General Finance Corporation
Q1 2015 Earnings Call Transcript

Published: 10 Nov 2014

[Operator:]

Welcome to General Finance Corporation’s Earnings Conference Call for the First Quarter ended September 30, 2014. Hosting the call today from the company’s corporate offices in Pasadena, California are Mr. Ronald Valenta, President and Chief Executive Officer of General Finance Corporation and Mr. Charles Barrantes, Executive Vice President and Chief Financial Officer. Today’s call is being recorded and will be available for replay beginning at 1.30 PM Eastern Time. At this time, all participants have been placed in a listen-only mode and the floor will be opened for your questions following the presentation. (Operator Instructions). It is now my pleasure to turn the call over to Mr. Chris Wilson, Vice President, General Counsel and Secretary of General Finance Corporation. Please go ahead Mr. Wilson.

[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, market interest rates for our variable interest 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 natural resources industry or the U.S. construction of oil and gas industries or a write-off of all or other part of our goodwill and intangible assets. These involve risks and uncertainties that 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 these non-U.S. GAAP measures are in our earnings release and will be included in our quarterly report on Form 10-Q. And now I turn the call over to Ron Valenta, President and CEO. Ron, please go ahead.

[Ron Valenta:]

Thank you, Chris. Good morning and thanks for joining us to discuss General Finance’s results for the first quarter fiscal year 2015. As usual, I’ll begin with a brief discussion of our operations and then provide an update on our outlook for fiscal year 2015. Our CFO, Chuck Barrantes will then provide a financial overview and following his remarks, we will open the conference call to your questions. We are extremely pleased to reported as you’ve all seen that we’ve come out of the gate with a very strong performance and operating momentum, generated another quarter of record results. Our North American leasing operations have hit ball out of the park, resulting in our 18th consecutive quarter of year-over-year growth in both total revenues and adjusted EBITDA. We continued to successfully execute our strategic initiatives to expand our container fleet while maintaining high average utilization rates and implementing increases across most of our product lines. We also continued our strategy of supplementing our organic growth with creative acquisitions. Since the beginning of this fiscal year, we have completed two acquisitions of portable storage container business in North America investing approximately $20 million and adding four branch locations to our network of approximately 40 locations across 20 states in United States and one province in Canada. Our growth in North America has been driven by across the board, strength in all of our product lines but particularly from our container base products such as portable liquid tank, portable storage and office containers. Revenues from our leasing operations more than doubled and adjusted EBITDA more than tripled in the first quarter for the prior year’s quarter. We have grown our lease fleet in units by 36% over the last 12 months and our overall average utilization for the most recent quarter was 81%, up from 77% in the first quarter of fiscal year 2013. The financial contribution from loans are far exceeding our initial expectations as we’re capitalizing on the strength and demand for portable liquid storage tank containers and related services in the Texas region. Pac-Van has also seen broad-based improvement in a number of key sectors including commercial, mining and energy, construction and industrial. Southern Frac, our manufactured portable liquid storage tank containers also had a strong quarter, generating total standalone revenues of $14.8 million, up nearly 50% from the previous year. This was due to increased demand at our North American leasing operations. Adjusted EBITDA on a standalone basis for the first quarter nearly tripled to $3.1 million up from $1.1 million in last year’s first quarter. Turning to Asia Pacific region, Royal Wolf benefited from increased leasing revenues across the number of industries, particularly in the resources and construction sectors. Leasing revenues increased by 13% in the first quarter, driven by a combination of an increase in the size of lease fleet, higher utilization rates and higher average lease rates. Our sales revenues were lower in the quarter, primarily due to a large one-off sale to a freight logistics customer that did not occur in this first -- in this fiscal year. In addition, sales in the resource industries were also down as a sector showing signs of slowing down. For the quarter, adjusted EBITDA increased by 4% despite the decline in total revenues of 16%, demonstrating again the resiliency in the business model and the shift towards a higher percentage of leasing revenues in the quarter versus the year ago period. As a result, adjusted EBITDA margins increased by approximately 600 basis points in the quarter to 28%, up from 22% in last year’s first quarter. In addition, average fleet utilization increased by approximately 200 basis points year-over-year to 82%. The Royal Wolf management team is focused on delivering increased profitability in fiscal year 2015. Our highly diversified customer base and broad product offerings across a wide number of industries positions us well to weather an isolated slowdown in certain sectors of the economy, enabling us to continue our long track record of growth. In summary, with our continued focus on growing the container leasing activity, our overall leasing volume represent 71% of our non-manufacturing revenues and our EBITDA margins increased 32% from 20%. Now turning our company wide outlook. Looking ahead, we remain very optimistic about our prospects for strong overall performance in 2015. Based on our record first quarter operating results from both of our geographic venues and offset by a revised expectations for a lower value of the Australian dollar versus the U.S. dollar, we are comfortable that the consolidated adjusted EBITDA will be at least at the high-end of the range provided during our fourth quarter in fiscal year 2014 earnings press release and conference call. However at this time, we are not providing our guidance. As a reminder, on that call we stated the consolidated revenues for fiscal 2015 were expected to be in the range of $320 million to $335 million and the consolidated adjusted EBITDA was expected to increase 28% to 33% in fiscal year 2015 over fiscal year 2014. This outlook does not take into account the impact of current year acquisitions. At this time, I would like now turn the call over to Chuck Barrantes for his financial review.

[Chuck Barrantes:]

Thanks Ron. We will be filing our quarterly report on Form 10-Q tomorrow, at which time this document will be available on both the SEC’s EDGAR filing system and on our website. 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 $80.4 million in the first quarter of fiscal year 2015, a 22% increase over the comparable period of the prior year and includes $17.7 million from Lone Star, which we acquired this past April. Leasing revenues for the quarter increased by 79% to over $55 million from $31.1 million for the first quarter of 2014 and comprised 71% of total non-manufacturing in the quarter compared with 50% for the same period last year. Non-manufacturing sales revenues were $22.8 million in the quarter, down from 31.2 million in the first quarter of the prior year. I’ll talk about that in a second. Total non-manufacturing revenues of $78.5 million in the first quarter of fiscal year 2015 increased by 26% from the first quarter of 2014 and was driven by increases in our North American leasing operations where revenues more than doubled and was partially offset by a 16% decrease in revenues in our Asia Pacific leasing operation. In our North American leasing operations, increase and revenues was driven by the inclusion of Lone Star, as well as a 33% increase in leasing revenues and a 3% increase in sales revenue at Pac-Van. The increase in leasing activity was due to improved demand across virtually every sector, but particularly in mining and energy, commercial, construction and industrial. The Asia-Pacific region’s comparative decline in revenues was primarily due to a large one-off sale of sale of $8.7 million to a freight logistics customer that occurred in last year’s first quarter, but was not replicated this year, that’s the reason for the sale decrease. Leasing revenues were up 13% in the first quarter of 2015 as compared to prior year period. On a local currency basis, total revenues in the Asia-Pacific declined by 17% comparable and leasing revenues increased by 12% between the period. At our North American manufacturing operations, Southern Frac standalone revenues increased by almost 50%. And as Ron mentioned earlier, they benefit from increased demand at our North American leasing operations primarily in the Texas market. Consolidated adjusted EBITDA was $25.5 million in the first quarter of 2015 nearly doubling from $12.8 million in the first quarter of 2014. Adjusted EBITDA margin as a percentage of total revenues was 32% for the quarter compared to approximately 20% in the prior year’s quarter. Adjusted EBITDA for our North American leasing operation was $17 million in the first quarter, more than tripled of $4.7 million generated in the prior year’s first quarter. The large increase in adjusted EBITDA was primarily due to the inclusion of results from Lone Star, but also was driven by strong results of Pac-Van, which generated an increase in adjusted EBITDA of 62% in the quarter based on a 32% increase in the average number of units on lease, improved lease utilization and higher lease rates across most product lines. Royal Wolf’s adjusted EBITDA for the quarter increased by 4% to $9.3 million and was driven by the previously mentioned increased leasing activity across most industry sectors. Southern Frac’s adjusted EBITDA on a standalone basis was $3.1 million for the quarter as compared to $1.1 million in the prior year’s first quarter. The improvement was due primarily to the increased revenues from units sold to our North American leasing operations. Interest expense for the first quarter of 2015 was $5.3 million compared with $2.4 million for the first quarter of last year. The high interest expense was primarily due to average -- higher average borrowings in both the Asia-Pacific and in North America and a higher weighted average interest rate in North America, due primarily to the issuance at the corporate level during the fourth quarter of last fiscal year of our public senior notes and secured term loan with Credit Suisse, both of which bare higher average interest rates than that of our North American senior credit facility. The weighted average interest rate in North America was 5.7 for the first quarter of the current fiscal year versus 3.8 in the prior year’s quarter. However offsetting this in the Asia-Pacific the current period weighted average interest rate was 5.5%, down from 5.9% last year. Net income attributable to common stockholders was $3.7 million or $0.14 per diluted share in the first quarter of 2015 versus $402,000 or $0.02 per diluted share in the first quarter of 2014. The first quarter of 2015 includes a reduction of $920,000 or $0.03 per share for the fifth dividend paid on our Series C cumulative preferred stock. For the first quarter of fiscal year of 2015, we generated free cash flow before fleet activity of $19.3 million as compared to $14.4 million in the prior year, an increase of 34%. As a reminder, we define free cash flow to be cash from operating and investing activities adjusted for changes in non-manufacturing inventory, net fleet CapEx, and business acquisitions. For the first quarter of fiscal year 2015, the company invested a net $25.7 million in the lease fleet, $24.4 million in North America and $1.3 million in the Asia-Pacific area as compared to $12.2 million in net fleet investment for the first quarter of fiscal year 2014 and that would be $9.8 million in North America and $2.4 million in the Asia Pacific. Turning to our balance sheet, at September 30, 2014, the company had total debt of $318.6 million, and cash and cash equivalents of $9.4 million with a net leverage ratio of 4.3 times on a historical basis and 3.3 times with the pro forma effect of Lone Star for the trailing 12 months. This compares a little under $303 million and $5.8 million at June 30, 2014 respectively, with the net leverage of 4.3 times historically and 3.4 times on a pro forma basis. As we’ve stated many times before, we are very comfortable with a net leverage ratio of up to 4.5 to 5 times. Receivables were $54.9 million at September 30, 2014 as compared to $61.5 million at June 30, 2014. Day sales outstanding receivables were 40 days and 61 days for the Asia-Pacific and North American leasing operations respectively compared to 43 days and 67 days at the end of our year fiscal year June 30th. At June 30, 2014, our North American leasing operations had $76.5 million available to borrow under its $200 million credit facility, and Royal Wolf had approximately 30 Australian dollars or US$26 million available to borrow under it, so 175 million Australian dollar credit facility. As Ron mentioned earlier, we expect to continue delivering strong results on a consolidated basis, driven by execution of our growth initiatives, which includes expanding our container lease fleet. To that end we recently filed a universal shelf registration statement with the Securities and Exchange Commission, providing us the flexibility to efficiently access the capital markets at our discretion. While we currently don’t have any plans to offer securities under this shelf registration statement, we will have the ability to issue up to $250 million of equity, debt, or other types of securities in the future, as we pursue our growth strategy. This now concludes our prepared remarks and I would like to turn the call back to the operator for the question-and-answer session.

[Operator:]

The floor is now open for questions. (Operator Instructions). Your first question comes from the line of Brent Thielman of D.A. Davidson.

[Brent Thielman:]

Good morning guys.

[Ron Valenta:]

Good morning Brent.

[Brent Thielman:]

Good morning. Congratulations on a great quarter.

[Ron Valenta:]

Thank you.

[Brent Thielman:]

Ron or Chuck, I know we still have kind of three quarters ahead of us, but just given the Ron, strong start, in your language around the EBITDA range for fiscal 2015, what factors kind of weigh in your decision to not increase the guidance for this year?

[Chuck Barrantes:]

We’ve got a translation effect in Australia where the Australian dollar is weakening to the U.S. dollar which in our guides, we look at that as primarily around $0.90, it’s obviously going to be below that for the rest of the fiscal year. I shouldn’t say obvious, it appears to be all the echo to saying that. As well as the analysts in Australia have adjusted or will suggest EBITDA based on their results. So that combination impacts our thinking in revising guides at this point. However, there is no doubt that Lone Star is doing very well. But we’ve only had them for two quarters. As we know oil and gas can be very seasonal. We’re all aware that the oil prices are dropping a bit. I mean we want to comment on that a little bit better but all those combinations went into our thinking that we do not want to adjust guidance. We’re very comfortable, we’ll be at the high end of adjusted EBITDA but we want to wait one more quarter. So you can say it’s an element of conservatism.

[Brent Thielman:]

Understood. That’s fair. And then I’d be interested in your comments just regarding lease rates in North America, what the average increase was this quarter? And then where are you finding it most difficult to lift rates at this point?

[Ron Valenta:]

Yes. So, we’re seeing low single-digit increases across the board in pretty much all of our product lines. So that’s very positive which we have not seen for a while. And I would say if you look at the various product lines where the rates are improving and increasing are at the containers side because the leader that of sector is aggressively increasing rate. So we’re following suite to that as best we can. And then I would say as we get to some of the legacy asset product lines, those are probably increasing a little bit slower but everything across the board is going on. So that’s very positive for us.

[Brent Thielman:]

Sure. That’s okay. And then just the leasing gross margin, 65.6%, that’s quite a bit better than I think where you’ve been running in prior quarters. Is that mostly due to just a higher lease rate; is there any mix benefit there in the quarter?

[Chuck Barrantes:]

Yes. So, some of its mix clearly and some of its lease rate. Everyone knows our models really to focus on the leasing side and we have now I suggested, but commented several times that our focus continues to be on increasing that as aggressively as we do. The EBITDA margins will see positive results, it was even for us pretty dramatic increase in margins where we were 20% last first quarter and we’ve 32% now. And it’s really a combination of two things; one is the leasing revenues is moving dramatically and then the second thing is we didn’t have that one-off sale that sort of skews the margins in the last comparable quarter. So, the combinations there got us a big increase. I don’t think you’re going to see that kind of EBITDA margin increase that drastic in other quarters, I mean 1,200 basis points increase is pretty dramatic. But I think those two factors led us to very big increase in this quarter. But again, leasing is our focus and we’re going to continue to drive that annuity as best as we can.

[Brent Thielman:]

Great. Thank you.

[Chuck Barrantes:]

Thank you.

[Ron Valenta:]

Thank you, Brian.

[Operator:]

Your next question comes from Sal Vitale of Sterne Agee.

[Sal Vitale:]

Good morning, gentlemen. Nice quarter.

[Ron Valenta:]

Good morning, Sal.

[Sal Vitale:]

Just a quick question on the results. Was there anything -- and I apologize if you already addressed this, I got in the call a little late. But was there anything specific to the quarter that drove that outsize the gain in margin maybe something on the Lone Star side?

[Ron Valenta:]

It’s most definitely the primary reason Lone Star not to once again Pac-Van had increase EBITDA and profitability also, but Lone Star was not there obviously in the first quarter of fiscal 2014, they are there now and their leasing margins are excellent. So, it was the primary reason for the increase.

[Sal Vitale:]

Right. But in terms of this quarter versus future quarters should we expect that same level of intensity of EBITDA margin increase or is there something more specific to 1Q that maybe the seasonality that drives there?

[Chuck Barrantes:]

I would not say that it would be a significant margin increase percentage wise; I would look at comparable leasing margin percentage, but not an increase.

[Sal Vitale:]

Okay. Also in the release, did you -- I don’t think you broke out the EBITDA specifically from Lone Star. Did you provide that earlier in the call? I apologize.

[Chuck Barrantes:]

No, we did not, but I’ll give it to you. Lone Star’s adjusted EBITDA is $9.4 million of the $17 million in North American leasing.

[Sal Vitale:]

Okay, that’s helpful. Thank you. And the other question is so you did this $14 million acquisition, should we assume that that was roughly done let’s say 5 times EBITDA more or less?

[Ron Valenta:]

Yes. I think, Sal, so far this year we’re actually averaging up a bit and we think we’ll bring the averages down hopefully as the year goes on, but right now for the transactions we’re averaging -- we average actually 7, then there were an area that we really felt we needed to go into a great growth prospect so we actually paid up to be able to get in those markets. Again, I don’t think even you look at the year, we’re going to be at a 7, but clearly on the first two transactions that we did, we’re averaging to 7.

[Sal Vitale:]

Okay. So, you’re averaging 7 on say on the…

[Ron Valenta:]

(Inaudible) yes.

[Sal Vitale:]

Okay. So, that’s about $2 million of EBITDA so that transaction was that that it closed in October, did you announce it in October?

[Ron Valenta:]

It closed in October.

[Sal Vitale:]

Closed in October, so we have roughly three quarters worth of contribution there, correct?

[Ron Valenta:]

Correct.

[Sal Vitale:]

Okay. And then a little bit more color on the transaction, was that -- you mentioned Wisconsin, does that have anything to do with frac there?

[Ron Valenta:]

No, it is a container business, both businesses were container businesses.

[Sal Vitale:]

Okay. Thank you very much for your time. I appreciate it.

[Ron Valenta:]

Thank you sir.

[Operator:]

Your next question comes from Ian Corydon of B. Riley & Company.

[Ian Corydon:]

Thank you. Given that you are seeing a little bit of slowdown in the resources sector in Australia, I wonder if you could just talk about Royal Wolf’s exposure there and how much of that business is typically buy versus a lease business.

[Ron Valenta:]

Yes. So, I’ll answer the latter question first. So, about 80% of what they are doing is leasing and 20% of sales. We are underweighted in that sector from our perspective in terms of capital allocation standpoint. So, I don’t think we are certainly overly exposed to the sector. What I can tell you is you know that sector is slowing at this point. We do not have a lot in the pipeline right now. So, we continue to bid work, but we do not have what I would say a healthy pipeline going forward. So again, we’re underweighted in the sector, I think we’re about 17% weighted in that sector, which we think again is underweighted, but the pipeline has slowed considerably year-over-year.

[Ian Corydon:]

Okay. And speaking of pipelines, should we assume the acquisition pipeline in North America still is quite strong?

[Ron Valenta:]

I’d certainly think it’s as healthy as it’s been in probably at least five years. So, we’re seeing a lot more activity in North America. We are more active in North America. But the development, our business development team is doing an excellent job in getting us in almost all processes, which we’re happy with just the ability to be able to compete with other potential buyers. So, it’s very strong right now in North America.

[Ian Corydon:]

Great, I appreciate it. Thank you.

[Ron Valenta:]

Thank you.

[Operator:]

Your next question comes from Scott Schneeberger of Oppenheimer.

[Scott Schneeberger:]

Thanks. Good morning guys.

[Ron Valenta:]

Good morning Scott.

[Chuck Barrantes:]

Good morning Scott.

[Scott Schneeberger:]

I’m curious just on the acquisition conversation. The -- you mentioned paying a little bit more in for the most part in Wisconsin. Could you speak a bit to what made it so attractive, Ron? And did its size contribute to what you paid? And you mentioned these things are multiple, will go down over the course of the year. Just curious about the composition of the pipeline. Do you think it will be a lot of single doubles or sizeable? Just general thoughts around that. Thanks.

[Ron Valenta:]

Yes. Well, thank you first of all for the baseball reference. And then secondly, we had to pay up for the reasons you know. The one was because of the size and two; the latter property was a very significant player in that area. We know, we think there is a lot of product breadth opportunities that we have. It was capital constrained, which generally plays very well to what we like to do once we acquire an asset. So yes, we did bid up again size and I think opportunities led us to that. It’s nothing of comparable size in that area and we’ve been looking at that area for quite some time. And so we’re very excited about the opportunity that we actually prevailed. In terms of your second question, I think multiples are going up a bit right now in the marketplace. I think the average that we have for these two transactions, 7 is historically high for us. We think based on the stuff that we have on the pipeline, that’s going to come down again. But as long as the transactions are accretive to us with great growth prospects, we’ll continue to do transactions in that region of multiple, if we find the opportunities, clearly we’d like to tie better if possible but as long as again it’s accretive and there is growth prospects, we’ll certainly be competitive in any transaction.

[Scott Schneeberger:]

Great, thanks. And then I’ll bite, Chuck referenced earlier, Ron you may want to touch on, oil prices, volatility how may affect Lone Star otherwise; just how you look at your portfolio and implementations there? Thanks.

[Ron Valenta:]

Yes. It’s great question Scott, thank you for asking. So we are monitoring both rig count rate and the price of oil. We have had conversations with all of our customers in Texas, in both basins, Eagle Ford and Permian. And today, they are not actively adding to rig count in those areas, or customers are not and they are pretty much maintaining what they have which for us still keeps us very, very busy. So, we think we’re in a very good position. It really hasn’t affected our customers at this point, because of the new processes and technology that are in place, their breakeven point is a lot lower than it has historically been in the past. So incrementally, they are still very profitable. We don’t see in the short-term any real impact. To give you a view of how busy we are at Lone Star, they have invested their CapEx for fiscal 15 already in the first quarter. So, we feel very good about the area and the region. Both basins what I can tell you is we are monitoring again both rig count and oil prices, but at this point we’re not overly concerned with it, but we are cautious. And we feel very good about where we are and especially with the customers that we have aligned with.

[Scott Schneeberger:]

Excellent. One more, if I could, obviously strong pricing environment in portable storage containers. Could you speak just to your customer interaction and your view on potential near-term and longer term on ability to keep pricing up as an industry just from what you’re seeing anecdotally? Thanks.

[Ron Valenta:]

Yes, I certainly think the industry leaders doing a very good job in North America in leading the rate and I think most competitors including our self are attempting to do the same. I think what we all look at is comparable to other types of storage, let’s use mini storage as an example. And we are significantly below their average rates per square foot linear foot whatever measurement you choose to take. So I think there is a large gap still between that form a storage and our own, clearly we cater to different customers. So, we don’t think they’re near a ceiling on rate. And we certainly think the rate movement that has occurred is healthy for the sector. I think we have as an industry, done a poor job historically on rate. And I think it’s been a long time coming and again I think our competitor, our lead competitor in North America has done an excellent job. As we’re actually attempting to do is being the leader in Australia and New Zealand, we’re leading rate there, not as aggressively as the leaders in North America but we’re attempting to do the same in Asia Pacific as well.

[Scott Schneeberger:]

Excellent. Thanks for taking my questions and congratulations.

[Chris Wilson:]

Thank you.

[Operator:]

The next question comes from Brian Hollenden of Sidoti.

[Brian Hollenden:]

Good morning guys and thanks for taking my call.

[Ron Valenta:]

Good morning.

[Brian Hollenden:]

The strength in Pac‐Van, what’s the total opportunity set there, what could asset utilization get up to, you can talk a little bit about what improvement you think the potential is there that would be helpful?

[Chuck Barrantes:]

Yes. Well, I think, we have tremendous attention or potential in North America. And I think our focus two years ago was we would focus more of our time and capital allocation in North America which I think we have successfully deployed capital in the region. I think today our opportunities are not any different than they were two years ago. We have product breadth opportunity, basically products that we have in Asia Pacific that have gone considerably well. And we don’t -- we haven’t really penetrated the North America market with those products. The second thing is utilization and rate. We talked about rates, so, I think I’ve covered that. In terms of utilization, we think optimal is 85%, so there is still more room on that. In an healthy environment, or where we don’t want to be necessarily in 90, but that does happen in product lines or specific venues. But we have upside on that in terms of 85%. And then I think we have docks, we are really a super regional; we’re not really a national player in our mind. So, we have a lot more docks in geographic areas, large, med areas that we’re not in a yet. And then lastly, which we can do through de novo acquisitions and then lastly we have clearly no acquisitions available to us and we have done a couple this year so far. We think we’re going to do certainly more than what we’ve done. And again the pipeline is very rich and full and we think we will certain get our fair share of those acquisitions. So, I think a combination of all those factors will be to significant growth in North America for the foreseeable future.

[Brian Hollenden:]

Alright. Thank you very much.

[Chris Wilson:]

Thank you.

[Operator:]

This concludes the question-and-answer session of today’s conference. I would now like to turn the call back to Mr. Ron Valenta, President and CEO for any closing remarks. Please go ahead Mr. Valenta.

[Ron Valenta:]

Yes, I would like to thank you for joining our call today. We mailed out our proxies and have some interesting trending information there in, if you get a chance to look at it, I think you will walk away with some important invitation. Lastly, I’d also like to welcome everyone to our shareholder meeting that’s going to occur in the next month on December 4th at 3 pm. Again, we appreciate your continued interest in General Finance Corp. And enjoy your day. Thank you.

[Operator:]

Thank you. This does conclude today’s conference. Thank you for your participation. Participants may disconnect at this time.