Kevin Inda - John M. Engquist - Chief Executive Officer, Director and Member of Finance Committee Leslie S. Magee - Chief Financial Officer, Principal Accounting Officer and Secretary Bradley W. Barber - President and Chief Operating Officer.

Joe Box - KeyBanc Capital Markets Inc., Research Division Nicholas A. Coppola - Thompson Research Group, LLC Neil Frohnapple - Longbow Research LLC Philip Volpicelli - Deutsche Bank AG, Research Division Fred T. Lowrance - Avondale Partners, LLC, Research Division Daniel Politzer - RBC Capital Markets, LLC, Research Division.

Everyone, and welcome to today's H&E Equipment Services Second Quarter 2014 Earnings Conference Call. Today's call is being recorded. I would now like to turn the conference over to Mr. Kevin Inda. Please go ahead, sir..

Thank you, Corina, and welcome to H&E Equipment Services' conference call to review the company's results for the second quarter ended June 30, which were released earlier this morning. The format for today's call includes a slide presentation, which is posted on our website at www.he-equipment.com. Please proceed to Slide 1.

Conducting the call today will be John Engquist, Chief Executive Officer; Brad Barber, President and Chief Operating Officer; and Leslie Magee, Chief Financial Officer and Secretary. Please proceed to Slide 2.

During today's call, we will refer to certain non-GAAP financial measures, and we've reconciled these measures to GAAP figures in our earnings release, which is available on our website. Before we start, let me offer the cautionary note that this call contains forward-looking statements within the meaning of the federal securities laws.

Statements about our beliefs and expectations and statements containing words such as may, could, believe, expect, anticipate and similar expressions constitute forward-looking statements.

Forward-looking statements involve known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in the forward-looking statement. These risk factors are included in the company's most recent annual report on Form 10-K.

Investors, potential investors and other listeners are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements.

The company does not undertake to publicly update or revise any forward-looking statements after the date of this conference call. With that stated, I'll now turn the call over to John Engquist.

Thank you, Kevin, and good morning, everyone. Welcome to H&E Equipment Services' Second Quarter 2014 Earnings Call. On the call with me today is Leslie Magee, our Chief Financial Officer; and Brad Barber, our President and Chief Operating Officer. Please proceed to Slide 3.

This morning, I'll give an overview of our second quarter performance and also discuss activity within our regions and current market conditions. Leslie will then review our second quarter financial results in more detail. When Leslie concludes, I'll discuss our outlook for the balance of 2014. After that, we'll be happy to take your questions.

Slide 5, please. The second quarter was solid for our business' continued high demand for rentals, and strength in new equipment sales grow strong year-over-year improvements in our operations.

The improving trends we see in commercial construction and especially the escalating activity in the energy and petrochemical sectors, which we're seeing in our Gulf Coast market, provided us with opportunity, which we feel we capitalized on.

The momentum in our rental business continued with strong physical utilization combined with fleet growth and higher rental rates. Rental revenues grew 18% from a year ago and delivered solid gross margins at 48.4%. Fleet utilization remains at a high level, even with a much larger fleet, at 72.7% based on OEC compared to 71% a year ago.

Our fleet utilization on both OEC and units is high compared to industry comps, even with our ongoing fleet investment. Rental rates also increased 2.1% compared to a year ago. As I mentioned, our distribution business is also continuing to deliver year-over-year gains, with strength in sales and new equipment and parts and service revenues.

In terms of the financials, total revenues increased 14.3% to $280.4 million versus last year, and gross margin was 31.8% compared to 30.7% a year ago. Income from operations increased 31.2% to $37.9 million, and EBITDA increased 24.3% to $78.7 million compared to a year ago.

Net income for the quarter was $15.7 million, or $0.45 per diluted share, versus net income of $10.8 million, or $0.31 per diluted share a year ago. We're extremely pleased with our second quarter performance and the current opportunities we see in our end-user markets. Slide 6, please. I just want to make a few key points on this slide.

High levels of activity continue in the energy, petrochemical and manufacturing sectors in our Gulf Coast and Intermountain regions. And as such, these regions account for the majority of our revenue and gross profit.

We expect demand in these markets to accelerate even more over the next several years due to anticipated significant new capital projects in these industries. In fact, we expect to open a new greenfield site in Texas within the next 90 days to leverage additional growth from increasing demand due to increased oil and gas exploration.

We're diligently planning expansion efforts on both a greenfield and organic basis to take advantage of the significant growth opportunities, not only in our Gulf Coast and Intermountain regions, but in our other less industrial regions as well, which are also benefiting from the improving trends in commercial construction. Slide 7, please.

I've touched on trends and market conditions in my previous remarks, but to summarize, the current commercial construction environment is positive, and we expect improvement throughout the balance of this year and into the next several years.

Just the capital projects and the pipelines slated for the Gulf Coast region related to major chemical, energy and manufacturing projects are significant in number and investment dollars, with most of this activity slated for the 2015 through 2017 timeframe. I'll now turn the call over to Leslie to discuss our second quarter financial results..

Thank you, John, and good morning. I'll begin on Slide 9. It's pleasing to announce another quarter of solid results. And as John mentioned, our total revenues increased 14.3% to $280.4 million, and gross profit increased 18.1% to $89.1 million compared to the same period last year.

The primary drivers of our revenue growth this quarter were increased rentals and strength in new equipment sales, along with strong parts and service revenues. I'd like to review our results in more detail, and I'll begin with our rental business and discuss revenue highlights for each segment, and then I'll touch on gross profit by segment.

Our rental revenues were $98.8 million for the quarter, an 18% increase over the same period a year ago. We've continued to invest in our fleet, which has increased approximately $162.6 million or 17% from a year ago based on original equipment cost or OEC.

Although our fleet size has grown significantly, we have maintained high utilization levels, with average time utilization based on OEC of 72.7% for the quarter compared to 71% a year ago. In addition, based on number of units available for rent, average time utilization was 67% compared to 66.3% last year.

Also, average rental rates increased to 2.1% over a year ago and 1.8% over the first quarter of this year, with positive rate trends in all product lines. As a result, our dollar returns were 36.3% compared to 35.8% a year ago. New equipment sales were $90.6 million, up 23.3% from $73.4 million a year ago.

This increase was primarily the result of higher demand for cranes, which increased 14.6%; for aerials, which increased 141.4%; and for earthmoving equipment, which increased 28.9% in each case over a year ago. Used equipment sales were $31.4 million, a $3.3 million or 9.4% decrease over the second quarter of 2013.

The decrease is due to lower used crane and used aerial sales and was partially offset by an increase in used earthmoving sales. As we mentioned on our last call, we have by design a younger fleet, a consequence of which will be relatively flat to lower demand for fleet sales.

Sales from our rental fleet comprised 88.4% of total used equipment sales this quarter compared to 79.7% in the second quarter a year ago. And margins on pure rental fleet sales, which excludes the impact of margins on the sales of these inventory, were 35.4% this quarter compared to 35% a year ago.

Our parts and service segments also delivered solid year-over-year growth with a 10.6% increase in revenues to $44.5 million. Now let's move on to a discussion of gross profit by segment. Total gross profit for the quarter was $89.1 million compared to $75.4 million a year ago, an increase of 18.1% on a 14.3% increase in revenue.

Consolidated margins were 31.8% compared to 30.7% a year ago, with every major business segment delivering improved margins from a year ago. Our rental business delivered margins of 48.4% compared to 47.1% a year ago, due primarily to lower rental expenses as a percentage of comparative revenue.

Margins on new equipment sales were 12.3% compared to 11.4% in the same period last year, reflecting higher margins on new crane and earthmoving equipment sales. Gross margins on used equipment sales were 32.9% compared to 30.3% in the same period last year.

Parts gross margins were 29.4% compared to 27.3% a year ago, and service gross margins were 64.2% versus 63.3% a year ago. And margins on other revenues were 7.3% compared to 8.7% in the second quarter of last year. Slide 10, please.

Income from operations for the second quarter increased 31.2% to $37.9 million, or a 13.5% margin, compared to $28.9 million, or an 11.8% margin, a year ago. The driver of the increase was a strong performance from all of our business segments at both the top line and the gross margin line, which yielded solid operating leverage. Proceed to Slide 11.

Net income was $15.7 million, or $0.45 per diluted share, compared to $10.8 million, or $0.31 per diluted share, in the same period a year ago. And our effective tax rate was 38% compared to 32.6% a year ago due to lower benefits from permanent deductions in the current period. Please move to Slide 12.

EBITDA was $78.7 million or a 24.3% increase over the same period last year, and EBITDA margins were 28.1% compared to 25.8% a year ago, driven by the same strong operating results I previously mentioned. Next, on Slide 13.

SG&A was $51.9 million or a 10.1% increase over the same period last year, and SG&A as a percentage of revenue was 18.5% this quarter compared to 19.2% a year ago. We incurred increased wages, incentives and benefits of approximately $2.8 million, largely due to the growth in the business.

And further, our greenfield initiatives added $0.6 million in SG&A this quarter compared to a year ago. Slides 14 to 15 include our rental fleet statistics. And our fleet based on original equipment cost at the end of the second quarter was $1.1 billion versus $954.3 million a year ago, an increase of 17% or $162.6 million.

During the second quarter, we increased the size of our fleet by $92.8 million or 9.1% based on OEC. Our gross fleet capital expenditures for the quarter were $134 million, including noncash transfers from inventory, and net rental fleet capital expenditures for the quarter were $106.3 million.

For the quarter, gross PP&E CapEx was $4.5 million and net was $3.7 million. Our average fleet age as of June 30 was 32.3 months. Next, Slide 16.

At the end of the second quarter, our outstanding balance under the ABL facility was $172.8 million, and accordingly, we had $223.2 million of availability at quarter end under our ABL facility, net of $6.5 million of outstanding letters of credit.

And I'll now turn the call back over to John to discuss our current outlook and then we'll open the call for your questions..

Thank you, Leslie. Please proceed to Slide 18. Before we open the call to questions, let me close by reiterating that the first half of this year was strong for our business, and we believe we're successfully capitalizing on the increasing levels of activity in the commercial construction market.

We expect to balance for the year to be positive as we see traditional nonresidential construction activity accelerating at a steady pace.

We also see demand in the energy and petrochemical sector that we serve along the Gulf Coast escalating rapidly, due to both anticipated increased output and new capital projects, which are expected to ramp up significantly in the 2015 through 2017 timeframe.

Both our rental and distribution businesses are performing well, and we expect this to continue based on current trends and end-user demand in our markets. We expect to continue to make targeted investments in our fleet, as well as expand our market presence through both greenfield and organic opportunities.

Our focus is on placing equipment assets where demand dictates and taking advantage of the increasing growth opportunities in the marketplace.

Lastly, as we announced on Monday, we have initiated a quarterly cash dividend of $0.25 per share of common stock, with the first dividend to be paid on September 9, 2014, to stockholders of record as of the close of business on August 25, 2014.

We believe this reflects the confidence we have in our strategy, financial strength and the positive conditions and opportunities in our marketplace, as well as demonstrates our ongoing commitment to enhancing shareholder value. At this time, we'd like to take your questions. Operator, please provide instructions..

And we'll go to Joe Box with KeyBanc Capital Markets..

Nice job in the rates on a sequential basis. I guess, I would have thought that, that would have translated to something a little bit higher on a year-over-year basis.

I guess, is there something that's holding back the year-over-year rate, something like mix or anything that we should look into on that front?.

Joe, when you look at rates, I think you got to look at the fact that we're growing our fleet aggressively, we're increasing our time utilization. We are increasing the rates, we're increasing dollar utilization. I just -- I don't see any negatives there. I think we're finding the right balance between rate and utilization.

And if you really want to compare us to our peer group, you ought to take publicly reporting companies. Go back 8 or 10 quarters and stack the rates, and you're going to find that we look very good compared to anybody. Back when we were getting 10% rate increases, a lot of our competitors were getting 4% and 5% rate increases.

So we're going up against a lot tougher comps. But it might be worth your while to take public information and go stack those rates over 8 or 10 quarters..

Understood. John, I think you've been saying that your expectations were for CapEx to be somewhat similar year-over-year. And it looks like the quarter was a little bit north of what we were expecting on CapEx.

So have you guys changed the way that you're thinking about the market opportunities here? Are things just more robust? Or should we be thinking about maybe a deceleration in CapEx spend in the back half of the year?.

Well, we definitely are front loading our purchases. I mean, we want to take the bulk of the fleet in the first half of the year to take advantage of opportunities. So I think our spending will slow down just from seasonality in the second half of the year. But we're still projecting that our spending will be similar to last year..

Okay, great. And then I guess, one more and then I'll turn it over. It's kind of in line with the last one.

So if we do expect for CapEx to kind of seasonally adjust in the back half, how should we be thinking about free cash flow? And just from a longer-term cash standpoint, have you changed your viewpoint on free cash flow given the dividend announcement? I mean, is it more important now to remain positive on free cash? Or are you still willing to grow your fleet and kind of dip into the negative and borrow?.

Well, Joe -- one, I think over time, our cash flow will improve. I think that's a given. And look, we've got a strong balance sheet. We've got a tremendous amount of liquidity. We've got a lot of excess assets in our borrowing base.

So we feel like we have plenty of capacity to meet our growth objectives, grow our fleet, take advantage of any acquisition opportunities that may come up, and pay the dividend. So we think we can meet all of our growth objectives and continue to pay the dividend..

[Operator Instructions] Moving on to Nick Coppola with Thompson Research Group..

In terms of rate expectations, do you expect some reacceleration as peers take into account the higher cost of equipment? Or do you think we're effectively at more reasonable levels here and rate improvement will be more modest? And then kind of just trying to gauge expectations for second half '14 and into '15..

Well, I think that the market over time is going to have to adjust to Tier 4 in some of the price increases. It always does. I think as our inflow of equipment slows down somewhat, that could potentially have a positive impact on our rates. But the market will adjust over time to the price increases..

Right. That makes sense.

And then, can you provide a little bit more color on how utilization rates trended throughout the quarter and then through the month of July?.

Joe, it's been steadily increasing. Our -- we've been adding fleet and increasing our on-rent weekly. Our utilization has kind of been bouncing between 73% and 74%. I think we hit a high point of 74.5%. But it's been very positive trends..

Okay.

And then, on rate, has that improved -- did that improve throughout the quarter and to date?.

Well, we showed a nice sequential gain, obviously, from the first quarter. And we're continuing to see year-over-year rate gains. I would rather report quarterly than on any given month. I think it gives a much clearer picture..

Neil Frohnapple with Longbow Research has the next question..

I want to spend a moment on the new equipment sales gross margin in the quarter. It was an impressive 12.3%, and I think Leslie mentioned higher margins on new cranes and earthmoving.

But just wondering what drove this? Was it mix or stronger pricing in the market? And then just as a follow up -- I mean, looking forward, should we think of this margin level as a good run rate going forward? And just in context, looking back from 2006 to 2008, you guys averaged 13%.

So just wondering if this is kind of the new norm we should be looking at? And if this is sustainable going forward?.

I'm going to let Brad take that. He's a little closer to that than I am..

I think the answer is both, and particularly on the crawler crane side. As we spoke before, the large crawler cranes carry a much smaller margin, typically in the 5% to 6% range. And we were not heavily weighted to crawler cranes in Q2. So as you think about margins, I would tell you to look at more of the overall typical margin.

And I think we're doing a better job, but I also think mix had an impact. And it was slightly positive for us. So if we sell more large crawlers,that new margin could come down. But right now, we're feeling pretty good about what we see..

Okay. And then, I guess, a quick follow-up on that, Brad.

I mean, what's it going to take to kind of get back to those average levels you guys saw in 2006 or 2008? I mean, is it just a stronger pricing environment maybe when some of this increased capital spending starts coming through in 2015, would that maybe provide some upside from where we are today on margins? Or just if you could provide some more color on that, that would be great..

Yes, it's going to be purely demand driven. We've got the right products, we've got the right manufacturers, we've got high quality, we've got really good sales coverage. We just need demand to continue to increase as we're starting to see. And we can return to those types of numbers based on the demand opportunity..

Great. And then just one last one on the rental business, Brad. Are you guys seeing more pressure on the rate side from smaller rental companies that may have fleeted up more recently and are trying to get their equipment out on rent? I think last quarter, you guys maybe mentioned some more pressure on the crane side.

And just wondering if the dynamics have changed at all from maybe some of your smaller competitors..

Yes, you've got it. Well, no, I mean, look, in isolated cases, we see folks, smaller-, medium-sized rental companies doing some pricing that's irrational. By and large, our larger national competitors are very disciplined, pushing and working hard as are we. And so I would say it's just more of the same.

Our comments around cranes were regarding that we've taken large increases in pricing, and that some of our crane rental competitors are not as sophisticated as the typical rental companies we speak about and subsequently, had not improved their rates.

I think it's worth noting that every product category, earthmoving cranes, aerial, forklift and general products had positive rate trend sequentially. So we're seeing improvements across all product types at this point..

And next, we'll go to Deutsche Bank with Philip Volpicelli..

What I was hoping to get a little bit of color on is we've seen 2 of the large crane manufacturers report disappointing numbers and kind of lower their outlook on the manufacturing side.

Yet it seems from your new crane sales business and the amount of demand and utilization of your existing rate cranes in the rental portfolio that things are going well.

So what's the disconnect between what they're seeing and what you're seeing?.

Well, look, they're exposed to China and Asia and South America and a lot of markets. We're in a sweet spot right now in the Gulf Coast with all of this industrial expansion. So we just got a really good end market right now that doesn't translate to maybe what they're looking at on a much broader scale across the world market.

So we're just in -- we're in the right end markets right now..

The only thing I would add is the products we represent -- Grove and Manitowoc. Real high-quality products. There's been a lot of talk about the new technology. So the fact that we're representing Grove and Manitowoc is a benefit within our marketplace. And we suspect that will continue to improve..

Okay, great. And then with regard to the dividend, obviously, this is a cyclical industry.

Is the thought process to try to keep the dividend flat throughout the cycle or will you adjust it as you go through the cycle?.

Joe, it's our intent to keep the dividend flat. Now obviously, if we hit something unforeseen and the bottom fell out of the market, we'd make decisions based on that. But all of our projections are strong, and our business is countercyclical in -- from a cash flow generation standpoint. So it is our intent to continue to pay the dividend..

Okay, great. And last one for me.

Leslie, what was the floor plan financing balance at the end of the quarter?.

$52.1 million..

Next, we'll go to Fred Lowrance with Avondale Partners..

A couple of questions for me. It seems like you may need to add a little bit of leverage to fund the first couple rounds of dividends and, to the extent that you get back in the M&A game, debt would be an obvious funding mechanism there.

So recognizing that just your earnings growth is going to help you organically delever your balance sheet, do you have a targeted leverage range that you feel comfortable with at this point in the cycle?.

Yes, I think -- look, we're going to delever over time. Now if we were to find the right acquisition opportunity, a significant acquisition opportunity, we would still want to keep our leverage 4 turns or below. I don't think we would do anything that would exceed 4x leverage..

Okay. And you haven't participated in the M&A market in a long time. And so I guess, a couple things on that.

One, what has held you back from participating in this activity during a period that it seemed like a buyer's market coming out of the recession for those who have good access to capital and have some scale? And two, could you kind of share with us what you might be looking for in any sort of acquisition in terms of are you trying to diversify geographies? Are you trying to get -- are you looking at certain end market? Wondering what some of the criteria are there that you're trying to check the box on..

Well, look, we just haven't found the right deal for us, I mean, plain and simple, and we're going to be opportunistic. As far as what we would look to accomplish, I think it's all of the above. I mean, we'd like to broaden our geographic footprint, that would make sense for us, and I think probably grow the rental side of our business.

So I think those 2 things. We'll continue to be opportunistic. We've got a very strong balance sheet. We've got a lot of liquidity, and we can -- we're in a position to take advantage of the right acquisition if it comes along, and we will. But we just -- we have not found the right deal yet.

And we'll be patient and we'll be opportunistic and keep looking..

[Operator Instructions] We'll move on to Seth Weber with RBC Capital Markets..

This is actually Daniel Politzer on for Seth. Just a couple questions. Going back to the rate growth. I know you mentioned that every product category had positive rate trends sequentially, but I was wondering if you could maybe provide some color on a year-over-year basis on the different categories, if there's any weaker or stronger segments..

They were also all positive for all product lines on a sequential -- I mean, on a year-over-year basis, too..

Okay. So pricing was pretty good, because you saw actually the dollar utilization come down on aerials for the first time in a while.

So I mean, is there a deceleration there that we should think about?.

The -- no, I would not be concerned about a deceleration. I would say that if you look at the gross additions we've placed into the rental fleet in Q2, you [indiscernible] put it in the fleet and you have a run rate. So I'd have to look at the aerial dollar utilization in more detail. But I would tell you that you should not be concerned.

The timing may be an issue for a short period of time as we're growing as significantly, and I would probably want to look back and see what our utilization is or utilization was period-over-period. But I can tell you, as John spoke to early, our utilization levels are healthy. They continue to be healthy.

And we expect they will continue to run at very similar levels as they are today. And it may just be a timing issue..

Okay. And then just another one on -- broadly on construction trends.

Outside the Gulf Coast and the Intermountain region, are there any specific areas of strength or weakness you'd call out?.

Look, the improvement we're seeing is very broad-based. I mean, we're seeing nice year-over-year gains in Florida, California, Mid-Atlantic, Arizona. I mean, the improvement is broad-based. So we're definitely seeing the nonres construction markets improve. It's relatively modest improvement, but they're definitely turning up in improvement.

So what we're seeing is very broad-based..

Okay. And then just last one is on cold starts. Are you still planning around 5 to 6 this year, and is there any....

Yes. We will accomplish at least 5 locations for the year..

Okay. Is -- should we be thinking about those more in the fourth quarter or third quarter or just....

The third and fourth quarter. John made comments that we've got one in Texas. We're actually going to have -- so we have 1 in Texas within the next 90 days or so. And we should have a second location elsewhere in Texas within about 120 days or so. And then there's a couple others lining up behind that we're working on leases and staffing for right now.

But that will be potentially late Q3 and then certainly in Q4..

Joe Box with KeyBanc Capital Markets has the next question..

Just a follow-up question on the Gulf Coast buildout. It sounds like the tone from some of the ENC guys appears to be that projects are starting to trickle through, but there's not as many shovels in the ground as people would like right now. I'm just curious what your perspective is on some of the project starts in the Gulf..

I would agree with that, Joe. There's not a whole lot going on right now. I mean, there's a lot of engineering and permitting and all of that kind of stuff going on, but not a lot of real activity yet. We think you're going to see real significant acceleration there '15, '16, '17. It's going to get real busy..

And I guess -- and this is probably a really tough question to answer, but just internally, when you look at the backlog, I mean, there's -- you could say that there's numbers north of $150 billion of potential projects.

What are you internally assuming in terms of what's going to materialize of those projects?.

That is a good question. It's very difficult to answer. What I will tell you is if 50% of what has been announced happens, it's going to be real, real good for our business. I don't expect it all to happen. I mean, we see some projects fall by the wayside for various reasons.

But I mean, if we get half of it, and we will -- I think it will probably be more than that. But if we get half, it will be real good for our business..

That's helpful to kind of understand where you guys are at. One more on the service side. I know that's been an area of focus recently to just -- to try and reinvigorate the growth in that business.

Can you just give us a sense of how much of that growth stems from you going out there and getting more share as opposed to maybe a lift in end market activity?.

I think one of the big drivers is we had some fairly significant rebuild work on some crawler cranes that hit, and that is always a big driver of our parts and service business. I think Brad and his team are very focused on going out and gaining market share, and I think they've done a good job there.

But probably, the biggest driver and Brad, if you got any more color....

The only thing I would add is that Manitowoc about 1.5 years, 2 years ago approved what they call an on-core process where they would approve structural repairs, engineered structural repairs. For example, 3 years ago, if someone put a ding in a boom or bent a lacing in a Lattice boom crane, that may be a condemned boom section.

And so now they're allowing approved repairs to be performed. And we feel that a group of people that, that contributed very positively for us internally year-over-year. And so it's a combination of the traditional large crane rebuilds, as well as crane repairs, structural crane repairs, that maybe we would not have been able to do.

That's going to be very value-add for the Manitowoc distribution base and has contributed positively for us so far this year..

Understood.

I guess, from a modeling standpoint, should we assume that we're going to be looking at a double-digit growth rate in that business going forward? Or is it going to be more of a normalization to the -- back into the mid-single-digit type range?.

I think it's going to be more of a normalization to the mid- to high-single digits. But I would also point out that we've improved the margin in both our parts and service business while we're growing the revenues..

And we have no further questions at this time. I will now turn the conference over to John Engquist for any additional or closing remarks..

I appreciate your participation in our call, and we look forward to talking to you on our next call. Thank you very much..

This does conclude today's conference. We do thank you all for your participation..