Good day, ladies and gentlemen and welcome to the Universal Stainless Third Quarter 2017 Conference Call and Webcast. At this time, all participants are in a listen-only mode. Later we'll conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions]. As a reminder, this conference call is being recorded.

I would now like to turn the conference over to June Filingeri. You may begin..

Thank you, Leanne. Good morning. This is June Filingeri of Comm-Partners and I’d also like to welcome you to the Universal Stainless conference call and webcast. We are here to discuss the company's third quarter 2017 results reported this morning.

With us from management are Denny Oates, Chairman, President and Chief Executive Officer and Larry Pollock, Executive Vice President and Chief Manufacturing Officer; Chris Zimmer, Executive Vice President and Chief Commercial Officer; Paul McGrath, Vice President of Administration and General Counsel and Ross Wilkins, Vice President, Finance, Chief Financial Officer and Treasurer.

Before I turn the call over to management, let me quickly review procedures. After management has made formal remarks, we will take your questions. Our conference coordinator will instruct you on procedures at that time.

Also, please note that in this morning's call, management will make forward-looking statements under the Private Securities Litigation Reform Act of 1995.

I would like to remind you of the risks related to these statements, which are more fully described in today's press release and in the company's filings with the Securities and Exchange Commission. With these formalities out of the way, I would now like to turn the call over to Denny Oates. Denny, we're ready to begin..

Thanks, June. Good morning, everyone. Thanks for joining us today. Our third quarter results were in line with our preliminary forecast on October 18. Sales remain strong at $50.9 million and included record premium alloy sales which reached 14.5% of total net sales.

The market recover that began to Universal in the first half of the year continue to benefit our third quarter. However, unexpected and temporary operating challenges at the end of the third quarter took a sharp tow on our profitability, and result in a net loss of $0.04 per share for the quarter.

To be more specific and as noted last week, unplanned maintenance issues primarily in a hardworking areas of mills compounded by ramp up challenges that developed in the quarter. We strained our final shipment volume and increased our spending for maintenance and outsourced resources as we strive to meet customer commitments.

Our production ramp up has been in response to our continued strong levels of backlog, also impacting our bottom line with two plant buyers, one in our Dunkirk facility which we announced last month, as well as a much smaller fire in Bridgeville that in combination with the Dunkirk fire shy of 50 basis points of our gross margin and reduced earnings by $0.03 per share.

It is worth emphasizing that we view all these setbacks as very temporary. Most have already been resolved and we expect to get back on our growth plan as we move through the fourth quarter and into 2018.

Looking more closely at our third quarter performance, sales of $50.9 million represented an increase of 28.3% from the third quarter of 2016, although they were 3.3% lower sequentially. Year-to-date sales total of $152.4 million which is up 26.7% from the same period last year and just $2 million shy of our total revenues for all of 2016.

For the second – for the third consecutive quarter, sales of premium alloys reached a record high totaling $7.4 million about 14.5% of sales compared with $6.8 million or 12.9% of sales in the second quarter of 2017, and $3.4 million or 8.6% of total sales in the third quarter last year.

International sales also were strong in the quarter at $5.1 million or 9.9% of sales versus 7% of sales in 2017 second quarter and 8.9% of sales in the third quarter of 2016. Our backlog before surcharges in the third quarter continue to grow, reaching $66.2 million at September 30, up 4.3% from June 30 and up 68.1% from September 30 of last year.

Well, it eventually picked up in August and September and in stronger than normal seasonal expectations thus far in October. Gross margin for the third quarter of 2017 was $5.5 million or 10.7% of sales, which was below our target of the mid-teens for the quarter, due to the operating issues and usual items we decided.

I’ll come back to those issues here in a few minutes. At the bottom line, we incurred a net loss of $0.04 per share for the third quarter, although there was a net profit of $0.02 per diluted share excluding unusual fire related expenses and some discreet tax items that Ross Wilkin will discuss in his remarks.

EBITDA for the third quarter totaled $5.6 million which is below $7.3 million in the 2017 second quarter, but still the second highest level in the past seven quarters. Year-to-date EBITDA is up a noteworthy 68.2% from the same period of 2016. Let me return to the operating issues in the third quarter and where we stand in resolving that.

A major issue was the failure of the main work rule drive system in our Bridgeville hot mill necessitating outside maintenance, engineering and operating support to diagnose the problem, execute repairs and engineer modifications to mitigate future occurrences. This work is complete and the mills is now coming from a production standpoint.

The hot mill failure occurred just as activity was ramping up to meet out growing backlog during a period of high vacation time, peak overtime and new employee training. The loss production during a period of ramping activity created late customer orders and downstream bottlenecks as the hot mill recovered.

Striving to meet our customer equipments let us to temporarily add outsourced resources to break bottlenecks. The implant resources were reduced in recent weeks, so it’ll be eliminated by month end. We also experienced the seal failure in the radial forge in rejection requiring immediate repairs in the third quarter.

We left it to pull planned outage from the fourth quarter into the third quarter and took the forge down for a week. All repairs have been completed and obviously no outages required in the fourth quarter.

In Dunkirk, we wrestled with several spindle flairs on a bar mill and control issues on the bar and rod mill, generating a spike in maintenance plus both issues have been remedied. Lastly we incurred disruptions from two fires which we’ve already called out, both facilities are now repaired and running normally.

There’ll be some additional cost in the fourth quarter to cover outsourcing in early October and we will have insurance recoveries either late in the fourth quarter or early in the first quarter of 2018. In spite of these challenges, there were a number of developments in the third quarter that are positives as we look at the fourth quarter and 2018.

The base price increase of 5% that we announce in September on all stainless products where non-contractors new orders went into effect when orders booked on or after October 1. Regarding commodity prices, on the last call I mentioned that our surcharges will be modestly lower in July and August and recover to June levels by September.

That was in fact the case and beginning in August, commodity prices began to strengthen. At the end of September, nickel, molly and [Inaudible] all had reached their highest levels in two years.

The latest quotes for these commodities indicate the prices are continuing to trend upward with nickel for example, trading between $5.25 and $5.50 per pound in recent days. Speaking of surcharges, as we’ve noted in the past, many in the industry expect to [Inaudible] and cost to increase substantially in 2018.

Over the past couple of months, there have been announcements by some industry players instituting a surcharge mechanism to cover the inflationary pressure of electrode increases. We are in the process of recessing this action as a possible remedy to increase electrode cost should they occur.

We continue to earn customer approvals, expanding relationships and develop new products in the third quarter. The category of expanding aerospace relationships, our new five year contract with Rolls Royce that I mentioned previously has now been signed and takes effect in January 2019.

It add several more alloys in addition to the six alloys we already have with Rolls Royce. During the third quarter we earned two new product approvals, commercialize five new products, and our new product pipeline remains strong with 15 products currently under development.

On the financing front we announced earlier this week that obtained an amendment to our credit agreement, which to me that reduces the rate on our senior depth borrowings by 75 basis points and saves Universal about $433,000 per year at our current borrowing level. Ross will expand on this in a few moments.

One potential positive that has been differed to 2018 is action on Section 232 investigation by the Commerce Department. We do feel some form of trade relief is needed and will occur but not until well into 2018. Let me spend a few minutes on our end markets, beginning with aerospace.

Aerospace totaled $27.7 million in the third quarter of 2017 representing 54% of quarterly sales versus 55% in the 2017 second quarter and 60% of sales in the third quarter last year. Aerospace sales increased 17.3% from the third quarter of 2016, and were 4.4% lower than 2017 second quarter.

Aerospace sales typically dips sequentially in the third quarter. The good news here is that it was a much less of a dip than we would normally would have expected. Overall the aerospace market is healthy, our customers businesses are healthy and they continue to be positive about the remainder of 2017 and next year.

The positive drivers in aerospace remain the same. The multiyear backlogs of Boeing and Airbus are supporting aerospace market fundamentals and both are increasing production rates on the [Inaudible] airplanes.

Meanwhile, all passenger traffic and air freight traffic has been exceptionally strong this year, growing over 2016 by 7.2% and a 11% respectively, all fueling a robust aftermarket. The defense market is also seeing growth.

The announcement last week regarding the Airbus planned to acquire a majority stake in the bombardier C Series aircraft limited partnership which manufactures and sells the C series airplane. This airplane is roughly a 100 to 150 seats airplane.

As to the implications for Universal, the deal which is not expected to close until the second half of 2018 is generally a positive as we now have bombardier approval and a positive relationship with them, along with the fact that we have been doing business in the Boeing, Airbus supply chain for a considerable amounts time.

The heavy equipment market remain our second largest market in the third quarter representing 19% of total sales compared to 17% in the second quarter of 2017, and 12% in the third quarter of 2016.

Heavy equipment sales totaled $9.7 million in the third quarter, an increase of 8.4% from the second quarter of 2017 and double their level on the third quarter of 2016. As we’ve discussed, our tool steel plate sales are the main component of this heavy equipment category.

Tool steel remain and is benefiting from the fact that manufacturing activity is up overall. In automotive, we are continuing to see solid vehicle production numbers and the forecast automotive model change which is trending up reaching an expected 42 in 2019.

With off-road equipment makers is also continued to gain traction as described in Caterpillar’s release on Monday. In fact, [Inaudible] continue to be upbeat with lead times extending. Universal is benefiting from this continued ramp and demand coupled with the shooter lead times we can offer as a domestic supplier.

The oil and gas end market represented 9% of third quarter 2017 sales which is in line with our second quarter 2017 and compares to 8% in the third quarter of 2016. Our oil and gas sales totaled $4.6 million in the quarter, in the second quarter, down 4.6 from the second quarter of 49 – excuse me, let me go back and do that again.

Our oil and gas sales totaled $4.6 million in the 2017 third quarter, down 4.6% from the second quarter, but up 49.8% from the year ago third quarter. Among the oil service leaders, [Inaudible] prices led to mix commentary this earnings stage, generally land based activity in North America was solid and the Gulf of Mexico remains week.

It is worth noting the growing consensuses that the oil market is imbalanced based on the reduction in third quarter global oil inventories. Further, the continuation of this trend and further global inventory drill down will create the foundation for higher oil prices and subsequent increases in exploration and production spend.

We are seeing increasing optimizing and greater visibility from our customers, as they slowly recover from the poor conditions in 2015 and 2016. The power gen market represented 6% of third quarter sales versus 9% in the second quarter and 10% of sales in the third quarter of 2016.

Our power generation sales totaled $3.3 million in the 2017 third quarter, compared with $4.8 million in the second quarter and $4 million in the third quarter of 2016 were down 18.7% and 31.7% respectively.

There was considerable attention paid on GEs earnings call last week to issues in their power business, which offset generally strong performance in most of the segments. The power business includes heavy duty gas turbines, of this is which their new CEO [Inaudible] is undergoing major market changes.

The absence of new build business for Universal and our customers over the past several years is consistent with its overall observation.

Our opportunity and focus has been on the maintenance business on installed turbines which will pick up in activity in the second quarter but slow in the third quarter, which is not unusual as there was less maintenance during the summer months.

Overall, we expect the fundamentals and opportunities in our power generation business to remain the same over the next few quarters. Our general industrial market sales were 9% of the sales in the third quarter of 2017, which is in line with 2017 second quarter and compares with 8% of sales in the third quarter last year.

Third quarter general industrial sales totaled $4.6 million, also in line with the second quarter, but up 39.6% from the third quarter of 2016. We are continuing to benefit from our new products for infrastructure related projects as well as business development activities for domestic manufacturing.

As I noted on the last call, we continue to expect growth in this market to continue into 2018, subject to normal project seasonality. And any federal infrastructure build will just be an added plus.

Before I turn the call over to Ross for his financial report, I’d like to take a moment to acknowledge the substantial contribution he has made to Universal since he joined us couple of years ago. On our first earnings call together, I would comment that Ross was getting a real baptism of fire giving the poor industry conditions at that time.

But they hit the ground running. Ross, on behalf of all of us in the Universal team as well as our entire board, we want to thank you for your service to Universal since then and wish you all the best that you pursue in your next career opportunity.

On a personal note, I want to specially thank you for the advising council you provided to me during some very challenging times in the industry and the outstanding financial team you have assembled here at Universal over the past few years. Let me now turn the call over to Ross for his financial report.

Ross?.

Thank you, Denny, for the kind words. I just want to say before I jump into the financial report, I have enjoyed my time at Universal Stainless very much and it is with mixed emotions that I depart for another opportunity. A new opportunity was brought to my attention unexpectedly as I was not actively speaking other employment.

I will be watching closely with interest the expected continued progress of Universal and I am confident that Universal is on solid footing and has a bright future. On a personal note, I’ve enjoyed working with Denny and learning from his wealth of industry knowledge and company experience.

Even after I leave, I will be – I’ll remain available to Denny and the Universal finance team to ensure a seamless transition. I’m confident that transition will not be a problem. I wish Denny, the board and the rest of the Universal team the best going forward and I look forward to being a shareholder of Universal for the foreseeable future.

For those of you on this call including shareholders, analysts, bankers, colleagues and others, I have enjoyed meeting many of you and working with you regarding Universal over the last couple of years and I look forward to staying in touch and I wish you all continued success. Now for my financial report.

As Denny already noted, third quarter 2017 sales of $50.9 million were up 28.3% compared with the third quarter of 2016, and down 3.3% sequentially. For the first nine months of 2017, sales of $152.4 million were up 26.7% compared with the first nine months of 2016.

The year-to-date increase in sales versus prior year was broad based across all end markets. Gross margin in the third quarter was $5.5 million or 10.7% of sales, including approximately $300,000 of charges related to the fires in our facilities during the quarter.

Adjusting for the fires, underlying gross margin was a 11.2% of sales, down from third quarter of 2016 which was a 11.9% and down sequentially from the second quarter of 2017 which was 13.6%.

during the third quarter of 2017, increased cost associated with higher maintenance activities along with increased reliance on more expense of outsource resources to deliver a ramp up in production, negatively impacted our gross margin performance.

In addition, less favorable alignment of surcharges and input commodity costs contributed to the sequential decline in gross margin. As we enter the fourth quarter and plan for 2018, we anticipate that these greater than normal maintenance and outsourcing costs are temporary in nature and will be reduced going forward.

In addition, with recently higher nickel prices, surcharges have increased starting in October, given this we anticipate having favorable alignment of surcharges and commodity input cost in the fourth quarter relative to the third quarter.

Regarding the impact of the previously announced fire at our Dunkirk, New York facility, we expect to incur a maximum of $200,000 in charges in the fourth quarter associated with remediation and outsourcing which is now been completed and now that we’re back operating as normal.

These charges will be classified within our gross margin in the fourth quarter. The timing of the expected insurance recoveries are likely to be late fourth quarter or early 2018 and will be classified within other income and expense one recovery is agreed.

Looking at selling, general and administrative cost for the third quarter, SG&A was $4.4 million approximately flat with both the prior quarter and the prior year.

Our tax rate for the third quarter of 2017 was a negative 212% reflecting the inclusion of approximately $200,000 of discrete tax expense items, primarily related to the new stock comp accounting guidance in 2017. Excluding the discrete tax items, our underlying tax rate for the third quarter was 30.1%.

From a cash tax standpoint, we continue to pay a little in our taxes and this will remain self for the foreseeable future given the existence of the significant amount of loss carry forward which were $53 million at the end of 2016.

Bottom line net loss for the third quarter was approximately $300,000 or $0.04 per diluted share, this includes a $0.03 loss per share impact of the unusual charges for facility fires and the $0.03 loss per share of discrete tax expense items noted earlier.

Excluding these items, third quarter was net income of $0.02 per diluted share compared with net loss of $0.07 per diluted share in the third quarter of 2016, and net income of $0.17 per diluted share in the second quarter of 2017.

Looking at EBITDA, third quarter EBITDA was $5.6 million, an increase of $900,000 or 19.2% compared with the third quarter of 2016. Adjusting for non-cash share comp expense EBITDA was $6 million in the third quarter of 2017.

It is important to note that EBITDA and adjusted EBITDA were both negatively impacted by approximately $300,000 for the facility fires in the third quarter of 2017. EBITDA for the first nine months of 2017 totaled $17.1 million and an increase of $6.9 million or 68.2% from the same period in 2016.

EBITDA and adjusted EBITDA calculations are in the tables to the press release. Turning our attention to the balance sheet.

During the third quarter managed working capital of $101.5 million increased by $1.4 million compared with the second quarter of 2017, driven by higher inventory partially offset by favorable movements in accounts receivable and accounts payable.

The increase in inventory is primarily to support the higher backlogs noted earlier combined with greater mix of more expense with stainless grades. Capital expenditures for the third quarter of 2017 were $1.6 million compared with $1.7 million in the second quarter of 2017 and $1.4 million in the third quarter of 2016.

The year-to-date 2017 capital expenditures were $4.7 million compared with $3.1 million in the first nine months of 2016.

For full year of 2017, we expect capital expenditures to be approximately $8 million including initial down payments associated with the new bar sell automation line at our Dunkirk facility which is expected to be operational by the second half of 2018.

As it’s been noted in the past, capital expenditures continue to be less than our ongoing depreciation and amortization expense which is $18.7 million annualized reflecting the fact that we largely have the assets in place from investments previously made to support growth in the business.

Total debt was reduced by $600,000 during the third quarter to $77.1 million. Regarding our ABL Bank credit facility as was announced on Monday, we have secured a favorable amendment providing us an immediate reduction to interest grades by 75 basis points.

At current borrowing levels this was equal to approximately $430,000 per annum of interest savings. In addition, the amendment further improves borrowing availability and provides us with additional stability and flexibility to execute our growth plans.

There were no changes to our covenants as part of the recent amendment and we remain in compliance with all covenants at the end of the quarter. Lastly regarding our $19 million subordinated convertible nodes, as of October 17, 2017, the convertible feature of the nodes expired.

Going forward the nodes are simply a fixed interest rate node with no convertible rights. Additionally as previously agreed, the fixed interest grade of the nodes increased from 5% to 6% effective August 17, and this rate will remain at 6% until final maturity marks 2021. This concludes my financial report. Denny I'll turn the call back to you..

Okay, thanks Ross. In summary then, our team delivered strong top line results in the third quarter of 2017, with net sales of $50.8 million and record premium alloy sales which reached 14.5% of revenues.

The market recovery this year continued in third quarter and we are currently seeing further signs of it with stronger than seasonal order entry and additional increases in backlog in the fourth quarter.

However, we faced several unexpected and temporary operating issues late in the third quarter that hit our gross margins hard and resulted in a reported operating – reported loss of $0.04 per share.

We resolved most of those issues and getting back to our growth plan as we move through the balance of this year and into 2018 is certainly what we are involved in currently. There are a number of positive factors supporting our optimism.

First, the continued strong fundamentals of our largest end market aerospace along with our new five year contract with Rolls Royce. Second, we’ve been going high demand for our tool steel plate due to the continued strong pace of vehicle changeovers in the pickup and overall manufacturing activity.

We’re also seeing higher interest from our oil and gas customers, and while we expect power generation demand to be driven by maintenance rather than new builds, we do see further opportunity from our new products with infrastructure.

After these factors, the recent base price increase, the current strength and level of commodity prices and the savings were realized from our new credit amendment and we have a strong foundation for moving forward with our plant. That concludes our formal remarks. Operator, let's take some question..

[Operator Instructions] Your first question is from Michael Gallo with C.L. King. Your line is open..

Hi, good morning, and again, congratulations Ross on the – for the next phase here..

Thank you, Mike..

Good morning, Mike..

Good morning. Couple of questions, I want to just parse have a little bit on the gross margins, obviously you have a number of extraneous factors in the third quarter. Some of those will carry through October into the fourth quarter and then there’ll be other such as the surcharge alignment that sound like they’re going to flip.

So, can we parse out kind of the each of the factors in terms of what the impact, well, I know the fire was 50 basis points but what was outsourcing, how much was the headwind from misalignment and how do you think that’ll flip in the fourth quarter and then sort of how we should expect I guess margins to trend and what you expect kind of as you head into 2018 we obviously going to have some pricing rolling in as well, and presumably they’ll be through some of these issues.

Thanks..

Let me ask Ross to kind of do the parsing on the third quarter, and I’ll pick up the outlook.

Ross?.

Yeah, so the impacts on the third quarter, you already mentioned the fire being 50 basis points, the negative misalignment was about a 100 basis points relative to Q2. And from the additional maintenance activities was approximately – and outsourcing activities approximately a 100 basis point impact to Q3..

So, you take a look at that and if we’re looking at the fourth quarter Mike, and where we’re at, we will have some cost rollover into the fourth quarter, given our average costing system but our expectation would be that our margins will be north of 14% in the fourth quarter, probably in that 14% to 15% range..

Okay. So it sounds like the vast majority of it you really should be through, so well the misalignment I think you noted, we will actually get a positive benefit as you kind of [Inaudible] through the inventory, so it’s….

Yeah, that’s kind of one part. We would estimate that to be about 1% to 1.5%, so that’s why I give you the range of 14% to 15% see how that plays out but that’s roughly what we would expect looking at the fourth quarter. So, it’ll be positive relative to the negative….

Just to clarify – just to clarify, is that relative to the third quarter where you had a 100 basis point headwind or you expect it to be a 100 basis point benefit?.

It should be a 150 basis points benefit relative to third quarter..

Okay, those good to clarify..

And then as far as the price….

And then [Inaudible], yeah..

Let me just finish up on the price increase..

Yeah..

That was on orders effective, orders received after October 1, so we’ll start to see the benefit of that as we move into the first quarter of 2018. It might be a little bit late in the year but most will be ’18, right..

Okay. Just to come back to the demand side of things, I mean obviously it seems continues to grow. As you guided through this now, it seems you had a little bit of trouble with the ramp obviously [Inaudible] of issues that kind of arose in one quarter.

Are you confident in terms of the CapEx that you have everything where it needs to be and these are one offs or will you have to spend some capital perhaps to debottleneck as you ramp for increased demand? Thanks..

I am very confident that we have the capital spend plan well laid out for the next couple of years. There are some minor capitals that will spring from some of the problems we had in the third quarters.

We’ve had some engineering work that I mentioned in my prepared remarks, which we’re assessing right now that’ll probably lead with some capital spending for example on our hot mill here in Bridgeville. But we are not talking gazillions of dollars there Mike, we’re talking about relatively minor things.

Most of the instances, things that happen in the third quarter were, what I would characterize is one-off maintenance issues..

Okay, thanks very much..

You’re welcome..

[Operator Instructions] Your next question is from Tyler Kenyon with Keybanc Capital. Your line is open..

Hey good morning..

Good morning, Tyler..

Good morning, Tyler..

Denny, any sense you could provide us on kind of where you see the top line shaking out in the fourth quarter?.

Well, if you take a look at what happened in the quarter, we’ll have some spillover into the fourth quarter, and as I indicated bookings are holding up relatively strong, so I would be surprised it is a north of $50 million, with probably in that same range as the third quarter.

And depending upon how things play out at the end of the year with the balance sheet dressing that many customers do, it could be a little bit higher than that or a little bit lower but if you ask me, try to pin me to a number I’d say around $50 million..

Okay, great..

I will say customers that I talk to now are beginning to evaluate that tradeoff between cash flow inventory levels and business volumes at inventory requirements for the first quarter.

And it’s been a while since people were worried about having enough inventory in the first quarter, so I’m hopeful we will not as big in adjustment here late in the year in terms of customers willingness to accept orders..

Okay, great. Thank you.

And then just given some of the impacts that we saw in the third quarter, any sense just kind of on networking capital progression as we – as we close the year here?.

If you look at that what I just said, you expect receivables to be roughly flat. If you look at inventory it should be flat, payables with a little bit of wild card depending upon what kind of production we’re running primarily in our mill shop at the end of the year.

Given where we’re at with bookings and backlog I would expect this to continue to run through the end of the year. So, all-in-all I would expect the working cap to be roughly the same level they were at the end of September, at the end of December..

Okay, got it.

And then just any other updates you can provide just on some of the momentum that you’re seeing in North Jackson right now?.

Well, we’ve seen the last two or three quarters in a row, we’ve seen a noticeable uptick in our production coming out of the vacuum induction melting furnace. We’re operating in higher activity levels as a part of that.

On the demand side I think my take away from it personally is that the strategy that we’ve been executing over a number of years that beginning to gain traction. We went through – time traveling is everything in life, right and in 2015 and 2016 were horrendous years.

The downturn in the oil industry had a significant impact on the pace of which we could ramp that facility up, but with the current situation on the market place, we are basically proving to people that we can make these products, do it well, do it very competitively and we’re starting to see the benefit of that here as business levels in general recover..

Great. Thanks for taking our questions..

Any time Tyler..

[Operator Instructions] And I'm showing no further questions. I would now like to turn the call back to Denny Oates for any further remarks..

Okay, thank you. Once again, I want to thank everybody for joining us this morning. We sincerely appreciate your support and interest in Universal Stainless. And we'll be looking forward to updating you on our progress here in early 2018. Have a great day..

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program and you may all disconnect. Everyone have a great day..