Q3 2019 Earnings Call
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I would now like to hand, the conference over to Vice President Investor Relations James School.
Good morning, I'd like to welcome welcome everyone to commence third quarter 2019 earnings call.
Nothing to call today, our Neal Keating, Chairman, President and Chief Executive Officer, and Rob Star Executive Vice President and Chief Financial Officer.
Are we began I'd like to note that some of the information discussed during today's call will consist of forward looking statements setting forth our current expectations with respect to the future of our business.
Let me and other future events.
These include projections of revenue earnings and other financial items statements on the plans and objectives of the company for its management.
Statements of future economic performance and assumptions underlying these statements regarding the company and its business.
The companys actual results could differ materially from those I indicated in any forward looking statements due to many factors. The most important of which are described in the company's latest filings with the Securities Exchange Commission, including the Companys third quarter 2019 results included on Form 10-Q and on the current report on form eight.
Filed yesterday evening together with our earnings release.
In addition, we will discuss the Companys anticipated acquisition of vault field Engineering, which was just announced this morning.
Press release announcing the transaction can be found on the company's website along with the presentation provides an overview of the transaction.
Some of the information discussed on todays call. Therefore will consist of forward looking statements setting forth our current expectations with respect to the proposed transaction.
Underlying risks and assumptions for which are set forth in the press release announcing the transaction.
We also expect to discuss certain financial measures and information that are non-GAAP measures as defined in applicable FCC rules and regulations.
Reconciliations to the company's GAAP measures are included in the earnings release filed with yesterday they Kay.
Finally, please note that in light of the recent sales of the distribution segment. The focus of today's earnings discussion will be on the results of the continuing operation of the company.
With that I'll turn the call over to Neal Keating.
Thank you Jamie good morning, everyone and thank you for joining our third quarter 2019 earnings call.
I'd like to begin today's call with a discussion of this morning's announcement relating to the anticipated acquisition of ball seal engineering before moving to a discussion of our quarterly results from continuing operations and recent events I will then pass the call over to Rob for a more detailed discussion of our financial results an expert.
Patients for the balance of the year.
Over the last few months, we've taken a number of steps to transform command into a company solely focused on being a leading provider of highly engineered products.
August 26, we completed the sale of our distribution business and today, we are announcing the signing of the an agreement to acquire a ball feel engineering and industry, leading provider of highly engineered seals springs and contacts.
Ball seals strong management team and its 500 plus employees around the globe worked closely with premier customers in the medical industrial Aerospace and defense markets, leveraging a unique combination of patented and proprietary technologies.
Paul Seals innovative solutions results from decades of engineering manufacturing and material science know, how enabling balls feel to manufacture and create critical precision components used in products operating in the most demanding environments.
The addition of ball seal enhances our position as a leading provider of highly proprietary engineered products.
Broadens our access to high growth in markets, such as medical technologies and industrial applications.
And delivers both margin expansion and cash accretion in year one.
We expect the deal to close late in the fourth quarter subject to customary closing conditions and regulatory approvals and we look forward to providing more information about the transaction during our fourth quarter earnings call in early 2020.
This is a meaningful next step in the process to transform command, but is not but it is not the last step.
We will continue to seek appropriate M&A opportunities that fit well with our current capabilities and future direction.
With approximately $700 million in cash and debt available to deploy we have the financial capacity to acquire and integrate companies that will strengthen our current competitive position and provide improved long term growth opportunities.
But as you have come to expect we will remain disciplined in our approach and patient in identifying opportunities that fit our strategy culture and internal return metrics.
While we were excited about adding ball seal to our portfolio and look forward to welcoming their employees to the command family. We continue to increase investment in our core operations to drive organic growth.
We have increased our investments in new products in facility expansions to meet current customer demand and position us for future growth.
These investments include the expansion of our unmanned capabilities and development of a new composite rotor blade for the K Max.
Laser guided height of burst sensor and next generation safe and aren't technologies as well as new specialty bearing and engineered products.
In addition, we continue to invest in facility expansions and upgrades in the U.S., Germany, and the Czech Republic to meet future demand reduce lead times and improve efficiency.
Finally, we have started to streamline our operations in order to achieve the $15 million to $20 million in annualized savings we highlighted in our last call.
Estimate was based on our initial strategic planning process associated with the distribution divestiture and today, we expect to be at the high end of the range and anticipate we will be able to identify additional opportunities for savings as we move through the process.
Turning to a discussion of our results from continuing operations. We were very pleased with our strong third quarter performance with total sales growth of 16.3% to $182.7 million.
This increase was driven largely by a higher volume of J.P.F., Dcs deliveries and stronger sales of our bearing products.
Profitability was also a highlight in the quarter as operating income increased 20, excuse me $22.6 million to $15.6 million in the quarter and diluted earnings per share increased 70 cents to 36 cents.
On an adjusted basis operating income more than doubled to $19.9 million.
Yielding 46 cents in adjusted earnings per diluted share compared to 14 cents in the prior year.
During the third quarter, we received an export license for and made initial deliveries on our 324 million dollar JPS Dcs contract.
This enabled us to increase J.P.F. deliveries to 11750 units compared to 3800 units in the prior year and the higher Dcs mix led to significantly improve profitability in the period.
Demand for the J.P.F. remains high and during the quarter. We received our second significant JPS Dcs order this year, adding $42 million to backlog in September .
Our specialty bearing product sales growth was in the high single digits. In spite of considerable FX headwinds and was led by our self lubricating bearings, where we had our second consecutive quarter of record incoming orders and our aftermarket products.
The higher volume and strong operational execution led to improved gross margins for these products, while strong incoming order rates in the quarter continued the trend we experienced in the first half the year.
Year to date orders have increased for these products with an 11% increase in our self lubricating bearing products when compared to the prior year.
Turning to the K Max we were pleased to receive two new orders during the quarter, bringing our total backlog to three aircraft.
In addition to the new aircraft orders, we continue to make progress on our unmanned system for the K Max and during the quarter. We received our first five orders from commercial operators demonstrating the opportunities they see for unmanned K Max operations.
We are encouraged that we continue to add to the Capex fleet and remain very optimistic for the long term military applications.
Moving to our structures programs.
Revenue was up modestly in the period, while profitability improved substantially as a result of the actions we have taken to restructure and optimize our production.
Initially we had anticipated. These actions would result in annual savings of $4 million. However, through the third quarter, we have us achieved $7.1 million in savings and now expect these actions will result in full year savings in 2019 in excess of $8 million.
We will contribute to a significant year over year improvement in the profitability of these programs.
With one quarter left in the year. We are positioned to finished 2019 on a strong note due to higher anticipated sales levels for the JPS continued momentum in our bearings business the improved profitability of our structures programs and the scheduled deliveries for K Max in 2019.
This year is also marked a meaningful turning point for us as a more focused and more profitable company that is setting the foundation for its long term growth.
As I mentioned to not in my opening remarks, our teams are focused on implementing efficient and refined operating structure and deploying capital to enhance our portfolio of engineered solutions I would like to thank all of our employees for their hard work during this exciting but demanding time at command and congratulate our workforce print out still.
And in third quarter results now I'll turn the call over to Rob for a closer look at the numbers Rob.
Thank you Neil and good morning, everyone.
Before I discuss our performance for the quarter I wanted to touch on the key terms of the transaction we announced this morning.
The purchase price of 330 million values ball seal at 12, and a half times EBITDA.
When including estimated tax benefits and synergies and we expect to fund the transaction with cash on hand.
Sales for ball sale are expected to be 95 million in 2019 and will expand EBITDA margin of our consolidated business.
As Neal mentioned after this transaction, we will still have approximately 700 million of cash and debt capacity to deploy toward our organic and inorganic growth initiatives.
We expect a significant portion of this capacity will be deployed towards strategic acquisitions, and we will continue to focus on identifying additional opportunities to expand our product portfolio of highly engineered products in line with our long term growth objectives.
Now I will turn to a discussion of our performance from continuing operations for the quarter and finished with an update on our 2019 outlook.
Net sales for the second quarter increased to 182.7 million, an increase of 16.3% when compared to the prior year, resulting from increased sales of our JPS Dcs product and commercial bearing products.
Gross margin increased 320 basis points over the prior year period to 33.5% largely benefiting from favorable mix driven by our JP FTC as program and specialty bearing products.
Operating profit of $15.6 million increased 22.6 million over the prior year period, which was adversely impacted by a 10 million intangible impairment charge at our UK operations.
On an adjusted basis operating profit was 19.9 million or 10.9% of sales compared to the prior year period of $7.3 million or 4.6% of sales.
The increase in adjusted operating profit was the result of several factors, including a favorable sales mix weighted toward JPS, Dcs and specialty bearing products and a significant improvement in the performance of our structures programs as we realize benefits from prior year restructuring initiatives.
Adjusted EBITDA in the third quarter was 26.9 million or 14.7% of sales compared to $17.2 million were 10.9% of cells in the third quarter 2018.
Higher adjusted EBITDA was the result of stronger operating results across a number of our product offerings.
Diluted earnings per share from continuing operations of 36 cents increased significantly over the prior year loss of 34 cents.
The increase resulted from the absence of the intangible impairment charge recorded in the prior year offset by a 3 million dollar reduction and pension income period over period.
Increased corporate development expense resulted from increased consultant spend associated with our gene a initiatives and M&A efforts.
After adjusting for these and other similar items adjusted diluted earnings per share from continuing operations was 46 cents.
229% compared to the prior year period, which speaks to the strength of the results from our operations in the quarter.
Beginning this quarter. We included additional light items in our income statement that are designed to segregate and identify the activity relating to the transition services agreement, we entered into upon the sale of the distribution business.
Pursuant to the terms of the agreement we have agreed to provide certain services such as tax treasury human resources and IP during the transition period of the distribution business away from command shared services.
While most of these activities have already been transitioned IP services will take approximately one year to fully separate and we will continue to report both cost and income on a quarterly basis.
In total we expect to incur a net expense of approximately 800000 in 2019 and a total net expense of approximately 2 million to $3 million over the life of the agreement.
I would like to now discuss our cash generation performance for the quarter are approximate use of 6 million of cash during the quarter resulted primarily from the buildup of inventory for the JPS and specialty bearing product lines as we prepare for the steep ramp in cells that is projected through the balance of 2019.
Also impacting was a delay in certain cash receipts that we had anticipated in the third quarter.
We have begun to collect on some of the SMB accounts receivable from earlier in the year and have a clear path to deliver strong cash flow generation for the full year.
Moving to our outlook as we discussed in our June announcement of the sale distribution, we suspended our guidance with the exception of sales and operating income for the aerospace segment for the balance of the year.
We expect to provide a more fulsome outlook beginning in 2020.
Based on the performance through the first nine months of the year, we are maintaining our full year outlook, which calls for aerospace sales in the range of 740 million to 760 million with operating margins at aerospace in the range of 16.7% to 17.2%.
With that I will turn the call back over to Neil.
Thanks, Rob I would like to close by thanking our team across command I'm proud of our execution in third quarter. Despite the extraordinary efforts required to complete the sale of our distribution segment and move forward with the acquisition of ball seal.
For all of Us as employees of command.
For our shareholders. The path ahead of US is clear to maximize the earnings power of our business and to invest for the long term.
We were excited about the opportunity ahead and look forward to updating everyone on our continued progress Jamie.
Operator may we have the first question. Please.
Certainly.
First question comes from the line of Seth Seifman with JP Morgan. Your line is now open.
Morning, Seth.
So you on mute.
Yes. Thank you okay.
Okay, we've been living with that the last week as you can imagine that yeah, yeah, absolutely okay very good thanks.
So just kind of.
Just kind of doing.
Math.
Is it seems like the fourth quarter the guidance in aerospace kind of implies.
Maybe a margin that was kind of.
Kind of like what we saw in the.
In the third quarter, maybe a little bit better could you talk about some of the puts and takes there and.
Hey, what the opportunities.
Our that is that all kinda determine where that where that comes out.
Yes, no that's a good question Seth.
When we look at our fourth quarter as we've talked about really all year, we're expecting our strong fourth quarter on the premise that we will have significant.
JP of Tcs deliveries during the quarter that is a very key driver.
We also expect you can see continued improvement in our Aerostructures group of product lines.
And also.
Our specialty bearings and engineered products group.
Really has lined up a very strong quarter ahead of them and we have very good visibility to that so.
So that's really what's driving the implied outlook I think you're right the margin ranges I'm going to be somewhere between 18 and 19% that's implied range.
And it's going to them that's execution for us and we have a great team whose prepared to do that.
Great great Okay.
And then.
On the corporate.
Expense and the initiatives that you guys are undertaking and getting to the the high end of that 15 to 20 million that you cited should we think of the base there as being kind of the the 2017 2018 level and the high Fiftys.
As kind of the baseline from which to to assess those those savings I.
I think Thats correct set I just would want to point out we do expect there to be continued.
Noise in that number as we go through that effort.
And as I can imagine integrating these acquisitions, but as you think about the underlying base number.
I would support.
That calculation, yes.
Okay, Great and then maybe just last one from me right now.
Can you guys size, the the synergy and tax benefit contribution.
To the to the deal.
Sure I'll give it to we talked about that the unadjusted multiple is about two turns higher than the 12 and a half about 75% of that difference is attributable to the tax.
The rest is to operating cost synergies that we expect.
Great.
Okay excellent well, thanks very much thank you very much.
Thank you next question comes from the line of Steve Barger with Keybanc capital markets. Your line is now open.
Hey, Good morning, guys. This is Ken Newman on for Steve. Thanks for taking my question.
Morning.
Morning.
If I missed it but could you maybe just talk a little bit about how long you expect the integration of ball steel to take once the deal is closed and.
It was it was good to hear that.
The ball steel as a meaningful step and not the last step in M&A. So.
Kind of give us an idea of how long you would look to integrate this and then maybe step back into the M&A pipeline.
Sure This is Ken.
The team obviously as his experience doing integrations.
So we would expect that it would likely be about a six month period of time for us to move through that process with the ball seal team.
And.
We we continue to be.
Very active in in M&A is Rob kind of commented in his part of the prepared remarks.
And again I think that you can expect that we will focus in the areas of highly engineered products.
And that we will maintain discipline that we have historically.
Demonstrated in valuations.
As I as I think about that last comment there as we think about your M&A pipeline or their deals similar to the one that you've just announced today or are there other targets.
In terms of.
Larger or smaller size or may be different margin profiles.
I'll start and Rob can certainly chime in.
There is a broad range.
And I think that that as you would expect when you when you have opportunities that come into that acquisition analysis phase that theyre going to be a various sizes were not as opposed at all to small acquisitions of smaller companies or product lines that would fit very nicely, what we with what we currently.
Offer.
To our customer group and certainly we all know that there are larger companies that are out there today.
May end up being available and would add significant scale to our operations. So.
I think that we are open to either I think now with the ball seal acquisition. We've we've demonstrated the ability to step up in size and we could certainly do that again with the with the current strength of our balance sheet.
That's that's good to hear.
My follow on question here is about the forward EBIT margin for football seal.
Do we think about how synergies can improve margins on a go forward basis for that business and maybe just talk a little bit about.
The customer mix, an overlap for medical Andy and industrial.
And we'll we'll talk about that in a lot more detail on our fourth quarter call, but obviously as we've gone through the analysis, we see certainly some some opportunities.
For.
Increased sales it at joint customers today, whether they're in the aerospace defense medical or even industrial markets.
We don't expect that there'll be a lot of cross selling if you will because the products are very different from what we have today, although highly complimentary, but we certainly do think that we can leverage the strong relationships that command will bring with that customer base to ball seal and similarly false fuel will bring some very strong customer.
Patients ships to command that we hope to exploit we'd really look back to what we've been able to achieve with the G.R.W. acquisition. As you remember we did that about four years ago now and it had a at the time that we acquired them only about 19 or 20% of their sales was in the aerospace and defense here.
Yes, very similar to the ball feel acquisition.
They had a bigger exposure in medical we've been really pleased with how we've been able to leverage and increased sales at GR W.
In their area and de area and we've really been pleased with the underlying growth that they've been able to drive into medical markets that they serve today and even though we've known ball seal for for seven years, and and and been looking forward to two today for about that long.
We we entered the relationship initially seven years ago with a in D. in mind and now today, it's not just aerospace and defense, but increasingly medical as well. So we were really pleased with the ability to come to an agreement with.
With with Peter ball cells in the and the management team at false fuel engineering.
Perfect. Thanks for the sometime.
Thanks again.
Thank you.
Next question comes from the line of Edward Marshall with Sidoti and company. Your line is now open.
Good morning, gentlemen.
Ed.
Just wanted to talk about.
I skipped out I guess that's.
There's election day, so no juries today.
[laughter].
So so cash flow and and margin expansion.
For the discussions about ball seal.
And if I think about.
It didn't go as far to say that that would be accretive to EPS in the first year, it's hard kind of looking at the math, it's hard to kind of thing to the might not be.
But is there something unusual you probably still going through some of the deal coming but is there something unusual in that deal accounting that we should be aware off as we think about kind of ballsy on how you might integrate that into the business. Yeah, I Wouldnt, Yeah, Greg Great question, and what I'll say is we're still working through.
As you would appreciate the purchase accounting adjustments that will need to make.
This transaction will carry with it I potentially I would call an unusual and that into bad way, but just a purchase accounting feature that would limit the GAAP EPS accretion in year. One this deal is significantly cash accretive right out of the gates.
And then in year two on a GAAP basis, we would expect it to be kind of a mid single digit type accretion.
Just based on our early math.
So.
Adjusting for some of the purchase accounting adjustments clearly gap accretive.
Right out of the gate in year, one so we're very pleased to ought to be able to partner with ball seal and we think this transaction will provide a lot of benefits not just for command, but our shareholders as well as employees of wholesale.
Got it and the second question I had was.
Looking at the Q and seeing that you shipped to roughly 26000 fuses to date. The math suggests 14 to 19000 and the fourth quarter, which generally carry pretty high margins and looking at the margin guidance for Aero. It looks a little light. So just wanted to get your sense as to maybe is it a mix thing or something that might be.
Going through on on the with that implied.
Movements on fusion, yes, no. Good question, Ed I mean keep in mind in particular in the U.S.G. side.
That's an overtime calculation so when we talk about the units delivered.
In particular on U.S.J., there theres not always a correlation between what's impacting the revenue. So what I can tell you is that while we're still expecting significant dcs deliveries in the fourth quarter a good portion of what we're going to deliver in the fourth quarter is also you SG.
Where we recognize a portion of that revenue.
So in terms of them in terms of the margin guide once again once again.
We're trying to be balanced and what we're forecasting for the quarter, just given that we have to execute to deliver it so.
Do we think there's potential for upside sure if things all fall into place.
But we're really trying to be balances given where we are in the year.
Perfect. Thanks, guys very much for your comments thanks Ed.
Thank you Ed.
Thank you and as a reminder, ladies and gentlemen, if you have a question. Please press star one on your telephone.
Our next question comes from the line of Tony Bancroft Bancorp with Gabelli funds. Your line is now open.
Good morning, gentlemen, nice work.
Thanks for taking my question.
You've mentioned a couple of you've mentioned a couple times.
Talking about the unmanned heavy lift area, where you where you have a core competency could you maybe sort of.
Just high level talk about what potential other potential M&A opportunities out there what do they look like and would you be interested in that space.
What would drive you to be more interested in doing M&A that space.
Tony It's a good question you know, we we look at that quite often.
We think we have a very unique ear vehicles in the K Max today, that's that's proven its capability and whether its military logistics applications or a broad range of commercial applications from humanitarian relief to construction to logging to firefighting.
We're working currently obviously on on our own unmanned capability or system to put on that and we were really pleased to get our first five orders from commercial operators. We're focused on that right now, but clearly that informs us on what we both think the market is and what the capability of.
Our aircraft for further expansion or where a complimentary airframe might fit so.
I think that the biggest thing for US right. Now is that we have opportunities ahead of us that we want to capitalize and then bring that experience and what we can learn about the applications in the capabilities and have that really informed both internal development or any acquisitions that we might do in that area.
Great. Thanks Gents appreciate it.
Thank you Tony.
Thank you.
Our next question comes from the line of Chris Dankert with Longbow Research. Your line is now open.
Good morning, guys.
Hey, Chris.
My apologies I jumped on a little bit late here.
Walking through some of the numbers.
Seems like synergies are pretty significant my my back of gambled math, your so $5 million to $6 million that in the right ballpark for the deal.
Yes, now Chris that that is well north of what's implied in the numbers that we've given.
I don't want to go I'd love to say what that number is but you're.
You're fairly well north.
We'll be able to provide more details on this when we get onto the yearend call. Once we close the transaction, but the.
The significant opportunity really is.
You know about 75% of that difference in the implied multiples really around the tax expected tax step up benefit.
So.
On the operation side, what we've dialed in right now is pretty modest.
We're really its low hanging fruit fuel.
Got it okay, that's but thats very helpful.
And then maybe this is a bit early but I'll give it a stab any way obviously this year GPS shipments on track for for really impressive number not a record of remembering right.
But as we look into 2020 is there any kind of since you can give us.
Is this a repeatable figure should we be similar to 2019 next year, just any thoughts on give shipments big picture.
Yes.
We would expect that.
We would be in a similar range. We it is a little bit early for US we will talk more about that.
The the fourth quarter call.
But I think Theres two things you can see that we have.
Very strong backlog and combine that with a really good team doing production. So we think we can support.
Volume in this range into next year, but again, we'll we'll talk about that in more detail at the fourth quarter call.
Got it got thanks for the color though.
And then just one final one from me any update on.
The.
It was marine program kind of how that were kept going any update on autonomous firefighting, just just any thoughts around that program would be appreciated.
Chris.
As we mentioned, we actually received orders five orders from customers that are they're all commercial today in the primary goal of that those orders is for them to be prepared for and my man firefighting capability.
When we're able to get authorization to do that so.
Our operators are really looking ahead.
And we are teaming with them to make sure that we and they are both prepared to meet that demand when it occurs and and also we remain very encouraged.
The unmanned program within the U.S. Marine Corps as well so.
We'd like to we've got a lot of hard work ahead of us, but theres a few things that are coming together quite nicely on both commercial and military unmanned programs for the K Max.
Got it started a little slow on the uptake, but a very exciting stuff. Thanks guys.
Thank you Chris.
Thank you.
Next question comes from the line of Pete Skibitski with Alembic Global Your line is now open.
Hey, good morning, guys nice quarter policies like on late as well.
[laughter].
I guess just start maybe.
Rob Rob on the inventory build year to date, I think JP absent in the bearings had been a part of that.
Does that start to wash out in the fourth quarter here or do you get to a onetime conversion on free cash and net income for the full year or we could carry some inventory into 2020, just wondering how that's going to flow yes no.
I would say this side, we do expect to see a meaningful improvement in inventory number in the fourth quarter based on our expected shipments.
What I can tell you it in terms of the cash conversion. Some of this will be hung up on a are likely.
Ended the year just spending on the time of those sales depending how much of that moves into December given payment terms.
What I can tell you is we have line of sight, we have collected on some of the call it outstanding.
Solvable.
Some of our foreign customers. So we are seeing some good progress early here in the fourth quarter.
Long term, we have terrific visibility and confidence in delivering really strong cash flows.
Okay great.
A couple of questions on ball steel.
Is there anything to turn around here it looks like the margins are pretty solid.
Just curious.
Think about a 55% medical exposure to me not big a medical expert, but I kind of think of.
Schumer staple type of a market where.
Sales growth.
Is low to mid single digits, but it's pretty sticky not particularly volatile.
And performance is typically consistent is that the right way to kind of characterize kind of what are you guys have seen in the historical for ball sale.
I'll start by saying you know it is certainly not a turnaround. This is a an extraordinary company at every every phase whether its design manufacturing their sales and marketing organization.
We were extraordinarily impressed not only with the design capability that they have.
But the absolutely World class.
Processes that they have in place so.
Great management team terrific employees so.
As you rightly said the profitability of that that company demonstrates.
How strong they are.
Across all of those.
Facets of the operation and actually you know weve.
Historically, they've been strong mid single digits.
Under private ownership in and we think that in particular, if we get a little bit a health and recovery in the industrial markets that we couldn't be in in the high single digits, the 8% to 10% growth range and that over time. So of course will need a little help with recovery and industrial.
But we feel very good about strong growth with this business overtime as we come together.
That's great color. That's correct I. Appreciate you had just one quick follow up.
You guys you intend to operate is kind of a stand alone.
Unit within aerospace is that right.
I would say, we're still working towards how we're going to operate within our aerospace portfolio of companies, but needless to say, it's going to have a lot of attention from our management team working closely with the ball field management team to make sure that the teams are integrated appropriately and.
That employees are.
Good place to continue doing the work that they've been doing the whole time under private ownership. So.
Okay I appreciate the color guys great. Thanks Pete.
I'm showing no further questions at this time I will now turn the call back over to VP of Investor Relations James Coogan for closing remarks.
Thank you for joining us on today's conference call. We look forward to speaking with you again.
Report, our fourth quarter results.
Ladies and gentlemen, this concludes todays conference call. Thank you for participating and you may now disconnect.