Mar 10, 2016
Executives
Dan Rykhus - President and CEO Steven Brazones - VP and CFO
Analysts
Ben Hearnsberger - Stephens Inc. Andrea James - Dougherty & Company
Operator
Good morning and welcome to the Raven Industries' Fiscal Fourth Quarter 2016 Investor Conference Call. Today's call is being webcast live and will also be archived on the company's website for future listening.
On the call today will be Dan Rykhus, Raven's President and Chief Executive Officer; and Steven Brazones, Raven's Vice President and Chief Financial Officer. Before beginning, the company would like to inform everyone that certain matters discussed during this call will include forward-looking statements as that term is defined under the Private Securities Litigation Reform Act of 1995.
Since such statements reflect the company's current expectations, actual results may differ. In addition, during today's conference call, the company will be discussing certain non-GAAP financial measures, specifically net sales excluding contract manufacturing sales, adjusted operating income, adjusted net income and adjusted earnings per share.
All of the non-GAAP measures discussed today should not be construed as an alternative to the reported results determined in accordance with GAAP. Management believes that a discussion of these measures is useful to investors, because it assists in understanding the underlying operating performance of the company and its operating segments.
The non-GAAP information discussed today may not be consistent with the methodologies used by other companies. All non-GAAP information is reconciled with the reported GAAP results in the company's earnings release.
I would now like to turn the call over to Dan Rykhus, Raven's President and Chief Executive Officer.
Dan Rykhus
Thank you, Christie, and welcome everyone. As anticipated the fourth quarter was a very challenging quarter for the company.
Our fourth quarter is traditionally our lowest quarter for sales. The underlying market fundamentals also continued to deteriorate and the sales and profits of each of our divisions declined significantly versus the previous year.
Despite actions during the year to reduce our cost structure, significantly lower sales volume and the resulting loss of fixed cost leverage drove our profits down markedly. Although disappointed in our results, we did make progress in several areas.
Let me touch on a few of those right now. First, we delivered on our restructuring plan for the year to reduce costs.
The plan we executed in March together with our ongoing efforts to control costs, drove expenses down significantly. Corporate expenses were down $2.2 million in the fourth quarter and $4.6 million for the full year.
Selling expenses were down $1.8 million in the fourth quarter and $4.8 million for the full year and R&D expenses, while up slightly in the fourth quarter, were down $2.8 million for the full year. In total SG&A expenses were driven down more than $12 million in fiscal year 2016.
I am proud of how the organization has shown great resolve to control spending in this challenging environment. Second, we continue to manage our balance sheet and preserve the cash profile of the company.
We're addressing our excess working capital situation and driving inventory levels down in both Applied Technology and Engineered Films. These two divisions have done a very good job in reducing inventory levels over the last few quarters and together drove consolidated inventories down nearly $3 million versus the previous quarter.
They still have work to do but their actions in managing working capital levels and driving down capital expenditures in the fourth quarter resulted in positive cash flow generation, despite the substantial decline in net income. Lastly and probably most importantly, we saw continued sequential improvement in the sales development for Applied Technology.
Through our continued focus on new product development efforts and having addressed past quality issues in Latin America, we're gaining meaningful traction in the marketplace. While sales are still declining year-over-year and end market conditions are not expected to improve much this year, momentum is starting to sway in our favor and this gives us encouragement.
I will now discuss the results of the fourth quarter in more detail, division by division and then turn the call back over to Steven for a review of the financial statements. Beginning with Engineered Films, the division experienced a significant decline in sales in the fourth quarter, principally driven by declines in the energy and geomembrane markets.
Energy related sales declined by $15.5 million from $17.7 million in the fourth quarter of last year, a decline of nearly 90%, while sales into the geomembrane market were down nearly 20% year-over-year. Both the energy and geomembrane markets are heavily influenced by commodity oil prices and were negatively impacted by lower end market demand in the fourth quarter.
Cost reduction efforts in the division are ongoing and will continue until we ramp-up production volumes. Full year operating margins for the division was up 70 basis points versus fiscal year 2015, despite energy-related sales being down nearly $50 million year-over-year.
Our intense focus on value engineering and operational discipline generated significant gross margin gains throughout the year that offsets the negative leverage impact of the volume reduction. This was a great accomplishment by this team.
Although the energy market will be even more challenging this next fiscal year we are intensely focus on driving growth in our other markets by capitalizing on our new production capacity and acquired fabrication capabilities. We expect these efforts to lead to market share gain and profit margin expansion as volumes growth.
With respect to Applied Technology, momentum is building and we're encouraged by our pipeline of new business. As I highlighted earlier, the sequential year-over-year quarterly sales development continued to improve for the division in the fourth quarter.
The largest decline in division sales during fiscal year 2016 occurred in the second quarter when sales declined approximately 42% year-over-year. Subsequent quarters improved, with the third quarter declining approximately 33% and the fourth quarter declining 26%.
Unfortunately we are still declining and our goal is growth, but we're encouraged by the trends and the pipeline of new business being developed. We expect these efforts will result in incremental new sales and the trend of sequential improvement will continue as we progress through fiscal year '17.
From an international standpoint we are very pleased with the sales development in the fourth quarter. International sales were up approximately 46% over last year, compared to domestic sales which were down approximately 36%.
International sales growth was driven by strong organic sales in Europe and stabilized performance in Latin America. In the fourth quarter of last year, the division sales in Latin America were adversely impacted by approximately $700,000 as a result of product quality returns.
We have since addressed these quality issues and have stabilized the situation in this important region. Adjusting for the prior-year product returns, international sales were up about 19% year-over-year.
We are still facing very challenging end market conditions but we're encouraged by the progress we're beginning to make. We have a lot of opportunities for growth in market share expansion.
First, OEM interest in our new product portfolio is very strong and building momentum each month, particularly for our Hawkeye nozzle control system. Total sales from Hawkeye were just under $2 million in fiscal year 2016 and we expect sales of this system to climb substantially in fiscal year '17.
In addition we're seeing constant developments in the international markets we serve, particularly in Europe. We're also continuing to invest for growth.
An example of this, is the recent minority investment we made in AgEagle, a leader in UAS technology for agriculture providing aerial data acquisition capabilities to Ag service providers and growers. In conjunction with this investment we entered into an exclusive distribution agreement with AgEagle to provide unmanned aerial systems to our customers.
The AgEagle product offering becomes part of an integrated solution in which data will be delivered seamlessly through our Slingshot wireless communication systems to and from software providers, such as the industry-leading SFT platform for data analysis and the creation of unique crop management prescriptions. These prescriptions can then be executed Viper field computers to drive both higher yields and reduced input costs.
We have many reasons to be cautiously optimistic for fiscal year '17 and we are, but at the same time that optimism is somewhat tempered due to the challenging end market conditions we will face. Now let me turn to Aerostar.
This was a disappointing year for Aerostar driven largely by the poor results of Vista Research. We had expected Vista to continue its strong growth patterns and achieve success in winning a large international pursuit this year.
Unfortunately instead of another step forward, the business took a big step back. We initiated swift changes in leadership in the third quarter to address the lack of execution and enhanced the collaborative efforts to grow Vista.
We also have structured the business to reduce its operating expense profile and bring it more in line with its lower level of sales. While it is still early, we are pleased with the progress the new leadership team is making.
The team is expanding their new business development efforts in building a much more robust pipeline of new business opportunities to pursue. Our balancing efforts between U.S.
defense contracts and international opportunities focus on our core technology, we believe the team is in a much stronger position to successfully grow this business moving forward but it will take time. Regarding Project Loon, the ramp in production continues to take longer than we planned but we're encouraged with the continued progress of the program and our continued advancement in stratospheric technology.
Success with Loon would lead to accelerated growth for Aerostar and significantly higher balloon volumes in future years. In the meantime, we will continue to improve our balloon design and capabilities to provide the project every opportunity for success.
The progress we have demonstrated with balloon endurance and capabilities has already provided other new opportunities for stratospheric balloon applications, well beyond the work we've done with NASA and Google. While this segment of the business is relatively small, it is stable and profitable and has significant upside.
Fiscal 2017 is a critical year for the division, no question about it. We are currently performing at an operating loss and this is not something we're willing to sustain in the intermediate to long-term.
Actions were taken to drive sales growth, particularly within Vista Research must begin to bear fruit this fiscal year. The division must return to profitability and meaningfully contribute to the overall performance of the company to meet the expectations we have for our operating divisions.
The new leadership team is acting with a great sense of urgency to improve the performance of the business. Based on what we're seeing so far, we are optimistic the team will deliver tangible results this fiscal year and restore Aerostar to a profitable and growing division once again.
With that, I will turn the call over to Steven.
Steven Brazones
Thanks, Dan. On a consolidated basis, sales were $52.8 million in the fourth quarter, down 41.2% versus a year ago.
Excluding sales from contract manufacturing activities, sales were down 36.4% versus the fourth quarter of last year. Operating income for the fourth quarter of 2016 was $0.2 million down $6.2 million versus the fourth quarter of '15.
Operating margins of 0.3% down 680 basis points year-over-year. Significantly lower sales volumes drove the reduction in operating income year-over-year.
The lack of fixed cost leverage significantly impacted operating margins in the fourth quarter. Fourth quarter net income was $1 million or $0.03 per diluted share.
Fourth quarter benefited by approximately $900,000 from the timing of U.S. tax legislation related to the research and development tax credit.
As a result, the effective tax rate for the fourth quarter of fiscal 2016 was 20.6%. For fiscal year 2017 the company expects an effective tax rate of approximately 30%.
On a divisional basis, net sales for Engineered Films were $25.4 million down $15.4 million or 37.8% versus the fourth quarter of 2015. The decline in sales for the division was driven largely by the significant decline in both energy and geomembrane market sales.
These markets were off approximately 90% and 20% respectively versus the fourth quarter of last year. Both are heavily influenced by developments in the oil market.
Sales into the agriculture, construction and industrial markets in aggregate were up 3.9% year-over-year, but only partially offset the declines in energy and geomembrane. Division operating income for Engineered Films was $1.9 million in the fourth quarter of 2016, a decrease of $2.7 million or 58.8% year-over-year.
Division operating margin was 7.5% in this year's fourth quarter down 380 basis points versus the fourth quarter of last year. Significantly lower volumes drove capacity utilizations, markedly lower relative to both the third quarter of this year and the fourth quarter of last year.
The fourth quarter represents a trough of sales activity for the division. The declines in both energy and geomembrane related sales exacerbated the seasonal situation in the fourth quarter and put significant pressure on profit margins.
Although raw material cost development, reformulation efforts, cost controls and pricing discipline continue to benefit the division, these were not enough to offset the impact from lower volumes in the fourth quarter. For Applied Technology fourth quarter sales were $18.4 million down $8.1 million or 30.3% year-over-year, excluding contract manufacturing activities sales for the division were $18.4 million down 26.1% year-over-year.
Sales to OEMs declined by approximately 33% while sales into the aftermarket declined by 21%. Both represent sequential improvements versus the previous quarter although we expect the aftermarket to continue to outperform the OEM channels, both are expected to improve throughout the next fiscal year.
Division operating income for Applied Technology was $2.2 million down $1.2 million or 34.7% year-over-year. The significant declines in sales volume as a result of the challenging end market conditions together with sustained R&D spending principally drove the decline in profits year-over-year.
Division operating margin was 12.1% down 80 basis points year-over-year and 340 basis points sequentially. Restructuring savings and ongoing cost controls, outside of research and development have reduced spending levels but were not enough to offset the impact of lower volumes.
For Aerostar fourth quarter sales were $9 million down $15.6 million or 63.3% year-over-year. Excluding contract manufacturing activities, sales for the division were $8 million in this year's fourth quarter down $7.8 million or 49.1% year-over-year.
The decline in proprietary sales was driven by a significant decline in Vista Research sales which were down $6.4 million year-over-year. Stratospheric balloon sales were flat versus the fourth quarter of last year, while Aerostar sales were down year-over-year in the fourth quarter due to the timing of orders.
Division operating income for Aerostar was a loss of $200,000 versus operating income of $4.3 million in the fourth quarter of 2015. The significant decline in Vista Research sales year-over-year principally drove the decline in division profits.
Turning to the balance sheet we ended the fourth quarter with $33.8 million in cash up slightly versus the previous quarter. Cash flow from operations was $8.8 million in the fourth quarter of 2016 down $5.6 million versus the fourth quarter of 2015.
Increasing cash flow was primarily driven by lower net income. Capital expenditures were $2.3 million in this year's fourth quarter down $2 million versus the fourth quarter of last year.
Capital expenditures for fiscal year 2016 totaled $13 million versus $17 million in last fiscal year. For fiscal year 2017 we expect capital expenditures to be approximately $9 million.
With that I would like to turn the call back to Dan for our outlook going forward.
Dan Rykhus
Thanks, Steven. As we begin fiscal year 2017, the markets served by our core businesses remain very challenging.
The agriculture equipment market is expected to decline for the third straight year. Energy markets are enduring multi-decade lows and defense spending my governments continue to be curtailed or delayed.
This is not the ideal backdrop for a business with our end market exposures. With that said, we're much better positioned to deal with these challenges as a result of the actions we took in fiscal year 2016 to preserve our core business.
We executed a restructuring plan to reduce expenses on an annualized basis by more than $13 million. We heightened our divisional focus on net working capital management and aggressively reduced inventory levels.
We prudently reduced our capital expenditure profile to better reflect the market conditions we face. We executed leadership changes within both Applied Technology and Aerostar to drive enhanced accountability.
We launched our Hawkeye, our next generation application control system. We have addresses the quality challenges we faced in Latin America and reengaged customers to begin rebuilding our market share in this key region.
We continue to fund and preserve our research and development capabilities to continue our track record of introducing new and innovative solutions to the market to drive future growth. Despite a very difficult year, I am proud of the organization's resolve to deal with these challenges head-on, manage the key variables we can directly control and focus on finding opportunities to grow in a down market.
Today we remain focused on protecting and optimizing our core businesses, particularly in Applied Technology and Engineered Films. We have deep product talent and customer relationship strength in these core businesses that are defensible and offer good growth opportunities as conditions improve.
We're actively strengthening our businesses during this season by focusing on customer relationships, long-term quality improvements, working capital efficiency and key investments in R&D that fortify and expand our core product lines. Our long-term standing strategy to serve growing niche markets with innovative technology continues today.
We set our businesses apart by delivering quality, service and innovation substantially superior to our competition. We're looking now to bolster our organic growth prospects in ATD with acquisitions that support our technology strategy and improve our reach to key Ag markets around the world.
We continue to diversify within EFD by realizing sales growth in non-energy market segments, leveraging the recent investments in the division. We believe we have a number of strong opportunities in front of us to drive market share gains in fiscal year 2017.
Momentum is building within Applied Technology. New production capabilities are online in Engineered Films to grow sales into the industrial market.
And we have new invigorated leadership in Aerostar focusing on turning around Vista Research and advancing Project Loon. We're cautiously optimistic that the sequential year-over-year sales comparisons will continue to improve as we progress through the year.
We expect to maintain flat sales and adjusted operating income in fiscal year 2017 with potential to achieve very modest growth in each. With that I'd like to open up the call for questions.
Operator
Ladies and gentlemen [Operator Instructions]. Our first question comes from the line of Ben Hearnsberger of Stephens Inc.
Your line is open.
Ben Hearnsberger
Thanks for taking my question. I wanted to start with the guide.
Clearly your end markets are facing significant headwinds. I guess maybe what gives you confidence that you can at least hold sales flat in the out year?
Maybe it's best to look at it on a segment-by-segment basis.
Dan Rykhus
Sure. I will take that.
Thanks, Ben. So we look at ATD first and that starts with an assessment of what we think the market is going to do and we are expecting at least a 10% decline in what the market will give us.
And we see that we can offset that or make progress towards offsetting that with our Hawkeye sales, with the long-term agreements that we have put in place with our OEM customers, with the success that we've seen internationally in Europe and with some recovery in Latin America. We think that there is a chance that that we believe that those things will offset this underlying market decline.
As we look at Engineered Films we have taken such a decline in our energy market that quite frankly there's not a lot for to go there. We are not expecting that market to improve for us this year and we do expect based on the results that we are already seeing in the fourth quarter and into the first quarter that our industrial market sales as a result of our new line 14 will have the momentum and delivers the result that we need in Engineered Films division.
But I want to be clear, it's a tough -- that's a tough business. Engineered Films, it's a very tough business.
We serve a lot of different market segments and each one of them is full of competitors and many of the competitors are scrambling to build their capacity as well. So it's absolutely critical that we leverage the strength that we have in value engineering and be disciplined in the way we buy resin, disciplined in how we price and to the extent we will continue to do those things.
We believe that we can be competitive and that we can hold up margins, but we have got to get the volumes and we think we can do that based on successes that we are having outside of the energy market. With Aerostar, it's a year where we need to restore Vista.
We have taken the actions that I outlined on the call earlier to do that and we will continue to operate at a loss in the first quarter, but we believe that we will be able to outperform our budget and outperform last year. But we have got to make progress each quarter in Aerostar and we believe that we can based on the stratospheric balloon opportunities that we are generating not only with Google but beyond Google as well.
So those are the ways that I see us getting to a flat performance year-on-year. Just a few other notes, I mean, we are anniversarying this effort that we have had ongoing for four years now to get out of the contract manufacturing businesses and we are down to not having year-on-year comparisons that involve nonstrategic elements of our business.
Ben Hearnsberger
Okay. That's helpful.
So it sounds like, in each segment, the expectation is to hold sales or try to hold sales flattish. It's not one segment pulling more weight.
Dan Rykhus
No. I wouldn't say that one segment is going to save the day.
But we are a mixed business and it's the second month of our fiscal year. So if you look at our history, our history looks that just the one -- usually one division does carry the water.
We are not managing or expecting that out of the company right now. I would say though, we have despite the tough Ag market conditions the momentum that we are realizing within the business in the first quarter so far is mostly in ATD and that's encouraging, because I'd remind you while EFD has their work really hard and disciplined to grind out margin improvements, they are just fantastic at that and as far we can hold up there.
In ATD we get a huge leverage impact on the way up and the way down and we saw that in the past and as we start to gain from the sales momentum in ATD we should see some margin improvements and that I expect to see that because I have been in that business for 24 years, so I have learned the ups and the downs there.
Ben Hearnsberger
I'm assuming you are experiencing more momentum in the aftermarket piece of that business. Is that right?
Dan Rykhus
It's really both. We are doing some things in the aftermarket that are generating some improvement.
But -- and I know that's a -- most of the people in our Ag technology sector are doing and saying it's all about the aftermarket because again the volumes are down. But we have strong OEM relationships and that has been -- on the short-term that OEM business was down around 40% I believe in Q4 maybe a little less than that.
That hurts, that hurts. In fact we are committed to those OEM relationships for the long-term and we keep developing new OEM relationships.
The Hawkeye introduction is just critical to us and that's gotten us back with some OEMs that we have lost. A couple come to mind but it's also opened doors in other international markets to OEMs that we haven't had access to in the past as well as domestically.
So we are working all fronts Ben. I think that market would give us a little more access into the aftermarket for easier growth but we have not at all taken our foot off of the gas pedal with the OEMs.
Ben Hearnsberger
Okay. Maybe shifting to Engineered Films, I know 4Q is a seasonally soft quarter, or I think the softest for this segment.
But it was down greater than normal seasonality on a sequential basis. Energy in 3Q I think was less than 10% of sales, so it wasn't clearly driven that much by energy.
What else is at play driving the almost $12 million sequential decline in Engineered Films?
Steven Brazones
Yes, Ben this is Steven. So when you look at Engineered Films, we had energy down about 90%, geomembrane down 20%, industrial was down slightly as well during the fourth quarter with Ag and construction up.
From a margin perspective, the margin profile of 7.5% was a lot lower than we had seen in the third quarter and same quarter last year and a lot of that's being driven by the significantly lower volumes, being in the mid-20s for revenue in the fourth quarter versus a mid-30s significantly puts our margin under pressure.
Ben Hearnsberger
Okay. But did we see more pronounced seasonality this year versus past years?
It seems like looking back historically we did. And I'm wondering if other pieces of your business outside of energy are starting to slow, or is there something we need to surface that is playing out that we can't see?
Steven Brazones
We did see quite a lower Ag growth in the fourth quarter of this year versus and that had an impact year-over-year as well.
Ben Hearnsberger
Got it. All right.
Maybe I'll skip to Aero as well and ask one question. The sensor oriented businesses are excited by the passing of this DOD budget, the first time we've seen a DOD budget in place in several years.
I guess why is Vista diverging from that sense of optimism that we are hearing from other defense oriented firms?
Dan Rykhus
You got to remember the size of Vista and we don't -- we go after very, very unique and relatively small opportunities and there is not the opportunities as strong as they have been going back several years and that's just our view on it, Ben with Vista. We don’t see a big lift coming from the current status of the DOD.
Ben Hearnsberger
But it's not -- it sounds like it's more of kind of a timing issue than it is a competitive issue. You are not losing share.
Dan Rykhus
Correct.
Ben Hearnsberger
Okay. And then the aerostat orders, you mentioned some timing issues there.
I guess the last quarter, we talked about the big international contract that was pushed out. What does the pipeline look like in aerostat as of now?
Dan Rykhus
Well regarding, aerostat, this year versus last year we are up for the full year -- those sales tend to be lumpy, Ben, and so where they fall in the fiscal year does change from year-to-year. But the business year-over-year grew and we would expect the business at this point in time to be relatively stable for us next year.
Ben Hearnsberger
Okay. I've got one last one and I'll jump back in queue.
It sounds like you're comfortable with the capacity you have in place now. Is the expectation, given the environment and your 2017 outlook, that you'll keep the capacity you have?
Dan Rykhus
Yes.
Ben Hearnsberger
Okay. Thank you.
Operator
Thank you. Our next question is from the line of Andrea James of Dougherty & Company.
Your line is open.
Andrea James
Thanks for taking my questions. I wanted to talk about Aerostar.
You're talking about maybe making a strategic change, and I'm curious about where Project Loon comes into all of this? And if you were to make some sort of change, would you keep Loon or separate it from the rest of the division?
Just curious what your thoughts are there.
Dan Rykhus
Good question, Andrea. Stratospheric balloon technology is really core to this company and when I say we are focused this year on preserving and optimizing our core businesses, I count stratospheric balloon as a part of that.
So as we look to Aerostar's future we are doing everything we can as a company to help Aerostar work through where we are at with Vista in particular and get to returning to the -- like we had first three years when we were growing Vista. But as I look forward, all the divisions do have to contribute in the medium to long-term.
But if we got to a place where we are looking differently a Aerostar, I can't see any scenario where stratospheric balloon technology isn't a part of Raven Industries.
Andrea James
Okay. It sounds like that's sticking around for the long haul then.
Dan Rykhus
All of it is at this point.
Andrea James
Go ahead.
Dan Rykhus
That's good.
Andrea James
Okay. And then last quarter, I asked about energy being derisked in the Engineered Films business and we kind of also cheered the fact that energy was less than 10% -- or 10% of Engineered Films, meaning oil price declines had been derisked.
And I feel like I'm learning for the first time now that the geomembrane market has oil risk. So my question is I'm not sure what's the base level of sort of low risk revenue in EFD?
Dan Rykhus
Steven you want to take that one?
Steven Brazones
Yes. So as we mentioned Andrea, energy is about 10% of our total sales and geomembrane is about the same amount maybe 15% of the total.
And geomembrane is also impacted by mining and the oil markets. They tend to move together and so we have seen geomembrane dip this year in conjunction with the energy markets.
It hasn't been as pronounced as our energy markets, but we have seen that tail off in the mid-teens the 20% range for the year. Ag is steady and stable and growing and with the Integra acquisition we have a much more robust product portfolio in Ag.
In the silage covers and grain covers market we are very optimistic about that and continued growth for that in '17 and construction likewise is growing quite nicely for us. We have got a very competitive product offering and we are seeing good success there.
So and industrial just to kind of round it out, while down in the fourth quarter we do expect industrial to grow for us next year and in particular given the investment we have made on new line 14 to drive sales growth in the industrial markets. So energy is probably going to be -- it's going to be a challenge for us this next year and geomembrane less.
In the remaining three markets we are expecting growth.
Andrea James
Thank you. And then one final one, what's your -- what is your thought on your shareholder base and sort of their appetite for maintaining the dividend or reinvesting in the business in different ways?
I'm just curious what your read is on that topic.
Steven Brazones
Yes. I think in talking to our shareholders they are looking for a mixed approach between continued dividend payments as well as being opportunistic with our share repurchase program.
We been pretty clear Andrea, with our investors that our primary focus for our capital going forward is to really grow the business through acquisition. And so we feel there is a tremendous amount of value to unlock through putting our balance sheet to work.
And so we are increasing our activity in that front and building our pipeline of potential acquisition targets that we hope to execute on here in the next 12 to 18 months.
Andrea James
Okay. Thank you for taking my questions.
Dan Rykhus
You are welcome.
Operator
We are not showing any further question in the queue. I would now like to turn the call back over to Dan Rykhus for any further remarks.
Dan Rykhus
All right. Well thank you for the questions today and thank you for joining us on the call.
And we look forward to updating you again on our first quarterly performance in May.
Operator
Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program.
You may all disconnect. Everyone have a great day.