Ultra Clean Holdings Inc (UCTT) 2010 Q4 法說會逐字稿

Good afternoon. My name is Marcelo, and I will be your conference operator today. At this time I would like to welcome everyone to Ultra Clean Technology fourth quarter and fiscal year 2010 results conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer session. (Operator instructions).

Joining us today is Mr. Clarence Granger, Chairman and Chief Executive Officer; and Casey Eichler, Chief Financial Officer. I will now turn the call over to Mr. Casey Eichler. Sir, you may begin your conference.

Thank you, operator. Welcome to our fourth-quarter and fiscal year 2010 financial results conference call. With me today is Clarence Granger, Ultra Clean's Chairman and Chief Executive Officer. I will begin by presenting the financial results for our fourth quarter and fiscal year 2010, and Clarence will follow with some remarks about the business.

A few moments ago we issued a press release reporting financial results for the fourth quarter and fiscal year 2010, ended December 31, 2010. The press release can be accessed from the investor relations section of Ultra Clean's website, along with the information for the tape delay and replay of the live webcast at UCT.com. Together with our recently issued press release, this conference call enables the Company to comply with the SEC regulations for fair disclosure. Therefore, investors should accept the contents of this call as the Company's official guidance for the first quarter of fiscal 2011.

Investors should note that only the CEO and CFO are authorized to provide Company guidance. If at any time after this call we communicate any material change in guidance, it is our intent that such updates will be done officially via public forum such as a press release or publicly announced conference call.

The matters that we discuss today include forward-looking statements as defined in the US Private Securities Litigation Reform Act of 1995 related to matters including our future performance, new product orders and shipments and industry growth. Investors are cautioned that forward-looking statements involve risk and uncertainties that may cause actual results to differ materially from those projected in the forward-looking statements. Some of those risks and uncertainties are detailed in our filings with the Securities and Exchange Commission. The Company disclaims any obligation to publicly update or revise such forward-looking statements or to reflect events or circumstances that occur after this call.

Now, here are the fourth quarter and fiscal year 2010 results. Revenue for the fourth quarter was $120.3 million, or an increase of 2% from the prior quarter and an increase of 65.3% when compared to the same period a year ago. For fiscal year 2010, revenue was $443.1 million compared to $159.8 million in fiscal year 2009, an increase of 177%.

Semiconductor revenue for the fourth quarter was $93.6 million, a decrease of 2%, and non-semiconductor revenue was $26.7 million, an increase of 15% when compared to the third quarter. Semiconductor revenue was 78% of total revenue for the quarter and 80% for fiscal 2010. Revenue outside of the US was 27% in the quarter compared to 30% in the prior quarter and 26% for fiscal 2010. Two customers had revenues over 10% for the quarter and fiscal year. Gas delivery systems represented 50% of our revenue for the quarter.

Gross margin for the fourth quarter decreased to 12.3% compared to 14.5% in the third quarter and 11.6% in the same period a year ago. For the fiscal year 2010, gross margin was 13.3% compared to 5% in fiscal year 2009. Operating expenses were $9 million or 7.5%, an increase of approximately $336,000 from the prior quarter. As discussed in our conference call last quarter, operating expenses include a one-time employment related charge of $400,000.

Our operating expenses as a percentage of revenue should continue to be in the range of 7% to 8%, as previously discussed.

Our operating income was $5.8 million or 4.8% before interest expense and income taxes compared to an operating income of $8.5 million or 7.2% in the third quarter. For fiscal year 2010, operating income was $25.5 million or 5.7% compared to an operating loss of $16.1 million or 10.1% in fiscal 2009. An income tax expense of $1.7 million was recorded in the fourth quarter. As discussed in our third quarter conference call, California has disallowed the use of net operating loss carry-forwards for 2010. As a result, we had an additional income tax charge of $730,000, which impacted our fourth-quarter earnings per share by $0.03. The tax rate for the first quarter should be modeled at 28%.

Fourth-quarter net income was $3.9 million or $0.17 per share. This compares to a net income of $6.7 million or $0.29 per share in the third quarter. Net income for the fiscal year 2010 was $20.1 million or $0.87 per share compared to a net loss of $20 million or $0.94 per share for fiscal 2009. Q4 net income includes one-time employment-related charges, cash employment-related charges, of $400,000, as I mentioned earlier.

The fully diluted share count was 23 million shares, a decrease of 30,000 shares from the prior quarter. Non-cash charges for the fourth quarter were $749,000 related to FAS 123(R) and $639,000 related to depreciation and amortization.

Turning to the balance sheet, cash was $34.7 million, an increase of $6.9 million from the prior quarter. Cash net of third-party debt was $6 million, a decrease of $4.1 million during the period. Accounts receivable was $54.6 million, up $8 million from the third quarter, and days sales outstanding increased to 41 days from 35 days. Accounts payable of $46 million decreased approximately $5.4 million. Days payable outstanding at the end of the fourth quarter decreased to 39 days from 46 days at the end of the third quarter, as we were focused on leveraging discounts with our vendors.

Net inventory was $59.3 million, a decrease of $4.8 million over the prior quarter. On a year-to-date basis net inventory increased $12.3 million from $47 million reported at the end of fiscal 2009. Inventory levels are projected to remain relatively flat during the first quarter of 2011.

Earlier today we filed a common stock shelf registration statement with the SEC. Once declared effective by the SEC, the registration statement will enable us to sell up to $100 million of our common stock from time to time. The shelf will provide us with the flexibility to issue and sell common stock opportunistically in the future, should we decide to do so. If and when we elect to issue common stock under the shelf, we will file a prospectus supplement with additional details about the offering.

Now I would like to turn the call over to Clarence for our operating highlights for the fourth quarter.

Thanks, Casey. While I am pleased that during the fourth quarter of 2010 UCT once again achieved all-time high revenues, I am disappointed in our overall operational performance. During the quarter we made organizational changes at several sites. At one site specifically, we experienced operational inefficiencies. Also, we incurred additional facility and labor-related charges associated with the ramping of new product introductions. This resulted in charges that were higher than previously anticipated. We have now completed all of the planned organizational changes and facilities modifications, and we expect that the operational inefficiencies will be remediated by Q2 of 2011.

Despite these issues, we did achieve several significant milestones. Our total revenue and profit for 2010 were all-time records for UCT. Our revenue for the year was $443 million, an increase of 177% from our revenue of $159.8 million in 2009, and profits for the year were at an all-time high of $20.1 million. And, as Casey stated earlier, the fourth quarter saw an overall revenue increase of 2% to a record quarterly revenue of $120.3 million. At the same time, we were able to reduce our overall inventory by $4.8 million while increasing our shipments.

In other areas, revenue from our Asian operations decreased from 30% of total revenue in Q3 to 27% in Q4, a decrease of 7% quarter over quarter. Our non-semiconductor equipment revenue increased by 15%, while our semiconductor equipment revenue decreased by 2% quarter over quarter.

I will now provide highlights of our activities and accomplishments for the fourth quarter. Our total non-semiconductor revenue for the quarter increased from $23.1 million in Q3 to $26.7 million in Q4, a 15% increase. As stated in previous quarters, our biggest near-term growth opportunity by far continues to be in the high-brightness LED market. During the fourth quarter we achieved our stated objective by shipping multiple orders for LED-related gas delivery systems to multiple customers for a total of $6.1 million in revenue, up from $2.4 million during Q3.

We continue to receive additional production orders from multiple customers, which we anticipate will result in shipments of greater than $9 million in the first quarter of 2011. We are also beginning to restart our solar-related business activities. During the quarter we added a second solar customer. This customer is an established player in this market and should add $3 million to $5 million in new solar-related gas delivery systems business during 2011 with significant growth potential in 2012 and beyond. This product will be manufactured in China, which will increase our Asian-based revenue. In general, our relationship with all of our customers remains very strong.

This quarter we experienced a reduction in revenue from our Asian manufacturing operations from 30% of total UCT revenue in Q3 to 27% in Q4. This is the result of product mix changes during the quarter. Year-over-year we saw an increase in Asia revenue of 303%. We anticipate continued ramping of production in our new Singapore facility during 2011 as well as our China-based facilities. Also this year we anticipate additional growth in the percentage of revenue from our Asian facilities with the transfer of US production to China and Singapore in support of the activities of our key customers. During 2010 we have been very successful in transferring products from the US to Asia, and this has assisted in UCT achieving its record financial performance.

I would now like to shift to our guidance for the first quarter of 2011. In the first quarter we are projecting an increase in revenue and EPS. Our revenue guidance for the first quarter is $119 million to $124 million with earnings per share in the range of $0.19 to $0.23. As Casey discussed earlier, the tax rate for the first quarter should be model at 28%.

In summary, during the fourth quarter 2010 UCT experienced operational inefficiencies due to organizational changes and ramping of new products. We expect these inefficiencies to be remedied by the second quarter of 2011. Despite these inefficiencies, we continued to experience growth resulting in record revenues. For 2010, we saw an increase in our revenue of 177% and record earnings per share for the year, and we continue to grow revenues from our adjacent served markets.

Looking forward, we are excited about continued growth in Asia and anticipate an increase in significant new business opportunities, particularly in the high-brightness LED market in Q1 and beyond.

In closing, 2010 was a year of record revenue and profitability for UCT, and we are confident that 2011 will be another year of growth and record profitability as we further expand our business. With that, operator, we would now like to open the call for questions.

(Operator instructions) Edwin Mok, Needham & Company.

So first question is on the fourth-quarter gross margin. I think you mentioned two operating issues there. I was wondering if you can quantify the impact on gross margin of those issues in terms of basis point change sequentially, and also is the change in mix because you have lower semi-cab and higher LED business, does that change in mix also have impact on gross margin?

This is Clarence, Edwin. First of all, there were two significant issues that we mentioned. The first is that the cost of ramping the production facilities and the new opportunities associated with that and the training of personnel -- hiring and training of personnel. So we did anticipate some charges associated with that, obviously. But the cost typically ran in the order of $400,000 to $600,000 higher than we anticipated.

We also moved several people to different assignments in the quarter, and in particular we had one particular site where we had significant operational inefficiencies. I'm not prepared to completely quantify that, but we have since made organizational changes that we believe are stabilizing that facility.

And then you also ask, I guess, about the mix changes. I'll let Casey talk about the mix changes.

Yes, the mix changes didn't help -- Asia, the US and then the product mix didn't help us either, though we didn't really talk about that too much because we realized that that's just what happens from quarter to quarter. Sometimes the mix works for you, sometimes it doesn't. But these other issues Clarence were talking about were really the majority, some of which we had baked in. But we didn't have them baked into the magnitude that we saw in the amount of disruption we saw.

If I look out through 2011 as you have talked about LED being an area of growth driver for your Company, with that piece of business increasing as a percentage of total sales, should we expect that to continue to have some impact on gross margin going beyond just the first-quarter?

It could have some impact on the first half, but I think, by then, that should be worked through pretty well. We ramped up, as we talked about a little bit in the last call, ramped up some facilities costs and some overhead costs around that because, as we've talked about, we see a pretty big opportunity in front of us.

And so, when you're trying to make sure that your customers are served properly in their ramp, you probably tend to lead that a little bit more because the last thing you want to do is take a significant group of customers and not meet their needs out of the gate. So there's definitely some of that in the first half, but I think that will be worked through.

Yes, we really expect most of that to be remediated in the first quarter. And so there may be some small leftover residual in Q2, but we really think that's a Q4/Q1 event.

So if I look at your guidance, it seems to imply that there will be some operating margin improvement, maybe around a 70 to probably a 100 basis point improvement. Is that all coming from gross margin or is it from operating leverage? Can you break down this into two pieces?

I think you should consider most of it coming from the gross margin line.

That's helpful. And then, since we talked a little bit about (inaudible), I think previously, Clarence, you've talked about potentially getting to that $25 million to $30 million quarterly run rate by the fourth quarter of this year. Any update on that ramp? How you feel about that so far?

I think we are tracking exactly as we said we would, so I guess I would say, if anything, I feel better about that than ever. So we had said last quarter we thought we would do about $6 million in revenue in Q4. We actually did $6.1 million revenue in Q4, and that was a mix of some continued qualification samples or qualification orders, but it was starting -- it's now starting to turn into production-related orders as well. And so we are very much on track with that. I'm very confident that we will achieve the numbers that we said we would in that area.

Great, just two questions (inaudible). One of your customers has announced a new product recently. Are you guys more leveraged or less leverage with that, or should we not focus on it that way?

We are not talking about any customers in the area of high-brightness LEDs. But in general, a lot of what we are doing is related to new product opportunities. We are generating revenue from existing products, but we certainly feel better about our opportunities in the new product areas.

Great, that's helpful. Last question, and I'll let someone else jump in. So just if I look at the sequential growth on your non-semi revenue on the fourth quarter, it seems like most of that came from high-brightness LED. I was wondering if you could qualify that is there is any kind of increase or decrease on the other markets you serve such as solar, flat-panel, medical as well as just instrumentation? And how do you look at that going to first quarter?

Yes. It's not -- I would say we saw probably a slight decrease in flat-panel. Again, our ramp with Orbotech has been a little slower than we anticipated. Our revenues with the research side, where FEI is the primary customer, is a little bit higher than we anticipated. So I would say, net-net, that equalized.

So you're correct; the primary growth driver that we are seeing right now outside of semiconductor is in the high-brightness LED market. I mentioned earlier on the call that we did get a new solar customer; that's the first one we've -- well, we now have two solar customers, but it's the first completely solar customer that we have. And we are starting to pursue that business area again. So I'm confident that that will start to show some growth for us in 2011.

Also, the relationship with Orbotech continues to be strong, and I'm confident that we will start to see some growth in that area as well in 2011.

Great, that's all I have, thank you.

[Jay Deena], individual investor.

Shortly after Casey came on board, you guys started pitching a story to the investment community that your margins would be higher at equal revenues this cycle versus last cycle. Last cycle your execution was pretty damn good; I can't really remember any issues. And fast forwarding to now, in five years of listening to your conference calls I can't really remember a period of time where you guys sounded less in control of your business. So what exactly is going on here? Is there a structural problem, or is this a tactical breakdown?

I guess what I would say is that, again, at the end of Q3 we were at 14.5% gross margin, which was approaching our targeted margin levels. I think it was consistent. We had said that we thought we would get the 15% gross margin, and as we transitioned more products to Asia we would start to move up the margin curve. So I really don't think this is a fundamental fall down in our overall model. We were tracking on track in Q3, and we were moving in the right direction.

I do believe that this is a blip. Obviously, these kinds of things -- blip probably isn't a comfortable word. But this is a phenomenon where we experienced some organizational changes, some structural changes, and we're restructuring ourselves to move forward, back to where we were one quarter ago.

And so I'm very confident that there is nothing fundamentally wrong with the business or the business model, that we simply had an issue where we had some organizational changes that didn't work out properly, and we also had greater than anticipated cost increases associated with ramping a new product.

How much of this is fallout in the wake of Savage's departure, and what is the status of finding someone to be the Chief Operating Officer, or is that a position that is not going to be filled?

With regard to the first question, I think anytime you have an organizational change and we end up making subsequent organizational changes and it takes time for those changes to settle in. We did make some additional changes during Q4 to restructure our organization in a manner that we thought would be more efficient, most efficient moving forward, and those changes have now been completed or in place. And I'm comfortable that we will start to see significant improvements and lead to a better long-term organization as we move forward. In terms of your --

So you're halfway through the first quarter here, and basically what you're saying is that the problems were human resources in nature, not systems or structure, is what I'm gathering. Is there any evidence or anything that gives you some level of comfort that the people that are in place now are doing the right things and that it's coming through in your numbers that you see that suggest that the turn is actually sticking or starting to happen?

Well, I guess what I would say is that we are guiding to higher EPS than we guided last quarter, and we are guiding that based on the data that we have. So obviously, we believe we are experiencing improvements and we believe that those will be demonstrated in our financial results.

I also want to answer some of the previous questions that you had asked. You also asked about the CFO -- excuse me -- the COO search and if we are intending to bring in a new CLO. Yes, we are in the midst of the search. We think we are making good progress, and it is our intention to bring in a new COO into the company.

And then regarding the shelf registration, what is the purpose of raising money?

Well, again, the purpose of putting up the shelf is to have the opportunity to react to situations that are in front of you. So we don't have, as I said, a specific purpose for today. You see a lot of companies in our space and our size putting up shelves. And so it's really related to giving us the flexibility to look at opportunities going forward and be able to react more quickly to anything that would come up.

So are you guys looking to buy back stock or by the Company?

It's unlikely that we would buy back stock. We've said for a while now that we think there might be appropriate opportunities for M&A and that we did have a good experience with an M&A that we did in 2006. As our financial and business conditions are improving, it is our intent to have the resources available to us to do an acquisition, should an opportunity arise.

Lastly, at the Needham conference you articulated your expectation that the first half would be greater -- the first half of 2011 would be greater than the second half of 2010. Were you talking about revenues or earnings or both? And does that still stand?

Yes; we said revenues in the first half of 2011 would be greater than the revenues in the second half of 2010. And I am still confident that that is going to be the case. We aren't giving EPS guidance out into Q2.

Okay, thanks.

(Operator instructions) Dick Ryan, Dougherty.

I dropped off on my cell here, so I'm not sure if some of these questions were asked. Casey, on the tax rate, you said look at 28% for Q1. How should we look at that for the rest of the year?

Well, again, it's hard to guide out much beyond that. I think that I am hoping to drive the rate down over the course of the year, but with the California situation -- I knew that was going to impact us this quarter and for the year, and it did. And I think that there's going to be a period where we are going to have to continue to drive to keep our tax rate down below -- our goal line certainly is the low that. But I really can't commit for the full year at this point. We still have a valuation allowance out on some of our taxes and all of that. We have to see how that reverses and goes forward. So working those very actively right now, but 28%, I think, is a pretty good place to be for Q1.

On the LED side, where were the ship was coming out of? Are they coming out of Asia?

No. And so that is a factor in our mix out of Asia. Currently, almost 100% of our activity related to the MOCVD is coming out of our factories in the US, the expansion that I talked about, the ramp-up in efficiencies -- they all related to US activities. And so, as we move forward, we have certainly had some serious interest on the part of our customers in transitioning that to Asia. I don't expect that to happen until probably the latter part of 2011, maybe even the beginning of 2012. But as that happens, obviously that has the potential to favorably impact our long-term margins in that market.

And when you look at your rollout, 2.4 to 6 to 9, are you hitting on the opportunities that you thought you had, or are you -- have you lost getting opportunities out there that you have been able to [count]?

So far we are very confident that we haven't lost any of the opportunities that we thought we were going to get. I still remain confident that toward the end of this year will be at a $30 million a quarter run rate in that business. So it has been very encouraging. I know that market is slowing down a little bit, but we are still very confident because we are strictly a new entrant at this point, and the majority of our opportunities are still related to new product introductions. We are very excited at our positioning there.

Are you still going to be shipping prototypes or qualification units? And if that ends, could that help margins?

Well, I will let Casey talk about the margin side. We are still shipping qualification units, as we go into this more and more, are being shipped to end customers and multiple shipments to the same customer. So we are gradually moving out of the prototype stage. I would say that, still, the majority of what we are doing is prototype, but we are definitely in the transition stage.

From a margin standpoint, as I mentioned earlier, I think there is some leakage in the fact that when you're launching with some new customers and in potentially a new market for us, we are probably willing to make sure that things go very, very well by a little bit of overkill. And so I think as you move through and get more comfortable with the production and how things flow and the like, you probably pick -- you do definitely pick something up. But I don't know that it's related to prototype; it's just making sure that we get in front and do the right thing for these customers.

And I'm not sure if I caught any comments on the medical side of the business.

Actually, we didn't say anything about the medical side. Nobody has asked any questions about that. It's continuing to progress well. We still have the one primary customer. We are starting to evaluate other potential opportunities, but right now we are very heavily dependent on the growth of that into surgical. We are very heavily dependent on the growth. They continue to project good growth rate, so we remain optimistic with that. And our relationship with them remains very strong. Actually, they gave us an award recently.

I'm sorry; what was that?

They give us a performance award recently.

Thank you.

Edwin Mok, Needham & Co.

Just two questions. First is, if I go back through the gross margin line and look at how you guys have discussed about it, do you expect Q2 to actually snap back to this 14.5% on gross margin? Is that what you are suggesting in your commentary, or am I too aggressive (multiple speakers)?

I think that's too aggressive.

We certainly think we'll be heading back in that direction.

I think the comments that you made earlier are probably more accurate.

Okay, great, that's exactly what I'm trying to get to. And then I guess two more questions -- one is, do you expect any merit increase potentially coming either in the first or the second quarter that might increase your operating expense?

No. We'll probably have one in the third quarter that will impact the third quarter, but not the first or second quarter.

Okay, great, (multiple speakers) that was helpful. Lastly, just on the semi equipment side, I think this quarter was down a little bit, and your guidance implies basically flattish, maybe increase a little bit in the coming quarter. I'm just wondering how you think about that market this year. Obviously, equipment companies are talking pretty positively about the year, but how do you think the year will progress out through the rest of the year? And I remember probably like two years ago you guys had won some new design, and I know that some of those benefit of those one has already factored into your numbers already. Do you expect any more new design potentially driving some growth in the semi cap side of the business?

I guess what I would say, on the semi cap side, we're probably going to grow mostly as the Industry grows. I don't have any huge projections of other product opportunities, but I certainly am optimistic about the growth this year. A few months ago, people were very conservative. People were actually projecting that semi cap equipment would go down in 2011. Now most of the analysts and most of the customers seem to believe that it's going to be an up year in semi cap equipment. And we are very excited about that potential. (multiple speakers) We don't see it in Q1, but I think it will be coming.

Great, thank you.

(Operator instructions) Michael Needleman, Preservation Assets.

I wonder if we might be able to go back to the gross margin issue and talk about the first quarter and how you see that improving throughout not only the first quarter but in the second quarter. If I understand what you said was, some of it is mix and also some of it is on the LED side that the product is made here in the United States and not in Asia. So how do you see improving? And coming back to a question that was asked, in that gross margin assumption that you have, can you break it out as far as where the improvements might come from?

Sure, I can give you some thoughts around that. As I said, I think that we're going to get some efficiency as some of these operational changes take hold and we get the opportunity to leverage off of some of the changes that were made. There's opportunity across materials, labor and overhead for improvement, and we are focused on all those areas. I think labor, when you're trying to meet your customers' needs, you've got overtime, you've got a lot of other expediting things that you do to make sure that the customer's happy, number one. And there's a way of doing that efficiently and inefficiently, and I don't think we did it very efficiently this past quarter.

From a material standpoint we are always trying to source new opportunities both domestically and in Asia, and we've got a fairly aggressive plan that we are putting in place to continue to do that. I think we've got the right people; they just need the right amount of time to focus on it to get some of the improvement. So I think we've got some improvement opportunities there as well. But it wasn't specific to any one of those categories. On the overhead side, again, because of some of these facility costs and that, you need to get the volumes up to absorb that. But you also need to be ready for some of this new business that we've talked about. And so I think that will work itself through, but it's not just a one-quarter issue.

I don't want you to think, though, relative to the high-brightness LED, that we are anticipating needing to transition that to Asia to meet a reasonable margin. We anticipate achieving a reasonable margin in the US. It's just that in this last quarter we were significantly ramping up the volume, so we had inefficiencies in people and training people and hiring people, and we also had incremental facilities costs that we had anticipated to some degree that ended up being higher than we anticipated. So we expect to see significant improvement in that performance. We are not waiting until we move this to Asia; we expect to see significant performance improvements in that area in Q1 and Q2.

I think you said also that this cost you, I think, $400,000 to $600,000. So would you say that the labor component of the gross margin aspect is taken care of and now we need to move to more of just the ramp? Or where do you see the benefits coming in this quarter and next quarter? Because I know you have said that you were working on that, but is the labor component aspect of hiring, getting the right people; is that completed?

Yes. Now, but that won't be completely behind us until those people get fully trained. And so our expectation is that those people will be fully trained or start getting training in Q1 and become fully trained by Q2 or the latter part of Q2.

Just a last question -- when you guys thought about this ramp taking place and you looked at what you anticipated as far as order development and just the people on planning, was it that you saw acceleration this last quarter in terms of just the magnitude of orders and you definitely wanted to get the product out? Or was it that you underestimated just the amount of people that you thought you needed?

I think what it turned out to be -- I think the products turned out to be more complex and there were more changes associated with those products, and as a consequence we underestimated the cost and complexity of ramping up those new products.

Okay, thank you gentlemen.

We also, as you remember, guided to revenues of $10 million to $15 million. And when we did that -- I'm sorry, $110 million to $115 million. When we did that, we certainly thought that was fair. As you can see, the revenue came in a little stronger, and that certainly adds to the issue as well a little bit.

At this time we have no other questions in queue. Mr. Granger, do you have any final comments you would like to make?

I appreciate everybody dialing in. We continue, as I said, to see a good 2011. We're going to continue to work on some of these issues that we have been talking about and look forward to talking to some of you during the quarter.

Ladies and gentlemen, this does conclude today's conference call. You may now disconnect.