Ambassadors Group Inc. Q2 2008 Earnings Call Transcript

Aug.25.08 | About: Ambassadors Group, (EPAX)

Ambassadors Group Inc. (NASDAQ:EPAX)

Q2 2008 Earnings Call Transcript

July 23, 2008 11:30 am ET

Executives

William Sennett - Director of Strategic Planning

Jeff Thomas - President CEO

Peg Thomas - President of Operating Subsidiary

Chadwick Byrd - CFO

Analysts

Greg McKinley - Dougherty

Mimi Noel - Sidoti & Company

Mike Roarke - McAdams Wright & Regan

Terrence O'Connor - Cedar Creek Management

Jeff Osher - JMP Asset Management

Jim Bellessa - DA Davidson & Company

Operator

Good day, ladies and gentlemen, and welcome to the second quarter 2008 Ambassadors Group Incorporated earnings conference call. My name is Frances and I will be your coordinator for today. At this time, all participants are in listen-only mode. We will conduct a question and answer session towards the end of this conference. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today, Mr. William Sennett, Director of Strategic Planning. Please proceed.

William Sennett

Thank you, Frances. Good morning. On the call with me today is Jeff Thomas, President and CEO of Ambassadors Group, Peg Thomas, President of the operating subsidiary, Ambassador Programs, and Chadwick Byrd, Chief Financial Officer of Ambassadors Group.

First, before we proceed into the call, I will read a Safe Harbor statement regarding forward-looking statements. Statements contained in this press conference and related comments by Ambassadors Group's management which are not historical in nature are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include without limitation statements that relate to expectations concerning matters that are not historical facts. Words such as projects, believes, anticipates, plans, expects, intends, estimates and similar words and expressions are intended to identify forward-looking statements.

These forward-looking statements reflect our beliefs or current expectations with respect to, among other things, trends in the travel industry, our business and growth strategies, our ability to integrate acquired businesses, future actions, future performance or results of current and anticipated sales efforts, expenses, the outcome of contingencies such as legal proceedings, financial results and fluctuations in our results of operations.

Forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from anticipated results. These and other risks are discussed in greater detail in the Ambassadors Group's periodic reports filed with the SEC. All forward-looking statements are expressly qualified in their entirety by these factors and all related cautionary statements. We do not undertake any obligation to update any forward-looking statements.

With that, I will hand the call over to Jeff.

Jeff Thomas

Thank you. Good morning. This is Jeff Thomas. We appreciate you join us for our Q2 2008 earnings call. The second quarter just ended. It's a very important quarter for us. We traveled 17,885 delegates, generated $104 million in gross receipts and posted net income of $17.2 million. These numbers all compare unfavorably to the same indicators one year ago, although the results are in line with our expectations given the current economic markets.

For the year, we have traveled 21,250 delegates, generated $113 million in gross receipts and posted $11.7 million in net income. These results have allowed us to continue to strengthen our balance sheet as we generated $36.5 million free cash flow while deploying $10.9 million capital back to our share owners through dividends and share repurchases. This quarter also provides additional insight into the rest of the year, as we have 42,697 delegates traveled or enrolled to travel in 2008, compared to 53,245 one year ago.

During the second quarter, we also significantly increased our planning efforts for 2009. It's the first marketing efforts for 2009 on underway, although not enough time has elapsed to assess any early indicators at this point. We've also used the changes and tumult in our marketplace to continue to develop our business.

We have watched new initiatives in several areas that have been developing for some time, including new inbound efforts and newer lowered price point products. We continue to make personnel changes, including a new head of sales, and also worked to tighten operating expenses. As an aside, for competitive reasons I do not want to divulge too many details around our new product efforts except to say that their earnings impact will have a lengthy lead time, probably in 2010.

We also found an opportunity to increase our marketing efforts to our core audience, teenagers and their families that find the pursuit of education to be valuable, what we call strivers. Nearly a year ago, we found a company called BookRags and began discussing strategic ideas which culminated with us purchasing BookRags in May.

BookRags is primarily and educational website that generates revenue both product sales, mostly study guides and other research materials, as well as online advertising. The company has a handful of employees, is growing and is profitable. The acquisition expected to be accretive from the start.

Their website generates over 3 million unique users a month, with about one third of those coming from an international audience outside the United States. Our plan is to support BookRags' continued growth while developing, testing and implementing different ways of using the site to generate additional leads for our travel business.

At this point, I will turn the call over to Peg for more detailed overview of our operations this quarter.

Peg Thomas

Good morning, and thank you for listening in this morning. If you are new to the call, our focus for the second quarter is the execution of our busiest part of our year in terms of travelers. Our summer travel season began June 1st and will be completed by August 21st. All four of our product lines travel during this time period. We have crossed the half way point for the season and here are a few of the headlines regarding the travel season.

We continue to deliver high quality programs which explore 49 countries in comparison to 44 countries last year and we are on all seven continents. We are traveling delegates on our programs from almost 100 different countries. This summer the Iraqi Ambassador to the United Nations met with some of our students to discuss global diplomacy and leadership in foreign relations.

We had our first Leadership Summit take place at Harvard University in June. Almost 500 students will participate in the Harvard leadership events throughout this coming summer. 750 athletes participated in the Youth Friendship Games in Vienna, Austria where athletes were coached by Olympic gold medallists Rulon Gardner, Lenny Krayzelburg and Tiffany Milbrett.

And we had the honor of naming a rare mountain gorilla in the Rwanda Conservation Project. We are in good company in this honor as past honorees have included Bill Gates and Natalie Portman.

This quarter, we traveled 17,885 delegates in comparison to 22,380 one year ago in the same period, a 20% decrease year-over-year. Year-to-date, through June 30th we have traveled 21,250 in comparison to 25,380 one year ago, a 16% decrease year-over-year.

For the year, we have 42,697 currently enrolled delegates. This does include those that have traveled year-to-date. One year ago, this number was 53,245. We are anticipating to close the year at a higher withdrawal rate than in the past year, at around 35% in comparison to about 33% one year ago.

Our second focus this time of year is our marketing campaigns for 2009. We are in the process of launching these campaigns currently. As Jeff talked about, at this time it is too early to anticipate the effect of these campaigns. We are looking forward to our fall sales season, as we have a new head of sales, and we do believe our product is more relevant than ever in these times of globalization.

Other developments around the organization, our mission and our business continue to gain momentum through the growth and hard work of all of our associates around the world. This summer, our students will have completed almost 100,000 service hours in the different communities that they are visiting.

These community services include meal services for the elderly, environmental projects and animal conservation in various communities. These projects fulfill so much of what we are trying to do, educate students in an experiential manner, open their eyes to global issues and events, and bring people together to provide a platform for friendship and exchange.

And with that, I will pass the call over to Chadwick for the financial review. Thank you for your time and attention this morning.

Chadwick Byrd

Thank you, Peg, and good morning. Today, I will start out discussing the results of the second quarter and then our balance sheet and cash flows before I provide an update on our guidance for 2008.

During the second quarter, we traveled 17,885 delegates, compared to 22,380 delegates one year ago, a 20% decrease for the quarter, while gross receipts and gross margin decreased 14%. Our gross margin as a percent of gross program receipts was 35.3% despite a weaker dollar and increased fuel surcharges.

During the quarter, we paid an average $207 per delegate in fuel surcharges, compared to an average of $179 a year ago. Total fuel surcharges paid in the quarter was $2.9 million. Online content and advertising sales provided by BookRags contributed $318,000 and $283,000 in gross receipts and gross margin respectively for the one and a half months since the acquisition.

Operating expenses for the quarter decreased $877,000, or 7% in comparison to the second quarter of 2007 reflecting lower marketing costs for current year programs, later timing of marketing costs for next year programs and lower general and administrative costs due to lower personnel.

At the end of the quarter, we had 12% fewer employees than we did one year ago. Other income decreased approximately $322,000 or 26% due to lower average cash and investment balances held during the quarter.

The majority of the Company's investments are in highly high quality tax exempt municipal obligations or government backed or insured auction rate securities. The underlying rating of all the municipalities represented in the portfolio is investment grade. The Company does not hold any collateralized debt obligations.

Our effective tax rate for the quarter was 33% for both quarters due to the amount of tax exempt investments held during the quarter. The balance sheet and the cash flows continue to be a strain for the Company. Total assets of $198 million include $100 million of cash and short term investments.

The balance sheet includes $8.6 million of content trademarks and goodwill related to BookRags. Participant deposits are down 27% year on year, which is in line with expected future travelers in the coming quarter.

The Company has no long term debt. Deployable cash increased 17%, or $4.7 million in the last quarter after paying $8.7 million in cash for the acquisition of BookRags and allocating $6 million back to our shareholders in the form of dividends and share repurchases. During the second quarter, we repurchased approximately 196,000 shares at an average purchase price of $17.31.

Subsequent to the second quarter, we had repurchased an additional 191,000 shares at an average purchase price of $14.14. As of today, we have approximately 10 million remaining on our share repurchase authorization. Year-to-date, we have generated $36.5 million in free cash flow, or $1.88 per share.

In providing guidance for 2008, we still anticipate earnings to be between $1.05 and $1.15 based upon the numbers we have traveled to date, the enrollments we have for future travel, any remaining marketing efforts for 2008, and the inclusion of BookRags in our consolidated results.

Our current and expected earnings for 2008 have been and will be negatively impacted by the decrease in participants year-over-year. Current year earnings are also challenged with additional fuel surcharges assessed by the airlines just prior to ticketing, which we are not able to pass on to our delegates, continued economic uncertainty and late withdrawals from our programs, interest rates on short term investments and the continued decline in the U.S. dollar.

The number of delegates traveling the summer months will be evenly split between the second and third quarters with slightly fewer in the third quarter, while our gross margin for all products and quarters combined is expected to be consistent with average historical rates of approximately 35%.

I thank you all for your continued interest and for your time today, and will now turn the call back over to Jeff.

Jeff Thomas

Thank you, Chadwick. Frances, at this point if you could set up our call to take questions, we would like to answer a limited number of questions in the next few minutes here.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) Your first question comes from the line of Greg McKinley from Dougherty. Please proceed.

Greg McKinley - Dougherty

Thank you. Guys, I'm wondering, if you could talk with us a little bit about your anticipated program delivery costs as you head into the '09 travel season. You said, you've just begun marketing that travel season. Can you talk with us a little bit about the price increases that you're anticipating? And I'm just looking at obviously increased weakness of the dollar versus the euro year-over-year from -- heading into this next year, versus where you were a year ago as you prepared for the '08 season. So, talk to us a little about costs and how you feel you need to price the programs accordingly, please.

Chadwick Byrd

Thank you, Greg. This is Chadwick. Good question on 2009 program pricing. As you know, we are about to start marketing our programs for 2009, so we have set those prices in general that are going up, we believe, around 7%. We think that we're happy with how we've been able to maintain costs. We do have a weaker U.S. dollar really across the board. Only the pound is probably the only one that has come in year-over-year. The euro is 9% off where we were last year, so we are facing those challenges. We are also facing challenges with airline, international airline costs, fuel surcharges, hotel cost internationally has not come down. In the past, we've got a great travel operations group that has been negotiating those contracts for quite some time. So, we believe we'll be able to maintain margin, but it's going to be a challenge for 2009.

Jeff Thomas

Hi, Greg, let me just add that we also look at the CPI and for the past several years, as you know, the CPI has been a lower number, I think pretty much below 3%. And our price increases have been much more significant for the past several years, particularly last year. And I think this fall as Chadwick mentioned we are looking at 6% or 7% price increases year-over-year. The CPI is tracking around 5%. So, this is actually the first year in several years where we've been actually pretty close to what consumers might be expecting in other areas of their lives.

Greg McKinley - Dougherty

Okay. And then, as a reminder, what was your price increase for the '08 programs versus '07?

Chadwick Byrd

So, in the face of the consumer when they were looking at, if they were looking at an application book year on year, it was a 12% to 13% increase. Let me remind you that in 2008 for the first time we had to include fuel surcharges in that price, so that was -- that accounted for 3% to 4% of that price increase in 2008.

Greg Mckinley

Okay. And could you just share with us what you thought your learnings were after that January/February additional campaign in terms of customer response to some of the things you experimented with around deposit levels, et cetera .? Will you be, I mean, what should we be looking for differently from you as you market the programs in '09?

Peg Thomas

Greg, we thought and we talked before about the different deposit levels and we did try different -- the $95 deposit versus the $400 deposit in past years. And that's part of that withdrawal increase year-over-year, we believe. We are seeing a higher withdrawal on some of those lower deposits.

And so, we're still tinkering with some of that and testing different levels of the deposits as we go here into the fall. So, you'll see some of that across the board. We'll go back in some areas on the $400 deposit, you'll see other lower deposit levels. But I don't think we're done with that decision yet in terms of what 100% works.

Greg McKinley - Dougherty

Okay. Thank you.

Peg Thomas

Thank you, Greg.

Operator

Your next question comes from the line of Mimi Noel with Sidoti & Company. Please proceed.

Mimi Noel - Sidoti & Company

Good morning. And I apologize in advance, I had to dial in late. A bigger picture question probably for Peg and Jeff, I've noticed in the time, some brief time that I've covered you that you've always maintained a focus of not yet on the current year, but you've always had very good vision. And in terms of supporting your programs with marketing, is there any shift in that thinking? I was a little bit surprised at the marketing -- the sales and promotion expense came down as much as it did in the second quarter. Does that just reflect 2008 and you are still firmly committed to the years out, or are you getting a little bit more strict in reallocating?

Jeff Thomas

I wouldn't read into that how we feel about 2009…

Mimi Noel - Sidoti & Company

Okay.

Jeff Thomas

We're still very committed to 2009. I would look at some of those things as some timing issues and that have come up in there. And you can expect, I mean, at this point we have no indicator from any marketing we've done about how 2009 will turn out.

Mimi Noel - Sidoti & Company

Okay.

Jeff Thomas

We are aiming to grow year-over-year, although we know that will be challenging, but we are marketing from that angle.

Mimi Noel - Sidoti & Company

Okay, good. In addition to changing -- increasing prices for 2009, are you repackaging them, and if so, how? And can you talk a little bit about how you perhaps rationalize your program offering as well?

Jeff Thomas

Sure. One of the things we started looking at last fall was to take a hard look at every single program we offered, and depending on how you count things we probably eliminated about half the different programs that we offered…

Mimi Noel - Sidoti & Company

Okay.

Jeff Thomas

And focused more on ones that could handle more capacity, add unique elements more of the kind of benefits we were looking for, hold back to some of those things as we felt like we could grow better with those than adding new products. So, one of the questions that I get all the time is, do you need to add new products to grow? And the question is not necessarily. We need to add capacity in many cases and we need to add quality pieces to the programs that we have. But we are better off focusing our resources on a fewer number of programs. And I think, Peg mentioned we are offering a fewer number of programs visiting roughly the same number of countries that we've visited before.

Mimi Noel - Sidoti & Company

Okay. And then, the last thing I wanted to ask about, and again, I apologize if I missed it, but is there anything distinct about the geographic diversity of BookRags?

Jeff Thomas

When you say distinct about the geographic diversity…

Mimi Noel - Sidoti & Company

I guess what is the geographic makeup of the database that comes along with BookRags?

Jeff Thomas

I guess it's a -- it's not a random pattern, but it's just a disperse pattern. As I mentioned about one third of their audience is international, about two thirds comes from the United States.

Mimi Noel - Sidoti & Company

Okay.

Jeff Thomas

The international people come from all over. What's kind of interesting, because it gets obviously busier during the academic year in America -- the school year in America, and so actually during the summer when other countries have a higher presence, sometimes gets as high as 50% international visitors.

Mimi Noel - Sidoti & Company

Okay. That's all I have. Thank you very much.

Jeff Thomas

Thank you for being on the call.

Operator

(Operator Instructions) And your next question is from the line of Mike Roarke of McAdams Wright & Regan. Please proceed.

Mike Roarke - McAdams Wright & Regan

Hi, good morning. Would you be able to provide some more detail about your new head of sales, who the person is, when they joined the Company, and background on previous work experience?

Jeff Thomas

Sure. His name is [Scott Carrougher] and he just joined us about two weeks ago. He was actually living in Washington State, but on the other side of the state and is relocating over here. So, the most part he's been involved in the technology industry, but has a fantastic background all the way from up to carrying a sales bag to sales management, to managing the field force to managing internal sales, a whole variety of skill sets that we haven't really had as much in our organization in the past. He brings a lot of great energy to us and I think a really good vision for the future on how we can better complement our strong marketing efforts with more direct sales efforts.

Mike Roarke - McAdams Wright & Regan

Okay. So, he joined two weeks ago, historically how involved had this person been in getting the forward marketing campaign up and running in terms of lead generation and such? I mean, that seems like kind of a late stage to be adding to that position, or am I wrong?

Jeff Thomas

Well, I think, if you go back a couple of years we had a different structure than we do today. We are now driving the marketing campaign -- the lead development campaign much more than the product management position, more like a [PG] model. And so that's been driving all along. We've been looking for -- our former head of sales was a former college basketball coach and is going back into coaching basketball, his first passion. And so, we've been working with him on a transition for a while. So, it's gone very smoothly. Scott's joined us, yes, we would have liked to have joined earlier, but it's not as if the prior head of sales wasn't helping us prepare for the fall as we've seen it come together.

Mike Roarke - McAdams Wright & Regan

Okay, great. Any other thoughts on ramping up the buy back with your stock down here, too?

Jeff Thomas

Well, I think we talked about the fact that we've bought about 600,000 shares year-to-date, an average price of $16 and change. We don't want to declare whether we are going to buy or not buy, but obviously we've been active in the marketplace. Even during this quiet period we were able to do some filings beforehand that allow us to keep purchasing. Thank you.

Mike Roarke - McAdams Wright & Regan

Okay, great. Thanks for taking the questions.

Operator

Your next question comes from the line of Terrence O'Connor with Cedar Creek Management. Please proceed.

Terrence O'Connor - Cedar Creek Management

Hi, guys. Could you do me a favor and just give us your rough planning assumptions for he major currencies, dollar versus say euro and pound, and how much of that you've hedged?

Peg Thomas

Terrence, can you ask that again? So you are asking about the different -- the major currencies for '09?

Terrence O'Connor - Cedar Creek Management

Yes, '09. What are you guessing for the relationships in '09? Are you sort of steady state for as where we are now? Are you guessing there'll be dollar weakness or dollar strength from here, and how much of that have you hedged?

Peg Thomas

You seriously think I'm George Soros, or what?

Terrence O'Connor - Cedar Creek Management

No, no, but I know you did some hedging, right?

Peg Thomas

Yes. No, no, for '09 we're -- as we price we hedge right then. So, for the euro, for example, we're almost done. We've just -- so we're at 70% or 80%. All of the other major currencies we're basically done for '09 already and that's priced into the 2009 prices. So, we do that -- so we take out all the risk of the currency.

Terrence O'Connor - Cedar Creek Management

Got it, okay. Thank you.

Peg Thomas

Thank you.

Operator

Your next question comes from the line of Jeff Osher with JMP Asset Management. Please proceed.

Jeff Osher - JMP Asset Management

Hi, guys. Nice job in a very difficult environment. Just a quick question. Can you maybe just provide some color on how we should as new investors to the story think about prepaid costs versus customer deposits, and maybe what the implied forward margin when we just look at the balance sheet which inevitably will flow through the income statement?

Jeff Thomas

Yes, that's fine. The prepaid program costs are really those costs that are for second or third quarter travel expenditures both in airline tickets that we generally purchase anywhere from 30 to 60 days prior to travel, so for those individuals that are traveling in the third quarter most of that is up there. Also some deposits that we have on hotels and with our international partners.

Participant deposits are just the opposite of that, and so year on year you see a 27% decrease in our participant deposits, but that's also reflecting a shift from our -- a shift in the number of delegates traveling between second quarter and third quarter. This year it's much more even between the two quarters, where last year we had a higher percentage traveling in the third quarter.

Jeff Osher - JMP Asset Management

Got you. That make sense. That's very helpful. Why didn't the prepaid costs come down by a similar margin? Is that just the associated inflation you guys have been dealing with?

Jeff Thomas

No, I think some of that is also a little bit of our own putting our balance sheet to work and making some deposits a little earlier than we have in the past, and in effect hedging some costs for us that have proven very effective for us. As we spoke about on our last call, we were able to eliminate one third of the rift on our fuel surcharges by making some prepayments. We felt very comfortable with that. If there was any downside or any upside in that we'd get that. And we've also done that with some of our programs in the fourth quarter. So, where you see those increases, it's really to our advantage in doing that.

Jeff Osher - JMP Asset Management

Great, thank you. And then one final one, I appreciate the patience. With BookRags, are there other tuck-ins kind of online [lead-gen] acquisitions you guys are currently looking at? Is that kind of the right way to think about where you may deploy the balance sheet for other lead-gen opportunities? Would there be any online space?

Jeff Thomas

We are looking there, and there's nothing imminent or nothing worth informing the share owners about at this point in time. But we see even the -- kind of a lot of the traditional mailing lists or name sources that you use, a lot are becoming mailing lists and email lists or online lists. And so, there's a lot of action taking place in terms of people being active on the web and generating leads over there and we feel we need to be a part of that.

Jeff Osher - JMP Asset Management

Great. Thanks a lot, guys.

Peg Thomas

Thank you.

Operator

Your next question comes from the line of Jim Bellessa with DA Davidson & Company. Please proceed.

Jim Bellessa - DA Davidson & Company

Good morning.

Peg Thomas

Good morning.

Jim Bellessa - DA Davidson & Company

You've reduced your headcount -- employee headcount by 12%. When do you receive the full benefit of that cost reduction?

Jeff Thomas

Well, as soon as it reduces we start receiving the full benefit of it. So that has -- I think last quarter we also said that we were down 12%, and so we're starting to feel that. Most of what you are seeing in our cost reductions both in our selling and marketing, as well as our G&A about 80% of that reduction is coming from personnel costs.

Jim Bellessa - DA Davidson & Company

And the program mix between the third quarter and the second quarter, is there any material differences between the two quarters here this year?

Jeff Thomas

Yes. The third quarter is going to be slightly less than the second quarter. Less in terms of delegates traveling.

Jim Bellessa - DA Davidson & Company

Right. Are the programs different, or are the margins different, or the tuitions differ or whatever might be different, or is it immaterial between the two quarters?

Peg Thomas

Jim, I think it's probably immaterial between the two quarters.

Jim Bellessa - DA Davidson & Company

In the fourth quarter programs that you've identified this year, how are they lining up? What might you be offering this year versus last year's fourth quarter?

Jeff Thomas

Similar to what we've offered in the fourth quarter of '07, Jim, though primarily focused on our domestic programs, as well as our professional programs traveling internationally.

Jim Bellessa - DA Davidson & Company

And on BookRags, you've indicated that you had $0.3 million in gross receipts and gross margin. That was a 45-day period. If I annualize that, is that what this business produces or in terms of revenues and gross margin, or is there a seasonal effect here?

Jeff Thomas

There is a bit of a seasonal effect to it, it's opposite from our travel programs which is nice. And so, actually as you go into June or actually July, August you see a decline in revenues as well page views that they are producing.

Jim Bellessa - DA Davidson & Company

Thank you very much.

Jeff Thomas

Thank you, Jim.

Peg Thomas

Thank you, Jim.

Chadwick Byrd

Thanks, Jim.

Operator

(Operator Instructions) And your next question is from the line of Pete Mahon with Dougherty. Please proceed.

Greg McKinley - Dougherty

Hi. It's actually a follow up from Greg McKinley. In terms of your view for the way enrollments proceed through the remainder, I'm sorry travelers proceed through the remainder of the year, did you indicate that you expected slightly fewer travelers sequentially from Q2 to Q3?

Jeff Thomas

That's correct.

Greg McKinley - Dougherty

And with the withdrawal rate should -- do you expect that -- there's about a 20% decline in the net enrollment rate as of July 15th year-over-year. Would you expect your travelers to come in at about negative 20% for the year, or are you suggesting that the withdrawal rate would drop the traveler decline a little further below that level?

Jeff Thomas

Yes, I think that your latter comment is correct. Of the environment that we're at now we are seeing a little bit higher withdrawal rates on our program, and so that is going to have an impact on what you're looking at as far as the enrollment that we have to date and those travelers that we expect to travel at the end of the year.

Greg McKinley - Dougherty

Thank you.

Chadwick Byrd

One of the best indicators to look at -- we talked about is we had about 53,245 enrolled or traveled at this point one year ago, we have about 42,697 enrolled or traveled at this point this year. And you can see, we lost a few hundred on the 53,000 between now and the end of the year. And so, a lot of times, if you look at those historically, those are pretty good indicators of where we're going.

Greg McKinley - Dougherty

Thank you.

Peg Thomas

Thank you.

Operator

And there are no other questions in queue at this time. I'd like to turn the call back over to Mr. Jeff Thomas, Chief Executive Officer for closing remarks.

Jeff Thomas

Thanks, Frances. We'll go ahead and close the call right now. We appreciate our share owners calling in and participating in the call. We enjoyed taking your questions. We look forward to the marketing season this fall for 2009, and in getting our performance back on track where it's been the last decade or so. Thanks for your time, and have a good day.

Operator

Thank you all for your participation in today's conference. This concludes the presentation you may now disconnect and have a great day.

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