Regis reports third quarter 2012 results
Minneapolis--(business wire)--regis corporation (nyse:rgs), the global leader in the $160 billion haircare industry, today reported a third quarter net loss of $0.02 per share. these results include non-operational after-tax items of $21.0 million primarily related to the non-cash write-down of the company’s investment in provalliance. absent non-operational items, third quarter operational earnings increased to $0.32 per diluted share. “we continue to make progress on our plans to improve operationally and increase efficiency while continuing to develop and implement our long-term strategies. we are pleased that the third quarter results reflected our ongoing vigilance in controlling costs and managing our business more efficiently. looking ahead, our priorities remain focused on improving the salon experience for our customers, hiring and retaining the best stylists, continuing our efforts to simplify our operating model by consolidating our salons into one of four consumer segments and effectively leveraging our scale as north america’s largest salon company. we believe these initiatives are putting us on the right track to enhance profitability and drive value for our shareholders,” said eric bakken, evp, interim corporate chief operating officer. fiscal 2012 third quarter financial highlights consolidated highlights sales of $573.6 million, down 1.3% from $581.3 million in the third quarter of fiscal 2011. same-store sales declined 3.4% versus a decline of 2.3% in the third quarter of fiscal 2011. same-store customer counts for our salon businesses declined 3.0% in the third quarter of fiscal 2012. gross margin decreased 10 basis points to 44.2% of sales from 44.3% in the third quarter of fiscal 2011. operational operating margins increased 120 basis points to 5.6% of sales from 4.4% in the third quarter of fiscal 2011. operational net income of $19.7 million increased 33.6%, from $14.7 million in the third quarter of fiscal 2011. operational diluted earnings per share of $0.32 increased 29.3%, from $0.25 in the third quarter of fiscal 2011. operational ebitda of $58.1 million increased 12.2%, from $51.8 million in the third quarter of fiscal 2011. net store base decreased by 115 units in the third quarter for a total store count of 12,662 at march 31, 2012. the reported income tax rate was 32.4%, which includes the impact of the non-operational charges. the operational income tax rate was 33.6%. total cash at march 31, 2012 grew to $97.6 million, an increase of $1.3 million since june 30, 2011. total debt at march 31, 2012 decreased to $292.3 million, a decline of $21.1 million since june 30, 2011. segment results: north america salons revenues: third quarter 2012 revenues were $503.3 million, a decrease of 1.3% from the fiscal 2011 third quarter. service revenues were $390.2 million, a decrease of 2.1% compared to the same period a year ago. same-store service sales for the quarter declined 4.1%. same-store service customer counts declined 2.3% and average ticket declined 1.8%. retail product revenues were $103.3 million, an increase of 1.4%. retail product same-store sales declined 0.8%. service margins: service margin rate for the third quarter of fiscal 2012 was 41.6%, an improvement of 10 basis points over the third quarter of fiscal 2011. retail product margins: retail product margin rate for the third quarter of fiscal 2012 was 50.1%, an improvement of 40 basis points compared to the third quarter of fiscal 2011. the improvement in product margins was a driven by savings from the retail commission plans implemented for new stylists. site operating expense: site operating expense for the third quarter of 2012 was 20 basis points, or $1.6 million, lower than the third quarter of 2011, coming in at $45.3 million, or 9.0% of north american revenue. the decline in site operating expense is a result of decreased advertising expenses due to the timing of promotions year over year. general and administrative expense: general and administrative expense for the third quarter of 2012 was 60 basis points, or $3.6 million lower than the third quarter of 2011, coming in at $27.2 million, or 5.4% of north american revenues. we continue to see savings in travel expense due to the implementation of new portable technology for our field staff. in addition, we saw a decline in general and administrative salaries and related expenses due to the implementation of cost saving initiatives. rent expense: rent expense was $73.1 million, or 14.5% of north american revenue. this represented an increase of 30 basis points over the same period a year ago, primarily the result of deleveraging due to negative same-store sales. depreciation and amortization expense: depreciation and amortization was $16.7 million, or 3.3% of north american revenues; which included non-operational charges of $0.1 million related to the accelerated depreciation on our point-of-sale system. operational depreciation and amortization was $16.7 million, or 3.3% of north american revenues, a decrease of 30 basis points over the third quarter of fiscal 2011. operating margins: third quarter 2012 gaap operating margin was 12.3% of north american revenues. excluding non-operational items, operational operating margin was 12.3% of north american revenues, an increase of 120 basis points over the third quarter of fiscal 2011. international salons revenues: third quarter 2012 revenues were $32.6 million, a decrease of 8.3% from the fiscal 2011 third quarter. service revenues were $22.8 million, a decrease of 7.2% compared to the same period a year ago. same-store service sales for the quarter declined 9.3%. retail product revenues were $9.8 million, a decrease of 10.6%. retail product same-store sales declined 12.7%. service margins: service margin rate for the third quarter of fiscal 2012 was 48.1%, a decline of 240 basis points over the third quarter of fiscal 2011. the decline in service margin was primarily driven by lower salon productivity due to reduced sales levels. retail product margins: retail product margin rate for the third quarter of fiscal 2012 was 45.6%, a decrease of 80 basis points compared to the fiscal 2011 third quarter. the decrease in product margins was the result of an increase in the obsolescence reserve due to the decline in retail sales. rent expense: rent expense was $8.6 million, or 26.4% of international revenue. the increase of 110 basis points over the same period a year ago was primarily the result of deleveraging due to negative same-store sales. operating margins: third quarter 2012 gaap operating margin was $0.6 million, or 1.8% of international revenues; which includes non-operational expense of $0.1 million related to severance. operational operating margin was $0.7 million, or 2.2% of international revenues, a decrease of 420 basis points compared to the third quarter of fiscal 2011. hair restoration centers revenues: third quarter 2012 revenues were $37.7 million, an increase of 5.0% from the third quarter of fiscal year 2011. same-store sales for the quarter increased 4.3%. gross margins: gross margin rate for the third quarter of fiscal 2012 was 52.0%, a decline of 320 basis points over the third quarter of fiscal 2011. the decline in gross margin was primarily driven by increased hair system costs due to wage pressure in china, as well as an increase in labor costs due to a sales incentive program. operating margins: third quarter 2012 operating margin was $2.7 million, or 7.3% of hair club revenues, a decrease of 40 basis points compared to the third quarter of fiscal 2011. corporate general and administrative expense: third quarter 2012 gaap general and administrative expense was $34.1 million, or 5.9% of consolidated revenues, which includes non-operational charges of $6.0 million. operational general and administrative expense for the third quarter of 2012 was $28.1 million or 4.9% of consolidated revenue, a decrease of 50 basis points over the third quarter of 2011. the decrease in this expense category was due to a decline in corporate general and administrative salaries and related expenses due to the cost savings initiatives being implemented. we continue to expect general and administrative expenses to be in the $28 million range for the fourth quarter of fiscal 2012. income taxes during the three months ended march 31, 2012, the company recognized tax expense of $6.0 million with a corresponding effective tax rate of 32.4% utilizing the year-to-date method. the company’s operational tax rate of 33.6% came in better than expected primarily due to the release of income tax reserves and increased employment tax credits during the quarter. equity in (loss) income of affiliates loss from equity method investments and affiliated companies was $15.0 million in the third quarter of 2012, which included a non-operational impairment charge of $17.6 million related to the company’s pending sale of its 46.7% ownership interest in provalliance. operational income from equity method investments and affiliated companies was $2.6 million, a decrease of $0.9 million over the third quarter of 2011. the decline in this category relates to lower revenues and earnings from empire education due to a decline in student enrollment and decreased earnings from provalliance due to an increase in their effective tax rate. fiscal 2012 outlook the company expects fiscal 2012 same-store sales to be in the range of negative 3.5% to negative 2.5%. at these same-store levels, ebitda is expected to be in a range of $210 million to $220 million and operational earnings are forecasted to be in a range of $1.11 to $1.21 per share. regis plans to spend approximately $95 million for salon and corporate capital expenditures and up to $5 million for acquisitions. the company expects to generate free cash flow after investment for new stores and acquisitions of approximately $75 million to $80 million. third quarter non-operational items third quarter non-operational items, which netted to $21.0 million on an after-tax basis, consisted of the following items: in connection with the expected sale of the company’s 46.7% ownership interest in provalliance, the company recorded $17.6 million of non-cash after-tax expense. the expense primarily relates to the impairment of its investment in provalliance which was partially offset by a reduction in the fair value of the equity put. senior management restructuring and other severance costs of $3.5 million after-tax. as previously disclosed, the company is reviewing alternatives for non-core assets and has retained an independent financial advisor. in connection with this review, the company required an audit of the hair restoration centers and recorded expense of $0.3 million after-tax. accelerated depreciation expense of $0.7 million after-tax related the replacement of the current point-of-sale system with a new third party point-of-sale software system. $1.1 million of income tax benefit was realized in discontinued operations related to the release of income tax reserves related to our previous ownership in trade secret, inc. a complete reconciliation of reported earnings to operational earnings is included in today’s press release and is available on the company’s website at www.regiscorp.com. regis also announced today that, effective with the first quarter of fiscal 2013, the company will discontinue its current practice of reporting consolidated revenues and comparative same-store sales in advance of its quarterly earnings report. revenues and same store sales will be reported together in the quarterly earnings announcement. regis corporation will host a conference call discussing third quarter results today, april 26, 2012 at 10 a.m., central time. interested parties are invited to listen by logging on to www.regiscorp.com or dialing 877-941-6010. a replay of the call will be available later that day. the replay phone number is 800-406-7325, access code 4531291#. as of march 31, 2012 regis corporation owned, franchised, or held ownership interest in 12,662 worldwide locations. about regis corporation regis corporation (nyse:rgs) is the beauty industry’s global leader in beauty salons, hair restoration centers and cosmetology education. as of march 31, 2012, the company owned, franchised or held ownership interests in approximately 12,700 worldwide locations. regis’ corporate and franchised locations operate under concepts such as supercuts, sassoon salon, regis salons, mastercuts, smartstyle, cost cutters, cool cuts 4 kids and hair club for men and women. in addition, regis maintains an ownership interest in provalliance, which operates salons primarily in europe, under the brands of jean louis david, franck provost and saint algue. regis also maintains ownership interests in empire education group in the u.s. and the my style concepts in japan. system-wide, these and other concepts are located in the u.s. and in over 30 other countries in north america, south america, europe, africa and asia. for additional information about the company, including a reconciliation of certain non-gaap financial information and certain supplemental financial information, please visit the investor information section of the corporate website at www.regiscorp.com. to join regis corporation’s email alert list, click on this link: http://www.b2i.us/irpass.asp?bzid=913&to=ea&nav=1&s=0&l=1 this press release may contain “forward-looking statements” within the meaning of the federal securities laws, including statements concerning anticipated future events and expectations that are not historical facts. the forward-looking statements in this document reflect management’s best judgment at the time they are made, but all such statements are subject to numerous risks and uncertainties, which could cause actual results to differ materially from those expressed in or implied by the statements herein. such forward-looking statements are often identified herein by use of words including, but not limited to, “may,” “believe,” “project,” “forecast,” “expect,” “estimate,” “anticipate,” and “plan.” in addition, the following factors could affect the company’s actual results and cause such results to differ materially from those expressed in forward-looking statements. these factors include the impact of management and organizational changes; competition within the personal hair care industry, which remains strong, both domestically and internationally, price sensitivity; changes in economic conditions; changes in consumer tastes and fashion trends; the ability of the company to implement its planned spending and cost reduction plan and to continue to maintain compliance with financial covenants in its credit agreements; labor and benefit costs; legal claims; risk inherent to international development (including currency fluctuations); the continued ability of the company and its franchisees to obtain suitable locations and financing for new salon development and to maintain satisfactory relationships with landlords and other licensors with respect to existing locations; governmental initiatives such as minimum wage rates, taxes and possible franchise legislation; the ability of the company to successfully identify, acquire and integrate salons that support its growth objectives; the ability of the company to maintain satisfactory relationships with suppliers; or other factors not listed above. the ability of the company to meet its expected revenue target is dependent on salon acquisitions, new salon construction and same-store sales increases, all of which are affected by many of the aforementioned risks. additional information concerning potential factors that could affect future financial results is set forth in the company’s annual report on form 10-k for the year ended june 30, 2011. we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. however, your attention is directed to any further disclosures made in our subsequent annual and periodic reports filed or furnished with the sec on forms 10-k, 10-q and 8-k and proxy statements on schedule 14a. regis corporation (nyse: rgs) march 31, march 31, nine months ended march 31, $ march 31,2012 june 30,2011 salon location summary march 31,2012 june 30,2011 march 31,2012 june 30,2011 march 31,2012 june 30,2011 march 31,2012 june 30,2011 (1) canadian and puerto rican salons are included in the regis, mastercuts, smartstyle, supercuts, and promenade salon totals and not included in the international salon totals. (2) represents the acquisition of a franchise network. revenues by concept: three months endedmarch 31, nine months endedmarch 31, (1) same-store sales are calculated on a daily basis as the total change in sales for company-owned locations which were open on a specific day of the week during the current period and the corresponding prior period. quarterly and year-to-date same-store sales are the sum of the same-store sales computed on a daily basis. locations relocated within a one mile radius are included in same-store sales as they are considered to have been open in the prior period. international same-store sales are calculated in local currencies to remove foreign currency fluctuations from the calculation. management believes that same-store sales, a component of organic growth, are useful in order to help determine the increase in revenues attributable to its organic growth (new locations construction and same-store sales growth) versus growth from acquisitions. financial information concerning the company’s salon and hair restoration businesses is shown in the following tables. income (loss) from continuing operations before income taxes and equity in (loss) income of affiliated companies non-gaap reconciliations we believe our presentation of non-gaap operating income, net income and net income per diluted share provides meaningful insight into our ongoing operating performance and an alternative perspective of our results of operations. presentation of the non-gaap measures allows investors to review our core ongoing operating performance business from the same perspective as management and board of directors. these non-gaap financial measures provide investors an enhanced understanding of our operations, facilitate investors’ analysis and comparisons of our current and past results of operations and provide insight into the prospects of our future performance. we also believe that the non-gaap measures are useful to investors because they provide supplemental information that research analysts frequently use to analyze financial performance. the method we use to produce non-gaap results is not in accordance with u.s. gaap and may differ from methods used by other companies. these non-gaap results should not be regarded as a substitute for the corresponding u.s. gaap measures but instead should be utilized as a supplemental measure of operating performance in evaluating our business. non-gaap measures do have limitations in that they do not reflect certain items that may have a material impact upon our reported financial results. as such, these non-gaap measures should be viewed in conjunction with both our financial statements prepared in accordance with u.s. gaap and the reconciliation of the selected u.s. gaap to non-gaap financial measures, which are located in the investor information section of the corporate website at www.regiscorp.com. non-gaap reconciling items for the three and nine months ended march 31, 2012 and 2011: the following information is provided to give qualitative and quantitative information related to items impacting comparability. items impacting comparability are not defined terms within u.s. gaap. therefore, our non-gaap financial information may not be comparable to similarly titled measures reported by other companies. we determine which items to consider as “items impacting comparability” based on how management views our business, makes financial, operating and planning decisions and evaluates the company’s ongoing performance. senior management restructure and severance charges – we have excluded expense associated with senior management restructuring and other severance charges from our non-gaap results. during the three and nine months ended march 31, 2012 and 2011, we incurred expense of $5.6 and $1.9 million and $7.9 and $1.9 million, respectively, associated with senior management restructuring and other severance charges. hair restoration audit fees – we have excluded expense associated with an audit of the hair restoration centers from our non-gaap results. during the three and nine months ended march 31, 2012, we incurred $0.5 million of expense associated with the potential sale of the hair restoration centers. pure beauty note receivable reserve – we have excluded the note receivable valuation reserve recorded for the outstanding note receivable with pure beauty from our non-gaap results. we recorded valuation reserves of $9.0 million during the three and nine months ended march 31, 2011. proxy fees – we have excluded the advisory fees and other costs associated with the recent contested proxy from our non-gaap results. during the nine months ended march 31, 2012, we incurred $2.2 million of advisory fees and other costs associated with the recent contested proxy. strategic alternative costs – we have excluded the fees associated our exploration of strategic alternatives during our second quarter of fiscal year 2011 from our non-gaap results. during the nine months ended march 31, 2011, we incurred $1.3 million of expense related to the exploration of strategic alternatives. point-of-sale system accelerated depreciation – we have excluded the accelerated depreciation we recorded related to our point-of-sale system from our non-gaap results. during the three and nine months ended march 31, 2012, we recorded $1.1 and $16.2 million, respectively, in accelerated depreciation related to our point-of-sale system. goodwill impairment – we have excluded the goodwill impairment charges we recorded related to our hair restoration centers reportable segment and our promenade salon concept from our non-gaap results. the company recorded a goodwill impairment charge of $78.4 million related to our hair restoration centers’ reportable segment during the nine months ended march 31, 2012. the company recorded a goodwill impairment charge of $74.1 million related to our promenade salon concept during the three and nine months ended march 31, 2011. legal settlement – we have excluded income associated with a legal settlement from our non-gaap results. during the nine months ended march 31, 2012 we recorded income of $1.1 million associated with a legal settlement. tax provision adjustments – the non-gaap tax provision adjustments are due to the change in non-gaap taxable income as compared to u.s. gaap taxable income or loss, resulting from the non-gaap reconciling items addressed herein. the non-gaap tax provision adjustments are made to reflect the year-to-date non-gaap tax rate for each period. my style impairment – we have excluded the impairment recorded for our investment in my style from our non-gaap results. due to the natural disasters in japan that occurred in march 2011, we recorded an other than temporary impairment for our investment in my style of $8.7 million during the three and nine months ended march 31, 2011. provalliance impairment, equity put liability, and non-operational charges recorded by provalliance – we have excluded the impairment recorded on our investment in provalliance, partially offset by the gain recorded for the reduction in the fair value of the equity put option associated with our provalliance equity method investment and non-operational charges recorded by provalliance from our non-gaap results. the company recorded an other than temporary impairment charge of approximately $37.0 million during the three and nine months ended march 31, 2012 as a result of the company entering into an agreement to sell its 46.7 percent interest in provalliance for eur 80 million. as a result of the expected sale, the company recorded a gain of approximately $20.2 million during the three and nine months ended march 31, 2012 for the decrease in the fair value of the equity put option associated with the provalliance. in addition, the company recorded an additional $0.8 million of expense primarily related to non-operational charges recorded by provalliance. the company recorded a gain of approximately $3.6 million during the three and nine months ended march 31, 2011 for the settlement of a portion of an equity put option associated with our provalliance equity method investment from our non-gaap results. release of income tax reserve related to discontinued operations – we have excluded the tax benefit for the release of income tax reserves related to our previous ownership in trade secret, inc. operations from our non-gaap results. the company recorded income of approximately $1.1 million during the three and nine months ended march 31, 2012. weighted average shares adjustments – the non-gaap weighted average shares adjustments are due to the change in non-gaap net income as compared to the u.s. gaap net income or loss, resulting from the non-gaap reconciling items addressed herein. non-gaap net income per share reflects the weighted average shares associated with non-gaap net income, which includes the dilutive effect of common stock and convertible share equivalents. three months endedmarch 31, nine months endedmarch 31, $ 581,267 $ (59,504 $ 25,503 $ (25,335 release of income tax reserve related to discontinued operations $ 14,720 0.017 — 0.080 — — — 0.416 — (0.053 0.127 — 0.106 56,704 56,704 68,217 notes: (1) based on a year-to-date tax rate analysis, the non-gaap tax provision was calculated to be approximately 37% for the three and nine months ended march 31, 2012 for all non-gaap operating expense adjustments, except the goodwill impairment. the goodwill impairment had a tax benefit of approximately $5.9 million for the nine months ended march 31, 2012, as the charge is only partially deductible for income tax purposes. the non-gaap tax rate for the three months ended march 31, 2012 was 33.6%. based on a projected statutory effective tax rate analysis, the non-gaap tax provision was calculated to be approximately 39% for the three and nine months ended march 31, 2011 for all non-gaap operating expense adjustment, except the goodwill impairment. the goodwill impairment had a benefit of approximately $45.7 million for the three and nine months ended march 31, 2011, as the charge is only partially deductible for income tax purposes. (2) for the three and nine months ended march 31, 2012 and 2011 non-gaap net income per share, diluted has been calculated under the if-converted method. for the three and nine months ended march 31, 2012 and 2011, $2.1, $6.2, $2.0 and $6.1 million, respectively, of after-tax interest on the convertible debt is added to the non-gaap net income to determine the non-gaap net income for diluted earnings per share. (3) non-gaap net income per share reflects the weighted average shares associated with non-gaap net income, which includes the dilutive effect of common stock and convertible share equivalents. the earnings per share impact of the adjustments for the three and nine months ended march 31, 2012 included 0.2 million, for both periods, of common stock equivalents and convertible share equivalents of 11.2 million, for both periods, of additional shares under the if-converted method. the earnings per share impact of the adjustments for the three months ended march 31, 2011 included 0.4 million of common stock equivalents and 11.2 million of convertible share equivalents of additional shares under the if-converted method. the earnings per share impact of the adjustments for the nine months ended march 31, 2011 included 11.2 million of convertible share equivalents of additional shares under the if-converted method. the impact of the adjustments described above result in the effect of the common stock equivalents and convertible share equivalents to be dilutive to the non-gaap net income per share. (4) operational operating margins for the three months ended march 31, 2012, and 2011, were 5.6% and 4.4 %, respectively, and are calculated as non-gaap operating income divided by u.s. gaap revenue for each respective period. (5) total is a recalculation; line items calculated individually may not sum to total due to rounding. regis corporation reconciliation of reported u.s. gaap net loss to operational ebitda, a non-gaap financial measure ($ in thousands) (unaudited) operational ebitda non-operationaladjustments (1) threemonthsendedmarch 31,2012 % ofrevenues threemonthsendedmarch 31,2012 % ofrevenues 503,312 (1) the three months ended march 31, 2012 included $0.1 million pre-tax expense for the accelerated depreciation related to our point-of-sale system. (2) computed as a percent of service revenues and excludes depreciation expense. (3) computed as a percent of product revenues and excludes depreciation expense. non-operationaladjustments (1) threemonthsendedmarch 31,2011 % ofrevenues threemonthsendedmarch 31,2011 % ofrevenues % (1) the three months ended march 31, 2011 included $74.1 million impact of the goodwill impairment charge related to the company’s promenade salon division. (2) computed as a percent of service revenues and excludes depreciation expense. (3) computed as a percent of product revenues and excludes depreciation expense. non-operationaladjustments (1) threemonthsended march 31,2012 % ofrevenues threemonthsendedmarch 31,2012 % ofrevenues (1) the three months ended march 31, 2012 included $0.1 million pre-tax expense associated with senior management restructuring and severance charges. (2) computed as a percent of service revenues and excludes depreciation expense. (3) computed as a percent of product revenues and excludes depreciation expense. non-operationaladjustments (2) threemonthsendedmarch 31,2012 % ofrevenues (1) threemonthsendedmarch 31,2012 % ofrevenues (1) (1) computed as a percent of consolidated revenues. (2) the three months ended march 31, 2012 included $5.5 million of pre-tax expense associated with senior management restructuring and severance charges, $0.5 million of pre-tax expense associated with the potential sale of the hair restoration business, and $1.1 million pre-tax expense for the accelerated depreciation related to our point-of-sale system. (3) computed as a percent of service revenues and excludes depreciation expense. (4) computed as a percent of product revenues and excludes depreciation expense. non-operationaladjustments (2) threemonthsendedmarch 31,2011 % ofrevenues (1) threemonthsendedmarch 31,2011 % ofrevenues (1) (1) computed as a percent of consolidated revenues. (2) the three months ended march 31, 2011 included $1.9 million of pre-tax expense associated with senior management restructuring and severance charges and $9.0 million of pre-tax expense associated with the pure beauty note receivable reserve. (3) computed as a percent of service revenues and excludes depreciation expense. (4) computed as a percent of product revenues and excludes depreciation expense. (1) the company recorded an other than temporary impairment charge of approximately $37.0 million during the three months ended march 31, 2012 as a result of the company entering into an agreement to sell its 46.7 percent interest in provalliance for eur 80 million. as a result of the pending sale, the company recorded a gain of approximately $20.2 million during the three months ended march 31, 2012 for the decrease in the fair value of the equity put option associated with the provalliance. in addition, the company recorded an additional $0.8 million of expense primarily related to non-operational charges recorded by provalliance. the company recorded a gain of approximately $3.6 million during the three months ended march 31, 2011 for the settlement of a portion of an equity put option associated with our provalliance equity method investment from our non-gaap results. (2) due to the natural disasters in japan that occurred in march 2011, we recorded an other than temporary impairment for our investment in my style of $8.7 million during the three months ended march 31, 2011.
