Titanium Transportation Group Inc
XTSX:TTR
Titanium Transportation Group Inc
XTSX:TTR
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Earnings Call Transcript
Earnings Call Recording
Other Earnings Calls
Good day. My name is Jack, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Titanium Transportation Group Q4 2017 Conference Call. [Operator Instructions]Before we begin, I would like to remind you that certain statements made on this call today may be considered forward-looking. In that regard, I would refer you to the risk factors and cautionary provisions outlined in the press release issued by the company yesterday as well as the filings made by Titanium on SEDAR.Ted Daniel, President and CEO, you may begin your conference.
Thank you, moderator. Good morning, and thank you for joining us for today's conference call. With me is Titanium's COO, Marilyn Daniel; and CFO, Kasia Malz.I'm very pleased to report that we ended 2017 on solid footing as we continued to invest in our people, equipment and technology. We achieved strong year-over-year revenue growth, up 24%, and increasing EBITDA, up 6% on a consolidated basis compared to a year ago. We ended the year with momentum as industry conditions are dramatically improving, offering additional opportunities for further organic growth in 2018.Now turning to the quarter. We delivered excellent growth in the fourth quarter of 2017 and made important progress on various levels, including completing and fully integrating our most recent acquisition. Revenues increased by 24% to $35.4 million, and EBITDA increased by 14% to $3.5 million year-over-year. In the Truck Transportation Group, revenues grew 20% to $24.1 million and EBITDA increased 14% to $3.5 million, helped by the addition of Xpress Group, which closed on October 1.We did see some incremental margin pressure in the Truck Transportation segment this quarter. This was due, in part, to some transitory expenses related to the acquisition of Xpress, which are not expected to persist. Rising fuel prices were also a contributing factor. We are very pleased with the Logistics segment, which delivered significantly improved results in the fourth quarter. Revenue grew 35% to $11.8 million, and EBITDA grew 82% to $0.9 million. Margins improved to 7.9% from 5.8% compared to Q4 last year. These positive trends reflect a dramatic tightening of available capacity in the marketplace. Importantly, these trends have persisted in early 2018. Against this backdrop, we achieved record sales in February, which also marked a third conservative month of record logistics sales. While it is still too early to tell, current industry supply constraints remain favorable for both our Logistics and Truck Transportation divisions.In response to current market conditions, the Truck Transportation segment is experiencing increases in customer contracted rates and focusing on driver recruitment. In addition to delivering strong operating performance for the quarter, we're also able to bring to a satisfactory conclusion proceedings the company had initiated against the vendor ProNorth. Under the terms of the settlement, the net consideration for our acquisition of the ProNorth business was reduced by $3.4 million. This was achieved through the forfeiture and cancellation of shares issued to the vendor as part of the original purchase price. Concurrently, a review of our intangible assets has resulted in a noncash write-down of approximately $3.5 million combined these developments addressed fully our outstanding issues with this transaction.Looking forward. As I noted at the beginning of this call, industry conditions are now materially better than what we've experienced over the past 2 years, with solid demand, constrained supply and improving pricing. Operationally, Titanium's investment in people, technology and equipment over the last 2 years has positioned us well to support our customers' growth in this market. Titanium's acquisition of Xpress Group was an excellent addition to our already existing Windsor Terminal and will contribute to our growth. Additionally, we're driving organic growth by focusing heavily on driver recruitment.As a result of Titanium's positioning and a favorable industry outlook, we are increasing our revenue and EBITDA run rates to $155 million and $16 million, respectively. In terms of the outlook for acquisitions, we maintain a healthy pipeline of acquisition targets, including tuck-in acquisitions. However, we remain extremely disciplined in terms of the quality of assets we will consider in the pricing of any potential transaction. As industry regulations and driver scarcity continue to flavor larger integrated and technologically advanced platforms, we believe that Titanium will remain a preferred partner for businesses looking to benefit from added scale. As we focus on getting the right deals, we also remain sharply focused on achieving operational improvements and delivering our financial objectives to drive organic growth going forward in 2018 and beyond.That concludes the formal portion of my presentation. I would now like to open up the call to questions.
[Operator Instructions] Your first question comes from the line of David Tyerman with Cormark Securities.
My first question is on the TT margins in the quarter. So they were down. You cited Xpress for -- as one of the drivers there. So if you -- taking out the Xpress effect, would you've been -- where would you've been in terms of EBITDA margin? Would have been closer like 15%, 16%?
Sir, can you repeat the question?
If you took out Xpress -- the Xpress effect, would the Truck Transportation margins, EBITDA margins been closer to 15%, 16%?
No, it's about 14%.
14%.
Yes.
Okay. So it sounds like -- Ted, you gave very bullish outlook, which I'm not surprised to hear. Is it really the case that, in Q4, you weren't really seeing that so much, but with -- this is really a forward-looking thing, and we should see higher margins as we look through the course of the year and sort of maybe progressively improving through the year with the usual seasonality on it?
So there's a couple of things to keep in mind, right, the increase in run rates were mainly driven by our Logistics division, which has been seeing significant growth. In terms of -- we can expect in terms of margins going forward, pressure on trucking margins will continue for the short term. We are seeing dramatic price increases for 2018, but there are cost pressures as well. Those mainly being driver rate increases.
Okay. So -- that was my next question. So when we think of the pricing versus the driver rates, are you looking for net improvement? It sounds like from the U.S. companies I've heard and the Canadian companies, too, for that matter that they are. And...
We definitely will in the second half of 2018. You just won't see those results immediately.
There's a bit of a lag between Logistics and Trucking only because Trucking has contracted rates, right?
Yes. Okay. Fair enough. And do you -- can you give any sort of magnitude on the price increases that you're seeing and the driver rate increases?
So -- it's Marilyn, David. The increases that we're seeing across the board is anywhere -- in our van division, we're seeing anywhere from 5% to 10%. 5% to 10% seems to be the average growing rate. We are seeing anywhere, some of our accounts, to 20%, 25%, sometimes 30%, depending on where the account started in terms of pricing. There also seems to be a little bit of accelerated growth on the side of -- some of the other segments of the Trucking division. But we are seeing -- so for the industry published thing that you're seeing is 5% to 10%. We're seeing at least that and more. So that gives you an idea. Driver wage increases are going up. We have always sort of been at the top of our pay terms in terms of the company. Titanium has always been a good payer for our driver wages, so we are seeing increases. But we still believe we'll be net ahead.
And we're doing that to drive organic growth.
Correct.
Okay. So when I think about that like, again, from the U.S., especially, since they've talked about it, it sounds like the driver wages are roughly -- going up roughly in line with pricing, but because driver wages are only a relatively small portion of revenue net, you end up with a large profit increase. Is that the way we should be thinking?
I think the way you should be thinking is half of the increase has probably been good of driver rate increases.
Perfect. That's really helpful. And then the last question I had, you had a covenant breach, so I was wondering if you could talk about your thoughts on the balance sheet because it seems like you're running at a pretty high leverage level like just barely clearing principal and interest payments. Obviously, they should improve with better results, but that's pretty tight. Do you have any thoughts about maybe trying to bring the leverage down a bit?
Yes, absolutely. Actually, we are -- in the last 2 years, we've been heavily investing in our people, our technology and equipment. We have a very new fleet. And when we look at other companies, we're seeing a lot of fleets that, right now, are having a refresh. So perhaps, we're kind of ahead of the curve. So having said that, I would just say in general terms, I look at this as very positive at this point in time. I mean, let's face it, every company, every industry has ups and downs. I think the most important part of this concept right now is what's going to show a very positive result at this point in time. And I guess, to quote you, my bullish outlook is that we've had a very resilient approach. Titanium is very capable at managing challenging change. Our bank is extremely confident in Titanium. And we've managed through -- for a lack of better term, we've managed through tough times. But at this point in time, actually, we're extremely well positioned to take advantage of good times and further improve our balance sheet.
If you're asking like whether we think we need to do a raise at this point in time, no, we're not going to do a raise just to improve our balance sheet at this time. If transformational acquisition comes along where we need to do that, we may consider at that point in time.
I think from that point of view, it's purely opportunistic, and it's got to, first and foremost, make business sense. The business case has to make sense, and then afterwards everything else, I think, will fall into line.
But because of the strong organics we're seeing, we don't see any need for it at this time.
Right.
Your next question comes from the line of Konark Gupta with Macquarie.
So then a couple of questions here on the M&A. You acquired Xpress in October last year, and you're saying that pipeline looks healthy here with some tuck-ins. I really want to understand, do you see the M&A landscape changing here, with the industry fundamentals improving and the driver shortage becoming even more kind of challenged? So is that impacting the M&A market? And what do you think about the valuations in the market right now?
Actually, you would think that counterintuitively, perhaps -- you're right. It's an interesting question, and I kind of do think about it. So I think that -- I would say that M&A may actually be a bit better in the sense that during tough times, a lot of companies are really struggling to establish any sense of value. At this point in time, I think that it's actually a good time to sell because if in the next few months companies can show some improvement, it actually almost makes it easier for us to buy and easier for the seller. So anyone that's actually at the stage that they need to sell, then it would be easier to do a transaction rather than in tough times they don't have the EBITDA to be able to warrant sufficient value for their -- for the purchase -- for them to get a decent enough purchase price to be able to sell. So I think that it's actually going to improve.
But you're right. Given the driver scarcity, I think more -- there'll be more sellers because they're going to continue to be challenged by -- although they're getting better pricing, they're going to continue to be challenged to grow.
And the industry itself is continuing to progress very rapidly in terms of structure and technology, regulations, et cetera. So it's actually more expensive to operate more sophisticated to do so and that the pace of that is increasing exponentially. So again, all these ingredients make the marketplace very ripe.
Yes, these are expected to come into Canada Jan 1, 2020. That's 22 months from now.
And Marilyn, on the driver shortage topic, the shortage is across the industry, clearly, right, and you guys have technological advantages over your competitors in Canada absolutely. But what do you think about like -- apart from wage and technology, like what drives the driver retention rate so high for you guys here? And like -- and do you see any concerns in themselves sourcing drivers down the road?
Very exciting for us. So there's a few things. You're right, wage increase -- wages are one large aspect of it. The other thing that's very important for us is our fleet, right? We've got an average age of 2 years old on our truck. So we have a very attractive equipment for the drivers to operate in. In addition to that, our culture, safety and things like that are important. And most importantly, unique to us is our share purchase plan that drivers participate in and our owner operators have the opportunity to participate in is a huge added advantage. It's a very attractive piece. It's also -- it attracts drivers. It also retains drivers. And that's very exciting for us. So we are focusing on recruiting just in manpower to be able to properly bring new drivers onboard expeditiously and train them and so on. That's where our focus is. The interest for our company is definitely there in the marketplace.
Your next question comes from the line of Paul Beattie with Wells Fargo.
Ted, I just wanted to ask a quick question, and I know it's relatively new on the radar here, and I know it's not a big part of what guys are involved with. But what are your thoughts on the pending tariffs on Canadian steel going to the U.S. and how it may affect your flatbed group?
Good question. We've actually all been talking about that recently. And so I'll let Marilyn answer this one.
I'm thankfully close to it. We have a portion of our business that is definitely aluminum and steel. It's not an enormous portion. I think it's...
Under 10%.
Under 10%.
Yes, less than 10%. But I've stayed very close and been in touch with our large customers that are both in steel and aluminum, and the general consensus out there is, if the tariff does come to fruition and we're not certain about that yet, we -- it could be a negotiating tactic. But -- however, these are raw materials, and the volume of raw material that is crossing the border now is too large an impact for anything to happen overnight or even within months or within a year. Freight will continue to move. There's no issues on that. In fact, some of our customers have increased their outlook for the year in terms of production, so we're actually expecting more steel and aluminum to cross the border than it already does. Very often in the steel and aluminum business the product crosses the border multiple times in production and far too complicated a business model to change very quickly. So general consensus is, if in the case of aluminum, with a 10% increase, it will add a 10% increase at the end user level. So your cost of construction, et cetera, will go up 10%. It's inflationary more than it is an issue on the Trucking segment of it. So we feel very confident that there'll be no change. In the long-term perspective, it could be something that would be looked at over a decade perhaps, with the change in economies, but that would be at least 2 presidencies in the process, and things could change dramatically in that as well.
There's also, I think, a macroeconomic component, which is not only the inflationary aspect, but if the Canadian dollar -- let's say, using 10% as an average tariff, if the Canadian dollar drops by another 5% to 10%, there you go, you've just eliminated and cost-neutral the issue because, I think, a month ago -- or couple of months, we were like at a $1.23, $1.24. Right now we're at about $1.30, so another $0.04 on that. Mathematically, in 3 months, we've adjusted for the tariff. So to be honest with you, I don't think that that's completely unfathomable. If you go back to the early 2000s, we were bordering a $0.60, dollar, which converts at about $0.60. So I think that it'll adjust economically.
Your next question comes from the line of Jean-Francois Lavoie with Desjardins Capital.
I was wondering if you could discuss about the Logistics segment organic growth in the future and your overview on the growth going forward, please.
Right. So Logistics is -- our Logistics is a third-party logistics broker, so we actually aren't tied down to contracted rate. So we have one business that's more on the contracted side, and we have one business that's actually less contracted, in fact very little contract rate. So it has agility, and it has the ability to flex up or down. So in times of capacity shortage, we actually are able to actually flex upwards. And given industry fundamentals at this point in time, we believe that there's going to be a certain amount of persistence in their performance at this point in time. Right now, the van industry is utilizing the reefers as vans. So we actually believe that they're going to have a fairly strong year. And beyond that, into 2019, I'm not so sure that the capacity crunch -- which is what's driving to a large degree their ability to solution a lot of customers. I'm not so sure that the capacity crunch is going to get solved in the next 12 months. You can order as many trucks or trailers as you want, which currently there's record backlogs and record orders for equipment, which is, I believe, another reason and another fundamental ingredient to what contribute to the increased rates. So I think that in our case though -- it's going to go on for a while until shippers start to solve their problems, which is going to take some time to do that because the biggest ingredient is the drive shortage, and you can't order drivers on a production line, right. Drivers is something we have to train and we have to build this industry and reignite the interest of people coming into the industry. So that is what's going to take some time.
And just to add to that quickly, the Logistics segment, we're ahead in terms of the trucking area for exactly what Ted was speaking about noncontracted rates that are on the spot market level. Their excitement is sort of a prelude for what's sort of coming on the trucking side of things. And the ingredients that have made this marketplace very robust at the moment are long-term ingredients. They're not a sporadic blip. ELD, driver shortage, increased regulations, the U.S. exchange rate, the cost of equipment, all of these things are macro ingredients that aren't easy to retract or change very quickly. So we feel very strongly in sort of position right now.
Yes, mentioning the U.S., we believe that the U.S. is going to be on a pretty solid growth curve for the next 5 to 10 years. So -- and given that we are about 2/3 cross border, we're well positioned to take advantage of growth in the U.S. for the next few years.
Great. Thanks for the color. And in terms of margin for that division, what is your view on it for 2018 and going forward?
Logistics?
Yes, yes, please.
Yes. So I mean, Logistics has traditionally been in a range of 6% to 10% net. You're talking to EBITDA?
Yes.
Yes. So in that 6% to 10% range.
During times of tight capacity, we're on a higher end. And during times of low capacity -- sorry, excess capacity, it will be on the lower range, which we've seen over the last 2 years.
Okay, perfect. And maybe last one for me. I was wondering if you could talk about the integration of Xpress Group. So how is it going? What's left on the table right now?
So it's Marilyn, again. We've successfully fully integrated the company into our location in Windsor effective Jan 1. We used Q4 for our transition. As effective Jan 1, we're all into one -- under one roof, and we have integrated them. The -- we are probably a quarter ahead of where we generally are following an acquisition in terms of full integration in optimizing the acquisition. So now we're actually just focusing on optimal returns on customers, lanes, et cetera. So there is some fine-tuning there, so yet to be realized. But the majority of it has gone very well. A very good transition. We had acquired excellent people and business to go with it, and the transition went very smoothly.
Your next question comes from the line of Ben Jekic with GMP Securities.
I have a question, and I'm going to apologize because I had technical difficulties early on. I think David was asking a question initially. When I look at your -- the new run rate, it is implying EBITDA margin of 10.3%. I think the earlier one is 10.7%. So if I'm hearing then correctly, one factor is growth in Logistics, the other one is growth in drivers' rates sort of speaking on a consolidated level. What would be -- what are some of the steps that would make that margin increase higher?
It's going to be volumes. Our focus will definitely be -- it will be on strong organic growth in 2018. The other thing I wanted to highlight is, our run rates do not reflect M&A. Organic growth actually is just taking into account what we've seen in recent months. So the margins also reflect what we've seen in recent months, right. So we do hope that over time, as our volumes grow, you'll see improvement in margins as well.
Now is there still an element of sort of squeezing more juice from Xpress in terms of synergizing it more? Or is that process all but done?
No, absolutely, you haven't seen anything in Q4, right. In Q4, it would be opposite, right. There's a lot of transitionary expenses, right. So all those synergies you'll start to see in Q1 and onwards.
Your next question comes from the line of David Tyerman with Cormark Securities.
I just wanted to follow up on a couple of things. Ted, you mentioned on the Logistics comment, in times of capacity shortage, you can flex upwards. What does that mean?
Yes. So what that means is that shippers, in particular, even in the U.S. -- including the U.S., so shippers need essentially more capacity relative to the capacity that their contract carriers are able to offer. And what that means is that they're going to a broker basically to assist them in moving freight that they're unable to move on just the basic lanes. So what happens is, it does cost more money to increase the demand for capacity. It's a little bit of your supply and demand curve here, right. When capacity is lower than what the market demands, pricing goes up because we need to find those carriers for customers that need to move freight, and it just simply costs more money. So they're able to flex upwards because it is a brokerage.
Okay. So are you saying that the Logistics business kind of swings more toward spot and away from some of the contract? And in this kind of tight period, it generates better margins?
Yes. Generally speaking, our broker is primarily a spot market business.
And yes, that's right. During times of tight capacity, you'll see improved margins.
Okay, okay. That's helpful. And then the other question I had just on the ability to attract drivers. This seems to be a big issue in the U.S. Now their unemployment rate is lower. What's the situation in your territory for getting drivers? Is it...
It's very similar.
So definitely, for the first time ever, we're feeling the effect of the driver shortage, which is why we said we're focusing very heavily on recruiting now. If you remember from discussions earlier on, we didn't have a recruiter, we hardly advertised. Now we've got both. We advertise and have a recruiter because we're increasing the volume of drivers we're bringing on. So we focus very heavily on that. We are positioned well in the industry in terms of being very attractive for drivers. Drivers today, rightfully so, are able to be a little pickier as to where they work. So young equipment. Our average age of a tractor is 2 years old. Our average age of a trailer is in that range as well. So very attractive for drivers. Our share purchase plan is unique to us, and it's something that is not in the marketplace for drivers. Especially, younger drivers coming in that are looking to benefit from future growth of the company are looking at the stock purchase plans very favorably. So those ingredients make us very attractive. When I say we focus on recruiting, it's not just bringing drivers in, it's the process of orientation and training, et cetera. So that's an area that we've focused on most recently to increase the time periods we're able to do that with people.
But net-net, since January 1, we've already brought on 10 drivers, and we continue -- we expect to continue to grow at that pace. We just purchased another 13 trucks for our next phase of growth.
Yes.
So we're actually increasing, not decreasing. A lot of companies, I think, are seeing...
A slide.
A slippery slope. And they're having trouble keeping what they currently have. So I think that we are very, very well positioned to be a very attractive company for sort of the next generation of drivers.
Okay. That sounds good. Actually, you just triggered a last question. Could you just maybe I missed it in the MD&A or whatever. But can you just talk about the CapEx for 2018?
Yes, no problem. Kasia's got that number.
Yes, absolutely. In terms of what -- sort of guarantee at this point in time is, there's 10 new flatbeds we're purchasing and then the 13 new Volvos that I just mentioned, so that's about $13.3 million, $13.5 million. Anything above that is going to be dependent on growth. So if we continue to do grow in drivers, we'll continue to invest in new trucks. In terms of maintenance CapEx, there's not much. We still have a very new fleet. So it's all going to -- it's going to mainly be based on growth.
So I thought I heard $13 million. It's $3 million.
Oh, I'm sorry, $3.3 million.
$3.3 million, not $13 million.
I was going to say those are pretty expensive trucks.
Yes, very expensive trucks. Those are the self-driving ones.
Okay. So the $3.3 million to $3.5 million that you're committed to right now, is that all, I think, first half spending and then you see for the second half depending on demand and...
Yes, we have approximately 30 to 50 build slots that are available to us from Volvo currently. And what's going to happen is, as we see great drivers come on with Titanium, we're going to be able to support their need for equipment. So we do have that. But of course, that will only happen as it relates to organic growth and profitability, right. So the 2 are going to work hand-in-hand.
Absolutely. So the 30 to 50 slots you have, does that include the 13 you've committed to?
No, no. That's over and above. It's available. And I think that shows how supportive our partner -- it shows how supportive Volvo is of Titanium's growth, which is great. We're very appreciative for that.
Your next question comes from the line of Konark Gupta with Macquarie.
Just following up here. On the guidance, Ted, so there's a significant revenue growth implied by your guidance, right, when I compare that to 2017. So what you said -- how much would that be coming from Xpress this year and trucks' organic growth outside of Xpress plus Logistics?
So as I mentioned like the guidance isn't really implying organic growth. So it's actually implying the original guidance we gave on Xpress, which was $15 million in revenue plus what you've seen historically for Trucking, right. So the real increase is just what we've seen in Logistics in the last 3 months. So it's mostly Logistics that's driving there.
Yes. One thing we're trying to do here is, we're trying to be careful of being overly speculative. And I think that that's important.
Okay. And just on Xpress. So the $15 million cash, is that incremental? I mean, like, is that $15 million overall or $15 million on top of the 3 you recognized in Q4?
Well, $15 million is a annualized number, right. So revenues were a little bit lower in Q4 for Xpress for a number of transitionary reasons. But we still remain confident that the Xpress run rate is $15 million and growing. Xpress has seen significant revenue growth in the past. They have a great team, and we expect that to continue.
Okay, that's great. And on M&A, what's your -- what do you think is your capacity to execute more M&A here in terms of balance sheet and, obviously, given the covenants and other things. And I know you said, if a platform acquisition comes through, you might look at the market. But what are you seeing in terms of the capacity you have for small M&A? And how much bandwidth do you have for those acquisitions?
You know what, Konark, the bandwidth is good because I think that, first of all, we have a - we do have an acquisition line with our bank that is available outside of our existing facilities. That facility for acquisitions is on a case-by-case basis. So because we're very disciplined, very focused on making sure that when we bring on a so-called acquisition opportunity, what we're looking to do is find a transaction that's mutually beneficial both to us and the vendor, obviously. But it has to represent good value, right. So good value is going to, first and foremost, I think, support the business case. So if the business case is supported, then naturally the acquisition from a financing perspective, regardless of whether it's a small tuck-in and it requires bank financing or if it's something transformational, which is absolutely huge, then the business case will, obviously, probably end up going further down the balance sheet into the equity area. So I think from that point of view, we have very, very good bandwidth. Again, our bank is very confident in us. We have a great relationship with our bank. We have so for many, many years. And I'm actually very excited about the opportunities. I'm excited at the fact that because the economy or the industry is actually showing improvements, there might be some vendors out there that are finally at a point where they can sell their business. And I think that actually excites me.
[Operator Instructions] Your next question comes from the line of Alexandre Ryzhikov with Ewing Morris.
I just want to clarify. It seems like there is some confusion on the call around the $16 million EBITDA number. It should not be taken as guidance for '18, I assume, but just as a run rate that you currently see. And given the color you've provided on the call, it seems reasonable to expect that the '18 number should be better than the current freight rate -- run rate. Would that be accurate?
That is accurate. That's correct.
Got it. And then just a question on cash flow. And maybe you can use the run rate as assumption, and you've provided some expectations on CapEx. But how do you think about free cash flow in '18 or sort of given your current run rate?
Free cash flow is going to definitely improve in 2018 and that's because Logistics is growing, and it doesn't require...
CapEx.
Any CapEx. Exactly. So a lot of free cash flow -- a big improvement of free cash flow in 2018, definitely.
And then maybe how are you planning on using that cash flow? I mean, you talked about the benefit of having the stock option plan, clearly. I mean, so far, I think it's fair to say that probably the drivers haven't benefited given where the stock is trading today and so perhaps that's an attractive opportunity for you guys to use that cash flow to perhaps change that. So what are your thoughts on uses of cash?
Well, it's a great time for them to buy actually. So I'm hoping all my employees do well on their ROI.
I think that the bulk of it will be going to paying down debt and rightsizing our balance sheet a little bit. But we're going to continue to look at acquisitions and see if the ROI makes sense. If the stock price continues to be low and we get our leveraging to a level that's acceptable to us, we'll look at whether repurchasing some stock makes sense.
There are no further questions at this time. I would now like to turn the call back over to our presenters.
Thank you, moderator, and thank you to everyone for joining our call. We look forward to reporting our Q1 results in May and our 2018. Thank you very much.
This concludes today's conference call. All participants may now disconnect.