Hertz Global Holdings' CEO Presents at Citi Global Industrials Conference (Transcript)

| About: Hertz Global (HTZ)

Hertz Global Holdings, Inc. (NYSE:HTZ)

Citi Global Industrials Conference

September 18, 2013 10:15 AM ET


Mark Frissora - Chairman and CEO


Mark Frissora

All right. Thank you and good morning everyone. So today, we're just going to cover some updates in the marketplace and some of our various businesses and strategies. Give you a quick overview of where we stand on LTM basis. We have a forward-looking statements and disclosures on our financials in the presentation listed here.

So again, as we look at Hertz going forward, our investment thesis continues to be that we are a very diverse global company with four big businesses that are growing double digits. We have a culture of operational excellence with 27 quarters -- consecutive quarters of improving revenue per employee, advance technology leadership as demonstrated with the seven patents that we have now on our 24/7 Hertz On Demand technology, accelerating cash flow generation that will be demonstrated this year in the tune of 500 million to 600 million growing to over 1 billion by 2015.

If you look at the company most recently though the second quarter, revenues were up 16% adjusted pretax income up 42% and as you can see here the company has a lot of different pieces to it that have rhythms that are different and provide a very diverse portfolio.

We have a geographic diversity as well and we are a market leader. We are the number one brand. Hertz is on airport everywhere in the world by long shot as a single brand and now in the US with the Donlen we have about 37% share, number one again with all three brands against any of our two competitors here, mainly two competitors in the US.

As you look at this, I think this slide demonstrates our franchise network. We started showing this about six months ago, wanted to make sure people understood the breadth of Hertz. Revenues are 14.3 billion in the total network, locations are 10,600 and you can see in each continent there is a significant amount of revenue. We think there is obviously a big opportunity to get back to peak levels which were in 2007 for us and if you look at Hertz on a standalone basis, Hertz is still -- Hertz the equipment enrollment business is still 272 million below the 2007 peak. Rental cars is actually above this 2007 peak due to the growth in off airport and other strategic initiatives that we had in leisure.

So all the pieces are in place now. Over the last three years, we've completed a lot of acquisitions. We feel very good about the fact that all of these pieces give us an integrated approach to the market and strategically we are strong in all geographies now.

So the next step for us is really to maximize profit and cash flow. So, as you -- if you went to our investor conference earlier this year, you saw that our 2015 plan calls for about a 1.3 billion in cash flow as well as pretax margins and pretax profit of over $2.3 billion. So again, we think we've got those pieces in place and we're working hard now to optimize that and integrate it.

We do have four big growth drivers in the company, rental car off airport and when you look at that piece, the big drivers are insurance replacement and our 24/7 technology. When you look at vehicle leasing and you see what we're doing in this space through fleet management and technology, Donlen is growing right now double digit 15% kind of growth against an industry that's growing 3% to 4%.

On the rental car leisure segment, Dollar Thrifty is growing high single digits already with the synergies they get with the partnerships that we have. Hertz has always had 30% of its revenues tied to partnerships in the hotel industry and in the airline industry and now we're turning all of those partners on the Dollar Thrifty and we are seeing very nice growth through synergies there.

On the equipment rental side, Hertz has made, again about $240 million of acquisitions over the last three years and a lot of them in the oil and gas and industrial markets and we're seeing in North America growth of 19% to 20%. So again, very nice growth in this big business for us as well. So we think we have very well-articulated our strategy in four big segments and we're experiencing double digit growth in these segments and feel very positive about revenue growth as a company going forward.

US off airport rental car, if we talk specifically about that for just a minute is a $11 billion market. We have about 13% share and we think that that share can continue to grow to 23%, 24% without a lot of headwinds over the next three years.

We offer -- we're going to be offering the 24/7 rental program in your neighborhood, that will be coming next year with a hard launch. We are doing soft launches in the second half of this year. Locations in 2007 were 1,580 and in Q2, 2013, we were at 2,618 and with the 24/7 strategy, we'll actually have each car will become a location and we'll put those cars at retailers around the United States and that's a very asset like technology driven strategy to penetrate the off airport market.

If you look at off airport rental cars, you can see this very strong margin. In fact, it compares favorably to the airport rental car business. Labor cost are 8% lower, direct operating expenses are 34% lower, SG&A is 48% lower and utilization is up by 220 basis points. Very profitable high RIOC business.

Donlen fleet leasing and management, again, we are looking at fleet management solutions, combining that with the rental car side and selling more solutions than just a rental car rate. We helped -- this helps upgrade rental car when they do their selling value proposition, but it helps Donlen grow as well. In equipment rental, we have equipment financing that we are doing, a syndication model. So on the equipment rental side, we are the only equipment rental company that can come to a large national contract and offer a leasing solution and a rental solution and a telematics solution. No one else in that space has that. And we are really getting traction on that and momentum on it. So we think that we will continue to penetrate national accounts and big job sites where you have two and three year projects. We have a much more integrated solution than anyone out there; it’s a real differentiator for us.

On the US rental car leisure segment, you can see the brand; we added one called Firefly to replace advantage in the deep value segment. Now this is a brand that will go after the 5% market share of the US airport market in the deep value segment. But remember that 5% share is more like 15% share in the markets that participates them. So there is about 20 airport markets where deep value is important and when you go into those, the market share in deep value is more like 15. So our goal is to try to put out a business, the little guys that don't have a lot of good standards if you will in customer service. And we will go in with a cheaper fleet, we will have a counter, low labor cost and this is just identical to the advantage marketing strategy that we had that was growing 40% a month and we launch these this quarter and into the fourth quarter. We already have a couple locations up; we're taking orders and reservations right now in 11 locations. We're actually not and up and running more than two right now. So, as that comes on line, Firefly comes online, we will be able to use less opaque, which is good for overall pricing for us. We end up having a better pricing equation, we'll use less opaque. Today we use opaque to kind of replace advantage and this should help us going forward.

We talked about acquisition strategies, still the same number 300 million in revenue. We can see that we've already opened 137 corporate Thrifty locations; we've negotiated Dollar Thrifty agreements with 150 Hertz corporate accounts. We have trip away now list Dollar Thrifty as a vendor, Marriott airline partners like [indiscernible]. So you can see we've already advanced quickly if you will the Hertz relationships. DTG referrals or Hertz airport is underway as well.

On the fleet side, our real fleet savings will begin to come when we have all counter systems and our fleet systems integrated in the first quarter of next year, that will be the end of the first quarter and there is three points of utilization in these numbers. We think the opportunity is anywhere from 5 to 10 points. So we're hopeful that we can over deliver on some of these cost synergies. Technology system integrations occur in fleet, ecommerce reservations billing HR and finance. So, it is a massive undertaking, but it's being worked at and it's on schedule. So really good about the opportunity going forward.

I think people ask me a lot about pricing for the industry and I would tell you that, once we have our fleet module and our yield management module in place amongst all the brands, there is opportunities for better pricing as well. Right now, we're doing a lot of that manually and doing very well with it, but there is even more opportunities as we get the cost synergies up.

Non-fleet procurement is also been a pleasant surprise for us, we've been getting the DTG spends, the decentralized and brought in as we do that, we get much lower cost of procurement products that we're buying.

Equipment rental growth drivers, recovery in non-res construction. We think there is a lot of growth drivers here in non-res. We track about 26 SIC codes and depending on which part of the country, in some parts of the country, non-res growing 30% like Northern Florida.

California is only growing 10% to 12%. So you know the non-res recovery hasn’t taken place because the contractor loans that fund the projects that are already there, they are not yet pre flow. We are not getting contractor loans for projects at a free flow rate like we had in 2007. Contractor loans at local regional banks are up 30% this year, but the dollar value is not up 30% but a number of them is. We think that over the next 12 months, there will be a backlog of projects released and there will be more loans given and that's kind of one of the biggest things we use to track whether or not that non-res recovery is fully in place.

So you can see that in equipment rental, we want -- between 2010 and 2012, 11 acquisitions, one joint venture and $240 million investment, those things are playing well for us now, driving good growth. Obviously price in volume growth have been together and time utilization for us has improved significantly every single quarter. We continue to see good things in equipment rental business as we move forward in the year and I'll talk about that a little bit more in the outlook section I have in this presentation.

When we take a look at adjusted pretax and adjusted pretax margin, and we see that trajectory. The total company's adjusted pretax income CAGR of 53% since 2009 has been done primarily through both a combination of revenue growth and cost reduction programs which, some of which I have already talked about. So we believe this last 12 months, total profit 66% over 2007 peak fleet level demonstrate this company is a much better company than was in '07. It’s a company that has a lower cost of operation, a better growth rate and a much better balance sheet.

Which leads me to cash flow improvement. When you look at cash flow from operations and you go back to 2009, you can see what it was and what the year over year change was each year, showing improvement in '12 and again in '13 we're projecting $500 and $600 million of free cash flow and that's in spite of investing in the Hertz fleet growth. And so with all the investments in Hertz fleet growth generating this kind of a number is I think a good progress in terms of our ability to sweat our assets and make sure receivables and payables in terms continue to improve.

When we look at cash flow acceleration strategies, we can see that by using better fleet management systems and driving utilization up, we improve our cash flow and we expect with a Dollar Thrifty acquisition to have significant improvement utilization. We know that in equipment rental, we've been driving strategies also to drive [indiscernible], we use lean six sigma tools to continue to improve in those areas. We also have a lot better capital management asset like strategies for off airport expansion, so we get revenues with less capital deployed against them. We're lowering our fleet cost by buying less expensive fleet and selling our fleet into higher priced channels. That helps lower our capital intensity as well. And of course our balance sheet today '07 is hugely different. We had debt covenants in '07, and we were tied, our debt was raft, our fleet debt was raft with MBEC and MBIA. Today there is no raft instruments with MBEC or MBIA and there are no financial covenants in our debt as well.

So this fleet management, better fleet management has driven higher returns and we do that through these alternative resale channels which we predict will be in '13 and '14. We think these are not aggressive numbers, that will probably be higher than this retail, especially right now we're expecting '13 to be 18%, we're hopeful to be higher than that and in '14 we're projecting 30% to 50% at retail. At retail right now, we see residuals very strong, have been strong all year, still making anywhere from $1,200 to $15 a car profit, that's all cost in including advertising. So, big opportunity to continue to shift our used cars and selling higher percentage of those at retail.

We look at lean six sigma which continues to be part of the Hertz culture transformation. I would say that lean is alive and well, continues improvement is alive and well in Hertz today. We have now more than 225 light yellow and green belts. Our performance I think speaks for itself, it will probably be the only the company, rental car company certainly that has demonstrated every single quarter the ability to generate higher revenue per employee even during the reception where we had in one year a minus 16% revenue growth during the worst part of the recession.

Higher returns investments due to technology and innovation. So again, this is figuring out how we can use technology to both improve customer service, but at the same time reduce labor cost and reduce fleet cost and reduce bricks and motor cost. So our e-return receipt, uses less paper on mobile gold alerts allows people to upgrade. They get a gold alert, so you are a gold member and you get texted when you land, what slot your car is in and then up pops on the screen two new cars that you could upgrade to and it asks you, do you want any of either one of these two cars, you just click on the one you want, it's ready by the time you get bust to the Hertz lot.

ExpressRent kiosks are helping us reduce the temporary and over time labor we need during peak seasons as these kiosks get up and operational, we're getting significant labor savings off of them and then on Hertz 24/7, again we deploy a car instead of deploying a bricks and motor location. The car becomes the location.

Couple of update slides, pricing trends with fleet cost, wanted to update these for everyone. This data -- all of this data that you see in the top box basically suggests that when fleet cost increased prices increases as well. Happens with a very high [indiscernible]. Any time you see residuals, weakening which drives higher depreciation or you see fleet cost in the OMs going up, pricing always goes up with it.

Manheim Used Vehicle Value Index, Moody's forecast, against strong residual markets and in '16, everyone is expecting to see an uptick in those stronger residuals that will start occurring. So some modest residual degradation, 1% to 2% in '14 and 15%. And for us, it's all about offsetting that by selling at retail channels.

Six months ending June 30, 2013, wanted to reinforce this message by showing you that pricing has gone up in spite of soft volumes. So discover pricing slide update you can see that when you look at our six months ending June 30, we were up 2.8% US Hertz brand airport and fleets have generally been over fleeted the industry since the second quarter has been over fleeted in the December season and even in an over fleeted situation, the industry is in fact seeing nice pricing increases.

So that brings me to just talk a little bit about volume, so in volume we see good news in Europe, decent and on point news in Hertz, but in US rental car, as I told people on the second quarter call, if I take the Hertz brand on airport, on airport volume is soft, has been soft, continues to be soft. Lot of [indiscernible] here on the slide to support that. That's a $3.4 billion business for us. We would normally expect fairly significant growth there, it’s a significant growth on 3.4 billion, probably in the neighborhood of 5% kind of growth, 4% to 5% growth, we're not seeing that kind of growth. And airlines, it's important to know, 13 million seats out the last 12 months, hotels, recession is still lingering impact right now, corporations are watching their bottom line, commercial travel is not strong. Restaurants you can hear, the McDonalds quote in the second quarter of '13 and then of course again, looking at retail sales in the US, rose less than forecast and consumer confidence is at five month low. It’s a quest that we think was one of the biggest impacts on our business. When we look at the airport business, obviously the Washington airports are down significantly, but more importantly we have about 6% of our total revenues in the US tied to government or government contractors and that business is off significantly, 30% to 40% depending on the month. And so, that's a big number to be off and it helps levels that and drive that softness. So those are the primary drivers. Now we have offset all this obviously, pricing helps offset that, I just talked about pricing. There is offsets also to the issue around Hertz and Europe, they are both growing. Dollar Thrifty is helping offset that, airports are growing strong. But even in the off airport segment, if you look at leisure only, not internship placement, but leisure only, [indiscernible] is impacting is softer as well. So overall, we're seeing this softness in the US, and it is impacting us and the only thing that's bad that happens when you look at the softness, is you do see, extra fleet and we certainly we combine the fleets, we had extra fleet and when buying this and develop, you get extra fleet and you get to sell that fleet and you have to sell it sometimes fast. So, still evaluating the risk on this, but again, the softness is not something that should go unnoted.

Switching gears to Hertz update, [indiscernible] and pricing is in line with guidance. We think oil and gas markets remain strong. Government spending is down, however again, I said volume and pricing is in line.

Non-res construction recovery just recently McGraw-Hill moved their number, but that number I can't depend on. It's moved from 6 to 1 now, it moved down. The reality is, that's not a number we really track to, we have an index that we really well. But that number is, that's an indicator and it's nothing saying anything positive. Even if it flow throughs in line with 60% to 65% guidance, cash flow is exceeding internal targets. So again, feel good about the Hertz business, it's kind of a quick update to where we are on that.

And that's it, all the pieces are in place. I'll open it up to Q&A now.

Question-and-Answer Session

Unidentified Analyst

Maybe I'll kick it off markets, you mentioned the softness on the airport volume, we have seen Manheim with last two months with the index actually look for the gaining again, is that running a little bit ahead of what you were expecting?

Mark Frissora

Yes, it's very good, bounced back strong. So, the overall residual market is really decent. So I see -- we weren't surprised to the negative at all on the residuals. We thought April and May was an aberration but weren't sure. But in general yes, I think the residual market looks good. The only time residuals get challenged is if you try to defleet and you're selling 16,000, 15,000 cars in a month and you have to do that all at auction and all the rental car companies do that together, then you'll see weakness and you'll see car sale losses. So while the market is good, its channel specific. So, market and retail is really strong. You go out and talk to car dealers today and you ask them about their used car lot, their used car sales are strong and the rates are strong. Same thing is true. Dealer direct is less though. You're selling to dealers directly today, you'll find softness there versus what they were a year ago. But, not a bad market. Its auction where you sometimes will see pressure today versus what you saw a year ago, when you go to see, when you go to sell in excess of 10,000 products. That's the way to characterize it.

Unidentified Analyst

Just on the Hertz cash flow being embedded and you expected that isn't always a good thing in that business. Is that due to lower CapEx spending or is it due to strong…

Mark Frissora

Due to strong performance and [indiscernible] for us. So, that's really what it was driven by. We've -- they come to me twice this year for more capital, so and I've given it to them. We're not like shrinking or anything if that's what you're thinking.

Unidentified Analyst

And just one other quick one, on 24/7, do you -- are you seeing that most of that revenue, is that incremental revenue do you think in 24/7 or to what extent is it cannibalizing your other businesses, whether it's on or off airport?

Mark Frissora

24/7 is not big enough to do anything right now. So, when 24/7 happens, we'll be rolling it out regionally, in a very controlled environment with high customer sat scores, that's the only way we'll do it, if it has high and we'll have to redefine the logistics model because I am putting a car on a 24 hour grid. My whole fleet system stood on a 12 hour grid. So it's quite a change. And it's an opportunity to get incremental revenues off hours that we don't have today. So we look at it as a fleet opportunity. We should drive utilization improvement with it, and we should drive incremental revenue from it. For me to predict how much or when and where it's premature. But as we go, as we roll it out region by region, we'll talk about what we see and fine tune it and tell investors how it's going.

Unidentified Analyst

Got a quick question about your off airport car rental business. $11 billion dollar overall market, your investor can share, you mentioned how you think that's 20%, 25% in a few years. What are some of the catalysts take you there?

Mark Frissora

So one is just continuing to penetrate the 195 insurance replacement accounts we have. The top 200 we have 195 and we're in the door, we are in some cases have 5% shares, sometimes 10% but every year we seem to grow a little bit because we are the second guy with a monopoly leader which is enterprise. So that's one way of just being there and having a history and continuing to serve the customer we're growing our natural share there.

The second way is 24/7, that technology will enable us to deploy a car anywhere for an insurance replacement customer. So if you have a big company, and I'll just say all stay right, which gets claims everywhere all the time, in the past, bricks and motor locked in, you get to deploy cars, but you couldn’t keep them everywhere so you can have a medical right. Now with 24/7, we can actually put cars instead of bricks and motor in any place they want, even areas where traditionally they had not had. So it’s a selling value proposition for us. Plus, we get incremental revenue if we just had a car there anyways that can be self-service. So remember these cars, all you have to do is click online and swipe and go. So its 100% self-service. It's all virtual and inside the car you can talk to customer service real time, you press the button they come in, you have a problem with the car and so we think that technology plays well on off airport.

Unidentified Analyst

Could you just talk about on airport pricing? It seems to go against common thought [indiscernible] seeing excess supply out there that you'd still see such solid pricing. There are certain programs in place, I've noticed the new signs search choice or something where they upgrade you as you show up at the airport, but could you maybe talk about some other pricing mechanisms that have changed over the years that allow you to enhance pricing?

Mark Frissora

Well we are -- we have more products available than we had three years ago to sell. We've lowered the cost of our insurance products, we've made our gasoline programs more attractive to people. Those are derived through growing our ancillary revenues. Our ancillary revenues were actually up 30% this year in spite of Hertz having 66% of its customary based gold, which means they don't have to go to the counter, where our ancillary revenues were actually up. We've come up with a lot of creative ways to sell to consumers other products if you will. We're running iPads today in several locations. That's been a home run for us. So we continue to come up with new creating approaches to ancillary revenues.

Your question though, the beginning part of it, could you repeat it? I don't know if I answered the first part.

Unidentified Analyst

You pretty much, I guess how much is the ancillary revenues had a total RIOC revenues.

Mark Frissora

Well ancillary revenues are around let`s say $9 a day. That's kind of how we track it on a daily basis. Enterprise is probably around $16 a day and that's because they have a higher touch model than we do. When you come into the airport with Hertz in your gold, the business drops you off in front of a car, so I can't sell you. So, I think that when we have the in car technology with the 24/7, we've been pretty slick I think in the way we pass on the new iPad, it's not an iPad, it’s a tab, we call it the have NeverLost tablet. The have NeverLost tablet will have a button that you can press for a range of services that will instantaneously be activated. So if you're lost, you can press the have NeverLost button and never lost is instantaneously activated in the car. Today only 20% of our cars have NeverLost, in the future 100% of our cars will have NeverLost. That's just one example that's shows you how we're trying to generate ancillary revenue in the car and remember that we have video feed in the car, so you'll be able to talk to customers, actually see another person, so its high tech but its high touch and that's kind of been our strategy as we evolve with technology, high tech but high touch.

Unidentified Analyst

Had a quick one on Hertz. You gave the comments that rack industry seems over fleeted, what's your view on Hertz industry wide fleet level and then somewhat related I want to get your perspective on one of your other competitors taking down their pricing guidance albeit somewhat minimal way versus your color that Hertz pricing is a little strong.

Mark Frissora

Yes, I think that in general pricing is in line with expectations for us. I already said that. So I think that the year-over-year increases in pricing will begin to accelerate when non-res recovery occurs. Right now non-res is growing but it's just not where it should be and that will provide the next impetus for pricing recovering. I think in terms of our other competitor, I know that they grew a lot of their business into the national accounts, that's contracted rate business, those prices are much lower than local and if you're growing local contractor business, pricing is much higher. So that could be maybe one of the reasons and they probably told you that, I don't know, but that could be one of the reasons why they are seeing a little bit softness in that. So, we continue to emphasize local that placed a non-res recovery, that's our strike. Our sweet spot has always been non-res. It used to be 48%, 48% of our revenues. It's now 37% right now. So as the peak to trough recovers in non-res, so are rates and we'll continue to get I think more aggressive rate increases once that occurs.

Unidentified Analyst

[Question Inaudible]

Mark Frissora

Yes. I don't see over fleeting. I know that I am trying -- I could buy lot of fleet right now and probably put some to use. We're very selective of where we're at it, but I know we're tight fleeted, I know we're not loosely fleeted and I don't see evidence that United is over fleeted. I think they are buying fleet. I remember, they are going to be buying some fleet.

Unidentified Analyst

Yes, the CFO of United Rentals said yesterday, I am very much interested in equipment rental business, what's your response?

Mark Frissora

He's very interested in it?

Unidentified Analyst

Yes. He's going to buy.

Mark Frissora

For $6 billion, he can have it so. No I am kidding, that's a joke. So, maybe not. $6 billon worth? Yes. No, I think that in terms of our ability to either spin off or sell equipment rental, we've been ready to do that since I've been with the company. So, right timing and the right price, we're not resistant to doing that. We need to create shareholder value. to separate that company from Hertz, you need to create shareholder value and we've always been open minded about that and I think it's just a matter of the timing and the pricing and if things are right, again, we are not resistant, I am a very shareholder friendly guy. And we look at this, we've looked at this for better part of five and a half years, and so we're not opposed to doing it but again it has to be the right time and the right price. Other questions?

Unidentified Analyst

You talked about telematics 24/7, it's just a big picture question, what do you think connected cars, vehicle to vehicle, vehicle to machine and even autonomous cars in the future will do to Hertz in terms of any positive benefit or efficiencies and just really kind of big picture in your fleet.

Mark Frissora

First part of the question, say it again.

Unidentified Analyst

Just in terms of the connected cars in the future and you're talking about telematics and 24/7, as cars become more connected to be able to communicate with each other and with machines, and eventually even semi-autonomous vehicles, what does that do to your business model in terms of really new efficiencies or even new revenue streams in the future.

Mark Frissora

So for us, it’s a big deal because it allows us to see where the fleet is all the time and where its moving. So today I only have about 85% of my fleet that I know where it is any given moment. Any given moment, I don't know where 15% or $1.5 billion of my cars are. I don't know where they are at. They are unavailable for rent, because the customer turned them back late, a customer decided to steal it, a garage decided to bang the car up in racket, I got 15% of the fleet unavailable. When the technology goes in, you have electronic and GPS and RFID technology all put into the car. Instantaneously it's on a grid. I see where it is, I remember, hey I am actually able to disable a car. In fact, if someone's driving it down the freeway and we figure it’s a rogue, someone that's stealing the car, we can actually lock the steering column out, so they won't be able to steer and we would never do that on the freeway. We would wait till they were parked to do that. That's my lawyers told me I had to say that. But no, I think that the connected telematics package allows you to even monitor driving and what people are doing, how they are driving. So there is just a lot of goodness that comes from asset utilization by having these vehicles have technology in them.

Unidentified Analyst

Just one more, just circling back on Hertz. Just curious about your appetite for investment both kind of internal as well as acquisition related, you made a handful of tuck in acquisitions in the past year, so just kind of what's your view on additional investment there and then going back to your comments earlier about getting more increase from the field in terms of more fleet and you put together plans for next year regards to overall CapEx. I think this year you are '13 is going to be down from '12, any initial thoughts on the outlook for '14?

Mark Frissora

I think we talked about next year being about the same roughly as this year on CapEx, maybe a little bit lower maybe about 100 million. In terms of looking at acquisitions, if there is a tuck in small acquisition, we'll look at it. We had a couple on the radar screen but they are small, nothing big. We are not looking to make any big capital deployment anywhere in the company. Again, my strategic slide that was emphasized here was cash flow, cash flow, cash flow and margin expansion. That's really the emphasize to drive every decision that I make in the company for the next three years. So nothing big. Just going to make the parts work better.

Thank you everyone. Thanks again.

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