Q3 2019 Earnings Call
Greetings and welcome to the Quaker held in third quarter 2019 results conference call.
Question and answer session will follow the formal presentation, if anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded and it's now my pleasure to introduce your host Michael very Chairman Chief Executive Officer, President for Quaker, how and thank you Mr. Barry you may begin.
Good morning, everyone. Joining me today are married Hall, our CFO , Joe Berquist, our Chief strategy officer, as well as our head of global specialty businesses and chain House that are our head of finance and Chief Accounting Officer.
We have flights for conference call you can apply them in the Investor Relations section of our website at Www Dot Quaker help dot com.
Our last conference call was August socket, which was our first full day as Quaker House.
And now we've recently passed the 100 day, Mark and I can certainly a test it's been a fascinating 100 day period.
Today I want to make some comments from both the perspective, our external environment.
As well as my observations on our initial days as Quaker how.
So let me start it off now with some remarks about the external environment and our third quarter results.
At a high level, our sales were down 7% with lower volumes and FX being the major drivers.
Which is very similar to the second quarter.
Overall, our bias were down 4%.
And foreign exchange negatively impacted sales by 2%.
Please note I refer to these numbers I've been consistent with our reported financials and our new segments and how we're treating the additional help sell says combination related and outside of these volumetrics.
However, we also provided pro forma information in our slides.
Which include 2018 2019 for the third quarter year to date and trailing 12 month.
When looking at Q3 pro forma comparison. It also shows sales being down 7% with similar negative impacts due to lower volumes and foreign exchange.
So our story assess that no matter if you look at a reported financials for the pro forma financial.
As we started out the quarter our July performance was good and consistent with previous expectations.
However, we saw a weaker than expected August and September compared to our original expectations, which included Q3 somewhat a proven based on customer feedback and the information we had in July .
The declines in the quarter were due to a weaker automotive demand globally.
And generally weaker industrial environment, most places of the world.
What we're still production in the areas the steel where most of our products are used.
And some country specific issues like India, where we saw a significant and expect to slow down and industrial production.
In addition, we continue to see some customer inventory corrections in their markets.
So why we originally expected relatively weak conditions to continue.
Actual conditions and that up even weaker than expected.
So we asked ourselves when we solve these declines where are we losing market share.
We have <unk> customer by customer analysis to see what our gains and losses and market share we're at the customer and product level.
This analysis analysis continues to show that we are taking share in the marketplace.
As our overall organic volume growth due to share gains for Q3 19 versus Q2, Q3 18 was approximately 2%.
And we sold these market share gains in all regions and especially in Asia Pacific.
And there were other positives in the quarter as well, we continue to perform well in the areas that we can't control, which helped offset market challenges, including continue to take share like I, just talked about keeping our gross margins at appropriate target levels.
Controlling our operating expenses.
And executing on our cost synergies.
Doing this and help enable us to have a good third quarter pro forma adjusted EBITDA of 61 million, which has a 3% increase from the third quarter last year. Despite the volume declines.
I now want to share some comments about how had how we have Dod and the first 100 days as a combined company.
I traveled to many of our locations globally and got to me many new colleagues have business leaders.
Some key takeaways for me were.
Once the second culture between the two companies feels very good.
We recently had a top 100 leadership meeting as we set our priorities for playground and during our discussion as it was difficult to tell legacy Quaker from legacy health leaders.
Our working together on integration planning for 28 months store in the regulatory approval process.
Really helped and we have spent a great deal time and energy, both pre and post close by creating our core values and the kind of culture, we want and this has been paid off.
[laughter] stuck at El forgot visibility into a number of strategic commercial initiatives that legacy <unk> have been working on it.
We as competitors I could not share this part to be in combined.
I'm very excited about what I've learnt one example of and initiate with that I found very promising was the equipment solutions that happened it was working on.
In addition to their offerings to customers I.
I believe this can have a great deal traction for Quaker how down the road.
And third with regard to the integration process.
This call on well well in early days, we haven't announced the vast majority of our organizational structures.
Consolidated or global headquarters and the Philadelphia area.
And have begun to many tas involved and achieving both the cost synergies and cross selling synergies.
We have a dedicated team to lead this integration effort at a sure we're doing this well.
With all these are number one goal on line, which is keeping our customers satisfied.
So after the first 100 days.
We are on track with all aspects of our integration.
Another achievement I'm excited about as our acquisition of Norman Hey on October 1st.
We believe this is a very strategic acquisition and our existing markets and also takes us into areas with higher at her growth characteristics.
In addition, we were able to purchase this business and attractive price of approximately seven times EBITDA.
We are keeping this business separate rather that integrate it at this time due to our concentrating our efforts on the larger Quaker how a combination integration.
Looking forward over the next quarter and into early next year, we continued to see markets that's generally weak.
It's really hard to tell exactly if we're at the bottom now our current thoughts are that we are near the bottom and we don't expect to see major market changes up or down for the next couple of quarters.
As far as our EBITDA growth is concerned our October 18th Guide US still holds for 2019.
And in 2020, we do expect good EBITDA growth due to the estimated incremental cost synergies of approximately 30 million.
Continuing to take market share.
And a four year benefit of Dorvin <unk>.
So overall, it's been a good start to our newly combined company and I continue to be excited about our future.
Despite the weak market conditions, we are currently experiencing I'm, even more positive now about the future as [noise].
We see the early benefits of combining our two companies and that adding norm and high.
All the to your projections, we mentioned during our last call still apply by August 2021, we expect our adjusted EBITDA to be over $300 million on a going for basis.
Our net debt to adjusted EBITDA to be under two and a half times.
We expect to be growing above the market by 2% to 4% on our entire revenue base.
In closing I want to thank all of our colleagues I, Quaker Houghton, whose dedication and expertise helps to create value for our customers and shareholders and differentiate us in the marketplace people or everything in our business and by far most valuable asset and I'm very happy with far Quaker how the team.
And what we will be able to accomplish for our customers going forward.
And that concludes my prepared remarks, I'll hand, it over to marry whole says that she can review some of the key financials for you for the quarter. Thank you Mike and good morning off as you may have gathered from my comments. They have a lot to talk about say before I begin however, I need to remind you that comments made during this call include forward looking.
Statements, which are based on current expectations estimates projections and assumptions that are subject to risks and uncertainties, which may cause actual results to differ materially for discussion of these risks. Please review the cautionary statements regarding forward looking statements included in our earnings release and Form 10-Q .
And the rents back there was included in our 2018 Form 10-K filed with the FCC. These are available on our website.
In addition, please note that we provide certain information, including non-GAAP earnings per diluted share non-GAAP operating earnings and adjusted EBITDA and certain pro forma item in an effort to provide shareholders with better visibility into core operations, excluding certain items, which we believe do not reflect our core.
Operating performance reconciliations are provided in charts 13 through 26 of this investor deck and some of them are in yesterday's earnings release and Form 10-Q as well.
Well actually well know by now we closed the combination with how non August 1st 29 team if one could pick the timing for close to the major transaction one would take the first day of a quarter at least all accounts. What however, given our long awaited close we are happy when the first of the month timing, but it does make things a bit mapping.
We strive for clarity and transparency. So we've included in the DAC. Both actual results uncertain information such as sales revenue and adjusted EBITDA on a pro forma basis as if we had been combined with how throughout the periods presented we hope this provides more insights into core operations of the combined.
On company now and going forward.
So let me begin with actual result, which include two months of housing in Q3.
I refer you refer you to the financial highlights slide on page five.
As Mike discussed in Q3, we continue to face headwinds from the stronger dollar and continuing weakness in industrial production generally across all of our end markets, but especially automotive as a result, net sales of approximately 325 million, although up year over year due to the inclusion of Howden.
Would've been down 7% year over year, excluding the two months and how.
This result is inline with our updated guidance issued on October 18.
Our actual reported gross margin of 32.3% includes a one time expense at 10.2 million due to the sale of housing inventory in the third quarter that had been adjusted to its fair value in purchase accounting.
Excluding this one time expense, our gross margin would've been 35.5% as compared to 36.5% in the third quarter last year.
This result is inline with our prior guidance that upon close and before synergy capture our gross margin would be in the 35% area as how its gross margins are generally about lower than legacy Quakers due in part to the accounting treatment for chemical management services also called really care and.
Differences, some differences and product mix.
Our operating loss in the third quarter or 14.5 million.
Includes a restructuring charge of 24 million in combination related expenses, a 14.7 million.
The restructuring charge reflects the start of our program to achieve the expected cost synergies on the 24 million as our current estimate a primarily severance related expenses, we expect to incur over the next 12 to 24 month.
We still expect to incurred total charges of approximately one times, our synergy estimate as we've said earlier, which will be recorded as they are incurred.
Excluding the restructuring charge and the combination related expenses, our non-GAAP operating income increased to 34.5 million from 27.8 million in the prior year, primarily due to the inclusion of how.
Our non-GAAP operating margin of 10.6 person is down from prior years, 12.5% due primarily to the lower gross margin discussed earlier and a slight increase in adds DNA as a percentage of sales due to the decline in sales.
Reported effective tax rate for Q3 was 27.6%.
Excluding the impact of all acquisition related charges.
[noise] and other non core items.
We estimate that our effective tax rate for Q3 would've been approximately 20%.
As we noted in our October 18th update to the quarter in the current quarter. We received the renewal of a concessionary tax rate at one of our non U.S. subsidiaries that we originally expected to receive in Q4 as a result, the effective tax rate guidance. We gave you in our Q2 earnings call for quarters, three and four inch.
Changed.
Specifically, we said earlier, we expected an effective tax rate of 25% to 27% in Q3, and 19% to 21% in Q4 with the beneficial tax rate actually received in Q3, the 20% effective tax rate estimate is inline with expectations.
It's just one quarter earlier also we now expect our Q4 effective tax rate to be in the range of 23% to 25%, which would give us some full year effective tax rate of 20% to 24%.
Our adjusted EBITDA margin of 15.8% showed a nice improvements from 14.9% last year, primarily due to FX transaction gains year over year, which are included in other income expense.
And the inclusion post combination of equity earnings from the Korean JV would show that below operating income.
Our non-GAAP EPS of <unk> dollar 56 declined compared to $1.63 last year, primarily due to the impact of the 4.3 million shares issued as part of the closing consideration, but still ahead of the consensus estimate of $1.41.
As I mentioned at the beginning of my remarks, we've included certain pro forma numbers for sales and adjusted EBITDA now provide insight to the core operating performance and the combined company.
You can see these pro forma numbers on slide six to six through eight and we provide reconciliations in the appendix slides 19 to 26.
As you can see pro forma net sales showed the same 7% decline we discussed on an actual spaces earlier.
Pro forma adjusted EBITDA improved 3% year over year to approximately 61 million primarily attributed to an improvement in gross margin and FX transaction gains, partially offset by lower volumes and negative impacts from foreign exchange translation.
On chart nine please note our net debt to adjusted trailing 12 months EBITDA at September 30 of 3.3 times improved versus the approximately 3.4 times, we estimated on our August 1st CLO.
Our leverage ticked up slightly to about 3.5 times outdoor Norwegian Hey acquisition as expected, which closed on October 1st However, Norman Hey brings with it similar good cash flow characteristics to that of Quaker Howden and our commitment to improving leverage to less than two and a half time.
Bonds within two years from close remains unchanged our liquidity position is strong with about 400 million available through a combination of cash on hand, and undrawn revolver capacity.
Until <unk> nine and 10. Please note that we've updated or up from certain information provided earlier regarding accounting adjustments and other items, including our estimate of the impact of conforming accounting policies and our estimates for depreciation and amortization interest expense Capex and.
Tax rate there were no material changes here. These are updates are more a in the nature of fine tuning.
In summary, Q3 was challenge the operating environment was more difficult than we anticipated. When we were looking forward in July and in the midst of navigating unexpectedly choppy waters, we closed on our combination the doubled the size of the company and we did at mid quarter, while sales were down through a lot of hardware.
Across the company, we delivered on our gross margin expectations improved our adjusted EBITDA margin and took a good first up and improving leverage. It's early days, we still have a lot more work to do well, we're confident that we're on track to deliver on our commitments regarding synergies leveraged and growth. These.
Our key topics among others that we will speak to our at our Investor Day scheduled for December 11th in New York at the New York Stock Exchange and we hope to see there if you've not yet received an invitation and would like to attend please let me now. Thank you for your interest in Quaker Houghton and now I'll turn it back over to Mike.
Thanks, Mary will now open it up for questions.
Thank you will now be conducting a question and answer session. If he would like to ask your question. Please press star one on your telephone keypad. It confirmation telling all indicate your line is in the question can you maybe prestart Kim if you'd like some of your question from the Q4 participant speaker equipment, maybe necessary to pick up your hands that the four pressing the star keys.
One moment, please only poll for your questions.
Our first question comes from the line of Edward Marshall with Sidoti and company. Please proceed with your question.
Hi, there good morning.
Good morning that.
So I wanted to talk about.
We looked at the organic growth down about seven I wanted to make sure that that how that was trending about the same was there any differences and maybe their end markets that you'd like to share with us at this time.
So major differences really Oh, that's what we fall between the two companies is pretty similar impacts between the different types of businesses that we have.
Okay, you mentioned about 2% to 4% market share gains and that's what I think historically Quakers Don.
You talked about several initiatives that that how might be bringing on I'm just curious if.
Over time do you expect that number two to increase as far as market share.
Gains over the market.
Yeah, I mean, the one thing we've I guess committed to add on and try to set expectations as rewrite like Quaker historically has been growing above the market, 2% to 4% [laughter]. If you look at what we.
Did this quarter as a combined.
Company, we did 2% and we said it it probably be you know get back to that 2% to 4%. After a year you know as we get really geared up with lot of the cross selling initiatives that we have and that takes a little bit time. So I do I do feel confident that all of the entire.
<unk> revenue will be consistently in that 2% to 4% one year from now after our.
You know all the things are kind of in place relative to cross selling synergies.
Synergies.
And yeah canopy could it be higher as always potentially for that but for right now I'm, just where to suck stay with what we said about continually growing 2% to 4% over the market.
Got it and then the release you talked about 2 million in synergies I just want to make sure. That's part of the 5 million that you expect this year and do you still expect that additional three and Mike in your prepared remarks, you said, a 30 million in 2000 2020, I just want to make sure. That's the 2020 components incremental over that five sorts combined 30.
5 million over the first I think two years, which was for the first year and a half way I think which was the original dog okay.
Yes, that's yeah, if you're correct that both of those so the we would expect the have three or so in the fourth quarter and then we would have an incremental 30 next year.
Got it.
And the change in the business segments, I guess, the globally specialty business it looks like the majority of that.
Is the traditional Quaker business I think there was about 12 of the 50.
And from from Houghton.
Well you would you provide you know.
The pro forma for the segments. It for two Q1 Q.
As as you read as we go forward or how should I actually think about kind of.
Adjusting for that.
[noise], Yeah, and a this is shanteau standards. So the amount the break out like you said is obviously there's components between how named Quaker oats.
I would say your estimate is a little white mountain side, but we won't be disclosing the individual components between out and legacy for swagger Quaker legacy within specialty businesses will be obviously disclosing the four segments going forward on an apples to apples basis from quarter to quarter bases.
But we also will not provide pro forma items the legacy businesses from prior year are just a bigger centric.
Got you so we'll see the true up as we as we move forward each quarter that report.
It is not that's correct. Okay. All right. Thank you guys appreciate it.
Thank you it [noise].
Your next question comes from the line of Mike Harrison with Seaport Global Securities. Please proceed with your question.
Hi, good morning.
Good morning, Mike.
Was wondering.
Mentioned, the 2 million synergies and your expectation that you would get another 3 million or so in Q4.
We're going to get some contribution from Norman Hay in the fourth quarter, just curious as to why we wouldn't be moving from 61 million dollar pro forma EBITDA number.
Something that's that's lower than that.
Given that we should be getting.
At least a kind of a low to mid single digit million dollar EBITDA contribution from Norman and those incremental synergies.
At a high level, it's really because I I mean, that's this is just our past forecast that we have a half from our businesses you know there's probably some components in there like you know foreign exchange transaction I have kind of or the lower operating income that that was a positive this possibly wouldn't expect that Gulf War.
There could be a little but because we only had two months of out into the third quarter or that type of all upward pressure a little bit on the gross margin.
We expect to see you know, probably some seasonality and our and our business you know one of the things that's really hard for US Mike to forecast is like a month of December there can be seasonality, we don't know given the weak markets others.
You know we're hearing some rumblings that some places that there could be more extended shutdowns over the holidays that than maybe we normally see but it's really kind of too early to tell a lot of that so it's for you know, it's just tough sometimes in these choppy markets to get.
Uh huh.
Very precise forecast. So that's the best are the best we have at this point, but Oh, I'm certainly, hoping it's higher [laughter].
Got it and and maybe in terms of though.
The the extended shutdowns.
But you saw some of that activity takes place in Q3 were there specific regions or end markets were better activity was most pronounced in Q3.
Oh I don't think we saw too much from a customer perspective around extended shutdowns or you know we did see certainly some lower production.
At our customer level, because maybe things in their supply chain or their their customer chains or as far as inventory corrections, but we that we didn't see an eight too much from a extended shut down we did see you know the beginning effects for example on a.
ER early days on the GM strike in September of their customer of ours. So you had some sort of things like that.
And then.
The also ask about the raw material versus pricing situation. Obviously, you guys had pricing down in the quarter overall Oh My assumption is that that's starting to follow what's going on with raw material trends.
Is that true into my other question regarding that is <unk>.
Seen similar trends.
Pricing.
Often can be the case a company that's that's about to be acquired.
Some of its pricing discipline.
Do you feel like maybe there's some additional work to do on on that legacy portion of the business from a pricing standpoint.
Sure I <unk> you know on the when I think about pricing right now I think our and raw materials I feel we're going to very stable raw material environment.
As a therefore were generally are pretty stable pricing environment. So I don't think of our.
Ah think of what we're at a note of a declining prices right now I think it's relatively stable. So one of the things you know there there could be mix effects in there to a that are that are causing us at us as far as legacy having said that they have been doing price increases over time.
Time, and so forth. So there's there's not a you know.
That's not that I'll take nothing's been been done or anything like that so I think that's fine of course, one of the things that we're gonna be doing that we've been consistently doing and the legacy Quaker businesses, you're not doing the EPA analysis, and we've been doing that for the past 12 years than that.
What kind of find that help points us in the right direction of areas or whether it's a customer profitability or product line profitability that can be approved or maybe don't have adequate returns.
We will be doing that analysis, a 2020 on the a legacy.
How the business for the entire Quaker Houghton platforms. So so hopefully that you know that we'll continue to be a benefit for us going forward.
Okay and then it had a question on the Asia Pacific business.
Two quarters, now where volumes were lower if I think about.
For the 18 in Q1 of 19, both of those quarters saw good volume performance, even as we were seeing markets deteriorating.
So given those challenging comps.
Is it fair to say that we should expect volumes to continue to decline.
For it and maybe even into Q1.
Maybe can you give a a little bit of color in there also about you mentioned, India had an unexpected decline.
Can you talk about where you were seen there.
Sure Yeah, we.
Yeah, it's hard it's hard to tell you know when I think about.
Asia Pacific for US I continue to be very optimistic and I feel the rubber offer for us has been really strong.
So yeah, the volumes were down 4% button context of.
You know somebody like automotive market in China for example, a double digit banned the you know that it's it's.
I think they've been performing really well and like I said in my comments, where we're kind of looked at it.
Where we're getting share gains were going to share gains everywhere in the world, but especially in Asia Pacific. So I really feel our Asia Pacific is continue to do well so really will depend upon how things start as things start to rebound I think and automotive in China or not.
You know there's talk of more incentives in place or for that but who knows so I think that will really the patent I think we'll always do better than the market. How the market is growing there a india in particular that was we did see some.
Declines there that were somewhat unexpected because of what's been happening or relative to industrial production, there, but again feedback we've been getting from our.
Leaders there is that the government is putting in place.
So incentives.
Things in place to improve that and they expect to see some kind of a rebound going forward. There. So I don't actually I think that's going to be a long long term thing, but but it certainly hit us on the third quarter.
All right. Thanks, and then one just kind of quick housekeeping keeping question, but the inventory purchase accounting adjustment that you made you noted there was a gross margin impact or gross profit impact of about $10 million did that also fall down.
The piano, an impact operating profit and EBITDA as well or was there an offset somewhere else.
No Mike a this.
Impacted operating profit as well as a even.
Alright, thanks very much.
Thanks, Mike.
Thank you. Our next question comes from the line of Jon Tanwanteng with CJS Securities. Please proceed with your question. Good morning. Thank you for taking my questions, maybe if you could start.
I know December is a little bit tough to forecast.
Could you discuss on a sequential basis. If October November were stable or weaker than September and you know if any end markets recovered or stood out otherwise.
Oh, it's a say October or was it is fine and was consistent with our expectations.
Nov is really hard to call that still still kinda early days here and in November and I'd. Like you said December is gonna be though is the one that's really more of a wildcard [noise].
Okay got what was October we couldn't it it's just a September though kind of so I was getting us.
Yeah, I think Oh I can say is October was fine we were disappointed we thought it with October it was consistent with our expectations.
Okay got it and did you discuss your gross margin expectations in Q4, and you know what are they are selling price and mix and then input price and senator components of that.
No I'm no. We just like we don't generally give specific guidance around that but 35%. Yes. It's one you know weve sad until the synergies again begin to kick in and so again staying in that 35% area that guidance we inside.
The second half the year and we're sticking with that.
Okay, Great and then I'm, just looking into slides or what is your capex come off after such a two years into the integration is there some investment you're turning off or any other color you could provide on that.
I think we were thinking that you know normally both companies were around one of the half for side of cells.
For a capex a and then we said you know in the next two years, we're going to begin number of optimization projects at our supply chain and how we do things with different sites.
And that will require some additional capital investment to optimize that supply chain and not two year period and then once that's over we expected to go down to its more normal level off one of the half for side.
Okay, great. Thanks, but last one from me Mike You've mentioned a couple of times. How excited you are about the equipment business at Howden in my understanding is that.
Norman Hey, actually bring something at the table on that front as well are you able to tell us what exactly that opportunity might look like from a revenue our margin standpoint, and you know growth rate and if you need to wait for a bit more integration before nominated can contribute to that effort.
Yeah. The you know I don't see it as a big as more as a revenue thing I certainly will be some revenue Atlanta this'll. It's early days in this whole lot for but what I I guess, what excites me as I really.
You know feel it's part of our offering that can be I continue to be a differentiator as we go to customers not only providing them with the kind of products. We can provide on how to service we can provide on but also.
Part of that put equipment as part of that delivery of things that we can provide I just think that will continue to help us lifar differentiation and they are competitive environment.
Okay, great. Thank you.
Thank you John .
Thank you. Our next question comes from the line of Laurence Alexander with Jefferies. Please proceed with your question.
Good morning, most my questions have been answered, but I guess two things one on the Housand side are there any parts of their and marks exposure that would improve with a like to the turnaround activity in that market in Indian markets or.
Much like Quakers their entire business basically coincident with the end markets.
[noise] tickets or most of the business that they have is very consistent.
You know with the with that with what Quakers legacy business I.
I think they they do have other type of businesses like the offshore business that that would have a different set of.
You know characteristics to it that you know if the price of oil goes higher and so forth that back to pick up a along with with that but.
Other than that I've come to think of the business is relatively consistent with what we do.
And then secondly is with respect to sort of the operational rhythm at their on their side of the business.
Are there anything that they were doing differently from Quaker in terms of either you know.
Inventory management or price indexing price negotiations with customers like Quaker could benefit from.
Or is it mostly sort of haltzman dot.
Opting the Quaker methodologies.
I think both companies actually did a good job of managing price. So I don't I don't think there's a lot to do there you didnt <unk> inventory and management, maybe and stuff like that you know we are.
Happy and for Us with what we've learned about.
They're working capital management practices.
And just manufacturing in general a that that I think a legacy Quaker can benefit from so I think both companies do it do things generally well and the pricing area and I think a you know will continue to.
Keep track best practices into place to do that going forward and that's going to be really important.
I can't tell you how much efferson conversations we have around March madness, Matt and maintain it are making sure that as we get these benefits from our supply chain.
Optimization procurement benefits that we expect to get and making sure. We keep all those there's been a lot of discussions on process has put around to ensure we got a good we're going to get though kinda margin expansion that we expect to see.
Okay. Thank you.
Like slots.
Thank you we have reached the end of our question and answer session I'd like to turn the call back over to Mr. Barry for any closing remarks.
Okay, given that I, what other questions, we'll on their conference call now and I want to thank all of your free interest today, we're pleased with the Finalization of our combination with housing and I'm confident in the future of Quaker House.
Our next conference call for the fourth quarter will be in late February or early March and if you have any questions in the meantime, please feel free to contact Marissa or myself.
Thanks again for your interest in Quaker House.
Thank you. This concludes today's teleconference. You may disconnect. Your lines is at this time. Thank you for your participation have a wonderful day.