Met-Pro Corp. Q2 2008 Earnings Call Transcript

Aug.21.08 | About: Met Pro (MPR)

Met-Pro Corp. (NYSE:MPR)

Q2 2008 Earnings Call Transcript

August 21, 2008 11:00 am ET

Executives

Kevin Bittle - Manager of Creative Services

Ray De Hont - Chairman and CEO

Gary Morgan - SVP of Finance and CFO

Analysts

Michael Gaugler - Brean Murray, Carret

Ryan Connors - Boenning & Scattergood

William Bremer - Maxim Group

Richard Verdi - Sturdivant

Michael Roomberg - Boenning & Scattergood

Operator

Good morning. My name is Tabatha and I’ll be your conference operator today. At this time, I’d like to welcome everyone to the Met-Pro Second Quarter Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions). Thank you.

I’ll now turn the call over to Mr. Kevin Bittle, Manager of Creative Services. Please go ahead.

Kevin Bittle

Good morning and welcome to Met-Pro Corporation’s earning conference call for the second quarter and six months ended July 31st, 2008. My name is Kevin Bittle and I’m with the company’s Creative Services Department. With me on our call this morning is Ray De Hont, our Chairman and Chief Executive Officer, and Gary Morgan, our Senior Vice President of Finance and Chief Financial Officer.

Shortly, you’ll hear comments from both of these individuals. But before we begin, I’d like to make a few comments. First, during today’s call we will be referring to adjusted net income and earnings. This is considered to be a non-GAAP financial measure since it excludes from our net income and earnings the effects of certain nonrecurring items.

In today’s release, we provided a reconciliation of adjusted net income and earnings to our GAAP based results, together with the discussion of why we use adjusted net income and earnings. The earnings release along with the reconciliation is available on the Investor Relations page of the corporate website, www.met-pro.com.

I’d also like to remind you that any statements made today with regard to our future expectations may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Please refer to our annual report for the fiscal year ended January 31st, 2008, that was filed with the SEC for important factors, that among others, could cause our actual results to differ from any results which might be projected, forecasted, or estimated in any of our forward-looking statements.

And with that, I’ll now turn the call over to Ray. Ray?

Ray De Hont

Thank you, Kevin. Good morning, everyone. And welcome, again, from Harleysville, Pennsylvania. Earlier this morning, we released our financial results for the second quarter ended July 31st, 2008.

In a moment, Gary Morgan will provide more specific comments on the quarter’s financial results. But prior to that, I’d like to offer these general comments. Your company had another excellent quarter. Second quarter sales, net income and fully diluted earnings per share were the highest for any second quarter in the company’s history. This performance demonstrates the ability of our employees to deliver solid results despite a soft economy in many countries around the world and in a period of rapidly rising commodity prices.

We continue to implement our strategy to leverage our business model through a variety of efficiency initiatives including facility consolidations, global sourcing and more effective logistics. These productivity improvements are enabling us to drive better earnings growth as evidenced by our performance.

Our international business remains vibrant and continues to be a growth driver for Met-Pro as we evolve into a global company. Met-Pro’s largest installed base of original equipment together with new original equipment sales continue to provide a tremendous source of opportunities for aftermarket sales to customers who trust the Met-Pro brand and value the relationship with us.

For the first time in the company’s history we have been added to the broad-market Russell 3000 Index. On June 4th, 2008, the company’s Board of Directors declared a quarterly dividend of $0.055 per share payable on September 10th, 2008 to shareholders of record at the close of business on August 27th, 2008. This dividend represents a 9% increase over the same period last year. This is a 33rd consecutive year that Met-Pro Corporation has paid either a cash or stock dividend.

With inquiry levels and quotation activity remaining strong throughout the company, we are optimistic regarding our prospects for the second half of our fiscal year.

I would now like to ask Gary Morgan to review our second quarter performance after which I will provide some concluding remarks before we take your questions. Gary?

Gary Morgan

Thank you, Ray. Met-Pro reported record second quarter net sales, net income, and earnings per share for the quarter ended July 31st, 2008. Net sales were a second quarter record $28.1 million, up 8% from the same quarter last year. Net sales growth in the quarter was led by our Product Recovery and Pollution Control Technologies reporting segment where sales were up 10% to $14.2 million.

This increase was due primarily to increase demand for our particular collection equipment and laboratory fume hood exhaust systems. Net sales at our Fluid Handling Technologies reporting segment were up 6%, in parts due to continued growth and demand for our pumps worldwide.

Net sales on our Mefiag filtration technologies reporting segment were up 9% due to strong domestic and international demand for our horizontal disc filter equipment. And net sales in our Filtration and Purification Technologies segment were up 3% as a result of continued demand for our Keystone Filter and Pristine Water Solutions products and services.

Met-Pro continues to post strong international growth. In the second quarter of the fiscal year 2009, international sales increased 66% to a record $9.6 million compared with $5.8 million in the second quarter last year. For the quarter, international sales represented 34% of the total company sales.

The gross margin for the second quarter was 34.2%, equal to the second quarter of last year, but up sequentially from the first quarter of this year. Gross margins achieved continue to reflect the benefits of favorable product mix, strategic product price increases and leverage gains through our efficiency initiatives, including consolidations and global sourcing, offset to a certain extent, by rising commodity cost as Ray mentioned.

Income from operations rose 49% to $4 million. In the quarter, the operating margin rose to 14.2% in net sales from 10.3% in net sales in the same quarter of fiscal year 2008. The improvement in operating margins was due to higher sales combined with a decrease in selling expense as a result of reduced expenses for representative and distributor commissions.

By individual segment, the Product Recovery and Pollution Control Technologies operating income was up 118% as operating margins in the quarter nearly doubled to 12% of net sales. The Product Recovery and Pollution Control Technologies pricing remains firm, product mix has been favorable and we achieved excellent operational executions.

Our Fluid Handling Technologies reporting segment posted an 18% increase in operating income, as the operating margin rose to 23.6% on net sales from 21.2% a year ago. Results are consistent with strong demand for our pumps worldwide and from cost efficiencies realized through facility consolidations such as the relocation of our Sethco plant.

Operating income was up 31% in the Filtration and Purification Technologies segment due to higher sales in the Keystone Filter and Pristine Water Solutions business units. And our Mefiag filtration technologies reporting segments reported a 32% increase in operating income as the operating margin rose to 5.9% from 5.8% last year.

Total selling and advertising expenses in the quarter were down from the same period a year ago, primarily due to reduced expenses for representative and distributor commissions. Selling expenses may vary quarter-to-quarter in part as a result of variations, which result in some sales being commissionable and others not.

General and administrative expenses were essentially flat on a dollar basis. But as a percentage of net sales, the general and administrative expenses decreased by 90 basis points to 10.3%. For the quarter, we reported second quarter record $2.7 million in net income, up 40% compared to a year ago. For the quarter, net income was 9.6% of net sales. We also reported record second quarter earnings of $0.18 per fully diluted share, up 38% from earnings of $0.13 per fully diluted shares for the second quarter of last year.

Met-Pro’s balance sheet remained strong. At the end of the second quarter our cash on hand totaled $22.7 million or $1.47 per share, and our current ratio was 4.8. Total debt was only $5.3 million at the end of the second quarter, reducing our total debt to equity to just 6.1%.

In summary, the company had the best second quarter in it’s history reporting record second quarter net sales, international sales, net income and earnings per share.

Thank you, and I’ll now turn the call back Ray. Ray?

Ray De Hont

Thank you, Gary. Just a few concluding thoughts before we open the call to questions. Despite a soft economy and a period of rapidly rising commodity prices, your company produced record second quarter sales, net income and earnings per fully diluted share. Our strategy to leverage our business model through a variety of efficiency initiatives is working and enabling us to drive better earnings growth.

We continue to grow our international business and evolve into a more global company. Met-Pro’s largest installed base of original equipment together with new original equipment sales continue to provide a tremendous source of opportunities for aftermarket sales to customers who trust the Met-Pro brand and value the relationship with us.

The company’s inclusion in the Russell 3000 Index is recognition of the hard work of the many dedicated Met-Pro employees that stand behind our commitment to provide value to our customers and shareholders. Our second quarter performance together with our strong inquiry levels and quotation activity allow us to remain optimistic regarding our prospects, not only for the second half of our fiscal year, but for the long term as well.

With solutions that helps solve the challenges of protecting our environment, while serving business and industry around the world, Met-Pro is well positioned to take advantage of opportunities presented by the global trend toward more responsible development.

I’d like to thank the many loyal, dedicated and talented employees, who have contributed to our success, as well as thank our shareholders for the continued support. I would also like to thank all of you for your participation in today’s call.

I’ll now turn the call back to Kevin Bittle, Kevin?

Kevin Bittle

Thank you, Ray. At this time, we welcome any questions you may have. I would like to ask our operator, Tabatha, to provide instructions for this portion of the call. Thank you.

Question-and-Answer Session

Operator

(Operator Instructions). Your first question comes from the line of Michael Gaugler with Brean Murray, Carret.

Michael Gaugler - Brean Murray, Carret

Good morning, everyone.

Ray De Hont

Good morning Michael.

Gary Morgan

Good morning Michael.

Michael Gaugler - Brean Murray, Carret

First of all, congrats on the nice quarter.

Ray De Hont

Thank you.

Gary Morgan

Thanks.

Michael Gaugler - Brean Murray, Carret

It seems like you seeing strength across the board, but where I would like to drill into a little bit is there anyone business that as you look out 6 months to 12 months really gets you excited?

Ray De Hont

I think the Strobic Air business is getting us excited, because of the opportunities in Asia and in Europe; we are seeing a lot of activity there. That’s one business. We also have a lot of activity on the Flex-Kleen side. In the year, the Product Recovery and Pollution Control side is seeing a lot of activity in various products. When you look over at Fluid Handling, there is good opportunity there also. Michael, the one thing that we are seeing and we have been seeing for last three quarters is our activity as far as inquiry levels and our quotation activity is strong pretty much across the board. We have just got a close some of the bigger jobs, which are -- from the time that these are job quoted to the time they are closed have extended out. And as I said that in other conference calls, what’s happening because of the economy and the people not being sure as far as what’s really coming down the pipe. There being more – there is more concern as far as on large projects to really got all Is and cross the Ts and go up through many levels and many companies.

So, it’s taking longer to get these jobs actually handed over as a booking. But, we are seeing a lot of activity on Strobic. We are seeing a lot of it on the Flex-Kleen side, on the specialty collectors, and also in the Fluid Handling and Product Recovery side, Fluid Handling side. And then when you go over to the Filtration and Purification side, we have got some good things going where we are packaging some equipment and going out and trying to break into some new markets, one of which is the print industry.

Michael Gaugler - Brean Murray, Carret

Okay. Just kind of as a follow-up to your response, you mentioned the global economy as it stands today and you have done very, very well in what has been a weak macro environment. And during this time, I know you have kind of scaled down and consolidated some facilities. If the macro environment improves next year, next calendar year, are you going to have enough capacity or will you be looking at potentially adding onto existing facilities to meet demand?

Ray De Hont

No, we have enough capacity. The reason we do, Michael, as you're well aware and many of the people on this phone call are aware, we have a percentage of our business that is done in-house and then we also shop out a lot of our business, a lot of our manufacturing, which allows us to ramp up or scale back more quickly than some businesses that primarily manufacture in-house. So, we have the ability to, on the manufacturing side, to ramp up very quickly, even in our existing facilities because most of the existing facilities are running one shift, maybe two in some, but we have the ability to run a second shift also on the ones where we manufacture product in-house. On the ones where we subcontract, it is a matter of finding additional capacity with subcontractors around the world which we are doing. We just had some people over China, we have been dealing with some people in Mexico, so we are constantly looking at new opportunities where manufacturing around the world.

Michael Gaugler - Brean Murray, Carret

That's very helpful. Thanks Ray.

Ray De Hont

Thank you.

Operator

Your next question comes from line of Ryan Connors with Boenning & Scattergood.

Ryan Connors - Boenning & Scattergood

Good morning gentleman.

Ray De Hont

Hi Ryan.

Gary Morgan

Good morning Ryan.

Ryan Connors - Boenning & Scattergood

First of Gary I didn’t hear you mentioned of booking in the backlog figures, are you going to -- can you provide us with those or do you have them?

Gary Morgan

Yes, the booking numbers for the quarter were $20 million -- the bookings were $25.7 million for the quarter. They were up 4% from the prior quarter and year-to-date the bookings were $53 million or an increase of 10% over the prior six-month period. The backlog at the end of July was $20.3 million.

Ryan Connors - Boenning & Scattergood

Okay. Great. That's great. Now in terms of just kind of follow-up on Mike's question a little bit. Obviously given the booking activity and all the strength you see and it clearly seems that you kind of booking the macro headwind out there. I just wondered if you could just spend a couple minutes Ray talking about why you think that might be, is it that you've taken some market share on the margin, is that that the market and niches that you are in or sort of less susceptible to that? Just any color you can give us about why you are able to post what looks like pretty impressive performance in this environment, it will be helpful.

Ray De Hont

Sure. One of the key areas is that we are niche-driven business. So the niche is we are playing, we are pretty much one of the top two or three players so we are able to have some colors as far as going into the customers and getting being one of the top players as far as player of choice and also dealing with our margins. The other thing is as far as the way we have been able us stay ahead is that we are also -- we have been expanding globally as you can see with the results and that helps us too, because we are not just domestic business anymore will becoming more global. And I have been preaching that for a numbers of years now that in order to gain some installation when the U.S. economy turns down, we have to become more global, and by doing so that's helps us stay ahead of the macroeconomic conditions.

Ryan Connors - Boenning & Scattergood

Okay. And then on that account on same note, obviously, you’ve talked a lot about the international markets including in your comments right there. Obviously, the weak dollar does play some role in that I would assume. And so, if you could just talk about given that the dollar appears to be firming up quite a bit, does that impact to your outlook at all for the international side over the remainder of this year?

Ray De Hont

The strength of the dollar doesn’t really impact it, because what we are trying to do and we are having success in this, we are finding fabricators and so forth that we can use overseas where we are selling the product. If we were manufacturing here and shipping overseas which we have done in the past, the dollar will play more of a role. But what we’re able to do is now, Bill, that we are -- in the economy that we are selling to, and that helps us so. You might have a little bit of an impact from the strength of the dollar, but I don’t a think a lot.

Ryan Connors - Boenning & Scattergood

Okay. And then, just on the acquisition front, Ray, I know you have talked about this on many, many calls in a row here and I know that there is probably not too much you can tell us, but obviously you continue to generate cash flow, I guess, about $3 million in the quarter, and then the balance sheet just keeps getting stronger and stronger. So I know it is the right problem to have, but any kind of update you can give us on your cash deployment initiatives and then and/or the acquisition front, I think would be helpful?

Ray De Hont

Well, we are working hard on the acquisition front, we have made some progress, I can tell you that. We are having meetings, we are dealing with people, the problem I have Ryan, I really can’t say, put a percentage on it, because it comes down when the deals closes, the deal closes. You can go right up the end and do your due-diligence, everything looks right, and somebody pulls out, and I would be reluctant to put a percentage on it, but we have made some progress, we are working with some companies, and we are into some of the details, and hopefully it turns out well for us.

Ryan Connors - Boenning & Scattergood

Understood. Thanks a lot, guys.

Ray De Hont

Thanks.

Operator

The next question comes from the line of William Bremer with Maxim Group,

William Bremer - Maxim Group

Good morning, gentlemen.

Ray De Hont

Hi, Bill.

Gary Morgan

Hi, Bill.

William Bremer - Maxim Group

Can you break down a little further, international sales a little bit where are you guys seeing the growth and also how many sales individuals do you have overall plus how many do you have going towards international activity?

Ray De Hont

When you look at the growth of the international it varies, we have had some good growth over in Europe even though the economy over there is kind of soft. The Singapore area has been a real good area for us, as far as Singapore and also Dubai we had some good results -- on the bigger, the larger sized projects, we had results in those areas. When you look at our fluid handling, we have started to have some good results over in the eastern block countries and countries such as Georgia, where we had some aquarium business and other types of pump business. But, if I was going to say where we have had the major growth, it has been Europe and Asia, they have been the two areas, and Singapore being one of the hot spot.

Gary Morgan

Hey, Bill, by segment the product recovery and pollution control segment was up 160% for sales and the next higher segment was the filtration and purification that was up 69%, and the fluid handling segment was up 35% and the lowest one was Mefiag filtration which was up about 80%.

William Bremer - Maxim Group

No, I commend the income from operations on a percentage increased very nicely year-over-year for all your segments? What I would like you to do, can you just comment regarding the ruling that hit yesterday on the US Court of Appeals and they struck down the environmental protection agency rule that’s meant for States and local authorities from enacting the new air pollution requirements?

Ray De Hont

Well its not about enacting a new air pollution requirements, what it was is that the, that rule prevented the States and the local government from requiring more monitoring of the existing facilities as far as emissions, and what basically what everybody was saying is that because of that you had companies that were putting out more emissions than they were allowed to, because when they were allowed they were getting away with this because their emission monitoring devices weren’t operating properly and basically what the Federal government had said that the states and the local governments could not enforce that, while the Court of Appeal basically not that down said that the states and the local government can.

And what that does is that, it means people have to make sure they are monitoring their emissions properly that they were within the -- below the emission standards that they have to meet and if they are not, they are either going to have to put pollution control, or product recovery equipment in to make sure that they maintain emission limits below what they are required to.

William Bremer - Maxim Group

So, basically this validates the higher standards that some of the states have, in particular, I believe California has higher standards. What other states truly benefit from this type of ruling?

Ray De Hont

Well, what it’s not really validate, what it’s validating what it's saying is that the states and the local governments can enforce their emission standards and do so by requiring these facilities to test more often, to test their emissions. You got California, you’ve got a lot of states, even here in Pennsylvania for instance, you’ve got to monitor emissions. We go through that in some of our locations where for instance, if you look at our pump business over it Fybroc, we have styrene emissions where naturally minor which means that we have very few emissions, but we still have to report that every year. So, California is the toughest by far though.

William Bremer - Maxim Group

So, in longer terms, this is a nice catalyst for your underlying products?

Gary Morgan

Sure, because what it’s doing, is not only enforce the emission standards. It is going to allow the states and local government to enforce it. And require the companies to have a proper equipment to meet those emission standards, and of course, part of our business is pollution control.

William Bremer - Maxim Group

Very nice. How many salesmen do you have right now?

Gary Morgan

We have the number of salesman as of 2008, 53.

William Bremer - Maxim Group

Okay.

Gary Morgan

Now you got to keep in mind in many of our businesses when you look at our food handling business, the sales channel is primarily distribution, where we have distributors out there. So we have regional sales managers that manage a number of distributors world-wide. In other areas, where you get the, for instance, our chemical business our Pristine Water Solutions you may have more direct sales people there, but you go over the Flex-Kleen, you go to Duall you have sales representatives around the world. So it's not like we are out there direct selling all the time. Many and much of our business is conducted through either sales reps or distributors, and we can manage them.

William Bremer - Maxim Group

Okay, great. Thank you, gentlemen. I will hop back in queue.

Gary Morgan

Thank you, William.

Ray De Hont

Thanks William.

Operator

Your next question comes from the line of Richard Verdi with Sturdivant.

Richard Verdi - Sturdivant

Hi, guys. Nice quarter.

Ray De Hont

Thank you, Rich.

Gary Morgan

Thanks, good morning.

Richard Verdi - Sturdivant

I kind of missed that last question there about the selling expense, I just want to hear a little bit of your story on it, could you explain that again for me?

Ray De Hont

I am sorry, selling expense?

Richard Verdi - Sturdivant

Yeah, basically what I want to get at is I don’t want people to think that because selling expense is going down it's an indication that sales are going to be going down, going forward.

Ray De Hont

No, if you look the reason Rich, why the sales went down.

Richard Verdi - Sturdivant

Yeah.

Ray De Hont

Primarily on the commission line.

Richard Verdi - Sturdivant

Okay.

Ray De Hont

Okay, the commission line with the reps and distributors. In our business there is jobs where the rep and the distributor are involved and they get commission or they buy and resell. When you look at the commission line, there are also jobs that are very complex or very large that are sold directly through the company, where no commission is paid and if you look at the first quarter and second quarter this year, the commissions are about -- the commission level and the S side of the SG&A are about the same, the pre-level. When you go back to last year it was different. We are considerably below last year, but that changed here from quarter-to-quarter depending on how many jobs you have out there that are commissionable. And that was the only change, it wasn’t change in reduction of sales or anything like that it just what commissionable, what's not commissionable, what by resale. There is sometime even on a big job where sales rep or what we consider is sales rep may buy and resale it on the million dollar job let's say. On another job he may not buy and resale it he might sale the job and get a commission on it. So, it varies from quarter-to-quarter year-to-year, but that's main reason why the S is down in the SG&A.

Richard Verdi - Sturdivant

Okay. It's bottom-line that decrease in the selling expense is not an indication if sales are going down, going forward.

Ray De Hont

No it's not.

Richard Verdi - Sturdivant

Alright. Perfect. Most of my other questions have been already answered, I just have one more, last quarter you mentioned that there was about $800,000 to $900,000 in the product recovery segment that was pushed out.

Ray De Hont

Yes.

Richard Verdi - Sturdivant

Was that recognized this quarter?

Ray De Hont

Yes, but the normal course of business another $800,000 or actually 750 to 850, I don’t have the exact number in front of me moved out of the quarter, so it basically washed each other. What’s happened is some of the jobs I will explain why in this economy you have large jobs which were a piece of were smaller piece of let's say a multimillion dollar job may be a $30 million job we might have million dollars worth of equipment on that job.

And with the inflation that is taken place during last six months or year some of these projects have really gone over budget and what's happened is they slowed them down in order to try to soften the blow over the inflation and as a result some customers will say well I don’t need it this month, we are about a month behind, I need it next month. And so we are seeing some of that. They are not canceling but they are pushing them back because they delay things on the major project side in order to control their expenses.

Richard Verdi - Sturdivant

Okay. Alright. That’s it for me, gentlemen and thanks a lot, and good quarter gentlemen.

Ray De Hont

You’re welcome. Thanks.

Operator

(Operator Instructions). Your next question comes from the line of [Michael Roomberg] with [Boenning & Scattergood].

Michael Roomberg - Boenning & Scattergood

Good morning, guys.

Ray De Hont

Hi, Michael.

Michael Roomberg - Boenning & Scattergood

Congratulations on a nice quarter.

Ray De Hont

Thank you.

Michael Roomberg - Boenning & Scattergood

The last few weeks we have seen a pretty sharp roll back in certain raw material input prices and I am just wondering can you comment a little bit on what this means to your business, of course, on the cost to sales side, but I guess, the more revealingly or importantly on your ability to sustain price increases that you might have been able to past forward recently?

Ray De Hont

That’s going to help us. As you see the rollback in some of the steel and other items, it is going to help us on the cost of sales -- cost of material. And, I see that as a positive going forward. We are also, as I said, we are not just waiting for the commodities to roll back, we are going out and trying to find new opportunities whether it would be instead of working through a distributor going directly to the source, in another countries, those type of things and that is working, that’s part of our business plan, business model to go out there and really lower our course by doing that not just wait for the commodities to roll back.

Michael Roomberg - Boenning & Scattergood

Alright. Okay. That’s helpful. Thank you. The second thing I was wondering was with regard to the recent product introductions. Can you update us on how you these products were being received, I guess, and what sort of incremental top line growth you can expect going forward from these, in particularly we have seen the FRP magnetic pumps that are a big hit in Dubai, I am wondering if you anticipate any follow-on interaction to buy products for that?

Ray De Hont

Well, I think what we are seeing is that the FRP pumps ordered will truly become even more worldwide. We have always done well over in Asia, we have done well of course domestically. We did very little in the Eastern Block but now we are getting more and more inquiries and we sold a number of jobs now in Eastern Block in Europe. So, we are seeing some expansion there because of the type of pump and the type of things that are being built over there, and the modernization of some of the facilities over there.

We have of course our R&D program on product improvement -- new product development program, when that will work, we have got some products that we are working with, with some industries, one of them being the print industry. We have decent equipment that we are marketing to that industry. Now it’s on the infancy side of the growth cycle. It’s just been introduced. We have put a couple of amount there and things seem to be testing out very well. And we have got some other things on the burner which we have done some prototype testing. We had people in to evaluate them. We put the sales and marketing strategy together and will be introduced in to the markets in the coming months. One will be on the Strobic Air side, which we think will be nice addition to our product line.

Michael Roomberg - Boenning & Scattergood

Great. Thank you very much. Congratulations again.

Ray De Hont

Thank you. You’re welcome.

Operator

There are no further questions at this time. I would now turn the call back over to Mr. Bittle for closing remarks.

Kevin Bittle

Thank you, Tabatha. That concludes today’s conference call. We thank you all for your participation and continuing support.

Operator

This concludes today’s conference call. You may now disconnect.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!