Visionary Holdings Inc.
Q4 2019 Earnings Call Transcript

Published: 12 Mar 2020

[Operator:]

Greetings and welcome to the Goldfields Corp Fourth Quarter and Full Year 2019 Financial Results Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] It is now my pleasure to introduce your host Kristine Walczak. Please go ahead.

[Kristine Walczak:]

Thank you and good morning, everyone. I'd like to welcome you to the Goldfield Corporation conference call to discuss the company's fourth quarter and full year results for 2019, which were reported yesterday. Joining us on today's call are President and Chief Executive Officer, John Sottile and Chief Financial Officer, Steve Wherry. If you did not receive yesterday's press release, please contact me at 312-898-3072 and I will send you a copy or go to Goldfield's website where a copy is available under the Investor Relations tab. A replay of today's webcast will be available on the company's website under the Investor Relations tab. Before we begin, I want to remind you this discussion may contain forward-looking statements within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995. You can identify these statements by forward-looking words such as may, will, expect, anticipate, believe, estimate, plan and continue or similar words. Any forward-looking statements are based upon Goldfield's management's current expectations about future events and Goldfield assumes no obligation to update any such forward-looking statements except as required by law. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Accordingly, these forward-looking statements are no guarantee of future performance. These risks and uncertainties are discussed in the company's annual report on Form 10-K for the year ended December 31, 2019. Also, certain non-GAAP financial information will be discussed on the call today. A reconciliation of this non-GAAP information to the most comparable GAAP measure is set forth in yesterday's press release, which can be found on the Investors section of the company's website. With that said, let me turn the call over to John Sottile.

[John Sottile:]

Thank you, Kristine, and good morning. We appreciate you joining us and for your continued interest in the Goldfield Corporation. After my initial remarks, I will turn the discussion over to our CFO, Steve Weary, who will update you on the financial performance of the fourth quarter of 2019. As we announced yesterday, our 2019 year end results included record high electrical construction revenue as well as improvements in net income, earnings per share and EBITDA compared to 2018. Also our electrical construction backlog and December 31, 2019 was $276 million up 29% from December 31, 2018. Additionally, as of January 31, 2020 our backlog was approximately $502 million as a result of newly executed MSAs in January of this year. Each of our regions experienced strong revenue growth in 2019. This growth was due to a combination of securing new customers, increased demand from existing customers and service line expansion. I would also like to share with you several significant achievements we anticipate will have a positive effect on our electrical construction business in 2020. These include service line expansion in substation and distribution services with both new and existing customers, increased presence in Kentucky accomplished by our securing additional MSAs during 2019 and 2020. We are also expanding our geographic footprint into states adjacent to Texas including Oklahoma, Arkansas and Louisiana, execution of a new and renewal of existing MSAs in our service line territories. Looking forward, Goldfield is well-positioned to build upon the recent successes and to continue growing revenue and expanding our customer base. At this point I'd like to turn the call over to Steve Weary, our CFO to provide a review of our financials, Steve?

[Stephen Weary:]

Thank you, John and good morning, everyone. On today's call I will be reviewing our 2019 fourth-quarter results as compared to the same period last year. Record fourth quarter 2019 consolidated revenue was $44.1 million an increase of $7.4 million compared to the same period last year, driven by improved electrical construction operations. Electrical construction revenue in the 2019 fourth-quarter was $44 million an increase of $7.3 million or 20% from $36.7 million in 2018. Year-over-year fourth-quarter revenue grew primarily due to increased revenue in both the Texas Southwest and Southeast regions. In these regions we experienced continued growth in both MSA and non-MSA customer project activity as well as service line expansion. These improvements were partially offset by a decrease in store margin. Fourth quarter 2019 gross margin on electrical construction operations increased to 22.2% compared to 13.4% for the 2018 quarter. The increase was primarily attributable to favorable closeouts of certain projects in Texas. Factors contributing to this improvement including the acceleration and improvement in project schedules. Our foundation operations also experienced margin improvements as a result of higher volume. Comparing the 2019 fourth quarter to 2018, depreciation and amortization expenses increased approximately $392,000 or 16.3% to $2.8 million. This increase was mainly due to higher capital expenditures to support revenue growth in electrical construction operations. Selling, general and administrative expenses rose $755,000 or 45.4% to $2.4 million in the fourth quarter compared to the same period a year ago. This increase in SG&A was primarily due to higher accrued executive bonuses as a result of a partial bonus waiver in executive compensation for 2018, which was not waived in 2019. Fourth quarter operating income was $4.6 million in 2019 compared to $853,000 in 2018. This improvement was primarily attributable to higher electrical construction gross profit. Net income increased to $3 million or $0.12 per share for the 2019 fourth quarter from $664,000 or $0.03 per share in 2018. EBITDA for the fourth quarter ended December 31, 2019 was $7.4 million compared to $3.3 million for the same period in 2018. Total backlog at December 31, 2019 increased $61.9 million or 28.9% to $276 million compared to $214.5 million as of December 31, 2018. At the end of the fourth quarter our 12-month total electrical construction backlog increased 39.5% to $142.1 million compared to $101.8 million one year ago. This was mainly due to increases in MSA backlog. As of December 31, 2019 estimated MSAs accounting for proximally 72% of total backlog versus 79% at December 31, 2018. Subsequent to December 31, 2019, we were awarded multiple new MSAs with existing customers amounting to approximately $242 million in additional backlog. These awards increased our estimated total backlog to a record $502 million as of January 31, 2020. Approximately $31.5 million of the backlog awarded subsequent to December 31, 2019 is estimated to be completed in 2020. At December 31, 2019, we had $23.3 million of cash and cash equivalents, $32.2 million of funded debt, $36.7 million of working capital and a $23 million revolving line of credit of which $22.4 million was available for borrowing. This concludes our prepared remarks. Operator, please open the call to questions.

[Operator:]

Thank you. We'll now be conducting a question-and-answer session. [Operator instructions] Our first question today is coming from Sam Rebotsky from SER Asset Management. Your line is now live.

[Sam Rebotsky:]

Yes. Good morning, John and Steve. This is the best year end ever and if the stock market was different you would be -- that market would be more responsive. Now when we look at the Texas and Southwest, the fourth quarter showed $16.8 million versus $13 million. Presumably, this was a profitable quarter in this area where before we were losing money. Okay now yeah, now the backlog the $240 million is what period of time is that took place in Pl. in 2020 instead it MSA over seven years or is that one is the timeframe of that to $240 million.

[John Sottile:]

I think there is a -- it's a three and five that I'm -- I think that's three and five Sam. Between three and five.

[Stephen Weary:]

That is correct John.

[Sam Rebotsky:]

That's wonderful and presumably any contracts that are in Texas are now significantly more profitable than they were before.

[John Sottile:]

Well what happens in Texas Sam is as you know we have changed our methodology of how we pursue bidding and some of the components that affect the bidding process have been modified to accommodate or manage quote the weather, during the bidding process rather than when we're on the ground. Having said that, the additional customers generated by the new contract or one of the new contracts should give us a greater source to draw from -- for the Texas Southwest region. That's a very positive event because the more customers we have to draw from the greater the opportunity we have for success.

[Sam Rebotsky:]

Okay. Now as far as -- do we have enough employees to handle the jobs that we have?

[John Sottile:]

The answer is presently yes. It varies from time to time Sam, depending upon other work that other contractors have, but as far as the relating answer is yes.

[Sam Rebotsky:]

Okay. And now that we earned $0.12 in the fourth quarter, it would appear that the profitability going forward should be significantly greater because we had significant losses in the or reduction in profitability earlier in the year.

[John Sottile:]

Are you talking about Texas or are you talking about corporately?

[Sam Rebotsky:]

Just in general having achieved $0.12, I would think that the profitability for the full Goldfield going forward if you allocated save $0.50, you would do much better even than that going forward.

[John Sottile:]

Okay. What I want to share with you but as I have in the past is the short answer is yes, but be very careful in watching this company quarter-over-quarter because there are substantial variations or fluctuations between the quarters depending upon our job mix, so please oh please, look at this company on an annual basis and don't get me in an individual quarter that may be an anomaly high or an anomaly low. I am not saying the $0.12 is too high or something else might be too low. What I'm saying is it will vary from quarter to quarter. I encourage you to look at this company over an extended period. Let me expand on that, say looking forward we have entered into several new MSAs that are going to have startup cost associated with them that will impact Q1. In addition to that these projects are -- revenue and profit from these projects are really expected to come online commencing in Q2. So there were delays in receiving these contract. We've been expecting them for quite some time and the utilities just as things will be is did not get the agreements to us such that we could get started a couple of months ago. Think about it we started job it can take several months to get it really up to speed.

[Sam Rebotsky:]

I'm very excited about where you could go because this backlog even taken a consideration there may be some costs that go in the beginning of the year and I think at this point in time I would hope you would attempt to tell the story more and let other people know about this hidden secret of Goldfield. Good luck, John.

[John Sottile:]

Thank you,, Sam and I appreciate very much.

[Operator:]

Our next question is coming from George Gaspar, a private investor. Your line is now live.

[George Gaspar:]

First question relative to the financial statement, notice that for December 31, 2019 versus 2018, other accrued liabilities show as $5,047,000 versus $213,000,900 can you explain what that is please.

[John Sottile:]

I am going to let Steve say on that one, but these are lease liability. I am going to Steve get in but the company uses a number of different methodologies to secure equipment to build projects and including straight purchases, rentals, RPOs and master lease agreements. Under the master lease agreements there is a change in the accounting regulations that impact the balance sheet where there is both an asset and liability associated with these leases, these master leases that vary in time between 60 months and 84 months, but and I think Steve can give you the corresponding entries dealing with the lease liability Steve?

[Stephen Weary:]

Yes John. Thank you. George at December -- in 2019 when they set up a new accounting lease standard they start setting up some assets and corresponding liabilities with basically offset each other on the balance sheet. So we had about $6.8 million of operating lease right of use assets at 12/31/19 and then we had $6.8 million a similar number in lease liabilities of which the $5 million you're referring to is in the noncurrent.

[John Sottile:]

New accounting standards. You just have to account for both the used, the asset used of the equipment and the relative liability associated with making the lease payments.

[George Gaspar:]

Okay Thank you. Next question relates to your improving revenue range and in your field operations, can you explain a little bit more, is there anything new that you're doing in terms of your overall complexity of lets -- how you're generating your revenue, maybe say between Southeastern part of the United States in the Texas area, are you able to grow the opportunity level of you're doing, could you explain that?

[John Sottile:]

Let us look at it globally first of all as I've shared with you, we have additional MSA contracts, our MSA contracts are contracts through at December 31 and then subsequent to that date we have additional MSAs that we have signed. So having said that, I would take new customers. We have several new customers that are going -- that have impacted and will in the future continue to impact our revenue and profitability. In addition to that, we have made substantial expansions into Kentucky and I think you'll see that as a larger source of revenue moving forward. The number of crews there have expanded and will continue to expand during 2020 and into the future. Additionally, our geographic footprint is continuing to improve. As I said in the beginning of my prepared remarks that because of location of some of our customers, we are able to step out into Arkansas, Oklahoma and other adjoining states to Texas. During 2019 I believe that we added 19 or 20 new customers that we had not done business with certainly within the last year. So as we continue to add to our customer base, our geographic footprint we feel that we should be able to continue to expand our business additionally.

[Stephen Weary:]

I'd like to point out that we are expanding this thing, we are expanding our service lines to include not that they haven’t in the past but to expand our substation construction, our foundation construction and our distribution involvement. Historically, we've not done much distribution. We expect during 2020 to start working more in that area to expand our distribution presence throughout all of our regional offices.

[George Gaspar:]

Thank you for that explanation and that's very powerful commentary on your part, it does express the gigantic opportunity that you have as you move your customer base forward and some of new geographical areas that you're moving into. There's a lot of growth in those areas and that should be very beneficial to you.

[John Sottile:]

Well let cut it off, franchise area particularly between Virginia and then running down the Florida and then across to West Texas I think is as good as it gets in the country and as we fill in those areas in Louisiana and Alabama this will further enhance our ability to support new customers and many of them can be supported out of our current offices but we are hopeful that as we secure these new customers we will open new offices to accommodate this expansion along this southern south-central and out west and in the central state. South central states.

[George Gaspar:]

Okay. And then one last question the 5G are you doing anything on 5G install at this point in time. I know I asked the question three months ago, but I just…

[John Sottile:]

I know that you do, as you know we do fiber-optic work and it is a small portion of our business, it's a very profitable portion of our business but it remains a very small portion and our involvement in 5G only is associated as new fiber-optic lines or splicing is needed by our customers. Again I reiterate we do a small amount of business in that arena.

[George Gaspar:]

Well thank you, good luck to you. Thank you.

[Operator:]

Thank you. Our next question today is coming from Everett Harmon [ph] from a private investor. Your line is now live.

[UnidentifiedCorporate Participant:]

I'm not a numbers guy and I'm just average investor, but I've been watching Goldfield for 53 years, 1967 the stock was $13.25 a share and your…

[John Sottile:]

I remember it well by the way, just that you'll know. $13.57 by the way, if you remember.

[UnidentifiedCorporate Participant:]

I had a 125,000 shares of Goldfield and because of a bankruptcy in 1998, I had to sell it all, but I'm back in and I wish you all the luck in the world I am hanging in there.

[John Sottile:]

We'll do our best to want make sure that your decision is a wise one.

[UnidentifiedCorporate Participant:]

Actually a tickertape it was a tickertape that it wasn't electronics or anything it was actually a tickertape machine and there was an elderly gentleman there and he actually got me interested in Goldfield and it's been 56 -- 53 years. So I won't hold you up anymore, you take care and have a great day.

[John Sottile:]

Thank you for your call Sir.

[Operator:]

Thank you. Our next question today is coming from the Steven [ph] from ABL Investments. Your line is now live.

[UnidentifiedCorporate Participant:]

The gross margins were exceptionally high this quarter and it was pretty well explained but going forward do you see us getting in the high teens or maybe around 20% gross margins going forward?

[Stephen Weary:]

I think our goal is to try and get it between 16% and 19%. As I shared with you before there will be variations in sometimes wide variations quarter to quarter in gross margins. I encourage you to look at Goldfield over an extended period of time because of the way some of the jobs fall and the start up on some of the projects can be delayed and it's not always the fault of the company or the fault of the utilities themselves. Many times there is the mercy of the nerk [ph], ferk and other governmental agencies that give that grant the outages for the construction and Texas Furkot controls the outages and during the summer months it is almost impossible to get an outage and you need to be working either doing prep work that is working energized lines and I didn't mention it earlier but we are making a very strong push to expand our expertise within the hard work area in all regions. We do hard work done, we've done it for some time but as these constraints continue to tighten on the utility and their ability to grant these opportunities for us to work on, they can't be energized the lines for us to work. We have to have the ability to work on energized lines and additionally and at night it's not much fun but we do on occasion we have to be in a position to work at night for MOT and traffic considerations. There are great many components that often we don't think about when we discussed powerline building but that since many other write ways are adjacent to major highways, it can get very complicated in the construction process.

[UnidentifiedCorporate Participant:]

Okay. Very good and the new MSA work the $240 million that are added to the backlog are the gross margins in that 16% to 19% range?

[John Sottile:]

We are hopeful that they will be in the 16% to 19% range and it will vary from job to job. As I shared a few minutes ago the projects done that we signed up during 2020 or I don’t know what may have been signed in late '19. There are startup costs associated with them that I could get granular on but there are startup costs that hit these projects in the initial stages of starting up and the issuance of work has taken longer than we had anticipated because some of these contracts were actually signed in February I think and so that's delayed our ability to keep the rhythm moving in a very smooth pattern. Having said that, we feel strongly that this is a temporary situation and then moving forward throughout the year, we should be able to continue to capitalize on the successes we achieved last year and we are hopeful that the additional customers will bring us both increased revenue and profit in 2020.

[UnidentifiedCorporate Participant:]

Very good the tax rate you guys plus for a while has been around 32% the corporate tax rate is 21%, the floor corporate tax rate is 5.5% what's causing your rate to be kind higher than the general population of…

[John Sottile:]

There are three or four different things, one of them is the non-deductibility of certain expenses one of them happens to be in the way we pay the which is it Steve, we pay Perdiem to the men and a portion of that simply isn't a deductible. Part of it related to…

[Stephen Weary:]

Part of it relates to mills and then you got the 50% deduction on the portion that's not deductable for federal purposes for mills, entertainment. So that's been a large number Perdiem's been a big cost expense for us big expense for the company.

[John Sottile:]

And we do not expect that to get better. Perdiem as the cost of housing these personnel -- line personnel increases the Perdiem rates certainly over the last four or five years have increased dramatically although hopefully it is going to the rate will slow, it is going to be a larger component in the transmission business. We work over broad areas I -- some of our regions they -- you have to be more than a certain number of miles from your house it’s a federal or is that an internal remember law I can't remember.

[Stephen Weary:]

Federal does draw.

[John Sottile:]

Okay. They don’t draw the line.

[Stephen Weary:]

They don’t draw bright lines. You have to set an estate so or reasonable range that will be expected to return home or stay out of town.

[John Sottile:]

But the Perdiem is one of the principal contributors, there are other things.

[Stephen Weary:]

It's also a principal contributors to obtaining employers.

[John Sottile:]

It depends on what part of the country you're going to. There are certain areas that it is very challenging finding qualified health rather than get into getting where they're at is if I assure you we all know where it is and they can be -- we have to pay special high Perdiem rates. The other thing, think about this if you have a catastrophic event happening in the Bahamas that draws personnel at very high rates to the Bahamas to work on them, there goes that workforce and they're paying far more than we can afford to because they are paying much, much more to the men then we could under our existing contracts. Additionally PG&E pay much higher rates than we do and the dynamics or the fluidity of the workforce permits the men, women to go to where ever the work is. So we have little control over these people because there is an extreme shortage of personnel that we are -- we have to take these people back and I understand what they're doing. Sometimes the Perdiem might be more than $200 a day might be $300 a day in California but that PG&E has been a pain from our perspective. The rebuilding of areas in the Bahamas and Puerto Rico has also been extremely challenging and we work our way through that. But those are the main issues and are going to continue to do that in the future.

[UnidentifiedCorporate Participant:]

Okay. Are there any large contracts that you're bidding on like you were last quarter that possibly could be found in the near future.

[John Sottile:]

Well the answer the short answer to that is yes. We are generally working on substantial contracts all the time and yes there are contracts that we are working on as we speak that would reach the threshold of a public announcement should we be successful. We don't like to go overboard announcing every contract we get, but when they hit the one we did for CNC when those projects there were two projects that aggregated about $50 million. We felt it compelling that we informed the shareholders because it was so significant that it was imperative that we put out a press release. You don't have to hit $40 million to get a release but it certainly has to be well up there in order to generate public dissemination. And the reason being is that we don't want information available to the street because a guy is supplying certain products and he knows how big that job is that is not available to you as a shareholder.

[UnidentifiedCorporate Participant:]

Right. With the stock market trading the way it is and the Coronavirus have you had any issues dealing with the contracts your employees or your customers.

[John Sottile:]

No the company has developed plans for the Coronavirus. We're in the process of implementing them, most of the provisions relating to the Coronavirus are obvious and are similar to what other -- what other companies are doing. We feel that since we work in small groups a crew may be somewhere between let's say six and 20 people depending upon what they're doing and that they are widely dispersed and are in non-concentrated urban areas that we may have a lower likelihood of encountering the virus. I can say that and tomorrow morning wake up with an employee that may come down with a virus. We are hopeful that as the summer comes on, the heat begins to rise that the viruses will become less of an issue and as vaccines are developed, hopefully later this year this issue will be put to bed.

[UnidentifiedCorporate Participant:]

Great, one last thing you have the share buyback it doesn't look like you bought any recently, have you ever considered doing like a dust tender offer where you say by 4 million or 5 million shares $2.50 a share and could there might be some fun that need to get blip some liquidity and this will be a great opportunity to take advantage of, you have a lot of cash position, you have big accounts receivable for $10 million you'll probably but back 4 or may be even 5 million. Is there any thought of doing it tender or are you going to consier buying back the shares here?

[John Sottile:]

Their rules are actually very strict on the buybacks and how they work by the answer is yes, it is actively under consideration and it is a where do we feel that the best source and use of funds of the company is, is it in the share buyback or is it in capital expenditures or the reduction of existing debt. It could be a number of areas that the board considers as they move through the process. So these are constraints. So it's not as easy is you don't run out there and do that. It's not that easy because it's been challenging for us in the past to come up with large amounts of shares from the market, but the short answer is absolutely. I believe this to be a good source of the company funds.

[UnidentifiedCorporate Participant:]

I think it would be -- I think it's an SEC form it's called SCCO-I\A was then resorts to this 51 where they issued and it got sold because of the market activity. So I don’t know sometimes you have a couple it did at $5 below market and it came down and met them I guess the market but we don’t know where the market is going to go. Your stock is trading around $3 a little over $3 but it can go to $2.25 and if you offered it there might be some funds that need liquidity and on the value that's definitely accretive.

[John Sottile:]

I couldn’t agree with you more. I will look that. To be honest with you I have not spent a lot of time looking at acquisitions below market I'll speak to counsel about it.

[UnidentifiedCorporate Participant:]

See you on the next call and very good. I'll see you at the shareholder meeting.

[Operator:]

Thank you. Our next question today is coming from Michael Eisner [ph] a private investor. Your line is now live.

[UnidentifiedCorporate Participant:]

Great job my question was about Coronavirus but I think you just answered it but I hope 2020 looks great going ahead especially with the contract in January.

[John Sottile:]

Yes and we'll see that develop as the year moves on. As we move from quarter to quarter and we develop these new contracts and they come online I think you'll be pleased with the ultimate results.

[UnidentifiedCorporate Participant:]

Now you just certainly think of something, is it a big expense to bring them online to gear up?

[John Sottile:]

It can be and let me give you a for instance, when you bring on a distribution curve you have to and the tools don't meet the threshold of capitalization and let's say across $40,000 or $50,000 to tool up a new crew, that money gets deducted at that point immediately. So you can take a hit for $50,000 before you turn the screw and that could be a big expense that hopefully we will discuss at the time if it becomes a significant number. If you build it slowly the amount of money that could hit the income statement won't be large enough to get your attention, but should we know and it wouldn't take 15 crews to really put a stick in your eye in terms of how much it may hit the income statement and again it is type of work issued and you have to have some threshold in order to for capitalization of equipment it's tricky accounting wise.

[UnidentifiedCorporate Participant:]

I think this goes back to why you said before don't look at the three months result, look at the big picture the year because you how if you were going to get hit March 20 that for the next quarter that you get hit for five contracts to go forward and you get hit with one big bill at the end of the week, last quarter you really can't judge what's going to happen.

[John Sottile:]

You are spot on and it has happened.

[Operator:]

Thank you our next question today is coming from Kurt Caramanidis from Carl M. Hennig. Your line is now live.

[Kurt Caramanidis:]

Hi guys, I've been following the company for quite a while not as long as the one guy for 50 some years, but certainly the last nine months is where we were nine months ago, this is something that probably I have not seen it's a big credit to you guys where the new customer count the outlook compared to what it was last summer is really pretty incredible. So congratulations on that, that's pretty impressive. Housecleaning, the bonus accrual, does that take place throughout the year or is that a Q1 event?

[John Sottile:]

It takes place throughout the year.

[Kurt Caramanidis:]

Okay. So that is something…

[John Sottile:]

The bonus you saw is where the bonus number is in there -- we made some changes and I don't it is that in the public documents read my bonus, read Mr. Weary's bonus they have been modified. We felt that we have historically felt that since and we have discussed this with the compensation committee that the company does not grant options to its employees or shareholders or executives that we have paid cash and then I at least I personally have gone out and bought shares in the open market. You can see those in my filings but it makes a very large what appears to be a very large individual bonus that may have accrued anyway had we paid a smaller salary and then paid a -- paid a branch and or options. So I not going to preclude in the future that the committee may not consider that. I just wanted to share with you that that's one reason why the compensation from a cash perspective may be -- may appear to be large and when in fact if you look at competitors you'll see that they have all kinds of different methodologies of compensating executives and what the com committee does in the future I'll defer to them, but we historically have we've done it in cash and then members of the I can speak for myself only, it is that we go out and we purchase shares in the open market when we're able to.

[Kurt Caramanidis:]

I was just curious for more about your accrual versus just one quarter, so that makes sense and thanks for the color on Q1 because I think that that can happen you finish the quarter on pretty much of exceptional situation and that may or may not be repeatable even though the year looks fantastic. So I definitely appreciate the color on Q1 and we'll look forward to the next call.

[John Sottile:]

We sincerely appreciate your time and questions.

[Operator:]

Thank you. We've reached the end of our question-and-answer session. I'd like to turn the floor back over to Mr. Sottile for any further or closing comments.

[John Sottile:]

I would like to thank everyone for joining us on the conference call today. Also I would like to express my sincere thanks to our shareholders for their continued support.

[Operator:]

Thank you. That does conclude today's teleconference. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.