Washington Prime Group Inc.
Q1 2018 Earnings Call Transcript

Published: 26 Apr 2018

[Operator:]

Good day, ladies and gentlemen, and welcome to the Washington Prime Group's First Quarter 2018 Earnings Conference Call. [Operator Instructions] As a reminder, this conference maybe recorded. I would now like to introduce your host for today's conference Lisa Indest, Senior Vice President and Chief Accounting Officer. You may begin.

[Lisa Indest:]

Good morning and welcome to WPG's first quarter 2018 earnings call. During today's call, we will make certain forward-looking statements as defined by the Federal Security laws. These statements relate to expectations, beliefs, projections, plans, and other matters that are not historical and are subject to the risks and uncertainties that might affect future events or results. For a detailed description of these risks, please refer to our earnings release and various SEC filings. Management may also discuss certain non-GAAP financial measures. Reconciliations of each non-GAAP financial measure to the comparable GAAP measure are included in our press release, supplemental information packet and SEC filings, which are available on the Investor Relations section of our website. Members of management with us today are Lou Conforti, CEO; Mark Yale, CFO; Greg Zimmerman, Head of Development; Paul Ajdaharian, Head of Open Air Centers; and Josh Lindimore, Head of Leasing. Now, I’d like to turn the call over to Lou.

[Lou Conforti:]

Thanks, Lisa. Good afternoon, everybody. First and foremost we're reaffirming guidance for fiscal 2018 FFO in a range of between $1.48 and $1.56 per diluted share, as well as reaffirming our guidance for fiscal 2018 comp NOI growth within a range of negative 100 basis points to flat. As emphasized previously, our charter is to provide cash flow stability i.e. minimal variance as we redefine our assets. Let me put this into perspective. Since 2014, we've had about 2.3 million square feet, think about this 10% of in-line space to come to the black-cloaked, scythe-wielding grim reaper known as bankruptcy. In spite of this, we've evidenced minimal variance relating operating metrics. Between 2014 and 2018 portfolio-wide occupancy decreased by only 160 basis points, comp NOI has increased by a 1% and tenant allowances have actually decreased. So there existed delicate balance between the financial and operational namely diversifying tenancy, activating common area, introducing new initiatives and of course large scale redevelopment require time and money. We're accomplishing all of the above while continuing to improve balance sheet strength which Mark will describe in detail. As it relates to operating metrics, I'd characterize the first quarter as a continuation of our roll up your sleeves, kind of noble incremental approach. Sure I’d be happy as a kid and a Shelby's Sugar Shop of comp NOI growth was better. But let me add up a few line items which account for the vast majority of the decline. Year-over-year snow removal on 100bps, year-over-year bankruptcy related 270, and the maraschino cherry on top was the 30 basis point missed timing of a liquor license. In addition and this is important, the decision we're making of not kowtowing to lackluster tenancy and crowded categories is absolutely the right one. Well this is going to result in a hiccup or two, as we thoughtfully replace them, the benefit to our guests who seek variety far outweighs the short term agita. There is increasing evidence the fruits of our labor are beginning to manifest. For instance, in-line sales per square foot and occupancy cost both exhibited improvement. In other words, shoppers are spending more dough which in turn improves the operating efficacy of the stores that matter. In fact in-line sales per square foot for the 12 months ended March 31 exhibited the highest year-over-year growth in the last five quarters. While occupancy for the core portfolio decreased 50 basis points from the end of the first quarter, it's actually a 50 basis point improvement compared to the year-over-year occupancy decline at the end of 2017. Listen, Tier Two remains challenging albeit we whittled down this category to approximately 10% of our core portfolio NOI. And remember, 42% of Tier Two was encumbered and we've proven several times, we're not averse to handing back keys to servicers. Tier One and Open Air now represent 64% and 25% of core portfolio NOI respectively, and 77% of Tier One enclosed are now hybrid town centers which incorporate an Open Air component. Leasing continues to be robust especially when considering the diversification mandate we've set forth. Leasing volume for the first quarter totaled 1.1 million square feet, thank you Josh and team, and thank you even more so 44% of it was lifestyle tenancy i.e. food, beverage, entertainment and the like and we've addressed over 60% of our 2018 renewals to-date. Aside from capital markets activities upon which Mark will elaborate, here’s what we've accomplished strategically during the quarter. We closed down the first tranche of our $67.5 million disposition of 41 restaurant outparcels to Four Corners Property Trust. We completed the purchase of four Sears department stores and adjacent Auto Centers for $28.5 million all of which are slated for future redevelopment. To note, the sale-lease transaction was funded by a combination of our credit facility, proceeds from the aforementioned restaurant outparcel sale and our joint venture partner O'Connor. All are situated within Tier One assets which are located in Longview Texas, Columbus Ohio, Sioux City and Aurora Colorado. And we completed the purchase of Southgate Mall for $58 million. Southgate situated in Missoula and actually this is in conjunction with the remaining proceeds from the Four Corners reverse 1031 exchange. Southgate it's in Missoula Montana and it really exemplifies our dominant secondary market focus as the asset captures a catchment over 130 miles, it's within close proximity to the University Montana and its diverse tenancy mix including a newly built Lucky’s market and a nine-screen dine-in AMC theatre really demonstrates our hybrid town center mandate. Tenant driven redevelopment - thank you Greg, Eric and your team remains one of our most intriguing value propositions. We allocated 84 million bucks through redevelopment in 2017 and we earmarked between a 100 or so in 125 in 2018. Currently redevelopment includes 34 projects ranging from between 1 million and 60 million bucks with an estimated return on invested capital of 10% and this is not including the benefit to adjacent unproductive space. We also continue to activate common area via such initiatives as local craft breweries, tangible, our proprietary e-commerce platform, as well as a host of other offerings including Shelby's Sugar Shop and just quite frankly events and activities that are relevant to our demographic constituency. I like to address capital spend and corresponding return for such initiatives, and I’ll give you a couple for instance. For instance, per installation capital attributed to our local craft brewery rollout and Shelby's is 290 granite, 200 grand respectively and we're estimating return to between 10% and 12% and that doesn't include the dynamism, the excitement for those installations and those initiative and view with our guests. I mention these to elaborate upon our incremental approach. Too often landlords have allowed assets to go to heck in a handbasket at which point a large scale redevelopment project being necessary. This is fundamentally flawed to think of investing in this manner is there are viable iterative steps prior to a major retrofit especially within the common area and we owe it to our guests, our tenants and our shareholders to beta test these cost containment initiatives. As it relates to department stores, we continue to significantly reduce exposure since 2015, 26% in total that includes reductions of Sears and Bon-Ton by 33% and 26% respectively. We've completed or commenced or approved 15 department store repositionings ranging between 5 million and 20 million bucks and these projects - upon completion reflect an average sales volume increase of between two and three times. The liquidation of Bon-Ton stores was expected, we plan for it and Mark will provide detail and we are currently vetting several wholesale solutions for the 16 stores within our portfolio. Let me also quickly mention the Bon-Ton stores opportunity we considered with a buyout consortium. It was a high-yielding capital structure investment i.e. we positioned ourselves as secured real estate lenders. The amounts for $55 million and we had lined up potential syndication participants. We viewed it as an opportunistic investment like a mid-dated option allowing us time to evaluate adaptive reuse while getting paid to wait. Relatively short, we really like the deal of the deal we lost it and we feel pretty damn good about addressing these stores in a comprehensive fashion sooner rather than later. I know some of literary critics are in as low as perhaps the speaking coach, retired of my team and using grind it out as our battle cry, too bad. It's what we do, it ain't easy, we refuse to tolerate the status quo. Our objective of revitalizing dominant secondary assets is resolute and always and as always we'll continue to grind it out. Thanks, and Mark you're up.

[Mark Yale:]

Thanks Lou. We finished the quarter with over $60 million of cash on hand and $450 million of capacity on our recasted credit facility giving us over a $0.5 billion of current available liquidity. This liquidity along with free cash flow after payment of our dividend puts us in a position to fully commit to our current redevelopment pipeline which we believe represents our best and most strategic use of capital to-date. With the recent January credit facility recast, we have no unsecured debt maturities until 2020. Additional in terms of secured debt maturities. We only have approximately $150 million of mortgage loans maturing through the end of 2019. About $55 million relates to five Open Air centers with the debt yield of over 30% giving us ample flexibility to pay off or refinance. The remaining maturity relate solely to the $94 million loan on a Rushmore property. One of the three properties identified is over levered and non-core. When considering the 8.5% debt yield and the approximately $109 million of mortgages described to these three assets, this provides us a nice opportunity to delever going forward. Finally with the first quarter on encumbering of our Seattle outlet property. We now have over 60% of our total core NOI represented from unencumbered properties. As we've stated before, while we remain realistic with respect to the macro challenges facing our sector, we believe we have a sound balance sheet that will enable us to address the inherent risks and opportunities that might come our way in the near future. Now let me turn to our quarterly financial results. Our FFO for the first quarter was $0.39 per diluted share falling within our guidance range going into the period. And we did see NOI performance generally in line with our budgeted expectations. In terms of the quarter-over-quarter decrease in property NOI, the significant drivers included a million-dollar rise in snow removal costs, a million dollars of lost stub rent associated with Bon-Ton declares first quarter 2018 bankruptcy filings and the continued negative impact from 2017 tenant bankruptcies. Additionally, when drilling down into our Open Air portfolio the negative first quarter growth was driven by higher property operating expenses include the snow mentioned above and timing issues. It's also important to remember that we experienced over 8% NOI growth during the fourth quarter from these same properties. We're expecting to see growth back about 2% for the Open Air portfolio during the second quarter. With the line performance for the first quarter, we have reaffirmed our outlook for fiscal year 2018 FFO guidance in the range of $1.48 to a $1.56 per diluted share. Once again the guidance includes the recent closing of the acquisition of Southgate Mall in Missoula Montana and assumes the closing of a second tranche of the Four Corners outparcel dispositions early in the third quarter of this year. There were no other significant changes to key guidance assumptions previously detailed. The guidance does exclude the impact of potential net gains on the extinguishment of debt and from the second tranche of the Four Corners outparcel disposition. In terms of comparable NOI from our core portfolio for the full year, we are holding to the expected range of flat to down 1% with the guidance assuming full liquidation for both on Bon-Ton Toys "R" Us. This will most likely push us close to the bottom end of the range. When considering the first quarter NOI drop and the nature of what drove the decreases, we are expecting improved core comp NOI performance closer to flat for the remainder of the year. Specifically in terms of Bon-Ton, we are assuming that all locations will close by June 30 and that included an estimated million dollars of related co-tenancy impact in the guidance. When factoring in all announced 2018 department store closings, we are estimating an additional co-tenancy impact of between $2 million to $3 million in 2019. This assumes tenants with co-tenancy rights converts alternative rent and that there's no cure by the landlord. I we don't release any of this space. We do believe this estimate will prove conservative as we do see opportunities throughout the portfolio to address securities co-tenancy rights via available replacement provisions. Finally in terms of our dividend, we remain comfortable with current coverage which will allow us to generate approximately $55 million of free cash flow during fiscal year 2018. We also believe will be in a position to absorb any taxable gains incurred in connection with the possible resolution with the services on our three highly levered non-core assets. We will now open the call to any of your questions.

[Operator:]

[Operator Instructions] Our first question comes from Caitlin Burrows with Goldman Sachs. Your line is now open.

[Caitlin Burrows:]

I guess just starting with two questions we're seeing in spreads. It looks like new deals in close centers has flushed down almost 10% where renewals were stronger but often times it seems like we see new deals have highest spreads versus renewals I think with the idea that sales outlook would improve with the new users so they pay higher rent. I’m just wondering if that’s not the case, is that now that newer users are agreeing to lower occupancy costs, any impact of a higher reliance on percent rent or something else that might be impacting the new lease spreads?

[Lou Conforti:]

What was our relax spreads over the previous quarters, it's so higher to make a generalized observation with one quarter and will get you a better break out in terms of what might have significantly caused it, was it an individual payment, was it a package deal Mark?

[Mark Yale:]

I just think generally we get this question a lot in terms of whether we’ve seen a change in the leasing environment the last three months, the last six months. And Josh and Paul you can speak to it, it's the same environment we've been dealing with for the last couple years. So, it just comes down to what's in those numbers, we’d have to go example by example but it's certainly no indication that there's a change in lease environment it’s been difficult for the last two or three years and I think we demonstrated our ability to navigate through it.

[Josh Lindimore:]

We did a couple of package deals with some new tenants that was a driver of some of these spreads. So the mixture of renewal deals and new deals, was because one of them but we shouldn’t mention it – and the two that I know are both are diversifiers to junior fashion and accessory.

[Paul Ajdaharian:]

Caitlin, this is Paul. It's obviously, a function of the population of the deals you're talking about maybe this positions in the projects, those kind of things and there are some boxes in there that change from quarter-to-quarter.

[Caitlin Burrows:]

I guess just on that I know also you guys changed the reporting to be from year-to-date to trailing 12 months, I'm wondering if you would say what the – maybe overall leasing spreads would have been had been just year-to-date?

[Lisa Indest:]

And Caitlin, we really made that change, primarily because people would ask us, most people were doing trailing 12. And so, we think one quarter volume is not really that meaningful. Certainly, the quarter was lower than the trailing 12, which you could certainly discern that from looking at last year's versus where we are now but it was fairly consistent with what the trailing 12 was. There was no big difference in a three-month versus a 12-month they were it’s been consistent.

[Lou Conforti:]

It’s the volatility of the quarter.

[Lisa Indest:]

Yes, I mean, one quarter was just - we felt and we were actually receiving feedback wasn’t that meaningful, so we switched to trailing 12.

[Caitlin Burrows:]

And then just I know your original guidance included $5 million to $8 million accommodation for unbudgeted bankruptcies and store closing. So just wondering based on what you know now whether it’s Bon-Ton, Claire's or anyone else any comment on kind of how much of that has been or will be used up and how much is left for additional unforeseen closures at this point?

[Mark Yale:]

I mean certainly the majority of that has been captured now with the bankruptcies whether it's Toys "R" Us whether its Bon-Ton, whether its Claire's. I think what interesting when we look at the watchlist today versus where it's been, we do not see any immediate risk. So we feel like with what we do have and what cushion does remain at least based on what we know today we feel like we certainly can absorb it. But compared where we’re last year and what was in front of us and where we are today, we just don't see any immediate risk in terms of especially in line tenants.

[Operator:]

Our next question comes from Ki Bin Kim with SunTrust. Your line is now open.

[Ki Bin Kim:]

Can you just go back to your opening commentary about the cotenancy dollars at risk in cotenancy this year and I think you gave about $2 million to $3 million of estimate for 2019. Just curious, if you can provide little more details about - what is that - how many retails would that impact how many malls that are coming from just a little color?

[Mark Yale:]

I mean, certainly we looked at the Bon-Ton situation along with some other announcements we had some Sears over and Seritage and things of that sort. And we went through tenant by tenant. I think, and we talked about this before, it's not like we're going through every single tenant and it will comprises the occupancy, typically is four to eight that will be impacted. Some have horn clauses, some have and 18, twelve-month period before any cotenancy would kick in all that was factored in. And I think it’s also important to emphasize that this does assume any of those tenants have a right to go to all rent due. But in most cases we do have an opportunity to cure and that is not factored in. And that doesn't mean we don't have confidence that we won't be able to address some of this cotenancy, but we did want to size what the potential downside would be.

[Ki Bin Kim:]

Okay.

[Lou Conforti:]

So weird on the side and I think it’s important to reiterate this. Weird on the side of conservatism with respect to cotenancy and corresponding sales figures. And what’s also interesting is that approximately 450% is concentrated in two assets. So it is pretty well spread in terms of looking at 2018. And again, this is that number, the million-dollar number is evidence by Mark earlier in the 2 million to 2.5 million, $2 million to $3 million, that assumes that we don't do anything. And look at our historical precedent over the last couple of years, we don't - we have handled adaptive reuse of our boxes better than anybody.

[Ki Bin Kim:]

So just to be clear, this is assuming if there are horn clauses those are triggered, the cure peers are passed and basically all those levers are pulled, right?

[Mark Yale:]

I mean, we went through tenant by tenant and they could go to a media cotenancy, so we factored it in. Even if there was a horn clause, we just assumed that cotenancy would kick in. If there was a grace period of six to 12 months, we did factored that in that does help kind of smooth things out a little bit and that's ultimately what gets to the really if you look at it and you incorporate 18 it’s $3 million to $4 million in total with a $1 million coming in 2018 and we think potential 2 to 3.5 [indiscernible].

[Lou Conforti:]

And kudos Mark and Lisa and team, because you tell me even and everyone else. I think we're the first folks to actually provide this much visibility with respect to cotenancy from a quantification standpoint.

[Ki Bin Kim:]

Well, I don’t cover it top end but I think that’s true, okay. And the 50% located in two assets which was interesting as well. Are those – do those two assets happen to have.

[Mark Yale:]

We’re not going to go into detail with respect to – and we’ll give more visibility than anybody else. We’re going to stop that. I think it will be unfair to those…

[Ki Bin Kim:]

Well, I was only asking where the assets are I was just asking if those have mortgage debt on it?

[Mark Yale:]

No, but then you’ve reduced the sample size. I’m not giving you trick me no.

[Ki Bin Kim:]

I know Tier Two is really a small part of your portfolio but…

[Mark Yale:]

But let’s not talk about it. Next question, Ki Bin. I’m not talking about where – talking to me brother.

[Ki Bin Kim:]

So I just want to is like I said, it’s a small part but the 14% decline I think and why obviously kind of catches your attention. If you had to draw a kind of bell curve of how that looks like the decline where is coming from is it, kind a normalized bell curve, where everything is just come down a little bit or is there you had this concentrating?

[Mark Yale:]

We have drawn that bell curve and thought about it from a standard deviation standpoint and like and there is other aberrants in that – from where it comes just by virtue of the denominator, literally we will have and if you miss timing and we’re actively leasing. You’ll find yourself down 20% in an asset you know quite frankly, through December we were down 30% in an asset that asset very well and we can cite several examples down 20%, up 30%, 10% that and you know you have the kind of the intrinsic volatility pursuant to a load denominator. These are smallish assets when we do our multivariate factor model. It will be kind of smarmy of us to not including size as a factor and we include it and whether Tier Two.

[Operator:]

Our next question comes from Floris van Dijkum with Boenning. Your line is now open.

[Floris van Dijkum:]

I had a question regarding Southgate Mall, I believe you had mentioned earlier that part of the consideration was going to be settled in OP units. Could you walk us through how you price that?

[Mark Yale:]

We did not because I think it would - it just - didn't make sense quite frankly from a ministerial standpoint for the size that might have been considered as well as. So no OP units.

[Floris van Dijkum:]

So no equity at all, it was all cash?

[Mark Yale:]

All cash funded with the second tranche of the Four Corners’ transaction which will close this summer, yes.

[Floris van Dijkum:]

And then just a follow up question on the Sears boxes, I know that two of them would appear to be very low sale per square foot malls at Southern Hills and at Longview. I know you say they’re Tier 1, but we would look at them a little bit maybe more skeptically, what’s the upside potential, particularly at some of these malls that do very low sales per square foot. What do you think is the upside potential at those and is that – and how much money will you be investing in those two particular ones?

[Louis Conforti:]

Zimmerman just perched up and boy, he is ready to go.

[Greg Zimmerman:]

So obviously, hey Floris it’s Greg. Obviously, we see upside potential, starting in Sioux City. The mall is inflated at 90 miles north of Omaha, 90 miles south of Sioux Falls. So it's got a very significant trade area. There was a lot of debt on it for a lot of years, so not a lot of capital was put into it. We’re already underway with the renovation of the AMC theater. Sears expanded a couple years ago. Sears is powerhouse retailer. We see a lot of upside potentially in that mall and therefore we wanted to capture the Sears box. With respect to Longview, obviously same kind of thing, the closest centers is in Tyler. We spent $16 million, $17 million already to bring Dick's Sporting Goods BJ’s to a complete mall renovation. So we see future opportunities to diversify there and what we like to do is more restaurant entertainment that sort of thing. So we think that both these opportunities will provide significant upside.

[Louis Conforti:]

Yes, both the quintessential town centers of which we are transforming into hybrid town centers and I spend a couple of times at both of them actually.

[Mark Yale:]

And Floris this is Mark. I mean, the other thing when we look at sales per square foot is interesting and certainly the trend is interesting. But you know when we’re evaluating, allocating capital we also look at higher good sales that are being done from that center both clear the bar kind of $100 million if you want to look at that, the bar, they’re both well over that. That is evidence of the trade area, the catchment area and the liability and the concentration and critical mass of retail and commerce has been done out of that center.

[Operator:]

We have a follow-up question from Caitlin Burrows with Goldman Sachs. Your line is now open.

[Caitlin Burrows:]

I was wondering if you could tell us anything about the Sears acquisition that you did and cap rate on that or some commentary to figure out how it could or maybe not impact 2018 FFO?

[Louis Conforti:]

Well, so as part of the deal, cap rate is kind of superfluous kind of a metric when you think about - we weren't in here to the present value stream of Sears cash flows. Well, as evidenced by the lease term. We wanted to some - kind of again, some kind of optionality money with those assets, we think we had, and I can only - and you all can harken back to previous transactions by other parties - listen, it was a great deal. It was about us getting the yields that we thought and that was necessary for us to move forward and execute on? So in essence we looked at as an investment wasn’t necessary looking at as a cap rate, as it relates to ultimately the sale-leaseback as we bought the properties back from Sears we’re leasing them basically we set rent to cover our cost to care.

[Mark Yale:]

That exactly right and we didn't have well formed and quite frankly Greg and Eric, at all I can’t say we, if we didn't have well formed plans for every single one of them indeed in various stages, it would have been a different transaction if not a transaction at all.

[Caitlin Burrows:]

So it definitely sounds like this is more versus a real acquisition more to get state free development?

[Louis Conforti:]

Yes, I think about the quality. You’re spot on. And think about the quality of those boxes. And again whether they be defined by something as robust and MSA as robust as Columbus or to Greg’s sort of a tenant with respect to whatever our catchment. These are great assets for us to have and they need that bar from a total sales volume. God forbid we actually do something interesting and do a little bit of open air and food and dining and entertainment and just view a little dynamic in some of these assets.

[Caitlin Burrows:]

And then another one maybe more new ones. On Page 5 of the supplement, where you guy show the non-cash items and FFO, look like the line for mark-to-market adjustments to base rents increased noticeably, it’s about 4.6 million. So I was wondering if there is a specific driver on if the elevated level will continue if it has to do with the Sears sale-leaseback or something else?

[Lisa Indest:]

It was really just a lease that had been mark-to-market that attendance closed and so it’s a kind of non-recurring its high in first quarter. It won’t continue with that rate.

[Caitlin Burrows:]

Okay, got it.

[Lisa Indest:]

I’m sorry, it’s grand central, the grand central.

[Mark Yale:]

Which authority.

[Lisa Indest:]

Which was in the budget, but when they closed it was awesome…

[Mark Yale:]

I am sorry, say that again.

[Louis Conforti:]

Which has already replaced with it.

[Lisa Indest:]

Yes absolutely.

[Caitlin Burrows:]

Okay, thanks, team.

[Mark Yale:]

And you’ll like its replacement.

[Operator:]

We do have a follow up question from Ki Bin Kim with SunTrust. Your line is now open.

[Ki Bin Kim:]

Could give us a sense of the percent leased in your development pipeline right now. I know there are some like apartments, which obviously will be zero but for like the retail portion or whatever you can actually put a number on, like what is that percent lease look like?

[Mark Yale:]

We don’t necessarily look at that way, Ki Bin, because we typically don’t put a shovel on the ground without substantial preleasing and most of what we’re doing right now is not your traditional ground-up development where you're looking to get to 67% lease. Most of its driven by one or two tenants and we have that commitment before we get moving.

[Greg Zimmerman:]

So if we go through, if you go through the supplement Ki Bin, it’s Greg again. At Markland Mall, we have announced Ross all the PetSmart Party City all signed leases at Cottonwood Mall we’ve announced Hobby Lobby signed lease. We have another signed lease with the tenant that we can’t announce yet and we’re continuing to finish up on that one. In addition, it’s Scottsdale quarter. As you said, we’re in preleasing because that really won’t open for till the end of 2019. Great Lakes mall Mentor Round 1 is open Northwoods Round 1 is open and Room Place will open here in I think three weeks. So to answer your question, pretty substantially leased.

[Mark Yale:]

Yes I mean, the remainder is generally kind of ancillary.

[Greg Zimmerman:]

Yes, and some of its waiting for the right tenants. So at Great Lakes, we have restaurant opportunity, we want to make sure to the right tenant.

[Mark Yale:]

There is a good point to bring up Ki Bin, because in traditional for ground up, you get one or two you are at 30%, 40% and then the [indiscernible] building it and they shall come is not what we’re about.

[Ki Bin Kim:]

And that’s what I was trying to allude to so. Yes, that’s it. Thanks.

[Lisa Indest:]

There is no other questions in the queue, operator. Well, thanks everybody for joining us on today’s call and have a great day.

[Lou Conforti:]

Our operator is going I think buying shares, bye.

[Operator:]

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude today's program. You may all disconnect. Everyone have a great day.