 results, which can be downloaded from their Investor Relations page at corp.turtlebeach.com.

  • On that website, you will also find an earnings presentation that supplements information to be discussed on today's call.

  • Finally, a recording of the call will be available on the Investor Relations section of the company's website later this evening.

  • Please be aware that some of the comments made during this call may include forward-looking statements within the meaning of the federal security laws.

  • Statements about the company's beliefs and expectations containing words such as may, will, could, believe, expect, anticipate and similar expressions constitute forward-looking statements.

  • These statements involve risks and uncertainties regarding the company's operations and future results that could cause Turtle Beach Corporation's results to differ materially from the management's current expectations.

  • The company encourages you to review the safe harbor statements and risk factors contained in today's press release and in their filings with the Securities and Exchange Commission, including, without limitation, their most recent quarterly report on Form 10-Q, annual report on Form 10-K and other periodic reports, which identify specific risk factors that also may cause actual results or events to differ materially from those described in forward-looking statements.

  • The company does not undertake to publicly update or revise any forward-looking statements after the date of this conference call.

  • The company also notes that on this call, we will be discussing non-GAAP financial information.

  • The company is providing that information as a supplement to information prepared in accordance with accounting principles generally accepted in The United States or GAAP.

  • You can find a reconciliation of these metrics to their reported GAAP results in the reconciliation tables provided in today's earnings release presentation.

  • And now I'll turn the call over to Juergen Stark, the company's Chief Executive Officer.

  • Juergen?

  • Juergen Stark - CEO, President and Director

  • Good afternoon, everyone, and thank you for joining us.

  • Let me start by saying that we are very pleased with our 2017 results.

  • At this time last year, we stated that we would focus on significantly improving our profitability, to strengthen the balance sheet and enable us to begin making some investments for growth again in 2018.

  • We believe we have accomplished that, and I'd like to thank my colleagues at Turtle Beach for their hard work in helping us achieve our goal.

  • Let me also refresh our investors on who we are and why we believe we are a compelling investment opportunity.

  • We are the dominant provider of gaming headsets, with a strong brand in $100 billion global gaming market.

  • Gaming headsets are the largest portion of a more than $2 billion global market in gaming peripherals, which include headsets, keyboards, mice and other accessories.

  • At about 50% of the total gaming peripherals market, headsets are arguably the most important gaming accessory, and we are the brand gamers turn to for headsets more than anybody else.

  • Consoles, where we hold over 40% share in gaming headsets, continue to be the dominant gaming platform in the U.S. and many parts of Europe.

  • Consoles are also where the majority of eSports fans and players are, almost 70% play on consoles.

  • So we are a key supplier of gaming gear, with a great brand to eSports fans and gamers in a $100 billion gaming market.

  • This past year, we increased market share despite our already dominant share, nearly tripled EBITDA, generated over $3 million of operating cash flow and significantly improved our balance sheet, which is enabling us to make investments intended to drive sustained growth over time.

  • It also set the stage for our new financing agreements, which we announced today.

  • The amended agreements moved the maturities to 2023, lower interest costs, increased availability and loosened covenants, which will further support our growth initiatives.

  • John will have more to say on this shortly.

  • With the stage set on to our results.

  • As reported in February's preliminary results, we experienced strong sales of Turtle Beach headsets in the fourth quarter, which helped drive our leading market share higher.

  • Cautious ordering trends by several of our large U.S. retailers caused an approximate $6 million to $7 million sales shortfall in the fourth quarter compared to our guidance range.

  • Despite this dynamic, we delivered earnings and EBITDA that met or exceeded our outlook for the fourth quarter and the full year on strong gross margin growth and prudent expense management.

  • And more than all of the revenue shortfall was made up in January, as I'll cover momentarily.

  • Underlying our sales results was another strong quarter of market share expansion.

  • Despite a highly competitive market, recent NPD North America data show Turtle Beach grew its leading revenue share to 42.1% for 2017 versus 41.9% for 2016.

  • The NPD data also showed that in the fourth quarter, our North American console headset revenue market share increased 130 basis points from 43.6% to 44.9%.

  • We also experienced robust share growth in most of our major European markets, particularly in the U.K., the largest console gaming market outside of the U.S., where our year-over-year console headset revenue share grew from 46.9% to 51.8%.

  • Included in these strong share gains was the addition of points of distribution in our major markets.

  • For example, we gained shelf space across North America and key European markets, increasing points of distribution by over 20%, despite our very strong existing distribution coverage.

  • And our products across the board performed very well at retail.

  • Indeed, many of our products dominate their respective priced tiers.

  • Despite my earlier comment regarding the Q4 sales shortfall, healthy consumer demand and retail restocking early in the first quarter of 2018 has more than closed this gap.

  • In fact, NPD data reports the strongest January for console gaming since 2013.

  • And shows North American console gaming headset sell-through in January up 61% on a dollar basis compared to January 2016, and Turtle Beach up 79%.

  • We believe this is being driven by the blockbuster Fortnite and PlayerUnknown's Battlegrounds releases, both of which are fueling strong headset sales as well as an overall robust gaming market, driven, in part, by exponential growth in eSports during 2017.

  • We're obviously very pleased to see that we even outpaced the strong market in January.

  • I will have more to say about business trends so far in 2018 and introduce our full year outlook, but I'd like to turn the call over to John, who will review our financial results first.

  • John?

  • John T. Hanson - CFO, Treasurer and Secretary

  • Thanks, Juergen, and good afternoon, everyone.

  • Net revenue in the fourth quarter of 2017 was $79.7 million compared to $82.2 million in the fourth quarter of 2016.

  • As Juergen mentioned, the decline was largely due to reduced ordering by several retailers in December that we estimate caused a $6 million to $7 million sales gap compared to our outlook.

  • And again, this gap was closed in January with higher replenishment orders.

  • Gross margin in the fourth quarter increased 90 basis points to a record 37.6% compared to 36.7% in the year-ago quarter.

  • This is the highest level of gross margin we reported since becoming public in 2014.

  • This improvement was due to a mix shift towards higher-margin headsets as well as ongoing supply chain and logistics driven cost, product cost improvements.

  • Operating expenses in the fourth quarter were reduced by 6% to $14 million compared to $14.9 million in the fourth quarter of 2016, due to our continued focus on cost management across the entire business.

  • Net income increased 17% to $14.2 million or $0.29 per share compared to $12.2 million or $0.25 per share in the fourth quarter of 2016.

  • Adjusted EBITDA increased 7% to $17.2 million compared to $16.1 million in the year-ago quarter.

  • Both the improvement in net income and adjusted EBITDA was driven by the higher gross margin and lower operating expenses.

  • And both metrics were the highest level since becoming public in 2014.

  • It's also worth noting that for the full year, we achieved our goal of nearly tripling our adjusted EBITDA, reporting $11.6 million in 2017 compared to $4 million in 2016.

  • And now turning to the balance sheet.

  • We ended the quarter with cash and cash equivalents of $5.2 million compared to $6.2 million one year ago.

  • As a result of our $60 million revolving credit facility, we generally don't hold a large cash balance.

  • Inventory, at December 31, 2017, increased to $27.5 million compared to $21.7 million one year ago, due to the reduced ordering by retailers that Juergen described in his opening remarks.

  • However, given the strong sell-through so far in 2018, we are already well under our inventory levels for this period last year.

  • Total outstanding debt principal at December 31, 2017 was $72.1 million compared to $69.7 million at December 31, 2016.

  • The debt consisted of $38.5 million of revolving debt, $11.7 million in term loans and $21.9 million in subordinated debt.

  • Our leverage ratio, which we define as total term loans plus average trailing 12 months revolving debt divided by consolidated trailing 12 months adjusted EBITDA, stood at 2.1x at December 31, 2017 compared to 7.4x 1 year ago.

  • This significant improvement was an important goal for 2017.

  • As Juergen mentioned, the improved leverage ratios and business performance enabled us to amend our financing agreements with our lenders as we announced earlier today.

  • The new agreements improved certain terms and covenants under the prior agreements, including a reduction in the interest rate and greater availability on our revolving credit facility, a 3.5% reduction in the interest rate on the Crystal term loans, a 1.4% reduction in the interest rate on a majority of subordinated debt with Stripes, the ability to use funds from a term loan to reduce the subordinated debt, the elimination of EBITDA coverage covenants on the term loans and the extension of the loans to 2023.

  • Further details will be forthcoming in a Form 8-K filing.

  • The new agreements are expected to give us more flexibility to run our business and pursue various strategies.

  • The net effect of the changes is expected to be interest savings of at least $3.5 million over the next 5 years.

  • Now I'll turn the call back over to Juergen for some additional comments on the business and our updated outlook.

  • Juergen?

  • Juergen Stark - CEO, President and Director

  • Thanks, John.

  • In addition to my earlier comments about strong sell-through in January, according to NPD, Turtle Beach gained 4 percentage points, 400 basis points of market share in North America in January compared to January 2017, topping out at 45.5% revenue share.

  • Underscoring this achievement, the growth in our revenues for January was larger than the total January console gaming headset business for the next largest competitor in North America.

  • Our product portfolio continues to perform very strongly.

  • If we look at November 2017 through January 2018 NPD data, which reflects all of our new 2,000 headset launches being fully in the market, we were up 23% year-over-year compared with the market being up 16%, indicating we gained share.

  • In fact, over 200 basis points of share gain in North America in that time period.

  • We had the #1 selling headset in the whole market in our Ear Force Recon 50X, the #1 and #2 bestselling Xbox wireless headsets, the STEALTH 600 and STEALTH 700, which includes our industry-leading direct-connect wireless technology.

  • We had the #1 PlayStation 4 third-party wireless headset in our STEALTH 600 and the #1 jack headsets for both platforms.

  • In addition, 7 of the top 10 headsets are Turtle Beach, and 2 of the others are first-party headsets.

  • We believe this strong performance is driven by the broadest line of products that consumers prefer 3:1 over the next closest competitor.

  • We have exceptional distribution and retail merchandising, and have gained -- even game points of distribution and market share in the past year, as I mentioned earlier, despite a highly competitive market.

  • All in all, high-quality products, a brand gamer's love and great retail is contributing to our strong performance.

  • Now on to our 3 business priorities for 2018: number one, continue to dominate our core console headset market.

  • We have more great products coming this year.

  • And we will continue to focus on our brand, distribution, merchandising and all of the operational capabilities that make us the leader in our segment.

  • We plan to make some investments to nurture and broaden our brand as well this year.

  • Number two, drive our presence in burgeoning eSports and VR markets.

  • According to a February 2017, article published by Sports Illustrated, eSports produced an estimated $493 million in revenue during 2016, up 51% from 2015.

  • That article stated the number is expected to surpass $1 billion by 2019.

  • What's even more staggering is that according to Newzoo, there are 148 million eSports' enthusiasts around the globe, and 22% of American male millennials watch eSports, putting it virtually equal with baseball and hockey in terms of viewership among that demographic.

  • As the far-and-away leading provider of headsets to gamers, even when measuring PC and console gaming headsets together, we are one of the top providers of gaming gear to eSports players and their fans.

  • In 2018, we will look to further develop our presence by delivering high-quality innovative headsets that have driven eSports teams and players and influencers to seek Turtle Beach for partnership opportunities.

  • Our successful ongoing partnerships with some of the best eSports gaming organizations in the world, including OpTic Gaming, Astralis, Splyce and others are a testament to the professional appeal of our headsets, and we look forward to growing our partnerships in 2018.

  • VR is a small but growing segment, which we believe has great long-term potential as a gaming platform.

  • As you know, we launched the first gaming audio headset designed specifically for VR, our Stealth 350VR, an innovative headset that continues to be the top seller by revenue in this new category.

  • We'll continue to nurture this lead and launch additional products for this segment in the future when warranted.

  • Goal #3, invest to drive future growth.

  • As I mentioned on prior calls, we have opportunities in PC gaming headsets, new geographies like China as well as nonheadset gaming accessories in the future.

  • The PC gaming headset market is similar in size globally to the console gaming headset market.

  • And recent research we commissioned shows that our brand is known and relevant with PC gamers in our core markets.

  • That area will be our priority in terms of investments this year to drive future growth.

  • China is the biggest gaming market in the world and virtually untapped by us.

  • We will increase our efforts a bit this year and put more emphasis on China growth investments next year.

  • With our strong performance in 2017, we are now in a position to begin to make more meaningful investments to drive growth in the future.

  • So with these opportunities and context, I'd like to turn to our 2018 outlook.

  • Here are the key assumptions that drive our forecast: number one, we expect overall console gaming headset market will be up low to mid-single digits this year based on quarterly sales profile that reduces the revenue concentration in Q4 to 45% to 50% versus well over 50% in 2017.

  • In other words, more aligned with 2016, which had 47% of revenues in Q4 and typical of the stronger holiday game releases we see every other year that drive revenues in Q4 through Q3 of the subsequent year.

  • Number two, we expect to maintain our share in core markets and gain share in our noncore markets as we've done the past few years.

  • Number three, we believe retail channel inventory changes won't cause major revenue swings like they have in the past few years, given retail inventories are at a lower run rate, which will be difficult to further meaningfully reduce, and retailers are also likely to be cautious not to over order.

  • So for the first quarter of 2018, we expect net revenues to increase approximately 102% to $29 million compared to $14.4 million in the first quarter of 2017.

  • Please note, this includes approximately $6 million to $7 million of spillover from 2017, as retailers restocked their inventories as we discussed.

  • The rest of the strong performance is expected to be driven by robust industry sell-through and the especially strong performance of our products.

  • Adjusted EBITDA for the first quarter is expected to improve to approximately $1.5 million loss compared to $6.2 million loss in the first quarter of 2017.

  • Net loss for the first quarter is expected to improve to approximately $0.12 per share compared to $0.20 per share in the first quarter of 2017.

  • For the full year of 2018, we expect net revenue to increase 5% to approximately $157 million compared to $149.1 million in 2017.

  • Per my comments, we expect the timing of revenues to be more or like 2016 this year with less concentration in Q4.

  • Gross margin in 2018 is expected to be comparable to 2017, and operating expenses are expected to increase slightly, but to hold roughly comparable as a percentage of revenues as we make incremental investments to drive the growth priorities I just discussed.

  • As a result, we expect to generate approximately $12 million in consolidated adjusted EBITDA in 2018 compared to $11.6 million in 2017.

  • This reflects incremental investments in products and partnerships tied to our growth objectives.

  • Net loss in 2018 is expected to improve to approximately $0.03 per share, based on $49.4 million diluted shares outstanding compared to a net loss of $0.06 per share in 2017.

  • In closing, we are very pleased with 2017, having accomplished our key goals, including the improvement to our loans and record profitability in the fourth quarter since becoming a public company in 2014.

  • And we're excited about 2018 and the strong start of the year already.

  • We have a great position and brand, and what we feel is one of the most exciting markets in the world, and we look forward to our bright future in that market.

  • Thanks, again, to a great team of colleagues for driving such a strong start to the year.

  • On behalf of all of our dedicated employees, we look forward to reporting our progress as the year unfolds.

  • Operator, we're now ready to take questions.

  • Operator

  • (Operator Instructions) Our first question comes from Mark Argento of Lake Street Capital Markets.

  • Mark Nicholas Argento - Head of Capital Markets & Senior Research Analyst

  • Just a couple of questions around the overall market for headsets.

  • I know the transition this time around has been a little different.

  • It seems like a little longer in duration.

  • How do you guys see '18 shaping up in terms of mix?

  • I know there's been some new consoles that have been launched or at least kind of updates to the consoles.

  • Does that change kind of how you are approaching new hardware launches, new product launches?

  • Just a little bit of thoughts on the transition from this cycle versus last cycle?

  • Juergen Stark - CEO, President and Director

  • Sure.

  • Last cycle, you mean old-gen, right, Mark?

  • Mark Nicholas Argento - Head of Capital Markets & Senior Research Analyst

  • Yes, old-gen.

  • Juergen Stark - CEO, President and Director

  • Sure.

  • So market continues to be for the -- for PlayStation 4 and Xbox One continues to be quite good.

  • In fact, PlayStation continues to track well above old-gen PS4 at the same 50-month mark, which is the end of 2013.

  • And Xbox is tracking roughly similar to old-gen.

  • So very positive when you add up the 2 of them.

  • And both, by the way, I mentioned the good performance of the whole market in January.

  • So both platforms were up significantly year-over-year.

  • Xbox was up more than 60% in January, U.S. NPD data, by the way; and PlayStation was up more than 25%.

  • And so that's contributing to the strong headset sales at the start of the year.

  • So we expect the console market to continue to be -- kind of the new-gen console market to be good.

  • We're obviously completely out of old-gen stuff that's at this point old news.

  • And both platforms have upgraded to essentially pro models in the last 2 years.

  • That's gone seamlessly.

  • No portfolio issues on our side adapting to the new platforms.

  • In fact, the Stealth headsets are both great headsets for the Xbox One X. And so we don't expect any kind of new transition this year.

  • And as I mentioned in the past, at some point when there is a platform update to the consoles, we expected not to have the same level of disruption as it did a couple of years ago because the connectivity is quite standardized now, as in essence we demonstrated with the pro models that launched last year, the year before for Xbox and PlayStation, respectively.

  • Mark Nicholas Argento - Head of Capital Markets & Senior Research Analyst

  • Great.

  • And that's helpful.

  • And then just thinking about inventory, I know it seems like retailers continue to work inventories or just operate at much leaner inventories.

  • Do you feel like that's kind of troughed at this point, in terms of kind of -- when you think about your guidance for '18, what kind of replenishment or restock versus kind of just normalized run rate inventory going forward that the retailers are running?

  • Juergen Stark - CEO, President and Director

  • Yes, glad you asked.

  • Retail inventory changes has been kind of a major driver of revenue swings over the past couple of years.

  • In fact, we -- there is a good chart in the quarterly presentation we just released, which shows our revenues over the past few years.

  • But off to the right, it actually shows retail sell-through of our product for our core markets where we have good tracking, essential North America and U.K., which represents the vast majority of our sale.

  • And unlike our revenues, which has swung up and down a lot in the past few years, and you look at that and you go, "What the heck is going on?" The sell-through of Turtle Beach products has been stable and slightly increasing over that time period.

  • And we showed just because January has been so strong, we showed trailing 12 months, which is actually up substantially compared to the full year periods of last 3 years.

  • So right now channel inventory, maybe just a little bit of context in the last 2 years, recall retailers ended heavy in 2016.

  • And in some cases, we told the retailers that we felt like they were ordering too much.

  • But of course, by the time they figured out that Q4 '16 market in gaming wasn't as strong as expected because of weaker first-person shooter game performance essentially, they had already stocked up, and we ended up with about a $12 million overhang in terms of coming into 2017 that reduced replenishment.

  • So now 2017, the first 3 months -- the first 3 quarters, the market was down a bit.

  • This is somewhat typical.

  • Weak launches in Q4 or weaker launches tend to drive a weaker first 3 quarters of the year, and then everything resets going into Q4 as new games launch -- new games launched in Q4.

  • 2 of the 3 of them did quite well.

  • So the market was up year-over-year for Q4.

  • But the retailers were, we think, overly sensitive to ordering because perhaps they were heavy leaving '16.

  • And so this Q4, we were telling our retailers we have a good track record for forecasting and helping guide their ordering, that they were ordering far too little, and indeed, we were right.

  • In fact, we had a few retailers, one in particular, who was stocked out at key parts during the holidays, which obviously is very frustrating for us.

  • And they figured out literally going into 2017 or 2018, we were right.

  • Sell-through on top of everything was very strong.

  • And so suddenly these guys were way behind on -- and trying to be conservative on inventory way behind and literally stocked up significantly even in the first 2 weeks of January.

  • So despite the stock up and kind of a catch up from Q4, retail channel inventory of our products in dollar value across the major retailers in the U.S., which is where we have the best tracking is still down year-over-year, in fact, down meaningfully.

  • And we think it's now at a run rate where these guys -- they can't run much leaner because they'll end up with sporadic stock outs.

  • And we think that there'll be more cautious, and frankly, maybe in some cases listen to us a little bit more about making sure they're not essentially over ordering, which we don't like either because it ends up moving our revenues around.

  • So our -- you never know exactly how it's going to go, but our sense is that our revenues should track much more closely to sell-through now going forward.

  • Sorry, for the long answer, but it's a really important topic when you look at our historical revenues to understand kind of what's been going on there.

  • Mark Nicholas Argento - Head of Capital Markets & Senior Research Analyst

  • Yes, obviously, I know it's kind of little bit -- it's hard to predict, but good to hear.

  • It sounds like the prior inventory's trough level are, like you said, hard to imagine guys getting any leaner out there.

  • One for Mike (sic) [John], in terms of the cash flow -- and I haven't been able to get through the -- all the numbers.

  • Can you talk a little bit about where the balance sheet sits, kind of, once you kind of wind down the holidays here, though you need to pay down some of that debt?

  • I know you guys press released earlier today the refinancing, which is fantastic.

  • The ability to get after and start to kind of retire some of that debt and kind of delever.

  • Could you talk a little bit about the free cash flow generation, the excess capital you'll have to start shipping away that debt here over the next 12 months?

  • John T. Hanson - CFO, Treasurer and Secretary

  • Sure.

  • Sure.

  • Sure, Mark.

  • This is John.

  • So we use leverage-free cash flow as our -- as one of our metrics here, and we define that as EBITDA less CapEx, less the cash interest, and of course, less our scheduled debt repayments.

  • And so for 2017, we delivered $2.2 million leverage-free cash flow.

  • And as we're looking forward, we see something more along the lines of $5 million for 2018.

  • So we're continuing to deliver and grow the leverage-free cash flow as a function of the improving margins and the lower OpEx.

  • And of course, as revenues grow in 2018, we get more leverage across our fixed cost base.

  • Juergen Stark - CEO, President and Director

  • Maybe just to add 2 other things.

  • Be careful when looking at the total debt balance at the end of any year.

  • Because the revolver balance, our working capital line, tends to be near the maximum.

  • So that amount of debt will actually get paid off rapidly.

  • In fact, it’s being paid off rapidly, and typically approach 0 near the end of Q1.

  • Right?

  • So be careful with that number because it moves around a lot during the year.

  • And then the second thing, one of the good terms in the improved loan agreements here, which you are right, is a big deal and was a key goal for us, is that we can increase the Crystal term loan by -- up to about $3 million to retire -- start to retire some of the sub debt, which will reduce the interest rate between those 2 -- between their total term loans and sub debt.

  • And then obviously as we generate cash during this year and the coming years, we will look to improving -- further improving the balance sheet.

  • Mark Nicholas Argento - Head of Capital Markets & Senior Research Analyst

  • Good work.

  • Keep it up.

  • Obviously, as PAT continues to trade a bit through evaluation which I guess is a function of the leverage and of the volatility and the revenue line to a degree but I guess keep cranking on the profitability and get after the debt.

  • I don't know how you're stock can't work from these levels, but it's just one guy's opinion.

  • Operator

  • (Operator Instructions) Our next question comes from Matt Campbell of Laridae Capital.

  • Matt Campbell

  • I was wondering, Juergen, if you could expand upon the dollars that you will be investing in the growth for the company on a going forward basis?

  • And specifically, could you address the opportunity in China?

  • Juergen Stark - CEO, President and Director

  • Sure, Matt.

  • Thanks for joining in the call today.

  • So we are investing, let me just say, a couple of million dollars this year.

  • And I'm not trying to be vague about it, but it's sometimes hard to separate how much of our core marketing spend and all that, which can span multiple categories and helps us across the geographies.

  • It's a little bit difficult to peel out exactly x amount.

  • But in our operating plans for the year, we have a couple of million dollars of increased spend on product, R&D and marketing to help drive some growth initiatives.

  • And I'm not going to give a lot of details at this point mainly for competitive reasons, other than to say, that our first target is the PC gaming market in our core markets, so U.S. and Europe.

  • And we'll -- we have some presence in China with a good small team there.

  • They are building relationships in preparation for more of an aggressive approach to China, but I wouldn't expect that this year.

  • Right now, we are focused on leveraging the strong brand we have in our core U.S. and European markets, jumping more aggressively into the PC gaming headset market where our products are very similar, and we've got a lot of brand leverage.

  • And we will increase a bit in China, but really look to do that more in 2019 and moving forward.

  • Operator

  • Thank you.

  • And ladies and gentlemen, this does conclude our question-and-answer session.

  • I would now like to turn the call back over to Mr. Stark for any closing remarks.

  • Juergen Stark - CEO, President and Director

  • Thank you very much.

  • As I mentioned, we look forward to speaking with our investors and analysts when we report our first quarter results in May.

  • I would encourage you to review our presentation we just posted for the quarter.

  • And we'll see you all in May.

  • Thank you very much.

  • Operator

  • Ladies and gentlemen, this does conclude today's conference -- teleconference.

  • You may now disconnect your lines at this time.

  • Thank you for your participation.