Good day, ladies and gentlemen. And welcome to the Apogee Enterprises Incorporated Q3 FY 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time [Operator Instructions] As a reminder, this conference is being recorded. I would now like to introduce your host for today's conference, Ms. Mary Ann Jackson. Ma’am, you may begin.

Thanks, Lauren. Good morning, and welcome to the Apogee Enterprises’ fiscal 2016 third quarter conference call on Thursday, December 17, 2015. With us on the line today are Joe Puishys, CEO; and Jim Porter, CFO. Their remarks will focus on our fiscal 2016 third quarter and our outlook for full-year fiscal 2016. During the call, we will discuss non-GAAP financial measures when talking about Apogee’s performance. You can find definitions for these Non-GAAP financial measures in our press release. Our call also contains Forward-Looking Statements reflecting management’s expectations based on currently available information. Actual results may differ materially. For information about factors that could affect the Apogee’s business and financial results can be found in our SEC filings. Joe will now give you a brief overview of the results and then Jim will cover the financials. After they conclude, Joe and Jim will answer your questions. Go ahead Joe.

Thank you. Good morning, everyone and welcome to the Apogee's conference call. In our fiscal 2016 third quarter, we delivered outstanding earnings performance. In particular, we achieved an 11.7% operating margin, our best ever quarterly operating margin on our way to our best ever full-year operating margin as well. This is a 330 basis point improvement from last year's third quarter, which illustrates our earnings potential and underscores our success in driving margin enhancement. In addition, our gross margin for the quarter grew 300 basis points to 26.2% also a new record. Operating income was up 35%, earnings per share were up 34% in the quarter. Revenues were impacted by foreign currency effect and lower volumes in our international operations as well as some project timing that pushed revenues into fiscal 2017, when we expect to see double-digit top line growth. In the quarter, our backlog also grew to its highest level ever by far to $545 million, up more than $30 million from the near record second quarter backlog. We saw a sequential backlog growth in the quarter in all four of our operating segments. With our backlog strength especially in fiscal year 2017 and 2018 as well as our robust bidding activity and favorable market conditions we are expecting that growth for Apogee will continue for multiple years. More on the three year plus outlook before I go to your questions, we are focused on managing factors within our control for improved earnings, namely operations, productivity, costs which should be evident in the magnitude of our margin improvement. We continue to make strong gains in manufacturing operational excellence, leveraging our lead initiative. I want to remind you that we've had more than four years, 17 straight quarters to be exact of double-digit operating income growth. Revenues though have…

Thanks Joe. I’m very pleased with the strong operating and earnings performance in the third quarter. Third quarter revenues were down 2% compared to last year to $238.3 million and were flat in constant currency. Revenues were impacted most by our Brazil and Canadian businesses and by project timing with revised project schedules pushing some revenues out to be recognized in fiscal 2017. We achieved a strong gross margin of 26.2% for the quarter, up 260 basis points sequentially and up 300 basis points compared to the prior year. Across the board, we experienced solid operational performance with good cost management. Compared to last year, we benefited from increased pricing and mix, improved productivity and lower aluminum cost along with lower healthcare cost. Operating income grew 35% to $27.9 million and an operating margin of 11.7% improved by 240 basis points sequentially and 330 basis points year-on-year. Our earnings of $0.63 per share were up 34% from the prior year period. I will provide some detail on the quarterly segment results. In Architectural Glass, revenues were down 5% driven by lower international revenues primarily due to currency exchange and lower volume at the Brazil operation where we face challenging economic condition. In constant currency, segment revenues were down 2%. Our Architectural Glass segment continues to see strong domestic core project demand. Operating income grew 44% to $8.4 million with improved pricing and mix and good productivity and cost management in our U.S. operations. In Architectural Services, revenues and operating income improved year-on-year. Revenue growth of 9% to $61.2 million was driven by project timing. We regularly comment that this segment has lumpier quarter-to-quarter revenue as well as backlog impacted by normal job site schedules and activities. On a year-to-date basis architectural services revenue were up 1% with the third quarter…

Thank you Jim. With some revenue that we expected for fiscal 2016 moving into fiscal 2017 combined with our high level of backlog and robust bidding activity, we are anticipating double-digit top line growth for next year. We have visibility internally from our bidding activity and quoting activity and market conditions continue to be favorable for sustained non-resi growth. Some of the external metrics we watch are, number one, job growth which continues to be healthy particularly in sectors that impact our business, namely professional services, education and health services. Two, the Architectural Billing Index is showing increasing levels of demand for designed services for nearly all construction project types the majority of this year. In fact, the ABI has been at or above 50 for 20 in the last 24 months. The Dodge non-residential construction forecast adjusted for Apogee’s fiscal year and lag to production starts continues to show growth for our end-markets for three to four years through our fiscal 2020. With our outlook of strong end-markets and strategies we have in place, we continue to believe we are positioned to deliver the longer term goals I have outlined before. I will be happy to take your questions now. So Lauren if you could please open up the call to questions. Thank you.

[Operator Instructions] Our first question comes from Samuel Eisner from Goldman Sachs. Your line is open.

Yes good morning everyone.

Hey Sam.

Good morning Sam.

So just wanted to talk a bit about the project push outs. Maybe you could give us a little bit more color on what's happening on a regional basis? What are the reasons behind these push outs? And maybe address why you have conviction in a double-digit revenue growth for next year, given the current delays?

Yes so Sam, I have stated we felt that Q2 and Q3 would kind of be the end of the phenomenon. What happened last year, when the orders rebounded around the April time frame and the end-market started to explode in our sector, it resulted in project schedules and GCs and developers really putting together aggressive schedules for the construction sites that would ensure that the subs and the people would be ready. And I would say when the orders exploded last summer, a year and a half ago, it led to schedules that were unattainable. And I would say in Q2 and through about the month of October we saw an abnormally high level of calls late in the month, late in the quarter to push off deliveries for a couple of months or a couple of quarters, because projects were not where they anticipated at the site. You hear a lot of people talk about getting employees or workers at the site, I believe it’s frankly more about overly aggressive schedules that were put into place in the summer of 2014 that impacted us this year. We are very confident that from October it was behind us, November was a normal month, every single month we will get calls to push off deliveries for a few weeks. It was quite typical in November, I won’t name specific projects, I’m not here to count on a general contractor who I do business with, but a lot of it was in Chicago and New York areas where we just had project schedules that we were not keeping up. And it impacts our product businesses, primarily our Wausau Window business and our Viracon Glass. We feel that’s behind us, we feel Q4 will be a normal quarter of picking up prior push outs and the normal level of push outs going forward. So while it’s hurt our revenue line in Q2 and Q3 of this year, it hasn’t gone anywhere other than later into the delivery schedule. We feel very, very confident, we wouldn’t be projecting the revenues we are projecting for next year, if we didn’t have the backlog and the schedules to support it. so I believe it was phenomenon based on the unusual spike in demand that happened a year ago.

That's very helpful. And so just to confirm, it sounds like delay through October; November, you saw more normalized order patterns. And then for the first two weeks of December, are you also seeing that kind of normalization come back into your order trajectory?

Yes, we are feeling good about that. I’m confident of our revenue growth that we have stated for the fourth quarter and more importantly is the margins, the margins in backlog are healthy. Obviously while our revenue might have been a disappointment to some of you. We've pretty much been trying to signal that the delay issue would impact our third quarter as well. The headwinds from the foreign operations, Brazil is not going to get better anytime soon, but it's a small piece of business for us, we continue to stay in the black. Canada there are significant signs of a return to a more healthy climate, they had GDP growth in their counter third quarter, so I'm feeling a little better about Canada now than I did. We made some changes in our operations and saw significant improvement in our abilities up in Canada, so, all-in-all, very confident on next year's projections.

Understood and then just lastly on the incremental acceleration this quarter, you know, pretty strong; I think over 100% drop-through. Can you talk a bit about your expectations for where aluminum prices will be going for your business and also how you think about pricing on glass into next year? Should we be able to still see 40%, 50% incrementals? Or should those come back down to earth going forward? Thanks

Yes no problem Sam. Listen, I've been very consistent in saying, if you grow 20%, the 30% to 40% conversion on incremental is more challenging, because you have a lot of headwinds with regards to productivity, new hires and we were struggling with those kind of conversions. When you are growing at closer to 10%, 5% to 10% we should expect 25% to 35% conversion depending on the mix of which businesses are driving the growth. Next, year we haven't completed our ALP process business-by-business that happens for us in January and I will review my board in February at the end of our fiscal year. I'm confident we'll be back to somewhere between 20% and 35% conversion depending on the mix. It's a pretty wide range, but as we start growing double digits again it won't be 80% to a 100% conversion. We still believe we will continue to grow our bottom line, you heard my comment, you probably picked upon the comment. We are holding our revenue forecast and our earnings forecast for F 2018, probably what I said 12% at least, we haven't locked on our new 2018 forecast yet, so we'll have more clarity on that in a couple of quarters when we talk with you guys, but feeling pretty bullish about that now.

If I can just sneak one more in, just the automation investment that you're making in glass. What is the expected return on that, and how much are you spending? And you know, it seems as though this is also an operating margin improvement initiative. So if you can just talk to that, that would be great. Thanks.

Yes thanks Sam. Jim will talk about the returns. We're going to invest over $50 million that project has begun. For automation and capability, we have some of the new architectural designs call for glass sizes we were not capable off, if we weren't able to change the spec, we would lose an opportunity that is no longer the case. When you look at the schedule, how the timing works from bidding to actually delivers, and effective immediately we're now able to start selling the oversize glass capability for delivery in about 15 months and we're very-very pleased to have made that investments, substantial. But it includes significant capability and as importantly a lot of automation and productivity in our factory as far as return I'll let Jim answer it.

Yes, we generally use 15% of ROIC hurdle for large investments than - for those of you who have been to our factory know that too, really take advantage of some of the lean initiatives. In architectural glass business we've got some just shop for and layout issues based on the configuration of the buildings. And so as Joe mentioned it will be about a little over $50 million and it will actually occur over three fiscal years in terms of the timing of that because we need just in building to be able to introduce some of the automation as well as the new capabilities.

Helpful. I'll hop back in line. Thanks.

Yes and Sam its actually just a phase in our automation investments, we have more to go in our, especially our glass factories with regards to automations and this was one of our major steps as you can tell over $50 million, but there is more opportunities there. So thanks Sam.

Our next question comes from Brent Thielman from D.A. Davidson. Your line is open.

Hi, good morning.

Hey Brent.

Good morning, Brent.

Joe or Jim, you had $378 million in backlog. It looks like it's scheduled for next fiscal year; and, as you noted, notably higher from where you stood in the same period last year. But it's a fraction of the revenue you need to get to in order to be up double digits next year. So I guess my question is: do you expect the backlog to see a meaningful step up here sometime in the next 12 months? Or is that even necessary in order to hit that revenue target?

Brent, it's first of all yes, $378 million it's almost $70 million more. Our classification was that $378 million is for F 2017 and beyond, the bulk of it or the majority of it is in that F 2017, a year ago when we would have been talking about F 2016 and beyond, that number was closer to $300 million. Again, with most of it being into the next fiscal. That is an incredibly strong indicator. Most of our businesses are short lead time, so our largest business in Apogee is our glass business. We have eight week lead times, six to eight week lead time depending on the month. So typically by far our largest business when an order enters the backlog it’s revenued out within eight weeks. So typically that business has a very small backlog considering the size of the business. Our largest contributor to backlog is our services segment and our installation and that’s I think over 60% of our backlog. That business we have been very public that our goal was not to try to grow that faster than the market or even as fast as the market. We wanted to focus on results and operating margins and as you can see, we are up over 500 basis points this quarter. We had no project surprises. We are being very particular about what projects we bid. Our win ratios are higher, because we are focused more on the projects we feel will be successful and that business will not grow substantially higher, it’s about 80% of the capacity, we like that business. So short of an acquisition, we don’t see that business growing dramatically, maybe mid single-digits and we are more interested in the quality of projects and the margins in that business. The backlog this quarter coming in, it might possibly grow as well. Again, we have a lot of big projects that come and go into backlog, so it’s impossible to predict. Jim likes to say every quarter we don’t need sequential backlog increase to make our numbers. More than likely, we will see some growth in backlog, our largest contributor to backlog is getting to the point of the business we wanted at. And if we look at our activity, the forecasted projects we are working on, we are very confident with that $378 million beyond and combined with our forecast for our short lead time businesses that our revenue forecast for next year is solid.

Brent, I will just make a couple of comments. First of all, as Joe indicated the current backlog level, frankly our view is that level plus or minus a little bit really supports our kind of two year outlook for growth. I do want to remind everybody that the way we capture backlog for all of our businesses other than Architectural Glass, we receive a contract or purchased order for the full project value. The way the architectural glass industry evolved and that as Joe said our biggest business, we receive commitments for a project and that project gets down into construction phases representing that short lead times that Joe referenced. So backlog itself, we only have a portion of the project that’s been committed to us in architectural glass, but we have really good visibility beyond what is in our backlog.

Okay. And then thinking about kind of the growth expectations, Q4 and I guess into next year, can you kind of help frame what is built into that with respect to Canada and Brazil?

Yes this is Jim. So first of all, I mean there are different businesses, in Canada Q4 is just a seasonally slow time period, but I think we have seen stabilization from a volume standpoint there and so we are getting close to kind of anniversarying during the exchange rate impact. So probably a little negative impact that was in Q4. And then similarly as we go to the Brazil business, volumes are not quite stabilized yet, we are still working through backlog that we had and kind of the exchange rate this year. As we look into next year, our current expectations would be kind of relatively flat in the Brazil market before any exchange rate adjustment and maybe some slight declines, but that’s a small business. And then in Canada, our expectations are that we start to see the benefits of what we have seen some growth in GDP up in Canada and outlooks are economic improvement. And so again, we are just now working on our plans from next year, but at this point we would expect to see on constant currency basis some growth in that business.

Yes Brent for the first time and probably year, I’m beginning to have the beginning of some confidence in our opportunities in Canada. There are ways for us to take advantage of the 0.73 exchange rate with Canadian U.S. dollar in the marketplace. So we are going to try to do that but operation, we have made a lot of improvements in the last six months. So starting to feel better about that. And as Jim said, Brazil a lot of people struggle to make money in Brazil, we didn’t. it was a high money making operation for us when I first showed up here, our U.S. business was struggling, the tables have turned a little bit. We all know what’s going on with the situation, the scandal in Brazil. We are anticipating two more years of trouble down there in the economy, but for us to keep that business in the black is actually pretty impressive accomplishment, it’s very small so doesn’t have a big impact on us. The economy will return, they will continue to build building's down there and we'll be ready when it does turnaround.

Okay. And then on the architectural glass business, when you hit 10% close to 10% margin this quarter. I mean, is it fair to say this 12% sort of operating margin target is fairly conservative for that business at this point? Were you surprised to be at 10%?

No, no, we are not surprised. 12% is conservative for that business.

Well, 12% is our goal for a overall Apogee and I think we've been clear that architectural services is always going to be our lower margin business with a goal of getting to 10% which obviously requires our other businesses to exceed 12%.

Okay. If I could just sneak one more in. Kind of going back, and thinking about the backlog and just the degree of shorter lead time business you have. And maybe just thinking about Viracon glass specifically, is there a way you can frame your pipeline relative to where you were last year, I mean, just to give us a little more comfort about the double-digit revenue growth expectations in the next year? I'm just trying to think of other ways in terms of framing the visibility that you have right now beyond backlog.

Well, as Jim said, our largest business doesn’t - I'll give you an example, as you mentioned if we went up $15 million award in our services business, $15 million goes in the backlog on one day and it might take a year of revenue. So over the course of the year, it has an average backlog impact of $7.5 million over that time period. Same thing for our large windows business, when you look at the glass business, our largest business, if they have a $4 million win, unfortunately we don't put $4 million to backlog, because we don't have a legally binding purchase order for that yet. We'll get a PO for the first four floors of the building for $300,000, that will go into backlog and come out within eight weeks and then, and we might get five to 10 purchase orders for that particular project. So even though the backlog impact of Viracon is low, we have great visibility for what the total award is worth. It’s just the way it's done. So I would like to mention, we have four levels of visibility to our future work, one that we highlight and discuss publicly to one non-GAAP metric we use is booked backlog, $445 million. We also have awards that are in hand yet we do not have a signed contract, so it's called contract in review, they virtually all enter backlog within the next 90 to 120 days, there are lot of negotiations on our contracts in our long lead time services business. You've heard me say repeatedly, we never would sign the first version of a contract that comes across our desk. It typically calls for us to be responsible for anything that goes wrong in the world including weather. It takes a lot of work to get the contracts the way we want them. That's a contracts and backlog. We have a third level of visibility, it's project we've been awarded, whether its verbally or we're working with one GC and if the general contractor wins award that's our business. So, we know a contract is coming, we put into the win column and it probably will materialize in the backlog in the next six to 12 months. And then the fourth level of visibility is the least concrete, but by far the largest, it's work we're bidding on and when we bid work we know what our probability of success is. Of course we bid work where we're at the long shot and we score that in the low probability, but we also bid a lot of work we know where there are likely winner if the project goes forward. By far that is the largest category so we try to weight that. And when we combine those four levels of visibility we have a fairly accurate position of what our revenue potential will be in the next 12 months to 24 months.

Okay. Thanks for that, appreciate it.

You bet Brent.

[Operator Instructions] Our next question comes from Michael Conti from Sidoti. Your line is open.

Hey good morning.

Hey Michael.

Hi Michael.

Just a couple of questions related to backlog. Can you break out the backlog by segment?

Yes, Jim I'll do that here. Well, we obviously will do that in the queue, but Jim do you have the number in front of you?

Yes, for our segment backlog for the quarter our architectural services segment, just kind of round off in numbers and this is for intercompany eliminations of be about almost $360 million. So, that represents roughly 60% of our total backlog consistently. Our architectural glass business is about $85 million, architectural framing systems about a $112 million and then our large-scale optical business for less than $3 million. Now we have about $15 million of [UM's] (Ph) confirmed.

Okay. And then I guess if we stripped out some of the delayed work, which I assume just stays in your backlog, how much of an incremental increase in backlog or I guess better said, how much new work did you guys win on a sequential basis?

Well the increase in the backlog this quarter of over $30 million was entirely new work. If we had been able to revenue $20 million more, obviously our backlog would have been down and would be a different story. So I’m sure that would have made all the difference in the world, but it is what it is.

We have in the range of $275 million to $280 million of new orders in the quarter. So it continues to be a strong order activity.

Okay, and then I guess can you quantify I guess the margin on the new work added on a year-over-year basis?

Yes well we continue to see margin enhancement in all the new work we are bidding. It’s been triple-digit. Our margin and backlog continued to increased in the third quarter which is pretty impressive, because the entire $500 million backlog saw lift in margin. It’s 50 to 100 basis points consolidated and it’s a sign of the new work coming in at better margin. Some of it’s certainly because of the strength in our industry and for that very reason margins improve. There is tighter capacity, fewer people bidding on projects, but it’s also significantly due to our discipline around project selection. We have stated for two years now, we thought we could do a better job and what projects selected, not every order is a good order and we have consistently been 100 to 200 basis points better in work going into backlog versus the work that’s in backlog.

Great. And one last one for me. Can you just talk a bit more about glass imports? Is that a net positive or a net negative for you guys? How should we be thinking about imports and potentially any disruptions to your business? Thanks.

Well I think you are talking about competitors from international sources?

Yes.

Yes there aren’t a lot of people in the U.S. that can do what our Viracon Glass business can do which is coat and fabricate. Most of our competitors in the U.S. are regional fabricators who buy pre-coated glass, slightly different business model. So for premium high-end class A commercial buildings, our business is really the cream of the crop. We do have international competitors. Clearly on the Eastern Coast, European competitors are similar to our Viracon business have tailwinds because of the strength of the U.S. dollar, the comparative weakness of their own. They have got a European cost base selling to U.S. dollar it gives them an effective price increase without having had to raise their prices. So we have been pretty good at maintaining our share or doing a really nice job of competing in spaces we have not tried to compete in before. There has not been a noticeable change in market share, but clearly we have got - the current exchange rate - power of the U.S. dollar has clearly opened the door for international competitors to try to move in.

Okay great.

We are building our plans and strategies around not expecting any improvement in the U.S. dollar, there are other ways that we can continue get our fair share of business out there. And our Viracon Glass business really has focused on the really one-third of the non-resi building market that is high end where we’ve had a very strong market share position. There is another two-thirds of the market out there where things we have done like our new coater that went into place in August of 2014, some of the investments Jim and I referenced early in this call that allow us to be a better competitor in the entire non-resi sector and not just a slice. So we are confident where we are.

Okay, great, thank you.

Thanks Michael.

Our next question comes from Samuel Eisner from Goldman Sachs, your line is open.

Hi, yes Sam.

Hey, just to quick follow-ups here. Just going back to the pricing question, how do you think about pricing on glass into next year? I believe you are near prior peak levels. So how do you think about pricing? And then also on raw materials, given that aluminum has deflated, are you hedging that? Are you locking that in some way so that you can still see benefits in the next year? Just wanted to understand the whole price cost dynamic, because it does seem to be a pretty significant driver of incrementals. Thanks.

Yes. Either you or someone asked about that and I didn’t answer, so I appreciate you bringing it back up. Jim will comment on aluminum, but as far as glass pricing, all of our projects are forward purchase. So if the raw material on glass increases, which it has in the last couple of years, it was pretty steady for 10 years. The float guys took out capacity in the recession, I think above 25% capacity of float was removed from the industry, as that price started to go up, we just reflect that in our quotes in our bidding activity. So there is really no exposure on glass pricing and so we have no issue there. We are certainly enjoying versus a little over a year ago where we had headwinds on aluminum cost and I have mentioned in our segments, our industry is very, very slow to pass on aluminum cost increases to the marketplace. It's equally slow in passing on the aluminum on favorability in the form of pricing and that's where we stand today. So, we're certainly enjoying and improvement in our margins from aluminum, but frankly it's one aspect, it's not the dominant reason for our profitability improvement in our framing systems businesses. It's been primarily productivity in our factories. The aluminum cost has been a contributor though and but we continue to hold our pricing in that segment.

And as it relates to aluminum material cost Sam, we're probably about 50% of our aluminum related purchases, we have a forward buy on those and the other are spot buy, I mean we were anticipating maintaining relatively low aluminum costs over the next year, but we're also looking at some additional hedge opportunities.

Great. Thanks very much.

Thank you Sam. Lauren are there any more questions?

We do have one more question from Scott Blumenthal from Emerald Advisers. Your line is open.

Good morning Joe, Jim, Mary Ann.

Hey Scott.

Good morning.

Jim, you mentioned Brazil and Canada as being headwinds during the quarter particularly due to the strong dollar. Would you be able to or are you able to quantify the impact on EPS from those two geographies?

Yes. It's probably roughly only about a penny, because that level of the businesses as Joe said we're happy to kind of be stand in black in those businesses, but it's pretty modest, it has started to get pretty modest the year ago.

Okay, and then, Joe, kind of on the same topic there, you mentioned that you may have some opportunities in Canada due to the situation with the Canadian dollar trading at about $0.73. Might you be able to give us an idea as to what some of those might be?

Scott, I don't want to telegraph my strategies or to my competitors, I just want to be careful there, but I would just tell you, there's lemonade in that lemon, it was mentioned I think I don't know for Sam or Mike or Brent, but somebody asked about the impact of the international people coming here. Well guess what, I've an international operations that's getting, - has a same exchange advantage if we want to use that to compete and we will take advantage of that if it's possible.

Okay, that's pretty helpful, thank you. And then one more if I might.

You bet.

Can you discuss utilization right now, particularly in your facilities in Owatonna and also out in St. George?

Yes, Jim can give you any specifics, but let me open just simply by saying our capacity utilization dropped in the quarter. but the primary reason was the startup of our new anodizing line, within the framing system segment one of our businesses are finishing operation that does anodization and painting of the aluminum systems that go on buildings and it's a great business that’s been growing. Especially the anodizing side, we added about 60% capacity to that business with this major project we announced the year ago, the project won online in this quarter and we are already running 24/7 on that line. And then in our glass business, our St. George factory is up and running and frankly we're at full capacity there as well, our glass business is really humming right now. So our capacity utilization dropped but it was mainly because of the capacity we brought online in the last year in St. George, Utah on glass and in our Wausau line tech business.

I think maybe the key point Scott is that we continue to feel that we're largely capacitized to be able to get through our fiscal 2018 revenue numbers other than we're making investments and capabilities and productivity and then there's kind of nominal investments for capacity.

Got it. Appreciate it, thank you.

Thank you Scott. Lauren are there…

And I'm showing no further questions at this time. I would like to turn the call back over to Mr. Joe Puishys for closing remarks.

Alright Lauren, thank you very much. And everybody I appreciate you dialing into our call today, hope really we've provided more clarity to our strong results. Obviously we will be talking to many of our analysts over the next couple of days and weeks and Jim and I will be on our usual road show through the quarter and look forward to see you on the streets. And clearly, we look forward to talking to you in about 90 days as we wrap up another phenomenal year. I would like to remind you, we set some pretty significant goals three years ago of getting to a billion dollars and 10% operating margin and a lot of people didn't believe us and we're virtually on knocking on that door and we'll literally be there at the end of this fiscal year. And I hope you feel we've earned the credibility when we say $1.3 billion and at least 12% operating margin in fiscal 2018, which is only we will be there and literally to fiscal year. So, look forward to continuing to do what we said we will do and we will talk you all soon. Thank you.

Ladies and gentlemen, thank you for your participation in today’s conference. This does conclude the program. You may all disconnect. Everyone have a great day.