SP Plus Corporation

Thank you, Shannon, and good morning, everybody. As Shannon just said, I'm Vance Johnston, Chief Financial Officer at SP Plus.

Welcome to the conference call for the fourth quarter of 2015. I hope all of you have had a chance to review our earnings announcement that was released last evening.

We'll begin our call today with a brief overview by Marc Baumann, our President and Chief Executive Officer. Then I'll discuss our financial performance in a little more detail.

After that, we'll open up the call for a Q&A session.

During the call, we'll make some remarks that will be considered forward-looking statements, including statements as to our 2016 financial guidance and statements regarding the company's strategies, plans, intentions, future operations and expected financial performance.

Actual results, performance and achievements could differ materially from those expressed in or implied by these forward-looking statements due to a variety of risks, uncertainties or other factors, including those described in our earnings release issued yesterday, which is incorporated by reference for purposes of this call and is available on our SP Plus website.

I would also like to refer you to the risk factor disclosures made in the company's filings with the Securities and Exchange Commission.

Finally, before we get started, I want to mention that this call is being broadcast live over the Internet, and that a replay will be available on our SP Plus website for 30 days from now.

With that, I'll turn the call over to Marc.

Thanks, Vance, and good morning, everyone. About this time last year, we communicated our goals for 2015 and beyond, which were to improve operating results by increasing gross profit at existing locations, adding new business and further reducing costs.

I'm very pleased with our results in 2015 and the fact that we were able to grow adjusted EBITDA by 7%, adjusted earnings per share by 31% and generate strong free cash flow.

Looking back in 2015, we really accomplished a lot. Most notably, we wrote more new business in 2015 than ever before, and it's the third year in a row that we've written record new business.

We also successfully refinanced our senior credit facility, significantly reducing our interest expense. We realigned our organization to improve productivity and reduce costs and rolled out a number of new safety and risk programs to further reduce our total cost of risk.

We also made significant progress towards reducing our accounts receivable, which contributed to our strong free cash flow. We achieved this 2015 performance despite a softer-than-planned fourth quarter.

Just to give you a little more color on the Q4 and our results in the New York market, we saw reduced parking volumes at some leased locations due to required elevator repair work. As we've mentioned in the past, structural repairs were needed at certain leased garages that were acquired in the Central Parking merger.

At some of these locations, we had to shut down car elevators or restrict access to the garages for an extended period of time, which had an impact on parking volumes and revenues. While difficult to precisely quantify, we estimate that the lost revenue due to this could be as much as $0.5 million for the fourth quarter and $1.2 million for the full year.

As the repair work is now largely complete, we expect to recover the vast majority of this revenue going forward.

We also saw fewer events than usual in the fourth quarter in the New York market, and Vance, of course, will provide more detail on Q4 in a few minutes.

Touching briefly on new business. We had a very active fourth quarter with continued growth in our hotel vertical market and renewals of several municipal contracts.

In addition, we've been awarded a couple of nice transportation deals, one serving California State University at Fresno and another at Dallas-Fort Worth International Airport. We've highlighted some of these deals in last night's earnings release.

Looking forward to 2016, we expect to be able to grow adjusted EBITDA in the high single-digit range. Our proven ability to control costs and drive cost improvement initiatives coupled with continued growth in organic gross profit should enable us to grow EBITDA at this level.

Our focus in 2016 and beyond is to continue to grow the business organically by improving same-location gross profit and location retention, while continuing to drive new business growth. We're also turning more of our attention to longer-term priorities and are starting to evaluate other growth opportunities and capital structure initiatives.

These may include strategic acquisitions or partnerships, stock repurchases or dividends, all with an eye toward driving overall growth and shareholder value.

With that, I'll turn the call over to Vance to lead you through a more detailed discussion of our financial performance in 2015 and guidance for 2016.

Thanks, Marc, and hello, everybody. I'd like to spend a few minutes reviewing our financial results in more detail.

Fourth quarter 2015 adjusted gross profit decreased $4.2 million or 9% over the same period of 2014, largely due to the factors affecting the New York market, as Marc discussed. In addition, increased health benefit cost as well as the nonrecurrence of the Q4 2014 Hurricane Sandy settlement and the timing of a few large rent adjustments and other timing-related items impacted the year-over-year results for the fourth quarter.

I want to clarify that these timing items did not impact the full year -- year-over-year results.

We did a good job managing G&A costs in the fourth quarter and as a result, adjusted G&A for the fourth quarter decreased by $3.5 million or 15% over the fourth quarter of 2014. The decrease was largely due to comp and benefit decreases as a result of organizational restructuring and tighter cost controls.

Q4 2015 G&A also benefited by $1.2 million due to the -- due to adjusting the company's performance-based compensation payout expectations. As Marc mentioned earlier, we continue to be encouraged by our ability to control costs and drive cost improvement initiatives to reduce overall G&A without negatively impacting the business.

Resulting adjusted EBITDA for the fourth quarter of 2015 was $20.8 million, a slight decrease over the same period of 2014. Despite the year-over-year decrease in adjusted EBITDA, fourth quarter 2015 adjusted EPS increased by $0.06 compared to the fourth quarter of 2015 as increased depreciation and amortization expense was more than offset by lower interest expense and a lower normalized effective tax rate for the quarter.

Even if the normalized effective tax rate were the same in both years, Q4 2015 adjusted EPS would still have increased $0.01 over the fourth quarter of 2014.

Looking at the full year results, 2015 adjusted gross profit increased by $3.6 million or 2% over full year 2014. If you exclude the New York market, we grew same operating location gross profit by 2%.

Net new business and favorable changes in casualty loss reserve estimates also contributed to the year-over-year increase. Moderating the year-over-year growth was increased overall health benefit costs with most of the increase in cost coming in the fourth quarter, as I just mentioned.

Adjusted G&A for the fiscal 2015 -- for fiscal 2015 decreased $1.4 million or 2% over 2014, primarily due to tighter cost controls, overall cost reductions and organizational restructuring initiatives. We expect to see the full year benefit of many of the 2015 cost reductions in 2016, and we have new initiatives underway to drive additional cost savings.

I want to emphasize that we are driving cost out by improving our -- and optimizing processes and are not making cuts that will jeopardize our ability to serve our clients and to support the growth of the business. As a result, adjusted EBITDA increased by $5.6 million or 7% in fiscal 2015 as compared to fiscal 2014.

Fiscal 2015 adjusted EPS was $0.98, an increase of $0.23 or 31% as compared to fiscal 2014 adjusted EPS of $0.75. Low interest rates resulting from the amended senior credit agreement that was put in place at the beginning of 2015 more than offset increases in depreciation and amortization expense to contribute significantly to the increase in EPS.

Both 2015 and 2014 had significant tax benefits resulting from certain reversals of valuation allowances, deferred tax assets as well as other nonroutine items which have been excluded from the adjusted results for both years. While there were some fluctuations in the quarterly effective tax rate, the overall effective tax rates for 2015 and fiscal 2014 after adjusting for the nonroutine tax items were substantially similar.

The company generated adjusted free cash flow of $36.9 million during fiscal 2015, which was greater than the expected range of $30 million to $36 million. While it was lower than the $37.4 million of adjusted free cash flow generated in fiscal 2014, we expected a lower level of free cash flow due to a significantly increased level of cash tax payments in 2015.

In fact, cash tax payments were $18.1 million in 2015 as compared to $1.3 million in 2014. When you normalize for cash tax payments, we were able to increase adjusted free cash flow by 79%.

Generating strong free cash flow will continue to be an area of focus.

Finally, I want to cover our outlook for 2016. Our expectation for 2016 is for adjusted EBITDA to be in the range of $88 million to $93 million, an increase of 10% over adjusted 2015 at the midpoint.

For the sake of clarity, I think it's important to point out that we have adjusted -- we have defined EBITDA and adjusted EBITDA to be after deducting for minority interest expense. A full reconciliation of GAAP net income to EBITDA and adjusted EBITDA was presented in our earnings release that was issued last night.

Adjusted earnings per share is expected to be in the range of $1.16 to $1.26, an increase of 23% over adjusted 2015 at the midpoint. Adjusted EBITDA and adjusted earnings per share will continue to exclude nonroutine items such as, but not limited to, restructuring costs, asset sales, changes in valuation allowances for deferred tax assets and other nonroutine items.

Adjusted guidance will also exclude any gains or losses resulting from our equity interest in the Parkmobile joint venture, which will continue to be presented below operating income on the income statement. 2016 adjusted EPS anticipates a normalized effective tax rate of 41%.

However, the company’s tax rate could vary based on a number of factors. In addition, while our management contracts heavy portfolio provides us some measure of protection in economic downturns, our guidance does not contemplate a material change in economic conditions.

Adjusted free cash flow before cash used for nonroutine structural and other repairs is expected to be in the range of $40 million to $46 million, an increase of 17% over adjusted 2015 at the midpoint.

As a reminder, there is some seasonality to our business as reduced air travel and hotel occupancy levels as well as increased snow removal cost in the first quarter of calendar -- in the first calendar quarter of the year results in Q1 being our weakest quarter historically. That being said, our results for January were in line with expectations despite the severe weather winter that was experienced in parts of the country.

While we cannot draw any conclusions based on one month, we are pleased that this year is off to a good start. That concludes our formal comments.

I'll turn the back -- the call back over to Shannon to begin the Q&A.

Good morning, David.

Just wanted to follow up a little bit on 2 things. First, the G&A side, presumably some impressive headway there.

Or presumably, some goes ins and goes outs in the fourth quarter, I would guess. So just curious if, how we should think about it on a run rate basis.

Were there any sort of get-backs there as you adjusted comp for the year? Or is this a new good level to trend off of?

Dave, this is Vance. So I think as we mentioned in our prepared remarks, we had about $1.2 million of comp adjustments, if you will.

So that's basically related to the decline of our performance bonus compensation, and so that would have been a year-over-year -- quarter-over-quarter difference for the fourth quarter of '15 relative to the fourth quarter of '14. Outside of that, the rest of the reductions in G&A, we really believe are real and we're starting to gain a lot of traction on G&A reductions.

And so notwithstanding that, what we would suggest is that the rest of it is very real and we would expect not necessarily the magnitude of $19 million per quarter going forward of G&A, but we would expect something not that much higher than that, as we kind of contemplate what's headed into 2016. And as we noted also, we expect to be able to get a good run rate from the G&A reductions that we made in '15.

Now we'll have a full year cycle of that in 2016. And in addition, we're also making good progress on a number of other initiatives in 2016 as well.

So once again, we expect absolute G&A cost to come down in 2016 relative to 2015.

Got you. So just to clarify, the $1.2 million variance, is that a reversal or was that just comp not paid?

Yes, so what we do is that we -- on a quarterly basis, we true up our accruals for performance-based compensation. And so the way to think about it is that we had -- we reduced our accrual more in 2015 relative to 2014, so that's kind of why there's a difference.

So not all of the change year-over-year is just pure cost reduction. There's some related to the fact that we had to reverse some performance-based accruals -- performance-based compensation accruals.

And that's just due to kind of where we're kind of netting out on certain targets for the year.

Great. That makes good sense.

And can you give us a sense of how much of it was truly a reversal?

Yes. Once again, one point.

Well...

So the $1.2 million was a reversal? Or I'm sorry, I thought you said part of it was.

No, no, no. The $1.2 million, so if you take the whole difference from -- in G&A from the fourth quarter of '15 relative to fourth quarter of '14, $1.2 million of that relates to performance-based compensation accrual adjustments.

The rest of that is pure cost reductions, which we expect to continue to go on.

Got it. All right.

So one second. Because I'm not sure, maybe we're using different words.

So what I'm trying to get at is there are 2 ways that comp or bonus accruals go down, right? One way is we just don't accrue this period, and another is earlier in the year we've accrued some, and we realize at the end of the year we're not quite going to get there, so we reverse that accrual.

What I'm trying to get to understand is of the $1.2 million, are you calling all of that out as a reversal? Or is that a combination?

And if it's a combination of the 2, if you can give a sense for -- basically, was wondering how much of that was giveback from earlier in the year? That's the important question I'm trying to get at.

It's effectively -- it's a reversal.

It is a reversal. Okay.

Okay. Got it.

Perfect. And then one other minor.

As to the step-up in health care claims, any sense of -- obviously, these things are impossible to time, I guess, from your side of things, but any sense to -- if that's gone back to normalized levels?

Yes, I would say, the reason we called it out is because we felt that what happened in the fourth quarter was unusual in terms of its size. We, obviously, as you know, operate a self-insured up to some limit health plan.

And the important thing for us is that we have lots of participation and that we are -- we are doing what we can to control claim costs. Although, unlike casualty, it's a little bit more difficult in the health area.

So they tend to be what they are. Claims do tend to come in throughout the year.

They build a little bit, so they're a little lower earlier, and they get a little higher later in the year. We did have some unusual claims, we're aware of that.

That happened late in the year and make us think that that's not going to be continuing issue for us, as we go into '16.

This is Kyle Dicke on for Nate Brochmann. So just wanted to kind of talk about kind of the pipeline on some of your new business.

I know you guys had some nice wins recently, so just trying to get a feel for what that looks like going forward.

Yes. I think we're -- the verticals that we called out for you in our results are really the verticals where we're seeing the most interest for new business development, and that's our municipal space, our large venue and event space and our hospitality space.

I think those are the areas where there's certainly a big interest by people who own facilities in those spaces to outsource in many times for the first time or to make changes in their operators. And so I think we'll continue to see good growth in those areas over the next several months.

I think, generally speaking, people are more open to making change in operators or to bring in new ideas and new creativity, and we think we're very good at doing that, and that's why we're running record new business, but we're also seeing that some of our existing locations are going out to bid in ways that maybe haven't in the past. And so I think if you look at our location count in our kind of underlying business, you'll see that while we are writing record new business, we're also losing some business along the way as well.

Okay. Great.

And then in terms of kind of that bidding operating environment, are you guys seeing additional pricing pressure there or more competition on some of those bids or is it pretty consistent over the past few quarters?

Yes, I don't think there's any new competitors. It's the same kind of array of folks.

But as we've talked many times before, in the municipal space, which is maybe 20% of our portfolio, those contracts are going to come up on a regular basis for renewal and rebidding, and so we're -- we definitely see that happen all the time, and that's not any different than before, and we're typically bidding against the same people who tend to use the same thought processes as they have in the past. In the nonmunicipal space, obviously things there don't ever need to go out to bid.

And if we're doing our jobs, we're convincing our clients that we're delivering value for them all the time, and there's really no need for them to put a property out to bid. What we're seeing, I just think, and this is maybe the economic backdrop that we're operating in now properties are starting to flip again.

We've kind of recovered now completely from the big recession. New owners come in, new property managers come in, they say, "Gee, someone's been there for a long time, it's time you have put a fresh pair of eyes, look at it and make proposals."

And so I think what we're seeing is -- and not just us, but all of the operators are seeing an uptick in the locations going out to bid that maybe they hadn't gone out to bid before. Now we think for ourselves, that's a net positive because we're going to be offering up new and creative solutions and it enables us to win new properties, and that's why we've written record new business for the last 3 years.

We look at what competitors take away from us and what we take away from them. And I would say, generally speaking, we're pleased with how that's going.

That being said, we do feel that anytime you're in an environment where more things are going out to bid, there's a chance that somebody's going to make a decision based on who is offering the lowest price per service. We don't try to be the low-cost provider of service because we think we're generating a lot of value-add, we're helping our clients optimize the revenue with their facility and generate more profit.

We're bringing new technologies and all the things that are going on out in our world in terms of how people choose where to park and how they choose to pay. We're at the cutting edge of those things.

We're bringing a lot of value to our client, so we don't think we have to price our property at the lowest possible price. Now, sometimes when a property changes hands, a new owner comes in or a new property manager who is not aware of all of that, and they just think like well they're all the same.

I'll just go for the low-priced option. So that's the battle that we have to fight all the time to make sure that we're educating our current clients and our prospective clients around the array of things we do, and why there's value-add in hiring us to provide the service.

If you gave a range and I missed it, I apologize. Marc, and Vance.

Is there an organic gross profit growth range embedded in your '16 -- 2016 guidance range?

There is. We didn't actually give that range, and it's not something we normally guide on.

What I would say, given our comments, is that, clearly, we were running at, I think, 6% gross profit growth through the third quarter of last year, and then given Q4 came in at 2% for the year, which I would say for us is disappointing and certainly not where we want to be. So as we look to 2016, our desire and our expectation is that we're going to grow faster than that.

Whether we can get back to where we were, let's just call it in the first 3 quarters of '15 remains to be seen. But our desire is to grow our gross profit at a faster rate organically than the 2% that we delivered for 2015.

We will, of course, do all the things that Vance talked about on the cost side of our business to ensure that if we aren't able to drive our gross profit growth up at a faster clip that we're continuing to drive our EBITDA and our bottom line results in the way that we've guided.

Very helpful. And clearly, gross profit growth is more critical than the number of locations.

That said, you continue to exit less profitable contracts and the declines in the number of locations has increased in the last couple of quarters. Do we expect the trend to continue in '16?

When do we think we can get to the point we're actually growing the number of locations again?

It's certainly a prime objective for us, Dan, As we keep pouring new stuff into the top of the bucket, old stuff drops out of the bottom now. One of our focus has always been looking at the array of business development opportunities that can generate the most gross profit per location.

And these tend to be larger, more complex operations, where our whole array of services are required. So at one level, we don't concern ourselves too much with location count.

That being said, we still don't like to see our location count go down. We're churning out some stuff that's still legacy from the kind of premerger days.

That will probably continue during 2016. As you guys know, we also have loser leases that we inherited in our portfolio when we did the merger between Central and Standard.

Some of those we can convert into profitable deals when they renew, and others, we just have to walk away from. So I would say '16 is going to be another year where it's a little bit unclear whether we'll show positive location count growth but I'm trying very hard with my operating team to bring the decline to a stop and to show positive growth, as I do believe over the long haul, if we're going to generate kind of sustained gross profit growth, we're going to need to grow our location count as well.

Okay. And then just wanted to touch on New York little bit more if $500,000, give or take, was kind of the impact of structural repairs, can you talk about what else went on in the market?

You mentioned fewer events. What gives you confidence that it was more of a temporary slowdown as opposed to more structural changes in the market, if you will?

Yes. I mean, I think -- obviously, the impact on New York for the quarter was bigger than the $500,000.

That was the amount that was just related to the structural work, as we indicated in our comments. I think, New York, obviously, very vibrant right now.

There's a lot of construction going on. To date, that construction is working to our advantage because some surface parking lots are going away and being replaced by buildings, but we did see weaker demand whether it was in the hotel sector or with events in Times Square and Broadway and some of the other event things that occur in the fourth quarter that led to a bit of a disappointing Q4 in terms of level of activity.

We're constantly looking at our parking rates, both for transient and monthly parking in New York and in our belief that we have the right staffing levels. I think we were a little slow to react when we saw a downturn in revenue in Q4.

And as a consequence, probably had too much staffing at some of our lease locations, in particular. And so, I think, who knows, weather events are out of our control, obviously.

But I think we certainly saw signs that there are things that we can do both with our parking rates and with our control of our staffing levels and overtime at our facilities to try to generate the profitability out of New York that we think it can generate. And by that, I mean, drive positive gross profit growth in that market in 2016 compared to '15.

Got it. Helpful.

Free cash strong, continues to get stronger. How much of a difference do you expect there to be between adjusted free cash flow and the actual free cash flow as far as 2016 is concerned?

Yes, Dan. Let me just answer that.

We would expect actually, as we go forward into '16, for that difference to be rather minimal, certainly, as you kind of relative to what occurred in 2015 and 2014. So we would expect our adjusted free cash flow.

And once again, this is a reminder to everyone. In the case of free cash flow, when we adjust for that, we're just adjusting for cash outflows related to structural repairs, and so we would expect there to be much more minimal amount of structural repairs into '16 than there was in '15, for example.

Would that be kind of sub-$5 million or you don't want to go there?

I think that we would expect it to be kind of less than $5 million. I think that's a fair statement.

We don't have a specific amount. Obviously, for the few remaining items that we're doing, we're still in the process of going through that process, but I think that's a fair way to think about it.

Okay. And lastly, you mentioned in the prepared remarks, Marc, turning your attention to capital structure and growth opportunities, could you perhaps either rank order in order of priority or likelihood: acquisitions, buybacks, dividends, et cetera?

Well, I mean, certainly, as we -- this is not really anything new, Dan. We always look at, are there acquisition opportunities out there for us?

Because if we can acquire people that have relationships that we don't have that can enable us to grow faster than we can grow on an organic basis, that's a desirable thing to do. But our ability to complete acquisitions is a function of both of people willing -- wanting to sell their business and also having a realistic perspective on the value of their business.

And, of course, a lot of the companies that come up for sale in our marketplace are simply people who want to retire and maybe their children aren't interested in the company, and those have not been too appealing to us. So I'm hoping that we have some people that we're watching now and talking to all the time.

I'm hoping that we could find some candidates and get some deals done in 2016 and 2017, but it's a little bit out of our hands. Now that being said, as you see, if you run the numbers, we're continuing to delever our business.

And I think we've now dropped below 3x leverage for 2015, and there's no need for us to go below our sort of 2 to 3 range that we've talked about before. And so clearly, in the absence of the need for cash for an acquisition or to invest in our own business, we're going to be looking at either stock buybacks or dividends.

I mean, that's obviously a decision for our Board of Directors, but we're not going to just delever down, down to a level that don't make sense.

Just getting quickly back to the puts and takes on the G&A expense here. In the press release, you talked about a binding decision related to the Central Parking dispute that resulted in an expensive $1.6 million in the fourth quarter on administrative.

So I guess, do you think about the core G&A being even lower than the $19 million, excluding that $1.6 million expense?

No. I think the way to think about it would be is that, that $1.6 million doesn't really play a role in kind of the significant decline that we saw in G&A in the fourth quarter of '15 relative to '14.

So the way to think about it is that, as we discussed, we had about -- the decline was about $3.4 million from the fourth quarter of '14 to '15. We had $1.2 million of that was related to PBC or performance-based compensation accrual adjustments.

So we had a benefit of that. The rest of the decline from '15 to '14 in the fourth quarter was really what we view as kind of good traction on tighter cost controls and cost reduction initiatives, and we expect that to continue going forward into '16.

Right. Right.

But I guess what I'm asking is that the decline would've been even greater if you exclude that $1.6 million expense that apparently was recognized in the fourth quarter. So if you take that out, you're more like $17.4 million instead of $19 million.

Is that not the right way to think about it?

It was actually -- it was an add-back. So when we go from reported to adjusted, it was an add-back.

So like I said, it really doesn't figure into that calculation, Kevin.

All right. Fair enough.

So it looks like to me the EPS guidance for 2016, you're assuming a pretty significant reduction in interest expense and also maybe depreciation and amortization expense kind of flattening out or maybe even declining in 2016 relative to '15. So could you just address those 2 areas as they factor into your 2016 guidance, both the interest expense and the depreciation and amortization?

Yes. And Kevin, as you know, we don't give guidance on the specific elements of interest expense and depreciation expense.

What I would say is that in the case of depreciation expense, we had some increased depreciation and amortization expense in '15 due to projects that we had related to the integration and other IT-related projects. We would expect kind of that to be somewhat similar, not materially different as we head into '16 per se, and once again, without giving any specific numbers or guidance, on interest expense, like what we saw in '15, we would expect interest expense to continue to go down into '16 and the reasons for that is that: one, obviously, our interest expense is paid based off of LIBOR, and I think everybody is familiar with kind of where that stands these days.

We're not seeing any significant uptrends per se. In addition to that, our interest expense is also pegged to the level of our debt outstanding.

And as Marc just alluded to, we've been able to use the excess free cash flow to pay down debt and so that's helped us there. So debt outstanding is lower.

And then the third thing is that our interest rates are actually not only pegged to a LIBOR, but it's -- there are certain thresholds and so as we reduce leverage, which we've continued to do in '15 and we expect to do in '16, that will also have an impact because our interest rates that we're paying in accordance with our -- with the credit agreement will come down as well related to kind of what our leverage is. And so long way of saying that we would expect interest expense to continue to decline in '16 relative to '15.

Okay. So it sounds like one of the main uses of free cash flow in 2016 is going to be continued debt repayment.

Well, yes. I mean I think the way to describe it, and I think Marc was talking about this earlier, is that as we think about '16, really, in our guidance, we haven't contemplated, for example, the use of free cash flow to do something that may be a capital structure-type initiative or to fund an acquisition or something like that, because although we're clearly in the process, per our remarks earlier, in the process of evaluating those type of opportunities, we don't have anything specific at this point that we could really kind of dedicate that cash to.

So for purposes of giving guidance, which I think would be normal from those companies, what we've done is we've assumed that at this point that we would use excess cash to pay down debt, and that would effectively lower our interest expense cost.

Okay. Perfect.

And then just lastly, as you look to 2017, is there anything in your 2016 outlook that makes you more or less confident in your ability to reach that $100 million adjusted EBITDA goal in 2017?

Well, I would say it's still our goal, and we performed well relative to the guidance that we gave for '16, and that's a goal that's attainable for 2017. No doubt because our growth was slowing in Q4, and we landed at the end of 2015 a little lower than where we would have liked, that means that we have to perform even better to get to that goal still, but I don't think it's an unrealistic goal for us as a company.

And certainly, we're going to be focusing, as I mentioned in my earlier comments, on increasing our rate of organic growth and gross profit.

Thanks, Shannon, and I just want to thank all of you for joining us today and taking the time to listen to us, talk about our company and what we're doing as we go forward. I think you're going to see we'll have some exciting announcements about new business and other things going on in our company as we move into 2016.

As Vance indicated, I think we're confident that we're off to a good start for the year and look forward to talking to you next time. Thank you.