Q4 2021 ACCO Brands Corp Earnings Call
Some of these faster growing categories.
We have good momentum going into 2022.
And we expect sales.
Profit and free cash flow.
Growth to continue.
Let me review a few highlights from last year that Neil will take you through all the numbers I will join him afterwards to take your questions.
Our 2021 highlights begin with power array.
They had a terrific year.
Growing pro forma sales approximately 22%.
Including 10% in the fourth quarter.
And increasing market share in console gaming accessories in the U S.
The sales growth exceeded our initial expectations.
It was even more impressive in a year of gaming console shortages.
That hurt overall industry sales, especially in the second half.
I am very pleased with <unk> results and.
And expect its profitable growth to continue.
Equally impressive is EMEA.
With 15% comparable sales growth in 2021.
We expanded product and channel portfolios and leveraged our strong brands to grow sales and take market share, especially with at home products and in online channels.
Not only were last year's EMEA sales substantially higher than in 2020.
Were also higher than pre Covid 2019.
North America comparable sales grew 2%.
But this headline number hides higher underlying growth in the business.
When you consider a large kensington deal that benefited the U S. In 2020 and did not repeat in 2021.
Without it North America 2021 comparable sales grew 7%.
North America had a great back to school performance take a share with five star products.
We finished the year on a high note with 13, 13% fourth quarter comparable sales growth.
Furthermore, including power array.
And with cost reduction initiatives and price increases North America expanded its adjusted operating margin 220 basis points during the year.
On the product side. In addition to strong power sales growth, we had double digit growth in shredding.
Stapling products.
<unk> arc products and no taken.
The 5% comparable sales growth for our total business was higher than our expected long term sales growth of 2% to 4%.
Due to the economic recovery.
On the channel side, we continued our diversification initiatives and investments in growing channels.
Our 2021 growth was led by retail and E tail helped by powertrain we.
We also saw good growth in independent dealers and wholesalers.
Walmart was our largest customer was almost 10% of global sales.
Amazon was second with 9%.
I am very pleased with the work our sales and marketing teams have done in transforming our channel landscape for <unk>.
Oster growth and healthy margins.
Our company entered 2022 in excellent shape and with strong momentum we expect to have another year of record sales strong profit and free cash flow growth and winning market based performance.
Before I hand, it over to Neil.
I want to make a few comments about our announcement that Neil plans to retire later this year.
I want to publicly thank Neal for his 37 years with ACCO brands, including 17 as our CFO .
He has been instrumental in our transformation to a faster growing consumer and technology oriented company and.
And in successfully navigating us.
Through the two most recent recessions both of historic proportions.
Been a great CFO for our company and our wives counselor in front of me.
We're going to miss them.
Neil will continue his current role until his successor is named and will help us with a smooth transition afterwards.
With that I will now hand, the call over to Neil and we'll come back to answer your questions Neil.
Thank you boss for your kind words and good morning, everyone.
Most of my comments will refer to our full year results.
Our 2021 reported net sales increased 22% to 2.03 billion.
Largely due to the contribution from <unk>.
Which had sales of $257 million.
Our comparable sales rose, 5% as we had higher pricing and improved volumes in most markets.
Foreign exchange added 2%.
Full year net income was $102 million or <unk>.
1.05.
<unk> per share adjusted net income was $137 million and adjusted EPS was $1 41.
A 46% improvement versus prior year.
<unk> contributed <unk> 28.
While the comparable business added 18.
This included a <unk> <unk> adverse impact from a higher tax rate and one negative impact from a higher share count in 2021.
The quarterly cadence of the year was uneven.
Our first quarter of 2021 still reflected COVID-19 declines as compared with the first quarter of 2020, which did not.
Our business steadily improved in the subsequent quarters with comparable sales growth of 5% for the full year, but 11% for the last three quarters.
Foreign exchange was favorable for the first three quarters, but turned adverse in the fourth quarter.
Even with the supply chain pressures, we were able to successfully increase our adjusted gross margin by 80 basis points for the year to 35%.
Increase was largely the result of our focused on cost reductions and also lower inventory charges.
The benefit of our sales price increases did not fully offset our cost increases because we are chasing continually rising costs.
SG&A expenses were $393 million compared to $336 million in 2020.
Results in 2020 benefited for many pandemic related temporary cost reduction efforts that impacted both SG&A and cost of goods sold.
2021 expenses are at a normal level for our company and also reflect the addition of cloud.
SG&A expense as a percentage of sales was 19, 4% below 2000, twenty's, 23% due to higher sales.
<unk> operating income was $151 million compared to $112 million last year and reported operating margin was almost 8% one percentage point better than 2020 due to the improved gross margin and reduced SG&A margin.
The power <unk> earn out is payable in two equal installments in March of 2022 and 2023.
In sales and profit targets are met.
Each quarter, we recognize any change in the fair value of the earn out as an expense in our income statement.
For 2021 <unk>.
Exceeded its sales target and achieved 100% of the earn out associated with those criteria.
But due to higher costs for products in freight it achieved less than 100% of the earn out associated with the profit based criteria.
Our fourth quarter reflects the true up of the earn out based on <unk> actual performance.
For 2021 power contributed 15 million to operating income after $19 million related to the earn out $15 million of amortization related to the acquisition and $6 million of inventory and transaction costs.
The 2022, we expect quarterly charges throughout the remainder of the earn out period for both sales and profit metrics.
Turning now to taxes, our GAAP taxes reflected a $15 million benefit from a reversal of evaluation allowance related to our ability to utilize foreign sourced income.
This beneficial change reduced both the GAAP and adjusted tax rates the.
The significantly larger fourth quarter earnings also altered the geographic mix of earnings and specific rates applied to adjusting items, which led to our adjusted tax rate being 29% for the full year.
This change in adjusted tax rate accounted for <unk> of.
Our EPS improvement versus previous guidance for the year.
We anticipate that for the full year 2022, we will have a similar adjusted tax rate of approximately 29%.
Now, let's turn to some details of our segment results for the year.
Net sales in North America increased 27% to 104 billion.
Largely due to the $200 million contribution from power.
Comparable sales rose, 2%, primarily from higher prices and volume recovery from schools and offices reopening.
During the year, we had a solid back to school season and saw some recovery in commercial sales starting in the second quarter.
Our sales to the technology channel declined as we shipped a very large order in 2020 that did not repeat in 2021.
North America, adjusted operating income and margin increased because of power a long term cost reductions and lower inventory charges.
Particularly offset by higher SG&A costs reflected normalized expenses and power.
Now, let's turn to EMEA.
Net sales rose, 27% to 663 million and comparable sales rose, 15% to $603 million, which are both above 2019 pre COVID-19 levels.
The strong increases with the results of the general economic recovery as well as market share gains and a benefit of approximately $13 million from the addition of the Franklin product line.
We have now seen six consecutive quarters of strong business improvement in EMEA.
EMEA posted a higher operating profit for the year, but lower gross and operating margins due to the lag in realizing the benefit of price increases.
EMEA increased prices last October and has announced additional price increases in 2022 to offset inflation.
Moving to the international segment.
Net sales increased 4% due to price increases.
And favorable foreign exchange.
Comparable sales decreased 3%, primarily because of lower volume related to COVID-19, especially in the first quarter, which continued throughout the year and Latin America as schools largely remained closed in person education for most of the season.
Mexico, and Brazil continued to be impacted the most by COVID-19, although we are seeing improvement as vaccination rates have increased particularly in Brazil Mecca.
Mexico, essentially did not have a normal back to school season in 2021, and Brazil season shifted into the first quarter of 2022, instead of the fourth quarter of 2021.
Schools began reopening in Mexico in January and most have now or will reopen in February in both Mexico and Brazil.
As a result, we are seeing improved demand in Latin America in the first quarter.
Our business in Australia posted higher sales from increases in both price and volume.
Sales were impacted by a difficult first quarter comparison and certain out of stocks due to supply chain disruptions.
The international segment posted a higher operating profit due to lower reserves for bad debt and inventory higher sales prices cost reductions and power.
This was partially offset by higher expenses as the prior year benefited for many pandemic related short term cost reduction measures, which included $4 million in higher government assistance.
Now, let's move on to our balance sheet and cash flow.
For the full year, we generated $160 million in net cash from operating activities and had $138 million of free cash flow.
We paid dividends of 26 million and Capex was $21 million.
We achieved our free cash flow target.
This resulted in a year end net.
Net leverage ratio of three three times, which is lower than it was at the time, we acquired power and.
Constraints, our ability to rapidly de lever after acquisition.
We were pleased with a 39% increase in our EBITDA to 292 million, which represented 170 basis points improvement in our adjusted EBITDA to sales ratio.
At year end, we had almost $600 million revolving credit facility available.
We reduced debt $131 million in 2021.
We ended 2021 with high levels of both inventory and payables driven by supply chain disruptions and inflation.
A larger amount of goods in transit due to extended shipping times accounted for approximately $40 million of the inventory and payables increase.
The remaining inventory increase was due to adding inventory to maintain customer service levels and cost inflation.
Now, let's turn to our outlook, we expect demand to continue to improve in 2022 as more offices and schools are in physical use at least in hybrid mode and world economies continue to recover from COVID-19.
We are continuing to increase pricing to catch up on offset cumulative inflation rate cost increases and we will drive additional productivity gains.
Therefore, we anticipate an additional 50 to 100 basis points gross margin improvement in 2022.
We remain committed to returning our longer term gross margins to the 33% level, but due to both the increasing cost environment and the magnitude of inflation. It will take us more than one year to achieve that annual goal.
We expect foreign exchange to be a headwind in 2022 for the full year. Our outlook is for sales growth in a range of 1% to 6%, including a 1% negative impact from foreign exchange.
Full year adjusted EPS is expected to be in the range of $1 48 to $8 58, including a <unk> <unk> adverse impact from foreign exchange.
The adjusted effective tax rate is expected to be approximately 29%.
We will continue to help margins by a continuous productivity programs and expect to again deliver approximately $30 million and full year expense savings.
A large part of our annual savings comes from the full year benefit of projects executed during the preceding year.
Intangibles amortization for the full year is estimated to be $43 million, which equates to approximately 31 of adjusted EPS.
We expect our free cash flow to be at least $165 million cash from operations of at least $119 million as capex of $25 million.
For 2022, we expect to return to our historically more balanced capital allocation that will include dividends debt reduction and opportunistic repurchases of our shares.
We have $125 million remaining on our stock repurchase authorization.
We expect to finish the year with a net leverage ratio of less than three times.
We maintain significant revolver availability and good relations with our banks to support acquisitions should any arise in 2022.
We are returning to an annual guidance and will not be continuing with quarterly guidance. However for the first quarter. We are providing an outlook as our first quarter is small and we expect significant impacts from inflation foreign exchange and prior year comparisons.
You may recall that in the first quarter of 2021 power a posted 100% sales growth and we don't expect that first quarter volume level to repeat.
In the first quarter, we expect a sales increase of two 5%, which includes two 5% impact of adverse foreign exchange adjusted.
Adjusted EPS is expected to be between <unk> and <unk> with a negligible impact from foreign exchange.
Now, let's move on to Q&A, where first and I will be happy to take your questions.
<unk>.
Thank you if you'd like to ask a question. Please press star followed by one on your telephone keypad.
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We take our first question from Chris Mcginnis from.
Please go ahead.
Good morning.
Boris Neal and Christine Thanks, and congratulations on the strong quarter. Neil also congrats on the retirement and thanks again for all the help and support over the years.
Wish you the best in your retirement.
Thank you Chris.
First question just around the <unk> results and how much is power has been impacted by the chip shortage and what's your expectation for growth in 2022. Thanks.
Thanks, Chris.
Like others in the industry certainly power array has been impacted by lack of console product availability. Our teams have done a great job securing inventory for our products, but the overall demand.
Was.
Hurt by the fact that they werent enough Xboxes playstations.
Playstations and Nintendos out there selling especially in the second half and especially during the strongest time of the year, which is the holiday.
Which is the holiday season.
Despite that <unk> grew 22%, which is much higher than our initial anticipated rate of growth that included 10% growth in the fourth quarter. So we executed really well.
But certainly.
Sales would've been even better had there been more more consoles out there.
If we look at next year.
We are expecting power rate to return to trend growth it's historical.
Its historical trend drove but really the industry historical trend growth. So we are expecting sales.
10% to 13% range.
For 2022.
Hopefully, we'll do better hopefully there'll be more consoles out there, but that's our initial expectation.
Great. Thanks for that and then.
It's nice to see North America rebound in Q4 can you just talk about the difference between.
The performance in North America and EMEA.
And maybe just outside of restrictions and mandates are you doing anything different in EMEA.
That's driving the continued growth from that region.
I think Chris the businesses are a little bit different between North America, and EMEA North America is much more consumer and school driven.
A significantly larger percentage of our sales in North America.
Go to those types of customers.
Is more commercially driven and EMEA has additional growth vectors.
Outside of North America, such as DIY tools, which is almost $60 million business in EMEA and that has grown nicely over the last few years as their businesses are slightly.
Different outside of that.
EMEA is obviously 27 different countries with.
It's.
Different.
Puts and takes with what drives the business and most countries North America is a large.
Homogeneous market with.
Fairly concentrated channels. So the dynamics of the market the markets are different.
Our EMEA team has done a terrific job.
Last year and actually in the year before as well.
Certainly with a 15% comparable sales growth we took significant share.
And really taking advantage of the fact that we have a lot of feet on the ground in EMEA addressing customer needs with a broad product assortment we have.
Many growth vectors and we were very quick in EMEA to pivot.
Two home office and work from home environments, and really drove sales.
Into that particular environment very well so did a tremendous job.
15%.
Sales growth I think speaks for itself.
North America as I mentioned is much more consumer and back to school driven and as such.
<unk>.
Sales in 'twenty, one were affected by the back to school dynamics.
If you remember there were a lot of inventory that was in.
In the channel from 2020.
And that affected our ability to sell in the sell out was good.
We took share but certainly due to inventory in the channel the sales were affected.
You saw North America rebound nicely in Q4 with 13%.
Comparable sales growth has.
Schools were fully insertion in North America.
And more people were working.
In a hybrid mode, where people were returning to the office in 'twenty one based in 'twenty. So the environment is different but both regions have done a tremendous job and we're really happy with the performance.
Clearly.
I'll jump back in queue, but thanks for taking my questions and good luck in Q1.
Thanks, Chris.
The next question comes from Brad Thomas from Keybanc. Please go ahead.
Good morning, everyone. This is Jim on for Brad.
First of all congratulate and wish him all the best in his upcoming retirement.
So to start I was hoping we could just get a little bit more color on the sales outlook by segments.
Noted a 1% to 6% sales increase targeted for 2022.
I was hoping you could give a little more color on as to what Youre thinking about sales in international.
International North American and EMEA.
Sure Jim.
So.
For North America, we're guiding to roughly 3% to 5% sales growth.
For EMEA.
One 3%.
And for international 5% to 10%.
Sales growth for next year, and Thats, what im giving your sales growth for that segment. It is all in including.
All products and FX effects everything.
Great. Thank you and then so you mentioned that you're expecting to take price in EMEA in next year and it was <unk>.
Wondering if you have similar plans to do so in North America, and International and then kind of on a similar note.
I was wondering if you could provide some color as to any elasticity youre seeing from.
From a demand perspective to those price increases.
Yes, as I mentioned in my previous answer the environments at different in all the different countries in North America, We took four price increases in.
2021, so by the end of the year.
We are pretty much caught up with.
With inflation, even though for the whole year.
We didn't in North America by the end of the year, we're pretty much. There. So there are minor tweaks, we still need to do in North America in 'twenty, two but we are in decent shape there.
EMEA, because we're mostly selling to commercial customers, who have catalog cycles, we have more limited to when we can take a price increase so in EMEA.
Did.
Our price increase.
In Q3.
And that wasn't enough to offset the impact of the inflation that we are continuing to see so in EMEA. We're doing another fairly significant price increase in April of this year April of 'twenty two.
And hopefully that will.
Catch us up.
And then international is also almost like North America, we do we get multiple price increases last year in international.
To position us to to offset inflation.
So we're in pretty good shape, there and all of the regions, though we got to do whatever is necessary to make sure that we stay ahead of the inflation. So if we need to do more in all three and the remainder of 2022, we are prepared to do that.
Got it got it and then if I could just squeeze in one more quick question.
So im sorry, I imagine youre still targeting in a bit of more debt paydown, despite leverage being lower than before the acquisition, but I was wondering.
Could you provide some color as to your capacity to complete Patel.
Potential another acquisition, both financially and in terms of management bandwidth.
To complete an acquisition and integrate it.
Sure I'll take that one.
We have a significant.
Revolver capacity and we have very very good relationships with all of our banks and so in the event that we needed to borrow more money that exceeded all of overcapacity.
B.
Relatively simple for us to get so.
That is not a barrier to us being able to make acquisitions of tool.
And.
From a management bandwidth perspective power acquisition is pretty much behind us I mean, there is some work that continues.
Really focus more on the power <unk>, but as far as our overall ability to make additional acquisitions that should not be an issue.
Great. Thanks, and best of luck throughout the rest of the year.
Okay. Thank you Jim.
The next question comes from Jay comes from Naval Capital. Please go ahead.
Good morning, Let me also add my congratulations to Neil and for the strong quarter.
Good morning, Joe Thank you.
So quick question here on the <unk>.
Third quarter, you had talked about.
The Delta variant.
Demand for some of the commercial products and less back to school and then we got into the omicron here in the fourth quarter, but you guys really knocked the ball out of the.
Park I was just wondering.
It seems like the omicron really didn't have any impact.
Or maybe you can kind of give a little color detail if it did things actually should even better.
That would be appreciated.
We saw a little bit of an impact in the last two weeks of December .
It was kind of too late to affect sales so from a from our ability to to.
To sell and ship it didn't really have an effect.
On our Q4 and at the start of this year, if I looked at January had a little bit of an effect just delaying office re openings.
But it also did not really have an impact on our ability to ship sales were good in January and up versus versus a year ago. So.
We've managed it well I'll give kind of more credits to our team and our ability to manage it because certainly.
A lot of community spread they're unaffected and our people.
It didn't really affect the business.
Okay. Thanks for that.
<unk> talked about.
New product pipeline I was wondering if you might also give us some more details to what kind of products you're looking to.
Introduce.
In 2022, and maybe where and what geographies.
Sure Joe So each year, we introduced thousands of new skus to support our sales and to give.
Our customers reason consumers reasons to buy our products 2022 is going to be no exception, we're going to have a whole new collection.
Products for back to school.
In our.
North America and international businesses.
To be introducing a new line of wellness products.
Both.
Fortifying our air Purifier line <unk> Air Purifier line.
Under expanding outside of the airport.
Purifiers to new products.
And wellness.
We are constantly refreshing.
Our.
Kensington products.
Introducing that are introducing new docking stations and new.
Apple.
Apple accessories, and Kensington, and then power Ray has a.
Constantly evolving collection.
Controllers and charging stations, so that we're going to we're going to be introducing as well so.
I am excited by the portfolio that we have and it's the fuel that drives our growth.
Certainly.
Im excited that we will have more than enough to drive.
Sales growth that we forecasted for the year.
Yeah.
Thanks for that Bob So I'll get back in queue. Thank you.
Thanks, Joe.
Our next question comes from Kevin Steinke from Barrington Research. Please go ahead.
Good morning.
Wanted to ask about.
The revenue growth guidance for 2022 in the range you've given can you maybe touch on some of the factors that you're thinking about.
That would get you towards the higher end versus lower end of that range.
It's obviously very early in the year. The guidance, we gave is a pretty broad.
Broad guidance.
1% to 6%.
Obviously.
There is additional.
Covid variance that will impact the demand.
If there's some kind of a geopolitical event.
In fact demand is.
There is interest rates go through the roof that we'll have taken anything that impacts broad demand, we'll obviously.
Affect affect our sales growth to the detriment and on their hand.
If.
Businesses continue to reopen we have more people going to offices.
We don't have major effects from new variant.
Able to manage.
Increase in interest rates in a smooth manner that of consoles, yes, better semiconductor availability better console availability all of that should push us towards the higher end of the range and clearly as the year goes along we'll be able to.
Tune in our guidance.
As we see what's happening.
Okay great.
And as a follow up you mentioned Amazon up to 9% of your sales.
What additional room is there for you in terms of penetration of Amazon and just the E Commerce channel in general.
It's slight open Kevin Amazon.
Is big and growing fast, but there's still only 9% of our global sales.
We still see tremendous opportunities to grow with Amazon both in the U S, but especially outside of the U S where there are smaller and there is just more opportunity to grow.
But besides Amazon.
E Commerce channel is growing very fast all over the world and we have other customers and other partners.
Especially.
In EMEA and international they're doing a terrific job growing sales and taking share. So overall, we think e-commerce .
Presents a huge opportunity to grow for us that's where the consumer is going and we certainly riding that wave.
Okay, great. Thank you and Neil.
Let me add my best wishes for your upcoming retirement, certainly enjoyed working with you throughout the years.
Thank you.
The next question comes from the answer Crossman from Jefferies. Please go ahead.
Good morning, and thanks for taking the questions and congratulations to Neil.
I just wanted to ask on the last quarter, you said on the back half of 2022.
You should start seeing supply chain and commodity costs improvements are you still comfortable with that and are you starting to see lead times come down or are they still elevated.
Yes Oliver.
Our expectation at this time, we don't think there'll be much improvement.
In the first half, but we are expecting to see improvement both in supply chain.
And semiconductor chip availability in the second half.
I'm not going to be perfect, but certainly it should be better than what we saw in 2021 or expecting to see.
This quarter as far as your.
Second part of the question.
We're not seeing improvements yet things are not getting worse than that deteriorating.
They are stable, but they're not.
Proving yet from what we saw in Q4.
Got it thanks, and then I think you mentioned, 60% now of the portfolio comes from the consumer Tech.
End markets should.
Should we expect that to come down a little as office and schools are more normalized.
Do you want to keep it elevated at that.
60% range or do you have goals of making it higher just any more color there would be helpful.
Sure No. We think over time that number is going to grow because those categories at faster growing categories with more consumer demand.
And those are the areas that we're focused in.
To differentiate at value to invest we think over time that 60% number will grow regardless of.
People going back to offices or not.
Got it thanks, and then just if I could squeeze in.
One more I appreciate the three times leverage target.
Year end I think.
Is two to two and a half still the long term range that you guys are looking for.
Yes, that's correct.
Okay. Thank you very much and congratulations again Neal.
Thank you.
Our next question comes from Amit <unk> from VW <unk> financial Please go ahead.
Hey, good morning, first off I just wanted to ask you on the.
Commentary you provided on power about expecting.
Trend growth of 10% to 13% does that include your expectation of expanding sales into Europe and 22.
It does not include our expectations of.
Broadening things to the legacy ACCO Salesforce, that's probably not going to happen how that until 2023.
It's natural sales growth that we're seeing in Europe overall.
For power and for controls and charging stations, but without that.
Mental effort that we're going to launch probably in the middle of 'twenty, two but won't have an impact until 'twenty, three which will allow us to leverage our <unk> footprint in Europe and grow sales incrementally.
Okay. My other question was as you look into 'twenty two with <unk>.
Channel inventory, how comfortable are you that you could actually sell in more.
Have your customers really pushed back into how much they want to carry.
Our channel inventory is at a very good level.
Anything our customers right now want more product due to the supply chain issues.
They would like to have more product and buffer stock and they wanted to have products.
As I typically do for some of the core selling seasons of the year. So it's actually probably the other way around it's not that they're pushing back on inventories. They are asking for more inventory can be shipped to them sooner.
Okay.
Thank you and good luck deal.
Thank you very much.
As a reminder, if you would like to ask a question. Please press star followed by one on your telephone keypad now.
Okay.
We have another question from Chris Mcginnis from Hei. Please go ahead.
Thanks again.
Quickly wanted to ask about the competitive landscape given the market share gains you're seeing in EMEA, just how are they competing given kind of the external environment being pretty difficult to operate them.
I would say it's normal.
Again, I want to give our teams a lot of credit for doing a terrific job all over the world.
Growing as much as would have been taking share certainly I would rather be in our position than anybody else but.
Competition is still out there they're fighting for share they're still trying to win business.
So we have to be at our best.
Everyday.
It's great I am happy with our.
2021, but we still have to fight in our business in 2022.
Great. Thanks again for taking my next question.
Yes.
Thanks, Chris.
Okay.
As a reminder to ask a question. Please press star followed by one on your telephone keypad now.
I can confirm we have no further questions I'll hand, it back to <unk> for any closing remarks.
Thanks, Katie and thank you everyone for your interest in ACCO brands, we had an excellent 2021 with record sales and strong improvement in earnings and free cash flow our business has pivoted to faster growing channels and product categories, and we expect financial performance improvements to continue in 2022.
I'm confident about our long term future as we continue to position the company to be more consumer product oriented with higher growth and strong returns for our shareholders.
We look forward to talking with you in a couple of months to report on our first quarter. Thank you.
This now concludes today's call. Thank you all for joining you may now disconnect your lines.
Okay.