Good morning and welcome to MarineMax Inc. 2021 Fiscal Fourth Quarter and Year-End Conference Call. Today's conference call is being recorded. At this time, I'd like to turn the call over to Dawn Francfort of ICR, Investor Relations for MarineMax. Please go ahead..

Thank you operator. Good morning everyone and thank you for joining this discussion of MarineMax's fiscal fourth quarter and year-end 2021 results. I'm sure that you've all received a copy of the press release that went out this morning. But if not, please call Linda Cameron at 727-531-1712 and she will e-mail one to you right away.

I now would like to introduce the management team of MarineMax. Mr. Brett McGill, President and Chief Executive Officer; and Mr. Mike McLamb, Chief Financial Officer of the company. Management will make a few comments about the quarter and then be available for your questions. And with that in mind, let me turn the call over to Mike.

Please go ahead Mike..

Thank you, Dawn. Good morning everyone and thank you for joining this call. Before I turn the call over to Brett, I'd like to remind you that certain of our comments are forward-looking statements as defined by the Private Securities Litigation Reform Act.

These statements involve risks and uncertainties that could cause actual results to differ materially from expectations.

These risks include but are not limited to the impact of seasonality and weather, general economic conditions, and the level of consumer spending, the company's ability to capitalize on opportunities, or grow its market share, and numerous other factors identified in our Form 10-K and other filings with the Securities and Exchange Commission.

With that in mind, I'd like to turn the call over to Brett.

Brett?.

Thank you, Mike. Good morning everyone and thank you for joining this call. I'm very proud of the extraordinary achievements of our team in fiscal 2021. Record revenue of more than $2 billion, record gross margin of over 30%, record earnings per share, all while achieving record Net Promoter Customer Satisfaction scores.

Given the extremely lean inventory and well-documented supply chain issues, this is a great achievement in 2021. I want to thank the entire MarineMax team for their hard work and persistence which enabled us to finish the year with $6.78 in earnings per share compared to our guidance of $6.40 to $6.55.

Today I'd like to share highlights from our fourth quarter and full year, followed by a discussion of the results of our strategic growth plan, which will continue to create shareholder value in 2022 and beyond, then Mike will discuss our financial results in more detail and provide color on our 2022 financial outlook.

Let me start by touching on our fourth quarter and full year performance. For the quarter we generated 16% revenue growth, record gross margin of almost 38%, and record earnings per share of $1.45.

I'm extremely pleased that our strategic acquisitions are exceeding expectations and diversifying our model resulting in robust margins and earnings growth.

Our same-store sales for the quarter were down 7% versus 33% growth a year ago as supply chain challenges and lean inventory environment worsened and impacted us as we move through the later part of the quarter. However, demand remains strong and we see no softening as consumers are still actively seeking the boating lifestyle.

This strong demand environment is highlighted by our customer deposits which jumped more than three times last year's level to over $100 million. Last year was elevated with increased demand so this increase this year is a significant sign of strong and growing demand. For the full year, same-store sales growth was over 13% on top of 25% a year ago.

Our significant geographic and product diversification along with the effective utilization of our digital platform are driving profitability and growth. The marine industry is continuing to experience an influx of new boaters.

Given our scale and global presence we are benefiting from our growing share of the market and based on available industry data, we believe we continue to gain market share. From a cadence perspective, the supply chain headwinds deteriorated as we moved through the quarter.

I want to emphasize that we are not seeing a demand issue rather the timing of shipments is impacting our ability to fulfill some customer orders, and therefore recognize revenue. Simply put, if we had the boats, they would be delivered and we'd have even higher revenue.

We are working closely with our manufacturing partners to satisfy the strong demand. But as many experts in the industry are forecasting it will likely not improve materially until later in fiscal 2022. It's a unique environment and one that is challenging to predict but our team will continue to perform.

I also want to underscore our strategic growth plan and how it is not only driving market share and revenue growth but expanding company-wide margins. This quarter we increased our operating margin by 130 basis points over last year's record to 9.5%.

We also finished the fiscal year with an operating margin increase of more than 300 basis points to over 10%. This performance is directly attributable to our ability to execute our strategy, focusing on higher gross margin businesses, including charter, finance, insurance, marina, storage, parts, service and brokerage.

The gross margin strength we produced in the first nine months of the year accelerated in the September quarter. Additionally, as we integrate our acquisitions, they continue to outperform and are aligned with our strategy of contributing to MarineMax's record margin expansion.

Specifically, each company we have acquired has outperformed their best year or is on pace to outperform their best year. Earlier this month we shared that we have entered into an agreement to buy Intrepid Powerboats. Many of you know that Intrepid is an iconic brand led by one of the best management teams in the industry.

We are very excited about having Ken Clinton and the Intrepid team join the MarineMax family. We plan to support them with their innovative plans provide them capital and arm them with the tools to better serve the Intrepid nation.

Now let me discuss our confidence we have that our strategy will continue to create sustained growth and long-term shareholder value in 2022 and beyond. We continue to make significant progress on our vision of creating exceptional customer experiences through best services, products and technology.

Our team remains focused on these initiatives resulting in strong demand and margin.

We've accomplished this through our global market presence, premium brand, valuable real estate locations, exceptional customer service, technology investments, strategic acquisitions, industry-leading inventory management and finally, a continued commitment to build on our strong company culture.

Supported by one of the strongest balance sheets in the industry, we will continue to make strategic accretive acquisitions in a disciplined manner.

The combination of being well capitalized and having a broad global geographic presence has allowed and will allow us to grow in many ways by adding additional dealers, marinas, storage, service-related offerings, manufacturing and asset-light business such as our Superyacht services business.

We continue to have strong demand and are ready to keep serving our loyal customers. As supply constraints are resolved by manufacturers, we expect to ramp sales in the future.

Our scale continues to be a competitive advantage as we leverage our deep manufacturing relationships, our nationwide shared inventory and our strong balance sheet to support the growing demand.

We believe the combination of driving operating leverage and generating significant cash flow, coupled with strong consumer demand, will result in sustained growth well into fiscal 2022 and beyond. And with that update I will ask Mike to provide more detailed comments on the quarter.

Mike?.

Thank you, Brett, and good morning again everyone. I'd like to start by thanking our team for producing another record quarter and year underscored by strong operating leverage and significant free cash flow generation.

For the quarter, revenue grew 16% to over $462 million even with the lean inventory environment as we benefited from the accretive acquisitions we completed during the year. Overall, our growth has been demand-driven across generally all segments of products and across every global market.

We expected inventory to remain low through the quarter, but with the increased supply chain challenges, retail deliveries grew more challenging, which impacted revenue in excess of $50 million. This led to the decline in same-store sales growth. Our units declined in the quarter double-digits, while our average unit selling price continued to expand.

However, with the increasingly stronger customer deposit visibility, coupled with our broad product portfolio and production insight from our manufacturing partners, we believe we are better positioned than most in our industry resulting in market share gains in all our major segments.

Gross profit dollars increased over $58 million, while our gross margin rose 860 basis points to almost 38%. Our initiatives to drive margin growth over the last several years continue to generate solid results.

Margins rose with contributions from multiple segments and businesses, including new and used boats, storage, parts and service, higher-margin finance, insurance and brokerage businesses, as well as our global superyacht services businesses Northrop & Johnson and Fraser Yachts.

As expected, with Europe reopening, we did see improved sales in charter revenue in August and September this year. About half of our margin improvement came from the growth in our superyacht services businesses. Regarding SG&A, the majority of the increase was again due to rising sales and related commissions, combined with the recent acquisitions.

SG&A rose as a percentage for a few reasons. We did expect significantly more sales, which are not lost but delayed. Additionally, as our higher-margin businesses grow the compensation related to those businesses are higher. We had elevated acquisition costs in a smaller quarter not to mention some cost inflation.

We believe SG&A overall is generally on track on an annual basis, but we will watch the inflationary pressures carefully. Our operating leverage in the quarter was about 15%, which drove very strong earnings growth setting another quarterly record with pre-tax earnings of over $43 million.

Our record September quarter saw both net income and earnings per share rise over 21%, generating $1.45 in earnings per share versus an adjusted $1.19 a year ago. For the full year, I will make a few comments. The acquisitions we completed were all successfully integrated, resulting in record-setting results for each.

Additionally, the acquisitions we completed over the last few years are all contributing greatly to our results. The management teams of each acquired company also are contributing to our overall success. Our ability to acquire and integrate companies is greater today than at any point in our history.

During the year, we added significantly to the strength of our balance sheet, while continuing to make significant long-term investments in our real estate portfolio, our digital capabilities, and our team. Lastly for the full year, our EPS was close to double the midpoint of our initial guidance, and I would add that $6.78 is a pretty strong year.

Moving on to our industry-leading balance sheet. We continue to build cash with over $220 million. Our inventory at quarter end was $231 million, down 22%. Excluding SkipperBud's and Cruiser Yachts inventory declined about double that percentage.

Looking at our liabilities, short-term borrowings decreased sharply due to lower inventory and related financing as well as an increase in cash generation. Due to the demand we are seeing customer deposits as Brett said, more than tripled to over $100 million setting another new record.

Our current ratio is over two and our total liabilities of tangible net worth ratio is at one, both of these are very impressive balance sheet metrics. Our tangible net worth is about $400 million.

Our balance sheet has always been a formidable strategic advantage, and now more than ever it provides the capital for growth and expansion as opportunities arise in good or bad times. Turning to our guidance for fiscal year 2022. Fiscal 2021 and the September quarter generated significant operating leverage and demand remains strong.

The challenge with projecting 2022 are the assumptions around the supply chain. Today, given what we are being told from our various manufacturing partners, we do expect retail unit growth in 2022. However, until we see more stabilization in the supply chain, our guidance assumes basically flat units.

This combined with increases in our average unit selling price should provide annual same-store sales growth in the mid-single digits. Including the remainder of the Cruisers and Nisswa acquisitions we expect total annual revenue growth in the high-single digits to 10%.

Given the inflationary pressures in the marketplace, we do expect modest margin pressure. We have levers to mitigate these pressures, but believe it's prudent to include it in our expectations for now. Our guidance is also before any other acquisitions that we may complete including Intrepid.

Using the low-end of our historical leverage range, plus a modest share increase and a tax rate of 25%, results in our earnings per share guidance range of $7.20 to $7.50. Obviously, we expect to update you throughout the year as our visibility increases on the supply chain.

Turning to current trends, October is forecasted to end with positive same-store sales growth and our backlog is at record levels. As we have said industry demand remains strong and we are generally outperforming these elevated levels. With those comments, I'll turn the call back over to Brett for some closing comments.

Brett?.

Thank you, Mike. 2021 generated landmark metrics for MarineMax. And I am very proud of our team's ability to execute on our strategy and to successfully integrate our recent acquisitions driving superior operating leverage. We are pleased to see our business continue to build strength and are confident in our strategy for, 2022 and beyond.

Our operating margin ended the fiscal year at over 10% almost double 2019. This is the result of our team's commitment to capitalize on the strong industry demand.

While we know we will face a few challenges related to the supply chain and inventory as we start fiscal 2022 beyond our organic growth we will pursue additional brand expansions in higher margin businesses to support our strategy to create long-term shareholder value. And with that operator, let's open up the call for questions..

Thank you. [Operator Instructions] Our first question comes from the line of Joe Altobello with Raymond James. Please proceed with your question..

Good morning guys. This is Adam on for Joe. Congrats on strong year. I wonder -- I was curious I wasn't sure if you could break down maybe quantify different components of the gross margin improvement from the 29% to 30%, you've been running the last four or five quarters versus now..

Yeah. Thank you, Adam. I can talk on the current quarter. I mentioned that half the margin expansion was from the very strong performance of our superyacht services businesses Fraser and Northrop & Johnson. The rest of it in the quarter is almost all our higher-margin businesses expanding.

One of the things with same-store sales decline it gives us higher margin businesses, a chance to kind of catch-up. So we saw an increase as a percentage of revenue in our marina business in our service business, in parts and accessories and F&I, all of which led to the very high margin in the quarter.

New and used products accounted for a very small amount of the increase in the quarter because remember last year we started seeing increased demand and product margins were expanding at this time last year as well.

On a year-to-date on an annual basis when you look at, the 32% consolidated company margin versus the 26% last year, less than half of it is due to new and used product margin expansion, probably 35% something like that would be product margin expansion. The rest of it is the expansions in our higher margin businesses.

Again, our superyacht services businesses the investments we've made in our marina businesses our service parts and accessories F&I all those businesses are driving the rest of it. So hopefully that answers your question a little bit..

No. That's great. Thank you, Mike. And also, I know, you guys alluded to customer deposits.

Obviously, a good metric but not perfect, are there any store traffic or lead generation statistics you guys could give in terms of year-over-year metrics, or is that kind of not going to be disclosed at this time?.

Hey. This is Brett, Adam. We don't disclose the actual metrics on that, but we actually track that daily, weekly, monthly, everything from web traffic to leads that we're generating et cetera. And we see it anywhere from ranging to flat to last year to up a little. It depends on the day and the week. But store traffic also is still holding strong.

The boat shows that we have attended have great traffic coming through those. So we don't see any softening of the demand pipeline possibly even some increase..

Awesome. And if I could squeeze one more in. Are you guys still seeing elevated levels first-time buying? I know you've alluded to it over several calls. Are first timers that bought a model year 2020 or model year 2021 returning to upgrade, or is it perhaps too early to get a good sense for that. And that's all for me..

Yes, Adam. We track it very well and look at it. First-time buyers new to MarineMax, we continue to see those levels elevated still more and more new people coming into our family. And, yes, we do have groups of people that have already upgraded some of those have bought newer boats. So it's -- those trends are great.

They were great last year and we see them continuing. Bringing all these new people into boating is going to be -- have a very positive effect and so we're excited..

Awesome. Thank you, gentlemen..

Thank you, Adam..

Our next question comes from the line of Mike Swartz with Truist. Please proceed with your question..

Hey, guys. Good morning. Just maybe help us understand, I mean, I think you summarized it pretty clearly that your guidance assumes kind of flattish comparable unit sales for 2022.

So maybe help us think about how that kind of trends through the fiscal year? I'm just trying to understand is this more of a back half weighted year just given the timing of deliveries and some of the supply chain bottlenecks? Just help us think about the cadence of the year. .

Yes. Great question, Mike. And clearly with us having pretty strong same-store sales growth to start 2021, we had 20% growth in the December quarter and 45% growth in the March quarter both of which were unit-driven in addition to average unit selling price both of them contributed.

So, yes, I think, you'll see more growth in the back half of the year where we had 6% same-store sales growth in the June quarter which we did comment. Our units were actually down that quarter and then obviously, we're negative this quarter with units being down again. So we do see it being more quite frankly in a better time of the year for us.

It's the seasonal highlight for us the summertime. And it also is when hopefully the supply chain will be working more of the bugs out of it by then and things will be in a better position to have that growth. .

Okay. Great. And then maybe just also talk about -- I mean one of the big questions we're getting is just the sustainability of margins into 2022. And obviously fourth quarter was well above expectations from a margin perspective.

So maybe walk through some of the puts the takes where you feel comfortable where maybe there's a little more pressure throughout the year..

Yes. Good question again, Mike. I think the pressure, I alluded to it in the prepared remarks is just with the inflation that's coming in the industry.

And while we're still being very successful passing price increases on today to consumers, we did bake in a little bit of extra pressure and we do actually have specifically in our guidance margins coming down slightly in 2022 because of the inflationary pressures we're seeing.

We do think that with our ability to continue to focus on these higher-margin businesses those are some of the levers we can pull to try to offset some of the product pressures that we do expect..

Yes, Mike this is -- this last quarter was a little bit of a sample of when sales were down a little our higher margin strategy of these businesses, kind of, shine through a little bit. So yes that's long-term as maybe a discounting environment comes back whenever that might be.

That will put pressure on the new and used boat but we've been working hard for several years now on really loading up these high margin businesses that will kind of shine through a little bit clearer. .

Okay.

And just maybe one point of clarification on your comments, but I mean do you expect the kind of a promotional environment or "normal promotional environment" to return in your fiscal year 2022, or do you think that's a couple of years out?.

No. Thanks for, yes I want to clarify that. We don't -- with the inventory levels being where they'll be I can't imagine there would be any real pricing pressure in the....

For a while. .

For a while especially not in 2022. A little concern like Mike mentioned around some margin erosion a little bit just based on price protection and input increases. But definitely it's not a discounting environment and promotional. Thank you..

Okay. Great. Thank you, guys..

Thanks, Mike..

Thanks..

Our next question comes from the line of Eric Wold with B. Riley. Please proceed with your question..

Thank you. Good morning guys. So you talked about, obviously, not seeing any degradation in demand and traffic and demand and deposits still trading in the right direction. What are you seeing in terms of pricing acceptance? Obviously, we're seeing prices move up profit from the pressures and labor constraints and whatnot from the OEMs.

What do you do in terms of passing those along? How accepting are consumers around those? And any, kind of, anecdotal evidence that that may be getting too high or they still find this little?.

Yeah, it's a great question. We monitor it very closely. We're still looking at trying to price the boats to market even though all these costs continue to creep in. So we're watching it closely. Right now there doesn't appear to be any I'll call it blocking at the price increases demand there.

Keep in mind too that the innovation of these products and the new technologies coming out continues to help support all of that. So right now no pressure on it, but it is something we look pretty far out in the future to say what's the tolerance level there..

And I know it'll vary based on brand and type of boat and all that. But what do you in general quoting buyers in terms of when they can expect to receive boats? For example you got the Fort Lauderdale show come up.

What are people looking at in terms of the delay in deliveries?.

Yeah. We have boats that are available pretty quickly right now. And with the size of our inventory management or I guess the breadth of the inventory we have coming up let's say in the Lauderdale here, our team has a large inventory that they can leverage to give boats. It can be a month or two or three.

Of course there are some models that are really far out into the future. But most of them can be -- if somebody is looking for a boat now for the north, they can have it by spring..

Got it. And then final question. You've highlighted a lot of the opportunity around the Aquila businesses that you've expanded marina and storage and F&I and all that. I guess, you've made two OEM acquisitions over the past six or so months.

Are there any other holes in your product portfolio that could be filled by additional manufacturer acquisitions, or would you view those as more of the one-offs or two-offs so to speak?.

Yeah. I mean those were -- we're very excited about those acquisitions and what they can do and the growth opportunity. And I think I've said before, it's not a new strategic direction that we're taking off into, but we will continue to look to see if there's other opportunities as they arise.

But it's not a brand-new strategic direction that we're running towards..

Understood. Thank you..

Thank you Eric..

Our next question comes from the line of Scott Stember with C.L. King. Please proceed with your question..

Good morning guys, and congrats on a great quarter..

Thanks Scott. .

Can you maybe talk about the cadence of sales throughout the quarter? Was it just really chugging along through the end of the quarter? And it sounds as if you talk about how I guess October is up from a unit's perspective.

What changed to bring that around? Any dynamics in the market more supply?.

Yeah. Great question. In a normal time when you have plenty of inventory you don't have supply issues. The only thing that could explain negative same-store sales to positive same-store sales with a flip of a switch, I mean, you really have a hard time explaining that.

But in the current world, it's literally because of shipments coming from manufacturers and the ability to get products. So throughout the quarter, our ability to get product or manufacturer getting us products worsened for various different issues. And each manufacturer had a different issue but worse as the quarter went on.

As you wind out in September come into October, we received some of the product we thought we'd have in August and September plus some product that was ready for October. And so October should finish up with same-store sales. So it, kind of, speaks to the -- a little bit of the volatility of the supply chain right now.

It's not a demand issue that’d be driving or not driving sales. It's more of just product availability. .

Got it. So there will be volatility. There could be a down month in the months ahead.

It just all depends on supply, or what you can get…?.

Yeah. You know what it's based on again input we have with our manufacturers, we feel pretty good about things, but the answer is yes. It's just -- it's subject to us working through the different supply chain challenges with the manufacturing partners..

Got it. And just last question. You talked about your guidance, I guess, is based off of the conversations you've had with your OEM partners about, I guess, inventory and supply chain.

What are you assuming? And what are they telling you? And when should we see an abatement of some of these issues?.

Well, that's the $64 question that I think every company in the world is being asked right now is, when is the supply chain going to fix itself. I don't think anybody knows for sure. I think everybody is believing that the supply chain will be in a better position as we go through 2022.

But specifically to the first part of your question, the feedback we're getting is that, we expect unit growth in 2022 retail, for the industry and for us, based on the input from our manufacturers. Now in our guidance we don't have unit growth. It's flat unit growth.

It's really basically just some inflationary-based increases in our average unit selling price, plus the addition of the remainder of the Cruisers and the Nisswa acquisition, which is getting to the high single digits to maybe 10%.

I think it's important to remember, though, for everybody on this call, I mean, the industry today in 2021 is actually down in units. I mean, it went from being up in units to down 8% in units overall.

And -- so you got to think, as you think about 2022 with the demand that's out there, as long as there's any improvement, any slight improvement in the supply chain, the demand is there to comp a negative comp. So in 2020, there was massive unit growth. But sitting here today, the industry is down 8%.

So it's not like we're comping up against a real big unit comp as an industry. So that helps with our belief as to what can happen in 2022, just working our way through the supply chain is what we need to do..

Got it. That’s all I have. Thanks..

Thanks, Scott..

Our next question comes from the line of James Hardiman with Wedbush Securities. Please proceed with your question..

Hello. This is Sean Wagner on for James. I just wanted to clarify one point first. I know October is looking like it's going to be up on -- from a same-store sales growth perspective.

But just to clarify, are units going to be up as well, or are they just meaningfully better than the double-digit decline that you saw this last quarter?.

I don't have the unit forecast right in front of me, Sean. I don't recall if units are going to be up or not. Again, for the full year, we're assuming units will be flattish in our guidance range. .

Right.

And that gets better throughout the year just based on comparisons?.

That's correct. .

Okay. And then, any idea kind of where -- the double-digit decline in the quarter, obviously, that got worse through the quarter as availability got worse.

If you had the product that you wanted, any idea where that could have been or the same-store sales could have been? I know you've talked about the traffic kind of metrics that you look at being anywhere from flat to up slightly.

Is that a reasonable number that could have been attained units-wise, if availability wasn't an issue?.

Well, so we were expecting obviously same-store sales growth in the quarter, given the $50 million drop in revenue. Really to answer your question, as a matter of fact, I mean, if we had the product we'd have very strong unit growth. Just look at -- that's just a fact of the $100 million customer deposits we have on our balance sheet.

The demand is very strong people are seeking product today. So I think it would fix the units in the industry. I think it's a - I think the overall industry and also us it's an inventory issue not a demand issue. .

Right, right. Okay. And one last quick question.

I guess one of the main kind of bear cases, we're hearing are all of the talk of kind of new customers that we've seen over the last 1.5 years and those trends seem to still be strong, but are you starting to see any evidence or expect to see in the next year kind of anybody exiting the lifestyle or trading in their boats? Have you seen any kind of uptick in used boat availability or anything like that?.

Yes. The -- so no uptick in used boat availability. That's still hard to come by. So that -- and there has been a few great success stories of people that bought last year already upgrading this year. That's kind of common in our business when we get new people in.

But -- and then the third thing I'll say is back to your beginning there which was we still see new people entering the industry or entering MarineMax as a new customer to us, but nothing that shows they're getting out or nothing shows that that percentage of new people is declining. .

Okay. Thanks a lot..

Our next question comes from the line of David MacGregor with Longbow Research. Please proceed with your question. .

Hi. This is Joe Nolan on for David..

Hi Joe..

I was just hoping that you could talk about the impact that acquisitions had on gross margins in the quarter.

And then along with that if you could talk about the supply channel for your recent acquisitions and just that they're dealing with relatively similar supply constraints?.

Hey Joe, we have a bit of a bad connection. I think your first question was on the impact of acquisitions on gross margins. And I would comment that the acquisitions we made a number of years ago, Fraser Northrop & Johnson either a year ago or two years ago, were great drivers of the margin growth.

They contribute about half of the overall gross margin growth in the quarter. Cruises would have had a contribution, but it would have been not as significant as the Fraser and the Northrop & Johnson. And then Nisswa that we merged with on July one because of their larger service and storage business profile they would have contributed some as well.

But as we mentioned on the call, half the margin increase was Fraser Northrop & Johnson. The rest of it was really the expansion of all of our higher margin businesses. And I may not have heard the other parts of your questions. .

Yes. On the recent acquisitions you asked about the supply chain constraints. And I think I would categorize that as we're seeing the same thing that the industry is seeing. It's hit or miss your daily battle to get through it and try to get the boat completed and help our stores out. .

Well, thanks. I will pass on..

Thank you, Joe..

There are no further questions in the queue. I'd like to hand the call back to Brett McGill for closing remarks. .

Well, thank you everybody for joining the call today. And both Mike and I are available if you have any additional questions and we're looking forward to updating you on our progress on our next call. Have a great day. .

Ladies and gentlemen this does conclude today's conference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day..