Earnings Call Transcript - CIGI Q3 2020

Operator, Operator

Hello, and welcome to Colliers International Third Quarter Investors Conference Call. Today's call is being recorded. Legal counsel requires us to advise that the discussion scheduled to take place today may contain forward-looking statements that involve known and unknown risks and uncertainties. Actual results may be materially different from any future results, performance or achievements contemplated in the forward-looking statements. Additional information concerning factors that could use actual results to materially differ from those in the forward-looking statements is contained in the Company's annual information form as filed with the Canadian Securities Administrators and in the Company's annual report on Form 40-F as filed with the U.S. Securities and Exchange Commission. As a reminder, today's call is being recorded, today is October 27, 2020. And at this time, for opening remarks and introductions, I would like to turn the call over to the Global Chairman and Chief Executive Officer, Jay Hennick. Sir, you may begin.

Jay Hennick, CEO

Thank you, operator. Good morning everyone and thanks for joining us for our third quarter conference call. As the operator mentioned, I'm Jay Hennick, Chairman and Chief Executive Officer of the Company. With me today is John Friedrichsen, Chief Operating Officer; and Christian Mayer, Chief Financial Officer. This conference call is being webcast and is available in the Investor Relations section of our website, and the presentation slide deck is also available to accompany today's call. Despite the impact of the pandemic, Colliers reported better than expected results for the third quarter with continued growth from recurring services. These results are a testament to the resilience of our business model, a business that is also diversified by geography, by service and by asset class. Revenues came in at $692 million, down 6%, adjusted EBITDA was $92 million, up 9% and adjusted earnings per share came in at $1.08 up 4% relative to the prior year. While uncertainties persist, we expect our full year results to come in stronger than anticipated. As a result, we have increased our operating assumptions for the balance of the year as you will hear. In a few minutes, I'll turn things over to Christian and John for comment. But before I do, I'd like to make four points today. The first is, culture counts. Our unique entrepreneurial culture at Colliers has always been a differentiator for us. Culture takes years to create and discipline to sustain and that's why it's so difficult to copy. I'm extremely proud of our leadership teams around the world who continue to execute the Colliers way. Our bias for action and propensity to make informed decisions quickly has always allowed us to respond better than most to contain costs, to align resources, while always continuing to provide essential advice to our clients. I'm also confident that coming out of this pandemic, we will adapt to the new normal faster and better than others with our unique enterprising culture, leading the way. Second, like we've done in the past, Colliers is programmed to capitalize on opportunities. We always maintain a strong balance sheet to capitalize on opportunities to strengthen our business, especially in times of change when others are either hitting the pause button or running for cover. This year was no exception. So far we've invested $240 million in acquisitions, up from $45 million last year. During the quarter we continued to integrate recently acquired Colliers Mortgage and Maser Consulting and also completed the acquisition of Colliers Nashville, a leader in one of the fastest growing markets in the United States. Though still in the early days, I'm very excited about the potential for all of these additions this year and look forward to helping them accelerate their growth as part of our global platform. We continue to see great opportunities out there, to add talent, to expand our services and to streamline our businesses, while also looking for incremental acquisition targets to strengthen and further diversify our business. Number three, almost 60% of our earnings now come from high-quality recurring services. Having such a high percentage of our earnings coming from recurring revenues gives Colliers more resilience than ever and clearly sets us apart, not only in terms of the percentage of recurring revenues, but also in terms of the quality of the recurring revenues. Today, the investment management, property management, project management, engineering and design and mortgage services represent a growing majority of our business and we fully expect this growth to continue in the years to come. Make no mistake, there is nothing wrong with traditional capital markets and leasing. Transaction volumes may be down, but they will be back and they'll be back strongly, as the economy stabilizes, because they are essential services that are needed and required by real estate owners and occupiers everywhere. In fact, we're already seeing some signs of recovery in most of our markets as John will talk about. Finally, it's time to better appreciate the value of what we're creating at Colliers. The Colliers leadership team has been creating value for shareholders for a long time. Over the past 25 years, we've delivered about 20% compound annual growth rate in share value. This record of achievement is enviable to say the least, but it also suggests that we know a thing or two about how to value and build high-quality service businesses. The way I see it, Colliers remains materially undervalued. From an investment perspective, where they value us on a standalone basis or on the basis of the sum of the parts, Colliers trades at a significant discount to other property or professional service companies with similar characteristics. Where can you find a global, highly diversified company with an institutional brand, compelling growth prospects on a global basis with almost 60% of its earnings coming from resilient revenue streams, trading at the value that we trade at, especially one with an impressive track record of creating value for shareholders, where management has so much skin in the game, almost 40% of the equity of our Company. With that said, I'd like to now pass things over to Christian. Christian?

Christian Mayer, CFO

Thank you, Jay. As announced earlier today, Colliers reported better than expected financial results for the third quarter. My comments follow the flow of the slides posted on the Investor Relations section of colliers.com to accompany this call. Please note that the non-GAAP measures referenced on this call are defined in the press release issued today. All references to revenue growth are calculated based on local currency. Third quarter revenues were $692 million, down 7% relative to the prior year. Internal revenues were down 19%, primarily due to the impact of the COVID-19 pandemic on our trend and capital markets operations globally. Our internal revenue variance showed significant improvement sequentially that is relative to Q2 2020, as economies began to reopen after the initial phase of the pandemic. Third quarter consolidated adjusted EBITDA was $92 million, up 8% from $84 million last year, with margins at 13.3% versus 11.4% in the prior year quarter. Margins in each region were impacted by reduced revenues but mitigated by continuing aggressive measures to manage expenses including discretionary support at NIM costs, as well as compensation. In the case of the Americas, margins were favorably impacted by acquisitions. Americas Q3 revenues totaled $423 million essentially flat versus the prior year period overall. Americas' Outsourcing & Advisory revenues were up 25% as a result of engineering and loan servicing revenues from recent acquisition. Capital markets' revenues were down 6%, but include the benefit of debt origination revenues from recent acquisition. Leasing revenues were down 18%, a significant improvement from the 45% reduction experienced during Q2. Adjusted EBITDA was $55 million, up 41% from last year with significant contribution for acquisitions as well as continuing cost savings implemented early during the pandemic. In the EMEA region, Q3 revenues were $117 million, down 19% overall. Capital markets were down 37%. Leasing was down 25% and Outsourcing & Advisory was down 4%, all impacted by the ongoing pandemic. Adjusted EBITDA for the region was $8 million compared to $13 million last year. In the Asia-Pacific region, Q3 revenues were $110 million, down 23%. Leasing and capital markets were down 45% and 35% respectively, as all markets and asset classes were impacted. Outsourcing & Advisory revenues were down 5%. Adjusted EBITDA was $13 million, compared to $19 million last year. Q3 investment management revenues were $42 million, up 4%. Assets under management were $36.2 billion as at September 30, 2020, up modestly from June 30. Harrison Street's demographic investment strategy focuses on lower volatility, alternative asset classes, including student and senior housing, medical office, storage and social infrastructure.

Operator, Operator

Ladies and gentlemen, please standby. Your conference will continue momentarily. Please standby. Once again, ladies and gentlemen, please continue to standby, your conference will resume momentarily. Thank you for your patience. You're connected.

Christian Mayer, CFO

Thank you. Q3 investment management revenues were $42 million, up 4%. Assets under management were $36.2 billion at September 30, 2020, up modestly from June 30, 2020. Harrison Street's demographic investment strategy focused on lower volatility alternative asset classes, including student and senior housing, medical office, storage and social infrastructure. And for the most part, the underlying guide of these assets remained stable. Adjusted EBITDA for the quarter was $15 million versus $16 million in the comparative period, impacted by catch-up fees on a new fund earned in the prior year quarter. Our net debt to adjusted EBITDA leverage ratio was 1.5 times as of September 30, 2020, which was the same as the prior quarter and well within our target range. The full impact of the pandemic remains far-reaching and uncertain. However, as Jay mentioned, we have updated our working assumption for the balance of the year to reflect better-than-expected operating results for the third quarter as well as to narrow the range to the balance of the year. The updated revenue range for 2020 full year is at 10% to 15% decline, relative to 2019. The updated adjusted EBITDA range is the 10% to 15% decline relative to 2019. Looking forward, we expect transactional leasing and capital markets revenues, both of which have a highly variable cost structure, to remain below 2019 levels in the fourth quarter. Investment management and Outsourcing & Advisory revenues are expected to remain on track for the fourth quarter. That concludes my prepared remarks, I would now like to turn the call over to John.

John Friedrichsen, COO

Thank you, Christian. As reflected in our Q3 results and updated working assumption for the balance of the year, the level of uncertainty related to the COVID-19 pandemic that negatively impacted our operations and those of most of our clients abated somewhat during the last few months, although we are not out of the woods yet. We saw a positive change in sentiment and momentum during the last few months and we expect this trend to continue for the balance of the year and beyond, supporting modest improvement in business activity. As a global business and leading provider of professional services and investment management to property occupiers, owners and investors, Colliers continue to put clients first, providing our diverse and relevant experience during this unprecedented period. Based on our experience since the outset of the pandemic, we are confident that the time, attention and value delivered today will be rewarded by our clients when the current level of uncertainty reduces and longer-term decision-making resumes. In fact, we are already seeing tangible examples of our advice leading to significant client engagements, most notably in our workplace advisory practices, which we anticipate will lead to future transaction advisory work. Across our global business, our business leaders, professionals and support staff remain highly engaged, despite the challenging operating conditions and the cost-containment measures in place. With just about 6% of our employee base still furloughed, primarily in transactional services, we continue to manage our business carefully and expect to bring back additional supporting capacity as activity levels warrant. Despite the pandemic, Colliers continues to strategically invest in talent across our global platform and take advantage of opportunities to close gaps and build capabilities by attracting leaders and professionals looking to be part of a global business where the entrepreneurial spirit is alive and well. We expect this to continue and accelerate going forward. And to complement this investment in people, we continue to invest in technology that helps improve our productivity and service to clients. Over the next couple of weeks, you will hear about our latest innovation, workplace expert, a mobile-enabled app designed to serve as a user-friendly diagnostic tool to visualize the future workplace using a variety of inputs based on client preferences. This technology was the first developed by Colliers globally under our new updated IT platform and strategy development, that focuses on our client's most pressing needs. A beta version of this technology with the input and involvement of our global workplace practices team has been responsible for winning workplace advisory engagements with several hallmark clients in Europe and the U.S. recently. While cost management remains an operational priority across our business, other areas of focus include the integration of Colliers Mortgage into our U.S. brokerage operations, as well as more recently acquired Maser Consulting. In both cases, we have accelerated the process of cross-selling by leveraging our relationships across relevant advisory practices, that drive value to our clients and brokerage professionals across our U.S. platform. Looking beyond the current crisis, we expect to see a significant uptick and leasing in capital markets transactions across our global markets, largely related to deferred decision making by occupiers and investors reversing. Driving a recovery in activity which from an operational perspective, we intend to maximize by leveraging our recent investments in acquisitions, talent and technology, and emerging from the current crisis stronger than ever before. That concludes our prepared remarks, and I would now like to turn the call back to our operator to facilitate questions.

Operator, Operator

Thank you. Our first question comes from the line of George Doumet with Scotiabank. Your line is open.

George Doumet, Analyst

Good morning, and congrats on yet another strong quarter. You guys raised your 2020 working assumptions, Q4 is our big quarter, you must have some visibility there. Can you maybe share what you're seeing in terms of pent-up demand? And second part to that question, do you guys feel comfortable that you've baked in enough wiggle room there, given the pretty meaningful second wave that we're seeing in Europe and the Americas?

Jay Hennick, CEO

When considering our working assumption, there are several factors to take into account. While we cannot predict the future, we can review our activity pipelines. Q4 is typically a very strong quarter for transactional activity, especially in our EMEA business, which usually generates about half of its EBITDA in this quarter due to the high transactional volume. After assessing our pipelines and discussing with our teams, we feel confident in our working assumption for Q4 based on the information we have today. However, we are aware that new factors may emerge that could impact this outlook.

George Doumet, Analyst

Okay, thanks. Maybe a question to John as to where we're trending on the $150 million in cost savings. I think we're at $60 million last quarter. And second part of that is how much do you guys plan on investing back into the business over the next few quarters?

John Friedrichsen, COO

Look, in terms of that number, we're pretty much right on where we were going to be. So the reason, there's been no change to that number, that's been a consistent factor since we initially identified what we expected those savings to be, so we're running right at that level. And in terms of investment, I'm not going to quantify that, George, it is very selective and somewhat opportunistic around talent. It depends on the availability and whether or not we can connect and make arrangements that work for those that we're hopeful of joining Colliers and for the Company itself. And then ongoing spend around particular technology we've already indicated our expected amount for CapEx this year, which is down, but roughly half of the CapEx relates to technology in some way. And while we have deferred certain expenditures in that area, we are still focusing on those that will drive the greatest return to Colliers during the current period and beyond. So we're still investing there definitely.

George Doumet, Analyst

Okay, fine. And just one last one if I may. Maybe to Jay, I'm just wondering if the pandemic has it all kind of rethought the investment management segment, maybe more particularly what types of asset classes that you'd be interested in acquiring?

Jay Hennick, CEO

It's a good question, but I think the best way to do to answer it is to go back to the very strategic decision we made at the time we entered investment management. We didn't want to go into the investment management business as a same as. And we wanted to have a unique and differentiated product or service offering. We spent a lot of time looking at virtually every type of platform in investment management around the world and concluded that alternative asset classes where institutions were significantly expanding their allocations was the place for us to be. They also have a moat in that business because it is a more complicated way of managing assets, which creates a differentiator, keeps most of the people out of the space. And so we concluded that Harrison Street was the ideal platform. And on top of that they had an incredible management team with a great desire to grow really on all cores with what we look for in a partnership relationship. So the pandemic has not changed that at all. In fact, we are lucky, scale, call it what you want, but we're very happy where we are. We continue to look in alternate asset classes as a way to grow that segment of our business but also assets or strategies that have clear differentiation, they're not the same as, they are clearly differentiated strategies. So I think we have a tremendous platform here and tremendous leadership team, it's obviously been growing, as you can see despite the pandemic, most others have seen asset values fall. We are essentially flat and I would say we're flat because some of the investors have pressed pause on making further allocations had nothing to do with the quality of the assets that we offer. So we're very happy with Harrison Street, I think it has a bright future, looking at some interesting opportunities to continue to grow it. We have an amazing management team that we've got great confidence in. And I think the future in that segment of our business is very bright.

George Doumet, Analyst

Okay, great. Thanks for the answers. I'll hop in line.

Operator, Operator

Thank you. Our next question comes from the line of Frederic Bastien with Raymond James. Your line is open.

Frederic Bastien, Analyst

Good morning, everybody. Can you quantify the contribution that both Maser and Dougherty made to the Outsourcing & Advisory and the capital markets service lines respectively?

Jay Hennick, CEO

Yes, Fred. We get the internal growth rates on a consolidated basis not by region. But as you're aware, both businesses are concentrated in the Americas segment and I'll tell you that the EBITDA growth internally in the Americas was positive and contributions from the acquisitions were significant and as I always mentioned in my comments.

Frederic Bastien, Analyst

Okay, cool. On a related topic, are engineering and mortgage banking services that you plan on growing aggressively in the EMEA and Asia Pac regions? Or is there something unique about these markets that would keep you from doing that?

Jay Hennick, CEO

I think our goal in both segments is they were additional engines for growth that were very closely tied to our core business. We are looking at opportunities in both segments globally. We are obviously taking advantage of our existing platforms and spending most of our time trying to leverage what we own into bigger businesses, bigger opportunities. But having these additional recurring earnings service lines within our family provides great growth opportunities not just in the Americas, but virtually around the world.

Frederic Bastien, Analyst

Thanks, Jay. Are there service lines if you'd like to add that you're not currently offering that some of your peers maybe offering that you're not?

Jay Hennick, CEO

It's an interesting question. I'm not sure our peers are as similar to us as people might think. We have really evolved our business, as you know, Fred, since you have followed us for many years. If you compare us to some of the names you mentioned, I believe we align more with property and professional service lines rather than those other businesses. While a part of our business overlaps with others, we are increasingly evolving in a different direction. Additionally, we've been fortunate to develop new growth engines, including investment management, which we completed in early 2018 and has been in the works even longer. We have numerous opportunities to grow within our existing service lines. Our exceptional culture, which I have discussed and you've witnessed over the years, enables us to execute transactions globally, regardless of travel challenges and other factors. We feel that we are in a very unique position with a culture that supports both internal growth and acquisitions, and we will continue to pursue that in the coming years. Did we lose you?

Frederic Bastien, Analyst

Thank you. No, thank you. Congrats. Congrats and keep it going.

Operator, Operator

Thank you. Our next question comes from the line of Stephen MacLeod with BMO Capital. Your line is open.

Stephen MacLeod, Analyst

Thank you. Good morning everyone, and congratulations on another successful quarter. The Outsourcing & Advisory business was the primary driver of revenue this quarter, demonstrating strong resilience. Could you provide a breakdown of how each segment within Outsourcing & Advisory performed during the quarter?

Jay Hennick, CEO

Well, I would say that property management was very, very stable. Steve, like flat to perhaps even up in a couple of markets. And then the project management business was down slightly, particularly in India. And India has had very challenging situations with its control of the coronavirus and we're watching that closely. And that business has seen delays in its productivity in the project management space. So the valuation and advisory continues to be resilient. And business there, particularly in the U.S. is very strong, but also solid elsewhere around the world.

Stephen MacLeod, Analyst

Will Maser and Colliers Mortgage serve as the new platforms within Outsourcing & Advisory, and will you be segmenting those revenues separately into different segments and verticals?

Jay Hennick, CEO

They are part of Outsourcing & Advisory for sure. So, loan servicing and engineering and we will not be explicitly segmenting those. They will be part of the Outsourcing & Advisory Group just like the other.

Stephen MacLeod, Analyst

Right. Okay. Now, that's great. Thank you. And then when you think about Q4, you talk a little bit about the pipeline that you have in the visibility that you have. How would you characterize your visibility beyond Q4 into 2021, is that something that is beginning to evolve or emerge in terms of your sidelines?

John Friedrichsen, COO

Steve, this is John. Look, this is all about uncertainty. And I think at this point, it's a little bit too early to tell what 2021 will show for us. But one thing we do know is that there has been an incredible deferral of activity, particularly in leasing where companies have opted to make short-term decisions and ultimately that's not really where they want to be. They just need a bit more clarity. And then we expect there to be a resumption of longer-term that might adjust a little bit of relevance to the way it was in the past. But most occupiers are going to want uncertainty and certain landlords do as well, beyond just sort of a one-year roll forward. So that is coming and whether in 2021 or later, we don't know at this point. But it's significant and it will occur either next year or the year after. So we certainly have that, as sort of anecdotal evidence is what we expect.

Stephen MacLeod, Analyst

That's helpful. I want to ask about your entrepreneurial culture and the quick decisions you made regarding cost adjustments in the early days of the pandemic, which have clearly benefited EBITDA over the last few quarters. As you see revenues recover, will you need to reintegrate more costs into the platform to support those revenues? Or are you in a position to explore other revenue growth opportunities without reintroducing the costs you previously eliminated?

Jay Hennick, CEO

So Stephen, we expect to take out $150 million this year of costs. And as we look forward, we think we can become more efficient in a number of areas. This has been a real bit of challenging, but yet rewarding experience in some ways with silver linings appearing through some of the things we've seen and learned. And certainly our hope is that when we start to reinstitute some of these costs in 2021 and going forward that we will not have to reinstitute all of these costs. We will be able to make some pretty significant transformation in the way we do business, the way we approach travel and discretionary expenses, the way we approach some of our support staffing in our transaction with these particular, but also on the other businesses. So our intention would be that our cost structure will be different going forward as we return to more normal conditions.

Stephen MacLeod, Analyst

That's helpful. Lastly, could you share your thoughts on how Colliers Mortgage and Maser have performed in line with your expectations during this strategically important period? How has your experience been so far?

Christian Mayer, CFO

We are very pleased with the performance of the businesses we've recently acquired. Although we've owned them for a brief period, we invested significant time in due diligence, which has allowed us to understand them thoroughly. The time we've held these businesses has been quite successful, with integration progressing smoothly, as Jay and John have mentioned. The Colliers Mortgage business is currently benefiting from strong refinancing activity, which we expect to continue for the next few quarters. With interest rates at historic lows, it's an appealing period for multifamily property owners to refinance. This situation has allowed us to gain market share in Fannie Mae origination, which was part of our expectations. These factors are contributing to solid operating results. The engineering business is also performing well across all its sectors, exhibiting strong margin performance along with high staff utilization and productivity.

Stephen MacLeod, Analyst

Great. Thank you very much and congratulations.

John Friedrichsen, COO

Thank you.

Operator, Operator

Thank you. Our next question comes from the line of Stephen Sheldon with William Blair. Your line is open.

Stephen Sheldon, Analyst

Hi, thanks and congrats on the continued strong execution. Wanted to ask a little more directly about the visibility you have especially if you look into 2021 and how your clients are thinking about their office footprints at this point. And the adoption of remote working policies, could it take an extended period for companies to think through work from home adoption, which could continue to weigh on lease durations per period?

John Friedrichsen, COO

Stephen, absolutely I think you hit the nail on the head. I think it's going to take a bit of time here to sort out. I mean, and it's dynamic because it's changing and every company has got a different perspective on how important the workplace is and how it impacts our culture and all those kinds of things. I mean, the short answer is that in the immediate term, it's difficult to change the dynamics and that's partly why there has been a deferral, I think of so many decisions around leasing. But you know, as I said in my remarks our workplace advisory business really ran off their feet counseling with the who is who of companies that are all going through a discovery process currently to evaluate what they think best works for them going forward. And that's going to I think unfold over the next several months and well into next year, and then beyond that, decisions will get made and there will be a little bit more certainty. But it certainly is a great time to be in the workplace advisory business as long as you've got 24 hours a day to expense your advise.

Stephen Sheldon, Analyst

Got it, makes sense. And I think the thought out there, it's been leasing activity would likely come back and recover before investment sales in particular, in office, especially just given the impact of leasing dynamics property can have on properties value. How do you think about that dynamic, especially that seems like investment sales activity is holding up as well arguably, maybe a touch better than leasing so far?

John Friedrichsen, COO

Yes, the impact on leasing is primarily related to deferrals, which many companies are choosing to negotiate with landlords who wish to keep their tenants. These deferrals are typically pushed forward by a year. Consequently, the associated fees are adjusted based on how the industry generally operates. This creates a temporary situation that affects overall leasing revenues. However, activity is expected to pick up again, and revenues should return to previous levels when companies are ready to commit to longer leases, particularly when they have greater certainty about their future space needs. I anticipate we will see more of this momentum by mid-2021, assuming the pandemic experiences a second wave and eventually resolves, leading to a new normal in 2021 or later.

Stephen Sheldon, Analyst

Got it. And then last one for me, just curious what the M&A pipeline looks like right now? And have you seen anything notable in terms of valuation expectations out there, especially for smaller players that may have less flexibility to ride out the volatility?

Jay Hennick, CEO

The short story is, yes. I think there is a lot of people, a lot of targets, that feel a missed optimum time to potentially sell their business. I'm now talking about more traditional capital markets and leasing. We're being very, very careful there. We're excited about buying significant business like our affiliate in Nashville, which is something like 90 professionals, fully balanced business, property management valuation, project management and expertise and healthcare obviously, in that segment of the market. They happen to be the market leader, also in Nashville. So from our perspective, that is a profile type opportunity. We're seeing some of those around the world, a couple in the U.S., several in Europe and a couple in Asia, more Australia and New Zealand, in particular. But generally speaking, I think it's fragile for acquisitions right now. Although valuations for acquisitions, particularly those that have high recurring earnings, are up significantly and that's because there are a lot of private equity firms chasing these types of assets in the hope of potentially consolidating and doing whatever they do. And ultimately I think they're going to have more headwinds than normal given the maturity of the marketplace. It's very powerful for Colliers Mortgage to associate itself with Colliers because there are so many different points of leverage, both between Colliers and Harrison Street and I'd say the same for Maser. And we're seeing that in a variety of different M&A opportunities. So we've got a nice pipeline, whether it'll be able to bring some of it is a different question. But the beauty is when we make a deal, it's for the right reason, it's because the leadership teams aligned with our unique culture. They want to stay and continue to grow and leverage their business. And that's been a great differentiator for us over not just the last few years, but the last 25 years, as we've executed on our growth strategy.

Stephen Sheldon, Analyst

Great. I appreciate the color.

Jay Hennick, CEO

Thank you.

Operator, Operator

Thank you. I'm showing no further questions at this time. I would now turn the call back over to management for closing comments.

Jay Hennick, CEO

Thank you very much, operator. Thanks everyone for participating in today's call. The fourth quarter is an important quarter for Colliers, let's hope that we have a strong one. And look forward to speaking again in early February. Have a good day.

Operator, Operator

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.