Tribune Publishing Company
Q2 2015 Earnings Call Transcript

Published: 11 Aug 2015

[Operator:]

Good morning, and welcome to the Tribune Publishing Second Quarter 2015 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Kimbre Neidhart, Assistant Treasurer & Investor Relations for Tribune Publishing. Please go ahead.

[Kimbre Neidhart:]

Thank you, and welcome to our 2015 second quarter earnings conference call. Joining me on the call are Jack Griffin, Chief Executive Officer; Sandra Martin, Chief Financial Officer; and Denise Warren, President of Digital and CEO of East Coast Publishing. Before we begin, I would like to remind you that management will make forward-looking statements during the course of this call and our actual results could differ materially. Statements containing words such as may, believe, anticipate, expect, intend, plan, will, continue, estimate or similar expressions are forward-looking statements. Differences in our actual results from those described in these forward-looking statements may result from actions taken by the company, as well as from risks and uncertainties beyond the company’s control. Some of the risks and uncertainties that could impact our business are included in publicly filed documents, including our Annual Report on Form 10-K and our quarterly report on Form 10-Q. I should also mention that our remarks today will include references to non-GAAP financial measures, including adjusted EBITDA, pro forma adjusted EBITDA, adjusted net income and adjusted diluted earnings per share. And we have provided reconciliation to the most comparable GAAP measures in our earnings press release, which is available on our website at investor.tribpub.com. Now, I’d like to turn the call over to Jack Griffin.

[Jack Griffin:]

Thank you, Kimbre, and good morning, everyone. Before I share the details of our second quarter financial performance, I'd like to take a moment to observe an important milestone in our young company's history. August marks our one year anniversary as a public company. I am proud of what we have achieved in the last 12 months. Notably, we completed two major acquisitions. In May, we acquired the San Diego Union-Tribune and formed the California News Group, which also includes the Los Angeles Times. Last fall, we acquired 38 suburban Chicago daily and weekly newspapers and integrated these properties into our Chicago Tribune Media Group. Pursuing a creative acquisitions is a core component of our five-point transformation plan and these acquisitions are in addition to others we completed in Maryland and in Connecticut earlier this year. We added best-in-class executives to our management team. You will hear shortly from Denise Warren our new President of Digital and CEO of East Coast Publishing, who joined us recently after a very successful 20 plus year career at the New York Times. We introduced new digital platforms and mobile apps for our major media brands. Collectively, our portfolio of digital properties attracts more than 43 million unique visitors and generating 320 million page views every month. Our brands earn a number of industry and peer awards for outstanding journalism. The Los Angeles Times led the way with two Pulitzer prizes. The Chicago Tribune and the Baltimore Sun were also named finalists in several other Pulitzer categories. And finally, we implemented major cost reduction initiatives, which I'll talk more about shortly. As we began our second year as a standalone company we remain committed to our five-point transformation plan, the tenets of which are, one, accelerating our transition to digital; two, diversifying our revenue base; three, accelerating our national sales initiatives; four, maintaining a disciplined cost structure; and five, pursuing accretive acquisitions. Turning now to second quarter results, I'll start with the few highlights. Although the quarter was marked by continued secular declines in print advertising revenue, our management team anticipated these declines early in the quarter and implemented significant cost controls. We also advanced our revenue diversification efforts, closed to San Diego acquisition, and continue to make important moves to drive our digital strategy forward. Specifically in the second quarter, we reported total revenues of $410 million compared to $430 million in the prior year quarter. Pro forma adjusted EBITDA was $38 million, which exceeded last year's second quarter pro forma adjusted EBITDA by $2 million. Our company was able to achieve an increase in pro forma adjusted EBITDA due in large part to effective expense management as well as the accretive impact of acquired properties. Similar to the first quarter, we continue to reduce expenses to match secular revenue trends. Total operating expenses were $399 million, down $6 million from the year ago quarter. We exercise discipline in every aspect of expense management resulting in $27 million in second quarter adjusted cash operating expense savings for more than $40 million in the first half of this year versus the prior year first half. These in year cost reductions are part of our plan to continue lowering our cost structure. You may recall that earlier this year, we rolled out a strategic sourcing effort to leverage the collective purchasing power of our businesses. In the second quarter, we expanded that initiative and launched a company-wide program to examine all facets of our cost structure as we prepare for 2016. Turning to advertising, total advertising revenue was $226 million in the quarter, a decline of 6.9% versus the prior year quarter. When we exclude approximately five weeks of advertising revenue from the San Diego Union-Tribune, ad revenue was down 10.5% versus the prior year. Digital advertising revenues adjusted for the impacts of modified affiliate agreements were essentially flat in the second quarter compared to the prior year period. Diversifying our revenue basis is a critical component of our transformation plan. Digital Marketing Services again posted meaningful gains in the quarter. Revenue of $7.3 million was up 15% over the year ago quarter and up 14% from the first quarter of this year. Additionally, content syndication was up 33% in revenue year-over-year. Tribune content agency, the major contributor to this category, continues to add new clients across diverse industries and recently launched a video-based syndication service. We achieved modest gains in total digital revenues which were $52 million for the second quarter, up roughly 4% from the prior year when adjusted for the impact of modified affiliate agreements. Total digital subscribers rose slightly from Q1 to 678,000 while total digital-only subscribers were 70,000 at the end of the second quarter. As I said, accelerating our transition to digital is at the core of our transformation plan. To lead our company on this front, Denise Warren joined us in mid-June and she is already making an impact. We are pleased that Denise has joined the call today and I will turn it over to her now.

[Denise Warren:]

Thanks Jack. It's good to be here. As Jack referenced, Tribune publishing has an enviable portfolio of premium brands each with a deep connection to the community it serves. Together, our brands also provide significant national scale for marketers looking to reach our coveted audiences. Since my arrival two months ago I had spent considerable time with our central digital team and with the leadership at each of our properties. I see my role as a catalyst for driving top-line digital revenue growth. I am focused on enhancing our product suite to drive deeper user engagement and greater reach which in turn will drive both our consumer and advertising businesses. In the last 30 days, I have begun an in-depth top to bottom review of our digital consumer business. I am examining every aspect guided by data and primary research so that we can better understand the ad scale and market by market opportunities. We set an expeditious deadline of the fourth quarter for this comprehensive evaluation and from there we will immediately begin to implement a plan to realize the opportunity. While we undertake this expansive assessment we are making adjustments in all aspects of our digital businesses as we see them. For instance, in July, we introduced a new summary view model that appears at the end of each article page. In the few short weeks, this feature has been live we have seen a 10% increase in engagement, a metric that will only improve in the weeks ahead as we finish rolling out our most popular algorithm for this module. We are also developing new creative ad units and looking at further opportunities to grow our high performing digital marketing services business. Both of these initiatives are being developed in collaboration with our Chief Revenue Officer Michael Rooney and with the local market sales leaders. We are also looking at several other mission critical areas. First, we have begun to think long-term about new products and services that over time can reduce our reliance on third party classified advertising revenue. Developing these new solutions will take time but we must, as an organization, begin to think about them now. Second, we have reoriented our product development and marketing teams to take a mobile first approach to product development. This mindset will be critically important in helping ensure that we can anticipate and plan for rapidly changing consumer behaviors. Third, we are in the process of creating a dedicated audience development team whose sole focus is growing user reach and deepening engagement. Fourth, we are working to further develop our video capabilities across the company. I am impressed with our branded series of video offerings that are in place at the LA Times and at our two Florida properties, the Orlando Sentinel and Sun Sentinel, both of which have earned Emmy nominations for their work this year. Lastly, I want to take a moment to discuss the importance of culture to a company such as ours that is in the midst of a transformation. I am partnering with our new Head of Human Resources Cindy Ballard and the rest of the Tribune Publishing management to ensure we have the right talent and resources in place to drive our transformation. Each of us recognizes we must build upon the culture of experimentation that already exists in our DNA. For instance, you may recall that earlier this spring our company was the only major publisher to introduce a full suite of Apple Watch apps for each of its major brands. It is that sense of experimentation that we help to cultivate further within Tribune Publishing. What I've outlined this morning represents an abundance of work, but I am confident that with the right team and support we can and will be successful. I will make it my mission to do so. I would now like to turn the call over to Sandy Martin, our CFO. Thank you.

[Sandy Martin:]

Thank you, Denise, and good morning, everyone. As Jack mentioned, Denise has hit the ground running and we are beginning to see improvements in our digital performance. We ended the second quarter with $42 million of cash on the balance sheet. Our revolving credit agreement is undrawn with current availability of approximately $100 million. During the second quarter, we funded the cash portion of the San Diego acquisition by expanding our term loan facility securing identical terms to our existing note. We invested $7 million in capital expenditures, paid down our debt by $4 million, and returned $5 million to shareholders through a cash dividend. Our board of directors also declared another quarterly dividend of $0.175 per share which is payable later this week on August 14. We plan to continue to prioritize the utilization of our free cash flow generation in the following three ways. First, investing in accretive acquisitions that continue to leverage our infrastructure cost across larger geographies and audiences; second, paying down existing debt as required by our credit agreement while strengthening the balance sheet with lower leverage. And finally, continuing our policy of returning cash to shareholder through quarterly cash dividends. As Jack mentioned, we generated pro forma adjusted EBITDA of $38 million during the second quarter, which was $2 million higher than the pre-spin prior year quarter. Restructuring cost including severance, acquisition cost and such related expenses totaled $13 million in the quarter. In July, we paid a $1 million into the single employer pension plan that was assumed as part of the San Diego acquisition, and remaining pension funding for this plan in 2015 is expected to be approximately $2 million. We continue to offset print advertising declines with significant cost reductions. In the second quarter, we judiciously managed both cash compensation cost and discretionary spending. We are demonstrating success in these areas in line with the cost reduction discipline articulated earlier this year. As we look to the rest of the year, we are changing full-year guidance for total revenues and adjusted EBITDA. The new fiscal year revenue range for 2015 is $1.67 billion to $1.7 billion. Although, total revenue guidance is being revised upward today, this guidance assumes a downward adjustment of second half print advertising revenues that are in line with first half trends, offset by incremental revenue contributions from the San Diego acquisition. The net result is a modest upward revision of the total revenue range. We are also changing our full year guidance for 2015 adjusted EBITDA to a range of $165 million to $175 million. This reflects three factors as I mentioned. The first continuation of first half revenue trends, EBITDA contribution from San Diego, which includes partial in year synergies and, finally, the elimination of the benefit of the $8 million retiree credit in our full year adjusted EBITDA guidance that was originally provided back in March. As Jack noted, it's been a great year for building, developing and growing our brands as an independent company. And now we would like to open up our line for questions from analysts. Operator?

[Operator:]

We will now begin the question-and-answer session. [Operator Instructions]. Our first question we have comes from Lance Vitanza with CRT Capital Group. Please go ahead.

[Lance Vitanza:]

Hi, guys. I have a couple of questions on the digital side. I don’t know Denise if you’re still available, but let’s start with the digital assessment. Did you say, I think in your prepared remarks I couldn’t quite make it out you described it as being either expansive or expensive, I couldn’t quite hear which of those two it was?

[Denise Warren:]

Expansive, Lance.

[Lance Vitanza:]

Expansive. Okay. And as long as we are on the cost side of that what do we expect this review to cost, and will that be reported above or below the EBITDA one?

[Sandy Martin:]

De minimis expenses it will be included above the line. We did in the capital expenditures $7 million; about half of that was on the digital platform. So we continue to make significant investments in our digital through capital expenditures.

[Lance Vitanza:]

Okay. And then the digital -- the 70,000 digital-only subscribers that you talked about, are those all paid digital subscribers?

[Denise Warren:]

Yes.

[Lance Vitanza:]

Okay. And so then I guess two couple of questions out of that. First off, I think what, did you have like 60,000 65,000 at the end of March?

[Sandy Martin:]

67,000 at the end of March.

[Lance Vitanza:]

Is that pro forma for Union Tribune?

[Sandy Martin:]

No, that does not include the Union-Tribune, no. That’s purely pre-acquisition.

[Lance Vitanza:]

Okay. So, I’m just trying to get a feel for I guess on an organic basis, what kind of growth was there, if any, in digital, paid digital only subs?

[Jack Griffin:]

So, Lance, this is Jack. And you’re right on a sequential basis Q1 to Q2, the growth in digital-only paid subscribers was very modest which goes to the heart of 1) why Denise is here, and 2) why she’s underway with what she explained. So, we have a top to bottom assessment going on and we'll be in a position later this year to talk more fulsomely about it.

[Lance Vitanza:]

Right. And so I remember when you were in the process of the spin there was fair amount of discussion around the roll out of the new mobile apps and websites which seemed very impressive at that time. Should we be thinking, I mean, is the assessment meant to get a better handle on how marketable and successful that ultimately is, or is this something that goes deeper and beyond that and is related to other aspects of your digital platform?

[Jack Griffin:]

So I think as I've said before, we are now a year into to this. Denise has been with us a couple of months. And throughout the time I've been talking about playing catch-up in digital. So the second half of this year is very important for us in terms of sizing the opportunity, setting the table and beginning to execute at the scale we think is possible. So you can look to us for next year to start to be quite explicit about what we think is possible and how we're doing against that.

[Lance Vitanza:]

Great. And then on the digital and revenue front, if I heard you correctly, it was essentially flat year-over-year when you made all of the adjustments. And I guess my question there is, and I'm certainly not surprised with the trends in print. But I guess I would have expected that there would be a little bit better growth on the digital side, notwithstanding all of the issues that you talked about. Are you attributing this to the same -- I mean is this essentially just a same issue where you need to play catch-up in digital? Or is there something going on in the underlying trends, vis-à-vis industry-wide digital advertising in newspapers that’s changed perhaps?

[Jack Griffin:]

Well, I think that digital advertising is in flux, in transition every day of the year. What we're focused on is we're building a very capable team on the branded content side, native advertising. And if you look at our peers and where they talk about growth in digital advertising it's essentially entirely coming from that segment, where we've just established the foundation for that. The second thing I would say is that when you look at our classified business where we have modified affiliate agreements, particularly on the employment side, we're still getting used to what those agreements translate into in terms of results. And it's more complicated than I should go into now. But we have got a very thorough set of initiatives that we're going to be launching as we enter the second half of this year. Denise launched on recently redesigning our ad map. So when we went to NGUX we lost some inventory. So she has put it back. And we have a very effective programmatic unit. And the programmatic function is essentially filling that inventory, and we think it will have a meaningful impact in the second half.

[Lance Vitanza:]

Okay. Great. And one more for me, if I can on the M&A front. Can you give us any idea of the pay -- I know that you mentioned obviously that it's important, it's one of your five points, but what kind of pace can we reasonably expect for additional transactions? I know you don't want to commit to a certain dollar amount. But are you seeking any opportunities? Is it realistic to think that you would be in a position to make a number of acquisitions in the next 12 months or are you going to be too busy consolidating the Union Tribune?

[Jack Griffin:]

I think, Lance, without commenting specifically which you know we do not. The integration of the San Diego Union-Tribune has gone exceptionally well; well ahead of plan. We were praying the San Diego Union-Tribune and the Olympic plant in Los Angeles within a couple of weeks. So that integration is well underway I was actually there last week and it is a very positive situation, but when we think about acquisition we have done for so I think we have demonstrated what the blueprint is and that we are able to execute. We do have a pipeline but we take a very thoughtful and judicious approach to the right targets at the right place with the right timing and we will continue to do that.

[Operator:]

The next question comes from Hamed Khorsand with BWS Financial. Please go ahead.

[Hamed Khorsand:]

Hey good morning. First off, just following up on the questions about digital. There was a comScore report out a few weeks ago talking about how Washington Post moved up the ranks on the digital traffic. Does that have any impact as far as the ad revenue you are seeing and the pricing you are able receive through your ad spot? Are you guys, I guess, to advance that earlier how are you going about trying to fix the situation?

[Jack Griffin:]

So thanks for the question, I will make a comment and then Denise can add to it. So I think you're right about the Washington Post; they have moved up in the rankings, and I think moving up in the rankings is a sort of key objective that every company like us has. So not just monthly unique visitors but the coin of the realm is really endangerment is how long as the visitor spend on the site, how many pages does the visitor watch video, how often in the months that they come back, and I know Denise is intensely focused on that metric.

[Denise Warren:]

The only thing I would add as the main reason why we are building an audience development team to singularly focus on greater reach and deepening engagement of all of our properties.

[Hamed Khorsand:]

Okay. All right, and then my other question is can you just talk about the cost you're able to remove off of our San Diego acquisition. The merging of LA it seems like traffic-wise it is so horrendous given that I am living here. So just try and manage how you are guys going through the cost savings by merging the two operations.

[Jack Griffin:]

Yes. We detailed some of this earlier and I will just say in a general sense a very large portion of the cost synergies comes from exiting the printing and distribution facility in San Diego, which we have done. And I made the LA to San Diego drive myself last week in mid-morning, which is not fun, but remember our papers are going in trucks at 4 o'clock in the morning and there is no snow. So that is not an issue for us. The other area where our synergies become very important is we built a platform company. So we have large shared services centers and finance and human resources and tax and tech that all translate into very efficient support for a business like San Diego, which is a standalone property had all dedicated functions in that respect. So when we acquire a business like San Diego essentially we are taking the brand and the content and the masthead and the management team on the edit side and the sales side and most of the rest of it we are able to do with existing infrastructure and that is why it is so powerful.

[Hamed Khorsand:]

Okay. Yes, was just trying to get a glimpse of how you're working out through the traffic perspective. Last question just to follow up on M&A, how comfortable are you with the leverage ratio right now and well can I have an idea as far as the deal [indiscernible] as it goes?

[Jack Griffin:]

So when we got a leverage ratio that we are comfortable with, the rating agencies have articulated that they are comfortable with it. We have a three prong capital allocation policy that Sandy articulated. On a regular basis as a function of the credit agreements we are regularly paying down debt, but I would think of us as judicious and conservative managers when it comes to leverage on the balance sheet. We have done that so far and we remain committed to that proposition.

[Operator:]

[Operator instructions]. The next question comes from Barry Lucas with Gabelli & Company. Please go ahead.

[Barry Lucas:]

Thanks, and good morning, Jack. Two areas, one, the top-line maybe you could talk about regional variances if there are any or if you have seen any at the papers given the geographic diversity of the company?

[Jack Griffin:]

Sure. You had two questions, do you want to ask the other one or you want me to take that one now.

[Barry Lucas:]

Sure. The second one, I wanted to go back to the expense issue as well. How much more opportunity is, you've talked about sourcing and I think we've discussed looking at the expenses in total and sort of an opportunity to slim that down as a standalone company, I was hoping you could maybe throw a dart in terms of what do you think that expense that should look like one year, two years down the road or something like that?

[Jack Griffin:]

Sure. Well, thanks for the questions, Barry, and if okay, I'll take them in reserve order. On the expense side, as I made the comment in my remarks, versus the prior year when you strip out all the spin noise and the acquired properties, we're at a run rate for the first half that’s about $40 million less than run rate for the first half of the prior year. And implicit in our guidance is that we continue that from a very strong and I call it rigorous expense management. So we're confident that we'll deliver on what we said early this year in terms of what we were able to remove in the budgeting for last year and I think the actual number show that we're on track. Like all of our peers, we're getting ready for 2016 and we have a number of initiatives that are well underway to essentially try to quantify the answer to the question you asked like what's the size of that opportunity and you know that, that works takes significant advance planning and we had it actually underway when we started this year. So we are well ahead of the came in terms of being ready to go after 2016 in a way that has a meaningful expense management continuing. I can't put a precise number on it at this point, but I hope that in the year that we've been at this we have demonstrated that we backed up our talk with action on expense management. And I think we saw that in the second quarter for sure. So in our upcoming calls as we start to talk to talk about next year, I think we'll be able to be more precise about the question that you asked. If I go on to the first question about revenue; clearly, the second quarter from an advertising stand point was challenging for the whole industry. And it started off in the month of April and there was an Easter shift this year where the retail benefit of the Easter last year was in the second quarter, this year it was in the first quarter. And I think that affected the entire industry. There is across the board sort of downdraft in print ad revenues. We're basically the last reporter in the peer group and we're kind of a little bit better than some and kind of right on number of some of our other peers, and it was broad-based particularly in the retail sector and it was across the country. And the preprint categories affected as retailers experiment with different size units, different frequency of drops, but when we think about retail and preprint, we maintain and believe that price and item advertising in the newspaper remain a fundamental tenet of the way retailers reach their customers and go to market. And so when we think about the go forward, we are not, as I think Sandy made clear in the guidance, we are not kidding ourselves at the tough revenue environment, we are planning for it and we've got it embedded in what we've talked to you about so far today.

[Operator:]

[Operator Instructions]. The next question comes from Matthew Brooks with Macquarie. Please go ahead.

[Matthew Brooks:]

I've got a couple of questions on the digital front to Denise. Firstly, I was sort of wondering if you could make any initial statement or thoughts about whether you planned to work with some of the Internet companies like Facebook or Snapchat and their sort of new features, whether you can make any comments on the rates that are getting programmatic and any changes there, and whether you consider allocating more of the all capital for the first point of your transmission plan to invest more in digital on the acquisition side rather than just on the CapEx side?

[Jack Griffin:]

Sure. Thanks for that multipart question. So again I'll try it in reverse order. Digital acquisitions, I think as you know, are very tough for companies like ours. Digital acquisitions tend to get done on a multiple of revenue. And very often, if not more often than not, there is no EBITDA contribution to go along with that revenue. So we've got a tremendous amount to do, I think as Denise's assessment made clear, in our own house at this point and that’s where we're going to be putting our resources. I would say on the first item, we have been good partners with third-parties and Denise talked about our initiatives with Apple on the Apple Watch. But one of the reasons that we wanted executives with the caliber of expertise and ability like Denise Warren is, she knows everybody in the digital ecosystem, and she will be able to navigate where we place our bets. But I don't think anybody can succeed in the digital environment these days by just trying to go at themselves entirely. So I know Denise has some thoughts about that. And then on programmatic, we don't disclose the rates, but if you think about the sort of the hierarchy in general interest media, digital advertising CPMs are 15 bucks or something like that unlike the financial world where they're 30 or so. But then the networks, the peer networks are two bucks or one buck. And our programmatic function and business is highly developed, its best in line, best in class, and we've built private exchanges that help us yield a CPM that's materially better than the network CPM. So we're continuing to invest in that function, as well as the world continues to become more automated in that respect.

[Matthew Brooks:]

Okay. And are you able to make any comments about the Apple Watch, and like how many apps have been download, any evidence of success that you can point to, I know it's too early?

[Denise Warren:]

We haven't released that information, and I would just put this one under the culture of experimentation that we talked about earlier.

[Operator:]

The next question is a follow-up from Hamed Khorsand with BWS Financial. Please ago ahead.

[Hamed Khorsand:]

Thank you. I just have three more follow-ups for you. What was the EBITDA contribution from San Diego in the quarter?

[Jack Griffin:]

So we have not disclosed that specific number. As you know, we don't report by business unit. But what I can tell you is that the EBITDA contribution in the quarter from all our acquired properties was roughly $7 million. And if you look at the press release, the revenue in the quarter from acquired properties was roughly $32 million. So if you take that in the aggregate it's about a 23% contribution margin, which we think is pretty good.

[Hamed Khorsand:]

Okay. And I think you answered previously. Can you disclose what the dollar decline in print was without San Diego?

[Jack Griffin:]

We can get -- we can get back to you on that number, it's just a calculation.

[Sandy Martin:]

We gave you the percentage of 10.5% decline and you can sort of do the math but you and I can go through it together, Hamed, if you want to kind of walk through it.

[Hamed Khorsand:]

Okay. And my last question you guys did a good job as far as cutting costs and keeping pace with the secular decline in advertising. Can that continue and do you think this decline in ad revenue is going to be at approximately 10% rate?

[Jack Griffin:]

So, when you think about, well I talked about our transformation plan and it's got five points for reason. We believe that secular print revenue declines will continue into the foreseeable future and that means on whatever planning scenario that we have. But when we think about our model we think about being able to offset in the core business, the secular revenue declines with cost, with expense reduction, so you think we can check the box so far on that that we've done that. We've got, we think a very large opportunity ahead of us that we haven't even shipped a service ad which is digital revenue growth from all sources on the consumer side, on the advertising side, and you can see the progress that we're making in digital marketing services. So that's a growth engine for us that's in front of us. And then finally the accretive impact of the acquisitions and we just did a little bit of that math. So we think that that in its totality creates a balanced model for the foreseeable future and where we're executing on. Thanks a lot.

[Operator:]

This concludes our question-and-answer session. I would like to turn the conference back over to Sandy Martin for any closing remarks.

[Sandy Martin:]

Thank you again your interest in our company. And please feel free to reach out if you have any follow-up questions. Bye.

[Jack Griffin:]

Thank you.

[Operator:]

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.