Thomas Donohue - IR Max Roberts - CEO Patrick Maloney - President of Barnes & Noble College Barry Brover - CFO Kanuj Malhotra - COO of Digital Education

Mark Rosenkranz - Craig-Hallum Capital Group Vahid Khorsand - BWS Financial Greg Pendy - Sidoti & Company

Good day ladies and gentlemen, and welcome to the Barnes & Noble Education Fourth Quarter and Full Year 2017 Earnings Conference Call. Today's call is being recorded. At this time, I'd like to turn the conference over to Mr. Thomas Donohue. Please go ahead, sir.

Thank you. Good morning and welcome to our fourth quarter and full fiscal year ended April 29, 2017 earnings call. Joining us today are Max Roberts, our CEO; Patrick Maloney, President of Barnes & Noble College; Barry Brover, CFO; Kanuj Malhotra, Chief Operating Officer of Digital Education, as well as other members of our senior management team. Before we begin, I would remind you that the statements we will make on today's call are covered by the Safe Harbor disclaimer contained in our press release and public documents. The contents of this call are for the property of Barnes & Noble Education, and are not for rebroadcast or use by any other party without written consent from Barnes & Noble Education. During this call, we will be making forward-looking statements with predictions, projections and other statements about future events. These statements are based upon current expectations and assumptions that are subject to risks and uncertainties, including those contained in our press release and public filings with the Securities and Exchange Commission. The company disclaims any obligation to update any forward-looking statements that maybe made or discussed during this call. I would also like to tell you that following the completion of our acquisition of MBS we are reporting two segments, Barnes & Noble College Book Sellers, LLC, or BNC, and MBS Textbook Exchange, LLC, or MBS. And our fourth quarter and full year results include the nine weeks of MBS results between the acquisition date of February 27, 2017, and our fiscal year-end. Prior to the acquisition BNC was our only reportable segment. At this time, I'll turn the call over to Max Roberts.

Thanks, Tom, good morning everyone, and thank you for joining us. On today's call I will provide a summary of our results, our high-level view of the higher education marketplace, and the strategic and competitive initiatives we executed this past year to strengthen Barnes & Noble Education and enhance our ability to deliver solutions designed to help our partner institutions achieve student success. Finally, I will review our fiscal 2018 outlook. After that, Barry will discuss our fiscal 2017 fourth quarter and full year results in more detail. In fiscal 2017, we made solid progress in many areas, increasing sales by approximately 2% at BNC, continuing to sign new business, and growing our market share. For the full year adjusted EBITDA, excluding the nine weeks of MBS' results, was $82.5 million, an increase of $2 million over fiscal 2016. We also made excellent strides in new business wins for fiscal 2017. Along with MBS, we now have a complete solution to provide schools with physical, virtual, hybrid physical-virtual bookstore solutions. We have received an enthusiastic response from the marketplace regarding our product and service offerings. At BNC, during fiscal 2017, we signed new contracts with estimated annual sales of $118 million, representing 38 new physical stores while only closing 20 physical stores, bringing our total store locations to 769. MBS Direct, our virtual bookstore solution, has demonstrated solid performance, signing 80 new contracts representing $17 million in estimated revenue in fiscal 2017. We now offer an almost 1,500 physical and virtual bookstores serving over six million students in higher ed and K-12. This momentum has continued into fiscal 2018 as the current pipeline for new business remains strong. In fiscal 2018 so far, we have been awarded new contracts with estimated annual sales of $50 million for BNC and $8 million of estimated annual sales for MBS Direct. We are remaining competitive, and we're winning in the marketplace. In fiscal 2017, we significantly enhanced our digital services and content platforms. Our agreement with UNISON, a consortium of 22 leading universities, allows us to bring our predictive analytic solutions to a wide audience of advisors and faculty both in and out of the BNC footprint. And it also strengthens our position as a significant player in driving student success and outcomes. This year we also launched our Courseware product; a digital solution built on a foundation of open education resources or OER, and is enhanced with content such as quizzes, videos, and self-assessments for students, along with analytics tools that allow faculty to monitor student performance. Today, students require more advanced multi-formatted methods of learning. And since acquiring LoudCloud, in 2016, we've continued to cultivate our digital platform to meet these needs. Higher education is in the midst of significant change with increasing focus on student affordability and success, while at the same time experiencing enrollment decreases. As a result many of the major publishers are more aggressively shifting from physical to digital options, reducing prices, pursuing direct-to-consumer models, and piloting rental programs for new additions. MBS is a supply-driven business, and is dependant upon an adequate supply of new and used books. In the past, publishers have traditionally sold new books to MBS to be resold to the MBS customers. In 2017, and continuing into fiscal 2018, the major publishers have refrained from making these sales. In addition, for the first time since 2008, our general merchandise sales were impacted with unfavorable trends similar to other clothing and general merchandise retailers. Of course, such significant change is also accompanied by great opportunity. And in response to these near-term trends our strategy is to, one, continue to work with our campus partners to increase student success and outcomes by embracing all publisher content, including publisher-hosted digital content, digital on-platform content, and traditional print textbooks, while at the same time enforcing our channel exclusivity, and working to eliminate counterfeit or unauthorized content. Two, we're going to continue to aggressively grow our physical and virtual bookstore locations to expand our sales opportunities. Three, we're going to grow our digital educational services and digital content businesses through LoudCloud using our analytics and OER capabilities leveraging these solutions through our existing client footprint, and other strategic partnerships. Four, we're going to grow our general merchandise sales via web and mobile sales, including Promoversity and our True Spirit athletic and alumni Web sites, and further maximize in-store promotions and events. Five, we will pursue opportunistic acquisitions and partnerships, as we did with MBS, to either grow our student base or enhance or compliment our digital or other product offerings. Six, we're going to aggressively manage our cost structure by allocating capital and expense spending using a disciplined process based on the best use and return. And seven, integrate MBS to achieve the benefits and the synergies of this important acquisition. Let me speak just a few moments on these strategies in more detail. Sales and rental of printed textbooks remain a core driver of revenue. Printed textbooks are still the format of choice for most students, and we continue to focus on new ways to improve the profitability of our textbook business. We are also improving our competitive response in our core business by accelerating our online marketplace programs and competitive pricing. With our acquisition of MBS students and faculty now have unprecedented access to the largest inventory of low-cost course materials creating maximum savings for our students. We have worked and will continue to work with our publishers as we deliver on our goal of providing student access to authentic, affordable options for their textbooks and course materials. We also are best positioned to provide legitimate content for our partners. We continue to drive our digital strategy, and our plans to grow our digital education services and digital content businesses. Through the transformative and tactical development our LoudCloud platform provides schools with analytics, OER courseware, and competency-based learning solutions. We provide one package one solution on one platform. We are now a delivery channel and also a content creator and we are moving quickly and effectively to scale our business in this very fragmented market. While the evolution toward digital solutions has been slower than some originally anticipated, we saw an increasing shift toward a broader adoption of digital solutions in fiscal 2017, and have derived significant benefits from the timing of our LoudCloud acquisition in 2016. Our agreement with UNISON establishes -- enables us to provide a best-in-class analytic solution to a wide audience of advisors and faculty. Now moving on to our higher-margin general merchandise, we're focusing on growing the sales via web, and mobile channels, and maximizing the in-store promotions and events. In addition to the many products and service we offer our campus partners, another important aspect of our business is our ability to partner with schools to promote their brands therefore thereby strengthening relationships with faculty, alumni, parents and students. True Spirit our alum and athletic focused e-commerce sites along with Promoversity are great examples of this effort. We have implemented True Spirit Web sites for 61 schools extending our reach directly to alumni and athletic fans and also creating additional sales, branding and marketing opportunities for us and also our partners. We plan to launch True Spirit sites for another 30 schools in 2018 through Promoversity, which can more quickly and efficiently personalize our vast GM assortment to meet the needs of all students, faculty, alumni, and fans. We will continue to creatively adjust our general merchandise strategies to meet the ever-changing needs of our customers offering them the most convenient and personalized shopping experience using the shopping channel that they choose. Another key aspect of our strategy, which we are focused on since becoming a public company is our pursuit of strategic transactions to complement and strengthen our core and digital businesses. The recent acquisitions of LoudCloud, Promoversity, and MBS are examples of our ongoing commitment to enhance our core digital services contents and student services business. Finally, as we execute these initiatives we remain extremely focused on expense management. As Barry will detail in a few minutes, we've made significant progress in 2017 and will continue to drive efficiencies at the individual store level as well as our corporate offices as we look to tailor our expense structure to respond to our sales outlook. We completed the MBS acquisition in February and have completed the first step in the integration of this strategic asset into BNED. We are now focusing on optimizing inventory and increasing margins both at our college stores and MBS. In fiscal 2017, we laid the foundation to achieve the strategy in fiscal 2018. The fiscal 2018 all areas of our combined company will focus on our ability to help our partner institutions achieve student success while continuing to strengthen Barnes & Noble Education. As we look ahead, it's clear that community college enrollments run countercyclical to employment outlook. Consistent with national students clearing house projections, we believe there will be short term fluctuations and overall enrollments particularly at community colleges may continue to decrease over the next 12 months. We recognize and are adapting to these short-term challenges, but the value of higher education over the long term is still widely acknowledged as positive. And our mission is to help improve the quality and affordability of the education partners that we serve. Before I turn the call over to Barry, I would like to take a moment to discuss our outlook for fiscal 2018. We are comfortable with and will continue to give annual guidance on sales, comp sales, and CapEx. We are not giving guidance on EBITDA or adjusted EBITDA at this time. While we believe the near term trends for higher education remains strong, there are important industry trends that impact our ability to provide guidance in the short-term. They are: (1) Enrollment trends, especially in community colleges. (2) Continued performance reactions from the publishing community including the pricing of textbooks, [Kathy] [ph] rental programs, content creation like OER, and digital conversion by students, as well as diminished wholesale supply from the publishers to MBS. (3) The general confusion by students as to the type and quantity of content to purchase. And with respect to investment opportunities and support of our strategy, it remains our objective to pursue opportunities that are accretive to earnings and EBITDA. However, we may encounter good long-term opportunities that are not immediately accretive to BNED. And finally, we anticipate a lack of improvement in general retail trends in the near-term. Therefore, we have and, for the time being decided not to provide EBITDA outlook. It is a pivotal time in the industry with unprecedented uncertainty and change. We have and will continue to position our company as a leading provider of content and educational services for our campus partners and students. In conclusion, we remain very competitive as evidenced by the new business that we are winning both in our core business and also with respect to new services such as analytics, OER, and other services aimed at student affordability and improved outcomes. These market wins are the best validation of our relevance and strategies. With that, I would like to turn it over to Barry for the detailed financial review.

Thank you, Max, and good morning. Please note in my remarks this morning, all comparisons will be to the fourth quarter of fiscal 2016 unless otherwise noted. Total sales for the quarter were $342.8 million, an increase of $48 million or 16.3%. Total sales for the full fiscal year were $1.87 billion compared with $1.81 billion from the prior fiscal year, an increase of $66.4 million or 3.7%. The quarter and the full year includes $34.1 million of sales from MBS for the last two months of the year. For the full year, we realized incremental sales of $109.5 million from new stores, partially offset by a decrease in sales related to close stores of $23.8 million and a comparable store sales decline of $50.6 million. In addition our service revenue which includes revenue from Promoversity and LoudCloud along with our brand partnership income increased by $5.8 million compared with last year. As we further derived revenue from outside out footprint and monetize our customer base. Comparable store sales increased 1.4% for the quarter and decreased 3% for the fiscal year. Textbook revenue increased for the quarter $2.9 million in comparable stores primarily due to the later spring rushes. For the full year comparable store textbooks sales decreased 4% or $46.1 million. For the quarter, our general merchandize sales in comparable stores increased over the prior year by $0.6 million or 0.5% including new stores our general merchandize sales for the quarter were $135.5 million and $571 million for the full fiscal year and continues to be an increasing percentage of our sales which generates higher gross margins. Our rental income for the quarter was $76.6 million and increase of 2.3% compared with the prior year. For the full year rental income was $235.4 million and increase of 3.1% when compared with the prior fiscal year. Rental income continues to be a very important part of our value proposition to our students and contributes prior margins. We continue to maintain our strong list of approximately 80% of course required materials available for rents at competitive pricing and a large percentage of our rentals by used textbooks, which generates our highest margins as many of these textbooks were previously rented. Gross profit for the quarter was a $122.5 million and increase of $16.5 million or 15.5% due to higher sales and approximately $4.7 million of gross profit from MBS. Gross margin was 35.7% down 30 basis points with the prior year. The gross margin for the full year was 24.4% down 70 basis points from the prior year. The decrease in gross margin was impacted by the low margin rate at MBS which is the result of the fixed warehouse and operating costs during this seasonally low sales period. In addition BNC had increased markdowns on textbook, lower rental margins and higher costs related to college and university contracts. Partially offset by improved shrink results and a favorable sales mix. Selling and administrative expenses increased $9.7 million or 11.1% to $96.9 million for the fourth quarter. For the fourth quarter selling and administrative expenses were 28.3% of sales compared with 29.6% of sales in the prior year. $8.3 million of the increase relates to S&A expenses associated with MBS. Excluding MBS BNC, S&A expenses continue to decrease as a percentage of sales as a result of continued expense rationalization and leveraging the higher selves. For the fiscal year, selling and administrative expenses increased by $6.3 million or 1.7% to $379.1 million. The increase was due to expenses for MBS excluding MBS; BNC S&A expenses continue to decrease in absolute dollars and as a percentage of sales as digital and comp store payroll and expense savings were offset the incremental S&A expenses associated with new stores. Digital expenses including Yuzu and expenses associated with LoudCloud decreased by a $11.2 million for the full fiscal year due to the digital restructuring and lower cost structure associated with the digital restructuring that occurred in Q4 last year. During the fourth quarter we recorded transaction cost of $7 million primarily related to the MBS acquisition. The full year transaction costs are $9.6 million. Our adjusted EBITDA was $25.6 million for the quarter an increase of $6.8 million compared to the prior year. For BNC adjusted EBITDA was $29.8 million for the quarter and increase of $11 million from the prior year. Adjusted EBITDA for MBS for the quarter was a loss of $3.6 million. The fourth quarter for MBS is the seasonally lowest sales quarter as they build inventory for the fullback fiscal selling season. For the full year, adjusted EBITDA was $78.3 million a decrease of $2.2 million from the prior year was BNC contributing $82.5 million while MBS had a loss of $3.6 million. The effective tax rate for the fiscal year was 46.9% compared with 96.9% in the prior year and reflect the impact of certain nondeductible expenses principally nondeductible compensation expense partially offset by state net operating losses benefiting the company as a result of the spend as well as certain income tax credits. Fourth quarter net income was $0.2 million or $0.00 cents per diluted share compared to a net loss of $2.8 million or $0.06 per diluted share in the prior year period. Non-GAAP adjusted earnings were $4.5 million compared to non-GAAP adjusted earnings of $3 million in the prior year period. Full year net income was $5.4 million or $0.11 per diluted share compared with $0.1 million or $0.00 per diluted share in the prior fiscal year. Non-GAAP adjusted earnings was $12.3 million compared with $15.5 million in the prior fiscal year. The current year's fiscal quarter has 46.9 million diluted shares outstanding, while the prior year has 47.2 million diluted shares outstanding. Our cash balance at the end of the year was $19 million; in addition we had outstanding borrowings of $159.6 million, which includes $100 million under the FILO. The increased borrowing as compared to last year was a direct result of the acquisition of MBS. We continue to have sufficient availability under our credit facility, and expect borrowings during fiscal 2008 to peak at approximately $250 million and be fully repaid during the fiscal year. For the full fiscal year, cash flow from operations was $68 million, a $15.1 million decrease as compared to the prior year primarily related to the inclusion of the MBS operating activities, changes in working capital, and changes in deferred tax balances. Merchandise inventories increased by $121.3 million as compared to the prior year. MBS added a $138.5 million of inventory, while BNC inventory decreased by $16.6 million or 5.3%. During our fiscal fourth and first quarters, MBS will drop its inventory in advance of the peak selling season in Q1. Accounts payable increased by $40.6 million, from $152 million to $192.7 million primarily related to the addition of MBS. Capital expenditures for the fourth quarter were $8.2 million compared with $13.1 million in the prior year area, and on a full-year basis was $34.7 million compared with $50.8 million last year. Now, turning to fiscal 2018 outlook, currently based upon contracts signed to date, BNC expects to open 23 stores in fiscal 2018, while closing 13 stores. Included in the closed stores are five locations where we will close a satellite location and continue to operate the main store, two stores with annual sales below $1 million, and six stores with average sales below $1.5 million. Annual sales associated with the new stores signed for fiscal 2018 is approximately $50 million, while sales associated with the 2018 store closings is $10 million. This results in $40 million in estimated annual sales for net new stores. MBS has to date signed 46 virtual contracts for an additional $8 million of estimated annual sales in 2018. For fiscal 2018, the company expects sales at BNC to be relatively flat, while BNC comparable store sales are expected to decline in the low-to-mid single-digit percentage point range year-over-year. In addition, the company expects consolidated sales to be in the range of $2.25 billion to $2.35 billion before intercompany eliminations. Capital expenditures are expected to be approximately $50 million, an increase from fiscal 2017 primarily due to the new store growth at BNC. With that, we will open the call for questions. Operator, please provide the instructions for those interested in asking a question.

Thank you. [Operator Instructions] And we'll hear from Mark Rosenkranz with Craig-Hallum Capital Group.

Hi, great. Thanks for taking my questions, guys. Starting off, now you've had nine weeks under the hood at MBS, just wondering if you could talk a little more on some of the inventory optimization and procurement savings you discussed in the last call, just where do you kind of see the opportunities throughout fiscal '18?

Sure. Thanks for your question, Mark. Good to talk to you again. Look, we've already started as a matter of fact at the end of the fiscal year to maximize the inventory by transferring excess inventory that we had at the college businesses into MBS to be liquidated. Patrick and his team and Dave have spent a tremendous amount of time going through the process of how we can best liquidate the inventories, and also achieve optimal purchasing. And it's in the early stages, and we expect it to be maximized throughout fiscal 2018, but has already started and helped us with this fiscal year. Patrick, you want to add anything on that?

Sure, Max. Mark, I couldn't be more happy with the way that the two management teams have blended and are working together. Everything has been extremely positive with their interactions as we expected it would be because of our long-term relationship as management teams. In addition to the inventory that Max spoke about, we're also focused on increased new business for both companies, expanding our product offerings across all of the different formats that we serve, as well as monetizing our customer base further. And we are looking to expand the use of the MBS warehouse and distribution center to benefit the Barnes & Noble College stores.

Okay, great, that's helpful. And then kind of switching gears to the general merchandise, how much would you say the products you've been seeing recently have been related to kind of changing consumer behavior versus some of the enrollment trends you've been seeing. And just kind of going forward into '18, how much comprises the mix in terms of your expectation.

Great question. I'll talk a little bit about our general sales trend. As you noticed, for the year we were $50 million down, without the community colleges it would've been $23 million. And for the first time since 2008, we had a decrease in general merchandise sales. And consequently that was $14 million. So our sales and profitability would've dramatically changed for the general merchandise if the general merchandisers remain stable. I believe it's a combination of, obviously, there are less students in higher ed, and that is a definite trend that is supported. What is also interested is the decrease in enrollments both in community colleges and many of the private schools and other schools are in full-time based students as opposed to part-time based. And that significantly affects the number of transactions at the register, along with the student possibly spending greater amount of time on the campus. So it is a level of traffic decrease, and there is clearly apathy by the consumer across all retail channels, general merchandise channels, both traditional stores and other formats, and in clothing and general merchandise. So it's a combination of both. It's hard to determine because our transactions obviously are down because of enrollments, but we're being very aggressive. Our web sales are continuing to grow. We have one of the best omni channels that exist. We are powering up our social media, our web programs, our marketing programs along with an optimization of SEM and SEO. So at the end of the day we are -- and we'll also be putting in a tremendous amount of events and promotions within the stores. We're not going to sit passively behind. One of the reasons for the guidance is we will react to this decrease, and we will promote and we will spend marketing dollars to regain that customer. And it is tied also to the enrollment issue. So we're not passively waiting for the consumer to come back.

Okay, great. That's really helpful. That's so much for your time.

Thank you. And we'll continue to Vahid Khorsand with BWS Financial.

Hi. First question on the general merchandise inventory line, so that is all -- the increase is all attributable to MBS?

Hi. Yes. When we're talking about our comp general merchandise sales, it's pure BNC. If your question is on the inventory levels on our balance sheet, the increase in inventory levels is entirely related to MBS, as the BNC stores actually experienced an inventory decrease.

Okay. And then you made several references to authentic textbooks, and I'm going to just assume that's related to what [indiscernible] was going through or is going through. With that said, in going back to your commentary on MBS and its relationship with publishers, wouldn't that in itself want publishers to sell more to MBS and then have MBS then fulfill more sales to universities and other schools?

Yes, it's a great question. We're not going to comment on any litigation of the industry or competitors or anything along that line. As you may have listened to a lot of the publishers' earnings calls they are maximizing their inventories. I think that's had a short-term effect on what they would sell to MBS. But absolutely, we believe that that is an opportunity to source from publishers, bring it back to the levels. But at the same time, we're reacting very rapidly to this decrease, and have other alternatives for sourcing.

Okay. And then related to that, did you know that publishers were reluctant to increase their sales or push sales to MBS before you acquired it?

No. No, this happens within the current season. And this is the inventory investment period for MBS. And each year it stands on its own, and the sources stand on their own, and at the end of the day next year we could have excess inventories from publishers and we may have no inventory from publishers. But the sourcing season was post transaction. We believe that that's -- I want to go back to the MBS. MBS had already been vital to our strategy. I think it's disappointing that the stock price has not reflected the MBS valuation in there, but the company needs a virtual solution. The company needs a lower cost of inventory acquisition, and MBS provides those. And as a matter of fact, in the contract managed bookstore industry there has never been a contract operator that didn't have a wholesale operation. And this really completes the portfolio, our competitors have it. And it has more advantages than just the sourcing of inventory in used books. It's a very strategic asset. And quite frankly I can honestly say we have not received the value we deserve on.

I wouldn't disagree with the undervaluation in the stock price [indiscernible]. One last question though, going forward, are you not going to provide EBITDA guidance or is that something you're just not going to do for right now?

Vahid, this is Barry. We will evaluate it on a quarter-by-quarter basis at this point in time as we go into our peak selling season with all of the changes in the industry, as Max talked to, we did not think it was appropriate to provide the guidance.

It's very hard to predict enrollments of 700 admission centers -- 769 admission sites throughout the United States. And given the apathy of the retail consumer, as I said, the first time since 2008 we've ever seen a decline -- we feel that the investment that we have to make in order to promote sales, the investment that we have to make in our digital businesses which is growing. And we really believe clearly now that the digital future is both content and analytics, and that's a combined process. And that will improve the outcomes as opposed to just traditional content. And we are fully entrenched in that business through LoudCloud and digital operations. So, given all of those factors, it really doesn't make sense, and compounded also is last year our guidance would have basically had $90 million, we wound up at $82.5. That's a very narrow range to be trying to predict given in the industry that had decreases in enrollments a level of retail question as to whether that side nationwide will turn around. So, basically we are not giving any guidance till we can stable it.

Okay, thank you.

Thank you. Our next question will come from Greg Pendy with Sidoti.

Hey, guys. Thanks for taking my call. I guess just two quick questions; one; if I'm not mistaken, this year again you are cycling sort of a later buying period. So is this becoming the new normal that we should be thinking about when we look out to 2018, where the business is becoming arguably a little bit less seasonal quarter-to-quarter as you start to see a later buying periods in both the spring and fall rush?

This is Barry. Our selling season for rush is really dependent on when the school reopens and goes back to class, whether it's the fall or post-Christmas period. So it's going to fall quarter-to-quarter between the second half and the first half. You kind of have to look at it six months and six months. And that's the best way -- that's the way we manage it, and you know, there is really no predictability as to how the sales will fall.

Okay, that's helpful. And then, I guess, just one follow-up, and I'm sorry if I missed it; I know you went into a lot of detail on the SG&A costs. If I'm not mistaken, the original guidance as you switched the lower costs LoudCloud platform was roughly about 12 million in savings alone, and as we look out to 2018, how shall we be thinking about that? Is that you know something that we're going to go and continue on that run rate, or do you think that the SG&A as possible other areas?

Well, we certainly have not. As we're not giving EBITDA guidance, we are not in a position to give S&A guidance either. The digital savings that we talked about last fiscal year of -- you know, we delivered a decrease in expenses this year of $11.2 million as a result of the restructuring. So we are proud of our ability to be able to deliver you know, as we had discussed, we will as -- we will be adding new stores that will increase our S&A, and we will continue to look at opportunities to better improve our cost structure and better leverage ourselves to be able to take more from the bottom line in this time of changing industry dynamics and lower comp sales.

Okay, that's helpful. Thanks a lot.

Thank you. [Operator Instructions] And with no additional questions in the queue, I'd like to turn the conference back over to Mr. Tom Donohue.

Thank you for joining us today. Please note that our next scheduled financial release will be our fiscal 2018 first quarter earnings and which should be on or about September 6th. Thank you very much.

Thank you, ladies and gentlemen. Again, that does conclude today's conference, thank you all again for your participation.