Q1 2021 Ranpak Holdings Corp Earnings Call
Good day and thank you for standing by welcome to the rents have Q1, 2021 earnings call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask the question. During the session you will need to press star one on your telephone.
Please be advised that today's conference is being recorded.
The require any further assistance. Please press star zero I would now like to kind of the conference over to David Joe Chief Financial Sustainability Officer and Secretary. Please go ahead.
Thank you and good morning, everyone before we begin I'd like to remind you that we will discuss forward looking statements as defined under the private Securities Litigation Reform Act of 995 actual results may differ materially from those forward looking statements as a result of various factors, including those discussed on our press release and the risk factors identified in our annual report on form 10-K.
And the other filings with the SEC some of the statements and responses to your questions. On this conference call May include forward looking statements that are subject to future events and uncertainties that could cause our actual results could differ materially from these statements ramp back the assumes no obligation of does not intend to update any such forward looking statements you should not place.
Undue reliance on these forward looking statements all of which speak to the company only as of today.
The earnings release, we issued this morning of the presentation for today's call are posted on the Investor Relations section of our website the call.
Copy of the release has been included in the form 8-K that we submitted to the SEC before this call. We will also make a replay of this conference call available via webcast on the company website.
The financial information that is presented on a non-GAAP basis. We've included reconciliations to the comparable GAAP information. Please refer to the table on slide presentation accompanying today's earnings release lastly, shortly we will be filing with the FCC. Our 10-Q for the three months ending March 31 2021.
<unk> will be available through the SEC or on the Investor Relations section of our website with.
With me today of Omar <unk>, our chairman and CEO Bill <unk> our CFO.
I will summarize our first quarter results of Bill will provide some additional detail before opening up the call for questions with that I'll turn the call over to Omar.
Thank you David Good morning, everyone as always I hope everybody listening in and their families are staying healthy.
2021 is off to a very good start for ramp back the first quarter was a record quarter driven by the continued robust demand for our products in Europe and Asia.
Our team coordinated globally to serve our customers in these regions on I'm incredibly impressed by the way our organization has come together.
Once again I must make the point to recognize in particular, the hard work and contributions made by the ramp back employees, who continue to show up every day to our manufacturing and converting facilities across the globe.
Without them, we would not be able to place our equipment at a double digit clip or achieve the outstanding topline growth we saw in the first quarter.
Our end users and customers rely on brand back to keep their businesses running seamlessly and protect their goods while at the same time signal linked to the world that they are focused on the impact of their supply chain has on the environment.
Ramp up of team members take great pride in fulfilling these obligations and continue to go above and beyond to meet our customers' needs.
Would not be more proud of our team.
Throughout the pandemic, our utmost priority has been the health and safety of our employees and customers. We remain committed to following the advice of the CDC and other medical professionals around the globe to protect our team of customers.
As we enter the vaccination face we are committed to helping our team members who choose to get vaccinated to do so with the paid time off as needed.
Just the scope of it had its initial impact on the world at different times. So does the vaccine rollout of certain regions are further along in getting their populations vaccinated.
We are monitoring this closely on taking a local and regional approach to expanding the abilities of our employees to ramp up business activity and returned to slightly more normal rhythm.
Because we put our employees' health and safety first we're being cautious and we will take a measured approach to bringing back groups of employees to the office first in North America, and then elsewhere as vaccination rates improve.
As the company, we continue to be laser focused on execution in growing our business, we're implementing our growth strategies by adding technology hiring the talent and improving our capabilities in key expansion areas.
Our new products are gaining a lot of traction in all regions and our retail rollout, which we pause in the spring of 2020 is off to a great start this year with solid adoption in a number of key retailers both online and in store.
Our investment in ramp up automation continues with building out our team in North America with the particular focus on artificial intelligence and robotics.
We are on offense in all areas of our business.
I have previously said on numerous occasions that I believe we are still at the beginning of the sustainability and automation Super cycle and that ramp back is making the investments needed to position ourselves for long term success.
From an operational and supply chain perspective.
We're pleased to continue to report that operations at each of our global facilities continues uninterrupted life.
Like many other global businesses, we're navigating through longer lead time of sports remain backlog and shipping goods CFO truck or air has become more expensive.
We're taking the necessary steps in our business to ensure we are meeting the needs of our customers and getting products to them when they need them.
Commodity prices within the protective packaging, where the resin or paper have increased the started the year. So we are working with our suppliers as well as customers to ensure we are all being good partners in light of the current macro environment.
Fortunately the cost of competitive substrates like resin based plastics has increased significantly.
So overall, we are pleased with our competitive positioning and feel this is an environment where paper solutions are very attractive.
While the near term environment, maybe more volatile I remain very constructive on our outlook and the ability to grow our business.
I am happy with the strong results of the first quarter as the team continued to execute and advance key ramp back initiatives for the quarter consolidated net revenue on a constant currency basis increased 31, 2% to $85 million driven by robust demand for all of protective packaging products as E. Commerce is written.
<unk> elevated and we have seen improvements in industrial activity globally.
North America returned to growth as net revenue increased three 7% year over year with wrapping leading the way.
We continue to see strong adoption and trial activity of our newer products as well as increased focused by end users on sustainability and the automation offerings.
Our enhanced commercial capabilities are getting traction in North America, and with the level of trial activity, we have seen to start the year and the increased focus on the environmentally friendly solutions, we feel that North America is very well positioned.
I believe just like we did in Europe, North America will follow suit and we expect it to deliver meaningful growth for the rest of this year.
Performance in Europe continues to be extremely strong with all applications up meaningfully year over year continue.
Continuous e-commerce growth across almost all territories drove void fill the performance with specific strength seen in the northern regions of Europe and in particular the U K.
We saw a continued rebound of industrial activity with the automotive and general manufacturing sectors in Germany, France, and eastern Europe picking up momentum in the quarter.
Wrapping continues to penetrate further in the region as Archie Ami products get solid traction of retail and ship from store.
In Europe sustainability is often highlighted by our end users of the reason for the switch from plastic based in the box packaging paper applications.
While we are extremely pleased with the sustainability tailwind we at <unk> are always focused on delivering the top solution in the marketplace.
We'd like to demonstrate to our customers how will we compete on speed reliability and cost and rely on the sustainability of our products is the icing on the cake.
In Asia Pacific, We had a very strong performance across the board, indicating a recovery in industrial and electronic market segments, along with the continued strength in e-commerce.
Within the region higher labor cost areas, such as Australia, Japan, and South Korea took the lead in driving growth in.
In particular, Australia is experiencing significant growth driven by the switch to sustainable solutions and further and further development of E Commerce.
Overall, we're very pleased with the level of activity in the region we.
We feel great about our ability to further penetrate the region as trial activity is robust and we have signed new distribution partners in Australia, Indonesia, and South Korea to help us expand our presence in constant currency terms adjusted EBITDA of $28 million was up 55% year over year due.
The higher sales volumes relatively steady input costs and greater operating leverage compared to last year.
Those are the high level points on our excellent start to the year in summary, we continued our focus on safety of our employees responded to strong demand and continued to invest in future growth opportunities.
With that let me turn the call over to Bill who will give you further details related to the quarter.
Thank you Omar in the deck Youll see a summary of some of our key performance indicators. We will also be filing our 10-Q, which provides further information on the impacts operating results.
Machine placement continued its steady increase as we placed over 3000 machines in the quarter up 12, 9% year over year to more than 120000 machines globally.
Consistent with recent performance Cushioning systems grew four 6%, while void fill installed systems increased 13, 5%.
Wrapping continues its rapid expansion grown 31, 7% year over year is on the way to becoming a meaningful contributor to our top line.
As Omar mentioned overall net revenue for the company in the first quarter was up 31, 2% year over year on a constant currency basis, driven by strong performance in Europe, and APAC as well as growth in North America.
Net revenue for cushioning and void fill applications, both increased more than 30% over the prior period and rapid and continued impressive growth improving more than 41% year over year.
On a constant currency basis gross margin for the quarter was 41, 3% compared to 42, 3% in the prior year with increased freight and production costs being the primary drivers of the slight pressure on margins.
As Omar mentioned freight cost globally are up due to rapidly ramping up of trade activity and congestion that ship channel.
While we do expect these trends to continue throughout 2021, we believe a portion of the pressure we experienced was transitory at some of our paper suppliers in North America experienced unplanned downtime due to the company specific issues and severe weather in the southern U S in February which impacted their operations.
To offset this we expedited sourcing from alternative suppliers, but then on network and incurred cost moving paper among our debt facilities.
Additional production costs related to temporary labor overtime, and higher operating expenses to support elevated volumes and manage the supply chain disruption also impacted gross margin in the quarter.
Adjusted EBITDA grew 54, 7% year over year due to increased sales of the benefit of operating leverage on our SG&A.
Margin improved approximately 500 basis points, resulting in a margin of 32, 9% compared to 27, 9% in the prior year.
Cash interest expense for the quarter was approximately $5 $5 million and should remain consistent for the remainder of the year as the majority of our interest exposure on our USD tranche of hedged.
Capital expenditures for the quarter was $10 9 million comprised largely of increased placement of converters as well as investments in projects.
Demand has been robust, especially within wrapping in void fill we've been actively growing our installed base throughout the year and placing converters across the globe.
Lastly, our balance sheet remained strong as communicated on our previous earnings call. We made an $8 $2 million, one time exit payment to our lender in the first quarter license driving the decline of our cash position to $40 5 million as of March 31.
We also made the decision to increase investment in working capital to build of inventory due to the momentum of the business and to reduce the risk of longer lead times of the supply chain.
The $45 million revolver is undrawn and fully available to us should we seek additional liquidity.
Our leverage from the bank adjusted EBITDA standpoint, the three five times at the end of the quarter.
As you may have seen the SEC came out with the statement on April 12, which introduced new interpretation of the accounting guidance to warrant structures that are comment the special purpose acquisition corporations the.
On the FCC's perspective is that some spec warrants should be presented at liabilities on the balance sheet and mark to market each period.
As you will recall, we eliminated all warrants on our structure in September of 2020.
We've done the analysis of the warrants that were previously president of our structure and managements preliminary conclusion with the assistance of outside advisors is that the accounting impact is immaterial to our results in prior periods.
This of course subject to review by our auditors, which is currently underway.
It is important to note. However that if there are any potential changes. This change does not impact our financial performance results reported for <unk> 'twenty one than in previous periods will not impact any of our key operating metrics any of our GAAP metrics above operating income or any of our non-GAAP metrics to the X.
Sent necessary, we will update you on the 10-Q on as filed with the.
I'll turn it back over to Omar before we move on to questions.
Thank you Bill to summarize I am very happy with the exceptional first quarter results and the teams the ability to manage through unprecedented demand in Europe and APAC for this time of year.
I'm also happy with how we are navigating supply chain challenges across the globe without missing a beat.
I think of the results speak for themselves and the team should be very proud of the strong start.
That being said it is only one quarter and as I have shared with many of you on the past we are more focused on achieving robust long term growth rather than quarterly results to build shareholder value.
With that long term mindset and vision, we continue to capture the many tailwind in our business and although we do not want to update our annual guidance based on any one quarter.
Given our advocacy for long term thinking it is fair to say that our current expectations for the remainder of 2021 are very strong and we expect to outperform our plan for the year.
We remain enthusiastic given the positive macro environment and strong customer trends, but more importantly, we feel very confident about our ability as a company to deliver outcomes that.
That being said the world is still experiencing many uncertainties, especially as it relates to the vaccine rollout the pandemic and economic conditions.
The team our continued expansion across the across the globe is paramount to our long term vision and we feel very good about the momentum of our business and all regions demand is robust for all of our key product lines and we are getting good traction in our investment initiatives.
Our brand building and stepped up digital marketing efforts are also taking hold and raising the awareness of the benefits of environmentally friendly protective packaging.
Lastly, I hope you all saw our 2020 ESG impact report, we published earlier this month.
It provides new on the updated performance metrics on context related to our environmental sustainability efforts, our commitment to our employees and communities and corporate governance.
We also laid out of aggressive targets on commitments for the next decade, namely <unk>.
Reduce our greenhouse gas emissions by 46%.
<unk> in aggregate paper supply consisting of at least 75% recycled paper.
Also of <unk>, 5% of our total supply from post consumer waste or alternative faults and lastly, sell 100% of our paper products FSC certified.
Our pledge is to obtain all of these goals by 2030.
Like all aspects of our business, we are committed to constant improvements on our ESG journey and.
And we will keep you updated as we hit these key milestones with that thank you again for joining our call I will now open it up to questions operator.
Thank you.
Tom If you would like to ask the question simply press Star one on your telephone keypad against you asked the question. Please press star one on your telephone keypad.
Your first question comes from the line of Greg Palm from Craig Hallum. Your line is now open.
Yeah, great. Thanks, Good morning, Bill Hey, Omar really good quarter here. So congrats on the results. Thank.
Thank you. Thank you Greg good morning.
So I guess first question on.
Geographics.
Europe APAC was was clearly the standout again.
And maybe you know I think I asked the same question on last quarter, but what exactly are you seeing in those regions. How much of the activity is driven by new customers versus entering new regions, you talked about some new distribution partners, but it's the growth. There is just incredible and and then sort of ice.
First the.
North America is still still lagging a bit in terms of growth, but it sounds like you're still pretty confident that youll see an acceleration. This year. So anyway, it's a little bit of help on the geography differences would be great.
Yes sure.
So let me start with Europe.
It is the mix of existing customers, obviously shipping more boxes in particular in the e-commerce area its debt.
Definitely new customers and folks moving away from plastics to paper just to give you an idea with new customers, 30% to 40% of them are telling us of the main reason the switched is around sustainability and that number of used to be less than 10% in Europe four years ago.
So there is a clear trend that continues around sustainability and gaining market share.
With some of these new customers and then this past quarter other than elevated E. Commerce activity, we started seeing a pickup in industrial activity. Some of the automotive players some of the manufacturing guys Nordic region, Germany, Netherlands, frankly U K.
All contributed.
In Asia Pacific, we are expanding geographically.
So that's helping we signed a few of new distributors Thats also helping but story is frankly the countries like Australia like Japan, like South Korea continue to embrace our products.
And similar to Europe, it's a lot of e-commerce activity, but also activity around electronics light manufacturing light industrial guys are light cushioning product was pretty strong in many of those regions.
And that trend we continue to feel is in the early innings, Greg Lastly, on North America and the reason.
I am why I am confident and I have been saying that for publicly for a couple of months now is all of the leading indicators are trending of the right way our belief is north America as of few years behind.
Europe, and we're starting to see more and more accounts talk to us about sustainability.
We see our trial activity, we see our pipeline and just to give you something tangible we also see the demand for our equipment and what we're seeing in North America. As we are accelerating the demand the converters and equipment. We thought we would need in Q4, we're accelerating that to Q3, while we thought we were going to need.
In Q3 in North America, we're accelerating that to Q2, so I think as the year progresses youre going to see some nice growth from North America, which I believe is just a couple of years behind Europe.
And over time, you'll see that activity pick up so overall a lot of strong demand across the board for our product and we think.
You should expect some meaningful pick up in North America as the year goes on.
Great. Okay. That's that's helpful commentary and true.
I think we all sort of understand the sustainability of fact, you're here I think what's what's also equally interesting recently is what's happened with some of the substrate costs, which you alluded to I think we've all kind of read about what's happened in the in the resin market and all of the shortages that folks are seeing I mean is this a potential catalyst to convert.
The more customers from plastic to paper any early signs that that's going on.
Absolutely and the answer is that is the big catalyst and there are good early signs of which is increasing our confidence in sort of the rhythm and growth opportunity for our business for the rest of the year.
Many of the resin based competitors of ours have increased pricing a couple of times already in some cases many of them cannot secure supply and are telling customers, it's going to take them.
Number of months and long lead time to fulfill demand we're stepping into into that we're leaning forward hard we're working operationally to make sure. We can fulfill the demand for some of these new customers.
The two key things that are helping us as one paper pricing is going up.
As much as resin and in many cases that is helping us narrow the spread if you will and where it exists and then secondarily given all of the supply chain all of the procurement all the work we're doing from the manufacturing and op standpoint.
We are going to be using sort of our shorter lead time to meet demand that we think are the customers out there so I.
Expect that you will see continued market share shift from plastic to paper. In addition to sustainably the reasons for some of these pricing as well as just the availability and capacity reasons Gregg.
Yeah, Okay, and then last one I just wanted to clarify the comments around the the guidance. So is the thought debt.
Based on what happened in Q on and sort of what you see going forward that you are well.
Drawing guidance or you're just not updating it clearly sounded like you're expecting the outperform what you laid out a couple of months ago. So I just want to make sure. We're all clear on exactly what you meant there yes, absolutely. So look the way we run the company we have annual plans and we have three year and multiyear plans at the management team.
That we're trying to target, we announced sort of our annual guidance last quarter this quarter clearly.
Formed very well I don't want to be the company that keeps on updating guidance every quarter. When we have an annual plan I think we are comfortable saying just to be crystal clear.
And this year in 2021, given the start for the year given what we're seeing given all the commentary and sort of of the answers I provided to your questions. We believe we will of meaningfully surpass our plan. This year, but we don't want to be in the business of continuously updating guidance. We are really just focused on driving outcomes on delivering numbers.
Understood.
Right. Thanks for all the color and best of luck going forward I appreciate it. Thank you Greg.
Thank you moving on your next question comes from the line of the ton of creep from CJ Securities. Your line is now open.
Omar on Bill good morning, and congrats on a great quarter.
Good morning, Steph, Thank you very much.
First could you give us a sense of the revenue growth that was driven by new product offerings like cold chain and the new wrapping in that kind of stuff.
Sure Bill do you want to take that.
Yes, sure happy to.
So wrapping as you can see from the converted placement right that the continues to grow meaningfully.
We're also expanding our <unk> offering that is getting great traction really globally. So if you take a look at the contributions from some of those products on the debt.
Topline wrapping overall I think was up over 40%.
On the top line so a fantastic performance there and we think that there's a real big opportunity to take that and expanded into retail.
If you look on online you can see the feedback that we're getting from the number of our new retail offerings, which is going quite well so coming from the small base of course, but.
Yeah.
Sure.
Sorry, sorry.
I think bill we're losing your line of <unk>.
What I would add also just on coal changed since you were asking about that we continue to invest in that area and grow.
We have a number of customers frankly, the rhythm there is great. We are growing quite a bit and what we've done in cold chain recently as we introduce some of our products outside of the U S.
In particular in Europe and plan on expanding that into some of our markets in Asia Pacific. So stay tuned on that one but some of these new products in cold chain and in other areas I think as of the year progresses should deliver some outsized returns for us.
That's great. Thank you.
And then the final question.
With with the rising paper prices two years ago, you saw some pull forward as customers.
Increase in their volumes.
Are you experiencing that right now.
Maybe you know how where volume is looking in April so far can you give us some more color on that.
I think what I will say is the strength of the beginning of the year continues.
Volume and demand continue to be robust.
I don't think its people pulling forward demand.
Given pricing the.
If you look at just what's happening even in the core of the corrugated industry of what's happening in e-commerce and with the reopening of some economies on industrial activity staff.
There really is the surge in demand for our products. So it's not people just pulling it forward given pricing.
And we continue to see a lot of customers shifting more boxes, asking for more products and I expect in the near future of those trends will continue.
That's great great color. Thank you and congrats again, thanks, a lot I appreciate it.
Your next question comes from the line of all the extend their lease from bearing Berg capital. Your line is now open.
Morning, guys and congrats on on what was a very strong quarter.
My first question is sort of around on the industrial end markets on picking up.
How much of a recovery was the buses from pre pandemic levels and how much more is left on the recovery on an uptick the end market.
Yes, I don't think I don't think in the industrial channel, we're seeing them quite at the level of pre pandemic I think what we've seen is a little bit of pent up pent up demand given the declines of many of those companies on customers experienced.
In 2021, and 2020, obviously towards the end of 2020 industrial activity started improving and then what we saw is.
Significant growth.
In the first quarter, so there wasn't a little bit of pent up demand, but we're not seeing industrial activity reached the levels of pre pandemic. So I think we will continue to see some nice tailwind with our customers. There and then in terms of your type of of industries. It really depends by geography. So are you.
So light.
Light manufacturing out of Asia.
Electronics out of Asia pick up.
The momentum of this past quarter in Europe, It was more sort of in automotive and some of the heavier machinery in the industrial activity.
In the U S. A lot of folks in sort of general manufacturing.
The tools in smaller appliances. So so we're seeing things open up and a lot of different geographies.
I think of the tailwind, it's probably no different than what we're seeing in GDP I think is going to continue for a while until the world normalizes, but the level of industrial activity as of this moment still has not reached pre pandemic levels.
At least for our business.
Okay, great. Thanks, a lot.
As we sort of look out for the remainder of the year, what's your sort of capital allocation strategy and are you looking to do any any acquisitions tool.
Our main focus is meeting our <unk>.
Customer demand. So we are investing in the business and our supply chain to make sure we meet the demand, which right now frankly across the globe is pretty strong and as I said in North America, we expect it to ramp up meaningfully towards the end of the year the.
Other area that we're investing in is making sure we get our equipment on automated solutions ready for the second half of the year.
On the demand there is really strong you are not seeing that in the numbers because that's equipment, we're going to deliver to customers in the second half of the year, but we are almost at capacity there already given given what customers are asking us to do so that's our main focus in addition to that we are exploring a couple of.
Of.
What I would characterize the small tuck in acquisitions that we think add to our solution at the our technology at the our team.
And we're exploring some of these things between now and year end.
And frankly, it's along the same lines that we've discussed historically automation cold chain. These are the opportunities where we continue to explore adding to our offering.
But right now of priority one is meet customer demand given how strong it is and given our expectation for the rest of the year.
And then priorities do add to our solutions to sort of expand our offering.
Okay, great that's very useful thank you. Thanks.
Thanks, Alex.
Again to ask the question. Please press star one on your telephone keypad to ask the question simply press Star one on your telephone Keypad. Your next question comes from the line of Chris Mcginnis from Sidoti. Your line is now open.
Good morning, Thanks for taking the questions and congrats on the quarter.
Chris Good morning.
I may have missed this but was there any.
Any update on the function side and.
And just kind of what your thought process or thinking is around demand trends as they progress throughout the year for that product line.
Bill you want to take that.
The question was on automation, sorry, it broke up a little bit on my line.
Yeah.
To address the expectations of how it progresses through the year, yes, yes.
We like what we're seeing on the automation side of the demand. There is excellent of lot of the conversations that we're having especially with the high volume end users that we have is centered on automation right. How do they make their businesses more efficient how do they reduce the number of folks at the end of the line to improve the health and safety of other employees that are in their facility. So the <unk>.
And there I think is really robust.
The feedback that we're getting on on our product line.
Is quite good as well so we're very optimistic about about automation of that being a real contributor to us.
On the second half of the year when things open up a little bit more.
And just the.
Just around North America in the kind of the confidence are.
Are those the trials of our ending the periods.
Or the conversations that you're having or just improving as the economy opens up.
And then I guess just what's the.
Just the factor behind the few years behind where Europe is.
Just the confidence that youre going on.
See the growth kind of took the through to the north of match the market. Thanks.
Yeah sure in terms of the trial activity. It varies by account the size of account nature of that account. So typically it could be anywhere from amongst the two amongst the something of that takes a few more months and what I would say about our trial activity in North America, and why I feel confident about sort of the Rev.
Of the year.
It's really elevated across across the board so early stage trials.
Trials in some cases that closed trials that are about to close we continue to feel our successful percentage of closing is very high.
And as these customers get on boarded we delivered of the equipment and they start ramping up and sometimes it takes a few months for the ramp up in activity for these customers to.
Have all the different warehouses and facilities at sort of paying customers and Thats what were seeing and we also monitor the demand on our equipment and the demand of our equipment for the rest of the year is very robust given the trial activity and the successful trials that we are closing so we have quite of bit of data that is good.
The us that confidence if you will from a bottom up standpoint customer by customer region by region in North America, and we feel good about that level of activity, we feel great about our sales organization.
Now top down on when Youre, asking about sustainability and why do we think we are a few years behind behind Europe honestly, when we have monitored the type of dialogue, we've had with European customers around the sustainability I said four years ago, 10% of those new customers. We're seeing sustainability was the key.
The reason why they switched to ramp back today, it's about 30 or 40%.
We are seeing similar pattern, where the percentage today its still low in North America of people, who are quoting sustainability is the main reason for talking to us.
And we think that pattern will repeat itself as we expect more on more dialogue with customers around the sustainability topic. So it will take some time.
Take the next whatever 12 months to ramp up a lot more sustainability of dialogue.
Our team is engaged with our distributors with our customers with end users on all sorts of discussions around environmental impact end of life recycling sustainability and that's why I feel the pattern we saw in Europe.
Is.
It's going to repeat itself potentially here in the U S.
Great.
We appreciate the fee or the.
The commentary.
Good luck on Q2.
Very much appreciate it.
Again, if you wish to ask the question. Please press star one on your telephone keypad.
There are no further question at this time I would now like hand, it back over to Mr. Bill true for any closing remarks.
Great. Thank you and thank you all for joining US today, we look forward to speaking with you again next quarter take care.
Ladies and gentlemen, this concludes today's conference call. Thank you. So much for your participation you may now disconnect.
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