Q3 2019 Earnings Call
Operator, we will be with you momentarily.
David the.
The brown the Oh W.
Well control Ryan Group Holdings third quarter 2019.
EMEA.
Okay.
The audio.
Both.
All right Holdings, President and Chief Executive.
So this conference call.
Our vice President and Chief Financial Officer.
Now regarding.
Regarding the format of the call.
Our end markets.
The news.
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Gross profits.
Yes.
Gross.
Mark in.
I will highlight.
Yes.
Backlog.
Projects.
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Jason.
Pending awards.
As well as our estimates and assumptions regarding our future growth administrative expenses.
We will then.
The call for questions.
These statements.
This conference call.
Since.
I will make projections.
And forward looking statements.
Gordon.
Including those described in our 10-K that make calls.
Actual results to differ materially from those statements. Moreover.
Thanks.
This past performance.
It is not necessarily an indicator of future.
Our results.
Among other things.
Providing this information.
Yes.
We undertake no obligation to update or revise any new projections or forward looking statements, whether as a result of new developments or otherwise.
Also please note that adjusted net income adjusted earnings per share EBITDA, and EBITDA margin, our non-GAAP financial measures under the rules of the Securities and Exchange Commission, including regulation G.
Please refer sort of reconciliations and definition inclusive sort of most comparable GAAP measures and reconciliation tables accompanying this earnings call within the press release included this morning.
The press release can be found on our website at Www Orion Group Holdings Inc. dotcom.
Also for additional discussion of risk factors that could cause actual results could differ materially from our current expectations. Please refer to our quarterly and annual filings with the FCC, which are also available in the Investor section of our web site.
And with that I'd like to turn the call over to Mark Stauffer, President and Chief Executive Officer Mark.
Thank you and good morning, everyone. Thanks for joining us today.
Today, we will discuss our 2019 third quarter results provide an update on our investor scale and grow initiative or EISG. The key takeaways from our remarks today will be our sequential and year over year improvement in our top and bottom line performance.
Backlog remaining near an all time high with a record level in the concrete segment.
Hi, FGF there.
I'll begin by giving an overview of the quarter. Robert will then discuss our financial performance and capitalization in more detail and finally I'll come back to discuss our markets provide an update on our see initiative and comment our expectations for future results.
As always I'd like to start by saying, Thank you to ordinary 2500 coworkers for their commitment hard work dedication to the company, which they show day in day out.
Because of our dedicated team we were able to meet the needs of our customers and achieve our goals.
During the third quarter, we posted the highest quarterly revenue in company history. We were also able to improve our bottom line as both concrete and marine segments delivered positive operating profit.
The improved operational performance of both segments led to increased EBITDA, both sequentially and year over year.
Our concrete segment now has positive operator operating profit year to date as we saw improved weather conditions in our IC initiative began to yield.
Positive results, especially in the area of labor efficiency.
We remain focused on executing our strategy of being a premier specialty construction company, providing solutions for our customers across the infrastructure industrial and building sectors, while maintaining a healthy financial position and maximizing stakeholder value.
Our end market demand remained strong as evidenced by a robust backlog of $630 million as of the ended the third quarter of 2019.
Our outlook for topline growth is favorable.
This combined with the operational transformation, we've been implementing through our IC initiative supports our ability to deliver improved results as we progress through 2019 and into 2020.
Now I'll turn the call over to Robert to discuss the financial results for Q3 19.
Thank you more and thanks, everyone for joining me.
Revenues for the third quarter 2019 were 99.5 range compared to 125.1 million in the third quarter, 2018% to 62% increase is driven by better you move utilization rates in our marine segment and improved productivity in our from increasing third quarter 2019 reported gross profit rose $29 million compared.
4.8 million in the prior year third quarter year over year increase was primarily driven by process improvements, resulting from honesty increase cubic yards production in our concrete segment in the outdoor mentioning improved utilization rates for our marine assets was this specifically we have improved labor efficiency, a great deal which has resulted in.
Project margin expansion and decrease Unabsorbed labor and equipment.
And then from third quarter 2019.
Were 14.6 million or 7.3% of revenues, which compared to second quarter 2018, as June expensive 12.4 million or 9.9% of revenues. The increase in DNA expenses reflect approximately 1.1 million of nonrecurring professional expenses and other fees related to our I assume Michigan.
For the third quarter, we reported net income of 4 million or 14 cents diluted earnings per share. These results compared to a net loss of 6.4 million or 22 cents diluted loss per share for the same period a year ago. Net income included point 3 million or about one cents per share of nonrecurring costs and other charges.
Adjusted net income for the period was 4.3 million or 15 cents diluted earnings per share.
Third quarter 2019, adjusted EBITDA was 14.3 million represent an adjusted EBITDA margin of 7.2% compared to adjusted EBITDA of 660000 or margin of 25% in third quarter of last year.
Results with respect to our two segments third quarter 2019, our marine segment revenues of 107.4 million and adjusted EBITDA of 12.7 million within adjusted EBITDA margin of 11.9%. This compares to revenues of 63.5 million and adjusted EBITDA of 2.5 million with adjusted EBITDA more than a 4% in the third.
During the year over year fees, primarily driven by increased utilization of dredging assets in core marine equipment, coupled with the margin expansion on certain projects.
Yes, all three segments.
Revenues third quarter revenues.
92.1 million as compared to 61.6 million in third quarter 2018, adjusted EBITDA for the country segments, approximately 1.6 million representing 1.7, adjusted EBITDA margin in third quarter 2019, as compared to a loss of $1.9 million or adjusted EBITDA margin negative 3% in third quarter 2018 occurs.
Three segments during the improvement was driven by increased cubic yards production and increased labor efficiency as evidenced by a sharp reduction and may not or cubic yard.
In terms of breakout by customer type the marine segments third quarter 2019 revenues comprised of 69% government agencies are 31% generated from the private sector. This compares to 62 in 38% from government and private sector customers, respectively. In the third quarter 2018 countries.
Third quarter 2019 revenues comprised of roughly 85% private sector versus 80% third quarter 2018 for the third quarter 2019, we bid on approximately 1 billion worth of opportunities and were successful in 160. Natalie. This resulted in the book to Bill ratio 0.8, Bob tops in a win rate of 16.3 quarter at September 30.
2019, we had a backlog of contract on the work of 630.5 million of which 404.3 million was associated with a marine segment in $226.2 million will the concrete segment. Additionally, we are the apparent low bidder or have been boarding subsequent to that ended third quarter 42.5 billion woods.
Of opportunities up this 31.6 million is related to the marine segment, while $10.9 million relate to the concrete segment. In total currently we have over $670 million of projects between backlog low bit and that backlog and low, but an increase of $195 million coming into 2018, this positions us well for growth.
Now turning to the balance sheet as of September through 2019, we had over 18 million of cash and revolver Bill Billability. We ended the quarter would approximately 70 million in total debt outstanding of which approximately 32 million is related to the revolver and $30 million related to the terminal. This translated into a 2.27 times.
Leverage ratio and fixed charge ratio of 2.14 times well within our government requirements. Further we finished the third quarter 2019, and a net over build position between availability on our revolver in our expectations for free cash flow generation.
More than ample liquidity to support our strategy.
Additionally, our bonding program remains solid and is more than adequate to support our bidding activities now I'll turn the call back over to March.
Thanks Robert.
Turning to our view of our market sectors in our Marine segment, we continue to have extensive opportunities with both public and private customers for the matrix and expansion of marine facilities and waterways. We continue to see a strong bidding environment as evidenced by the $14 million Award, we recently announced for to US Army Corps of engineers dredging projects on the Texas.
Kurt.
Additionally, we are currently in the process of bidding are tracking a number of other large bid opportunities.
We continue to track and pursue good opportunities in the industrial sector to execute foundation and other heavy civil work inside the industrial and other land based environment.
We believe our prospects for using existing skill sets to expand our addressable market and build profitable backlog are very promising.
In our concrete segment, we continue to expect solid long term demand driven our population growth throughout our main end market.
Demand for structural work remains strong as evidenced by the several contracts we were awarded in the third quarter, including a $26 million job for the construction of a 45 storey residential tower in Austin, Texas, and a $7 million structural project in Dallas Fort worth.
Likewise, we continue to see demand for like commercial work as evidenced by two recently announced projects in Houston totaled $22 million.
We continue to believe in the strength of our markets in Texas with construction activity well above historical averages and we're very excited about the bid opportunities that we expect to materialize in the coming year.
Our backlog and the concrete segment results on high at the end of the third quarter and we're optimistic that our prospects for additional awards given the continued healthy bidding environment.
Currently we have over 1 billion worth of bids total bids outstanding of which $361 million related the marine segment and 640 $54 million is related to the concrete segment. Overall, we are tracking over 9 billion dollars' worth of.
Current and future bid opportunities.
With a combination of our current backlog are low beds, the $1 billion bids outstanding and the 9 billion of opportunities we are tracking.
The possibility that funding picture may improve even further over the next several years, if I knew federal infrastructure Bill as path, we see significant growth potential for business.
We are confident in our ability to when mark and execute on that work, which should we expect to drive an increasing the topline for alliance.
Over what we're acutely focused on is enhancing our profitability on this work and maintaining consistent profitability across projects.
Which greatly to our IC update.
During the third quarter, we made significant strides in the implementation of our IC initiative across all areas of focus Labor management further management project execution and corporate processes.
In each of these areas, we've implemented enhancements and improvements to the functionality of data and reporting to provide better visibility leading to better efficiency and cost control.
I made element of our IC initiative has been a rig commitment of our expectations to our teams and our reinforcement of the accountability of our teams.
Our labor efficiency has improved a great deal, which along with our efforts in equipment management has reduced the unabsorbed labor and equipment costs contributing to significant gross profit improvement compared to prior year period.
We've also continued with our efforts to reduce corporate overhead and lay the groundwork to implement a shared services platform across our divisions to eliminate duplication of effort and cost all with the goal, but fully implemented to reduce SDMA to less than 8.5% sale.
We outperformed our target in the third quarter with SDMA at 7.3 person per cent of sales and we're focused on achieving our goal and maintaining over the it over the long term.
As stated before the end goal of our IC initiative is to provide a pathway to performance that meets our expectations for our business segments occupancy.
Hi, this with our strategic plan.
As we complete the process of embedding IC into our processes. We will continue to work on full implementation of shared services.
And conversion to accommodate ERP platform across our divisions.
In addition to these areas of focus under Iotg.
Recent awards of larger projects in our Marine segment are enhancing our capabilities to pursue and execute these larger anchor projects, which in turn improves our visibility and predictability.
Generally in our concrete segment as we expand our market share and structural projects, we're positioning ourselves to add larger and longer duration projects into backlog with the same improvement and visibility and predictability.
We are pleased to see the steps we've taken at our IC initiative are taking hold and yielding improved results, which we remain.
And we remain acutely focused on continuing this trend as we move into the fourth quarter of 29 team and into 2020.
Now I'll hand, the call back over to the operator for the Q and a portion of the call.
Thank you at this time, we will be conducting a question and answer session. If you will like to ask your question. Please press star one and your telephone keypad and confirmations homeland. The key inline as in the question Q. You May proceed thought too if you would like to move your question from Q.
Participants using speaker equipment and may be necessary to pick up to answer before personal style. Keith Allman. Please what we pull for your question.
Our first question comes on line of Alex Regal.
And company. Please proceed with your question.
Mark and Rob really nice quarter.
Thanks.
Couple questions first.
Can you.
Give us a little bit more detail or.
Color on sort of year views about the fourth quarter as it relates to third quarter.
And then your early look at 2020.
Well.
Ill kind of start on Robert jump in.
As we said kind of in the release.
We're pleased with the backlog.
We certainly think fourth COVID-19 is going to be much improved over fourth quarter 18.
We do note that.
Especially with a a.
The performance we had in Q3 oftentimes you know cheap or can be a little bit of a pull back just seasonality wise.
We were hopeful that we continue the good weather trends that we've had so thats going to factor into it.
But we think we might see some pullback from from from Q3 as we move ahead in fourth quarter, but.
Certainly much much improvement ofer over over last year as we go into 2020.
Just generally speaking I mean, we're focused on on the implementation and have been on the implementation of IC initiatives and again, our drive with all of this is to just get us back to consistent performance and that in the range of expectations that we expect our our divisions are two segments to perform.
So thats, what our focus is and.
We're working to do that more pleased with the backlog that we have going into 2020.
As we noted in the release this Florida and.
We're already seeing seeing some projects that will.
You know.
Phil.
Period does some of our schedule in the back half of next year. So thats very positive and we see a lot of opportunities that were either pursuing or or currently bidding is that.
We're very excited about so we think we've got good markets get backlog and again, we're focused on doing the things that we've been doing this year with.
Disease. These changes with with our IC initiative and to drive improved results.
Can you also comment on sort of the implied profit margin in backlog today.
As it stands relative to maybe the last couple of years and also talk a little bit about sort of your pricing strategy.
Out there in the market and how that has changed and how that has impacted your your win rate.
Yes, well couple things so so I think that.
Alright, thank you.
We're pleased with bid market or the backlog margin side Theres improvement there, but also I want to cut back on me.
For the areas of focus for our IC initiative because.
The execution on projects is part of the equation. The other part of that is not having that performance on those projects get deteriorated Bob.
Absorb.
Labor and equipment costs. So thats why that's been a key area of focus or us with bias GE is.
We think that we've got.
Markets. Good good backlog, obviously, and we were pleased with the margins we haven't that backlog, but we also want to make sure that we're not going to executing that worked well, but that will work we're controlling.
The indirect so that we're not seeing a deterioration of that after we execute on those projects Thats key focus for us we like what we're seeing so far we are seeing.
Improvement and labor efficiency, we commented on that we're seeing improvement in the area of equipment and underutilized equipment. Clearly those are two areas, where we're going to continue to focus on really.
We've got more work to do there and we can do that and thats going to help translate.
Our backlog into profitable results and.
Last thing on pricing.
Yes.
We we we've talked about this little bit on the last couple is that it's also as part of I SD.
You know we're focused on.
You know improving and enhancing if you will the analytics, we we have around project selection.
Our bid selection I should say, which projects. We go after how we price of those project what what are those that give us the best chance of success.
What weve what are we to four types of work that we performed better asset others and things like that said just really on a lot of that we've we've always done but just trying to see if we do those better. So that we can kind of continue the momentum that we're generating right now.
And lastly, can you discuss various opportunities to improve your cash position, including asset sales or real estate sales and operating activities.
And then you are likely uses of that cash over the next 612 months.
Yes, I'll touch on this let Robert Robert do have drilled out and so.
Well Thats continued area of focus on us I mean, youve solved that we de lever.
On the term debt this past quarter.
As we as Robert noted in his comments were in an overbuild position on a private overbuilt position on our project, we want to continue to execute well out of backlog.
Maintain maintain that that level of.
Over billing and we are ramping up.
Wrapping up some more particularly in the marine side.
And so.
We're managing that working capital made.
We do have.
One area of focus and I will let Robert touch on some other parts of this but just with the equipment piece that I touched on a minute ago.
Thats part of the equation to make sure that were maintaining the optimum size of.
Of fleet, and if we have surplus or excess things that we.
We liquidate that and we generate cash out of that and we'd work towards de levering and let Rob Yes, Alex now so that.
In the third quarter, we executed a sale leaseback on one of our properties.
The generated roughly $18 million that we used to to pay down turn that there'll be a sizable discloser on that in the Q. When we file it tomorrow morning Tomorrow afternoon, So you're going to redeployment there was no of piano benefit.
Through the quarter it was a balance sheet.
I was actually in.
The way, we're going to account for this thing is you.
You also uptick in.
Oh the liabilities.
Liabilities, so those whatever drug that out to do that launch as far as cash flow Oh, yes, it's something we want to we manage so we seem to uptick and they are just just from the major.
Well increase activity in buildings, if you look too well since the end of last year, a ours up roughly $30 million, we expect that to liquidate out as the year progressive.
We will continue to use those bonds.
De lever.
John .
Strategy around working capital right now.
Very helpful and thank you for hosting my Washington Nationals. So.
Trend learn Houston, but early it sounds like food.
[laughter] not the outcome, we wanted to say, but congratulations Matt. Thank you good luck.
Thanks.
I would like some of mine our participants at this time, if you would like to asking question. Please press star one on your telephone keypad.
Our next question comes from a lot of pull Frank of normal capital markets. Please proceed with your question.
Good morning, Mark Good morning, Robert Good morning.
A follow up on the working capital.
The negative for the last two quarters, roughly 9 million in at about 13 million will that start to turn and Robert mentioned to you know account receivables up we'll let start to turn in the fourth quarter is that more of a 2020 event.
It should start to liquidate over the fourth quarter into Q1.
We will Mark mentioned that you know this was ours, but revenue quarter in company history. So as we build out and start to collect that we'll we'll see to position.
So its liquidity.
And as I mentioned before we'll continue to focus on paying down debt at this time.
And drunk driving down our leverage ratio.
Thank you and then on the sale leaseback Robert.
Was there any savings that you could sort of quantifying on term.
I am reducing the revolver and using the sale lease bank.
The means could do that.
Yeah, no. It you know the savings.
Obviously, we reduced interest expense.
And take on a little bit leased experience. What it was there was quite a push the way to burn off is through interest amortization. So well also of note no no impact to EBITDA.
That's what you're doing.
Yes, just trying to figure out if the financing rate would.
Advantageous to you relative to what you're paying on the revolver.
Yeah. It was it was it was a portion of the material difference well you know the key for US is that we want it we want to drop down debt.
And continue to improve the liquidity position and as we drive down the overall leverage ratio it drops down our overall cost of capital. So we've factored all of those things in the decision as we continue to execute on our real estate strategy will continue to two to drop down the debt.
Great and more talked about the you know iced tea program and to see the progress there can you.
Only one target it seems like you have out there is that's DNA into percentage.
Revenue and you well line do that.
Thanks out the 1.1 million them.
One time costs.
You are well under it are there other measures that you're looking at whether its gross margin improvement can you quantify anything else that you're looking at to.
To help us understand where else the we're going to see the benefits of dry ice tea program.
Sure No. Good question, absolutely really relates back to actual performance I mean, it is in gross margin or isn't.
Don I know, that's why we can't say look where our end goal here is to is to use this.
To strengthen our processes systems and tools to have the units be performing at the level of our expectations on a consistent basis. So.
We think about the marine.
The Marine Division, we've kind of said before that we think we should be in the 10% to 12% EBITDA margin range with periods of outperformance.
We are adding to the third quarter, we were there.
You know we were we were in the middle of that range with their performance that we had in the third quarter with respect to the concrete segment. I mean, we think it out in the eight to 10, 11% from eight to 10 or 11% EBITDA margin is the range, we want to be in we're not quite there in that division we've made you.
Again improvements there.
You know we did generate positive.
Operating income in that division.
Clearly we have got more work to do there to get us back in the range that we expect so really the culmination of all the efforts that were doing our two to have the businesses perform what our expectations are so thats really that metric that.
We have out there and what what you can measure against along with the DNA targets that you mentioned, so that's really why de emphasis around project execution.
And controlling the indirects around labor and equipment. So.
If we execute the way, we should execute and we are executing well and we control.
The efficiency of labor or.
Reducing minimized.
Unabsorbed labor Unabsorbed equipment expense, then that you're going to see the the benefit of that and gross margins and therefore, EBITDA bottom line and EBITDA.
Great markets I could follow up on the.
Getting to that construction or concrete margin goal.
If you look at the third quarter record revenue.
How much to that 92 million in revenue was if you will on unprofitable or low margin projects that were bid.
Last year were in backlog I mean can we look at it that way and say that.
Were 75% of the way burning off those projects or is there. Some metrics did you give me to.
To figure out just when we're going to see that improvement in in EBITDA margins in the construction or concrete business.
Yes, so a lot of different things go into that so again, we have largely you know burned off as we said it said on the last call, we largely kind of burned off some of the more challenging work that we had that were impacted by weather.
Last year and ended the first quarter this year.
We have made progress there.
In terms of our performance there we as you say, where we had high high revenue we had very good production in the in the quarter.
Both there's other things that go into into that in terms of up you know improvement in our labor efficiency rate.
Our cubic yards per man hour, we want to gain more improvement there.
There's also.
The issue of.
Rework that we'd have to do on certain projects, then and then that the flow through for.
No change orders and getting paid for some of the work that we're doing there so.
You know again, what I can say is is that we've made a lot of progress in the concrete division.
We clearly have.
More progress to make but we're confident that are are.
Teams are focused on this there.
You know there they're performing at a much.
Quicker pace that.
You know we're focused on the things that they need to be focused on and so.
Our goal is to ticket to get so where are you know, where we think that expectation of performance should be as quickly as possible.
Whether thats Q4 Q1.
Our we'll wait and see what happens there, but we are focused on all the things that we should be focused on.
The teams are focused on our team in concrete is focused on the things they should be focused on and so.
We're we're.
We're moving in the right direction and our goal is to is to perform at the level, we should be performing that as quickly as possible.
Great.
You talked about sort of little bit the magnitude of the seasonality than the fourth quarter typically is the slowest time at the year.
Are you talking about you know revenue booking or profitability.
We should we expect lower revenue in the fourth quarter, but gross margin to hold up in the double digits.
To give me an idea sort of how to look at the fourth quarters for the seasonality that you mentioned you know what we're talking about on seasonality is.
A lot of savings gains this.
And they actually.
It was less they like let's talk about cost, which is a driver. So how we booked revenue. So yes. We expect go a pullback go up typically Q1 is the weakest acute Q2 bills between Q3 was to be it would come back down in Q4.
As bars as far as margins, what really goes into that is utilization at our ability to keep the equipment working so I would I would.
Right.
Just to kind of mirror the not is not as dramatic as as the surgeon revenue books.
The pullback slightly.
Great and then just if you wouldn't mind just a couple of nitpicky things on Capex target for the year and then also were there any startup costs for the terminal five.
In Seattle that might have dragged down gross margin in the in the third quarter little bit.
So it's got back to growth expectations of a I think.
It continue on the run rate that it has been all.
Through three quarters, you can model.
I don't expect.
So a big Spike up in Q4 August 4th C. Five yes, we do have flow of what we call uninstalled materials that.
We.
We're still in some of those raw materials.
We'll take those to the piano revenue caused zero margin into their installed then we'll take the margin so.
So it's almost all of that is flowing through in Q3 in some of that we expect to flow through Q4.
Okay still into Q4 Robertson.
Repeat the question again, sorry, there's still going to be a little bit startup drag from Seattle Tunnel T. Five as you mentioned in the fourth yes in Q4, Yeah, and then the other than what I would add to that though is we still think that's.
We're still very excited about that project and performing that work for the for the port up there as a key project form I think that we think overall, that's going to be a very very good job but.
Again, there's just some of the corpse of of.
Construction accounting Trc accounting that.
They have a little bit of impact in Q4, but overall, that's we're very excited about that.
That project as we as we move ahead.
Great and it document the other project by project is on the radar screen you mentioned on the second quarter conference call in August .
It looks like Georgetown, there's going to be voter referendum mid December has your confidence level on that project changed at all over the last three months.
Well you know we think.
We're very pleased with the team that we have there were.
We think that Thats a very.
You know important project for the economy.
In the Cayman Islands.
We think that our team has done a fantastic job at.
Addressing the concerns around environmental concerns and other concerns.
And we all our team is.
Helping communicate that message about what we've done in some of the Redesigns that have gone on.
Some of the steps that have taken we've taken now with the environmental consultants that weve.
We partnered with too.
You know assist in some of the some of the areas that are a key for us too focused on from an environmental standpoint.
So we're very very hopeful that.
The people will.
See the benefits of the project and see the.
See the steps that we take into.
Dressed concerns that they may have and so we'll see what happens on the 19th but I think we're.
We're hopeful for positive outcome there and.
Assuming that occurs that were.
Im pleased to move to the next steps on on that process as a as the preferred better.
Great and then just tie down a couple of sensitive.
Any change in your ability to recovery that change order that you guys have been talking about for the last couple of quarters I think it was up in Alaska.
Yes, well yeah, yeah. So no news to report specifically, but I do think that we've had some positive progress we've had.
Our team.
Up to meet with the customer almost on the project up there I think we've got a good path forward for us.
To to resolve.
Those things that I think we can resolve easily and then to address those that might be a little more.
Involved to resolve that I think.
I think we have seen some positive.
Of progress in that area, and we'll just keep where we're keeping our focus on that and hopefully we'll have.
So nothing to report out on that relatively soon but I think.
What I would say is as again, we were pleased with the progress we've made with our teams meeting with the with client and.
You know, we're keeping after it and.
Hopefully before too long, we'll have some some resolution.
Great. Thank you so much and and look forward to seeing it continued progress at the company. Thank you. Thank you.
At this time, we have no further questions over the audio portion of the conference I would like to turn the conference back over to management for closing remarks.
Thank you guys I know, we look forward to talking to you on to the next conference call.
This concludes today's conference. Thank you for your participation you may disconnect your lines at the top have a wonderful rest of your day.