Viad Corp (VVI) 2004 Q3 法說會逐字稿

Welcome to the Viad third quarter 2004 earnings release conference call.

Just as a reminder today's call is being recorded.

At this time I would like to turn the call over to Ms. Carrie Long, Director of Investor Relations.

Good Morning and thank you for attending our conference call.

I'd like to remind everyone that certain statements made during the call which are not historical facts may constitute forward-looking statements.

Actual results may differ materially from those projected in the forward-looking statements.

Additional information concerning business, and other risk factors that could cause actual results to materially differ from those in the forward-looking statements are contained under the caption forward-looking statements in Viad's financial statement filed with the Securities and Exchange Commission.

This conference call may not be recorded or reproduced in transcript without the explicit written permission of Viad.

During today's call we will refer to Tables 1 and 2 in the press release.

Our press release is available on our website at web www.viad.com.

Now I will introduce Bob Bohannon, CEO of Viad Corp.

Hi, everyone we are happy you are with us today and we have Paul Dykstra who is president of GES.

Kim Fracalossi, President of Exhibitgroup/Giltspur, you'll here shortly from Ellen Ingersoll our Chief Financial Officer and, of course, you just heard from Carrie.

Let's start today with the third quarter of '04 and as I discuss the results you may want to refer to Tables one and two in the earnings press release.

Income before noncash impairment losses was $12.6 million or 57 cents per share.

This compares favorably to both our prior guidance which is 43-54 and to 2003 third quarter net of $1.9 million or 9 cents per diluted share.

After noncash goodwill and intangible asset impairment charges of $80 million, net of tax, a net loss of $68.3 million or $3.14 per share.

Now, the impairment charges we recorded relate to Exhibitgroup.

Accounting rules require us test our goodwill and certain intangible assets for impairment at least once a year.

Normally we would perform this testing during the fourth quarter.

When we saw a greater than anticipated decline in new exhibit construction revenue during the third quarter we brought our forecasts -- we brought down our forecast for new exhibit construction.

Because we had a significant decrease in actual and forecasted revenue for new exhibit construction we went ahead and completed other impairment testing for Exhibitgroups goodwill and intangibles for the third quarter.

In very basic terms, we used future cash flow projections to determine whether a write-down is necessary.

Obviously there are an awful lot of assumptions we need to make when projecting future cash flows and while we still believe that demand for new exhibit construction will improve the issue is we do not have good visibility as to when this will happen.

Therefore, we are unable to build much improvement into the assumptions, given the recent history.

So I hope that kind of gives you a sense and feel for what we did on the impairment piece and I think Ellen' going to talk a bit more it.

In addition to the impairment charges third quarter results we also had a favorable tax benefit related to some state tax settlements and also took a charge of $530,000 after tax related to consolidation of some leased office space.

The third quarter segment revenue was 18.6 an increase of 53.5 million or 32% from the 2003 third quarter.

Segment operating income 23.5 up from 2003 third quarter amount of 8.8.

The improvement from the prior year was mainly due to the positive show rotation at GES that we talked about during the second quarter conference call, improved visitation in the Travel and Recreation segment and also reduced certain performance based incentives.

Adjusted EBITDA shown in Table 2 of the press release was 24.4 million the quarter up from 9.8 in the third quarter of '03.

Free cash flow for the quarter was $7.7 million.

At the end of the third quarter, cash and cash equivalents were 119.3, up from 110 at the end of the third quarter and this is after payment of accrued spinoff related costs.

Our debt outstanding was 22.7 and debt to cap ratio was 6.1.

On the segment side, GES revenue increased $44.4 million or 46% from the 2003 third quarter to 140.7.

Operating income increased $10.3 million to 11.6 due to positive show rotation and reduction of certain performance based incentives that I mentioned a few minutes ago.

I should just add here that GES did a terrific job in the quarter.

Paul will talk about the number of top 10 shows that we did -- we had a very heavy load.

Beyond that we had the work stoppage in Las Vegas and the four hurricanes that affected that southeast corridor from Texas corridor on over through Atlanta, Miami and across the whole Florida coast.

So very, very difficult quarter for them, particularly from a planning standpoint.

Exhibitgroup revenue is $38.1 million, up nearly 6% from the 2003 third quarter.

Operating results declined to a loss of 4.9, compared to a loss of 3.5 in the third quarter of '03.

Revenue improvement was primarily related to the Farnsboro [phonetic] air show that did not occur in the 2003 third quarter.

And margins were negatively impacted by significantly lowered new exhibit construction revenue.

A real great story in the travel and rec segment.

The revenue there increased 21% to 39.7 from the 2003 third quarter and that was due to increased visitation.

Segment operating income increased 52% to 16.9 and operating margins were 42.6.

Now, for the individual operating segments.

Again, you may want to refer to Table one of the press release which provides revenues and op income for each of the operating segments.

Now, I will turn it over to Paul Dykstra to talk about GES.

Paul?

Good morning.

Thanks, Bob.

Good morning, everyone.

A s Bob mentioned the third quarter was a very challenging one for GES.

During a span of approximately seven weeks we successfully serviced ten of the largest trade shows in the nation and that was in five different cities.

Additionally overcame a ten day work stoppage in Las Vegas and four hurricanes in the southeast that necessitated a contingency plans.

Once again I cannot say enough about the commitment of the GES people to get the job done despite these conditions.

Our third quarter revenue increased by more than 44 million from the 2003 third quarter.

Thirty million of this improvement was from positive show rotation.

The major shows that rotated in included IMTS, the manufacturing technology show, the international wood working, international baking, mine [phonetic] expo, and also the special work we did for the Democratic national convention.

In addition to the positive show rotation we saw slight same show revenue growth for the quarter and growth in our new products and services.

For the industry as a whole we have not seen the final stats for the third quarter but we are expecting very modest growth in terms of square footage and and number of exhibitors.

Although we have seen that show growth kind of stabilize over the last few quarters we have also seen continued pressure on our material handling revenue as exhibitors are using lighter exhibits and are bringing fewer products to exhibitions.

Material handling revenue is a key driver in the general services contractor business model.

In response to this trend, we found several ways to drive significant productivity gains.

In addition a year ago we formed our products and services division with the intent to offset lower exclusive material handling revenues by capturing more of our exhibitor's discretionary spend ing.

This initiative has been successful.

Year-to-date revenues are up 15% but the change in the mix of business has negatively impacted our margins and it was necessary to invest in our infrastructure to accelerate the ramp up of that division.

During the quarter we felt the the ramp up of that division.

During the quarter we felt the impact of increased fuel costs and increased prices of our petroleum based commodities such as carpets, plastics, and propane.

Price increases in general have become more difficult to realize and we have discussed before exhibitors are placing greater focus on the trade show investment return.

GES is very committed to providing the highest value we can while at same time delivering good margins for our shareholders.

To that end we continue to be very focused on becoming more efficient in controlling costs and a significant percentage of this is from our labor costs.

While we have typically had very good working relationships with labor we have also tried to negotiate contracts that are fair to both sides and recognize the current business climate.

As Bob mentioned during the quarter we did have a work stoppage that cost us about $1.3 million.

We believe we did everything possible to avoid this work stoppage.

However, we were able to successfully service our clients and ultimately come to an agreement that is fair to both sides, and will continue to support the future success of the Las Vegas trade show market.

On labor we have over 100 collective bargaining agreements across the United States and about a third of these expire in each year.

While we always seek to avoid work stoppages we do take a hard line when it comes to cost and inefficient work rules and unreasonable rate increases.

With the stoppage in Las Vegas we demonstrated that we can quickly put our contingency plans in action to be ensure that the shows go on.

Though we have been successful in keeping labor cost increases at a reasonable level, it is still more than the exhibitors are willing to bear during the past three years.

To bridge this gap we have had to become more efficient.

Year-to-date we realized 3.2 million in productivity gains from best practice implementation and selective investments in technology.

This it down from prior years as incremental gains become more difficult to realize.

We continue to look for additional ways to drive down costs but we are reaching a point where we cannot offset labor rate and fuel related increases without larger price increases.

This is the number one challenge for me and my leadership team and part of the answer, of course, is to continue to provide greater value to our exhibitors.

Now, I'd like to touch quickly on our revenue backlog before wrapping things up.

During the quarter we signed $160 million of future revenues.

This brings our future bookings to $750 million at the end of the quarter.

The signings include major account renewals for VNU and photo marketing as well as the recently announced signing of Primedia which was a significant competitive take away. .

Looking ahead we expect fourth quarter revenue to increase slightly from the 2003 fourth quarter but operating results are expected to decline as a result of the margin pressures I discussed previously.

With respect to 2005, the outlook for continued industry growth is moderate and for GES our show rotation is expected to be slightly negative impact on our 2005 revenue.

And we expect our revenue mix to shift even more towards exhibitor discretionary products and services and away from the higher margin material handling. 2005 will be another challenging year but I have a terrific team of people who are focused on continually improving our products and services and become more efficient.

With that I'll pass it off to you, Bob.

Okay and thanks Paul.

And, now Kim, will you talk about Exhibitgroup/Giltspur, please?

Our revenue increased by nearly 6% during the quarter due to the positive show rotation from the Farmbro [phonetic] air show as Bob mentioned.

The show provided roughly $10 million in revenue for the quarter.

Offsetting the revenue increase from the air show was a significant decline in our new exhibit construction revenue which dropped in to the 15-20% range throughout the third quarter.

This compares to about 25-30% earlier in the year and historical norms of 40-45%.

Although our revenue was up, we posted an operating loss of $4.9 million, down from the 2003 third quarter loss of 3.5.

This was the result of a significant shift in our mix of business.

As I mentioned before, our margins on construction revenue are about twice that of our show services revenue so with construction down our blended margin is also down.

Now, if we were to have had the same construction mixes last year, even on our lower revenues, we would have had an incremental 5-6 million in op income.

That fact highlights our sensitivity to mix.

As we said before, our customers set their marketing budgets in the third and fourth quarters and based on recent feedback we are getting we are not seeing the rebound in spending in 2005 to the extent that we previously had anticipated.

Particularly on new exhibit construction.

Price competition for the new exhibits does remain aggressive.

That being said, we do believe that spending on new exhibits will rebound.

We just don't know when that is going to happen.

As Paul had mentioned, key trade show metrics do indicate that the overall industry is recovering somewhat.

We are seeing modest growth in show size as well as the number of exhibitors and attendees.

We think that these are good leading indicators for new exhibit construction.

The increase in size and number of exhibitors indicates that companies are more willing to spend money to go to trade shows than in the recent past.

The increase in attendees should reinforce that spending and hopefully encourage additional spending in the future with a larger target audience companies should be able to realize a good ROI from a creative engaging exhibit.

With our national network of design talent, sophisticated national manufacturing processes and national purchasing power,we are well suited to design and deliver at a fair price exhibits that create a real buzz on the trade show floor.

I reported in prior quarters that we have seen an increase in RFP activity and I'm happy to report that that picked up in the third quarter as well.

Our RFP activity is up 20% from the prior quarter and up more than that on a year-over-year basis.

Not only are we being invited to bid on more jobs we are also winning more of those bids.

In fact we just won a sizeable construction job for next year's CES show that we're very excited about.

Now on the business that has been awarded, our win rate is 75% in the third quarter versus less than 50% in each of the prior three quarters, and significantly better than a year-ago basis.

While the improved win rate would not be possible without our creative design and superior quality and service it was an increase in our sales force effectiveness that really drove the improvements.

When the exhibit designing and construction market began to contract in 2001, one of the things that we notice was that the sales structure and the compensation plan of our sales force were not properly aligned with the company's profitability and growth goals.

Correcting this was one of my primary goals when I took over at Exhibitgroup.

The biggest change that we made to the sales compensation plan was a realignment in sales position.

We separated the sales force into two groups.

Those that develop new business and those who manage existing accounts.

The goal was two-fold.

One to grow organically.

And two, to deliver better customer service, thereby shoring up the base business.

Now historically our sales force has not focused on new business growth.

Although we had, and we certainly still have a very strong team that manages our existing accounts, we needed to build a team that could generate and deliver upon new logo opportunities.

The sales compensation plan change in combination with the centralization of our manufacturing locations did cause turnover in the sales team and consequently in our client base over the past year.

In addition, the hiring, training, and temporary learning curve inefficiency of the new hunter sales group, in combination with the lengthening sales cycle, resulted in a deterioration of the sales pipeline.

But we knew that this was a risk we had to take to ensure the long-term health and growth of Exhibitgroup/Giltspur.

As I just mentioned the impact of these changes did temporarily slow us down in winning new business but I do believe that we are back on track now and I'm very happy with the continuing improvement in the results of our sales force, particularly in the third quarter.

Our new comp plan and structure are proving to be very successful in winning new business and in maintaining our client base.

And we are now seeing some of the competition follow suit.

With regard to the increase in RFP activity please keep in mind that winning an RFP doesn't necessarily mean that we will see immediate results in spending on a new exhibit.

Although a bid may be awarded the actual new exhibit build may be deferred until the budget affords it or in cases where a build is in the budget it may get consingencied out.

The bulk of business that we are winning is primarily show services at this time.

Hence the mix and shift downward in construction.

We do have a lot of big names on our client list and eventually look for them to increase their spending on new exhibits and we also have a strong pipeline of additional business opportunities.

Heading into the fourth quarter we are not expecting any improvement in overall revenue or in particular the mix of construction revenue.

And because of this, we expect to realize lower operating margins as compared to the 2003 fourth quarter.

We don't have good Visibility into 2005 but even if the market doesn't improve we are committed to realizing better results and we intend to continue our winning streak on RFPs without losing focus on cost control, driving efficiencies or improving customer service levels.

Bob, back to you.

Thanks Kim.

Let me now cover highlights for the Travel and Recreation segment.

This segment has seen a very nice recovery this year and they have been a substantial contributor to a good third quarter results.

Operating income was $16.9 million on revenue of 39.7.

The op marks were 42.6% and as compared to the third -- 2003 third quarter revenue increased # 21% operating income up 52% and operating margins improved by 860 basis points.

Now, comparisons granted to 2003 are a bit easy due to the special circumstances that negatively affected travel in Glacier Park in 2003 including, of course, the war in Iraq, SARS and the forest fires among other things.

It is important, though to note that the 2004 results for the segment are the best that they have been since year 2000.

And even using year 2000 as a benchmark, 2004 year-to-date revenue is down only about $6 million from that, and operating income down about 3 and while operating margins have improved 240 basis points.

So Joe Fasly [phonetic] at glacier and Cindy, and her team, as well as Dave Morrison and his team, at Brewster have done a terrific job during this period of getting a lot more productive and you can see that with the margin improvement.

Now with a seasonally slow fourth quarter 2004 is substantially complete for the segment and again very happy with the results for 2004.

Let me now turn it over to Ellen Ingersoll our Chief Financial Officer to discuss some additional financial highlights.

Ellen?

Thank you.

As shown in Table 2 to the earnings release adjusted EBITDA was 24.4 million during the quarter versus 9.8 million in the third quarter of 2003.

Also shown in Table 2, free cash flow defined as cash flow from operations, less capital expenditures, and dividends was 7.7 million for the quarter versus 15.8 million last year.

Our goodwill and intangible trademark write off breaks down as the goodwill write off was 76.6 million after tax, and the trademark intangible impairment was 4.2 million after tax.

And that leaves a net book value of 5.9 million on the trademark.

Total debt at the end of the quarter was 22.7 million with a debt to capital ratio of 6.1%.

Net interest expense for the quarter was 394,000 compared to 295,000 in the third quarter of 2003.

Our depreciation and amortization for the quarter was 5.4 million compared with last year's third quarter 6.4 million.

Our full year 2004 forecast remains at approximately 21 million.

Capital expenditures for the quarter were 3.3 million, down slightly from 3.4 million in the prior year's third quarter.

Full year 2004 forecast is approximately 15-18 million compared to 15.5 million in 2003.

The 2004 income tax rate year-to-date, now, this is excluding the goodwill and intangible asset impairment charges, was 35.6% versus 43.8% year-to-date in 2003.

And our average outstanding and potentially dilutive shares for the quarter were 21,767,000 compared to 21,680,000 in the third quarter of 2003.

And that is back to you, Bob.

Thank you.

Before wrapping up the comments and opening the call to the Q&A section let me talk about the rest of '04.

Please keep in mind this guidance is subject to change.

Visibility at Exhibitgroup is still reasonably poor.

Visibility of GES is certainly better because of their long-term contracts.

Please also keep in mind that 1 cents per share is the equivalent of approximately $220,000 after-tax dollars.

Not an awful lot on an after-tax basis.

Guidance for the fourth quarter and full year 2004 reflects the reduced outlook of both Exhibitgroup and GES from what we had currently expected.

We expect fourth quarter new exhibit construction revenue to decline at a rate consistent with that experienced in the third quarter.

We also expect that margins at GES will continue to be impacted by margin pressures on certain exhibitor service, higher fuel costs, and increased costs associated with revenue growth initiatives that are still in the ramp up phase.

Also, our fourth quarter is seasonally slow and we are expecting a diluted loss per share in the range of 25-31 cents.

This compares to income of 1 cent per share in the 2003 fourth quarter which included a restructuring reversal of 10 cents per share back in the fourth quarter of '03.

Revenues expected to decrease by mid to high single digit rate from 2003 fourth quarter revenue of 143.9 and that primarily is due to decrease in orders for new exhibit construction at Exhibitgroup as well as a cancellation of a couple of shows that we discussed during the last earnings call.

Segment operating results are expected to decrease by 8-11 million from approximately break even in 2003, and this, of course, reflects what I just discussed.

Full year 2004 income before impairment losses is expected to be in the range of $1.04 to $1.10 per diluted share versus 97 cents in 2003. 2003 also included restructuring reversals of 14 cents versus 2004 year-to-date restructuring charges of 5 cents.

Revenues expected to be flat to slightly down from 770 million in '03.

This reflects the expectation that revenue growth at GES in the travel and rec segment will be offset by revenue declines in Exhibitgroup.

Segment operating income is expected to decrease at a low to mid single digit rate from 51.2 million in '03 primarily due to decrease in new exhibit construction revenue at Exhibitgroup and that is partially offset by improvements at the travel and rec segment.

Fourth quarter and full year revenue and operating income guidance for the individual operating segments can be found in the earnings press release.

Let me close by saying coming in to 2004 we thought we might see a pickup in the convention industry in the back half of the year.

And while we are seeing some positive signs that indicate the beginning of recovery the environment is still very difficult.

You heard Kim and Paul talk about the challenges they are facing.

I believe they are both up to the task.

Companies have been and remain very cost conscious in the trade show marketing spending.

On Paul's side of the business this is leading to lighter weight exhibits and reduced material handling revenue.

On Kim's side companies are spending even less on new exhibits than we previously anticipated.

We just have not seen that pent up demand released yet.

As Paul mentioned his team has been working hard to replace the declining material handling revenue with revenue from the newly forms products and services division.

Both GES and Exhibitgroup have done a great job of reducing costs and becoming more efficient.

It is still a tough world out there and the fact of it is the leadership teams at both companies are going to have to step up and do even more on the cost side until we do get a little better visibility in those two segments.

Despite all the work we can do to become more efficient, the simple truth is that the cost of doing business is increasing and I expect our leadership teams at GES and Exhibitgroup, again, to do a better job in respect to obtaining price increases.

On the corporate Level we identified several savings opportunities for 2005, we continue to look for more, and we have a lot of good things lined up there that we will talk about in the analyst investor meeting in New York, in December.

Looking back at our long history, we have a strong record of taking the right actions when necessary to over come the challenges and improve performance.

This time is no different.

We had hoped that the economy would be a bit better and that companies would be spending more at this time.

So we have very talented people.

They are stre driven, and they are very dedicated to getting the absolute best results, and I'm confident that everyone throughout the organization will be able to produce better results next year even about if the business environment does not improve.

So, with that I'll close and ask you to open up the call for the q-and-a portion.

From Midwest Research we will go to Kartik Mehta.

Good morning.

Good morning.

I wanted to ask you a question on the Exhibitgroup.

In terms of the big picture are there any fundamental changes happening in the Exhibitgroup that you are noticing now?

Are there more rentals?

Are companies looking to do things differently now?

Kartik, I think with the exception -- I mean everyone obviously is pushing toward the lighter weight but that is not good for Paul's business but is not necessarily bad for Kim's.

I think new construction because of the different composites so forth.

Kim do you want to pick up from that?

We actually are not really seeing any fundamental changes.

What really is happening is the old exhibits are an inadequate substitute at the moment for people to use.

And on some of the recent wins that we have with the larger programs they are just sort of reconfiguring their existing properties at the moment.

And even though, you know, we can see when we are bringing some of this stuff over it looks very, very tired and does need some work.

A lot of times if they -- you know don't have it in the budget we have to make do with what they have.

That is really more of what is going on is just using the existing properties reconfiguring them and then sending them out.

You know, the balance sheet as you said, Bob, really strong you have a net cash of almost $100 million.

What are your thoughts in terms of utilization for that cash?

Our first priority if we can find the right things are to go out and do some acquisitions.

I can tell you that we are looking very actively.

We have some very good leads right now in things that I think that if I could talk about that the shareholder group would be pleased with so we are working very hard.

Whether or not we can get anything done is a different issue because it all gets down to obviously on the pricing piece.

And there are a few sizeable things there.

Now, having said that, if we can't get those type of things done, we certainly would have the wherewithal to repurchase shares consistent with the bank agreements.

What we do, if we have an opportunity on the acquiring side of something we put it through our models and so forth and with what we think we can get out of a particular deal we model it versus what if we repurchased shares.

So, again, the first thing if we can find the right deals but if not we certainly would look toward share repurchase as a second thing to do.

And one last question, if I may.

On the Exhibitgroup side, Kim and I think Bob, you also indicated that right now the budgets don't seem to be shoring up as you would have thought and you are taking a lighter look at 2005 for Exhibitgroup.

Does that mean you anticipate flat revenue growth or are you expecting revenue growth in that segment?

I just wanted to get your thoughts on that?

I'll certainly kick in and give you mine.

I mean we hope that for '05 we could certainly see an uptick on the revenue piece.

If this economy continues to go as it's gone, and I hope that with the election once that is out of the way whoever wins with that type of over hang, at least there is a certainty as to who is going to lead the country over the next four years I hope those things will kind of come together and if nothing untoward happens in respect to any big terrorist activities at some point companies I think will start spending again.

And then, Kartik, we see some positive scenes from time to time.

The client that Kim mentioned for the consumer electronics show.

They are going in with a new construction build of about a million and a half.

Part of what happens there is as the competitors also exhibit there and they see that, we hope that will kind of be a builder.

So, the problem is right now it is just very difficult to predict.

What I would say about Exhibitgroup, the revenue is still going to be a bit of a wildcard but in respect to what Kim said from the '04 results we definitely are going to see, we believe, some significant improvements.

We hope a good part will come through the revenue cycle.

If not we are going to have to do it through the cost and expense cycle.

But that is the commitment that we are making and that is the commitment Kim will make.

Kim, will you add on to that, please?

It is exact exactly what you said.

Even if the economy sort of continues at the rate it is and people are starting to spend a little bit more on capital it eventually then comes into the marketing budget so we should be able to see an improvement on the top line.

If the economy deteriorated any more that would probably be a different story but as long as the customers don't pull back on their existing budgets we should be in pretty good shape next year and we are focussed to again on the cost side to continue to be more and more efficient.

Thank you very much.

We will now move on to Joe Pevelidge [phonetic] with Schneider Capital Management.

I have a real quick question here.

On the seasonality on, what is your typical seasonal pattern to your orders in the Exhibitgroup?

Typically, and this was the issue for the goodwill that we talked about, typically for the third and fourth quarter particularly the last month of the third quarter and the three months of the fourth, typically have been good new construction projects because of all of the first quarter, second quarter shows that come up.

Kim, do you want to add to that?

Ours usually is -- it is second quarter is best.

First quarter, fourth, and then third.

So third is the worst quarter.

What department?

That is just overall our overall for Exhibitgroup/giltspur.

And just for all activity it is pretty much show activity but the first and second quarter tend to have more of the construction.

Okay.

We will now move on to Daks Glasses with Gates Capital Management.

A couple of questions.

First of all you talked about acquisitions.

In what segments would you contemplate acquisitions?

Certainly on the GES side we have certain things that we do today.

I mentioned previously on the calls that for example we do some of the electrical work in some of the convention centers where we operate.

Clearly that would be one avenue that we would look at.

And then on the travel and recreation side, particularly on the park if we had any type of available opportunities there on the park piece, given those type of margins we would certainly look there as well.

We are not going to go out and acquire something that is brand new, has nothing to do with what we have been doing.

They would certainly have to be a good fit and or have the adjacency like I mentioned on the electrical side.

So as far as your -- your bread and butter GES, it sounds like the electrical business would be something, like you said, an adjacency.

Talking about the core GES business, can you talk about market share trends given what has happened in the industry and your current sort of market shares and whether you need to have further consolidation to get to a point where the pricing stabilized or you are able to raise prices from a competitive standpoint?

Paul, I will turn that over to you for the second.

Let me make a couple of comments.

Obviously on the pricing side itself, any time that you have a one or two less competitors it helps, but this industry is not that fragmented.

You know, GES and Freeman Decorating Company, a privately held company out of Dallas have about, Paul, what, 60-65% of the market.

There is a 30-35% all other and you want to be more precise, Paul?

No, that's about right, Bob.

And so this market unlike Exhibitgroup/Giltspur is not that fragmented.

So Daks, does that answer your question?

So the 30-40% you don't see any further consolidation in that sector?

Sound is like.

Companies that are causing pricing problems or having more issues than the larger stronger than larger players such as yourself with a strong balance sheet?

No, I think there could be some further consolidation in the GES side.

There is no bigger chunks than 30 plus percent or like bigger companies than more of a fragmented nature as you suggest?

Oh, you have -- you have a couple sizeable ones, you know, you have Freeman Decorating Company and us that I mentioned on the 60/65.

But in the remaining 35-40, you have a couple of good sizeable companies that are very, very strong positions.

Very good revenue so.

Okay.

And how big is the electrical segment that you are talking about as an adjacency?

How significant is that to would it be to the GES segment?

There are any -- is that a large area of potential expansion?

Paul, do you want to address that?

Yeah, electrical is less than 10% of our revenue right now but it does fit nicely into the general contracting business that we are in.

So there are some players out there that I don't have the size of the market overall off the top of my head but there are certainly some growth opportunities in that market.

Okay.

Last question.

Can you talk about where your corporate expense will end up this year from a dollar value perspective and what sort of numbers you are looking at taking out going forward and the methods to get there?

Thanks a lot.

Sure.

On the corporate expense side we will probably for this year end at about 13.2 to 13.5.

That will be down from about 15.2 in '04.

We believe working a lot of things, we believe that conservatively that I mean we have another 3 to $3.5 million on a run rate basis that is teed up and we are after and clearly we are going to get after as much as we possibly can.

Where -- where can you take that out?

I mean that is a big chunk.

Yes, it as big chunk but something that we have to do and that is a combination of things.

I had mentioned that we took a restructuring charge this quarter on some waste space here at corporate in consolidation into fewer floors and so it as combination of that.

Certainly have been, and will be, some people implications and beyond that we have to work a lot harder at identifying on the benefits side such as health and healthcare and that type thing.

We think there is some opportunities there.

As well as on the full insurance specter.

We are going across every dollar that we spend and that dollar is just going to have to be absolutely justified for us to spend it and that is the discipline that we are taking.

I have been very pleased with Ellen Ingersoll and the group that we put together here that have looked at every buck and they have come up with some outstanding thanks so --

Thank you very much.

Thank you.

We will move on to Louis Sykes with Penant Capital.

I have a question on the Exhibitgroup segment, Kim.

Could you compare this business cycle to the previous cycle.

Why at this stage in the cycle do you see pricing deteriorating and the mix deteriorating?

I don't -- at the moment the price isn't deteriorating any further but it is still aggressive.

But we are not seeing the deterioration of any further on the pricing side.

I think we have gone through the worse of it with respect to pricing.

However, on the mix side of it, that deterioration was a bit of a surprise this year.

We had hoped to be at least where we were last year and that was one of the things that happened in the third quarter that we recognized was changing from where we were in the second quarter.

So the reason for that is really I believe as you can read in the Wall Street Journal and in different indicators in just business sectors as people aren't consistently spending their dollars, they have a lot of cash but they are not spending on capital, and until they spend on capital they certainly don't spend on marketing.

We are the first into an economic downturn where they yank back on the dollars and really the last to see the spending when the dollars come back.

They usually fall into advertising and then the other marketing sectors and then we eventually get it into the trade show business.

Si, I think it is just an economic downturn that has consistently sort of just motored along with inconsistent spending on the capital side so people are afraid to spend.

And so what they are doing if you have an adequate substitute they are continuing to spend on that.

It is very similar to, you know, sort of the automobile.

You got your own car and it is old and yet you are not quite sure yet whether you want to buy a new car but then you start deciding are you spending too much on maintenance for the car that it really justifies you going out and buying a new one.

I think we are sort of in that cycle where they are saying, you know, the cost now of fixing these exhibits when they are 3-year-old exhibits the cost is not that great.

When they are 4-year-old exhibits they are a little more and 5-year-old exhibits they are pretty expensive to continue to patch up on the show floor and so, you know, we were hoping this would be about the point when people would start saying, you know what, it is really worth it to buy a new exhibit and not have the additional costs on the show floor.

Now, it is certainly our job to make sure we explain that to the customer as a consultant and say you are spending a lot more on these dollars and we have better data to do that and a plan in place to go through that for all our customers.

The hope is that we can turn that around a little but we really need some help from the economy.

Big picture when you look at this if you put yourself into let's say three years from now and let's say, god forbid, the industry hasn't turned around, what would do you think would be the most likely reasons why that wouldn't have happened?

The most likely reason if it does not turn around it would be because people are not seeing the value in a trade show or going to a trade show program and, you know, I think it is part of the industry's responsibility to help our customers understand how to measure the value of this.

And we specifically have examples of that ourselves because there are industry trade shows that we go to and we will build a booth and exhibit at the show and we measure it, of course, and measure the leads that are generated in the dollars that come from it and we find it very, very successful and generally can get a pay back in a year.

Our job is to make sure that the customer understands how to measure this and they can show it to their senior management team.

This is really not a sophisticated industry with respect to return on investment or return on objectives.

It's really in its infancy from a measurement standpoint.

There really is a lot of opportunity to help them understand the value of this but the reason, you know, three years from now if it doesn't is that nobody is understanding the true value of a trade show program.

But I don't think that that is going to be the case because usually when the dollars come back ,marketing dollars are spent, people start going back to trade shows because they do see the value in them.

It is just a difficult environment now and because they have a substitute they are using that substitute.

It will be very difficult to take a 7-year-old exhibit and stretch it another three years.

You know, that is just going to be really tough.

Anything that has changed that might lead to less value to the exhibitor?

I would answer it maybe a little bit of a different way.

If you look at GES and you look at the revenue side there, despite again all of the horrific things from September 11th, the telecommunications collapse, the dot-com collapse, SARS, you name it, that industry has held up remarkably well.

Which tells me that those companies that go to the CES show, consumer electronics show, the men's apparel show, wood working, world shoot and things like that.

It has held up well and we have seen some actual growth this those shows.

It says to me on the valuation side that these companies that are exhibiting have a decent understanding of what that valuation is.

Our issue that has come out of this just happens to be that as opposed to getting a new exhibit every two, three years these things are running five to seven.

We believe, again, there is going to be some terrific pentup demand because these things were not built to last for that type of period.

My point is that --

Essentially you're saying that GES is proving that.

If the industry is there, that the value is there, and sooner or later people will build some new exhibits.

Of course, we hope it is a lot sooner than later.

Last quick question on the tax rate.

What was the tax rate if you exclude both the impairments as well as the tax settlement and the restructuring charge?

I get to about 44%.

Is that right.

Ellen do you --

The tax rate without the tax settlement was about 40.

40?

Yeah.

And is that what we should expect going forward?

Around 38-40, going forward.

Okay.

Thank you.

Thank you.

We will now move on to Eridge Wymum with Sherwin Boyle Capital.

For 2004, for Exhibitgroup, what is the actual percentage of revenues that would come from new construction?

And also what is the actual percentage paring margin difference?

Thanks.

Thank you.

Kim?

We are running in the sort of low 20s as a percent of our total revenue is construction.

And new construction is about twice that of the show services piece.

All right.

Thank you.

Thank you.

We will now move on to Adam Weiss with Tilton Investment.

Good Morning.

Good morning Adam.

A question about the Q4.

Looks like you will be able to make some improvements in the operating loss in the Exhibitgroup even though revenues look to be sort of flat sequentially.

No, actually Exhibitgroup for Q4 will actually be down over prior year.

But sequentially I think you lost 5 million.

I'm sorry, sequentially, I missed you, okay.

I think you lost 5 million this quarter and 38 million in revenues.

Sequentially there will be an improvement.

How do you plan to achieve that?

Do you want me to go about -- the real thing is the mix, the sequential mix.

On a year-over-year basis there is going to be a deterioration in mix on a year-over-year quarterly basis.

That is sort of to where we are seeing the trend now as we saw it in the third quarter.

But from the third quarter to the fourth quarter there is a difference in the types of business, that the overall mix should be better,margin business in the fourth quarter than the third quarter.

Because we sell kiosks also and their big quarter is the third quarter so that the margins on the kiosks are significantly lower than the margins on the exhibit side of the business.

When do you think we will get a '05 preliminary outlook from you all?

We will have an investor meeting in New York in December.

December 16th.

December 16th.

Carrie is going to get the information out if she hasn't already done that and at that meeting we will give the '05 outlook for the company.

Okay.

And just third question.

The pressure that you are seeing on material and handling revenues, what kind of duration of that trend do you think will impact the business?

Is that kind of a longer term issue that is going to be with you for awhile?

It is hard to say.

We know that exhibitors again are pushing on the lighter weight and that type thing because obviously there is freight handling charges that would be less on lighter weight versus more weight.

I think Adam, that it's the old thing that much like I talked about on the corporate expense here we are looking at every buck obviously.

We have to do that.

I hope that we would also do that, though, in good times although I suspect that when times aren't as good we are a lot better at it.

I think the same thing holds true for customers.

They are more cost conscious.

They have had to be more than they have ever been.

If this economy continues to improve and the stock market is a little better, and corporate profits are up, we will obviously get some relief from that so you get some relief from the good times.

Has there been a lot of inflation in the billing for material and handling?

Is that kind of pushing customers to try and get those charges down?

It has been I think, Paul, the best way to say it. and correct me if I'm wrong, would be that it's the old thing again when we come out of good times that we had, and all of a sudden times aren't so good, people just start pushing on every buck and I think that's what happened.

Paul, do you want to ad anything to that?

I think it is true.

Trade shows are a discretionary marketing spend and after 9/11 things went down quite a bit and now trying to get that back is -- is a challenge because you don't get it back as fast as it went down.

And I think it is really a combination of really looking at every dollar that there is being spent like Bob said.

You know, this trend, we have seen over the last couple of years and so we are trying to act aggressively by being proactive about improving the productivity on the freight side of the business but also starting to look at what other revenue sources can we use in case this goes on nor a long period of time.

We don't really know right now but I would say that, you know, five years ago, four years ago when the economy was roaring we didn't see a lot of people worrying about that.

Today we do.

I think it is just a different phase in the cycle.

Okay.

Thank you.

Thank you.

We will now go to Patrick [inaudible] with Newburgher Berman.

Hi, Patrick.

How are you?

Paul can you talk about the new revenue initiatives that are in the ramp up phase that were mentioned in the press release.

What exactly are those.

Paul?

Sure.

About a year ago this time, I think it was about eleven months ago, we formed a new division at GES called the products and services division.

Really what we are focused on is penetrating our shows and our exhibitors with a new products and services value adds to capture some of their discretionary spend.

In our business they typically have to use this on the material handling side.

That is an exclusive service but there are a lot of nonexclusive services that are provided to exhibitors, booth rental, furniture rental, booth carpet, those types of things those types of things that we have gotten a lot more aggressive on penetrating and we have actually been fairly successful at it.

It is in its infancy because it has been about 11 months.

We ramped up the division and Kevin Rabbit,and his team, have done an excellent job of getting that up and we are seeing some good double digit growth in those segments.

But that division alone, how much money is that losing?

It is not losing money.

But we did make an investment to ramp up that growth.

You know, basically it is people.

Okay.

And are you seeing tighter spending on these discretionary items as well?

Yeah, to a degree.

I mean a lot of this is, you know, taking share from other small players that are also aggressively out there trying to get this stuff, too but, you know, we certainly have an advantage as the general services contractor because you know we are very close to the show organizer and we have good quality information on the exhibitors because they have to use us for nonexclusive things so we thought it was a natural add on and it was things we did we just increased the focus.

Okay.

And switching to Exhibitgroup.

I guess the comment in the press release that you are seeing a lot of pricing irrationality sounds a lot worse than your comments on the call.

I mean can you just clarify, Kim, the pricing behavior you are seeing?

I mean are competitors pricing at a cost just to keep production going through this phase, or is it not as bad as that?

Patrick, let me -- before Kim jumps in remind everyone that part of what happened in this industry, it was very fragmented, part of what happened is that over the past couple of years four of the top fifteen competitors either shut their doors or filed bankruptcy.

On their way to their demise they did an awful lot in the marketplace on the pricing piece and, of course, as we know now, and the market knows, a lot of that was done out of desperation trying to survive.

But it did tend -- because any they were in to the top 15 -- it did tend to have an over hang into the market place.

Kim, do you want to add on to that?

That was sort of the start of the irrationality and they were trying to just basically get working capital in the door and cash it the door so they could survive.

We are not seeing -- I mean the problem with that is that you -- you have got sort of that pricing in the market at the moment.

We are not seeing it deteriorate any any further really though you do have on many bids you may still have one of those smaller guys in there just trying to get some cash flow.

But what has progressed over the course of the last year is customers are understanding sometimes when they go to one of these who basically low balls the bidding is they are not getting the same kind of service.

And so we are talking so many some customers who had left us because we wouldn't do that irrational pricing.

Some of the stuff that we are finding out is they go over there but they are making the company then do all of the work that we would do, the advisory and a lot of the leg work, and that is not something they anticipated when they went for the low ball.

We are hoping that the market starts understanding some of the value that is delivered with companies more like us than some of these people who are just doing it to pull the business over for cash.

Okay, and last question, Bob.

I remember a few years ago you had a slide at a presentation showing that the cost benefit of conventions was the best use of advertising dollars versus any other form of advertising.

I guess has that changed?

And if not, why is the perception different in the marketplace than those statistics showed a couple of years ago?

Patrick, I don't know that that perception is different.

And again, I get back to my earlier comment and what I talked about on the GES revenue after, you know, all the horrific events.

Let's take the consumer electronics show.

That is held every January as you know in Las Vegas.

There is not a single newspaper, or a single television station, or radio station that you can -- paper you read, or radio station, you listen to, or television you watch that does not talk about all of the new fun gadgets and so forth that are going to be displayed that the show.

My point on that, you can't buy that type of free publicity and so forth.

You can take that and then go to the world shoe show where these buyers can go in and look at, you know, 100 different manufacturers of shoes and styles and that type thing.

You can't go anywhere else and to do that so that value is there.

I don't think that perception for those on those type of shows, I don't think that that has decreased at all.

In fact, I think it has gone the other way and I think that is why, again, that the GES revenue piece after you take out the, what was back to the dot coms, and then the telecommunications set, again, it has done very, very well in my opinion.

I think the value is still there and I would argue in all probability it could be greater today as people target their advertising dollars even better than what they did in the good days.

Okay.

Thank you.

Thank you.

And from Shumway Capital Eddie Costa.

Hi, good morning.

Hi, eddie, good morning..

I just had a couple of questions.

On the cash balance of 119, I was just wondering, I know that before the cash I think was 110 or something, and then there was some liability for the for the spinoff or whatever of 27 million.

I'm just trying to understand is 119 net of all spinoff liabilities and so forth?

Yes, yes.

And appreciate you mentioning that because we would have really had a terrific ending balance had we not had the 27 million on all the other spend stuff but no, that is, correct.

It is net of those expenditures.

Okay, great.

And on the GES side, you mentioned you had 1.3 million of strike-related costs.

So basically the sort of run rate margin in that business was more like 9% versus the 8.2 or whatever?

Is that the way to think about it?

Talk about it in this broad context I think it would have been more because the other thing that happened is we did tweak the performance incentives but when we think about the hurricanes, for example, the four that we went through, what happened in that corridor from new Orleans through Atlanta, and all down through Florida, the whole southeast. and up into the Carolinas there was a lot of uncertainty, will the show be cancelled, will the show go on.

I am talking not the major shows or a lot of these smaller regional shows that obviously caused us a great deal of anguish.

But, even beyond that what really happened was that in the strike, for example in Las Vegas, we were not able to use a lot of our Florida operational people to come up and help out there because they were in the process of reboarding buildings, securing all the equipment, that type thing.

So we have had a lot of underlying things that went on in the quarter and that is why I said up front I'm proud of Paul and his team for very, very difficult circumstances actually ending up with a terrific quarter considering what they were confronted with on the labor side in Las Vegas, and then the whole southeast issue that we had.

And the other thing that we do know, a lot of loss of productivity on the southeast because again we had to be concerned about the safety of our employees and that type thing.

A tough quarter in that respect.

Okay.

Great.

On the travel and leisure side, what are your thoughts, I mean growth was pretty robust throughout 2004.

You know can we expect similar type growth in 2005?

I don't think that we can expect similar type growth because again remember last year what happened to us, we had the two forest fires in Glacier Park and we had to evacuate that park twice during the height of the season.

And and last year also, we had the Iraq war and then the SARS scare in Toronto that a lot of the Europeans that go to western Canada have to connect through there.

So we had a lot of adverse thing last year.

But I can tell you that again without those type of things we had a nice pickup but we expect to have a real good year next year at Brewster, at Glacier.

And at Brewster we are still below the 1999 level that we had on actual result basis there.

We look for a nice year next year out of those two.

Right.

On the GES side there was comments at the beginning about that there was some same show growth in the quarter.

Can you give us some color as to how much same show growth there was, and, you know, was that a change in the trend?

Was the same show revenue declining previous to that or -- or some color on that?

Paul, would you take that one, please.

Sure.

For '01, '02, '03 we saw shows decline overall and if you go back to the first quarter and second quarter earnings calls we talked about that you know for the first time in 13-14 quarters we were seeing shows growing again.

My comment on the third quarter is, and we don't have the final statistics in yet, but it looks like the growth in the third quarter was less than it was in the first two quarters; however, it was positive.

So we see a continuing trend, a good trend and hopefully we will see that pick up again in the fourth quarter and into '05.

Okay, and just staying on GES.

Can you give us some color in 2005 in terms of what the show rotation will be like in the different quarters?

It seems like historically the first and second quarters have been the strongest.

This year you had some good rotation in the third quarter.

Yeah, and the first two quarters of -- in fact the first quarter of this year, Paul, correct me if I'm wrong, I think will set a record for your company for the largest quarter.

I mean you want to be more descriptive than I just was, please?

Sure.

The overall show rotation for '05 will be down from '04 and that is mainly because we had four huge shows in the third quarter.

We do replace that in the first quarter of next year with con-expo, con-ag, which when it happens typically is number one or number two show for the year.

We think we are forecasting a million eight square feet in Las Vegas for that show.

The first quarter is as Bob mentioned as far as we can tell will be the largest quarter that we have ever had as a company.

So the rotation will be mostly driven in the quarter by con-expo and con-ag.

And the third quarter is not going to be next year as robust as this third quarter but second quarter should be better, I believe than the second quarter of '03.

Is that correct?

I don't know if I know exactly what the second quarter is.

One of the shows that impacts the second quarter is the plastics show that doesn't occur again until '06 so we had that in '03 and this is why we were down second quarter of this year.

If there is a rotational effect I think it is probably minimal in the second quarter, Bob.

And what we will do at the December call, we will lay all of that out by quarter.

To put it in.the conexpo, conag, what is the magnitude of that?

This year the consumer electronics show for example likely to be the largest show in North America was a million four and con-expo, con-ag is a million eight.

They use outdoor space because it is a heavy equipment machinery show.

But it is a very, very, very large event.

You say like a million and a half dollars?

No, square feet.

Oh.

Terms of dollars what does that translate into.

We don't talk about individual shows.

Would it be more than $10 million.

It would be more than $10 million.

Okay.

All right.

Thanks a lot.

Thank you.

We will move on to Abbott Keller with Kestrel Investment Management.

Lee kaplan here.

Good morning.

I have a couple of questions for you.

The first one is how do you recognize revenue at convention services and exhibit services?

Like, I mean do you use sort of long-term contracts.

At what point do you recognize revenue?

Ellen?

We recognize revenue at show close at GES and then when the exhibit is shipped at Exhibitgroup.

So it is not in -- what is the time frame when backlog turns into revenue in these two segments?

Well, again, at GES, all the services that they are performing during the show, again, at show closing date after those services have been performed and are being billed that is the revenue recognition piece there.

And at Exhibitgroup on construction, you know, for very large exhibits that could take from, Kim, what, 2-3 months and then ones that is shipped, that is when it is billed..

Right, on the construction side we recognize the revenue at the ship date and on the services side it's the at the end of the show.

Okay.

That can span, you know, two or three months as Bob had just said.

So you win an RFP.

Oh, yeah, if we win an RFP it could be anywhere from three weeks that you turn something around or it could be like we were winning some RFPs for the CES show four or five months before we were even building.

Okay.

But from the time you win an RFP I guess there is no set --

There is no set.

That is the whole thing.

Sometimes one of the things that is happening is the and why the visibility is a little bit more difficult to predict than it has in the past is sometimes you will have bid on an RFP and this is the part that has taken a little longer to hear who wins that time is extended.

And it can be that they will tell you right before the show because they ran out of time.

You know and you got to get it built.

To the timing is really now for us is very difficult to predict.

Gotcha.

With respect to convention services, has your market share changed?

Kim and Paul?

This is Paul.

On the GES side I don't think there has been a market change in our market share.

GES' probably improved a little bit over the past couple of years.

And how about on the exhibit side?

Kim?

On the exhibit side up through this year we had sort of 12-15% market share and had maintained that market share.

The stats on the industry aren't out this year so it is difficult to say what happened.

More recently we think that we are winning more than our market share on the new RFPs but how that translates this year is still unknown because we don't know what the overall market is doing.

But in the past we had maintained or slightly increased our market share even as the whole industry declined.

Last question.

Bob said that four out of the top fifteen competitors closed their doors.

What amount of market share does that equate to?

Oh, it was probably -- actually -- it's actually difficult to say.

Just a second.

Let me just add.

Maybe 5%.

5%?

Yeah.

Thank you very much.

Sara, we have time for one more question.

That will come from Amy Northflux with Pilot Advisors.

Hi.

Good morning.

Good morning.

You said earlier that you will give guidance for 2005 on December 16th.

However, earlier we spoke in 2005 for the GES with moderate growth, slightly negative show rotation, and a mix issue and the with the Exhibitgroup with no visibility.

If I hear those words that would imply that things would not be as good as it was in '04?

That is just the opposite.

Paul and his leadership team have challenges in that type thing and we tried to lay those out but, there is a lot that we are going to have to do there on the productivity side and other things and the same thing on Exhibitgroup.

With what has happened there, with what we believe that we can do with the cost piece and other things, both GES and Exhibitgroup and certainly that -- let me change that to say that convention segment we believe is going have a better '05 than what we had in '04.

And we are committed to that.

We also believe that the travel and rec segment will have a better '05 than '04 and we also are doing as I mentioned a lot of work on the corporate side as well.

So, we expect that this economy continues along as it is, again, there is no untoward terrorist attacks and that type thing or anything that frightens people like the SARS thing that we had the last few years we expect a better '05 than we had in '04.

We expect good growth there.

Why would '05 be better '04 if we have the negative head winds coming?

Is it just productivity improvements, and cutting costs on your side?

There is going to be a lot of that.

We also will have another year behind and Paul's new ramp up on some of those product initiatives and so forth.

And on Kim's side, again, if we don't have an appreciable pickup on the new construction piece there is a lot more that we are going to do the cost piece itself.

As well as the sales productivity side of things I think that is a big positive on our side -- in the pipeline.

The pieces I had talked about.

Okay.

So I shouldn't -- okay.

So I shouldn't be concerned with the fact that the mix is negative and that, you know, we are doing less construction business and that the, you know, people are not shipping as much weight for the shows?

Well, Amy, let me put in context.

We are concerned about all those things but -- but the fact of it is those are just things that are happening in the industry.

What Kim and Paul have to do is to make certain that have got terrific people that can deal with those type of challenges.

There are a variety of different ways to deal with those challenges.

We wish those, you know, some of that headwind wasn't there.

The headwind is far less today than what it was, gosh, 2-3 years ago back when everything kind of just melted down, if you will.

So we will just -- we will just push on and we will get better as a company and again for '05 we expect in December to report out that we do expect a better '05 than '04.

Okay.

Great.

We may get there a little differently than what we would like to get there.

We obviously hope that with the election over hang, however that ends up, we hope that companies will once that is done at least start talking about there is a certainty to that however they feel about who won, a certainty to that it removes another bit of uncertainty and again we hope things pick up from an attitudinal standpoint a confidence basis from some of the client companies.

That would help a lot.

But we can't -- all we are trying to suggest is that we can't and we are not going to sit back and count on that happening in '05.

We hope that we are wrong but in the meantime we are going to get after just a lot of other things to make certain again we can turn in aer with '05 than '04.

Perfect.

Thanks so much for being with us today.

We hope that you can attend our new York conference and we will be getting the time and dates and so forth out.

Thank you again for being with us.

Goodbye.