dependence on a small number of large customers, including 2 large automotive customers; dependence on automotive, appliance, commercial vehicle, computer and communication industries; international trade disputes resulting in tariffs; investment in programs prior to the recognition of revenue; timing, quality and cost of new program launches; changes in U.S.

trade policy; ability to withstand price pressure, including pricing reductions; ability to successfully market and sell Dabir Surfaces; currency fluctuations; customary risks related to conducting global operations; recognition of goodwill impairment charges; dependence on the availability and price of raw materials; fluctuations in our gross margins; ability to withstand business interruptions; successfully benefit from acquisitions and divestitures; dependence on our supply chain; income tax rate fluctuations; ability to keep pace with rapid technological changes; breach of our information technology systems; ability to avoid design or manufacturing defects; ability to compete effectively; ability to protect our intellectual property; success of Pacific Insight and Procoplast and our ability to implement any profit from new applications of the acquired technology; significant adjustments to expense based on the probability of meeting certain performance levels in our long-term incentive plan; and cost and expenses due to regulations regarding conflict materials.

Additionally, this conference call will present both GAAP and non-GAAP financial measures. A reconciliation of these measures is included in today's earnings release, which you can find on our Investor Relations website. I would now like to turn the call over to Don Duda, President and CEO. Please go ahead, sir..

Thank you, Stacy, and good morning, everyone. Thank you for joining us today for our fiscal 2019 third quarter financial results conference call. I'm joined today by Ron Tsoumas, our Chief Financial Officer. Both Ron and I have comments. And afterwards, we will take your questions. To start, I will ask you to turn to Slide 4.

The first nine months of fiscal 2019 have been challenging due to the weak automotive market exacerbated by Europe's implementation of WLTP or the Worldwide Harmonised Light Vehicle Test Procedures.

While the near-term automotive market is projected to remain soft, the long-term fundamentals of our business remain intact, due mainly to the strong cash flow generating businesses we have been building and acquiring. Our free cash flow generation allowed us to reduce debt by $55 million in the third quarter.

And with a reasonable -- responsible debt to trailing 12-month EBITDA ratio of 1.7x at the end of the third quarter, our balance sheet is also fiscally conservative. Additionally, free cash flow is anticipated to be $92 million for the fiscal year.

This free cash flow will allow us to continue to invest in technologies, businesses and end markets such as magnetoelastic sensing, vertical integration of onboard vehicle cameras, Dabir Surfaces and LED lighting technologies, which will provide Methode the ability to continue to grow and increase long-term value despite the significant automotive headwinds.

It is also interesting to note that almost 80% of our fiscal 2018 revenues are attributable to businesses or companies we acquired. The acquisitions we have made over the past decade or so have not only facilitated our growth, but through our manufacturing prowess and vertical integration strategy have generated significant cash flows.

Moreover, our industrial segment sales grew 84% year-over-year in the first nine months, due mainly to the addition of Grakon, which is anticipated to have strong results for the year because of higher revenue and margin improvement.

Not only is Grakon opening up additional customers and additional end markets, it is reducing our concentration in automotive and expanding our product line offering, while leveraging our past technology investments. Grakon also increases the scale of some of our core vertically integrated manufacturing capabilities.

From an operations perspective, there are several ongoing integration activities within Grakon, including the implementation of the Methode business planning system, Methode production system and quality management system. As in every acquisition, there is learning from both sides and best practices are being shared.

One of the key initiatives at Grakon is the implementation of lean tools, which will ultimately drive improvements in efficiency and inventory reductions, leading to further margin and cash flow improvement. Along with operational improvements, our global purchasing teams have been working on consolidating our purchasing power.

Also, we now expect our tariff expenses will be lower for the year than we originally projected, which assumes a 10% rate. This combined with the anticipated improved results at Grakon resulted in our increasing fiscal 2019 guidance for income from operations.

Additionally, as I will discuss more in a few moments, we have made significant progress in both the number of Dabir Surfaces sold and the number of clinical evaluations completed. Looking at the financials on Slide 5. Consolidated sales improve;d 8.3% year-over-year in the third quarter and 11.4% in the first nine months.

In the third quarter, non-GAAP adjusted income from operations increased from $29.6 million last year to $32.4 million this year and in the 9 months from $91.5 million last year to $102.3 million this year.

These figures exclude expenses for initiatives to reduce costs and improve probability, acquisition-related costs as well as long-term incentive plan of accrual adjustments in the applicable periods. Non-GAAP adjusted EPS improved from $0.74 in the third quarter last year to $0.83 this year and in the 9 months from $2.07 last year to $2.34 this year.

This excludes the items I just mentioned as well as the impact of U.S. tax reform. Ron will discuss this tax impact in his comments. Next, I'll be referring to Slide 6 to look at the key drivers to our sales performance this year versus last year.

Our acquisitions and new launches have added $150 million in revenue through the first nine months, more than offsetting the impact of reduced vehicle production volume at our customers.

Besides the sharp drop in vehicle sales and production in Asia, our customers in North America were impacted by the shift away from passenger cars, while our customers in Europe were also impacted by lower market demand for diesel as well as the WLTP.

Additionally, pricing reductions and the adoption of a new accounting standard regarding revenue recognition, which affected the accounting of tooling sales in our European operations, reduced overall automotive sales.

Consolidated sales were also negatively impacted by the late start of a major appliance program as well as reduced data program volumes in the Interface segments. In the Automotive segment, pricing reductions on lead frames and touchscreens negatively impacted both sales and margins in both periods.

Margins were also affected negatively by sales mix, initiatives to reduce cost to improve profitability and tariff expense, partially offset by a favorable currency impact from the Mexican peso. As I mentioned a moment ago, our industrial segment sales grew year-over-year 84% in the first nine months and 136% in the third quarter.

Industrial segment sales improved in the 9 months due to the addition of Grakon, but also due to increased electronic and Power Products sales. Year-over-year, gross margins improved 840 basis points in the third quarter and 630 basis points in the 9 months.

Gross margins in the fiscal 2019 periods were negatively impacted by purchase accounting adjustments attributable to the Grakon inventory and tariff expense. Now let's move on with an update on Dabir on Slide 7. During the third quarter, we started, managed or completed 9 clinical evaluations across the United States.

We also had the first clinical evaluation in the med-surg arena with 10 systems placed in an oncology unit, in line with our plan to expand in the acute care space beyond the surgical suite.

Finally, one of the key internal measures we judge Dabir's progress on is the number of services sold, which has increased year-over-year nearly fivefold from 79 in the full year of fiscal 2018 to 384 thus far in fiscal 2019.

Excluding controller sales and leases, revenue attributed to surfaces alone has grown from $64,000 in fiscal 2018 to over $396,000 thus far in this fiscal year. Our number of clinical evaluations has also grown from 18 in all fiscal 2018 to 28 to date in this fiscal year.

At this point, I'll turn the call over to Ron, who will provide more detail on the financial results and review guidance.

Ron?.

Thank you, Don, and good morning, everyone. On a GAAP basis, third quarter net income increased $55 million to $30.7 million or $0.82 per share in fiscal '19 from a loss of $24.3 million or a loss of $0.65 per share in fiscal '18.

For the 9 months, GAAP net income increased $48.6 million to $69 million or $1.83 per share in fiscal '19 from $20.4 million or $0.54 per share in fiscal 2018. In both periods, GAAP net income benefited mainly from lower income tax expense, higher sales in the industrial segment and increased international government grants.

This was partially offset mainly by reduced passenger car demand and production in both Europe and Asia, higher stock award amortization expense, increased acquisition-related cost, increased intangible amortization expense related to the Grakon acquisition, higher net interest expense, initiatives taken to reduce costs and improve profitability and tariff expenses.

Consolidated GAAP income from operations was $26 million in the fiscal '19 third quarter versus $35.6 million last year and $73.8 million in the 9 months of fiscal 2019 versus $90.7 million in the same period of last year.

In both periods, income from operations was negatively impacted by reduced passenger car demand and production in both Europe and Asia, higher stock award amortization expense, increased acquisition-related costs, increased intangible asset amortization expense related to the Grakon acquisition, initiatives to reduce costs and improve profitability and tariff expense.

Moving to margins on Slide 8. Non-GAAP adjusted gross margins improved 70 basis points year-over-year in the 9-month period and exclude initiatives to reduce costs and improve profitability and purchase accounting adjustments related to the step-up in inventory.

Gross margins were negatively impacted by an unfavorable sales mix and customer pricing reductions in the Automotive segment as well as significantly reduced sales in the Interface segment, partially offset by a favorable sales mix in the Industrial segment and a favorable currency impact.

Non-GAAP selling and administrative expenses as a percentage of sales decreased 30 basis points in the 9-month period and exclude acquisition-related costs, initiatives to reduce overall costs and improve operational profitability and the long-term incentive plan accrual adjustments in the applicable periods.

Shifting to EBITDA, the company generated $109.1 million in the 9 months of fiscal '19 or 14.9% of sales versus $113.3 million or 17.2% of the sales in the same period last year.

However, adjusting for initiatives to reduce overall costs and improve operational profitability, acquisition-related costs and long-term incentive plan accrual adjustments in the applicable periods, adjusted EBITDA improved year-over-year from $114.1 million or 17.3% of sales in the 9 months last year to $137.6 million or 18.7% of sales in the 9 months of fiscal 2019.

For the full year of fiscal 2019, we expect EBITDA to be between $155 million and $160 million or in the 15.5% to 16% of sales range. For the full year, we anticipate adjusted EBITDA to be in the range of $180 million to $190 million or 18% to 19% sales range. A few other financial items to review.

Year-over-year, intangible asset amortization expense in the third quarter of fiscal '19 increased $3.5 million or 175% to $5.5 million, primarily due to the amortization expense related to the Grakon acquisition and increased $7.4 million or 200% to $11.1 million due to the Pacific Insight, Procoplast and Grakon acquisitions.

The company's effective tax rate was 6.1% through 9 months or an expense of $4.5 million. For the third quarter, the company reported an effective tax rate benefit of 10.4%. The lower tax rate was due to a few significant events that occurred during the third quarter. First, the company finalized its provisional estimate for U.S.

tax reform and recorded a tax benefit of $4.8 million as allowed under accounting standards SAB 118. This adjustment was due to additional regulatory guidance, which became final during calendar fourth quarter or our fiscal third quarter.

In addition, the company's tax rate also benefited from other discrete items, which totaled $2.7 million in the quarter. These adjustments combined for a $7.5 million benefit during the quarter.

The company's effective tax rate, excluding the impact of these adjustments, would have been 16.7% for the third quarter and between 16% and 17% for the full year, which is consistent with our previous guidance.

We estimate that our effective tax rate will normalize for the remainder of our fiscal 2019, and we expect the full year effective tax rate to be in the 9% to 11% range. The company continues to enjoy a favorable overall effective tax rate, which drives higher earnings and cash flow on a long-term basis.

We will continue to pursue prudent and reasonable actions that will allow us to maintain this enviable rate. In the first nine months of fiscal 2019, we invested $37 million in CapEx, mainly to support programs and launches in North America and Europe. We estimate our capital investment for fiscal 2019 to be in the $45 million to $47 million range.

Expense for depreciation and amortization for the first nine months was $30.6 million. For fiscal 2019, we expect depreciation and amortization to be between $42 million and $44 million. Let's move to Slide 9. Free cash flow for the first nine months was $62.6 million. We expect our fiscal 2019 free cash flow to be between $90 million and $95 million.

Our debt to trailing 12-month EBITDA ratio, which is used for our bank covenants, is approximately 1.7x. This ratio was lowered in 3Q due to our significantly -- significant deleveraging during the quarter. Moving to Slide 10. I'll finish up my remarks with guidance.

As a reminder, the guidance ranges for fiscal 2019 are based upon management's expectation regarding a variety of factors and involve a number of risks and uncertainties, which have been detailed in this morning's release, the 10-Q and the Form 10-K.

We announced this morning, we anticipate fiscal 2019 sales to be at the lower end of our previous guidance range of $1 billion to $1.04 billion. The company has updated guidance for pretax income to a range of $104.5 million to $111.5 million and earnings per share in the range of $2.50 to $2.67.

These changes are from pretax income in the range of $91.5 million to $105.5 million and earnings per share in the range of $2.02 to $2.33.

Looking at the midpoint of the pretax guidance range issued at the end of the second quarter, which would be $98.5 million and adding to that the improved anticipated operational results at Grakon and lower-than-anticipated impact from tariffs on imported Chinese goods, the new midpoint of the pretax income guidance range is $108 million.

From an EPS perspective, adding the transition tax due to U.S. tax reform and the other discrete items that I just mentioned to the 2 quarter EPS guidance midpoint nets to the current EPS guidance midpoint.

In conclusion, please move to Slide 11 to look at our key drivers for our anticipated EBITDA performance this fiscal year versus next as we get closer to the performance measurement period at the end of our fiscal 2020.

Looking at EBITDA based on the midpoint of our fiscal 2019 guidance range issued today, which would be $159 million and adding the EBITDA from new automotive and laundry program launches of approximately $20 million, adding EBITDA from a full year of Grakon, which is estimated to be an additional $24 million, substracting the impact of the loss of EBITDA from reduced passenger car production, which we estimate to be about $19 million, adding the benefit of initiatives to reduce cost and improved profitability of about $10 million and adding the onetime costs we incurred in fiscal 2019 for acquisitions and restructuring of about $27 million brings you to the target level of Methode's long-term incentive plan, which is $221 million of EBITDA.

For the accounting regulations of ASC 718, management must attach quarterly to the probability of meeting the 2020 EBITDA projections with a 70% confidence level as noted in Footnote 7 in the 10-Q. Don, that concludes my comments..

Ron, thank you very much. Stacy, we are ready to take questions..

[Operator Instructions]. Our first question comes from Chris Van Horn with B. Riley..

I was hoping that you could give us a little more detail on the guidance.

What you're kind of thinking about for -- maybe even on some of your end market level, using IHS as a baseline for auto and kind of adding in what you see from a program launch perspective? And then just kind of some commentary on your other markets, if you don't mind?.

From an auto standpoint, we of course use our releases from the automakers and our discussions with the automakers overlaid with some IHS and LMC. And we do sometimes doublecheck with IHS. So that's -- those are the main drivers of auto. Grakon, we're still familiarising ourself with it. But there, we use ACT and also the releases that Grakon sees.

So all that put together is driving the automotive and transportation. And then the smaller business, it's customer discussions and releases..

Okay. Got it. And then, the Grakon acquisition, I think a big part of it, from our viewpoint, was the heavy-duty trucking customer was going to be a bigger end market for you all.

Could you comment on the pipeline that you're seeing with now that you have Grakon and maybe some other Methode technologies that you can add into that? What you're hearing from the customers? And any sort of commentary on the pipeline over the next couple of years?.

Sure. I want to be -- I don't want to speak for our customers, but our backlog remains strong. We anticipate it will remain strong for the duration of the calendar year. I think that's in line with what ACT has said. We'll see what calendar year '20 brings.

From our standpoint, we continue to take cost out of Grakon, and we're actively managing the factory. Our VP in Asia has control of the factory, and so we'll take costs out there, which will help us not this year, but it will help us next year.

And then we can continue to factor the customers about whether there are areas that -- or products that we can provide. And then very important, and I said -- I think I said in the script is our global procurement. We've already seen reductions in our LED by -- for global Methode, including Grakon, by our negotiations.

So there's a number of things that we're doing as we look into calendar year '20 to -- and we improve Grakon's performance and that potentially might offset any downturn we'll see in their business..

Okay. Got it. And then when we look at the capital deployment, I know you've made a number of successful acquisitions and I imagine there's probably not anything in the near term.

But as we think further out, are there any sort of areas, regions or end markets that you've identified that might be interesting for you from that perspective? And then, as you look at the portfolio, how are you thinking about the companies that you're holding now?.

Well, let me answer that first. We continue to evaluate what our portfolio is and what the -- where does that fit within Methode. And then if something does, we will take action there. But there's nothing imminent in that respect. In terms of future acquisitions, we are focusing on industrial.

I won't rule out automotive, but that space we know how to operate in, we've got technology that we can bring it. We certainly know how to manufacture the product. So that's a focus for us. Medical, I think, we'll focus on Dabir unless there's some great acquisition that gives Dabir a very strong path to market.

I think, for the most part, we'll focus on our industrial and build that up in line with, I guess, our technologies and what we're comfortable with. We wouldn't do an industrial acquisition that we didn't understand and would take us too far afield from what we know. And then the other thing I would add is we've done well in sensors.

Our magnetoelastic sensors have done well. Our [indiscernible] sensors do well. So the sensor acquisition, which would actually help all of Methode, is also something we'll be looking at..

Our next question comes from David Leiker with Baird..

This is a Erin Welcenbach on for David. My first question is, again, a follow-up on the Grakon acquisition.

So I'm wondering if you can frame for us how much of the upside in the quarter was from better fundamental business performance may be given some of the stronger commercial vehicle end markets versus synergies, either cost or kind of cross-selling synergies tracking above your expectations?.

Well, as I think both Ron and I said, tariffs came in better than we anticipated. I think the team has done a very good job of moving as quickly as they could to mitigate certain portion of them and that was really us.

Grakon brought all their product into Seattle and then they would ship to Mexico or ship to Canada and, of course, in United States as well. Our team was successful in quickly changing the ship point, which reduced the tariffs. So that helped. And Grakon did -- in the quarter, the sales were higher than forecast in Q3.

So they've got the advantage of Class 8. And then -- well, it's -- in our automotive, Tesla also had an impact. Ron, is there anything you....

I would add that maybe we were able to very quickly gain some procurement synergies that definitely dropped to the bottom line in 3Q and going out into 4Q and then into fiscal 2020 as well..

Okay. That's helpful. And then on the cost actions you announced, I believe it was last quarter.

Where do you stand in those in terms of when we'll start seeing the benefits of those flow through the P&L more substantially?.

We'll see some benefit in our Q4, but we'll see the full benefit in our fiscal 2020..

Our next question comes from Steven Dyer with Craig-Hallum..

A couple of questions for me. I guess, I'll start briefly on Dabir. Looks like it's at long last starting to get some traction after a lot of testing and probably a little bit slower out of the gate. But how do you think about certain deployment from here? It seems like it's checked all the boxes in terms of efficacy and safety and so on and so forth.

And what sort of the ramp to this becoming sort of the product that you envisioned several years ago?.

Good question. The next step is to expand from single-point hospitals into hospital systems. And we're starting to see some of that now. Again, slower than we would like, but it is moving in that direction.

And you first have to demonstrate efficacy at the operating level with the nurses to get credibility and then you can talk to the C suite in the systems. And that's where we're at now. The teams are, I think, doing a very good job now of expanding Dabir in particular hospitals we're at now and then going forward.

And I judge that by, as I said, the number of surfaces that we're selling and the number of clinicals that we're going on. You have to do that first before you can talk about in these sales.

We still maintain that the hospital surgical suites are the area we want to focus on, although we have, as I said, in my prepared remarks, went into other areas and that remains a very large and robust market for us. Now in terms of when we see that, we'll make progress next year.

I -- we're not planning on [indiscernible] the corner next year from profitability. We think that's more of a '21 event. And I realized that we have been talking about it a long time. But I have to say, from my standpoint, I feel reinvigorated with the progress in Dabir that's been made. So I still think we have some time.

That's not going to swing Q4, but I think we're in the right direction. And I agree, it's taken a long time, but I think we're getting there..

And that's very helpful. I guess, just following up on that. At one point, I think, we all had expected that was going to be a very major product for the company in the future.

And have you seen anything in the last year, 2 or 3 that has sort of changed your mind on that in terms of the TAM that it could be for you guys?.

No. Actually, I would go the other way that the market is larger than we thought it was. That -- again, we still have to land some systems and get it to be a standard of care. But once it becomes a standard of care, that market -- the total available market is quite large.

And I've said a number of times, we're focusing on the surgical suites because there's essentially no compression, but the bigger market is when you get outside of the surgical area into acute -- excuse me, not acute. We did a study on respirator patients....

Ventilator..

Ventilator that turned out very favorably. I think we commented on last call. So no, I -- in no way, shape or form, we think the market is diminished at all. In fact, I think it's growing..

Got it. And then, I guess, just jumping over to auto. Your largest auto program is, I think, in the middle of a changeover model years, redesign [indiscernible] to the T1.

Just kind of given the disruption, I guess, that you're seeing here in fiscal '20 around that changeover, would you expect that the absolute dollars from that program can kind of grow in fiscal 2020? Is that part of the assumption?.

You have to tell me what the expected [indiscernible] is going to be and where GM forecast their year obviously is going to be dependent upon that. I -- in our planning, I think we're holding our own, but we're not expecting a huge upside from that. I don't think there's anything in the marketplace that would suggest that..

And the reason I said is that I think most of fiscal '19 or at least half of it is going to be sort of not at full production for the K2, just given that change over.

So I guess, the assumption would be as most of fiscal 2020 should be back sort of full production for the T1, both trucks and SUVs?.

Let me answer this way. From our -- looking at LMC, looking at IHS, that's really what we do our planning on and we're not seeing that. Now that doesn't mean that three months from now that does not change.

I mean, we -- I really feel that we have a 3 to 6 month window where we can have some degree of certainty, but you get past that as it -- I think, it becomes difficult to forecast..

Okay. Fair enough. And then, I guess, can you just remind us around content on the T1 versus K2 kind of apples-to-apples per vehicle? Just directionally, if nothing else, similar or more or less, et cetera..

It would be less and average tool price is reduced because the screens are down. Screen is directed by. So the average tool price has dropped. And -- in general, they have a total price of center consoles have reduced from when we originally launched K2. Directionally, the content has dropped and the dollars have dropped.

And we've talked in the past calls about the dramatic reduction is screen prices..

But that's largely passthrough revenue as I recall, right? I guess, I'll just jump....

It is passthrough revenue, but it's in the price..

Yes. Okay. fair enough. Last question for me, and then I'll jump back in line. On the walk from EBITDA from fiscal '19 to fiscal '20, it's very helpful.

It looks like you increased sort of your expectation of cost initiatives and so forth -- I'm sorry, the additional Grakon revenue and contribution there by about $7 million, but you kept sort of your overall 2020 target at 221.

Should -- is that just conservatism on your part that, that can now be upside? Or have you seen something sort of compressed in other parts of your business?.

Well. Yes, we've seen, European auto drop -- what do we have in the chart, $19 million, and it's because of the passenger car reduction. That's significant. And we may have more headwinds and tailwinds from that standpoint. Will Europe stabilize or will Europe drop? So are we being conservative? I guess, we're being practical.

And there can always be some upside, but there can also be downside as well. And when we do these numbers, we have to certify that the auditors that were 70% confident in the -- in our forecast, and we're still -- what do we give guidance, four months from now [indiscernible] ways to go.

Do you have any comments, Ron?.

Yes. I might say that -- Steve, is that the plan is in the Q and on the filings, 221 is the target, and that's where we're at and we can't really say much more about that. Otherwise, we'll really be giving fiscal '20 guidance as well. So the plan is -- [indiscernible] still the plan..

Next question comes from Skip Tague with RBI Capital..

I just wanted to confirm, I think I heard that acquisitions added $150 million of revenues in the nine months that ended January 2019? Is that correct?.

Yes..

So then that implies that in the 9 months ended 2017, the organic revenues have been $584 million, which would compare to $659 million for the previous 9-month period? Is that also correct?.

Just a second. $150 million of acquisitions and new launches. So $115 million for acquisitions and $35 million for program launches..

Our next question comes from Christopher Hillary with Roubaix Capital..

I just wanted to ask you've done an excellent job in managing your margins, both in the current period and through your planning period.

What do you see in the medium term as tailwinds to your margin, whether it be cost improvements or the mix of business that you anticipate to be growing when we head beyond the 2020 period?.

Sure. The two big drivers for us are new programs, using our technology and higher margins. And I've pointed in the past to our magnetoelastic margins, in general, our sensing business.

We put a slide out, I think, in the Needham conference, where we had -- I guess, last quarter, we had -- what was about $80 million of book business through '22 and that's a very, very good margin. And actually, we anticipate probably by '22 it will be $100 million. That the product carries one of our highest margins in the company.

So new business at higher margins or higher profit drive our overall margins. And also, we can generally take costs out of the product. It's harder in Auto today because we're fighting reduced volumes and reduced overhead coverage. Our North American business was down $23 million year-over-year. But from gross margin dollars, the team's kept it flat.

And that's not easy to do in the auto business when there's a downturn. They have done a good job. Europe has struggled a little bit more, some of it's because their margins are higher than in the U.S. But in general, if I look at Grakon, we've got great opportunity and we've built into our plans to take costs out there.

They run a good factory, but it's not -- not up to the Methode standards to our production system. We've got a good team. We will get them there and we'll see the benefit of that some in '20, but also in '21. So it's a combination of new business and higher margins and then what we do well is take costs out of the product..

Thank you. I would like to turn the call over to Don for closing comments..

Stacy, thank you very much, and we thank everybody for listening and their questions. Have a good day..

This concludes today's conference. Thank you for your participation..