EXHIBIT 99.2
SANDERSON FARMS, INCORPORATED
MODERATOR: JOE SANDERSON
MAY 24, 2005
10:00 AM CT
Operator: Good day everyone and welcome to the Sanderson Farms
Incorporated Conference Call. Today's call is being recorded.
At this time for opening remarks and introductions I would
like to turn the call over to the Chairman and Chief Executive
Officer, Mr. Joe Sanderson. Please go ahead sir.
Joe Sanderson: Thank you. Good morning and thank you for joining us today.
I would like to welcome you Sanderson Farms Second Quarter
Conference Call with shareholders, analysts, and investors.
With me on the call today are Lampkin Butts, our President and
Chief Operating Officer, and Mike Cockrell, Chief Financial
Officer of Sanderson Farms. The purpose of this call is to
review financial results and operating trends reflected during
the second fiscal quarter and six months ended April 30, 2005.
We issued a news release this morning announcing net earnings
of $26 1/2 million -- or $1.32 per fully diluted share -- for
our second fiscal quarter of
2005. For the first half of fiscal 2005 we have earned $36.6
million -- or $1.82 per fully diluted share.
Each of you should have received a copy of the release and
accompanying financial summary. I will begin the call with
some brief comments about general market conditions and the
company's operations. I will then ask Lampkin to give you an
update on our Georgia project and the recently announced
expansion at our Collins, Mississippi facility.
Lampkin will then turn the call over to Mike for a more
detailed account of the financial results. Before we make any
further comments I would like to ask Mike to give the
cautionary statement regarding forward-looking statements.
Mike Cockrell: Thank you Joe and good morning to everyone. Before we begin
the call this morning I need to caution you that the call will
contain forward-looking statements about the business,
financial condition and prospects of the company.
All forward-looking statements are made pursuant to the Safe
Harbor Provisions of the Private Securities Litigation Reform
Act of 1995 and are made based on management's current
expectations or beliefs as well as assumptions made by and
information currently available to management.
The actual performance of the company could differ materially
from that indicated by the forward-looking statements because
of various risks and uncertainties that are described in item
seven of our most recent annual report on form 10K and in
management's discussion and analysis of financial conditions
and results of operations found in item 2 of part one of the
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company's quarterly report on form 10Q -- which was filed this
morning with the SEC for our second fiscal quarter ended April
30, 2005.
Joe Sanderson: Thank you Mike. Our financial and operating results for the
first half of the year marked a strong start for fiscal 2005.
And we are pleased with our results. While overall market
prices for chicken were down during the first half of the year
grain costs were also lower and the company's operations
continued to run well.
With the exception of the Georgia dock market prices for all
poultry products were lower during the first half of the year
compared to the first six months of last year. The average
Georgia dock price for whole birds during the first half of
the year was 4 1/4% higher than last year's first six months.
However parts prices were down across the board for the first
half of the year contributing to a 4 3/4 cent per pound
decline in the company's average sales price for poultry
products.
Bulk leg quarter average prices decreased 6.4% for the second
quarter and 3.3% for the first six months of the year compared
to last year's second quarter and first six months. However
the market for leg quarters showed considerable strength
during the end of the second quarter reflecting strong export
demand. This strength is reflected in the current market price
for bulk leg quarters of 38 cents per pound.
Wing prices during our first six months averaged $1.05 per
pound -- down 5.6% from the average of $1.11 during the first
six months of last year. Wings currently trade for 84 cents
per pound. And this year have followed their historical
pattern of strong demand through the first calendar quarter
and falling thereafter.
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Demand and prices for wings generally pick up again in the
fall. Boneless breast meat average prices during our second
quarter were also lower decreasing 24.6% when compared with
the second quarter a year ago, and have decreased 18.6% for
the first six months of the year compared to last year.
The above average market price for chicken is a result of
continued strong demand for chicken products in the United
States. Furthermore estimates for growth in the domestic
supply of chicken continue to call for modest growth.
These estimates are consistent with trends in breeder stock
placements and egg sets. For the last six months -- for
example - pullet placements have been right at 100% of the
prior year -- which indicates to us there is no significant
new production coming online in the next few months.
The USDA now expects domestic chicken production during
calendar 2005 to be 3.1% higher than during calendar 2004. And
the USDA's first prediction for 2006 reflects a 3.3% increase
over 2005 production. On the other hand export volume during
the first calendar quarter of the year was strong --
increasing 16 1/4% in volume and 10% in value.
While chicken prices on the whole were lower during our second
quarter compared with last year's second quarter and during
the first half of the year compared to the same period last
year the same can be said about feed grain prices. Market
prices for corn during our first six months were down 21% when
compared to the first half of last year.
Soybean meal market prices for the first six months of this
year were also lower than the same period a year ago dropping
32.9%. As we reported on our
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first quarter call the company experienced higher grain cost
through the first fiscal quarter as the higher priced grain
purchased during last year's fourth quarter worked it's way
through our cost of goods sold.
As we reported on our first quarter call we expect corn and
soybean meal prices to be lower overall during fiscal 2005
than fiscal 2004. The USDA reports that planting progress for
both corn and soybeans is good. Based on current and projected
prices of corn and soybean meal and based on the price of that
portion of our needs we have already priced through the end of
this fiscal year.
We continue to believe we will save between $60 and $65
million in grain costs for the fiscal year. In addition to
favorable market conditions during the first six months of the
year we are pleased to report that our operating performance
also continue to be strong.
Both our processing division and our live grow out continue to
compete very well in the industry, and our marketing and
product mix continues to be an advantage for us. While we
continue to operate at the top of the industry we have
opportunities in all areas of our business that we will
continue to work to capture.
We will continue to look for ways to improve our operation and
ways to increase value for our shareholders. At this point I'd
like to turn the call over the Lampkin Butts, President and
Chief Operating Officer, to discuss our current expansion into
Georgia and the conversion project at our Collins facility.
Lampkin Butts: Thank you Joe. As Joe said our operations continued to perform
well during the first half of fiscal 2005. We are not only
proud of our financial
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performance during the first half of the year but are also
proud of our operations and of the people responsible for
managing and operating our assets.
Our Georgia complex continues to progress on schedule. We have
currently targeted August 22, 2005 to begin processing birds
in Georgia, and we expect to set eggs in our Georgia hatchery
on June 13, 2005.
We currently have five blocks of pullets and one flock of hens
on the ground and doing well. In addition to the Georgia
facility we announced two weeks ago that our Board of
Directors has approved an expansion project for our Collins,
Mississippi facility.
The Collins facility currently processes 1.1 million head of
chickens per week, six hundred and twenty five thousand of
those being dedicated to the chill pack retail market and
475,000 of those birds being processed for the big bird
deboning market.
We currently run retail product on the day shift and big bird
deboning on the nightshift. The expansion project announced
two weeks ago will convert the Collins, Mississippi plant to
all big bird deboning, and will add 150,000 head per week
capacity to the night shift, bringing the Collins, Mississippi
plant to full capacity.
When the conversion project is finished in July 2006 the plant
will be processing 1.2 million head per week for the big bird
deboning market. The conversion in Collins will involve a net
capital budget of approximately $20 million. $6.5 million of
that being spent during fiscal 2005. The $20 million capital
budget involves cash outlays of 24 million less four million
saved on the transfer of certain equipment to our new Georgia
plant. This money will
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be spent to expand our existing hatchery in Collins, retrofit
certain equipment in the processing plant, and build a new
feed mill.
The conversion of the Collins plant will be timed to dovetail
with the opening of the new Georgia facility. Much of the
chill pack product currently produced on the day shift at
Collins is being shipped to customers who will be better
served out of our new Georgia facility.
Accordingly as the Georgia facility comes online we will shift
those customers to the Georgia facility allowing us to take as
much as a full day off the travel time to serve our Southeast
customers and allowing Georgia the luxury of starting
operations with a full shift of established customers.
Furthermore this conversion will allow us to sell our new
product into two market segments instead of one -- which
should allow us to sell the new production more efficiently.
During our third quarter we will begin shipping two new retail
customers on the East Coast who will become part of the mix at
the Georgia plant.
And as I mentioned earlier approximately $4 million in
equipment at the Collins facility will be transferred to the
Georgia processing plant. The conversion at Collins will also
maintain the company's balance between market segments.
Currently the company maintains a favorable mix between the
retail market segment and the big bird deboning segment
processing approximate 50% of its pounds in each market
segment.
Following the conversion of the Collins facility and the
opening of the Georgia plant we will maintain this mix.
Finally the conversion at Collins will achieve certain
efficiencies at the plant by having uniform products produced
on both the day and night shifts.
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We will update you on the progress of both the Collins
conversion and the Georgia facility during our third quarter
call in August. I'm also pleased with our sales and marketing
efforts in the fresh chicken markets through the first half of
the year.
I'm very proud of all our employees and independent contract
producers who have dedicated themselves to both expansion
projects and to the idea that we will continue to grow this
company for the benefit of its shareholders.
I would now like to turn the call over to Mike who will give
you more detail on the financial performance of the company
during the first half of the year.
Mike Cockrell: Thank you Lampkin and good morning again. As Joe said we are
very pleased with our financial performance during the first
half of the year. Net sales for the first six months totaled
492.5 million compared to 499.2 million for the same six
months during fiscal 2004.
For the quarter net sales totaled 259.2 million, and that
compares to 272.7 million for the second quarter last year.
The decrease in net sales reflects the decrease in market
prices of chicken described by Joe, and that decrease was
offset by an increase in the pounds of poultry products sold
through the first half of the year of 7.2%
The $1.32 per share earned during the quarter compares to
$1.67 earned from operations during last year's second
quarter. Our cost of sales for the three months ended April 30
as compared to the same three months during fiscal 2004
decreased 1.7%.
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The decrease is a result of the decrease in the cost of feed
grains offset by an increase in pounds of poultry products
sold during the second quarter this year compared to the same
quarter a year ago of 7% - 7.7%. The company's cost for corn
and soybean meal were down 25.4% and 33.6% respectively for
the three months ended April 30 when compared to the same
three months a year ago.
For the first six months for the fiscal year cost of sales
increased 4.2% compared to the first half a year ago, again
the result of an increase in pounds of poultry product sold.
SG&A expenses for the first half of 2005 were up $3.9 million
compared to fiscal 2004.
This increase is primarily the result of higher accruals
associated with the new advertising and market initiatives
that we started during last year and the administrative costs
associated with the start up in Georgia.
At the end of our second quarter our balance sheet reflected
shareholders equity of $313.2 million and net working capital
of $136.6 million. The current ratio was 3.2 to one. Our debt
totaled $15.2 million and our debt to cap ratio was 4.6% at
April 30, 2005.
As of today we have just over $70 million in cash on our
balance sheet resulting in a net debt of less than zero and a
net debt to cap ratio of a negative amount. We spent $59.7
million on capital expenditures during the first half of the
fiscal year of our total annual capital budget of $132.2
million.
We also spent $4 million on dividends reflecting our higher
dividend rate of 10 cents per share per quarter. During fiscal
2005 we expect to spend approximately 43.7 million on planned
capital projects other than the Georgia
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and Collins projects -- which amount includes $7.2 million in
vehicle leases and operate - and $13 million on our new
corporate general office.
Our depreciation and amortization during the first six months
of the year total $12.6 million, and we expect approximately
$26 million for fiscal 2005.
As we have previously announced, we budgeted $88 million for
the Georgia facility to be spent this fiscal year, and we have
a net capital budget for the Collins project described by
Lampkin of 20 million -- of which we expect to spend 6.5
million during the current fiscal year.
As Joe mentioned earlier we remain encouraged by market
conditions and demand trends, and we look forward to the
second half of this fiscal year. We will now open up the call
for questions and answers.
Operator: Thank you. The question and answer session will be conducted
electronically. If you would like to ask a question please do
so by pressing the star key followed by the digit 1 on your
touchtone telephone. And if you're using a speakerphone please
be sure your mute function has been turned off to allow your
signal to reach our equipment.
Once again that is star 1 if you would like to ask a question.
We'll go to (John Emridge) of (Iron Works Capital).
(John Emridge): Hi thank you. Two unrelated questions. I'll ask them
separately. Of the 60 to 65 million in savings in grain costs
this fiscal year how much did you all recognize in this
current quarter just reported?
Man: Twenty million dollars roughly. Oh in the quarter?
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(John Emridge): Yeah.
Joe Sanderson: We did - in the first six months of the year the - our savings
were $20 million versus the six months a year ago. I don't
have it broken down by quarter.
Mike Cockrell: It was mostly of course (John) as we mentioned in the second
quarter during the first quarter -- as we talked about on the
last call -- the call as we were still recognizing in our cost
of sales the higher priced grain purchased during last year's
fourth quarter...
(John Emridge): Right.
Mike Cockrell: Again most of that 20 -- and I don't have it broken down by
quarters in front of me. I'm sorry for that.
(John Emridge): No that's okay. It sounds like order of magnitude my guess -
in my model I plugged in 15 out of 20. And in the April
quarter it doesn't sound too far off.
Mike Cockrell: Sounds very reasonable.
Joe Sanderson: That would be - that'd be very close.
(John Emridge): Very reasonable. Okay. And the CAPEX budget I'm trying - 132
for this year. Obviously a lot of extraordinary things going
on. Have you - order of magnitude fiscal '06 it sounds like
you've got - you said 43.7 million of planned capital projects
other than the expansions.
There might be some non-recurring things in there as well like
the headquarters. But then you've got 16 or so of the - or 14
or so of Collins
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falling into next year. So is 40 to 50 million in CAPEX for
fiscal '06 even close to what you all are looking at?
Man: It's a little high (unintelligible).
Lampkin Butts: (Use a) $25 million normal budget. Add the balance of the
general office.
(John Emridge): Which is how much?
Man: It's six.
(John Emridge): Six.
Man: Next year.
Man: And then add 14 for Collins.
(John Emridge): Collins.
Mike Cockrell: You've got 45. Well you were close. Yeah 45 or so.
(John Emridge): Forty five.
Mike Cockrell: But we haven't announced that. And of course we'll be looking
at next year's capital budget. We generally do that and go
through that process in August.
(John Emridge): Yeah. I was - again. I was just trying to get order of
magnitude since there's a little bit of volatility in that
line item this year. And lastly the feed costs are flowing
through just as projected. What -- and I apologize. I'm new to
this story. I'm a general so I don't your industry real well.
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But how far out can you kind of lock in these savings? Do you
have any confidence in the ability to keep those savings going
into the next fiscal year? Because you buy forward or anything
like that?
Joe Sanderson: We do buy forward. It would be a bit unusual to buy next
year's crop this early.
(John Emridge): Okay.
Joe Sanderson: We don't - we do not use derivatives. We buy the basis from
market suppliers. And they like to get a bit more vision on
the crop before they would sell it to us. But sometime this
summer -- typically we start in July and August -- looking at
next year. And their time will fit with ours. We would look at
a substantial portion of next year typically in July and
August.
(John Emridge): Okay. Perfect. Thank you very much.
Joe Sanderson: Yes sir. Thank you.
Operator: We'll go next to (Christine McKracken) of (SPN Mid-west).
(Christine McKracken): Good morning.
Joe Sanderson: Good morning.
Man: Morning (Christine).
Man: Morning (Christine).
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(Christine McKracken): Wondering, you know, I've been noticing breast meat
prices haven't really been strengthening as much as I guess
normal. Not comparing it to last year -- which I view as
something of an anomaly. But it seems like they're even a
little weaker than we normally see this part of the year.
Wondering if you could point to anything that you think might
be an issue.
Lampkin Butts: (Christine) this is Lampkin Butts. We - as you said last year
was a very unusual year. As you look back at '02 and '03
boneless breast in May was $1.47 to $1.66. And trended up
$1.50 - got as high as $1.50 in '02 and $1.85 in '03. But
we're - as you said -- we're a little bit below that right
now.
And we really - I'll be the first to tell you. We don't know.
I mean we don't ever know about that market. But the - what we
do see is maybe 3% more supply. Export market's taking a good
bit of that production. And we still think - we still have
reason to believe that this should be a normal summer.
(Christine McKracken): So are you seeing anything on the food service side from
the perspective? And realizing that possibly it's maybe not
your primary market. But are you seeing any trading down from
kind of the casual dinning in mid-tier to quick service? Could
that be affecting the breast meat markets at all or?
Joe Sanderson: We don't - what we can say about the food service market the
portion we serve -- and it's not so much fast food as is
casual dinning. But the demand there is average. It is not
robust. And we do not have a lot of indicators that it's going
- indication that it's going to get robust.
It's not bad. It's not fallen off. It's just not real strong.
I don't know about fast food.
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(Christine McKracken): Right. All right. And then just in terms of Georgia.
I assume since you're sticking kind of with your fall opening
plan wondering you - it sounds like you have a majority of
your growers in place. Is that a fair assumption at this
point?
Joe Sanderson: Yes absolutely.
(Christine McKracken): And day one - I guess we talked a little bit last quarter
about kind of the ramp up at that facility. What are you
anticipating kind of day one? And then kind of on the timing
of that given the fact that you're shifting some of your
production over? Kind of what can we expect in terms of
volumes through that Georgia plant kind of through '06?
Joe Sanderson: Through '06?
(Christine McKracken): Yes.
Lampkin Butts: (Christine) we project to begin operations there August 22.
And the first couple of weeks will be real light. But by the
end of the year - by the end of December we should be - we
should have that plant up to...
Man: Fifty percent capacity. Six hundred thousand head a week.
Lampkin Butts: Three twenty five - first we'll get up to 325. And then by
Christmas hopefully up to 600,000 head per week. And then
we'll ramp up and be up to 1.2 million by...
Joe Sanderson: Fourth quarter.
Lampkin Butts: Fourth quarter of (unintelligible).
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Joe Sanderson: Maybe by July. But.
(Christine McKracken): All right. That helps a lot. And then just in terms of
your Collins facility - in terms of the conversion there. You
know, you're shifting some of your mix at that facility. I'm
wondering have you got that product already sold? Or are you
in the process of selling kind of that new mix of products?
How does that work?
Joe Sanderson: Well we're selling every day. I mean we sell into both
segments every day. We're continuously looking for new
business. One shift at Collins is already sold. So just as
we're in the process of selling the new chill pack mix we're
also selling the big bird deboning.
(Christine McKracken): So you're not worried at all about kind of this new
production coming on the market finding a home for that at
all?
Joe Sanderson: No. We - instead of - our decision was instead of having a
million - 250,000 head of chill pack birds to go out and sell
we're going to have 600,000 head of big bird deboning birds to
sell and 600,000 roughly chill pack birds to sell. And it'll
keep our corporate product mix inline. And it'll improve the
operation of the Collins plant.
We'll have to sell basically a day shift of the Collins plant
-- breast, wings, tenders, and dark meat. And we've - we think
we can do that and do it fairly rapidly.
(Christine McKracken): Good stuff. Thanks a lot.
Joe Sanderson: Thank you.
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Operator: We'll go next to (Greer Toben) of (Stevens Inc.).
(Greer Toben): Good morning.
Man: Good morning (Greer).
Mike Cockrell: Good morning.
(Greer Toben): Was wondering if you could break down the percent in change in
volume for the quarter between number of birds and lively if
possible?
Mike Cockrell: Yeah if you'll give me a minute I can tell you that. Okay I'm
sorry. The - for the - are you asking for the quarter or
(unintelligible)?
(Greer Toben): For the quarter.
Mike Cockrell: Oh. For the quarter actually the net head sold decreased
slightly. Just very, very marginally. It remained almost
constant. So it was almost all live weight during the quarter.
For the first half of the year the head process were up 2 1/2%
and live weights up just under 2%.
(Greer Toben): Thank you very much.
Joe Sanderson: Thank you.
Operator: Again that is star 1 if you'd like to pose a question. We'll
go to (John Emridge) of (Iron Works Capital).
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(John Emridge): Quick follow up. Thank you. The - if I understand correctly
the difference between Georgia and Collins in terms of return
on investment is Georgia is an expansion of capacity and
Collins is shifting what you're producing in that facility. Is
that correct?
Joe Sanderson: Yes. Shift in that facility - the dayshift birds from a chill
pack bird to the big deboning.
(John Emridge): Big bone. Right.
Joe Sanderson: But we also will be adding 150,000 per week to the night
shift.
(John Emridge): Okay.
Joe Sanderson: Will fill up the capacity there.
(John Emridge): What does Collins kind of represent right now -- do you think
-- of your overall production as a percentage?
Joe Sanderson: We're just over a million head out of...
Lampkin Butts: Twenty percent.
Joe Sanderson: Yeah twenty percent.
(John Emridge): Okay. And typically when you go from chill pack to the big
bird deboning what's the -- kind of -- gain in margin that you
would see in the market as it stands today. Obviously anything
could change. But...
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Lampkin Butts: Historically the margin per head on big bird deboning is - on
margin per head basis is 50% higher on big bird deboning than
it is tri-pack.
(John Emridge): Great. And then lastly Georgia represents what kind of
incremental capacity for you all in terms of production?
Mike Cockrell: It's right out of - between a 22 and 23% increase.
(John Emridge): Twenty two to 23% increase.
Mike Cockrell: And as we said in response to (Christine's) question that'll
be phased in fairly evenly every month beginning in August
through about this time next year. A little bit later than
this time next year.
(John Emridge): And all of that production is the higher margin product?
Mike Cockrell: No.
(John Emridge): No.
Mike Cockrell: The Georgia facility is retail. And then we will be shifting
though some of that capacity to George -- as Lampkin described
-- will be a shift from Collins to Georgia. The day shift at
Collins now is processing that retail product.
(John Emridge): Got you.
Mike Cockrell: So okay.
(John Emridge): Okay. Georgia. Thank you very much.
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Mike Cockrell: Sure.
Operator: We'll go next to (John Rosenberg) of (Geneva Capital Markets).
(John Rosenberg): Yes good morning. How are you?
Man: Good morning.
Man: Good morning.
(John Rosenberg): I just had a question pertaining to your SG&A cost. A little
bit more detail. Mike described - you described in your
commentary how it picked up a bit. Some of that was higher
accruals advertising and marketing. And some of it was the
admin costs for Georgia.
I was just wondering are you - you're expensing some of the
start up costs for Georgia. Are we to model in that some of
that will remain flat? In other words some of that increase
will remain on an absolute basis going forward for running the
Georgia plant as it comes online? Or is that all...
Joe Sanderson: Oh no. that'll come out of SG&A and go into...
Mike Cockrell: Go into plant cost. Right now we're not selling any product
out of the plant (unintelligible) until August, you know, the
latter part of August. And so right now all of the salaries
and the cost of Georgia are going into SG&A. But once the
plant's operated no. That will shift over and go in...
(John Rosenberg): (Unintelligible).
Mike Cockrell: (Unintelligible). That's correct.
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(John Rosenberg): Okay. Thank you very much.
Joe Sanderson: Sure.
Operator: We'll go next to (Christine McKracken) of (FGN Midwest).
(Christine McKracken): Yeah just to touch on export markets briefly since
that's, you know, been in the news lately. Wondering, you
know, leg prices - or leg quarter prices are awfully high.
Seems like export demand has been very strong. Wondering if
you have any outlook there relative to some of the recent
headlines around Russia? It seems like we're getting a broader
base of exports. Maybe you can comment on that.
Lampkin Butts: (Christine) as you said exports are strong. And it's
encouraging to us that even though Russia is pulling very well
and right on target for their quota the increase in exports is
not showing up in Russia. It's showing up in other markets.
It's showing up in Mexico and Cuba and China. And so the
demand is good across the board.
Based on what we see it looks like that's going to continue
through the summer.
(Christine McKracken): And as you expand production you - presumably you'll have
more product for export. Are you working to increase - or
change your export business at all as you add more birds? Or
is it kind of the same model just on a larger scale?
Lampkin Butts: It's the same model on a larger scale. We always try to
maintain exports to actually a lower percentage of our
business than in the industry. With chill
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packing Georgia and some fresh sales in the United States
we'll - it'll be more of the same mix I think.
(Christine McKracken): And then just on the chicken and eggs report breeder
numbers have been up for the last couple months. So it's still
on a (ruling) basis pretty low on terms of total growth. Do
you think the USDA estimate for '06 seems to be on target? Do
you think it's a little high? Can you comment on that?
Joe Sanderson: Talking about the 3%?
(Christine McKracken): Yeah.
Joe Sanderson: Three point three percent?
(Christine McKracken): Yeah.
Joe Sanderson: Based on what we know now about new production coming online
it seems reasonable today. There's got to be - we think most
people are operating that capacity. And we think there's going
to have to be some brick and mortar and construction done
before there'll be some substantial increase in numbers.
(Christine McKracken): Good stuff. Thanks.
Joe Sanderson: Thank you.
Man: Thank you.
Operator: And once again that's star 1 if you have any questions at this
time. And Mr. Sanderson at this time no one else has signaled.
I'll turn the conference back to you for any additional
remarks.
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Joe Sanderson: Good. Thank you for spending time with us this morning. We are
pleased with our results to date. And look forward to
continued progress in fiscal 2005. And we look forward to
reporting to you our next quarter in August. Thank you.
Operator: And that does conclude today's conference call. We thank you
for your participation. You may disconnect at this time.
END
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