Viad Corp (VVI) 2012 Q4 法說會逐字稿

Welcome to the Viad Corp 2012 fourth-quarter and year-end earnings release conference call. At this time, all participants are in a listen only mode. After presentations, we will conduct a question and answer session.

(Operator Instructions)

This conference is being recorded. If you have any objections, you may disconnect at this time.

I would now like to turn the conference over to Joe Diaz. Sir, you may begin.

Thank you. Good morning and thank you for participating on the Viad Corp year-end 2012 earnings conference call. I'd like to remind everyone that certain statements made during this call, which are not historical facts, may constitute 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 can be found in Viad's annual and quarterly reports filed with the SEC. During today's call, we will refer to tables 1 and 2, and the business groups highlight section of the earnings press release, which is available on the Viad website at www.Viad.com.

Today, you will hear from Paul Dykstra, Viad's Chairman, President, and CEO; and Ellen Ingersoll, Viad's Chief Financial Officer. Additionally, Steve Moster, President of Viad's, Marketing & Events Group, and Michael Hannan, President of the Viad's Travel & Recreation Group, will be available for comment during the question and answer session at the end of the call.

With that, I like to turn the call over to Paul Dykstra, Chairman, President and Chief Executive Officer of Viad Corp. Paul?

Thanks, Joe, and thanks to all of you for participating on today's call. We appreciate your continued support and interest in the Company.

We had a very solid year in 2012, consolidated revenue for the year exceeded the $1 billion level, which is an important threshold as we continue to grow our business. Our total segment operating income for the year increased 65% as we benefited from increased revenue and operating efficiencies. Our operating margin for the year increased to 4.1%, from 2.7% in 2011. During 2012, the entire team did a great job of maintaining a strong focus on client service, execution of strategic initiatives, and achievement of our financial goals. I want each of them to know how much I appreciate their efforts and commitment.

Both the Marketing & Events Group and the Travel & Recreation Group delivered solid results, consistent with guidance for the year. Revenue from our Marketing & Events group increased 7.3% to $902 million, driven by a 6.5% increase in US based same show revenue, a $16 million net revenue benefit from non-annual events, and from new business wins. Marketing & Events Group operating income for the year increased to $17.9 million, compared to $5.2 million in 2011.

During the year we made significant gains with our service delivery network initiative. As a reminder, this initiative is aimed at optimizing the utilization of facilities, inventory, equipment, and labor across our network to reduce operating costs and invested capital, while also enhancing our ability to deliver great service to our clients. Since 2008, we have reduced our US facilities footprint by approximately 1.2 million square feet, and have realized annualized cost savings in excess of $6 million. Our largest expense in US Marketing & Events business is the variable labor that we contract to produce shows. During the year, we sharpen our focus in this area to more efficiently manage the amount and the manner in which we utilize the labor to ensure that we deliver a great customer experience at enhanced margins. To that end, we achieved a half-point reduction in labor to revenue on US based same shows versus 2011.

Improved labor utilization, the ongoing reduction in our service delivery network footprint and a continued focus on top line growth resulted in a 2% operating margin for GES in 2012, up from 0.6% in 2011. Our initiatives to operating more efficiently clearly had a positive impact in 2012. Although we will not benefit in 2013 from non-annual shows as we did in 2012, we expect to reach of full-year operating margin of approximately 2.5% for GES in 2013, as we continue to improve operating efficiencies and win new business. The international segment of our Marketing & Events Group also had a great year, with continued growth in revenue, operating income and market share. We also set in motions to successfully expand into Europe. I will provide additional background later in the call.

While economic conditions are still somewhat challenging in the UK and on the continent, we're making great strides in capturing more business in these markets. During the year we provided event services in more than 20 venues throughout Metropolitan London during the 2012 London Summer Olympic and Paralympic games. In the fourth quarter, we produced the health ingredients trade show in Frankfurt, Germany for United Business Media, a leading European-based business to business exhibition, events and entertainment organizer. We look forward to working on additional events with UBM in the coming years.

In our Travel & Recreation Group, 2012 full year revenue increased 21%, to $123.2 million, and operating income increased 18.6% to $24 million, reflecting a nice mix of event growth and acquisitions. Organic growth was 10.2%, as we continue to focus on providing excellent experiences for our guests and executing efficiently throughout the year. Our attractions turned in particularly strong performance with increased passenger traffic across the board. 2012 hospitality revenue benefited from the initial peak season contributions from our most recently acquired Alaska Denali Travel and Banff International Hotel properties. The St. Mary Lodge and resort and Grouse Mountain Lodge, both in their second year as part of the Travel & Recreation Group, also posted improved results over 2011. The Many Glacier Hotel provided a full revenue contribution in 2012 from rooms that were under renovation in 2011.

All in all, we are very pleased with the results we delivered in 2012. Let me now turn the call over to our Chief Financial Officer, Ellen Ingersoll, for a detailed review of 2012's financial results and our forward-looking guidance. Then, after Ellen's review, I will provide some additional background and we will open up the call for questions. Ellen?

Thanks, Paul and thanks to all of you for joining our call this morning. As I cover our financial results, you may want to refer to tables 1 and 2 in the business groups highlight sections of our earnings press release. As Paul mentioned, we delivered solid results in 2012. Full year revenue increased 8.8% to $1 billion. Segment operating income increased $16.5 million to $41.9 million, and income before other items nearly doubled to $1.09 per share. We finished the year in line with our prior guidance and the fourth -- with a fourth-quarter loss before other items of $0.34 per share, as compared to the 2011 fourth-quarter loss before other items of $0.27 per share.

Fourth-quarter revenue increased 2.6% to $202.6 million from 2011 fourth-quarter revenue of $197.4 million. Our fourth-quarter segment operating loss was $8.4 million, compared to a loss of $7.2 million in the prior-year quarter, reflecting less profitable revenue mix from both of our business groups. By definition, our 2012 full year and fourth-quarter income before other items excluded restructuring charges of $0.16 per share and $0.05 per share respectively, which primarily related to facility consolidation and the elimination of certain positions in connection with our efforts to optimize the Marketing & Events Group's service delivery network. Income before other items also excluded a fourth-quarter charge of $13.4 million related to tax matters which amounted to $0.67 per share for the year, and $0.68 for the quarter, with this difference being due to differences in the number of shares outstanding at 3 months versus 12 month. This charge is taken in connection with our analysis of deferred tax assets, during which it was determined that certain deferred tax assets associated with foreign tax credits no longer met the more likely than not test prescribed by the accounting standards regarding the realization of those assets. As a result, we established a valuation allowance during the fourth quarter.

Now I will discuss results for the Marketing & Events Group, which were in line with our prior guidance. During the fourth quarter, the Marketing & Events Group US segment posted revenue growth of $3.4 million, or 2.5%, driven primarily by positive show rotation of approximately $3 million. As a reminder, show rotation refers to shows that occur less frequently than annually, as well as shows that shift quarters from one year to the next. Base same show revenue, or revenue derived from shows that take place in the same city during the same quarter each year, was $48.8 million, which is essentially flat as compared to the fourth quarter of 2011.

US segment operating results were $674,000 higher than the 2011 fourth quarter, primarily as a result of higher revenue. For the full year, US segment revenue increased $45.4 million, or 7.2%, to $676.8 million, primarily reflecting increased exhibitor spending, new business wins, and positive show rotation of approximately $21 million. Full-year base same show revenue grew 6.5% to $281.2 million, from $264 million in 2011. Full-year operating results for the US segment improved by $11.8 million to income of $5.6 million reflecting higher revenues, as well as our ongoing efforts to drive operating efficiencies and to keep a tight control of our discretionary expenses.

Marketing & Events Group international segment revenue for the fourth quarter increased $724,000, or 1.2% from 2011, with operating income of $2.7 million. Fourth-quarter revenue is impacted by positive show rotation of approximately $1 million, and favorable foreign exchange rate variances of $743,000. International segment operating income decreased $1.4 million from the 2011 fourth quarter, reflecting a less profitable mix of business, as well as higher selling general and administrative expenses to support business growth. Additionally, foreign exchange rate variances had an unfavorable impact on operating income of $22,000.

Full-year international segment revenue increased 9.8%, to $240.1 million, with operating income of $12.3 million, as compared to 2011 revenue of $218.6 million and operating income of $11.4 million. The increase in revenue is primarily driven by work for the 2012 London Summer Olympic and Paralympic games, new show wins and same show growth, partially offset by negative show rotation of approximately $5 million. Foreign exchange rate variances had an unfavorable impact on revenue and operating income of $4.6 million and $160,000 respectively.

Now I will cover results for the Travel & Recreation Group before moving onto cash flows and the balance sheet. The Travel & Recreation Group's operating results were in line with our prior guidance for the quarter with $9.8 million in revenue and a seasonal operating loss of $4.4 million. This compares to 2011 revenues of $7.6 million and an operating loss of $4 million. These results include the acquisition of the Banff International Hotel purchased in March of 2012, which experienced seasonal operating losses during the quarter but was accretive to full year results. Foreign exchange rate variances had a positive impact on revenues of $239,000, while negatively impacting operating income by $31,000.

For the full-year, Travel & Recreation Group revenue increased 21% to $123.2 million, and operating income was $24 million, an increase of 18.6% from 2011. Acquisition related growth contributed to $13 million and $2.2 million of the year-over-year revenue and operating income growth, respectively. Excluding these acquisitions in unfavorable foreign exchange rate variances, revenue for the Travel & Recreation Group increased $10.4 million, or 10.2%, primarily as a result of availability of all rooms at Many Glacier Hotel, which had rooms under renovation in 2011, as well as organic growth at Brewster. Foreign exchange rate variances had an unfavorable impact on full year revenue and operating income of $2 million and $726,000 respectively, as compared to 2011.

Now I'll cover some cash flow and balance sheet items. For the fourth quarter, free cash flow was an outflow of $9.4 million in 2012 versus an outflow of $5.4 million in 2011. For the full-year, free cash flow was positive $37.1 million, up from $10 million in 2011. The increase in full-year free cash flow was primarily driven by the increase in net incomes and changes in working capital, partially offset by increases in capital expenditures versus 2011. Capital expenditures were $7.8 million for the 2012 fourth quarter, versus $4.3 million in the 2011 quarter. Full-year capital expenditures were $27.7 million versus $21.5 million in 2011. We repurchased just over 23,000 shares during the quarter at an average cost of $22.70 per share.

Depreciation and amortization expense was $7.2 million for the 2012 fourth quarter, in line with the 2011 quarter. Full-year depreciation and amortization expense was $30.7 million in 2012, versus $29.1 million in 2011. Payments on our restriction reserves were approximately $1.9 million in the 2012 fourth quarter, versus $526,000 in the 2011 quarter, and full-year payments amounted to $4.7 million in 2012 versus $3.9 million in 2011. Our balance sheet remains strong. At December 31, 2012, we have cash and cash equivalents totaled $114.2 million, compared to $124.2 million at the end of September. Our total debt at the end of December was $2.2 million with a debt to capital ratio of 0.6%.

Now I'll cover our guidance for the first quarter and full year 2013 which reflects our best estimates based on information available at this time. Marketing & Events Group full-year revenues are expected to decrease in 2012 (sic - see press release "2013") at a low to mid-single-digit rate, primarily as the result of negative show rotation of approximately $55 million to $60 million, partially offset by same show growth in new business wins. US-based same show revenue is expected to increase at a low to mid-single-digit rate. Marketing & Events Group segment operating margins are expected to reach approximately 2.5%, driven primarily by continued improvement in US segment profitability. And exchange rate variances are not expected to have a meaningful impact versus 2012.

Travel & Recreation Group full-year revenue is expected to increase at a mid-single-digit rate from 2012, driven primarily by organic growth. Travel & Recreation Group operating margins are expected to approximate 20%. Exchange rate variances are not expected to have a meaningful impact versus 2012. Our corporate activities expense is expected to be approximately $90 million, our full-year cash flow from operations is expected to be between $35 million and $40 million. We expect full-year capital expenditures of approximately $40 million to $45 million, which includes an estimated $12 million to $14 million for continued construction of the Glacier Discovery Walk attraction. The depreciation and amortization expense is expected to approximate between $30 million and $32 million.

For the first quarter, we expect Viad's income per share to be in the range of $0.21 to $0.31, as compared to the 2012 first-quarter income before other items of $0.12 per share. Revenue is expected to be in the range of $268 million to $287 million, as compared to $268.8 million in the 2012 quarter. We expect segment operating income in the range of $8 million to $11.5 million as compared to income of $5.5 million in the 2012 quarter. Additional details regarding our 2013 outlook can be found in the earnings press release.

Back to you, Paul.

Thanks, Ellen for that review. At this point, I'd like to provide additional background on a number of developments that took place in 2012, and how they might impact us going forward.

As you all know, on December 14, 2012, Viad announced that the Board of Directors authorized management to explore and evaluate opportunities to enhance shareholder value, including a potential separation of our Travel & Recreation and Marketing & Events business. JPMorgan is assisting Viad as we move through the evaluation process. Although it is early in this process, it is important to remember that, as originally indicated, there can be no assurance that this process will result in any transaction. However, what I can say, is that this process is a priority for us and we will report back to you once it has concluded and the Board has reached it's decision.

In previous quarterly calls, I've referenced our expectation of the National Park Service issuing a prospectus for the new concession contract at Glacier National Park, where we have been the concessionaire for approximately 32 years. In December, we did, in fact, receive the prospectus. We are in the process of preparing our bid, which is due this coming March. As a reminder, about 1.5 of the rooms we have at our Glacier Park operation are covered by the concession contract, and we generate about $18 million in annual revenue under our current contract.

We believe we are well-positioned to win the new 16-year contract; however, if we do not secure the contract, we will still generate revenue from our own properties located outside the park. Should another company win the bid, we will receive $25 million in possessed reinterest due to us for improvements and other investments made within Glacier National Park over the past 32 years. We will also receive an estimated $5 million for our personal property used at the facilities covered by the contract.

On another front, construction work on our newest attraction, the Glacier Discovery Walk in Jasper National Park in Alberta, Canada, continued throughout 2012. We were previously targeting an August 2013 opening, which we have given the opportunity for a short operating season. However, we now expect construction related delays of approximately 30 to 45 days. As a result, the attraction may not open until the beginning of the 2014 operating season. That being the case, our expectation is for little or no revenue from the Glacier Discovery Walk in 2013, but we expect the Glacier Discovery Walk to be an exciting and iconic attraction featuring the splendor of the amazing glaciology, geology and vistas at the park and we very much look forward to getting it online.

On the Marketing & Event side of the business, we achieved great progress in 2012, in expanding the scope of the international segment of the business. Our London-based Melville GES unit is the undisputed market leader in the UK. We have the widest range of capabilities to produce and service large exhibitions that our competitors in the market do not possess. That wide range of capabilities was a critical factor in ExCel London entering into a 10-year agreement with us to be it's preferred exhibition services supplier.

ExCel London is a leading international exhibition and convention center in the London Metro area, and is the venue for many of Europe's largest exhibitions, congresses and corporate events. This agreement provides us access to a new set of opportunities to expand our international business in the coming years. In that regard, we recently announced the opening of a new office in Amsterdam, with the goal of extending our reach into Continental Europe. This is an exciting development that can enhance our ability to capture greater market share throughout Europe.

2012 was a very successful year for GES in generating new business and producing the first of a number of new multiple year shows. During the year, we were awarded a contract to produce the National Rifle Association annual meeting and exhibit commencing in 2013 through 2015. The NRA annual meeting is a three-day major exhibition covering more than 400,000 square feet with more than 500 exhibitors and an estimated 70,000 attendees. This past June, we produced the first of five annual events awarded to GES by the American Wind Energy Association. The wind power conference and exhibition, the world's largest wind energy event, took place in Atlanta and represents a notable competitive win for GES. Over the next four years, the contract GES will produce wind power annual conferences in Chicago, Las Vegas, Orlando, and New Orleans.

Last February, GES produced a brand new show called Modex for MHI, which has been a GES client for more than 25 years. We have successfully serviced various events for them over the years, including ProMat. We are pleased to have been selected as their partner for the launch of Modex, which span 180,000 square feet, featured 586 exhibitors -- (No audio)

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Operator, can you hear me okay?

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Very sorry for the technical glitch here. I'm going to restart where -- approximately where we think we dropped off. Again, I apologize.

On the Marketing & Event side of the business, we achieved great progress in 2012 in expanding the scope of the international segment of the business. Our London-based Melville GES unit is the undisputed market leader in the UK. We have the widest range of capabilities to produce and service large exhibitions that our competitors in the market do not possess. That wide range of capabilities was a critical factor in ExCel London entering into a 10-year agreement with us to be it's preferred exhibition services supplier. ExCel London is a leading international exhibition and convention center in the London Metro area and it is a venue for many of Europe's largest exhibitions, congresses and corporate events. This agreement provides us access to a new set of opportunities to expand our international business in the coming years. In that regard, we recently announced the opening of a new office in Amsterdam, with the goal of extending our reach into Continental Europe. This is an exciting development that can enhance our ability to capture greater market share throughout Europe.

2012 was a very successful year for GES in generating new business and producing the first of a number of new multiple year shows. During the year we were awarded a contract to produce the National Rifle Association annual meetings and exhibits, commencing in 2013 through 2015. The NRA annual meeting is a three day major exhibition covering more than 400,000 square feet, with more than 500 exhibitors and an estimated 70,000 attendees. This past June we produce the first of five annual events awarded to GES by the American Wind Energy Association. The wind power conference and exhibition, the world's largest wind energy event, took place in Atlanta and represents a notable competitive win for GES. Over the next four years of the contract, GES will produce wind power annual conferences in Chicago, Las Vegas, Orlando, and New Orleans.

Last February, GES produced a brand-new show called Modex for MHI, which has been a GES client for more than 25 years. We have successfully serviced various events for them over the years including ProMat. We are pleased to have been selected as their partner for the launch of Modex which spanned 180,000 square feet, featured 586 exhibitors and welcomed nearly 20,000 visitors from 96 countries. Modex will take place in even years while ProMat takes place in odd years.

As I mentioned earlier, we have entered into a 10-year agreement with ExCel London, a venue for many of Europe's largest exhibitions, congresses and corporate events, to be their preferred exhibition services supplier. As the market leader in the UK, this positions us even better to capture more market share in the UK and throughout continental Europe. We are gaining real traction, both in the US and in international markets in attracting new shows and look to continue our efforts in 2013 and beyond.

As many of you know, we have had a great partnership with the Consumer Electronics Association for more than 20 years, and we believe we played a role in helping CEA to make CES the highly anticipated and successful technology event that it has become. The 2013 show was no exception, and the show once again enjoyed record-setting net square footage and exhibitor participation. We executed very well and had exhibitor satisfaction scores that were at an all-time high. Prior to this year's event, CEA put the show out to bid for 2014 and we were recently informed that they have awarded the show to a competitor. This is a big disappointment, but I'm proud of the passion and effort put forth by the GES team to retain the business and provide excellent service to CEA and the CES exhibitors over these many years. We wish CEA continued success with its events and look forward to winning business -- their business in the future.

As you may be aware, we have a stated target of returning to historical operating margins of about 5% at GES, and we had previously expected to hit this target in 2014. However, the recent loss of CES introduces an unexpected headwind and we now believe that an operating margin of approximately 4% is more realistic for 2014. Despite this temporary setback, we remain committed to restoring GES's margins to their historical levels of about 5%, and we are currently in the process of reviewing our operating plans to meet this goal.

The progress achieved in driving operating efficiencies across our service delivery network, as well as our continued focus on labor management has also been significant. As I mentioned earlier, we achieved a 0.5 point reduction in labor to revenue on our base same shows in 2012 and we made significant efficiency gains through our service delivery network initiative. Again, the goal of the service delivery network initiative is to efficiently manage our facilities, inventories, and equipment, in order to meet the demand patterns of our business in the most cost-effective manner, while also enhancing the level of service that we provide our customers.

During the fourth quarter, we reorganized our Atlanta warehouse with a more efficient lay out as it will become our East depot. Atlanta will provide support to all other locations in the region when their inventory requirements exceed a specified store set level that is housed locally. We have commenced shifting inventory into Atlanta from other East region locations, which is a key step forward in our goal to reduce overall inventory levels, and the warehouse space required to store those inventories. We also down-sized our Boston office and shifted some of its operations into our Cincinnati office for greater efficiencies. Cincinnati will become our focal point for national manufacturing and client storage, due to its favorable cost structure and availability of space. Additional actions completed earlier in 2012 include consolidations within the Chicago, Washington DC, and San Francisco markets.

We are pleased with the progress achieved to this point and we believe that these actions will help us in achieving improved operating margins in the coming years. Today, we have greater flexibility to adjust our cost structure to address the ebbs and flows of the business. I'm also happy to report that in the United States, JD Power and Associates recognized GES in 2012 for excellence in its customer call center operations for the fifth consecutive year. Consistently earning this recognition is a concrete example of our dedication to provide exceptional service to our customers. We are pleased with this recognition of our corporate values and we take pride in our ability to consistently execute on those values.

As I have indicated in previous calls, we believe there are significant opportunities ahead for both of our businesses. We have the people, the resources, the expertise and the experience to continue to grow our businesses. While global macroeconomic conditions still present some challenges, we've done a great job in bouncing back from the lows of 2009 and 2010, and positioning Viad and each of its business groups for continuing success in the coming years. We have a strong balance sheet, very little debt, and great opportunities in both of our businesses. We look forward to 2013 and beyond with great enthusiasm.

With that, let's open up to questions. Maryanne, can you open up the line, please?

(Operator Instructions)

Steve Altebrando, Sidoti & Company.

Did CEA give any indication for their decision and was it a matter of pricing?

Yes, we are very proud of the work we've done with CEA. The feedback we got that we presented a very strong and innovative proposal, but they were looking for a fresh set of eyes on their business, was basically the feedback that we got.

Okay. And then in terms of the improvements to the service delivery network, what inning do guys suspect you are in? Obviously moving up to 4% up margins in '14, how much of a function is that of that is positive show rotation? In other words, will most of the initiatives be in place in 2013?

Let me take a cut at that and I'll ask Steve Moster to comment as well. We've made a lot of progress. We've taken 1,000,001 square feet out of our network. We do believe there are ongoing opportunities. Steve, do you want to expound on those opportunities moving forward?

Yes, thanks Paul. I think that in relation to what inning we are in, we started this effort back in 2009. But, there's still significant opportunity ahead of us going forward. So, as I look at the initiatives around the service delivery network, which is primarily around the facility footprint as well as our initiative around labor-management, those are the things that are -- were initiated strongly in 2012. I think they have opportunities and '13, '14 and '15. I still think there's quite a bit of run rate.

Okay. And in that segment, I know probably a couple of years ago you had said the flow-through or the margin contribution was probably about 20%. Is there a new number now given the changed structure of the business?

I think we'd still look for flow through of north of 20% going forward.

Last one and I'll get back in the queue. In terms of the buyback, could you give any color how you are viewing it? Is it kind of an opportunistic view of how to repurchase stock?

Sure. The Board did authorize an additional 1 million shares. It's really another vehicle for us to deploy our capital. The Board wanted us to be able to have the opportunity to deploy. We will deploy that at the appropriate time and keep in mind with our other capital deployment strategies and we did increase our dividend last quarter, we are looking at other strategic alternatives. So, it was another vehicle that the Board wanted to give us to deploy our capital.

Okay. Thank you.

(Operator Instructions)

We have more questions from Steve.

For the Travel & Rec segment, guidance being up mid-single digits, I assume that implies really nothing from Glacier Discovery Walk. Is there any cost implications to the delay?

Most of the cost that we will be incurring next year are capital expenditures. That will be included in the cost of the asset of the Glacier Discovery Walk.

Okay. I should say, did it change the CapEx budget for it?

It shifted the CapEx budget a bit. Our guidance, now, is about $20 million. Before, it was $17 million to $18 million. Now it's about $18 million to $20 million.

Okay. And, in terms of the possibility of separating the Travel & Rec segment, I don't know how much you can give on this, but if you can give any sort of timeline that you are expecting the review to take. I'm not sure if you provided this, but the tax basis for the segment?

Yes, we have not set any specific dates, Steve, as we want to fully and thoroughly explore all our opportunities to enhance shareholder value. We will definitely comment on the results at the appropriate time. We do also recognize that investors want to know results and decisions, so we are moving forward with the valuation process without delay. We are moving very, very quickly. On the tax basis side --

Yes, right now, Steve, that's not something that we have disclosed in the past on the tax basis.

Okay. And are you still considering acquisitions in that segment? Or are things generally on hold pending the review?

We are still continuing to evaluate deals that make strategic and economic sense.

Okay. Thank you.

At this time, there are no other questions.

Okay. Thanks Maryanne. Thank you all for participating on today's call. We did have a very, very solid 2012. We look forward to continued improvements in 2013 and 2014. We made a lot of progress on our strategic initiatives and expanding our international presence.

Again, 2014, we will enjoy a good, positive rotation year. We are very, very excited about our business. Thanks again for being with us today and we look forward to updating you on our progress at the end of the first quarter. Thank you.

This does conclude today's conference call. You may disconnect your phones at this time.