Financial Federal Corporation F4Q09 Earnings Call Transcript

Sep.23.09 | About: First Trust (FIF)

Financial Federal Corporation (NYSE:FIF)

F4Q09 Earnings Call

September 23, 2009 11:00 am ET

Executives

Paul Sinsheimer – President, Chief Executive Officer

Steven Groth – Chief Financial Officer

Analysts

Sameer Gokhale – Keefe, Bruyette & Woods

Brian Holden – Piper Jaffray

Scott Valentin – FBR Capital Markets

[Justin Moyer]

Operator

Welcome to the fourth quarter 2009 Financial Federal Corporation earnings conference call. (Operator Instructions) This call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. Readers are referred to the most recent reports on Form 10-K and 10-Q filed by the company with the Securities and Exchange Commission that identifies such risks and uncertainties.

I would now like to turn the call over to Mr. Paul Sinsheimer, President and Chief Executive Officer.

Paul Sinsheimer

Good morning. Thank you for attending our earnings conference call for the fiscal year ending July 31, 2009. Joining me are Steve Groth, our CFO and David Hamm, our Controller. I will briefly discuss our fourth quarter and year end results and business trends. I will then ask Steve to discuss liquidity. Then, we will take questions from participants.

For the fourth quarter, net income was $8.9 million, 14% lower than the third quarter. Diluted earnings per share were $0.35 for the quarter, 15% lower than the third quarter. Originations for the quarter were $60 million compared to $77 million in the third quarter. Net interest margin was 6.05% compared to 6.14% in the third quarter. Expenses were $7.8 million in the quarter compared to $7.3 million in the third quarter.

For the year end, net income for fiscal 2009 decreased 14% to $43.1 million from $50.1 million. Diluted earnings per share decreased by 14% to $1.72 from $2.01. Originations for the year were $488 million compared to $924 million last year. The yield for fiscal 2009 was 8.84% down from 9.14% for fiscal 2008 and our interest cost went down to 3.98% from 4.75%. This resulted in a higher margin of 5.95% compared to 5.48%.

The provision for credit losses was $7.9 million in fiscal '09 compared to $4 million in fiscal '08. Expenses for 2009 were $29.6 million compared to $27.3 million for 2008. This increase resulted mostly from higher non performing assets. All of this together resulted in a 10% return on equity and a 2.5% return on assets and an ending 2.3 debt to equity ratio.

As to asset quality, net charge offs were $7.7 million in fiscal 2009 compared to $3.2 million in fiscal '08. At 7/31/09 compared receivables were 4.2% of total receivables compared to 1.73% at 7/31/08. Delinquencies were 2.47% compared to 1.18% and repossessed equipment was 1.47% compared to 68 basis points in '08.

Steve Groth

At the end of July and the beginning of August we pre-paid approximately $195 million of term debt. We project this will save us about $8.5 million in interest expense in fiscal 2010 based on today's LIBOR. Additionally today, we paid another $60 million of term debt with an expected interest savings of $2.5 million.

Of note here, the combined interest savings from these pre-payments should equate to an additional $0.27 of diluted earnings per share in 2010.

Finally, with our low leverage and $410 million of liquidity at the end of the year, we remain very well capitalized.

Paul Sinsheimer

We all know that these are very, very difficult economic times, marked by unprecedented events and extreme actions. We are weathering this storm better than most. We reported healthy net income, higher margins, growing liquidity, manageable asset quality and a very conservative leverage.

At a time when liquidity and access to capital is critical, we were able to opportunistically pre-pay higher priced debt as pointed out by Steve. I will now take questions from the group.

Question-and-Answer Session

Operator

(Operator Instructions) Your first call comes from Sameer Gokhale – Keefe, Bruyette & Woods.

Sameer Gokhale – Keefe, Bruyette & Woods

I had a question on the reserve to NPA ratio. If one calculates that number it looks like it was 29% down from 40% last quarter. Now the loans ratio increased to 1.63% from 1.48%. So I'm trying to figure out how one should think about the reserve to NPA ratio, the reserve coverage ratio. It looks like charge offs were increasing. NPA's were increasing. So should we expect the reserve to NPA ratio to also increase going forward? Just some color on that would be helpful.

Paul Sinsheimer

Our reserve is, as with I believe all financial institutions is the result of a formula that takes into consideration all of the issues you've mentioned. I don't know how much more clarity I can give you other than to say that we try to be as conservative as the formula will permit.

Sameer Gokhale – Keefe, Bruyette & Woods

I understand that historically you've talked about your reserving methodology and you look at the charge offs and if one were to look at the reserve ratio in absolute terms of 1.6% relative to your charge off ratio, it does seem more than adequate, but then again, one looks at the reserve to NPA ratio, it seems like that is coming down. So I think in a nutshell if maybe this might be the way of thinking about it which is that you seem to think you have adequate reserves, maybe over-reserve so you don't think the reserve to NPA ratio should be going up. It's fair for it to be coming down and possibly could go even further down in the future. Is that a reasonable thing to expect?

Paul Sinsheimer

I'm not the judgment of expectations, but keep in mind the following. We are a secured lender. We have collateral that supports our net outstanding's, and when accounts are put on a non-performing basis, they are written down to what we believe the assets are to secure the loan even though we might be getting paid on it and not recognizing any income and therefore, reducing our net investment.

Unlike maybe other lenders you're thinking of where delinquencies and non-accrual status is a direct un-dotted line to charge offs, that is not the case in our business.

Sameer Gokhale – Keefe, Bruyette & Woods

If one were to dis-aggregate your charge off rate into a gross default number and a recovery number, is it fair to say recoveries again were almost 100% this quarter and the charge off rate was really just a function of the defaults. Is that the way to think about it?

Paul Sinsheimer

I don't think so, if I understood you correctly. Recoveries occur when they occur. I can tell you that on a historical basis, what has happened is we began to as the economy starts to weaken, our write offs increase. Our recovery rates are obviously low because we've come out of a very tranquil and positive economic environment.

As we continue to have a weak economy and growing non-performers, we continue to have write offs, but the recoveries lag and do not start to show up until a later date. It is problematic as to when that exact time starts, but it in general occurs as the economy starts to improve. And so our recoveries are a lagging indicator and our write downs are a leading indicator.

Sameer Gokhale – Keefe, Bruyette & Woods

So if you were to again dis-aggregate your net loss rate this quarter, could you share with us your gross default rate and the recovery rate this quarter that would allow us to get back to your net charge off rate. Is that something you can provide for us?

Paul Sinsheimer

Our gross write offs for the fourth quarter were $3.065 million and our recoveries were $773,000 which is roughly 25% of the $3 million. And if you went back and you look at it historically, you go back to early '07, late '06; our recovery rate was probably in the 80% to 90% range. But those statistics could possibly mislead because when you deal with percentages, it was a very high percentage number, but gross charge offs during that period were very low.

Operator

Your next question comes from Brian Holden – Piper Jaffray.

Brian Holden – Piper Jaffray

A question on the loan originations; obviously you're a long way from pre-downturn levels. I know you've tightened a lot, but also demand is also quite weak as well. I guess the lower level of originations is it more that just demand this time down from last quarter of $77 million and this quarter was $60 million or is it seasonally? We kind of expected a little bit of an uptick. Not much, but can you give us some color on originations and what's going on there?

Paul Sinsheimer

You don't have to read too many sections of the business part of the newspaper to realize the economy is very soft. My answer to your question would be loan originations are down because demand is significantly down. I would turn you to any news releases by Caterpillar, Deere, Packard, Oshkosh who are all first class manufacturers of the assets we finance and if you were to read those, I believe you will find that they are finding new equipment sales to be very difficult and if there are no new equipment sales, there are obviously less financing opportunities for us.

My personal view is our originations are mostly off in large part because of the general economy.

Brian Holden – Piper Jaffray

Have you tightened any further?

Paul Sinsheimer

The answer is I think we've all tightened in our mind. Have we done anything specifically? No. But as collateral values soften, credits get weaker it's a natural response to at least tighten mentally. But we believe we are underwriting today in the same way we underwrote transactions a year ago, two years ago and ten years ago.

It just so happens that this current economic environment produces much greater risk and we tend to be conservative.

Brian Holden – Piper Jaffray

With that, can you go through the trends in each business segment, and obviously demand and commercial construction and transportation is obviously quite weak as you just alluded to. Can you go through credit quality in each of the segments, just the trends there?

Paul Sinsheimer

As to trends, transportation remains exceptionally weak, which once again my personal view of that is there is fewer goods being shipped; therefore there's lesser demands for trucks and if truckers can't move goods to produce revenues, they can't pay their bills. It also reduces the demand for re-possessed trucks.

Construction is by no means as poor as transportation, but it is weaker today than it was a year ago, and there are many factors there; State governments, local governments, private enterprise, private equity, not in an investment sense but individuals wanting to build with the instability in the financial system, makes those projects just that much more problematic.

So the overview is, it's not a positive environment for risk taking whether that's to build a building or to manufacture goods to ship or for that matter to finance them. In an effort not to be too down, it is at the margin getting better. That's not to say it is good. It is not getting worse at a more rapid pace than it once was.

Please keep in mind that we are financing the basic industries in our economy. These industries are not disappearing. They are moving dirt, moving goods, picking up garbage. These industries will come back and I'm just as confident as I've always been of that statement. What I can't share with you today is that the visibility as to when that will start.

But it will start. And when it does we are financial powerhouse, at least in my judgment. We have an organization that is intact. We have an organizational structure that is built to manage a company significantly larger than we are today and one of the things, and I would ask the analysts that are listening to go back and review, in 2002 and 2003, if my memory is correct, our net receivables shrunk and our operating expenses went up.

As we came out of that economic downturn and started to grow our receivables at a 20% plus rate, our operating expenses actually went down so that the operating leverage that we are sitting with today, not only on the ability to generate quality receivables; not only do we have that in our quiver, we also have a very de-levered balance sheet that no one is overwhelmed by in the sense that it's a good thing.

It is a good thing today, but it is not the way I would envision running this business going forward. What people are most concerned about is when things start to change and the dynamic not only of growing our business, but also the management of our capital and our liquidity change.

Once again, it's not as dark today as it was three months ago, but I don't want to lead you to believe the sun is out. So as difficult as this environment is, I think we've hit it right on both the left side and the right side of the balance sheet. We are in the proper mode. We're in the proper position.

What we're looking for is visibility and when we see it, rest assured that we will act and as we've always acted in the past with a view towards enhancing shareholder value.

Brian Holden – Piper Jaffray

You're very well positioned definitely from a balance sheet perspective, and kind of that in mind, the competitive environment, that's got to much, much improved. Any comments around that?

Paul Sinsheimer

For sure. I'm not sure I can identify my competitors other than to say the banks. I can't think of any city here to meaningful bank competitors. The captives are sometimes a competitor, but mostly not. The competitive landscape has never been, at least in my opinion as good as it currently looks today.

The problem with the competitive landscape is, there's no demand and that affects us as well as everyone else. I'm excited about the competitive landscape.

Brian Holden – Piper Jaffray

So when the market and the economy does turn, you're able to really ramp us growth.

Paul Sinsheimer

I see absolutely no reason why that isn't an easy yes. We have kept our organization intact. We have kept our powder dry. We continue to underwrite better than anyone else's numbers I have seen. We are pre-paying debt while others are having to pay through the nose to get any form of debt.

If that doesn't speak volumes Brian about the way to properly manage a commercial finance business, I don't know what could. We're actually going to save roughly $11 million in fiscal 2010 that equates north of $0.25 a share. Name me somebody else out there that could even approach that type of comment.

Operator

Your next question comes from Scott Valentin – FBR Capital Markets.

Scott Valentin – FBR Capital Markets

A couple of questions around the non-performing assets; when they're booked as non-performing do you write them down to fair value or how are they carried in terms of evaluation?

Paul Sinsheimer

They are written down to what management at that moment in time believes is the ultimately collectability of the account. Income is not recognized. All cash receipts go to reduce our net investment.

Scott Valentin – FBR Capital Markets

In terms of recovery values as we've seen in the news, maybe Asia coming back a little bit, are you seeing any improvement in recovery value or demand for some of the repossessed equipment?

Paul Sinsheimer

Very interesting comment. If there is a ray of sunshine in collateral values, it does come from a weak dollar. There have been opportunistic sales of assets at prices higher than we thought. The buyers were not domestic. In most cases they were either far east or South America. There is at least for us, that small benefit in a weaker dollar.

Scott Valentin – FBR Capital Markets

As far as the reserves you have established for the non-performing assets, how much of that would you say is kind of specifically allocated to the NPA's and how much is just general reserve for assets that aren't bad yet but they may go bad.

Paul Sinsheimer

The roughly $25 million number is substantially, all of it is to the general portfolio. I would tell you that right at $1 million has been specifically identified so to use round numbers, $24 million of the $25 million is for the currently performing assets and only $1 million of the $25 million has been dedicated to specifics.

Scott Valentin – FBR Capital Markets

You mentioned demand is still relatively weak although not deteriorating as fast as it was, is there any hope that stimulus, a lot of the stimulus is supposedly back end loaded to 2010. Have you done any work there to try to forecast the impact on demand that may have?

Paul Sinsheimer

I would agree with your observation that at least the part of the stimulus package that would have the positive affect on us has been clearly back loaded. I think the indication of the stock markets rise and those manufacturers that I have recently referred to bodes well for us. But the rise in the stock market prices is on the hope that the stimulus package will in fact increase their sales and we should be a tag along right behind that. If their sales improved, I know of no reason why our volume won't go up as well.

Scott Valentin – FBR Capital Markets

In terms of yield, your yield went up during the quarter. How much more room is there? I guess it's a trade off between demand and yield, but how much room is there do you think to raise prices still given the lack of competition?

Paul Sinsheimer

That's a real moving target right now. I'm guessing when I respond here and I don't like to guess, but your question is a valid one. I'd look for them to stay in the same range, but you could ask me that question two weeks from today and I might change my mind. But today, I would tell you I would look for them to stay in the same range.

And obviously with the pre-payment of debt and our interest expense going down, the obvious conclusions can be made which is we should have some expansion. If our revenue line stays firm and our interest costs go down, our margin should increase.

Operator

Your next question comes from [Justin Moyer]

[Justin Moyer]

Back to the question on the reserve on the NPA's, can you give us any feel, I appreciate the color on the recovery as a percentage and the lead and lag indicator, but do you have like the banks are trying to tell us right now that you're carrying assets at X percent on the dollar as they are in NPA. They're trying to of course argue that they're being conservative in where they mark stuff which I think is subject to speculation, but I know you per your point have been very conservative in your underwriting and fully amortizing and all the stuff you've talked about over time, but what's the average value if there is such a thing of assets that are sitting in NPA such that to your point you only have $1 million specific reserve.

Paul Sinsheimer

Let me try to answer that. It was a very broad question. Our policy when an account is put on non-accrual is to write it down to what management estimates the fair value of that receivable is. So the amounts on non-accrual, at first step we do not see additional write offs. But keep in mind, we don't necessarily see the assets at that moment.

When a non-performing receivable is converted to an owned asset, there may be a subsequent write down because we mark those assets to market at the time we convert the receivable to an owned asset.

Now what can happen after that is, markets are not stagnant. Sometimes we'll end up selling the equipment and we'll have to write it down because its value has deteriorated more and sometimes we will have a recovery because we have over-written it down. Our goal is to be more conservative than liberal and I will tell you that our gains and write downs on the sale or the liquidation of roughly $50 million of repossessions in the 12 months ending July 31, our plusses and minuses came out to about $0.5 million.

And that's a pretty darn good score card when you're repossessing and liquidating $50 million to only have a plus or minus, and I believe it was, I don't even really remember whether it was a plus or a minus, but we were only $500,000 off of our mark. Granted there were some gains and there were some losses, but at the end of the day they were pretty well marked.

[Justin Moyer]

Could you argue that the nature of your assets because they're depreciating assets, you would tend to, not just you but the industry, would tend to have better results from that liquidation process vis a vis commercial real estate and other assets that are presumed to be appreciating assets and therefore the delta of expected versus realized value in that case could be significantly larger than yours?

Paul Sinsheimer

Once again that was two mouthfuls. Let me say this. We finance different asset classes. In transportation, it's very difficult to see how used transportation assets will have a meaningful gain in value. However in construction assets, you run the asset down to a replacement value and even though the cash value may have been written down below that on our books, sometimes it's more prudent to sit and wait because those values will come back.

Or let me better phrase that. In my 40 years of doing this, they have always come back. I don't want to make any prognostications about the future, but my experience is that these assets along with a whole host of other assets always, the market always seems to overshoot not only on the upside but also on the downside. And so there is value in a good number of the construction assets we finance and once again, we benefited in a small way in the last 90 days where that value was translated as when I spoke to Scott, we were able to achieve that added value because of the weak dollar.

I'm not using that as part of my answer to you. These assets, a bulldozer that costs $300,000 a year ago, today should be worth $250,000 to $230,000. In the cash market it may be only worth $150,000 to $170,000, but everything else being equal, that same bulldozer could be worth $230,000 a year from today.

Its age isn't as important as its condition. And if it has sat and not worked, the market will price it not as a three year old asset, but it will price it as something less than a three year old asset. That's not true of trucking.

[Justin Moyer]

On the originations side, I doubt you have it, but is there any sense of market data, chatter out there as to, certainly with GE scaling back and any insight you have there would be appreciated as what they're up to these days. But Textron and others and the banks kind of pulling back a little bit. The only bank I've heard talk about it being incrementally interested in the business' PCF, and therefore I would think your market share should be growing right now. Granted to your point, there's much reduced amount of activity going on economically, but any sense as to how much share you feel you're picking up right now and obviously what that bodes for you going forward?

Paul Sinsheimer

I know of many, many more who are withdrawing than I do of those that are entering. I also know many more that are withdrawing as opposed to those that want to increase market share. I don't even know if I can define market share in today's terms and numbers, but common sense leads me to believe that when there are fewer participants, there are better results for the remaining participants. I certainly expect that for us.

[Justin Moyer]

I don't have the data in front of me, back to your point on the '02, '03 time frame, your originations, where were they troughing out during those times? I would think that the competitive environment you sit in today should be much better than it was six, seven years ago, right?

Paul Sinsheimer

Our competitive position today is much better than it was four or five years ago, but what's dangerous about your lead in to your question is, in '02 and '03, the financial system of the country was not under the same attack that it is today. What we are experiencing today, is my opinion again, a reflection of the current economic status of the country as opposed to the current economic status of Financial Federal.

There are so many things that are not directly related to us. I'll give you an example. Banks in general are cutting back on liquidity lines of credit for contractors. When their liquidity is restricted, they do fewer jobs, buy fewer pieces of equipment and we have fewer opportunities to finance.

That's on the origination side. Take that concept and put it on the collection side, we have a large number of our non-accruals had come about for the same reason where banks had failed to renew liquidity lines and contractors or debtors of ours were darn near current if not totally current at the moment they had to file bankruptcy.

The ripple effects of the collapse of liquidity in the economy are reaching us in many ways that I have never seen in my 40 years. I never had a general concern about the quality of my credits based upon the quality of the other lenders that support them. We are almost at the point today, and I'm a little tongue in cheek here, of having to understand the validity or the financial capabilities of the other lenders because we are not in virtually all cases, the only lender to a borrower, and those lenders that are having more difficult problems than others are treating their customers in a different fashion.

And so a lot of the times, we find ourselves responding to elements and circumstances that were never really meaningfully in our historical profile which is what happens when their bank collapses? So the underwriting process is a little bit more gamey today than it has ever been.

What I'm describing here not only affects me, it affects General Electric, it affects everybody in this business. And until, my opinion again, the publics confidence is restored in our financial system, not only growth in my business but growth in the economy will be problematic.

[Justin Moyer]

Is that then all external, meaning the liquidity problems to your customers and the lack of activity as a consequence, on top of it your traditional conservatism, but on your funding side, you talked a lot about what you've done on the funding side which is great, but is any of your hesitancy internal if you will? Meaning, you want to make sure you're doing the best deals today at the best yields, not that you would ever not want to do that but because you want to make sure that the capital markets are still flowing and that you have access to your liquidity as well to grow the balance sheet when that time is right.

Paul Sinsheimer

That is a very fair observation. For me to identify any once specific thing that you just brought up would be unfair to the other six or seven things you brought up. It is a whole host of issues. It's not only our liquidity; it's the liquidity of our borrowers. It is animal spirits that are derived from confidence that is not currently present.

There's a whole host of things that make this enterprise successful not only in the present tense, the past, but also the future and one doesn't see positive things happening if several of those significant items that you just mentioned do not come into some historical norm. It's a whole host of issues that go into, just being in this business in the first place.

Operator

Your next question comes from Brian Holden – Piper Jaffray.

Brian Holden – Piper Jaffray

On the cost of funds; you just paid of early $194 million and another $60 million from what I understand. My question is are the rates on what you paid off, can you give a sense of what the rate is going to be because the cost of funds was 4.12% this quarter and 4.15% a year ago, but last quarter it was 3.75%. It's kind of bouncing around. Just get a sense of where that's going.

Steven Groth

Clearly from our earlier comments, you can anticipate lower cost of funds. Now given that, we've got riding against that further de-levering but we also have changes in LIBOR. But other than that, you're going to see significant savings for the near future.

I haven't put a pencil to the paper and said based on what our average debt outstanding will be, what's that cost of funds going to be? But you can imply from what we talked about earlier, of a savings of close to $11 million pre tax, what that would equate to.

Brian Holden – Piper Jaffray

With your nice balance sheet that you have, and obviously you have a share re-purchase program out there as well, did you repurchase any shares during the quarter and what are your thoughts and outlooks on a share repurchase at the moment?

Paul Sinsheimer

I'm almost certain we did not. We did not repurchase any shares. Capital is king. And access to more capital is probably a better answer to your question than taking it directly head on. While capital remains king, it is difficult. I'm not going to close the door here entirely, but it's difficult for me to see a set of circumstances where we would head in that direction.

But things are changing. We do recognize that we are under levered. We're sitting on $450 million plus of equity, tangible equity on roughly $1 billion and change of debt. What future financial liberties that will afford us in a more normal environment, use your imagination.

Management clearly understands, never ever intended to run this business on a two times leverage. But we also didn't expect the United State financial system to almost collapse a year ago. And the only thing I can say about that is, thank goodness we were prepared for it.

Brian Holden – Piper Jaffray

Are there portfolios out there that are available to purchase or any thoughts on any acquisitions of that sort?

Paul Sinsheimer

I have been disappointed that those opportunities have not been more forthcoming. One would expect that. I do continue to expect that. As the future of some of our competitors becomes more clearly defined, and they themselves can find an appropriate time to exit, I think we will be a beneficiary, but it's different this time because the system is at risk, much more so than just individual institutions.

And as soon as the system believes that its individual members can be successfully liquidated, I think that's when the time comes when we will see our opportunities. I read and hear through the media that there's going to be a thousand banks that will fail in the next whatever number of months and that has yet to occur.

As the system gets its feet on the ground and becomes comfortable that the worst is past, I think you will see these banks fail and I also think their portfolios will then be available. But that has yet to occur.

Brian Holden – Piper Jaffray

And along the line of banks, are you still exploring the IOC bank option or any updates there?

Paul Sinsheimer

Let me answer you this way. We have not slammed the door shut on that, but it is closed. Not necessarily just to Financial Federal but what appears to be the government's policy regarding some of our peers have been unsuccessful and we would be regretfully I might add, put in the same group with those folks and I would say the likelihood of that is much less today than it was six months ago.

Operator

Your next question comes from Scott Valentin – FBR Capital Markets.

Scott Valentin – FBR Capital Markets

The SG&A line went up a little bit this quarter. I know its tied a little bit to delinquencies and non-performers and problem assets, but it had held steady in the second and third quarter and popped up this quarter. Is there anything one time in there? Should be expect it to follow the trend of non-performers?

Paul Sinsheimer

I have made a career of not projecting those types of expenses going forward. I will tell you it smells today, and it's just where I am today. I'm going to answer you today and maybe not next time, but I don't think you're going to see the same level of growth going forward. But what could change that answer is if credit quality resumes its more deteriorating pace of earlier this year, then you could assume it would go up. But while it's not getting better, it just appears to have bottomed.

Scott Valentin – FBR Capital Markets

Not that you have any need for liquidity now, but is there thought on the government programs out there or you just don't want to get involved?

Paul Sinsheimer

Right now I wish we had the need to do that. Our current cost of borrowed money is in large part less. I would love to be able to report to you my shareholders and anyone willing to listen that business prospects were so good that we were in search of it or needed it, but right now that's not the case and I don't know when it's going to change, but it's not going to be tomorrow.

Scott Valentin – FBR Capital Markets

So no philosophical bias?

Paul Sinsheimer

Absolutely none.

Operator

There are no further questions. Would you like to have any closing remarks?

Paul Sinsheimer

Thank you. We'll be speaking again shortly. Have a good day.

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