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Crown Media Holdings, Inc. (NASDAQ:CRWN)

Q4 2013 Earnings Conference Call

February 21, 2014 11:00 am ET

Executives

William J. Abbott - President and Chief Executive Officer

Andrew Rooke - Executive Vice President and Chief Financial Officer

Charles L. Stanford - Executive Vice President, Legal and Business Affairs and General Counsel

Allison Bennett - Director, Corporate Communications and Media Relations

Analysts

Michael Pace - JPMorgan

James C. Goss - Barrington Research

Peter - Stifel Nicolaus

Lawrence M. Stern - Stern Capital

Bill Gordon - Gordon Capital

Operator

Good day, ladies and gentlemen, and welcome to the Crown Media Fourth Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, this conference call is being recorded.

Today's presentation includes forward-looking statements regarding the Company and its performance. The forward-looking statements may concern, for example, expected financial positions and operating results, its business strategy, its operating and financing plans and other matters. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those contained in or implied by any forward-looking statement and should be considered in conjunction with the cautionary statements included in our press release and our most recent reports filed with the Securities and Exchange Commission, including our most recently filed annual and quarterly reports. Any forward-looking statements are made only as of the date of this conference call, based on information known today in the Company's management. The Company is not undertaking any obligation to update any forward-looking statement.

I would now like to turn the call over to Allison Bennett. Go ahead, Allison.

Allison Bennett

Thank you. Good morning, everyone, and welcome to Crown Media's fourth quarter conference call. With me today are Bill Abbott, President and Chief Executive Officer; and Andy Rooke, Executive Vice President and Chief Financial Officer. Bill and Andy will comment about the operating results and financial performance for the three months and year ended December 31, 2013, and then we will open up the call for questions. I would like to remind everyone that our press release, which contains information on non-GAAP measures, was distributed this morning and is available through the Investor Relations section on our website at ir.crownmedia.net. In addition, our 10-K will be filed today.

Now, I would like to turn the call over to Bill.

William J. Abbott

Thank you, Allison. Good morning, everyone, and thank you for joining us today. I'm pleased to report positive results for fourth quarter and full year ending December 31, 2013. We experienced sold growth in advertising revenues and subscriber license fees, driving an 8% increase in total revenue as compared to 2012. This increase carried over to our bottom line with adjusted EBITDA increasing by 16% for the year.

2013 marked some exciting development for Crown Media for both our networks. The year commenced with Hallmark Movie Channel surpassing the significant distribution milestone of 50 million homes and it culminated in record ratings for Hallmark Channel in fourth quarter. In addition, we launched Hallmark Movie Channel's own holiday initiative, The Most Wonderful Movies of Christmas, and debuted Hallmark Channel's first ever original scripted series, Cedar Cove, both to great success.

To give a complete picture of the strategic initiatives we implemented last year and how they impacted our business I will now review fourth quarter and 2013 full-year operating results. In the area of content and ratings, Hallmark Channel kicked off fourth quarter on a high note, propelled by the Season 1 finale of Cedar Cove and the latest instalment of our Good Witch franchise which showed 2.2 and 2.4 household ratings respectively. With the November 2 launch of Countdown to Christmas, ratings from that then picked up speed and continued to build through the end of the year, resulting in a number of all-time highs for the network.

In addition to fourth quarter, the Hallmark Channel's highest rated quarter to date, the final three months of 2013 marked the network's highest month, December; two highest weeks, November 25 through December 1, and December 9 through December 15; and highest day, Sunday, November 10, to-date. In addition, fourth quarter also delivered the Channel's highest rated telecast to date with the November 10th premiere of A Very Merry Mix-up which garnered a 3.9 household rating and was seen by nearly 6.1 million unduplicated viewers.

With 1,300 hours of 24/7 holiday programming, Countdown to Christmas reached more than 68.7 million viewers overall. The strategy we embarked on in 2012 to consolidate our new original movies under the banner, The Twelve New Movies of Christmas, has appreciatively raised the profile of the franchise and cemented Primetime on Hallmark Channel as the top destination on cable during the holidays.

Our 2013 new original movie premieres attracted more than 23 million unduplicated viewers and elevated Hallmark Channel to rank as the #1 cable network among households and women 25-54 for weekend primetime Saturday and Sunday 8 to 11 PM throughout the holiday season; and #2 among households and total primetime Monday through Sunday 8 to 11 PM, second only to ESPN. Against virtually 20,000 individual cable telecast each week, 11 of the 12 new Hallmark Channel original premieres ranked among the top 10 cable programs for the entire weeks in which they premiered, with four of the 12 ranking as the number two program of the week excluding sports.

Further demonstrating the dominance of Hallmark Channel during the holiday, the network recorded the highest year-over-year viewership growth in Total Day of all 103 ad-supported cable networks for fourth quarter 2013 versus fourth quarter 2012 average. For the full fourth quarter, Hallmark Channel registered notable annual growth in Total Day across every demographic including; women 25-54, 10%; women 18-49, 19%; adults 18-49, 16%; adults 25-54, 12%; and persons 2+, 23%. In addition, the network saw year-over-year growth in Total Day across key demographics including 4% among women 25-54, 6% among women 18-49, and 5% among households versus 2012.

Hallmark Movie Channel also saw a strong finish to the year with fourth quarter 2013 marking the network's highest rated quarter-to-date in Primetime and in Total Day among households, women 18-49, adults 18-49, and persons 2+. In addition, buoyed by its new holiday franchise, The Most Wonderful Movies of Christmas, Hallmark Movie Channel experienced its highest rated week, November 18-24, and the highest rated month, November, in network history.

The Most Wonderful Movies of Christmas also delivered the network's most watched original movie ever among households and women 25-54 with the November 25th premiere of Christmas with Tucker, which earned a 1.2 household rating and drew 615,000 households and 124,000 women 25-54. For the full year, Hallmark Movie Channel saw 27% increase among households and 30% among persons 2+ versus 2012.

On the distribution front, Hallmark Channel's universe estimate is now 86.4 million homes for February 2014, a decrease of 1.2% or 977,000 homes from February 2013 universe estimate. This decrease is due to the continued migration from cable to telco as well as Nielsen shifting its methodology to include broadband only homes in its sample which has resulted in universe declines for the majority of cable networks across the landscape.

We continue to expand carriage of Hallmark Channel HD, adding 75,000 new HD subscribers to the network in fourth quarter, including launches on Comcast, Charter and various NCTC members nationwide. In addition, we secured a number of regional launches and positive repositions in fourth quarter that generated additional subscribers in various markets around the country.

Hallmark Movie Channel's carriage continues to grow as a result of new launches and positive repositions Hallmark Movie Channel is now in 53.3 million homes, marking an annual increase of 3.5 million households or 7% since 2013. From February 2013 to February 2014, Hallmark Movie Channel has averaged a monthly increase of 293,000 Nielsen subscriber homes, the eighth largest of all 113 measured cable networks. In October, DIRECTV launched Hallmark Movie Channel on the entertainment and premiere tiers, resulting in 2.3 million new subscribers. We secured additional launches and positive repositions in fourth quarter with affiliates nationwide including Comcast, Charter and DIRECTV as well as several NCTC members.

On the advertising sales side of the business, we achieved revenue increases of 10% for the full year compared to 2012. The marketplace responded extremely well to our fourth quarter programming, highlighted by Hallmark Channel's content of Christmas and the inauguration of Hallmark Movie Channel's holiday initiative, The Most Wonderful Movies of Christmas. As a result, total advertising sales revenue grew for the quarter by 17% over fourth quarter 2012.

In addition, increased holiday spending in such categories as retail, auto, theatrical had a positive impact on fourth quarter scatter volume driving a 26% increase. Both Hallmark Channel and the Hallmark Movie Channel saw growth in scatter CPMs over upfront with Hallmark Channel registering a 32% increase and Hallmark Movie Channel up 80%.

We are off to a strong start in 2014. Fueled by the momentum in fourth quarter, the launch of Hallmark Channel's second original scripted series 'When Calls the Heart', and the first annual Kitten Bowl have driven success. First quarter 2014 scatter volume is pacing 25% ahead of the same period in 2013.

On Hallmark Channel, scattered CPMs to-date are up 29% over upfront and 7% over first quarter 2013 scatter pricing. Hallmark Movie Channel is also experiencing CPM growth with scatter CPMs up 25% over upfront. Preparation is well underway both internally and externally for the 2014-2015 upfront and we are optimistic that our sales strategies will allow us to monetize the gains being made on the programming side of the business, especially in the area of original scripted series in Primetime.

I will now turn this over to Andy to review the financial results.

Andrew Rooke

Thank you, Bill. As Bill has just spoken about, fourth quarter 2013 was the most successful quarter ever for Crown Media. On Hallmark Channel, our key audience demographic of women aged 25 to 54 increased 10%, distribution of Hallmark Movie Channel increased 8%, advertising revenue increased 17%, and adjusted earnings before interest and taxes increased 46% to just over $56 million over the comparable period in 2012.

Total revenue for the quarter ended December 31, 2013 increased 16% to $118.5 million, subscriber fees increasing 8% to $20.5 million, advertising revenues from Hallmark Channel increasing 15%, and advertising revenue from Hallmark Movie Channel increasing 25% from the fourth quarter 2012.

For the full year, total revenue increased 8% to $378 million, distribution fees increasing 5% to $82 million, advertising on Hallmark Channel increasing 6% to $238 million from a 4% increase in our key audience demographic of women 25-54, and advertising on Hallmark Movie Channel increasing 24% to $56.5 million from increases in channel distribution, ratings and pricing increases that Bill discussed earlier.

While revenue increased 16% for the quarter and 8% for the year ended December 31, 2013 when compared to the prior year, we have maintained our programming and other costs of services at similar levels to the comparable periods a year prior excepting only a small increase in our bad debt reserve we've commented on previously.

In support of and as a consequence of revenue increases, selling, general and administrative expenses increased $1.5 million to $4.5 million, or 8% and 7% increases respectively for the quarter and year, largely due to increases in play costs. Marketing expenses increased 13% to $11.5 million for the year, following promotion of Cedar Cove, our first original series, in third quarter.

Our revenue increases together with modest cost growth has resulted in adjusted EBITDA growth of 16% for the year to almost $160 million, and our operating margin has increased from 39% of revenues in 2012 to 42% in 2013.

Interest expense decreased over $1 million from the fourth quarter of 2013 to just over $10 million as compared to the same period of 2012, due to a decline in the outstanding balance on our term loan and the reduction in interest rate following an amendment in March 2013. Interest expense for the full year decreased $3.5 million for the same reasons.

In 2012, we paid Hallmark Cards almost $22 million in satisfaction of obligations under a federal tax sharing agreement rescinded in October 2012 following a federal tax deconsolidation resulting in the Company recognizing income tax benefits for both the fourth quarter and the full-year 2012.

Our provisions for income tax for the quarter and year ended December 31, 2013 of $17.2 million and $41.6 million reflect effective tax rates of 39% and 38% respectively. We expect to use available net operating losses to offset our 2013 federal tax liability and have not, nor expect to, make any significant tax payments related to the year.

Increases in adjusted EBITDA and the decreasing cash taxes has led to an increase in cash flow provided by operating activities of $12.5 million to $23 million for the quarter and $27 million to $57.5 million for the full year 2013 as compared to 2012. We have used this cash generated from operations to reduce the presentable balance under our term loan to $154.3 million from $187.6 million at December 31, 2012. This reduction in debt together with our increased earnings has reduced our leverage ratio from 3.6x adjusted EBITDA at December 31, 2012 to 2.9x as of December 31, 2013.

We are very pleased with our results for the fourth quarter and year ended December 31, 2013, and as we look forward to 2014, we expect to continue investing in programming to drive revenue and earnings growth, currently anticipating mid-single-digit growth in both revenue and adjusted EBITDA for the full year 2014.

With that, I will turn it back to Bill.

William J. Abbott

Thank you, Andy. In 2013, we implemented some key strategic initiatives that marked turning points for both Hallmark Channel and Hallmark Movie Channel. The excellent results we saw in the fourth quarter and the holiday season capped off a year of solid growth across Crown Media's business, drove our bottom line, and provided a great jumping-off point for the New Year. We are confident that the positive momentum we saw last year will continue to build and we look forward to taking our business to the next level in 2014 and beyond.

At this point, I will turn these proceedings over to the operator to assist us in facilitating the question-and-answer portion of the call.

Question-and-Answer Session

Operator

(Operator Instructions) Our first question will come from the line of Mike Pace from JPMorgan. Your line is open.

Michael Pace - JPMorgan

I apologize I had to jump on a little late, but Bill, did you give any kind of view on how the upcoming upfront might shake out for you guys and your expectation there and what the current scatter market looks like in Q1 versus last year?

William J. Abbott

I didn't, Mike, but I can tell you that cable overall and the video business is still I think the number one place that advertisers turn to, to get their message across, and we have seen a particularly strong scatter market. I think overall the scatter market has been very strong for the cable and video industry, and at the end of the day I would anticipate that the upfront would also be very, very solid.

Michael Pace - JPMorgan

Okay. And then I guess on the context of you having a little seasonality in your business, given your programming in Q4, but can you in your experience, the ratings growth that you had in the fourth quarter, how does that flow through into the next couple of quarters from a viewership perspective or even when you're negotiating with advertisers?

William J. Abbott

Certainly it's our goal when we're attracting such huge audiences throughout that period to put up a step forward and to launch new initiatives like 'When Calls the Heart' which we launched in first quarter, original series, and Kitten Bowl, both of which have been very successful, and I think that that's a great platform for us to use as the launching point to continue to build the business. The other element certainly is that when you have success like that in one given quarter, advertisers take note and they want to be part of it and certainly that halo effect that the strength of fourth quarter has on our business is significant.

Michael Pace - JPMorgan

And then for Andy I guess, now that leverage is below 3x, do you have any cash flow sweep requirements on your term loan and how should we think about your use of free cash flow going forward as it relates to either paying down debt or other initiatives?

Andrew Rooke

We are not required to make principal payment under our term loan, as our consolidated leverage ratio was less than I think 3.25% of adjusted EBITDA which was the trigger point in the term loan. However, we currently anticipate making a $25 million paydown voluntarily probably towards the end of fourth quarter – sorry, end of first quarter, in March of this year.

Michael Pace - JPMorgan

Okay. And then for either Bill or Andy, I guess that your parent standstill agreement expired at the end of 2013 I believe, can you give us any updates there and any conversations that you've had with your parent?

Charles L. Stanford

This is Charlie Stanford. The Hallmark [indiscernible] in its 13D filing and we have no information here on that.

Michael Pace - JPMorgan

Okay, great. Thank you very much.

Operator

Our next question comes from the line of Jim Goss from Barrington Research. Your line is open.

James C. Goss - Barrington Research

I would like to get in a little bit into the interplay between your channel carriage levels, your viewership levels and CPMs, possibly looking at maybe a ranking of the drivers that should see it in generating the outsized ad revenue gains you've been able to create, and any potential impact you might have on affiliate fee increases.

William J. Abbott

Certainly the primary metric that drives our business on the advertising side is our demographic delivery. We've seen consistent increases over the past several quarters in terms of our ability to deliver stronger demographics. In addition to that, we've been doing it around the right type of content. So our original content is really resonating with our viewers, our original movies have performed exceedingly well, our two original series have also been successful in terms of generating high audience levels, and ultimately that allows us to take that to the marketplace and hopefully create additional value.

In terms of the distribution equation, certainly we are in a position where we feel like our distribution partners really value our service, we have a unique position in the marketplace, we have family-friendly content that is high-quality with a great brand behind it and there are very few networks that can say they have all three of those things. So we feel very good about our prospects there as well.

James C. Goss - Barrington Research

And I would think your argument would have to be a lot stronger now that you've been able to demonstrate what you've been able to achieve, and it's always a tough struggle with all the competing [indiscernible] but good luck on that. But tying into what you just said too with the content and the demographics you serve, I wonder in this political year if you're finding any more political opportunities since you do carve out a niche better than some might be able to in a defendable way, and if that's appealing to any certain political candidates or initiatives, and then also if the type of campaigns you'll begin then creates any over-the-top opportunities?

William J. Abbott

I'll take the political side, then I'll turn the over-the-top side to Andy. It's a great question. Certainly we look for political opportunities every which way we can on the advertising side. The reality though especially of internal elections are that they tend to be more local in nature, and so our national footprint isn't necessarily what the candidates are looking for, but we do look to capitalize on any opportunities that are around issue campaigns. So we are very proactive there but I don't anticipate the political would be a big category for us in 2014.

James C. Goss - Barrington Research

Okay, and the over-the-top then?

Andrew Rooke

Yes, Jim, certainly several of the cable and satellite distributors have indicated that they may stop such over-the-top services, distribution of networks and programs via the Internet to television and a variety of other devices. We would expect that those services develop in other programming services, participate in them, but we will do so also.

James C. Goss - Barrington Research

You think you might consider doing like your own apps like HBO Go or something of that nature?

William J. Abbott

On an authenticated basis, we are starting to develop those apps both within our own website and externally on a standalone basis.

James C. Goss - Barrington Research

Alright, thank you very much.

Operator

Our next question comes from the line of [David Sadler from GCO Capital] (ph). Your line is open.

Unidentified Analyst

One of my questions is answered there but I was wondering if the Company had made any progress in terms of growing the number of subscribers and what the outlook was for both of the channels on that front?

William J. Abbott

Certainly on the Hallmark Movie Channel side we've had tremendous success in driving increases in subscribers there. We are one of the leading I think three networks over a three-year period in terms of subscriber growth. So we feel very good about that. Hallmark Channel is nearly fully distributed. So there is an awful lot of room left to grow there, although certainly we look for every opportunity that we can find.

Unidentified Analyst

And what's the number of subscribers now at Hallmark Movie Channel?

William J. Abbott

53.4.

Unidentified Analyst

Okay. And then how should we be, or how is the Company looking at investment in programming for 2014 versus 2013?

Andrew Rooke

We continue to invest in original programming and we have a number of original series coming up as well as probably 30 or more original movies and continue to invest in syndicated programming throughout the shared groups.

Unidentified Analyst

Okay, alright. Thank you.

Operator

Our next question comes from the line of [Jay Kumar] (ph) from [indiscernible]. Your line is open.

Unidentified Analyst

I've got a quick question. Your current outstanding debt is about $25 million, is that right?

Andrew Rooke

No, that is of the current portion of our debt, and as I just mentioned, our intent is to pay $25 million at the end of March. We have a much larger balance in the long-term portion on balance sheet.

Unidentified Analyst

So if you guys pay down $25 million, what amount of interest say would that be on a quarterly basis?

Andrew Rooke

We are currently paying 4% per year on that term loan.

Unidentified Analyst

Okay, alright. Thank you, guys.

Operator

Our next question comes from the line of Peter [indiscernible] from Stifel. Your line is open.

Peter - Stifel Nicolaus

Congratulations on a record quarter as it is. Andy, the recount was in 2008 if I recall?

Andrew Rooke

The recapitalization in 2011 where we already financed the debt, are you talking about the recap?

Peter - Stifel Nicolaus

I'm talking about what all the minority shareholders were diluted with the initial plan, that was 2008, right?

Andrew Rooke

That sounds about right.

Peter - Stifel Nicolaus

Right, [indiscernible] as a shareholder it's like I almost feel like Rip Van Wrinkle falling asleep, but my point being that in 2008 when the recap was done and minority was probably diluted, the stock was around in the low $3s if I recall, and now after having a really great year, a great year, I got to congratulate you, the stock is $3.40 right now, so it's basically at the same place, minority shareholders were diluted excessively. So do you think that management is really providing value to the shareholders of this public company? That's my problem as a – I just would like to get some feedback on that basically because you are performing on an operating basis right now, but again, this is a public company and there are people that are interested in seeing some value created above where it was five to six years ago. Do you understand my question?

Andrew Rooke

As we have mentioned in past calls, Peter, our focus has been on driving results of the business and we are pleased to note that those results are being reflected at this point and our stock price, which you noted, has actually doubled over the last year. Thank you, Peter.

Peter - Stifel Nicolaus

But over the last five…

Operator

It looks like our next question will come from the line of [Kyle Dogler] (ph) from Prudential.

Unidentified Analyst

Would you guys be willing to disclose the amount of [RP] (ph) capacity under the bonds?

Andrew Rooke

We haven't disclosed that publicly at this point and don't intend to on this call.

Unidentified Analyst

Okay, thanks. And I guess maybe in the upcoming July 2015, I think is the call date, maybe how were thinking about bonds given that call date?

Andrew Rooke

Certainly we continue to keep an eye on the marketplace for anything that makes economic sense both in the short and long-term, but have nothing to comment on at this point.

Operator

Our next question comes from the line of Lawrence Stern from Stern Capital. Your line is open.

Lawrence M. Stern - Stern Capital

Congratulations on the best quarter ever for the Company from an operating perspective. Can you update us on the AT&T U-verse situation for the 3 million subscribers that's been open-ended for the past three or four years?

William J. Abbott

Sure. We continue to have very positive conversations with AT&T, although we have no definitive date for an agreement to be reached. We've been told by AT&T that Hallmark Channel is their number one requested service and we continue to have a good relationship and productive dialog around our turning Hallmark Channel and Hallmark Movie Channel to the U-verse platforms.

Lawrence M. Stern - Stern Capital

Okay. Second question, Andy, on the interest expense, while it went down from $46 million in 2012, this year you were at $42.5 million, and the largest chunk of that is this 10.5% long-term debt, if Company was really looking to best align for the long-term interest of anyone, help us out since high yield debt is now in the 5% to 6% range, why a company like this can't dramatically improve upon the 10.5% yield it's currently paying?

Andrew Rooke

There are seven restrictions on us calling those notes as you're aware, Lawrence, and buying them in the open market is certainly at a significant premium. Having said that, we continue to keep our eye as I just mentioned on what is available both short and long-term, and to the extent that anything makes economic sense for the business, we will investigate further. Beyond that I have nothing to comment on.

Lawrence M. Stern - Stern Capital

From a capital allocation perspective, talk to us about how you envision taking excess free cash flow the Company is now generating above producing new movies from your financing perspective?

Andrew Rooke

I would refer you back to my earlier comments. We continue to see a first use of that to pay down debt as well as invest in the programming and marketing for the business to grow our operations.

Lawrence M. Stern - Stern Capital

Okay. From a strategic perspective, is management interested in having Crown Media remain in the public marketplace, because after your best quarter and best year and highest ratings, this independent cable channels still have no analyst coverage anywhere on the Street?

Andrew Rooke

I cannot comment on the intent of our parent in that regard, Lawrence.

Lawrence M. Stern - Stern Capital

But why do you think this Company remains so uncovered from either your perspective, Bill's perspective, from Mr. Stanford's perspective? You just produced the best results, you told us you came in second to ESPN during the last quarter and certain marks, and yet from a Street perspective, this is a blank slate of which there is absolutely no knowledge that Crown even exists as a public company. Thank you.

Andrew Rooke

Certainly Lawrence, as you know, we respond to analyst calls as they come in, and they do come in. Beyond that, we're not responsible for who or how our stuff is covered by the Street.

Operator

Our next question will come from the line of Bill Gordon from Gordon Capital. Your line is open.

Bill Gordon - Gordon Capital

Nice quarter guys. Simple question. How we look at this quarter which had some good hits, good women coming and watching the show, how do you see the upcoming quarters, is there heavy-duty seasonality here in the fourth quarter that you don't see another hit record coming out conceptually, another hit show or how do you see you growing the Company over the subsequent quarters in terms of seasonality, how big will that seasonality be or can we look at some sort of stability here?

William J. Abbott

I think there are two answers to that question. One is that our ratings are so high in the fourth quarter that our holiday effort and our holiday programming is so well received that it's just, it's our playoff, so it's the time of year where our brand resonates the most and our content resonates the most, and so we expect to see that continued strength in the fourth quarter and we view that more as a strength than necessarily as seasonality weakness. But certainly here as we move forward, the focus is very much on how we take that success that we experienced around that two-month period through holiday and we drive that into the other 10 months of the year, and that is a big focus of management, something that we're very optimistic we'll be able to be successful at through our investment programming, original series, original movies lifestyle and the acquisitions that we've made, and we think we have a good strategy to get that done.

Bill Gordon - Gordon Capital

One other question, one last question, and also a tough question, but why do you feel – you've got a no-liquid market in terms of the totally empty spot that really is out there compared to number of shares that are closely owned 90%, is there a reason why Hallmark wants it out there, is there – certainly if this was a Nexstar or this was a content provider with what you just printed and now you are operating up light and the wholesomeness of it, you'd be doing a lot better with the market rewarding and clapping and jumping up and down, because of the lack of liquidity or the ability to have the analyst coverage as the other teller just mentioned earlier on, he's 100% right, we have here a Catch-22, what's the reason for us still being out here if we can't liberate what you guys are celebrating?

Andrew Rooke

I would refer you back to our earlier comments, Bill, where we cannot – will not comment on the intent of that 90% stock holder beyond what they have filed.

Bill Gordon - Gordon Capital

[It's awful] (ph) as to why this is the situation, in other words that we stay in this conundrum so to speak.

Andrew Rooke

No, I have no further comments.

Operator

(Operator Instructions) Alright, and this time I'm not showing any further questions. I would now like to turn the call back to management for any closing remarks.

William J. Abbott

Thank you very much for joining us today. We look forward to reporting our first quarter earnings in May of this year.

Operator

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone, have a great day.

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