Kevin D. Williams - Jack Henry & Associates, Inc. David B. Foss - Jack Henry & Associates, Inc..

Brett Huff - Stephens, Inc. Peter J. Heckmann - Avondale Partners LLC David J. Koning - Robert W. Baird & Co., Inc. (Broker) Glenn Greene - Oppenheimer & Co., Inc. (Broker) Rayna Kumar - Evercore Group LLC Kartik Mehta - Northcoast Research Partners LLC.

Good day, ladies and gentlemen, and welcome to the Jack Henry & Associates First Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, this conference call is being recorded.

I would now like to turn the conference call over to Kevin Williams, CFO. Sir, please go ahead..

Thank you, Abigail. Good morning. Thank you for joining us today for the Jack Henry & Associates first quarter fiscal year 2017 earnings call. I'm Kevin Williams, CFO. And on the call with me today is David Foss, our President and CEO. The agenda for the call this morning, in a minute, I'll turn the call over to Dave.

He will provide some of his thoughts about the business and the performance of the quarter. After that, I will provide some additional thoughts and comments regarding the press release we put out yesterday after market closed, and then I'll update our guidance for FY 2017 and for Q2. And then, we will open the line up for Q&A.

I need to remind you the remarks or responses to questions concerning future expectations, events, objectives, strategies, trends, or results constitute forward-looking statements or deal with expectations about the future.

Like any statement about the future, these are subject to a number of factors which could cause actual results or events to differ materially from those which we anticipate due to a number of risks and uncertainties, and the company undertakes no obligation to update or revise these statements.

For a summary of these risk factors and additional information, please refer to yesterday's press release and the sections in our 10-K entitled Risk Factors and Forward-Looking Statements. With that, I'll now turn the call over to Dave..

Thank you, Kevin. Good morning, everyone. We're pleased to report another strong operating quarter with record revenue and operating income. As in the past, I'd like to begin today by thanking our associates for all the hard work that went into producing those results for our first fiscal quarter.

I'm particularly pleased with the results for the quarter because the prior-year quarter included some fairly significant headwinds for us to grow over. Our Q1 in FY 2016 included both Alogent, which we sold last quarter, and a full quarter revenue associated with Susquehanna as we've discussed on prior calls.

Despite these headwinds, total revenue increased 7% for the quarter and increased 6% excluding the impact of deconversion fees from both quarters. Organic revenue growth was also 7% for the quarter.

Our payments businesses performed well despite the pressure we highlighted last quarter, and we posted a 7% increase in payments revenue or a 6% increase, excluding deconversion fees. Our outsourcing and cloud revenue growth for the quarter was 19%.

And if you exclude the impact of deconversion fees from both quarters, we saw a very solid 14% increase. Despite an extremely strong sales quarter in Q4 of FY 2016, our sales teams finished Q1 in excess of 100% of quota and booked more business than any previous first quarter.

This is significant not only because they have set a sales bookings record but because they did it without the benefit of any Alogent sales in this quarter. Additionally, all three of our brands continue to work robust sales pipelines.

As I mentioned in the press release, we hosted our two largest client conferences of the year in September and October for our Symitar and JHA Banking brands. Between the two conferences, we hosted more than 44 prospect institutions represented by almost 100 people.

I was overwhelmed of both conferences by the levels of customer satisfaction expressed to me by our customers, which in a reference selling business like ours is obviously very helpful. With that, I'll turn it over to Kevin for some detail on the numbers..

implementation services of $15.6 million versus $17.1 million was a slight decrease of 9% for the quarter; electronic payments was $135.8 million versus $126.5 million, which is a nice 7% increase as Dave mentioned; OutLink revenue, $83.8 million versus $70.7 million, again increased 19% for the quarter; in-house maintenance, $84.8 million versus $84.3 million, which is a slight increase for the quarter compared to last year; and our bundled services of $12.9 million versus $9.1 million, which is made up of implementation, license, and maintenance with increase of $3.8 million for the quarter.

As Dave pointed out, total revenue growth was 7% for the quarter and grew 6% for the quarter if you were back out total deconversion fees of $13.1 million this quarter versus $7.1 million in year-ago quarter.

And if you back out the increase in deconversion fees of $6 million over the last year, revenue is still above consensus estimate for the quarter. To look at just current operations and back out the $6.4 million of Alogent revenue in last year's quarter, our revenue from operations grew 9%.

And if you adjust for both total deconversion fees and Alogent grow over, revenue grew 8%, which is right in line with the prior-year revenue growth.

Our deconversion fees were just slightly higher than we anticipated for the quarter, due to a couple of unknown deconversions that occurred in the quarter, but the big decrease in these fees compared to the prior year that we discussed on the last earnings call is projected to be in the second and fourth quarters, as that is when we had the large one-time deconversion fees from Susquehanna and CIC (5:29) last year.

Our growth and operating margins both improved slightly as reported, and remained relatively level if you back out deconversion fees for both years. The effective tax rate decreased to 31.9% for the quarter from 36.1% last year.

This decrease is primarily due to the reinstatement of the R&E Credit, which we got the benefit of this year, but we did not have benefit of in the prior-year quarter.

And we have the early adoption of ASU 2016-09, which allows you to recognize the benefit of stock-based compensation through the P&L as an adjustment to taxes, which previously, this ran through retained earnings, which the impact from this early adoption was approximately $0.03 EPS.

We anticipate the effective tax rate to return to the more normal 34.5% in the second quarter, and wind up for the year between 33.5% and 34%, with the impact of this early adoption. Our net income was up 21% to $62.2 million from $51.4 million a year ago, which led to EPS of $0.79, which was up 24% over last year EPS of $0.64 for the quarter.

Excluding the increase in deconversion fees this quarter compared to a year ago, net income would still be up 13%, and EPS up 16%. Therefore, decreased taxes contributed $0.03 to the EPS, and the increase in deconversion fees contributed just a little less than $0.05.

So, true adjusted EPS from operations without these impacts was still a little above $0.71, compared to the $0.70 consensus. EBITDA for the quarter increased to $125.7 million compared to $111.9 million last year, or a 12.3% increase.

Included in the total amortization disclosed in the press release is the amortization of intangibles from acquisitions, which was down to $3.7 million this quarter compared to $4.8 million last year.

Our free cash flow, defined as operating cash flow less CapEx and cap software, plus proceeds from sale of assets, was $101.5 million for the first quarter this year, or $1.29 per share, compared to $86.4 million or $1.07 per share last year.

We continue to provide solid return to our shareholders through both dividends of $21.9 million for the quarter and stock buybacks of $61.3 million for the quarter. Our return on equity for the trailing 12 months was a solid 26.8%.

For guidance, our revenue growth will continue to be slow in FY 2017 as we continue to grow over the headwinds created by the disposition of Alogent and loss of the two large customers last year that got acquired, and the huge increase in deconversion fees last year that we will grow over this year.

For the December quarter, we have $8.2 million of revenue that Alogent contributed in the prior year, and we had our largest payment (8:22) process that was acquired last year, contributing revenue through the end of November in the prior year that we have to grow over both of those.

We anticipate deconversion fees to be down $3 million to $5 million in the December quarter compared to previous year, again, because last year, we had the large one-time deconversion fee from Susquehanna. We anticipate revenue growth in the December quarter of roughly in line with the 4% to 4.5% we previously provided on the last earnings call.

However, if you were to adjust that for the Alogent and back out the deconversion fees from both periods, our revenue growth from operations would continue to be in the 7% to 8% range in Q2. We anticipate margins will be essentially flat with the same quarter a year ago.

And the effective tax rate obviously will be up to 34.5% in the December quarter, up significant from the 29.9% in the quarter last year. However, with all that, we are still comfortable with EPS consensus estimate of $0.74 for the December quarter at this time. That concludes our opening comments, and we are now ready to take questions.

Abigail, will you please open the call lines up for questions?.

Thank you. Our first question comes from Brett Huff with Stephens. Your line is open..

Good morning, guys..

Good morning, Brett..

One question. Kevin, I think you said the OutLink was up 19%.

Is that a reflection – is that where the deconversion fees would show up?.

I think Dave mentioned this on his comments. If you back out deconversion fees, it was still up 14% for the year, which is actually pretty much in line with where it was all of last year. Last year, it was 13% back out deconversion fees, Brett..

Okay. And then remind us again, you called out one more one-time item. I think the large payment processor year-over-year growth.

What was that sort of one-time item again that we need to make sure we're good within December? Can you just reiterate that?.

Yes, that was Susquehanna, and there was a onetime fee when they deconverted in November of $5 million, which is why I explained there are deconversion fees, but December quarter is going to down $3 million to $5 million from where it was last year..

Okay. And then can you give us a sense of how the conversations – Dave, you mentioned being able to talk to some of the 40 prospects I think or customers and prospects at the recent conferences.

As you're talking to those folks and those bankers, any change in tone of what they're looking for? Are they still looking for compliance or cost reduction or revenue enhancement and kind of what are the top things on their list these days?.

Yeah. And I've talked to most of them I would say at those two conferences. I don't know that I got to every one of them, but generally, it's around improving functionality in the core system, certainly focused on compliance and efficiency. And one of the new solutions we released last year that we've talked about is (11:12).

So, that's gaining some traction because it helps a bank or credit union improve efficiency. So, normally, that's around improved overall solution, improved customer service, and then compliance and efficiency..

Okay. And then last question from me.

Any update on the new digital banking products that are rolling out that I think were associated with Banno or some of that functionality, kind of how was that going and what's the feedback so far?.

Yeah. Feedback has been solid. We've signed, I think not in the quarter but in the past 12 months, we've signed around 90 customers, and I don't have an exact number in front of me, but around 90 customers on the Banno platform.

Feedback is good that is the solution that we're building around as far as a digital platform for mobile and webhosting and the entire customer experience, and customer reaction is very solid to that solution..

Okay. That's what I needed. Thanks, guys..

Yeah. Thanks..

Thank you. Our next question comes from Peter Heckmann with Avondale. Your line is open..

Good morning, gentlemen..

Good morning, Pete..

Good morning..

Great. So, you've had two consecutive quarters where term fees were much higher, and that's seeing a whole lot of activity in the marketplace as regards M&A.

Would you characterize that as just kind of an unlucky coincidence?.

Well, I would say, Pete, that we knew going into this quarter, like I said in my opening comments, the deconversion this quarter were just slightly higher. We knew of some that were going to happen this quarter. There were a couple kind of surprises that happen as the payments came in, the paperwork came in that we weren't really anticipating.

But like I said, we got pretty good visibility next quarter. Obviously, you can always be surprised, but we don't see anything coming up the next quarter even for the (12:57) that surprised us.

So, we still think our deconversion fees for the year are going to be down quite a bit from last year primarily because of those two large ones from the Susquehanna and CIC (13:09) that got acquired last year. Just those two, that's about $10 million. So, we still think it's going to be down for the year.

We knew it's going to be a little up this quarter. It's just a matter of timing, which we have no control over. We have to recognize revenue when the (13:24) come in, Pete..

Yeah. Sure enough. Sure enough. So, that's good though that you expect term fees to be down for the year, and you talked about the second quarter, so that's a positive.

Can you give us an update on the M&A pipeline? Are you seeing anything there that looks interesting in terms of allocating some capital towards some smaller growth companies that you could use to complement your core solution?.

Yeah. This is Dave, Pete. I'd say that the story right now on M&A is pretty much the same story that we've been experiencing for the past 12 months. We are always looking. There are always fields that we have our eye on.

It's tough to find a deal that really fits, A, because we have such a broad suite of solutions today, finding something that we don't have that fits who we are and what we're trying to do as a company can be a challenge; and then, B, valuations are still difficult to get something that really fits as far as valuation.

So, there are deals that are out there, and we're looking all the time. Just haven't found one recently that fit the profile that we're looking for..

Got it. Got it. Okay. I'll get back in the queue. Thanks..

Thank you. Our next question comes from Dave Koning with Baird. Your line is open..

Yeah. Hey, guys. Thanks. Yeah. Hi. I guess, my first question just the payments business on an ex-term fee basis, most of the last year kind of was around 4% growth. In Q1, it's at 6% now.

Is there anything changing on an underlying basis that's just getting better? Are you starting to partially anniversary some stuff from Susquehanna or anything else? Because it just seems like momentum is getting better there on an underlying basis..

No. And, Dave, it's Dave. No, no anniversary as far as Susquehanna is concerned. I think your kind of high-level assessment is correct. The payments business is performing well, performing better frankly than I had expected, and it's really across all three areas. As a reminder, we have three aspects of our payments business.

We have our card processing business, our bill pay business, and then our remote deposit capture ACH business. All three of those lines of business are performing well and better than we had anticipated..

And is that a function of market share wins or do you think in part that's just a function of – I don't know – a pickup in economic activity or just banks really pushing more for electronic like, I guess, how do you, I guess, parse that?.

Yeah, I think it's market share wins, and I don't know if it's banks pushing more or us helping them push more. So, we track pretty closely subscriber adoption, for example, in bill pay. And same-store sales growth is a key metric for us, and same-store sales growth is up this year.

And we are active in helping our bank and credit union clients with their adoption within – so, customers that were already signed with us, we help them with adoption for their customers.

So, I think there is an uptake across the board, not only in competitive signings but in us helping our customers get to more of their consumers with our payment solutions..

Yeah, Dave. I think we mentioned on the last call we continue to have a very solid pipeline in all three of those lines. (16:40) capture the sales we have there. That part still continues to serve us well. But we still got quite a bit of runway in our customer base for the card business.

I'd say, obviously, we saw that as much outside the base as we did inside the base. So, there is still some nice runway, and what you're seeing I think is some of the sales that were made last year that are now getting converted, because everybody has those; once you convert them, you're actually bringing some nice volume on..

Okay. Got you. Thank you. And then I guess secondly, just the guidance comments you made, I think they were fiscal Q2 when you said 4% to 4.5% revenue growth and margins flat year-over-year.

I guess, first of all, am I right about that and then, full year, is it still 4% reported and then with maybe mild margin expansion?.

Yes. That's exactly what I said..

Okay. Got you.

And I guess, finally, on the tax rate, the adjustment to your tax rate guidance, is it still somewhat – like, are there moving parts still around some of the new accounting where, depending on the stock movement, the actual tax rate could still move around a little bit outside of your range, or do you feel pretty good now about the full-year range?.

I feel good about it, Dave. And the reason is because most of our stock-based compensation benefit happened in Q1, that's when the long-term comp restricted stock vests for the executives and GMs, in that (18:18) the vast majority of any stock-based benefit is going to happen in Q1.

So, there'll be a little bit the rest of the year, but not near as much. So, going into this quarter, we didn't know exactly what the benefit could be, and until we knew that, which was actually in mid-September, that was when we made the decision to go ahead and early adopt to get the benefit.

But up until September 10, to be quite honest, we weren't sure if we were going to early adopt or not. So, very comfortable with the tax rate for the balance of the year on the guidance I gave, because the stock-based benefit is not going to have much impact the balance of the year..

Got you. All right. Great. Well, thank you. Nice job..

Yeah. Thanks, Dave..

Thank you. Our next question comes from Glenn Greene with Oppenheimer. Your line is open..

Thanks. Good morning. Hey, Kevin. I want to go back to the fiscal 2017 guide also. So, back in August, you called out two major headwinds was lower deconversion fees, which I think was going to be a $0.10 drag, and the tax rate sort of grow over, which I think was a $0.05 drag.

That obviously drove the upside of the quarter, this quarter, sort of the $0.08 that you sort of called out, meaning the deconversion fees, I'm pretty sure, and I think you acknowledged, came in higher than you would have thought in the quarter, and then you got the benefit from the tax rate in the quarter.

So how should we be thinking about the flow-through of this quarter's upside into the full-year guide?.

Yeah. I mean, obviously, the $0.03 tax impact for this quarter is going to take the whole year guidance up, Glenn. I mean, there are a couple of deconversion fees that came in this quarter that we kind of anticipated next quarter. So, we're still going to have an overall decrease for the year in deconversion fees.

Probably not quite the drag that I anticipated in August, but it's still probably going to be a $0.07 or $0.08 drag to the year..

So, all else equal, we should probably looking at $3.10 in EPS kind of thing?.

That is probably about right..

And then on the deconversion fees, it certainly sounded like it was somewhat unexpected, and it seemed like a pretty big deconversion fee.

So, what happened, and how should we be thinking about when that potential revenue drag is going to hit you?.

Actually, Glenn, the Q1 deconversion fees wasn't that much of a surprise, and I tried to get that across (20:45) comments. I mean, we knew deconversion fees this quarter were going to be up compared to last quarter. The surprise was only like $1 million or $1.5 million of the total deconversion fees for the quarter that came in kind of unexpectedly.

So, we knew it was going to be up this quarter, but we also knew it's going to be down quite a bit next quarter..

Okay.

So, in your mind – (21:08) so this was nothing incredibly unusual in the quarter as it relates to the term fees?.

No, absolutely not..

They're not going to be a meaningful headwind that you're going to be calling out at some point within the next three, four quarters kind of thing?.

No..

And the credit union business, which had just been humming along and all of a sudden slowed to like 3% growth, anything that explains that, and kind of (21:28) banking got a lot better..

Well, a couple of things there, Glenn. I mean, if you look at last year, the comp we had, credit unions had a 32% increase last year in Q1. So, pretty tough comp to grow over. There was nothing really unusual. I mean, everything kind of keeps trucking along.

Our bundling revenue was down a little bit this quarter compared to a year ago, just because of the timing of delivery. Some of the implementation was down, just again due to timing of billing and revenue recognition. License and hardware, both down slightly and that's again just due to timing of delivery.

So, there is nothing unusual in credit unions other than a very tough comp a year ago.

Banking, everything is continuing to track along, especially the outsourcing, which is relevant to the in and out business that we continue to talk about and continue to see a very good momentum there as we see that shift of our existing (22:26) customers moving to outsourcing, and I think we're going to continue to see that nice growth especially in the outsourcing and payments businesses in both sides of the business..

All right. Great. Thanks a lot..

Thanks, Glenn..

Thank you. Our next question comes from David Togut with Evercore ISI. Your line is open..

Good morning. This is Rayna Kumar for David Togut. It's good to see the capitalized software down for the quarter.

Could you just talk about your expectations for FY 2017 as a whole? And separately, could you just talk about any major product investments you're making currently?.

So, I talked about this a little bit on the last call that we expect that CapEx is down a little bit, the cap software is down a little bit, and I expect cap software to run at that same rate going forward.

As far as the new products that are in process or maybe capitalized software projects that are in process, we have the ongoing Episys technology development that we've talked about on several calls in the past that goes on through 2018 but is being rolled out in phases. So, it's not that it's a big bang at the end, but it's an ongoing project for us.

We've highlighted our treasury management project that's been going on that is released next year. We have a financial crime solution that we've been working on that we have talked about previously and then other ongoing projects with our payments business, for example, and with Banno that was already asked about today.

So, a number of large development projects that are ongoing. But with that said, as I said earlier, I expect cap software to kind of run at the same rate that you are seeing now..

And I'll also say we rolled a lot of products out in the June quarter and into live production (24:14) which drove to the increase in amortization that you see in the press release that flowed through (24:20) the cash flow statement this quarter.

So, our percentage of cap software that's still in development is not being amortized, is running pretty much where it has been historically. And as Dave said, our cap software for the year, as we guided last quarter, is going to be down for the year..

That's very helpful.

Could you discuss your business pipeline for electronic payments and your expectations for revenue growth for the year?.

Sure. I think I said the expectation on the last call that we'd be in the 5% to 6% range. And if you look at this quarter, excluding deconversions, we are right at 6%. I think that's a good number going forward in the 5% to 6% range. The payments business, as I talked about earlier with one of the questions, is performing nicely for us right now.

We have some grow over that we're dealing with from last year, but the payments, all three lines of the payments business are performing well right now..

With the strong top line growth and EPS gains, I was a little surprised to see your operating cash flow up only 5%.

Was there any onetime items or anything in the cash flow that we should be aware of maybe in working capital?.

No, not really. Nothing unusual. Obviously, deferred revenue is up quite a bit from a year ago, and that's probably the biggest change right there that caused the increase not to go up anymore. I mean, that's a $12 million increase which is actually a good thing..

Got it. Okay. And one final question from me.

Could you just discuss the competitive environment in the large credit union space, and specifically, are you seeing any increased competition from Fiserv's DNA product?.

I would describe the competitive environment as intense as it has been in the large credit union space, intense as it has been for quite some time. No, we are not seeing any increased level of competition or reason to be concerned when it comes to any particular core provider. We're all competing..

And like Dave said, we have a large number of core prospects at our Symitar Educational Conference. I believe there was 28 (26:40)..

28 and half of those were over $1 billion in assets.

Let me point out too that in the last fiscal year, so I don't have the number for this quarter, but in the last fiscal year, for us, so July 1 to June 30, there were 12 credit unions that made a competitive decision – over $500 million in assets,12 credit unions that made a competitive decision, meaning leave their current core provider.

50% of those went with our Symitar solution. So, I think that's a good indicator of how we're positioned today as a core provider against any of the cores that are out there..

Thank you..

Thank you. Our next question comes from Kartik Mehta with Northcoast Research. Your line is open..

Hey. Good morning, Dave and Kevin.

Dave, you talked a little bit about how sales have been fairly strong, and I know, Kevin, you don't give backlog numbers anymore, but if you look at the visibility based on what you have already in the pipeline, how far can you see out? I mean, is demand strong enough that, over the next two fiscal years, you feel fairly good that you'll be able to maintain a fairly decent organic growth rate?.

Let me touch on that first, and then I'll turn it over to Kevin. I think it depends on the product line that you're looking at. So, you sign a new core deal today. Well, that core deal isn't going to install for 12 to 14 months. You never know what their conversion timeline is, but it's a long-term project.

Whereas you sign a bill pay customer today, they may convert in 60 days. So, it really depends on the product line that you're talking about, and given the fact that we're pretty diverse today when it comes to product signings, I think that's a difficult question for me to answer. Now, Kevin may have a better response..

Yeah. I guess, Kartik, what I'd say is, with our recurring revenue at 80%, with the backlog of conversions that we know we have out there for, not only payments, but also the customers that have signed contracts to move from in to out, so we know the conversion timelines for those and what that benefit's going to do to revenue.

So, we got very good visibility for at least 12 months to 18 months out, barring any large M&A activity where we lose another customer just like we did last year, but barring that, we got extremely good visibility, probably 95% plus of what we're going to have for the next 12 to 18 months..

Hey, Kevin. You and David talked about core systems.

Are you seeing – has demand increased for banks and credit unions looking at core systems, potentially replacing them or doing some kind of analysis?.

I don't know that I would characterize it as any significant increase. There are a lot of deals in flight (29:37) right now, and as always, our biggest competitor is no decision, right, if people go out and look and then they decide to not make a move for whatever reason. So, I don't know that there's some great big increase overall.

At this point in time, there are a lot of deals that are in play..

Yeah. I would say this, the good indicator is having record attendance at your education conferences, record number of prospects, and we even had a record number of CEOs at our CEO forum, at our Banking Education Conference. So, those are all really good indications.

And I would say that's surprising, because there was a large number of the CEOs actually stuck around this year and went to the technology fair to look at some of our products. So, to me, those are all very good indications that we're going to continue to do well..

And then just last question, just your use of cash, Kevin. I think, Dave, you said that, on the M&A side, really there hasn't been any product that you've been really attracted to, and maybe the multiples are too high.

From a use of cash, is it, Kevin, going to be just buying back shares like you have, or are there other things you're thinking about?.

Yeah. I mean, obviously, we're going to continue to look at M&A activity (30:57). As Dave said, there's just not a lot out there, which is why we continue to reinvest in our products and develop products. We have our Annual Shareholders Meeting this week on Thursday and our board meeting.

And just like every board meeting, we're going to discuss the use of cash, but anticipate that we'll probably continue to use to buy back stock and continue to evaluate increasing dividends..

Thank you very much..

Sure..

Thank you. And we have a follow-up from the line of David Koning with Baird. Your line is open..

Yeah. Hey, guys. Thanks for taking my second one. So, you talked a little bit about – I know capitalized software, down this year. I know you talked about that. CapEx, did you say what you expect? I know last year was $56 million.

That's also going to be down this year?.

I mean, as of now, we think it is, Dave. (31:51) depending on upgrades to hardware and some different things, but we don't have any large, unusual CapEx, other than maintenance, really planned for this year. In the following years, very possible we're going to have to add another building in Springfield because we are out of space there.

We're back to leasing almost as much space as we did before. We built two buildings in 2010 and more to come on that, but the CapEx should be flat to down slightly through the year..

Got you. What it seems like is happening, I know last year was a little different than the norm that free cash flow was a little below earnings. After 10 years in a row, I think it was above.

It feels like given CapEx going down despite the overall growth of your business, it just seems like you might revert and kind of catch-up this year, not only be above earnings but kind of pick up the little bit of gap that you had last year, so be more above earnings than normal.

Does that seem like a fair statement?.

I don't know how (32:52) about confirming that, but I think it would be back above earnings, yes..

Okay. Great. Well, thank you for that..

Thanks, Dave..

Thank you. I'm showing no further questions. I'd like to turn the call back to Kevin Williams for further remarks..

Thank you. Again, I want to thank you all for joining us today to review our first quarter fiscal 2017 results. We're very pleased with results from our ongoing operations and the efforts of all of our associates to take care of our customers.

Our executive managers and all of our associates continue to focus on what is best for our customers and our shareholders. I want to thank you again for joining us today.

And, Abigail, will you please provide the replay number?.

Ladies and gentlemen, this conference will be available for replay after 11:45 AM Eastern Time today through November 15, 2016 at 11:59 PM Eastern Time. You may access the replay at anytime by dialing 855-859-2056 and entering access code 8367060. International participants may dial 404-537-3406 and access code 8367060.

Those numbers again are 855-859-2056 and 404-537-3406, access code 8367060. That does conclude our conference for today. Thank you for your participation in today's conference. You may now disconnect at this time..