Greg Lundberg - SVP, IR Jeremy Male - Chairman & CEO Donald Shassian - EVP & CFO.

Alexia Quadrani – JPMorgan Marci Ryvicker - Wells Fargo Benjamin Swinburne - Morgan Stanley Jim Goss - Barrington Research Drew Borst - Goldman Sachs.

Good day, and welcome to the Outfront Media Third Quarter 2017 Earnings Conference Call. At this time, I would like to turn the conference over to Greg Lundberg, Senior Vice President of Investor Relations. Please go ahead..

Good afternoon, everybody. Thank you for joining our 2017 third quarter earnings call. On the call today are Jeremy Male, Chairman and Chief Executive Officer; and Donald Shassian, Executive Vice President and Chief Financial Officer. After a discussion of our financial results, we’ll open up the lines for a question-and-answer session.

You can find the slide presentation for today’s call and the earnings release on the Investor Relations page of our website. And after today’s call has concluded, an audio archive will be available there as well.

This conference call may include forward-looking statements, relevant factors that could cause actual results to differ materially from these forward-looking statements are listed in our earnings materials, and in our SEC filings, including our 2016 Form 10-K. We’ll also refer to certain non-GAAP financial measures on this call.

And any references to OIBDA will be made on an adjusted basis, and reconciliations of OIBDA and other non-GAAP financial measures are in the appendix of the slide presentation, the earnings release and on our website, outfrontmedia.com. And with that, I’ll turn it over to Jeremy..

Thanks Greg, and good afternoon, everyone. This call really marks a turning point for the company. With the recent announcements of our new 15 year agreement with the New York MTA, we’re in a position to really begin a digital transformation which will ultimately enhance our growth trajectory.

But before we talk about any more detail, let’s review the third quarter. We grew organic revenues 1.5% in-line with the guidance we gave you back in August. The shape of the growth was also as we anticipated and very similar to the second quarter. Local advertising grew solidly across billboard and transit and with 55% of our U.S.

business during the quarter approximately the same level as full year 2016. On the National side we saw some sequential improvement once again but not sufficient to return to positive growth. Our organic growth was led by transit while billboard revenues were closer to flat and Don will provide some detail on this later on the call.

With good cost control we saw OIBDA grow very slightly which is also a marked improvement from earlier this year. So the quarter was as expected. Local is doing well and transit is doing well, but our focus is on improving billboard particularly National billboard to increase our cash generation.

Before I come back on and talk about our fourth quarter revenue guidance and give you a digital update let me hand the call over to Don for a more in-depth review of our quarterly results..

Good afternoon, everyone, and thank you for being on our call today. Please turn to Slide 6, which shows a high-level summary of the year-over-year performance of some of our key financial metrics. Please note that one quarter of Latin America is still in our nine months 2016 results.

The takeaway from this table is that low single digit revenue growth combined with good cost control helped drive OIBDA of very slightly year-over-year. Nevertheless revenues were weighted towards transit and we did not have solid billboard performance which precluded a stronger fall through to OIBDA.

This combined with an increase in taxes, interest and maintenance CapEx resulted in AFFO that was down on a year-over-year basis. We will start our review with revenues on slide 7. Total reported revenues increased 2.5% and organic revenues increased 1.5%. U.S. Media increased 1.8% on both a reported and organic basis. U.S.

Billboard organic revenues were down 0.6%, this reflects the decline in National advertising that was only partially offset by growth in local. In addition there are two other items impacting our revenues.

First, the August and September hurricanes in Texas and in Florida saw a great dedicated effort by our employees in removing vinyl to prevent wind damage to our structures. We had minimal physical impact overall.

During the quarter however, we did record a reduction to revenue of $1.5 million representing a reserve for potential claims by customers for lost advertising time.

And secondly, at the outside of the quarter on July 5, we completed an asset swap wherein we exchanged numerous static boards in four non-strategic market clusters where collection of prime digital billboards around the Boston market.

These are great assets and will drive revenue growth in the future as part of our broader portfolio, but the swap did drive a short-term negative revenue effect during the quarter. Absent these two events our billboard revenue growth this quarter would have been comparable to Q2 levels which was up slightly.

Same board static yield which was down overall for the quarter was also impacted by these two events. I’ll point out that same board digital yield however increased. On a blended basis the decrease in yield across our entire U.S. Billboard portfolio was driven by declines in occupancy. Rates were once again up especially in digital. U.S.

transit & Other was up 7.8%, organically, during the quarter. This is principally driven by solid local growth offset by National decrease and also growth of net impact won and lost contracts was primarily addition of MBTA in Boston.

In Other, reported revenues were up 12.6% principally reflecting our acquisition of the digital billboard portfolio in Canada in June. Organic revenues were down 2.6%, while the legacy portion of the Canadian business was also slightly positive, this was offset by a slight revenue decline in our sports marketing operating segment.

Please turn to slide 8 for an overview of expenses. This is the same presentation as last quarter that illustrates the main changes on a segment basis and isolates some drivers of change for the quarter and year-to-date.

Our reported expenses excluding stock-based compensation were up 3.6% year-over-year for the quarter and up 1.5% for the nine months. There are three items I want to point out in order for you to understand us. First, the U.S.

Media segment in Q3 2017 includes a franchise fees and other expenses of MBTA in Boston; Secondly, the Other segment reflects higher expenses in 2017 related to the recent renewals of several long-term Sports Marketing contracts; and third, Latin America was divested on April 1, 2016.

As you can see at the bottom of the two charts on Page 8, on a more comparable basis, our controllable expenses were closer to flat for the quarter and were down slightly year-to-date, which has been our stated goal for the year.

We’re also continuing to invest in future revenue growth with $2.6 million of strategic business development expenses during the quarter. Even with this investment remains our goal to keep these controllable expenses flat for 2017. On slide 9, you can see our adjusted OIBDA showed slightly positive growth.

We’re now where we like it to be, it is worth noting this a marked improvement from the declines in the first part of the year. Turning to slide 10, capital expenditures were $16.4 million during the quarter or 4.2% of total. Growth spending was 3% of total revenues, and maintenance was 1.2%.

Growth in the quarter and for the year reflects a significant increase in spending on our digital initiatives. During the quarter we built our converted 16 digital boards in the U.S. and 6 in Canada and continued the expansion of small liveboards primarily in Boston.

We feel good about these discretionary investments for future growth and continue to see very good returns from the investments we’ve made to-date.

For 2017 our guidance for capital expenditures is approximately $75 million, a high end of our prior range and it might be slightly ahead of this based on the timing of some incremental digital growth opportunities we’re pursuing.

This increase is all related to growth CapEx, as our maintenance CapEx spending is estimated to be $20 million below our prior guidance. I would also like to point out that this 2017 CapEx guidance does not include the rollout of digital displays under our new MTA agreement in New York.

While these cash outlays will not be that significant in 2017, it will not be recorded as capital expenditures.

As you may recall these will be recorded on the balance sheet as prepaid assets and intangible assets, this reflects the economic structure of the agreement which allows for recovery of appointment outlays for the retention of incremental revenues. Please turn now to slide 11 for a look at AFFO.

As you can see we’ve demonstrated sequential quarterly improvement and year-over-year AFFO performance in each quarter this year. In Q3 despite slightly higher OIBDA, the decrease in AFFO was due to higher cash taxes, leased acquisition costs, interest expense and maintenance CapEx.

We expect this improving AFFO trend to continue in the fourth quarter. However, a recovery in National advertising is a key driver on billboard in particular and continued softness leads us to believe that we will be unlikely to achieve our prior guidance for full year AFFO.

Our expectation is that full year 2017 is likely to be down approximately 7% compared to the current year consensus of down approximately 5%. Slide 12 shows our 12 month trailing AFFO of $272 million and a dividend payout ratio of 73%. This is still in-line with the 70% zone we established when we went public and set our original dividend level.

Our 12 month trailing free cash flow however was $197 million and our dividend payout ratio on this metric was 101%. I’d like to spend a moment explaining this free cash flow payout calculation.

The free cash flow number on 12 month trailing basis includes $10.6 million of higher CapEx and $20.3 million of higher use of working capital including lease acquisition costs. As stated earlier our higher CapEx reflects our decision to increase our discretionary investments in digital assets.

The working capital use includes a $11 million relating to the fact that the MTA contract extensions we’re currently operating under have a very different payment structure that’s been in the past. In 2016 we made fixed monthly payments with an annual revenue share true-up in the following year.

In 2017, the extensions are structured to pay the actual revenue share amounts currently with no true-ups the following year. As a result, in 2017, we not only paid the 2016 revenue share true-up but we’re also paying the higher revenue share currently. So this is not an indication of an increased cash use as much as it is a onetime change in timing.

These working capital matters have had the principle impact on our cash generation this year and are not an indication of true cash flow of this business on recurring basis. The new MTA payment terms and an improvement to our billboard revenues will bring this payout ratio back into the 80% zone it was in for 2014, 2015 and 2016.

On October 25, our Board of Directors approved a quarterly cash dividend of $0.36 per share payable on December 29, 2017 to shareholders of record at the close of business on December 8, 2017. Slide 13 shows a highlight of our balance sheet.

As of the end of the quarter our liquidity position was $497.3 million including $42 million of cash, $428.3 million of availability on our revolving credit facility and $27 million of availability under a new three-year accounts receivable securitization facility entered into on June 30.

Our net leverage ratio is unchanged from last quarter of 4.9 times. We remain focused on our goal to reduce this to our longstanding target range of 3.5 times to 4 times, which we’ll achieve through growth in OIBDA and further debt paydown.

We also believe that the terms of the MTA agreement will be accretive at the outset to both OIBDA, AFFO and cash flow. Let me now turn it back over to Jeremy..

Thanks you, Don. And moving onto Slide 15. Let me now give you some color on our fourth quarter. We expect organic revenue growth to be low single-digits and overall similar to the third quarter including solid local growth in billboard and transit partially offset by softness in National and with transit once again outperforming billboard.

As usual this outlook represents our view at this point in time and it’s on a constant dollar basis. To put some context on the trends we’re seeing from advertisers, the free advertising categories with the strongest U.S.

growth in dollar terms for us in the quarter across both billboard and transit led technology, health and pharma, and thirdly food and beverage. You will notice that these were exactly the same categories as the second quarter, so we’re pleased to see consistency and continued strength. Technology was once again a strong performer up 24%.

Brands like Apple, Google and Netflix contributed to this increase. While most of our advertising categories are relatively stable overtime, technology has been growing quickly from 1% of revenues in 2007 through over 5% of revenues in the third quarter.

At the other end of the scale our bottom three categories for the quarter were automotive, financial services and movies. In automotive we saw another improvement in the rate of decline and did see some brands increase their spend in order enough for us to see overall growth.

Movies are another kind of gray that current swing around quarter-by-quarter depending on the film slate and while 2017 this clearly not been a great year for the industry, the 2018 slate sounds like it might be somewhat improved.

But I would like to end today on slide 16, we’ve been investing in our digital product base over the last three years and are really starting to see the benefits. Back in 2013, we had 392 bulletin size digital billboards generating $73 million of annual revenue.

On a 12 month trailing basis through the third quarter we now have 959 boards generating $168 million of revenue that’s around a three times a number of boards and a compound annual growth rate in revenues of 25%. So we’ve come a long way.

We’re going to continue investing into digital bulletins and we’ve a robust pipeline of development opportunities. The opportunity for growth and the significant ramp up in the change of pace is also coming on smaller screen digital.

Looking at some of the European and other interNational markets where digital is now close to 50% of total revenues compared to our 14%, we see huge upside. This is especially true in urban trans and environments where we can show full motion video through addressable displays.

As you’re all well aware mobile video is the largest growth ad category in the U.S. and this is the market that’s around 6 times larger than the out-of-home industry in total.

With our new digital transit displays and thinking back to our comments on the movie category earlier, the Hollywood studio will be able to show an actual trailer instead of a static poster.

These will be engaging captivating ads effectively creating an entirely new channel for advertisers that’s completely additive to the existing out-of-home market. So the stage is set for a very large transformation of our small scale digital displays.

We will be rolling out thousands more addressable video displays at New York and other cities in the U.S.

but it’s still too early to give absolute yield metrics where we have deployed our newest liveboard so far Boston and Washington DC metro for example, we’re seeing healthy increase is in revenues through the conversion of locations from static to digital.

Additionally, it’s our firm belief that our technology platform will give a digital and indeed a static displays new life with real time geo-location audience data.

We believe that network to digital video displays, audience data and insights will transform the way our clients allocate that budgets to our assets and be a real growth driver for the out-of-home industry. So with that operator let’s open the line for questions..

[Operator Instructions] And we will take our first question from Alexia Quadrani with JPMorgan. Please go ahead..

Hi, thank you very much.

Just two quick questions, I guess, one if you could update us if there is anything that played us in terms of the MTA, any file details you can provide on the process in terms of timing and building out new digital displays? And then, the second question is sort of drilling into the weaker results you’re seeing in National, I guess can you talk a bit more, give us more detail in terms of some of the larger markets dead in the quarter and are you seeing any of the evidence or some early signs in MPT for National buys or some of your advertisers?.

Thanks for the question, let me try and take both of those. Firstly, with regards to the MTA, we’re very busy just on the final nits and nuts of the contract we expect to have the contract signed sometime pretty soon over the coming weeks obviously before our current contracts expire at the backend of this year.

We’re in full planning mode right now in terms of screen acquisition and deployment plans. In terms of deployment, worth saying that outside of relatively small number of displays which we expect to deploy in the first half of year, this will be the backend of 2018 when we start to really see the main deployment impetus.

And maybe it’s just worth mentioning again, how transformative I think that this contract can be for us. You know, 15 years effectively for the largest opportunity in the world, I think it really will underpin our growth strategy for the future and it certainly underpins our transit business for the future.

We said on the call that we expect that revenues in this contract should double over the next 10 years what that means is that this business alone will be equivalent in scale effectively to our entire transport business today. So very, very significant and we’re very excited about really getting into this contract next year.

When we start to – go to your second question and so think about National, we’re pleased to, so we said the early part of the year that we expected our National business to improve and indeed it did, Q2 as that in Q1 and Q3 sequentially has been – was better than Q2.

Now quite enough to get to positive, when we look at Q4 it’s fair to say that National business is lumpy and it’s late. So I don’t want to call exactly where it’s likely to come in, but I can say that once again it’s likely to be a drag on our revenue growth in total.

If we start to sort of think about geographies, fair to say that National business is pretty much focused towards New York, we’ve a very significant platform in New York, so that’s one market that has performed below our hopes and desires this year.

As we look around some of the other key markets, Chicago was a little bit weak, Houston after a great start with super bowl sort of tailed off a bit as we’ve sort of gone through this year. Other geographies, West Coast has been good for us this year.

So a mix overall, but typically National advertisers within our portfolio tend to sort of concentrate on this top DMAs, so it’s there where we’ve noticed the weakness..

Okay, thank you very much..

And we will take our next question from Marci Ryvicker with Wells Fargo. Please go ahead..

Thank you. I want to just continue with the National conversation. Without giving us guidance how do you feel about National for next year, I mean, is it going to be the same case that is going to be a drag and continuously improve but still be negative.

Do you have any visibility into that?.

Thanks for the question Marci. In terms of visibility, I just, obviously just made the comment that Q4 is quite hard to call right now in terms of National, so I wouldn’t really want to get into thinking about next year.

When we look at our overall portfolio actually our weakness this year has actually been based around a relatively small number of advertisers, who had a sort of substantive change year-on-year in terms of the dollar spent in our medium.

I believe that if we can fix those there is absolutely no reason why we can’t have a positive year in National for both Outfront and for out-of-home. Certainly I think when we come to finalize our budget process, we’re certainly not going to be budgeting National to be down next year..

And when you went to buy Van Wagner I think what excited you was getting bigger in National, do you regret that?.

No, absolutely not. Marci, when we look at the U.S. out-of-home business, now I’ve said it before and it’s fair to say well, maybe Jeremy show us the money. But what we do know is that National continue to be – National advertiser continue to be underrepresented in U.S. out-of-home compared to just about any other metric.

It’s our firm belief that we will be able to develop stronger National revenues as we go forward.

Right now, we’re actually putting more resources into going higher up food chain, making sure we’re having more conversations with the strategic buying agencies and directly with clients rather than if you like to sort of the more – the typical out-of-home buying process.

So what we’re doing is, we’re taking dollars out of administering our business and putting far more into selling upstream. And we think about by – let’s remember that this business and the value of our business long-term is location, location, location.

We acquired some immensely valuable quality, long-term assets through our acquisition of Van Wagner which is delivering massive audiences in the top market such as New York, LA and Miami where they were particularly strong and I would go back and do that acquisition every day the other way..

I’ve two quick clarifications for Don.

When you talk about organic, we’re getting asked exactly what is organic include or exclude and then the second quick one is, if revenue is looking to be of low single digits for the fourth quarter, can you talk about expenses for the fourth quarter?.

Organic for us is acquisitions and dispositions are excluded, so disposing of assets and acquiring of assets is what would be pulled of there, sort of the wins and losses of transit is organic. The nature of that business is you win some, you lose some and that is a part of organic in our definition.

On revenue, with digital expenses, we’re looking to keep expenses very tight again in fourth quarter, our folks have done a real nice job on the leases, obviously we’ve got increased expenses with the Boston contract and we had some increased expenses from those gross marketing contracts.

But all the other controllable expenses, we’re looking to really maintain to be flat even with the strategic development expenses that we invest in..

Right, thank you so much..

And we will take our next question from Benjamin Swinburne with Morgan Stanley..

Thanks, good afternoon. Don, any impact if you mentioned this I apologize I may have missed it.

But any impact from the weather related issues in Q3 and your Q4 guidance?.

We did mention in the prepared remarks Ben, we did not lose a lot of structure, didn’t have significant structure damage from the weather in Texas and Florida, the CapEx amount is not going to be that significant and the operating expenses not that significant.

What we did do is we booked a $1.5 million reserve for potentially some revenue claims from customers.

We see Florida is bouncing back quite nicely, Houston has taken a little bit of time to bounce back, I think it may, I’m not sure it’s going to be noticeable from the overall consolidated, but Houston has taken a little time to bounce back, it’s really been hammered as you will know advertiser mix is changing there, as we’re now still trying to get themselves back on their feet..

Okay. And then, just on the MTA as we think about next year, I guess you guys talked about 8% cagier on contract but the early years higher than that I believe as you deploy assets. And sort of go back Jeremy made a comment before that the MTA benefits probably don’t start kicking in materially until the second half of next year.

So I just wanted to know that’s a change in the timing of your expected revenue benefits and if not, revenue should be?.

No..

On sequel would suggest to us that revenue growth accelerate in 2018 versus 2017 given the MTA deployment, just wanted to see if that made sense?.

Jeremy’s comments was related to the deployment of the assets first of all, so we’re in a planning mode right now to be able to deploy assets, I think, he was saying with deploying the assets in the second half of next year.

So those assets being deployed and getting the revenue kick up, it’s really not going to be so much in 2018, maybe the back of 2018 was really kicking into 2019.

So it really starts to deploy the back half of 2018 and that is where you saw getting significant appointment back half of 2018 all through 2019, all through 2020 and that really gives you nice lift that is not a change what we communicated on the earlier call on the MTA contract.

We’ve always anticipated that we still think we will have the same growth trajectory we talked about, it’s a matter of just ramping the first year to really get this going..

Got it. And then related to that Don, I just wanted to see at this point arbitrarily but how does all this fit into your thoughts on the dividend for 2018, I know the MTA is accretive nicely to EBITDA and AFFO but there are obviously capital requirements upfront, you talked about your leverage target.

Do you have a sense of where you guys are headed on the dividend for 2018 or is it too early?.

I think it’s too early to talk about that’s obviously a Board decision and I think we will address that in February when we get to it.

But our drive right now is to deliver on the expectations of this business, we’ve got cash outlays on the MTA contract that are very, very important, the MTA contract itself is going to be positive to us, as you know the revenue share changes out of the gate but also recognizing that the dollars we’re spending can be significant.

We’re also spending CapEx on our discretionary digital deployments elsewhere, so a lot of pieces at play, we’ll have the Board make that decision on dividend, but our goal here is driving this business to grow revenue, grow EBITDA and AFFO and provide real good sustainability for opportunities in future on that regard..

Okay, thank you very much..

Thank you..

We will take our next question from Jim Goss with Barrington Research. Please go ahead..

Okay, thanks.

Regarding the MTA does this lined up being somewhat of a test kitchen for you with the new things you’re going to be developing, you might be able to apply in markets? And separately this winning that contract give you any competitive advantage in trying to develop some wins in other markets or do you, is there an incumbent advantage for other parties in those other markets that would be harder to overcome?.

So thanks for the question Jim. I think it’s fair to say actually that in term wise, in terms of test market actually Boston we’ve been building out our platform there obviously relatively much smaller, but we’re now up to a couple of hundred displays there, hope to be there by 300 by the end of this year and 800 next year.

To put that in perspective that’s less than a 1,000 and we would expect to be deploying a multiple of thousands within the MTA. It’s worth saying that when we look at other opportunities there is no doubt that our text stacks is proving of interest to other municipality, Boston was a win for us, the MTA obviously a renewal.

Otherwise said and continued to believe that there is always some advantage to being an incumbent but we do think that our technology in terms of both hardware, in terms of content management and the text stacks in terms of audience data inside and at based delivery of information and/or advertising will actually be something that we think could be of interest to a number of different transit authorities.

And as we look forward, I think I might have said before it’s a little bit like, over the last couple of years to some extent or rather we’ve been in defense, as in terms of protecting the contra base that we have particularly with regards to the MTA.

As we look forward there may well be more opportunities coming up over the next couple of years for offence..

Okay, thank you. One other thing back on the National billboard concept is there any capacity or interest to do swaps in certain markets to intensify I know you said that they’re like top 25 markets you’re focusing on.

Is it better to even do fewer within the top 25 with the stronger position or is that not necessarily in advance that you need to seek out?.

I think as we look at our portfolio in total, we’re always looking at the smart things that we can do within our billboard portfolio to sort of strengthen as a market where we think we can get incremental value and it’s something that we’re always open to and if we can find smart things to do either for us as swaps through acquisitions and/or possibly some disposals in certain markets where we’re always on the lookout for that..

Alright, thank you very much..

Operator:.

[:.

Thanks.

I was wondering if you could talk about the National advertising weakness, are you seeing that particularly pronounced in certain geographic regions or is it pretty in all your major markets?.

Thanks Drew. I think I made the comment on that. We’ve a very major business in New York, and I would say its lot of National dollars go into New York so that’s a market that I called out weakness in.

but for the most part, the vast majority of our revenues are driven by the top 20 markets which are all markets that potentially National advertisers would want to be in. So as I say, it’s a little bit broader rather than thinking about specific categories.

It’s worth noting that in the third quarter so while you’re never going to be down, actually on National business as we define and I think it’s fair to further say that I think maybe within if you like all that that companies that report publicly and out-of-home I’m absolutely certain, we’ve the same definition, but in terms of our definition of National we were off 2 points in Q3.

So yes, still soft and still a bit of a drag, I made the comments about Q4, it’s a little uncertain exactly where we’re going to end up in Q4. And as I said, I did also paint a picture of what I perceive to be hopefully a more positive trends while not guiding but more positive trends for 2018..

Thanks for that, and then, I noticed in the press release you guys talked about declines in yield, and it was true in both the billboard business, as well as the transit business, which has very good growth, but I guess I was wondering are there things that you guys can do to try to stimulate that and maybe you could talk about what you're doing to try to improve the yields in both businesses..

First of all, on billboard the yields were all based on occupancy. Rates were up, and so occupancies were quite the driver there. As Jeremy just mentioned, it is driven by national. And it is national in certain of the major top 25 DMAs.

So driving – our sales force driving up the food chain with advertisers, with companies is the big effort we are pursuing. And transit, I'm not sure we have got lower yields on transit. Transit has been doing very, very well. There seems to be good growth there. It is still an occupancy issue.

Rates are doing well, but it is more of an occupancy issue there as well. National drives this. I mean that is the underlying theme here if you would that we have got to get national moving. It is going to drive yields all over the place..

Okay, and just one last question.

I was noticing in the slide you presented on digital, that last slide, if you do the revenue per board that has declined since 2013, not dramatically but about 6%, could you just add some color to why that may have happened? Is that just sort of – it may have converted some high-value big markets initially in the early stages, and then it declined over time or that reflects sort of anything about the pricing or demand side of digital boards?.

Absolutely not. In some way, you partially hit upon the answer there. In the past I have talked about billboards being a little bit like a pyramid, and you tend to convert the boards right at the top of the pyramid first out of the gate, where you have the highest revenue per location.

As you come down that pyramid, almost by definition you are going to be converting boards that had lower static revenues, and therefore would also have lower digital revenues. So that is the key driver there.

I think the only other important point to make is that if you think over that sort of four-year period, what you have actually seen as well is a decline in the capital rate of actually digitizing a board; the Capex required.

So, when we look at the returns that we can make, we are still getting a 4x revenue lift on the boards that we are converting, and we're making IRRs of 25% plus. So, it is still a great business and we will continue to look for digital conversion opportunities..

Okay. Thanks for your responses..

And it appears there are no further questions. I like to turn the conference back over to Greg Lundberg for any additional or closing remarks..

Thanks very much operator, and thanks to everyone on the call. Thank you for your questions and your time today. We look forward to seeing many of you at our investor events before the year-end. Thank you very much..

And once again that does conclude today's conference. So thank you for your participation, and you may now disconnect..