Q1 2020 Earnings Call
Ladies and gentlemen, thank you for standing by currently on hold for the GCP applied technologies first quarter 2020 earnings call.
At this time weren't assembling stays audience and find to be underway shortly.
The question to answer session. During today's call if you'd like to participate in that place to go by pressing star. One once again, everyone that is star one if you'd like that's a question during today's call. We thank you for your patience. Please continue to hold.
[music].
Please standby worry about to begin.
Good day, everyone welcome to the GCP applied technologies first quarter 2020 earnings call.
Today's conference is being recorded after today's presentation, there will be an opportunity to ask questions to ask a question. You May Press Star then one on your telephone keypad into withdraw your question. Please press Star then too.
Now ill turn the conference over to Mr. Jody Cristofaro. Please go ahead Sir.
Hello, everyone and thank you for joining us on todays call with us on the call or Randy Dark President and Chief Executive Officer incorrect, Merrell interim Chief Financial Officer.
Our earnings release and corresponding presentation slides for this quarter's results are available on our website.
Almost copies. Please go to GCP 18, dotcom and click on investors tab.
Some of our comments today will be forward looking statements on the U.S. Federal Securities laws.
Actual results may differ materially from those projected on slide you do a variety of factors.
We will discuss certain non-GAAP financial measures, which are described in more detail in our earnings release and on our website.
Our comments on forward looking statements and non-GAAP financial measures apply both to the prepared remarks into the Q on that.
References to EBITDA I refer to adjusted EBITDA.
References to EBIT refer to adjusted EBIT in references to margin refer to adjusted gross margin adjusted EBITDA margin or adjusted EBIT margin as defined in our press release.
Oh revenue and associated growth rates and this discussion I've stated on a comparable constant currency basis, which adjusts for the impact of foreign currency.
With that I'll turn the call over to remedy.
Thank you very important everyone.
Before turning to our first quarter results I want to begin by acknowledging how much has changed in the world since our last earnings call.
Cobi P. pandemic has deeply affected it changed all over lives seemingly overnight.
We want to express our sincere sympathies to everyone, who has been impacted by the buyers as well as our deep gratitude for the health care providers, who are on the front lines everyday India Central workers, who keep our lives movies as much as possible.
Well, that's a GCP it goes without saying that ensuring that health and safety.
Employees, if we'd run the business will always be our number one priority into our teams. Thank you.
Our employees have been truly extraordinary throughout the past months in under very challenging conditions. They performed admirably to meet the needs of our customers and suppliers and provide the service they've come to expect from GCP.
Did you take a few minutes and discuss what we're doing studies successfully manage the company through the most complex global health crisis, we've seen in many years.
And the strategic actions, we're taking as a management team to take the compete in the next level.
As we managed to the crisis on a day to day basis, we're focusing on the following priorities and principles wanted to health and welfare of our employees customers suppliers and other stakeholders.
Touching our strong balance sheet and liquidity position.
Provided a great service, our customers expect from us to maintain our market position.
And continuing to invest in the company in a prudent fashion, what closely scrutinizing, our expenses and reducing our capital spending plans to appropriate levels based on current market conditions.
GCP is very well positioned to successfully navigate this period of uncertainty.
Our board and management team have maintained a disciplined approach to capital management. It has resulted in a very strong balance sheet with significant liquidity no near term debt maturities.
Our balance sheet is indeed, a competitive differentiator, providing substantial financial flexibility and positioning us to successfully manage through the ongoing economic challenges as was the uncertainty caused by the coded 19 pandemic.
He will continue to preserve our balance sheet strength in explore ways to find the best value, creating use for our cash once we see stability in the market.
At the same time will not lose sight of executing on our strategic initiatives is they are key to driving the company's long term value.
Just a reminder, these priorities include returning especially building materials to sustainable growth.
Do you need to build on the momentum and success, we have achieved with verify.
Further optimizing fccs operating model in challenging or go to market strategy, which I'll talk about 15 minutes.
And advancing our restructuring plans removing complexity.
So many additional efficiency projects to make GCP a stronger company.
Nothing provides better evidence that our programs are working in our results.
We posted our best first quarter earnings performance since 2016, delivering improved performance and maintaining the positive momentum we have seen as business in recent quarters.
I'm very pleased with our results, especially in an environment that shifted rapidly from healthy to extremely challenging.
Third number of accomplishments during the quarter that I'd like to highlight.
Including exceeding our expectations in guidance, the sales of $219 million and 25% adjusted EBIT growth the $50 million.
That's the M. sales growth of 6% North America due to favorable building nimble a project activity in wins as well as strong performance in fireproofing.
Let's see see sales growth and 4% in North America due to healthy construction activity in the region for most of the quarter.
Gross margin improvement of 170 basis points in the quarter, despite reduced total sales volumes.
Continued improvement in Fccs profitability with gross margin up 400 basis points that EBITDA margin up 130 basis points. This is the fifth quarter in a row of year over year margin expansion.
Verifies positive momentum continued with 44% year over year growth in our installed truck days in 23% sales growth in the quarter.
On the topic of verified you may recall, we also reaching agreement the pan United and Singapore implement verify on more than 300 trucks and pain unites fleet.
And we'll get a fleet.
We also secured a commitment this past week with the customer in Australia for approximately 70 trucks. The interest continues.
As you can see by the decline in our operating expenses, we continue to execute on our restructuring programs as planned.
And we generated $12 million, an adjusted free cash flow in the first quarter, an improvement of over $20 million compared to use of about $10 million in the first quarter 2019.
This is due to our focus on strong working capital management.
Most of all I'm very proud to power team worked together to overcome the challenges the virus presented as the quarter progressed.
So turning now to our individual business units, our near term strategic goal for SP remains restoring sustainable organic growth, particularly in our North American building envelope in residential product lines.
By increasing our presence in underserved segments and market geographies that are profitable and growing in the long term.
Our plan also includes expanding our product portfolio awareness to larger in adjacent market segments and accelerating the launch of new and accessory products for the premium in mid tier segments.
Resi C., we will continue to prioritize profitability by emphasizing core markets in modernizing our operations, including our service model to become more efficient.
Our strategy for FCC includes three elements.
First we plan to reinvigorate our core admixtures business by leveraging and continuing to refresh or best in class product portfolio.
Mizer service model.
The second element of our estimates and strategy is driving the adoption of verified by new and existing customers.
Our strategy is to grow the data portion of the business with additional truck installs and in the process gain additional admixture business than we otherwise we might have had without their five.
The third element of our FCC strategy is to expand our specialty segments. We plan to strengthen our go to market approach by leveraging some of our unique products for these markets as well as new product introductions in the summit additives pre cast in engineered points systems segments.
Turning now to GCP as a whole.
Yes, I'd become CEO gifts focus on meeting our financial commitments will continue to provide improved forecasting to a board of directors and to the market.
We will also continue to further modify our organizational model to fit the needs of our strategy and higher specific expertise where appropriate to build out a best in class scheme of construction experts.
Pursuing cost out initiatives that eliminate complexity in our business processes and improve the quality of earnings has been and will remain a top priority.
Our restructuring initiatives are working as expected, we are targeting $26 million and savings in 2020.
We're well on our plan of targeting approximately $80 million an annualized savings by 2022.
Our tax optimization project, which is designed to optimize our tax rate to provide additional earnings over time is also proceeding as planned.
As a reminder, we believed that we had the opportunity to reduce our tax rate by two to four percentage points over the next two to three years compared to historical rates.
For point of reference for GCP, each tax percentage point represents about $1 billion in earnings.
Greg will talk in more detail about our assumptions moving forward. It steps, we're taking the whether the continued economic uncertainty.
But in terms of our operational focus meeting the needs of our customers and suppliers is absolutely critical we will not lose sight of 400 best in these capabilities.
We're continuing to service our customers at the highest level of possible.
Execute on our strategy deliver on the significant actions, we've announced and invest in the company for the long term.
I'd now like to turn the call of duty, Craig who will review the Companys financial performance for the quarter and thoughts on our outlook Greg.
Thank you Randy and the good morning, everybody. Just a reminder, all revenue and associated growth rates in my comments are on a constant currency basis.
Before we summarize our overall performance for the quarter, Let me just say a we're very pleased with our financial results in Q1, particularly considering the impact of the pandemic, which started to have a impact on our production and demand in some regions and countries during the quarter.
Our team did a tremendous job working through the complexities of the situation right from the on site.
In the first quarter North America sales were up 5%.
This performance was offset mainly by lower volumes in other regions, primarily due to the impact of the government imposed restrictions on construction and manufacturing activity as a result of the Cove at 19 pandemic as well as a strategic market exits that we spoke about in the past.
We were successful capturing price in both FC Cnf B M in the quarter.
We have substantially completed the cost reductions associated with our FCC market exit program, which has produced strong FCC margin expansion.
There continues to be some trailing customer product commitments that we expect to lap in the first half of this year.
<unk> will be ended at the end of Q2.
<unk> gross margin increased 170 basis points to 38.2%, primarily due to improved pricing.
Favorable impact of restructuring activities as well as favorable regional and product mix, particularly in FCC.
Driven by both market exits and our verify strategy.
This was partially offset by lower gross margin enough yeah.
Due to unfavorable product mix and lower productivity comparisons year over year.
As Randy mentioned, we had our best first quarter earnings performance since 2016.
BCP EBIT margin increased 160 basis points to 6.9%, primarily due to an increase in gross margin and lower corporate cost due to our restructuring programs.
CP EBITDA margin increased 220 basis points to 12% due to higher EBIT margin and benefits from the verifying model compared to the prior year period.
Looking at the performance of our segment specifically.
FCC sales were down 3% to 128 million.
But north America had a 4% growth.
Offset unfortunately by Asia Pacific, which including the impact of the covert 19, and the planned exit markets that we spoke about in the past.
The strategic actions, we had undertaken in FCC continue to have a positive impact on fccs gross profit.
Which increased 7%.
While gross margins were up 400 basis points due to improved pricing lower material costs, the favorable impact the restructuring as well as favorable regional and product mix.
Segment operating margin of 6.4% increased 40 basis points compared with the prior year quarter, primarily due to higher gross margin.
Segment operating income increased 1% as higher gross profit was partially offset by higher operating costs, mostly attributable to an increase in depreciation as we forward invest in the verified product line and amortization and other expenses related to growth initiatives.
Excluding depreciation and amortization.
Operating income in FCC increased 8%, primarily due to higher gross profit.
Turning to SPM.
SP EMS revenue was down 3% year over year.
With improved pricing and solid performance and not that North America, which was up 6% year over year due to strong building envelope fireproofing inhaler volumes.
Offset by lower volumes in Asia, including the impact from Cobot 19.
And lower residential volumes year over year.
After the EMS gross margin declined 150 basis points compared to the first quarter of 2019 due to lower productivity and reduced sales volumes, particularly in Asia.
Due to temporary closure of our facilities.
Resulting from the Cobot 19 pandemic.
SPM segment operating income was down 11%, primarily due to lower gross profit.
Which offset lower operating expenses in the quarter compared to last year.
Now turning back to GCP just in summary.
In the fourth quarter, our gross margin improved 170 basis point.
Mostly due to operational improvements materials optimization and price.
Our operating expenses declined by $3 million year over year overall with reduced corporate and general administration expenses, all contributing to the drop.
The benefit in the reduced expenses.
Was mainly attributable to reduced headcount during 2019 as we work through 2019 restructuring and Q1 and two what 2020.
Lower expenses and lower total salary and compensation spend in Q1 of this year versus prior year and from an overall spend reduction due to the restructuring programs and other cost savings offset slightly by strategic investments and increased health and welfare benefit.
Corporate costs on their own.
Up 7.1 million were down 40% compared to last years first quarter, primarily due to lower executive and stock based compensation lower costs, resulting from our restructuring and organizational alignment.
And allocation of certain cost operating segments.
Our adjusted tax rate for the quarter was approximately 26% and improvement year over year, largely largely due to the tax benefits of the cares Act.
Adjusted free cash flow generation was very strong fourth quarter, resulting in $12 million compared to a use of 10 million in the quarter in 2019.
That's greater than 20 million dollar improvement year over year and was due to improved demand and supply forecasting result, with lower inventories.
Lower days on hand, better collections and greater focus on overall, working capital management, including vendor payables and lower capital spend year over year in Q1 versus prior Q1 2019.
We're continuing to move forward with initiatives that are designed to improve the management of our receivables inventory and payables through increased transparency into our region and individual country operations. We expect these initiatives to continue to improve our efficiency and cash flow throughout the year in overtime.
Now turning to our outlook for 2020.
The Cobot 19 pandemic has obviously created tremendous uncertainty.
It is difficult to predict at this time, the duration and extent of the impact of the pandemic on our business.
As a result, we're not providing financial guidance for 2020 at this time.
So we are well positioned to navigate this uncertainty given our strong balance sheet.
The color we can share currently is as follows.
Our construction products are considered essential in many cases in most countries around the world and our plants and warehouse facilities around the world have been able to continue to operate with very few exceptions.
The most substantial disruption we experienced has been in China, where several facilities were shut down for more than a month in the first quarter.
Since then have all reopened.
This time, our base expectation is for country and regional walk down to begin to subside during the month of May and the global and regional economic activity slowdown will improve during the second quarter of of into May and we'll continue to be the test for the economies of the world during may.
In into June and we expect volumes in April and May be impacted the most during the transition to an economic restart.
As a result for the quipped second quarter, we expect the impact of Cobot 19 pandemic will reduce our overall demand for our products by 25% to 35% during this period, depending on product line and geography.
We expect demand to improve and slowly return to closer to normal levels as the year progressive beyond Q2, but obviously considerable uncertainty remains and disruptions to our facilities and to our customers are likely to continue for the remainder of 2020.
Aside from our restructuring program, we have identified identified additional cost savings opportunities.
Approximately $15 million to $20 million compared to our original plan for 2020 that we have implemented.
We also expect raw material deflation to improve modestly and to offset some of the volume decline as we work our way through the year.
We will continue to execute execute on a restructuring programs and initiatives.
As previously discussed we have reduced planned capital expenditures by about 25 million in 2020.
For about 35% to 40% of our original plan capital spend for the year.
Our cash position should remain quite stable throughout the year based on the working capital programs, we have instituted.
And our reduce capital target and the current cadence of expected revenues and volumes.
In the invent the actual conditions turned out to be worse than the current scenario, which I have outlined.
We will respond to changing conditions with contingency plans, we have developed to ensure we emerged from this period of uncertainty in strong financial shape and well positioned for the future.
Looking beyond the pandemic, we're confident in long term fundamentals with a construction industry and GCP.
As you can see from our Q1 results the impact of the restructuring savings initiatives working capital programs are all starting to take hold to improve our financial performance and maintain our strong financial position.
We are confident that our current plans will allow us to navigate the pandemic and we will be well positioned for when the markets and the demand patterns globally start to stabilize.
With that I will turn it back over to Randy. Thank you.
Thanks, Craig.
Our first quarter results clearly demonstrate continued meaningful performance improvement, which I in my executive team, we're very proud of.
Our teams are absolutely key to our success in their health and safety will continue to be our top priority.
Both during and after the crisis, we will work to ensure GCP remains an employer of choice through a myriad of programs, including novel work schedules formation of diversity groups competitive compensation programs and employee development initiatives, we want to attract and retain the best talent to achieve our ambitious goals.
And that effort will not stop during this pandemic.
We will continue to closely monitor our cash the cash position, especially in this time a crisis, what continued inkling that working capital initiatives to ensure a maximum cash performance.
Today, we have $320 million and cash on our balance sheet and access to additional liquidity in the form of the 350 million dollar revolving credit facility maturing in 2023, bringing total liquidity sources to around $670 million maintain this flexibility would be key.
Solidifying our competitive position while navigating this crisis.
We will also continue to focus on sustainability, which was one of the goals I had set when I joined GCP.
I'm happy to report that we published our first sustainability report on Earth day.
Port which is available on our website.
Outlines our commitment to environmental and social stewardship, and or contribution to more sustainable construction practices and structures.
We'll continue to leverage GCP global product offerings, where people in production processes to optimize our sustainability footprint and build upon or for sustainability report with enhanced reporting metrics in the future.
Before I conclude I'd like to share some thoughts on where we are where we are going.
I can tell our employees that we're a very good company with good products good market positions in the segments, where we are present.
And outstanding people, both commercially and technically I think this is an area, where we can agree with our critics.
I will always continue to tell or employees that we can be a great company that can create a lot of value for our shareholders.
When I joined GCP. It was evident that this company had work to do movie legacy complexity, better utilize resources, removing cost and setting the company up for future success.
Our supply chain initiative was the first launched in early 2019 to focus on completely overhauling, our updated sales and operations planning process, improving our global procurement processes rationalizing product gasket use modernizing or outsourced freight process season relationships, establishing clear sight cap.
Little allocation procedures, and focusing on site asset utilization I'm happy to say our teams have addressed all of these.
And already in 2019, we saw our inventory down by 13% almost $15 million compared to 2018 and or days on hand improved from 56 to 53 definitely in the right direction.
In addition, our on time deliveries are up or outbound freight costs are down.
Our current focus and supply chain is on creating a new modernize quality management process. The task our teams are undertaking now.
Last August I laid out my board approved streamlined organizational model. It is aligned unclear business focus PML accountability.
Couldn't be more happy with how this new model is working.
Themes of coalesced around the needs of their specific markets is better alignment with corporate business unit goals product development focus is clear by having a global business unit lead to champion and oversee innovation activities and the organization better prepared to address the needs of our customers.
We established last year, a customer engagement team is responsible for overseeing all of the processes related to the customer experience.
Our GCP plus new business portal, which launched late last year has had tremendous success in the short time since its launch in the first quarter about 5% of and sales in North America went through this portal with many more customer conversions planned in the coming months.
Other new tools, such as GCP, dashing or implementation of Salesforce dot com will be gaining traction shortly.
As a global head of SBM range as discussed on our last two investor calls that reevaluating efficiently executing upon or SPM global strategy has been one of his top priorities.
You May recall, we worked with a leading global consulting firm to better understand the current situation, but more importantly to develop a plan of action for the future.
This plant is being implemented with the focus on broadening our reach to adjacent markets prioritizing new product developments, adding commercial and development resources is required and implementing new go to market pricing approaches. We're doing this long sure im routine are leading market presence and the key areas, where we've been successful in the past.
It's clear to both in the range and mean that continuing to invest in her SDN business is will be a top priority.
Speaking of R&D in new product launches I've consistently been impressed with a global product innovation capabilities last year alone. We filed 100, new product patterns. We were granted 75, new patents, we registered over 50 trademarks.
Innovation Department works with our global business teams on 70 priority priorities as well as resource allocations.
Stage Gate project management been used in conjunction with market led data as well as clear return type metrics.
Also integrated utilized capability of labs and personnel through accurate acquisitions that we have made to better align global resources to the needs of the market.
I'm excited to see how innovation led by an experienced seasoned technical expert Dr. Joseph.
Menus to deliver value.
The goal is very simple make a very good company, great. We're well on our way into it to do so with continued question to the status quo hiring of specific expertise where needed a continued focus on cost management and clear accountability I have absolutely no doubt we will get there.
Lastly, I want to spend a couple of minutes on Starboards efforts to replace the Super majority of GCP Board.
GCP is committed to maintaining independent diverse inexperienced board maintaining an active dialogue with our shareholders has long been a priority for us.
As we've outlined in our proxy and another shareholder communications. We've made numerous attempts over the past several months to reach a reasonable resolution to this situation.
Operating shareholders' significant board representation on our already refresh board.
More than half of the board has been appointed within the last three years. So during those discussions are only unshakable negotiating position has been that no single shareholder or to shareholders should be allowed to exert effective control over the board.
Despite our settlement offers that we have detailed recent communications weird and impacts.
We believe our board has acted responsibly and is genuinely sought to protect the interests of GCP shareholders. We will continue to take actions that we believe him the best interest of all GCP shareholders.
As such we believe the best path forward does to allow our shareholders to determine the outcome. We believe its most appropriate for the future of GCP and their investment in the company.
The purpose of today's call is really to discuss our first quarter performance in our initiatives, we implemented to prove the company.
We will not be taking further comments on the proxy contest or on our conversations with our shareholders and asking keep your question today focused on our results.
So I would like to wrap up my comments by thanking our employees personally and on behalf of my leadership team for all of the hard work and effort. They continued to vote to GCP under extremely challenging conditions I truly appreciate it.
With that I'd like to say, thank you for joining our call and we look forward taking your questions.
Thank you Sir well now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone, if you're using a speakerphone. Please pick up your handset before addressing your keys to withdraw your question. Please press Star then too.
This time, we'll pause momentarily to assemble a roster.
And once again that is star one if you'd like to ask a question well take our first question from Rosemary Morbelli with GE research.
Hi, good morning, everyone.
Randy even though you Uh huh.
You mentioned you would not to talk about it I do have a question and ones that you get a subject. So last year your head of strategic treat view of chips at the operations and go through that channel gets would be that would benefit some of the company's remaining independent and you had chance to make progress in improving.
I was wondering if you could help us understand what your largest shallow gets NAND about the value of the company.
Cause them to supports another hotel Penn.
Take control of that because that premium for all shareholders.
If you could have touched on that I would appreciate it.
Well good morning, Rosemary and indeed, we conducted the a very thorough strategic alternatives process that we've been public about.
And you're absolutely correct. It at the end of that process. After much much work in much consultation the board determined that the best path forward was the path that we're taking and again that that shouldn't results.
I'm not going to comment on specific.
Comments that are made to us about that process from shareholders I mean to keep those conversations confidential.
Tom I think we publish quite a bit of information that's out there regarding this this contest and I'll refer you to that but looking back at the strategic alternatives process. Rosemary was indeed, the right process to do at the time and again, putting forth our strategic plan was the best outcome.
Oh, thank you.
Then looking at Oh population, so could you touched a little branch more on what to expect <unk> on the regarding the profitability.
The building materials, which has dropped I understand because that's probably 90 19, but what are you doing which could that impact the in the upcoming credits.
Well as we mentioned in our remarks, we have contingency plans that we have implemented we've done cost cutting already we've reduced our capital spending so like everybody else right now we're watching to see what comes next in its evolving on the day to day basis I'm just create pointed out we're happy that our business has been running the the Simon the doors open and I believe.
Well too many countries and regions around the world continue to sell them both SPM in FCC.
So as long as we can sell will continue to sell to our customers, but the world still crazy.
Since its on Monday, we anticipate in certain countries with the opening up to find out on Tuesday that do not and vice versa countries that we were told we're going to be closed for a little bit longer we find out in the Tuesday that their opened up so it could ever changing dynamics, but as a management team prices team will take the data that we get and we'll make the appropriate action.
As in decisions as necessary to maintain the business.
Oh, Thank you very much in the tank.
Thanks Rosemarie.
All right and once again that is star one if you'd like to ask the question. So please make sure. Your mute function has turned off to a larger signal to reach our equipment.
So to Laurence Alexander with Jefferies.
Hi, Good morning, it's actually didn't Brazil on for Laurence how are you.
Thank you.
You mentioned a additional savings.
Coming in insurance would you previously announced I was wondering if you could provide color on where exactly that savings is coming from and I wanted to know if that's saying just going to be math to a larger extent pledged to lower volumes and unfavorable fixed cost absorption given everything was going on.
Yeah, I can take that Lauren it's Craig.
Good morning.
We went through his them you know we got hit by the pandemic probably earlier than most in China in February and March with closures over plan. So we and the leadership team went through a very diligence program. We've got a lot of cost of that we've identified.
In discretionary travel and entertainment advertising marketing that we had originally built into our plan.
Some of those are some of those are just current expenses that won't happen to some extent just because of the shutdown on a country lock down. So we'll save there, but then there is other ones on the advertising and marketing that we're kind of forward thinking on a on span. So we've cut those.
So the economy gets back to normal and then there's other areas that we have specifically country by country.
They had some spend in there just on Gionee and others and then we had some LP a head count that we had planned to put in just for the investment in SPM in FCC Weve slightly trim back on some of those so that is also an offset to the volume decline. So all in all.
That number comes to about 15 or $20 million versus our original plan.
And we've really got that tight.
But you're correct that will be an offset to the volumes, but we'll have to see whether that's enough and we've also got contingency plans in place if we need to do more.
Thank you get felt was actually very very helpful. You just mentioned that you hit earlier in China than than others I.
I guess I'm thinking about thrown could I thought you had smaller exposure to China overall I thought it was mostly in Asia was mostly southeast Asia outside of China, and obviously, a big exposures are the U.S.
North America outside North America, Europe, and Latin America.
I sort of less than 5% of sales in China.
Mike literally memory.
No you're correct Laurence the only difference is when you're a facility we had our SPM facility, which is located in a in the <unk> on who Bay area, which is specifically was down for almost two months from production so that did impact us.
Even though it's a smaller piece of our overall revenue base.
Thank you very much.
All right and it looks like there are no questions. At this time, so that will conclude today's call. We thank you for your participation you may now disconnect.
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