General Finance Corporation
Q3 2017 Earnings Call Transcript

Published: 10 May 2017

[Operator:]

Welcome to General Finance Corporation's Earnings Conference Call for the Third Quarter Ended March 31, 2017. Hosting the call today from the Company’s corporate offices in Pasadena, California are Mr. Ronald Valenta, Chairman and Chief Executive Officer of General Finance Corporation; Mr. Charles Barrantes, Executive Vice President and Chief Financial Officer, and Mr. Jody Miller, President of General Finance Corporation. Today's call is being recorded and will be available for replay beginning at 2

[Chris Wilson:]

Thank you, Operator. Before we begin today, I would like to remind you that this conference call may contain certain forward-looking statements. Such forward-looking statements include, but are not limited to our views with respect to future financial and operating results, competitive pressures, increases in interest rates for our variable rate indebtedness, our ability to raise capital or borrow additional funds, changes in the Australian, New Zealand or Canadian dollar relative to the U.S. dollar, regulatory changes, customer defaults or insolvencies, litigation, acquisition of businesses that do not perform as we expect or that are difficult for us to integrate or control, our ability to secure adequate levels of products to meet customer demand, our ability to procure adequate supplies for our manufacturing operations, labor disruptions, adverse resolution of any contract or other disputes with customers, declines in demand for our products and services from key industries such as the Australian resources industry or the U.S. construction and oil and gas industries, or a write-off of all or a part of our goodwill and intangible assets. These risks and uncertainties could cause actual outcomes or results to differ materially from those described in our forward-looking statements. We believe that the expectations represented by our forward-looking statements are reasonable, but there can be no assurance that such expectations will prove to be correct. For more details regarding these risks, please see the Risk Factors section of our periodic reports filed with the SEC and posted to our website at generalfinance.com. These forward-looking statements represent the judgment of the Company at this time, and General Finance Corporation disclaims any intent or obligation to update forward-looking statements. In this conference call, we will also discuss certain non-U.S. GAAP financial measures such as adjusted EBITDA. A reconciliation of how we define and arrive at adjusted EBITDA is in our earnings release and will be included in our quarterly Report on Form 10-Q. And now, I'll turn the call over to Ron Valenta, President and CEO. Ron, please go ahead.

[Ronald Valenta:]

Thank you, Chris. Good morning and we appreciate you joining us to discuss General Finance's third quarter fiscal year 2017 results. As in prior earnings calls, I will begin with a brief discussion of our operations and then provide an update on our outlook for the remainder of the fiscal year. Our CFO, Chuck Barrantes will then provide a financial overview, and following his remarks, we will open the call for your questions. Also, joining us again for today's question and answer session is Jody Miller who is our President. Now to my operational review, this quarter marks the first quarter in two years where we have delivered year-over-year growth for adjusted EBITDA. Drilling by ongoing growth in a non-oil and gas sectors at our North America leasing operations and the second consecutive quarter of our year-over-year growth at our Asia-Pacific leasing operations. In North America we expect to continue growing our non-oil and gas sectors and also encouraged by signs of increased production activity in the oil and gas sector in Texas which we believe will lead to improve sequential results in the coming quarters. In the Asia-Pacific region, we continue to benefit from higher leasing revenues and a strengthening Australian dollar relative to the U.S. dollar. In our North America leasing operations, most of our product lines experienced higher average monthly utilization and/or higher average lease rates during the quarter which is a testament to our customer, industry and geographic diversity. We continue to execute on providing superior customer service, and as a result, our excellent net promoter score at Pac-Van was 86% for the most recent quarter and for the last 12 months. At this time, I would also like to congratulate Theo Mourouzis and his recent promotion to CEO of Pac-Van as over 20 years of experience in service with that company. Moving on, we see improvement in our liquid containment business in North America which showed an increase of approximately 19% sequentially in the second quarter of fiscal 2017. We’re encouraged by the increased production activity in Texas which enabled us to achieve higher sequential average fleet utilization for the third quarter in a row. For the quarter, liquid containment average utilization was 49%, up from 44% in the second quarter and 39% during the first quarter. In addition, we experienced an increase in average monthly lease rates on a sequential basis for the second quarter in a row which averaged $541 for the quarter, up 14% from the trough in the first quarter of fiscal year 2017. We remain focused on growing our business with both new and existing customers in the basins that we serve, benefitting from our high level of customer service and our safety record. Our North American manufacturing operations is making good progress in the marketing and production of our chassis and specialized blast resistant container products but its financial results are still being impacted by the ramp up of these new products and the ongoing soft demand for new frac tanks. However, we do remain focused on making these new steel-based products commercially viable and are cautiously optimistic that we will continue to post improved financial results in the quarters ahead. In the Asia-Pacific, total revenues during the quarter were up 8% year-over-year with most sectors experiencing growth. We also benefited from a favorable foreign exchange translation effect between the periods. The Royal Wolf team continues to implement a number of growth initiatives and is focused on building upon its leading market position across the region through a combination of organic growth, accretive acquisitions, and Greenfield openings. With respect to our geographic expansion, we remain focused on continuing that expansion both organically through Greenfield locations and through accretive acquisitions. Our pipeline remained healthy as we continue to see a fair number of opportunities particularly in the United States where we currently have a presence in 44 of the top 100 MSAs. Now I'd like to discuss our companywide outlook. Based on year-to-date results and assuming the average exchange rate for the Australian Dollar versus the U.S. Dollar remains at current levels for the remainder of fiscal year 2017, we expect that our fourth quarter consolidated adjusted EBITDA will show year-over-year growth as compared to the fourth quarter of fiscal year 2016 and that fiscal year 2017 consolidated adjusted EBITDA will be even with the prior year. Consolidated revenues for fiscal year 2017 will be in the range of $270 million to $289 million. To conclude, we remain focused on pursuing our long term growth opportunities including expanding our North American footprint and strengthening our market leadership in the Asia-Pacific region. As always, we remain disciplined on our capital allocation, deploying our resources and capital where we see healthy demand and opportunity and with a primary focus on our portable storage container and office container product lines. I’d now like to turn the call over to Chuck Barrantes for his financial reviews.

[Charles Barrantes:]

Thanks, Ron. We will be filing our quarterly report on Form 10-Q shortly, and this time this document will be available on both the SEC's EDGAR filing system and on our website. And I encourage investors and other interested parties to read it as it contains a substantial amount of information about our company, some of which we will discuss today. Turning to our financial results. Total revenues were $60.5 million in the third quarter of fiscal year 2017 compared to $66.5 million for the third quarter of fiscal year 2016, an increase of 3%. Leasing revenues were $43.9 million, an increase of 5%, and comprise 65% of total amount of manufacturing revenues. This compares to $41.9 million and 64% for the prior year's third quarter. Non-manufacturing sales revenues were $23.6 million in the quarter, up slightly from $23.4 million in the third quarter of 2016. In our North American leasing operations, revenues for the third of fiscal year 2017 totaled $40.8 million compared with $40.5 million for the year ago period an increase of approximately 1%. Leasing revenues increased by 3% on a year-over-year basis primarily the result of increase in the commercial industrial construction sectors. These increases were partially offset by declines in the oil and gas at retail sectors. Revenues at our North America manufacturing operations for the third quarter of $1.7 million which include intercompany sales of $700,000 to our North American leasing operations. This compares to $1.6 million total sales including intercompany sales of $400,000 during the third quarter of fiscal year 2016. In our Asia Pacific leasing operations revenues for the third quarter fiscal year 2017 totaled $26.7 million compared with $24.8 million for the prior year period, an increase of approximately 8%. The increase in revenues occurred primarily in the transportation, construction and retail sector that was accompanied by approximately 5% favorable foreign currency translation affect between the periods. These increases were partially offset by declines in the industrial, consumer and oil gas sectors. Consolidated adjusted EBITDA was $14.7 million from the third quarter of 2017 and increase of 4% over the third quarter of 2016. As Ron mentioned this is the first quarter in two years that we delivered year-over-year adjusted EBITDA growth and we are optimistic that we are back on track to deliver consistent growth on a quarterly basis going forward. Adjusted EBITDA margin as a percentage of total revenues was approximately 21% for both third quarter periods for fiscal years 2016 and 2017. In North America adjusted EBITDA for our leasing operations was $9.4 million for both third quarter periods including these results was adjusted EBITDA for Lone Star Pac-Van of approximately $1.4 million and $2 million for 2017 and 2016 third quarter periods respectively. For our manufacturing operations on a standalone basis adjusted EBITDA was a loss of approximately $300,000 for the quarter and improvement over the loss of approximately $700,000 in third quarter of 2016. Asia Pacific adjusted EBITDA for the quarter was $6.7 million as compared to $6.5 million in the year ago period, an increase of 3%. On a local currency basis adjusted EBITDA decreased by 2%. Interest expense was $5.2 million during the third quarter up from $4.8 million in the prior year period. Interest expense in North America was $300,000 higher on a year-over-year basis due to higher average borrowings on a year-over-year basis and higher weighted average interest rate of 5.2% just compared to 4.9% in the third quarter of fiscal year 2016. In the Asia Pacific, interest expense was $100,000 higher due to slightly higher average borrowings and stronger Australian dollars between the periods. The weighted average interest rate was unchanged from both third quarter periods at 4.9%. Net loss attributable to common stockholders in third quarter of 2017 was $2.1 million or $0.08 per diluted share an improvement for the net loss attributable to common shareholders of $3.3 million or $0.13 per diluted share in the prior year period. However the third quarter fiscal year 2016 included a $2.7 million pre-tax goodwill impairment charge related to our North American manufacturing operations. In both periods $922,000 of preferred dividends were paid on our preferred stock. For the first nine months of fiscal year 2017 we generated free cash flow before fleet activity of $13.9 million which when comparing this year 2017 with fiscal year 2016 was impacted by $23 million reduction in cash flow due to timing and collection of trade receivables and satisfaction of payables, accrued liabilities and other revenues. These working capital items reduced cash flow by $11.8 million in fiscal 2017 where and they positively impacted cash flow by $11.2 million in last year's first nine months. Historically we have experience significant variations in operating in assets and liabilities between periods when conducting our business in due course so this is not unusual. Free cash flow for the first nine months of fiscal 2016 was $35.2 million. As a reminder, we define free cash flow that we cash from operating and investing activities adjusted for changes in non-manufacturing inventory net fleet CapEx and business and real estate acquisitions. For the first nine months of fiscal 2017 the company invested a net $18.6 million in lease fleet consisting of $8.3 million in North America and $2.3 million in the Asia Pacific. This compares to $19.6 million in net fleet investment in 2016 $12.7 million in North America and $6.9 million in Asia Pacific. Turing to our balance sheet, at March 31 2017, the company had total debt of $365.4 million and cash and equivalence of $8.2 million with a net leverage ratio of six times for the trailing 12 months. This compares with $332 million and $9.3 million in June 30, 2016 respectively which comprise a net leverage ratio of 5.6 times. Receivables were $41.8 million at March 31, 2017 as compared to $38.1 million in June 30, 2016. DSL and receivables at March 31 for both our Asia Pacific and North American leasing operations was 49 days, and this compares to 36 and 49 days respectively as of June 30, 2016. At March 31 2017, our quarter end, our Asia Pacific leasing operations had in Australian Dollar 15.4 million available to borrow under its $150 million credit facility and our North American leasing operations had $26.9 million available to borrow under its $230 million credit facility. We are pleased with the early refinancing of our North American credit facility which extends its maturing date to March 2022 and adding four new members to the syndicate. Taken together with our recent $5.4 million tack-on offering to our senior notes, we have more than sufficient capital available for our plans for continued growth. This now concludes our prepared comments and I’d like to turn the call back to the operator for the question-and-answer session.

[Operator:]

[Operator Instructions] Our first question comes from the line of Scott Schneeberger of Oppenheimer.

[Scott Schneeberger:]

Could we touch on Pac-Van a little bit? Just a little bit more delving into the end market. Anything interesting you're seeing with regard to pricing competitive behavior in that segment?

[Jody Miller:]

Scott, this is Jody. I would say nothing unusual. Container pricing is starting to rise because of the production in China, and they’re switching over to water based tank which is going to derive some production, so there’s little bit of rumbling on the pricing and containers, but really didn’t affect us much. As far as the rental pricing, I’d say it’s consistent and continues to have slight increases. And Pac-Van had a very good quarter. If you look at the quarter, rental product, they were up 20% year-over-year in core container storage product which I think is very good.

[Scott Schneeberger:]

Is it largely constructing? Could you speak a little bit to the end markets, Jody? Anything unique you’re seeing there, or is it largely construction driven?

[Jody Miller:]

It’s spread out really. When you look at it, construction has done well. Our highest category is commercial. But all the categories are showing nice increases other then oil and gas and it's - as you know on the rise now. And if you look at it excluding acquisition, it’s still organically 13%. So across the board, it’s doing quite well.

[Scott Schneeberger:]

And then shifting gears a little bit. Related to Lone Star and obviously some good progression in the metrics. But Lone Star was proactive than working on pricing as energy prices came down. Could you guys elaborate to some what kind of discussion you're having with customers right now and looks like a little bit of movement in price the right way. But just kind of conversation and what you think would occur over the coming quarters at stable prices?

[Jody Miller:]

So, this is Jody again. I think it's very consistent with last quarter. I mean, activity definitely has increased. We’re seeing very nice gains in utilization. We are starting to have some conversations about moving the price up because we are very accommodating during the slow times and lowered our pricing. We’re starting to see a little bit of traction. Some of the specialty tanks, after the round bottoms, are getting shorter in supply. So we’re able to move that up a little bit with some of our new customers. We have been in place to kind of lock in the pricing for a while. But I think they’re more open to the conversation, but it's going to be bit before we see much huge increases just because supply has to be heating up, and then I think after utilization, it’s higher levels then will definitely be able to have more in depth conversations about pricing. But we are seeing some increases.

[Scott Schneeberger:]

Sounds good. I’ll turn it over, thanks very much.

[Operator:]

Our next question comes from the line of [indiscernible] of D.A. Davidson.

[Unidentified Analyst:]

Good morning. So you mentioned oil and gas leasing revenue within North America saw further declines. Shouldn't that be I guess turning with activities at Permian, what’s causing that?

[Jody Miller:]

We've seen increases. We transferred a fair amount of tanks from our South Texas facilities to the Permian. As far as the margins, we have yet ready cost and transfer cost that you have to incur when you do that. But the Permian is definitely much more active, and we’re seeing good results as far as utilization increases and revenue in the Permian. Did that answer your question, I’m sorry?

[Unidentified Analyst:]

Yes. I guess the decline in leasing gross margin, was that due to like currency fluctuation in pricing?

[Jody Miller:]

Talking about the EBITDA margin?

[Unidentified Analyst:]

Yes.

[Jody Miller:]

Actually we've gotten a little bit better on the foreign currency translation. But the margin in terms of situation that we’ve incurred as part of our business in the Permian and Grand Eagle Ford, a certain amount of fleet maintenance and truck and transportation cost, getting the right fleet over to the right customer. So probably have a little bit more expense in that category. But other than that, the EBITDA margin haven't really fluctuated significantly between the periods?

[Unidentified Analyst:]

And the gross margin as well?

[Jody Miller:]

The gross margin as well. Yes.

[Unidentified Analyst:]

And I guess in terms of Australia, you're pretty confident about the adjusted EBITDA continuing to grow from here.

[Ronald Valenta:]

So I think the environment economy is relatively flat. And so I think we are generally trading to somewhere right around there, maybe a little bit higher. So we don’t see any significant risk on the downside, like not materially back rolling at a strong rate year-over-year. But we’re just going to make some forward lease pretty much retain at this point. We are not seeing a big in a general economy upward.

[Unidentified Analyst:]

And I guess lastly, could you provide I guess with leased fleet utilization for non-oil and gas versus [indiscernible]?

[Charles Barrantes:]

So in North America, in the third quarter, the average fleet utilization for storage containers was 73% which compares to 71% from the third quarter of last year. Office container grew 76%, normal ops grew 77%. These are average utilization rates. Modulating grew 81% and the composite total for the whole of North America lease of operation was 73%. These are not frac - and the composite includes the frac tanks.

[Unidentified Analyst:]

Thank you, appreciate it.

[Operator:]

Our next question comes from the line of Greg Eisen of Singular Research.

[Greg Eisen:]

I was wondering, you talked about oil and gas related revenues in North America were actually down. And I guess that question was asked earlier in the call but I didn’t quite get the answer to that. Lone Star itself, it sounds like its revenues for the quarter were down versus last year's. Is that correct?

[Ronald Valenta:]

That is correct. But it's up sequentially from Q1 and Q2 which is where the improvement is.

[Greg Eisen:]

Okay. And you're seeing strength in demand in the Permian basin. Is that true also for the Eagle Ford basin or is it not a strong?

[Charles Barrantes:]

It’s an increase but not as much as the Permian. There is definitely more activity in the Permian and the Eagle Ford that we are seeing increases that it has a nice jump in rig count as well. There are close to 90 in rig count which they’re lower down 30. So it’s up but just not near as much volume as the Permian. And maybe something just to add to that as well is we have 15 new customers in the quarter which has been the highest we've seen in quite some time and accounted for 235 plus tanks to just those new customers as well.

[Greg Eisen:]

That's pretty strong quarter-on-quarter that’s sounds good. It sounds like there is a lot of activity going on in the Permian basin right now but said before that your work is skewed more towards the production side as opposed to the initial drilling side. In that regard are you seeing signs that - what you’re seeing going on the production side is the front end of the snake and your kind of that toys back end of the snake. Are you seeing signs that you expect increased utilization because of that?

[Jody Miller:]

Yes. So the process the drilling obviously happens first to drill all the initial wells and on the drilling side we do have some business there but it's not as much as our core highest volume area from the fracing completion and production side is where we come in and do most of our work. And after the drilling which has been up for the last couple of quarters now we’re getting into the fracking and completion production side which as you mentioned is where our sweet spot is and were definitely seeing some nice increases and keeping busy with that.

[Greg Eisen:]

Okay. Could you comment on new locations this quarter in all your markets geographic expansion, were there any new locations for the quarter?

[Jody Miller:]

In the quarter that there were new locations during the year for the first six months we opened six Greenfield locations four North America to be specific and then made two docks from acquisition in North America.

[Greg Eisen:]

Understood. Going back to Asia Pacific at Royal Wolf, can you discuss the status of mining accommodation units you’ve discussed previously that were sitting ideal. Are they still sitting on the balance sheet is there any progress or repositioning those assets.

[Ronald Valenta:]

Yes, this is Ron. So in Australia specific to Asia Pacific, we continue to move fleet on a regular basis. We had hopes that we will be little bit faster and more through the sales channel what actually happening is we are moving on average about 4 million that's in Australian dollars about 4 million of fleet each quarter is about what it's averaging and about 250,000 of that 2 million is going to the sales channel and the rest is being three weeks out or we let out. And it’s not only in Australia growing actually moving fleet to New Zealand as well so the fleet entire Asia Pacific. So annualized it feels like about 8 million a year and about 1 million of that is through sales channel what’s been averaging which is a little slower than we expected and we hope more to be done through sales channel but long-term clearly the leasing is more profitable for us so long-term leasing will benefit us greater but in the short-term we are doing less sales than we originally has available.

[Greg Eisen:]

Understood although you get a lot better margin seems on lease.

[Ronald Valenta:]

Yes on the leasing side long-term we definitely make better margins but as I said yes slightly we had in many one quarter.

[Greg Eisen:]

Okay. I’ll let someone else talk. Thank you.

[Operator:]

[Operator Instructions] Your next question comes from [indiscernible] Private Investor.

[Unidentified Analyst:]

Good morning, guys. I have a few questions the first one, I know you always spoken about Lone Star and then pickup in activity but I just wanted to have your feel of a rough number on what do you expect from Lone Star over the next 12 months on free cash flow or at least in EBITDA or something?

[Ronald Valenta:]

We expect Lone Star to sequentially grow over the next 12 months. The issue is how fast and we'll sustain we believe we’ll sustain, we believe though that utilization will increase first and then rates substantially but we’re looking at probably in Q3 as part of our forecast Lone Star to be somewhere around I’ll say $2 million of adjusted EBITDA and then growing from there. So that will be annual adjusted EBITDA of about $8 million starting off and growing from there.

[Unidentified Analyst:]

Okay, all right. But I mean right it’s kind of hard to estimate but do you see any further pick up I don’t know 12 months from now from those $8 million?

[Ronald Valenta:]

Yes, like I said we believe that in Q4 it will be around $8 million and sequentially increasing from there so we will see order take it from there.

[Unidentified Analyst:]

Okay. All right and then I had a question regarding of the Greenfields and recent acquisitions, what returns on capital do you guys kind of calculate or estimate when you do those and obviously both of a different number but I just wanted to have your feel on those?

[Ronald Valenta:]

On the acquisition side, so I think historically we’ve been in the 4 to 5 range in terms of the multiple data so somewhere around 20% return I would say that’s what we would be looking at. And then on the Greenfields generally speaking I think and Jody can speak to what our breakeven point is, initially because there is no rabbit, we’re not buying rabbit and putting asleep. It takes a while to get to breakeven and then it becomes profitable and may be Jody can speak to the history that he has had here on our Greenfield. But I can’t tell you before Jody answered that what has been historically very favorable but the type - because in the past its two to three years since he gets a breakeven but they have had far greater successes than that now let Jody answer more specifically what they’ve experienced.

[Jody Miller:]

There is basically two strategies on the Greenfields where the hub and spoke is the preferred where we can take an outlying market and support from the hub and generally we can breakeven within two quarters and then the true cold start into the new market where there is a very little fleet we definitely want to be positive within the first year but we've actually outperformed that model on the Greenfields over the last two years and most of them have been within the two quarter range of being positive and growing from there. So we're very pleased with the Greenfield for the last two years.

[Ronald Valenta:]

And I would add to so I would take with another say call it four quarters they’re probably very close to what our average returns would be relative to other locations. So I think the ramp up to profitability has gone a lot faster than historically it has in the sector and we will see more normalized margins in another four quarters or year out from there.

[Unidentified Analyst:]

All right yes, so after the breakeven let’s say one to two years or whatever it is or six months after that after you gone through that period what are the kind of numbers there of the investment you did and the near returns what would you think they are?

[Ronald Valenta:]

So again so that being with your experiences two quarters to breakeven and then within a year thereafter to remember like fields which get faster than 20% returns.

[Unidentified Analyst:]

All right. Then another one you guys expect the free cash flow number this year to be kind of smaller than last year given the working capital, the negative working capital is that right?

[Ronald Valenta:]

Yes well it’s the working capital so I would say it’s negative working capital it’s the affect of the working capital but we expect that to normalize over the next quarter six months.

[Jody Miller:]

And really it’s not so much a function of in my opinion significant deterioration receivable, payables, during the second period of last year, there were actually significant amount of pre-payments that make last year look significantly better. But generally speaking, our free cash flow in a normal working capital environment, it’s really about north of $30 million. It should be around there - a low down there are 40 million. So that’s normal at this point.

[Unidentified Analyst:]

That’s consolidated number?

[Ronald Valenta:]

That’s consolidated number. Yes.

[Unidentified Analyst:]

Right. Without preferreds and included the corporate expenses, right?

[Ronald Valenta:]

Including the corporate expenses. That is correct.

[Unidentified Analyst:]

And then final question. Given the Royal Wolf right now is trading at around six times. I’m surprised by the EBITDA. Does it make sense, and I know you guys have answered this before, but does it make sense to start a pre-purchase program there?

[Jody Miller:]

We at all levels are always looking for opportunities, and this would certainly fall under the development side on acquisition. So we’re always looking for the greater returns on our capital. And it’s something that we certainly look at quarterly and monitor it pretty much weekly. So I think it potentially could make sense, it’s ultimately board decision. What I can tell you is it’s always been considered, and I think relative to other opportunities, if it moves up the list, it’s clearly something that will be best for the company as a whole. It would be something that the board would seriously consider at the appropriate time.

[Unidentified Analyst:]

Right. I’m just mentioning because a strategic point of view for General Finance is it better that Royal Wolf is public, or is it better for Royal Wolf to be private?

[Ronald Valenta:]

I think because of the size, it’s certainly today publicly better private certainly from an operating perspective. It would be easier for us because we - everything is too - two separate committees for every function. We clearly you have a cost to being public. And then lastly, we have fiduciaries possibility issue which is we have to be cognizant of both public shareholder basis. So it’s certainly more complex for us from an operating perspective through an private structure.

[Unidentified Analyst:]

That's a good because given the current price, you could probably take it private with repurchase in three maybe four years or so. So I mean, as I said, I guess you guys think about it, but it’s just an interesting thing to think about. Okay, well thanks for your questions, and I’ll talk to you next time.

[Operator:]

There are no other questions at this time. I’d now like to turn the call back to Mr. Ronald Valenta for any closing remarks. Please go ahead, Mr. Valenta.

[Ronald Valenta:]

We thank you for joining our call today. Certainly appreciate your continued interest in General Finance Corporation and look forward to speaking with all of you at the end of our fiscal year. Thanks.

[Operator:]

Thank you. Ladies and gentlemen, this does conclude today's conference call. You may now disconnect.