Sensient Technologies' CEO Discusses Q4 2013 Results - Earnings Call Transcript

| About: Sensient Technologies (SXT)

Sensient Technologies Corp. (NYSE:SXT)

Q4 2013 Earnings Conference Call

February 10, 2014 11:00 AM ET


Steve Rolfs – SVP Administration

Paul Manning – President & CEO

Dick Hobbs – SVP & CFO


Mike Sison – KeyBanc Capital Markets

Edward Yang – Oppenheimer & Co.

Christopher Butler – Sidoti & Company


Good morning, everyone, and welcome to the Sensient Technologies Corporation 2013 fourth-quarter and year-end conference call. Today's call is being recorded.

And at this time, for opening remarks, I would like to turn the call over to Mr. Steve Rolfs. Please go ahead, sir.

Steve Rolfs

Good morning. I'm Steve Rolfs, Senior Vice President, Administration of Sensient Technologies Corporation. I would like to welcome all of you to Sensient's conference call to discuss 2013 fourth-quarter and year-end financial results.

I'm joined this morning by Paul Manning, Sensient's President and Chief Executive Officer; and Dick Hobbs, Sensient's Senior Vice President and Chief Financial Officer. Earlier today, we released our 2013 fourth-quarter and full-year financial results. A copy of the release is now available on our website at

Before we begin, I would like to remind everyone that comments made this morning, including responses to your questions, may include forward-looking statements as defined in the Securities Litigation Reform Act of 1995. Our statements may be affected by certain factors including risks and uncertainties, which are discussed in detail in the Company's filings with the Securities and Exchange Commission.

We urge you to read Sensient's filings for a description of these factors. Please bear these factors in mind when you analyze our comments today. Now, we'll hear from Paul Manning.

Paul Manning

Thank you, Steve. Good morning.

Sensient reported diluted earnings of $0.63 per share in the fourth quarter, excluding the impact of restructuring costs. This is a fourth-quarter record and an increase of 15% over the $0.55 reported in the comparable period last year.

The strong fourth-quarter performance was driven by operating profit growth at each of the groups. In particular, the Color Group delivered 16% growth and Asia-Pacific grew by 30%. Overall, Sensient's operating income, excluding restructuring costs, increased by 12% in the fourth quarter.

The Company's operating margin showed solid improvement. Excluding restructuring costs, Sensient's consolidated operating margin increased 150 basis points to 12.6%. Each of the groups contributed to this improvement.

The Color Group's operating margin improved 280 basis points to 20%, and the Flavors & Fragrances operating margin increased 70 basis points to 13.9% in the fourth quarter. The improvement resulted from our continued emphasis on selling value-added, technology-driven products, and our focus on cost reductions.

For the full year, diluted earnings increased 9% to $2.71 per share, excluding the impact of restructuring costs. This is an all-time high for EPS.

Operating income, excluding restructuring costs, increased 7% for the year to $204 million from $191 million in 2012. Consolidating operating margins for the year, adjusted to remove the restructuring impact, increased 13.9% from 13.1% last year.

Sensient also delivered record cash flows in 2013. Cash flows from operating activities, excluding the impact of restructuring costs, were $168 million in 2013, a 19% increase from the 2012 result of $139 million.

We have completed our restructuring activities, which led to the consolidation of multiple facilities throughout the Company. The total restructuring costs incurred this year were $31.7 million, slightly less than our original estimate of $32 million. Each of the groups generated cost savings in 2013, and the total savings achieved during the year were consistent with our original estimates.

The Color Group delivered a strong performance in 2013 and is well positioned for future growth. We are the global leader for food and beverage colors, and we have the unique ability to provide both synthetic and natural color solutions to our customers.

We're also the global leader for digital inks and cosmetic ingredients and have strong capabilities in pharmaceutical excipients. The Digital Inks, Cosmetics and Pharmaceutical businesses each delivered double-digit profit growth this year.

The Color Group generated operating margins of 20% or more in every quarter of 2013. This margin level is sustainable, and we anticipate upside in the future.

The Flavor business made several fundamental changes in 2013. We relocated the US Flavor headquarters to Chicago, which improved our access to both customers and technical talent.

We realigned globally the commercial and technical activities around three key market segments: savory, sweet, and beverage flavors. This alignment leverages our existing capabilities and allows Sensient to provide dedicated teams to each segment.

We believe this focused approach improves our ability to deliver innovation and value to our customers. I was encouraged by the Group's fourth-quarter results, and I'm optimistic about the growth opportunities for this business.

Sensient has regularly increased its dividend payments allowing shareholders to participate in the Company's success. Last April, the Board of Directors increased Sensient's quarterly dividend to $0.23 per share. This is the fourth consecutive year that Sensient increased its dividend. The consistent dividend increases demonstrate the Company's commitment to shareholder value. We will be evaluating opportunities to increase the dividend during the year.

There are many reasons to be optimistic as we begin 2014. We had a strong performance in 2013, delivering record revenue and earnings per share for the fourth consecutive year. We continue to execute on our sales strategy of providing value-added products, which has increased our operating margins.

The Color and Asia-Pacific businesses will continue to thrive. Flavors & Fragrances will also have an improved performance in 2014. We have shaken up our Flavors business, modifying our strategy, organizational structure, and technology focus to create stronger value for our customers.

Corporate-wide, we have increased our focus on improving our return on invested capital and cash flow from operations, and we expect to see progress on both of these fronts during 2014. And we have completed our restructuring program, consolidating several facilities and significantly reducing our cost structure.

I'm confident about our growth prospects for 2014, and we expect to report earnings between $2.86 and $2.94 per share this year. Dick Hobbs, our CFO, will now provide you with the details for the quarter.

Dick Hobbs

Good morning. Sensient reported another year of record revenue, as well as record operating income, net earnings, and earnings per share before restructuring costs.

Annual revenue was $1.47 billion in 2013 and $1.46 billion in 2012. Operating income, as reported, was $172.4 million in 2013 and $191.2 million in 2012.

Before restructuring costs, operating income in 2013 was $204.1 million, an increase of 6.7%. Before restructuring costs, 2013 operating margins were 13.9%, an increase of 80 basis points. Non-strategic products were replaced with higher-margin value-added products, which significantly increased operating margins.

Foreign currency translation did not significantly impact revenue or operating income in 2013. Diluted earnings per share, as reported, were $2.27 in 2013 and $2.49 in 2012. Before restructuring costs, 2013 diluted earnings per share were $2.71, an increase of 8.8%.

Sensient reported revenue of $351.1 million for the quarter ended December 31, 2013, and $356.2 million in last year's fourth quarter. Operating income in the fourth quarter, as reported, was $38.6 million and $39.7 million in 2013 and 2012 respectively.

Before restructuring costs, operating income in 2013 was $44.3 million, an increase of 11.5%, and a fourth-quarter record. Before restructuring costs, 2013 fourth quarter operating margins were 12.6%, an increase of 150 basis points. Foreign currency translation did not significantly impact revenue or operating income in the fourth quarter.

Diluted earnings per share, as reported, were $0.56 in the fourth quarter of 2013 compared to $0.55 in 2012. Before the impact of restructuring costs, 2013 fourth-quarter earnings were a fourth-quarter record of $0.63 per share, an increase of 14.5%.

Sensient's cash from operating activities, as reported, was $153.6 million for 2013 and $139.4 million for 2012, an increase of 10%. Excluding the impact of the restructuring costs, cash from operating activities in 2013 was $166.4 million, an increase of 19.4%. The Company made capital investments of $104.2 million during 2013 and $103.8 million during 2012 for purposes of upgrading its production facilities and expanding its technical capabilities.

Total debt as of December 31, 2013 was $355.2 million, compared to $354 million as of December 31, 2012. The Company's debt to total capital ratio improved to 22.2% at December 31, 2013, from 23.5% at the end of last year. Debt to EBITDA improved to 1.4 at the end of 2013, from 1.5 one year ago.

I'll now take a brief look at the results of our operating groups. Sensient's Color Group reported revenue of $494 million for 2013, compared to $499.2 million in 2012. The Color Group's operating income was $103.6 million, an all-time high, and an increase of 7.5% from $96.4 million reported in 2012.

Foreign currency translation had minimal impact on both revenue and operating income in the year. Operating margins increased 170 basis points to 21% in 2013. Strong performances from Food Colors, Cosmetics, Pharmaceuticals, and the Digital Inks businesses drove the increased results.

Revenue for the Color Group was $115.7 million and $115.6 million for the fourth quarters of 2013 and 2012 respectively. Fourth-quarter Color Group operating income increased 16.2% to a fourth-quarter record of $23.1 million in 2013, from $19.9 million in the prior year. Foreign currency translation had less than a 1% impact on both revenue and operating income in the quarter.

The Flavors & Fragrances Group reported revenue of $881.3 million in 2013 and $875.3 million in 2012. Operating income was $122.4 million in 2013 and $123 million in 2012.

Foreign currency translation had minimal impact on both revenue and operating income in 2013. Operating income was impacted by increased manufacturing and raw material costs earlier in 2013. Revenue for the Flavors & Fragrances Group was $210.1 million in the fourth quarter of 2013 and $216.9 million in the same period last year.

Operating income increased 2% to $29.2 million, from $28.7 million in the fourth quarter of 2012. Operating margins were 13.9% in the fourth quarter of 2013, an increase of 70 basis points from the prior year.

Improved product mix in the fourth quarter drove the increase in operating margins. Foreign currency translation impacted revenue and operating income by less than 1% in the quarter.

Revenue in the Corporate & Other segment, which includes the Company's operations in China and the Asia-Pacific region, and certain Flavor operations in Central and South America, was up 3.3% to $150.4 million in 2013, compared to $145.6 million in the prior year.

For the fourth quarter of 2013, revenue was $38.1 million, an increase of 2.9% from revenue of $37 million in the fourth quarter of 2012. In local currency, revenue for these businesses grew 6% for the year and 8% in the fourth quarter.

For 2014, we expect the effective tax rate to be in a range of 31% to 32%, and more evenly distributed throughout the year. As Paul stated, Sensient expects 2014 diluted earnings per share to be between $2.86 and $2.94.

Steve Rolfs

Thank you very much for your time this morning. We will now open the call for questions.

Question-and-Answer Session


(Operator Instructions) Your first question comes from Mike Sison of KeyBanc.

Mike Sison – KeyBanc Capital Markets

Paul, can you give us a sense -- you talked about shaking up the Flavors segment, just maybe color there. What did you do, and where do you think you are now in terms of improving profitability with the changes you've made?

Paul Manning

Well, I would say that that really goes back to October 2012, when we really made the declaration that we needed to shake up this business. I think it's taken a couple different dimensions.

Number one, we looked at the strategy of this business. In other words, how do we create value? What makes us different in this business?

And we recognized that we were overly focused on Ingredient sales and less so on Flavors, and more importantly, technology-driven flavors that create not only unique tastes to customers but also compelling health advantages to the products. For instance, lower salt or lower fat, et cetera. That was the strategy piece.

The other piece is organizationally. We had a rather complex organization, in my estimation, in particular in Europe.

So in an effort to more directly align with our customers and the relevant market segments, we instituted a fairly broad-based organizational change throughout Europe and North America to address this limitation in the business.

The other piece of this was -- and not too dissimilar from the organizational piece -- was a restructuring, in which we did consolidate a number of the sites throughout the Flavor group, finding opportunities to improve efficiencies, to improve costs. And again, we go back to that simple concept, to make the operation more simple.

And then, of course, as you then get into the businesses, we looked very closely about how we organize our sales force, how we manage our staff, and how do we identify the top-performing people and find ways to retain and really grow them within the organization so that we can have more internally-based promotion opportunities for our personnel. Those were big changes.

I think another big change was an increased emphasis on product development from a much longer time period, and doing so systematically throughout the organization.

And then I would say probably a last point would be a more systematic approach to knowledge transfer, whether that was technically-based, commercially-based or production.

So I would tell you those are kind of broad brush, some of the key areas we've looked at. I think we started to see the signs of life.

You see we've got some improvement. It's nowhere near where we're going to be, and where we want to be; but I would tell you that the future for Flavors is very bright.

As you know, it's a large piece of our business; and so I think that's going to be a much more positive impact for the Corporation in 2014 and beyond.

Mike Sison – KeyBanc Capital Markets

Great. And in terms of the progress we should expect in 2014, can you maybe give us a little bit of help? Do you expect -- what type of margin improvement do you see in 2014, or what type of earnings growth you should see for that segment in 2014 based on the progress that you've made?

Paul Manning

I think it's safe to say that we're going to see gross margin and operating margin improvements. Not only from the strategy of higher-value products, but also taking advantage of some of our cost reductions, which came -- the cost reductions came principally at the gross margin line.

But I would estimate the operating profit growth, I feel very comfortable with telling you mid single digits on OP, with improvements again on gross margin and operating margin. I would anticipate SG&A being flat to perhaps even down, and then I would anticipate some growth in revenue.

Now, one of the things I'll mention, and you saw how we did this in the Color group, and we were able to generate a lot of improvement in operating profit in the Color group, along with gross margin and operating margin, by taking a very, very specific approach to the market.

We have a very disciplined strategy with respect to what we're going to sell. And so for that reason, you recall over the last couple years, we've culled a fair amount of that business in the Color group.

I would expect, as I've mentioned previously, a similar approach to Flavors as we had in Colors. I think it's an effective model. It creates a lot of discipline and focus in the business, not only commercially but technically.

Mike Sison – KeyBanc Capital Markets

Okay. And just a follow-up there. I know you guys like to be conservative, but your mid-single digit operating income growth doesn't really seem terribly exciting, given the fact you've made a lot of changes. Is there some headwinds that are preventing you to grow earnings faster in Flavors & Fragrances in 2014?

Paul Manning

No, I think you hit it when you said we tend to be a bit conservative in that guidance. I suppose you could say you can give it, but you can't take it; and so we want to make sure we deliver.

We're always looking for upside and certainly there could be in any one of the groups. But, no, I don't see any major impediments to achieving our goals in 2014.

Mike Sison – KeyBanc Capital Markets

Okay. Great. Thanks.


Your next question comes from Edward Yang with Oppenheimer.

Edward Yang – Oppenheimer & Co.

Just starting with the topline, could you break out volume and price? I know FX wasn't much of a factor, but how much of the revenues were driven by volume or price, and by segment if possible?

Paul Manning

Let me take the first part of that, and then I'll turn over to Dick for a few more details. As you look at each one of the revenues that we had in Q4, as I've been describing in Color, when you remove the impact of the elimination of a piece of tolling business, the underlying topline growth has been about 6% or 7%. In fact, I can tell you that in January, the topline growth ex this tolling was 7%.

So again, I think that's the underlying growth. I think the business looks very good across the board, and you should see that moving forward.

As for Asia-Pacific and the other corporate businesses that we describe, Corporate & Other, actually, FX had a fairly substantial impact there. And in the fourth quarter, that topline growth was about 8%, and that's straight-up. There wasn't any, and there hasn't been any major initiatives with respect to the culling piece.

When you look at Flavors, that's really where the -- underlying growth right now, Q4, I would tell you it's more like when you add back the impact of the culling, it was low single digits on topline.

We've had some culling throughout, in particular some of the ingredient businesses, and in fact, some of the low-margin beverage-based CSD business, where we didn't have much of an offer. And it was largely a pure revenue volume basis sale.

So that's kind of the underlining revenue that we're seeing right now, and Dick can give you some more details about the volume distinctions.

Edward Yang – Oppenheimer & Co.

I'm sorry, Paul, you're saying the culling impact. So in Flavors, it was about mid single digits or low single digits?

Paul Manning

Yes, because in the fourth quarter, we were down about 3 and change. When you add back the impact of the culling, yes, you're in low single digits.

Edward Yang – Oppenheimer & Co.

And that's expected to continue in 2014, for both Color and Flavors?

Paul Manning

Well, for Color, one of the comments I made in the past is once we hit certainly end of this quarter you're going to see most of that go away. There was a little bit residual in April, even less so in May. But in essence, yes, the culling impact in Color is cleaned up substantially at the end of this quarter.

Edward Yang – Oppenheimer & Co.


Paul Manning

I don't anticipate further impact. We've been working on that for some time. I'm very pleased with the portfolio hereafter.

Flavor, it's a little bit of a longer duration program. Certainly, we're not going to get through that by the end of the year. I don't anticipate that it would be as aggressive as you're going to see in the first year here.

So in other words, as we get into 2015, the impact would be less. But certainly there is some residual culling from 2013 that's going to carry into 2014, plus whatever we may determine in 2014 should be put into that category.

Edward Yang – Oppenheimer & Co.

So it sounds like at least on the Flavors side, -- on the Colors side you said January was up 7%, so you'll see mid single digits growth there. But on the Flavors side, it sounds like that might be negative for the year, mainly as a result of culling of that low-margin revenue?

Paul Manning

Yes, I think that would be a fair statement. And what I'll do is, each quarter, I'll give you kind of an impact distinction between the straight number and then when you factor in what we deliberately and intentionally culled from that portfolio. And I think that should give you a pretty good sense of the underlining growth then.

Edward Yang – Oppenheimer & Co.

Okay. And the breakout between price and volume, which was the stronger contributor?

Dick Hobbs

In the case of -- let me just go back in general to respond to Paul's comments about Color, and then back to Flavor again.

Color was very strong. And as Paul mentioned, when you take out the tolling impact, they had very good growth, very good volumes, particularly in the focus areas, that we talked about a little bit in the script

We talked about Cosmetics; we talked about Pharmaceutical; we talked about the Digital Inks. So certainly, we had key areas of the business where we saw very significant growth.

And so with Color, as Paul mentioned, when we lap that tolling operation, you're going to continue to see very nice growth there. But all the while, you'll continue to see the positives in the operating profit.

Now, with Flavors & Fragrances, certainly the moves that were made there, while they did include some pricing along with the culling, much of the pricing was to offset raw material costs, but also related to the mix, and the fact that we did end up net-net with a much more favorable mix in Flavor.

And so, while some volume did come out in that process, we did not lose share in any area of the business.

Edward Yang – Oppenheimer & Co.

Okay. All right. Just moving on to margins, it was very nice to see the improvement in Flavors margins year-over-year.

And I think, Paul, you mentioned some of the structural changes you made in Europe.

Could you give us an update in terms of where European Flavors margins are, relative to North America, and some of these organizational changes you made? How much of a percentage improvement in margins in Europe have you made by taking out some of these redundancies in costs?

Paul Manning

Well, I would say this. The upside in Europe is substantial.

Much of our very good growth in Flavors right now is coming from our Eastern European over to Turkey/Russia region of the world. And so we have made substantial investments over there, with respect to technical and sales people. We are now fully staffed.

And so moving forward, we expect the underlining growth, which has been well into the double digits, to continue moving forward. There's going to be a good improvement there in gross margin year over year.

I think that certainly Europe has not been as profitable as our North American operations have been, and so the opportunity is much larger there.

Getting back to the element of the question which points to the restructuring, a number of those consolidations did take place in Europe. We consolidated several of the facilities in 2013, so we will definitely see the impact in the gross margin line.

Fewer of those reductions were directed at SG&A, so I would caution you on that front. In other words, you'll see the improvement in gross margin before you're going to see it in SG&A. But just the same, I would expect to see a fairly flat SG&A in that region year over year.

And then again, in terms of the US, which is a business that has a much stronger --and I should say North America, Canada and Mexico being included in my definition of it -- you would see a much better gross margin than in Europe.

But, yes, you hit it right on. Europe is the area of most interest with respect to improving that.

And it's going to take the same format as the overall plan here, with a stronger emphasis really on upselling the portfolio. That is where we need the strongest amount of work in the Flavor group.

Edward Yang – Oppenheimer & Co.

Okay. Thank you.


(Operator Instructions) Your next question comes from Christopher Butler with Sidoti & Company.

Christopher Butler – Sidoti & Company

Just staying on the margin question, Dick had mentioned raising prices because of raw materials. Were you getting those price increases ahead of raw materials, or were those concurrent when looking at the fourth quarter?

Paul Manning

Well, in some cases they were concurrent. In other cases, we were ahead of the raw materials. And still in a third scenario, we were a bit delayed in taking those prices for the increased raw materials. So it's a little bit of a mixed bag.

As we look at 2014, we don't anticipate and we have not yet experienced any major pushback because, I suppose in part, much of the pricing was fairly nominal for the year. I think there are some crop-based products that, yes, there is a standard volatility you're accustomed to seeing in many of those.

But by and large, we are getting the pricing and communicating fairly far in advance with our customers on those points.

Christopher Butler – Sidoti & Company

So just trying to get my arms around an 80-basis-point gross margin improvement sequentially. Could you break that down on how much of that's due to tolling versus maybe getting some prices or restructuring?

Dick Hobbs

Are you referencing only Flavor, or are you looking at the whole Company?

Christopher Butler – Sidoti & Company

Well, I was looking at overall; but if you want to just look at Flavor, that's fine.

Dick Hobbs

I think Flavor -- the majority of that increase was relating to the mix improvement and the things that Paul was talking about with the culling.

However, I should point out, and to add on to what Paul said, organizationally the things he's doing in places like Europe and in general around the world will make a difference with the business, as well as with the costs that have been taken out.

So you will see the margins going up in 2014 from some of those changes that have been made, from some new product activity, and as well from the culling that Paul referred to as it relates to the Flavor group.

And Color, as we said, once we lap the toll manufacturer, you're going to see a lot of things that will come to light about the positive nature of a number of the areas within the Color group. And that will play very nicely on the numbers you'll be seeing, particularly after the first quarter.

Christopher Butler – Sidoti & Company

And just staying on the strategic shift part of your comments, it sounds like the restructuring is done. What's next on tap?

Is there more consolidation that's needed? Do you need to make more investments in order to better go after the higher-margin sales that you want to move towards? What else do we have coming?

Paul Manning

Well, specific to restructuring, we don't have any plans specifically for 2014 at this time. But really, like any good Company, we're always looking to make improvements.

And I think we have a lot of improvement to be made in return on invested capital. There are still a lot of improvements that we can make internally from a cost standpoint, whether it's consolidations or looking at headcount in certain areas.

So I would tell you that anything is on the table; but again, no definitive plans as I'm sitting here right now.

Christopher Butler – Sidoti & Company

What are you looking at in 2014 for depreciation and then CapEx?

Paul Manning

I'll answer the CapEx piece, and then I'll let Dick answer the depreciation piece.

I would say as we've guided, and we're still consistent with our previous guidance of $80 million to $100 million. Again, since we don't have a major restructuring item that we would add to that as we did in 2013, I think that's a fairly good number to work with.

What we're finding is that our performance of our recent investments has been very good, and we're very pleased with those returns. And so therefore, in addition to containing some of those costs moving forward and continuing to grow our operating profit, I would tell you that there is upside.

There is very good upside on return in invested capital, and I'm not blind to the fact that's a real pinch point right now. But the upsides are there, and you'll see those improvements.

Dick Hobbs

For depreciation, 2013 was $52 million. 2014, our estimate is $54.8 million.

Christopher Butler – Sidoti & Company

And just finally, could you talk about the Natural Colors in the United States and how that's progressing? And then maybe tie in new product development by customers overall and how that may be helping you or hurting you as you look forward to 2014?

Paul Manning

I would tell you that the US market is certainly still behind Europe in terms of its developmental path. You could probably say they're in the third inning of a nine-inning game, whereas Europe may be more like seventh inning.

Interestingly enough, we had very good performance in Europe over the last year with respect to not only Natural Colors, but also what they would describe as well as coloring food stuffs. Not to get into a regulatory debate, but you can think of that as somewhat of a derivative of Natural Colors for purposes of this call.

If you want a regulatory discussion, we can sit down and have that, but probably not necessary.

As far as the US concerns, the product development in terms of new launches in the US still tends to be very stagnant. It still tends to be a bit behind where it's been in 2010, 2011 and 2012 principally.

As you've seen with many of the releases for many of the people that would be our customers, we're seeing a lot of declines on some of their base businesses. And so some of the pacing on the product development has slowed, and it continued to slow and to be slower than it has been historically in the last three to four years, in 2013 and 2014.

So really the growth there will continue to come with -- there are still product launches, obviously. The acquisition of new customers and it's taking share, because what we find is that we're able to take share on the technically advanced opportunities.

Anybody can go take share when selling things at cost and take share from competitors, but that's not real sustainable business, and that tends to be an area that we shy away from.

We focus on taking share on the more technically-advanced opportunities which are going to generate the sustainable business, the profitable business, and the business that's most closely aligned with our business strategy for the Color group.

So, yes, we still see good opportunities. They've slowed a bit in the US but Europe continues to move along.

And again, our positioning with respect to some of the other derivatives of Natural Colors is very good; and we're seeing good growth there.

Christopher Butler – Sidoti & Company

I appreciate your time.


There are no additional questions on the phone line. I would now like to turn the call back over to management.

Steve Rolfs

Thank you again for your time this morning. That will conclude our question and answer session.

If anyone has a follow-up question, feel free to call the Company after the call. Thank you.


That does conclude today's conference call. You may now disconnect.

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