© 2024 Alpha Spread Limited. All Rights Reserved.
www.alphaspread.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on www.alphaspread.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. In no event shall Alpha Spread Limited be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on www.alphaspread.com, or relating to the use of, or inability to use, www.alphaspread.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance.
You don't have any saved screeners yet
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Ladies and gentlemen, thank you for standing by. Welcome to the Teledyne First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Instructions will be given at that time. [Operator Instructions] As a reminder, this conference is being recorded.
I would now like to turn the conference over to your host Jason VanWees. Please go ahead.
Great. Thank you very Greg. Good morning everyone. This is Jason VanWees, Executive Vice President and I like to welcome everyone to Teledyne's first quarter 2020 earnings release conference call. We released our earnings earlier this morning before the market opened.
Joining me today are Teledyne's Executive Chairman, Robert Mehrabian, President and CEO, Al Pichelli, Senior Vice President and CFO, Sue Main and Senior Vice President, General Counsel, Chief Compliance Officer and Secretary, Melanie Cibik. After remarks by Robert, Al and Sue, we will ask for your questions.
However, before we get started, our attorneys have reminded me to tell you that all forward-looking statements made this morning are subject to various assumptions, risks and caveats as noted in the earnings release and our periodic SEC filings. And of course, actual results may differ materially. In order to avoid potential selective disclosures, this call is simultaneously being webcast and a replay, both via webcast and dial in, will be available for approximately one month. Here is Robert.
Thank you, Jason. Good morning, everyone. And thank you for joining our earnings calls. Before discussing our results and outlook, I want to talk very briefly about our people, our response to COVID-19 and our business portfolio as a whole.
Our first priority remains the health and safety of our employees and the family. Employees use tasks can be done outside have been instructed to work from home. And currently, up to 40% of our total personnel are working remotely.
Our corporate office has been and remains open, and all of our 70 manufacturing sites worldwide are operational. But we're maintaining social distancing, enhanced cleaning protocols and usage of personal protective equipment where appropriate.
Our businesses can remain open because they serve critical infrastructure sectors, such as the defense industrial base, water and wastewater, health care and public health. Teledyne's business portfolio also remains exceptionally well balanced across end markets and geographies. In addition, approximately one half of our businesses are longer cycle, more predictable and supported by record ending -- quarter ending backlog.
Looking back to the first quarter, we did not suffer any widespread reduction in customer demand. In fact, orders actually the sales in each month including March and quarter end backlog was a record at approximately 1.8 billion. Likewise, we did not incur any significant negative impact to our supply chain. Nevertheless, there were some first quarter operational challenges in manufacturing and chirping product due to our policy of maintaining appropriate employee density at the workplace, balancing employee absenteeism and the availability of our customers to accept product.
These are operational and HR matters along with some demand and supply chain issues likely reduced our first quarter revenue by approximately $15 million. Nevertheless, organic sales growth was positive and overall first quarter revenue increased 5.3% from last year. GAAP earnings increased 7.4%. And despite $10.4 million of pre tax charges, GAAP operating margin also increased.
Finally, revenue, earnings and operating margin were all records for any first quarter period.
Now looking forward, to the second quarter and the full year. Operational challenges in context in the first quarter remain. However, there is no uncertainty regarding customer demand in the 50% of Teledyne businesses that are shorter cycles and generally tied to corporate capital expenditures and the global economy as a whole.
In addition, some end markets such as commercial aviation, although just 6% of sales in the first quarter will be impacted beyond the next few quarters and 2020. While many other industrial companies have withdrawn to 2020 earnings guidance, our total company has a relatively and I emphasize relatively high degree of predictability and stability. Nevertheless, in the current environment, we find it prudent to both lower and widen our prior expectations for revenue and earnings that we provided in our January 22, 2020.
Our current outlook is based on the following assumptions. First, at the lower end of our earnings range in the second quarter, we've assumed overall revenue contraction of approximately 6% as well as year-over-year declines in each of quarter three and quarter four, although moderating by year end. This would result in an overall full year-over-year revenue decline of approximately 2%.
Second, at the high end of our earnings range in the second quarter we have assumed overall revenue contraction of approximately 4%, more about this contraction in Q3, flat year-over-year sales in Q4. This would result in roughly flat year-over-year overall sales. And by segment for instrumentation, which is our shortest cycle business group, we expect an overall revenue change in the second quarter ranging from negative 5% to flat.
At the midpoint of our outlook range, we expect full year's segment sales to be flat, including incremental sales contribution of about $60 million from Gas and Flame and OakGate acquisition. We expect digital imaging to be more resilient, as nearly half of the segment serves defense based healthcare and scientific market. This segment also has greater exposure to "back at work" customers in Asia, plus, given a weaker 2019 in those digital imaging businesses serving semiconductor inspection and factory automation, we have an easier comparison in 2020, hence, we expect to achieve positive or these low single-digit segments full year's sales growth.
In the other two segments, that is aerospace and defense electronics and engineering systems, we continue to see our defense businesses in this segment growing at mid-single digit rates, perhaps even high single digit despite the ongoing operations related challenges mentioned previously. However, we are forecasting a collapse in commercial aviation in the aerospace portion of our aerospace and defense electronic segment. While less than 6% of our total sales in the first quarter we're expecting a 40% plus year-over-year decline in commercial aviation due to both significant air transport OEM and aftermarket declines. As a result, we expect total year-over-year segment sales to decrease approximately $90 million.
Before turning to Al to report on the first quarter performance by segment, I want to emphasize the following. We do not know the depth and duration of the economic decline or the pace of the recovery. But as we have repeatedly shown in the past, we know how to be disciplined and perform well in challenging environments. We are aggressively managing variable costs, CapEx and cash flow and quickly and permanently reducing costs where a prolonged non-cycle is anticipated, such as in aviation.
Finally, our balance sheet is exceptionally strong with over 230 million of cash and cash equivalents, more than 600 million available under our credit facility maturing in 2024. Given our ample liquidity and the resilience of our business portfolio, we continue to review and pursue acquisition opportunities.
Al will now comment on the performance of our four business segments followed by Sue Main, who will give further financial details and present our outlook. Al?
Thank you, Robert.
In our instrumentation segment, overall first quarter sales increased 11.2% from last year. Sales in marine instrumentation increased 3.9% organically in the quarter. Backlog continues to grow and it was at the highest levels in early 2015. In addition, operating profits improved significantly.
As a reminder, while marine includes products sold in the energy industry, we expect this market to directly account for just over one-third of total marine sales in 2020, or approximately 150 million of annual revenue compared to almost 400 million in 2014.
In the environmental domain, sales increased 26.5% as a result of our acquisition of the Gas and Flame Detection business. In addition, we achieved organic sales growth of certain laboratory instrumentation products, but this was offset by lower sales of other industrial instruments.
Sales of electronic test and measurement systems increased 2.5% due to the acquisition of OakGate. Nevertheless, organic sales were flat given continued strong demand for our protocol test instrumentation.
Overall instrumentation segment operating profits increased 27.3% in the first quarter, and margin increased 226 basis points with margins increasing for test and measurement and marine instrumentation. Excluding the Gas and Flame Detection acquisition and related purchase accounting margin was flat for environmental instrumentation.
Turning to the digital imaging segment, first quarter sales increased 6.2% and included higher sales of infrared detectors for defense applications, MEMS products and x ray detectors for life sciences.
Sales of all machine vision products collectively decreased slightly, but nevertheless stabilized with improved orders and sales for advanced instruction camera systems. GAAP segment operating profit increased 19.7% and margin increased 201 basis points, generally as a result of the increase in sales volume.
In the aerospace and defense electronics segment, first quarter sales decreased 6.2% as positive 9% growth in sales of defense electronics was more than offset by a 35% decline in sales of commercial aerospace products. GAAP segment operating margin decreased due to lower aerospace sales, but also 525 basis points of charges for severance facility consolidations and certain contract cost adjustments.
In the engineering system segment, first quarter revenue increased 7.6% with greater sales related to marine, space and nuclear programs, as well as electronic manufacturing and turbine engines partially offset by lower sales from missile defense programs. Segment operating profits increased 460 basis points, largely due to higher sales and greater mix of higher margin manufacturing programs.
I will now turn the call to Sue, who will offer some additional commentary regarding the first quarter and our 2020 outlook.
Thank you, Al, and good morning, everyone. I will first discuss some additional financials for the quarter not covered by Robert and Al, and then I will discuss our second quarter and full year 2020 outlook.
In the first quarter cash flow from operating activities was $76.4 million, compared with cash flow of $80.1 million for the same period of 2019. The cash provided by operating activities in the first quarter of 2020 reflected the timing of accounts receivable collections, partially offset by the impact of higher operating income, lower income tax payments and incremental cash flow from recent acquisitions.
Free cash flow that is cash from operating activities less capital expenditures was $56.2 million in the first quarter of 2020 compared with $58.8 million in 2019. Capital expenditures were $20.2 million in the first quarter compared to $21.3 million for the same period of 2019. Depreciation and amortization expense was $29.3 million in the first quarter compared to $27.6 million for the same period of 2019.
We ended the quarter with $618.3 million of net debt that is $849.7 million of debt less cash of $231.4 million for net debt to capital ratio of 18.3%. Stock option compensation expense was $7.4 million in the first quarter of 2020, compared with $8.9 million in the first quarter of 2019.
Turning to our outlook, management currently believes that GAAP earnings per share in the second quarter of 2020 will be in the range of $1.90 to $2.05 per share. And for the full year 2020, our GAAP earnings per share outlook is $9.30 to $10. The 2020 full year estimated tax rate excluding discrete items is expected to be 22.8% a 220 basis point increase compared to full year 2019 due in part to less R&D tax credits.
In addition, we currently expect significantly less discrete tax items in 2020 compared with 2019. Please note that the estimates for second quarter and full year 2020 GAAP diluted earnings per share exclude any future potential charge related to Airbus OneWeb Satellites.
I will now pass the call back to Robert.
Thank you, Sue. Greg, if you're ready to proceed taking question and answers, please go ahead.
Thank you. [Operator Instructions] Your first question comes from the line of Greg Konrad. Please go ahead.
Good morning. I just wanted to start with something that's maybe a little more topical. I think there was a release out last week on thermal cameras for non-contact fever screening. How big of an opportunity is that and what type of interest are you getting just kind of what's going on in the world?
Hi, Greg. Good morning to you also. The cameras are long wavelength infrared cameras. They're made with our own sensors produced on a wafer level packaging. They are 640 by 480 of 17 micron pixel size. And we're just beginning the manufacturing of those cameras, as we announced. We are getting interest from a large number of manufacturers. And while it's still speculative, we're positively motivated to increase production of those cameras. So how big an opportunity it is too early to tell.
Thanks. And then, I mean you kind of talked about the size of the oil and gas market within marine, but given oil price fluctuations and CapEx rationalization on the part of customers. I mean, have you seen any change to expectations or push out of shipments in that market?
Not yet. The short answer is not yet. But I have to put that in perspective. The Marine businesses today are really we expecting the midpoint to be over $425 million. Only 150 of that or 35% about is in offshore oil exploration, offshore oil production and very little on land oil. So, most of our marine businesses we already see 65% is in defense, construction and other areas.
Going back to the oil and gas, we do have good orders so far for the year. It's over 1, it's 1.1 and we don't see any cancellations yet. Having said that, that's in the oil production. In the oil exploration, we're seeing a little bit of softening, but in our orders, and considering the price of crude and what's happened to Brent, we think that we expect to have some softening later in the year. So we're taking that into consideration in our guidance, but the good part is, there is a good part to this for us versus 2014, when oil collapsed in '15 and '16, is that at that time, the majority of our marine sales were in oil and gas, today it's only 35%.
Thanks. And then, just last one for me. Can you update us on expectations for margins for the year and given your report on a GAAP basis and had some restructuring in Q1. Do you have any other restructuring contemplated in the guidance for the rest of the year?
Yes. So let me start from the latter part of your question, which is do I expect more restructuring? In the first quarter we had about $0.21 of restructuring. We were doing a little cost stakeout right now in the second quarter. And we expect that if things don't change get worse, we'll have to take some more out. We think that overall for the year, including first quarter can range between $0.40 and $0.50; $0.40 on the on the lower side.
The margin effect is very interesting. Our margins weigh on the midpoint, we will always work with the midpoint of our guidance, which would get would be about 965 in earnings in EPS and about [3140] [ph] in revenue. Stay with that. With those numbers, I think instruments margin in the instrument segment should increase slightly maybe as much as 15 basis points. Digital Imaging year-over-year, we believe margins can go as high as 90 basis points above last year.
In the aerospace and defense, very different issue. Defense is going to do okay. But aerospace is going to be done significantly and that's one of our highest margin businesses, so we think margins year-over-year would go down as much as 700 basis points. Engineering systems will go up probably 75 to 80 basis points. So overall segments will go down because of aerospace primarily, a little over 100 basis points and maybe 110. But we have cost control in the corporate domain. So, overall in the midpoint we think margins can go down as much as 80 basis points. But that, of course, is preliminary data on everything we know right now.
Your next question comes from the line of Jim Ricchiuti. Please go ahead.
Thank you. Good morning, and thanks for the detailed outlook. I'm not sure there are many companies in a position to offer that in this environment. Question I had Robert was regarding the defense business. There have been at least we're seeing more reports of supply chain disruptions in the defense market. And I guess what I'm wondering is, is there any potential risk as you look at that business in the second half, where there could be an issue for you or even the broader government business, normally have a pretty good line of sight there.
Yes. There are -- we are seeing a little disruption right now, especially in our printed circuit board -- specialized printed circuit board supply chain. The flip side of it is why we have hiccups. We have a very strong procurement initiative underway that started two years ago, actually to reduce procurement costs and they're shifting their emphasis to working with our suppliers to ensure that we do have a reasonable supply chain.
Hiccups yes, I expect that we'll have more, so far nothing very serious. What's been troubling on the defense side is that availability of some of our customers to approve product that we're delivering to them. For example, just a simple example, in our shadow water combat submersibles, which are the boats we make for the Special Ops. We'd have the boat ready to test but because of the restrictions -- COVID's restrictions, our divers and the government divers can't test them. So they can't take delivery completely without getting paid completely. So there's those kinds of things happening all over.
But, going back to something I said, Jim earlier, we know how to deal with these issues. We've done it before. We did it in 2015, '16, when oil collapse, we did in 2008 and 2009, in the financial crisis. So we're taking this into consideration with our guidance.
Got it and thanks. The question on the industrial machine vision business. You talk about stability, it sounds like you're seeing some pick up, maybe on the semi side. I'm just wondering, is this more of a case of easier comparisons? Or is there some improvement that you're seeing in some of these markets, including the factory automation, which seems a little surprising, but just curious about that?
Yes. Let me start with the first part which is last year, we had, this is one of those cases that -- good case is usually we say things like, we have a tough comps, or we try. Last year, semiconductor and factory automation really in general relatively weak. So our comps this year as last year are better. Let me start there.
We think machine vision, this mission vision systems part of our overall digital imaging should be flat this year. We think overall digital imaging will increase. But I think the vision system will be flat and there's some good gives and takes. Our flat panel display orders are pretty good right now. Our scientific cameras are doing well. Semis catching up, we do have some incremental sales from acquisitions that we made the site cam from Roper and micro line in Canada, which makes MEMS products. So we think some of the other stuff is going to do well. Our aerospace and defense businesses in machine vision are doing well and we expect them to continue. So overall, I'm going to say the semi factory automation, we are lucky because last year, we had such weak revenue so the comps are easier. The others we've done okay.
Your next question comes from the line of Joe Giordano. Please go ahead.
So, Robert, for businesses like commercial aerospace and energy which are like more -- obviously much more challenged now. You're taking actions. There seems to be kind of debate or confusion around when these things actually bottom. So like, are these markets now given what's happening in the time it takes to kind of flow through, are these markets that are likely worse than '21 than they are in '20? Or is this something that -- how do you characterize the likelihood of recovery in these markets over the next 12 to 24 months.
Let me start with energy first, if I may. As I mentioned before, on the oil and gas part of our business is about $150 million and it's less than 5% of our revenues today. In that market, the products that we make lag the overall market that is, our orders presently are good and will continue for the next two quarters. We think it will soften in Q4. So while the primes are suffering today, I think our suffering will come a little later.
The same happens with the recovery if the recovery come, which would obviously depend on the overall economy. We will be lagging the recovery. Having said all of that, in the overall marine businesses, which we kind of look at it as our energy businesses, we have really strong programs in the defense area, both vehicles and other areas like mine confirmations, et cetera.
So, we see some downside for us. Recovery as to -- we need to bottom, I don't know. But I think recovery for us will come later. And we've all suffered the consequences of the current downturn perhaps later in the year.
Going to commercial aerospace, I can't guess it. Right now, it's -- again, we're lucky. It's 6% of our sales, we have $90 million decline that we're projecting from last year to this year from about 211 to 120 or so. And again, we also there also lag the market after the 911 in 2001. Aviation didn't really recover until 2003. So that was a two year hiatus and we suffered the consequences of that.
So, if that's an indication of how long is probably before things start turning up, it'd be another two years before we see a recovery. And frankly, that's the way we're treating these businesses. We are taking cost out, Joe permanently. And barley we've taken almost 20% of our folks out in that business a plus the other people are on furlough and other things. So the long answer is, the recoveries in both segments, the aerospace should be longer timeframe than energy in my view. We won't suffer much from the energy, we are taking hit from the deviation.
Now that's clear, and it's very helpful. On the free cash flow side, can you talk about your expectations for the year? I mean, let's not -- you could strip out the potential for OneWeb write downs and things like that? But just outside of that, how do you looking at your working capital performance outlook for the year and when you think about a conversion? Will you guys be able to kind of accelerate cash -- bringing cash in as you kind of liquidate backlog and things like that this year?
Let me start by saying, because obviously, we're lowering our earnings right now. So our free cash should be a little lower than last year. Last year, we had about $400 million. We think this year it'd be about 375, maybe even a little less. Having said that, we are taking very strong action now to reduce our inventories across our businesses, how successful it'd be will depend on how well we execute. If we do all the things that we've laid off, out to do, we might keep last year's free cash flow.
But, the other thing that happened is, if you look at 2009 versus 2008. In 2008, free cash flow was fairly low; it was like $111 million. In 2009, when we came out of it, our free cash flow grew almost double to $190 million. The same thing happened in the '15 ,'16 timeframe. Free cash flow went from 160 million in 2015 to 250 million in 2016.
So, the answer is this. I think we do okay, this year if we execute, we'll be around 375 maybe a little better. But if history is a lesson, we'll come out at this much stronger next year because of our ability to discipline. Our CapEx is going to be lower this year than last year; Al is kind of controlling that almost project by project justification. So I think we should be alright. And we do have cash in the bank.
And maybe last for me. Can you just touch a little bit more on what you're seeing out of China for the respective businesses like test and measurement and some of the environmental businesses there?
Okay. Let me, if I may Joe, you didn't ask it, but I think in the machine vision business things because of this back to work "framework". We also in the machine -- but in machine vision, health care products, we're doing okay there.
In the test and measurement, we're lagging a little bit. On the other hand, our protocol in our test and measurement businesses had two legs to it. One of is oscilloscope and affiliated systems for looking at electronics hardware. The other part, the protocols, which are the standards by which in digital imaging systems communicate that area we're doing really well, both here and in China. And so I think our T&M, test and measurement, while we expect it to be essentially flat this year, it's probably going to be a little down because of what we do of acquisition there. So it we might be done 3% or 4%. But China is not our problem. Our problem is really right now is Europe and North America.
Moving to environmental, that's a different story. We're seeing some compression there in China, two reasons. One, we make a lot of product that go in air quality monitoring, and measurements of air quality, continuous monitoring as well as measurement. And we see weaknesses there. The second thing, which is a little even more troubling, is the Chinese government emphasis that Chinese companies buy Chinese made product. That's not as much discussed in the United States. We've had initiatives like Buy America initiatives previously, but there's a strong emphasis there to do that. And frankly, I don't mind assembling products there. I don't want to manufacture products there because of other issues.
So we are seeing some compression there and that's a little worrisome, but we do have new products and we will compete with everybody and we get our share of the market in that business.
Your next question comes from the line of Andrew Buscaglia. Please go ahead.
Can you take it into the thermal sensor for the skin application, skin temperature monitoring? And that, again, I don't know if you guys have talked about this much before. So can you remind us kind of where you fall on the spectrum of your capabilities for that? That's, is it a handheld scanner? Is it something that could scan crowds or just maybe a little more details on that? And then secondly, how fast do you think you can ramp production given all the supply chain issues?
Yes. Let me start with the latter part of the question, Andrew, if I may. As I mentioned, unlike other companies that are making such devices, we make the sensors ourselves in our MEMS foundry in Canada in Bromont. And we make it on a wafer level packaging scale. So, we are our own supply chain. So that's the good part. The cameras are called Caliber. And we've been making various versions of the Caliber camera for about a year or longer. The ones that we're talking about are handheld, they're our newest product. They've just been manufactured. I cannot tell you how fast we can grow that, but obviously, we're going to do our best to increase production as fast as we can.
Our cameras are also -- lastly, the sensors that we use that we make are vanadium oxide based sensors, really nice sensors 17 micron pixels whereas a lot of the other products around the world are made from amorphous silicon. So we think we have a niche there. I know there are some other companies that have had really a ton of publicity because of this domain. I don't know whether this is kind of move the needle in $3.2 billion revenue company.
Okay. Can you talk about the potential Photonis acquisition, the rationale behind it and where do you sit with the French Ministry in getting that approved?
Yes. Let me start with the rationale. That's it, that's easy one. Photonis primarily makes night vision product for the war fighters. And they do it for almost the rest of the world that has to have an ITAR-free product whereas our two companies in this country don't have ITAR restrictions. The second part that there is business related, again, is in life sciences, but 80% of the business is in defense.
Now, what they do have is a very nice product, nice processes, but what they have lacked because they've been supportive by private equity, what they've lacked is the ability to significantly invest or acquire digital imaging companies that would complement it. Almost everything we do in our digital imaging is complimentary to what they have, including the infrared sensors I just mentioned. So we think we will, and digitization is obviously the future of that domain as well. So we think we made some significant capabilities to that product. Now, where are we?
Unfortunately, on March 31, we were verbally notified that the Foreign Investment Office of France that they were going to have a negative opinion by the Minister of Economy, essentially saying there is going to be total transaction. Everything has gone quite since then. There are some indications that the Minister of Economy may be reconsidering. We don't know.
Ultimately, one or two scenarios can develop. They will reaffirm the verbal detail. We have a written response from them because our agreement with the people we're buying it from is such that everything is in escrow until a final decision has been made. So once we get a written agreement would be one of the following. Either they'll reject it, which is same as their verbal, or they'll come back and agree to a transaction but put certain conditions on it.
Now, we are used to certain conditions because we bought two businesses in France, would have operations in France. First, e2v be which we bought several years ago, last year, we bought Gas and Flame Detection business from 3M. In both those cases, there were certain conditions in terms of because they were supplying product to the French government, et cetera, in terms of how long we kept the businesses, et cetera. And we agreed to those conditions because frankly, they were also in our best interest. So we have a really good relationship with the Ministry of Economy and his offices in that domain, and we have a good track record with them.
So if the conditions are not honored, they could be onerous, then we could live with it. On the other hand, if the conditions are onerous that would damage our ability to run the company, then we won't be able to complete the transaction. So that's a long way of giving you the best answer I have. And we expect to hear from them. I don't know it could be shortly or it could be a couple of months.
There are no further questions.
Thank you. And if I may, I'll ask Jason now to conclude our conference call. Jason?
Great. Thank you, Robert. And again, thanks, everyone, for joining us this morning. If you have any follow up questions, my number is on the earnings release, please feel free to call me. And of course all our news releases and periodic SEC filings are on the Web and available. So thank you, everyone. Greg, if you could give the replay information to the audience. We'd appreciate it and we shall sign off now. Bye-bye.
Thank you. Ladies and gentlemen, this conference will be available for a replay after 10 AM Pacific Time today through May 22. You may access the AT&T Executive Replay System at any time by dialing 1-866-207-1041 and entering the access code 9504925. Those numbers once again are 1-866-207-1041 with the access code 9504925. That does conclude your conference for today. Thank you for your participation and for using AT&T Teleconference. You may now disconnect.