Good morning and welcome to the Acuity Brands' Fiscal 2018 Fourth Quarter Financial Conference Call. After today's presentation, there will be a formal question-and-answer session. [Operator Instructions] Today's conference is being recorded. If you have any objections, you may disconnect at this time. Now, I would like to introduce Mr. Dan Smith, Senior Vice President, Treasurer and Secretary. Sir, you may begin.

Thank you and good morning. With me today to discuss our fiscal 2018 fourth quarter and full year results are Vern Nagel, our Chairman, President and Chief Executive Officer; and Ricky Reece, our Executive Vice President and Chief Financial Officer. We are webcasting today's conference call at acuitybrands.com. I would like to remind everyone that during this call, we may make projections or forward-looking statements regarding future events or future financial performance of the company. Such statements involve risks and uncertainties such that actual results may differ materially. Please refer to our most recent 10-K and 10-Q SEC filings and today's press release, which identify important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Now, let me turn this call over to Vern Nagel.

Thank you, Dan. Good morning, everyone. Ricky and I would like to make a few comments and then we will answer your questions. While our results for the fourth quarter and the full year were records, we had higher expectations coming into 2018. Market conditions for growth were far more subdued than most had originally anticipated, especially for larger commercial projects and deflationary pricing persisted throughout the year, while cost pressures were far more significant than most had forecast, particularly in the fourth quarter. Our results for the quarter and the full year reflected solid performance given these market conditions, while our strategic accomplishments this year were very significant as I will describe later in the call. I know many of you have already seen our results and Ricky will provide more detail later in the call, but I would like to make a few comments on the key highlights. First for the fourth quarter. Net sales of almost $1.1 billion for the fourth quarter were a record increasing approximately 11%, compared with a year ago period. Reported operating profit was $142 million, compared with $153 million in the year ago period. Reported diluted earnings per share was $2.70 compared with $2.15 in the year ago period. There were adjustments in both quarters for certain special items, as well as certain other add-backs necessary for our results to be comparable between periods as Ricky will explain later in the call. And adding back these items, our adjusted operating profit for the fourth quarter of 2018 was $154 million, compared with adjusted operating profit of $176 million in the year ago period. Adjusted operating profit margin was 14.5%, a decrease of 390 basis points, compared with the prior year. We will provide important detail on the change in operating profit and…

Thank you, Vern. And good morning, everyone. As Vern mentioned earlier, we had some adjustments to the GAAP results in the fourth quarter of fiscal 2018 and 2017, which we find useful to add-back in order for the results to be comparable. In our earnings release, we provide a detailed reconciliation of non-GAAP measures for the fourth quarter and full year of both fiscal year 2018 and 2017. Adjusted results exclude the impact of amortization expense for acquired intangible assets, share-based payment expense, acquisition-related items, special charges and credits for streamlining activities, manufacturing inefficiencies and excess inventory adjustments related to the closure of a facility, gain associated with the sale of the company's Spanish lighting business, gain associated with the sale of an investment in an unconsolidated affiliate and an income tax net benefit for discrete items associated with the US Tax Cuts and Jobs Act. We believe adjusting for these items and providing these non-GAAP measures provide greater comparability and enhanced visibility into our results of operations. We think you will find this transparency very helpful in your analysis of our performance. In addition, many of our peer companies, especially as we become more of a technology company, make similar adjustments, so it will help you as you compare our performance to other public companies in our industry. During the fourth quarter of fiscal 2018, we reversed pre-tax special charges of $5 million, as certain previously planned streamlining activities were no longer expected to occur, primarily because we were successful in selling the Spanish lighting business for a gain during the quarter. We recorded a pre-tax charge of approximately $10 million in the prior year fourth quarter, which included planned streamlining activities associated with the Spanish business that were no longer necessary due to the successful sale of the…

Thanks, Ricky. Current market conditions in the lighting industry continue to create challenges for management to drive improvements in short-term financial performance while continuing to invest in attractive long-term opportunities. Shorter term issues notwithstanding, we are optimistic regarding our long-term future. Our many actions taken in 2018 to improve market -- our market reach, enhance our customer solutions and capabilities and to drive company-wide productivity were done so we can optimize our financial performance while continuing to invest in areas we believe have high growth potential over the long-term. The following are a few observations regarding our fiscal 2019. Many independent third-party forecasts continue to suggest the overall construction market as measured in dollars will grow in the low to mid-single digit range. We believe the lighting industry will continue to lag the overall growth rate of the construction market, primarily due to continued product substitution to lower priced alternatives for certain products sold through certain channels. From a pricing perspective, we expect the market to be competitive, though announced price increases by many in the industry should abate some of these pressures. Additionally, labor shortages in certain markets will continue to impact growth rates for both construction and lighting. We believe the outcome of the tariff situation could have a dampening effect on overall demand due to higher component costs and finished good prices, particularly at the proposed increase in tariffs to 25% from 10% on finished goods made in China takes effect on January 1, 2019. It is not possible for us to precisely determine what the potential impact tariffs will have on demand as it is a very complex situation impacted by numerous factors including currency fluctuations and political outcomes. Excluding the potential impact of future tariffs and other changes in the economic or political environment, we…

Thank you. [Operator Instructions]. Our first question comes from Ryan Merkel with William Blair. You may go ahead.

Thanks. A couple questions from me. First, I wanted to ask about pricing. How much price did you capture in the quarter from the summer price increases? And then now that we're approaching the middle of your fiscal first quarter, can you comment on whether you're starting to recover the 200 basis points of gross margin that you lost this quarter?

Sure. Ricky, why don't you start?

Yes. The price increase that we did earlier in the summer was on selected items. It was not across the entire product family. The broader ones didn't come effective until after the end of the quarter. So, we got pretty good capture on that, but I want to stress that it was largely on the legacy, non-LED products, and therefore that's a minimal amount of what we're selling today, and therefore didn't have as big of an impact as the price increases that became effective middle of September and then other two that'll become effective here in the middle of October.

And Ricky, I would also say that as we see our order rates, they continue to be robust. And so those orders that are being placed have in effect the price increase that was announced on August 9th. So, I would say that we are seeing capture in a robust way on that price increase. And we expect to have the same type of capture on the other price increases as well.

Okay, very good. And then secondly on gross margins. I think your view has been that we should be finding a bottom soon and you've got pricing, new product introductions, and cost takeout, so I guess I'm just trying to gauge your confidence, Vern. How confident are you that the fiscal fourth quarter could be the bottom for gross margins?

Ryan, while we don't prognosticate going forward, as I look at the fourth quarter, the spike increases of cost were a little north of $20 million. These are very discrete items that we track. And we just didn't see those increases really in Q3 anywhere near to the extent that we did. So, when I look at our business and really try to understand the very elements of your question, I believe that 200 bps of margin degradation, because of these spiked costs, we will recapture these. If I look at the price mix, which was probably a 280 bps drag on margins compared to the year ago period. Again, we’re seeing -- we continue to see that, if you will, price degradation, but we also see a shift in products to, if you will, lower-priced substitutions. And it doesn't mean that they're less effective. It doesn't mean that we make less margin. It just may mean that we make less margin dollars around that. Having said all of that, I believe that the price increases will have an influence on that price mix as well, as we go into the market. So confidence level of trying to understand where we are and then the base going forward, our view is that 2019 will see growth in dollar terms, driven by, again, price increases. We're assuming that the economic environment continues to be favorable. Again, our customer base gives us pretty solid input that while they have record backlogs, yes, they're a little concerned about releases of larger products, they still see the notion of stock and flow in those types of projects being favorable. So, we have a positive, yet cautiously optimistic view coming into 2019. And we're pretty good at extracting margin as volumes improve. So as I mentioned, mix does have an impact on our business. Mix did have an impact this quarter. When we look at our C&I business, we don't look at it as a business, but we look at the C&I channel. Typically, that's north of 60% of our total revenues. Well, it declined this quarter because the revenue growth in other aspects of our business, whether it be electrical distribution channel, the home center channel, the infrastructure and utility channel, our enterprise solutions, which are really selling our Atrius-based luminaires, those are the folks that brought us the lift and larger projects were left behind, if you will. So, we are optimistic that these larger projects will continue to come back, and that adds spice to our margin stew, if you will, because the variable contribution off of those more complicated projects are favorable to us.

Very helpful. Thank you.

Thank you. The next question comes from Tim Wojs with Baird. You may go ahead.

Yes. Hey. Good morning, guys. I guess maybe first just on inflation. You talked a little bit about beginning to offset the inflationary pressures kind of midway through to Q1, which I guess where we're kind of at today. So I mean are you starting to see that pricing start to recapture the inflation? And then second I guess, is your message that kind of by the time you get into the second quarter that you should kind of be fully offsetting inflation? Just some color on those two questions would be helpful.

Sure. We do believe that the price increase that was effective for 9/17 on those inflationary items, as Ricky had described earlier, that we are seeing full capture and we are starting to see the offset to that. But again, as you know, we have costs in our inventory that need to roll through and the way that inventory turns in less than a quarter, it will influence Q1. Our expectation is that as we get into our full Q2, we will have full capture of both price increases that will offset the inflationary effects of costs that we saw earlier, as well as the significant tariffs increases on component parts that are rolling through, and then to a lesser degree on finished goods. So, our expectation is that we will cover these costs. I do believe that we are experiencing continued wage inflation because of tight labor markets. Our expectation is that that will continue. We do hope to offset some of those with productivity improvements, and then to a lesser degree, the price increases that we have put in place.

Okay, that's helpful. And then just on the large project side, I mean any change you've seen kind of sequentially as you kind of talk to your agent base or talk to your customers just about the release of some of those large projects?

Yes. Again, I believe that folks continue -- and when I say folks, I'm talking about contractors, electrical distributors, if you look at people who are in the specification world, architects, engineers, lighting designers, people continue to be busy. Contractors and electrical distributors, many of them are operating with record backlogs. So the question is, how and when do these release? I do believe in certain markets that labor shortages continue to be a problem, and so people are picking and choosing which jobs they release. I do think that some of those labor shortages will continue to influence our industry. But I also believe that some of these larger projects that people had on the books are starting to release. And so, our expectation is that as we get into 2019, some of these more interesting projects will release and we're starting to see that. We've had some really nice releases of both commercial spaces, as well as street and roadway things starting to release. For all of those of you who come through Atlanta, when you walk outside, you'll see a fantastic overhang or a bridge, if you will, between parking structure and the terminals, and that all looks just outstanding. So, we're starting to see these types of projects release. So again, cautiously optimistic around that, and our market channel partners have a similar view.

Great. Thanks. Good luck on this year.

Thank you. The next question comes from Rich Kwas with Wells Fargo Securities. You may go ahead.

Hi. Good morning, everyone. On the price increases, have you seen any pre-buy, noticeable pre-buy? I imagine that wasn't all that substantial maybe in the quarter that just got reported, but so far as you're seeing into F Q1, any significance on the volume side that you're seeing?

So Rich, we saw some uptick in volume prior to, if you will, the 9/17 effective date. And then post the 9/17 date, we've continued to see strong demand. I think some of that may have to do with the effective -- the price increase effective 10/15, because I think for all folks, from the things I've read everyone's saying that you have to take delivery on that. So, I suspect that there is some of that. But that doesn't necessarily influence medium to larger sized projects as much. So -- and we're seeing some of that, but I don't think that is really at the core of the overall growth that we're seeing in our order rate. It's a factor, but it's not the overall factor.

And then Vern, on your comment about going -- if the rate goes to 25% effective 1/1, which is the plan, it seems like whatever price increases you've put through, you'd have to put through an incremental price increase to cover the move from 10% to 25%. Is that the right way to think about it?

Rich, it is. I mean, yes that is exactly the right way to think about it from Acuity's perspective. I think even from a market competitive standpoint, a 25 point increase in just cost because of tariff, the -- few would have the ability to absorb that. So, the question for us is how much does that influence demand? And you know it gets really complicated when you start to bring in changes in foreign currency and what offsets what, but our expectation -- our strong expectation in our price increase in the release that we had, we identified that should the tariff increase on 1/1 go to 25%, that the price increases that we would put in place would be effective immediately on that date. So, we didn't announce what that price increase would be, but we said it would be effective that date. So, we gave our many, many channels way advance warning on this.

And then you're seeing good follow-through from your competitors? And it seems like imports are even raising pricing, so I mean what's your thoughts around just realization?

We think overall -- folks -- it's too much for someone to absorb for too long. I think that there will be some gamesmanship a little bit on the fringe around how much inventory do I have at lower prices, and how long can I last, and what's going to happen there. But on the other hand, you should have folks saying well the industry is going to put through the price increase, it's going to go all the way to the end consumer. So, do I use that as an opportunity to optimize my margin? So all -- that's all the noise out there. Our view is that the industry follows through on these price increases.

Okay. And then last one from me, just this is a shorter-term question. But since the margin dropped as much as it did here this quarter, typically you go from F Q4 to F Q1 and it tends to vary, but it seems to be up a little bit, at least sequentially in terms of gross margin. Is there any thoughts, any color you can provide us on how we think about the near-term in terms of going back to one of the other questions around the bottoming here on gross margin? Is there any thoughts on the near-term? Anything that you'd point out that we should really think about as we think about the November quarter?

Rich, we have -- as an industry, really we've experienced over the last, I'm going to say handful of years, deflationary environment. This quarter was really the first quarter where inflation reared its head in an aggressive way. Truthfully, I would say that Acuity, I'll put us into the big bucket, and the industry caught a little bit off-guard on the significance. And some of it had to do with the tariffs. We just didn't know how those things were going to roll through but that’s a piece. We were experiencing inflation in other areas as well. And so, I think the timing of how we put through our price increases, we were probably a little late. And so that's why I'm calling out, if you will, the spike increase in these costs, because typically we catch up, we understand how to do it and boom, we're now putting this in place. We're also looking at other measures to reduce our costs, but we always are doing that. So, that's why I'm calling out this north of $20 million spike increase that impacted our margins a couple of 100 bps. We knew that we were going to have some mix changes, particularly as we introduce Contractor Select into several different channels. The margin profile on Contractor Select is solid. But when I look at the overall average or compare it to larger projects, it's not there and it never will be, but our cost-to-serve is also a lot less. So, we like the dynamics. But I would just tell you that we missed the spike increase, as did most of the industry. We caught up pretty quickly. So, I think as you think about your margin sequentially going forward, we're still down year-over-year, even if I add that back. And that had to do again more with mix and some of these product price substitutions and price. I think that will still -- the product substitution will still be with us. I think that the price increases are going to be addressing some of the price degradation that we've seen over the last probably five or six quarters.

So, to simplify it, if you think about the 200 basis points impact sticking here at least for the November quarter on a year-over-year basis, and then anything above that you'd have to just think about overall volume assumptions and then go forward from there? Is that right -- just if I simplify it?

It is, that is. And the fact that the price increases are going to kick in as well, not just to cover costs but also how will it influence different positions that people have. Acuity does have a strong position because of our North American manufacturing footprint, but we import a lot of components that we convert, if you will, in the process. So, we're going to look to see how we can drive our productivity and our improvements to capture margin there as well.

I would just like to make sure that you remember that the price increase will be only for half of the first quarter. We'll get the full impact of that in the second quarter of course. But the price increases related to tariff aren't effective until the 15th of this month, October 15th, which obviously is halfway through the quarter. So as you're doing your math there, Rich, I just want to make sure that you factor in that we won't have the full quarter benefit of the price increases.

That's a good point. Unfortunately, there's noise around that.

Thank you. The next question comes from Joseph Osha with JMP Securities. You may go ahead.

Yes, well. Hello, good morning.

Good morning.

Two questions for you. First, given the extent to which you've been willing to lever the business and buy back stock, work with the balance sheet, I'm wondering at this point, would you be willing to go out and explore the idea of acquiring smaller competitors, and exploiting additional efficiencies there in an effort to maintain market share? I'm wondering what your thoughts are about that.

So, three elements of our overall, if you will, shareholder value creation strategy is to continue to drive the financial performance of our business, acquisitions, and return of capital through stock repurchases. I thought that 2018 was a pretty solid reflection of that balanced strategy. We picked up almost $300 million or invested almost $300 million in share repurchases. We spent about $160 million, slightly more, in acquiring two small businesses. And dividends and CapEx were probably another $60 million or $70 million on top of that. So, the answer to that is yes. We continue to explore different opportunities that are both share expansion opportunities, the ability to expand into our -- expand our access to market, to expand our technology capabilities. I think Lucid and IOTA were two good examples. IOTA expanding our SaaS model around bringing more Tier 4 type solutions to Acuity. And I thought that the acquisition of IOTA was just as you described, a beautiful business that expands both our access to market and our product portfolio. So Ricky and team have a pretty active pipeline of acquisitions that they're looking at. And so I would expect us to continue to do the things that we demonstrated that we've done in the past around these types of acquisitions.

Okay. Thank you. And second question, it's interesting, operating expense is 25.5% of revenue. That's as low as it's ever been. Your comments about wage pressure notwithstanding, might we be seeing that OpEx line perhaps sort of in the mid-20s percentage of revenue going forward? Some commentary there would be helpful.

So when I look at the dollars and put freight and commissions aside, which are pretty truly variable, based on the type of revenue that we have, our fixed investment in our SDA, our salaried headcount was stable year-over-year at about 3,100 folks, 3,200 folks. But that was also -- we did acquisitions where we brought in salaried headcount, but we also took some streamlining actions. My expectation is that we will see wage inflation more than we have say over the last handful of years. But generally speaking, we feel that the investments that we have in our human capital are pretty solid right now. So, we would expect as our volumes grow in dollar terms, because the price increase will impact dollar terms, that we will see some leverage on our SDA expense. It's interesting. Our unit volumes continue to expand at a more rapid rate than our dollar volume. And so that has an influence on many things. We measure everything in terms of dollars as a percentage of sales. So, when we see our freight costs going up, when you have product substitutions that are putting lesser valued items on a truck, it doesn't necessarily mean that the box is any different. So, you're experiencing freight -- more freight cost as a percentage of sales, and then you add on top of that the fact that oil's going up, you can't find enough truck drivers. And so freight rates are going through the roof right now. So anyway, a long way around the barn to answer your question. Yes, we would expect leverage on our SDA line going forward.

Thank you very much.

And then just to finish off real quickly on that, everyone looks at a quarter-to-quarter. We look at it on a full year basis because a lot of that SDA is fixed. And it goes -- if volume changes as we have seasonality in our business, for example, our second quarter is typically our lowest seasonal quarter, you would expect SDA as a percentage of those sales to be higher. So, you have to just look at it over the course of a full year.

Thank you.

Thank you. The next question comes from Christopher Glynn with Oppenheimer. You may go ahead.

Yes. Thanks. So just want to look at the gross margin volatility here. Moving away from the year-over-year frameworks, I think it was down about 260 basis points sequentially. Putting aside inflation and the timing of price, you did say price mix was a 280 basis point drag, but price mix was better than it was in the third quarter. You moved from a minus 5 to a minus 3. So, that 280 magnitude seems a little surprising. Maybe you could help clarify why or why not that's sort of incongruous kind of number? That magnitude of 280 given that the minus 3 improved from the third quarter?

Sure. So Chris, I just did a little math and maybe my math is wrong, but our adjusted gross profit was about $414 million. So, if I add the 30 back to that and compare it to the $1.61 billion sales, I get a 41% -- excuse me, I get a 43.8% margin. So, well, I get a 41.8% margin, sorry. So, that's the 280 bps if I exclude the spike cost in that. It's just math.

Well, we didn't have such gross margin impact called out from price mix in the third quarter, but you had in fact a minus 5 price mix on the top-line that quarter.

I just -- I guess I looked at it just a little bit differently this time. We felt as we were looking at and then analyzing our business, the price mix, primarily price, but with product substitution a little bit and mix going in there, that’s -- that was the number. That's about a 280 bps impact if I look at it on this quarter's results. I don't have third quarter in front of me, so I'm a little bit at a loss. I can get back to you.

Okay. On a separate tack, inventory spiked last quarter for purpose-built finished goods. We certainly saw that in the volume this quarter. Inventory still remains up here at year end. Is that still a story of kind of purpose-built finished goods, kind of a bullish kind of positioning for the channel volume throughput you're seeing?

Yes. We're seeing our inventory investment in a couple of different areas to support growth, growth through if you will our electrical distribution channel, our home center channel, our enterprise solution folks. These are all investments that we're making because we expect to see increases in revenues through those channels. I would also say that we've had some component issues, so we've wanted to make sure -- if you recall, a couple of quarters ago we mentioned MOSFETs and other types of resistors, and other types of electronic components that were just a challenge to get. So, we pulled those in, probably have converted some of those, but I think that our inventory levels are reflective of what we expect in future sales.

Okay, thanks.

Thank you. Our last question comes from Brian Lee with Goldman Sachs. You may go ahead.

Hey, guys. Thanks for taking the questions and squeezing me in here. I just had maybe a couple of housekeeping ones. I think you might have alluded to this, Vern, but can you update us to what percent of sales Tier 3 and Tier 4 were in the quarter and then what the growth rate was? I think it was 40% year-on-year last year, so just trying to get a sense for what the trend line is looking like? And then similarly on LED as a percent of sales, roughly two-thirds is what you've been tracking at. If there's an update on that number you could provide as well?

Sure. I think that LED relative to our total percentage of sales, we're probably going to stop reporting that because as a percentage of our luminaires, it's just such a significant portion, that just assume that it's all LED. It would be the exception when it's not LED. And we do sell non-LED products but that's not really the focus. So we've really stopped, actually even internally accumulating that data because it doesn't mean anything to us anymore. So, relative to our lighting business and lighting in general, as you know, we sell many other products beyond just lighting. The predominant share is now LED. As to Tier 3 and Tier 4, so for the full year, sales of Tier 4 and Tier 4 were up 30%. And if I look at our fourth quarter, we're up about 25%. Again, a little bit of lumpiness, that's why I'm talking to make sure people understand that we will have continued lumpiness as we deliver those solution sets, particularly with our Atrius-based luminaires. So, we're up about 25 points. And if I did that based on the quarter, we would probably be a 17% or 18% of total sales would be in that 3 and 4. But understand also that mix influences that. So as we introduce -- and in our Contractor Select portfolio the introduction was received very well in numerous channels. Well, those aren't Tier 3 and Tier 4 solutions. So, don't be concerned about percentage wise. We feel robustly strong that our investments in the things that we're doing in 3 and 4 are paying off. When I look at our enterprise solutions business, which is really what we're selling our Atrius-based luminaires through, that business was up huge on a year-over-year basis. And we're now introducing our nLight AIR solution set, which is really Tier 3 enabled capabilities. And we're seeing really strong interest there. So our expectation is that Tier 3 and Tier 4 in 2019 will continue to grow at really quite a significant rate, and improve our capabilities as we go forward.

Okay, great. And appreciate that color. Just a second question on margins here. The $20 million and 200 basis point impact from wage inflation and also costs and tariffs I know may be difficult, but is there any rough ballpark delineation you can provide as to how much was wage-related, and how much was other cost-related? And then I know there's been a few questions around the gross margin trajectory. I just want to clarify, are you inferring that gross margins in fiscal Q1 will be up versus fiscal Q4, i.e., Q4 is the trough or are we to assume that things are relatively flattish and then you get an up quarter where you get the full capture in fiscal Q2? Thank you.

Sure. So let me be clear on the slightly more than $20 million of spike increases. Those spike increases were for various types of material, whether it's commodities like steel, component parts, electronic component parts. We also experienced an increase in freight. What we -- and they’re round items, but when we say wages, what we're really meaning, wages are in the SDA area for us, so that in fact $20 million is not including wages. But what is important in the $20 million is if you look at freight and some of these other things, freight is a meaningful part of our business, whether we're shipping product to our customers or people are shipping components to us, these folks are having a difficult time finding enough truck drivers. And so wage inflation is driving up their rates to us. It's because of the tight labor markets that we're experiencing some of these inflationary items that are coming through. So at the gross profit level, I'm not calling out our wages, I'm calling out the tight labor market that's driving other costs -- other input costs for us to be higher. So, that $20 million doesn't include our SDA wages. Our SDA wages, as I said, while headcount is flat, if I look at the increase on a year-over-year basis of our SDA, excluding freight and commissions, a little bit more than half was due to employee-related costs. And that's the wage inflation item that we see there. So I hope that adds a little bit of clarity to the point.

Yes, that's helpful. And just on the gross margin trajectory?

Sorry, I forgot that one. I think on the gross margin trajectory, as Ricky described, our expectation is that the price increase that is effective 9/17 or a portion of what we have will have a positive impact. And then the price increase that is effective 10/15, we will absorb some costs prior to that. So our expectation is that we will claw back at a portion of this 20 plus million. Our expectation is that we'll see some positive price in some of the other areas. So, we're hopeful that we will see a lift from the fourth quarter in terms of margins. But it's a fluid situation, as you might imagine.

Okay. Thanks, guys.

Thank you.

Thank you. And I would like to turn the call back over to Mr. Vernon Nagle for closing remarks.

Everyone, thanks for your time this morning. We strongly believe we are focusing on the right objectives, deploying the proper strategies, and driving the organization to succeed in critical areas that have the potential over the long-term to deliver strong returns to our key stakeholders. Our future is bright. Thank you for your support.

And that does conclude today's conference. All participants may disconnect.