Unifi Inc (UFI) 2003 Q2 法說會逐字稿

Good afternoon, and welcome to your Unifi Incorporated second quarter fiscal 2003 conference call. At this time, all lines have been placed on a listen-only mode, and the floor will be open for questions and comments following the presentation.

At this time, it is my pleasure to turn the floor over to your host, Mr. [Billy] [ph] Moore, the Executive Vice President and Chief Financial Officer. Sir, you may begin.

Good afternoon. Thank you for joining us for Unifi’s fiscal 2003 second quarter conference call. As you know, certain statements included herein are forward-looking statements within the meaning of the Federal Securities Laws. Management cautions that forward-looking statements are not guarantees, and that actual results could differ materially from those expressed or implied in the forward-looking statements.

For the second fiscal quarter ended December the 29th, 2002 the company announced a net loss of $2.2m or four cents per share, which is an improvement over the net loss of $3.5m or seven cents per share for the prior year December quarter.

The results of the December quarter brings year-to-date net income to $2.2m or four cents per share versus a net loss of $38.7m or 73 cents per share including the cumulative affect of an accounting change of $37.9m or 71 cents per share for the first six months of last year.

Reported earnings are in line with expectations provided at the end of the previous quarter, when the company advised that it anticipated finishing the quarter with a loss of four to seven cents per share.

Global sales volumes for the first six months of fiscal 2003 were .6 percent higher than the sales volumes in the comparable period of fiscal 2002. While the most recent quarter experienced a 5.5 percent decline compared to the same period in fiscal 2002.

For the quarter net sales were $201.9m, compared to $221.7m of net sales for the prior year quarter. Net sales for the first six months of fiscal 2003 totaled $423.4m, compared to $444.7m for the same period last year, reflecting stabilization of sales volumes and a reduction of sales price accompanied by a slight change in product mix.

Our successful second quarter can be attributed to our ongoing strategic focus to improve free cash flow and strengthen the company’s balance sheet. We ended the December quarter with no amounts outstanding under the bank credit facility, and had cash on-hand of $48.3m, up from $25.1m in the second September 2002 quarter, further enhancing our long-term flexibility to grow the company’s product and global customer base.

Our continuing ability to significantly reduce debt and improve our cash position is a result of the application of cash flows from operations and distributions of earnings from unconsolidated equity affiliates, reductions in working capital, and the better utilization of the company’s state-of-the-art manufacturing and information technology systems to minimize capital expenditures.

The continued improvement in profitability levels on an equivalent or slightly reduced levels of sales is a clear indication that our equity investments and strategies involving customer service, manufacturing excellence, and maximization of cash flows are sound, and continuing to generate the positive results we anticipated.

Also provided and a positive impact to the second quarter numbers was pre-tax income of $2.6m stemming from our equity and earnings of our unconsolidated affiliates, Parkdale America, Unifi-SANS Technical Fibers, and UNF Industries.

The company also realized a pre-tax benefit in the fiscal 2003 and 2002 December quarter results of 7.8m and 7.4m, respectively, generated by the manufacturing alliance with DuPont. Despite the continuance of the previously disclosed arbitration process between our two companies Unifi and DuPont’s Management continue to work diligently to maximize the benefits from the alliance. Due to the breadth and complexity of the arbitration the Arbitration Panel has advised that the final ruling will be delayed until the end of February 2003.

The decisions that will be rendered by the arbitrator could have a material affect on Unifi’s financial position, results of operations, and cash flows. Costs associated with the arbitration included in our SG&A costs totaled $1.6m for the December quarter, bringing the year-to-date total to $2.8m.

The continued improvement of our balance sheet provides us a competitive advantage, and will help drive growth throughout the world, and whether the current economic environment has successfully managed the realities of our industry.

Globally our operations in Brazil continue to perform well, with profits and volumes up significantly for the quarter and year-to-date periods of fiscal 2003 compared to those realized in the prior year comparable periods. Our success in Brazil is a result of continued advances in market penetration and operational efficiencies.

Elsewhere our European operations continue to perform in-line with expectations. And Unifi Asia based in Hong Kong continues to make progress in developing Asian customers and preparing the way for the future growth in the region.

In the Americas we continue to drive sales of Unifi products through an ongoing commitment to innovation and alliances.

The Caribbean Basin continues to offer opportunity for expansion, and we anticipate further sales growth from the region.

For the remainder of the year we expect to face a difficult operating environment, as we anticipate continued economic weakness and import pressures. We will continue to reduce our operating costs in light of the expected difficult operating environment. We also plan to develop opportunities through Unifi Asia, and our relationship with Tuntex Tile and Public Company Limited and our focus on operational efficiency and quality will continue to drive profitability.

Our focus on operational efficiency and quality will continue to drive profitability. We are working throughout the organization to duplicate successes such as those in Brazil, where profits have risen substantially, and Unifi focus on manufacturing excellence have allowed for significant improvements in the range and the quality of the products produced.

The company has made a policy change with regard to providing future earnings guidance. We will no longer provide quarterly or annual earnings per share guidance. In the future the company will continue to provide investors with a perspective on its strategic initiatives, and those factors critical to understanding its business, liquidity, and operating environment.

Following a series of discussions with our Board of Directors we believe that establishing and providing short-term guidance prevents a more meaningful focus on the strategic initiatives that the company has taken to build its business and succeed on the long-term.

Thank you for your time. Ian, I would now like to open the floor to questions or comments.

Thank you, sir. The floor is now open for questions and comments. (Caller Instructions.)

Our first question comes from Dennis Rosenberg. Sir, please state your question.

Hi, Billy.

Hey, good afternoon, Dennis.

How long do you think it will be before your strategic initiatives in Asia bear enough fruit to where it becomes a significant profit contributor to the company?

Probably, Dennis, the one that we have that’s the closest to fruition is our opportunities in Thailand related to Tuntex. The initial phase of that project which was to – for us to go-in and utilize our manufacturing expertise and knowledge of texturing to upgrade their products to where we would feel comfortable putting the Unifi name on the box is getting closer to fruition. Our Management Group has a planned trip scheduled for somewhere in late February to visit those sites to see if we’ve made enough progress where we could put our name on the box.

If we get to that point and we’re comfortable with the product and the quality of that product I think you could start seeing some benefits in Asia as you get into the maybe the June, September quarter. Now, whether it’s a meaningful result on the financials only time will tell, but I think it is an excellent opportunity as a first step into Asia.

If you would just isolate that business, what is the profit potential?

I have a difficult time measuring that until we get in there and really see what type of products can be run, how we can distribute those products, where we could distribute those products, and the margins you can achieve on those. I don’t know how to measure that today, but it is a significant opportunity to move pounds that should be attractively cost in the market.

Okay. And when you talk about a difficult environment in the second half of this fiscal year is that any different than what you were thinking three months ago?

Not substantially. The only thing we’ve seen is just, you know, continued weakness of retail. And we thought it might have bounced-back a little bit more than it has, but other than that not really. You know, some of the sectors that we thought might bounce-back a little faster, the home upholstery sector looks like it’s still going to be soft for a little bit longer.

What about the automotive?

Yeah, our automotive business has stayed, you know, reasonably strong. And I think it will continue to.

Okay. Thank you.

Our next question comes from Brian Hunt. Sir.

Thank you. Billy, could you tell me what capex was for the quarter? And whether you’ve changed your plans for the rest of the year?

Our capex – I can give you the six-month capex.

Okay, that’s fine.

That number is $13.9m. My expectation at this time is that our capex will come-in for the full fiscal year somewhere between $21m and $22m.

Okay. And does that $13.9 include investment in ventures?

No, there is no investment in ventures that is in this quarter, for that six-month period.

Okay.

That $13.9 is primarily just capex.

All right. And so, it looks like you all generated about $10m of free cash for the quarter. And yet, your cash balance went-up by about $23.2. Can you give us a clue where that additional $13m came from? Did you get a dividend from somewhere?

Yes, we received a large dividend distribution – we actually received two during the quarter. We received one from our investment in Israel of approximately $3m, and we received one from Parkdale Mills of around $6.2m, $6.8m.

Okay. And do you assume that there’s capabilities for more, future dividends this year from the provider of those entities?

Yes, we would expect dividend distributions from both of those during this calendar year.

Okay. And then, last quarter you talked about some new opportunities in the CDI Region, in [bottom weight] [ph] fabrics, as well as some new products you’d sell with Nikki. Are there any other new achievements we should expect that drive any significant volume in the near-term?

I mean we continue to try to develop those markets. I mean it’s a market that we have never tried to penetrate before probably six to nine months ago. There’s a lot of opportunities. People are – a lot of the retailers that we’re working with and the brand-name manufacturers are looking for alternative sources to the Asian manufacturers in an effort to try to have quicker replenishment on store shelves. And so, we’re working with quite a few different companies right now to try to figure-out how we can participate in that chain.

Okay. And then, just to backtrack, is it possible to quantify what you think the dividends might be for the year?

You know, a lot of that depends on the operating results of those entities. My expectation is that the one with – it’s a tough question to answer, okay. And for two reasons. The one with Israel, our joint venture in Israel is an easier one to answer because we control 50 percent of it so we have an equal vote in the cash distributions.

Okay.

Okay, so that one I would expect over the remainder of the calendar year we should get anywhere from $1.5m to $4m of cash distributed back from Israel as a result of cash flow generated by those operations.

All right.

Our other source of distributions that we got in this quarter was Parkdale America. And we own 34 percent of Parkdale America, Parkdale Mills own 66 percent. Obviously, they control the cash distributions. The only thing that is required to be distributed is cash flow sufficient to pay taxes. Any distributions above that have to be effectively approved by Parkdale, and so, that’s a different one, a more difficult one for me to quantify just because I don’t control that distribution.

Okay, got you. Is there any – I know you all focus on filament, but is there any top or is there any bottom on potentially selling your interest in Parkdale America, to Parkdale Mills? Since you don’t effectively have control of that entity?

It’s not something that we have actively pursued selling to Parkdale. It’s technically not one of our core businesses as we’ve defined it here, so that if we were offered a fair price for Parkdale America it’s something we would consider and give a lot of consideration to potentially selling. But, again, when you’re a 34 percent owner it’s not something that you control.

Do you know the book value of that business as of the quarter, or within the most recent period?

I don’t know that number. Our share of the investment on our books is approximately $155m.

All right.

Just to clarify, I think I may have given you the wrong number on one question you asked. The distributions that we got this quarter. We got $3m from our investment in Israel, and we got $6.1m dividend from our investment in Parkdale Mills or Parkdale America. And subsequent to year-end we’ve got an additional $1.3m.

That’s subsequent to the end of the quarter?

Subsequent to the end of the quarter, correct.

That is 1.3 from Israel, or 1.3 from Parkdale?

From Parkdale.

Okay. Okey-doke, thank you very much.

Thanks.

One last question.

Sure.

What’s the intent with the cash? You continue to build this cash full -- $48m now?

Yeah, we had a Board Meeting today, and that was a topic of discussion, obviously. Until we get the arbitration results behind us we don’t have any commitments for that cash. We don’t think it would be the prudent thing to do to make a decision what we’re going to do with until we know the arbitration results. We’ve been told by the Panel, as I mentioned, we should have a result from them by the end of February. Once we understand that then we will sit and make a – go-back to the Board with some of our recommendations, what Management would like to do with the cash, and then get their approval. But I think it’s premature to talk about it until I get that arbitration behind us.

All right. Well, I’ll get back into queue. I’ve got one or two more. Thanks.

Thanks.

Our next question comes from Ed [Brae] [ph].

Yeah, good afternoon, Billy.

Hi, good afternoon, Ed.

Let’s see, a few questions here, the first one is just I am trying to understand structurally why your Brazilian operations are doing so well, I guess, in relation to the U.S. manufacturing bases? Maybe you can just talk about why the cost structure there is so much more appealing than what you have here?

Well, you know, one thing fundamentally different between the two businesses is that the U.S. Government doesn’t do a lot to protect any manufacturing in the United States. It – the Brazilian markets are protected by significant duties to protect their borders, and so that manufacturers in the country have a much better opportunity to perform well. And Brazil is a perfect example of that. Brazil has high duty rates and it makes in-country opportunities more beneficial than they are in the United States.

There’s a limited number of first quality producers of polyester in Brazil. They have a large market share there. They produce an excellent product, probably the best product produced in Brazil in my opinion. And they’ve been able to buy raw materials effectively, and charge prices that gave them an adequate margin.

So this is primarily servicing the Brazilian local needs or country needs, not for re-export back to the U.S.?

No, none of the goods that are manufactured in Brazil are sold back to the United States. They’re substantially all sold in Brazil with maybe a little bit being sold into, you know, bordering countries.

Okay. Just jumping around here, the arbitration with DuPont, I am not going to ask about that specifically, but the agreement with them has this foot call provision that I think for whoever is left following your company, I guess, there’s some fear that you would take-on potentially in a call, future calling, their share of the joint venture with them not wanting to be in this business long-term. And I know you have the provision to sell it, but for whoever owns it is there a benefit to it being held 100 percent by one entity? In other words, are there further cost-cuts that can be achieved by either DuPont owning your stake, or by you buying DuPont stake?

Yeah, I think clearly if – you know, what we have tried to do between Unifi and DuPont, you know, absent the arbitration is run it as if we were one company. Quite frankly, that’s probably easier said than done. And I believe that whoever owns those facilities, if Unifi owned the [Kinston] [ph] Plant, or if DuPont owned the [Yaketville] [ph] Plant, there are even further opportunities and synergies that could be realized if they were owned by one party.

Okay. Going to the revenue line for a second. Revenues were, obviously, trailing volumes, and so there’s pricing pressure. Is it SKU’d toward either polyester or toward nylon, or is there just general price deflation across all the products? Or is it a mix this year?

Yeah, some of the pricing decline you would see is mix related, especially if you look at last December quarter versus this December quarter. I mean our dyed yarn business was much better last December quarter than it is this December quarter. And most of that is just economy driven and automotive driven, specifically. But the general price decline, picking out mix is an across-the-board sales price pressure issue. Polyester is not that much different than nylon.

Okay. And then, finally, after all these distributions from Parkdale, though, what is Parkdale’s net cash position as it looks today?

If -- Parkdale would have net cash on their balance sheet of approximately $100m at the end of the December quarter.

Okay. And do they have significant cap – I guess capex needs going forward, or retooling needs? Or whatever it might be, that are obvious uses of that cash?

Parkdale does have a capex plan in place that’s going forward. I sit on the Parkdale America Board with them. There is a plan in place to continue to keep their plants technologically on top of the market. I believe they’re the number one player in the U.S. today, clearly. And they like to retain that position which we agree with. My opinion also is that the business has generated sufficient cash that it could probably do most of the capex out of continuing operating results, and the $100m is something that is being discussed between the two parties as to potential distributions long-term.

Okay. A couple more. The equity income line, I know over the years it’s contained a lot of different things. But it seems as if the joint ventures, and the Parkdale joint venture are all sort of cash-producing entities now. Can we expect that to be a more, I guess, systematic income line unlike the past? Or will this thing always jump around?

I’d love to tell you that it’s not going to be volatile. But I’d be misleading you, and probably am misleading myself if I made that statement. I think there is some volatility to it. I also do expect that it will, for at least the next few preceding quarters, following quarters, that it will be positive. I don’t think it will continue this $6m run rate for six months. I expect it to fall-off slightly as we move into the last, the next six months. But I expect it to continue to be positive.

And then, finally, with respect to your own capital spending needs, obviously you’re not doing anything new in the U.S. So far, the international ideas have been using your technology know-how and less so on the capital side. And even on these joint ventures being really, I think, husbanding the capital. If we look-out two to three years are those sorts of strategies going to, I guess, tick-up the capex line more materially? Or can we expect this lowish level to continue for awhile?

From a domestic standpoint I think the levels you see are what you’re going to get going forward. I mean I am not aware of any plans in the next three to four years to spend significant capex in the United States in the business areas we’re in today. Internationally or globally I think there are some opportunities as we expand. If we just make the decision not to move some assets to those locations, that you could spend some capex dollars in certain locations going forward. But again, I don’t believe it’s significant capex dollars.

Okay. And when you – I’ll just leave it after this – but when you think about your international spending needs. If for instance, you wanted to build a new plant next to, you know, a sewing operation in the Far East, whatever it might look like. Does – can you – is that a relatively low-cost investment, because you can just transfer some of the machinery out of the U.S. base over there? Or are we really talking about a true Greenfield type of analysis? I mean is a lot of the stuff, as volumes out of the U.S. continue to shrink is that, can that, that machinery and plant then be transferred to other areas around the world?

It can. I mean recently we – I think we’ve sent several machines. I think it was six machines from Ireland to Brazil. Those machines were transferred, they’re up and running in Brazil as we speak, and it’s not – there’s some cost to it, but it’s not like buying new machines.

Okay, okay. Great. Thanks very much.

Certainly.

Our next question comes from Nelson [Opus] [ph].

Hello, Nelson.

I’ll check the line, sir. Our next question comes from Tom [Lewis] [ph].

Hi, Billy.

Hi, Tom. Good afternoon.

Could you update us on the progress that the Sans joint venture – is that still a drag on earnings?

It is a drag on earnings. It’s – you know, we’ve made a lot of progress, though. Several quarters back we had a lot of technology issues with the plant. It was not able to produce the quality of products we expected it to make. We’ve made changes in the staffing of the plant. We put some of our own operational management within the plant to improve that, and we’ve accomplished that. The volumes are on-target now, and we’re moving towards where we should be getting close to a breakeven position shortly.

Are you running the sorts of product through there that you originally planned?

Yes, we are.

Okay. And can you give us a sense of the European operations, were they profitable in the quarter?

No, they were not. They were cash flow positive, but were not profitable. Again, Europe and the United States are facing a lot of the – similar issues. You know, a lot of import pressure, pressure on pricing.

Okay. Well, I’ll leave it at that. Thanks.

Okay. Thanks, Tom.

Our next question comes from [Steven Korn] [ph].

Billy.

Hi, good afternoon, Steven.

How are you?

Been well.

Hope you are.

I am.

Can you quantify what you mean by increasing pressure from imports? Is that a change from what you’re seeing now when you look-out towards the second half of at least the calendar year?

You know, one of the thing that happened effective, I guess, January 1st of last year. Some of the quotas came-off on importation of fibers. And for the last, you know, 12 months we’ve seen a pick-up in the importation of fibers into the United States. It’s still not a big percentage of fibers, but it just puts pressure on pricing that customers have access to that fiber. They use it as a lever against you and in pricing your products in the market. My guess is it’s less than 10 percent of the fiber that’s utilized in the U.S. is imported. But it does put pressure on pricing. Europe has a much higher percent of imported fiber into the country than we do. And so, there’s even more pressure on pricing there than you see here.

Okay. And then, you gave that cash balance for Parkdale Mills. Is there a cash balance, or what does the balance sheet look like for the Israel joint venture?

I don’t think they’re sitting on a lot of cash, because we distributed substantially all of that in the December quarter.

Okay. And so, if you had to think about what normalized dividend distributions would be out of those two facilities how should we think about what that is?

Again, a lot of it depends on the profitability of those operations, but $5m to $10m annually.

Okay. Great, thank you very much.

Sure. Thanks, Steven.

Our next question comes from Steve [Maser] [ph].

I didn’t have any question. I apologize.

Thank you, sir. Our next question comes from Tom [Spiro] [ph].

Tom Spiro. Hi, Billy.

Hi, Tom. How are you doing today?

Fine. On the subject of the arbitration, just so I can understand, have both sides completed their presentations to the panel?

We did, we completed those last Thursday.

You’re simply now are passively awaiting while they complete their deliberation?

That’s correct.

Thanks a lot.

Thanks, Tom.

Again, the floor is still open for questions. If you do have a question please press the numbers one, followed by four on your touch-tone telephone at this time.

Our next question comes from William Martindale. Sir.

Hi, Billy.

Hi, Bill. Good afternoon.

How are you doing?

I am doing well.

Well, I had a more general question on the perception of the global balance as it pertains to filament capacity. And in addition to that, what’s the perceived growth rate globally?

For polyester?

Filament, yes?

Polyester is probably growing globally in the range of seven to nine percent annually. Nylon would be a much smaller growth rate, probably closer to [50 percent].

And the balance of supply-demand in there?

You know, we’re expecting to see price increases, some of our vendors have already announced some price increases, as underlying raw material prices have gone-up. So, obviously, there must be close to imbalance otherwise we’d have a difficult time passing along price increases. Now, there’s probably, though, slightly still more supply than demand on a global scale.

And has that basically from being grown-out over the last four or five years with no new capacity coming in?

That would be correct.

Now, another question that may be, you know, too technical to get into relating to the arbitration, but it seemed to me there was some lack of clarity in there as to whether Unifi would be obligated to purchase at the price established, if they elected to purchase the facilities. Is that …?

You mean you’re talking about as part of the arbitration?

Well, and part of the agreement?

Yeah, there is a put-call provision within the agreement, and DuPont has a right to put that facility to Unifi in June of 2005 at a price between $300m and $600m. And Unifi also has the right to call that facility during that same time, or that same time, so that same price range. That’s the way the agreements are drafted.

And so, I guess, one can conclude that if there was something that occurred prior to that date that it sort of undermines the strength of that – of, you know, requirement?

I am not sure I understand the question, Bill?

Well, what mean is that there’s a terminal date there which is used for the establishment of the range of pricing.

Right.

If something were to occur to change that, you know, that agreement, or that alliance, you know, like it appears to be those numbers wouldn’t necessarily hold water?

Yeah, I don’t know how to answer that one until I see the arbitration ruling.

Right.

I am not aware of anything that will be ruled upon by the arbitrators that would affect that pricing. My expectation is that this alliance will continue following the arbitration, and I think the two parties have both mutually benefited by the alliance. It’s a big benefit to Unifi, and it’s a big benefit to DuPont financially. And I don’t think the two parties have an intent to dissolve it at this time. I don’t think it’s an option. We’re too intertwined in our facilities, and the way we run the business today. And so, I expect it to continue till 2005, and then we’ll address the put at that time in the call. And again, there’s nothing to say in the agreement that it could not continue past 2005. But that’s just the date that’s included in the agreement.

Great, well, thank you. That’s all I had.

Thanks, Bill.

Our next question comes from Nelson Opus.

I am just curious, in the conversation that the Board had in regard to defer giving guidance going forward whether there was any discussion of whether or not the organization owed it to the shareholders to provide what the company considered to be an appropriate ROE, say on a one to three-year perspective?

At the Board Meeting today we did not discuss ROE.

What – I mean what would you say that would be?

I mean, obviously, it’s an enviable position to get people to look long-term.

Yeah.

But on the other hand, there’s also that element of accountability.

Right.

Maybe you could discuss the accountability issue? Obviously, there are some shortfalls that you’ve identified in holding yourself to short-term earnings, but what are the larger issues of accountability that we can feel comfortable with in regard to the shareholders vis-à-vis management going forward?

I mean I can’t give you a percentage because I can’t speak for the Board of Directors. I will tell you that our Board of Directors is very focused on shareholder issues. They’re very focused on the fact that we run this business for our shareholders. We don’t run it for the management, we don’t run it for the employees, we run it for the shareholders. And that is their primary focus. They did not discuss today any long-term ROE that they were targeting. All we want to do is maximize the return for shareholders. And I would think our Board feels the same way.

And those formulas will continue to show-up in the compensation section, I assume? And there shouldn’t be any change in that regard, correct?

No, there shouldn’t be. I mean there’s no intent to change the compensation structure of the company by the Board. Obviously, I mean, the Board compensates us based on the performance we provide, and you know, we work for the Board.

Well, like I’ve said to other people, you know, it’s an enviable position in some ways, but you’re not Coca-Cola so it’s a little trickier. But we’ll keep – we’ll stay-tuned.

Okay.

If there are any further questions please press the numbers one, followed by four on your touch-tone telephone at this time.

Sir, our next question comes from Ed Brae. Sir.

Yeah, Billy, just one more additional, on the – just going back, again, to the capital structure of the company. And I know the arbitration is, I guess, in the near-term you’re not going to do anything in advance of that. But as best you can tell from a cash flow perspective and what your capital needs might be, and you know, what sort of debt you already have outstanding what would be the, I guess, the primary use of the cash, you know, post-arbitration? Assuming the arbitration isn’t material, although, you know, it may be?

Yeah, I think the first goal, I mean obviously what we want to do is have a meeting with the Board to talk about opportunities, not necessarily new opportunities, but talk about our existing businesses and where we see those going. We’ll also talk about new business opportunities, and you know, quite frankly, my goal is to try to figure-out a way to grow the top line and the bottom line.

I think that’s a good use of the cash if we can find a business that will give us a type of return that, again, back to Nelson’s comment, will give us the type of ROE that the shareholders would be pleased with. Absent that we’ll look at other alternatives such as repurchase of stock in the market, which is an alternative, or repurchasing bonds in the market, which is another alternative. But my preference would be to find a way to invest the money to grow the business.

Okay. Thanks.

Mr. Moore, there appear to be no further questions.

Again, thank you for joining me for this conference call. I look forward to speaking with you at the end of the third quarter. Thank you very much.

Thank you. This does conclude today’s presentation. Please disconnect your lines, and have a wonderful day.