Q4 2021 Covenant Logistics Group Inc Earnings Call
Welcome to today's Covenant Logistics group Q4, 'twenty, one earnings release conference call.
Host for todays call is Joey Hogan.
At this time, all participants will be in a listen only mode. Later, we will conduct a question and answer session.
I would now like to turn the call over to your host Mr. Hogan you may begin.
Thanks, Ross and good morning, everyone.
Welcome to our fourth quarter 2021 conference call as a reminder for everyone. The conference call will contain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
Forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward looking statements.
Please review, our disclosures and our filings with the SEC, including without limitation the risk factors section in our most recent Form 10-K , and our current year form 10 juice.
We undertake no obligation to publicly update or revise any forward looking statements to reflect subsequent events or circumstances.
A copy of our prepared comments and additional financial information is available on our new website at Www Dot Covenant logistics dot com in the investors tab.
I'm John genre on our call today by our senior Executive Vice President CLO, Paul <unk>, and our Chief Accounting Officer trip Grant.
David Parker is not able to join US this morning for the call.
2021 was a record year by covenant in many ways Reg.
Revenue our minority investment in sale earnings per share and return on invested capital all achieved record results.
Our team battled through the continued effects of the pandemic.
Most difficult driver market in history.
Huge growth in our managed trade division and leadership changes early in the year.
We pushed through some large pay adjustments across the enterprise and all that.
Conditions.
Warehouse teammates in our office staff.
Okay.
And over the last year and we're excited to tackle 2000.
The model transformation that we started five years ago is really starting to prove out with continued opportunities in.
And our results for 2021 are directly do just theres, a covenant community, it's hard work and his commitment to each other and our customers.
In summary, the key highlights of the quarter.
Our freight revenue grew 27% to $267 million compared to the 2020 quarter.
Our asset based truckload group freight revenue grew 9% versus the fourth quarter of 'twenty with 186 less trucks.
Are less asset intensive managed freight and warehouse segments grew a combined 56% compared to the fourth quarter of 2020.
On the safety side, we produced another solid quarter with our D O T accidents rate per mile being 19% below the year ago period.
Second lowest fourth quarter on record.
And 2021 for the year finished the best year on record.
RTL leasing company investment produced a record quarter and year contributing an additional 10 per share versus the year ago period.
We finished the year with an all time low leverage ratio of <unk> 72, and.
All time low net debt to total capitalization ratio of 15, 8% and an all time high return on invested capital of 13%.
Additionally, we're very excited to announce the commencement of a quarterly cash dividend program.
Work over the last few years to deleverage the company and improve our operating model to produce more consistent results led our board to this approval.
Net indebtedness has decreased by almost $240 million over the last two years with a potential to be close to debt free by the end of 2022.
The goal is to yield 1% on an annualized basis at our current share count will impact cash by about a million dollars per quarter.
We continue to evaluate a full range of capital allocation alternatives to effectively deploy our cash.
Now I'll turn it over to Paul to provide a little bit more color on the items affecting the business units. Thanks, Joey for the quarter. Our managed freight division was our largest division both in terms of revenue and operating profit as revenue for the quarter grew 67%.
And achieved record revenue of $321 million for 2021.
Managed freights favorable results for the quarter were primarily attributable to the robust freight market executing on various spot rate opportunities and handling overflow freight from both expedited and dedicated truckload operations. This division remains a major strategic growth opportunity as we have invested more operations and sales resources into the <unk>.
To continue its momentum into the future.
We remain excited about this leadership team and the prospects going forward.
The expedited divisions revenue grew by 13% versus the year ago quarter due to both strong rate and utilization improvements.
We did invest in are driving workforce during the quarter with a significant pay increase which after several quarters of.
Sequential decline, we were able to hold the fleet size versus the third quarter and increase our seated truck count the.
The driver pay investment was our third pay increase for the year and has given us momentum heading into 2022.
We are very thankful that our customers value our service and supported our driving themes in this unprecedented time.
The dedicated division had a good quarter and achieved nice sequential and year over year margin improvement. Despite some unusual corporate expenses that hit both expedited and dedicated in the quarter.
Had it not been for the 250 basis points of unusual expenses in the quarter dedicated would've hit the mid ninety's or targets set at the beginning of the year Rev.
Revenue per truck continues to improve as we push through our improvement plan with further rationalization coming in the first half of.
21% revenue per truck improvement in the quarter was a significant contributor to the margin improvement the pipeline for this division is very encouraging as we start 2022.
The warehouse division grew 11% due to the impact of new business late in the third quarter and pricing to offset cost increases.
Operating income was negatively impacted due to higher labor cost as it relates to a tight labor market and escalating real estate costs for newly leased facilities.
We remain committed to our current asset light model and continue to pursue opportunities to accelerate our growth.
We are excited about this year is the operating model continues to be refined.
We expect a good freight environment for the first half of the year with some moderation in the second half.
Cost pressures will be meaningful in terms of wages equipment and over the road repairs for the year, but the market should allow us to pass the majority of those increases.
Through to our customers in the form of rate increases. The first few weeks of the year were tough from a working for truck percentage as many of our drugs.
With the virus after the holidays with the fleet working percentage has improved greatly in recent days and we are especially pleased with where the team count is today.
Dedicated improvement plan continues to make progress and we are confident that we will continue to improve the margins to high single digits in 2022.
Net indebtedness is already dropping.
We generate free cash in 2022, providing further opportunities to deploy cash for growth <unk> share repurchases.
You for your time, we'll now open up the call for any questions.
If you would like to ask a question.
Please press star one on your phone now and you will be placed in the queue. In the order received please be prepared to ask your question when prompted.
Once again, if you would like to ask a question. Please press star one on your phone now.
And our first question comes from Scott Group from Wolfe Research. Please go ahead Scott.
Hey, Thanks, good morning, guys.
And in the earnings release, you had you had some comment in the outlook section about operating results similar.
And maybe just can you give a little bit more color, but I wasn't sure. If that was the first half comment on a full year comment if thats youre talking about earnings just any more color there would be great.
Yeah, I think Scott what we were trying to do so if we were confusing apologize for that but we feel based on what we see today, we feel that our first half earnings will approximate.
First half of 2021 are higher.
So we feel we feel good the plane the combination of commitments from the customers and kind of what we say in the market and.
So that's what we're intending to the second half.
From a modeling and our planning purpose, we just <unk> continues to do their job.
We're anticipating some slowdown in the second half but.
We were saying we felt we could do at least what we did in 'twenty one from an earnings perspective in the first half of 'twenty two.
Okay great.
The <unk>.
You gave some helpful color on dedicated margins Im curious, how youre thinking about the expedited margins this year.
Yeah, Scott this fall.
I think.
<unk> margins will probably approximate 21 for 'twenty two.
Thank you could see margins Q1 is starting off really strong.
We've we've <unk>.
A dedicated expedited we've done a good job getting out of the gate on rate increases early in the year and so I think youll see margins you know maybe a little stronger and then as costs continue to pile up they could dilute a little bit but the expedited specifically to your question I think will be similar margins to what you saw in 'twenty one.
On a full year basis right.
So maybe if I just take those two things combined expedited is similar and dedicated has got a lot of improvement.
Would think there'd be some.
Potential for earnings growth and better than flattish. So maybe just tie those two together.
I think.
And warehousing you should see some small improvement there two pipelines is pretty decent it's all going to come down to manage trends in the overall and the overall freight market.
If things stay really die and managed trans has a year like it had this year then we will make more money in 'twenty than we made in 'twenty one.
If things soften up a little bit in the second half of the year.
You saw the large contribution that managed trans had especially in the third and fourth quarters.
I think thats, where we don't have the full visibility and so that's that's what can determine are we a little bit under this year's earnings are a little bit over this year's earnings as we're managing <unk>.
Second second half of the year.
Makes sense and just lastly, just from a pricing standpoint, what you guys are seeing.
To start the year.
Yes.
Low singles.
High single digits to low double digits.
Okay from a rates very helpful.
Okay. Thank you guys appreciate it.
Scott.
Our next question comes from Jason Seidl from Cowen. Please go ahead, Jason. Thank you operator, good morning, gentlemen, and my best to David is not on the call.
I wanted to talk a little bit about the pricing in your script that you have out there online you talked about how the contracts already long gating.
Excluding dedicated can you give us a sense of sort of what percentage of your contracts now are over a year.
Yes, I'll speak.
Managed trans or there's not a lot of stuff that's over a year, it's pretty short term opportunities and as we've said before that's where we play in the spot market on the expedited.
We're probably somewhere in that 40%, 40% to 50% of contracts that are multi year in nature right now.
Okay.
That's helpful. I wanted to switch back to the dedicated side you said if you exclude some of those unusual costs, which I'm assuming are going to happen again reoccur in 'twenty. Two you were about 95 for the end of the year.
Whats this going what setup market do we need to get this business down to that low 90 level.
Yeah, I mean, I think some of it's market and some of its time, but if you look at the.
On an adjusted basis dice them with.
To 95 million and the thing <unk> been around 100 or a 101 so.
<unk>.
We have improvement through there.
We continue to wait and feed process and Youll remember, we we entered some contracts in <unk> on the heels of Covid and had some contracts that were longer term in nature that we've gotten the increases we could get but.
Theyre still sub par to market and as we roll out of those in the first half and second half of the year and in either replace those with a business that is I would say more market rate business and has more of a fixed variable.
<unk> margin.
Or renegotiate those contracts to be more I'll call. It true DCC with fixed variable youre going to continue to see that improvement.
I agree on a rerun of about 95 run rate.
For Q4, and I think youre going to continue to say that.
Eight down.
A little bit each quarter for the balance of this year and so are we going to be at a 92 or into Q1 now do.
We hope to be there.
They ended the year or first part of 'twenty three yes.
Right well the progress is definitely there I didnt want insinuated it wasn't yes.
You talked a little bit about the contracts that weren't really to DCC what.
Percentage.
All the contracts that you have right now would you consider problematic.
Yeah.
30%, 40% of the contracts.
The buyers are.
Half of those come up between now and the.
Between now and August .
Okay.
That's a good sign for sure.
Well fantastic gentlemen, those are my view and I'll turn it over to a colleague. Thank you for the time as always.
Thanks, Jason.
Our next question comes from Jack Atkins from Stephens. Please go ahead Jack.
Great. Good morning, everybody. Thanks for taking my questions.
Hey, good morning.
Guess, maybe maybe to start I would like to ask maybe a two part question first just you know Joey Paul trap whoever wants to take it.
What are you seeing in the equipment market, both for trucks and trailers and and if you can maybe think of help us think through how that's going to.
Change if it changes at all over the course of 2022, and then I guess kind of as it relates to covenants specifically.
Within your equip.
Equipment leasing investment tell.
You know, it's obviously a very strong contributor to the bottom line. You know can you help us think through how that should maybe trend as we look forward.
Yeah, we had a we did have some trucks pushed from 'twenty one into 'twenty two it was a small amount about.
About 50 trucks that pushed into.
First part <unk> two will have those Bob March so there they are satisfying the commitment from 'twenty one.
'twenty or 'twenty two initial order as well as everybody is what you wanted you didn't get you've got a percentage of that 22.
Yeah, we've worked around that from serious various means.
We've got about.
70% of our requested order.
For 'twenty two.
Now for US I don't say, that's okay, but we're trying to pull some equipment forward that were having problems with.
That we wanted to kind of transition to another manufacturer inside of our suppliers. So for us it's okay.
Trailer market.
The pricing is up pretty meaningfully on the truck side.
I would say it's.
I would call it manageable the trailer side is a different ballgame.
You got to look at our trailer capacity, it's pretty.
Concentrated in a few years and so our big.
Years to start trading trailers will start in 2023 and won't go on five or six years. So we tried to start we tried to get an order place for 'twenty, two and got zero.
Try to start moving that schedule forward to smooth out that concentrated purchase cycle, we got zero I mean, not even a quote of pricing.
I mean, we're not a huge fleet, but we're not a small fleet and so.
Basically from all the suppliers look we cant we cant commit.
Commit anything and we'll talk to you late in 'twenty two for 'twenty, three and beyond we then try to float a five year commitment of your committed capacity.
Capacity.
So again, no buyers, but folks willing to talk at the end of 'twenty two.
Pricing in that market from what I understand.
Is up.
Significant.
Just significant and so theres various theories and reasons why.
But it's up significantly.
Tail on the other hand, our investment or sale.
In this business, it's in the truck trailer.
Sale resale leasing business and obviously it had a good a record actually.
And I believe strongly we will have another record 2002.
They were able to get some trailer capacity.
That's their business, they're paying about 25% ish ish.
More and they will pay more for that in 'twenty two.
Reefer pricing I can't even say the number and I wont say the number because it's almost ridiculous what I'm hearing what he's having to pay for <unk>.
<unk> on the other hand pricing he has been able to get out in the market to lease that equipment is.
Unbelievable also.
So.
Sales doing really well I mean, the $5 million ish number in the fourth quarter that they contributed to our results.
Some of that was gain on sale. They are very opportunistic buyer also in the marketplace and they do a great job.
So, but it's definitely going to be higher than what we've seen over the last year or so in 'twenty two.
So theyre going to have a really good year. So we.
We buy.
<unk> and trailers together.
Between the two of US week now we have a pretty good SaaS fleet between trucks and trailers.
We chose to let them have the trailer capacity.
Cause that opportunities this year and we will explain the two of us will settle sorted out in 'twenty three.
For going forward, but quite a market's real tight and.
We did get a little risk one other note.
Our trucks that were pushed in the fourth quarter into the first quarter are being delivered slightly early which is.
A blessing versus over the last year or so and.
And the schedule that's been committed to.
On schedule and no further delays that we know of.
Just to add to add onto Joey's point about kind of the size give you some context.
2021, it was a very very light year from a capex perspective, obviously, we've talked about it throughout the quarters and had a little bit of a bump up with some deliveries in Q4 of 2021, but over the course of the year. We had I think net proceeds of $10 million or such rounded.
As we think back to 2022, just to give you a kind of an idea in the scale of what how it will look.
With the equipment purchases, even though it wasn't as much as we had ordered with the cutbacks and assuming things go well.
Looking at a range of about $50 million to $70 million of <unk>.
Net capex for the year, so there's quite a big swing as we try to normalize our capex flow.
In terms of maintenance Capex and get it back to our normal course, a lot of which stems back to what we did in 2020 with the downsizing of the shrink in our downsizing of the fleet and shrinking and selling a bunch of older equipment. It naturally may 2021, a light capex year, so youre going to see a little bit of a rebound in 2010.
Two and probably even a bigger rebound in 2023 as trailers come into the equation.
Okay got it got it.
Helpful. I guess, maybe thinking bigger picture.
Joey going back to your comments.
In your prepared remarks.
And the market.
And sort of the outlook for the market and how it could unfold this year.
It doesn't seem like there's going to be a influx of capacity coming just because of the items you just talked about on the equipment side you know when you kind of think about.
<unk>.
The idea of the second half maybe being a little bit.
You know more of a moderation in terms of the marketplace versus the first half is that because of your outlook for the economy, just concerned about the fed or is it something that your customers are maybe telling you about about their business in.
In the second half of the year.
Just the economy.
<unk>.
Yes.
<unk> start tracing rates, it's intending to slow the economy down.
So if the if they do and there's a lot of rhetoric around that is it for is it eight is it three but history shows that it's impactful now the question is how big and when do we start seeing that but we certainly notes within six months or so that's what history shows now if this is different because of.
Drug and alcohol clearinghouse because of infrastructure spending which is a natural competitor to our drivers.
The construction market in general.
It's hot and low inventories inventories to sales is still very low.
Is there some things that overcome that.
Vale that impact into the economy that pushes it out you know.
Or the freight side has minimal impact because of that.
I find that hard to believe but we'll see.
So that's just that no. There's no there's no indication from from customers regarding any anticipated slowdown now nobody's talking about peak, either but it's way too early.
Are we talking about peak.
Got it no that sounds good I guess the question is do we have we even stop with maybe maybe not but.
Right.
I guess last question and I'll turn it over but you know it's on capital allocation, obviously there've been some significant improvements to the to the balance sheet over the course of the last couple of years because of the actions that you guys have taken.
Business is hopefully more profitable through cycle, but you know I think that's I.
I think folks are looking forward to that.
The stock.
Is kind of back down to the levels, where you guys.
Sort of initiated that the Dutch tender last year you.
<unk> initiated the quarterly dividend.
Help us think through you know ways to tip that you're kind of contemplating returning capital to shareholders.
Outside of that the quarterly dividend.
Would you look to maybe get more aggressive on open market purchases of the stock just given that the Dutch tender really didn't yield.
Type of.
A reduction in share count than maybe you were initially intended could you maybe kind of walk us through some of the capital allocation strategies.
Just given the strength of the balance sheet here.
I think hey, let's go back to the.
The expectations for cash generation for the year. So it depends on whatever modeling that everybody has as far as what they expect EBITDA to contribute 22.
We feel that even with $50 million to $70 million of net Capex, we will still generate cash.
Speaker 1: generate cash for 2022.
For 2022.
The dividend relatively speaking the cash impact of that is small it's around $1 million a quarter.
Speaker 1: dividend relatively speaking the cash impact of that is small it's around a million dollars a quarter and we felt it was a not only a commitment but a signal to the market and our shareholders that
And we felt there was a not only a commitment that a signal.
So the market and our shareholders that.
Speaker 1: You know, it's time, just because of where we are. Number two, you know, what are we going to do with the cash generated this year and what we see into the future? I would say, Jack, it's all of that. We firmly and fully intend to execute the Dutch auction.
<unk>, it's Pat.
Because where we are number two you know what.
What are we going to do with the cash generated this year and what we see into the future.
I would say Jack it's all of that.
We firmly and fully intend to execute the Dutch auction.
Speaker 1: And full, you know, some people would say that we executed it without having to use the cash. Our intent was to use the cash, you know.
And in full.
Now some people would say that we Dick's we executed it without having to use the cash our intent was to use the cash.
You know.
Speaker 1: people that ran away from us because we just got, I think we kind of woke the market up and Kevin is going to buy this too cheap and I'm not going to sell it.
People they ran away from us because we just got I think we've kind of woke the market up and Kevin It's gone up by this too cheap and I'm not going to sell at this price.
Okay.
Okay, because I ran much higher than what our.
Speaker 1: ran much higher than what our generous at the time of announcement offer based on history. So it ran away from us and our intention was to execute that. So as we move forward obviously Jack I can't. I mean we're looking at M&A you know our last one of size was 2018 and so we feel the models at a place that our team can
Generous at the time of announcement offer sure.
Oh, so it ran away from us and our intention was to was too.
To execute that so as we move forward, obviously, Jack I can't I think we're looking at M&A.
Our last one of size was 2018 and so we.
We feel the models at a place that our team can.
Speaker 1: focus and execute, you know, another acquisition size, I don't know. I mean, I'm.
Focus and execute.
Another acquisition size I don't know.
Theres some things there is some strategic smaller ones that make sense that are good complements and there's some larger ones that are.
Speaker 1: There's some things, there's some strategic, smaller ones that make sense, that are good complements, and there's some larger ones that, you know, are larger, you know, similar to what the land air acquisition was back in 18. So.
Our larger you know similar to what the land Air acquisition was back in 2018. So we're in the market looking where in the market looking at further.
Speaker 1: We're in the market looking, we're in the market looking at further, you know, whether it's normal share repurchases, Dutch's, whatever. So, we're going to move and the dividend.
Whether its normal share repurchases, Duchess whatever so we're going to move and the dividend was.
Speaker 1: a start, if you will, and we'll see how it plays out. But we're excited about, it's neat to be in a cash generation mode because it gives you a lot of opportunities. And we're going to try to be diligent about deploying that cash in the right means. Okay, that's.
Start if you will and.
We'll see how it plays out but we're excited about it it's natively into cash generation mode. Because it gives you a lot of opportunities and we're going to try to be diligent.
About deploying that cash in or out means.
Okay. That's great. Thanks, so much.
Thanks Jack.
Our next question comes from Bert <unk> from Stifel. Please go ahead Bert.
Speaker 2: Our next question comes from Bert Subin from STIFO. Please go ahead, Bert.
Hey, good morning, everyone.
And Barton I am Bert.
Hey, Joey just a follow up to your comments there what is your view on inventory restocking. It seems like theres been some concerns that perhaps retail sales start to moderate through the year.
Speaker 3: Hey, Joey, just to follow up to your comments there. What is your view on inventory restocking? It seems like there's been some concerns that perhaps retail sales start to moderate through the year. You know, inventory sales ratio is still at all-time lows. Are you noting any actions to rebuild inventories? And do you think that could be an offsetting tailwind if the economy does moderate from high levels in the upcoming quarter?
Inventory sales ratio is still at all time lows are you, noting any actions to rebuild inventories and do you think that could be an offsetting tailwind is if the economy does moderate from high levels of <unk>.
Coming quarters.
Paul.
We met with a large customer yesterday.
It carries a lot of inventory and.
Yes, I think that.
Restocking.
And carrying more inventories building more warehouses.
This this company basically said.
Everybody knows what they need to do post COVID-19 , and which is keep more inventory domestically.
Sure.
They've just got to get there and it's just been a firefight ever since COVID-19 and so.
That's a pool of one but.
Really large company that carries a lot of inventory in their comment was.
That has not happened yet, but they are making plans every day to try to do that to increase inventory levels.
Domestically and you got closed.
Then two phases I think.
No.
Your favorite stores are as we walk through the stores as we see the empty shelves start filling.
You know whenever it gets to fail.
Well it'll be moving into the next phase, which is how do I feel that the warehouse or do I add warehouses, and and I think thats, a general whether you read it or hear it directly.
I think people are saying, okay, we got to skinny.
Obviously now Pandemics won several hundred years, we hope.
We've got one that's last in a while but.
But even besides that.
I think the market is.
General feels that we were too skinny.
And then I think to your point Bert is depending on that view it could delay.
As I was saying earlier it could delay that impact to the freight side of the economy as people are trying to push through that it just depends on rates. Some CFO is doing the plus and minus on cost to capital and when does it make sense I'd rather have more inventory than.
Empty shelves and cost of capital is still pretty cheap they can move a lot and it's still cheap relatively speaking.
That makes sense. Thanks for thanks for the commentary there Paul My My fellow National Champion, Mike My follow up questions for you.
Hum.
How good do you think the improvement in dedicated would have to be more than offset what you're expecting to be it sounds like some normalization to manage great.
Just give us like a rough order of magnitude, perhaps on an or improvement.
Yes.
All said it dedicated what has to be.
It'd have to be in the eighty's to get anywhere close.
Once you know on a longer term basis, but so I don't think dedicated it'll get there this year, but I don't think managed trans will drop.
That much I mean, it's going to drop probably in the second half of the year. So the fully offset it it has to be in the eighties probably.
Okay. Thanks.
Hum.
With me.
Yeah, it's great growth.
Go ahead.
Our next question comes from Bruce Oliphant from Oppenheimer. Please go ahead, Bruce. Thank you congratulations on an excellent year.
But one thing that I.
No. It was just covered but I have to mention it but one thing that's a little bit disturbing.
Back in August the company realize the stock was.
Extremely undervalued.
You decided to have a doctor.
Auction.
With $40 million purchase roughly one 7 million shares which represented about 12% of the outstanding shares.
Sent a signal to wall Street and investors that you thought your stock was extremely undervalued.
And now with the stock.
Where it is today.
Selling at less than seven times learning.
Sort of disappointing that the what we saw was a small dividend.
For shareholders rather than.
Do you know off Madison, realizing some kind of buyback its almost like.
You know 80000 shows got tended on the Doctor looking.
We never really raised prices, which we could've done and sort of disappointing that there's no action taken right now.
Yes, it's a fair question Bruce.
As I said earlier, we fully intended.
To do that to spend that cash.
Arguably we still have that cash and there are several things that go into the decision and the actions and the timing and.
We're still very interested in fill it whether it's seven times earnings or one three times tangible book value.
We agree with you and.
We're working diligently to.
As I said earlier to deploy our cash in the best means so that we can.
Okay. Thank you I hope something is done.
Yes.
Okay.
And we have a follow up question from Bert <unk>. Please go ahead Bert.
Hey, sorry, I got cut.
Cut off there at the end I just had a quick follow up to an earlier question.
I said high single to low double digit rate increases can you break that out amongst dedicated expedited. Thank you.
Yeah, it's probably.
I would say they are pretty similar.
Theres not theres not theres not a ton of differentiation between the two.
You've probably got expedited is probably a little higher on the right side. They are probably in the probably in the low double digits in dedicated is probably in the high single digits.
Both business units were about the same size from a revenue perspective and so.
If ones all of them are 12.
13, the other ones.
Eight or nine.
Yeah.
Okay. That's helpful. Thanks, Paul.
And gentlemen at this time there are no further questions.
Okay, well thanks, everybody.
For being on the call. Thank you for your questions. Bruce again Fair question and we agree with you so are behind that.
So.
Look forward to make with you all and visiting with you after the first quarter. Thanks a lot.
This concludes today's conference call. Thank you for attending.
Yeah.
The host has ended this call goodbye.