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Q4 2015 · Earnings Call Transcript

Mar 14, 2016

Executives

Cody Slach - Director, IR Mark Ritchie - President, Black Diamond Equipment Aaron Kuehne - CFO

Analysts

Camilo Lyon - Canaccord Genuity Jim Duffy - Stifel

Operator

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Black Diamond Inc's Financial Results for the Fourth Quarter and Full Year Ended December 31, 2015. Joining us today are Black Diamond Inc's CFO, Aaron Kuehne, Black Diamond's Equipment President, Mark Ritchie; and the company's Director of Investor Relations, Cody Slach.

Following the remarks, we will open the call for your questions. Before we go further, I would like to turn the call over to Mr.

Slach, as he reads the company's Safe Harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Cody, please go ahead.

Cody Slach

Thanks, Camille. Please note that during this conference call, the company may use words such as appears, anticipates, believes, plans, expects, intends, future and similar expressions, which constitute forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are made based on the company's expectations and beliefs concerning future events impacting the company, and therefore, involve a number of risks and uncertainties. The company cautions you that forward-looking statements are not guarantees and that actual result could differ materially from those expressed or implied in the forward-looking statements.

Potential risks and uncertainties that could cause the actual results of operations or financial condition of the company to differ materially from those expressed or implied by forward-looking statements used in this conference call include, but are not limited to, the overall level of consumer spending on the company's products; general economic conditions and other factors affecting consumer confidence, disruption and volatility in the global capital and credit markets, the financial strength of the company's customers, the company's ability to implement its reformation and growth strategy, including its ability to organically grow each of its historical product lines, the ability of the company to identify potential acquisition or investment opportunities as part of its redeployment and diversification strategy; the company's ability to successfully redeploy its capital into diversifying assets or that any such redeployment will result in the company's future profitability; the company's exposure to product liability or product warranty claims and other loss contingencies; the stability of the company's manufacturing facilities and foreign suppliers; the company's ability to protect patents, trademarks and other intellectual property rights; fluctuations in the price, availability and quality of raw materials and contracted products as well as foreign currency fluctuations; the company's ability to utilize its net operating loss carryforwards; and legal, regulatory, political and economic risks in international markets. More information on potential factors that could affect the company's financial results is included from time to time in the company's public reports filed with the Securities and Exchange Commission, including the company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K.

All forward-looking statements included in this conference call are based upon information available to the company as of the date of this conference call, and speak only as of the date hereof. The company assumes no obligation to update any forward-looking statements to reflect events or circumstances after the date of this conference call.

I would like to remind everyone this call will be available for replay through March 28, 2016, starting at 8:00 PM Eastern tonight. A webcast replay will also be available via the link provided in today's press release as well as on the company's Web site, at blackdiamond-inc.com.

Any redistribution, retransmission or rebroadcast of this call in any way without the expressed written consent of Black Diamond Inc., is strictly prohibited. Now, I would like to turn the call over to the President of Black Diamond Equipment, Mark Ritchie.

Mark?

Mark Ritchie

Thank you, Cody, and good afternoon everyone. My name is Mark Ritchie and on January 1, I formally assumed the role of President of the Black Diamond Equipment brand.

At the close of business today, Black Diamond Inc., released it's earnings for the fourth quarter and 12 months ended December 31, 2015. Following my opening remarks, our CFO, Aaron Kuehne will review the company's 2015 financial performance and its outlook for 2016.

Following Aaron's remarks, I will return to the call to provide some additional commentary and we will [give] [ph] time for a question-and-answer period. During the fourth quarter of 2015, Black Diamond Inc.

completed it's divestiture of POC and made the strategic decision to retain the Black Diamond Equipment and PIEPS brand and commit to a long-term holding company structure in which Black Diamond Equipment and PIEPS will remain core holding, while the Board seeks to redeploy a significant capital resources into diversifying assets. To illustrate its commitment, the Board asked me to initiate a reformation project at Black Diamond Equipment.

The reformation is expected to return the operating company to its historical 2011 operating margin with a long-term focus on and commitment to increased operating cash flow. Prior to the reformation the company's strategy was to use Black Diamond Equipment as its operating platform to acquire additional technical outdoor brand and to invest in sales growth to leverage that platform.

With the sale of Gregory Mountain products in 2014, the sale of POC in 2015 and now the completion of our transition service commitment, we began to eliminate platform function that had historically been staffed to provide centralized human resource, customer service, IT, supply chain and other administrative services to all of our brands. In late 2014, the company also began to repatriate its Chinese manufacturing functions to Salt Lake City.

We expect those repatriation of our Asian manufacturing platform and reaffirmation project to be complete in 2016 and we expect the brand to be well positioned to achieve its profitability and cash flow objective on a run rate basis excluding corporate cost and transitional growth margin variances related to foreign currency and the repartition of manufacturing some time in 2016. Thus far the reformation project seeks to achieve the following primary initiative.

Number one, significant cost reductions in North America and in Europe; number two, the relocation of our European headquarters from Basel, Switzerland to Innsbruck, Austria; and number three, a reorganization of our apparel strategy to achieve profitability at substantially lower sales target. I would now like to turn the call over to our CFO, Aaron Kuehne.

Aaron?

Aaron Kuehne

Thank you, Mark, and good afternoon everyone. The reported results we issued in today's press release are from continuing operations, which exclude the results of POC for both the three month and 12 months period ended December 31, 2015.

Sales in the fourth quarter of 2015 decreased 4% to $44.1 million compared to $46 million in the same year ago quarter. The decrease was driven by the weakening of foreign currencies against the U.S.

dollar and softer product volume in Japan. Due to the recent volatile foreign exchange markets, fourth quarter sales were negatively impacted by approximately 370 basis points or $1.7 million.

On a constant currency basis, Q4 sales were essentially unchanged at $45.8 million. Consolidated gross margin in the fourth quarter decreased 160 basis points to 33.5% compared to 35.1% in the same period last year.

Again, foreign exchange created the 245 basis headwind, so on a constant currency basis, gross margin improved by 90 basis points to 36% due to a favorable mix of higher margin products. Overall, our sales in gross margins are impacted by unfavorable foreign currency changes on a transactional basis.

The primary cost of our inventories denominated in U.S. dollars, while 42% of our global sales are denominated in foreign currencies primarily the euro, Canadian dollar, Swiss franc, British pound and Norwegian krone.

We attempt to manage our foreign currency risk on a continuous basis through natural hedges and foreign currency hedge contracts. Although, we have hedges in place for the different cash flows, denominated in foreign currencies, these hedges will never be a perfect offset to the actual currency moments especially with the currency volatility we've experienced in recent quarters.

These hedges also do not protect our financial statements from the translation impact we experienced from these weaker currencies. In our reported sales and gross margin, our hedges offset approximately $1.7 million of foreign currency exposure in the quarter and approximately $5.8 million for the year.

Fourth quarter SG&A, which excludes restructuring, merger and integration and transaction cost decreased 14% to $15 million due to the realignment of redundant operating platform resources that Mark described following the sales of Gregory and POC. During Q4, we incurred restructuring charges of $803,000 related to the repatriation of manufacturing activities from Asia to the U.S.

and the reformation of Black Diamond Equipment. We also incurred a $500,000 transaction fee to retain Rothschild Incorporated for systems with our capital deployment strategy.

Also, during the fourth quarter, we recorded a $29.5 million non-cash goodwill impairment charge after determining that the implied fair value of Black Diamond incorporates goodwill was lower than its current value. For purpose of this analysis under U.S.

GAAP, the implied fair value of the company is determined solely by the company's market capitalization as of December 31, 2015 plus a control premium. Adjusted net income from continuing operations which excludes these non-cash charges as well as restructuring and transaction costs increased to $600,000 or $0.02 per diluted share in the fourth quarter of 2015 compared to an adjusted net loss from continuing operations of $500,000 or a loss of $0.02 per diluted share in the fourth quarter of 2014.

During the fourth quarter, we repurchased approximately 1.6 million shares of our outstanding common stock and have repurchased an additional 360,000 shares of our outstanding common stock during the first two and a half months of 2016 for a total cost of approximately $8.6 million at an average price of $4.45 per share. As of today, $21.4 million remains on our $30 million stock repurchase program and we will continue to seek to accumulate shares on an opportunistic basis.

As a remainder, our common stock continues to be subject to a rights agreement that is intended to limit the number of 5% or more owners, and therefore, reduce the risk of a possible change of ownership in order to maximize the value of our NOLs. Any such changing of ownership under these rules would impair our existing and significant NOLs for federal income tax purposes.

As of December 31, 2015, our NOL balance was approximately $166 million. Cash and available for sale marketable securities at December 31, 2015, totaled $98.2 million or approximately $3 per share compared to $39.7 million one year ago.

Total debt was down -- total debt was $20.1 million which includes $20 million of 5% subordinated notes due in 2017 and $100,000 in foreign term notes compared to total debt of $18.6 million at December 31, 2014. For flexibility, we continue to maintain a $20 million revolving credit facility, which matures on April 1, 2017.

On March 11, we entered into an amendment to the revolving credit facility, which reduced our minimum net worth covenant required to be maintained for the year ending December 31, 2015 to $140 million with an annual increase of $2 million for each fiscal year thereafter. Our inventory balance decreased 9% during the last 12 months to $51.5 million as we indicated last quarter; we purposely carried higher levels of inventory through the first three quarters of 2015 to avoid disruption associated with the transition of our manufacturing activities from Asia to the U.S.

This transition is now complete and we have eliminated the safety stocks. At December 31, 2015, stockholders equity was $176 million were approximately $5.64 per share based on 31.2 million shares outstanding.

Looking ahead to 2016, we expect sales on a reported basis to be approximately $145 million to $150 million compared to $155.3 million in 2015. On a constant currency basis, however, we expect sales to increase slightly to approximately $155 million to $160 million.

We expect gross margin in fiscal 2016 on a reported basis to be between 32.5% and 33.5% compared to 34.9% in 2015. On a constant currency basis, we expect gross margin to increase between 90 and 190 basis points to be between 35.8% and 36.8%.

We expect SG&A in 2016 to be around $49 million, which is a decrease of $9.5 million or 16.2% from 2015. This cost reduction reflects the work that Mark Ritchie and the team are doing to seek to reform our cost structure to eliminate operating platform costs and to achieve operating margin targets prior to corporate overhead.

The $49 million includes approximately $4 million of cash, corporate overhead expenditures. Our guidance assumes that euro to be at 108 and reflects our expectations for significant headwinds from foreign exchange in 2016.

Pressure in both reported dollars sales and margins versus the prior period. During 2016, we anticipate $3 million to $4 million of total cash and non-cash restructuring charges related to the elimination of operating platform cost in Europe and North America as well as the cost associated with moving our European headquarters from Basel, Switzerland to Innsbruck, Austria.

The move to Innsbruck alone is expected to reduce operating cost by approximately $2.2 million on an normalized basis in 2016 compared to 2015. We expect our inventory levels to decrease by approximately $5 million during 2016 with the remaining non-cash working capital components being consistent with that of 2015.

We are forecasting capital expenditures of $2.5 million during 2016. During 2016, we expect to generate free cash flows of around $5 million before corporate cost and related activities.

We expect the combined EBITDA margins for the Black Diamond Equipment and PIEPS brands to be approaching our target of 10% by 2017. However, this excludes transitional gross margin variances related to one, the continued ramp-up and optimization of our in-house manufacturing activities which have a direct impact on the gross margins of our internally manufactured goods; and two, better foreign exchange stability.

We believe that through the reformation project, our cost structure will be appropriately aligned in supporting this target. At this point in time, it is too early to provide any specific guidance or details around the redeployment of our capital.

We continue to believe that at the appropriate time, we will acquire high-quality, durable, cash flow producing assets with expected enterprise values in the range of $250 million and $500 million. We expect to invest in assets unrelated to outdoor equipment in order to diversify our business and as noted earlier, we have retained the global investment bank Rothschild to assist us in our search.

This concludes my prepared remarks. Now, I'll turn the call back over to Mark.

Mark?

Mark Ritchie

Thanks Aaron. Before opening the call for questions, I would like to share a little more with you about our reformation efforts primarily in Europe and with apparel.

We started with the following strategic objectives. To solidify Black Diamond as the number one climbing company globally to sell more of our core products deeper into existing channels, to create new channels for longer term growth, to grow our eCommerce business globally and to return the brand to its 2011 cost structure.

Towards these objectives, as Aaron mentioned, we have already eliminated significant SG&A both in North America and in Europe and we expect our European business to be fully relocated in Innsbruck in May of this year. We expect to move to Innsbruck to reduce cost, alleviate complexity and reduce structural risk.

Moving our headquarters from the Swiss franc denominated city of Basel to the euro denominated city of Innsbruck better aligned our euro sales with our euro cost creating more of a natural hedge in our P&L. We also estimate Innsbruck cost of doing business is roughly 30% less than Basel.

Today, we are building out the office and actively hiring and with the Innsbruck as a real asset to our brand, a great new home for the brand and for employees who will now have immediate access to the mountains in summer and winter similar to our global headquarters in Salt Lake City. To help drive these efforts, we relocated our North American brand leader Tim Bantle to be the Managing Director of our European operations and we expect him to more tightly align our European headquarters with our corporate headquarters in Salt Lake City.

In spite of the office transition, Tim has already reorganized European sales management around account types, differentiating strategic accounts from regional key accounts from specialty retail. We have also soft-launched eCommerce to test demand and fulfill from global inventory.

In Europe, 2016 starts with various new product introduction. Our spring summer line is a comprehensive update of climbing hard goods supported from Salt Lake City facility of the operation.

Our lighting and trekking products remain market leading and we have an ongoing effort to develop our gym climbing business in a new dynamic and exciting distribution channel. As this channel develops over the quarters ahead, we will tell you more about it.

Outside of Europe, Black Diamond has relationships with approximately 30 independent global distributors, which extents our reach into many important and developing international markets. We continue to seek expansion in our international reach but the most important focus remains on the largest and most established market such as Japan, China, Korea, Australia and New Zealand.

We have been faced with headwinds due to the U.S. dollar currency strength that is making our products more expensive in these local markets.

Our 2015 financial results and our 2016 guidance reflects these headwinds with the weakest market being Japan, Australia, Russia, Ukraine and Taiwan. Specifically in Japan, the country is experiencing both consolidation and stabilization after a three year growth spurt.

Weaker yen and changes in duty rates are also hampering consumer spending. Our apparel business is also an integral part of restructuring Black Diamond Equipment to achieve historical operating margin.

As many of you know, we launched apparel globally in the fall of 2013 with a bold objective to achieve $250 million in revenue by the end of 2020. Given the company's latest objectives to grow organically and profitably as well as achieve 2011 operating margin, the apparel business has been reorganized to achieve industry appropriate margin.

To be clear, however, we remain absolutely committed to our apparel business as we recalibrate the line and the resources toward more humble objective. To do so, we have naturally scaled background investment in development level staff and certain marketing initiatives that were in place when apparels formed the center of our universe.

This includes certain style and SKU reduction. For example, our 2015, line encompassed approximately 290 styles and over 3000 SKUs.

For 2016, we expect to reduce line to around 200 styles and approximately 2400 SKUs. At the same time, we are also focused on broadening the accessibility of the line.

This includes improving the fit and more approachable pricing on selective styles. In mid-November, we expanded our global footprint of our direct to consumer business enabling access in the U.K., Germany and Sweden.

This was a soft launch and precursor to an expected full European launch. We also implemented several new email solutions starting Web site cart abandonment and back in stock email capabilities.

Mobile visitation was up 19% and attributable sales up 49% versus the same period last year. Our focus for 2016 in our direct to consumer business is to expand further into Europe and we expect to add an additional 10-plus countries in the second quarter.

On the online marketing front in the second quarter, we will expand our email solutions providing greater insight into customer needs and our ability to market to them. On the mobile front, we expect the continued progression of our mobile experience to deliver our customers the ability to shop, interact and experience the BD brand and product.

Before we open the call for your questions, I'd like to highlight our recent new product award, a few of them coming out of the Auto Retailer and Expo shows included. The Outside Magazine gear of the show award for the Helio fixed length ski poles.

The gearjunky.com best in show award and the gearinstitute.com best new gear for the Helio fixed length ski pole. The gearinstitute.com best new gear for the Micro Avalanche Beacon, the Climbing Magazine Editor's choice for the Sabretooth Crampon; the Climbing Magazine Editor's choice for the Camalot Ultralight and the manual.com best in show for the Micro Avalanche Beacon.

With that, I'd now like to turn the call back over to Camille for questions and answers.

Operator

Thank you, sir. [Operator Instructions] And our first question comes from Camilo Lyon with Canaccord Genuity.

Please proceed.

Camilo Lyon

Thank you. Good morning, gentlemen.

I was hoping you could give us a little bit more detail on -- what is the apparel piece look like going forward, now, that there has been some more conservative assumptions baked into the plan. And how do you see, what kind of growth is needed to get back to the 2011 EBIT margins in -- on the apparel business.

And then, some of the early, does that imply that you are just looking for more stable levels of demand in the equipment piece on Black Diamond, and was there also an embedded growth function for that piece of the business as well?

Mark Ritchie

Okay. So there were a lot of pieces to that.

I will do my best here. To reaffirm the primary concept, we remain fully committed to the apparel initiative.

Obviously, as we've discussed previously, we've invested heavily, we've learned a lot and we've recalibrated our revenue expectations around the idea organically and profitably growing this important product category. What we are doing is distilling the product line down to the essential pieces that are aimed at the peer Black Diamond customer, climbers and backcountry skiers along with the emerging gym climber.

So we are making the line more accessible from both a pricing and fit perspective and we are driving the business forward along a more natural rhythm. The goal was to have fewer key items that offer best in class value as we've done with products like the Momentum Harness and the spot headlamp so try to mimic those sorts of product placements.

Though we are still committed to Helio innovative product, we recognize need for sharper price points to drive sales. So the key takeaway here is that we remain committed to apparel.

Would like to comment on EBITDA and margin?

Aaron Kuehne

You bet. So, Camilo, as part of the reformation process that included the scaling back of our apparel initiative to be inline with what Mark just articulated.

So, as we think about the overall profitability target of 10% for the combined brands of Black Diamond and PIEPS on a go forward basis, we believe that we have the appropriate operating model or cost structure in place whereby the primary focus for us relies on two remaining factors both of which actually impact gross margins and that is that of optimizing our in-house manufacturing activities getting that ramped up and having our in-house products that are manufactured which represent about 20% to 25% of our business producing the gross margins that we anticipate or expect as a result of the manufacturing repatriation as well as a more stable foreign currency environment, if you will. We were not actively managing our foreign currency exposure per se during the exploration strategic alternative process for obvious reasons, but we have been actively managing that process and addressing that process over the last several months.

And as we continue to evolve the organization through the reformation process in 2016 and start to experience hopefully a more stable environment when it comes to foreign currency, we do believe that we will be able to start to move towards -- more quickly towards that 10% EBITDA target. However, it does not necessarily pin itself on, how big or little, the apparel initiative is.

Camilo Lyon

Okay. And then, Aaron maybe if you could just help us understand a little bit more granularly with respect to the cadence of SG&A as the year progresses.

It sounds like there are some timing -- there is some distinct timing differences that will influence how that unfolds?

Aaron Kuehne

Most of the timing will actually relate around the restructuring charges that we outlined at $3 million to $4 million. We've been working on the reformation process which we outlined during our Q3 call for the last several months.

And so, we put a lot of this in the motion. And so, we do believe that for the most part we will have a nice rhythm to how we go about achieving these targets as it relates to SG&A.

Now, obviously, there will be the typical seasonal trends that it will follow which if you look at 2015, that will provide you get indications or processes to how we expect that to roll out. That really will be around the restructuring activities as far as the different timing components.

Camilo Lyon

Okay. And then, I guess finishing upon the apparel fees.

Will it be enough to what began this transition last year? Big focus was improving the retail presentation and having a more robust direct to consumer piece.

It sounds like there is more movement on the eCommerce portion of the direct to consumer. Is there a fundamental change in how you are viewing your presentation at retail with respect to either partners or you partnering with and/or how you're viewing the presentation of the actual product at retail, so that there is a better -- a more sort of definitive embracement of the brand?

Mark Ritchie

I believe my answer is that we continue to focus on trying to optimize how we appear at retail. We are -- and as you point out, we are pushing a lot on eCommerce and direct to consumer.

We are doing a lot with point of purchase fixturing in order to enhance how the product is displayed with our closest retail partners. And we do expect that that will help to differentiate the product in the market as we move forward.

But, what we are seeking to do is, is to recognize where this product can really be sold. We are closely with that retail customer and begin to push the product through channels where we know it can be successful.

Camilo Lyon

So that means, that there is a change in the number of wholesale partners whether up or down that you will be partnering with apparel?

Mark Ritchie

I don't believe that there is any fundamental change that desires to simply focus and target the product better at what we are seeking to do, so that we can drive sale through and improve the position of the brand going forward.

Camilo Lyon

Okay. So improve productivity of existing tourists basically?

Mark Ritchie

Yes.

Camilo Lyon

Okay. Great.

I will turn over the questions to someone else. Thanks very much guys.

Good luck.

Cody Slach

Thanks Camilo.

Operator

[Operator Instructions] And our next question comes from Jim Duffy with Stifel.

Jim Duffy

Thanks. Hi, Mark and Aaron.

Hope you guys are doing well? Aaron, I've a couple of questions looking for more clarity around the 10% EBITDA margin objective.

You had mentioned excluded overhead cost, how much of those overhead cost, just explain a little bit about what those overhead costs are associated with, is that the Connecticut offices expense?

Aaron Kuehne

No. So what those relate toward the corporate overhead cost or the cost associated with being publicly traded or non-directly attributable to the operations of Black Diamond and PIEPS.

Jim Duffy

Okay. What's the number?

Aaron Kuehne

Approximately $4 million of cash charges.

Jim Duffy

Okay. And then, what is the D&A assumptions in that?

Aaron Kuehne

Yes. So for 2016, our D&A assumption is right around $3.5 million.

Jim Duffy

Okay. And that's a good run rate for 2017, assuming that's going to expand?

Aaron Kuehne

Right now the that we are approaching the business from a CapEx and a D&A perspective is more of a maintenance, obviously, we are making investments in new tooling and other parts of the business that continue to further our innovation and our overall operations. However, we are not expecting significant CapEx assumptions into the outgoing years.

And so, the $2.5 million number that I provided as far as the 2016 guidance is a number that continue to utilize same with the D&A assumption.

Jim Duffy

Okay. Very good.

And then, the point you made around lower currency volatility in the gross margin maybe I'm slow on the uptake here. But, can you explain that in more detail, does that assume some recovery in currencies to get you back to some historical gross margin or does it relate to pricing action, hedge contracts, help me think through that?

Aaron Kuehne

Yes. It's the latter.

And so, obviously, if we were to start to see a little bit of retraction or strengthening of the foreign currencies that would help us out. But, the way that we are thinking about is that, we are obviously in a volatile marketplace right now.

And, in order to help stabilize some of that, we are actively managing our foreign currency contracts to mitigate some of this exposure. So that will obviously, start to benefit us as we head into 2017 as being able to more actively manage that versus where we were in 2015 coming into 2016.

But then also, it does relate to pricing opportunities as well. We recognized that out there in the marketplace foreign currency is having an impact.

It is making our product more expensive, and so we need to be sensitive to that on a global basis. However, we will continue to -- we evaluate this process on a continuous basis and we will continue to do so.

And where we believe that there are certain opportunities whether that be geographically or via the different product categories where we can be opportunistic. We will do so.

But, we are obviously, sensitive to that component.

Jim Duffy

Got you. That's helpful.

And then, final question. Can you just share some of the thought process on share repurchases versus the use of cash for acquisitions?

Aaron Kuehne

Yes. So we will continue to be active in the marketplace and continue to be opportunistic with our repurchases.

However, the primary focus is around the redeployment strategy as we believe that is the greatest opportunity in terms of shareholder value in the maximization of our NOLs. And so, yes, we will continue to be active, we will be opportunistic.

We have been. Also please keep in mind though that we are limited just to the amount that we can repurchase on a daily basis.

And so we will just continue to manage through the process. But obviously, once again, our focus is on redeploying the assets into redeploying the capital into diversifying assets.

Jim Duffy

Great. Thanks for that.

Aaron Kuehne

Appreciate it.

Operator

At this time, this concludes our question-and-answer session. I'd now like to turn the call back over to Mr.

Ritchie for closing remarks.

Mark Ritchie

We like to thank everyone for listening to today's call. And we look forward to speaking with you when we report our first quarter results, which we expect in early May of 2016.

Thanks again for joining us.

Operator

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time.

And thank you for your participation.

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