Ladies and gentlemen, thank you for standing by, and welcome to the Apogee’s Fiscal 2020 Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions].

I will now like to turn the conference over to speaker today, Jeff Huebschen. Thank you. Please go ahead, sir..

Thank you. Good morning and welcome to Apogee Enterprises fiscal 2020 second quarter earnings call. With me today are Joe Puishys, Apogee's Chief Executive Officer; and Jim Porter, Chief Financial Officer.

I'd like to remind everyone that there are slides to accompany today's remarks, which are available in the Investor Relations section of our Web site. During this call, we will reference certain non-GAAP financial measures.

Definitions of these non-GAAP measures and a reconciliation to the nearest GAAP measures is provided in the earnings release we issued this morning, which is also available on our Web site.

I'd like to remind everyone that our call will contain forward-looking statements reflecting management's expectations, which are based on currently available information. Actual results may differ materially. More information about factors that could affect Apogee's business and financial results can be found in our SEC filings.

And with that, I'll turn the call over to you, Joe..

All right. Thanks, Jeff, and thank you to everyone who has joined us this morning. Overall, this was another solid quarter for Apogee. We delivered on our commitments and made very good progress in a number of areas.

This morning, I’d like to discuss the highlights in the quarter and the trends we are seeing across our businesses, talk about the progress we’re making on several key initiatives to advance our long-term strategy, and then I’ll turn it over to Jim for more details on the quarter and our guidance.

Regarding the second quarter, highlights, and trends, let me start by saying first we made significant progress toward completing the last of the legacy EFCO projects that we acquired. We’re on track with our schedule and cost estimates.

We expect the building will be largely enclosed by the end of October, and as is extremely normal for large construction projects, we will have residual activity that will stretch over the next few quarters. We’re also continuing to pursue potential cost recoveries, some of which we could see later in the second half of this fiscal year.

More broadly in Architectural Framing Systems, we are encouraged by the trend line in this segment with sequential revenue growth and margin improvement in each of the past few quarters, in spite of incurring costs associated with the supply chain synergy project I’ll discuss shortly.

In particular, the EFCO business is starting to demonstrate its long-term potential performing nicely in the quarter and year-to-date. The EFCO team has made significant progress increasing productivity, quality, controlling its costs and improving pricing.

Later in my commentary, I’ll speak more about some strategic moves we’ve made to drive further progress in margin expansion in our Framing Systems segment. Architectural Glass has delivered 13% sales growth and more than tripled operating income compared to last year’s second quarter.

While the segment certainly had a modest comparison, we’re pleased with the substantial year-over-year improvement. This year-over-year margin gain would have been even better if not for the start-up costs related to our Architectural Glass growth initiative which reduced segment margins by about 100 basis points in this quarter.

We’re excited about this opportunity, and I’ll provide more details about this investment in a few moments. Our Glass segment has also seen some negative impact from the stronger U.S. dollar. This is something that is affecting most U.S. manufacturing companies. Over the past year, the dollar has steadily strengthened versus other currencies.

This disadvantages our U.S.-based glass operations and increases competitive intensity, particularly from European competitors. For this reason, we’re reducing our full-year outlook for Architectural Glass and we will continue to monitor changes in the competitive environment.

In Architectural Services, while we anticipated that revenues would be lower this quarter, due solely to timing of projects in the backlog, the segment performed better than we expected driven by strong project execution at the construction site. Based on year-to-date results, we’re increasing our full year outlook for Architectural Services.

In addition, the Services segment was awarded several new projects during the quarter pushing its backlog to over $500 million. This record backlog further increases our confidence in the longer-term outlook for this segment and gives us good line of sight to revenues over the next two fiscal years.

Finally, in Large Scale Optical, we continue to deliver strong operational performance improving on its impressive operating margins. In particular, our team has had great success in improving our mix to higher value-added products, which has benefitted both revenues and margins.

So overall, a solid quarter and we feel very confident about how we’re positioned for the remainder of the year. I’ll now provide my view of the end markets. Looking at the conditions in the economy and our end markets, all of you see the same headlines I see; so it’s hard to argue that there is not some uncertainty in the economy.

In spite of the headlines, we still see reasonably healthy bidding activity. It continues to feel like we’re bumping along the top, an environment in which Apogee can continue to grow. Based on U.S.

government data, while this economic expansion is the longest since World War II, it has also been the weakest of the 11 recoveries, and overall building in the non-resi sector has remained below prior recoveries. The office sector, which is most important to us, remains strong as does healthcare and education, also key to our portfolio.

Office vacancy rates are at decade plus low levels as is rental rates as they come down – or as they are rising, I apologize, and consumer spending and job growth remained reasonably strong. Bottom line is that the non-resi market appears to remain balanced as the U.S.

economy continues to migrate from manufacturing to services; that mix works in our favor.

Looking back at our company, the project wins we’ve had in Architectural Services as well as our pipeline reinforce our confidence and validate that aspects of the commercial construction market are not in decline, and I expect we could see further backlog growth in Services in the third quarter.

As I mentioned earlier, our biggest economic concern right now is the impact of the stronger U.S. dollar which we continue to monitor.

Looking at our strategy and initiatives to drive growth and margin expansion, regardless of what’s going on in the economy and our end markets, we are focused on managing what we can control to better position the company for long-term earnings growth and more consistent performance throughout the economic cycle.

We’ve had a lot of success executing our strategy over the past eight years, and Apogee is clearly a stronger company than it was in fiscal 2012. We’ve diversified our product and project mix both within each of our segments and across the company.

We’ve expanded the growth opportunities available to the company through new product innovation and geographic expansion, and we’ve improved the efficiency and productivity of our operations. I’m confident this strategy is still the right direction for Apogee.

Over the past several quarters, we’ve had some near-term challenges, most of which are behind us, but throughout this time we’ve not been sitting still. We’ve been moving forward with a number of initiatives to advance our strategy. Let me provide some detail on these.

First, we continue to believe our Framing Systems segment has the largest opportunities for long-term growth and margin expansion as well as stability throughout an economic cycle. We’ve had success and we are accelerating our efforts.

Towards that end we recently created and appointed a new leadership team so that for the first time we’ll have combined P&L responsibility for our entire Framing Systems segment, which is previously operating as six independent businesses.

This new leadership team under the command of a proven P&L leader that I brought into the company a year and a half ago is focused on accelerating our progress by increasing integration and driving synergies across all of our Framing Systems businesses.

For example, during the quarter, we took initial steps to increase supply chain integration and optimize our facility footprint by closing a manufacturing facility and shifting production to other Apogee locations.

Additionally in Framing Systems, we completed a significant facility investment at our main EFCO operations center this quarter designed to streamline the processes for handling and shipping finished goods to enable further shop floor efficiency improvements.

This investment is already having a positive impact on EFCO’s productivity, quality and margins. The past two quarters we’ve mentioned a growth initiative in our Architectural Glass segment that we would like to provide some additional details on today.

We’ve invested in a new facility located in Texas which we will expect to be operational in our fiscal third quarter. This facility will be focused on the short lead time segment of the Architectural Glass market.

While our Viracon glass business is the established leader in mid and large-sized projects, this facility marks our entrance into a portion of the market in which Apogee has not historically participated.

As short lead time smaller projects comprised the largest sub-segment of the overall Architectural Glass market, we believe this expansion offers significant long-term growth potential in all phases of the economic cycle.

This new facility will also supply some of the glass needs of our Framing Systems segment generating further synergies across our portfolio. We’re excited about this opportunity which expands our addressable market and continues our efforts to diversify away from the most cyclical large project segment of the non-resi construction market.

Lastly, we’ve launched an initiative to look at opportunities for material procurement savings across all of Apogee. Historically, our purchasing has been mostly decentralized across our nine individual operating units. We’re analyzing all categories of spend for opportunities to leverage our scale and drive synergies in our supply chain.

We’ve engaged with a leading advisory firm to add expertise and help accelerate these efforts. We’re still in the early stages of this initiative but believe the opportunity will have meaningful impact on our profitability in fiscal '21 and beyond. We’ll have more to say about this in the future quarters.

We have an exciting set of opportunities ahead of us, most of which are largely in our own control which gives us confidence in our plan to deliver continued earnings growth over the next several years. With that, I’ll pass it over to Jim who will provide more details on the quarter and our outlook.

And before we take questions, I’ll return with a few additional comments.

Jim?.

Thanks, Joe. Good morning, everyone. I'll begin with our consolidated results, which you can see on Page 5 of our earnings presentation. Total revenue came in at $357 million, down slightly from last year’s second quarter with strong growth in Architectural Glass offset by the expected lower revenues in Architectural Services.

Operating margin of 7.7% was down from adjusted margin of 8.1% in last year's second quarter. Lower margins in Architectural Services and Framing Systems were partially offset by improved margins in Architectural Glass. EBITDA came in at $39.2 million compared to adjusted EBITDA of $40.6 million in last year's second quarter.

Net interest and other expense increased to $2.2 million on higher debt levels and the tax rate of 24% was comparable to last year’s level. Putting it altogether, earnings per share were $0.72. I’ll now turn to segment results on Slide 6. Framing Systems revenue was $187 million, down slightly from last year's $189 million.

Operating income was $15.5 million with an operating margin of 8.3% compared to adjusted operating margin of 10.2% in last year's second quarter. The lower margin was due to less favorable project mix as well as cost associated with initial steps of implementing the supply chain synergy projects that Joe mentioned.

These costs add about 100 basis point margin headwind in the quarter for Faming Systems. Architectural Glass had a strong year-over-year improvement over an easy prior year comparison. Glass revenue grew 13% to $99 million reflecting increased volume and a more favorable sales mix.

Operating margin improved to 6.5% compared to 2% last year primarily driven by operating leverage on increased volume and improved productivity in our factories.

Glass segment margins were negatively impacted in the quarter by about 100 basis points from start-up costs related to the new facility for the growth initiatives serving the short lead time segment. Year-to-date, we have incurred $1.6 million of our estimated $4 million to $5 million of start-up expenses for this initiative.

As expected, Architectural Services revenue decreased to $62 million from $76 million in last year’s second quarter due to timing of projects. Operating income was $4 million with operating margin of 6.5% down from 10% in last year’s second quarter due to reduced operating leverage on the lower revenue base.

Architectural Services continued to have great success in its markets with several new project wins during the quarter which increased the segment’s backlog to a record $502 million. Our Large-Scale Optical segment grew its revenue by 2% to $21 million. Segment operating margin increased to 22.3% compared to 20.8% in last year’s second quarter.

Both revenue and margin benefitted from a more favorable sales mix in the quarter. Turning to Slide 7, I’ll briefly touch on cash flow and the balance sheet. We had a solid quarter at cash flow rebounding from a slow start to the year in the first quarter. Fiscal year-to-date, we have now generated $18 million of cash from operations.

We’re still below last year’s level, primarily due to increased working capital related to completing the legacy EFCO project which has reduced the year-to-date cash flow by $21 million. We expect this working capital impact will be much less in the second half of the fiscal year.

Year-to-date, capital expenditures were $23 million and we continue to expect full year CapEx in the range of $60 million to $65 million. During the quarter, we used our positive cash flow to pay down $20 million of debt reducing our total debt to $273 million, down from $293 million at the end of the first quarter.

As we move through the rest of the fiscal year, we’ll look to deploy excess free cash flow to further reduce debt and we’ll also continue to evaluate opportunistic share buybacks. Turning to Page 8 for the outlook, we are maintaining our guidance for the full year.

We are adding some costs into the fiscal year for the supply chain productivity and purchasing synergy projects that we mentioned that were not previously factored into our outlook. We believe these are high return investments that will increase our future profitability. However, most of the positive impact will not be seen until next year.

That said, we’re working to offset these investments in the back half of this fiscal year as these additional costs are a factor that could push us towards the low end of our guidance range.

The upper end of our guidance range assumes more favorable project schedules which drive higher revenues in the year, increased order volume in the shorter lead time segments of our business and accelerated progress on various margin improvement initiatives. We’ve made a few adjustments to our segment guidance, which is on Page 9.

Our full year guidance for Framing Systems is unchanged. As of our last earnings call, we did expect Q3 to be strongest quarter for Framing Systems. However, due to customer project schedules there were some Framing Systems revenue pulled forward into the second quarter and some is pushed out into the fourth quarter.

We also are expecting an additional roughly 100 basis points of margin headwind for Framing Systems in the third quarter from additional costs associated with the implementation of the supply chain projects with offsetting benefits more weighted to starting the fourth quarter and next fiscal year as these projects kick in.

So at this point we expect Framing revenue and margins to be sequentially lower in Q3 with a rebound in the fourth quarter. Just as a reminder, timing shifts of customer construction project schedules is not unusual for this segment and we remain focused on effectively servicing our customers.

In Architectural Glass, we now expect full year revenue growth in the upper single digits, down a bit from our previous estimate of approximately 10% growth. This is primarily due to the increased competitive pressure related to the currency exchange rates that Joe discussed.

We are also slightly reducing our full year margin outlook for Architectural Glass to a range of 6% to 7% compared to our previous forecast of approximately 7%.

We continue to expect approximately $4 million to $5 million of total start-up costs for the new Architectural Glass growth initiative which will reduce full year Glass margins by 100 to 150 basis points. These start-up costs will have the greatest impact in the third quarter as we begin operations.

We should begin to generate limited revenue in the fourth quarter and we expect this initiate will continue to ramp up in fiscal '21 making positive contributions to both revenue and operating income.

Our outlook for Architectural Services has improved compared to our previous guidance based on solid year-to-date results and some new project wins that will begin to flow this fiscal year, especially in the fourth quarter.

We now expect full year Architectural Services revenue will decline by approximately 10%, which is compared to our previous guidance of a decline of approximately 15%. And we now see full year margins of approximately 7% at the high end of our previous range of 6% to 7%.

The project wins and backlog bode well for the Services segment as we look ahead to fiscal 2021 and fiscal 2022. Finally, our full year outlook for Large-Scale Optical is unchanged as we continue to expect mid-single digit growth in operating margins of approximately 25%.

So we have some puts and takes but net-net we feel good about our full year guidance. With that, I’ll turn the call back over to Joe..

Thanks, Jim. To wrap up, we were pleased with the progress we have made through the first half of the fiscal year.

We’re delivering on our commitments and we see a lot of positive momentum across our businesses, and we’re taking action to sustain this momentum with a number of strategic initiatives that should contribute to revenue growth and margin expansion as we look ahead to next fiscal year.

These initiatives are underway and some are already having a positive impact. I continue to believe the future is bright for Apogee. We have a terrific team. Our business strategy has strengthened our company in an exciting set of opportunities ahead of us. With that, I’d like to open it up for your questions. Sonia, if you could please do so. Thank you..

[Operator Instructions]. Our first question comes from Chris Moore of CJS Securities. Your line is now open..

Hi. Good morning, guys..

Hi, Chris..

Good morning.

Maybe, Jim, just start again on the – talk about kind of the puts and takes in terms of reaching the higher and lower end of EPS guidance for this year?.

Yes. So the two primary factors are really going to be the kind of timing of the work that we have in front of us that we’re pursuing and the ability to fill in, in the short lead time parts of the business. And those are going to move the needle in revenues and leverage and flow through in the different businesses associated with it.

And then the timing of the potential benefits that we see from these initiatives coming in, we’re trying to ramp up each of those initiatives as quickly as possible and trying to generate savings within this fiscal year to offset the costs associated with it, which is more of a headwind in the third quarter before the benefits start to kick in.

But depending on how rapidly we’re able to see some of those benefits come into this fiscal year, that’s a driver that could push us to the higher end. The lower end assumes that we have more of the costs and we don’t have the revenue upsides..

Got you, thanks.

And then on the new Glass initiative, maybe Joe, can you just talk about kind of who’s the competition there? Are there any unique challenges from a labor standpoint or otherwise associated with this?.

Yes, Chris, again, I have been a little bit quiet on this for strategic reason or competitive reasons, and I’ll continue to limit my comments. We are actually launching this quarter that we’re in right now Q3, so there will be more for me to say as we go forward.

But this will allow us to compete in the regional market where very short lead times are required. We have a very automated facility. The people, which is far more limited than we’re used to in our other factories is fully in place.

We’re using existing leadership from the company at the top of this operation, and so we’re confident we have the leadership team and the factory workers in place, and we will be able to compete in this very quick, less than two weeks lead time from order to delivery marketplace, and it’s been something I’ve frankly been envisioning for our company since I came.

This investment is timely for us.

We’re obviously vulnerable to global competition on the large monster towers that are not only highly volatile from an end market and revenue stream, but also such long lead times that international players can’t compete for that which is not possible in this rapid short lead time business, which is over half the market as this segment.

So, it’s a regional play for us. I’m not going to get into our competitors. We’re going to do our best to be a very good competitor ourselves in this space..

Chris, we strategically pick taxes which is a very big and robust construction market, and there’s short lead time, smaller project market has the opportunity to differentiate based on predictability, quality, and service levels which our company has a reputation for and we think will allow us to be very competitive..

Got it, I appreciate it. I’ll jump back in line. Thanks, guys..

Thanks, Chris..

Thank you. And our next question comes from Eric Stine of Craig-Hallum. Your line is now open..

Good morning, everyone..

Hi. Good morning, Eric..

Good morning. Maybe and I understand that you may not share a whole lot of details here, but I know you picked Texas first.

I mean, is this something that we should think of you kind of taking a measured approach as you look at other markets? And when we think about the type of investment that is necessary, you kind of called out the 4 million to 5 million, I mean is that roughly a good way to think about what it would mean per location if you were to expand beyond Texas?.

Yes. Well, Eric, I’m not going to comment on our strategy going forward. Obviously, as I mentioned, it’s a regional play. I think these initial P&L start-up costs are indicative of what it requires. Capital layout is much more modest than a large glass operation and it depends on whether you’re building a new building or renting a facility that exists.

They are certainly within our capital wheelhouse [ph] if we chose to do further regional expansion..

Chris, at a full facility, I think we’ve talked about this before, I mean total capital cost is going to be roughly $20 million. And this start-up cost, we’ve called out, I think there’s a certain degree of those costs which are kind of the first time you do something like this that we would expect that we’d be able to learn from in the future..

Got it, okay.

And then maybe since this market’s a little bit different than where you have historically been, is there a retrofit component to this or how does this maybe play into some of your retrofit goals?.

Yes, we could use this facility to supply glass for a retrofit.

We are planning to use this facility to supply glass to our existing Framing Systems businesses that will include pulling through the retrofit initiative, which continues to be a very strong initiative for us and we have passed and will pass the $50 million order input from retrofit or renovation this year. And I’m very pleased with it.

And this business will contribute to that. It’s not the driving force behind it though..

Okay, fair enough. Maybe last one for me, just going back on some of the operational challenges that goes back a number of quarters. I know last year – I’m sorry last quarter, you kind of said that some of the hiring challenges in dealing with the high demand in glass that that was kind of a work in progress.

Another solid quarter, is this something that you would still characterize it in that way or do you think it’s kind of something that you’ve put behind you?.

Yes, we’ve pretty much put the hiring issues behind us in glass.

When I referenced some operational challenges in the past several quarters, I was clearly referring to the projects we acquired and acquisition of the EFCO business, which I’ve commented on in this call, and last summer the issue we had with the glass operations that is behind us and we’re at the staffing levels we need to meet current demand in glass..

Okay..

Hiring across the U.S. is still a challenge in general. Most of our businesses, we’re at levels. It’s one of the more challenges all of us manufacturers in the U.S. have is finding talent. But it’s not something we’re calling out as an operational concern for us. And the big one was glass and that is behind us..

Okay. Thanks..

Thanks, Eric..

Thank you. And our next question comes from Julio Romero of Sidoti & Company. Your line is now open..

Hi. Good morning, everyone..

Hi, Julio..

Good morning..

So wanted to ask about the strategic growth initiative in glass. Historically, when you’ve talked about that shorter lead time in market from – you’ve talked about education, healthcare as more of that type of work and less office type of projects.

Is that the same way we should think about any future work that you’d be targeting in Texas?.

It really covers all segments. What it covers is really kind of smaller office, if you think more like three or four kind of storey type office building, but it really is geared to service all segments of the marketplace people. Store front less than – think of buildings that are generally less than five stories.

Again, that’s about half of the Architectural Glass market, whereas our existing glass business generally is focused on buildings above 10 stories. The customer base is similar.

Many of the general contractors and glazing contractors that are glass, people sell to, it’s the same, but they’ve never been able to go to our existing facility for these kinds of lead times. Their operations are not set up for that with the kind of glass and the coatings we have traditionally delivered..

Got it, that’s helpful.

And then on the supply chain synergy projects in Framing, can you talk about how long of a runway you think this could potentially be a driver for you on the margin side and maybe what kind of annual margin benefit roughly we can expect going forward for that?.

Yes, Julio, really what we’re doing is when we look at this particular initiative is looking at kind of our extrusion, finishing, fabrication supply chain across three of the Framing Systems businesses. And we really in the third quarter we should be complete in terms of implementing this kind of new supply chain flow, if you will.

And then should start to see benefits from it in the fourth quarter as it kind of ramps up. Fourth quarter tends to be a little bit softer seasonally, but that’s when we’ll start to see the benefits..

Got it. Thanks very much and best of luck in the back half of the fiscal year..

Thanks, Julio..

Thank you. [Operator Instructions]. And the next question comes from Jon Braatz of Kansas City Capital. Your line is now open..

Good morning, everyone..

Good morning, Jon..

Joe, just want to touch on the strong dollar and its impact on your business. You cut your guidance back a little bit in the Architectural Glass because of that.

Are you just no longer competitive in many projects now or have you lost any business? Can you talk a little bit about the impact the stronger dollar is having on maybe the bidding and the activity levels that you’re seeing?.

Sure, yes. Jon, we’re still – our Glass segment is still the market leader and share demand in the large projects greater than 20 stories, meaning commercial towers and 5 to 10 to 15 storey buildings, which we call the midmarket. Both those markets make up a little less than half the end market. They’re about equal.

And our business is the largest demand – share demand player in that space. But we used to have such a large share demand in the large monumental projects that we had nowhere to grow, it was nothing but downside.

And right now, at about $1.10 per euro – when I arrived here, we were even in the midst of just coming out of the Great Recession, we were exporting about $40 million of glass. The dollar and the euro was about a $1.30 to the euro at the time. I believe that could be more parity based on the economies in Europe and the U.S. at the times.

We’re not counting on it going back there. As it started to go back from a $1.05 to $1.20 about two years ago, we started to see relief on this issue for us. And now that it’s kind of plummeted, it got below $1.10 a week or so ago. It’s back at $1.10 now. Yes, we’ve lost some large projects.

I’m very pleased that our business has a very disciplined approach to selecting projects. We are not going to chase low margin work. Right now, our European competitors have an advantage on price with the conversion at these rates and European cost basis.

And that’s why we’re making efforts like we have in this small projects move that we’ve been working on for many years. We’re still winning a lot of work in this space, but we’ve lost some share recently and we’ve seen some awards go to European competitors. They still have to deliver. We’re a great competitor.

Jim highlighted our strengths in our glass businesses; our quality, delivery and how we stand behind our product. But first and foremost, we’ll remain disciplined in project selection. That is the forefront of why our Services segment has been doing so well is their disciplined approach to what projects they will go after.

But we’re still the share leader in the large and mid projects as we stand here today and expect we will be going forward..

Okay, Joe, thanks. One other question. Obviously, you’re trying to recover some costs associated with the EFCO business and you talked about in the last quarter and this quarter.

As it stands today, are you more confident about recovery of some of these costs that you incurred compared to maybe where you were three months ago?.

Yes, I’m confident I wouldn’t say more or less. I’m very confident we will or I wouldn’t say it. I expect we will see some recovery in the second half of the year. Obviously, they’ll be non-recurring and we’ll call them out. But we deserve what we’re going after. We will fight hard. It’s not my operating people that are distracted.

It’s kind of the corporate team. And I’m fine with that. And my operating team are focused on running the business, driving growth, executing the completion of that project we’ve referred to. But my confidence remains where it was that I feel just in saying I believe we will see recovery and we will see some this year.

But these things take time and we’ll report it as soon as we have news to report..

Okay..

They are not – but I want to be clear, Jon, they’re not in our outlook..

I understand. Okay. All right. Thank you..

Thanks, Jon..

Thank you. And ladies and gentlemen, this does conclude our question-and-answer session. I would now like to turn the call back over to Joe Puishys for closing remarks..

Yes, thank you, Sonia. Team, I feel confident we did what we said we would do. We’ve hit our numbers. We remain focused on long-term growth. And while we can’t necessarily control the end markets, we still feel they are relatively balanced and we are acting on what we can control, which is our cost and margin expansion opportunities at Apogee.

I look forward to another solid quarter when we talk to you in about three months. And good luck and we’ll look forward to follow up with some of you over the next few days and weeks. Have a great day, everybody..

Ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect..