U-Haul Holding Co (UHAL) 2017 Q2 法說會逐字稿

Good morning, and welcome to the AMERCO second-quarter fiscal 2017 investor conference call.

(Operator Instructions)

Please note, this event is being recorded. I would now like to turn the conference over to Sebastian Reyes. Please go ahead.

Good morning, everyone, and thank you for joining us today. Welcome to the AMERCO second-quarter fiscal 2017 investor call.

Before we begin, I would like to remind everyone that certain of the statements during this call, including without limitation, statements regarding revenue, expenses, income, and general growth of our business may constitute forward-looking statements within the meaning of the Safe Harbor provisions of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended.

Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Certain factors could cause actual results to differ materially from those projected. For a discussion of the risks and uncertainties that may affect AMERCO's business and future operating results, please refer to Form 10-Q for the quarter ended September 30, 2016, which is on file with the US Securities and Exchange Commission.

I will now turn the call over to Joe Shoen, Chairman of AMERCO.

Thanks, Sebastien. I appreciate everybody being on the call.

Our earnings, as you all have seen, are below last year but about what was anticipated with our discussion last quarter's call. The two big factors are the used truck market and last quarter, we discussed one-way transactions.

We saw one-way transactions firm up in the last quarter here, but not dollar per transaction. If you recall, last winter into the spring, we spoke about how our fleet was a little bit behind -- our one-way fleet was a little bit behind in total numbers and we expected that to catch up in late June or July.

Those numbers caught up, and we saw our transactions start to positively develop. I expect that we will see decent transaction growth through the winter.

I'm always a little bit apprehensive to predict anything, but that is the way it looks right now, and I expect we will see a continued sluggish truck resell market both in volume that the market wants to absorb and in dollar -- the pricing that we are getting.

Other than that, we are proceeding ahead with adding more fleet, particularly in the larger-size truck, the 26 footer, and we have a pipeline full of self-storage projects, and I expect we'll see a increased amount of inventory come on in this 12 months compared to the prior 12 months.

I'm fairly positive about anything, although I am a normally apprehensive person, as you all know.

With that, we'll turn it over to Jason, let Jason walk through the numbers, and then we will go to questions. Thank you.

Thanks, Joe.

Yesterday, we reported second-quarter earnings of $9.01 per share as compared to $9.36 per share for the same period in fiscal 2016. Through all of my comments, my period-over-period comparisons are going to be for the second quarter of 2017 versus the second quarter of fiscal 2016 unless specifically noted.

Included in the results for the second quarter of fiscal 2017 was an after-tax benefit of $0.79 per share associated with our settlement of the PEI litigation. This resulted in a reduction of operating expenses of $24.6 million during the quarter.

Excluding this after-tax benefit, adjusted earnings were approximately $8.22 per share for the second quarter of this year.

To tie a knot on this issue, in October, we settled our outstanding litigation with PODS Enterprises. That dated back to mid 2012. In the previous two fiscal years, we had accrued approximately $66 million of expenses associated with what we believe would be the probable ultimate outcome of that case.

We were able to reach a settlement with them and that included a cash payment of $41.4 million.

Operating earnings in our Moving and Storage segment decreased $4 million to $293 million. Equipment rental revenues, we increased them 2% or about $13 million during the quarter. We continued to increase our transactions while revenue per transaction was down nominally, as Joe mentioned.

It is this continued growth in transactions that leads us to believe we have opportunities to further improve revenue beyond the current pace. The number of trucks in the rental fleet continues to be higher than at the same period last year.

[eMove] revenue growth for the month of October was slightly ahead of our six-month trend. Storage revenues were up a little over $10 million or about 16%. Revenue growth is coming from occupancy gains at existing locations, new facilities being added to the system, as well as a general improvement in rates.

Over the last 12 months, we've added approximately 3.5 million net rentable square feet to the system; about 540,000 of that came online during the second quarter of this year.

Our spending on real estate related CapEx for the first six months was $252 million. That is down about $24 million from last year at this time with the majority of that decrease coming from reduced acquisitions of existing storage facilities.

Our all-in quoted occupancy statistics, we finished the quarter at 79% occupancy, down about 5%. Looking at square feet occupied on average, we experienced a 2.4 million square foot increase in how many square feet were occupied during the quarter.

Of the 3.5 million square feet of new storage that I just mentioned, about half of that came from our own development, the other half from acquisitions, and the average occupancy of that new square footage was about 19%.

Excluding that new square footage, we would have reported occupancy just under 90%. Operating expenses at the Moving and Storage segment decreased a little over $8 million for the quarter, if you exclude the effect of the reversal of the PEI litigation accrual, operating expenses otherwise increased $16.5 million.

We saw increases in personnel, repair and maintenance, property taxes, and we still are seeing the effect of our accounting for the expensing of smaller capital items. During the second quarter, this last item accounted for about a $4 million increase in our operating expenses.

Capital expenditures on new rental trucks for the six months was $665 million; that's compared to $426 million last year. While proceeds from the sale of retired rental equipment were $308 million, that is down from $376 million for the first six months of last year.

Our rental equipment depreciation expense, I'm looking at this before taking into account gains, for the quarter was up $17.4 million primarily due to additional equipment in the rental fleet.

Gains on the disposal of property, plant and equipment, primarily the sales of our trucks, decreased $23.2 million. We increased our pace of truck sales from the first quarter, but we're still below last year's amount.

The decrease in gains for the quarter was primarily the result of higher average cost of equipment being sold along with a decrease in the average sales price per unit.

Our consolidated earnings from operations including all of our segments were $307 million, which is down $4 million from last year. Cash and credit availability at the Moving and Storage segment was $971 million at September 30. Our notes, loans, and capital leases payable were approximately $3 billion.

During the second quarter, we completed the financing of 23 storage properties resulting in $94.5 million of proceeds. We continue to maintain a pool of unencumbered real estate assets that could be leveraged in the future.

And finally, on October 5 of this year, we declared a $1 per share cash dividend, which was paid on November 3 of this year.

With that, I'd like to hand the call back to Joe.

Thanks, Jason. We'll go to questions now. Operator, go ahead and take questions, please.

(Operator Instructions )

Our first question comes from Jim Barrett from CL King & Associates. Please go ahead.

Good morning, everyone.

Good morning.

Good morning, Jim.

Joe, could you talk about at least directionally, what percentage of your customers go into a U-Haul location and actually negotiate -- attempt to negotiate price?

I don't know a statistic there. You know, between the internet doing price comparisons, which people as you know do, and we try to make it not totally easy to do, but nevertheless people do.

I don't have a good number on that. I would say that it's not an abnormal thing. People giving and depends what you want to do. But a lot of people say something, Jim, like, I want to rent it, not buy it. In other words, they are not directly negotiating, but they are negotiating.

Someone like that hopefully, they will pitch back a product feature or maybe include a dozen furniture pads or something like that. It kind of depends on where the person views themselves.

I think that, and I believe I mentioned it last quarter's call, is that I didn't like where we were headed on transactions going into middle of June and going into July, and so I told people to get the transactions.

To a certain extent, they interpret that as permission to give way if they are in doubt as to whether the customer -- they are going to lose the customer over rate.

So we recovered some of that clearly in this last quarter. We clearly did better, but we're still below where we were the same time last year in dollar per transaction, which as you know, it's kind of a somewhat a metaphor for pricing.

It's not uncommon at all that people push back on price, and it's very common that people will say they quoted a competitor and they will either ask us to price match or something.

Now, we don't always price match. We don't guarantee a price match because there is a lot of factors going on, and we don't think it would be smart to guarantee a price match. But at the retail or point-of-sale, people are going to be -- if they have the inventory, they are going to be inclined to price match.

I see. Can you tell us how are your branch managers actually incentivized? Is it salary plus bonus? How does that work?

Yes. The store manager and then what we call marketing company at the level above the store manager, they are on an incentive that, of course always has a total gross increase, just total gross dollar incentive. Then the people who run the stores are actually on a profitability incentive, so every one of those stores we produce a P&L every month for.

And it puts their expenses against their revenue, including self-storage, hitches, box sales, and truck rentals, and they are attempting to manage that mix of stuff and their expenses, and their primary variable expense of course being payroll and utilities.

They try to manage those to show a profit on a monthly basis, and then they get a -- some performance compensation based on that. So they are not incentivized directly on transactions, but we run a level of incentives based on what we call workload or utilization.

So if people are running high utilization, sometimes they're not able to get a transaction growth because they are just short of equipment. They have another way to get compensation, which is by having very high utilization. So they could still get a bonus even if revenue wasn't up if utilization was up enough.

Makes sense. And then on a separate subject, when was the last time the Company reported breakeven or a loss on disposals. And what kind of industry factors correlate with those kind of results?

Neither, and Jason, you have to help me, either first quarter 2008 or 2009, I think we actually had a loss on disposal for [eight quarters] --.

It was fiscal 2009.

Yes, fiscal 2009. And that was, if you kind of think back, the truck market, particularly the pickup and van market, just went dead. And our primary way of getting liquid with our pickup and vans is through the organized auto auction business, [Angle], and American ? the various auto auctions around the country.

The primary way we sell our bigger trucks, our six wheel trucks, is we retail them ourselves. It is a little different between the two of them.

Correct me if I'm wrong, Jason, we did probably a little better than breakeven in our six foot trucks. Somewhere right at breakeven or maybe a little bit better. And we made money on our pickups and vans last quarter but not as such as we had been. Is that pretty accurate?

I?m sorry.

I just want to make sure.

On the (multiple speakers) trucks, we actually had some gains in the quarter. Again, those sales are a relatively small amount of our overall sales, so it was not that material but it was positive during this year over year.

And the last time -- to put some more detail to the last time we experienced this, September of 2008 we experienced losses in pickups and cargo vans that lasted until February of the following calendar year.

Okay. So it was for almost five months then, six months.

Yes.

Jim, I don't have a crystal ball on that. I have some friends who are car dealers, and of course, they are still reporting decent sales, but I have to believe that they are incentivizing people, and I don't have a line to this any better than you do except for what I see with our own sales. We are taking steps, of course. We're going back through equipment conditions.

Of course, if the equipment comes in with scratches and chips, of course it's getting less money, so I am all hot on everybody on that because that's just throwing away money.

And I think that there was some of that going on. But the market is tighter. There is just no question about it, and we're in for more money per vehicle. They got us pretty good.

All the automakers got pretty good price increases 24 to 18 months ago and that's the vehicles you see rolling now, and they are rolling into a much less robust resell market so the margin is squeezing. It's still positive but it is squeezing.

Right. Thank you both very much.

Our next question comes from Ian Gilson from Zacks Investment Research. Please go ahead.

Good morning, gentlemen. Joe, let's go back and look at the transaction value, if you like. In prior years you have discussed competitor discounting, in particular, I believe, Penske in certain key markets.

How are you seeing that at the moment or over the last few quarters? Has discounting become more or less or do you have a feel for that?

Yes, Budget permanently prices underneath us. They go to some -- as near as I can tell, they don't share this with me, but as near as I can tell, they go to some great lengths to data mine our rate system. And they intentionally price back of us across the board.

When they don't, it's an aberration. In other words, they have some inventory difficulty. So they have kind of established themselves as a -- I would say a cut-rate competitor, okay. And we have chosen to -- if we drop down, they will drop, we drop again, they'll drop again.

They just decided they're going to run at a lower rate, and we have tried to counter that really with convenience, product availability, and then finally product features. So we are much more geographically convenient.

We have much more product available, and we consider we have better product features. But ultimately if it is a $1,000 or $1,500 rental, then coming back 5% off of us or something, it ends up being $50 or $75. It's enough money that the customer might care.

I don't think in this day and age that it will work good for anybody if we just simply start ratcheting down on them real hard. But we're beating them on convenience. We're beating them on availability. And I think hands-down beating them on product features, and I think it is a valid strategy.

It's very difficult for me to tell if they are up feeding or down feeding, and I couldn't actually tell you. Different parts of the country, I see different signs of what they are doing.

They had been, for the prior three years, I would think say they steadily down-fleeted, but this last year, I'm seeing mixed signals as to what they're doing. Penske, I can't make a generalization I think that would be accurate.

Okay, General Motors is cutting production across the board and in the northern US states. I don't know that they have much left in Michigan but certainly in Ohio. I believe they produce the smaller trucks up there.

Yes.

Is that likely to have any impact or can you get better pricing out of them, or --?

We are hitting them up for better pricing. It is interesting because as near as I can tell, they're upping production capacity in the lighter duty trucks at the same time that you and I are both hearing of production cuts.

They are on these longer-term five and seven year programs of capacity. They are actually going to be bringing on more capacity going into next summer. So if that would lead to where we might be able to negotiate better pricing, we are certainly out there aggressively doing it.

And what normally happens is if there's a little bit of oversupply, you can get a little bit better price. But again that won't reflect itself for 18 or 24 months so all these things have lag and a lead.

In the present tense, in the next six months, we are really in the position of having equipment that we paid more for than we did 24 months ago, and right now the sales price that you're seeing in the used truck market is down.

I personally think it would be -- I'm not going to complain if they cut some production because it will lower supply and usually that makes the prices kind of come up a little bit.

They are not sharing with me their high-level strategy. We know that production capacities, because of course they always want to tell us, if you ordered this is how many we could produce, blah, blah, blah.

So we have a pretty good idea of what their capacity is, and definitely General Motors is increasing capacity. So they must have some reason for optimism, although what you see in the paper is that they are cutting production.

Okay. Without giving away any of your positioning, about how far in advance do you book or put in orders for --?

You need usually at least 90 days lead to the start of an order.

Okay. You're talking about a few months, not six months or more.

Yes, but let's say we are really committed today, about 90% committed to what will be produced in May if you really go through it. They are just starting deliveries right now on trucks we probably ordered 90 days ago. But we ordered enough at the time that they will be delivering through May.

Now, if we had to cut some of those, we could still cut them, and if we wanted to increase, we could do a little bit of increase. But in order just to get into their production planning process, they need a 90 day lead and then that's kind of rolling ahead at the same time.

We would have a real contentious thing if we tried to today cancel January's production -- planned production, because they are pretty much committed to it. And that is about 90 days away.

If we wanted to lower our trucks that we would accept in March, we could negotiate that today. But it is a rolling process. But we do a big negotiation every fall and that big negotiation has pretty much occurred.

Okay, and finally, other revenue. I see that it's grown very nicely on a year-over-year basis.

Of course, I'm cautiously optimistic. We are still seeing room to -- if we will improve our service or improve our presentation, that we can get the customer to do more business with us.

The storage market remains still delivering good gains even though there's a lot of new entrants out there. That's just the truth. There is a lot of them out there, and they're probably going to be more people coming in.

I have no control over that. And that's a combination of just that the market looks good and then the cost of money is low, so people are jumping in continuously.

But that hasn't hurt so far, and I don't think it will hurt our storage particularly, but at some point, they are going to -- be a little cut back in the storage business. I don't see how it could not happen.

Other revenues, boxes, we're solid on. Our U-Box continues to grow a little bit, and I feel like we are getting better positioned every day.

So, yes, other revenues are there. We have some more opportunity in trailer. We're not quite hitting trailers where I would like to be, Ian. But I don't have the answer yet, but there is more market share, or more growth in that market than we've gotten at this point so I'm trying to re-jigger that at this time.

Okay. Thank you.

Our next question comes from Ted Wagenknecht from Applied Fundamental Research. Please go ahead.

Good morning.

Morning, Ted.

So you made the comment last call that you were trying to increase your number of transactions.

I'm going to interrupt just for a minute. I'm don't think I'm on the speaker line. I don?t know if the operator -- I got some feedback that I'm not showing up on the speaker line, if the operator can hear. But go ahead, Ted. I'm sorry for interrupting.

It is okay. I was going to say, last quarter you guys mentioned that you were almost purposely trying to take transaction volumes to grow your share. You kind of made the comment that you wanted to dominate this market.

Has that been -- would the evidence suggest that you are being successful in that initiative?

Yes. I would say simply, yes.

Okay, and so when do you -- strategically, when do you think about or how do you think about trying to get back some of this price that you have used to increase this utilization now that you have that share?

I would be saying it too simplistically if I said I can literally contract the price on gross share, but we have been growing share or growing total transaction volume, and I think you give up some price. But we don't literally, Ted, lower our price sheet.

If we just lower our price sheet, it doesn't quite do it. What happens is these end up being at the point-of-the-sale reductions. The manager makes a reduction or the dealer makes a reduction. They are not really that you'd lowered your price.

But on the other hand, we grew some of that back in the last 60 days, so I saw some of that what we would call dollar per transaction. It is a metaphor for prices. Not the same as price, but our dollar per transaction, we got some of that back in this last quarter but not as much as we believe we should have gotten or that's fairly available from the customer.

So we are trying to do that going into the spring and that would be my intent. But it is not literally if we have a X share of X that we can crank the price. It doesn't quite work like that. There is more moving parts.

But the principle is or the -? so the fundamental action was going in through last spring, we had an under supply in one of our sizes of trucks, and that hurt us in transactions. And when we got into the summer, particularly about July, we didn't quite have the transaction growth that I believed we should have. And I put pressure on my teams to get transactions.

When I put pressure on them to get transactions, one of the things they do is cave or give in a little bit easier at the point-of-sale to the customer.

In other words, the customer wants a concession, they are more likely to give it. And so we probably did that more, although I don't have a statistics that I could really, really report that to you on.

But I believe that's what we did. And then we picked it up and I told people, okay, let's firm our stance up, let's hit product features, availability, convenience, and hold a little tighter on the pricing, and I think people did that and we bought a little of that back.

How much we will get going through the winter, I don't know. All these were --the whole industry is at overcapacity in the winter and it is not normally a time you think you are going to get much in the way of dollar per transaction. But there are a lot of markets where we can.

So when we look at this, we break this down into hundreds of submarkets because there?s not really a national truck rental market. And breaking down those markets there's plenty of places we can increase our dollar per transaction. We are working on it very diligently.

So I would hope to see it -- certainly no more declines in it but hopefully a firming up and a little increase.

Okay, and if I'm reading correctly, are you no longer a controlled company?

That is correct. We are no longer a controlled company. So that is a very specific definition. So yes, under I believe it is NASDAQ rules or Jason or Sebastien, you could comment.

Yes. That is correct.

I am curious as to then has there been any discussion about adding newer directors to the Board? Making any changes in terms of upping the number of independents?

Well, right now we have a -- Larry, if you are on the call, you speak up if I misspeak. We have a eight-member Board, which six are independents, and two of those people are new as of August. So we actually had that exact discussion you are talking about a year ago seeing we weren't going to go this way.

So we recruited some Board members, brought them on. And so the answer is yes, but we already pretty much they have.

And would you be willing to revisit adding new members who might bring different skillsets to the Board? On a net neutral basis, I mean still with the eight -- (multiple speakers).

Sure. Sure. I'm always open to the subject. I don't have -- right now, I would have to get somebody off. I don't want to -- my Board members really (inaudible) they?d say if I tried to get rid of them.

That is fair.

I'm not trying to get rid of anybody. But sure, absolutely. We actually reinstituted -- in order to work towards that, we reinstituted what we call an advisory board position. And so we brought a third person on in what we call the advisory board. They come to the meetings, they participate, but they are not legally a Board member, but it is a way to continue to introduce people at a high level who have a different skillset and different business experience.

We had used that in prior years and we're happy with the result so we reinstituted that as of August of this year also.

Got you. All right. Thanks so much.

Sure.

(Operator Instructions)

Our next question comes from Jamie Wilen from Wilen Management. Please go ahead.

Hi, fellas. You've added a lot of square footage in the self-storage area over the last several years and obviously, more to come. I'm always pleased when I see the press releases that you have taken a part of town that had deteriorated and you turn a vacant building into a potential profit center for you all and a great new spot for the town.

But what I'm looking at is for every million square feet that you add, obviously in the startup phase, it costs you money and down the pike, we make money.

Is there any way you can quantify for every million square feet we add, how much it costs us in year one to profitability and year two? And when those facilities -- when do you expect them to be a positive contributor to corporate earnings?

Jason, do you want to take a cut at that?

Sure. Jamie, I don't have a specific metric that I can give you. Just generally speaking, this year for example, for the first six months of this year, our property tax bill is up a little over $4.5 million. About half of that is from properties that we bought in the last year or so.

That is kind of a drag right there. But I guess if there is a good point to this, we started developing so many years ago that now we are kind of at the point that as we bring on new properties, properties that were drag in the previous year are now beginning to rent up and kind of offsetting that.

I still want to be able to answer your question but I just don't have an answer for it yet.

Obviously, part of the -- (multiple speakers). Go ahead, sorry.

Go ahead.

No, part of the hit to the income line is the property tax bill but obviously there is an operating loss you have to incur in these facilities in year one and year two, or at least in year one, as the occupancy rate goes from 0 to 50 to 90.

Yes. What you are looking to do is say is could we quantify it. So I will speak to it on a per store basis. I don't have a aggregate number.

On a per store basis, what happens typically is that it is going to take you 12 to 18 months after your first outlay of cash to actually be open on any considerable basis. This is a new build or a conversion, okay. Of course, if you buy existing boom, it is the next day.

But let?s do new build to conversion, it's going to take 12 to 18 months before you see real money coming in. You are going to then ramp up, best case 18 months, worst case, five years. So somewheres in that range. Of course, we are always looking to do it in 18 months or less, but that's the real range.

And what you are going to lose during that time, of course you're going to have a cost to capital loss, and we have been fortunate or I guess in the last three or four years that that loss has been a modest thing, so I don't know what you want to put on that, 4%, 5%. 5% on cost of capital.

Let's assume it debt financed, 5%, and you are going to see that kind of decline over let's say a 36 month basis too where you're not losing cost of capital, and after that it's your operating expenses. And they vary -- you can get one of these giant locations that this could be $300,000 on a given store, Jason?

Yes. Usually.

In a year?

Yes.

Yes. So and then you put capital on top of that. On a $10 million store, I don't think it would be at all unreasonable to say you are going to lose $1 million getting to breakeven of real cash flow.

I think that would be not a total -- I think that would be a somewhat reasonable assumption. Now of course, I don't budget people to that and we're driving not to, but the fact is you could.

On the other hand, like Jason says, if you are not expanding your total amount in the pipeline, that kind of remains the same year after year. The difference is the last two years, as you have observed, we have added a lot more into the pipeline so we have kind of blown that up.

And if you want to know whether that was $10 million this year or $5 million or $15 million, I don't have an answer as we sit here today. I don't know what the answer would be. And it doesn't sound like Jason does either.

Okay. I still applaud the efforts. I think it's great to --we are looking to optimize your earnings in the long run, not to maximize in the short run, so it's great investment spending.

Thank you.

Secondly, on the additions to the fleet, we are seeing low-ish single-digit growth in transactions, but our fleet continues to increase at a pretty nice pace there.

Is there an optimal level to what the fleet is or why is our fleet size increasing to such a significant extent when our transaction volume is not increasing so much? As I go around, I see sometimes a lot of U-Haul centers with a lot of trucks sitting there. Do we have too much, too little?

It kind of separates into categories of vehicles. You're not going to see as much absolute number of growth in the next 12 months as you saw in the last 12 months. We have kind of reached another plateau, I believe.

Now I'm always aggressively wanting to probe the market, expand, and not leave an easy spot for our competitors to grow into. But we have found some pretty good techniques over the last four years that allowed us to increase the fleet.

I don't see that over the next 18 months, although we are going to have some growth and some of that growth, Jason, you correct me if I'm wrong, is going to be in the one-way fleet whereas the growth we had -- the big number growth over the last 36 months was in the local or the -- what we call the in-town fleet.

Inside of this, we have a -- as you might imagine, a lot of the different categories of things. But I don't think you're going to see the growth in numbers but we now have a, let's say a bank of utilization to use to grow.

So we have the equipment and that means we have -? that?s unused time period, or under-utilized equipment. So the opportunity is to grow into that. So I think we have plenty of room to grow even if we don't grow the total amount of trucks over the next say 18 months.

Okay, and lastly on the U-Box program, could you talk about that a little bit? Is that now profitable and what is your future outlook for the program?

Jason, I will let you speak to profits. You are the accounting person.

Sure. What I will say is over the last -- we have had eight months now of consecutive month-over-month growth. We are still a little bit off of our peak.

If you look at kind of 12 month running revenue, we are still a little bit off the peak of where we were about two years ago. From a contribution margin perspective, I will say the amount that that revenue is contributing to our bottom line after we do some cost allocations to it is positive for the six months, positive for the first quarter compared to both periods last year.

It's still a relatively small amount, but it's positive and we're seeing some nice revenue growth. Ian asked a question earlier about the other revenue line and the majority of the increase in that line is coming from U-Box improvement.

Very good. Thank you, fellas.

Thank you, too.

This concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

This is Joe, again. I appreciate you being on. I will try to keep you as well informed as we possibly can. I'm still cautiously optimistic and I will put in a bump for Donald Trump. I am excited to see him in, and I think maybe if we get a little lift for the whole country, we will rise with it.

Thank you for being on the call, I look forward to talking to you in another 90 days.

Ladies and gentlemen, the conference has now concluded. Thank you for joining today's presentation. You may now disconnect.