Patricia Penman - VP of Marketing Services & Global Communication Helen Johnson-Leipold - Chairman & CEO David Johnson - VP & CFO.

Brian Rafn - Morgan Dempsey Capital Management George Kelly - Imperial Capital Ryan Hamilton - Morgan Dempsey Morgan Dempsey.

Hello, everyone, and welcome to the Johnson Outdoors Third Quarter 2017 Earnings Conference Call. Today's call will be led by Helen Johnson-Leipold, Johnson Outdoors Chairman and Chief Executive Officer. Also on this call is David Johnson, Vice President and Chief Financial Officer. [Operator instructions] This call is being recorded.

Your participation implies consent to our recording this call. If you do not agree to these terms, simply drop off the line. I would now like to turn the call over to Patricia Penman from Johnson Outdoors. Please go ahead, Ms. Penman..

Thank you. Good morning, everyone, and thank you for joining us for a discussion of Johnson Outdoors results for the 2017 fiscal third quarter. If you need a copy of today's news release, it is available on our website at www.johnsonoutdoors.com under Investor Relations.

I also need to remind you that this conference call may contain forward-looking statements. These statements are made on the basis of our current views and assumptions and are not guarantees of future performance. Actual events may differ materially from those statements due to a number of factors, many beyond Johnson Outdoors' control.

These risks and uncertainties include those listed in our press release and filings with the Securities and Exchange Commission. If you have additional questions following the call, please contact Dave Johnson or me. It is now my pleasure to turn the call over to Helen Johnson-Leipold..

Thanks, Pat. Good morning, and thanks for joining us. I'll begin with an overview of results and provide perspective on our markets and our brand's performance this quarter. Dave will review the financial highlights, and then we'll take your questions.

Third quarter is the height of our warm-weather season and provides the best insight into consumer response to our products and programs. We had a great quarter. Sales increased 11.5% to $155 million, a record third quarter for Johnson Outdoors. Operating profit grew substantially to $24.7 million, nearly double compared to last year's quarter.

Net income in the quarter nearly tripled to $1.65 per diluted share. Year-to-date is a similar story. Sales in the 9-month period were $399 million, an 11% increase over the prior year same period. Operating profit rose to nearly $46 million, nearly $18 million above last year at this same time.

Net income was $3.45 per diluted share in the 9-month period, more than double last year's first 3 quarters.

The outstanding results during the quarter and year-to-date emphasize the importance of our continued focus and investment on delivering market-winning innovation, driven by deeper understanding of and unique insights into outdoor recreation consumers.

Fishing has had a phenomenal year with strong growth in all segments and channels by our powerhouse flagship Minn Kota and Humminbird brands. And while we're benefiting from this year's very healthy boat market, the primary driver behind Fishing's performance is robust innovation across the business.

For perspective, Fishing new products this year accounted for about 60% of the entire product offering. Normally, the new product target level is about one third. Our 2017 new product lineup was exceptional and marketplace demand has exceeded expectations across the board.

Among these are the award-winning patented Minn Kota Ultrex, the first electric cable-steer motor and the most technologically advanced one, providing our breakthrough steering and navigation features at the tap of a foot. Response from pedal control fishing enthusiasts, primarily bass anglers, has been terrific.

In addition to the new pioneering Ultrex, we did a technical upgrade across our entire Minn Kota electric steer line, and these restaged motors are also doing very well. The Minn Kota Ulterra, with automatic wireless stow and deploy is also doing well.

Legacy i-Pilot and i-Pilot Link add-on accessories continue to be strong as well as combo unit motors, which come equipped with these navigational technologies.

In Humminbird, we're seeing continued growth in our Helix series of fishfinders, due largely to the introduction of our new MEGA Series Imaging and MEGA Down Imaging, which launched fish-finding sonar technology into the megahertz range for the first time ever.

The quantum leap in frequency provides the greatest underwater clarity, detail and definition, and are now available in our second-generation Helix series model. The new Humminbird SOLIX is also off to a great start.

SOLIX is the biggest display fishfinder ever, and just earned Humminbird its seventh consecutive Best Electronics award at ICAST, the world's largest and most prestigious fishing show in the world.

Our press release gives more details into SOLIX features, but suffice it to say, the SOLIX is the most technologically-advanced and user-friendly fishfinder on the market today. It's important to note that while new products have done extremely well, sales in base business segments and models for both brands are also strong.

So, a fair amount of trading up without erosion of the base business. Now going forward, we expect growth in core fishing brands will continue [of it] at a more historical rate.

This is our largest and most profitable business, and we are investing in innovation to protect and preserve our market leadership positions all the while exploring opportunities to expand the playing field of this business. Moving on to Diving, where we're starting to see benefit of our innovation focus.

Diving sales for the quarter were up about 17% and up 10% year-to-date due to improved results across some key dive markets, and the surge in sales this quarter was due primarily to very favorable response to 2 new innovations in core life support segment. First, the new SCUBAPRO HYDROS PRO BC, a first real innovation in the BC category in years.

It's lightweight and formfitting with a modular design that makes it easy to pack and customizable for each dive. Keeping up with demand for the HYDROS PRO has been a welcome challenge this year. Second, the new G2 dive computer, which we started shipping a couple of months ago.

The G2 dive computer is the second-generation of our popular SCUBAPRO Galileo computer series. The G2 marks the big step ahead in diver-friendly computers. Its large, color, high-def screen is easier to read, and its intuitive 3-button control makes it simpler to use.

The G2 is also Bluetooth-enabled, providing greater ease in syncing with computers and other devices. And like other SCUBAPRO dive computers, it uniquely utilizes heart rate, skin temperature breathing rate and water temp when calculating diving profiles. The G2 is doing very well right out of the gates, adding to the quarter's sales gain.

Net-net, we're very pleased by the improved results in Diving, but more work is needed to get to where we want to be. For the last three years, Watercraft recreation has been on a steady positive growth trajectory. This year's sporting goods retailer bankruptcies contributed to a very sluggish kayak market.

Demand for our award-winning Old Town Predator series of fishing boats, particularly our latest pedal drive model has cushioned the impact on it, although not enough to completely offset the market softness.

And while sales are lower year-over-year, retail data shows that we are gaining share even in the down market, which bodes well for us once the market is back on the upswing. Our Camping business also has been affected by retailer bankruptcies this year, which is driving market restructuring.

Continued solid growth year-over-year in Jetboil could not overcome the resulting constricted distribution and market pressures on Eureka!. Our strategic plan considered a possible risk like this and identified emerging camp consumer segment. Efforts to reposition Eureka! for future success against these segments are well underway.

More time and more investment will be required to maximize value and deliver improved results for Eureka!. In summary, Johnson Outdoors is well positioned overall to end the year strong with solid momentum heading into the next fiscal year.

Looking ahead, we will continue to advance progress against our 3 key strategic planned priorities, richer consumer insight, enhanced innovation processes and digital sophistication. These are the cornerstones of a foundation for success in delivering accelerated sustained profitable growth long-term.

Now I'll turn the call over to Dave, and a review of the financial highlights..

Thank you, Helen. Our ongoing emphasis on growing profits ahead of sales is paying dividends. We've clearly benefited from the diversity of our portfolio this year, as growth and improvements in our 2 largest businesses are far exceeding the impact of challenging markets in our 2 smaller units.

Across the board, price to value innovation and increased efficiencies have expanded gross margins.

Compared to the prior-year quarter, operating expenses, which are higher this year due to higher volume-related expenses, higher compensation expense and higher legal and administrative costs, were largely offset by the impact of a goodwill impairment charge of $6.2 million recognized in last year's quarter.

Throughout the year, net income has also benefited from a favorable lower year-over-year effective tax rate resulting from the repatriation of cash from overseas in the first fiscal quarter. Now we expect the tax rate to return to more historical levels in the mid-30s range next year.

Heading into the final quarter of the year, cash and cash equivalents grew $18.1 million from a year ago. Our growing cash position enables continued investment in organic and new growth strategies for our business.

As always, targeted strategic acquisitions remain a growth strategy for Johnson Outdoors, with the goal of strengthening capabilities, enhancing our connection with outdoor recreation consumers and expanding our playing field.

There's no timetable on when acquisitions opportunities may emerge, which is why we have an active, ongoing and disciplined M&A radar screen process that proactively identifies and evaluates technologies, brands and innovation-building targets with unique application to our segments.

Ultimately, we're looking for acquisitions at a reasonable valuation that deliver an appropriate return on investment to our business and our shareholders. Our Board of Directors annually assesses the size of our dividend based on our cash position; next year's budgets and other relevant factor.

A healthy cash position enables us to fulfill our commitment to continue to pay a meaningful dividend to shareholders. The balance sheet is in great shape, and we're charging forward with plans and programs to ensure a strong close to the year. Now I'll turn the call back over to the operator for the Q&A session.

Operator?.

[Operator instructions] Our first question is from George Kelly with Imperial Capital..

So, I have a few questions for you. I'll start in the Fishing segment. Helen, you mentioned an opportunity to expand the playing field. I take that as a brand extension possibility with Minn Kota.

Can you help at all with what that could look like, your timing? Or just provide any more data on what you -- the original comment in your prepared remarks?.

I can't give too much detail, but just to say that our strategic planning process, I think one of the great things we've done is identified an expanded playing fields for each of our brands and each of our businesses.

And as we do the research and keep connected with the consumer, we're looking for ways to leverage our core competencies and our brand equities in all the businesses. So certainly, Fishing with the Minn Kota brands and Humminbird brand is in a great position to look for new segments and expand, whether it be organic or acquisitions.

So, it's just -- I think the positive is that, that is something that is what we're looking at and part of our strategic plan..

Okay. And then specific to Minn Kota.

Can you remind me the dynamics between the bass fishing market and the nonbass fishing freshwater market? Just how big is each and how big is your -- what is the mix for your own business? And the reason I'm asking is I know Ultrex kind of brings you up in the bass market, and I'm just wondering if that could be a multiyear kind of growth path for you as the bass market catches up with your own mix to where the freshwater mix is.

Does that make sense?.

Yes, it does. I think we look at them both as very important segments. The bass fishing market is we would -- this is a generalization, but is more the southern market. And the northern markets, I guess you would say more kind of walleye fishing, but the bow mount is very important to the south.

It's also used in the north, but that is our bass fishermen.

And I think the great step to really make inroads into the bass fishing southern market is the fact that we've gone after the cable-steer segment, and that cable-steer is the foot pedal which -- historically, they love our foot pedal, but they don't want to move and do anything different than that, and we've discovered that.

We have broken into that market. So, I think you're right in saying there is more growth to be had down there.

And I think that's just -- I think our group does a great job of segmenting the fishing market within the bigger framework so that you can introduce innovation segment by segment, and that gives you continued opportunity to keep -- you don't have to innovate for the same consumer every year. So, I would say, we've done a good job down there.

The innovation that we've come out with is very appealing to that group and they certainly showed they like it, and we'll hope that keeps going..

Okay. Helpful.

And then is there a backlog still with Minn Kota? And do you need to expand production? Do you think you'll expand capacity anytime soon?.

We're still working on orders. The season is coming to an end. And really, our constraints this year have been more on the supply chain as opposed to our own capacity. So, we continue to work on the supply chain and make sure that we can respond quickly..

Would you mind quantify -- so it sounds like there's still is a backlog, is it sizable?.

As the season winds down, we'll be able to take care of the backlog. So, yes. I won't give you any numbers, though..

Okay. Humminbird. What -- is there anything besides -- is it really new product -- it sounds like Humminbird is growing nicely as well.

Is that new product-driven mostly, or is there anything else you can point to? And how is the margin structure at Humminbird?.

I'll talk to the innovation. It definitely -- Humminbird is driving growth through innovation and the fishing consumer, the passionate ones which are our core target are always looking for the latest and greatest. And I think, if you innovate, you can create a growth in the market.

And they've done a great job of -- we were the first in with side imaging, sonar. Our new -- we've had a couple of versions of the next generation of that sonar, and also the screen itself. And lots of elements that we can innovate on and they've definitely picked up on it.

I would say that the SOLIX that I talked about is, there is a benefit in large screen and the option of touch screen or not, we really hit on all the attributes that a fishing consumer is looking for. But the MEGA Imaging is truly new-to-world and that shows that the fishing consumer is receptive.

I think the other thing is that having a trolling motor with Minn Kota being the leader and the key player in that market and having the Humminbird and the Minn Kota product talk to each other and work together is a huge bump for both.

And I think we're seeing that play out as well and that connected boat concept is really something that's not that we can uniquely do, but because we play in both spaces it's pretty -- we've got a strong position there..

Okay. And then last question for me. Several years ago, you gave long-term growth and margin targets and -- I haven't heard an update now recently.

Do you expect to come out with an updated target at some point soon?.

Yes. When we went into this 3-year window that ends kind of next fiscal year, we've said -- we said modest growth and keeping profitability levels commensurate with that. So, we're -- we continue to kind of invest in our plans over this year and next year.

We haven't really updated that yet, but certainly as we get more visibility in the next year, we can talk about that..

Our next question is from Brian Rafn with Morgan Dempsey Capital Management..

What -- give me a standpoint, you talked about supply chain logistics.

What -- when you're in season, how much in-season replenishment do you have in your different end markets, Marine Electronics versus Diving versus Camping versus Watercraft? And how much is it just front-loading on the front season with your retailers and then -- other than special orders? Give me a sense as it breaks out across your 4 product areas..

I'll give it a shot. I mean, our distribution channel in fishing is about 40% of our business and a lot of that is on kind of preseason orders. So, the rest is pretty much in-season, and they will obviously reorder too, as they see things kind of shake-out in the season. So that's the best direction I can give you.

I mean, it's difficult for us to quantify the other businesses necessarily, but that's kind of the order of magnitude we're talking about..

Let me just add to that. We are very careful about working capital, and we don't do -- we try not to make everything ahead. And as much as we can do in-season production, that is what we would shoot for. But again, it comes down to forecasting.

And if you have suddenly something that's just -- is blowing away your numbers, you -- there's always a balance. But Dave is pretty tight with the working capital dollars, which is a good thing..

Right, right, right.

If you have that type of in-season or you have a rocket product, will you build inventory then, or do you just kind of play it as it goes?.

We will definitely -- we keep our ear to the ground in terms of the forecast and what's happening. Yes, so we will build ahead..

But let me ask you -- I'm assuming that the supply chain logistics are bigger -- better for your category super store, your big boxes, Bass Pro Shops versus Uncle Ernie's local fishing store in Podunk, Iowa.

What -- how do you -- especially in the Marine Electronics, what is kind of your mix and distribution between big-box players that have -- that -- they have the EDI architecture, and that they can give you the back and forth, versus just the little boutique guy?.

Well, the -- in Fishing, the little boutique guy is getting serviced through our 2-step distribution channel. So that's -- again, that's an important piece of our business. But the big guys are also, obviously, really critical too. And they tend to order kind of in-season. So luckily, we're able to service both channels really well..

We don't -- it used to be you got a lot of heads up on what the order would be for the big guys for the year. They'd give you kind of their estimate. But I would say that just as we're careful to not build too much upfront, they're careful. They are more and more tight with what they carry and what they give you heads up on.

So, I think we just have to be flexible across the board..

More nimble, yes. How on an in-season basis -- how nimble and responsive is nimble? Is it a [tough] -- you mean, if you get an order, can you turn that around in days or weeks or -- because your seasons don't last forever.

So, I mean, you've got to be able to -- I'm just wondering in size, how quickly -- do you have something that takes off? How fast can you manufacture and get that replenishment out?.

That's hard to say because it all depends. But I would say, we have, obviously, a forecast going in. If we have a new product, we will estimate its appeal. So, we do project and we do try to build to what we think is the demand. So, it -- we're not just reacting. So, we do have a -- we absolutely have. We build to a forecast that we have.

But if something is suddenly way beyond what we thought about, it depends on the product. And in the case of Fishing, it's the component parts that have lead times. It's not necessarily our capacity, but we -- if we have them on-site, we are pretty quick about the turnaround.

So, it depends on which category and what the product is, but I think, as you know, the whole world is going towards flexibility and being able to turn it and that's what we're working on.

But I think our goal is to get much better at forecasting so that we are making what is needed and then having some kind of flexibility to react to something that we didn't predict. But most of it is -- we've got pretty decent forecasting at this point..

Just to add to that, Brian, it -- with our larger retailers, we do leverage the POS system and....

Yes. Okay. Oh, I see. So, you get that direct. So, your turnaround might be days on something like there -- certainly [within hours]..

With the big guys, we can look at POS system and react pretty quickly..

Okay. So, would you get that on a daily basis or a couple of days lag or....

It -- yes, it's daily. Yes..

Okay. All right. That gives me a sense. I didn't hear your opening comments, I missed the first 6 minutes.

Did you have anything -- I heard about the Galileo, anything on the Diving? Your kind of comments on how you see that market?.

Well, I would say we feel good about what's going on. It just shows that innovation does drive growth. And Diving, as being one of the #1 -- one of the leading global brands, with innovation, we can really drive some growth. So, it doesn't mean that we've got everything in place. We've got work to do, but it, to me, it's a very exciting market.

And the focus on innovation, the focus on digital sophistication, the focus on getting closer to our consumers and really understanding our core target is really paying off.

But we have work to do, we still have a tough market in Europe with the Red Sea -- is going to be challenge for, I would say, years to come and -- but I would say -- and -- we don't have data, but I would say that we are experiencing share gains and doing the right things in the market. So, lots of work to do, but the initial read is good..

Got you. And then how much -- I'm not a fisherman, I'm a gun guy, so I ask this out of ignorance. On the Marine Electronics side, how much does weather, either cold or rainy weather, we've had a lot of rain here, certainly, in southeastern Wisconsin.

How much does that impact your demand for Marine Electronics? Or really is that -- guys fish, regardless, unless it's a lightning storm.

How does weather impact? You're -- we talk about building the plan and -- do you ever have years where the variance is really affected by weather?.

I would say, the Fishing market is very impacted by weather. We're in categories that usually, if you're a pretty avid fisherman, you're planning ahead of time and you're buying your products before the season starts, so that is a good thing. But I would say weather probably impacts more the in-season demand.

But our core fishermen, I would say, is core. But if it's cold and rainy, that's kind of not fun. So, I think -- and so it does impact..

Okay. And then just a comment on kind of the Eureka!, the Camping side.

Anything on the military side, or how is that kind of Camping and Hiking market doing?.

Yes. Just in terms of military, it's a small piece of the business now, and it will probably remain so until something opportunistically happens..

The Camping and Hiking market, we're bullish on that market and it's a recreational activity that's here to stay. I would say that we have work to do on positioning our product line in the right place and against the right target audience, and we're working on that.

But it's a -- it is an important part of outdoor recreation, and we are doing our best to get the brand, Eureka! brand turned around. Jetboil is growing and -- but again, we need both to kick in, and that's what we're working on..

Yes. You guys dominate with Humminbird and Minn Kota certainly on the fishing side.

Where -- what are your competitors with Eureka!, and what's kind of the market share, your -- kind of your brand position with that versus something you just absolutely dominate on the electronic side in the Fishing?.

Well, if you look at our Jetboil brand, we are -- we're one of the leaders in the cooking systems for the avid camper. I would say, our goal -- we're playing a little bit more in the more mainstream camping with Eureka!, and we're not at a place we're comfortable with right now, but our goal is to be a key competitor in that segment..

Okay.

And then Dave, anything on commodity inflation, stainless steel, resins, plastics, anything that you -- wood -- that you might see?.

Nothing material happening in commodities. So there's a little bit of pressure on resin, but it's not huge..

Okay.

And then any capital budget projects across the different factories?.

Well, in capital spending, we're -- we'll probably be -- maybe flat to incrementally higher this year. But as we kick into our digital strategy, we'll see some more capital spending in the months to come. We can give you more clarity on that later..

Our next question is from Ryan Hamilton with Morgan Dempsey..

I've just got a couple of follow-ups. You talked a little bit about your core target as far as in Fishing.

Is there an age that you associate with that, like is the guy 45 or 35, kind of talk about that a little bit, if you don't mind?.

And -- well, actually, we try to hit all ages. Certainly, they have to own a boat, because we make products that go on the boat. But we have products for entry-level fishermen and up. And our goal is to get them when they come in, and then to trade them up as they become more avid, or they become older and have more money to spend on their products.

So, we really market and promote our innovative products, but we still have the whole gamut of offerings. So -- but if the fisherman -- there's a level -- they tend to -- the core fisherman that is avid tends to be a little older. So, our core target that is spending all the dollars tends to be an older target, not relative to the (inaudible)..

Sure. And you talked about some of the innovation that you've got in your Diving segment. I was wondering if you could maybe talk about -- if you're seeing an overall improvement in certain popular diving destinations.

I know you often mention like the Black Sea, are you seeing kind of a turnaround in some of those regions?.

Well, I think you're talking about the Red Sea. But Red Sea -- yes, the Red Sea is truly an incredible dive destination, but it has been totally hindered by all the unrest over there. And I would say that, that is not going to come back for a while. And we have to see a lot of things happen in the political arena, I guess.

But people do -- the avid divers find new destinations and -- so there is -- around the globe, there is, obviously, great places to dive and the key, even for Europe, is -- you still got the Mediterranean, you got this -- along the Southern Coast and -- so there are other places to go, and they are -- we find that they are adjusting and -- adjusting their locations.

I think the other piece that goes with it is you have to -- to travel and to take vacations, you got to have income. And so, the other piece of this is not just the Red Sea, but it's what's going on in the economy in Europe that we have to keep an eye on.

But we have a target of -- our brands are premium, so our target tends to be a little bit more protected from that, but certainly, it's a discretionary spend. But I think diving is a recreational activity that's here to stay, and just like other categories, you create growth through the innovation.

They like the latest and greatest, so I would take the responsibility [of that]..

Yes. No, absolutely, and you guys are doing a great job on that. And then my last comment, you kind of talked a little bit about a sluggish kayak market.

Could you kind of talk about what you might think is causing that?.

Well, the one indicator, we did -- there is a disruption in the channels that carry some of our mainstream kayak product. And the whole kayak market is -- somehow is a little depressed, but I think it's hard to tell how much is from the issue with our distribution channels or with other things going on. I mean, it's hard to tell.

But there is always cyclical factors at play, but our -- we've got -- when we launch our new products that are -- especially our Predator line, we see response there. So Dave, unless you want to add something to that, I think it's hard to tell right now what else is contributing..

No. And I would just reinforce, where we have innovation, it's been responded to, like the Predator pedal this year has done well..

[Operator instructions] And I'm showing no further questions. Actually, we have a question from [Eric Brudos] with West Coast Capital..

As we look ahead into the fourth fiscal quarter and the seasonality inherent, how do we think about operating margins in the different segments? Last year, obviously, there was some potholes in the business.

Do you think now that business is kind of resurging? Are we getting back to a more normalized kind of September '15 -- September 2015 kind of benchmark for operating margins in those [different] segments? How do we think about that?.

Yes. I mean, I think with the -- with Diving, having a much stronger position this year, we should see the fourth quarter be more like a normal fourth quarter for us..

Okay.

And then Fishing?.

Yes, Fishing. Fishing will continue to, again, wind down the season and meet demand, so it's, obviously, a much smaller quarter for us. But again, it's probably going to be more of a normal fourth quarter for the total business..

And we have a follow-up question from Brian Rafn..

Yes, let me just -- since -- if you look at your Marine Electronics, scuba diving, camping, watercraft, and maybe some ice diving on the Diving side, but it's primarily warm weather, spring/fall or spring/summer and maybe early fall.

Are there any counter winter outdoor recreational areas that you might look at, even not even mentioning them from an acquisition standpoint? Or do you really need the off-season to strategize, to build inventory, to design product for your more summer-weather type products?.

Well, I would say that it -- our decision to be in these segments is not related to whether we need time to build the product. I think it's more about the strategic focus, and we -- in the beginning, we've looked and we always look at all recreational categories.

And I would say, as we looked at the winter, nothing has popped as something that we can bring value to or get the return that we need. But -- so I would say, from a strategic standpoint, the 4 areas we're in right now are where we want to be and where we think we can really drive growth and profitability long term.

So, it's -- and as we -- we've got some global products. Having that global aspect helps to do a little bit of counter-seasonal offset. But I think for now, it really -- we're in the right recreational categories..

Yes. Okay. And certainly, I get the global on this, the scuba diving side, the camping. Is the Marine Electronics, how much -- do you have business in Canada? Or how much -- is that a -- is that primarily a U.S.-captive market or for U.S.

boaters? And -- or is there a little international sales, maybe in Canada or Puerto Rico or whatever, on the Fishing side?.

Yes. Fishing is -- it's a global business. It's not as global. But we sell into Europe and Australia. And Canada is a very important market for us..

[Operator instructions] And I am showing no further questions. I would now like to turn the call back to Helen Johnson-Leipold for any further remarks..

Okay. Well, thanks operator, and thanks everyone, and have a great day..

Ladies and gentlemen, thank you for participating in today's conference. You may all disconnect. Everyone, have a good day..