Olympic Steel, Inc.
Q2 2009 Earnings Call Transcript

Published:

  • Operator:
    Good day everyone and welcome to the Olympic Steel Second Quarter 2009 Results Conference Call. Today's call is being recorded. At this time for opening remarks and introductions, I would like to introduce Mr. Michael Siegal, Chairman and CEO. Please go ahead sir.
  • Michael D. Siegal:
    Thank you, Danielle. Good morning and welcome to our call. On the call with me this morning is David Wolfort, Chief Operating Officer and President of Olympic Steel and Ric Marabito, our Chief Financial Officer. I'd like to thank all of you for participation and for continued interest in Olympic Steel. Before we begin our discussion, I want to remind everyone that during this call, we will provide forward-looking statements that we do not undertake to update or that may not reflect actual results, changes and assumptions or changes in other factors affecting such forward-looking statements. Important assumptions, risks, uncertainties and other factors that could cause actual results to differ materially from those fet forth in the forward-looking statements can be found in our filings with the Securities and Exchange Commission including our Annual Report on Form 10-K. Earlier today, we reported our financial results for the second quarter and the first half of 2009. Let me review some of the details from that release. Our second quarter sales totaled 122.4 million which is down 66.3% from the 363.5 million recorded in the second quarter of 2008. The sales decrease was due to falling selling prices through out the quarter and sharp decline in customers demand. Our second quarter sales volume totaled 174,000 tons compared to 353,000 tons shipped in the second quarter of 2008, which represent a 50.8% increase in ton shipped. We successfully executed our expense reduction plan, reducing second quarter operating expenses year-over-year by 28 million or 50% to match the decline in tons sold for the comparable period. Our second quarter net loss totaled 33.8 million or $3.11 per diluted share compared to net income of 29.6 or $2.70 per diluted share for the second quarter of 2008. Our second quarter of 2009 results include a required inventory lower of cost or market accounted adjustment of 50.5 million that was recorded as of June 30th due to the continued deep deterioration of pricing and demand that occurred during the second quarter. Our first half sales totaled 263.3 million which is down 58.8% from 638.4 million recorded in the first half of 2008. Our first half sales volume declined 48% or 345,000 tons compared to 669,000 tons shipped in the first half of 2008. This compares to the year-to-date 44% decline and total steel service center shipments reported in the Metal 1service Center Institute's June 2009 Metals Activity Report. Our operating expenses in the first half of 2009 were $41 million or 41% lower than the first six months of 2008. Our first half net loss totaled 59.3 million or $5.45 per diluted share compared with net income of 42.8 million or $3.93 per diluted share for the first half of 2008. Our first half 2009 results include total inventory lower of cost or market pre-tax adjustments of 81.8 million. Our 2009 results were impacted by the dramatic and continued decline in the industrial activity in North America resulting in sequentially weaker demand for steel in the second quarter. This was most evident in our plate and fabrication operations where many of our large original equipment manufacturing customers for which we perform the preponderance of our value-added services continued experience substantially lower production levels than the market as a whole. We are not anticipating a meaningful improvement OEM customer demand in the back half of 2009. Our inventory turnover significantly improved in the second quarter as we executed on right sizing our inventory to our preferred historical Olympics Steel turnover rates and over to high cost of inventory purchased, specifically for these customers. We reduced our inventory tons by 32% in the quarter and experienced operating losses in doing so. However, this generated a significant cash flow and allowed us strengthen our balance sheet and reduced debt by 57 million or 64%. The second quarter truly was a difficulty period for the income statement. But we restored our strong balance sheet position through working capital turnover while maintaining a keen focus on expense reduction and our core values. We have a bank agreement committed through December 2011 with no interim debt maturities and only $18 million borrowed today. We have a significantly lower expense base and the experienced management team that provides Olympic Steel with a strong foundation for the long-term success in the steel industry. Also this morning, we reported that we are going to pay a quarterly dividend. Olympic Steel's Board of Directors has approved a regularly quarter cash dividend of $0.02 per share to be paid on September 15, 2009 to shareholders of record on September 1st 2009. I'll now turn the call over to Rick to comment on some more detailed financial results.
  • Richard T. Marabito:
    Thank you, Michael and good morning everyone. First I would like to cover the inventory lower cost to market charge. Similar to our first quarter charge the inventory adjustment was taken as of quarter end in accordance with accounting rules. The primary driver of the June charge was direct selling prices that fell an addition $180 per ton or 20% during the second quarter. Cumulatively, we have taken $81.1 million of lower -- of cost to market adjustments in 2009 as our direct selling prices declined by $385 per ton or 34% during the first half of the year. Based upon market price increases, we do believe that these inventory charges are now behind us. In terms of how the LCM charges are presented, the $50.5 million second quarter amount was recorded on our balance sheet as a reduction of inventory and was reflected as a separate line item in our income statement under the Costs and Expenses section. The adjustment was calculated in accordance with Generally Accepted Accounting Principles to state our inventory at market under a two-step process. Step one, reduce our total inventory from its cost basis to our average sell price at the end of June. Step two, then further reduce the inventory value for the future costs of completion to get the inventory to the point of sale. Next, I'd like to review our banking agreement which is committed through December of 2011. We amended our credit agreement in July to allow for up to $100 million of lower of cost to market adjustments to be excluded from our EBITDA covenant calculations. We ended the quarter with only $32 million of debt and have already reduced borrowings by another $14 million and as Michael said, our debt currently stands at $18 million as we end July. We anticipate further reductions and expect to eliminate our debt in the second half. We currently have approximately $44 million of availability under our credit agreement and our debt-to-equity ratio is only 0.12 to 1. For the second quarter of 2009, our operating expenses totaled $27.6 million. This is a $4.3 million or 13.5% sequential reduction from the first quarter of 2009. Michael provided you with the other expense statistics where we are down year-over-year by 50% in the second quarter and by 41% for the first half. Second quarter capital spending was reduced to $2.3 million, bringing our year-to-date CapEx total to 9.5 million. We have reduced our CapEx projection for the second half of the year to about $4 million and that consists of maintenance capital spending as well as our IT system project. An income tax benefit of 38.6% was recorded in the first half of 2009 and the majority of $37.2 million tax benefit from the first half can be carried back to prior years resulting in a significant cash refund expected in 2010. Now, I will turn the call over to David.
  • David A. Wolfort:
    Thank you, Rick and good morning. During our first quarter conference call in April, we indicated that we were not satisfied with our financial performance and we outlined some specific performance goals for the second quarter that included first of reducing our inventory by 25% and using the cash generated to pay down debt as both Mike and Rick described. Second, we're preserving cash including a reduction of our capital spending plan. Third, we further emphasize reducing our operating expenses while maintaining outstanding customer service and quality. And fourth, and on a longer term basis, garnering new business in greater market share at a time when customers are looking for strong financially stable and experienced suppliers like Olympic Steel. I'd like to review our second quarter progress and accomplishments for each of these goals. On the inventory reduction side during the first quarter, we had too much inventory due to inaccurate customer forecasts and we targeted a 25% reduction in inventory tonnage for the second quarter. As indicated by Rick and Mike earlier on the call, we actually reduced our inventory by 32% in the quarter with a demand environment that was weaker than the first quarter. Based upon recent July shipping and inventory levels, we are approaching our historical turnover rate of five times. Since the end of the second quarter, we've reduced inventory tons by another 11% and have targeted further improvements in inventory turnover for the second half of 2009. Our second tenant was cash flow and debt reduction and we established a goal of significantly reducing our debt and potentially eliminating debt by the end of 2009 as Rick took us through a moment ago. We've made significant progress towards that goal in the second quarter by reducing debt by 57 million or 64%. Further, we've reduced debt by another14 million in the month of July and anticipate eliminating all outstanding debt by year end. We anticipate enhancing our cash position with significant income tax refunds occurring in 2010. Third, scaling back on CapEx. We suspended many of our planned 2009 capital spending projects including our expansion in South Carolina and have now reduced our CapEx run rate to about $2 million per quarter. Our ongoing capital spending of our Steelman IT project and maintenance CapEx. We successfully implemented our Steelman IT system in Cleveland and Connecticut facilities in the first half of 2009 and have now migrated on beginning our operating under new system in our Chicago operation during the third quarter. Our strong balance sheet position and elimination of debt will allow us to consider appropriate capital spending for growth in 2010 and beyond. Further reductions of our cost base, again we established a goal to lower our cost base from first to second quarter to better align our cost structure with significantly depressed levels of steel industry demand as Mike outlined earlier. We accomplished this by sequentially saving $4.3 million or 13.4%. We've now established an annual expense base which is about $70 million or 37% lower than in 2008. Further expense reductions will be achieved as we will not renew our Philadelphia warehouse lease that expires at the end of 2009. We will continue to service all our customers' needs in the region through our other facilities in Pennsylvania, Connecticut and Ohio. Our fourth tenant was garnering new customers and we have experienced what we consider a flight to quality by certain well known OEM and customers who are consolidating their supply and expense base by looking for large experienced financially stable service centers and fabricators to meet their service and cost reduction needs. Olympic Steel meets these criteria and we are being awarded significant amounts of future business as a result. We're excited about these opportunities which will allow us to grow market share once OEM demand rebounds from the current depressed levels. In summary, our execution to right size our expense base, reduce our inventory, lay down our debt positions Olympic Steel well for return to profitability and for growth opportunities. We have built a company with a strong foundation and tested and experienced management team which serves us well in these difficult times. We are confident in our future and our ability to successfully emerge as an even stronger company when steel demand exits its depressed state. This concludes our formal comments and we will now open the call to your questions.
  • Operator:
    (Operator Instructions). And our first question will come from Sal Tharani with Goldman Sachs.
  • Sal Tharani:
    Good afternoon guys.
  • Michael Siegal:
    Hi Sal.
  • Richard Marabito:
    Hi Sal.
  • Sal Tharani:
    Couple of questions, you mentioned that on inventory you had a goal of 25% and you actually exceeded and reduced this tonnage by 32%. How are you seeing at the end users? Are they -- have they also running lean and have reduced inventories dramatically like the service centers have?
  • David Wolfort:
    Sal, David here. I feel that the short answer is yes. We see -- we see the end users reducing their, not only their finished goods but their raw materials corresponding quite frankly to lower thresholds of business.
  • Sal Tharani:
    Okay. And when I look at the third quarter, you mentioned in your press release that you'll see things improving from the price side. How is the shipment volume you're looking at? Do you think that third quarter volumes across the industry will be better than the second quarter?
  • David Wolfort:
    I think...
  • Michael Siegal:
    Marginally, yes. Go ahead, David.
  • David Wolfort:
    Sal, as Michael just indicated, we do see some marginal improvement. Of course, we've come from some very depressed ways as you well know and we saw the -- we saw that depression really start to ferment in the beginning of March and then obviously cascaded dramatically in to second quarter. And from our perspective, the weakest of the market occurred at the latter part of May and then we've started to see some hints of recovery here in June and July.
  • Sal Tharani:
    And yes, go ahead.
  • Michael Siegal:
    In particular, particularly in automotive obviously. It was a very big challenging second quarter from a volume perspective in automotive.
  • Sal Tharani:
    Are you seeing improvement in automotive now?
  • Michael Siegal:
    Yeah, marginal.
  • Sal Tharani:
    Okay. And lastly as a company, is your goal is to reduce the inventory further in the third quarter or you think that you will need to pluck some holes you might have in the inventory?
  • Richard Marabito:
    Well Sal, this is Rick. I mean our goal is to get back to our historical five plus inventory turn. We've talked about almost being there. So obviously, if demand remains about the same, you will structure lower inventories from Olympic Steel in the third quarter. But as we move to the second half, if demand does pick up, there -- but would want keeping a five turn there about and towards the back half of the year there could some increase in inventory. But right now, the answer to your question is yes, we're still lowering those inventories as we move through the third quarter.
  • Sal Tharani:
    Okay. Thank you very much guys.
  • Michael Siegal:
    Thank you, Sal.
  • Operator:
    Your next question will come from Tim Hayes with Davenport & Company.
  • Timothy Hayes:
    Hi, good morning.
  • Richard Marabito:
    Good morning.
  • Michael Siegal:
    Good morning.
  • Timothy Hayes:
    Just to further ask on the return on business, shipments in Q3 could be maybe marginally higher than Q2. That's -- typically Q3 would be below Q2 just for -- in terms of normal seasonal patterns, correct?
  • Michael Siegal:
    Yes.
  • Timothy Hayes:
    Okay. So that indicates a little bit of cyclical upturn, that's how I read it.
  • Michael Siegal:
    That's hard to say Tim, I mean the levels are so low that you had closed auto plants -- I don't know if it's seasonal or just -- is it better to anywhere near normal. So -- but you're coming of literally no production in certain cases.
  • Timothy Hayes:
    And then on the gross margins per ton, what -- in trying to figure out what we might see in Q3 given that the steel prices have turned higher and then you've written down the inventories. I would expect gross margins to not only increase from Q2 but may be materially?
  • Richard Marabito:
    Well, Tim its Rick. As you now we don't give specific guidance on any of the line items. I think you're right. Number one is as we go through third quarter we've obviously got a little more wind in everybody's sale in terms of the market price increases so that's a good thing and our anticipation is as I said earlier that the LCM that we took in the second quarter is it, so without giving any specific guidance, we're not looking for a massive improvement in gross margins, but yes, sequentially we should see some improvements.
  • Timothy Hayes:
    Yeah, turning off, my last question on the expected tax refund in 2010, any, even ballpark range on what that might be?
  • Richard Marabito:
    Tim, as we move through the back half of the year, we will, that number that you see on the income statement, includes federal, local and state taxes. The preponderance of it is federal. And the federal piece is, as we looked at it is refundable. So, if the year were to end at the end of June, we'd be in the $30 million ballpark.
  • Timothy Hayes:
    Okay, thank you. That's quite helpful;.
  • Richard Marabito:
    And you got to adjust to whatever happens in the second half.
  • Richard Marabito:
    I understand. Okay, great. Thanks.
  • Michael Siegal:
    Thanks Tim.
  • Operator:
    (Operator Instructions). We'll hear next from Luke Folta with Longbow Research
  • Luke Folta:
    Hi good morning, guys.
  • Richard Marabito:
    Good morning.
  • Michael Siegal:
    Hello.
  • Luke Folta:
    Hey just first a congratulations on your cost execution and the balance sheet improvements. You guys are doing a good job in this pretty difficult market. And my first question was regarding your mix sheet versus plate in the quarter. Can you provide us with that estimate?
  • Richard Marabito:
    Look we directly don't break out our product categories. As we've talked about on the last two calls, and you know that plate is a large product category for us and the plate market has been and continues to be softer than sheet markets.
  • Luke Folta:
    And typically less than your general 30% kind of ...
  • Michael Siegal:
    Yes. Yes.
  • Luke Folta:
    Okay. And then can you just talk about the competitive environment in the plate market, I understand there's a bit more of an inventory issue there and are you still seeing pricing below, are you going to you pretty competitive pricing in that market?
  • David Wolfort:
    Well, let me answer that, Luke, this is David. I think that we've seen the completion of the erosion in the market place, assisted by not only scrap elevating but the mills elevating prices and so we are seeing a recovery on that, but there in the second quarter there was extreme pressure on all products and particularly on plate, and we are seeing a recovery on the pricing on that and sort of less for connie and pricing in the market place, so it seems that most have faded their inventory when it gets down to the plate side of equation and we're not seeing those big depressions as we're in the early part of third quarter.
  • Luke Folta:
    Okay. And just lastly on our ability to pass through these price increases, any issues there or are your end users been cutting via tax prices arising?
  • Richard Marabito:
    Given from a commercial perspective, you'll always get a little bit of resistance early on you're of course in this great recession, you'll get dependents who don't believe that the pricing will stick. But for the most part, it is being absorbed. It's being absorbed because, number one, inventory levels are down dramatically, two there are no imports substantially coming into this country. Three, capacity at the mills has been taken offline responsibly. And when you add all of those together, we just have a very low inventory threshold as the MSCI has reported ten consecutive months and so what we really see the end result is, we are seeing the absorption of the pricing increase and we're seeing very little resistance to it as we move up.
  • Luke Folta:
    Great, thanks a lot guys and good luck to you.
  • Richard Marabito:
    Well, thanks.
  • Michael Siegal:
    Thank you.
  • Operator:
    And the next question will from Nat Kellogg with Next Generation Equity Research.
  • Michael Siegal:
    Hey, Nat.
  • Nat Kellogg:
    Hi, guys how are you doing? Most of my questions have actually been answered but just sort of two quick questions. I guess the first is on the cost side, you guys have done a nice job there and I am just sort of curious on how much of that is sustainable versus how much of that, I know you guys have talked a lot both Senior Management sort of deferring our just foregoing bonuses and obviously all the way down, the labor structure guys are working less and sort of tearing back. I'm just wondering obviously eventually you guys would like to begin paying bonuses again. So I'm just wondering as things creep up, how much of that comes back and how munch of that sort of as costs, you guys have permanently taken out and then also just -- the other one is if you guys could talk about what the lead times look like at the mills, and you guys are seeing the push on lead times or whether they are still pretty short?
  • Richard Marabito:
    Okay Nat, it's Rick I'll take your first one on expenses. Our expense reductions in terms of what we've done with the work force and what we've done with the paying compensation, those are permanent, so in other words, when we reduce compensation at the company, we poll the entire employee base if these are permanent. So if things start to come back, those aren't going to immediately revert back. We do as you said have an incentive structure that's been the same structure for many years and that is the pay for performance structure. So we didn't necessarily go into this market and say we're going to forego a bonus, we have a structure and an incentive structure that says, if we perform, the bonuses calculate out and if we don't, like now there are no bonuses. And then some of the other structural things that David talked about earlier like eliminating the least location in Philadelphia and some of the other things. Those are permanent and so what I would tell you is the things that are variable, you will not see in the expenses rising until you see the performance there. So, they will coincide with the profitability of the company. And David I'll let you handle the second question.
  • David Wolfort:
    Yeah, Nat. I'll answer the second part of that on the no lead times and the answer is that the no lead times are moving out. Product capacity is coming back on line, not significant, I think, but mills are running at about 52% or something along those lines last week. That's a market improvement however lead times are starting to move out fairly significantly as low inventory levels are fostering more spot buying in the marketplace. And then what we're seeing is even our lower threshold of inventory and more demand moving into the mills and lead times are expanding.
  • Nat Kellogg:
    Okay. That's great. Alright, well thanks guys, I'll hop back in the queue. Thanks for taking my questions.
  • Michael Siegal:
    Thank you.
  • Operator:
    (Operator Instructions) Next question will come from Mark Parr, KeyBanc Capital Markets.
  • Mark Parr:
    Hey, thanks very much. Good morning.
  • Michael Siegal:
    Good morning..
  • Michael Siegal:
    Hi, Mark.
  • Mark Parr:
    Hey, I one of you guys I think has got a Blackberry that's too close to the microphone.
  • Michael Siegal:
    Okay.
  • Mark Parr:
    So, you're getting a lot of Blackberry feedbacks.
  • Michael Siegal:
    That's me. Sorry.
  • Mark Parr:
    Alright. No worries. Hey, I just want to let you know just, one thing I am curious about is that with the rise in stock pricing that we're seeing in the federal side, how quickly does that flow through for Olympic Steel, I mean is that a 30 day lag, Dave, what do you think you're going to be able to realize here over the next couple of quarters?
  • David Wolfort:
    Well, Mark I think that the short answer to that is I think we are really mandated to realize all of the increases that go through. Obviously, our replacement costs reflect the announced published increases of the mills. And so we are compelled to recover all of that. We're really not lagging behind in that regard, because again, Mark the inventory levels are so low and there has been a reluctance for people to enter into longer term agreements, not that there aren't some that have, but there is reluctance to do that and so it's almost immediate. So there is less than a 30-day lag time today. I can't tell you what's going to happen in the next couple of months, but I can tell you that the initial price increase of June 1 and the subsequent re-think between June 15th and June 17th, we're absorbed almost immediately in the market place very little lag time there. And then the subsequent increases, we are out there promoting them.
  • Mark Parr:
    Okay, yeah there's...
  • Michael Siegal:
    Let me just comment on too Mark, I mean don't make -- don't misconstrue the fact that it's still very competitive at the service level towards the orders that are out there. So you know when to reduce inventories, when you get down to a sizeable -- there is still, its still competitive everyday in the market place.
  • Mark Parr:
    Okay, certainly would, would believe that. Other question just on nuance, Michael you've got a fairly significant part of your book that's rater the service centers and I'm just curious, if you're looking for say a marginal recovery in volume 3Q versus 2Q, is there any difference between the OEM side of your book as supposed to the service center side of your book in that upside momentum?
  • Michael Siegal:
    Well, I would tell you, we do expect more service centre activity, as the inventories are low and not everybody else stepped up on a continues purchasing basis. I think somebody asked early if there's holes, we expect to throw holes in the universe. The answers, yes, everybody has holes in their inventories. I think there is a lot of service centers today that are very lean in terms of their inventory, whether its by choice or by bank constriction, I do think that market has receded market pick up, we would also see a way of preponderance and the service centre kick-up in our order book, the accelerating probably a lot of discussion in the OEM.
  • Mark Parr:
    Okay. But anything on the ERP implementation? Is there any sort of expectation that we could have on EBIT margin perspective or is it really going to be more of the working capital benefit? Could you give us a little more color on what you think the benefits are going to be from a financial standpoint from this new system?
  • Michael Siegal:
    Mark I said from the beginning, sorry but that's not a question, we expect no margin improvement obviously, we'd expect that a complete cutover, the some have some expense improvement, but the reality is being on one system and have our visibility of the total inventory gives us an ability to perform better for the customer, whether or not that creates an EBIT margin, I would expect but a system is just a system, and it's people that have to execute the system. We just expect that from an overall cost perspective. And the ability for growth being absorbed and managed perspective having a single system really gives us significant advantages as our customers look for total national solutions
  • Mark Parr:
    Okay.
  • Michael Siegal:
    And having too many systems becomes a difficult communication aspect.
  • Mark Parr:
    Okay. And just if I could ask one last question on the market side, you have three basic product categories of Sheet, Plate and Stainless. Could you talk about the relative pricing momentum on those three categories 3Q versus 2Q from what you're seeing?
  • Michael Siegal:
    David?
  • David Wolfort:
    Yeah, Mark I'm happy to -- on the Sheet side I answered that earlier on one of the questions and we're seeing some forward momentum there. Stainless, we're seeing forward momentum there as the alumni reflects higher numbers for nickel and so forth.
  • Mark Parr:
    Right.
  • Richard Marabito:
    And the momentum has been going forward. On the Plate side, we see less forward momentum but, really no decay here. So its, I think its reached its bottom. The mills are asking for more money for that product and they are getting it and lead time start to marginally expand and the scrap cost more money obviously. So, the Plate is the lager of the other two but they're all moving forward.
  • Mark Parr:
    Okay, thanks very much for that color and good luck on the second half.
  • Richard Marabito:
    Thank you.
  • Michael Siegal:
    Thanks, Mark.
  • Operator:
    And next in queue we have Sal Tharani with Goldman Sachs.
  • Sal Tharani:
    Hi guys you mentioned you'll closing one of the warehouses, which one is that?
  • David Wolfort:
    Philadelphia, Sal.
  • Sal Tharani:
    Okay. Is there other plans or this is it?
  • David Wolfort:
    That's it, to date and a part of that is fostered by as Rick took all of us take you through that, its one of own of our only two leased facilities, the lease is expiring at the end of the year and we've put an awful lot of capital in our Chambersburg, Pennsylvania facility, we've expanded that a couple of fold over the last three years and so we're absorbing that facility into the Chambersburg facility which is in relative distances reasonably close.
  • Richard Marabito:
    Right, it's just really important for everyone to understand and we are not exiting the market. All we're doing is servicing our customers through a lower cost solution because as David said, we've got facilities in the region that can do that.
  • Michael Siegal:
    Yes Sal and the only other aspect which David I think mentioned is in our South Carolina operation where we brought the land and brought the building, and we suspended the erection of that building. So we basically have a structural building that has never been erected at this point and that can be either erected in South Carolina or any place else that we choose to.
  • Sal Tharani:
    Okay. And Mike with the press is now moving on HydroCoil above 500. Are you seeing any opportunity in the import market or any offers which can entice you?
  • Michael Siegal:
    Actually the offer is nothing yet enticing us.
  • Sal Tharani:
    Okay, thank you.
  • Operator:
    (Operator Instructions). And we have no further questions. I'll turn the call back to our presenters for any additional or closing remarks.
  • Michael Siegal:
    Thank you. As a reminder it is our policy not to provide forward-looking earnings estimates for the upcoming quarter or year. And not to endorse any analyst sales or earnings estimates. We anticipate we're releasing our third quarter 2009 earnings around October 29th. So, this concludes our call. Again, I really want to thank all of you for your interest in Olympics Steel. And let's hope for better times. Thank you everyone.
  • Operator:
    And once again that does conclude today's teleconference. Thank you all for your participation.