America Service Group Q4 2007 Earnings Call Transcript

America Service Group Inc. (ASGR)

Q4 2007 Earnings Call.

March 5, 2008; 11:00 am ET

Executives

Michael Catalano - Chairman and Chief Executive Officer

Mike Taylor – CFO

Rich Hallworth - President and COO

Larry Pomeroy - Chief Development Officer

Analysts

Kevin Campbell - Avondale Partners

Michael Lamb - Wealth Monitors

Richard Whitman – Benchmark Capital

Craig Pieringer - Wells Capital Management

Presentation

Operator

Ladies and gentlemen thank you for standing by. Welcome to the America Service Group Fourth Quarter and Year-End Conference Call. (Operator Instructions) I would now like to turn the conference over to Michael Catalano, Chairman and Chief Executive Officer. Please go ahead sir.

Michael Catalano

Good morning. Thank you for joining us today. A copy of yesterday’s press release and the related financial information can be found on our website at asgr.com. This Company needs a year of solid, consistent performance from its current contract portfolio and some earnings momentum from new contract awards. Our guidance for 2008 reflects realistic expectations of performance from our current contracts. Not reflected in our guidance are the possible effects of any new contract awards. There will be some important opportunities for significant new contracts this year and we are long over due for such an award.

Right now the Company has submitted or is in the process of preparing several bids representing a total of about 53 million in new annualized revenues. The largest of these is for the Minnesota Department of Corrections. Over the next 12 months Idaho, Michigan and New Jersey are expected to be out for bid. Depending on the award structure of the Michigan and New Jersey bids these three states alone represent potential new annualized revenues of $265 million.

We also expect that over the next 12 months several additional prison and jail opportunities will come out for bid. In the aggregate these could represent substantial new annualized revenues. Along with the named three state DOC systems the Company will actively compete for the best of these other opportunities as they develop and expect to win our fair share. Why do I believe we are long over due for significant new contract award? Because our Company has demonstrated it can deliver real value for patients and clients. The common wealth of Pennsylvania and Virginia, the health department of New York City, the states of Vermont and Wyoming, the counties of Alameda California and Subsec Massachusetts and the list could go on, are recognized as informed value driven purchasers. Please take a look at the Pennsylvania Department of Corrections own press release concerning the contract extension or the 2007 results of the paid for performance program under our contract with the Vermont DOC. The long-term extensions of the Pennsylvania and New York City contracts have not gone unnoticed by potential new clients.

We are continuing to improve our operating performance through the use of enhanced labor management and clinical information systems. Deployment of our Catalyst health record designed specifically for the corrections environment has been enthusiastically embraced by clients and clinical staff alike. Our marketing efforts and progress should also continue to improve building on the basis of strong client references.

Given the Company’s present market potential, I believe the new share repurchase program could significantly increase shareholder value over the longer term. At recent and current trading multiples, I believe this Company is the best value in correctional healthcare. We have the balance sheet and anticipated free cash flow to carefully implement this plan through the end of 2009.

At this time, let me introduce our CFO, Mike Taylor for a close review of financial matters. After his comments, Rich Hallworth, our President and COO and Larry Pomeroy, our Chief Development Officer will also be available for questions.

Michael Taylor

Thank you Michael, good morning everyone.

Similar to last quarter in the Company’s fourth quarter financial results were significantly impacted by adverse professional liability claims development. The impact on the fourth quarter results was reduced from the third quarter impact and the Company hopes that as a result of bringing the professional liability claims function in-house mid year 2007, the Company can avoid significant financial impacts related to this area in 2008 and future years.

Even with the $6.3 million greater negative impact on financial results in 2007 versus 2006 related to adverse professional liability claims development which by the way equates to a 1.13% reduction in 2007 total gross margin percentage, the Company’s total gross margin percentage still increased to 6.8% in 2007 from 5.4% in 2006. What this reflects is strong financial performance at the individual contract level in the majority of our contracts.

We were able to turn around the 2006 GAAP net loss of $0.32 per common share into GAAP net income of $0.30 per diluted common share in 2007. We expect GAAP net income to increase to $0.40 per diluted common share in 2008, a 33% growth rate.

Based upon the Company’s strong balance sheet, ability to generate cash flows from operations, current share price and prospects of 2008 and expected future profitability, we are initiating a new $15 million stock repurchase program.

Let's discuss some of the financial details related to the fourth quarter and full year results. Healthcare revenues were $121.6 million in the fourth quarter, a decrease of 2.3% over the prior year quarter. For the full year of 2007, healthcare revenues were $489.1 million, an increase of 3.5% over the prior year period. As a reminder, healthcare revenues only include those revenues from healthcare service contracts that continue to operate subsequent to the end of 2007 due to the accounting requirements of FAS 144. FAS 144 requires us to present expired healthcare service contracts as discontinued operations and collapse the revenues and direct expenses of those contracts into the line item on our income statement that is titled “Incomer Loss From Discontinued Operations Net of Taxes.”

When you include revenues generated by expired healthcare service contracts, total revenues were a $127.8 million in the fourth quarter, a decrease of 20.4% from the prior year quarter. For the full year of 2007, total revenues were $556.4 million a decrease of 14.4% over the prior year period. The decreases in total revenues are primarily due to the expiration of the Florida DOC Region IV contract late in 2006 and the Alabama DOC contract late in 2007. Healthcare expenses from continuing contracts were a $115.9 million in the fourth quarter as compared with a $117.2 million in the prior year quarter. For the full year of 2007 healthcare expenses from continuing contracts were $459.2 million as compared with $443.3 million in the prior year period.

Healthcare expenses were impacted by adverse professional liability claim development in the fourth quarter of $2.6 million and $10.5 million in the full year. A relatively small amount of share based compensation expenses included in healthcare expenses in both years results. Total healthcare expenses which includes healthcare expenses from expired healthcare service contracts and exclude share based compensation expense were a $121.2 million in the fourth quarter as compared with a $152.3 million in the prior year quarter. For the full year of 2007 total healthcare expenses were $518.8 million as compared with $614.5 million in the prior year period.

Gross margin from continuing contracts was $5.7 million in the fourth quarter. For the full year of 2007 gross margin from continuing contracts was $29.9 million or 6.1% of healthcare revenues. This compares with 6.2% in the prior year period. Total gross margin which includes revenues and expenses from expired healthcare service contracts and excludes share based compensation expense was $6.6 million or 5.2% of total revenues in the fourth quarter. As a percentage of total revenues, this is consistent with the prior year quarter.

For the full year of 2007 total gross margin was $37.6 million or 6.8% of total revenues. As I mentioned previously, this reflects the significant improvement from the prior year levels of 5.4.

Selling, general, and administrative expenses were $5.9 million in the fourth quarter as compared with $6.4 million in the prior year quarter. Included in selling, general and administrative expenses is $539,000 and $1.1 million of share based compensation expense in the fourth quarters of 2007 and 2006 respectively.

For the full year of 2007 selling, general and administrative expenses were $26.3 million as compared with $25 million in the prior year period. This includes approximately $2.9 million and $3.8 million of share based compensation expense for 2007 and 2006 respectively. Excluding share based compensation expense, selling, general and administrative expenses were 4.2% of total revenues for the fourth quarter and full year of 2007 as compared with 3.3% in the prior year period.

The Company completed its cost reduction process which was initiated in the third quarter. The goal of the program was to right size the Company’s overhead to its reduced revenue level. The Company incurred $107,000 on severance related expenses as part of this process in the fourth quarter and $440,000 for the full year of 2007. The financial benefit derived from the cost reduction program is an approximate $2.5 million annual reduction in selling, general and administrative expenses excluding share based compensation from the second quarter 2007 baseline.

Adjusted EBITDA was $1.2 million in the fourth quarter. In the prior year quarter adjusted EBITDA was $3 million. For the full year of 2007 adjusted EBITDA was $14.2 million as compared with $14.1 million in the prior year period. Depreciation and amortization expenses were $920,000 in the fourth quarter. This compares with $1 million in the prior year quarter. For the full year of 2007 depreciation and amortization expenses were $3.8 million as compared with $4.1 million in the prior year period.

Net interest expense was $458,000 in the fourth quarter. This is compared to $386,000 in the prior year quarter. For the full year of 2007 net interest expense was $1.6 million as compared with $1.9 million in the prior year period. The income tax benefit on continuing operations for the fourth quarter was $605,000. This compares with $546,000 in the prior year quarter. For the full year of 2007 the income tax benefit on continuing operations was $739,000 as compared with $3.4 million in the prior year period.

The net loss for the fourth quarter was $685,000 or $0.07 per common share, basic and diluted. In the prior year quarter the net loss was $2.8 million or $0.28 per common share, basic and diluted. For the full year of 2007 net income was $2.8 million or $0.30 basic and diluted per common share. This is compared to the net loss of $3.4 million or $0.32 per common share, basic and diluted, in the prior year period.

Cash balances increased to $9 million at the end of the fourth quarter from $2.8 million at the end of the third quarter. Debt outstanding was reduced to $7.5 million at the fourth quarter from $10 million at the end of the third quarter. Day sales outstanding and accounts receivable were reduced to 45 days at December 31, 2007 as compared with 49 days at September 30, 2007. Net cash provided by operating activities was $9.1 million in the fourth quarter and $9.5 million for the full year of 2007.

The Company’s initial 2008 guidance was provided in yesterday’s press release. Consistent with past practice the guidance reflects only the contracts the Company currently is operating and does not reflect any potential new business. The 2008 guidance reflects the significant impact of the loss of the profitable Alabama DOC contract in the last quarter of 2007, the expectations of reduced levels of adverse professional liability claims development in 2008 and the benefits of the company cost reduction process on selling, general and administrative expense levels.

The Company expects total revenues of $490 million to $500 million in 2008 absent any new business wins. Total gross margins are expected to be 7.4% to 7.5% of total revenues for the year. Adjusted EBITDA is expected to be at similar levels with 2007. GAAP net income is expected to grow to $3.6 million or $0.40 per diluted common share in 2008.

As mentioned earlier the Company’s Board of Directors has approved a new up to $15 million stock repurchase program. It is currently expected that this stock repurchase program will be carried out between now and the end of next year. Operator at this time we will welcome questions.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) and our first question comes from the line of Kevin Campbell from Avondale Partners. Please proceed with your questions.

Kevin Campbell - Avondale Partners

Good morning. I wanted to ask first you had mentioned for your 2008 guidance and expectation for medical malpractices reserves to come back down to a more normalized level. What do you think that will be? I guess that was 4.1 or so in the third quarter and 2.6 here in the fourth. What might we expect going forward on a quarterly basis?

Michael Catalano

Well Kevin, we expect to see a reduced impact from what we had seen in the full years of prior years, if you look back in ’04, ’05, ’06, we were running a little bit over $4 million of adverse impact on that line item. It was certainly much more than that in ’07, so the goal would bring in this in-house is to see a reduction from that 4 million level that we had seen and thought was unacceptable previously, so certainly there could be some but we would expect it to be much reduced from the 4 million level that we’ve seen in the past for the full year of ’08.

Kevin Campbell - Avondale Partners

Okay and are you seeing that thus far and I mean I don’t know how you actually go about doing this. Whether it’s done monthly or not but are you seeing any sort of reduction in the first part of -- this first quarter?

Michael Catalano

I can say a couple of months into this year, but I don’t see anything that changes my view of that expectation for ’08.

Kevin Campbell - Avondale Partners

Okay excellent. Moving on to acquisition that was something you guys had talked about a couple of quarters ago after your stock repurchase plan expired. Can you give us some thoughts there? Is that something that still you are considering or did you not really see anything out there that you liked and therefore decided your stock offered the best value here?

Michael Catalano

We’ve always said that we have a two strong strategy for growth the most efficient and effective obviously is the growth through the award of new contracts consolidation and within the industry is another opportunity and diversification of revenue stream is also an opportunity. Throughout the year really until the time of the loss of the Alabama contract we were much more actively engaged in annualizing acquisitions. The loss of the Alabama contract caused us to focus internally, rebase the Company in terms of its corporate overhead and revitalize our strategy for our core business which is Correctional Healthcare and that is our -- will be our focus for the immediate term. Acquisitions are not out of the question, but they are not our top priority at this point.

Kevin Campbell - Avondale Partners

Okay and then looking at the gross margins, I think you guided for about 36.7 million in the fourth quarter you were about 6.5 or so. So can you sort of walk us through why there is -- if you annualize that fourth quarter number, obviously $26 million is left on the 37, I know part of that’s going to medical malpractice reserves but can you walk us through maybe what the other differences are between fourth quarter levels and what your expectations are for 2008 and then maybe how that should progress throughout the year? Should it -- is it going to be fairly consistent margin levels throughout the year or is it going to trend upwards?

Michael Catalano

It’s good question Kevin. I think you hit on a big piece, probably the individually biggest piece in the change in expectations, fourth quarter run rate versus ’08 which was the med mile impact and we discussed a moment ago we think that’s going to be much less sort of significant impact on ’08 results. So that is the biggest individual change. Certainly we have continued to see a very strong performance in a lot of our contract portfolio in terms of improving of gross margins, we expect that to continue in ’08 and I don’t want to get into contract specifics but certainly most of our contracts are continuing to produce at a level or above of what we had expected even in ’07 at the contract level and we expect those to continue in ’08. So you are going to get some pickup in gross margins just from the continued operating of these contracts and so that’s the other piece. Just as I said, trying to stay out of specifics, we did have a few contracts in the fourth quarter that didn’t perform quite at the level of expectations in that quarter and we expect those to be back at more normalized rates in ’08 as well.

Kevin Campbell - Avondale Partners

Okay and so then as it progresses throughout the year then it should be -- it sounds like it should be fairly consistent from say the first quarter or fourth quarter in terms of the actual gross profit.

Michael Catalano

It’s probably more -- yeah, Kevin, it’s probably more consistent than some of the previous years. I do think you are continue as always to see enhancements in gross margin on any contract anniversary date or the price there steps up for the next contract year and most of those anniversary dates happen June 30 or later. So I would still think it will be a little bit higher margin in the second half of the year than the first, but probably not as dramatic a difference as what we have seen in some other years.

Kevin Campbell - Avondale Partners

Okay. And then lastly, looking at your free cash flow was about, off the top of my head, $7 million or so for the full year. What sort of expectations do you guys have, what that could be for the full year in 2008? Should it be similar, modest improvements or could it be -- well there’s something that kept that number down in 2007 you don’t expect will happen again in 2008?

Michael Catalano

I think it can be better than that and that’s our current expectations. The free cash would move up from what you saw in ’07. The fundamental changes are higher levels of profitability and less funding requirements on that med mile line which a lot of these reserve increases led to cash outlays as well, so I think if we can maintain the AR days sales outstanding in or about this level which was our target of 45 days and the balance sheet is more neutral, then I think you will see free cash flow grow a bit from where it is and be enhanced from that. Its one reason we are confident that this share repurchase program can be funded out of operating cash flows over the next 22 months or so.

Kevin Campbell - Avondale Partners

Okay, great, thank you very much.

Operator

Our next question comes from the line of Michael Lamb from Wealth Monitors. Please proceed with your question.

Michael Lamb - Wealth Monitors

Thank you. Good morning gentlemen. Mike Taylor regarding the gross margins, if I can just sort of follow up on the previous question. Where can we grow this gross margin or are we to a point where it’s only going to be enhanced by additional business?

Michael Taylor

I think it can continue to grow Mike. I think total gross margin with a more normal if you will medical malpractice adverse development in ’07 would have been pushing 8% for the year. If we can get even further reductions in the med mile that moves you up solidly and for the low 8% that benefited from a contract we don’t have in ’08 in Alabama, so new business will be a piece of getting us up maybe to the 10% range. I think we can get there or approach there over a few years with the current contract portfolio. Part of the challenge because we talked about 10% as a goal, part of the challenge is the structure of our largest contract; it’s a cost plus contract in New York city which as the total revenues haven’t grown this has become a bigger and bigger piece of the mix of the contract portfolio, so I am pretty confident in the other contracts that we can get around that level by records may hold the total a little below 10% until we get some new business and increase size of the business.

Michael Lamb - Wealth Monitors

Question to Rich, regarding the initiatives put in place. It was a rather blowing release by the Pennsylvania DOC regarding that five year extension where you were the soul source provider. Is this going to be able to be used when you go up to these other large DOC contracts and bid on those? How important are the initiatives you’ve put in place?

Richard Hallworth

Definitely the initiatives we’ve put in place including the catalyst systems are part of the reason for the Pennsylvania five year soul source extension of our contract year and we certainly want to try to follow you that into opening opportunities in other DOC and large jail opportunities that present themselves and we are trying to open those doors as frequently as possible. It has -- that press release from the Pennsylvania DOC has not gone unnoticed by several commissioners around the country. We are trying to continue to improve our underlying performance with all of our contracts and not only the technology applications we catalyst but all of our clinical and administrative programs to make sure that we are optimizing our performance in each of the areas that are crucial to serving our clients.

Michael Lamb - Wealth Monitors

I guess in the essence are we seeing some kinds of verification that with these systems that you are putting in place and have put in place for some short period of time at least are cost effective to the client?

Richard Hallworth

We have found that the system have been well received by the clients where they have been deployed so far, there is a combination of bringing -- a combination of benefits. Some which will have some -- I strong believe long term financial improvement to the client through risk management and better administrative, better monitoring of clinical performance and measures that I think will pay dividends for us because we will have a Digital Dashboard that we can monitor on more and more contracts and I hope that -- I believe strongly actually that that will help us retool our clinical programs to even continually to even better serve those clients. The initial reception has been very positive though because it is a way of monitoring all inmates to make sure that they are receiving the care they need at the appropriate time and with the major movement of prisoners around from cell block to cell block and how to quote there very high risk that they schedule for procedures that are to be seen and they are not physically there when you need them. This system does a lot less to monitor their movement and to make sure that they don’t fall through the cracks and that’s has been very well received by our clients.

Larry Pomeroy

And Mike this is Larry. Just to kind of chime in from the marketing development side on there’s a couple of points. One is when clients or potential clients are compared shopping and off the shelf EHR in the commercial markets, so what we can deliver to them in terms of a correction specific proven application, we seem to be very price competitive in that context and secondly we are seeing what I guess I’d call an unprecedented level of either explicit interest and requirements in the RFP’s or certainly an openness in receptivity to considering an EHR in both our larger DOC as well as jail based contracts. So, I think from Rich’s stand point in terms of the operational clinical efficiencies enhancements to quality reductions and risk management issues, complemented with again from my side what we are seeing in terms of the market degree of interest and our cost effective entry point, I think it’s a very positive momentum.

Richard Hallworth

Let me speak of that one other comment on that Larry. The -- those clients who gone out to look at commercially available packages have commented to us with some frequency that the commercially available packages do not fit a correction setting and that’s something we believed and why we developed our own package is that there is so much the functionality of commercial package that is applicable in a corrections environment and there are other unique needs in a corrections environment that aren’t available in a commercial available package and after researching the market place they have come to us to say that ours is the one that is best suited to their needs and we take that as a positive time for thinks to come.

Michael Lamb - Wealth Monitors

Question for both of you Larry and Rich, in regards to this EHR, we are basically going from paper to electronics moving into the 21^st century so to speak. Does that put as you had used the term in the past glue in the seeds. In others words a way that if you have using Pennsylvania is an example, could they suddenly switch to another operating system and have it totally compatible or any other client -- in other words does it move away isn’t this the objective to move away from simply price being the main determinant.

Richard Hallworth

We talked about this and the last couple of years here as we have gotten ready to go to market with the parallel system and our other clinical applications here that the intention is to present an opportunity where we can differentiate ourselves from our competitors on some thing’s that are tangible beyond price and this is an opportunity. I have used the term glue in seeds before and I’ll use it again, that it is an opportunity to put some glue in the seeds because its opportunity for us to present measurable differences in the way and the care that’s being rendered and I think that that will resonate with clients who are washing every dollars of their budgets, it’s no secret that counties and states are in tough financial condition around the country and so they are looking for the most cost effective solution and when cost invariably go up as they do in healthcare in general, they need to be able to explain the reasons for the increases and here we are able to demonstrate because we have captured the information digitally, we can demonstrate better what’s driving their cost factors and help them and work with them to design programs that meet those changing needs of their inmate populations.

Larry Pomeroy

Mike, I think it does as Rich says differentiate us. It is growing as seen, it does foster a longer term relationship all things being equal in that regard and it certainly appeals to that segment of the market that we have been targeting as a Company for years and that as the value purchaser. I'm not going to sit here and tell you that every buyer is going to want it or pay for it and we have looked at each bid accordingly with that but certainly in a significant number of both current and potential clients in the marketplace there, it’s a major factor.

Michael Lamb - Wealth Monitors

Last question, for macro picture, we have many municipalities, cities, counties, states dealing with very tight budgets. Larry, is this the kind of environment which leads itself towards more privatization potentially?

Larry Pomeroy

Yeah, absolutely, Mike. We are starting to see some of that and certainly the degree of interest in our services and the value proposition, I think as you say certainly follows those trends in terms of the budgetary cycles. We are seeing some new green field opportunities most notably small but significant, our sister state next of Raymond, New Hampshire has issued an RFP for the first time for physician and dental services and so forth. We are seeing some other jails go out to market that haven’t before. So the short answer is yes, in indeed that provides a great environment in terms of new business development opportunities and receptivity offers.

Michael Lamb - Wealth Monitors

Follow-up question, are we still expecting to see New Jersey and Michigan come out here very soon?

Larry Pomeroy

Very soon might be optimistic Mike, given the turnings of the bureaucratic wheels in both of those systems. I will hit each briefly. Michigan has just finished up their RFI process and interviews around the alternatives to the failed HMO model RFP, I was just up there this week again. They are projecting a 90 day give-or-take time frame for issuance of an RFP. So we can take that for what it’s worth and as I think we mentioned on the last call, the CMS contract there ends at the end of March of next year. They have plenty of time if they so desire to move that process along and make a selection or decision on that by year-end for even a January start if they wish to move that up. They haven’t indicated, they are going to do that but that is a possibility. So yes, I expect to see that within the 90 days or so. New Jersey, we understand, similarly has been working on an RFP. It is well along in the department itself. It still must go over to purchasing and treasury to go through that process. I think it will be summer time before we see an RFP from New Jersey but it is indeed on its way and there the CMS contract expires May of next year.

Michael Lamb - Wealth Monitors

Alright great thanks gentleman.

Operator

(Operator Instructions) and our next question comes from line of Richard Whitman from Benchmark capital. Please proceed with your question.

Richard Whitman – Benchmark Capital

Yeah, gentleman given your optimistic outlook for business opportunities this year coupled with a 52 week low in your stock price, can we assume that the buyback will be implemented and used fairly aggressively near term?

Michael Catalano

We do Richard think that at the current levels our stock is a very good value, so the short answer that is yes.

Richard Whitman – Benchmark Capital

Okay thank you.

Operator

And our next question comes from Craig Pieringer from Wells Capital Management. Please proceed with your question.

Craig Pieringer - Wells Capital Management

Good morning. Can you comment on the state of competition in the industry particularly the pricing through rationality that seems to have been prevalent of late; for instance I understand that CMS has new ownership out from under the umbrella of Madison Dearborn and do you think that development will effect considering dynamics within the industry.

Michael Catalano

I think the bidding dynamics remain dynamic, are not intended there. It does vary based on the particular bid environment and the queries at the table. We still see instances of bids being submitted at a pricing level that causes us to scratch our heads and say “How could anybody hope to deliver a level of service for that bid?” and sometimes those bids are rejected its being unrealistically low and so forth. The CMS recapitalization, it may be early. I haven’t seen any particular change in the bid dynamics or the pricing dynamics related to their taking on additional debt and so forth as a part of that process that remains to be seen. So I guess we continue to see price being a very significant factor in virtually all bids but I guess we are talking earlier in the call certainly an increased element related to the ability of bidders to capture manage and display clinical cost information data that helps manage the downstream cost of these contracts.

Craig Pieringer - Wells Capital Management

Yeah, I noted that talk of the catalyst products, that sounds pretty exciting so thanks and good luck.

Operator

Mr. Catalano, there are no further questions I will now turn the conference back to you.

Michael Catalano

This call may contain forward-looking statement made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. As such they involve risk and uncertainties that actual results may differ materially from those projected in the forward-looking statements. A discussion of the important factors and assumptions regarding the statements and risk involved is contained in the Company’s annual report on Form-10K and other filings with the Securities and Exchange Commission.

These forward-looking statements are made as of the date of this call. The Company assumes no obligations to update or revise them or provide reasons why actual results may differ. We have posted schedules on our Company website at www.asgr.com which reconciles our result as reported under generally accepted accounting principles to certain non-GAAP measures which may be referred to by our senior executives in our discussions today and from time to time in discussing our financial performance. These schedules can be found on our website and financial press releases and investor presentations. Thank you very much for joining us today. We look forward to reporting first quarter results.

Operator

Ladies and gentlemen that does concluded the conference call for today. We thank you for your participation and ask you to please disconnect your line. Have a great day everyone.

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