Q1 2020 Earnings Call
[music] good day, everyone and welcome.
Them to Norbord Inc.'s first quarter 2020 conference call.
As a reminder, today's call is being recorded and webcast and Norbords website Www Dot Norbord dotcom.
Norbords discussion today may include certain projections and forward looking statements regarding norbords businesses future actions unexpected results.
These statements are subject to known and unknown risks and future results may differ materially.
Further information on known risks. Please see the caution regarding forward looking information statement in Norbords Fabry fourth 2020 annual information form and the cautionary statement contained in the forward looking statements section of Norbords management's discussion and analysis based on February four 2020.
And now I'll turn the call over to Mr., Peter Weinberg, <unk>, President and Chief Executive Officer. Please go ahead.
Thank you Karen.
Good afternoon, everyone welcome to our Q1 2020 conference call.
I'm joined today by Robin line partnership Huh.
Okay, that's our director of corporate Affairs.
Robert Winslow.
I've Investor Relations and corporate development.
We held our Adriana this morning, so we'll keep our prepared remarks.
This quarter.
Okay, I had a chance to listen to my age am comments, but if not a replay and transcript will be available on our website.
This afternoon I want to take a moment are highlighted <unk> points are brought our Q1 results as well as how to covert 19 pandemic has impacted our key markets under corresponding actions we're taking.
Oh gosh Robin to make a few comments about our balance sheet and capital allocation before we take your questions.
Well first quarter results.
Our strong.
Yes, we generated $75 million of adjusted EBITDA, Our best result in six quarters on nearly doubled a year ago 11.
In North America, the improvement in years housing activity that began in late 2019 carried into the first quarter 2020 <unk>.
<unk> increased or Peter man, and higher or higher benchmark prices.
We produced 79% off available at 75, 9% of available capacity.
Excluding indefinitely curtailed hundred my husband corneal line Len.
It took 35.
Days of downtime in the quarter.
I'm, especially pleased that they were able to reduce our per unit manufacturing cost versus both comparative quarters.
In Europe panel demand improved significantly through most of the first quarter.
And the panel prices continued to decline or the decline to started in Q3 last year.
Our adjusted EBITDA of or so when you're running around or lower sequentially.
Our Inverness Inverness Miller is ramping up well.
Which supported the 26% sequential increase in our European shipping Williams.
Wow the construction activity.
On the second phase of investment in Inverness has recently been slow due to covert 19.
The mechanical insulation is largely complete and we still expect to complete this project before the other thing here.
This will help us.
Continue to serve substitution driven or anchor or.
40 years to come.
Turning to the impact of covert 19 or can't markets.
Yeah, I'm curious, where we saw the most immediate impact was north American industrial.
For our customers talk to manufacture products like upholstered furniture.
<unk> to be nonessential I'd have to suspend operations in March.
We also saw the UK government imposed trick looked on orders on manufacturing and retail, which forced many of our key customers in our largest European market to close operations.
However, in both cases businesses have started to reopen in the past three weeks.
And orders are starting to come back.
Homebuilders in North America her indicating.
But their business hasn't cools consistently in the past three to four weeks after significant declines experienced in March.
I'll note that may have Shane particular, Brazilians and demand from Germany, and the Benelux, our second largest European markets.
Well as North America, North American repair and remodeling, which represents about a quarter or north American demand.
Well this is encouraging in a short term.
There remains considerable uncertainty around to death <unk> ratio to economic impact of covert 19.
In April we reduced operating capacity by 35%.
In both North America, Europe by adjusting operating schedules.
Our current flexible operating configuration.
I was just to keep most of our people employed and be agile and scaling up and down that's needed to match production with the monitoring just <unk> parent of uncertainty.
Wow These are difficult times underworld, <unk> will lead to adapt.
<unk> purse covert reality.
We have not lost confidence in the future of always be or a company.
We're closely monitoring the effect of the pandemic and have confidence that always be will be a leading part of the economic recovery when the time comes.
And with that I'll pass the call over to Robyn.
Thanks, Peter and good afternoon, everyone.
Hi, Norbord, we've always taken a balanced approach to capital allocation and right now our priorities cash conservation, we're taking a number of steps to do that.
As previously announced we are differing non critical capital projects and have further reduced our 2020 capex budget by an additional 25% I'm 100 million to $75 million.
We have virtually no capital projects committed for next year and could if economic conditions, so warranted pull back capex to a minimum sustaining level, a $35 million and 2021.
We see great value in our stock with shares trading at a steep discount to our view of intrinsic value.
But while we were actively repurchasing our shares in January and February we suspended buybacks in March for the time being.
Finally, I'd you have seen our board reduced the dividend to Canadian five cents per share this quarter, which will save us $34 million annualized versus the prior quarters level.
This is entirely consistent with our variable dividend policy that gives us the flexibility to adjust the payout level up and down other operating results outlook and balance sheet allow.
So turning to our balance sheet.
Norbord has no bond debt maturities until 2023, and our liquidity remained strong with $247 million available at the end of Q1, even after we invested nearly 70 million in our usual seasonal working capital increased.
This seasonal build typically reverses over the remaining three quarters and we'll release cash flow as it on line.
We have significant headroom versus the two financial covenants governing access to our revolving bank line, neither of which is EBITDA based.
First is net debt to cap, which was unchanged from Q4 at 40% versus the 65% Covenant and the second is tangible net worth which was almost doubled the 500 million covenant.
We will continue to prudently manage costs capital expenditures and liquidity to protect balance sheet flexibility.
And with that we're going to jump right into questions and so I'll turn things over to the operator, who will open up the lines.
Thank you, ladies and gentlemen, if you wish to ask a question piecyk well by pressing star one on your telephone keypad piece I'm sure you mute function is switched off to allow your signal to reach our equipment.
And that is star wanting to ask a question.
Oh.
Our first question today comes from John Bob talk from Bank of.
Hey, good afternoon.
ER I just want to quickly follow up on Capex. So good kinda talk about you know the projects I guess that you're kinda sideline at this point and also I was wondering how long could you keep capex at that $35 million level.
Hi, John Good morning, it's Robin or afternoon, I should say it's robin.
Yeah. So I'll answer the second one first I would just point you back to 2008.
During the you know the global financial crisis, we kept capital at that minimum sustaining level for five straight years. So that's a you know that's our track record if things get that difficult you know we could keep it we could keep sustaining capital very low for for many years there wasn't a hole there wasn't anything.
Again that we cut out of the budget for this year to reduce the 25 million out of out of Capex.
We only really have the two significant projects going on this year as you know that's Inverness phase two which as you heard Peters days, you know is largely complete.
And we had been investing a little bit and chambord.
Were also the activity on that side has has slowed write down from for multiple reasons. So its really just cutting out all the other small projects that we would have liked to do but that aren't essential at this point.
Okay, and with regards to a Inverness and realizing you're generally tend to produce you know to demand I was wondering you know with Inverness kind of still ramping up and you know given kind of the overall situation. A you know with covert 19, you know is there ultimately sufficient demand for Supernus continue ramping up production at this stage.
Yes.
Hmm warning or Oh, sorry, so [laughter] I'll take that one Oh interestingly enough Oh paid amount on the continent House continued throughout this period to show our Moon Belgian must continue to run flat out.
For you know a lot of our demand growth in Europe is predicated on continued.
Substitution for imported materials.
From South America from Asia, and my belief that no doubt trying to continue and crushing does continue were shut up.
For the others really their foundation for our for our growing Ah boy and lot of here, but I smell.
Okay.
And then back to North America, you now it's kind of the reduction operating capacity for Ah you know by 35% in April is that about how much demand was down and then also I was wondering can kinda talk about how trends of kind of evolved internet here.
Well, it's it's as you know there are no real.
The statistics or not that's accurate about close soon I would say my best estimate is that demand.
<unk> reduction in demand is responsible for some of that.
But we also believe that Oh, there their customers her supply to the new home construction segment.
For active managers their inventory levels, you know the low but they were already gone too.
Sure a richer show understandable given the level of uncertainty.
And any color you could kind of provide on now you know order files I guess stand right now.
Oh, well I would say that we've been pleasantly surprised by the level of personal stuff. We're seeing over the last number rigs are in my prepared remarks, I refer to the fact that builders have seen activity improving over the last three or four weeks.
Through a drought in combination with the fact that the pro dealer show our between us and a builder. So you'll have very low inventory levels are asking rents are definitely if she and they were hoping or order intake over the last two or three or four weeks.
Okay and have you know and then just kinda last question before I turn it over have you announced you know any sort of downtime for me.
Well I think right in our in our Oh public disclosure around downtime retreat published at the end of March.
Reinsurer shut up there for adopted this.
Flexible schedule.
And that allows us to end crash or didn't crash. According to turn here very liberal demand well shut doesn't mean wouldn't make any further announcement with regards to that than your neighbor colder than the past for antitrust reasons read only reports on downtime. After we have taken it's unrealistic without policy going forward, but.
Our publishing or as long as paying through only produce which we can show.
Chauvinistic without mantra.
Okay. Thank you.
Thanks, John.
Our next question comes from Cat time, Mamtora of BMO capital markets.
Oh, thank you.
Oh, Okay Titan had another Ontario.
Is doing but I would imagine that someone can be industry. It anymore.
[noise] cadence sorry to interrupt me anyway, you stopped we couldn't hear you. After you said Hello, So you need start again please.
'cause there's better.
Yeah, I can hear your now here, yes, yep, Okay, sorry about that nowhere I was just curious just wonder going to sign a little bit better in terms of holliston lumpy or end markets trends are as you talked about in your prepared remarks sounds like Alternators is doing a little bit better.
Some of the industrial end markets, especially on before it is your site immediately would be good if it's possible the vessels from maybe if it's possible to quantify how some of those end markets are doing in holiday if I could you go into the second border.
I'll do my best.
As I mentioned already or they are in our sites. A has remained steady and strong you know it's in line with previous years.
Housing already talked about at the last question. So you know reflecting a decline.
And for end demand.
[laughter] for new home construction.
Hi, My earlier during the end of March and and the first half of April just trying to see that market recover now at least a friend or the near term.
In terms offer our industrial demand there are certain aspects of the industrial demand have continued to stray true brought you know a painful but a heavy manufacturing facilities, where there's lots of people working close together.
Yes, I can work curtailed or because they were not came to essential.
That business is starting to come back now and you know I would sort of say.
[laughter], it's you I'm, maybe getting a bit here, but there was sort of a 50% level for a poor to quarters, probably a reasonable estimate you know from my perspective at this stage.
I remember, how that's an industrial volumes or maybe.
15% to 20% of our total.
Total sales.
Understood. That's helpful and then just turning to Capex again.
So just hoping in Japan, So you get down to 75 million Bucks off the bad minimum that you have is about 25 Union and it sounds like you know kind of 18 million is left on Shambled. So one.
Oh, what you're thinking about spending that you mean 18 million. It's just something at this point, you're paying that you would want to beat the yard and then more up with went to 21 kind of spend or and then kind of walk on the big buckets that good bridge from 35 to 75.
Yeah. Okay. Then obviously there is no urgency on to occur under Chambord spending at the moment.
Moreover, a construction activity has been <unk> stopped completely in the provinces off cutback show.
Show, we haven't been able to spend any money, even if he would have one or two.
That's obviously an area of Burger to our spending is going to be minimal.
Until they've got a better perspective.
On with market recovery.
Oh thick trunk off the remainder is to completion of Cameron us phase two project and Robin already mentioned to you that.
No we expect to have to project completed before the another here you know there's a lot of to most of the mechanical installation is complete as of today.
Got it and so what is left thing you know when this is the most nvidia nine months I stopping there.
[noise] surely elaborate on that sort of sulfur Inverness.
Yeah that sounds about right, yeah, nothing not right in that range.
Got it that they had flagged to undergo a good luck.
Thank you [laughter].
Our next question comes from Sean Stewart of T.D. security.
Good afternoon Ah Thanks, a couple of questions.
Robin can you help us with I guess some of the other liquidity leaders you can pull beyond a lower capex and.
Due to working cap declines.
Can you go through some of the other variables that might be in play and I'm thinking is expensed deferrals tax refunds things of that nature or any other variables. We can expect to help support liquidity in the mature [noise].
Sure Yeah, I mean, obviously one of the things. We've we've done is look at all discretionary costs.
And you reduce them to the extent, we can obviously things like travel a it's it's come down significantly it's almost been eliminated in the last few months as an example, but I will note that we last year, when we curtailed hundred mile House and.
Cardio line one.
We have our philosophy has always been whenever we have curtailed significant operations, we've taken the equivalent amount out of our overhead and so we already streamlined our SG nine last year, which will benefit us through this year, but obviously, we could do more there. If if we you know if that made.
Sense, if we if we face ongoing significant curtailments and so that's on the you know on the overhead cost French.
And in terms of things like a tax deferrals, yes of course, where we are taking advantage of of all of those opportunities where they exist. You know there have been things like payroll taxes, where you can differ and you know BHP in the UK.
Those kinda things were taking advantage all of all those opportunities to judge to just defer the out outflow of cash where that's permitted.
And then on the income tax front you have seen we already got a significant refund in the first quarter and there's still a receivable on our balance sheet until they really more to come in the future and so we are taking advantage of all those leveraged.
And I think it's a 40 million dollar receivable you still have that that is phased in over the next 12 months I should add yeah I'd want it won't all be 12 months, but some you know some of that would be related to filing 2020 returns, which would and we wouldn't we wouldn't be able to get that cash until next year.
Okay and last question for me Peter if Inverness phase two is wrapped up by year end I think that previous guidance was it say an extended.
Ramp up of the incremental capacity.
Assuming demand starts to normalize in Europe, how should we think about the incremental capacity there be phased in.
And to 2020, well well, Sean I think we have talked <unk> or you have talked in general about no about a 100 million feeder or hundred thousand cubic meters per year.
Over there sort of four to five year period, or the pre ramping up and I don't see any reasons why or why we should be viewed or why we would need to deviate from the other two stage.
No. Thank you for that were below a lot of there's a substitution right. That's not right necessary is not necessarily depending on who demand creation.
Got it.
That's a that's it for me thank you very much.
Thanks, Sean.
Our next question comes from Mark wind problems of global.
Thank you.
First question given the an unusual nature of dynamic I'm curious if.
A random lengths pricing is still a good proxy a very good proxy for following.
Your your realizations.
Oh, yeah markets of the.
That's always a tough almost a telephone for us as well.
I would say that Oh, you know random lengths is a reasonable.
Proxy for market, reflecting off market activity at the moment.
Peter I think a pretty even in some regions, where the POS we've had some concerns she wants to ban.
It seems to be a reasonable approximation of what's going on at the moment.
The challenge in Arkansas to fluctuate lovely up and down is that we have the lag effect.
First of all.
Richard Lewis or it's all those makes it difficult Oh sure.
Reconciled to our merger Toronto draw realization.
In addition, there are some of our industrial products on lower fixed long term pricing show.
Oh.
Very high level market stores prices will look floor, and oh poor pricing environment or those kind of prices will look higher.
That's daughters are the two major moving parts of like it's always difficult to reconcile too.
A random likes Brent.
Okay. So think of Q1, you know I think our.
Do we are those numbers public or not yeah. You can you you I'll just stepping parents are et cetera, if I talk to the numbers [laughter]. Yeah. If you do you come back into a realization versus the originally weighted benchmark Mark as I know I think you've done you do that yourself I mean, we were 100, an 8% in their first quarter.
Versus 120% in the fourth quarter, and obviously that differences related to that lag effect and that Peter just outlined and I'm just also remind everyone that.
Only about three quarters of our volume in North America is tied directly or indirectly to random lengths. The corridor that 25% ralphie, our volume that is going into specialty and uses is de linked from random lengths and negotiate a pricing that doesn't move up and down a with random lengths.
Great and in <unk>. It would it be calls, we'll get a sense as to where April was.
Either relative to those benchmarks or where it was relative to the first quarter.
Oh, you're off to write a certain you're off to write to our next quarterly really yeah, I think youre thinking I really haven't done have not had myself no no no problem, Oh, and then on the cost side.
Can you give us a flavor of what's going on with wood resin energy.
Well I mean wood prices a sure as you've heard us say for a long [laughter] for a long time and I'll have barely moved pivotal sort of quite flat.
No they remain that way.
At the moment Youre really across the board you know obviously on the on the aggregate bullish as they might be down slightly because a 100 My house mill and Breeze. She was our.
By far and away our highest cost <unk> cross meal, and it's obviously not taking on they were at the moment.
HM resin prices are dropping a pill and there's a link their indirectly mine true true energy prices or oil prices.
And no I understand your energy is a small relatively small portion of our of our.
Cash manufacturing cost most of those electricity.
But there was a small portion others natural gas and those costs. Obviously you have continued to be quite low Robin I don't know if you can provide any specifics there.
No no no okay. Good [laughter], so and that I guess [laughter] significant perspective, when you rethink your cost.
<unk> costs I think in there and Jim I mentioned, the fact that never seem cost continued to decline in March and April.
Despite the fact that may have had to deal with curtailments.
Right and then I guess that last part because.
Maybe one could come out fairly favorable from from much of what's been done in the last part is I guess.
The absorption of fixed costs, given that you are producing a lot less and you've taken some actions, but is it possible get up.
Ballpark number off of what to used you had what percentage is fixed costs and kind of modeling.
Hey.
Significantly lower volume environment, I think mark I've talked to a true or the major cost factor show a religious about a third of our manufacturing cost cashman, if I turn costs.
RASM is about a quarter.
Energy is about 10%.
Shut up definitely to 70 70.
So the remaining roughly.
As for variable.
Oh sure fixed.
But you know the current environment.
With all the.
You know the government programs that are out there.
For the fact, the fact that some of our fixed costs has become very broad based in the short term.
Show the current push on those are probably slightly lower than that.
Okay.
Okay very helpful. Thank you.
Thanks Mark.
Our next question comes from Paul Quinn of RBC capital markets.
That's correct gap in Gert borne fruit for me [laughter] huh.
Yeah, but but it certainly feels like getting just following up on its cost actually I didn't mention that cost tracking in into Q2.
Our down quarter over quarter, and I'm just trying to.
You know I suspect the input costs are still coming down, especially on the energy and and the rest of side I'm. Just wondering the affected the downtime. It you know is a is that enough is that holding your cost flat or pushing up or is it does it continue to come down.
Well I think in life public comments earlier I mentioned, the fact that we've seen costs continued to decline in March and April.
You know very probably took a lot of downtime and you're right.
We have a crew couple of benefits at the moment, one is declining resin prices on the back off.
Oh, just very low oil prices.
At the same time, you know our Canadian capacity.
He is benefiting from you'll hear about 70% of or can any manufacturing costs, just Canadian dollar crashed and the Canadian doors tend to be centers and 70 cents compared to 76 cents not so long ago.
So those are a couple of things that I really playing in our favor I also mentioned.
But to some of our traditionally fixed cost as a little bit more variable at the moment or because of all the government programs that are available to employees.
So through I mean, it's early in the quarter show, but I'm I'm pleased with the direction.
Our operating team was able to managers in North America.
Yeah.
We've seen half ticking and it would be crazy notes Merck, there's a lot to reach you you attributed that to demand coming back or is that that inventory just starting that you talked about it when they're going to call is just sort of leach Mac. So any uptick in demand is it is it's going to flow through in person.
Yeah, I think it's probably the combination of those two things.
Oh, you know I think.
Keep talking about inventories about as long as I've got some done that's got some even lower obviously you know people have taken.
No dish.
Period of extra extreme uncertainty it to do the right thing, which is absolutely you know minimizing their working capital and.
I'm, taking inventory down showed up they are no flexible ever more flexible operating model just like our model is more flexible today I don't agree has traditionally been a show I think it has reached sort of a absolute minimum level at the same time, Oh, we're starting to see demand.
On to recovering.
For several reasons I managed from the low let's say the low point most people tell me builders in particular tell me about show the younger March.
If you shouldn't see things should improve mccosh personal no. There's a bunch of stage, where group, which are being real open for construction.
Secondly, builders told me that they're starting to sell homes again.
No I'd better clips on that expected.
We're starting to see industry demand come back as I mentioned earlier, no and our an hour or demand continues to be running stronger. So it's probably a combination of improving amounts attached in the short term.
Combined to address a inventories so it's kinda shrink any further.
Okay.
That's helpful. And then just flipping over to Europe, it looks like it must be crazy sort of.
Yeah.
Sure you see this at the bottom the bottom of the plate and to take on your thought I should be capable.
Yeah, I would say as I mentioned earlier pull a pre though demand on the continent really seems to have continued to be remained strong throughout this whole periods. You know that's really took me by surprise.
But.
Convalesce, a pleasant surprise.
And so it looks like things have bottomed out there.
Ending okay, Oh, it's probably a bit early to tell what are we haven't read into it reached a bottom.
Early indication Smyser just talked about you know, we're still that market is still starting to come back and being reopened as we speak So <unk> reserve judgment until you know a month or two from now.
Okay.
Great and just lastly, just some.
Ah export markets out of North America into each you.
What happened.
<unk> in Q1 did you see a big drop off in Dod age age group with my team took over and obviously not that or to fall pick back up.
In fact in the first quarter I think we're pretty much in line with the previous quarters for for export for him.
Then putting out a proportionate represents less than five for about 5% I believe of our total.
Our total North American production.
No there's a bit of shuffling between the different markets.
I think the divorce into China has increased a little bit recently.
The verint two hours or bushing ownership to three markets right to Vietnam, China, and Japan is our biggest markets.
As a Japan volume has been quite strong.
Good morning competition, we have terrorist from Europe.
But I think transportation costs have become a huge hindrance for.
We're not long haul shipping of containers back from Europe to treat Japan.
So yeah, it's a bit of mass shuffling of write a volumes go but on a total it's more or less in line with lot of machine in previous quarters.
Oh.
Oh.
Huh.
Sorry, I didn't hear where muffler I couldn't hear him.
Okay.
But the black going forward.
Hi, Thanks, right no pressure.
[music].
Our next question comes from Andrew Kuske <unk> of credit Suisse.
Thank you good afternoon.
I guess the question was really revolves around your rotating curtailments Ah, but you've got on your plants and I guess, there's just a few sort of interrelated issues.
You mentioned this a little bit earlier on that to certain degree you're getting some benefits. The stimulus plans that governments may have in a region, you're obviously keeping your people working.
To a greater degree than they otherwise would be if the shutdown a specific plants and then.
So there is where theres one benefit I guess that note the magnitude that benefits. The first question I guess the second question revolves around your customer needs, but this public positions you better to serve them in a lower cost fashion and then.
Thirdly, and the Lucky as I guess, we learn from paid nine or is it some of the research were painful when things came back. So you probably avoid that once we get back to a normal environment and you can go full throttle without any issues is that latter point fair and then any color on the first two issues would be appreciated.
Yeah, I think as a point is absolutely fair and up you know what kind of what we focus on the sort of pairing up mills in certain regions. So that we have an ongoing supply in every region, where you know borders demand.
A show that way and then secondly, if he can sort of.
<unk>.
This rotating.
Shut volume as required if demand improves.
Or increases if demand declines.
I'm showing me picked up kind of flexibility in the current circumstances is really important and you know the other auto, whereas we do not want to abandon ban on customers, where we're working very hard on their term to a two kimpton market going and so I think this just moto gifts or south flux.
<unk>, it's also sort of <unk> no I think the responsible way to deal with or you know our employees. We were just way can maintain their health manifests kinda can maintain an income or whether it is.
Supported by the government in certain cases, especially in the states.
For the to penetrate the short period, so they're not working the other thing that's kinda that's interesting observation from our perspective, you know there's a lot of discussion in the broader economy abroad restarting.
Well, we are experiencing this across our operations now on a Friday, you know a regular basis as people come back after a for a lot for a couple of weeks.
And they have to go alternatives upturn develop and implement.
A very strict protocol of coming back to work.
To make sure it at every Oliver I plan to remain safe.
You know asked to have been so far.
So.
I'm not saying that we can teach lessons here, but it's been interesting for us to really should have no I have to have forced ourselves through their thinking process. What I believe money industries are going to after think about here over the next couple of months.
That's very helpful. And then the second question just relates to your per unit costs were down.
Which is very encouraging but I guess, maybe some perspective on how that was tracking at the beginning of the quarter versus at the end and then you know inter related to that as you had impressive MIT games.
In the quarter, so static any color additional color would be great.
Yeah, I can't really get do you like within the quarter color, Andrew but the M.I.P. is is indicative of the kind of productivity improvement that we've been able to.
Realized in the quarter.
Remember that we you know we consolidated a bunch of downtime from last year by curtailing Cardio line, one and hundred mile House.
And so I think that's part of what were what we're seeing I'm now in the first quarter and as Peter just outlined this.
This out rotating curtailments I flexible curtailment configuration that we have in this current environment. We're doing yeah. We're we're finding a way to do it in as cost efficient ways. They can and that's you know we're happy to see that in our and our unit cost.
And we're seeing some payback of investments we've made.
Over the last couple of years as well, which is why you're seeing some others on M.I.P. now are coming up at all right.
Okay. That's great. Thank you.
Great. Thanks, Andrew.
Ladies and gentlemen that concludes the question answer session I would now like turn the call back to Mr., Peter Weinberg and for any additional or closing remarks.
Well, thank you Kevin I'm, a horse rather than other Robert and I are available to respond to further questions if any.
I want to thank all of hand for taking the time to participate stay safe out there until they look very much forward to report on our progress next quarter.
I have a good afternoon.
This concludes today's call. Thank you for your participation you may note.
[music].