Gerry Shreiber - President and CEO Robert Pape - SVP, Sales Dennis Moore - CFO.

Akshay Jagdale - Jefferies & Company Brett Andress - KeyBanc Capital Markets Francesco Pellegrino - Sidoti & Company Eric Gottlieb - D.A. Davidson & Co. Jon Andersen - William Blair Jonathan Feeney - Consumer Edge Research.

Welcome to the J&J Snack Foods Fourth Quarter Earnings Conference Call. My name is Christine, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded.

I will now turn the call over to Gerry Schreiber, President and CEO. You may begin..

Good morning everyone, thank you for participating in this call.

I'm Gerry Shreiber and with me today is Dennis Moore, our CFO; Robert Radano, our COO and Senior Vice President and COO; Gerry Law, our Senior Vice President and my personal assistant; and the guy we're going to blame for any of these numbers that don't show up at full strength; Bob Pape, Vice President of Sales; Marjorie Schreiber Rushkoff, our in-house Counsel; and Robert [Indiscernible], the Director of Sales for Food Service.

And I will begin with the obligatory statement. The forward looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements.

You are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. We undertake no obligation to publicly revise or update these forward looking statements to reflect events or circumstances that arise after the date hereof. Results of operations.

Net sales increased 1% for the quarter and 2% for the year. For the quarter our net earnings, increased by 4% to $20.6 million or $1.10 a share from $19.8 million or $1.05 a share from a year ago. For the year, our net earnings increased by 8% to $76 million, $4.05 a share from $70.2 million or $3.73 a share last year.

After-tax investment income of $676,000, $0.04 a share in the quarter compared to an after-tax investment loss of $2.3 million or $0.12 a share in last year's quarter and after-tax investment income of $2.7 million, or $0.14 a share this year compared to an after-tax investment loss of $516,000 or $0.03 a share last year.

Our EBITDA, earnings before interest, taxes, depreciation, and amortization for the past 12 months was $157.1 million, up 4.5% from 2015. Food Service, sales to Food Service customers were down 2% for the quarter with increased sales of Handhelds and Funnel Cakes, up 22% and 11% respectively. Soft pretzel sales were flat.

Sales of frozen juices and ices were down 12%. Churro sales were down 1% and bakery sales were down 4%. For the year, Food Service sales were up 1% with increased sales of Handhelds and Funnel Cakes leading the way.

Sales of Soft pretzels and Churros had modest 1% sales increases for the year and frozen juice bars and ices and bakery sales were down 5% and 2% respectively. Retail supermarkets. Sales of products to retail supermarkets were up 4% for the quarter and down 5% for the year. Soft pretzel sales were down 7% in the quarter and 7% for the year.

Sales of frozen juices and Italian ices were up 5% in the quarter, but down 5% for the year. Handheld sales were down 13% in the quarter to $4.2 million and were down 19% to $15.3 million for the year. ICEE and Frozen Beverages. ICEE, Frozen Beverage and related product sales were up 7% in the quarter and 7% for the year.

Beverage sales alone were up a strong 9% in the quarter and up 5% for the year with gallons up 10% in our base in the quarter and 6% for the year. Service revenue for others was up 3% in the quarter and a strong a 8% for the year. Consolidated.

Gross profit as a percentage of sales in the quarter decreased to 30.4% from 31.7% last year and for the year, decreased to 30.7% from 30.8%.

The gross profit percentage in this year's quarter compared to last year was hurt by lower sales and higher manufacturing costs in our Food Service business and product quality issues also in our Food Service business, pretty much related to cookies.

Total operating expenses as a percentage of sales decreased to 18.7% from 18.8% in last year's quarter with the decrease mainly attributable to slightly lower marketing and distribution cost. Capital spending and cash flow.

Our cash and investment securities balance increased $34.8 million in the quarter to $274.4 million as we continue to generate cash in access to our needs. We continue to look for acquisitions as a use of our cash. Our capital spending was $11.5 million in the quarter as we continue to invest in plant efficiencies and growing our business.

We are presently estimating capital spending for 2017 to be $45 million to $50 million or so roughly about the same in the past year. We are refocusing our efforts to take cost out of manufacturing through improved efficiencies and improved controls. Our investments generated before tax income of $4.1 million this year, up from $1.2 million last year.

Last year we sold off most of our mutual fund holdings, which generated a loss of $4.3 million compared to a reduced loss of $661,000 this year. During this year, we have increased our holdings of corporate bonds to $103 million, which we plan to hold to maturity. The bonds presently yield 2.2% per year.

Our other investments totaled about $30 million and yield about 5.25% per year. A cash dividend of $0.39 a share was declared by our Board of Directors and paid on October 6, 2016. For the year, we purchased and retired 141,700 shares of our common stock at a cost of $15.3 million. We did not purchase for retirement any shares in the fourth quarter.

Commentary. Sales of Soft pretzels and Food Service finished the year up 1%, but were flat for the fourth quarter. Sales to restaurant chains were up about 9% for the quarter and 3% for the year.

Overall, Food Service sales to restaurant chains were over $60 million, an increase of about 10% from last year as we continue to drive and focus on that new segment of our business.

Frozen juices -- frozen juice bars and ice sales in Food Service were down sharply in the quarter as sales of WHOLE FRUIT Frozen Organic Juice tubes were down the quarter compared to a very strong last year and sales of our MINUTE MAID products were down 11% for the quarter and 13% for the year.

Handheld sales and Food Service continue to climb led by sales to two customers. Our whole-grain Funnel Cake products has been well received in our -- in schools and contributed significantly to our sales growth of Funnel Cake products in the quarter and for the year.

For the quarter, bakery sales were down 4% as sales were up and down for a wide range of customers. Sales to one customer were down $7 million for the year as that customer added a secondary supplier. We expect sales to this customer to continue to be down through January of 2017.

Sales of Soft pretzels in our retail supermarkets segment continue to be weak with sales in the quarter, down across pretty much all of our items. Frozen juice bars and ices were up 5% for the quarter with good performances from Luigi's real Italian Ice and WHOLE FRUIT Frozen Organic Juice tubes and a slight improvement in PHILLY SWIRL sales.

Handheld sales in supermarket continue to decline due to decreased volume and increased trade spending for the introduction of our branded PILLSBURY mini dessert pies. Overall increased trade spending for the introduction of new retail supermarket products was up about $200,000 for the quarter and $2 million for the year.

We had significant sales in our fourth quarter of our new products, especially Oreo churro and WHOLE FRUIT Organic Juice tubes. In ICEE and Frozen Beverages, sales were up in all areas of the business with strong growth in operating income for the quarter and for the year.

Operating income in the quarter was down $2.9 million from a year ago, a 9% decreased and up $1.9 million or 2% for the year. We are confident that we will reverse this trend in the near future. Our estimated income tax rate was 35% this year and 38.4% last year for the quarter and 35% and 37.3% for the year last.

Year's rate was higher primarily because of losses on sales of investment securities are not deductible without capital gains to offset. We are estimating a rate of about 35% in fiscal year 2017. Thank you for your continued interest and let me turn this back to the -- for questions and comments..

Good morning..

Good morning Akshay.

How are you?.

I'm doing well. So, to start off, couple of unusual things going on this quarter. Probably the most unusual is higher operating or manufacturing expenses. Can you give us a little bit of background? I mean you're, obviously, good at a lot of things, manufacturing is probably right up there in your core competencies.

So, I don't remember ever seeing that called out. So can you just -- can you just, I know it's unusual, but can you give us some background on what's happened there and I think you've taken some actions already, pretty aggressive once to fix that, so that's my first question. And I have a couple of follow-ups..

Okay. Well, I'll cover the manufacturing issues real quickly. We had some issues. We identified them. Took a little longer to fix them than what we were led to believe. We wound up making some significant changes with respect to management in that. The changes were made a couple of months ago and we are pleased with the progress taking place.

We don't believe this will happen again, and Gerry Law and his team have been under reasonable to firm control now..

Okay. And then--.

But related to one plant -- one of the primary plants in Atlanta and it took us longer to properly identify and a little bit longer to properly correct. We believe that we are in advanced of that peak now..

Okay. And then on sales growth, the other thing that's been going on and sales have been somewhat soft for now couple of quarters or several quarters, but I noticed that the bakery business is really fallen, I mean the trend there has changed significantly for the negative over the last several quarters.

So, can you give us some color on what might be going on behind the scenes? I mean the Bakery segment, if I may, or product sales are a combination of a bunch of businesses and I don't think we talk about them a lot. So, can you just give us some -- it looks like something has affected that business pretty significantly.

So, one is that correct? And two, what is issue? And when might that be fixed?.

Good point Akshay. Yes, you're right there was a couple of significant issues or sales beat downs in our bakery products. One, we have a large customer -- terrific customer, we've been doing business with them for years and years and we had all of the business.

They made a decision about a year ago or so that they needed two suppliers, they were going to have to have two suppliers, it took them a while to implement that, but it wound up costing us on an annualized basis roughly $10 million with $7 million of it coming in this quarter. We're still enjoying the bulk of that business.

We have a terrific relationship with that customer. I don't like to point out customers, but this one begins -- would have sitting there located in Washington and you could figure that out.

And Gerry, the other customer was in bakery? We lost a healthy percentage of the business in the cookie business with one customer and we lost another customer on the West Coast that was a significant $2 million annualized sales. But we don't expect those trends to continue.

As a matter fact, Bob Pape and his switched on group are working real hard to reverse that now and we're confident that we'll have a better year next year than we did in the past year..

Okay.

So, just to summarize the impact there, there's $10 million annual impact, $2 million annual impact and some other customer which maybe the $1 million, I don't know, how much, but significant, so $12 million to $13 million annual impact and is that roughly correct?.

Roughly correct..

And when might we be lapping all of that, so what quarter will we -- second quarter?.

Akshay, yes, which begins for us in January. In other words it's going to continue through our first quarter of this year, but we'll be lapping that by the second quarter of this year..

Okay. And just one last one. M&A, can you characterize the environment from your perspective? Obviously, you have a lot of firepower. Remind us in terms of the size of the deal that you would like to do and then--..

Firepower, that's true, but we don't want to just be shooting everywhere. We look at some things. We've been conservative in our discipline.

Even though we've liberal in our thinking, we're still looking at things and there are some years we make one or two -- and occasionally even more acquisitions and there are some years where there was a dry period, but we don't want to get drunk on things all of a sudden, either..

Okay, I'll pass it on. Thank you..

Thank you, Akshay..

Thank you. Our next question is from Brett Andress. Please go ahead..

Good morning Brett..

Hey, good morning.

How are you?.

Good..

I had a -- what's that?.

I'm sorry, you said how are you and I said good and we'll be even better..

All right. That's good. I want to follow-up on Akshay's question on the manufacturing issues. Can you help us I guess quantify that in the quarter? I mean was it a couple million dollars or so or some amount because I think in the press release you said that you expect that to extend -- or the issues to extend in the first quarter.

So, if you could just kind of 0 guess lay out a little more detail on that, it would be helpful..

Well, part of it was a recall on which was initiated on by us and without going into discussion on it, it appears that the customer operated a little bit cautiously and we supported it. It was on cookies and it had to do with the basically some contamination coming from the frozen coils. It happened in August.

It didn’t exactly blindside us, but we -- took us a while to see through it. And we absorbed all of our potential cost with that and we let it all come hit us in the fourth quarter. We have some -- maybe recovery with respect to insurance issues. We have net -- we have not netted that out.

So, but we're confident that we have looked at all the costs, we've made the necessary manufacturing and personnel changes and it was something that we probably have not gone through, but we'll be better the future, because we went through it now and we exercised the discipline and getting over the hump.

It was a little bit bigger than a camel's hump. Probably it was probably equivalent to two bull humps, just getting over with..

Got it. So, when you're talking about the manufacturing issues and higher costs in the press release, you're mainly referring to recall, is that kind of what you're saying..

Probably covered more than half of it. And then when we looked at things, what happened to recall, some of the condition there, we also went through the necessary discipline of the expense and tightening up some issues..

Got it.

And then I just had one on ICEE, strong quarter, but I guess I wanted to -- you know if you look at Kmart 60 some stores in December, is there any way for you to help us think about that for next year, because I know last quarter wasn't the best quarter for ICEE and target closed 100 stores, so -- I mean is that kind of a similar impact that you would expect from Kmart?.

Well, the Kmart issues have been there. They have been every year over the last -- I don't know close to a decade, but ICEE continues to push sales and develop new skills beyond their existing business formula. They've done a great job in getting into convenience stores from A to Z and everywhere else in between.

We set up -- and even though, we experience some of the conversion on the Target store issues, we are able to set up a separate beverage bar. In Aaron [ph], we were impressed with the initial acceptance of that in the stores and ICEE see is developing new locations and new accounts all the time.

And I think what we have been experiencing with ICEE which has been a net-net positive, I think we can continue to plan on that. At the same time, our Food Service people are working closely with the ICEE people so that we can complement each other's.

So, wherever there is a pretzel, we could have a ICEE, wherever there is an ICEE, we can have churro, and so we're trying to consolidate those type of potentials..

Got it. If I could squeeze one more in just on the Corazonas -- I think that's how you pronounce it, is the acquisition you made -- could kind of maybe layout what you're expecting out of that business over the next few years? I know it's very small, but I think it used to have a sizable revenue base.

I mean can you guys really grow distribution and kind of get that back over time?.

We like the product and its Corazonas HEARTBA.R And we kind of had an opportunity in front of us that we kind of maybe like backed into, sales are running now, Gerry, what at the rate of $100,000 a month or -- and we also have some opportunities with one of the TV sales groups and we -- for the first time, it's going on -- we're expecting in excess perhaps as much as $2 million this year with it..

All right. Cool. Thanks guys..

We have good margins and it's a product -- most good for you products, don't taste good. This is a good for you product that taste really good.

And we've had some good focus groups on it, we've had some good learnings on it, and we think that it's -- you know it's not to be a Churro part of our business, all right, but it can add some fairly -- fair volume to us..

Got it. Thank you..

Thank you. Our next question is from Francesco Pellegrino. Please go ahead..

Good morning Gerry..

Good morning Francisco.

How are you today?.

Pretty good. I had a quick question on the manufacturing issues that you were talking about.

Which segment does that impact?.

It's really bakery and more specifically, I guess, it would be cookies..

So, bakery, cookies, so we're talking like Food Service, right?.

Right. I'm sorry..

Okay.

So, if so we're talking Food Service, one the other questions I had for you was during the order in Food Service, frozen juice bar sales were down 12% and is it fair to say that within the Food Service segment, frozen juice bars are one of the higher margin products?.

We have good margin of frozen juice bars and it's -- yes, that's as fair to say..

Okay. Then when I look at the retail segment, so we had pretzels lag [ph], and we had coupon redemption still rather elevated year-over-year, but I think when you look at what a normalized coupon redemption rate is for the fourth quarter, it's usually like a $1 dollars.

So, if you add back like -- if you lower the coupon redemptions by $1.5 million, you get to about a 10% operating margin within retail supermarkets.

So, I'm just trying to sort of wrap my mind around, because everything that I'm hearing right now during earnings season is you're seeing Food Service struggle a bit, so that makes a little bit of sense when I look at your business and I see Food Service operating margins contracting.

And then I would have just expected and as I saw -- I saw retail supermarket margins expanding, but I see many customers, it's taking them a little bit more to buy your products off the shelf and for that reason, they are sort of relying a little bit more on these coupon redemption, which is really hurting your margins.

And I was just wondering if you could give us a little bit of insight into maybe the discounting you might be doing going forward or if you're going to be maybe less aggressive with issuing coupons? Just trying to wrap my mind around where your retail -- where your retail supermarket segment is going? As it seems that in this economy, it might be one of the more favorable segments that you're selling into?.

Let me have Bob Pape who is waving his -- frantically at me, let me have him comment on this, because Bob's responsible..

The investments we made in the retail side of the business are due to the fact that we have a flat to down customer base generally and that frozen food continues to be a challenge for all manufacturers.

We feel we have to continue to invest in our business to be able to draw consumers to our products and have them continue to try and repeat purchase our products. And that's really what's driving our strategy right now, the competitive environment..

Okay. That makes sense. And just -- I guess the growth in the segment, it sort of does matter your organic growth rate, so it's not really troublesome given just what some of the category issues are at retail. So, I just want to see if maybe less discounting could solve those problems? But I understand the investments you guys are making.

And I guess just the last thing I want to touch on was last quarter, Gerry, you had touched on the fact that -- look, you have a pristine balance sheet, you have a lot of cash, but a lot of it is just being parked in the securities and you said, you know what, there's a come point in time over the next couple of quarters that if we don't get some sort of acquisition done, maybe increase issuing a special dividend would have to be a likelihood for the company.

Could you just give us maybe what your thought process is on that? And I'll jump back in queue and thanks again..

And again we've been building up our cash and I want to say was it's not like burning a hole in our pocket. Yes, we're looking for acquisitions. Yes, that would be the best use of our cash.

We have increased our dividend every year for 10 consecutive years, 40 straight quarters and the likelihood of a special dividend, although, it might be considered, it probably is not my -- on the top of our priorities..

Okay. That's perfect. Thanks again Gerry..

Thank you. Our next question is from Eric Gottlieb. Please go ahead..

Hi, Gerry. Thanks for taking my question..

Hi Eric..

If we could talk a little bit more about the manufacturing issues, I'm wondering you said they are going to linger into this quarter, are they done now presently?.

We believed that yes -- that we have accomplished essentially 90% resolve the issues that were there. And we don't expect them continue beyond this -- our first quarter, which ends in December..

Got it. Okay.

And then my other question is administration; that was higher in the back half of the year, what's going on there? What goes into that?.

Well, our accounting administration, I -- when you saw it was higher than past few -- let me turn this over to Dennis..

We're making additional changes to our IT systems as we move from older legacy systems to more modern systems. In the short-term, we have higher cost because of that. But over the long-term, it should lower our costs not only in administration; help to lower them through the -- other areas of the company, especially in manufacturing side as well.

Additionally, there are just increasing amounts of regulations that are impacting the business and all businesses and all kinds of new reporting they have to do for the government, for the healthcare, for the EEOC. So, we're just inundated [ph] with all kinds of new regulations that caused -- to pilot and report on. So, that's part of it as well.

And unfortunately the increasing regulations are going to be continuing and they -- what they hear is that they do hurt business and they hurt businesses pretty significantly..

Got it.

And then not on the recall, back to the recall, what was exact size? And how long did it last? Was it production for a week for this one customer, how -- little bit in more detail?.

Probably we can touch for a couple of months because first we did the recall and we held off some things from shipping in there. And last probably through September and October and it began in the mid-August..

Okay. Got it.

And then you talked about -- you're wanting to hold onto those bonds until maturity, when do they mature?.

This is Dennis. Our average time to maturity is a little under two years. Some of our -- four years or so and some begin maturing this year..

Okay. And then the other thing is the machines -- the frozen machines, I noticed there was a change in the press release versus last year.

I think there was a restate from 52 -- 53 to 49, as there are a certain customers you're just not counting anymore or how -- why -- what's going on there?.

This is just -- basically a correction of an error..

Got it. Okay. Fair enough. With that I'll pass it on. Thank you..

Thank you..

Thank you. Our next question is from Jon Andersen. Please go ahead..

Good morning everybody..

Hi Jon..

Hi.

I'll ask -- I want to ask one more time about the operating income in the Food Service business, down -- it was down in total about $6 million year-on-year, how much in there in press release that indicates about a quarter of that $6 million decrease was due to the bakery recall? The remainder $4.5 million or so -- how much of that was the incremental manufacturing cost, which have been dealt with now? And how much was just the fact that sales volumes were lower? Thank you..

Before commenting on that, it appears to be -- might have been a combination of both. The environment was a little more competitive. We made some pricing considerations to some of our top customers, but we don't think that that trend is going to continue..

Okay. On the restaurant business, which Gerry, you mentioned was up I think 10% this year you said, and now it's north of $60 million in sale..

That's correct..

Can you talk a little bit more about what some of the drivers were? I think you had a pretty significant piece of new business with a QSR that helped this year, do you think that that restaurant business continues to grow in fiscal 2017 and at the kind of levels we saw in 2016 or were there some kind of one-time factors in there to consider?.

There were some one-time benefits that we got in the past year, one of most Funnel Cake with a top customer.

But keep in mind that's the business that we spoke about that was a flat map a few years back and we went from zero up to $40 million, $45 million before it self-adjusted down by maybe 8% or 10% two years ago and now we -- and now this past year, we've been the beneficiary of that growth. We're still focusing on that.

We think that it is potentially for us. It could double in the next five years, but we have new products, we're very responsive to our customers.

We have a team that is dedicated to that channel and unlike our Food Service grew out of a small little company many years ago to a couple hundred million dollars; we think that the restaurant channel in there could be as much as $100 million in the next five years.

So, we're going to continue to push our existing products while we work hand-in-hand with them -- with our R&D people calling on this change, complimented by our salespeople or vice versa, but we think that we are -- it will be a major growth area for us..

Okay. And then on -- I'm trying to -- last thing for me is I'm trying to get a little bit more insight into how you're thinking about profitability or gross margin in fiscal 2017. Margins flattish in 2016, I know there are a lot of factors that influenced this year including some of the incremental cost we talked about here day.

What is the, kind of, overall pricing environment look like for you, the commodity backdrop, can your gross margins -- or do you expect your gross margins to improve in 2017? If so, why?.

Well, if they are going improve and we're of cautiously optimistic that they will be, it will be by basis points all right. The commodity outlook is reasonably favorable to us, but by the same token, there seems to be some resistance to pricing by major customers in there.

So, whereas in the past, we were very hesitant to pass on pricing and we would wait a couple years and maybe it would be in the mid-single-digits, 3%, 4%, we've taken a sharper look at that perhaps to look at it every year with a little bit lower pricing initiative, perhaps 2%, 2.5%, so we get the benefit of that as our -- we get the benefit of that and over a few years period, it can have a more significant pricing benefit.

In other words, small increments is better than bullish moves..

Okay. Thank you..

Thank you. And our next question is from Jonathan Feeney. Please go ahead..

Good morning Jon..

Good morning.

Hey Gerry, how are you?.

I'm good.

How are you?.

Never been better. I wanted to follow-up on the last series of questions.

Could you maybe encapsulate for me how much -- when I look at little bit of gross margin compression this year, I mean how much is that is mix and across your portfolio, how much of that is like pricing ahead of commodities? Like are you on an apples-to-apples basis, are you able to take price up right now and price for commodities and just mixing away from your or is the -- if any way you could talk about that, I'd appreciate..

I'm not looking exactly at the gross margin, but it seems to be perhaps one ad something basis points. And it may be totally related to volume..

Okay. And I guess my follow-up question about it -- my completely separate question is when you look at Food Service bakery, independent to the recall, back that out, you gave us a number of $32 million in total products across the company.

I mean -- I guess I'm trying to understand your apples-to-apples volume there, which is apparently declining and is that share loss primarily, across the Board or is that fewer doors or just less takeaway volume for cost efficiency?.

Dennis, how would you answer that?.

We've always had this kind of -- same kind of a situation where it looks like our new products far outpaced our sales increase. And we do -- we have new product that takes the place of older that disappear for one reason or another. Discontinue -- what's discontinued products because there was newer products or different kinds of products.

So, we've always had over the years if you would go back and look at the numbers..

Okay.

Yes, I get, but would you say that -- would say that I don't know if it's possible to even say, but if you looked at your -- the total takeaway of your Food Service customers in that relevant products in that bakery segment, would you say you're losing share to competitors?.

No, we did not say that, no..

Okay. I guess thank you. And my last question is on marketing.

I know it's -- you have been very efficient in growing the business quite well and you've -- but that marketing line is flat, I mean how do you think about -- everybody in the industry is talking about you getting more efficient, some marketing spending that you used to do is not working, retail customers are thinking more about push than pull and everything that goes with that.

I mean how do you think about your marketing investments? Would you expect that line to stay flat or decline because you've discovered new efficiencies? Or would you say next year is going to be years -- or N years after that use of investment in that line particularly?.

As a percent of sales, we would look at that to be relatively flat. We're doing a lot more of the new age type of marketing, which includes digital, which includes social, online and we seem to be picking up some reasonable -- not just content, but the following on that. We have a -- Gerry Law is responsible for Marketing and the R&D of new products.

The teams and the marketing people are working well. We have some good talent there and some talent that has been with us for a number of years and they are working closely with our sales group and our R&D people. And we're kind of like excited about it for the future. It certainly as has -- I mean it's fertile as has not been dry..

I understand. Thank you very much for your time..

Thank you..

Thank you. We have no further questions at this time..

Well, I want to thank everybody for participating in the -- this conference call. And we'll look forward to revisiting with you some 90 days hence or thereabout. And we're cautiously optimistic about the next quarter and superbly optimistic about the next couple of years. Thank you..

Thank you. And thank you ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect..

Bye now..