American Reprographics Company Q3 2009 Earnings Call Transcript

Nov. 5.09 | About: ARC Document (ARC)

American Reprographics Company (NYSE:ARP)

Q3 2009 Earnings Call

November 5, 2009 17:00 pm ET

Executives

David Stickney - VP, Corporate Communications

Kumarakulasingam Suriyakumar - Chairman, President and CEO

Jonathan Mather - CFO

Analysts

Kevin Mcveigh - Credit Suisse

Scott Schneeberger - Oppenheimer

Franco Turrinelli - William Blair & Company

David Manthey - Robert W. Baird & Co.

Operator

Hello my name is [Don] and I will be your conference operator today. At this time, I would like to welcome everyone to the American Reprographics Third Quarter 2009 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks there will be a question-and-answer session. (Operator Instructions).

Thank you. I will now turn the call over to. David Stickney, Vice President of Corporate Communications. Please go ahead, sir.

David Stickney

Thank you, Don and good afternoon. Today, I am joined by Suri Suriyakumar, our Chairman, President and Chief Executive Officer; and Jonathan Mather, our Chief Financial Officer.

Earlier today, we summarized our third quarter results in a press release. We will be adding further commentary on the quarter on today's call and then as usual we’ll take your questions after our comments. For your reference you can access the press release and the company's other releases from the Investor Relations section of American Reprographics Company's website at e-arc.com.

We are webcasting our call today, a replay of the webcast will be available on our website for 90 days from today and you can get there by again, going to www.e-arc.com.

A taped replay of this call will also be accessible by phone for seven days. The dial-in number for the replay is in today’s press release.

For the record, this call will contain forward-looking statements that fall within the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995 regarding future events and the future financial performance of the Company including the Company’s financial outlook.

Such statements are only predictions, and actual results may differ materially as a result of risks and uncertainties that pertain to our business. These risks are highlighted in our quarterly and annual SEC filings. The forward-looking statements contained in this call are based on information as of today, November 5, 2009 and except as required by law the Company undertakes no obligation to update or revise any of these forward-looking statements.

Finally, this call will contain references to certain non-GAAP measures. The reconciliation of these non-GAAP measures is set forth in today’s press release and in our Form 8-K filing.

At this point, I will turn the call over to our Chairman, President and CEO. Suri?

Kumarakulasingam Suriyakumar

Thank you, David and good afternoon everyone. ARC continues to be perform well in response to the challenges forced by this economy. This is clearly demonstrated by the results we have posted today. Once again, our aggressive stance in cost control, the speed and the responsiveness, with which we have right sized the company and our focus on preserving cash and profitability has served us very well.

On today's call Jonathan and I will be drawing your attention to the important details of our financial performance. And sharing our thoughts on the opportunities we are pursuing during this downturn. After that of course we will address your questions.

Our revenues of $119.4 million, we delivered $0.06 per share in the third quarter of 2009 on an adjusted basis. At the end of quarter three, ARC produced $75.4 million in cash flow from operations this year. This translates to a $19.6 million just for the third quarter.

This extraordinary performance in generation cash is a clear reflection of the underlying strength of our business. As we announced in October, our strong cash position has not only allowed us to comfortably service of existing financial obligations, but also provided us with the means to favorably restructure our debt agreements and substantially reduced the leverage we carry on our balance sheet.

When we combined the October prepayment on our amended debt agreement of $36 million, the $11 million we have pre-paid on capital leases in the second quarter and our scheduled debt payments. To-date we have addressed nearly $92 million of our debt obligations during one of the worst economic periods in the history of our company.

Even more impressive is that in spite of the 31% year-over-year decline in revenues, our gross margins remained a healthy 34.5%.

During our last call, I mentioned that having largely right sized the company, we are now identifying opportunities to create new revenue streams. Needless to say, the substantial revenue drop has produced additional capacity and this is the perfect time to employ in areas where we can generate new sales. Today, I'm happy to report that we are making progress on all these fronts.

First, our focus on technology has intensified given the environment. More than ever, our customers are looking to improve efficiencies and their return on investments. In a highly fragmented industry like construction, the right technology can create substantial process improvements and in that light, we have continue to invest and further develop our portfolio of technology products during this downturn.

Since our last earnings call, we have made significant upgrades to Abacus, our flagship product in the print packaging category. We have introduced PlanWell DataBridge, a brand new product to synchronize information between PlanWell and construction project management software.

We also acquired RCMS, a Building Information Modeling Services company. We now have the ability to partner with our customers to provide ground breaking consulting and outsource technology services to improve their workflow.

This recession is compelling the industry to increase efficiencies dramatically. While BIM, which is referred to Building Information Modeling has been waiting in the wings for sometime. Few technologies have the potential to offer such tremendous gains in process improvement. With the addition of these new services, we are ready to serve the industry like no other company.

We also continue in our efforts to build a national digital color printing platform to address the large and growing color graphics market. Using our existing infrastructure and expertise in color production, we are in the process of stepping up color service centers in strategic locations across the country. We expect this effort to add to our non-AEC revenues in late 2010.

In addition, we continue to focus on our strategy to expand our service lines and offer manage print services to our large national accounts across the country. Combining our domain expertise in all areas of print management our enhanced technology services and our national footprint gives us the substantial advantage over our competition.

Finally our smart [FM] efforts are finding willing partners with vendors and suppliers. As we might expect, working on the concept of high volume placements of smaller, more convenient machines is largely dependent on reliable supply chain management and creating this infrastructure has been where the majority of our time has been spent in preparation.

As you can see, creating opportunities for sales has been an area where we haven’t cut, but instead, increased our investment, much like we have done in our technology initiatives. Where others would simply conduct business as usual and look to limit their exposure in market conditions like this, ARC is exploring new ways to invest its resources to expand the market share.

Our management team is committed to finding new opportunities and acting on them to build the future for ARC, regardless of the current circumstances. With that summary, I will turn the call over to Jonathan now for a closer look at some of the financial information. Jonathan?

Jonathan Mather

Thanks Suri. To being with our customer mix stayed roughly the same from quarter-to-quarter. Of our total revenue for the third quarter, 21.6% came from the non-AEC segment with 72.3% coming from non-residential customers and 6.1% from our residential customers.

Our product and service mix remain stable as well. Facilities management made up 19.6% of our revenues. Digital services delivered 8.6% of our sales. 11.7% of our revenue was from equipment and supply and the remaining 60.1% came from our base of reprographic services.

Now the 64 working days for the third quarter, just as there were 64 days in the second quarter. There were also 64 days in quarter three of last year. On a regional basis, our year-over-year revenue performance was as follows.

Southern California continues to be the hardest hit by the economic downturn as is down 38.8%. Northern California was down 33.3%, the Pacific Northwest was down 22.1%. Our Southern region was down 33.2%, the Midwest was down 31.1% and the Northeast was down 35%.

On a very positive note however, our international operations excluding Canada are up 153.6%. Day sales outstanding or DSO were 48 days in the third quarter of 2009 consistent with 48 days in quarter two. Total debt including capital leases at the end of third quarter 2009 was $317.6 million. This is down from $329.5 million for the second quarter of 2009. The ratio of debt to trailing 12 month EBITDA at the end of the third quarter was 2.8 compared to 2.5 at the end of second quarter 2009.

That covers the basics. Before concluding financial comments, I want to point out that in today's press release we made reference to recording two impairments at a possible onetime charge associated with our amended credit agreement. Based on our annual goodwill assessment, we recorded $37.4 million impairment as of September 30, 2009. We also recorded an impairment charge of approximately $781,000 against certain of our long lived assets. Finally, we made a note of a possible onetime charge in the range of $700,000 to $1.3 million relating to the company's interest rate swap transaction related to the company's amended credit agreement. The impairment and possible onetime charge will be reflected in the company's Form 10-Q for the third quarter of 2009.

At this point, I will turn the call back to our Chairman, Suri.

Kumarakulasingam Suriyakumar

Operator, we are ready for the question-and-answer session.

Question-and-Answer Session

Operator

(Operator Instructions). Your first question comes from the line of Kevin Mcveigh with Credit Suisse.

Kevin Mcveigh - Credit Suisse

Actually I wanted you to just explain a little bit on the comment in the press release, suggesting that you're seeing a stabilization in daily sales trends and what you would expect as we work our way and obviously the fourth quarter, the seasonal impact in the fourth quarter and how you are thinking about, more of a recoveries as we think about 2010, relative to prior cycles or is it still little early to think about kind of a pickup in -- if so, how long we will be in this stabilization trend if you will?

Kumarakulasingam Suriyakumar

Obviously, when we are referring to the stabilization Kevin. If you look at it from the early part of the year, month-over-month, our revenues where dropping in the region of 5% to 6% at early part of the year, January, February, March. It has been diminishing little-by-little and actually as of this quarter, actually last month, we are down to less than a percent. In fact, I think it was last month we were up slightly and then, we are back to just under 1%. So, that’s a clear indication that the erosion or the drop in sales is diminishing. So, we are feeling very good about that based on all the trends we are seeing.

Now, having said that, the general prediction for 2010 is that, non-residential, will have some negative impact and we understand that. As far as ARP is concerned there are couple of things which actually works to our favor.

Number one, all of our efforts to actually start building our revenues in some of the areas that we had not worked previously, especially things like non-AEC, color and our management services areas. We are starting to see incremental benefits on that. So that's actually allowing us to offset some of the ocean which is going on.

Secondly for the first time we are starting to see a significant gain at competitor levels and we are starting to gain market share because in many markets we are seeing companies falling apart and that's understandable. I think this will only get worse during next year. So from ARC perspective, I think we are seeing leveling of this erosion. So I think there is going to be stabilization of revenues from our perspective. These are hard things to predict, but based on what we now that's how we see the marketplace.

Kevin Mcveigh - Credit Suisse

And in terms of given the cost actions you've taken already, do you see any more based on kind of the current revenue run rate or that number one, number two is the benefit from the previous actions already fully reflected in the financial statements. And then number three, I know I've got a lot of question here but, Jonathan just your thoughts on the capital structure now, will there need to be any other amendments to the facilities or anything like that?

Kumarakulasingam Suriyakumar

So if you talk about the cost cutting efforts we have taken, these efforts started obviously early this year, actually we started last year. All of those benefits as you keep fine tuning will start impacting our number as time goes by. As long as we are not in an expansion mode and we are not incurring any additional expenses. This is going to benefit us to reduce the cost. So, you see some of those flowing into the last quarter and then flowing into next quarter because all of the cost cutting efforts don't immediately impact the company, especially things like building leases and some of the long-term efforts we have made. So overall, while there is no reason, we think we have largely right sized the company like I said, we don’t see any reason to have major cost cuts. We can do that if you want but there is no reason too because we remain very healthy.

We think the benefits of those cost we have take out will still incrementally come to the bottom-line as we go along especially given the environment and the careful attention we are paying to numbers, I think that’s going to continue to benefit us. So, that will continue to go on and given what we have right now, we don’t expect to cut any further. There is no reason to unless otherwise something totally unexpected happens in the marketplace that is not our expectation given that now. Jonathan would you like to answer the last part.

Jonathan Mather

Just one little addition to what Suri said, while we don’t expect to do cuts, we continue to look for efficiencies. Every area we are continuing to do cost efficiencies. So you’re not going to see big structural reductions however, we are continuing to improve our profitability through efficiencies in our operations. The question regarding the bank, we did the amendment in the first week of October that had concluded and we believe, we felt we got a pretty good amendment in the product where the banks have worked with us with covenants giving us adequate room even if the revenue continues to decline. So, we protected ourselves, we believe as we set these covenants, giving us reasonable room to proceed without going back for an amendment.

Operator

(Operator Instructions) Your next question comes from the line Scott Schneeberger from Oppenheimer.

Scott Schneeberger - Oppenheimer

I guess, first up, can I ask, what was the organic growth in the quarter?

Jonathan Mather

We had a decline in the quarter 32.9%.

Scott Schneeberger - Oppenheimer

Any granularity there on by segmentation, AEC, non-AEC, any little more color on the detail guys.

Kumarakulasingam Suriyakumar

Not really, Scott. Jonathan, do you have that in.

Jonathan Mather

We don’t have that detail of AEC, non-AEC for that. But we can say, most of it is from clearly the AEC. Substantially all in AEC.

Scott Schneeberger - Oppenheimer

So, that’s more of the decline. A little bit more stable in non-AEC. But still down.

Jonathan Mather

Yes.

Scott Schneeberger - Oppenheimer

Since we last heard from you guys, roughly a month ago, Suri or Jonathan just, how are things trending since we last talked to the extent, you can share?

Kumarakulasingam Suriyakumar

Yes, we just mentioned Scott, the general trend is that we think the revenues are leveling off. Like I said, early part of the year, 5% to 6% month-over-month was the revenue erosion, but that has substantially reduced and for this month it's less than 1%. And of course don't forget the industry we are in and you know it's traditional and we expected to have lower revenues this month. So, we don't see that to be surprise, so therefore we have concluded. It's my opinion that revenues are flattening out, pretty much flattening out.

For the trend going forward, although 2010 is still expected to be a challenging year, what I think will offset some of these erosion would be the fact that there are two elements, one is these new initiatives that we've been pushing now for the last quarter or two, we have initiated such as color, such non-AEC are starting to show some life and we are getting some results out it.

And the second thing is, we feel like we're getting a little more traction or market share simply because many of the competitors are really finding it difficult to carry on. So but the combination of both of that and our continued efforts to drive our sales, I think it will be pretty flat. It's hard to predict any thing these days, but we feel confident about where we are right now.

Scott Schneeberger - Oppenheimer

That sounds like a very good signs because you are talking flattish down 1% that's on a sequential month -over-month basis. And typical 4Q is a tougher quarter than 3Q is, is October typically a tougher month than September, seasonality wise?

Kumarakulasingam Suriyakumar

Year-to-year it varies. Last year of course was a complete whacked out so, it's hard to go but generally if you come to October, November, December, we generally sense that much more holidays. The weather kicks in so generally, there is a tendency for Reprographers especially in the industry to loose money in the last quarter of course, ARC has never done that in the last so many years because we have been able to manage it through, but generally the last quarter is supposed to be a challenging quarter. So we feel like, so far it's stabilized.

Scott Schneeberger - Oppenheimer

We haven’t heard and update on Boeing in a while and maybe some other larger non-AEC business relationship you have. I imagined just kind of strained in the environment as well, but any thing you can add on those fronts.

Kumarakulasingam Suriyakumar

All the large accounts we have, we are continuing to get the work we are getting. But the revenue drop, there is a revenue drop in almost every one of the customer to the extent what the economy is reflecting. So, we don’t have any particular customer we can take, who is defying the economy, so to speak because in general all customers are slightly down. Where we are getting additional revenues are when we get new customers, so there are few new customers who come on board and obviously any revenue we get from them is a positive impact.

Operator

(Operator Instructions). We have a question from the line of Franco Turrinelli with William Blair & Company.

Franco Turrinelli - William Blair & Company

So lets go back to this kind of commentary on sequential trends improving which is what I interpret your comment about the plus or minus 1% relating to it right.

Jonathan Mather

Yes.

Franco Turrinelli - William Blair & Company

I am not assuming that you think that your fourth quarter October, November, December will be approximately flat to your September run rate. If it was that would be a pretty unusual performance relative to the seasonality.

Kumarakulasingam Suriyakumar

I agree. That’s I think very critical point. That is exactly what I was trying to highlight because given the fact that we are in the fourth quarter, given the fact that we are in the construction industry, the fourth quarter is always a challenged quarter. And plus of course, the number of working days, gets effected substantially specially in November and December.

So, we will have 19 days in November and then in December we will 22, but then I'll put that number in December is skewed again because depending on where Christmas is falling and New Year is falling, we loose working days. So, you are absolutely right. So, if we are able to maintain the same level that will be fantastic that is yet to be seen. The general tendency in the marketplace is to flatten out, taking out the seasonality and the fact that the holidays, number of working days.

Franco Turrinelli - William Blair & Company

I think the one thing that we can take away from your commentary is that the end markets appear to have stabilized and are no longer, kind of falling apart. So, maybe this is a good question for Jonathan, if we kind of go back forget 2008, which I think you described as [wacko] which pretty accurate as far as I am concerned. If you go back to 2007, 2006, maybe more normalized more stable environment, I mean can you remind us of the approximate relative seasonality of the fourth quarter versus even the full year or the third quarter?

Jonathan Mather

On a quarterly basis, as we have said before fourth quarter is the weakest of the four quarters in a year. Fourth quarter is the weakest in our business when you look at it organically. And what we've also said is let me just help you with this for the fourth quarter 2009. While we did not give revenue guidance in our EPS guidance, we implied our revenue in the 485 to 495 which basically translates to, if we did let's say around number $390 million in year-to-date quarter three. We're talking about $100 million, $105 million type of range fourth quarter. That implies fourth quarter using those seasonalities that from a $119 million it is down just over 10%.

Franco Turrinelli - William Blair & Company

And that’s exactly what I was looking for because I think that's sort of what I remember from prior non-whacky years. So that the other thing that I'm very interested in getting you to give us some color on as, over the last years, you guys have made some extraordinary efforts to try it out, maybe restructure is the wrong word but let me use it, restructure the sales force, increase for customer focus, really kind of the sensitive to the end-market condition. When you say that you're up 1% down 1%, are you able at all to pass out of that, how much is your success and your market share gains and how much of that is really just with market stabilizing.

Kumarakulasingam Suriyakumar

That you know Franco that’s a very good question that something that actually we are unable to separate it simply because if you take a sales person, we are constantly having new revenues. We have no comparison with other public companies and so on. But we all the time measure our performance of the sales people although we don’t publish those numbers. We know we are getting new revenues, but what happens is constantly sometimes you get new revenues from the same customers because we are serving them in areas we didn’t serve them before.

We are selling them color, we are selling them additional, digital an so on and so forth and then of course we are getting new customers. But at the same time the same customer their traditional businesses are dropping. So, it’s a very hard thing to separate but all we know is because we are in the business of acquiring companies for long-time, we are starting to get a feel because we are obviously having enquiries and we have put the acquisitions on hold because we believe its not yet time for us to kick start our acquisition program. So in getting to see some of these numbers we realized, that competitors in our market place have taken a much bigger drop than we have, so that allows us to come to a reasonable conclusion that our sales efforts and the drive to make our company more sales driven, that’s the term I used to use and obviously you remember that well, in order for us to be more product focused unlike being division focused those days.

All those efforts, we think are showing results and I think that is why our revenues are stabilizing. I think our revenues are stabilizing for a reason, because if you look at all the macro projection and look at what everything going on in the non-residential space, we should still be experiencing substantial amount of erosion. I mean without a question because every industries you see, and every projections you see are showing a negative trend. But the reason I think is flattening out is that because of the efforts we are doing, using our size, using our footprint, and the scope and the technology, its showing results.

Franco Turrinelli - William Blair & Company

Jonathan, just a real quick one here, so you are essentially expecting a charge for the refinancing but that charge has not yet being quantified or identified. Is that why it's not in press release, but it maybe in the 10-Q. Is that how we need to think about it?

Jonathan Mather

Yes. 10-Q we’ll file it early next week and we are fine tuning that number. The first point is, Franco, we’ve said, impairment cost, amendment charge for this refinancing including interest rate swap would range from $3.2 million to $4 million or so. That’s a one charge. However, there is an element of that which applies to quarter three 2009 and that’s what we’re trying to fine tune. It could be in the range as said $700,000 to $1.3 million in that range is what we think is going to be booked. We are fine tuning it with the auditors' etcetera, it maybe zero but I think it's more likely and we should have the number in the next 24 hours so that we would included it in our Q.

Franco Turrinelli - William Blair & Company

It just wasn't ready for the press release which is why you highlighted but it might be there but it's not in the numbers as in the press release.

Jonathan Mather

That's why we just share the range that we calculating it to be.

Franco Turrinelli - William Blair & Company

I'm sorry for one last one and then I really will allow other people ask you question. So you've already answered this but let me ask it explicitly. You've restructured the debt, you are producing great cash flow, your competitors are herding more than you are, boy it would seem about time to kind of crank up that acquisition and its obviously still too early as you said, but what's it going to takes for you to get out there and think of some of these distressed access.

Kumarakulasingam Suriyakumar

Confirmation that the market actually has bottomed out, confirmation that our competitor have actually bottomed out more than we bottoming or the market bottoming out, the confirmation that the competitors have bottomed out, because we don't want to buy an assets, lets say at revenue of $5 million because of what it is, and where they are, watch them go down to $4.5 million or $3 million of whatever that number is.

I mean even if they were going up, I would rather buy them on their way up at $3.5 million from $3 million than to buy when they are going down. And in a way if you think about it, it's a cynical way of looking at but it's just will happen, we have the acquirers, so I guess we have to speak in the best interest of ARC. If their competitors are going away and I'm getting everything for free then I may also take it that way. That's another objective because we have seen competitors go away in some markets especially smaller markets.

We don’t expect that to be wide spread but we certainly think there will be more opportunities although, we are not buying companies Franco we are very active in the marketplace talking to the people because that’s a right thing to do because we don’t even have to reach out because we are getting the calls. And the thing is to keep a pulse on the marketplace which is what we are doing. We think the opportunity will come, we all know that and its no secret. This is brutal downturn and it's hard to escape that if you are a small company.

When the time is right, we'll do it and the way I'm looking at it is, we just don’t feel we should open it up now. As you can see from our results, we have the cash, we have refinanced so we have the structure ready to go. It’s a matter of we feeling confident this is the right time so that it will be truly accretive to everything what we are doing.

Franco Turrinelli - William Blair & Company

Well I like the up part of a roller coaster ride better too.

Kumarakulasingam Suriyakumar

Absolutely. Me too. Thank you.

Operator

Your next question comes from the line of David Manthey with Robert W. Baird.

David Manthey - Robert W. Baird & Co.

I was wondering in terms of the business lagging in economic cycle both in and out. I'm wondering is that still true today and if so the upturn or the stabilization you’re seeing right now seem to be fairly concurrent with the economic cycle. Could you fill us in on and if there isn’t any change in that view.

Kumarakulasingam Suriyakumar

Not really, absolutely we lagged the cycle. There is now question about it. That’s just what it is, that is the industry and we lag the cycle. But if you note what I said, specifically, we don’t think that upturn is in because the entire industry is turning up. We think the upturn is not really an upturn, but actually a nullification of the erosion because of our efforts and just because of our position in the industry. So, I wouldn’t call it an upturn. I am not even referring to as an upturn.

I thinking stabilization and the stabilization wouldn’t have come now really David. The stabilization would have come much later on. I think the stabilization is coming because of our technology, because of our additional sales, because of our efforts in non-AEC, because our efforts in large national customer account. So, all of that additional efforts is actually resulting in somewhat differing that erosion that’s what’s happening. I wouldn't classified as an upturn just yet.

David Manthey - Robert W. Baird & Co.

Second, as it relates to the upturn in the industry whenever that happens, should we still think about in terms of sort of eight to 10 months from approval to the bid where you'd actually see some revenues really flow in a meaningful way? If that’s the case, are you seeing anything on the front end of the pipeline that give you gives you some confidence that we might see something by, I don’t know, later next year or something?

Jonathan Mather

Six to 12 month is what we talk about one can say eight to 10 months or. Generally, it could be anywhere from six to 12 months depending on the size of the project. Larger projects have a larger lag time. We haven’t seen any uptick that’s not there yet for sure, especially in non residential. The answer to the uptick part of it is, are we seeing anything in the pipeline no, everybody is talking about projects, everybody is looking at possibilities, but they are all on holds based on credit, that’s the biggest thing. Is the credit available for what you called construction community, the bigger answer is no or the answer is not yet. So we're not seeing up tick, but generally it takes about six to 12 months.

David Manthey - Robert W. Baird & Co.

And then final question, Sir I appreciate it and forgive me if this is in the release, but do you give data in terms of number of active customers or is there a some kind of way that you can show that we are gaining share because I would imaging most of your customers are down in terms of what they are doing with you but if you could show that with the number of customers that we're doing business with has increased that would help sort of hang some context around what you are talking about.

Kumarakulasingam Suriyakumar

No, we don't do that on a quarterly basis. In fact we don't practice on a quarterly basis David. Every year or so we just take a quick count to know what our total number of customer is and it used to fluctuate significantly because of our acquisition strategy but of course that has changed quite a bit now because we have not acquired what you called new companies. But it's something that we can look at -- it's a fluid number because we have lot of small customers, daily customers and so on and so forth. But unfortunately I don't have a number for you on that.

Operator

(Operator Instructions). There are no further questions in queue. Mr. Stickney do you have any closing remarks.

David Stickney

Yes, I just wanted to say thanks to everyone for their continued interest in the company. We appreciate your attendance and attention on this call and by all means have a great evening. Thanks so much.

Operator

Thank you for participating in today's conference call. You may disconnect at this time.

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