Greetings, and welcome to the Construction Partners, Incorporated Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Rick Black of Investor Relations. Thank you Mr. Black. You may begin..

Thank you, operator, and good morning, everyone. We appreciate you joining us for the Construction Partners conference call to review third quarter results. This call is also being webcast and can be accessed through the audio link on the Events and Presentations page of the Investor Relations section on constructionpartners.net.

Information recorded on this call speaks only as of today, August 7, 2020. So, please be advised that any time-sensitive information may no longer be accurate as of the date of any replay.

I would also like to remind you that the statements made in today's discussion that are not historical facts, including statements of expectations or future events or future financial performance are considered forward-looking statements made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995.

We will be making forward-looking statements as part of today's call that, by their nature are uncertain and outside of the company's control. Actual results may differ materially. Please refer to the earnings press release that was issued today for our disclosure on forward-looking statements.

These factors and other risks and uncertainties are described in detail in the company's filings with the Securities and Exchange Commission. Management will also refer to non-GAAP measures, including adjusted EBITDA. Reconciliation to the nearest GAAP measures can be found at the end of our earnings press release.

Construction Partners assumes no obligation to publicly update or revise any forward-looking statements.

And now, I would like to turn the call over to Construction Partners' CEO, Charles Owens, Charles?.

Thank you, Rick, and good morning to everyone. With me on the call today are Ned Fleming our Executive Chairman, Alan Palmer, our Chief Financial Officer and Jule Smith our new Chief Operating Officer that we announced this morning.

I would start today by providing an update on the third quarter and then turn the call over to Ned for a few additional comments. Finally, Alan will review the financial results and outlook before we take your questions. We are pleased with our strong profitability in the third quarter despite lower revenues.

Our solid results were driven primarily by vertical integration synergies, lower cost of fuel, effective utilization of crews and equipment, a disciplined project bidding strategy and pricing of our integrated products.

As an essential business we have continued to operate through the COVID-19 pandemic, without significant delays, the flexibility of our employees and the effectiveness of our safety protocols have positioned us to effectively manage pandemic related challenges in our day-to-day operations.

Notwithstanding current top line pressure from COVID-19 and its related effects in certain of our markets, we remain optimistic about the long-term prospects of our business and industry.

I'd also like to discuss the announcement that we made today promoting Jule Smith, a Senior Vice President of our company to the newly created role of Chief Operating Officer effective October 1. As a former owner, Jule has continued to lead Brent Smith company our North Carolina subsidiary, that we acquired in 2011.

As Chief Operating Officer, Jule will be charged with driving the development of the organization, overseeing in day-to-day operations. He has decades of experience and proven track record as a respected leader within our organization and his community.

Jule has significantly contributed to our senior management team and successfully executed the company's strategy in North Carolina. With the expansion of our organization in recent years, we see this position as vital to our future growth and success.

This new role strengthens our organizational structure, and allows us to efficiently manage today's business while focusing and executing on our long-term growth strategy. We expect Jule's leadership, experience and vision to enhance our organization.

Finally, based on the current backlog and near term visibility, of the business, we are adjusting our full year outlook for fiscal 2020 by raising our projected net income and adjusted EBITDA wages, while taking a conservative approach to our revenue outlook, based on current run rates, as Alan will discuss later.

Before turning the call over, I would like to thank our leadership team, and more than 2,300 employees for their commitment, dedication, and hard work that enables us to execute our strategy. And with that, I'd like to turn the call over to our Executive Chairman, Ned Fleming.

Ned?.

Thank you, Charles. And good morning to everyone. This was an excellent quarter. This quarter is a great example of our team’s strong leadership to successfully manage the business during these unprecedented times and still deliver impressive profitability. We have always run the company with a focus of growing margins, cash flow, and therefore value.

It is accomplished through continuing to drive vertical integration, better utilizing technology, increased efficiencies throughout the organization, including better equipment utilization, as well as employee training among many other things. My point is that we look at all aspects of the business to increase profitability.

While we navigate through this current uncertain economic environment as a result of the COVID-19 pandemic, we believe that CPI is well positioned as an essential business with a differentiated and proven strategy that is consistent and profitable.

We will continue to manage the company for the long term in a prudent manner as we advance the business through these unprecedented times. As Charles mentioned, Jule’s promotion to Chief Operating Officer expand his role and responsibility, which advances the organization for CPI’s future growth.

He's a talented operator and an executive that brings effective leadership skills to this new role, as well as the deep understanding of our business and growth strategy. Since joining CPI nearly a decade ago, he has led significant growth within our company.

The Board has great confidence in him, as well as our entire senior leadership team to continue to execute our business model as a consolidator in a fragmented industry while driving long term growth and value creation.

Let me add that it straddles establishing the role of COO is a step that will not only expand Jule’s role, but creates a structure for ongoing growth and opportunity for other senior management team members.

It is important to mention that Charles’ leadership and mentorship of our senior theme and really throughout the organization has been and will continue to be a core strength of a team oriented and entrepreneurial culture. Under Charles’ continued leadership, the senior team will proceed with, to execute CPI’s successful strategy.

I look forward to working with Charles, Jule, Alan and the entire CPI team as we grow the company. With that, I would like to turn the call over to Alan to discuss our third quarter results and then we will answer your questions. Alan..

Thank you, Ned and good morning, everyone. I want to start by highlighting our key performance metrics in the third quarter.

Revenue for the quarter was $217 million, a decrease of $10.3 million compared to the same quarter last year, the decrease included a decline of $20 million in our markets that existed at June 30th, 2019, primarily due to a reduction in the number of projects available in certain of our markets including North Carolina.

It is also a result of efforts to manage the backlog and effectively utilize our workforce in light of the uncertainties caused by the COVID-19 pandemic. This decrease was offset by $9.7 million of revenue attributable to acquisitions completed after June 30, 2019.

Gross profit for the third quarter was $36.5 million compared to $38.1 million in the third quarter last year, primarily as a result of the decrease in third quarter revenue. General and administrative expenses were $16.9 million in the quarter, essentially flat compared to last quarter and up $900,000 compared to the same quarter last year.

The increase year over year was primarily the result of costs related to acquisitions completed subsequent to June 30th, 2019, and increases in payroll benefits and stock based compensation expenses. Net income for the quarter was $15.7 million, compared to $17.2 million for the same quarter last year.

And diluted earnings per share was $0.30 compared to $0.33 for the same quarter last year. The decrease was primarily a result of lower gross profit and higher, general and administrative expenses.

During the quarter, we recorded a non-cash gain of $395,000 in other income related to fuel swaps, and a non-cash charge of $120,000 related to interest rate swaps. The value of these instruments was impacted by volatility in the financial and commodities market during the quarter due to COVID-19 and other macroeconomic factors.

Adjusted EBITDA increased to $31.9 million, compared to $31.3 million for the same quarter last year. The increase was a result of a higher depreciation, depletion and amortization of long lived assets, partially offset by lower gross profit and an increase in general and administrative expenses.

Adjusted EBITDA margin for the third quarter was 14.7% up from 13.8% in the third quarter last year. This was driven by an increase in adjusted EBITDA and a decrease in revenues as discussed earlier. Turning now to the balance sheet.

At June 30th, we have $78.7 million of cash and $19.3 million of availability under our revolving credit facility after reduction for outstanding letters of credit. As of the end of the quarter our debt to trailing 12-months EBITDA ratio was 0.83.

Since the end of the quarter, we borrowed $30 million in term debt and increased the capacity under our revolving credit facility to $50 million.

This additional liquidity provides financial flexibility in today's uncertain economic environment and provides capital for potential future acquisitions, allowing us to respond quickly to growth opportunities when they arise.

Cash provided by operating activities was $51.4 million for the nine months ended June 30, 2020, compared to $18 million for the same period last year. CapEx for the third quarter was $7 million, compared to $11.9 million in the same quarter last year.

As you will recall, we expect capital expenditures for fiscal 2020 to be $40 million to $42 million, excluding expenditures of $11.5 million in the first quarter of this fiscal year to purchase equipment previously subject to operating leases.

Project backlog at June 30, 2020 was $651.2 million compared to $579.1 million at March 31, 2020 and $581.1 million at June 30, 2019.

We strive to maintain a disciplined approach to bidding work as we strategically focus on recurring repair and maintenance projects and seek to maintain six to nine months of backlog in each of our markets at any given time.

We continue to closely monitor the impact of COVID-19 pandemic on all aspects of our business, including its impact on our customers, employees, suppliers and vendors. As Charles mentioned there has not been a material adverse impact on our operating results to date.

However, the extent to which our operations might be impacted by the COVID-19 pandemic going forward will depend largely on future developments. These includes actions that could be taken by governmental and health authorities and future funding for projects tied to gas tax receipts.

Management remains vigilant in monitoring these developments and their impact on our business and industry.

Taking these factors into account as well as our current backlog, we're revising our fiscal year 2020 outlook by lowering our expected revenue range and raising our expected net income and adjusted EBITDA ranges, for the full fiscal 2020 year we project revenue of $810 million to $820 million, net income of $36 million to $38 million and adjusted EBITDA of $92 million to $94.5 million.

In summary, we are pleased with our third quarter results and we'll continue to execute our growth strategy in the fourth quarter of fiscal 2020. With that we'll now take questions, operator. .

[Operator Instructions] Our first question comes from Josh Wilson with Raymond James. Please proceed with the question. .

Good morning. Congratulations on the quarter and congrats Jule on the promotion. A couple of questions here.

First, as it relates to your backlog on the last quarterly call, you had been concerned about margin pressures, given the potential challenging bidding environment you're guiding for margins to drop sequentially somewhat, but can you give us a flavor of what the margins look like in the backlog especially as we look beyond this current quarter..

Yes, Josh, we’ve seen some pressure on margins, some of the reason for the shortfall in revenue and Q3 was projects that were bid at extremely low margins that we were not successful in winning, but we feel good about the backlog we have for our fourth quarter and going into 2021 in most of our markets, we've not seen a substantial reduction in the bid margins that we've got on backlog.

So we were real pleased and optimistic about our fourth quarter and 2021. .

And as it relates to 21, should we expect the normal seasonal cadence or are there some, one offs from the pandemic that are affecting us?.

No, I think we see it lining up with the amount of backlog we've got going into 2021. We should say the normal 40% and 60% with only a slight variation.

So, obviously we've got to still fill at this point about half of our backlog for next year, but part of that will be filled in this fourth quarter and feel likely we’ll be in really better shape going into 2021 than we were at 2020. .

And then can you give us a sense of what the monthly trends were in sales as things opened back up then into July and August?.

Well our normal in the fourth quarter is going to be to see month over month sales increase throughout that quarter. In June, in May, and April, it really was kind of even throughout all three of those quarters, some of the look and burn that we thought we would pick up in some markets didn't, we didn't get.

So, that's why our revenue fell short a little bit. But we've got our backlog for the fourth quarter fully booked. So, normally, July because of holidays is the lowest in three months and August and September the higher revenue. So, that's certainly stacking up right now..

Our next question comes from Andrew Wittmann with Baird. Please proceed with your question. .

Okay, thanks. Good morning, guys. And thank you for taking my questions. I guess I'll just start off by building out some of the last questions around the backlog. It was pretty notable here this quarter.

And I was just wondering about just given the size of the sequential increase in the backlog if there are any larger projects in the backlog today than maybe they were in the last several quarters, or if maybe another way of saying that is the duration of this backlog to you better than average or worse than average visibility.

And some commentary on that would be helpful? Thank you..

Yes, this is Alan, there's not any real change in the duration of the projects and in the majority of those in our backlog are ones that will be completed in less than 12-months. We might have, I think maybe one project that's longer than 12-months that got booked, but it's not the 2022 is not amount is not significant. So, pretty typical.

What we're seeing are a lot of the repair and maintenance type projects. And usually they’re less than 12-months in duration. So, just seeing a lot of activity in that, still seeing strong, private work. And those are typically not multiyear projects. So, really a lot more just the same..

Got it. Yes. And that touches on kind of what I wanted to get into next. So, if you could expand on this a little bit on the kind of mix between private and public. It's not lost, but some of the public budgets are already seeing some broad pressures and may possibly see some more as we move forward through this COVID pandemic.

As a result of that, are you continuing to see are you seeing the private sector make up for that? Is it too early to say? And maybe specifically could you talk about what you're hearing and seeing and expecting from your state DOTs as we move forward would be also very helpful?.

Yes, I'll talk about the backdrop and then I’ll let Charles talk a little bit about the DOTs, but as far as the backlog, it's pretty similar mix of about, 65% public and 35% private.

Actually this quarter we just finished in probably in the next quarter, you'll see a little bit higher public because this is when we do a lot of the mill and resurface which generates, higher revenues for that portion of the work, but we're still seeing strong private work.

We're seeing in Alabama, specifically the cities and counties spending the money. So, that's public but non-DOT. So, we feel like we will probably stay in that 65, 35 range going into next year.

And we're, I think probably the backside of next year, some of the work we're hopeful that the DOTs and the other public will pick up, with the funding programs that they're looking at putting in place, I will let Charles kind of talk about that a little bit. .

Thank you, Alan. Andy what we're seeing in the markets that we're operating in, we're in 35 different markets scattered over these four or five States. And what we're seeing is a lot of the gas tax revenue coming back. In fact, where we have our operations, we were seeing down in a gas tax receipts a little bit less than 10%.

So what we're seeing is still a lot of traffic out there on the road.

And, from a federal standpoint, you know that we have fast tag, that's going to end and September 30th and the Senate has a proposal out there and the House has a proposal out there and both of them have a pretty substantial increase compared to what we've been seeing year over year.

So we think at some point in time that this tax increase will take place. And we don't really anticipate it taking place until maybe after the first of the year, but we are very confident that we'll see continuing resolutions that will keep everything in place.

So we're feeling pretty good about the DOT and I have Jule Smith in the call today here in one place that we've had a little bit more weakness in it, other areas hasn’t been in the North Carolina market. And so I've just been playing a big picture of kind of what North Carolina looks like because we’re seeing some very positive things right now.

Jule..

Thank you, Charles. Andy, the North Carolina DOT specifically, had been in the news the last six months with their funding issues. And I think it's important to remember that their funding mechanism has and continues to be healthy. They just simply overspent back in 2018.

So we're seeing their funding heal and we hope they've taken some concrete measures over the summer to speed that up. And so we see the North Carolina DOT resuming lettings this fall.

We're very optimistic about North Carolina moving forward, but the backlog that we've been able to build over our 35 market areas is just shows, we're not dependent upon one state or one market area at Construction Partners. .

Great. Thanks. I'm just going to do one last quick one and I'm going to jump back into queue, but Alan just given the, the gross margins were so strong here in the quarter.

I was wondering if there's any project close outs that allows you to book a little bit more profit as you've closed those out, or if there's any moving pieces in inside the gross margins that are notable like that. .

Yeah, Andy, I mean, it really was just a combination of things. The mix of work that we completed during the quarter, we certainly were the beneficiaries of lower diesel fuel prices and asphalt cement.

Although, because of the indexes that gave us some headwind to revenue compared to last year, when those indexes were going up, and we got a little tail wind, but it really was just a combination of and I think Charles said in his comments that the vertical integration with us having the liquid asphalt terminal and seeing benefits out of that, and then just being able to complete the work efficiently, and in some markets, we weren't working as much overtime.

And that helps us also so really just a combination no one thing as far as any kind of big project or a write up like that. Just normal business. .

Our next question comes from Michael Feniger with Bank of America. Please proceed with your question. .

Hi. Everyone, thanks for taking my specially my questions. The backlog looks good this quarter. I'm just curious.

You mentioned obviously July, usually low, I'm kind of curious, like, as we go through the next two months as you guys build the backlog, is there any concerns with the uncertainty around FAST Act? The stimulus right now with COVID? There's a big disagreement about what, are they going to help states and municipalities, are they not? Or does it feel like an next two month, it's kind of in the bag, and really, the uncertainty has a bigger impact on 2021?.

Well, certainly for us since our year end September 30th, and we've got 100% of our backlog for the next three months. We won't be impacted in our fiscal 2020. And we have a backlog for our fiscal 2021 that you know would carry us for the first six months of that.

But through September, most of the DOTs with the exception that Jule mentioned with North Carolina are still letting projects based on what was in their fiscal year budget is not really tied to this year's revenue tax collections.

Charles mentioned, we're already seeing a significant recovery in the states that we're in with people getting back to work and the traveling public back out there. So there's been a there less decline year-over-year in the tax revenues. If nothing's done in the COVID package that backstops the stage which we’re optimistic there might be.

We feel like the program will still be strong next year. We've said before, what historically happens when there's a shortfall in those state tax revenues, they get away from more of the large projects and the DOTs have certainly signaled that they're going to take care of the roads that they have, there's going to be their first priority.

So, we feel very positive that even if there's not a recovery of the tax revenues, the repair and maintenance portion of that budget will continue to be strong into 2021 in the future..

Great. That was that was really helpful. And I'm curious what you're seeing with your competitive environment. Are you seeing competitors with some deposits, with some of the lettings and projects coming up for bid? Is it getting more competitive. are you seeing pricing really come down a lot.

And do you think that if we go into to next year, do you think a lot of these family offices, are they willing to maybe kind of start to put their hands up for sales, don't want to deal with a higher tax rate? I'm just curious if you kind of give us a little bit more of a background, what you're seeing competitively in new projects coming up for bid and also maybe on the acquisition side with some of these other smaller competitors..

This is Charles, we’re seeing on a competitive bid, we're seeing a lot of pressure in different markets. Of course we'll have 35 different distinct market areas. And some are a little bit more competitive than others, but none of them what I call good, real great, none of them is real bad.

So, it's just a mixture out there and we've been fortunate enough with our team to stick drive, discipline the bidding and making sure that we book the work that we need and is going to be building the time we're going to need.

And as far as our acquisition pipeline, you know, we're still seeing a strong pipeline and maybe seeing a little bit more than we have usually seen.

And as Alan mentioned known the banking side and our balance sheet that we've made some that we've got some money available to where we can move quickly on acquisitions and not get tied up with banking side of trying to make things work. And, we think there's going to be plenty of opportunity going forward from a M&A side. .

Perfect. That's really helpful. And just lastly, you guys were commenting before about the Fast Act expiration to end in September there's different bills, to how they approach this. If we see a one year extension or a CR at the current level, which basically do you see the facts to kind of punt and say, figure it out after, after the election.

Is that, you guys used to have a lot of certainties with the CRs, is the situation with the DOTs is it better than it was before to handle that type of CR. If that's the case, if we don't get a multiple year extension..

We really don't see a federal bill passed until next year. And, if you track this business, as long as we have, and you know, that we have never had a bill put in place, I don't think when one expires and we've always gone through continuing resolutions. And so this CR is kind of almost given.

So, but I think one thing that may happen is we may see CR that's a little bit longer than this time is set up just a short term, just so the DOTs can do a little bit better planning, but I don't think that's going to slow down the process put in a permanent deal in place. .

Typically Michael, those CRs are at the current funding level or higher. And both parties now, the House and the Senate have talked about, if they do a CR they've got different levels of increases that they're proposing, we feel very good, the funding level even with the CR will be higher than what is expiring.

So, but as Charles said, I agree, I don't think that there's likely to be the replacement of the Fast Act before the election..

Our next question comes from Adam Thalhimer with Thompson Davis. Please proceed with your question. .

I wanted to ask first, hey with your high level revenue thoughts for fiscal '21? Do you have any early thoughts?.

Well, we haven’t put anything together we normally do that closer to our fiscal year end and we do that by, doing it from the ground up with 35 different profit centers and market areas. So, we have not begun that process.

We feel like that, given the backlog going into next year compared to what we had going into this year, we feel better, as I said earlier about the prospects and the things that Jule mentioned with North Carolina, DOT getting back on track and certainly in the next by September 30th, we'll know whether there's a continuing resolution at what funding level, so that will give a lot of clarity for us as to what 2021 looks like.

We feel very optimistic at this time that that's going to present some good opportunities for us..

Okay, in any case, good color on North Carolina and Alabama already curious what you're seeing in Georgia and Florida?.

Hey, Adam from Georgia standpoint, if we looked at -- if we look back over, say for me, for our site from March to May and look at the gas tax receipts, we actually see a more positive trend in Georgia.

And then in Florida, we're seeing a negative trend, but we're seeing a lot of work being laid in Florida and Florida some of those market areas in Florida continues to hold up and be strong.

And so from the op, where we have our asphalt plant and our operations from a March through May 2019 versus 2020 year-over-year, we're down about 9%, roughly about 9%.

And in more of your tax revenues, so down in our area, they were not locked down and we're moving in when a good thing that we're seeing is when you get out into traffic, we're seeing gridlock again. And that is a very positive thing for our industry because, everyone now is wants to get from one place to the other.

And so we feel good about a new revenue stream coming in. .

And Adam we as you know with the acquisitions we've made in the last 18 to 24 months, those have been greatly expanded our footprint in Florida.

And we're seeing that's helpful in having more market areas down there to bid in and some of the synergies of the plants that are now located next to each other being able to share some services and bid on projects that companies that we acquired couldn’t afford. So, some of the normal synergies that we see we're certainly seeing that in Florida. .

Okay. And just last one for me that you said you had a benefit from lower diesel and lower asphalt and that decreased revenue, but increased margin.

Can you just walk us through that dynamic quickly?.

Yeah, I think in our call last quarter, we said based on where the asphalt cement prices were and diesel prices that we felt like over the next six months, it'd be probably a $3 million to $4 million revenue hit where index is kicked in.

We had to give back that revenue that would be in our backlog and actually in the quarter, this quarter, compared to the same quarter last year, that was $2.1 million or $2.2 million. So we still feel like, that'll be $3 million to $4 million over the six months.

But what that basically does is that’s revenue we don't collect, but it's cost we don't incur. So we still have the same margin on that work. All you get back is the cost savings.

So that's where you, if prices are going down and we're having to refund part of the contract amount or not collect it, then that's where we see as a percentage, our margin is going to go up.

So that's, that's kind of what we were talking about, but that was the amount in this quarter, compared to the index adjustment last year, it was about a $2.2 million variance.

And also during the, we're booking and burning a lot of work, so, if the index, or if the price of asphalt, cement and diesel had stayed up and we would have been bidding projects with a higher cost.

So in addition to the index, give back on existing contracts, some of our new contracts that we were bidding had lower costs in there, and we might be getting the same margin, but it's on a lower revenue number. So that has a slight impact on the margin percentage. .

Our next question comes from Brent Thielman with D.A. Davidson. Please proceed with your question..

Hey, great. Thank you, good morning. And Jule congrats on the new position, actually had a question for you and that Fred Smith's been a really successful sort of operating subsidiary at the company.

And I'm, I'm curious as you move into this new role, if there’s some things you can take from your experience there to some of the other operating subsidiaries, just from an operating, from an efficiency standpoint, really get into the question of, is there an opportunity to drive 50 or 100 bips in margin improvement in the organization?.

Well, thank you, Brent. I think first of all, it's been an incredible decade with Construction Partners and I've learned a ton from Charles as a mentor and I'm looking forward to learning even more and helping him across all 35 market areas.

Fred Smith company has a great management team and leadership team there and, everything that we've done there, we're doing in the other States and I think there's always opportunities to improve and that's going to be part of my role is just to help Charles make sure that operations are running efficiently, safely and driving profitability throughout.

So, the one thing is, CPI also has just a great management team, and leadership team in all the states and I'm looking forward to getting to know each of them and work with them even more closely in the coming year..

Okay, all right. I appreciate that. Be curious to see how what you guys find. I guess second question would be just generally speaking, what you guys are seeing in terms of private sector or private commercial work out there in your markets? Thank you..

All right. We're looking at, we discussed quite a bit about the public side. And we see that coming back and we're feeling real good about what direction that's going in.

And we do still do a small portion of our business is a residential and what are the areas that we're in we're still see and residential scale holding up pretty strong, and with interest rates sat there on 15 to 30 year mortgages right now I mean is just unbelievable. What you can get a mortgage for right now, which is I think the big driver.

And we haven't seen in the markets that we're in that we haven't seen that much of a pullback in residential and our other bucket that we operate out of is our commercial work and the commercial over our 35 different markets some we see very little activity and then there's some markets that are still continue to be very strong.

And so right now we hear from public and residential commercial, we're really not seeing one that's what I've called this real weak at this point, so it's all looking very positive..

Thank you at this time, I'd like to turn the call back over to management for closing comments..

Okay, well, I just want to thank everyone for joining the call today and we look forward to speaking with you on the next conference call and just be assured that we will continue to focus on our strategy and execute in a very safe manner and want everyone on the call today to be safe. And look forward to the next call. Thank you..

Thank you, ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines at this time and have a great day..