Q4 2020 Verso Corp Earnings Call
Okay.
Good afternoon, and welcome to Verso Corporation's fourth quarter, and you're on 2020 earnings Conference call.
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At this time I'd like to turn the presentation over to versus Treasurer, Tim Nusbaum. Please go ahead.
Thank you and good afternoon in the fourth quarter and year end 2020 financial results for Verso Corporation were announced this morning before the market opened the earnings release as well as a set of slides to which we referred to refer to during the call are available on the investors section on <unk> website Www Dot Bruce.
<unk> Dot com joining me on the call today are Randy Knievel versus President and Chief Executive Officer, and Allen Campbell, Senior Vice President and Chief Financial Officer.
I'd like to remind everyone that in the course of the call in order to give you a better understand better understanding of our performance we will make certain forward looking statements. These forward looking statements are subject to risks and uncertainties should one or more of these restaurants certainties materialize for sure underlying assumptions or estimates prove incorrect actual results may vary.
Materially from managements expectations, if you would like further information regarding the various risks and uncertainties associated with our business. Please refer to our as you see filings, which are posted on our website for serco dot com under the Investor tab.
In addition, during today's call, we will discuss non-GAAP measures, which can be useful in evaluating on performance.
The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP and reconciliations to comparable GAAP measures are available in our earnings release.
At this point I'd like to turn the presentation over to Randy.
Thank you Tim.
Afternoon, everyone turning to slide for 2020 was a challenging year for the global economy, our industry and verso and.
In spite of those challenges we have continued to make progress executing on our objective of aligning our graphic web and feed offerings, the customer demand and improving the fundamentals of our business as we move into 2021.
I am proud of the team's ability to make sure our customers are receiving the best products and uninterrupted service.
This work is not yet reflected in our EBITDA performance.
Safety is a core value of verso.
We ended the year with a total incident rate appoint nine one which is a significant improvement over the one point to three we posted in 2019.
Our fundamental commitment, but is to keep our employees safe and healthy.
And I am proud of the work the team has done and continues to do.
We remain focused on cost management, while maintaining high standards for our products and customer service.
For example, on wood, which is a significant spend for the company. We have negotiated a reduction in the price of wood source for our Michigan bells.
While the past year has been challenging we are seeing more favorable supply demand dynamics in the industry.
Which we believe creates a significant opportunity for verso.
North American demand exceeded capacity through the quarter sequentially.
Sequentially, we saw revenues grow modestly to $314 million.
We service the increased demand increased shipments from inventories, while taking 66000 tons of downtime.
This contributed $82 million on free cash flow from finished good inventories.
The EBITDA impact of the downtime was a negative $13 million.
So wanted to reduce its finished goods inventory to be better aligned with projected needs going into 2021.
We are seeing the recovery in commercial print markets.
And the combination of reduced capacity and lower imports in the industry is resulting in a better business environment.
We are still managing through the pandemic. So we don't want to be too optimistic, but we feel that our proactive measures have positioned us for the future.
Finally in Q4, we continued to return capital to shareholders paying $3 million on dividends and repurchasing $7 million worth of shares.
For the year, we returned a total of $141 million to the shareholders.
Turning to slide five.
I want to spend a minute on the industry as a whole.
The structural demand decline in the demand of our products.
Has accelerated it was accelerated because of COVID-19.
And the industry has responded by rebalancing capacity.
Last year 360000 tons of coated free sheet capacity.
Were removed in North America.
Including the midyear idling of vessels, Wisconsin Rapids balance.
Wisconsin Rapids had on annual capacity of 540000 tons.
A total of 1.5 million tons of capacity was removed globally.
Since Q2 as things began to slowly recover we have seen an uptick in demand which is encouraging.
Specifically, we have seen stronger recovery in the commercial print market.
The demand environment, together with lower imports resorbs and stronger shipments from North America Mills.
Obviously, there are many challenges ahead of us, but we are cautiously optimistic about the future.
Most importantly, we are managing the elements of our business that are within our control by returning to our core strengths, which will help us drive improved financial performance as demand returns.
Turning to slide six.
I want to review some of the key principles of our strategy.
Number one.
<unk> goal is to ensure we are a customer centric company, we take pride in our efforts to deliver the best graphic specialty and pulp products offerings with the highest level of service.
Versus all spent time listening to our customers and working with our team to make sure. We are doing everything we can to support our existing relationships and to grow our customer base in key markets.
We are focused on our industry, leading graphic papers, both sheet and web offerings.
And we are leveraging the strong reputation of our well established brands like Sterling premium and anthem plus.
Second our.
Our streamline operations allow us to be nimble and react quickly in these uncertain times and to better service the needs of our customers.
We have also focused resources to reduce the cost of our manufacturing at our mills.
Third we are on a good position to capitalize on the rebalancing that is happening in the industry as demand continues to exceed supply.
Finally.
We are strategically investing in our business with targeted capital improvements slated for 2021 and 2022.
We believe the steps we are taking include capability upgrades, we excuse me.
We believe the steps we are taking including capability upgrades will provide a fast return on investment and enhance our customers experience.
Product and operational innovations are vital to sustaining and growing firms those customer relationships.
With that I will now turn the call over to Allen to review the financial performance.
Allen.
Thank you Randy turning.
Turning to page eight we show our income statement for the fourth quarter we.
We delivered $9 million of adjusted EBITDA in a very challenging quarter.
As you can see operating income and net income were both negative for the quarter as we accelerated depreciation on our Duluth mill and recognized a significant loss for the quarter on our idled and closed mills.
Additionally, we took $13 million downtime in the quarter to better position ourselves to enter 'twenty one.
Average total price was down $66 a ton if we exclude the sold mills from prior year.
While tons fell substantially.
Sequentially, our tons were up slightly from the third quarter and paper was the higher mix of our total sales, causing our total average price to be up $3 a ton versus the prior quarter.
Price seems to have bottomed out in the fourth quarter as we've also cleared some excess inventory related to our closed an idle mills.
In a year, where our revenues were impacted by Covid, we still manage to keep our SG&A costs close to 4% of sales as a result of all the initiatives we have had in place.
On page nine we bridge, our adjusted EBITDA from the fourth quarter 2019 to the same quarter in 2020.
Our two 2019 results included $11 million of adjusted EBITDA related to our sold mills. Therefore, we pegged our remaining mills at $63 million from 2019.
The slow business environment contributed $34 million of decline with price mix of $19 million and average price decline of $66 a tonne. While we also took downtime to balance inventory.
It was a swing of $12 million versus same quarter prior year.
On another Cogs for primarily unfavorable due to swing in inventory valuation year over year.
Also note that we had a favorable $13 million on income in 2019 from lump sum pension buyouts that did not repeat in 2020.
On the positive side and put in place and freight were $2 million favorable and SG&A was $3 million lower.
We highlight our strong fourth quarter cash flow on page 10.
Cash increased $64 million in the fourth quarter.
This even after accounting for $10 million of stock buybacks and dividends and incurring $34 million of closed an idled mill cost.
Cash from operations was $91 million positive.
This was driven by a $94 million improvement in working capital as we significantly reduced our finished goods inventory as we said we would.
We expect to close an idled mill cost to be lower each quarter in 'twenty one.
We also monetize some assets and received a working capital adjustment on our prior mill cells, combining for $17 million inflow in the quarter.
Our liquidity remains strong despite some limitation on our ABL facility, given a lower asset base and as you can see.
In effort to try to show her ongoing show our ongoing business and highlight our gross margin for Quintiles second Escanaba. We've added we've shown you on page 11, what their numbers are on that for a full year basis.
Please note that we took substantial downtime in 2020 at these two mills, which hampered their price financial performance, which along with the Covid environment for three quarters last year. We gave you. The 11.8 that we show on this page.
In addition to the traditional products that these two mills will operate a sheeting facility that will improve the overall mix of the business and an additional $15 million to $20 million a year going forward. While also working on significant initiatives to help improve our operating costs.
Turning to page 12.
I want to walk through our pension measurement that we did that we did at the end of last year.
Recall that we had to do a re measurement in quarter, three which is related to our significant closing an idling activity.
Which given the lower asset returns debt that time increase our net unfunded benefit obligation from $369 million at 12, 31, 2000 $19 million to $435 million at the end of quarter three 2020.
With a turnaround on our asset performance more than offsetting other actuarial assumption changes, we're now showing a net unfunded P. B O obligation of $350 million.
We have included a table highlighting the changes from the third quarter and I'm going to take just a short better time to go through the table on the right, which walks 2019 year in to the 2020 year end.
During this time period, we contributed $49 million of cash to our pension plan.
We transferred $37 million in net liability on the sale of our Stevens point and Androscoggin mill.
So recognize the small settlement gain from our 2019 buyout program that carried over into 2020, which amounted to $9 million.
Interest rate decline, along with mortality table and other assumption changes negatively impact the net unfunded amount for $115 million, while interest and service cost increased liability by $48 million.
Our return on plan assets generate additional $87 million in 2020, which reduced our net unfunded amount by the same.
Remaining balance should be very manageable over the next few years.
Moving on to page 13.
We spent a considerable amount of our on our idled and closed mills in the fourth quarter.
This came as we incurred severance.
The nice contract buyouts and made progress on site preparation and when Earth station.
We expect our costs to decline each quarter from here as some of the costs will not repeat and we will look to obtain a restore value for these assets.
We did receive $9 million on look asset sales in the fourth quarter and are looking to realize more this year.
We are not on positioning dance anything specific regarding Duluth, Wisconsin Rapids or other assets at this time.
And then to note that discussions and option of valuations continue.
On page 14, we have summarized our return of capital to shareholders.
Last year $111 million was returned via dividends and $29 million via share repurchases on open market and 10 B five programs.
We continue to have open authorization for share repurchase and recently declared another 10 cents a share quarterly dividend for the first quarter of 2021.
Continuing on to page 15, we provided an outlook for the year.
We expect to make more investment on our mills with capital spending estimated to be in the $45 million to $55 million range.
In addition to the regulatory baseline maintenance projects, we plan to spend capital improving our capabilities and product offerings as Randy mentioned earlier, which will generate reasonable returns.
Pension contributions are targeted to be from $42 million to $46 million for the year.
And we expect cash flow from operations adjusted EBITDA, plus working capital change to exceed cash needs for above mentioned items and cover our quarterly dividend requirements.
We note that idle and Mil cash costs should decline each quarter as we continued to advance potential realization of asset sales or other value added opportunities.
With that this concludes my section I'll now turn the presentation back to Randy. Thank you Allen.
In closing I'd like to summarize a few key takeaways from year end.
Through difficult times, we've kept our people safe and will continue to be our core value.
As business conditions improved we've been able to implement price increases across our product.
Folio.
We are a customer focused business and are proud of our effort to deliver the highest quality products and it's just strive to provide excellent customer service.
We continue to focus on cost management, and our streamlined business positions as well.
We know what we do well and that is why we are reestablishing our leadership position in graphic papers, both sheet and web offerings, which should propel us forward through 2021.
Finally, it is important to acknowledge that all the efforts we are going on that are going on require significant engagement from our employees.
Which is a focus for verso in 2021 and beyond.
With that we'll open it up for questions.
Thank you Sir we will now begin the question and answer session.
So asking question on their first started in one on you touched on from you'll hear a tone on to confirm you've entered the queue.
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Today's first question comes from Jeff, Brian singer with B Riley. Please go ahead.
Hi, everyone.
Wondering if you can speak more about the inventory picture and supply demand picture in the broader marketplace, maybe how your price increases are being received in the marketplace. In Q1, what we should look for order of magnitude in terms of volume and pricing in Q1, I know youre not going to give guidance, but just any any color around that.
Either year over year or sequentially, and then I know you've removed cost, but just wondering if there are further cost you can remove at this point.
Okay. Thank you so <unk>.
I'll try to hit everything if I Miss something let me know.
Okay, we we pulled our inventory down significantly through the last four to five months of the year.
We still have inventory to take out this year and.
We'll get down to somewhere below 200000 tons ton range in our inventory with that we've been able to get out of some warehouses and that certainly helps our cost position.
Price increases are.
Have a I would say, 95% and implemented.
Everything has gone well haven't I mean customers certainly ask questions, but I think theres, an understanding with the current demand and the current capacity and the inventory levels that are there.
These price increases where warranted and again they were across.
Our entire portfolio, whether that's our specialty pulp or our coated freesheet and coated groundwood.
The last question was are there costs to continue to pay be taken out on the the answer is Ah <unk>.
Very strong yes.
We have started putting.
I guess movements in place in our mills and we're starting to see the.
Outcome of some of those but that's going to take a while if you have to spend a little bit of capital. It takes a while to get the.
Equipment, and then get it installed so I expect by the end of the year the run rate cash cost will be.
It will be quite improved from where we are right now mainly driven by the in the mills.
So does that hit all your points.
Do you think you got them all and then I have another multi part question. If you can bear with me.
Just wondering if you can speak more about your overall strategy to improve product offerings in 2021, I know you touched on that.
And then are there any wine conversions that you might be contemplating or is that pretty much not part of the not part of the plan. This year and then anything on downtime we should anticipate.
And then maybe just obviously a lot of capacity has exited the marketplace.
Maybe you can just speak a little bit more to how youre thinking about the opportunity to gain market share, particularly in graphic.
Okay again, if I Miss something.
Come back.
First off we are.
We're trying to expand the range of.
Grades that we produce on our existing machines that includes we mentioned some capital investment where we're in the final stages of evaluating putting a new former on.
Our number one machine at Escanaba, which will give us the ability to make a I guess the more heavier cover stock grades.
Right now that in machine struggles above a certain grade range from and this should get us up to be in that.
Cover arena, which is a very well priced arena and it should be great from the productivity of the machine.
We've also spent little pieces of money on vacuum and again to make higher.
Higher weight sheets to get the water out of it and also to handle the sheet better on the machine on through the corner.
We are doing similar things on <unk> 41 again.
At the point of a b.
Right to ask for the capital and that is to put on new former on Q 41.
And to also put a new head box on Q 41.
The former is to allow that machine to go up and make heavier weights.
So the the Daisy chain as we take Lightweights, the lighter weights off E. One and move those to Q 41, and we put a more heavy weights on Q 41 that machine makes more production.
And again on a very well price part of the market.
We're also putting a new head box on we haven't been pleased with the.
Fundamental quality of our sheet of Quinto sect to make sheets, it's Tim.
It is a good sheet was very good and well received in the web based printing, but on sheet printing, we have to improve it and we recognize that and so we're moving forward with that project also.
As we move our Q 41 up and wait we can then take some of the lightweights off of it and put that on Escanaba four so it's it's a it's a big Daisy chain.
But those are some of the things we're working on.
And I'm, sorry, sorry repeat the rest of your question.
Sure sure no I was just wondering if theres anything we should anticipate in terms of downtime this year and then I.
I guess just you know.
It sounds like Youre really creating efficiency in your your operating debt.
On potential quality of the of the paper that you can supply.
And I'm, just wondering how youre thinking about taking market share given all the capacity that's taken it exited the marketplace.
Okay.
As far as downtime, we don't forecast that.
But so.
So far it's looking pretty good I guess, that's all I can say, we're not we're not going on a project that at this time.
We are doing our level best.
As you just mentioned, we're improving quality, where we're raising our our range.
Capabilities, we're doing our level best to try to.
Gained market share focused mainly in the Midwest, which is a large market that's right in our backyard and we feel with.
Our mills and how we can take cost out we should have a very strong competitive edge because of the shipping cost into Chicago has very little so we're hoping to gain share there on them to the extent that we can build a moat around it so that we have a nice business there, but we're also trying to.
Gained share in other areas that are freight logical for us.
Yeah.
Okay. Okay very good. Thank you for taking my questions and best of luck.
Thank you.
And our next question today comes from Mohammed coarse sand with Dws financial. Please go ahead.
Hi could you just describe the current demand dynamics in the industry. You you were saying, it's outstripping supply is that just a function of.
People spending more or is it just a function of that.
The printers are now operating again, because COVID-19 shut them down.
Well, it's a little bit of less capacity and the printers coming up out of the Covid.
Depression that we were in.
Certainly can't say that it's.
<unk> back to where it used to be.
But it seems to be balancing and slowly.
Inching up on one way or another.
That's pretty well across the.
You know, whether it's graphics or specialty or pulp demand is.
I won't say strong but its okay.
And have you seen.
A seasonal decline in Q1 like you have in previous years or is it just the sequential improvement so far.
It's been justice was quite sequential improvement I guess, where.
Q1's got off to a good start.
And how is this going to play out as you go into the peak period of the year as far as just having adequate supply and also potential.
Potentially as far as pricing is concerned.
Well as far as supply.
We are we hope to have our capability some of the new ones in place.
And that will give us a little more supply, but it's going to be a challenge I think we are.
We're doing everything we can to get positioned in to make sure. The inventory we have are in the right grades.
But it's going to be a challenge I believe.
I don't we don't usually talk much about projected price increases, but we will you know if we have a chance, we'll probably try to increase price.
Well, let me ask it this way.
History trade group is projecting two to three price increases this year. It is.
Environment that kind of situation, where it's that tight.
Well, that's third projection and I hope, they're right, but I really can't comment on how they came up with it but.
Again.
We're having a good quarter and.
We'll just have to see what the rest of the year brings.
Okay and then my last question is in previous slides you had mentioned that the two mills escanaba on the corner.
They were operating with our margins quite higher than this this past quarter is that purely a function of volume and could you see that being a higher this year given that your.
Running them at a higher level.
Utilization rate.
I'll comment first and then Allen can can give you more details but.
You know, we talk about 66000 tons of downtime last quarter.
And the 13 million that I talked about was unabsorbed fixed cost.
And that comes nowhere close to the true cost of.
Taking big paper machines down on bringing them back up.
So.
Downtime.
Severely.
Inhibits your margins it also and I hope we don't get.
Really good at this but.
You can get better at taking costs out when you go down and we made good efforts but.
We could not get a lot of the costs out that we.
To cover the downtime.
But you know we're working on.
Ways and if we ever have to do that in the future that we can get more cost out. So Allen do you have anything to yeah. I think if you look at where we'd like to B is if you run those two mills full.
We're talked Randy talked about earlier about increasing their weights.
We talked about having more mix of sheets business on those two mills versus what they traditionally make.
If you run them full you get heavier weights you got a better mix of product and then you got some programs to reduce costs and improve quality.
Those would give you some tailwind to a higher margin number.
Would that margin number be hired on what you've previously published or just purely hard on what you guys reported for Q4.
Well, we reported on those two mills, we reported now three quarters worth of margin.
The last one obviously had a almost a full year of COVID-19 and some downtime. So we would say that would be moving.
Disappointed to stay on that range.
The first one we reported was more in the.
300, 400 basis points higher than that.
And that had.
A little bit of Covid impact in it.
So I think your assumptions could could be that.
Without in a more traditional better mix you should be able to exceed those margins that we reported in prior quarters for those two mills.
Great Alright, thank you.
Thank you on our next question today comes from Adam Ritzer, a private Investor. Please go ahead.
Hi, Thanks for taking my call just a.
A follow up question regarding the supply demand characteristics.
What what is actual capacity now in the industry with all the capacity taken out.
Okay.
I'm, sorry, Adam say it again.
What do you think the capacity in the industry now is with the 360000 tonnes taken out.
In 2020.
It's roughly two points five to 7 million tons I believe.
For Covid, yes.
Yeah, Okay. So that so if you annualize the 640 debt you gave as demand that kind of gets you what you're thinking that demand exceeds supply is that the right way to look at it.
Yes, yes.
Got it from that that explains it.
My other question is you know based on your guidance.
I guess gets you to somewhere above 100 million EBITDA in 2021.
Do you like walk through.
Our Q4 results and how you get to above 100 million on 2021.
Oh, we didn't do that but as you can see that as you as you mentioned.
You would back out you would back out add back the downtime.
Right.
You would recognize the price increases that have been announced are anticipated.
And you overlay your cost structure.
And I think you can get there.
But does that also include the additional margin from the seeding strategy.
That does.
So the sheeting then yes that that's included in that.
Walk that you just mentioned.
Got it.
On two other questions B.
What do you think the run rate EBITDA run rate now.
Now.
You know what that's a good question I don't have at hand.
Because we are doing we just did one deceleration.
Adam Let me look at that.
Okay, that's fair on.
In terms of SG&A I know you you did about 15 million in Q4.
But you're also talking about 4%.
SG&A percentage of sales.
Is is the 15, a good run rate to use or is there improvement upon that.
2021.
We that should be kind of like the top and we should keep modifying that a little bit as we go on during the year. So that apps you you Wouldnt take if you took it times four you should show an improvement from there for the year.
Got it okay I appreciate it thanks for answering my questions. Good luck Sir.
Yeah.
And our next question today comes from Marty Lane with TCW. Please go ahead.
Hi, This is Jeremy true.
First question is.
Well their product innovation are you targeting any new market segments.
Yes.
Uh huh.
I guess to say a new market segment no. We're just expanding in the markets work.
Going to a broader range.
Kind of service servicing on a current customer none this is gaining new customers in other areas.
Well, we hope to gain new customers with some of the new products yes.
The second question what are you on.
Monetize your inventory.
<unk>.
Are you selling them on it.
Gain from where you're carrying the inventory at or at a loss.
We generally make we had some exceptions to that because we had some tails here and there on some of the mills, we close but.
<unk>.
We carry our inventory at lower cost to market. So we shouldn't be taken a loss on any of it. It's just some one offs ones that maybe are in there, but that's it.
But what's the typical gain from where you're on.
Net.
Carrying costs.
I wouldn't you know that we've changed the price on all of our products.
<unk>.
It varies from a few dollars to several hundred dollars a ton.
Okay.
Mhm.
And ladies and gentlemen on as a reminder to ask a question. Please press Star then one on our next question comes from Kevin Basin that would be our age. Please go ahead.
Hello, Good afternoon.
Hello, I had a couple of questions just oh kind of just tackle them individually I just first wanted to clarify a little bit on the sheeting strategy from what I understand on all the Europeans historically of controlled a big chunk of that market and does your strategy sort of dovetail with the Europeans.
Obviously, the huge shuts from store et cetera.
Them pulling out of the market a little bit does that open up room for for you guys to sort of penetrate that cheating market more is that a little bit behind that strategy or or.
Or what's driving that.
Well, that's that's a little bit of it I think more.
Again more than that I'll go back to what I talked about.
No.
We have some very good mills.
And.
Maybe a European supplier can compete with us on a cost basis.
On the East coast.
But in the Central U S. We think we have a cost advantage.
And we certainly have a service advantage I mean, if you are buying sheets from overseas, you're probably 90 days out from.
GAAP cash being laid out.
We were more much better than that so we just think we have a competitive advantage on.
At some level where.
We haven't taken advantage of that we think we can take advantage of that and gain share.
As the price of shipping Ocean freight and some exchange rates have changed.
That's even became more prevalent so.
I think the current world is helping us a little bit with with container shortages and stuff, but we think in the central U S. Weaken.
Easily gained share.
And it's important to note that we are in the seating business with our Rapids mill.
And we closed that May also we're continuing to support the business that we had before.
And now we're changing the model, where we can produce the.
Rolls to be seated at Escanaba and Quintus sick.
So it gives us additional products.
On to two mills, so it's not a product we have made before we've been in we sold to customers.
We're tweaking our product mix on a breath, but.
It's a business we service, we've been in and where.
It will be one for us going forward. So that's one point I wanted to know.
Yeah, Good point about our Wisconsin Rapids, because that's true you did a lot of the sheet at stuff up there. So obviously you have to.
Step into that that market. The other one that just it was just a little puzzling I guess, just looking through to the end markets and this.
The push more to some of the heavy weights.
Everyone you talk to everyone seems to be talking lightweight lightweight lightweight and yet you're moving in a heavyweight. So what's what's sort of driving that market opportunity is there just a shift from sort of the end demand or something from other producers leaving that.
It's an area that we didn't necessarily plan as much but we did it rapids. So we had heavier weights at Rapids, we did not at our other two mills as much. So now we have to bring their capabilities up to what rapid stayed before so it's more on concentrating on what we have left versus what.
He did before.
Perfect. Okay. So a lot of this is trying to step back into some of the markets and and things you were able to address with your Wisconsin mill. So.
One one just final question just on <unk>.
I understand there was a price increase that was put out on the coated free grades yesterday I think it was on.
You guys announced the customers is that and that's covering just the web grades. It doesn't go on the sheet are at.
At this point.
That's correct okay.
And that's April 1st I guess was the implementation of that.
Yes, Okay perfect. That's it for me thank you.
Okay. Thank you.
Ladies and gentlemen. This concludes the question and answer session I'd like to turn the conference back over to the management team for any final remarks.
Thank you everyone for your time on questions. We appreciate your support and look forward to speaking to next quarter.
Thank you Sir. Thank you concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.