Q2 2020 CubeSmart Earnings Call
[music].
Good day and welcome to the keep Smart second quarter 2020 earnings Conference call. All participants will be in listen only mode. So do you need assistance. Please signal costs, especially this Christmas Dorcheat Boise right.
After today's presentation, there will be an opportunity to ask questions.
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Please note. This event is being recorded no nobody can turn the conference ever to Josh shoots a senior director of Finance. Please go ahead.
Hi, coal Hello, everyone and good morning, welcome to Q Smart second quarter 2020 ours call.
It depends on todays call include Chris Marr, President and Chief Executive Officer, and Tim Martin Chief Financial Officer, our prepared remarks to be followed by queuing <unk> session.
In addition to our earnings release quicker issued yesterday evening supplemental operating and financial data is available under the Investor Relations section of the company's website at Www Dot Cubesmart dotcom. The company's remarks will include certain forward looking statements regarding earnings and strategy. They involve risks uncertainties and other factors that may cause the actual results the.
Serially from these forward looking statements.
The risks and factors that can cause our actual results could differ materially from forward looking statements are provided in documents. The company furnishes to were filed with the security and Exchange Commission specifically to form 8-K, we filed this morning.
Together with our earnings release filed form 8-K, and the risk factor section of the company. The annual report on form 10-K. In addition, the company's remarks include reference to non-GAAP measures reconciliation between GAAP and non-GAAP measures can be found in the second quarter financial supplement posted on the company's website at www Dot keeps mark Dotcom I'll now turn the call over to Chris.
Thanks, Josh good morning, everyone.
I will begin by recognizing our 3100 teammates across the country, we've had to change the way we do you.
Along the way our mission has been our guide and together we have been simplifying challenge is creating innovative solutions and delivering unparalleled service.
And we'll provide insight into the second quarter results.
From a high level perspective rentals hit the bottom in April rates in May and both began to recover in June.
You have in July was our first month, but we would consider more normal pre coded operations.
I will focus my comments on trends, we observed post the end of the second quarter.
Positive year over year demand trends, which began in June continued to show strength in July with same store move and up 3.8% over July of 2019.
We resumed our normal we processed in June and made significant progress in addressing our past few customers in July.
We expect to conclude the process substantially at the end of August certainly by the end of the third quarter.
Which point, we anticipate our receivables returning to more normal Cree coded levels.
Our July same store vacates were down 7.7% year over year.
Partially reflective of the status of our auction process.
But also reflective of continued increases in length of stay.
Our same store year over year net effective rents for new customers shifted into positive territory in July of 2.5% on average for the month compared to July of 2019 and ended the month up approximately seven per cent compared to the last day of July 2019.
As we noted our press release, we resume more traditional pre cobot operation processes by the end of June.
During the month of July and into early August rate increase letters were sent to all of our customers, including those remaining in our portfolio for whom we had pause the process in mid March.
We anticipate that the rent role will be fully caught up with rate increases by the ended the quarter.
We continue to innovate at a rapid pace reaping the benefits of investments we've made in our technology stack.
Revenue management, and marketing automation smart rental our online contact free experience accounted for approximately 25% of our rental buying during the quarter.
We remain cautiously optimistic our industry has been and remains very resilient.
We are keeping a watchful eye on customer behavior in light of continuing uncertainty around government stimulus the opening and closing of schools and segments of our economy and the varying impact the pandemic is having in each region of our country.
We believe that the breadth of our need based customer the quality of our portfolio the strength of our balance sheet and the investment we have made in our people in our systems will continue to create value for all of our stakeholders.
Thank you and with that I'll turn the call over to Ken.
Thanks, Chris and thank you to everyone on the call for your continued interest and support.
Picking up on Christmas comments, we do find ourselves feeling cautiously optimistic and interestingly.
As we report second quarter results, we find ourselves in a similarly strange position as last quarter.
When we reported first quarter results. The numbers, we were reporting seemed stale and not particularly reflective of the environment. We were in at the time.
The impacts of the pandemic, what front and center, but the first quarter results didn't include much of the impact.
And that was me reports second quarter results. The current operating environment feels much more positive certainly them April and May when we were seeing what we hope was the worst of the impact of storage fundamentals.
Overall for the quarter, we reported AFFO per share a 41 cents.
Same store revenue growth of negative 2.2% same store expense growth of 2.4%.
And same store NOI growth of negative 4.1%.
Last quarter, we adjusted several of our operating practices by stopping our lean sales and pausing on our rent increases to existing customers among other things.
Throughout June and July we began methodically resuming normal operations in those areas, but of course, it's not as simple as flipping a switch and things revert back to normal as there are a notice periods that need to occur prior to the financial impact.
So as we resumed those practices the positive impact of doing so will be partially evident in the latter part of the third quarter.
Then looking a lot more normal in the fourth quarter of course, all of that assumes macro conditions don't reverse.
And we don't go back to a more restrictive environment as a result of cobot 19.
Our store teams and district managers have done a great job working through our delinquent accounts as well as varying levels of lean sales as we had a lot of work to do what the backlog created from pausing in April and May.
As a result of those efforts we're in really good shape with our collections and our receivable balances.
Couple of different ways people have been looking at that someone an update on how the current months collections are trending that doesn't always work all that well in our sector, but on last quarter's call. We were talking about April collections, and we told you at the time that we collect 93% of April rents.
Parents, ultimately collecting 98% of April ramps in 2019.
This year that 93% grew and grew and as of today, we've collected 97.6% of ample reps pretty much right on top of last year.
So the answer the question for July is that as of today, we've collected 95.6% of July rats, again compared to about 98% ultimately collected last year.
Yes, we fully expect that has the weeks continue our July rent collections will continue to grow and ultimately will likely end up being very similar to last year.
Another way to think about collections is like an accounts receivable balances.
And from that perspective things also looked very healthy.
As we look at a our balance is less than 30 days and they are balanced is less than 60 days and compare those levels to last year at the same time, our comparable balances are actually slightly better than they were last year.
And then the final thought on collections and delinquencies then from an occupancy standpoint.
Since we paused on customer lean sales, our occupancy levels have been slightly inflated by those cubes that normally would've been subject to the lean sale process.
That incremental occupancy was 90 basis points at the end of June.
And was down to 40 basis points at the end of July. So that's another good indicator that were trending back towards normal.
So trying to provide some color there and details that I know some of you were looking for but in short.
Collections, a our balances write offs none of those are concerned to us and in fact really speak to the quality of the cash flows in our sector. The quality of the self storage customer and the high levels of customer diversification in our business.
In the second quarter from an external growth perspective, we closed on two acquisitions for 65.7 million during the quarter. We added 27 stores to our third party management platform.
As detailed in our earnings release last evening, given the volatile macro environment and continued uncertainty of potential future economic disruption caused by cobot 19.
We have decided not to reinstate guidance at this time.
Simply remains too many unknowns and uncertainties to factor in to provide a range of estimates per our normal practice.
From a balance sheet perspective, we remain very healthy and are well position not only to have capacity to meet our near and medium term commitments, but we have plenty of capacity financial flexibility and access to attractive capital to support for sewing external growth opportunities, if and when we identify attractive investments that will allow us to continue our history.
Of creating long term shareholder value.
At quarter end, our leverage levels remain conservative at 39% debt to gross assets our debt to EBITDA was 4.9 times in our fixed charge coverage ratio was 5.6 times.
Thanks again for taking the time to join US for today's call at this point coal.
Let's open up the line for some questions.
And we will now begin the question and answer session to ask a question you. My Press Star then one on your Touchtone phone.
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And our first question today will come from old with Escharex with Bank of America. Please go ahead.
Hi, everyone. Thank you for taking my question. Please start off with those units up for.
The lease though so I was wondering if there are certain markets that those are mostly concentrated it I'm just trying to figure out the delta between you guys and your peers.
So it's.
Great Universal as we stop lean sales across the entire portfolio and as we again as we began to resume the lean sales it was.
Oh, it was pretty programmatic and I'm, certainly varied a little bit market by market and there are different there are different requirements in each market as it relates to notice periods and the like but.
Generally speaking, we if we started the product the process across the entire portfolio and we expect.
To have things pretty much wrapped up in a in August some slip into September but by the time to get to the end of third quarter, we expect to be in good shape across the country.
Got it and so there's no there aren't many markets that are still restricting you from proceeding with it.
No.
Got it.
And Dan.
<unk>.
Oh.
And then just a anything on the smart rental other than just a 25% of rental volume as what feedback have you gone from customers anything else you can talk about that program.
Our so do you would expect there's a segment of the customer base, who understands the product feels comfortable with the space requirement that they have.
And is used to with self service experience and they are enjoying smart rattle as a.
As a way to meet their needs clearly we have another.
Daniel segment of the customer base, who are either first time users of our product.
Unsure of the space need or just like to have that.
That interaction so we're able to serve a at both ends of the spectrum.
We will continue to innovate smart ran all adding features we're adding features almost weekly.
I think it's been very helpful in terms of.
Thinking about times, where Oh for example, on a Sunday afternoon, or or early evenings et cetera, where customers may drive up a the office is close but there's a QR code on the door that they can scan and go through the rental process at their convenience. So it has a.
It has been helpful. I think you know what this is gonna look like someday when we return to more normal levels I think you're always going to have a significant segment of the.
Consumer who like say more traditional process as opposed to the self service model. So we will continue to.
Provide them with with both ends of the spectrum.
Understood and then just following up on that has that helped you in terms of your marketing spend Blake.
A lot in any way going to benefit you in the feature considering market continues to be really high.
I don't know whether you can draw a straight line between smart rental and marketing spend I think they are I think they're independent of one another certainly complimentary in terms of a again being able to attract a customer for whom contact less as they search term that that they choose to use.
Yes, but I think they are largely independent of what.
Okay got it thank you.
Thank you.
Your next question will come from Smedes Rose with Citi. Please go ahead.
Hi, Thanks, I was just wanted to ask now that Youve put back in place rents.
Rent increases for existing customers. He said for pretty much across the board or just any changing the way you're thinking about job. The degree of to rent increases increases kind of pre or post a pandemic or is it kind of just in line with where.
I have been regardless.
Hey, Smedes thanks for the question.
Yeah. We are we are still programmatically looking at at rate increases to existing customers and in a very similar way too to what we have would have done pre pandemic and lessons learned over over many many years, even going back to the global financial crisis is that all of our data all of our testing so.
Yes data at those levels consumer behavior or simply doesn't doesn't change.
As a result is continuing to push those rate increases again in the high single digit range.
Of course, you know history doesn't always repeat itself and we have the tools in the and the systems to monitor.
Behavior is very closely and if we work to see something that would give us some type of evidence that the consumer wasn't behaving the same way they had they had and in the past we can certainly be extremely nimble and adjust accordingly, but to date.
We haven't seen any evidence nor nor a our intuition suggests that we won't.
Okay. Thanks, and then there was just wondering I know you may not really have a good read on this I mean do you think that the.
The $600, that's kind of the unemployment benefits set around topic state benefits you know helped.
Your existing customers or do you think for the most part you know maybe they're just not really a in that category and it sort of less of an issue if that goes away or it's changed meaningfully I didn't know if you have a.
Anyway, or any kind of thoughts on that but curious if you do.
You asked me just purely anecdotal I think at the margin.
It certainly was helpful for for folks who had that.
Additional cash.
Again, I think across the.
The customer base, it so diverse and and and such a differing segments of both the country Junior geography is as well as economically that I can't imagine, having it or not having it is a material impact on on our customer.
Okay. Thank you.
Our next question will come from Todd Thomas with Keybanc capital markets. Please go ahead.
Hi, Thank you Tim Thanks for the the detail around the collections and the impact you know the delayed auctions had on occupancy and everything what was the bad debt expense or the reserve in the quarter.
That impacted the income statement and how do you expect that to trend in the third quarter as you work through the the backlog of auctions, you expect it to to be larger or smaller relative to twoq you.
Well I expect the impact from from bad debts to to decline, but I mean of course, it's all in a in a net revenue.
Reporting structure right. So we only report revenue on cubes that are rented where we expect that we will ultimately be able to collect it. So obviously during the second quarter, we experienced a period of time with a delay in the leading sales that we had that that portion of our occupancy that was there was in our cubes.
That we that we Didnt believe would ultimately pay.
Given historical trends of if you get that far behind and are subject to typically to a leading sale.
We view that rent as ultimately not collectible. So we don't recorded by way of reserving against it and netting down our revenue. So certainly I think the levels of of that will decline as we've caught up now are catching up with the lean sales I don't think the impact to the traject.
Three of revenues or the growth in revenues.
Has any direct impact from from the write off amount right. It's all its on net revenue presentation. So I think as things improve the impact from from write offs. The improvement in collections is helpful.
But we don't disclose the exact amount, but the impact, but it's certainly going to decline here as we as we returned to normal.
Are you able to sort of book and you know how much above average above you know average levels. It was in the quarter.
Yeah, I would say that our AR.
Our delinquencies that ultimately that we didn't think we were going to collect would have gone from around 2% to you somewhere between two and a half in 3% sedan.
Right. The write offs, then that would come from that if you do you know if you do the math is that right off then would've been up or just just north of 50%.
Got it that's helpful. And then I was also wondering if [noise].
If you could give us an update on I cap I believe there was some some pending legislation trying to loosen up the regulations to get new developments and ahead of the July 1st deadline or maybe some other possible changes can you can you provide an update on on what's happening there.
Yeah, the update that I can provide you a certainly there's a lot of Ah theres a lot of discussion. There are there are many impacted parties, who had things and the planning stages or who are who had made investments either in in real money or or in a lot of time and they're very interested parties and trying to get some lever.
Sales of exceptions to the line that was drawn.
I don't have anything to update you on any formal action that is that has been taken as a result of Ah of those efforts.
We certainly believe that the legislation that was passed ultimately as past and and medium to long term wouldn't expect that that would be reversed anything that's done in the short term to make a handful of exceptions too early to tell one would just be conjecture.
Okay, and then and have you have you started to see.
Developers begin moving outward from from New York City, you know, maybe Oh, you know looking to explore you know an uptick I guess an activity around new Jersey or West Chester, Maybe long Island and then I'm also just in terms of your New York.
M.S.A. exposure I was just wondering if you could also comment on conditions. There you know where they sort of consistent with you know what you laid out for you know the improvements that you saw in the second quarter and into July or or you know do you think that you know conditions and in New York.
Could could intensify a little bit or you know way further on revenue growth in the third quarter.
I'll take the first part of that and then Chris can Chris can chime in as the as it relates to developers and where their focus is even before the I cap legislation took hold we were already seeing folks that were in the area start to look further out.
Has the you know it's the supply that has come into the boroughs.
Has been has been supply that frankly over time is gonna be entirely justified the the levels of of square foot per capita and the boroughs, it's still extraordinarily low relative to any other market and so.
That said the attractive opportunities have you know were were picked over and so those who have development platforms in the burrows, we're already starting to look outside of the burrows to continue to to find opportunities smelt to develop our product types certainly the I kept legislation is going to enhance that and perhaps accelerate folks looking.
Looking at different places, but it was already underway and then for for color on performance, Chris If you want to jump in.
Sure New York, both the M.S.A. and the Burrows July was ER.
What is a fabulous month.
In fact for the M.S.A. exceeding you know what I quoted nationally so rentals were up 7%.
Effective rents to new customers were up just about 5% occupancy was up a 150 basis points for the boroughs specifically.
Rentals were up consistent with a with the same store portfolio in that three plus percent range, a net effective rents for the new customers were up a much higher than than what we had seen in the rest of the country or 5.8% for the month of July in that.
That really ranges from a the Bronx side I, just about 7% to Queens being up only a couple of basis points. So it it it it performed both as an I must say in the boroughs themselves really really well in July and we're excited about.
About that continuing on here into August.
Thank you.
Thanks Todd.
Your next question will come from Ryan Levine with Green Street Advisors. Please go ahead.
Thanks, and actually to stay on a similar topic in New York there.
You know we've heard anecdotally residents of new York's or just backing up and going elsewhere, either temporarily or and maybe more long term as the city faced a you know worsening case count in second quarter, you have any color around some of the flight I didn't mean to work on the second quarter to any of that turning to store.
<unk> demand any color you can provide there would be great.
Yeah, I, maybe wrong, but I think this little company called Facebook, just just made up granted 750000 square feet of office space in New York City I'm not sure if I read that correctly, but I think the demise of New York as it has been for 100 years is Ah Ah.
Premature from our customer base, you know in the outer boroughs, Brooklyn, Queens or the Bronx, particularly I think the store.
Oh looks like we [laughter] looks like Chris losses audio I think I think anecdotally you know, what you're referring to as folks folks moving around and and maybe a and maybe a leaving for a temporary period.
Certainly there you know there've been some articles on that and that's a trend that that certainly has has legs to it I think that's just yet another another description of a type of a type of customer who needs a temporary place to store their goods I would think most.
Likely those customers are are going to store for for a period of time when there when their work situation returns to returns to normal and they want to start coming back to the office I would suspect that many of those people will migrate back in.
And in their need for for a temporary place to store their belongings will and they'll find a new apartment probably at a much lower rate and things will get back to normal the timeframe for what should that that would happen.
You know your guess is good as mine at the moment could could be a could be a couple of months could be six nine months either way I think that's just again anecdotally another type of customer who needs our product and we're happy to have them as a customer.
Sure I understand and then as you heard from PS business parks.
Which caters <unk> sort of smaller tenants smaller businesses.
You know some weakness among small businesses.
Can you provide any additional color around maybe the health of your small business customer.
Yeah, I'm sorry, my myself on disconnect I mean, I am a what we're seeing across the portfolio.
<unk> is that the you know the majority of our customers.
That are small businesses continue to to to rent.
And there you know continued to be current on their rent.
We are seeing as we did during the great recession. Unfortunately, the return of the customer who's small business our restaurant they elected to close and they have inventory, where they have a restaurant equipment that they that they own that and they want to store.
With a belief that coming out the other side of this they will you know they will will resume business. So we are starting to see those customers coming into the portfolio much as we did during the great recession.
Okay, great. Thanks, guys.
Thank you.
Your next question will come from Michael Mueller with JP Morgan. Please go ahead.
Yeah, Hi, I was wondering can you talk a little bit about the spread between moving to move outreach during the quarter and how that look compared to I guess a year ago.
Yeah, I'm trying to trying to put my fingers on here, it's the gap or the gap widened a little bit.
From last year.
Mike If you had to do you have a second question I'll I'll try to pull that number for us apologies I just don't have right in front me.
Oh actually that was it that was that some stuff up New York, but yeah, Hey, I've got pretty thorough in that area I think the difference between move and I moved out there in the quarter.
Oh, it was down about 21%, which would have been compared to about 9% in the second quarter of 19.
Got it okay.
Okay and any any early commentary on how that's trending in Q3.
No not at this time don't have any update.
Okay. That's it thank you [laughter]. Thanks.
Your next question will come from Samir Khanal with Evercore. Please go ahead.
Yeah.
Good morning, everybody I guess to Chris or Tim can you talk a little bit about the third party management platform I mean have you seen.
Private owners wanting to be part of the you know the whole platform here as they navigate through the environment I guess, how should we think about.
<unk> platform the growth over the next sort of several quarters.
Yeah, I think it's [noise] continues to be.
A business that the inbound calls continue our pipeline of of management contracts to you know to bring on overtime here continues to develop and looks pretty healthy and it's it's a combination of.
Existing open and operating stores, many of which are stable and you have owners to.
You know for for a magnitude of reasons recognize and continue to recognize the value of a large platform like ours. The sophistication from a from a business intelligence revenue management perspective, the sophistication from.
From a marketing perspective.
The power of having an operating platform and the ability to navigate through you know the crazy world that we find ourselves and here over the last few weeks as far as being able to react quickly to you know to create the ability for customers to find new online no touch way and to manage through all of the it's a it's a heavy intensive operating business that way.
We're in a and working through everything over the last couple of months. Our team has just done such a fantastic job of.
Of of adjusting and I think if you're a smaller owner you look at that you say Wow I I can't I can't compete with that so you certainly have folks from that perspective. You also how are you know while the while the development cycle is getting late they're still new stores being delivered and many of those new stores.
Our are going to find a home and in our management platform or or one of our peers management platforms, because again their expertise as a developer is not in running our business and running a store and so they they need help and ER and they're going to come to talk to a large player.
So that helps so we continue to see inbound calls.
We continue to our business development folks are are are busy so there's certainly a lot of interest.
Okay and I guess my second question is around the transaction market sort of if I've missed this but is there any color that you can provide I know.
You know at the beginning of a year I think things things are lot starting to pick up and then you hit them you know the impact from co bid.
And there was a bit of a pause there, but I'm hearing that things are starting to pick back up again, no those sort of <unk> seller and buyer perspective, and any color on that in cap rates and pricing would be helpful.
Yeah I think.
Part of it is just seasonal met many folks on the on the selling side want to at least get part way into the into the summer busy season, and see their occupancy pick up or get a little bit of pricing power before they come to market. So I think there's two things happen one you're getting to the <unk> point of the year, where you have a little bit more activity in a normal in a normal year.
And then of course, we're starting to get a little bit more clarity on.
On for on operating performance and the impact on rates and the like as a result of the pandemic. So.
Certainly activity has picked up a little bit.
Pricing remains remains very strong from a seller's perspective, certainly on a on an open and operating stable property. There is a an awful lot of capital that's interested in those types of assets certainly not just the rates. There's an awful lot of private capital that is looking to to invest in our sector.
Given given the strength of the cash flows in our sector certainly on a relative basis to a lot of other product types storage remains a very attractive asset class. So there's an awful lot of interest which is keeping cap rates down I think no surprise, but the the potential area that we could find some opportunities that might be a little bit more attractive onerous.
Adjusted basis, our stores that are in some stage of lease up and you're seeing some of those opportunities I would say, there's still quite often a pretty big disconnect between buyer and seller expectations that the seller still looking to you know to to put out a package that shows.
You know that shows the dream is to rates are going to return to where they were you know back a year ago, and and and the lease up yeah. The pace of lease up pool will continue to be what what they thought it was when they built the store and and on the buyer side people are being a little bit more cautious and and perhaps a little bit more realistic on their underwriting so whether those trades find up.
Find a mark where where where the buyer and seller to meet we'll see how things play out.
And any idea as to how far off and pricing or isn't true earn chillers are off right now.
Got it so that's just watt wildly going to going to differ from a from from deal to deal. We've been we've been discussed connected [laughter] by as much as 20, 30%, sometimes and then you know, but but what's interesting is somebody will pop up and pay near what the sellers looking at four so it it only takes one it only takes one buyer to make transaction.
Got it okay. Thanks, so much for that.
Thank you.
And our next question will come from probably been Kim with Truth capital. Please go ahead.
Thanks, Good afternoon.
Just wanted to tie up some.
From a data point, if you're right we see our I program, if you never stopped that into Q.
What benefit would that have provided.
It would have been better.
[laughter] any kind of better color than that.
[laughter].
It wasn't clear enough for you.
We didnt, we didn't quantify that I mean, as we've talked about pathway, we we havent.
We haven't quantified the components of the revenue growth down to that down to that level I will tell you that it is the as we're modeling things out back in late March.
And looking at the you know the potential impact of of all kinds of different things rate increases to existing customers move in volumes.
You know factor breaks to new customers.
Write offs delinquencies you go through all of those variables. The I will tell you that that the passing along increases to existing customers in the you know in the Threed a nine month period of turning those off was the single biggest impact to revenue growth year over year, because if you're doing that consistently as we have been for years and then.
Do you stop it's a pretty it's a pretty big drag on earnings growth, So without giving you a number because we're not going to disclose it I will tell you that that in the range of things that could impact. It was certainly the biggest one.
Okay.
And the other rental income I'm, assuming there that's a big kind of registration fees late fees.
Yeah, how much did.
Not charging customers late fees and Pat that trend and.
As business returns back to normal should I, just expect that to normalize by by ended a year.
Yeah, the majority of the.
Of the amount that's down a year over year was attributable to late fees I'm a little bit.
A little bit early in the quarter would have been on administrative fees things that are associated with customers moving in and so moving volumes were down of course, and so that had a little bit have an impact, but you hit the big one which was a when you start charging late fees that was the biggest driver of the of the variance in that line.
Okay, and just high level do you think.
That's very different customer segment or.
<unk> using the story for different reasons that made a pronounced impact and July that might have contributed to the kind of.
Higher rental activity.
Well, it's just a you know it's just anecdotal stuff too if we have so they have so hundreds of thousands of customers, who all come to US you know again as I talked about early the beauty that business is there's so many different needs that that create demand for our product it would be a it'll be anecdotal at best anything that I would provide there from a color perspective.
Okay. Thanks.
Excuse me.
<unk>.
And this will conclude or a question and answer session I like to turn the conference back over to Chris nor for any closing remarks.
Okay. Thanks, everybody for participating in our call. Please continue to.
Stay safe, we wish you all the best and we look forward to speaking to everyone on our third quarter earnings call take care, having great rest of your summer.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.