Pre-Paid Legal Services Q3 2007 Earnings Call Transcript

| About: Pre-Paid Legal (PPD)

Pre-Paid Legal Services, Inc. (NYSE:PPD)

Q3 2007 Earnings Call

October 24, 2007 8:30 am ET


Randy Harp - Chief Operating Officer

Steve Williamson - Chief Financial Officer


Good day and welcome to the Pre-Paid Legal Third Quarter 2007 Earnings Results Conference Call. This call is being recorded and will be rebroadcast beginning at 11:30 AM Eastern Time today by dialing 888-203-1112 in the Continental U.S. and 719-457-0820 if at an international location. Please enter the confirmation code 319-7924 followed by the pound or hash key. The replay will be available until midnight Eastern Time Wednesday, October 31st.

At this time I would like to turn the call over to Chief Operating Officer, Mr. Randy Harp.

Randy Harp

Thank you, Lisa. Good morning. I want to welcome you to the 2007 third-quarter earnings conference call for Pre-Paid Legal Services. Joining me here at the home office is Steve Williamson, our Chief Financial Officer.

Before we get started I'd like to remind everyone that any statements made on this conference call other than purely historical information, including comments regarding future plans, objectives, expected operating results, dividends and share repurchases and any statements of the assumptions underlying those, constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934.

Forward-looking statements are based on certain assumptions that may not be correct; they are subject to risks and uncertainties incident to our business that could cause actual results to differ materially from those described in the forward-looking statements.

These risks and uncertainties are described in the reports and statements that we file with the Securities and Exchange Commission including, among others, those listed in our Forms 10-K, Forms 10-Q and Forms 8-K and include the risk that our membership persistency or renewal rates may decline; that we may not be able to continue to grow our memberships and earnings; that we are dependent on the continued active participation of our principal executive officer; that pending our future litigation may have a material adverse effect on us if resolved unfavorably to us; that we could be adversely affected by regulatory developments; that competition could adversely affect us; that we're substantially dependent on our marketing force; that our stock price may be affected by short sellers; and finally, that our active premium in force is not indicative of future revenue as a result of changes and active memberships from cancellations and additional membership sales.

Please refer to pages 14 and 15 of the 2006 Form 10-K and pages 7 and 8 of our September 30, 2007 Form 10-Q, which we filed yesterday for a more complete description of these risks. We undertake no duty to update any of the forward-looking statements after this call.

If you haven't seen the original episode of our national media campaign we entitled “Justice for All - Accessing the Promise,” that was broadcast on Court TV on September 29th, I wanted to give you just a brief overview of some of the people on that segment, including Andy Miller, former Attorney General of Virginia and active in the National Association of Attorneys General; Grant Woods, former Attorney General of Arizona, selected by his peers as the Nation's top Attorney General in 1995; Mike Moore hosts the show, is a former Attorney General of Mississippi for 16 years, you may remember Mike received national attention when he filed the first lawsuit against 13 tobacco companies that ultimately settled for $246 billion; Mike Turpin, former Attorney General of Oklahoma and partner of our Oklahoma provider law firm - so four former Attorney Generals.

President and CEO of the U.S. Chamber of Commerce, Tom Donahue; President and CEO of the National Black Chamber of Commerce, Harry Alford, another member of our advisory council in addition to three of the former Attorney Generals I just mentioned; Duke Ligon, a former member of our Board of Directors as well and a former Senior Vice President and General Counsel for Devon Energy, previously with the New York law firm of Mayer Brown, also previously Senior VP and Managing Director of Bankers Trust and has also held positions in the Departments of Interior, Treasury and Energy.

Also on the first segment was former President of the American Bar Association, Bill Paul. Bill also is a partner with the law firm of Crowe & Dunlevy that has done corporate work for us now for 30 plus years. Certainly throughout the 30-minute segment are real live member stories as portrayed by our members in relaying their experiences.

We'll tell you the next installment, again a 30-minute installment of our national media campaign, will air on Court TV this weekend, this Saturday, October 27th. It contains most of all the above that I just mentioned plus executives from four different companies that are existing groups that offer our services to their employees, also includes John Addison, co-CEO of Primerica Financial Services who we have a marketing partnership with.

So we want to certainly encourage you to tune in. If you missed the September 29th edition, feel free to contact Steve or I and we can get a copy of that to you. And I want to encourage you to tune in this Saturday, 11 a.m. Eastern Time, Court TV for the second installment.

And we'll continue throughout the end of '07 and certainly for a good portion of '08 to continue to offer these 30-minute insights into our business. And I think based on comments and feedback from the first airing or the first segment, just tremendous third-party credibility with four former Attorney Generals and presidents and CEOs of the U.S. Chamber, National Black Chamber, former president of the ABA - that's what our sales force has appreciated most about that.

So we feel like this company is in a position that we're all cleaned up and ready to go to the dance, if you will, and the September 29th segment followed by the October 27th segment are our first two steps at exposing what we believe is a tremendous value in our memberships and exposing that to more and more people as we go forward.

So we're very proud of these segments. Again, I think they just reek of third-party credibility, certainly that's what we were after and I think we've achieved that so we're very proud of those.

Again, we've already committed through the end of '07 and it looks right now that we'll continue through at least well into 2008 with at least doing a 30-minute segment once a month. So keep your eyes out for that; we're very proud of them and I think more importantly, they represent a true and accurate portrayal of the opportunity that we believe lies before us.

So with that I'm going to turn it over to our Chief Financial Officer, Steve Williamson, and ask Steve to step through the more significant financial highlights of the 2007 third quarter.

Steve Williamson

Thanks, Randy. Now I'll just walk through the third quarter comparison for '07 to '06 and step through the income statement and some balance sheet items as well. Membership fees increased 4% over the third quarter '06, came in at $107.7 million. The increase was due to about a 2% increase in both the average membership fee that's in force as well as an increase in the average number of members in force.

The membership base grew about 15,000 members this quarter, the largest growth we've had since 2005; cancellations came in at sub 140,000 levels for the second quarter in a row and persistency, we're proud to say, came in at 73.3%, which is the best persistency rate, the blended overall book of business evaluation that we have.

The best number we've posted since 2000, so we’re encouraged by some of the results from the efforts that Melanie and others are making in the field to post some of those quality numbers.

Associate services revenue, primarily due to the lower average new associate fee--it was $41 compared to $50 last year—we’re pretty much at the $49 entry fee for the entire quarter last year. This quarter we actually had a couple of $25 offerings which brought that $50 down to the $41 level, but that $9 increase is the primary reason that you saw associate services fees down $336,000 to around $6 million for the third quarter of ‘07.

Other revenue was about $100,000 lower than last year, came in at $1.1 million. Of course this is the amortization of the revenue that we receive on the $10 enrollment fee over the three-year average life of the member.

That brings total revenue in at $114.9 million for ‘07 versus $111.7 million for ‘06. Membership benefits were 34.8% of membership fees in ‘07, down from 35.3% for ‘06. Of course this is due to, as we discussed last quarter, the new contract that we have with Kroll that had some improved pricing, and if you will recall during the last quarter that original price reduction on the per member per month basis was $0.75 and then it increased.

We had further savings that began January 1 of ‘08 of an additional $0.25. And then each year dropped until January 1, of 2010. So the next reduction that we’ll see that presents itself on the financial statement will be the first quarter of ‘08, would expect that with 700,000 plus IDT members that this savings in that particular quarter should be around $500,000 for the first quarter and more than likely well north of $2 million for the year pretax.

Commissions came in at $33.4 million for the third quarter of ’07. That's an increase of about $2.3 million as compared to ‘06. For the third quarter of ‘07 average premium for new members was $326 compared to $335 and new membership sales were close to the same, 154,000 units sold this quarter compared to 155,000 units last quarter. You would have expected of course, given those numbers with the flat production and lower average membership fees to see a reduction in the commissions.

But you'll recall last quarter I explained a new change to the commission plan that allows the very first membership sold by a new associate to receive an advance commission. Due to that change that kind of swung the numbers when we do the comparisons and we actually had an increase of about $16 per membership to $218 per member compared to $202 per member, and would expect to see those same year-over-year comparisons, see increases until we kind of go around to the quarter where this was first implemented, which I believe the second quarter of ‘07 was the first time that we actually saw this on the financials. And again, that did start on April 1, ‘07.

The associate service and direct marketing costs were $8.9 million for ‘07, up $1.8 million compared to ‘06 due to the increased cost of player's club incentive programs. You'll recall that we have an incentive program that promotes long-term consistent high-quality production and if they meet these production levels and retention levels, and they have to do this for at least a year, they have the ability to receive a cash bonus for that month's production once they get to that 12th month.

We've seen a growing number of associates that meet that criteria and we saw increases in that cost. The Vegas contest bonus payments and some other incentive programs that we had was the other reason for that. Each year in Vegas we typically have a pretty good promotion in place and the cost of the promotions that we had this year were quite a bit more than last year. And, then we also had some other incentive programs for associates to get tools out into the field.

We do not have any current plans to continue the largest part of these Vegas type promotions during the fourth quarter since our focus is primarily on national media campaign. G&A costs were 12.7% of membership fees for the third quarter of ‘07 compared to 11.8% for ‘06.

We did see increases of course in advertising as it relates to the national media campaign, bank service charges, real estate and other taxes, Telco expenses and utilities. I will go ahead and kind of hit the bank service charges since I am here in the G&A section.

We will see the benefit of a renegotiated pricing for our ACH processing fees during the fourth quarter. I would expect that to be about $100,000 savings per quarter, plus or minus $10,000. And we'll see that in the fourth quarter of ’07, and we'll continue and savings would actually increase as the base gets larger.

Other net includes $2.1 million in depreciation expense for both ‘07 and ‘06, interest expense of $1.7 million this year compared to $2.2 million last year, of course at lower debt levels as we continue to pay down our debt.

Premium taxes were about $500,000 for both ‘07 and ’06, and in the third quarter of ‘06, last year, we had a positive entry that reduced this expense level by $700,000, which was a reversal of the litigation accrual, which you may recall last year talking about when we had the final settlement of the Mississippi-related litigation.

And all those items are offset by interest income of $1.1 million for ‘07 versus $700,000 for ‘06 and that's just a result of how much cash and the associated rates that we have.

Randy Harp

Do you want to talk about the interest rate savings while you're there?

Steve Williamson

Yes, might as well. We did, on our debt and I gave you a little bit of a heads up that we were certainly working on this last year, it's been 15 months since we originated the financing with Wells Fargo and at the beginning of the Wells Fargo relationship we still did have the litigation associated with Mississippi.

And since that was cleaned up we continue to improve operationally as far as our profitability. The leverage continued to reduce; we're down to 0.83 on a leverage ratio. So it felt like we were justified in requesting a reduction and did receive one. 1% on the largest piece - the stock financing went from LIBOR plus 250 to LIBOR plus 150. We also had similar type benefits at a lower cost on our debt associated with the building and debt associated with our aircraft.

The blended overall savings is about 0.95 basis points and that should generate a pretty healthy savings as it relates to interest expense in the coming years, and I'll go ahead while I'm here, the actual number that we will save is probably around $200,000 a quarter on that lower interest and fourth quarter and subsequent savings could be a little better.

You probably are aware, most everything is tied to LIBOR. LIBOR for most of the year has been about 5.32%, at 9/30 it came down to 5.12% and now right around a little north of 5%. So coupled with the 95 basis points savings with LIBOR coming down we may see a little bit better benefit on the interest expense, it just kind of depends on where LIBOR goes.

So, take that number of $200,000 plus the $100,000 on the bank service charges and looking forward to seeing those benefits, but the other item, and then I would argue a bigger item, that we were able to achieve is a slight modification in the compliance areas as far as those debt covenants are concerned.

Previously, when we first put this debt in place we’ve had the ability to use 50% of the excess cash flow that we generated, and due to the items, as I said before, we felt like really there's very little leverage so we really ought to have the ability to use all the cash that we have available.

And they agreed with us and that was part of the modifications that we put in place or the amendment that was put in place. So the new cash flow covenants, we have the ability to use all of the excess cash flow we generated. And at 9/30/07 we had about just south of $27 million available to spend on our stock buyback program, basically doubling our available cash.

If you look at it on an annualized basis, generate about $40 million of the excess cash, the old method we could have used 20 in a year, now we can use 40. That annual buying capacity at $60 a share is about 650,000 shares a year or 5% of our current outstanding.

So we're happy and appreciate the willingness of Wells and LaSalle, now BofA and all the other guys that stepped up to the plate, Comerica, and allowed us to have lower rates and better covenants. You can't get much better than that.

And I'll go ahead and continue through the balance of the income statement. Provision for income taxes were 34.1% for '07 compared to 35.9%. We had higher nontaxable interest income; virtually all of my cash and investments are non-taxable AAA rated munis and also we had a higher tax credit that we received this year compared to last year. That brought us to net income of $11,573,000 compared to the third quarter of '06, that's about a 14% reduction.

Diluted shares outstanding, we picked up about a 9% benefit in the third quarter of '07 when you compare that to '06 we purchased $18.5 million of stock, about 350,000 shares at an average price of $51.82. That brought our 9/30/07 outstanding shares to 12,886,110.

Diluted EPS came in at $0.88 for the third quarter of '07, that's down $0.05 and 5% compared to the $0.93 we posted in '06. Cash flow from operations was up 8% to $12.5 million for '07 versus $11.6 million for '06. We did make in the third quarter about a $7 million tax estimate due to being in a little ahead of the curve. I expect our fourth-quarter tax estimate to be quite a bit less, probably $5 million to $5.5 million level.

CapEx was $1.3 million for the third quarter; that brings us to about $3.5 million year-to-date, which is considerably less than the '06 comparable nine-month period, $4.5 million lower. And you may recall that last year's nine-month period was when we were incurring a lot of the cost in building out the Duncan customer service call center where we have a lot of folks today.

Total notes payable at 9/30 were $78.3 million, principal payments of $4.6 million per quarter, and of course all of it's tied to LIBOR and with those benefits that I've talked about before in reducing the interest rates, at 9/30 our weighted average cost is about 7% and most of this matures in 2011.

And I've hit those items and then probably the last thing, total cash and unplaced investments at 9/30/07 was $68.8 million. Over $38 million of that is at the holding company with the balance difference there being held in our insurance subs.

And with that, Randy, I'll turn it back to you.

Randy Harp

All right, Steve. I still remember our initial meeting with Wells Fargo, we told them we wanted lower interest and the less covenants and they said they heard that a lot. But we worked through it all so we do appreciate and enjoy the relationship we've developed with Wells Fargo and the other participants in that line, also Bank of Oklahoma sharpening their pencil for the ACH savings that Steve talked about.

And stock buyback that Steve gave you the numbers, I think you can look at the table of monthly purchases and any of our SEC filings and tell that on a sliding scale if the price goes lower we get more aggressive, as it moves up we become a little less aggressive, but did buy 357,000 shares during the quarter.

The bulk of that during the month of August when the stock had slid back into the upper 40s, we got very aggressive. So we have been buying certainly all along and will continue, but we'll become more aggressive now that we have even more leeway to do so with the bank modifications.

Now I want to respond to the e-mail questions. And I know just listening to Steve some of these have been answered by his flux analysis, but these are questions that have been submitted electronically that haven't been addressed this morning or in our 10-Q that was filed yesterday. And as always, utilizing our respective strengths I'll read the questions and let Steve answer them.

Question-and-Answer Session

Question 1

‘Can you discuss why selling and marketing expenses and G&A increased in the quarter?’

Randy Harp

And I think Steve addressed that. And again, we would expect from just a pure advertising standpoint those costs are expensed as incurred and we would expect to continue the national media campaign throughout '07 and well into 2008.

Question 2

‘Court TV had a feature on Pre-Paid Legal Services. Can you discuss the general feedback from associates and any impact on production?

Randy Harp

I can tell you just personally having been out in the field and done some meetings and certainly talking to our associates on a daily basis, I think the feedback from everybody has been good and has been as we've desired and expected. I think it just oozes with third-party credibility. Steve, you might address the second half of that question, impact on production?

Steve Williamson

Sure. And of course the first airing was on Saturday the 27th, we had already shutdown production for the third quarter. As it relates to the direct impact of the numbers that I've already presented to you as far as our production numbers of $154,000 compared to $155,000 last year's third quarter.

So really the results are in the first three weeks that we've had so far. And Melanie gave us an update yesterday which actually takes us for the first three full weeks plus Monday's business and on the recruiting side, recruiting is up about 25%.

On the production side, production is up around 12%. So certainly feel good that, one, pretty much the only thing we've been doing is the national media campaign, so it's pretty easy to figure out what the impact is.

And the only other thing that I would say is that when you take a look at our different relative production pools you've got our network marketing sales force that produces probably 70% of our business or so and then you've got the group producers.

And then of course we have our benefit that we have from Primerica. I would expect that most of these increases are for the most part from the network marketing sales force. They're a little more nimble, more quick to take advantage of things of this nature.

Most of the group producers need to kind of have the HR directors and folks actually see the program and then follow-up with it, whether they see it live on Court TV or whether they give them the DVDs. And the DVDs were not available to the field until really that first week in October.

So encouraging results but, as Randy has said many times before, he and I like to count the numbers when they arrive here at 1 Pre-Paid Way. But the early, the first three weeks is certainly encouraging.

Randy Harp

But I think, again, one of the desired effects I think of this media campaign is also a positive impact to membership retention and persistency. And we did notify on the front-end our members and especially the groups that put payroll stuffers in their paychecks to let their employees know about the Court TV episode.

And we'll continue to do that as we air these programs. And again, the one that airs this Saturday, October 27th does have four executives from different companies that are sharing their thoughts on why they offer this membership to their employees. So certainly should be a continued entree into the group market.

Steve Williamson

And the other thing that's going to be in the coming, I can't remember if it's the second or third, but John Addison will be in the second…

Randy Harp

Yes, he's on this next one.

Steve Williamson

And John Addison of course leading the Primerica sales force. I would expect with him there kind of talking about the product and how it benefits the members that they write and then his sales force hears him talk about that. I think we could possibly see some positive impact from that relatively small segment but a very good segment of our business.

Question 3

‘Talk about initiatives to improve membership growth and initiatives to improve agent growth and retention.’

Randy Harp

And not to be cute, but I think the short answer to both of those questions is this national media campaign. Again, I've always seen our job, at least what impact we can have from the home office on the field is to raise their belief level. Sales are simply a transference of belief, and if we can impact positively the belief level of our sales associates then I believe they'll be more productive.

And as they're more productive then that impacts membership growth and agent growth and as their belief level increases then I think it also addresses the agent retention question.

So I want to be cautious and we're not expecting a tremendous fly up in recruiting or production by airing a 30-minute segment on a national broadcast, but it is our first step in a branding effort, if you will, a credibility effort, if you will, that I think does bode well for us from a long-term perspective.

Question 4

I've just got one that kind of fits within this national media campaign. It says ‘can you discuss the cost of the national advertising campaign and how this works with your direct marketing force? Aren't you undercutting your own associates?’

Randy Harp

Good question.

Steve Williamson

Yes, very good question. They cost I've already addressed, it certainly had the biggest piece of the increase from the sequential basis on our G&A side, was due to this national media campaign and the associated cost and then of course we expense that whenever that airing occurs. And since that first one aired before the end of the quarter we did expense all of that and do expect to have similar type cost on a go-forward basis.

As it relates to how this works with the direct marketing force and ‘are you undercutting your own associates,’ the way we originally did the first program and all subsequent programs, we're not trying to generate calls here where we close sales at 1 Pre-Paid Way.

Last time I checked, and I think it's pretty accurate still today, Randy and I have sold zero memberships. The sales force are the ones that makes the sales. And really the way it works is we let them know in advance that we're going to have this national airing, they the associates, and then the associates invite their friends, family, whoever they see as a potential member or recruit, into their home so that they can see it live, that's the way it should work.

And then they, after they see the program, will go through the rest of the presentation and close the sale. They also have the ability to use the DVD subsequent to that airing if folks didn't actually come to their home and use it that way. There is absolutely no intent for Pre-Paid Legal to generate any sales.

We have relied on our sales force for 35 years to make those sales and we will likely rely on them for another 35 years. There is an 800 number that comes into 1 Pre-Paid Way, the first show we actually answered that particular phone call and tried to get the information on ‘who told you about the show,’ ‘you need to go back and talk to the associate.’ If in fact we could not determine we rolled those out to leads.

In the future what we're going to do is have a recording, and the recording is going to say ‘thank you for watching Justice for All and we encourage you to get with the associate that told you about the program’ and they will not even be able to leave a message.

So in no way do we want to ever compete with the field. They're the ones that generate the top-line revenue that pays Randy's and my salary and that's the way it will be as long as we're around.

Randy Harp

Good point and I think, again, that that continues to work well and is supporting and adding to the associates' efforts in the field with just a real credibility push.

Question 5

‘Can you give an update on the progress of the ADRS program?’

Randy Harp

We continue to every time there's another identity breach we certainly are taking that to the small-business market, especially the small-business market, most of which still have no idea what their liability is under all the new laws.

We're continuing to certainly press into the small-business market both with ADRS and one of the latest initiatives, certainly all the turmoil around the subprime lending, not that that impacted our investments but it does impact our members.

And so we've seen our provider firms, in fact we've had over a dozen of them record on a state-by-state basis phone calls for our associates to listen to, just educating our associates so they can educate our members and potential members about what can be done in the event of subprime issues or foreclosure issues.

And just another example of if you look in our product brochure and you look at what this product does for our members, you're not going to find anything specifically listed in our brochures about subprime lending issues, you're not going to find anything in there about the new immigration issues. In fact the state of Oklahoma now has one of the toughest immigration bills in the nation that goes into effect November 1st and has very serious ramifications, especially to the small-business market.

So I know Steve and I participated on a conference call last night with our Oklahoma provider and our Oklahoma sales associates talking about, again not going to find it in our brochures, but another way that this membership can help our members, our small-business members, etcetera.

So I think whether it's subprime lending and the resulting bankruptcy issues that are going to develop out of that, whether it's immigration or whether it's identity breaches or information breaches, I think that all continues to funnel down that ADRS path very well.

Steve Williamson

And I might add that of course we just came out of Vegas and continue the process of training even more and more folks to be qualified to utilize the ADRS program to help them get in the door to help the benefits do those regional steps, so that that they can protect themselves.

So continue the process of training new associates so we have more feet on the street if you will as it relates to the ADRS program.

Question 6

‘How many people are employed at the Duncan call center?’

Randy Harp

We're currently at about 160, again that call center capacity is about 375, so we do continue to put some folks there but obviously could double the number of positions there. That space is completely built out, so all we need are the warm, educated, motivated bodies to put in it.

Question 7

‘Quantify the results from the TV advertising. What do we think about TV advertising going forward? Do we anticipate more or less or flat?’

Randy Harp

Certainly not less, I would say flat or more. Quantify it, again very difficult for us to do. Steve shared the last four weeks or almost inception-to-date number since the first addition aired.

Steve Williamson

And I might add one little caveat on that. We were talking about a 12% increase in production, 25% on the recruiting. Of course the fourth quarter of last year was not exactly one of our best quarters, but the month of September was a pretty decent quarter. So that number that we posted last year was more heavily weighted to the October results, so the 12% isn't 12% of a bad number [inaudible].

Randy Harp


Question 8

‘Explain the reasons for the increasing losses in associate services.’

Randy Harp

I think Steve has done that. It's really a combination of lesser revenues and more expenses which are again we typically have with the Vegas event.

Question 9

‘And explain the year-over-year increase in commissions despite the increase in membership.’

Randy Harp

And Steve addressed that again earlier, the ability to earn advanced commissions at an earlier stage.

So, that's all the questions that we have. I do want to point out, and I'll give you some numbers in just a minute, but keep in mind from a broad perspective, when we started our treasury stock buyback program in April of '99, we had almost 24 million shares outstanding. Steve told you earlier, at September 30, we were down to 12.8 million. So not quite there yet, but almost have cut the number of shares outstanding in half and we are very proud of that.

And again, we've returned $356 million to shareholders since April of '99 through that share repurchase program, paid some dividends. If you look at the share repurchase and dividends that we've returned to shareholders, it's more than a 115% of our net income for that same period. Obviously, we've built a new $32 million plus home office facility here.

At September 30, we had $68 million cash and investments. So kind of total uses there, $456 million, at September 30, we only had $78 million in debt and we've recently obviously modified that debt to lower the interest rate and to ease the covenants to give us more access.

So, I think all of that, obviously just numbers, but obviously, also in my mind at least proves that this business model allows us to deliver a high-quality like events legal plan and still produce substantial free cash flow.

So we plan on continuing, as we have since April of '99, to utilize any excess cash, to leverage our operational results in order to produce what we believe maximum long-term per share results for our shareholders. We're proud of that goal, we're proud of what we've accomplished since then and certainly look forward to continuing along those same lines.

Again, I refer you back to our SEC filings that show the month-by-month-by-month stock repurchases. I think it becomes obvious that on a sliding scale, we're going to get more aggressive at lower prices and less aggressive at higher prices.

But appreciate you being on the call, appreciate for those of you that have ridden the river with us for a while, we appreciate that. Steve and I personally appreciate it. We don't take it for granted and we still believe and think the national media campaign will help.

But still believe that in the future, we'll produce results that all of us, as shareholders, can be proud of. Appreciate you being on the call today. Look forward to talking to you again in February. Thank you.


And that concludes today's teleconference. Thank you for your participation and you may now disconnect.

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