Courier Corporation F2Q08 (Qtr End 3/31/08) Earnings Call Transcript

| About: Courier Corporation (CRRC)

Courier Corporation (NASDAQ:CRRC)

F2Q08 Earnings Call

April 16, 2008 2:30 pm ET


James F. Conway – Chairman, President and Chief Executive Officer

Robert P. Story – Executive Vice President and Chief Operating Officer

Peter M. Folger – Senior Vice President and Chief Financial Officer


John Rogers – Ferris Baker Watts

Jamie Clement – Sidoti & Company


Good afternoon, ladies and gentlemen, and welcome to the second quarter 2008 Courier Corporation earnings conference call. (Operator Instructions) I would now like to turn the presentation over to your host for today, Mr. James Conway, Chairman and Chief Executive Officer of Courier Corporation. Please proceed, sir.

James F. Conway

Thank you, Stacey. Good afternoon everyone, and welcome to Courier Corporation’s Second Quarter Earnings Conference Call. I’m Jim Conway, Chairman and Chief Executive Officer. Thank you for joining us. We released earnings earlier this morning. I hope you’ve all had a chance to see the results.

It was a tough quarter for Courier, as for many other companies. A combination of factors in our industry and the economy as a whole, took it toward sales and earnings in both of our business segments. So, we finished the quarter with bookings up strongly on the manufacturing side, and preparations unscheduled prepared important product launches in publishing in our third and fourth quarters.

Courier’s Chief Operating Officer, Bob Story is here with me today, and Peter Folger, Courier’s Chief Financial Officer is also here with us.

Bob, will begin with an overview of financial results for the second quarter and first half of fiscal 2008. I’ll then discuss the key issues driving our business. I will also provide guidance on what you expect for the full-year. Bob, please go ahead.

Robert P. Story

Thank you, Jim. Before I begin, I’ll remind you that during this call, we may make forward-looking statements relating to the company’s financial goals, and business environment among other things. Actual results may differ materially. Today’s earnings release, issued earlier this morning, includes detailed commentary on the factors that could affect financial results. We encourage you to review those factors in conjunction with any forward-looking statements we make today.

All forward-looking statements are being made under the provisions of the Private Securities Litigation Reform Act. Also throughout this call, whenever we refer to earnings per share, it will be on a diluted basis. So, now let’s look at our performance for the second quarter ended March 29, 2008. We focused on three key measures that drive shareholder value, growth in revenues, growth in earnings per share, and growth in EBITDA. EBITDA is earnings before interest, taxes, depreciation, and amortization, which is a non-GAAP measure that we track as an indicator of the Company’s operating cash flow performance.

This measure should be considered in addition to, not as a substitute for or superior to GAAP financial measures. Relative to revenue, second quarter sales were $67.8 million down 11% compared to the last year second quarter. First half sales were $130.7 million, a decrease of 7% from last year. Weakness was seen across the Board in all of our diverse markets, reflecting a sluggish economy and the timing of orders, especially delays in text book orders. Relative to our second measure of earnings per share we earned $0.27 per share in this year’s second quarter compared to $0.44 per share last year, a decrease of 39%. And for the first six months earnings were $0.38 per share this year compared to $0.76 per share last year.

This drop in earnings is the result of the shortness in sales, other key measure, EBITDA was $11.1 million in the second quarter down 22% from last year’s $14.3 million, as a result of our earnings. For the first six months EBITDA was $18.8 million compared to $25.3 million last year. Now I will take a closer look at our two business segments and talk about the results of each one. I will start with the Specialty Publishing segment, which is comprised of Dover Publications, Research & Education Association or REA, and Creative Homeowner. Specialty publishing sales in the second quarter was $16.8 million down 8% from last year; while sales for the first half were $32 million also down 8%.

Creative Homeowner sales were down 6% in the second quarter and 15% for the first six months of fiscal 2008. The slowdown in the housing market this year has significantly reduced traffic in sales in the home center market, which is Creative’s largest channel. A chief dismount, but important gain in market share in this channel this quarter to help offset the market softness. We also achieved growth this quarter in other channels such as warehouse clubs.

REA sales were up 2% in the second quarter, which is well below their growth rate of 19% last quarter and 16% throughout of last year. Sell through of REA books and major retailers’ remain strong in the quarter. Suggesting retailers are managing inventories closely, and as the competitive environment has become tougher this year. For the first half of the year REA sales were up 9%. Dover sales were down 11% in the second quarter and down 6% for the first six months, during the period of slow market growth.

Dover had a challenging quarter across channels as retailers of all types ordered cautiously and managed inventories carefully. On the other hand, Dover made promising inroads into the mass market channel during the quarter, which we expect to contribute significantly to performance in the second half of the year. Dover also introduced a major new line of products targeting the craft market, which will begin shipping in the third quarter and we prepared to launch of another product line, which is expected to begin shipping in the fourth quarter.

Gross profit as a percentage of sales for the publishing segment decreased from 43.4% in last year's second quarter to 39.0% this year. Creative Homeowner has reduced the publishing segment’s overall gross margin percentage because of the lower margin distribution business and because of charges of approximately $350,000 to increase inventory reserves into write down investment in titles that have not performed up to expectation. Creative have also successfully implemented the SAP system during the second quarter and transitioned a book manufacturing to Courier from a competitor.

Despite, lower sales the gross profit percentage for the rest of the segment was comparable to the prior year reflecting productivity gains and cost reductions achieved since last year. For the first six months, the gross profit percentage was 39.9%, compared to 42.6% for the same period last year. Selling and administrative expenses for the segment were $5.9 million in the second quarter, compared to $6 million last year, and for the first six months were $11.7 million, compared to $11.8 million last year, down slightly in both periods.

Interest expense allocated to this segment in the second quarter was $440,000 compared to $472,000 last year. And for the first half was $876,000 compared to $910,000 last year. Pretax income in the specialty publishing segment in the second quarter was $200,000 down from $1.4 million last year. The major cause of the earning drop was Creative Homeowner, which incurred a pretax loss of close to $800,000 including the charges mentioned earlier, that totaled approximately $350,000. For the first half pretax income in the segment was $250,000 down from $2.2 million last year Creative Homeowner accounting for most of this change.

In our book manufacturing segment, second quarter sales were $53.4 million down 12% from last year while sales of the first half were $103.1 million, down 7% from the same period in 2007. In this segment we focused on three publishing markets; Education, religious and specialty trade. In the education market, while second quarter sales of $22.2 million were up 40% from the slow first quarter, they continue to be well below expectation, down 17% from last year’s second quarter. For this first six months of the year sales were down 9%, to $37.9 million.

This is a seasonal slow period for the education market, but it is a period when publishers have traditionally placed orders or reprints of textbooks to spread manufacturing more evenly throughout the year. This relieves pressure on the spring and summer peak season, when capacity utilization typically is very high. For a variety of reasons some publishers have delayed reprint orders this year. The publishing industry continues to predict, but 2008 will be another growth year.

So, we continue to expect to be very busy producing educational books over the balance of our fiscal year. In fact orders picked up strongly in March, and early April, and our four-color operation is now booked near capacity for the third quarter. Sales for the religious market was $14.4 million in the second quarter, inline with our expectations, but, 15% below, a record setting second quarter last year, when sales jumped 22%.

For the first half of the year sales to the religious market were $30.6 million down 6%. Last year, our religious sales experienced large peaks and valleys, which distorts comparisons this year. We continue to expect religious sales for the full-year to grow at low single-digits inline with historical trends. In our third key market specialty trade, sales were down 2% to $13.6 million from last years second quarter, and down 5% in the first half of the year to $28.0 million.

We continue to gain new customers and grow our share with orders. But, we are also seeing more caution in ordering by these publishers, as a result of the slowing economy. This means the publishers are waiting into the last minute to place orders for manufacturing, and some are reducing print quantities. Gross profit in the book manufacturing segment decreased by 18% in the second quarter to $12.8 million, and as a percentage of sales decreased from 25.9% to 24.0%.

This drop in the gross profit percentage is the result of lower capacity utilization in the quarter combined with an increase of approximately $3,000 and depreciation expense related to last year’s expansion of four-color textbooks capacity at our Kendallville Indiana plant. And to start-up of a new high output press for the religious market at our Philadelphia plant.

Gross profits for the first half of the year was $23.2 million and as a percent of sales dropped from last year’s 26.0% to 22.5% this year, reflecting the lower capacity utilization combined with a $9,000 increase in depreciation expense. We expect the gross profit percentage to return to normal levels for the balance of the year as sales volume in capacity utilization increase. Selling and administrative expenses in this segment were $7.5 million in the second quarter, down 4% compared to last year, and for the first six months were $15.5 million up 2%.

Interest income allocated to this segment in the second quarter was $168,000 compared to interest expense of $5,000 last year. And for the first half of 2008, interest income was $308,000 compared to $213,000 in the same period last year. Pretax income in the book manufacturing segment was $5.5 million in the second quarter down 30% from last year’s $7.9 million, for the first six months of the year pretax income in this segment was $8.0 million compared to last year’s $13.8 million.

Now, I will shift gears and talk about cash flow, and our financial condition. Cash provided from operating activities were $6.9 million in the first six months of the fiscal year, compared to $10.5 million to the same period last year. Net income decreased by $4.8 million, while depreciation and amortization increased by $1.3 million.

Working capital used $10.9 million this year, compared to $10.0 million in the same period last year. Investment activities this quarter used $7.9 million cash, capital expenditures were $5.5 million, compared to $11.8 million for the same period last year. We expect capital expenditures for the full year to be between 17 and $22 million. This improves the construction of a warehouse in Kendallville Indiana and the completion of our capacity expansion program in our religious book manufacturing operation in Philadelphia.

Prepublication expenditures in our publishing segment were approximately $2.5 million this quarter, down from $2.8 million a year ago. For the year, we expect these costs to be between $5 and $6 million. We used approximately $5 million to pay our quarterly dividend of 12% from last year. We often used $7.2 million to repurchase 250,000 shares of our stock in the first half of the fiscal year from the $10 million authorized by the Board of Directors last November. And we ended the quarter with $30 million of long-term debt, up $12 million from fiscal year end.

So to sum up, both segments are up to a slow start this year, reflecting the effects of the slowdown in economy and delays in textbook ordering. Book manufacturing sales were down 12% in the second quarter and pretax income decreased 30%. Sales to all three of our target markets were down in the quarter, yet we’ve remain optimistic about growth over the balance of the year. In particular, our four-color capacity is now nearly sold out to the third quarter, as orders from educational publishers have returned to more typical spring levels. Also this quarter, we successfully installed the major new press in Philadelphia, to provide additional capacity and greater efficiency for our major religious customer.

Specialty publishing sales in the second quarter decreased 8% and pretax income decreased by $1.2 million. The housing recession and its spillover into the rest of the economy, affected all three of our publishing businesses this quarter. Creative Homeowner was impacted the most with sales down 6% and a pretax loss in the quarter of $775,000, which included charges of approximately $350,000 for inventory and prepublication write-downs tied to slow down in sales.

Creative also successfully implemented the SAP system in this quarter, so the publishing division is now using common information systems throughout. We also completed the move of their book manufacturing this quarter to Couriers Kendallville plant from a competitor. Our investment plans continue on-track, and our financial condition remains strong, leaving us well positioned for continued growth. Now, I’ll turn the call back over to Jim.

James F. Conway

Thank you, Bob. As you can imagine this past quarter was disappointing for all of us in Courier. We were certainly not alone in our disappointment, as companies everywhere have inherit by the weak overall economy and the particular problems in the housing and financial sectors.

We are also not alone in our industry, with many book retailers reporting declines in same store sales and many publishers opting for later and later print runs in response to discouraging statistics on consumer confidence, but even in an uncertain economy it was an unusual quarter for Courier. In that challenges spent, both of our business segments in all of our major markets, with only a very modest gain at our smallest business REA, to offset declines elsewhere.

As a result we have lowered our guidance for the year as a whole. Fortunately we have ample evidence in hand that the story will be very different in the third quarter. Our four-color presses in Kendallville, Indiana underutilized in the last two quarters are now running full tilled as the spring text book season has fairly sprung after a hesitant start. Our longer way to new press and our scripture plan Philadelphia is in operation ramping up to support the long-term program of increased production on behalf of our largest religious customer, and we have healthy pre-release bookings for a new class line, Dover will be announcing shortly. But even with the soft performance over the remainder of the year we will be able to overtake the first half shortfall. So, while we expect our sales and income to grow from this point on, we’ll end up with our first down year earnings in more than 10 years.

So, what lessons can we learn from this situation? Are there things we could have done to make a difference earlier? Are we doing everything we should be doing now? Are there ways we can help our customers get through the challenges they are facing now? So, we’ll be even better positioned when the industry stabilizes and the economy recovers. The answer is yes. To the first question, yes; we could have eased the burden of the first two quarters, have we not invested in the technology and capacity that has made us the service leader in our two largest long-term growth markets of education and religion and yes, we could avoid -- we could have avoided the challenges at Creative Homeowner have we not pursued that’s attractive well run opportunity to diversify our publishing portfolio and reach out towards broad new audience of readers and consumers.

To the second question, yes; we believe we are doing what we need to do in the current market environment. It’s not all that different from what we have we done in past downturns. So, both we and our industry having a somewhat different position today. In our last downturn, we took a hard look at trends and directions in our markets and we chose to invest in the future. From that investment if the economy recovered and those trends continued our business grew substantially. From a small regional player, we became a national supplier of Choice in the large long-term market for four-color textbooks and as we have broadened our publishing segment, we not only reached to more readers, but learn to read new synergies in marketing and created a growing streamers business, for our manufacturing operations. Today the industry picture is somewhat different, as the wave of consolidations and changes have continued to run its course in manufacturing, publishing and retailing.

In a consolidating printing industry, we are the third largest book manufacturer in North America. Our position is stronger than ever in both education and religion, as we have held onto share gains and textbook production and forged a long-term partnership with our largest religious customer. Our plans are widely recognized, as the most efficient in the industry and as leaders in implementing new technology to make them even better. In publishing, while all of our imprints have been hit by the soft economy, they too are more widely recognized than ever for the quality of their offerings and their commitment to developing innovative, effective solutions for retailers as well as readers.

So, to the question of what we are doing today and tomorrow to help ourselves and our customers, we are doing more of the same. In a sense that we're continuing our program of disciplined investment and efficiency in service, while continuing to develop new products and capabilities in tune with trends in our markets. Frankly, we are very good at efficiency and service and our customers know it. That’s what share gains are all about.

Now when it comes to product development, sales and merchandising, we're getting better all the time. Upon Paul Negri’s retirement it’s a step after a distinguished 30 year carrier Dover publications, Chris Kuppig has taken the range as President in an exceptionally smooth transition. Building on Paul’s record of outstanding editorial quality, Chris and his team have thought a new energy and breather of perspective that board well for retailers as well as employees and readers.

Within this past quarter, we saw a sign, this broader retailer outreach is beginning to bear fruit and its mass market retailers are responding well to a new generation of customized Dover products. In line with this response, the first releases in Creative Homeowner’s new line of green titles has also sold well into a variety of channels and by the way starting this month, the weather channel’s Forest Earth Program will include a segment on one of those titles “green-up, you clean-up”.

With new prior plants coming out at Dover in the third and fourth quarters, we expect significantly stronger results in publishing over the balance of the year, but one clear lesson of the last two quarters is that we cannot predict the future of the housing and home improvement markets. So, while we are doing these new things we’re also continuing to ratchet up internal efficiency with investments in infrastructure and by taking advantage of our in-house capabilities for manufacturing creative homeowner books.

This past quarter, we completed our implementation of SAP information technology at Creative Homeowner. We now have a unified infrastructure that will strengthen collaboration throughout the segment while helping to make our manufacturing more efficient and our customer service even more responsive. For our publishing business of our size, this promises to be a significant competitive advantage. Also as we mentioned last quarter with the exploration of an external trading contract, we have now brought Creative Homeowners book manufacturing business in-house.

This development is great for our business all around. We get our books faster, we save money and we don’t have to order a whole container load at a time. I could give you more examples, but they are all to the same point. In a challenging environment we are doing what it takes to make sure our customers get what they need as efficiently as possible and also get what they want in terms of beautiful books that create excitement in the marketplace, stimulate consumers and satisfy readers everywhere.

By doing that well in the current environment, we are laying the foundation to do better when conditions improve and with that let’s go to our outlook. It was a difficult quarter, and there’s no getting away from it. The first half of the year did not shape up as we had anticipated. But while the economy is down our markets are still fundamentally strong. We have lost some ground, but we will regain our momentum.

We have a history of stronger performance in the second half of the year and we believed this year will be no exception. In book manufacturing, we expect education sales to keep us very busy, as publishers work to deliver high volumes of textbooks in a shortened ordering season. In publishing, we expect improved performance coming from new products and channels at all three businesses, but because of the shortfall in the first half we have reduced our full year guidance.

For the remainder of fiscal 2008, we expect sales growth of 7% to 10%. For the same six months period, we expect earnings per share of $1.32 to $1.42 versus earnings of $1.27 for the last six months of fiscal 2007. And we expect EBITDA to increase to between $38 million and $40 million over that same period from $36 million for the last half of fiscal 2007.

For fiscal 2008 overall, we project total sales of between $296 million to $301 million, versus $295 million in fiscal 2007. We expect full year earnings per share of $1.70 to $1.80 for fiscal 2008 compared to $2.03 per diluted share in fiscal 2007 and we expect EBITDA for the full year to be between $57 million and $59 million, versus $61 million for fiscal 2007.

Through the second quarter of fiscal 2008, Courier repurchased approximately 250,000 shares of its common stock for approximately $7.2 million under its share repurchase plan. As of the end of the quarter approximately $2.8 million of the part of the plans original authorization was still available for future stock repurchases. Now at this point I will turn the call back over to take Stacey and see if there are any questions.

Question-and-Answer Session


(Operator Instructions) Your first question comes from the line of Jamie Clement with Sidoti, please proceed.

Jamie Clement – Sidoti & Company

Jim, Bob, Peter, good afternoon.

James F. Conway

Good afternoon Jamie.

Jamie Clement – Sidoti & Company

Jim, first couple of question on manufacturing then follow-up on publishing. Your -- I know that the second quarter typically is seasonally stronger than the first quarter and obviously revenue on manufacturing played that out. The margin that you got on that revenue was a whole lot higher than in the first quarter. I mean was that simply a function of capacity utilization in the seasonally stronger quarter or was there something that hurts you in the first quarter that turned around in the second quarter, can you give us a little bit more color on that?

James F. Conway

Jamie it’s really just capacity utilization

Jamie Clement – Sidoti & Company

Okay and the follow-up to that would be -- I presumably -- you would expect a -- you would expect an even stronger margin in the second half of the year and that obviously, I think speaks your guidance and that sort of thing, I mean, is that the right assumption?

James F. Conway

That would be the right assumption, Jamie.

Jamie Clement – Sidoti & Company

Okay. When you have a decent amount of press time that is already has been booked as it sounds is the case in the third quarter. Is pricing effectively already locked up or is there -- or do you not necessarily have that locked in quite yet. Like can you explain how that process works?

James F. Conway

Well, for the most part Jamie, the pricing is locked up, we have pricing negotiations with our major customers usually in the fall, which tends to lock up pricing for the year. There is some spot work that comes in from time-to-time, but, you can assume that, the pricing levels for the most part are locked up.

Jamie Clement – Sidoti & Company

Okay. Have you -- is there any -- there is no evidence and you certainly didn’t say anything about this, but, is there any evidence at all of any kind of relative price deterioration vis-à-vis the first half of this year or actually are you -- or do you think things are relatively stable?

James F. Conway

It’s relatively stable, Jamie, again you see some inspiring things happen from time-to-time both up and down, but, for the most part, the pricing environment, I would classify as stable.

Jamie Clement – Sidoti & Company

Okay, okay. Switching gears to publishing, you mentioned that the new releases, from Dover to the mass channel. Is this -- let me - I think it was about a year or so ago, you all were alluding to some Dover pilots that were out there in the market. Is this related to that at all?

James F. Conway

No, that was a completely different program.

Jamie Clement – Sidoti & Company


James F. Conway

Different customers and different channels.

Jamie Clement – Sidoti & Company

Okay. I just was curios about that. And last question I let somebody else go, Jim, obviously your competitors some were struggling, some more than others, the major booksellers obviously have had some relatively negative things to say. Presumably there is a whole host of private company publishers out there that are likely feeling a certain degree of pain right now. Can you talk a little bit about the acquisition environment, if you -- if the economy and deterioration has maybe brought some people into discussions that were maybe on the sidelines before, can you talk a little about that?

James F. Conway

I can talk a little about it Jamie. I can just tell you that, we’re always out there looking for great companies that are well run, that are doing fairly well, that have a good track record and strong management and as I can -- I guess I can tell you, we’re always looking and you’re right, the environment now is very interesting for those sort of searches.

Jamie Clement – Sidoti & Company

Yeah, because sometimes, choppy waters can benefit financially strong companies like yourself through that area, so, I was just curious about it. Okay. Thanks very much for your time.

James F. Conway

Thank you, Jamie.


(Operator Instructions) Your next question comes from the line of John Rogers with Ferris, Baker Watts. Please proceed.

John Rogers – Ferris Baker Watts

Good afternoon.

James F. Conway

Good afternoon J.P. How you’re doing?

John Rogers – Ferris Baker Watts

Doing well, I had a few questions on the book manufacturing side specifically on the religious market, given the first half results and your expectation for low-single digit growth for the full year that would imply a back half growth number of close to 10%. So, I am wondering what you’re basing that full year number on, is that some of these orders in hand or is -- I was just wondering what that growth number is based on?

James F. Conway

Yeah, there’re couple of points J.T. number one, we’ve got a long, long history with that customer as you know that have had those sort of growth rates and every expectations and our discussions with them is that this year will be no different from the long-term trends and number two; if you go back and look at some of the quarter-by-quarter growth you can see that last year’s second quarter was one of their largest ever followed by a third quarter that was one of their slowest ever and quarter-to-quarter moves are not the way to measure this sort of account, as on a year-to-year average. So, we feel quite comfortable that they are going to have a stronger certainly stronger third quarter and therefore, a stronger second half.

John Rogers – Ferris Baker Watts

Okay, but again looking back over the past four quarters, three of the last four quarters, we have seen growth that was below expectation due to order timing, and then – and then the last quarter where we see growth it's only up 3%. If you want to get back to that single - low single digit growth number you are going to have to see some fairly strong growth of the second half of the year. You know they've been waiting until this new plant comes up so they get the most banks and their buck or is there something else going on here?

James F. Conway

Last year the order pattern and sales were very volatile. I think you – you can understand what's going on we have to really look and study last year’s volatility, this year we don’t have the same degree of volatility and so you see some quarterly ups and downs that really are just a reflection of what went on last year. We’re on a steady path this year, we’re very comfortable with it and yes to your point, it does imply a strong second half after - by comparison a weaker first half, but the reality is as I said we’re on a steady path this year instead of kind of a dramatically up and down on last year.

John Rogers – Ferris Baker Watts

All right. And then in the education market, I think you all were more -- after the disruptions in the last quarter you all were more positive after the remainder of the year given that we’re facing continued pressure on tax receipts, I think that the 50% of textbook adoptions states are facing, budgets shortfalls in ’09. What gives you confidence other than your customer’s saying, okay we’re going to have good orders in the second half of the year and do you have any contingency plans in case -- in place, in case those orders don’t materialize for the second half of the year. I guess that’s the two questions I guess the second part of that question is you know, how much cost savings can you take out of the business if we continue to see a deteriorating economic environment and specifically if it get much worse?

James F. Conway

Let me address your first question, because I think that’s the key one. The first well J.P. we have looked at the third quarter and our bookings in the third quarter in the educational markets specifically four-color textbook market our way out and quite solid through much of the third quarter. So we evaluate third quarter bookings and fourth quarter bookings and can see out and our bookings are much ahead of last year, that’s point one. Point two, when you go on a state-by-state adoption look and see that’s in fact you are right some states are running deficits, but when you looked deeper and we have talk to our customer who are dealing with these states that portion of those state budgets dedicated to textbooks is such a small portion of the educational budget, that history tells us it's one of the last items ever to get cut. For example, textbook purchasing then the educational state budget almost across the board in major adoption states, it runs about 4% of the total education spend. So, we are very comfortable as our educational publishing customers that books will be bought and new books will be in classrooms this fall.

John Rogers – Ferris Baker Watts

All right, and then I guess last question given the changing competitive environment, are you seeing any market share gains in your book manufacturing segment?

James F. Conway

We are not seeing much of anything yet, we've had some very interesting discussions with publishers who have been long-term customers of a couple of our different competitors, but I’d have to say, at the moment there has been some test titles and test runs, which we have passed with flying colors, but I would not say that there’s been any market share moves as yet.

John Rogers – Ferris, Baker Watts

Alright, thanks, that’s all for me.


There are no further questions in the queue.

James F. Conway

Okay. Well, Stacey, thank you very much for your help and folks thank you very much for listening in and we look forward to third quarter conference call with hopefully much better results. See you all folks -- see you folks soon. Bye now.


Thank you for you participation in today’s conference. This does conclude your presentation. Please disconnect, and have a good day.

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