Command Center's (CCNI) CEO Bubba Sandford on Q4 2015 Results - Earnings Call Transcript

| About: Command Center, (CCNI)

Command Center, Inc. (OTCQB:CCNI) Q4 2015 Earnings Conference Call April 5, 2016 4:30 PM ET

Executives

Bubba Sandford - Chief Executive Officer

Jeff Wilson - Chief Financial Officer

Analysts

Matt Campbell - Laridae Capital

Tim Clarkson - Van Clemens Capital

Buzz Heidtke - Heidtke & Company

Josh Horowitz - Palm Global

Robert Desanti - Private Investor

Operator

Good afternoon, everyone and thank you for participating in today’s conference call to discuss Command Center’s Financial Results for the Full Year ended December 25, 2015. Joining us today are Command Center’s CEO, Bubba Sandford and CFO, Jeff Wilson.

Please be aware that some of the comments made during our call may include forward-looking statements within the meaning of the federal securities laws. Statements about our beliefs and expectations containing words such as may, could, would, will, should, believe, expect, anticipate and similar expressions constitute forward-looking statements. These statements involve risks and uncertainties regarding our operations and future results that could cause Command Center’s results to differ materially from management’s current expectations. We encourage you to review these Safe Harbor statements and risk factors contained in last week’s earnings release and in our filings with the Securities and Exchange Commission, including without limitation, our most recent Annual Report on Form 10-K and our other periodic reports, which identify specific risk factors that also may cause actual results or events to differ materially from those described in forward-looking statements. We do not undertake to publicly update or revise any forward-looking statements after the date of this conference.

We also note that on this call we will be discussing non-GAAP financial information. We are providing that information as a supplement to the information prepared in accordance with accounting principles generally accepted in the United States or GAAP. You can find a reconciliation of these metrics to our reported GAAP results in the reconciliation table provided in last week’s earnings release.

I would like to remind everyone that this call will be available for replay through April 19 starting at 07:30 p.m. Eastern Time tonight. A link to a webcast replay of this call was also provided in last week’s fourth quarter earnings release, which is also available on the company’s website at www.commandonline.com. Any redistribution, retransmission or rebroadcast of this call in anyway without the expressed written consent of Command Center is strictly prohibited.

Now, I would like to turn the call over to the CEO of Command Center, Mr. Bubba Sandford. Please go ahead.

Bubba Sandford

Thank you, Tom. Good afternoon, everyone. I would like to thank everyone for their participation in this call. For those who are existing shareholders, I would like to thank you for your continued support and those who are considering buying the stock we thank you for your interest.

I’d first like to address a couple of things that may have caused some shareholder frustration or confusion. The first is the filing of our 10-K. This year we filed after deadline and typically we file this in early March. I want to provide a little backdrop to that if you maybe aware we relocated the company from Coeur d'Alene, Idaho to Denver, Colorado this year. And that was a significant undertaking that we believe will benefit the shareholders in both the short-term and long-term, but it was a significant undertaking and presented some obstacles. We only relocated a handful of people from the corporate office. And as such, we faced some challenges with the transition with the accounting department. The accounting department continues to gain experience and knowledge in training and we expect in 2016 to file the 10-K in early March.

The second area I would like to apologize for is the Q4 earnings release. We released that as separate release and that was an oversight on our part and going forward in an effort to communicate transparency in our financial information to the shareholders, we will release that at the same time.

Hopefully, everyone has had a chance to read the press releases of last week. I would like to address one issue that I know is on the forefront of everyone’s mind and that is North Dakota. I would like to preface this or use the analogy or story I kind of typically described North Dakota as the good thing about North Dakota was we had a great 2014. The bad thing for us presently is we had a great 2014.

North Dakota still experiences the impact of the oil industry decline and we are affected by that. North Dakota, our business was down $10 million or 40% from 2014. Frequently asked if we have seen the bottom and again, we can’t predict the future of the oil and energy industry, but we can be ready at all times and evaluate our stores there. They are presently cash flow positive and they are very good stores, but we will continue to evaluate the future viability and as with any of our other stores if the value of a store does not exceed its cost and those include all the resources associated with running a store, then we reserve the right to shut that store. But we believe the revenue from our stores outside of North Dakota which grew same-store sales at 10.5% will be greater than the decline from North Dakota.

Another area that has helped our margins this past year was our workers’ compensation cost. Workers’ comp is our second largest cost after payroll. And by aggressively managing our claims, improving our safety programs, looking out for our workers, which are a product in strengthening our balance sheet, we have been able to drive down our premium cost and not have to increase our collateral, two significant items for us. These all have contributed to put us in a very strong financial position in 2016. We ended the year with $7.7 million in cash. We reduced our debt by $2.4 million and bought back 2.3 million shares or roughly 3.5% of our outstanding shares for approximately $1.4 million.

Before continuing, I would like to turn the call over to Jeff Wilson, our CFO, to discuss more in the financial numbers, after which I will give a brief overview of the business development.

Jeff Wilson

Thank you, Bubba and good afternoon everyone. I want to jump right into the numbers. So, our revenue for the fourth quarter of 2015 was $21.9 million compared to $24 million last year and our revenue for the full year was $88.5 million compared to $91.8 million. As Bubba previously discussed, the decrease in both the quarter and year were due to the decline in demand for our services in the Bakken region of North Dakota. Our revenue in North Dakota for the year fell by $10 million or 40% compared to 2014, while our revenue from branches outside of North Dakota increased by 10.5%. It’s also worth noting that our revenue from our branches outside of North Dakota was up 8.2% in the fourth quarter.

I want to talk just a little bit about the seasonality of our business. If you look at from a historical basis, the third quarter is our largest quarter typically representing between 28% and 30% of our annual revenue. Q2 and Q4 are pretty similar and range between 22% and 26% of revenue and then Q1 is our lowest revenue quarter and is usually between 18% and 20% of overall revenue. This year, our Q4 represented just under 25% of our annual revenue.

Our gross margins in the fourth quarter were 26.2% compared to 29.7% last year and for the full year, our gross margins were 26.9% compared to 27.8%. The decline in both the quarter and year margins was primarily due to a reduction in the higher margin revenue that we were receiving from North Dakota. Our gross margin results were partially offset by a 40 basis point reduction in our workers’ compensation expense. Our margins continue to be at the high end of industry averages and we remained focused on improving margins.

Our SG&A expenses in the fourth quarter decreased 4% to $5.2 million primarily due to a decline in the executive bonuses in 2015. The SG&A in 2015 for the full year was $20.6 million compared to $18.5 million. In 2015, we include we had three unusual items in SG&A. The first was we recorded a reserve of $250,000 for our workers’ compensation deposit at Freestone Insurance formerly Dallas National. And as we discussed in the K, the Freestone is in receivership with the State of Delaware and we are working with them for the process of getting the return of our deposit. We believe we have a priority claim, but at this time, we cannot be certain how much of our $1.8 million will ultimately be returned to us. Second, we recorded a reserve for $175,000 for our net receivable from Labor SMART and the reserve is based on the financial position of Labor SMART and our ongoing litigation with them.

And finally, the cost associated with the move to Denver, including the hiring and training of new staff and the relocation of employees added about $400,000 to the total SG&A for the year. The remaining increase was primarily due to increased hiring and training of employees to support future growth, the expansion of our equity based compensation plan of about $320,000 and the costs incurred in opening the five new branches during the year. So with that our operating income for the fourth quarter was $500,000 compared to $1.7 million in the same period last year. And the reduction was driven primarily by the reduction in gross margins. The operating income for the full 2015 was $3 million compared to $6.5 million last year and as the decline was a result of the $1.8 million reduction in gross margin dollars and the $2.1 million increase in SG&A expense.

Our EBITDA in the fourth quarter of 2015 was $843,000 compared to $2 million last year and for the full year our EBITDA was $3.9 million compared to $7.4 million last year. And again the decrease for the full year was due to the decline, the previously discussed decline in gross margins and the increase in SG&A costs.

Our net income for the fourth quarter of 2015 was $300,000 or $0.00 per diluted share compared to $1.1 million or $0.02 per share last year and for the full year net income was $1.7 million or $0.03 per share compared to $9.1 million or $0.14 per share last year. As you look at last year, you should remember that last year we had – we included the recognition, a one-time recognition of $3.7 million net benefit from our net operating loss carry-forwards.

Our adjusted net income which includes non-cash compensation, non-cash taxes, depreciation and amortization, interest expense, other financing expenses and workers compensation, the reserve for the workers compensation deposits and net receivables in the fourth quarter was $843,000 or $0.01 per share compared to $2 million or $0.03 per share last year. And our adjusted net income for the full year was $4.3 million or $0.07 per share compared to $7.4 million or $0.12 per share last year as though initially we ended the year with $7.6 million in cash compared to $8.6 million last year that also includes a reduction of $2.4 million in debt and the repurchase of $1.4 million in our stock for the repurchase plan.

With that, I would like to turn the call back over to Bubba.

Bubba Sandford

Thanks Jeff. Our objective at Command Center is to maximize shareholder value. We know that when we execute on our key to success which are principles of our business, we generate cash. And we will allocate that cash in a way that they have returns commensurate return to the shareholders. We have done this in 2015. In 2016 we plan to execute on this again and we plan to do this in five ways. The first way, I will describe briefly here and I will go into greater detail following the brief description is first the same store sales. The second is new stores. The third is closing or mothballing underperforming assets. The fifth – the fourth is acquisitions. And the fifth is buyback or repurchase of the stock when it’s undervalued. And then – in additional ways we will continue to evaluate our investor relations program.

In ‘15 our same store sales grew by 10.5% outside North Dakota. We are seeing strength out of all the stores outside North Dakota including Texas. This was largely a result of three or four factors. One is our actual accounts continues to excel. Our auto auction business continues to excel. And our execution of our keys to success which I just briefly mentioned and I will take you through those. The key to success are three points is to sell good accounts, increase the margin and service that with excellence. Sell good accounts means is simply that we sell to customers that have good credit sell through within their credit. We sell to customers that value us. We sell on value not price. We have seen time and again in my branch visits where customers will select us even though we maybe the highest price.

The second is increase the margins. This is basic negotiation that goes to our core principal and coach train develop the branches and the fundamentals. Start high and start with the higher price and then go lower and price it appropriately. Price is it per the nature of the work and the management requires. For example, a customer, maybe a manger may require a lot of time from the branch manager that should be priced appropriately or the nature of the work maybe a little bit more risk that needs to be incorporated in the price. Conversely there may be times when the customer and the work associated doesn’t take a lot of management time and there is very low risk associated. We can price that down appropriately. And the third is service it with excellence and that runs across the board from corporate, myself, all the way to the branch and what we mean there is service, everything we do, every aspect of our business, the goal is excellent and that includes from the time an applicant comes in to fill out an application, all the way through the day we are dealing with the customer to the time we pay out a worker.

Now these may seem obvious, but I have seen many times that workers which our product will come to us because of how we run our business, how we treat the workers. When you get good workers, we are able to price them appropriately and charge at higher premium. All of these result in our ability to price accordingly and generate higher returns. The second aspect is new stores, we will continue to look to open new stores and open them in areas of concentration. The overall cost to open a store is not significant, it’s typically under $200,000, but the resources associated with opening store are very significant both at the field level, the store level and the bank office level. So we want to be very diligent about that. In 2015 we opened five stores and again mostly in areas of concentration. In 2016, we have already opened two branches so far. And we have done these, again we want to focus on areas of concentration where we have brand recognition, we have a strong branch manager that can help work with those other branches. We get coverage for our customers in a complete geographical area and we maximize the resources associated with working with those branches, the travel costs, the training, etcetera. We believe that in 2016 via either acquisition and/or organic we can add another four to six stores.

The third aspect we will maximize shareholder value is we are closing stores and mothballing stores. But keep in mind that’s after extensive coaching, training and developing the branches on a key to success. If after an extensive amount of time, we find that the resources associated with executing those keys is that are better allocated to another store. Better obligation is to move those resources to another store and either mothball or shut the store. This may also help – hope that it helps to explain some confusion on the store count. We have stores we have shut and we have other stores we have mothball, the reason being is we may mothball a store until a future time when we get a strong branch manager. Our ability to open stores is completely continued upon our ability to find excellent talent, hire that talent and training. And we also made mothball a store for a period of time until we have national accounts or one of our other lines of business that come in and can backfill it and layer that in and jump start that store.

The fourth way is acquisitions and as our cash position remained strong, we will continue to look for acquisitions that both fit and have appropriate price. We were very diligent and we have looked at many acquisitions in 2015 we spoke to them, visited them and we put out a number of offers. All of our offers were very competitive. And in one case it was the most competitive, obviously in an acquisition 50% of the parties on the other side. But we feel with our cash position and our reputation that in 2016 we will be able to close on an acquisition that fits with our business model and for the appropriate price.

The fifth, again with our excess cash, we will be continuing to repurchase the stock when we feel it’s undervalued. We feel this is a low risk opportunity for us to add shareholder value. We are buying certainty. We are buying ourselves at an undervalued price. In summary, in 2000 – going into 2016, we are in a very strong position. We finished the year with $7.7 million in cash. We have opened stores in our national accounts are obviously in business and our other verticals are excelling. We have finished the relocation to Denver. And so we are in a strong position to maximize shareholder value going into the rest of 2016.

At this time, I would like to thank everyone for their listening and turn the call back over to Tom.

Question-and-Answer Session

Operator

[Operator Instructions] We will take our first question from Matt Campbell with Laridae Capital.

Matt Campbell

Hi, good afternoon, gentlemen. Thanks a lot for having our first call. It’s really helpful to hear you guys talk about the business. Bubba, since you have come on as CEO, your team has clearly cleaned up the balance sheet, you have made good improvements on our store margins, the gross margins and a number of your team has personally bought stock at much higher prices than where we are today. I guess, I would like to understand as you look at 2016, do you see this year as a year that you can grow versus last year, your top line, to start?

Bubba Sandford

Matt, thanks for that question. That’s always our goal, is to grow and grow profitably obviously with our SG&A have not – our SG&A is in a place where in 2014 we did approximately $92 million revenue with about the same normalized SG&A. So, we have the ability to grow. We have opportunities out there with our national accounts, our auto auction, new stores and potential acquisitions and that’s always our goal is to grow more profitably.

Matt Campbell

And where you sit today, do you see with these new stores coming on with the fact that you have basically beefed up your SG&A in anticipation of growth and possibly the ability to do an acquisition, do you see those all contributing to growth and does anything in the economy today concern you that that growth could be derailed, because of something in the economy as of now?

Bubba Sandford

Well, to answer your first, but yes that we believe they will all contribute; the economy, that’s a big question and something that always concerns me. We feel we are in a good position. We are lean. So, if something happens to the economy we can turn pretty quickly, but our goal and objective will be a hybrid of all four of those and we remain ruthlessly opportunistic to move on something that will present itself and we can make decisions quickly.

Matt Campbell

Got it. And if I could follow-up with one more question, you guys have bought back roughly 2.4 million shares at an average cost of $0.60, you still have $3.6 million on that buyback. It’s like – it seems like you guys are trying to [indiscernible] to try to buy stock. Does it not make sense given where your stock is today roughly almost half the price of your average buyback to do some sort of a Dutch tender, you could buy back 12% to 15% of your stock in the mid-40s, have you thought about that and does that not make sense at this point?

Jeff Wilson

Hi, Matt, this is Jeff. Yes, just a couple of points there. Last year, I actually did the – from the time we started the buyback we represented about 20% of the volume in the stock. So, I actually thought the benchmark was very effective in executing the buyback. Obviously, as we look at this and where the stock price is today, we have discussed doing a Dutch tender, there are some considerations there, but it’s certainly something that we continue to evaluate just as we evaluate blocks that come up. Approximately, there were a few blocks that we were able to get last year and we will certainly look at those blocks and the possibility of doing a Dutch tender as we go forward.

Matt Campbell

Right. But I mean, this forces those blocks to come out and if I were to make any comment, my vote would be to get a little bit more aggressive, because last year was unfortunate year with what happened with North Dakota, but you should be taking advantage of your stock at these prices. I think it’s a gift and would hope that you guys take that seriously in terms of doing something that as Bubba said why don’t – the least risk you have is buying yourself. At this point, no one cares about your company other than the guys on the phone. So, take advantage of it and let’s buy it in our company at these prices. I think that would be a good source of cash and very effective.

My last question if I may, could you give us a sense of the SG&A – the SG&A level was up, that’s $400,000, Jeff, that you pointed to for 2015, how much of that $400,000 was actually incurred in the fourth quarter?

Jeff Wilson

It’s a great question, probably about half and half, maybe a little bit more in the third quarter, so split between third and fourth, a little bit more than half in the third.

Matt Campbell

Got it. Okay, thanks very much. I will go back into the queue. Thanks.

Jeff Wilson

Thank you.

Operator

We will take our next question from Tim Clarkson with Van Clemens Capital.

Tim Clarkson

Hey, I just wanted to get some, I am not super familiar with this business, but I have got a little bit of familiarity. What would be a typical gross margin for your competitors? What would be an average gross margin? What would be excellent? What would be poor? I guess that’s my first question.

Jeff Wilson

This is Jeff, and thanks for the question. If you look at staffing companies, there is a broad range of margins anywhere from things that are really not true staffing companies that could range as low as 12% to 15%, all the way up to I think the highest ones I have seen have been in the 28% to 30% and not very many of those.

Tim Clarkson

Okay.

Bubba Sandford

Can I add on that, Tim? Thanks for the question.

Tim Clarkson

Yes, sure.

Bubba Sandford

It ranges in terms of the nature of the work. There is light industrial and a lot of different verticals, hospitality, auto auction, warehousing, retail and the margin ranges across those in different companies and different private companies focused on different, I guess, sectors or specialized and we kind of run across the whole board. And then the day labor where you are able to provide workers on a short notice or where your higher margins are and that’s again where our keys to success come in to play, where we are coaching them how to increase the margin during that negotiation on a limited resource.

Tim Clarkson

Okay. Well, let me ask you this question. Let’s say that it’s a company with the higher margins, 24, 26 something like that, what would be the – when you are looking to potentially buy out a company, what kind of EBITDA multiple or what kind of price to sales do you typically pay if you are in a private market situation for a company like that?

Bubba Sandford

So, again, there is a broad range and you are exactly right, they look at multiples of EBITDA and then you look at number of branches, size, customer diversity, concentration, there is a whole list of things that would go. And we see things going in the range of anywhere from 2 at the very low end to as high as 4 from an asking price, again, and again it is larger companies that would be even higher than that, but…

Tim Clarkson

2x sales or 2x EBITDA?

Bubba Sandford

2x EBITDA.

Tim Clarkson

Okay, okay. Okay, alright. Okay, well that’s helpful and it sounds like you are expecting with between just regular growth from your current branches and new branches that the company is expected to grow your revenues this year, right?

Bubba Sandford

It’s always our goal and to grow profitably.

Tim Clarkson

Okay. Well, great. I have a son that lives in the Denver area. So, when I come out there this summer, I am going to look you guys up and come to your facilities, I am looking forward to that?

Bubba Sandford

Absolutely. Look forward to meeting you.

Tim Clarkson

Okay, great. Thanks. I am done.

Operator

And we will take our next question from Dan Gage with Heidtke & Company.

Buzz Heidtke

Yes, this is Buzz Heidtke. I occasionally go to one of your locations in Nashville, few of us was pretending like we are looking for jobs, pretty good manager out there on Nolensville Road. A question was, up in the Dakota is, what you have got I think 5 branches out there, what do you plan on doing those, cutting back a little bit or hanging around, what are you going to do there?

Bubba Sandford

In North Dakota? Those are all still good stores. They are all cash flow positive. We intend to evaluate those stores like we do all our stores on a weekly basis. If the market in the oil and energy industry continues to decline in those stores, again, their value doesn’t exceed their comp. And again when we say the costs, the resources, the back office, the payroll, the human resources, the marketing, the workers’ comp, all of that, if we find – if we feel that those resources are better allocated or used elsewhere that where we’ll turn. But right now we continue to coach, train, develop those branches to deal with a different market.

Buzz Heidtke

How much was your revenue down on those stores from the top, 40% or so…?

Bubba Sandford

Yes. It was down I think what we say $10 million, down 40% from 2014, yes.

Buzz Heidtke

But you are still positive on those?

Bubba Sandford

Yes. We are still positive and one thing I didn’t mention was and then if you will allow me just to comment here was the company wisely spent a lot of resources and time in 2012 and 2013 building up those stores. And then we reap the benefit. And that was a good decision by them to put that investment into those stores. The other thing I have meant to add was the year-over-year comps will eventually get down to – there will be less impact on the overall company with the decline in North Dakota.

Buzz Heidtke

Okay. About six months ago or eight months you all made an investment in some bonds and Labor SMART, what’s the status on that?

Jeff Wilson

So we – this is Jeff, we made – we purchased one of the notes for Labor SMART. And we have filed the lawsuit for the collection on that note and the litigation is ongoing.

Buzz Heidtke

Do you think you could possibility get any of their locations in lieu of a case settlement?

Jeff Wilson

It’s certainly a possibility. We have talked to Brian, the CEO there from time-to-time trying to workout the settlement.

Buzz Heidtke

Okay. That’s a real mess. I don’t see how they stay in open. But anyway you are doing a good job. Thank you very much.

Bubba Sandford

Thank you.

Operator

We will take our next question from Josh Horowitz with Palm Global.

Josh Horowitz

Hi. Thanks everybody. Couple of questions, Jeff you had touched on EBITDA multiple that was present in the marketplace, I am looking at competitors, I am just curious given Command size and locations and revenue mix and the host of other factors, what multiple of EBITDA do you think Command would fetch if it we were to look to….?

Jeff Wilson

Again, our stock is publicly traded. So I think it’s any valuation on that should just be up to the market.

Bubba Sandford

Can I add to that Josh?

Josh Horowitz

Sure.

Bubba Sandford

And I agree that some people are concerned we maybe a target and with our revenue and our cash and our ability to generate cash we are, but there is no fore-sale sight. We feel we have just kind of begun the process here to on our journey.

Josh Horowitz

Understood, if you are out in the market looking to acquire folks that I don’t know 2x to 4x EBITDA, I am just trying to understand how accretive it really is, by my estimates I would try in pro forma normalize your business and take out a lot of the noise that’s happened over the last couple of years and I sort of get to a range that would indicate that you are trading at probably 3x to maybe 3.5x what I calculate as pro forma EBITDA, so you really have to buy people at 2x to make it interesting, do you agree with that statement?

Jeff Wilson

That’s a lot lower than the numbers I have the trading between like 5x and 6x, I mean I know currently with the price being lower, we may be a little lower than that but – and so a lot lower than – we can talk offline as we can go your numbers versus mine offline if you want.

Josh Horowitz

Sorry, just one more thing, will you guys here on this conference call commit to holding regular quarterly conference calls?

Bubba Sandford

And that’s what I mentioned earlier and that we are going to continually evaluate our investor relations program.

Josh Horowitz

But you will not commit to holding regular calls?

Bubba Sandford

Well, I want to continue evaluate going forward. I want to get through this call, is our first call. And I want to get through this one and then we are going to have an annual meeting. And during that time we will be evaluating that.

Josh Horowitz

Okay, thank you very much.

Operator

[Operator Instructions] We will go next to Robert Desanti, Private Investor.

Robert Desanti

Hi Bubba and Jeff, how are you doing?

Bubba Sandford

Hi, Bob. How are you?

Robert Desanti

Alright. Getting close to us somewhere here in Chicago, so looking forward to, I appreciate you guys taking the time out for the call today. One other things, it’s obvious to everyone that the stock price have been hammered by the low price of oil, but one of the bad thing that we had in the past was that the stock was highly undervalued and if you look at it now, I was just doing some back of the math looking on Yahoo Finance and it looks like the industry average PE ratio was about 14, which if you do the math if the stock price get about $0.55 which would be oddly enough a 55% increase and so my question is what are we doing from an IR perspective to get the stock in front of new buyers because it was undervalued in the past and its certainly undervalued presently?

Bubba Sandford

Well, we intended conferences issue and try and communicate our long-term strategies and ability to maximize shareholder value. And we have also initiated an earnings, which we are on right now. So our goal as management is to make money and then to communicate that and again we are evaluating most effective way, we can do that.

Robert Desanti

I guess what I would urge you to carefully consider is a new IR group. I know when Chris Tyson was involved I know he is no longer with Liolios Group, but he did held the job and he brought a lot of new investors to the party and now the stock is fairly trading at any kind of consistent volume even though by anyone’s reasonable guestimate we should be at the bottom in terms of the oil picture and everything else. So, looking forward, I know I reached up to Chris and I know he is with the new group, MZ Group and I know what he has access to 3, 4 times the number of buyers that he did at Liolios Group. And so I would urge you and urge other investors to push you along these lines where you carefully consider perhaps a new IR firm. The other thing I would say is that the stock buyback, I was not a fan of it in the $0.60 range, I thought it was a bad use of cash, but I echo the earlier caller who said that he would strongly suggest doing so at these price levels for the aforementioned undervaluation reasons and those are the two comments that I have.

Bubba Sandford

Yes, thank you.

Operator

And at this time, this concludes our question-and-answer session. I would now like to turn the call back over to Mr. Sandford for any closing remarks.

Bubba Sandford

We would like to thank everyone for listening to today’s call. We look forward to speaking with you again in the future. Thanks, again for joining us.

Operator

And ladies and gentlemen, this does conclude today’s conference. You may now disconnect your lines at this time. Thank you for your participation.

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