Saia - Q4 2013
January 31, 2014
Transcript
Operator (participant)
Good day, and welcome to the Saia, Inc. Fourth Quarter 2013 Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Saia's Treasurer, Mr. Doug Col. Please go ahead.
Douglas Col (Treasurer)
Thank you, Shannon. Good morning. Welcome to Saia's Fourth Quarter 2013 Conference Call. Hosting today's call are Rick O'Dell, Saia's President and CEO, and Jim Darby, our CFO. Before we begin, you should know that during this call, we may make some forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, and all other statements that might be made on this call that are not historical facts, are subject to a number of risks and uncertainties, and actual results may differ materially. We refer you to our press release and our most recent SEC filings for more information on the exact risk factors that could cause actual results to differ. Now I'd like to turn the call over to Rick O'Dell.
Rick O'Dell (President and CEO)
Well, good morning, and thank you for joining us. I'm pleased to report that Saia's strong performance of 2013 continued through year-end. In the fourth quarter, we delivered a solid increase in year-over-year earnings while making meaningful investments in growth initiatives. The success this past year was built on the hard work and talents of the entire Saia team. Some highlights from the quarter compared to the fourth quarter of 2012 include the following: total revenue increased 5.8% to $280 million, LTL revenue increased 5.1%, LTL tonnage rose 2.9%, our operating ratio of 94.7 improved by 150 basis points, and earnings per share of $0.32 increased 45% from the $0.22 earned in the fourth quarter of last year.
Saia continues to prioritize throughout our organization our commitment to deliver a quality service product to our customers. The fourth quarter represented the ninth consecutive quarter of 98% on-time service. The value proposition is clear. Our customers have a need for consistent, on-time, claim-free freight service. As we have success in meeting that need, our yield continues to improve. LTL yield rose 2.3% in the fourth quarter compared to the fourth quarter of last year. Fourth quarter results are particularly satisfying as we were able to achieve a year-over-year improvement in earnings while simultaneously making investments in equipment and sales talent to drive results in 2014 and beyond. For the full year of 2013, Saia achieved a 27% increase in operating income over last year.
A few of the highlights from the past year include the following: Our cargo claims ratio improved to 0.85 versus 0.93 in 2012. Our load hours for the year improved 4.3%. Our purchased transportation miles were down 6.9% due to the continued impact of our line haul optimization, which selectively directs us to use the most cost-efficient transportation mode available in any given lane. The skill of our professional drivers, coupled with investments in technology and new equipment over the past several years, have driven improvements in miles per gallon. Fuel efficiency improved 3.2% this year to 6.5 miles per gallon. We completed the planned addition of 20 sales professionals in the fourth quarter, which enhances our competitive selling position to achieve future market share gains.
Our improved results have resulted in improved cash flow and a stronger balance sheet. We reduced our interest expense by $1.3 million, while making significant investments in our people, facilities, equipment, and technology. Quality Matters initiatives remain the cornerstone of Saia's corporate culture. The pursuit of quality is evident in the actions that you see every day at every terminal, every shop, and every office across our network. This investment in quality has supported Saia's industry-leading yield initiatives over the past several years. We expect that our continued focus on quality and our enhanced value proposition will support the combined yield and growth advancements that we seek this year in 2014. Now I'd like to have Jim Darby review our fourth quarter and year-to-date results. Jim?
Jim Darby (CFO)
Thanks, Rick, and good morning, everyone. As Rick mentioned, the fourth quarter 2013 earnings per share were $0.32, compared to $0.22 in the fourth quarter of 2012. For the quarter, revenues were $280 million, with operating income of $14.7 million. This compares to 2012 fourth quarter revenue of $264 million and operating income of $10.1 million. Both periods included 62 work days. As Rick mentioned, LTL yields for the fourth quarter 2013 increased by 2.3%, which primarily reflects the favorable impact of continued pricing actions consistent with the trend of the past several quarters. Our industrial engineering initiatives and operational effectiveness have maintained our high-quality service while significantly enhancing our line haul effectiveness and fuel utilization.
The quarter, however, did include higher costs in some areas, including salaries, wages, and benefits rose to $144 million in the fourth quarter, reflecting a mid-year wage increase of approximately 3% and improved tonnage trends. Purchased transportation expense for the quarter rose $2.6 million compared to last year. This increase favorably impacted our results due to the effective use of lower-cost rail miles. Depreciation and amortization ran $13.8 million during the quarter versus $12.3 million in the prior year quarter, due to our significant capital expenditures for tractors and trailers. Claims and insurance expense was $7.4 million in the quarter, compared to $6.3 million last year in the same quarter, which was the result of slightly higher accident severity.
For the full year, revenues were up 3.7% to $1.1 billion, while operating income of $74.4 million was 27% higher than the $58.7 million posted in 2012. In 2013, net income rose 36% to $43.6 million from $32 million earned the year before. Diluted earnings per share were $1.73 versus $1.29 in 2012. Our effective tax rate was 38.7% for the fourth quarter of 2013, and 36% for the full year. Excluding the impact of the tax credits recorded during the first quarter of 2013 that were retroactive to 2012, our effective tax rate for 2013 was 37.5%.
At December 31, 2013, total debt was $76.9 million. Net debt to total capital was 20.1%. This compares to total debt of $60.7 million and net debt to total capital of 19.2% at the end of 2012. As previously disclosed, we were able to take delivery of an additional 170 tractors in the fourth quarter and therefore pulled forward some of our anticipated 2014 capital expenditures. Net capital expenditures for 2013 were $122 million. This compares to $83 million of net capital expenditures in 2012. In 2014, the company currently plans net capital expenditures of approximately $85 million. This level of expenditure reflects primarily the replacement of revenue equipment, investments in technology, and real estate projects.
Now I'd like to turn the call back to Rick.
Rick O'Dell (President and CEO)
Okay, the fourth quarter finished with improved margins and increasing tonnage achieved through solid execution across our network. I believe our ongoing investments in technology and quality have set the stage for us to build on these demonstrated results. We remain committed to our core strategy of improving yield, enhancing customer satisfaction, building density, and reducing costs through engineered process improvements and continuous employee training. We believe this strategy provides a strong foundation for our long-term profitable growth and increased shareholder and customer value going forward. With these comments, we're now ready to answer your questions. Operator?
Operator (participant)
Yes, and if you'd like to ask a question on your phone, that is star one on your telephone keypad. We'll go first to Brad Delco with Stephens.
Brad Delco (Research Analyst)
Good morning, Jim.
Jim Darby (CFO)
Good morning, Brad.
Brad Delco (Research Analyst)
Rick, you know, comments in the release about the accelerating tonnage trends in the quarter. It seems as if you've maybe had a little bit quicker success with your growth in your sales force, plus the environment was a little bit better. Can you talk about expectations for tonnage growth going forward and maybe provide some details on monthly tonnage throughout the quarter for us?
Rick O'Dell (President and CEO)
Yeah, I'll have Jim kind of step you through the tonnage trends for the quarter, and then I'll make some comments, like you'd suggested.
Jim Darby (CFO)
Okay. Brad, going through the quarter, and this is LTL tonnage year-over-year comps. October was up 0.6%, November was up 2%, and December was up 7.4%. And that gets us to the quarter being up 2.9% over fourth quarter of 2012. So far, month to date through January, we're trending up 3.2%, and that includes, obviously, all the whatever weather impacts that we've had this year. So far, the month, we're up 3.2% LTL tonnage.
Rick O'Dell (President and CEO)
Yeah, so, again, we've completed the additions of our sales force, as planned. It was completed throughout the fourth quarter, and, you know, obviously, we're pretty pleased with the tonnage trends, especially, December. And then, you know, absent the weather-impacted days that we experienced in January, trends were also favorable. I would say probably from a run rate going forward, it's probably somewhere between that 3.5% and the 7%, maybe in the 5% range would be maybe our current expectations. And, you know, I think, the timing of our sales force addition probably proved, beneficial to some of the things that are going on in the marketplace out there.
You know, our Upper Midwest is growing faster than the rest of our network, and, you know, there's a competitor that's going through an integration up there that I think we're seeing some benefit from. And I think the economy is a little bit better. You know, we also enhanced some of our longer haul lanes in November and are having some early success with that that we would expect to continue to build on. So, you know, we're pretty pleased with what we're seeing from a top-line perspective. And, you know, for the year, we would clearly expect to see some improved tonnage trends going forward.
Brad Delco (Research Analyst)
Great. Then, I guess one other one. Jim, you kind of touched on the weather issue. Clearly, we're hearing a lot about that. Can you kind of talk about what is sort of the normal sequential change in operating ratio from fourth to first, and what weather or maybe some of the kind of costs associated with these newer sales guys may do to what, what may be the kind of normal historical sequential change?
Rick O'Dell (President and CEO)
... Sure. You know, in recent years, we kind of looked back about four years, and the first quarter has been about a point better than the fourth quarter. But this year, expectations need to be tempered for the first quarter due to two major factors. One is that we've experienced severe weather already in January, and, you know, we recognize, trucking remains an outdoor sport. Somebody reminded me the other day, and, you know, we've had to deal with that, and we're pleased to see that today is the last day of January, and we'd like to put January behind us. Number two also is we've had unfavorable accident self-insurance experience already in the month of January.
As a reminder, our self-insurance retention is $2 million per incident, and while our frequency and our fundamental safety programs at Saia are very good, as we've stated before, we're subject to earnings volatility from accident severity, and we're not going to have a good safety quarter due to what's happened already in January. Our results are going to be unfavorable from normal expectations from a safety by more than one operating point. So that being said, we now expect OR to be more flattish from the fourth quarter as opposed to the improving trend that we've experienced over the past few years. So again, it's early in January. We've experienced some unfavorable items. Obviously, the best months of the quarter are ahead of us, and obviously, the remaining 11 months of the year are ahead of us, too.
We like the fundamental things we're seeing, but we've had some bad experience with weather and accident severity.
Brad Delco (Research Analyst)
Okay, guys, thanks for the time.
Rick O'Dell (President and CEO)
Sure.
Operator (participant)
We'll move next to Jason Seidl with Cowen and Company.
Jason Seidl (Managing Director and Industrials - Airfreight & Surface Transportation Research Analyst)
Hey, guys. Good morning.
Rick O'Dell (President and CEO)
Good morning, Jason.
Jason Seidl (Managing Director and Industrials - Airfreight & Surface Transportation Research Analyst)
A couple quick things here. Talk about pricing and what you guys are seeing in the renewals. Obviously, we had a very good pricing year for the LTL market. You know, what sort of built in your expectations for 2014?
Rick O'Dell (President and CEO)
Yeah, I mean, contract renewals in the fourth quarter were, again, you know, greater than 3%. So, you know, again, where we've had greater increases than that the last two years, I think last year, we were up 4.2, I believe, for the year, and then the prior year was even better than that. But I think as we stated, a lot of our corrective action pricing is behind us, and, you know, we expect to be kind of a more normal level. Obviously, we, we price account by account, lane by lane, and our analytical discipline pricing continues to pay dividends, but we think the market's pretty good. You know, for the, for the quarter, our yield was up 2.3%. Fuel surcharge had a negative, impact of about 1%.
So, you know, our yield was up, you know, adjusted for mix and fuel surcharge, a little over 3%, and that's kind of in line with what our expectations are and kind of what we stated. And, you know, we would... Our target is to continue to achieve something in that range going forward, and we think the environment is conducive to that so far.
Jason Seidl (Managing Director and Industrials - Airfreight & Surface Transportation Research Analyst)
Okay, that's great color. Thank you. And when we look at some of your expectations for tonnage, I believe you said, you know, somewhere at the midpoint of that 3.5%-7% range, I guess, weather is kind of mucking up sort of the underlying demand here right now out of January. How much of that sort of 5% tonnage expectation do you think is coming from the economy, and how much do you think might be coming from some competitors that are a little struggling right now?
Rick O'Dell (President and CEO)
I don't know. You know, it's, we have such a diverse customer base, it's hard to see kind of where your volumes are coming from. You know, we're one of the early reporters out there from a tonnage perspective and trends. You know, I guess, my comment would be, we expect to get our fair share plus some, with some of the investments in the way the company is operating and having a very good value proposition out there. So it's hard to say. I mean, obviously, there's multiple factors that go into that, but I would tell you, you know, I think we're well positioned to capitalize on it.
You know, if we can get a 5% type LTL tonnage and a 3% type rate increase, I think we'll be in a good position to have some good results again this year.
Jason Seidl (Managing Director and Industrials - Airfreight & Surface Transportation Research Analyst)
Right. And, you know, when you start thinking about that sort of top line and hopefully bringing it to the bottom line in 2014, your CapEx is going to be reduced in 2014 and probably not going to be back to prior levels. Any plans going forward on the balance sheet side? I mean, you guys seem a little sort of underlevered in your net debt to cap. How's the market for maybe potential acquisitions looking?
Rick O'Dell (President and CEO)
Yeah, I mean, we stated we get to a 93-type operating ratio, then returns are better in the business, and, you know, we would look for opportunities to continue to invest in not only the LTL product offering, but as well as some asset-light opportunities. So again, we think there are good opportunities to improve margins and returns within our existing businesses, but we would also, you know, look outside of that for the right opportunities, you know, provided that they don't detract from the priority that we see and the opportunity that we see within our existing business, right?
But yeah, and I guess the market, it seems like, you know, there are some deals and opportunities out there, particularly in the kind of asset light type models, but a lot of people are seeking those businesses. And, you know, if we could find some that's priced reasonably, that has some good synergies and opportunities for growth, then we would certainly seek those out as well.
Jason Seidl (Managing Director and Industrials - Airfreight & Surface Transportation Research Analyst)
All right. Listen, I appreciate the time as always, guys. I'll turn it over to somebody else.
Operator (participant)
We'll go next to David Ross with Stifel.
David Ross (Managing Director)
Hey, good morning, gentlemen.
Rick O'Dell (President and CEO)
Good morning.
David Ross (Managing Director)
Rick, can you talk about any e-commerce activity that may have helped drive that, you know, December tonnage number? You know, is that something you're seeing more of at Saia?
Rick O'Dell (President and CEO)
I don't think so, particularly. You know, a lot of that obviously is residential-type traffic, and I think while we see some more of that, people doing business out of their homes and as well as, you know, consumer goods being delivered to, to our homes as we tend to order more over the internet, I don't think that's a major factor at all.
David Ross (Managing Director)
You guys don't have a ton of liftgates on the trailers and aren't gearing towards that business for any reason?
Rick O'Dell (President and CEO)
You know, we have probably more than our fair share of that, but we tend to be more at the strip mall as opposed to at your driveway.
David Ross (Managing Director)
Okay. Yeah, the driveway can be rather expensive for you all to operate, so it's probably better that way.
Rick O'Dell (President and CEO)
Right.
David Ross (Managing Director)
And then, Jim, on the operating taxes and licenses part, you know, it was down year-over-year, which, you know, is a good thing because it's been in that $9 million-$10 million a quarter range for the past four years. Was there anything one-time there, like a year-end true-up, to drive it lower, and what's your expectation for that line item going forward?
Jim Darby (CFO)
I would think, David, if you look at the year-over-year, we're down slightly. I mean, I would trend that forward.
David Ross (Managing Director)
Okay.
Jim Darby (CFO)
I don't know there's any big one-time thing in the fourth quarter that impacted that.
David Ross (Managing Director)
It just seems, you know, a little odd with, you know, more trucks that you would have lower taxes and licenses expense. So I didn't know if there was anything I was missing.
Rick O'Dell (President and CEO)
What line was that again?
Jim Darby (CFO)
Operating.
David Ross (Managing Director)
The operating taxes and licenses.
Rick O'Dell (President and CEO)
Yeah, a lot of that's fuel, though. I mean, with the fuel economy improving and our line haul effectiveness is impacting that. That's what that is.
Jim Darby (CFO)
Yeah, the fuel and the miles per gallon, and miles per gallon being a lower burn of fuel takes the taxes down. That's correct.
David Ross (Managing Director)
Oh, got it. Okay.
Rick O'Dell (President and CEO)
You'll also see that our purchased transportation was up a little bit year-over-year, and just the way the holidays fell and the weather that we experienced in December, as well as some of the long-haul lanes that we're seeing some growth in, our length of haul is up. We used more cost-effective use of rail. So, you know, that, that takes down your, you know, your miles and your fuel consumption.
David Ross (Managing Director)
Yeah. And, you know, when you talked about, you know, November, I guess, enhancing some of the longer haul lanes, that was driven around, you know, basically figuring out how to work some intermodal into your network?
Rick O'Dell (President and CEO)
Probably not incremental intermodal, really just looking at transit times that we have and, you know, maybe one day a week, you can't run it on the rail to make some more aggressive, cross-country transit times. But if you grow the, you know, if you're growing the lane, right, you might be running it one more day over the road, but when you have the weekend, you may put it on the rail, right?
David Ross (Managing Director)
Yep.
Rick O'Dell (President and CEO)
So you see kind of a growth of the rail overall as well. And then again, just the way the holidays fell, you had some more opportunities to run more rail, you know, during the week.
David Ross (Managing Director)
Excellent. Thank you very much.
Rick O'Dell (President and CEO)
Sure.
Operator (participant)
We'll take our next question from Scott Group with Wolfe Research.
Scott Group (Managing Director and Senior Analyst)
Hey, thanks. Good morning, guys.
Rick O'Dell (President and CEO)
Good morning, Scott.
Scott Group (Managing Director and Senior Analyst)
So wanted to get your view on how we should think about incremental margins going forward. So they've been obviously really good the past couple of years when it was about pricing and a lot of it internal things. But as we get a little bit more balance in with tonnage and yield, maybe have better even tonnages and yields, how do you think incremental margins should look going forward? And I understand the first quarter issues. I was thinking more kind of over the course of the year.
Rick O'Dell (President and CEO)
You know, we think there are good opportunities to improve margins. You know, we have a few cost headwinds, but they're kind of normal, right? You're talking depreciation from the incremental equipment, healthcare, wage and benefit increases, probably in the neighborhood of $35-$36 million in total. And if you get a 3% yield increase, that basically covers that. So then you've got the benefits from incremental tonnage, as well as our engineered cost savings project that we have that's kind of in the $10-$12 million range. So I mean, we think there's... You kind of do the math on that, right? Absent accident severity and weather type things, you know, we would be seeing good OR improvements for the year.
Scott Group (Managing Director and Senior Analyst)
Yeah, no, that's helpful, and we can do the math on that. So, Rick, what was the cost-saving number you just gave, and is that kind of the total way you're thinking about cost saves this year? And you've given some good color in the past on what you guys were targeting.
Rick O'Dell (President and CEO)
Yeah, I guess what I would tell you, more in the $10-$12 million range. So our, our target's probably, obviously, we have a little bit more than that. You don't get 100% effectiveness, but so probably in the $12 million range. And it's a little different, whereas in last year, a couple of years, actually, we've had some big buckets, like this last year, you know, you had $10s of millions in both just fuel and line haul and those two items, right? So, I don't have those big opportunities this much. It's more of an accumulation of smaller, you know, 2- and 3-million-dollar projects that we're targeting. So, you know, we probably won't have as much color to provide in terms of the detail on project success, right?
There's still a number of projects that are well outlined and, you know, we're confident in our ability to execute. Some of those things, whether it be load average, city production, dock production, you also get some help from that from a tonnage perspective. You know, incremental margins on tonnage with, you know, with our fixed costs and some efficiencies can be, can be positive there, too, right? More in the 25% range?
Scott Group (Managing Director and Senior Analyst)
Yeah. Yeah, no, that sounds good. And then just last thing, I know it's a small part of the business, but the truckload volumes were very good in the quarter. I don't know if that's an easy comp or something changing in the business. Do you have any perspective there?
Rick O'Dell (President and CEO)
Well, we've some of our targeted marketing and sales efforts have been on some of the heavier-weighted shipments where they make sense for us, particularly to fill backhaul lanes. So we have executed what I think fairly well in that area, with some changes and some targets that we've looked to achieve. So yeah, I mean, it's been a good, successful effort over the past six months or so that's contributed to our total tonnage and our over 10,000-pound shipments.
Scott Group (Managing Director and Senior Analyst)
Are you seeing any spillover from tighter truckload into the network, do you think?
Rick O'Dell (President and CEO)
You know, maybe some. If truckload tightens up a little bit, you know, some of these truckload stop-off type shipments would come back to, LTL. And I think, you know, again, given we've targeted some of these opportunities, we tend to -- we call it truckload because it's over 10,000 pounds, but our shipments in that area weigh around 14,000 pounds, is the average shipment in our over 10,000 pound size, and it's really more partial uploads, so to speak, right? So that's the market that we're playing in. And, you know, particularly, that's not the, a primary thing we're looking for. And you'll probably see, we've, we won't handle much of that outbound out of Chicago or some big head haul lane. But, in backhaul lanes, those partial truckloads make a lot of sense for us.
Scott Group (Managing Director and Senior Analyst)
Okay. All right, good stuff. Thanks, guys.
Rick O'Dell (President and CEO)
All right, thanks, Scott.
Operator (participant)
As a reminder, that is star one. If you'd like to ask a question, star one. We'll move next to Bill Greene with Morgan Stanley.
Bill Greene (Managing Director)
Hi. Thanks for taking the question. Rick, just in regard to the last comment in terms of spillover, do you feel like hours of service has played any role? Because I feel like the last time we had an hour of service change for truckload, it did affect LTL. Can you tease that out at all? It's just not. You can't see it.
Rick O'Dell (President and CEO)
You know, I don't know. You know, our thing is we look at this segment as it has good contribution margins for us, and how can we grow this, you know, upload type of segment or, you know, larger shipment segments? And so we've looked at our pricing and our marketing mechanisms to target certain segments of this business and have been successful with it. I mean, who it's coming from-
Bill Greene (Managing Director)
Yeah, sorry, Rick.
Rick O'Dell (President and CEO)
Impact, and hard for me to see.
Bill Greene (Managing Director)
Yeah, I actually meant more to the LTL network. So as things tightened up in the truckload market, does that sort of spill over and create this, this strength for you in some of your tonnage trends in LTL?
Rick O'Dell (President and CEO)
Well, I think it does some. We've seen that every time before. I think it has an impact. You know, to be honest with you, we even see it where people break up a truckload shipment into two LTLs and give them to us two days in a row, going to the same place, right?
Bill Greene (Managing Director)
Yeah.
Rick O'Dell (President and CEO)
I mean, obviously, they're recognizing that, and they don't have capacity, so they're sneaking it on us. So we, you know, sometimes that we have a pricing, and it pays well for that, and sometimes it doesn't, so we have to address that. But we are actually seeing some of that, so I think your point's valid.
Bill Greene (Managing Director)
Good.
Rick O'Dell (President and CEO)
So there's two segments to that. One is there's probably some spillover from a tighter truckload market, and then second is probably this, you know, targeting opportunities we have to kind of fill backhaul lanes for us.
Bill Greene (Managing Director)
Okay. Makes sense. I want to come back as well to the, to the CapEx question. When, what you've long said, as you mentioned it earlier, just when you kind of get to the target OR, you know, sort of start thinking about expansion again. And so a lot of us have sort of said, "Oh, that'll probably mean an acquisition." Why wouldn't you sort of look to more organically expand the network into territories where you maybe aren't yet, you could build new terminals, that sort of thing? Or is that just not an attractive strategy?
Rick O'Dell (President and CEO)
No, I mean, I think it is. I think a phased in organic is clearly an opportunity for us. And, you know, if there's... In the acquisition side, it gets you kind of an immediate network. You come with some revenue and, and tonnage opportunities and get a framework. You know, the negative side of that is you usually have a transition when you buy a smaller company to make that work for you. So and then, and then maybe the right answer is a combination, where you organically expand into a few major markets and then make an acquisition to fill out your coverage in some more rural areas. So, you know, I think there's opportunities to do one or the other, and we continue to evaluate those opportunities going forward.
I think, you know, with where we are from a cash flow balance sheet and the way the business is operating, I think that either one of those is certainly viable. I think, you know, the other comment I would make is, where historically organic expansion was, you know, somewhat difficult, where you made all the investments and you started with zero revenue, you know, obviously, we got a lot of national account relationships. And I would also comment that, you know, the with the 3PL business being a bigger portion of your business, you could kind of go into these new markets and get some immediate revenue through these 3PL relationships that we already have as well. So clearly, it's a... But I think it's clearly a viable strategy, you know, when the timing's right.
Bill Greene (Managing Director)
Yeah. That's great. Thank you so much for the time and insight.
Rick O'Dell (President and CEO)
Sure.
Operator (participant)
There are no further questions in the queue at this time. I'll turn the call back to Rick O'Dell for any additional remarks.
Rick O'Dell (President and CEO)
All right. Thank you for your interest in Saia. We appreciate it, and we'll talk to you guys soon.
Operator (participant)
That does conclude today's conference. Thank you for your participation.