Q3 2020 Hallador Energy Co Earnings Call
[music].
Good day and welcome to the Hallador Energy third quarter Twentytwenty earnings Conference call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist.
Watching Star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. You asked the question you May Press Star then one on your telephone keypad to withdraw your question. Please press Star then too.
Please note. This event is being recorded I would now like to turn the conference over to Becky Palumbo director of Investor Relations. Please go ahead.
Thank you Andrew and thank you everybody for joining us today.
[laughter] is being webcast live and you will be able to access a replay of this call on our website later today.
Yesterday afternoon, we filed our form 10-Q.
The RPC for the third quarter 2020 financial and operating results and we also issued a press release with certain financial highlights both.
Both documents are posted on our website with me today on this call are Brent Bilsland, our president and CEO and Larry Martin Our CFO, Larry will begin with a financial overview of the quarter and Brent will follow with our perspective on market conditions and outlook, we will open the call to your questions. After Brent.
Mark today I remarks may include forward looking statements.
That are subject to a variety of risks uncertainties and assumptions that could cause actual results to differ materially for example, our estimates of mining costs due to cost sales and regulations relating to the clean Air Act and other environmental initiatives.
While these forward looking statements are based on information currently available to us if one or more of these risks or uncertainties materialize or if our underlying assumptions prove incorrect actual results may vary materially from those we projected or expected.
We do not undertake to publicly update or revise any forward looking statement, whether as a result of new information future events or otherwise unless required by law to do so so with that I'm going to turn the call over Cleary.
Thank you Becky and good afternoon, everyone.
Let me go over our operating results for the third quarter and year to date.
So for the third quarter, we had net income of 1.9 million.
Which resulted in six cents per share.
For for the nine months, we had a net loss of 1.5 million or five cents a share our free cash flow for the quarter was 11.6 million.
And for the nine months 24.7 million and we define free cash flow as net income plus deferred income taxes.
DDNA A.R.O. accretion change in fair value of hedges in stock compensation less maintenance Capex and equity investment.
Method affects.
Our adjusted EBITDA, which we define as EBITDA plus stock compensation A.R.L. accretion and change in the fair value of hedge is less the effects of our equity method investments and our glass sands.
Was 17.1 million for the quarter 44.2 million for the nine months.
We paid down debt of 14.2 million for the quarter and 33.2 million year to date.
So our bank debt as of September Thirtyth was 146.9 million.
And our net debt.
It was 141.6 million.
Our debt to EBITDA leverage ratio was 2.46, well within our 3.4 or 3.5 times covenant.
I will now turn the call over to Brent Bilsland our CEO.
Thank you Larry.
During the third quarter shipments returned to normal coal inventory was reduced and aggressive payments were made towards lowering our debt.
None of these things would have been accomplished without the strong performance of our operations team.
So that has added new challenges for everyone.
Yeah, our operations group has done a remarkable job protecting the health and safety of our people keeping our cost structure in line and ensuring our customer shipments needs have been met.
Shipments for the quarter were 1.6 million tons, which is a 27% increase over the prior quarter.
We expect to ship 1.7 million tonnes during the fourth quarter of this year.
Improved shipments helped us reduce our coal inventory by $4.5 million during the third quarter.
However, inventory levels remain elevated by 9.3 million tons year to date.
We expect to further reduce coal inventories in the fourth quarter of this year.
As I stated earlier Cove. It has brought many challenges and out of an abundance of caution at times up to 25% of our workforce was quarantined due to possible exposure is.
Despite these headwinds during the third quarter, we were able to maintain production costs at $29.30 a ton within art, which was within our guidance range.
And how old are we have remain intensely focused on creating positive cash flow to aggressively pay down debt.
During the third quarter, we paid down 14.2 billion.
During the first nine months of the year, we have paid down $33.2 million.
By the end of 2020, we are targeting that we will pay down a total of $40 billion for the year, bringing our debt down to $140 million, which would represent a 22% reduction in our bank debt.
Year over year.
All this from a company with a market capitalization of.
25 to 27 million.
During the quarter, both our liquidity and our leverage ratios improved to 52.7 million and 2.46 times debt to EBITDA ratios respectively.
This profit this brings our debt to EBITDA leverage ratio a full turn below our covenant of 3.5 times.
On April 15th how it'll received a 10 million dollar alone or the paycheck protection program.
The company expects a portion of this loan to be forgiven in early 2021.
Looking forward to energy markets recovering inventory levels at both mines and utility customers have remained elevated bert but are improving rapidly.
Natural gas prices have improved dramatically, causing coal to dispatch from front, a gap of natural gas and most of our markets.
For the first nine months of 2020, Henry hub natural gas prices averaged $1.88 currently gas prices around $3.24 next year.
[laughter] 24 cents now and Nextshares Nymex is that a the forward strip is at $3, an 11 cents as of last night.
Nexstars gas prices are higher as the market anticipates less gas production a 2021.
One indicator of less future gas production is the dramatic slowdown in oil and gas drilling.
Well gas rig counts as of October 23rd.
Or 287 versus if you looked at the peak and in 2018 19. It was a thousand 85, that's a 74% decline.
The number of rigs drilling for oil and gas I guess this guest target specific rigs as of the 20 Threerd of October were 73.
Versus the 2018 2019 peak of 198, that's a 63%.
A decline in the number of rigs drilling for gas.
LNG gas prices in Japan have improved dramatically from slightly over $4. A july of this year to $7 today. This.
This is an impressive price recovery and only four months time eventually.
Proved LNG prices should improve coal exports coal export prices have been slow to rise but are improving.
If you I four is above $60 now throughout 2021.
And he P. I too is above $60 in the fourth quarter of 21.
In summary, it how it or will continue to focus on generating positive cash flow and reducing our debt. We are encouraged by the recent improvements in all energy markets and are cautiously optimistic of the future.
With that well open up the line to the Q and a session.
We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad.
If you are using a speakerphone. Please pick up your handset before pressing the keys if at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then to that.
At this time, we will pause momentarily to assemble our roster.
The first question comes from Lucas pipes or B. Riley Securities. Please go ahead.
Yeah, good afternoon everybody.
Hey, Lucas good afternoon Lucas.
Brent I.
Hey, I wanted to ask on on the pricing side specifically.
<unk> for for coal I'll get to natural gas in a in a moment, but but on the coal side, what's what's kind of the current pricing look like if you were to go out and sell spot tons and then looking ahead to 2021 2022. Some of your peers have noted that there is a mark.
Get there a you know a couple of utilities have come forth asking for the term business what sort of strip could we be looking at here for for your average product, but really appreciate your your perspective. Thank you.
Well I think in general.
The market like I said coal inventory levels are.
[noise] relatively high utilities I mean, if you go back to.
March April timeframe.
Coal plants, just didn't run very much with the lock down gas price was extremely cheap.
<unk>, what the less power demand.
I just kinda caused a backup of inventory levels, we've now kind of seeing that reverse where.
Gas is this or excuse me coal is dispatching in front of a gas and most of our markets. So we're seeing those inventory levels come down.
And we see this.
Pretty strong.
Or at least recently strong gas prices are making to your highs.
So it looks like people are going to burn a lot of coal next year I think most utility buyers will kind of take a wait and see see approach to buying.
We don't expect to see 2021 buying.
Very aggressive here, the Thanksgiving timeframe, which would which would be normal Oh, we think utilities will.
See would see what winter brings from a coal burn perspective see if gas prices hang in there or go higher.
And then eventually pulled the trigger so to be fair.
I just don't think a lot is transacting right now.
You know we we.
We did have some small spot business pop up it was you know upper thirtys, but.
I think you know that those are very few data points out there to really go by there were some blend and extend deals that we did this year.
We pushed some tons out of 20.
20 into 2021, and then extended the term of our contracts with customers you know for multiple years. So.
That's kind of what you see happening I think if gas prices you know you've got a few people out there, saying oh gas prices are going to.
Oh, I see a major rally [noise] I mean, I've, even seen I think squawk box yesterday had somebody saying it was going to be six dollar gas you know something.
Quite frankly, 350 or north happens I think the buyers will suddenly becomes.
Become convinced that get much more aggressive at buying but right now.
I think they've got a lot of inventory and they've been kind of chastised for being long and wrong in the past and with you know all the concerns about Cove is there going to be.
How much more headwind will that bring going future I just think.
Fuel buyers are going to take a wait and see approach.
[laughter] that's a.
That's helpful. Thank you Bren fair that back then and to hone in a little bit on the on the gas side you mentioned the decline in the rig count.
Some of the changes internationally as well and if you put it all together, what's what's your outlook on the gas side and and maybe more specifically I know you look at the Steri Uh huh.
And a lot of detail in terms of the supply demand balance it for natural gas you have it do you have a sense for how much supply natural gas supply could be lost here on a year on year basis 2021 versus 2020.
I think look.
Looking more at 30000 feet I mean.
You know, we saw the oil and gas industry in the United States produce no 13 million barrels of oil I believe in 19 and now you're saying.
Currently were running more like at a [noise].
10.8.
A million barrels a day pace [laughter] and you know you've seen.
Especially now with Q3 earnings starting to come out Youve seen multiple oil Ceos.
Come out and say well they think that there's probably going to be a further decline in oil production unless costs unless pricing gets gets above $40 and right now we're down in the mid Thirtys.
So you know I don't think were going to see you.
You know a year ago, we were seeing associated gas, 40% of the U.S. gas supply was coming from associated gas coming from oil wells. So.
You know its oil declines.
It backs off here, 20% to 30%.
You know I think that.
I think we we eventually will see.
That associated gas to some degree go go away.
When you look over at the Marcellus and Utica you know you've got.
Yeah. He qt outside the CEO said this week that you know they were not planning on production increases in 2021 because.
Price is still weren't high enough to justify the cost.
We saw who else.
Oh, I'm, drawing a blank on names here, but we've seen a range resources come out there see you said the market is not incentivizing further growth.
So to me.
You know ever the Ceos are all signaling that.
They're not they're not going to get crazy on drilling and then a $3 plus environment.
Coal does very very well, we have an inventory issue to kind of clear through.
Oh, no one is really transacting on the export side.
And.
You know it just it just kind of leads to a very unique year, where I think things are going to slow start off very slow and I think in the back half 2021 that could get really interesting.
Oh, just because we've seen a lot of production on the coal side come off a we're not seeing a response from the gas people yet.
And.
And so I think all that is making our markets much more healthier than they have been we still have a lot of risk on covance.
You know what what will that mean, we've seen.
Germany and France.
Lock down their bars and restaurants again for a month weve seen something similar to that out of the UK.
You know what's going to happen here in the U.S. you know in large part is going to depend on what happens to the covert numbers and and who's in charge.
So.
Although it is a long way of saying, we expect to see less competition from gas.
In gases coals primary competition still today.
Very helpful. Thank thank you for that and and my last question.
It's election day <unk> could you share your perspective on kind of what a biden or another can for Trump respect the need for for the coal sector and maybe more specifically the Illinois basin. Thank you.
Well that so an easy short question [laughter].
You know Trump is up.
And you know very vocal on he's for all the aboard of.
Oh, you know here, we've got our nation to where its energy independent.
Oh, we're the largest.
I've been one of the largest producers of oil.
And the World a we're still probably remain top three today.
So you know if it's if it's Trump we're definitely seeing a transition.
Away from Cold weather trumps, an office or whether biden is.
The question really just comes down to pace.
Add [laughter].
You know.
Utilities.
We've seen Duke energy Who's one of the larger players in Indiana They had there.
Investor Day, and put out there the investor U.S.G. type.
Conference.
And they're shutting down a lot of coal plants and the Carolinas.
But also on that it looks like to us their signaling more of a colon.
Colin Indiana's got you know.
15 years and beyond.
And we you know if you look at it they just got so many if they were to to to try to shut it down right away that first of all from an economic perspective huge stranded asset risk.
Are there any other utilities.
Secondly, so that's more back to Biden right because bidens, obviously had a lot of press about try.
Trying to transition and his.
Two trillion dollar stimulus plan.
When we talk to the grid operators, when we talk to the president and CEO MISO MISO is the grid operator.
For the state of Indiana, but quite you know the largest region. They go all the way from Louisiana.
To Alberta, Canada.
So when we talk to the Chief operating officer.
There.
And they put out a report recently.
I remember the title of it renewable.
Integration impact assessment, where they basically say.
They can go to 30% renewables in MISO without too much trouble.
But above that they start to really have significant challenges in MISO today that 9% renewables.
Oh.
Well, if they try to get to 50% the wheels, just absolutely fall off really in behind the scenes I'll tell you more like 40%.
So the grid was built.
For 60 megahertz.
[laughter].
Okay generation spending generation.
And so when you try to go to renewables. It just really wasn't designed to do that which.
Which is why you're starting to see grid issues in California, Texas prop up because both of those states.
Or in the 30% renewable rage, and and you know, it's it's looks like the states are going to be the testing ground that everyone else is gonna watch.
So when we talk to the grid operators about well you see all the utilities, what's your members saying.
Gosh, we're gonna go 50%.
Carbon free or we're gonna go 100% carbon free by you know these dates their common is look politicians are telling utility Ceos what.
What they what they want utility Ceos are saying this is a great growth opportunity for our earnings So lets go do it.
The physics isn't quite there yet so we take great.
Uh huh.
Uh huh.
Security and the fact that we think the grid is absolutely needs.
And.
You know when you look at our assets their design.
To run for another 10, 15 years, and we think that the grid in Indiana is designed to be burning coal from the <unk> 15 years plus.
So there will be a transition I just think it's going to be a lot longer tail than what you know some of the headlines right.
I mean.
As articles today and S&P talking about China.
It's just starting construction of new coal plants.
So.
You know the world.
We've got a lot of people out there trying to say that you know solar is cheaper.
Oh, we definitely don't think that is the case.
I think people will choose that because it's a lower.
Carbon option [noise].
But.
It's got a heck of a reliability issue associated with batteries are not ready to go look at the ice looked at the ISO comments out of California.
During the <unk>, you know <unk>, California is turn the lights off three times.
Since August.
And I just don't think people are going to put up with that.
He's got the largest.
Its largest economy in the world.
They can't keep the lights on and that's a 30% renewables.
Their plan is to go to 43% renewables here in 10 years.
And [noise].
So they're going to put more intermittent power on the grid.
At the same point in time, we're going to stop selling gasoline cars, which means that we're going to have more demand because when I try to fuel our transportation industry with electricity.
A lot of these are growth opportunities for the utilities.
And Oh, yeah, there definitely will be a transition and it definitely [noise], but it definitely is going to take it's not going to be inexpensive and it's going to take a very long period of time.
So, although it's a long way of saying.
Biden wins, they'll still be a coal industry.
The troponin is still vehicle industry.
Okay.
That's very helpful. I appreciate that that's sad disaster that very very helpful. Best of luck and.
I'll pass it on.
Thank you Lucas.
Once again, if you have a question. Please press Star then one I touch tone phone.
The next question comes from Mark Kaufmann MLK investment management. Please go ahead.
Hey, good afternoon, and thanks very much for your answers here I'm kind of a newcomer to the company, but familiar with you have natural gas is a competitor.
Great answer my question is more of a a shorter term out question.
The natural gas is in backwardation 21 looks great.
22, not so much. So my question is if 22 were to change it improve and the gas producers would job you know change their thoughts about.
Trying to.
Create more gas available how is that.
Well how are you.
You seem to indicate that.
You know coal prices would probably start to I shouldn't say rise there should be some more yeah, let me rephrase that they would actually be more demand for coal.
Because he had it seems that the.
The only way prices go up is because there's a shortage of something and with that I'm now shift back to the that's natural gas would ship back to the question of so called how quickly can you pivot to actually <unk>, obviously, you've got some extra inventory, but would you need to you know mine more in it.
Sense to catch up with potential demand that would be from coal you know if pricing on natural gas were higher sorry to be long winded [laughter].
Yeah no problem. Thanks for the question.
So.
I think you asked two questions are you made a comment about 2022 gas pricing being a backwardation high so the strip.
2021 is that.
Three tenets strip and 2022 is it's something like 280 or something like that <unk>.
[laughter], there's some interesting articles out there that are saying that because of different loan covenants of the gas producers.
That gas producers are forced to hedge 18 months out.
A lot of there.
A lot of their gas production and this is this is.
Potentially what is causing part of this backwardation in the gas field.
Are they are the gas pass is that you've got a lot of producers that have to sell 18 months out, but you don't necessarily have a lot of buyers out there.
That's right Yeah, you know the you know the.
The decline in the production of the shale wells, Yeah, It's like 60, 70% in the first year.
So you know with that ours, whether you want to go out and drill right away now you've really got to have something locked in on price because you're going to sell most or whatever it is you're drilling.
Correct. So there there's like a state of the gas and million dollars on the new well [laughter] [noise].
Yeah. So I think that you know there's a lot of you know capital dried up for the gas patch about a year ago.
So now all of these companies are basically, saying, hey, we've got to drill within cash flow and so.
They're trying to pay down debt to try to pay dividends and they're trying to maintain.
Their production and [laughter], Yeah, we think that.
There's.
No their messaging that if they don't expect growth at these prices the margins just just aren't there so [noise].
You have seen a rebound a little bit and the equity values of the gas companies you've seen the opposite for the for the oil patch I think that.
The top 25, all companies are share prices are down 53% year over year.
And if you look at like he shooting range their stocks up like roughly 80% this year.
So to us the economics, right now I guess looks better than better than oil but.
The Ceos are saying, we're not going to expand production at these prices.
But because I think capital for them, it's become more expensive.
So back to if we see higher gas prices will that lead to more coal production it absolutely will.
But I also think there's a lot of coal producers that have you know 10% of capacity.
Kind of sitting there ready to go.
So we don't like I said, we think from a buying perspective.
It's going to be quite it's going to be quiet you know through Christmas.
And then unless gas prices.
Does it go 50 cents higher or more.
Mhm from.
Beyond that I think it could get interested in the back half of the year, because I think <unk> exports could show up.
What we're what we're trying to follow is why is LNG in Japan.
I'm from $4 to $7 inform us I mean, that's just a dramatic move which kind of puts coal back into money in that and that Asian market Europe, we haven't seen that yet LNG is still in the you know 515 in UK and.
In 550 in Europe. So it hasn't quite responded there but gas inventories in Europe. There are also much better.
So that's what's supporting the market the cobot issues are constraining the market. There. So a lot of it really will come down to what does the winter it looked like both in Europe and in the United States is a cold that's going to have a dramatic influence on the market. It. This winter starts off cold and to see gas prices rise, you're going to see fuel buyers get nervous and come out uncover.
Because right now they're looking at burn projections that quite frankly are all over the place.
In some scenarios if weve got returned to $2 gas market. The steel bars are saying, what we already have enough cobalt.
But if we go to a 350 market there may not be enough coal to supply them. So it's going to be a volatile ride.
Everyone's going to wait until the last minute to make decisions, which is a little unusual normally by Thanksgiving, we're contracting with customers for business and 2021, Fortunately for out or we have a pretty good book, we have over 5 million tons already contracted.
So we don't have to do a lot of work.
But we certainly would like to sell more times and we certainly expect to sell more time so.
Mark I hope I've answered your question. So it sounds like it's there you are ready.
If the demand there already we we would have to hire more people, but you know weve shown that we can do that and I, but we have the equipment we have.
We have available capacity correct.
Okay. Thanks very much.
Thank you.
Again, if you have a question. Please press Star then one on a touchtone phone.
The next question comes from Eric front back a specific value. Please go ahead.
Hey, guys. Thanks for taking my call and congrats on the good quarter, where.
I was just curious about any of the supply destruction or you guys have seen out there on the coal side I.
No I think art, you mentioned that they're born 20 million tons from this year.
And then trying to reduce down to about 50% in the next two or three years. So any extra color you have on that anything else you're seeing.
Yeah, we've seen a dramatic pullback I think if you look at coal production.
First quarter of 2019, or there was something like 14 mines running in the state of Indiana.
Annualized pace of 34 million tons.
If you look to today.
As an internal number so its not probably won't.
Correlate with anything that's published.
Roughly six mines running in Indiana.
At a pace of about you know 17 18 million tons. So we've seen almost coal production in the state of Indiana go to half now some of those are permanent closures.
I know weve clip permanently close the mine and we've seen another competitor permanently close alive.
And some of those are just kind of sitting there idle or we've seen a competitor here in the last few weeks lay off all their workforce and you know idle all their minds and just loading out inventory.
So we have we have permanent closures of supply disruption as you would call it.
We have a mine such as ourselves that are you know running it at at 80% capacity.
And then we have other mines that they've laid off or workforce. So can those mines come back if they can.
But.
You know, there's going to be a scramble for people and and it remains to be seen.
When that happens and what that looks like.
Great. Thanks.
Yeah, you said 80, <unk>, 80% capacity right now.
What I mean, how high can you get that and still kind of keep production.
Cost, where they're at or you know, let's say under 30 Bucks a ton.
Yeah well.
Well you know we're we're.
I think we had about as tell them, we had a very challenging quarter from a production standpoint in that.
There were times, where 25% of our workforce quarantining now that doesn't mean there.
Tested positive for Covanta that means they came in and said well my my my spouse has it or.
I was around some of this weekend, who tested positive and so out of an abundance of caution.
Our policy is we've got to quarantine that employee until.
They have a a negative test so.
So far our ops people to say gosh, you know we're running it.
You know basically a 6 million ton pace you.
And on any given day were not sure who's going to walk in the door for work right because yeah.
Yes and that is.
It isn't is even as easy as that sounds because you'll skill sets aren't necessarily.
You could have all your electricians out well that that's a problem [laughter] you could have all your minor operators sick that day. So that's a problem. So specific skill sets. Obviously, we do a lot of cross training and obviously, we've got [noise].
A lot of units so were somewhat guarded against that so to see our cost numbers, where they were with the with the labor issues that kinda cropped up in the third quarter.
Felt pretty good about that so we're we're still.
Saying that we expect our cost to stay below 30 for the balance of this year.
And an end to end early next year I don't really see that changing at this time, if we run harder whose cost drop you know a few bucks time.
Okay cool thanks, Yeah, a and then one final quick question.
You go to the you know the quarter you guys had with the cash flow and the ability to pay down as much debt as you did we I'm just kind of curious.
Well sure in goal is is as far as de leveraging and how far you want to take that.
[noise] well look in 2014, we are a company that was net debt free so and that that's a very good way to live life [laughter].
We [laughter], we think you know I think you've seen other competitors out there, saying Hey, we'd love you know one times debt to EBITDA.
I think that would be a really good target and we'll reevaluate when we get to that when we get to that point.
But right now.
We're just trying to pay down on aggressively as possible <unk> thought we made great progress on that to the pay downs.
We're on target like I said, the pay down 22% of our debt. This year, so with all the headwinds of Cove, it which make producing an operating company or operating a production company challenging.
So.
You know I think more of the same from us.
Okay, great Yeah, well, congrats again on a great quarter and a pre [laughter].
Thank you.
Once again, if you have a question. Please press Star then one on the Touchtone phone.
The next question comes from Brian Bassett, a private Investor. Please go ahead.
Right.
Perhaps your mind is your phone Hello, yeah.
Yeah go ahead, thank a lot of that thank.
Thank you for taking the question I'm could you guys help with a little bit of what we should expect in Q4 from a capex standpoint, and an inventory reduction standpoint.
Yeah, So our capex for the fourth quarter will be about right ratable for what it's been the first three quarters, five or 6 million.
For Capex.
And.
Oh.
And what was your other what was the answer that question.
Regarding how much more inventory or you think you work through Oh, I I. Thank God, our inventory I think our inventory reduction will be very similar to the third quarter. Five I think 5 million, maybe five and a half million reduction and that would still be a little higher that then we started the year with but art.
Our first first quarter and second quarter of next year, our right kind of front end loaded. So then we would further reduce it first quarter next year, but probably five to five and a half million reduction there.
This quarter.
Excellent and in one last question when you guys think.
Right.
On Nat gas.
<unk>, we should be thinking is the number that within Indiana coal dispatching.
<unk>.
[noise] [noise] varies a little bit by each utility what's the price of coal, what's the price of transportation, but I think to thirtys kind of.
A good general as general range.
Well, we see 230 Henry hub.
Great well, thank you very much for taking the question yeah.
Yes for Indiana.
Yes.
Okay, great. Thank you guys. Thanks for taking the questions.
Yeah. Thank you.
Once again, if anyone has a question you.
You can press Star then one.
Touchtone phone.
Again, that's star then one if you have a question.
This concludes our question and answer session I would like to turn the conference back over to Brent Bilsland for any closing remarks.
I want to thank everyone through a taking the time to listen to our call today and specifically all those that asked questions.
We appreciate your interest and.
Look forward to talking to you next quarter. Thank you.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
[noise].