Q3 2020 Array Technologies Inc Earnings Call
Good morning, and welcome to I read technologies third quarter, Twentytwenty <unk> earnings Conference call.
Today's call is being recorded and we have allocated one hour for prepared remarks and <unk>.
At this time I'd like to turn the conference over to Anthony It wrote Smith Investor Relations for her great technologies. Thank you you may begin.
Thank you operator, I'd like to welcome everyone to write technologies third quarter earnings call on this call management will be making statements based on current expectations and assumptions, which are subject to risks and uncertainties.
Actual results could differ materially from our forward looking statements if any of our key assumptions are incorrect because of all the factors discussed in today's earnings news release and the comments made during this conference call or in our latest reports and filings with the Securities and Exchange Commission each of which can be.
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We do not undertake any duty to update any forward looking statements.
Today's presentation also includes references to non-GAAP financial measures.
Should refer to the information contained in the company's third quarter press release are definitions information and reconciliations of historical non-GAAP measures to the comparable financial measures with that let me turn the call over to Jim you, sorry raised technologies CEO.
Thanks, Anthony and good morning, everyone. Thank you for joining our first earnings call as a public company.
I'm joined today by Neil Patel, our Chief Financial Officer, and Jeff Krantz, Our Chief commercial officer.
I'd like to start off by thanking our new investors for the tremendous support we received in our IPO going public was an important milestone for our company and our entire team was energized by the result.
I think that this is our first call I would like to start off by providing a brief overview of array technologies for anyone who is new to our story and then focus the rest of my remarks on the progress we are making on our growth initiatives before turning it over to people to talk about the quarter.
The right technologies is first and foremost a technology company. We are one of the world's largest manufacturer of ground mounting systems used in utility scale solar energy projects, our principal product as an integrated system of steel supports electric motors gearboxes electronic controllers and software.
When we refer to as a single axis tracker truckers moves solar panels throughout the day to maintain an optimum orientation to the sun, which significantly increased their energy production up to 25%.
Our product is patent protected and has a compelling value proposition.
In fact, we have approximately 10 years left on our core patents and more than 10 years left on other patents since a race inception, we've shipped over 21 gigawatts of product to put some context around the scale of our business over the last 12 months, we've shipped over 26000 miles of trackers, which is enough to circle the globe.
Yes.
Finally, we are proud that more than one in every four solar modules in operation today in the U.S. is on our product.
We established a track record that as evidenced by our strong financial results, having delivered 692 million in revenue and 140 million in adjusted EBITDA. During the nine months ending September of this year, which represents 64% growth in revenue and 96% growth in adjusted EBITDA compared to the first.
Nine months in 2019.
With that background I'd like to pivot to our growth initiatives.
As many of you know from meeting with US during our IPO Road show there are three components to our growth strategy.
<unk> growth and market share gains in our core U.S. business international expansion and bolt on acquisitions.
I'm pleased to report that we have made progress on all three since our IPO price first U.S. demand for our products continues to grow.
Our order book, which we define as sign contracts and awarded orders was 703 million on September Thirtyth, which represents an increase of 31% over the same time last year and we're currently in advanced discussions on several large new projects some of which we hope to be announcing soon.
We believe that the ease of installation superior reliability and lower LCR, we upped our products is increasingly becoming recognized by customers and that we will continue to grow our share of demand here in the U.S.
Second we are beginning to see early returns on our investment in international sales resources of the orders that we are currently in advanced discussions on a number of them are projects outside the U.S. further as evidence of our commitment to international expansion over the last nine months, we've increased the size of our international.
<unk> foot print by more than 50% with resources now located in the UK, Spain, Brazil, Mexico, China and Australia.
We remain committed to add strategic resources around the globe in the coming months as needed.
We are actively pursuing our bolt on acquisition strategy outside of panels, Inverters and mounting systems, our customers purchase as much as 13 cents per watt and other products and components many of which worked directly with or are complimentary to our tracker.
Acquiring companies that make these products can be highly accretive to our margins because we can eliminate duplicate selling expenses since in most cases, we'd be selling more product to the same customers. We already have relationships with while we cannot guarantee we will be able to identify and execute any acquisitions we.
We are currently pursuing several targets now I will turn it over to neutral for an update on the quarter.
Thanks, Jim I.
I would like to begin by providing some context for comparing our 2019 versus 2020 results.
As most of you know 2020 with the first three annual step down in the ITC or investment tax credit for solar.
As a reminder, the ITC was originally put in place to support the economics of solar and provide the runway for the industry to become increasingly competitive to other forms of generation through innovation and economies of scale.
This has largely been accomplished and the marginal cost of utility scale solar is now lower than that of natural gas without subsidies in many parts of the country.
Well there is a potential for the ITC to be extended at the original level. The current legislation gradually reduces the size of the granted over three years eventually to 10%.
The result of these step downs is to incentivize customers to place orders in Q3 in Q4, and then take delivery in Q1 in Q2 of the following year.
As previously disclosed in our EPS one in road show the impact on US is to concentrate more of our revenue in the first half and the second half and that is what we saw this year and expect to see again next year.
As a result, comparing a single quarter in 2020 to the same quarter in 2019 is not necessarily indicative of the trajectory of our business since revenues and 2020 are skewed more to Q1 and Q2, while revenues in 2019 when more evenly distributed.
It's also important to note that because of the large size of many of our orders resulted in a single quarter are not necessarily indicative of what we may achieve over a full year.
Given the ITC change I will provide a brief summary of our third quarter results, including some commentary around how our results compared to our plan and they are not yet any consensus estimates available for our company and then provide comparative for the nine month period.
For the third quarter, we generated revenue of $139.5 million, which was a decrease over the prior year period as a result of the changes in seasonal order patterns that I discussed earlier.
Relative to our plan third quarter revenue beat our expectations, primarily as a result of faster than anticipated conversion and delivery of projects. In addition to more sales to smaller sized projects we.
We are seeing tractors being used in all size ranges projects with growing demand from the some 50 megawatt market.
ASP some third quarter were largely unchanged from the second quarter.
Gross margins in the third quarter were lower than the prior year period as a result of having less revenue to absorb fixed costs as well as higher logistics costs, largely driven by the global shipping constraints Ttcogen 19.
Importantly, we view both of these dynamics is short term in nature and not indicative of longer term margin pressure.
Operating expenses were roughly flat compared to prior year period.
Excluding professional fees related to our IPO and change for contingent consideration, reflecting tight controls on expenses.
We recorded an operating loss in the quarter of $5.1 million, primarily as a result of the $13.6 million charge. We took for the fair value of contingent consideration as well as $1.8 million, a professional fees and expenses related to our IPO and recapitalization.
The charge for the contingent consideration relates primarily to an earn out obligation we have with their founder in connection with his sale of the company to Oaktree in 2016.
Adjusted EBITDA, which excludes the impact of the earn out obligation.
<unk> expenses and approximately $1 million of other nonrecurring and noncash costs was $16.6 million for the third quarter, which exceeded our plan by a double digit margin.
Now turning to our nine month results.
Revenues for the nine months ended September Thirtyth, 2020 increased 64% to $692.1 million compared to $423.2 million for the prior year period, driven by increases in the volume of trackers delivered.
Gross profit increased 86% to $167.3 million compared to $90.2 million in the prior year period, driven primarily by higher revenue.
Gross margins increased 24.2% from 21.3% in the prior year period, driven by reductions in purchase materials, resulting from improved supplier arrangements and shifting volumes for certain components to new lower cost suppliers and greater leverage of fixed cost against higher sales volumes.
Operating expenses increased to $69.9 million compared to $47.3 million during the same period in the prior year, primarily as a result of the $13.6 million charge for contingent consideration and $1.8 million of professional fees related to our.
A recapitalization and initial public offering in the third quarter that I discussed earlier.
Income from operations increased 127% to $97.5 million compared to $42.9 million during the same period in the prior year.
Net income increased 431% to $68.8 million compared to $13 million during the same period in the prior year and basic and diluted income per share was 57 cents compared to 11 cents during the same period in the prior year.
Adjusted net income increased 116% to $93.4 million compared to $43.2 million during the same period.
In the prior year and adjusted net income per share was 78 cents compared to 36 cents during the same period in the prior year.
Adjusted EBITDA increased 96% to $140.5 million compared to $71.8 million for the prior year period.
We decided to provide guidance for the full year 2020 to give our new public investors additional insight into our outlook for the remainder of the year.
Going forward, we will be providing annual guidance as part of our fourth quarter and full year earnings announcements.
We will not be providing quarterly guidance in future periods.
For the full year 2020, ending December 31st 2020, we expect revenues to be in the range of 845 million to $865 million.
Adjusted EBITDA to be in the range of $156 million to $160 million.
Adjusted net income per share to be in the range of 82 cents to 86 cents.
This assumes diluted shares outstanding for the three months ending December 31st 2020.
126 million 123723 shares.
And diluted shares outstanding for the 12 months ending December 30, Onest 2020, 121 million 535154.
Our guidance excludes the impact of any one time charges expenses related to the recapitalization and IPO income or expense related to contingent consideration as well as any related tax impacts.
Now I will turn it back over to Jim for some closing remarks.
Thanks, Michael I'd like to wrap up by saying we are incredibly optimistic about the future of this company.
The drive to Decarbonize energy is only accelerating and we are a direct beneficiary of that transition.
Solar with single Axis trackers has proven to be one of the cleanest and lowest cost forms of generation and we see demand for trackers growing faster than the overall market for solar as customers convert from fixed tilt more.
Moreover, customers are increasingly recognizing the superior reliability and durability of our tracking system and that is leading to market share gains for our products.
These factors combined with our strong order book give us confidence that we are very well positioned to have another year of substantial growth in 2021.
Thank you operator, please open the line for questions.
Thank you we will now begin the question and answer session.
To join the question queue you May Press Star then one on your telephone keypad.
You will hear a tone and knowledge in your request.
If you are using a speakerphone please pick up your handset before pressing any keys.
Do we throw your question. Please press Star then too.
We will pause for a moment as callers during the Q.
Our first question is from Brian Lee with Goldman Sachs. Please go ahead.
Hey, guys. Thanks for taking the questions and congrats on a first quarter out as a oh.
A public company.
I guess just a couple questions on the model to begin with maybe can you give us what the U.S. and rest of world mix was for the quarter on revenue and megawatt.
Hey, Brian its nipple how are you, yes, we're we're not going to reporting megawatts I can give you the mix of that revenue for the quarter. It was 10% international.
And the remainder U.S.
Okay. That's helpful. And then you mentioned you pulled the Asps were flat from Twoq to Threeq you I assume that's a a comment on the.
Overall mix of business would you say that try and ASP wise were pretty similar across the two regions.
Yes, we're not seeing any any changes in the pricing environment.
Okay, Great and then maybe just kind of a bigger picture question you spent several minutes outlining the safe Harbor a.
Situation and kind of how the mechanics of that work for your business model for that was very helpful.
Is there some quantification you can provide as to how much volume you saw in megawatts in dollars and 2019 from a safe Harbor perspective, and then it sounds like you're anticipating more.
More of that in the end of 2020 in early 2001, we have heard from some other component vendors through three key learnings that facing.
They seem to be expecting a much more muted a safe harbor volume impact this year versus what they saw last year. So just trying to maybe.
Square up a little bit what what the impact might be for you.
Like could be different versus what we've heard from from some of the other technology appears that are out there. Thank you.
Yes, sure. Thanks Fran.
So yeah were worse I would say were in line with that at last year fourth quarter.
It was about $100 million of Safe Harbor orders and were seeing.
A slightly lower number here in our Q4 of this year in the guidance we provided.
Okay. Thanks, guys I'll pass it on.
Our next question is from Paul Coster with JP Morgan. Please go ahead.
Yes, welcome to the public markets and thank you for taking my questions. This morning, Jim perhaps we can just focus on the international initiative a little bit can.
Can you talk to us a little bit about the approach you're taking here is it are you sort of building it and hoping they will come in terms of infrastructure are you. Following your clients into that market. What's the timeline that investors should expect foods material change and can you talk a little bit about the pricing and margins in that manner.
Good.
Yeah. Thanks, Paul it's really the latter as you alluded to.
Oh, we're going to continue to work with our customers.
With respect to their growth in the various regions and countries [noise].
Having said that I just wanted to kind of give you a quick update we continue to expand out our resources with respect to those regions. We've actually increased the number of personnel whether its technical sales business development.
In the countries such as the UK, Spain, Brazil, Mexico, and China, and Australia, So as our customers go into those regions, we will follow accordingly.
And I would just reflect back with what people instead on asps, they remain somewhat stable and as we consider the margin performance, we're going to continue to build out our infrastructure, namely our supply chain for local content in order to cause that to be an accelerant for margin improvement going forward on the international side.
And what about timeline.
Oh, I'm, sorry, one more time.
What kind of timeline before we see materials sort of impact of international expansion program.
Yeah, we're gonna be reporting that out on an annualized basis.
So right now our sales internationally are roughly 10% and that's going to materially change as we go forward into into next year, but I don't want to provide too much guidance on the international mix for next year.
Oh, Okay. Okay April April.
People will also provide more information during the annual call on the split between international and U.S.
Alright, thanks, very much I'll hop back on the queue.
Our next question is from Stephen Byrd with Morgan Stanley. Please go ahead.
Hey, good morning, Congrats on your of course first quarter as a public company.
Okay. Thanks.
Wanted to just.
Pick up on the commentary you've laid out in the release about increased customer activity.
Discussions around some potential sizeable new orders are there any particular drivers you're seeing any trends or is this just specific to different customers I'm just curious sort of.
Of late if you're seeing something different than what you've seen in the past.
No Steven it's really the same our thesis remains the same with respect to the growth of solar overall, having said that we will be announcing in very short order a large deal with a very strategic customer.
That includes not only domestic international growth as well so our customers continue to see the value of our product and those trends really havent changed if anything they continue to strengthening on the basis of our value proposition.
Okay understood and then I wanted to just step way back and talk about U.S. policy and I know we're not.
We have a lot of uncertainty, but to the extent that there is a a U.S. stimulus package and that includes the extension of the solar ITC I just was curious sort of big picture. When you talk to your customers and when you think about the growth profile longer term.
How important that ITC is versus just the core importance of how very cheap solar has become I'm just kind of curious how you think about that that relative shift or we might see from a stimulus package.
Yes, Stephen it's really the latter our thesis remains the same with respect to the growth in solar and that is just based on its cost structure. That's really the driving force and then coupled with the Mega trends on de Carbonization and corporate America, most corporations globally.
That continues to be the fuel I would let to the individual.
Speculate on what you EPS policy would do I'm not going to comment there, but just you know are we see the cornerstone of growth being just the cost competitiveness of solar going forward and the other attributes I just spoke to.
[laughter] very fair and then just last one for me you've had a couple of questions already on sort of the international growth and I'm I'm pleased to see the increase in infrastructure that you're talking to is there a potential that you would see you know essentially enough growth. There that you want to make an investment over the next say six to 12 months.
That is you know you're spending your expenses could be maybe a little bit bigger than you had planned initially, but but ultimately you conclude that it's worth it because you just see an increased volume of ultimate revenue there how.
How are you kind of think about that cadence of spending in infrastructure you need again, I don't view it as a negative signal at all but I'm. Just curious if you kind of feel like you need to make more of an investment that may.
Maybe you had initially planned just to make sure you can connect you to comment on all the opportunity.
Yeah, Steve and that's great.
Our saying here is how much for how much every opportunity we're going to look at is going to be on an ROI basis, and if we need to invest in a set of region and put the infrastructure in place to support the customers grow and that said reason, we'll absolutely do that but we look at every opportunity on an ROI basis.
Okay perfect. That's all I had thank you.
Thanks Steven.
Our next question is from Shar Pourreza with Guggenheim Partners. Please go ahead.
Hey, good morning, guys.
Good morning, good morning.
And congrats echoing Stephen's comments on your first the first outing as a public company.
Jim You mentioned you are in the process of sort of evaluating potential acquisition targets. I know there is like sort of multiple areas of the balance the system related solar products from utility products that you sort of target, but maybe if you could just provide some color on what type of acquisitions, you're pursuing first and then sort of obviously the.
A source of funds for the acquisitions, assuming you're going to be tapping the the revolver capacity.
[noise], yeah, well first of all thanks to our I don't want to give too much detail surrounding any.
Any acquisition targets because that obviously is highly sensitive I would say with respect to those bolt on acquisitions, we do see opportunity across the board as we are selling.
To the same customers those various components and services that complement our tracker and.
And we just maintain a very healthy pipeline of opportunities that we vet accordingly.
And with respect to how we would transact I'll defer to people on that one yeah. So hey, sharp. So this obviously these bolt on EPS.
Up these bolt on acquisitions, we see we can handle with our free cash flow as well as our tapping the revolver if needed.
Got it got it and then so were a little over a month into the fourth quarter or when you sort of expect to see a large increase in orders can you just share what you're seeing so far in terms of quarters is the percentage of full year order volume in line with last year or is it a little less because last year was the first year of the ITC step down.
And then sort of how does how should we sort of think about this dynamic and 21 and 22.
Hey, Yes, I would I wouldn't.
Go back to our filing when we talked about our backlog, where our backlog was 703 million at the end of the quarter and that that was an increase.
Up 30% over 30% from the same period of last year. So we continue to see higher activity in Q4, which we feel really good about yeah.
Got it and then last one for me question, you're getting new posts gross margins were up around 3% driven by sort of the supplier arrangements year to date versus last year, how should we maybe sort of think about the shape of the margins over time, especially as you start to increase your footprint internationally and also look to renegotiate concho.
That's from your suppliers. So there's a couple of counteracting items here.
Yeah, and you know as we had we believe our margins.
That's a fair way to look at our margins is really on a full year basis and the way you know that we see our margin.
Is kind of.
What we said in the in the in the high Twentys for the full year.
Low twenty's excuse me for the full year.
Got a terrific thanks, again and congrats guys.
Thank you. Thank you.
Once again, if you have a question. Please press Star then one on your telephone.
Our next question is from Michael Weinstein with Credit Suisse. Please go ahead.
Hi, Good morning, guys congratulations again.
Yeah, just in terms of the.
Targeted acquisitions and bolt on acquisitions.
Can you give us maybe a at least an idea is are these in the U.S. or these foreign acquisitions overseas, where whereas the EPS is going to be.
Again, I don't like to give too much detail on that Michael but I would just.
Kind of point back to the synergies that we see with respect to our tracker and how that would complement the customer base.
Are these and.
On a specific types of technologies or see a technological ramp up that you are trying to achieve like what's the goal of the other bolt on strategy.
Yes, it's a complement of Bulgaria at all.
Yeah, it's a complement of technology as well as products and services and the way to really look at it is the balance of systems that we obviously want to address for the customer base. You know how we can continue to increase the value for them as well as our shareholders.
Got you and just.
Just one more from me out what other additional disclosures can we expect in future quarters, you know that go beyond what we are providing today.
So from a disclosure perspective, you know for the annual for the annual call. We'll obviously provide full year guidance for 2021, but we'll also.
Include the split on a revenue perspective from an international and domestic perspective.
Perspective.
Great.
How about on an EBITDA basis that are only going to be consolidated.
Yeah, we will provide EBITDA, obviously EBITDA guidance it will give us some color around what that EBITDA is comprised of.
Great. Thank you very much.
Thank you.
Our next question is from Colin Rusch with Oppenheimer. Please go ahead.
Thanks, so much with a fourth quarter guidance, how many megawatts are related to the safe Harbor in and how much you know I guess, how many megawatts related they are run do you expect to recognize as revenue.
[laughter].
Hey, Collyn. This in April so yeah. It for poor that guidance as you know as as its implied I would say that.
There's there's a portion related to the safe Harbor, which is.
Which is we're not going to provide the exact amounts but there is a portion that is smaller than what I mentioned in the 100 million for the Q4 last year.
Okay, and then with the backlog at the 703 million how much is related to save harder to passive harbor orders and what's the expected timeline for the delivery out on that full book.
Yes that a full book it like Oliver our backlog you know there there's things coming in and out of it but we'd expect that full book to deliver by the by the end of 2021.
Okay, Great and then just actually I'll take the rest offline. Thanks, so much guys.
Thank you thanks.
Our next question is from Jeff Osborne with Cowen and company. Please go ahead.
Hi, good morning, most of them have been asked I just had two one well the 10-Q be out today or no.
Hey, Jeff This is a as you know being up.
Going public just a couple of weeks ago.
And doing our first thank you it can take a little bit longer we expect it to be out.
Probably sometime next week it will go out today.
And just to follow up on Michael's question. The 10-Q will not have megawatts or geographic split of revenue, that's always something you're going to publish or disclose annually.
Correct. It will have the 10-Q will have that change in megawatts in R&D in a section that not the exact megawatt shipped.
So just given you have three objectives as a company I just want to focus on the first two gaining share in the U.S. and then growing internationally. How would you encourage your new shareholders to track your progress on those two initiatives.
Is it just once a year that you want to be measured on that.
No we will we will provide qualitative information.
Throughout the quarter. So, yes, I apologize that Scott will be planted that dollar numbers or figures, but we will absolutely provide qualitative figures. So so the market and the new shareholders can Paul.
Got it and then maybe just for Jim can you just touch on the decision to go after China I think in the latest wood Mackenzie report the pricing in China is about four cents a lot less than the U.S.. So certainly competitive obviously huge opportunity, but I would have thought your partners that you have in the U.S. are less focused on China's utilities.
Scale market and maybe more in Mexico, Brazil, Spain. Some of the other markets that you referenced so can you just touch on China in particular and the decision to go after that market.
Yeah, Jeff Let me clarify we're not going after the market in China, We have resources internationally, China is one where we have technical resources and supply chain resources. So as we discussed on the road show you know that's kind of where we're focusing resources for Asia. Overall, so the resources that we Havent China you can think of.
Actually handling supply chain as well as some of the technical.
Interfaces for suppliers out there.
Got it that makes more sense. Thank you I appreciate it.
Thanks, Jeff.
Our next question is from Paul Coster with Jpmorgan. Please go ahead.
Yeah. Thanks for taking my follow up question. They pulled me I'd wonder if you'd be kind enough to just sort of give us a sense of where that will stand at year end and what does the capital allocation strategy is with respect to the debt over the next couple of years.
Sure.
Yeah, we as far as the debt you know from a from the free cash flow that we are going to generate.
Let me say that the second part of your question. There. Paul is further free cash flow, we're going to generate our key is to to look at that the high ROI projects out and that and look at potential bolt on acquisitions, and then de lever to keep after that.
Three times leverage as I had mentioned previous.
Previously, but from a perspective of debt. We think it is we're going to be between 450 Fourseventy at year end, that's what we're forecasting at this point.
Okay. Thank you very much.
Good luck.
Our next question is from Phillip Shen with Roth Capital Partners. Please go ahead.
Hi, everyone. Thank you for taking my questions in terms of market share.
For next year, what do you expect it to be in the U.S. for you guys given the backlog that you see.
Yeah, Hey, Philip I'm, not going to comment on next year's share of demand.
Whether its here in the U.S. or internationally I would just refer back to me, but we'll continue to report on a quarterly basis of how we're doing.
Great. Thanks, Jim and then you know in a bunch of the checks that we've done with customers no. It seems like the preferences for truckers are quite quite strong you know some really prioritize oh and I'm savings.
Others, you know prefer and so some of the other features.
Up here is my offer just wondering you know as you guys go in and sell in and try to gain that share how do you.
Work to change these very entrenched preferences.
Yes, Philip we just continue to drive the value proposition, namely you know, where we stand with respect to Levelized cost of electricity your energy I should say, where we believe we have a distinct advantage.
Our own M. advantage zero scheduled maintenance that you know its a very highly technical sale and that continues to resonate with our customers. So really no change and how we're selling it's just really driving that value across the board with the customers.
Great. Thanks, Jim and you mentioned I think earlier Jim that.
You expect a nice order with a securities your customer to come up both domestically and internationally.
Can you talk about the number of those orders that might be.
The pipeline is it more than one or and from a timing standpoint.
I think we could hear about that customer or the other customers sometime this year or do you think it might be earlier next year.
Yeah. So we're gonna be announcing as planned tenant we Pat planned for next week, and it's going to be north of one gigawatt and it'll be projects domestic and international.
And it will talk about being able men of the said decision by that customer. So we're actually very excited about this one.
Great and then what's the mix of international business in that order.
Oh, I can't disclose that that's a customers decision.
Hi, can you share, which country or region of the world that might be in.
Unfortunately, I can't do that.
Okay, great. Thanks for taking my questions Congrats on being a public company and I'll pass it on.
[laughter].
This concludes the question and answer session I would like to turn the conference back over to management for any closing remarks.
Oh, so thank you operator and for those on the call again I want to thank thank.
Thank you again and just reiterate how happy we are with the results of this quarter.
And our outlook going forward, we continue to execute on all fronts very excited and very pleased and again a heartfelt. Thank you to everyone.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
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