Michael Elich - President & CEO Jim Miller - CFO.

Jeff Martin - ROTH Capital Partners Josh Vogel - Sidoti & Company.

Good day, everyone, and thank you participating in today's Conference Call to discuss BBSI's Financial Results for the First Quarter ended March 31, 2014. Joining us today are BBSI's President and CEO, Mr. Michael Elich, and the company's CFO, Mr. Jim Miller. Following their remarks, we'll open the call for your questions.

Before we go any further, I would like to take a moment to read the company's Safe Harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. The company's remarks during today's conference call may include forward-looking statements.

These statements, along with other information presented that are not historical facts, are subject to a number of risks and uncertainties. Actual results may differ materially from those implied by these forward-looking statements.

Please refer to the company's recent earnings release and to the company's quarterly and annual reports filed with the Securities and Exchange Commission for more information about the risks and uncertainties that could cause actual results to differ.

I would like to remind everyone that this call will be available for replay through May 30, 2014, starting at 3:00 p.m. Eastern this afternoon. A webcast replay will also be available via the link provided in today's press release, as well as available on the company's website at www.barrettbusiness.com.

Now, I would like to turn the call over to the Chief Financial Officer of BBSI, Mr. Jim Miller. Sir, please go ahead..

direct payroll cost and PEO gross revenues in the first quarter decreased slightly to 84.3% compared to 84.4% in the same quarter last year due to a small increase in overall average customer market percentages on a year-over-year basis.

Workers compensation expenses at percentage of gross revenues was 4.4% which represented 15 basis point increased over the same quarter a year ago primarily due to small increases in the provision for estimated workers comp claim cost and in safety incentives, and through a lesser extent the initial cost of new ACE program.

Looking ahead to the second quarter of 2014, we anticipate the level of gross revenues for workers comp extends to be in the 4.4% to 4.5% range. For the first quarter, payroll taxes and benefits as a percentage of gross revenues remained flat at 10% compared to the year ago quarter as payroll tax rate for 2014 remain comparable to 2013.

SG&A expenses increased 22% to $14.4 million compared to $11.8 million in the first quarter of 2013 primarily due to the higher management payroll and other variable expense components within SG&A to support continuous business growth. The benefits for income taxes in the first quarter was $2 million which represented tax rate of approximately 35.5%.

We expect this similar rate to continue for the balance of 2014. The income tax rate has increased comparable or as compared to 2013 as we anticipate generating lesser amount of employment tax credits during 2014 resultant from uncertainties surrounding the renewal of the Federal Employment Tax Credit program.

For the first quarter of 2014, we recorded a net loss of $3.6 million compared to a net loss of $2.5 million in the same period last year.

The diluted loss per share in the first quarter of 2014 was $0.50 compared to $0.36 per diluted share a year ago quarter consistent with our historical experience the net loss for the first quarter is due primarily to the seasonally higher burden of employment taxes during the first several months of our year.

Now turning to the balance sheet at March 31, our cash, cash equivalent to marketable securities and restricted maturities totaled $147.9 million, up from $143.2 million at December 31, 2013. At March 31, 2014 approximately $15 million of our cash is unencumbered or said another way not part of our captive insurance subsidiary or our new ACE program.

We also have no outstanding borrowings on a revolving credit facility. During the first quarter we funded $20 million of cash into the new ACE trust account has an initial deposit for our new workers comp insurance arrangement with ACE.

These funds are included as a component of restricted marketable security and workers compensation deposits within long-term assets on our balance sheet. The balance in the ACE trust account will continue to build as we transition customers into the ACE program throughout the remainder of 2014.

We generated approximately $7.7 million in operating cash flow during the first quarter of 2014 in large part due to the accrual of first quarter payroll taxes which are paid out in the month following the end of the quarter.

Much of our cash generated from operations is in the form of free cash flow except for the build in workers compensation and safety incentive liabilities as cash used to fund our insurance subsidiaries is primarily generated from workers compensation expense we recognize that do not immediately pay out to third parties.

As we discussed on our last call, during the first quarter of 2014, we began our new workers compensation (inaudible) arrangement with ACE that provides coverage to BBSI employees in California.

The arrangement typically known as the front end program will provide BBSI with at least of a licensed admitted carrier in California to issue policies on behalf of BBSI without the intention of transferring any of the workers compensation risk for the $5 million per claim.

This arrangement addresses the requirement of California Senate Bill 863 which prohibits BBSI from continuing its self-insurance program in California beyond January 1 of 2015.

Now turning to our outlook for the second quarter of 2014, we are expecting gross revenues to increase at least 15% to a range between $780 million and $800 million, compared to $675 million in the second quarter of 2013. The projected increase of 2014 second quarter gross revenues is based upon a recent revenue trend.

We expect diluted income per common share to increase at least 16% to a range between $0.93 and $0.98, compared to $0.80 in second quarter of 2013. I look forward to addressing you again on our second quarter earnings call.

Now, I'd like to turn the call over to the President and CEO of BBSI, Mike Elich, will comment further on the recently concluded first quarter and our outlook for the second quarter of 2014.

Mike?.

Good morning, and thank you for being on the call.

The mid first quarter of 2014, we recognized more clearly that we have been experiencing growing pains within operations resulting from growth fatigue related to doubling the company over the past two years, maturing of the organizational foundation through a build in senior management, as well as retooling of branch operations to accommodate business units and how we focus on client development in teams, and the implementation and adoption of HRP, our payroll and data platform along with the implementation and transition of our insurance model as resulted of SB 863.

It is as easy to see in hindsight, looking forward but we believe we have turn the corner in the most recent quarter adapting to effects resulting from third and fourth quarter of 2013 with this experience brings new perspective as to how we should look at the organization on a go forward basis..

Related to canceled clients, we did see an impact created by canceling of larger than normal clients in the fourth quarter of 2013 and January of 2014. As a result, we saw a loss of revenue is impacting our revenue base through the vetting process that once replaced will return us to our more recent trend.

By identifying canceling clients who were utilizing a disproportionate level of BSSI resources, we expect to recognize a long-term increase to efficiencies in quality of operation which will benefit remaining and future clients. Also in the quarter, we saw an 8% billed in same-store sale.

Looking at the current quarter compared to fourth quarter 2013, we saw 38% of clients add new headcount, 35% of our clients reduced headcounts, 27% of our clients remained unchanged. We saw 42% of our clients increase hours worked, while 57% of our clients reduced hours worked. 43% of our clients increased hours worked, while 53% reduced hours worked.

Excuse me, I want to back up a second. We saw 42% of customers increase payroll while 57% reduce payroll. We saw 43% of our clients increased hours worked, while 53% of our clients reduced hours worked. In comparison to fourth quarter, we saw 43% of clients increase hours worked versus 57% of clients in the fourth quarter.

In a sense we are seeing -- we saw a little bit of a flip from what we have seen historically from not so much headcount add, but we saw a disproportionate change in hours worked which is ultimately affecting payroll we believe.

Related to our regional pipeline growth, we continue to see strong momentum across our region in serving the operation as of -- as to forward looking pipeline strength, the general market outlook, we are not seeing change in momentum and change -- and things seem to be continuing on track related to new client add.

Related to structure and organizational build, we continue to expand and build business unit to support or operational integrity, matching resources to support client demand.

One reason we vet clients and cancel when necessary is to optimize how we are allocating time to ensure we are not just proportionally supporting clients, we are not making progress within the model. Currently, we have 32 business unit supporting 52 branches.

We currently have one business unit being built and are forecasted for an additional three business units to be built in the first half of 2014.

We look to capacity utilization to determine our rate as infrastructure built to support our net new client add and we will adapt as we see capacity strained at the -- by rates that we are building client -- bill clients.

As we look at quality and underwriting risk, in the quarter we finalized the funded arrangement which will satisfy our workers compensation insurance requirement in California related to our current self-insured program that goes away January 1, 2015 as a result of SB863.

Today, we have transitioned 215 new and existing clients into systems with very little disruption. First indication is that that this new arraignments has been very well received and should work to complement our overall offering in the future.

Related to workers compensation, in the quarter we continue to make progress on a reserve strengthening progress which we estimate to be completed in the next 60 days.

This has been a process focused on taking dollars that have been accrued in IBNR into incurred on individual claims which is intended to get us closer to an ultimate expected level on all claims.

Following completion of this process, it is our plan to employ an outside resource to evaluate the sample of claims to ensure we are not missing anything in the process.

In the quarter, we continue to see positive trends related to claim frequency reductions relative to payroll growth, total claim count build be in the neutral to even and settlement of more complex claims increasing.

Moving forward and looking to lessons learned in the past several months, I can see today is that we have in the past and can no longer run the company in the rear view mirror.

In the quarter, we have started to review methods we have historically used to review and predict operational outcomes and stress assumptions against larger numbers to build more robust operating matrices. During the time of significant change over the past few years, we have grown to appreciate the impact of change management method.

We continue to refine methods to adapt how we communicate internally as well as how we -- as well with clients to ensure change does not create disruption internally or externally in the future.

Cannot say at this point there is much we could or would have done differently in the past couple of years, but as an organization we will use what has been experienced to build a stronger organization for tomorrow.

Overall, I'm very pleased with the progress we continue to make, while continuing to retool systems and infrastructure to meet the demand of our product offering. We realize we are not perfect and have experienced recent growing pains but realize today that there is no straight line to where we are trying to get to.

It seems we have turned a corner but may take a couple of quarters to get things firmly back on track. As a result, this process will make us stronger as a company long-term.

Lastly, I want to mention the additional release posted this morning announcing the promotion of Gerald Blotz to Vice President and Chief Operating Office for Field Operations and Greg Vaughn as Vice President and Chief Operating Office for the Corporate Operations.

These moves complete the organizational transition we have been working through the past three years. Both Gerald and Greg have been and will serve as crucial pillars in supporting the overall growth in ongoing evolution of the company for the long-term. That means Greg has to stick around a lot longer than he has panned on.

This move also rounds out my ability to support and guide a much larger organization with better visibility to details within the operation providing the means for BBSI to remain nimble and relevant in the market place long-term. With that, I will open it up to questions..

(Operator Instructions) And our first question today comes from the line of Jeff Martin, of ROTH Capital Partners. Please go ahead..

Mike, could you go into little more detail on the client vetting process, what all is behind it? Is it just larger clients, is it clients in general that are taking a disproportionate amount of resources? Do you expect margin gains to result from this and how long the transition will take?.

We continue to look at our base of clients on an ongoing basis to understand and figure out where we are out with them, are we making progress with them, are we stalled in the process, are they communicating with us, are we able to longer term to have an impact on them.

So as we look at branches and/or business units and we reach a point where we look to, one, some of the analytics that come back and tell us that we are not making the progress with a certain client, we look to the client figure our okay is there short-term, long-term or does that make sense to continue to invest there.

The one piece that usually stresses that as we grow and add business, we have two choices, we can add additional resources to build more business units and add capacity to the overall branch, but the first thing we typically do is we will look back to the client base and look to kind of identifying 80/20 rule to understand which 20% or 10% of client within that business unit or branch might be taking up 80% of the capacity within that branch.

So the first step is that we will look at one quality of risk, are we seeing things that we shouldn't see.

It just so what happens as we keep combing through the branch and we kept keep combing through, I think it surfaced probably mid last year but we had some larger clients that were causing us little more problem than we are may have understood earlier and just made sense to move them out.

We still do business with a number of large clients and we do a great job with them.

It's just that with some larger clients you feel the pain a little bit more from operations, what it takes, how many visits you have to have, or do you have access to the owner, that's a lot times in bigger organizations as you don't have access to the owner and within their own organization, you have an infrastructure that is supporting a little bit of a status quo and it makes it difficult for us to help support change within that organization.

So when we look it we look at it from risk might come from client frequency, we'll look at it from tier movement, and we stuck in tier movement or in tier 1 and we become a tactical subordinate and the relationship with the client or are we truly a partner and given another six months, we will be able to see where we are moving forward we're having an impact at the supervisor level, management is listening to us and ultimately both we and the client are more efficient in how, one, the relationship works and, two, how both operations are able to run, and then, three, we still have -- if you look back in the last two quarters, it's roughly 100 clients that we pushed off of a base close to 3,000 clients it's -- but the disproportionate pieces that when you go in an start looking and vetting out a block that is bigger than it had been in the past and a lot of times you will see that at the end of the year especially after you had a long run where you just say no, I'm going to take the hit today and we will backfill tomorrow and that was a little bit what went on..

Okay.

And is this a process that for the end of its cycle or I mean, it's somewhat of an ongoing process but the bigger so to speak is worth its wait for this thing?.

Yeah, we have spent a lot of time in the field over the last couple of months trying to understand that ourselves and if all indications are that is where was the kind of the spike and that we are on the back end of it, I mean we will continue to have ongoing vetting as we always should but there was a definitely a spike in that activity that now that has cleared out we will see it reach a more normalized level and ultimately help us return to a base of supporting a stronger product.

The other thing too I would add is with that we begin to get more efficiency out of business units so we don't have to add as much to infrastructure and once you clear that out a little bit, it allows us to focus on the remaining clients and add new and better clients, because we get at underwriting over time.

I think that this is a -- it's a pent up build that you got to get out of way sometimes to be able to move to the next level and that's kind of where we ended up..

Okay, and it sounds like your transition over 200 customers to ACE.

Wondering if you could give any detail how that has gone and how the pricing tops have done (inaudible) workers comp?.

On the front end of it, we did ultimately get to an arrangement finalized until closer to March 1. We started bringing clients into the process in March, but we didn't really have that many.

And April actually it has been accelerating and with no effects, I mean, we're having good conversations; it seems to be pretty much a neutral change for our clients.

Where we were pricing our products with new business coming in, I mean, it's like anything, your price is always going to be a product of how good are you, but we are not seeing competitive pressures there that are keeping us from getting business at least on the front end.

I think the arrangement overall will be additive to the quality of the product that were bringing and our clients are getting a certificate of insurance now rather than a certificate of self insurance or a letter of self insurance. It allows them to go their clients and have more valid rate of paper behind them.

It’s just going to be cleaner and we already are seeing results of that..

So you previously talked about it 25 to 30 basis points uptake in workers compensation as a percentage of gross payroll once this is fully transitioned, are you seeing your ability to recoup a good percentage of that? I mean, it's early, but just curious if you are feeling that this is still likely to be an earnings from neutral transition..

I think throughout this first year, throughout 2014 we will be ramping into it and we will be capturing additional margin where it make sense and then over time will normalize where we need to get to which will be a process for 2015 more so.

But for most of the part we should be somewhat neutral even though the expense will increase, we're not seeing where we believe that it will be -- it shouldn't slow our growth curve to be able to capture that additional margin on a go forward basis to make sure that we are remaining neutral to maybe somewhat accretive to the new program..

Okay. And then one more, Mike, if I could, you talked about a couple of more quarters to kind of get through these growing pains.

What sort of things should investors look for in terms of ways to gauge your progress towards getting back to where you feel you are back on track?.

Well, you come out of first quarter and you go through and you are looking at what was the real effect of the business that left versus what you're backfilling with.

So if you look at the quarter we added 149 net new clients to the process, but how big they are, how much the new business coming in contributes to the existing month, the existing quarter, when we look to first to second quarter we are seeing pretty strong pipelines, we have already add what looks to be a pretty strong April, May looks pretty strong and then getting into July and it gets a little cloudier as you get out there, but what you are really doing is you are kind of backfilling, you might be at a neutral basis.

If we were to add back in what came out, we are still on trends that we had been on previously.

The challenges with that is is that as you are coming through and backfilling the vetting you are still going up with higher and higher comps based on a 35% to 37% growth rate last year and that's probably working against you more than what's really going on in the operation.

So if you were to normalize or add back in say close to $200 million under the base and then look at how we are building on top of it, it might give you more of a normalized idea of what our growth rate would be based on recent (inaudible) based on trends over the last couple of years..

Okay. And then just to clarify that of the clients that were vetted that's included in the subtractions number for the quarter..

Yes..

Yes..

But the problem with that is that when you let a client go you were 100% of those dollars that are contributing in a month or in a quarter ago where when you are building throughout the quarter unless that you added 200 clients you are getting maybe 60% to 70% credit in that quarter for what's coming in.

So you got your curves, your lines and then you got a growth curve that's going out, you got a vetting curve that maybe going out but as that vetting curve gets over you now will cross lines then you will start to find another build coming on after that..

Okay. Thanks, Mike, appreciate it..

You bet..

(Operator Instructions) Your next question will come from the line of Josh Vogel of Sidoti & Company. Please go ahead..

I just want to focus a little more on this vetting. You did $2.8 billion in revenue last year.

Can you kind of quantify how much of this revenue you are going to be pulling out?.

This is a little bit of a moving target but I would say that if you took out about $200 million, which represents around $50 million a quarter, and then you kind of start off a new base of say 2.6 and then you would grow similar to what you have seen in the past. It would get you back to where we should be.

And that's a little bit how we are looking at internally. It is a little more complex when you look at timings throughout a quarter of how business might leave versus how it's coming in. We were looking to this coming quarter and we don't see, I mean it's gotten back to much more of a normal process. So it's not spiking anymore.

So if you looked at that against additional clients that are coming in that's being offset and then if you look at maybe some strength returning to same-store sales which you sought on a year-over-year basis we typically see third and fourth quarter start to support our strength in same-store sales.

If we were looking at 30% on the 2.8 growth line taking us to almost 3.6 level, at 2.6 you are probably going to be somewhere between 3.3 and 3.4 in the year..

Okay. And you got some commentary about decline in hours work.

So when we are looking at your guidance for Q2, you are taking into account vetted clients but are you also baking in the decline in hours worked? Are you taking conservative assumption there?.

I think we are pricing pretty conservative assumptions right now. We are kind of working through this process. We missed two quarters, one by $700,000 the bottom end and the other one $8 million which is a literally a matter of hours within our guide.

We're trying to get to a point where we come with deeper into what's going on in that (inaudible) pot and understand where it really should be landing with the better predictability rather than using the old methods that we have had that don't seem to be robust enough to kind of get us to a real level.

So we are looking at, when we are diving back into it we are looking at the effective new clients added, we are looking at the effect of same-store sales and then we are looking at the effect of the vetting process all built on a base of which a run was on the previous quarter.

And so as you do that you have got new clients coming in, so it's a product of how big they are, how much they are going to contribute in the quarter and then at what rates they are coming in. Then you look at same-store sales and you look at three factors that are going to affect same-store sales.

It's going to be new hires coming on its going to be the number of hours worked which was almost going backwards last quarter and then you look at wage inflation.

So headcount, hours worked, wage inflation and those are -- that's what's going to affect same-store sales and really those are out of our control, but historically we have seen where those trends are but we are continuing to see similarities to previous quarters, so we are not seeing really where that change is.

And then the last one is ultimately how many dollars or how many clients are you moving out relative to what you are bringing in which either gives you a build or a net build in your client as it adds to your daily run rate..

Okay.

Now the client side you have targeted to vet out, are these more recent clients that you signed in the last two years or these are more of your client that you have had for dating back to previous (inaudible)?.

I would say probably more recent, because we continue to go through a pretty strong vetting process, I would say that they are probably a product of some of the more rapid growth that we have seen over the last couple of years, and it's not even that.

We went through post recession and '09, '10, '11 and we have kind of looked at the smaller clients that were causing us issues, because it's how much you are making versus what you are putting back into them. And then you kind of can go through that process and that starts to get pretty clean.

And then all of a sudden you started to seeing these bigger clients offer more margin dollars and more comp dollars short-term, but when you start to look back on it after the fact you start seeing what is the real net effect of them. And again I want to say that 80% of those larger clients are rock solid and they are great.

We do a lot of good business with them, but there are others where we probably came into the relationship (inaudible) when we look at how we come to the end of the relationship, how we sell the product today to the business unit process, and even in the last year to year and a half compared to where were three years ago, it's not even the same, it's so much more strong.

And so I would say it's not clients that came on six months ago and its not clients that probably -- we give clients a fair shot. We have everybody. I mean, we want to make everything work, but you got to be realist sometimes and say you got to trim your portfolio and make sure that you are not keeping stuff that you shouldn’t keep.

And so it's probably a trend that I would say probably clients that's been on two to three years..

Okay. And I just want to get a sense of how revenue growth should trend throughout the balance of the year. You talked about a spike in activity over the near-term with regard to the vetting so.

Is it safe to say that in terms of the revenue deceleration that we have seen over the last several quarters? Will Q2 basically mark a trough there before we expect to see revenue growth reaccelerate in the back half of the year?.

That's our belief, yes. And all the modeling we are doing, and we are looking at this pretty conservative. I mean, you know us. We are an operations based company, so we are all over this, trying to understand. It really comes down to what is going on, what is going out and then the effect of what is going out versus what is coming in.

If you were to not be up against a growth rate of 38%, 37% I think in third -- second and third quarter last year, the decline would be a lot more muted, it would not -- we are still adding quite a bit of business if you look on a year-over-year basis from almost $200 million. So yeah, I would estimate that it is somewhat of a trough.

It's hard still to understand what sort of impact it will have. In third quarters, you just kind of run it up against higher comps but then, by the time you get in and through fourth quarter, first quarter the problem is a little bit, next quarters you are -- or next year you are going to see it go the other direction again.

And -- because you are going to get up against slower comps, so we get excited about that. But I would rather run at a basis for we have the predictable growth rate that is reasonable and on mid 20s to high 20 is probably good number that we can bake to and run long term at once we get through this low maturing process we're going through. .

Okay. That is helpful. And just switching gears, we have seen a lot of investment by peers into the -- their tech infrastructure and platforms.

I know you rolled out a new payroll and data platform, but it seems like there is a big push into cloud base products and I was wondering, what kind of exposure you have there or any planned investment in the future on that front?.

Yeah. We both -- we basically have that a cloud system. I mean, we have an infrastructure and platform that's supported through our branches.

We are going through phase 2 of HRP implementation today that is giving our clients a access point to that information which will bring a cleaner interface for us and bring us somewhat into the 21 century from where we have been previously.

A lot of the investment that we are making is all about bringing more crisp analytics back to, one, the operating units that we have and then two, creating the bridge between our partners and who we are in the room. So realistically, we have an invested base into the same system. It is combination of cloud and on site.

HRP is on site with our -- at our branch, individual branch unit. The major platform cloud is going to be through our CRM process and system, a foundation, which is Salesforce and all of our electronic doc that we have, that our clients need to access will be cloud.

So without dressing it up into the latest and greatest, we are doing what the industry is doing. And I would like to stay with our operation with based platform ground up supported with our technology and our innovation around technology, especially which we will see going in the '15 in the next couple years.

It has been a truly give us a leg up in the process of supporting our clients and competing in the market..

Okay. And just one last one, if I may. May be more for Jim.

For the benefit of the investment community, can you may be quantify for us what the increment or frictional cost it went towards a swerve in Q1 and what is built into your modeling for Q2, just so we get a better idea of how this is really a net neutral event for you?.

Yes. During the first quarter, there was probably -- only may be two to three basis points of frictional cost related to the ACE program. And looking at Q2, it's going to increase to probably 10 to -- depending on how customers transition, may be as high as 15 basis points, but I would say probably closer to 10 basis points for 2Q.

And then, obviously, it will ramp more in third and fourth quarter. And again, going back to what we talked about here last quarter, that once fully loaded that the incremental fictional cost probably going to be 25 to 30 basis points. But again, we won't see that until that fully loaded cost until 1Q of '15..

And at this time, this does conclude our question and answer session. I would now turn the conference over to Mr. Elich for closing remarks. Please go ahead..

It's one of those things, as you grow and you have success hard to see sometimes what is not working. And like anything, we have to have -- unfortunately, we have to have some times the mirror put in front of you or something goes sideways for you to be able to look at things differently than you have always looked at.

I still see -- and although, it is painful, I would not want to ever say I had to do this many more times but it's the same time. I said I will do it as many times as it needs to be done to make sure that we will become a better company overall, that I think this process has done a couple things.

And when I look at your build in organization, the organization does not necessarily grow up until you have to figure out why you have to come together to get things done. And one of the things that this transition or this period of time has done is it has made us spread our ownership throughout the organization as to what has to get done.

And we are -- before I always tell, like I had to find the next answer, I feel like that an organization that's backing that up and we are pretty rock solid and we are only going to get better. I think related to your data point, it's always easy to look at them and keep trusting them and believe them when they are working.

But it is when they quit working on you is when you look deeper and go okay, this is broken, and I think from that we figured out by three or four more ways, new ways, better ways to look at the business in the last month or two that will help us have better predictability.

And by the time we get the '15, we should be able to lock it down and have a pretty good idea of where we will be even as far out as the couple years.

And then last thing is, as growing up in the business and moving from the role of COO into CEO, it's a tougher transition that I would have ever had expected, because you are still so much part of the operation, you are trying to get the answer you want to get to.

And with bringing Gerald old and bringing Greg to a new level and watching the whole organization grow up a little bit more, it allows me to be able to step back and be a little more impartial to where I want us to be in more critical and ask better question that will help us get better and may be see the next blind spot that might be coming at us.

So I do not want a discount for a minute how powerful and important this process has really been for us and or how serious we are taking it and the fact that it already has impacted the quality of the organization and who are becoming. So with that, I will leave you to more important things. And talk to you next quarter. Thank you..

And thank you, Mr. Elich. Ladies and gentlemen, that will conclude the conference call for today. Again, we thank you for your participation. And you may now disconnect your line..