Westlake Corp (WLK) 2005 Q4 法說會逐字稿

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Westlake Chemical Corporation's fourth quarter earnings conference call. [OPERATOR INSTRUCTIONS] I would now like to turn the call over to today's host, Dave Hansen, Westlake's Senior Vice President of Administration. Sir, you may begin.

Thank you. Good morning, everyone, and thank you for joining us for the Westlake Chemical fourth quarter conference call. I am joined today by our President and CEO, Albert Chao, and our Vice President and Treasurer, Steve Bender. The agenda for today will be as follows -- Albert will first make a few comments regarding Westlake's performance during the fourth quarter. Steve will then provide you with a more detailed look at our financial and operating results. After that, we will open the call up to questions.

Today, management is going to discuss certain topics that will contain forward-looking information that is based upon management's beliefs, as well as assumptions made by and information currently available to management. These forward-looking statements suggest predictions or expectations and thus are subject to risks or uncertainties.

Actual results could differ materially based upon factors including the cyclical nature of the chemical industry; availability, cost and volatility of raw materials and utilities; government or regulatory actions and political unrest; global economic conditions, industry operating rates; the supply/demand balance for Westlake's products; competitive products and pricing pressures; access to capital markets, technological developments; and other risk factors.

Westlake has issued early this morning a press release with details of our quarterly financial and operating results. This document is available in the Press Release section of our webpage at www.westlakechemical.com. A replay of today's call will be available beginning one hour after completion of this call until 11:59 p.m. Eastern Time on February 28. The replay may be accessed by calling the following numbers -- domestic callers should dial 1-888-286-8010. International callers may access the replay at 617-801-6888. The access code at both numbers is 21963244. Please note that information reported on this call speaks only as of today, February 21, 2006, and therefore you are advised that time-sensitive information may no longer be accurate as of the time of any replay.

I would finally advise you that this conference call is being broadcast live through an Internet webcast system that can be accessed at our webpage at www.westlakechemical.com. Now, I'd like to turn the call over to Albert Chao for a few comments. Albert?

Thank you, Dave. Good morning, ladies and gentlemen, and thank you for joining us. I'm pleased to report to you that we had a strong fourth quarter and a record year. In this morning's press release, we reported earnings of $1.13 per diluted share in the fourth quarter which is an all-time record for Westlake. We also reported earnings of $3.48 per diluted share for the full year 2005, outpacing last year's $2.18 per diluted share. I would like to emphasize that we experienced record profits in both our Olefins and Vinyls segments in spite of rising energy and raw material costs and the impacts caused by the two hurricanes that hit the Gulf Coast. Due to the strong business conditions during 2005, the industry was able to pass quickly through higher raw material costs with price increases that allowed for margin expansion.

The fourth quarter was particularly strong due to PVC resin and pipe price increases and strong demand which resulted from vinyls plant outages on the Gulf Coast. Natural gas and gas derivatives prices have subsided after price spikes caused by the hurricanes, bringing some of the U.S. chemical producers back into a cost competitive position with other parts of the world. We remain optimistic about the strength of the U.S. economy and we look forward to the prospects of another strong year in 2006. Now, I would like to turn the call over to our Vice President and Treasurer, Steve Bender, for review of our fourth quarter and annual results. Steve?

Thanks, Albert, and good morning everyone. As we reported in this morning's press release, Westlake had improved sales of $636 million in the fourth quarter compared to $563 million in the fourth quarter of 2004, primarily due to higher prices, which was partially offset by lower sales volumes in our Olefins segment. The lower sales volumes were caused by production outages at our Lake Charles facilities resulting from Hurricane Rita. Our Lake Charles facilities were shut down for approximately two weeks during October, primarily due to the lack of electrical power and other utilities. Our fourth quarter sales were also higher than the $605 million reported in the third quarter of 2005 due to higher selling prices in spite of the lower sales volumes related to the hurricane.

Net income improved to $74 million, or $1.13 per diluted share, in the fourth quarter of 2005 compared to net income of $47 million, or $0.73 per diluted share, in the fourth quarter of 2004, primarily due to margin improvement and a lower effective tax rate. The effective tax rate for the fourth quarter was 32.4%, resulting from a federal tax benefit of $4 million, not expected to reoccur. Fourth quarter net income also increased from the $44 million, or $0.67 per diluted share reported in the third quarter of 2005, primarily due to price increases which outpaced the energy and raw material price spikes caused by the two hurricanes.

The fourth quarter results benefited from the use of FIFO accounting. As you know, our utilization of FIFO inventory accounting impacts our earnings differently than the use of LIFO accounting. The energy and feedstock price spikes related to Hurricane Katrina and Rita benefited Westlake's results as compared with companies utilizing LIFO accounting. We estimate that the FIFO benefit for Westlake in the fourth quarter was approximately $0.12 per diluted share and approximately $0.26 per diluted share for the full year. Please bear in mind that the FIFO calculation is only an estimate, is not audited and is not a GAAP calculation.

As Albert mentioned, earlier, 2005 was the most profitable year in Westlake's history with both segments reporting record earnings. We had $227 million in net income, or $3.48 per diluted share, on net sales of $2.4 billion. This compares favorably with the year ended 2004 net income of $121 million, or $2.18 per diluted share, on sales of $2 billion. It should be noted that during 2004, we had debt retirement costs, net of taxes, of $10 million that lowered our diluted earnings per share by $0.18. Also, our share count is higher in 2005 compared to 2004 due to our IPO in August 2004, which increased our share count from 49.5 million shares to 65.3 million shares on a diluted basis. We remain focused on our cost structure. For the year ended December 31, 2005, our SG&A expenses were approximately 3% of revenues.

Now, turning to our segment analysis. Our Olefins segment generated $56 million in income from operations during the fourth quarter of 2005 compared to $65 million in the fourth quarter of last year but higher than the $45 million earned in the third quarter of this year. The decrease from last year was due to lower production and sales volumes resulting from the outage caused by Hurricane Rita. This decrease was partially offset by higher selling prices and margins in the fourth quarter of 2005. The sequential increase from the third quarter of 2005 was primarily due to increased selling prices and margins partially offset by lower volumes related to the hurricane.

Our Olefins segment earned $196 million of income from operations during 2005, up from the $180 million earned in 2004. Stronger demand for ethylene and polyethylene resulted in higher prices and margins in spite of higher energy and feedstock cost and the impact from the outage caused by Hurricane Rita. Average selling prices for the Olefins segment increased by 18% in 2005 as compared to 2004. These increased prices were partially offset by lower sales volumes, which resulted primarily from a three-week outage caused by Hurricane Rita. Merchant ethylene sales volumes also decreased as the internal requirements for ethylene at Geismar increased.

Now, turning to the Vinyls segment. Our Vinyls segment earned $58 million of income from operations during the fourth quarter compared to $19 million in the fourth quarter 2004 and $29 million earned in the third quarter of 2005. Income from operations increased over the prior year due to margin expansion and higher sales volumes for PVC resin and PVC pipe. Segment sales volumes were up 12.3% versus last year, driven by strong PVC pipe and resin demand. The sequential increase in operating income was primarily due to price increases, which outpaced higher energy and raw material costs.

Our Vinyls segment earned $179 million in income from operations in 2005, up considerably from $70 million generated in 2004. Stronger demand for our Vinyls products resulted in margin improvement and higher sales volumes. PVC pipe sales volumes were also higher due to our acquisition of the Bristolpipe assets in the third quarter of 2004.

Now, turning to the balance sheet and cash flow. We generated $143 million in cash from operating activities and $115 million in total cash flow after spending $25 million for capital expenditures in the fourth quarter. Our cash balance was $238 million at December 31, up from the $123 million reported in the third quarter. We have no revolver borrowings at this time.

I would also like to mention, in January 2006, we completed a refinancing of our long-term debt. We issued $250 million of new 6 5/8% unsecured senior notes due 2016 and amended our senior secured revolving credit facility to increase the commitment from $200 million to $300 million. We used the proceeds of these new senior notes, along with cash on hand, to redeem our 8 3/4% senior notes due 2011, and repaid the $9 million balance of the term loan. We expect to incur a one-time non-operating expense in the first quarter of 2006 of approximately $0.25 per diluted share for the early retirement of debt and a write-off of previously capitalized debt-issuance cost. This new debt structure will reduce our interest expense going forward and provide future flexibility.

In summary, I would like to end by saying that we are pleased with the strong results of the fourth quarter and the positive momentum going into 2006. Thank you very much. Now, let me turn it back to Dave Hansen.

Thank you, Steve. Before Albert and Steve begin taking questions, I would like to remind you that a replay of this teleconference will be available starting an hour after we conclude the call. We will provide that number again at the end of this call. Operator, we will now take questions.

Thank you, sir. [OPERATOR INSTRUCTIONS] And sir, our first question is from the line of Greg Goodnight with UBS.

Good morning, Albert. How are you?

Good morning, Greg.

One of the downstream producers that's publicly traded put out some -- released their earnings, last week that suggested that their margins on their pipe business, and hence, their prices, were way up. This producer operates mainly out in the West Coast area. My questions to you is -- can you quantify for us the impact of higher piping prices in margins that you saw in the fourth quarter? And then, what is the outlook in the first quarter and moving forward?

Yes. We also experienced a favorable pipe margin improvement. I think, as we mentioned, in the fourth quarter, we experienced a PVC resin and pipe price and margin expansion. Going forward, in terms of pipe prices, we're seeing that prices are still very strong. This is in the winter season so the demand is seasonally lower. The - from a total chain point of view, the ethylene and chlorine are still -- I think price has come down somewhat, so I think the margin still remains quite good.

Could you segment the improvement in pipe prices versus resin in general? I mean, our quarter-over-quarter improvement in EBITDA - how much -- just roughly, how much is attributed to the pipe margins?

We don't break down between the various segments and products in our Vinyls segment.

Okay. That's fine. CapEx in '06, what are your expectations for CapEx?

We are estimating our CapEx to be between $150 million and $175 million in Cap - in 2006, which is an increase over 2005.

Okay, and what specific projects is that attributed to?

Okay. We have our ongoing [feedflex] project which we'll be finishing, this year.

Right.

It's a large project. Then, we have ongoing maintenance, CapEx, as well as we have several - or many, rather -- energy-saving projects, given such high energy prices. We have a lot of low-hanging fruit that can benefit from energy-saving projects throughout the company.

Okay, thanks. No other projects that have been previously unannounced, then?

Not yet, no.

Okay. Thank you, Albert.

You're welcome.

And sir, our next question is from the line of David Begleiter with Deutsche Bank.

Thank you. Good morning, Albert.

Good morning, David.

Nice, very nice quarter. Albert, as your cash flow/cash balance increases, can you update us on the uses of your cash going forward?

Certainly. As I mentioned earlier, that we are having a larger capital benefit program, focusing on our key businesses and energy reduction. After that, certainly we are looking at various acquisition opportunities as we always have. And after that, we will look at the debt reductions, which today is [inaudible - microphone malfunction]. And lastly, we'll address actual dividends to shareholders.

[inaudible - cross talk] And Albert, any interest in overseas opportunities for Westlake?

We always look at opportunities in our core business on a global basis, so we have the company look at business around the world.

And would you consider one-time dividends or share buybacks if acquisition opportunities didn't, in the near term, present themselves?

Certainly, we'll look at both, but in Westlake's case, also we have a small flow. The share buyback would be contrary to the direction we want to go. One-time dividends certainly can be considered.

And last question, Albert -- just your view of the ethylene cycle over the next two to three years?

I think that the ethylene business in the U.S. for the next two or three years should be quite good. There are no major expansions in the U.S. There's, I think, the single [shale] plan that's already started in China. There are no major plans coming up. Maybe one or two in the Middle East in the short term, and the demand with the global economy still growing at a 3% clip, the demand for commodities, especially in our business, should be quite good. Despite the high energy prices we've seen in the last quarter or two, the demand, globally, for petrochemical is still quite strong and now with the reduction somewhat of energy prices, we foresee the demand for petrochemical, globally, will continue to be quite strong.

Thank you very much.

You're welcome.

And sir, our next question is from the line of David Silver with JPMorgan.

Yes, hi. I'd like to maybe just follow up on the question that you answered, previously -- immediately previously. But in the past, I guess in industry publications, Westlake has been connected, I guess, with their interest in something in the Middle East on the ethylene side and I guess also in Asia, in terms of further PVC development, and I'm just wondering, at this point, whether there has been any progress on either of those fronts? Thank you.

Thanks, Dave. Yes. As we mentioned in the past, and even this morning, we continue to look at opportunities around the world, areas in our core business where we can add value to us, and we do not comment on any of these activities until we can report to you until we are ready.

Okay. And for this quarter, specifically, Albert -- you mentioned that there were industry outages that affected many of your competitors, and my sense is that maybe your competitors were affected to a somewhat greater extent than Westlake was. I was wondering if you could comment on whether you believe that your fourth quarter results reflect any additional opportunistic business related to operating issues that your competitors or any other kind of somewhat unusual factor that you would cite for the strength in the Vinyls segment in particular. Thanks.

Albert Chao. Certainly. As we reported in the third quarter and this time, that actually Westlake experienced a major down in our major complex in Lake Charles, Louisiana. As you know, our Olefins complex is based in Lake Charles, Louisiana. We have two major ethylene plants there - polyethylene and styrene -- and the whole complex was down for three weeks in total -- one week in the third quarter and two weeks in the fourth quarter. But we experienced quite as bad or more than some other of our competitors. But we were able to come back. We suffered very little physical damage. We could've come back earlier. We had people who volunteered and stayed in the plant control rooms during the hurricane so they could quickly come out and assess the damage and start with the work afterwards. So we were able to get our plant up and ready but because of a lack of power from our power supply, we were not able to start until three weeks, as I said. I think our people did a great job in getting the plant up to startup and as you know with the [inaudible - audio interference] shut down and it was very fortunate that without peoples' help, that we would not have been able to startup quickly without much [instance].

Our Vinyls facility, as you know, we are the only vinyl complex in North America, today, that's not on the Gulf Coast. So, [inaudible - accent] as we reported to our shareholder many conferences that we have a unique advantage. We're not on the Gulf Coast and we were spared from this disaster, the two hurricanes, and certainly, we'll benefit from that.

Okay, and just a last question about -- also about your Vinyls segment. But I was just trying to confirm, if you could, that the expansions or the restarts that you have at Geismar are completed and that you're operating at the, let's say, 600-million pound level in PVC and VCM. And then, secondly, I was wondering if you could highlight any areas for de-bottlenecking or other increases in productive capacity throughout your segment there. Thank you.

Certainly. The -- as we reported in the past, Phase I of our Geismar operation was started in the end of 2004, really the beginning of 2005. So during 2005, we were able to enjoy some benefits from that. The Phase II was completed end of 2005. Going forward in 2006, we'll be able to enjoy the second phase of the complete benefit of the Geismar facility. As far as de-bottleneck, we always look for opportunities in all of our plants and we are looking at -- you mentioned Vinyls segment, but in the ethylene segment, Olefins segment, that we announced in our feedflex project, we do have a potential 100 million pounds of additional capacity coming out of that after the year [audio break] is completed.

Okay. Thank you very much.

You're welcome.

And sir, our next question is from the line of Nancy Traub with Credit Suisse.

Good morning.

Good morning.

Just back on that Geismar question, just remind us what is the incremental capacity there at Geismar?

Total capacity of Geismar is 600 million pounds for VCM and 600 million pounds for PVC. And the capacity is -- I mentioned the Phase II was completed end of last year, beginning of '06, so we're able to have full capacity for us to operate.

Good. And in the fourth quarter, you mentioned how your margins were up in Olefins, et cetera. You didn't mention anything about demand and some of your competitors were saying demand wasn't that strong in the fourth quarter. Could you put some color on yours?

I think demand was strong but supply was limited, in general, after the storm. And as you know, many companies, including us, had allocations for various -- several of our products. And so I think it's lack of supply that drove the price up. Now taking, I think, December -- starting December, people because of the purchases and -- people have made, as well as the high prices, people -- we see converters have reduced purchases and as a result, we believe the converter inventories are -- generally are low.

How about inventories at Westlake?

I think after - well inventories were very low after the storm and we are getting back to more normal levels.

So, not inflated?

Not inflated.

Okay. Is there any estimate for a FIFO impact for the first quarter?

We don't comment on -- we don't know, and we won't comment on that, either.

Right. And one last question. I know you're looking for a CFO. Do you have an update on the progress there?

We're doing [our] search and we'll report back to the public when the search is completed.

Should we expect that in the next month or two?

We hope to.

Okay. Thank you.

You're welcome.

[OPERATOR INSTRUCTIONS] And our next question is from the line of [Costas Carathonos] with Goldman Sachs.

Good quarter, Albert, and hopefully, natural gas costs will keep declining.

Thank you.

I've got a question about the PVC imports from Asia. What have you seen in the fourth quarter and what have you been experiencing with the first month-and-a-half for the first quarter of this year and what do you see for the rest of the first quarter?

Yes, I think as far as we stand, PVC has been weak in the fourth quarter, starting at probably December of 2005 in Asia, and since then has remained flat. So we have - I think we heard -- as you know, we don't sell to -- PVC to Asia but we heard the price has stabilized in the Vinyls segment in Asia.

So you expect it to decline a little bit?

To decline? No I -- as I said, we understand the prices will remain flat. It dropped in December from November and the prices remain flat in Asia for the period, as of now.

And then for the March shutdown in Lake Charles, can you please just give us an update about the feedflex project over there? What percent are you going to be getting from crude and how much the new capacity is going to be?

Certainly. We plan to have a turnaround in our Petro 2 plant in the second quarter. We're not quite sure which month, yet -- in the second quarter of this year. And that -- during that turnaround, we are going to complete our feedflex project in terms of time, everything else. The feedflex would allow 40% of the Petro 2, which is the larger of our two ethylene plants in Lake Charles, to - it'll run [inaudible] on natural gasoline which will be about 20% of the Lake Charles total capacity, 40% of Petro 2.

Okay, thank you. And then, one quick question for Steven. Steven, can you please give us a breakdown for the FIFO for the two segments, if it's possible?

Costas, we don't break down on that FIFO adjustment by segment.

Okay. Well, thanks a lot, guys.

You're welcome.

And sir, our next question is from the line of [Vitala Ellio] with Banc of America.

Good morning, gentlemen.

Good morning.

I'm stepping in for Kevin McCarthy today.

Can you speak up a little bit? You're cutting out.

Can you hear me better now?

Yes.

Okay. My main question is regarding capital expenditures. The numbers appear to be at a rate that would be double of what the usual rate might be. Can we get a little bit of clarification as to why is that? I mean, I understand that it is a breakdown for energy saving projects and improvements, but it is still a double than usual number.

Yes, if I may. Majority -- a large part of that is the feedflex project, which was really carried over from 2005/2006, and we have a multitude of energy saving projects and regular maintenance CapEx, and suddenly we have small projects that could reduce our costs. It may not be energy or increase potential de-bottleneck on some very small scale - I think, in fabrication, potentially. So, with all that together, this is the range we forecasted we will be spending.

Understood. Is it reasonable to assume that this number is a 2006 number or would it be a more typical CapEx number going forward?

No, I think this will be a 2006 number.

Okay. My other question is -- clearly, the pipe margins have helped and hopefully they will continue to help. How can we get comfort that this is a sustainable situation, if it is at all?

About the pipe margin being sustained?

Correct. That's the nature of my question. I mean, is it something that happened specifically for a quarter or two or is it something that we see going forward as something more sustainable?

Certainly, we'll be glad to see if it's sustained at this rate, going forward. But as you know, pipe margins, they do fluctuate and there's a question of supply and demand. There were outages, shortage of resin, so some pipe producers couldn't get their full load and were short of pipe. Then the demand of pipe was strong. We expect it to be strong, this year, as well. So there's a question of supply and demand and that would influence the margins.

And my final question is what sort of tax rate can we expect for the year 2007 - I'm sorry, for the year 2006?

Yes, well -- as you can see, the tax rate was below the normal statutory rate that you might expect. On a go-forward basis, if you use the tax rate of about 37.5% would be normal. That's a 35% statutory rate with a 1% manufacturing credit with a state and a local rate up 3.5 on top of that.

Understood. Thank you very much, gentlemen.

You're welcome.

And sir, our next question is from the line of Alex Mitchell with Scopus Asset Management.

Hi. Good morning.

Good morning.

Great quarter. I just wanted to ask whether you can comment on where you believe that pipe channel inventories are at this point.

Pipe inventory?

Yes. Inventories in the channel going in.

Okay. As I mentioned, this is a seasonal low area of the pipe demand because of winter. And because of the high pipe price, we believe the pipe customers' inventory is very low. However, the -- usually pipe producers will build up inventory during wintertime so they can sell in springtime. And so I think this probably will be the same, compounded with a high pipe price, so we think that pipe users' inventory should be quite low.

Okay. Can you comment on what pipe pricing is doing currently?

Currently, it's quite high.

Well, versus the fourth quarter?

We believe it's still quite high.

So does that mean it has not come down from the fourth quarter levels?

I think pipe price moves rather slowly. So with the PVC -- as you know, PVC price has decreased in December so pipe price will be affected generally by PVC prices.

Okay. Do you think that customers -- as they're watching PVC maybe coming under some pressure they may be on the sidelines, at least?

This is what we believe, yes.

And you mentioned, I guess, energy savings programs -- that you're spending some money on that. Do you have an estimate as to what you think you can save, corporate-wide because of -- ?

No, we haven't given out any estimates.

When -- if there are going to be savings, when would they start?

It depends. Some projects can be -- we'll see benefits within a year.

Okay. Thank you very much.

You're welcome.

And sir, our next question is from the line of David Silver.

Yes, hi. I had a question for Steve on the tax rate, but I was wondering if you could give your thoughts not on the tax accrual rate but on your cash tax rate. It's been, I guess, two years in a row where there's been a significantly lower cash tax rate versus your accrual rate. And I was wondering if you could maybe talk about that in relation to your expectations for 2006?

Well, we've used up all the NOL, and so the rate that I gave earlier of about 37.5% ought to be a rate to use on a go-forward basis.

Okay. And I'd also like to ask Albert, maybe, for his comments on the Chinese capacity to produce PVC. So, I guess, in the past conference calls, you've talked about the difficulties in bringing on the new capacity and quality issues with the new production, and I was wondering if you could maybe relate your thoughts on the developments there from just the country's capacity to produce PVC, the quality issues, whether you think that the pace of that will increase over time. Thanks.

Certainly. There's a fair amount of talks about expansion of the PVC capacity in China. As you know, they have a tremendous growth in economy and needs for construction and they have really a shortage of timber to use for wood. As a result, the government has been pursuing people to use small PVC as [inaudible - audio skip] for wood. It's all talk. Time will tell how much they plan to build. They are primarily based on the coal-based carbide of PVC which with today's high oil price, coal-based VCM, or carbide process, will be cheaper but it's very polluting, uses a lot of energy. And the product quality is inferior to ethylene-based PVC. We are seeing that they are displacing some [of the] imports of Vinyls and PVC into China but they're still importing a fair amount of PVC because the demand is still very large.

Okay. Thank you.

You're welcome.

And sir, we have a question from the line of Greg Goodnight.

A final question, if I could.

Certainly.

With respect to the Petro 2 outage, will there be any incremental shutdown expenses that hit your income statement or will those have been accrued and we won't see them in 2Q?

[inaudible - accent] The maintenance portion of the turnaround is capitalized and then amortized afterwards.

Okay. So we won't see anything incremental?

No, other than a loss of production --

Okay.

-- and profits for that quarter.

Okay. A final question if I could sneak one in. Your expectation for earnings sequentially '06 versus '05, do you see them as up, sideways, or down?

We'll do our best to be up but it depends on the market condition, certainly.

Okay.

Greg, as you know, we don't give any directional guidance there, I'm afraid.

Okay. I was just giving you one last chance. Thank you, gentlemen.

Thank you.

And sir, we have another question from the line of Nancy Traub.

Hi. With the slowdown in housing starts in the U.S. -- Albert, could you give us your view of how that would impact the PVC demand?

Okay. Certainly, PVC in the construction side is really going to three areas. There's residential, there's commercial, there's industrial. And what goes into the house is really the small tube -- the plumbing and the waste and drain type, which is a smaller part of the PVC pipe area. Certainly, a lot of -- talking about in the house, a lot of PVC use in refurbishments like a lot of window and siding and fences are used when people have old homes. Actually, there was a fence tech exhibition conference just a few weeks ago and people talked about U.S. homes getting older and older and that more work needs to be done to refurbish the homes. So there's a large potential for those areas, going forward, as well as new home construction.

Do you think that market is as big as the new construction -- we could offset the decline --?

I think -- no, it depends on whose forecast is for the new home construction. From what we've seen, it still remains maybe the second or third all-time high, so the construction of new homes is still quite robust from any measure.

Right. Okay, thank you.

You're welcome.

And with that, ladies and gentlemen, this concludes the question-and-answer portion of today's conference. I'd like to turn it back over to Mr. Hansen for any further comments.

Well, thank you very much and we appreciate your questions. Thanks for participating in today's call. We hope you will join us again for our next conference call to discuss our first quarter results. Thank you and have a great day.

Ladies and gentlemen, we thank you for your participation in today's conference. This concludes your presentation and you may now disconnect. Good day.