Mary Ann Jackson - Investor Relations Joseph Puishys - President and Chief Executive Officer James Porter - Chief Financial Officer

Samuel Eisner - Goldman Sachs Brent Thielman - D.A. Davidson Michael Conti - Sidoti & Company

Good day, ladies and gentlemen and welcome to the Q1 Fiscal 2017 Apogee Enterprises, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]. I would now like to introduce your host for this conference call, Ms. Mary Ann Jackson. You man begin, ma'am.

Thank you, Kevin. Good morning, and welcome to the Apogee Enterprises’ fiscal 2017 first quarter conference call on Thursday, June 23, 2016. With us on the line today are Joe Puishys, CEO; and Jim Porter, CFO. Their remarks will focus on our fiscal 2017 first quarter and our outlook for fiscal 2017. During the call, we will discuss non-GAAP financial measures when talking about Apogee’s performance. You can find definitions for these non-GAAP financial measures in our press release. Our call also contains forward-looking statements reflecting management’s expectations based on current available information. Actual results may differ materially. For information about factors that could affect Apogee’s business and financial results can be found in our SEC filings. Joe will now give you a brief overview of the results and then Jim will cover the financials. After they conclude, Joe and Jim will answer your questions. Joe.

Thank you, Mary Ann and good morning, everyone. Welcome to Apogee's first quarter conference call. I feel very good about our start to fiscal 2017 and the first quarter. Our operating income was up 44%, making this our 19th straight quarter of substantial double-digit operating income growth. At the same time earnings per share were up 49% from the prior year period. We also saw significant year-on-year margin improvement in the quarter with our gross margin up 280 basis points to 26% and in fact gross margins grew in all four segments year-over-year. In addition, we recorded our highest ever first quarter operating margin of 10.6%, up 300 basis points and we grew operating margins substantially in our three architectural segments. Contributing to the strong margins was our excellent operational performance in the first quarter across all our businesses. We believe this performance level will continue for the full year and accordingly have increased our full year EPS outlook to $2.70 to $2.85, up from $2.65-$2.80 per share. Our first quarter results also benefitted from higher profitability in our installation and window businesses as a result of our focus on project selection. I call those out as they are our long lead time businesses. Revenue growth at 3% was consistent with our internal expectations given the timing of project activity. We continue to anticipate approximately 10% revenue growth for the year. Backlog grew in the first quarter both sequentially and compared to prior year. We now have exceeded $0.5 billion in backlog for four straight quarters. I am expecting backlog to continue to grow for the full year compared to the end of fiscal '16 and I am confident we have the backlog and bidding activity needed to continue our growth momentum in fiscal 2017 and beyond. I will highlight a few first quarter segment results before turning to our outlook. All three architectural segments delivered significant operating margin growth with architectural framing systems up 530 basis points on operating margin. Our architectural services business was up 340 basis points and our glass segment was up 200 basis points. In addition, architectural services and architectural framing systems each had 13% revenue growth in the quarter. As we had expected, architectural glass revenues were down with the U.S. sales down only slightly while the strong U.S. dollar had a greater impact on export sales and revenues from our Brazilian glass business. I expect year-over-year revenue growth in Q2 and for the full year in the glass segment. I am especially pleased that our Canadian framing systems segment business performed well in the quarter. Remember this business is part of our framing systems segment. It exceeded prior year period on revenues, earnings and bookings. This business had provided some headwinds in fiscal 2016 due to the Canadian economy and I told you we expect a great performance this year and we are seeing it. As I highlighted, with our strong -- let met talk about the outlook now. As I highlighted earlier, our strong fiscal quarter, operational performance and expectations that this level of performance will continue throughout the year, we increased our earnings per share outlook to $2.70 to $2.85 and we will continue to maintain our outlook of approximately 10% revenue growth this year. Our expectations for another year of strong top and strong bottom line growth are based on our backlog, the commitments we have in hand, the bidding activity, as well as our productivity efforts through our lean initiative and CapEx investment, which are paying the dividend I fully expected when I joined Apogee almost five years ago. We are expecting mid-single digit growth in the U.S. commercial construction markets in fiscal 2017 as market activity, the Architectural Billing Index, office employment and vacancy rates all show the positive and the right momentum. In fact, there have now been 75 straight months of private sector job growth in the United States and the ABI has been at 50 or better, 21 of the last 24 months indicating sustained growth and architectural activity. Just yesterday, the ABI for the month of May reflected the best results in over a year at a rate over 53, in fact 41 of the last 45 months in architectural billing growth. With our internal market visibility and external metrics moving in the right direction, we see U.S. non-residential market growth at least through our fiscal 2020. We remain focused on the longer-term outlook that we have provided through fiscal '18. We still expect revenues between $1.2 billion and $1.3 billion and operating margin of at least 12% in fiscal 2018. We have been doing what we said we would do consistently and I am optimistic about Apogee stated growth outlook for fiscal years 2017 and fiscal 2018. I am going to turn it over to Jim Porter now to take you through some more details on the financials. Jim?

Thanks, Joe. Good morning. We started fiscal 2017 with solid first quarter performance. Our revenues were up 3%, 4% in constant currency. Operating income of $26.2 million was up 44% and earnings per share of $0.61 were up 49% on strength in our architectural segment and excellent operational performance across all four segments. I will provide some more details on the quarterly segment results. In architectural glass, first quarter revenues were down 8%, down 6% in constant currency. This is in line with the guidance I have previously provided to lower first quarter revenues year-on-year, based on the expected timing of project schedules. For the full year we anticipate mid-single digit revenue growth in architectural glass. Architectural glass operating income was up 15% to $9.5 million and the operating margin grew to 10.2%, on improved pricing and product mix which we need to look at together and strong operational performance. First quarter architectural services revenues grew 13%, driven by the timing of project schedules which always have quarter-to-quarter variation. Segment operating income of $3.2 million was up significantly and the operating margin grew to 5.1%. We had improved execution in both fabrication and insulation and also benefitted from volume leverage. In architectural framing system, revenues were up 13% and 14% in constant currency, driven by volume growth. Operating income grew 94% to $10.2 million and operating margin increased to 12.6% as a result of improved operational performance and leverage on volume growth across all U.S. and Canadian businesses in this segment. Large scale optical revenues and operating income were down just slightly compared to the prior year period. Operating margin was 23.2%, still strong but compared to 24.1% down a little bit based on increased expense for new market development investments in R&D. Operational performance in this segment remains strong and we expect top and bottom line growth for the full year. Also note that we did have a slight benefit from the lower tax rate and share count compared to the prior year period. The fourth quarter backlog of $509.7 million was up 8% from the prior year period and up slightly from the fourth quarter. As I do every quarter, I will provide my reminder that our business does have lumpy order intake activity. So we don't require or necessarily expect sequential backlog growth each quarter to be consistent with the longer-term trend and our expectations for topline growth. As Joe said, we are expecting backlog growth for the full year but this might not show growth at each individual quarter. Our backlog mix at the end of the first quarter continues to reflect strength in the office sector. The mix overall remains unchanged from the previous quarter. The office sector is approximately 55% of the backlog. The institutional sector remains at 25% to 30% of the backlog and this sector is now becoming more balanced between the education, healthcare and government aspects of the institutional sector. Multifamily residential including high-end condos and apartment is 10% to 15% of the backlog and hotel, entertainment and transportation remains at 5% to 10% of the backlog. In terms of the timing of backlog, approximately $364 million or 71% of our backlog is expected to be delivered in fiscal 2017 and approximately $146 million or 29% in fiscal 2018. In the quarter we had negative free cash flow of $18.6 million. We generally use cash in the first quarter for seasonal working capital needs, including for annual incentive compensation payments and we had large expenditures this quarter mainly for our new architectural glass capability. Our non-cash working capital was $94.2 million compared to $68.8 million at the end of fiscal 2016, driven by seasonal working capital requirements in timing of receivables. We continue to have strong days working capital management with DWC at 50 days in the first quarter, up only one day from the prior year period. Now I will turn to our outlook. For fiscal 2017, we expect to continue our growth trend based on our backlog, commitments and bidding activity as well as positive metrics supporting U.S. commercial construction market. As Joe noted, we have increased our earnings per share outlook to a range of $2.70 to $2.85 per share as a result of strong operational performance expectations for the full year. We have maintained our outlook for approximately 10% revenue growth. Based on our visibility of revenue timing, we anticipate our revenues will see bit of a step-up in the second quarter and will be pretty balanced across the rest of the year. We are expecting full year operating margin to be at least 11%. For fiscal 2017 we expect full year depreciation and amortization of $33 million and we anticipate our fiscal 2017 tax rate will be approximately 33%, down slightly from our prior guidance of 33.5%. We expect to again generate positive free cash flow for the full year, our priority for use of cash remains to find attractive investments to grow our business. We are actively working on our M&A pipeline and we are expecting our fiscal 2017 capital expenditure of approximately $60 million for additional capabilities, productivity, automation and capacity. At the same time, we will maintain our dividend and continue to evaluate repurchasing stock to offset dilution from our compensation program. In summary, our strong first quarter performance positions us to achieve new record levels in fiscal 2017. We have good market and operating momentum and solid strategies that we believe continue to position us to deliver long-term revenue and profit growth. Joe?

Thank you, Jim. Well, as you can see, my team delivered a terrific first quarter and continue to leverage our strategies to grow revenues through new geographies, new products, new markets and both organically and through acquisition. Our efforts to improve project selection, productivity and operations are benefitting our bottom line. Our capital expenditures are focused on capability and productivity to enhance our cost structure while we seek geographic growth opportunities in the U.S. and internationally as we diversify our end markets. We are also increasing our focus on the vast building retrofit opportunity and continue to dedicate considerable resources for new products and new market development. Collectively, these efforts strengthen Apogee's competitive position. By adding top line growth and improving our cost structure for the future regardless of market conditions. Kevin, I would like to open the call to questions, so if you could please do such. Thank you.

[Operator Instructions] Our first question comes from Samuel Eisner with Goldman Sachs.

So just going to your guidance here, the earnings guidance, and I appreciate the raise there. In terms of the phasing for the year, I think historically first half represents about 35% to 40% of the year's earnings and I am curious if you guys can put some kind of framework around how we should think about the earnings cadence for the year. Is it the normal 40%-60%? I think based on your guidance it actually is a little bit closer to 50%-50%. So I am just curious how we should be thinking about the phasing of earnings for this year.

A little bit more balanced first half and second half. I mean we still, at least, again based on the visibility we have and the timing of the revenues that we expect, we probably see a little bit more than 50% of earnings in the second half of the year but a little bit more balanced than the prior year.

That's helpful there. And then the margin expansion this quarter was very strong. I was wondering if you could kind of parse out the differences in pricing and raws? I know that you called out in glass, I mean the fact that you're expanding profits despite having downed revenue in glass is pretty interesting to see there. So I was wondering if you can give us a bit more color on what you're seeing in terms of pricing in the market? Is it raw material that's benefiting you, is it initiatives? If there's way to parse out the different components of that, that would be excellent.

So Sam, this is Joe. I will start, Jim will jump in. To touch base on your last point, raw material or input costs are pretty much a non-event. We have [lapped] [ph] the changes in aluminum, primarily glasses, has not really moved and as you well know from having studied our business, we generally move our prices along with glass. So we just performed extremely well in our factories. Our lean and operational excellence initiatives are truly paying dividends for us. I highlight at every meeting our new product introduction. We don’t need volume growth in our end markets to launch more competitive products that come with higher prices and higher margins. So our mix, we have a lot of mix driven price. I think we will continue to have that going forward but primarily the execution in our factories was a driving force for the margin enhancement.

Sam, it's Jim. I will just elaborate and probably say the same thing that Joe is saying. But if I look at the drivers for margin expansion in order, first has been the operations or productivity and the leverage on volume, as Joe talked about. Second is going to be the impact of project selection which drives the margin improvement in services and the longer lead times, framing systems part of the business. And then the price and product mix that Joe talked about as well. That would be the order of the drivers.

Understood. And then maybe, lastly, I will probably get this information in the Q, but in terms of the backlog by segment. I was wondering if you could give us either some percentages or the numbers as it stands today, just given last quarter that we had some pretty weak orders in one of the segments? I'm curious the way that looks now.

Yes. You saw our backlog was strong. Again, we don’t -- we are not going to expand our non-GAAP metrics, I have mentioned before. If you look beyond backlog, I have got projects or awards in hand, we call commitments. We have got bidding activity. We have got [verbals] etcetera. I would say that our backlog increased in our glass segment in our framing systems. It was down slightly in our services segment sequentially, Sam. But my commitments and backlog in services increased in the quarter. So, again, that’s why I am bullish enough to say I expect backlog to grow for the year. As Jim says in virtually every earnings release, it can be lumpy. We don’t guarantee it will be every single quarter but we feel good with the activity we have and the awards that we have received that backlog will go up.

Our next question comes from Brent Thielman with D.A. Davidson.

Joe, in Services, do you think you saw some pull forward in revenue in the quarter, maybe weather or something else that helped you get some jobs done faster than planned?

No. We had no pull forward in any of our segments and weather has never really impacted us other than a couple of years ago in Canada. It kind of caused headaches for the entire industry. But no weather and no pull ahead, Brent.

Okay, fair enough. And then on services though and the profitability there, a pretty notable improvement over the last year. I know you've been focusing on more selectivity in terms of projects for the last several quarters. When you look back at Q1 though, would there be any high profile or larger projects that drove that big margin improvement?

No. We have had our execution both at our fabrication facilities and our operational performance at the job site meaning installers, has been very consistent. Lack of surprises is the music we want to hear and we have been achieving that. But it all goes back to the focus on not chasing volumes in our installation business and focusing on project selection, projects with a better opportunity for higher margins. You combine that with solid execution, we have a tremendous team. I think we are the best glazing installer in the country and those two combined have lead to improved revenue margins and improved margins going into backlog. So I feel good about us being able to continue our upward trajectory on operating margin in that services segment.

Okay. And then just on the market itself. From a regional perspective besides Houston, do you see quoting or planning activities slowing down elsewhere in the country, and then also where do you see it picking up?

We see -- you are correct. I think Houston was really the only market that isn't very robust. We still are doing work in Houston in several of our segments. But across the board we are seeing very very strong market activity. Trust me, don’t think that my bullish comments on our end-market don’t mean we are not prepared for the worst. I always say, U.S. continually tries to talk itself into a recession. We are prepared if that were to happen. We don’t expect it. Even the negativity that came out following the jobs numbers of April and May. Even though the growth was less than the market expected, if you dig within those jobs growth, most of the growth came in education and health services and healthcare. Governmental retail and hospitality, that’s the stuff we like. The fact that IT temps, manufacturing and construction were down, there is not a lot of glass in the construction and the manufacturing sector. So the overall end-market metrics are solid but what we are focused on with capability and productivity, we are not out-running the growth curve. We believe the growth is real in our end-markets. We feel bullish about it. We are prepared for a downturn should we all get surprised. I would say it's -- Jim and I feel good about most of the entire U.S.

Okay. Good to hear. If I could sneak one more in. On LSL, when do you expect to see some of these investments in new markets start to deliver? Are they already today? Maybe you have some headwinds in there, just maybe an update there.

Sure. We are constantly -- I think you know in many of our segments we don’t have the United States geography fully covered. We do in our glass businesses, the others we have regional expansion. We are entering new products in some of our businesses, in particular our picture framing glass and acrylic. Jim mentioned that business. Even though we were relatively flat on revenue, we have always said we felt that business would be follow GDP for the most part. We have launched new products in segments we have not participated before at really solid margins. Our gross margins were up triple digits, low triple digits in that business and we are investing. So there are some cost headwinds. That’s been constant. You know I don’t want to tip my hands off of my competitors what segments we are entering but virtually every one of our businesses has a very robust pipeline of new products we are launching. It's never been as strong as has been our vitality index that we measure is well over 20% now from what was single digits. That’s the amount of revenues we expect in the given year from products launched in the prior five years. And I am pleased that we are executing. That’s why I mentioned earlier, we don’t need end-market growth for us to grow our business. We don’t have 100% share of demand and we can grow in an up market and we can certainly grow in a down market as well.

Brent, specific to large-scale opticals, as you know it just is a small segment. $200,000 of incremental spending is a full margin point in terms of impact. But anyhow, in terms of the number of the new initiatives that we are working on, we expect by the end of fiscal '17 to really have line of sight about what the potential of these initiatives are and how meaningful it could be, it will be over the course of this year.

[Operator Instructions] Our next question comes from Michael Conti with Sidoti.

Joe, can you just, I guess, talk about the order activity trend in orders, specifically April and May and what you're seeing so far in June? If that grew sequentially coming out of the quarter and maybe any improvements on a year-over-year basis?

So we saw a consistent order activity in the first quarter which was, March, April and May for us. I can't say there was a upward trend at the end of the quarter or anything like that. We are on 4-4-5 calendar so the third month of every quarter is always going to be our, typically our highest quarter just for the accounting calendar. I would say June, not going too far into Q2 results but June is starting out very strong as well. So we have seen no significant trend over the timing of the four months we are talking about.

Great. Okay. And then on the capacity increases in the Viracon. Can you just update us when you expect to start shipping out orders for the larger size glass and maybe give us an idea on the benefit to margin in that particular side of the business?

Yes. Mike, you might have used the word capacity, if I heard you right. So let me just clarify that. That investment we are making in Viracon, the greater than $60 million we have invested in process of investing in that factory was for capability. To be able to provide over-sized glass as well as a significant portion is for automation of productivity. So capacity is not at play there. I have always said, every time we become more productive, a side benefit is more capacity which is good news. But the great news is we are already on the scoreboard. The original target was that we would add capability of shipping oversized glass in the first quarter of fiscal '18, which is basically next March. We have already won several projects involving over-sized glass. The implementation of -- that is including a building expansion and a lot of the equipment add within the building and the expansion is on -- is actually ahead of schedule. So we are on schedule, we are on budget cost wise. We expect that capability gives us revenue upside. That product is at nice margins. So while I am not going to get into the specifics, it does provide upside on both the topline and the conversion. And we are on track and we have already had some awards. Again, that business, as far as the backlog, we talk about that as not a long lead time business but that’s because even though we get an award in the glass business today, it's typically for revenue nine months out maybe more. It will go into backlog much closer to the shipment date. So we are right on track. We expect to be getting orders in the summer of 2016 for shipments in the very beginning of our fiscal first quarter next year and we are doing exactly that. I would say we are probably even ahead of schedule on revenue expectation.

And are those orders, is that already built into your guidance for fiscal '18, the $1.2 billion to $1.3 billion, or is there an upside to that number?

Yes. That’s always been part of our strategic plan.

Okay. Got it. And last one for me, more of an industry related question. Can you just talk about financing for commercial properties? Just saw a couple of articles lately on mortgage backed securities and the funding side. I think on the last call you may have mentioned a mix shift to include a little bit more of the mid-sized buildings. But are those types of properties more susceptible to financing headwinds than your core large size buildings, or is that the other way around?

No. I think it's relatively neutral. We are not seeing any financing issues or any of the work. I like to say, we have over a billion dollars worth of bidding activity at any given time in our portfolio. We are not seeing any substantial -- we are not seeing any issues that are advancing or slowing down projects because of financing ability. You are right, we have made some nice progress in moving into the, let's say the medium sized buildings in our glass segment and our incredibly strong delivery performance and reduced lead times have allowed us to be able to penetrate that segment more. That is dealing with customers we have always dealt with but on slightly smaller projects. But that is unrelated to financing and Jim's not even said yes. So we are not seeing any impact on finance, good or bad.

Our next question comes from Samuel Eisner with Goldman Sachs.

Thanks for letting me hop back on here. Just two quick follow ups. Thanks. Two quick follow ups. Joe, I think you've made some commentary, I think you were alluding to it in that last comment. Just regarding the competitive dynamics on large projects, I think that weak dollar has allowed some foreign players to participate in the market that maybe historically they were not able to. I think lead times have extended. Can you just give us an update on what the competitive landscape is doing as it relates to some of those large more flagship products?

Yes. So nothing new in the last quarter but let me gain altitude for a minute. For a decade the euro dollar exchange rate sat at a certain level. Both end markets were growing at similar market rates. We believe that was parity if we try to compare the dollar to the euro. The recent, meaning last two years, 30% devaluation in the euro, the strength of the dollar, has clearly moved us what we believe was parity. It has opened the door for the international competitors to offset the higher freight impact. At the end of the day, it's a big market. We are offsetting any share loss we have had at the very highest end with wins in the mid-market. We continue to offer, be the premier, and we are mainly talking about the architectural glass segment here. We continue to be the premier provider in the United States. I think our customers are learning everyday that the total landed cost can be substantially higher than they model. The glass is only 10% of the curtain wall and the curtain wall is only 10% of the total building. So to save a dollar on 1% of the building can come back to haunt you on a premium freight and any quality issues. So I think we continue to address that in a favorable manner. But, Sam, nothing has changed in the first quarter. I told you in my comments earlier, I fully anticipate, I can -- guarantee is a word I can never use, but I fully anticipate you will see growth in the glass segment in the second quarter. In the third quarter I expect growth in the year. That business is doing quite well and competition is always out there, so the international guys have a little bit of an advantage with the exchange rate, we have an advantage, I believe on quality and delivery. And the management team will continue to exploit that as well.

Got it. That's very helpful there. And then just, Jim, I missed the final prepared comments on cash flow. The significant working capital build, can you just, I know you went through it a little bit, but again, I apologize for missing that. Can you just go through where that's going to and how you anticipate that playing out for the year? Is that going to be a source that's going to be used this year? Just any additional color there would be excellent. Thanks.

So as it relates to working capital growth in the quarter, really the two drivers are reduction of accruals primarily driven just by payments of annual incentive comp last year and then just timing of receivables. We did just see, relative to the year and then last year, just growth in receivables. Overall, we do expect a little bit of growth in the working capital from a full year perspective, really just driven by or outlook of growth in the business.

Our next question comes from Brent Thielman with D.A. Davidson.

One more. On the framing systems business, nice turnaround in growth here this quarter. I was curious how much of that is being driven by Canada or anything else specifically there?

So we have four businesses in that segment, all related businesses. All four performed well. Of course Canada had easier comps. We are not spiking the football. I told you that business would perform well this year. We are still in our own side of the 50 yard line and no longer fumbling the ball in the end zone. As I said, I think that business is -- I am very very proud, but we have got a long way to go. That business did not drive the performance. Our finishing business, our extrusion and storefront had double-digit growth and performed extremely well and our window business had a very significant increase in orders and will help drive growth in the next three quarters. I think framing systems will have stellar performance all year, thanks to all four businesses. Absolutely no extra weighting on the Canadian business. They did their job. They pulled their weight. They are one quarter of the improvement.

Our next question comes from [Jay Winslow] [ph] with Wells Fargo.

Just a quick question for you. Seeing that your company is undervalued, if you had the right offer came across for the company, would you be willing to entertain it?

Could you repeat that, Jay?

Seeing that your company is undervalued based on the stock price and everything. If the right offer came across for the company, would you be willing to entertain it?

I am not expecting an offer to come across the table. I don’t -- of course as the CEO I expect our performance to continue to go well. I expect stock to appreciate. Our job is to create shareholder value through growth and outstanding performance. I think we are doing that in tough markets. And I am not going to comment on whether -- of course as a public company we would follow the laws and our board would review anything that came our way. I am not expecting that.

Our next question comes from Michael Conti with Sidoti.

A quick follow up. Just on the M&A pipeline to enter geographies or any products. How have multiples, how have they been trending over the past year or so? And maybe just give us an update on any Greenfield initiatives.

So in the M&A world, we usually use a discounted cash flow method when we look at businesses. Obviously that gets translated to -- because ultimately everybody is looking for a multiple. I think there were a couple of deals done in our space that were at what I believe inflated multiples. I am not going to over pay for a business. That’s fun for about one day until you realize your ROIC in the long haul is taking a hit. We will not do that. We are very very disciplined. I think that’s the good part of being a public company. I think that has subsided a little bit. I do believe where we are in this cycle having had a couple of years of end market improvement. Yet we are not at peak and we believe we are several years away from what might be considered a peak. I believe valuations are possible, meaning buyer and seller can come together. Prior 12-month results are reasonable. There is still some upside, typically buyer and seller can come together. While I never predict we will do a deal, I do believe the atmosphere is more apropos for getting a deal done. I think multiples are somewhere between reasonable and slightly higher than reasonable right now, down slightly from what I thought was a little unreasonable a year ago.

And I am not showing any further questions at this time. I would like to turn the call back over to Joe Puishys.

All right. Thank you, Kevin. All right. I won't torture everybody anymore. I just will close by saying thank you. We had a great quarter. I think you can expect more to come. As we saw, our guidance we are continuing. It's early in the year. We are confident enough this early to raise our guidance and I can assure you I am looking forward to the next earnings release call. Thank you. Have a great day, everybody.

Ladies and gentlemen, that concludes today's presentation. You may now disconnect and have a wonderful day.