Q1 2022 Western Forest Products Inc Earnings Call
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This conference is being recorded. Cette conférence est enregistrée.
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Operator: All participants thank you for standing by. The conference is ready to begin.
Operator: Good morning, ladies and gentlemen. Welcome to Western For- Forest Products first quarter 2022 results conference call.
Operator: During this conference call Western's representatives may make forward looking statements within the meaning of applicable securities laws.
Operator: These statements can be identified by words like: anticipate, plan, estimate, will and other references to future periods.
will and other references to future periods.
Operator: Although these forward looking statements reflect management's reasonable beliefs, expectations and assumptions they are subject to inherent uncertainties and actual results may differ materially.
Operator: There are many factors that could cause actual outcomes to be different including those factors described under risks and uncertainties in the company annual MD&A which can be accessed on SEDAR and is supplemented by the company's quarterly MD&A.
can be accessed on SEDAR and is supplemented by the company's quarterly MD&A.
Operator: Forward looking statements are based only on information currently available to Western and speak only as of the date on which they are made.
currently available to Western and speak only as of the date on which they are made.
and speak only as of the date on which they are made.
Operator: Except as required by law, Western undertakes no obligation to update forward looking statements.
Operator: Accordingly, listeners should exercise caution in it relying upon forward looking statements.
Operator: I would now like to turn meeting over to Mr. Don Demens, President and CEO of Western Forest Products. Mr. Domains, please go ahead.
Donald Eugene Demens: Thank you, Patrick, and good morning, everyone.
Donald Eugene Demens: I'd like to welcome you to Western Forest Products' 2022 first quarter conference call.
Donald Eugene Demens: Leading the call today is Steve Williams, our Executive Vice President and Chief Financial Officer, and Glenn Nontell, Vice President of Corporate Development.
and Glenn Nontell, Vice President of Corporate Development.
Donald Eugene Demens: We issued our 2022 first quarter results yesterday.
Donald Eugene Demens: I'll provide you with some introductory comments and then ask Steve to take you through a summary of our financial results.
Donald Eugene Demens: I'll then follow Steve's review with our outlook section before we open the call to your questions.
before we open the call to your questions.
Yes.
Donald Eugene Demens: Before we begin I'd like to recognize our team at Western for their continued dedication to health and safety.
Donald Eugene Demens: Their efforts delivered another quarter with no COVID-19 workplace transmissions or downtime.
Donald Eugene Demens: This results a testament to our strong safety culture and commitment of our people.
Donald Eugene Demens: Financially I'm pleased to report that our results were a first quarter record for the company.
Donald Eugene Demens: We capitalized on strong markets to overcome ongoing logistics challenges that impacted shipment volumes, to generate record first quarter, adjusted EBITDA of $65 million.
to generate record first quarter, adjusted EBITDA of $65 million.
Donald Eugene Demens: Operationally, we successfully began to rebuild log inventories that were depleted due to difficult harvesting weather in the second half of 2021.
that were depleted due to difficult harvesting weather in the second half of 2021.
Donald Eugene Demens: We achieved this through a combination of accelerated log harvest and increased open market purchases.
Donald Eugene Demens: Of note, we purchased almost 50% more logs in the first quarter of 2022 as compared to the same period last year.
Donald Eugene Demens: Our continued strong results have allowed us to reposition our balance sheet despite our increased investment in logs.
Donald Eugene Demens: We ended the first quarter was $75 million of cash in our balance sheet and we also have approximately $128 million U.S. dollars in duty deposits with the U.S. Treasury.
and we also have approximately $128 million U.S. dollars in duty deposits with the U.S. Treasury.
Donald Eugene Demens: Combined these provide us significant flexibility to continue with our balanced approach to capital allocation.
Donald Eugene Demens: In support of returning capital to shareholders, we completed our 10% NCIB in January.
Donald Eugene Demens: Through the NCIB we returned a total of $61 million to shareholders and we just announced a 25% increase to our quarterly dividend.
Donald Eugene Demens: and we just announced a 25% increase to our quarterly dividend.
Donald Eugene Demens: In addition to our strong financial results, I'm pleased with the progress we have made in advancing our relationships with indigenous nations.
Donald Eugene Demens: In the last quarter, we continued to advance our milestone agreements focused on joint and collaborative planning of forestry activities with indigenous nations in his traditional territories, we operate.
with indigenous nations in his traditional territories, we operate.
Donald Eugene Demens: We believe our demonstrated leadership in advancing reconciliation with indigenous nations is consistent with what the B.C. government is hoping to accomplish through its policy modernization.
is consistent with what the B.C. government is hoping to accomplish through its policy modernization.
Multiple speakers: I'll now turn it over to Steve to review our key financial results. Thanks, Don. My comments will focus primarily on our financial results for the first quarter of 2022 with comparisons to the first quarter of last year.
Steven Williams: We reported first quarter, adjusted EBITDA of $65.4 million as compared to $62.9 million in the same quarter last year.
Steven Williams: Results in the first quarter of 2022 benefitted from higher lumber and log prices and a higher specialty lumber sales mix. Results were offset by lower lumber shipments due to logistics challenges, lower log shipments, higher export tax and stumpage expense and higher per unit timberland harvesting costs due to accelerated road building and a mix of operations.
Road building and a mix of operations.
Steven Williams: Lumber revenue increased 13% compared to the first quarter of 2021. Higher lumber prices were partially offset by lower shipment volumes due to logistic related disruptions. Our first quarter average realized lumber price was $1,688 per thousand board feet, an increase of 24% compared to the same period last year.
Last year.
Steven Williams: Log revenue was generally flat compared to the same period last year with higher log prices being offset by lower shipment volumes.
Steven Williams: All export grade logs were redirected to our saw mills to support lumber production.
Steven Williams: By product revenue was generally flat compared to the same period last year. Increased chip price realizations were offset by lower chip shipments.
Steven Williams: Freight expense increased 14% compared to the same quarter last year.
Steven Williams: Lower lumber shipments and no export log shipments were more than offset by increased freight rates, higher fuel costs and greater usage of break bulk vessel shipments.
Steven Williams: First quarter results included $11.5 million of export duty expense as compared to $8.2 million in the same quarter last year.
Steven Williams: At the end of the quarter, we had approximately $128 million U.S. dollars of duties on deposit.
Steven Williams: Lumber production was 12% lower compared to the same quarter last year due to operating curtailments related to log supply and differences in the net nominal production counts due to product mix.
and differences in the net nominal production counts due to product mix.
Steven Williams: Log production was 9% higher and we increased saw log purchases by almost 50% compared to the same quarter last year.
Steven Williams: We were successful in partially rebuilding our log inventory and ended the quarter with approximately 764,000 cubic meters of logs.
Steven Williams: From a profit and loss perspective, first quarter net income was $38 million as compared to $53.8 million in the same quarter last year.
first quarter net income was $38 million as compared to $53.8 million in the same quarter last year.
Steven Williams: Looking at first quarter cash flow and capital management, cash provided by operating activities before changes in non-cash working capital was $8.1 million as compared to $66.3 million in the same quarter last year.
cash provided by operating activities before changes in non-cash working capital was $8.1 million as compared to $66.3 million in the same quarter last year.
Steven Williams: The first quarter of 2022 included income tax payments of $58.4 million related to 2021 income taxes and a 2022 income tax instalment.
Steven Williams: Cash used in investing activities was $6.3 million in the first quarter as compared to cash provided by investing activities of $33.4 million in the same quarter last year.
Steven Williams: The first quarter of 2021 included proceeds of $37.7 million on asset dispositions.
Steven Williams: We returned $10.6 million to shareholders during the quarter via dividends and share repurchases and we completed our 10% NCIB in January .
Steven Williams: We ended the quarter with $75 million of net cash and $316 million in available liquidity.
Multiple speakers: Don, that concludes my comments. Great. Thanks, Steve.
Donald Eugene Demens: Let me start off our outlook section by touching on our second quarter seasonality.
Donald Eugene Demens: Typically in the second quarter, our harvest volumes increase as snow recedes and we expand operations across the entire timber harvesting land base.
Donald Eugene Demens: As our harvest activity moves further up the hillsides, our costs tend to rise. The steeper more difficult terrain increases harvesting complexity.
moves further up the hillsides, our costs tend to rise. The steeper more difficult terrain increases harvesting complexity.
increases harvesting complexity.
Donald Eugene Demens: From a market perspective, North American lumber consumption typically increases as we move into the more active spring season.
Donald Eugene Demens: As you look to our markets in North America, we expect to experience continued strong demand from all segments.
Donald Eugene Demens: We believe strong demand for lumber products combined with constrained supply will deliver above trend pricing over the near term.
will deliver above trend pricing over the near term.
Donald Eugene Demens: We note that any supply demand imbalances are likely to lead to increased pricing volatility in the months ahead.
Donald Eugene Demens: We expect pricing to remain strong for our cedar, Japan and niche specialty product segments.
Japan and niche specialty product segments.
Donald Eugene Demens: That said logistics constraints remain a challenge.
Donald Eugene Demens: With inadequate rail and truck capacity in Western North America limiting market access.
Donald Eugene Demens: On the export side, we've recently experienced an improvement in container availability.
Donald Eugene Demens: Our conditions remain uncertain in the current COVID-19 challenges in China could cause disruptions in the months ahead.
Donald Eugene Demens: We will continue to leverage our flexible operating platform to match production to market demand and logistics capacity.
Donald Eugene Demens: With respect to logs, we expect solid log markets to remain strong due to a combination of reduced supply and strong demand, while pulpwood prices are likely to remain relatively flat.
while pulpwood prices are likely to remain relatively flat.
Donald Eugene Demens: We will look to further build our log inventories in the second quarter, however, as we do so supply imbalances may lead to downtime at certain sawmills.
however, as we do so supply imbalances may lead to downtime at certain sawmills.
Donald Eugene Demens: Turning to industry developments, we remain optimistic about the long term growth opportunities for wood as a sustainable building materials.
Donald Eugene Demens: In North America, mass timber building presents an opportunity for increased wood use as a sustainable building product.
Donald Eugene Demens: For context WoodWorks estimates that there are currently over 1,300 mass timber projects built, under construction or in the design phase in the United States and third party research estimates of mass timber building has the potential to add over 4 billion board feet of lumber demand in North America by 2035.
and third party research estimates of mass timber building has the potential to add over 4 billion board feet of lumber demand in North America by 2035.
Donald Eugene Demens: We believe many of our existing products are well suited for use in the mass timber segment and should benefit from future sector growth.
Donald Eugene Demens: Over the last several years, we have been exploring how we can best participate in this growth opportunity.
Donald Eugene Demens: Our work has included completing various tests and trials for our hemlock products in both CLT and glue laminated beam end uses.
Donald Eugene Demens: We continue to explore additional strategic capital investment opportunities to support product lines, which are utilized in mass timber buildings.
Donald Eugene Demens: Overall, we believe mass timber building in North America will continue to gain momentum as the world looks to reduce its carbon footprint and we will continue to advance how we can best capitalize on this growth.
And we will continue to advance how we can best capitalize on this growth.
Yeah.
Donald Eugene Demens: Turning to capital allocation, we remain committed to a balanced approach to capital allocation, maintaining the flexibility to support growth initiatives, while returning cash to shareholders.
Donald Eugene Demens: Over the past decade, we've returned about a half a billion dollars to shareholders through dividends and share repurchases, while at the same time, we've invested another half a billion dollars into our business.
while at the same time, we've invested another half a billion dollars into our business.
Donald Eugene Demens: As I noted in my opening remarks, we completed a 10% NCID during the quarter and we also announced a 25% increase to our quarterly dividend.
Donald Eugene Demens: At the same time, we continue to evaluate both internal and external strategic capital opportunities.
Donald Eugene Demens: Internally, we're focused on reducing our costs as we pivot commodity production from Asia to North America and we are focused on investments that support product line growth.
and we are focused on investments that support product line growth.
Donald Eugene Demens: This quarter, we've approved two small quick payback capital projects.
Donald Eugene Demens: One will increase our kiln drive production by about 10% through the introduction of new kiln control systems and the other is the installation of an MSR machine at our Duke Point planer.
and the other is the installation of an MSR machine at our Duke Point planer.
Donald Eugene Demens: Both projects should be operational within a year and were included within our yearly capital- capital- our yearly strategic capital envelope.
and were included within our yearly capital- capital- our yearly strategic capital envelope.
Donald Eugene Demens: In addition to these projects we are continuing to look at other internal investments, which will increase our count capacity, reduce operating costs, increase recovery or support or move- or support our move up the product value chain.
reduce operating costs, increase recovery or support or move- or support our move up the product value chain.
Donald Eugene Demens: While we're focused on investing in our existing operations, we're also looking to grow through acquisitions. Acquisitions may include both capacity expansion and capital invested to support targeted product line growth.
and capital invested to support targeted product line growth.
Donald Eugene Demens: Overall, we expect to remain balanced and disciplined in our approach to capital allocation.
Donald Eugene Demens: For 2022, we continue to estimate total capital expenditures of around $60 million to $65 million.
Donald Eugene Demens: This includes approximately $15 million in strategic capital investments and $10 million in 2021 maintenance CAPEX that was delayed due to supply chain issues.
and $10 million in 2021 maintenance CAPEX that was delayed due to supply chain issues.
was delayed due to supply chain issues.
Donald Eugene Demens: Turning to what's next: our top priority continues to be the health and safety of our employees contractors and communities, and in working collaboratively with indigenous nations.
and in working collaboratively with indigenous nations.
Donald Eugene Demens: Our long term focus remains the same: to successfully and sustainably implement our strategic initiatives, to strengthen our foundation, grow our base, grow our business and deliver long term shareholder value.
to successfully and sustainably implement our strategic initiatives, to strengthen our foundation, grow our base, grow our business and deliver long term shareholder value.
to strengthen our foundation, grow our base, grow our business and deliver long term shareholder value.
grow our base, grow our business and deliver long term shareholder value.
Donald Eugene Demens: So with that, Operator, we can open up the call to questions.
Operator: Thank you. We'll now take questions from the telephone lines. If you have a question and are using a speaker phone please get your handset before making your selection. If you have a question please press star one on your devices.
Operator: You may cancel your question at any time by pressing star two.
Operator: Please press star one at this time if you have a question.
Operator: There will be a brief pause while participants register for questions. Thank you for your patience.
Operator: We have a question from Shawn Stewart from TD Securities. Please go ahead.
Multiple speakers: Thank you and good afternoon, guys. Good afternoon.
Shawn Stuart: Couple of questions.
Shawn Stuart: Don, I appreciate your comments on transportation bottlenecks persisting and it sounds like offshore you- you mentioned that things are getting a little bit better.
transportation bottlenecks persisting and it sounds like offshore you- you mentioned that things are getting a little bit better.
Shawn Stuart: Any sense at this point on when you might expect to see things improve at a faster pace and then the ability to move product a bit easier?
and then the ability to move product a bit easier?
Shawn Stuart: How- at what point during the course of the year do you expect that should be more prominent?
Donald Eugene Demens: Sure. Let me- let me- let me take a run at that. So you know we'll what kind of differentiate between export and domestic. I think domestically, we're seeing some real challenges with railcar capacity in the West including out of our you know our shipping hubs out of Vancouver and truck actually.
And truck actually.
Donald Eugene Demens: We had a unique opportunity last week to talk to a number of the rail- rail companies as they were in town for the COFE convention and they did not provide a great outlook as to- as to how quickly this- this situation here would be- would improve. I think we're looking, Shawn, kind of more towards the end of the year, where they might be able to get caught back up and provide more regular service to, I think, all of their our forest products customers in the West. Export wise, we've- we've implemented the use of more break bulk vessels, especially to get our products to Japan. I think you saw that we had a big increase compared to last year, the same quarter in our shipments to Japan. It's a little higher cost for sure, but I think that's how we're trying to deal with some of the challenges we've got coming out of- on the container side of exports. So it's- it's not been a very fun time here or- and then the logistics challenges I think are going to be with us at least through the next quarter.
end of the year, where they might be able to get caught back up and provide more regular service to, I think, all of their our forest products customers in the West. Export wise, we've- we've implemented the use of more break bulk vessels, especially to get our products to Japan. I think you saw that we had a big increase compared to last year, the same quarter in our shipments to Japan. It's a little higher cost for sure, but I think that's how we're trying to deal with some of the challenges we've got coming out of- on the container side of exports. So it's- it's not been a very fun time here or- and then the logistics challenges I think are going to be with us at least through the next quarter.
compared to last year, the same quarter in our shipments to Japan. It's a little higher cost for sure, but I think that's how we're trying to deal with some of the challenges we've got coming out of- on the container side of exports. So it's- it's not been a very fun time here or- and then the logistics challenges I think are going to be with us at least through the next quarter.
and then the logistics challenges I think are going to be with us at least through the next quarter.
Shawn Stuart: Thanks for that detail, Don. And second question I had, just digging in a little deeper on the capital allocation part of this. So you can finish the NCIB, you've raised the dividend.
part of this. So you can finish the NCIB, you've raised the dividend.
Shawn Stuart: It sounds like near to mid-term CAPEX needs are manageable and M&A is <unk> potential but, is it fair to say that the bias would be to look at another NCIB relatively soon and further buy backs would potentially be on the table?
near to mid-term CAPEX needs are manageable. and M&A is <unk> potential but is it fair to say that the bias would be to look at another NCIB
and M&A is <unk> potential but is it fair to say that the bias would be to look at another NCIB
relatively soon and further buy backs would potentially be on the table?
further buy backs would potentially be on the table?
would potentially be on the table?
Donald Eugene Demens: Yeah, well I think the kind of way we're looking at- so maybe back up, you're right. I mean, over the last 12 months, we've returned something like $100 million- almost $120 million to shareholders via dividends and share repurchases.
Donald Eugene Demens: You're right, you know, we increased the dividend back- back up- we increased it by 25%. I think you want to think about that is we've returned it to at least the total dollar amount it was prior to us repurchasing shares.
Donald Eugene Demens: Yeah, I think as we look forward, we're going to maintain flexibility on- in our return of capital alternatives, we will continue to discuss with our board. You know could an NCIB in the works for later or mid-part of the year you know absolutely, Shawn, but we're going to continue to look at ways to support growth in our business and remain balanced in our capital allocation and we will look at it each quarter.
but we're going to continue to look at ways to
support growth in our business and remain balanced in our capital allocation and we will look at it each quarter.
Shawn Stuart: Okay. Thanks, Don. I appreciate it. That's all I have for right now. I'll get back in queue. Thanks, guys.
Donald Eugene Demens: Thanks, Shawn.
Okay.
Operator: Thank you. Once again, you may press star one to ask a question.
Yeah.
Operator: The next question is from Paul Quinn from RBC Capital Markets. Please go ahead.
Paul C. Quinn: Yeah. Thanks, very much, and just a question just on the lumber side.
Paul C. Quinn: You shipped 186 in the quarter, just wondering how much inventory was built on the lumber side and what's your expectation for Q2?
Donald Eugene Demens: Sure. Good afternoon, Paul. So inventory build wasn't- it wasn't a whole bunch, it's kind of pretty flat from quarter to quarter, but I would like to tell you it's too high. So, we are continuing to manage the inventory we have.
Donald Eugene Demens: It's all around logistics challenges.
Donald Eugene Demens: I think is the previous question.
Donald Eugene Demens: We're going to continue to manage our production to our ability to obviously get orders, but I think that we're able to do that, it's just to be able to move the lumber. We have, Paul, taken a couple of weeks out at a couple of the small log mills this last quarter to try to get the inventory down and so we're trying to manage the situation on logistics.
to our ability to obviously get orders, but I think that we're able to do that, it's just to be able to move the lumber. We have, Paul, taken a couple of weeks out at a couple of the small log mills this last quarter to try to get the inventory down and so we're trying to manage the situation on logistics.
Donald Eugene Demens: We'd like to see the inventory lower kind of closed around 100 million feet, I think we'd like to see it in the 70 million foot range going forward and we're going to work towards that.
Donald Eugene Demens: Yeah, We did hit 185 million, 186 million feet of shipments in Q1. That was up from Q4. We'd expect to be there or better in Q2.
Paul C. Quinn: Okay, that's great. And just- just on the markets it looks like through Q1, Western Red Cedar prices have moved up. Japan looks pretty flat. Maybe you can just comment on what you're expecting going forward for those two markets?
through Q1, Western Red Cedar prices have moved up. Japan looks pretty flat. Maybe you can just comment on what you're expecting going forward for those two markets?
Donald Eugene Demens: Sure well, you know- I think I'll throw the niche in there as well. So any of the specialty product lines, we're looking at both specialty and Cedar and then of course as well as Japan, staying strong and relatively strong you know historically.
well, you know- I think I'll throw the niche in there as well. So any of the specialty product lines, we're looking at both specialty and Cedar and then of course as well as Japan, staying strong and relatively strong you know historically.
Donald Eugene Demens: I'll try to break them down. Cedar, you know, we've seen a lots of tail winds in the R&R sector over the last period of time, that's where a lot of the Cedar ends up. We're expecting to continue to see good demand from that- that segment. I can tell you the weather, as you know are living out here in the west, that it's been pretty, pretty tough and so in the R&R demand side of the business has been a been a little spotty, but we're expecting as the weather breaks for things to get better. So we're still holding on our view that pricing is going to stay firm, volumes may be a little different but pricing will stay firm. Japan, the only headwind there tends to be the yen has weakened tremendously, however, I think supply- supply is constrained as well with some recent developments and we're looking forward to continued good demand out of Japan and strong pricing in the niche market has been very very good. So, all and all our specialty segments should be a strong to firm- firm pricing for the quarters- for the quarter coming up.
and so in the R&R demand side of the business has been a been a little spotty, but we're expecting as the weather breaks for things to get better. So we're still holding on our view that pricing is going to stay firm, volumes may be a little different but pricing will stay firm. Japan, the only headwind there tends to be the yen has weakened tremendously, however, I think supply- supply is constrained as well with some recent developments and we're looking forward to continued good demand out of Japan and strong pricing in the niche market has been very very good. So, all and all our specialty segments should be a strong to firm- firm pricing for the quarters- for the quarter coming up.
I think supply- supply is constrained as well with some recent developments and we're looking forward to continued good demand out of Japan and strong pricing in the niche market has been very very good. So, all and all our specialty segments should be a strong to firm- firm pricing for the quarters- for the quarter coming up
We're coming out.
Donald Eugene Demens: There may be a little bit of- of [inaudible] on the demand side only related to some weather and I think that's just a delay. That's not a lost volume.
on the demand side only related to some weather and I think that's just a delay. That's not a lost volume.
Paul C. Quinn: Okay, and then last year, you know in Q2 you had a record- a record quarter you know prices are up since that late.
Paul C. Quinn: What are the impediments of- of trying to get back to that $120 million in EBITDA level?
trying to get back to that $120 million in EBITDA level?
Donald Eugene Demens: Yes, I think number one is gonna be shipment volume right? So that's going to be a challenge and also from a cost perspective as prices have gone up through the year, especially in the number of our segments and you're well aware of our of the differences between the coastal and interior stumpage system, we're going to see higher stumpage rates compared to last year for sure and- and I think we've all- we're all facing in the industry: cost pressures, whether it's on steel, freight, and fuel. So you know I think those are the big impediments. It's- number one will be volume and then number two would be stumpage and then three would be just general cost inflation.
the differences between the coastal and interior stumpage system, we're going to see higher stumpage rates compared to last year for sure and- and I think we've all- we're all facing in the industry: cost pressures, whether it's on steel, freight, and fuel. So you know I think those are the big impediments. It's- number one will be volume and then number two would be stumpage and then three would be just general cost inflation.
cost pressures, whether it's on steel, freight, and fuel. So you know I think those are the big impediments. It's- number one will be volume and then number two would be stumpage and then three would be just general cost inflation.
Donald Eugene Demens: It's going to cause us some problems.
Donald Eugene Demens: All that said Paul you know I think as you know, I have been in the business a long time, it is the one of the best environments from a pricing and product demand and supply position, so we're hopeful that the market can absorb some of these additional costs.
Donald Eugene Demens: Alright, and then not to suggest that you're not doing a great job, Don, but I just wanted an update on the CEO hunt.
Right.
Donald Eugene Demens: Sure. Thank you. So yeah, I think the board is taking taking their their time to go through their process. The- I've provided a long a long time- timeline and and to reiterate I'm not going anywhere in the foreseeable future. It is business as usual here at Western and we are here to drive the best results, we can safely and provide the best return to shareholders.
here to drive the best results, we can safely and provide the best return to shareholders.
and provide the best return to shareholders.
Paul C. Quinn: Alright. That's all I had. Thanks guys.
Donald Eugene Demens: Thanks, Paul.
Yes.
Operator: Thank you. This concludes today's question and answer session. I would like to turn the meeting back over to Mr. Demens.
Donald Eugene Demens: Great. Thank you Patrick and thanks everyone for your continued support. We appreciate your interest in the company and your time on the call today. Steve, Glen and I are available if there's other follow up questions and if not we certainly look forward to sharing with you our second quarter results in August. With that, have a great day. Thank you very much.
Operator: Thank you. The conference has now ended.
Operator: Please disconnect your lines at this time and we thank you for your participation.