Q1 2022 AZZ Inc Earnings Call
[music].
Good morning, and welcome to the AZZ, Inc. First quarter fiscal year 2022 financial results Conference call.
All participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then 1 on your Touchtone phone to withdraw your question. Please press Star then 2 please.
Please note this event is being recorded.
I would now like to turn the conference over to Joe <unk> with Lytham partners. Please go ahead Sir.
Thanks, Chad good morning, and thank you for joining us today to review the financial results of AZZ, Inc. For the first quarter of fiscal year 2022 ended May 31.2021.
Joining the call today are Tom Ferguson, Chief Executive Officer, Bill <unk>, Chief Financial Officer, and David <unk>, Senior Vice President marketing Communications and IR.
After the conclusion of today's prepared remarks, we'll open the call for questions. Please note. There was a slide presentation for today's call, which can be found on Azz's Investor Relations page under latest earnings release presentation at Www Dot AZZ Dot com.
Before we begin with prepared remarks, I'd like to remind everyone. Certain statements made by the management team of AZZ. During this conference call constitute forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
The statements of historical fact, this conference call may contain forward looking statements that involve risks and uncertainties. Some of which are detailed from time to time in documents filed by AZZ with the Securities and Exchange Commission, including the annual report on form 10-K for the fiscal year ended February 28.2000.
'twenty 1 those risks.
And uncertainties include but are not limited to changes in customer demand and response to products and services offered by the company, including demand by the power generation markets electrical transmission and distribution markets, the industrial markets and the metal coatings markets.
And raw material costs, including zinc and natural gas, which are used in the hot dip galvanizing process changes in the political stability and economic conditions of the various markets that AZZ serves foreign and domestic customer requested delays of shipments acquisition opportunities currency exchange rates adequate financing.
And availability of experienced management and employees to implement the company's growth strategies.
In addition, azz's customers and its operations could be potentially adversely impacted by the ongoing COVID-19 pandemic.
The company can give no assurance that such forward looking statements will prove to be correct. These statements are based on information as of the date hereof and AZZ assumes no obligation to update any forward looking statements, whether as a result of new information future events or otherwise with that let me turn the call over to Tom Ferguson, Chief Executive Officer of <unk>.
Easy.
Thanks, Joe and welcome to our first quarter fiscal 2022 earnings call and thank you for joining us this morning.
You did say that we are feel a lot better about this first quarter call and we did it. This time last year overall sales improved 7.8% versus the prior year to $230 million, although up 14, 6% when adjusted for the divestitures.
Metal coatings turned in another excellent quarter with sales up 7.3% to $128 million in infrastructure solutions up 8.3% to $102 million and over 23% up when adjusted for the divestiture of SMS.
The higher volume volumes resulted from strong operational performance and improved activity in most of our served markets I will get into the details of this as we go along.
We are pleased to have completed another strong quarter of performance. We continued to generate strong cash flow during the first quarter. While also returning capital to our shareholders. We generated net income of $22.3 million and EPS of <unk> 88 per diluted share both representing over 300% improvement versus the prior.
For years first quarter.
Our businesses leverage the realignment actions taken last year to improve operating margins, while maintaining their focus on providing outstanding quality and service to our customers.
We also benefited from lower interest expense, while incurring a 25, 5% tax rate for the quarter.
In line with our strategic commitment to value creation, we repurchased over 125000 shares for $6.3 million and distributed $4.2 million in dividends.
In metal coatings, we posted sales of almost $128 million, while achieving operating margins of 24, 7%, resulting in operating income being up over 25% from the previous year the.
The margin improvement was primarily due to driving operating efficiencies and productivity, while realizing improved pricing in the face of rising zinc labor and energy costs were.
We remain committed to delivering on the investments made in our surface technology business and we're pleased to see most customers beginning to return to pre COVID-19 levels of demand.
Our metal coatings team continues to demonstrate durability to perform and deliver great results.
Our infrastructure solutions segment, which was severely impacted by the Covid pandemic, particularly in the first quarter of last year demonstrated its resilience as they improved sales to $102 million or up over 23% when considering the impact of the SMS divestiture the.
The team delivered operating income of $9.6 million or 9.4% up dramatically versus prior year. The segment benefited from its realignment actions from last year, while building on synergistic opportunities between <unk> and WSI.
They are focused on strategic selling initiatives and are well positioned to deliver a strong fiscal year 2022.
For fiscal year 2022, while Covid continues to generate some uncertainty in certain sectors with our strong performance in the first quarter and due to seeing more opportunities than risks the balance of this year, we are tightening and raising our guidance we.
We anticipate sales to be in the range of 855% to $935 million and EPS at $2.65 to $3.5.
Metal coatings is continuing to focus on sales growth, including leveraging our spin galvanizing operations at several sites operational execution and customer service.
As labor and operating expenses due to material cost inflation are increasing.
Our infrastructure solutions segment has seen more normalized business levels and entered Q2 with some momentum and their bookings activity.
Our WSI business is seeing good results from the expanded Poland facility, although globally. The business continues to experience some intermittent project delays due to COVID-19 outbreaks at certain customer sites.
The electrical platform is focused on operational execution and growing its E house and switchgear businesses.
We anticipate continuing to benefit from low interest rates and should experience a lower tax rate for the remainder of the year.
For fiscal year 2022, AZZ will continue to execute on our strategic growth objectives to drive shareholder value our commitment to superior customer service is unwavering our ability to generate strong cash flow was based on initiatives that drive operational excellence manage costs and share pricing discipline and emphasis on receipt.
It was collection within our operating platforms.
We are confident that our businesses remain vital to improving and sustaining infrastructure. So we are actively working to position our core businesses to provide sustainable profitability long into the future and with that said I'll turn it over to Phil.
Thanks, Tom.
In the first quarter of our fiscal year 2022, we reported improved sales of $229.8 million.
7.8% higher than the prior year first quarter.
Where we had sales of $213.3 million.
Net income for the quarter was $22.3 million, an increase of $16.8 million compared with $5.5 million and net income for the first quarter of fiscal 2021.
The company's earnings per share was <unk> 88.
More than 4 times, the 21 earned and generated during the first quarter of last year.
For the first quarter gross margins. They were 25, 2% a 540 basis point improvement over the first quarter of 2021.
The improvement was a result of our businesses most impacted by the pandemic returning to normal more normal operations and continued strength in our metal cutting segment.
First quarter operating income of $30.7 million improved $16.4 million.
<unk> hundred 14, 5% compared with the prior year.
Our operating margin was 13, 4% 670 basis points better than the 6.7% recorded in prior year's first quarter.
Interest expense for the quarter of $1.7 million was 35.
6% lower.
As we realized interest savings on our $150 million senior notes that we refinanced last year and upsize by $25 million.
First quarter income tax expense was $7.6 million and effective tax rate of 25, 5%.
The current quarter effective tax rate was significantly improved over the 45, 8% effective tax rate realized in the first quarter of last year.
Driven mainly by our improved earnings in the current quarter.
At this time without consideration of the potential impact of tax law changes, we estimate our full year tax rate will be roughly 23%.
Next I'll cover the results of operations within our metal coatings and infrastructure segments, our metal cutting segment generated first quarter sales of $127.7 million.
A 7.3% increase over the $119 million reported in the first year first quarter of last year metal coating segment operating income of $31.6 million was $6.5 million or 25, 9% higher than the first quarter of 2021 metal coatings operating margins were 24, 7% 360 basis.
Points improved over fiscal 'twenty, 1 first quarter and 60 basis points improved over the first quarter of fiscal year 2020.
The business continues to thrive and is effectively managed.
Rising costs of labor zinc energy and most other consumable costs with operating efficiencies and increased productivity and value pricing.
In addition, the business segment is benefiting from the January 2021 purchase and full integration of acne galvanizing in Wisconsin.
Our infrastructure solutions segment generated sales of $102.1 million $7.8 million or 8.3% increase over the $94.3 million in sales during the first quarter of last year on a pro forma basis, excluding sales related to our divestiture of southern mechanical services from our industrial platform infrastructure solutions segment year over.
Year sales increased 23, 4%, our industrial platform sales improved year over year as personnel are now able to access customer locations.
However, this market continues to work through stricter cross border requirements when traveling to customer locations to perform their field services.
As a result of strong actions taken by the management team during the early stages of the pandemic last year operating income for the segment increased to $9.6 million from the first quarter as compared to the $1 million loss in the first quarter of last year.
We believe the actions to divest non core businesses in FY, 2020, 1 as well as making some difficult personnel decisions during fiscal 'twenty..1 we will continue to benefit the infrastructure solutions segment on a go forward basis the.
The infrastructure solutions segment generated gross profits of $22.3 million, which reflected a $9.7 million increase over prior year gross margins were 21, 8% well above the 13, 3% realized during last year's first quarter.
I will now turn to our balance sheet and liquidity net cash provided by operating activities from the 3 months ended May 31 was $11.1 million compared to net cash used in operations of $11.2 million in the prior year first quarter. The increase in cash provided by operating activities in the current quarter is primarily attributable to strong net earnings.
The company due to cyclicality in certain platforms of our business typically draws cash during the first quarter and generate positive cash flows the remainder of the year. This first quarter was no different as we observed a net decrease in cash of $2.4 million. However, current quarter use of cash represented a $7.8 million improvement compared with the first quarter of the prior Phil.
School year.
Capital spending in the first quarter was $7.5 million compared with $10.8 million investing capital during the first quarter of the prior year. Our current capital expenditure estimate at $35 million is consistent with the past couple of years.
At May 31, our outstanding debt was $185 million compared with $219 million outstanding at the end of the first quarter last year.
During the past quarter, we continued to generate strong cash flows that allowed us to continue to reduce debt.
During the quarter, we continued to repurchase shares under our November 2020, $100 million share repurchase program. During the first quarter, we invested in repurchasing $6.3 million or 126000 shares of our common stock, we declared and will pay a quarterly dividend.
Lastly, this week, we entered into a new 5 year credit facility with our bank group our previous arrangement was to expire in March 2022.
Our credit facility capacity range at $600 million with the following transaction highlights we reduced our revolver from $450 million to 400 million to reduce costs associated with unused line fees, we increased our accordion to $200 million from $150 million to retain full capacity.
We improved pricing levels of borrowing by 12, 5 basis points and reduced the unused line fees by 7.5 basis points.
We retained our leverage ratios of 3 and a quarter to 1 and our interest coverage ratio of 3 to 1.
We are excited with the banks, we have partnered with and look forward to improving our utilization of our credit facility as we remain active with acquisition opportunities and we continue to repurchase shares of our common stock under our $100 million existing buyback program.
We remain well within all boundaries of our existing debt covenants and continue to strengthen our liquidity and we will continue to evaluate our capital structure as we further execute and implement upon our strategic plans with that I'll now turn it back over to Tom for his closing comments. Thank.
Thank you Philip.
Here are some key indicators that we are paying particular attention to for the metal coatings segment's galvanizing business, we are carefully tracking fabrication and construction activity material and labor cost inflation and progress of infrastructure legislation.
For the surface technologies platform, we are primarily focused on expanding our customer base and benefiting from improved operational performance.
For infrastructure solutions, we are off to a decent start with turnaround and outage activity has returned to a more normal level in the fall season currently looking to be good as long as international customers are not impacted by further COVID-19 related restrictions.
The electrical platform is benefiting from T&D utility spending.
And growing datacenter and battery energy storage activity finally for corporate we have completed the strategic review of infrastructure solutions that are now focused on pursuing specific areas of opportunity.
As we've noted previously we are having regular meetings with the board and we anticipate being able to provide more detail in October.
We remain committed to our growth strategy around metal coatings, and achieving 21% to 23% operating margins with galvanizing performance being quite steady as we continue to improve surface technologies, we will remain acquisitive, particularly in galvanizing.
For infrastructure solutions, we will continue to focus on profitable growth in our core businesses.
Our segment business units should benefit from more normal turnaround and outage seasons, and a solid market for transmission and distribution utility and data center E houses and switch gear and with that we'll open it up for questions.
Thank you we will now begin the question and answer session to ask a question you May Press Star then 1 on your Touchtone phone.
If you were using a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press Star then 2.
At this time, we will pause momentarily to assemble our roster.
And the first question will come from John <unk> with Sidoti <unk> Company. Please go ahead.
Good morning, everybody.
Good morning, John.
Yes, I'd like to start the potential divestiture.
Structure solution.
Moving to review it I Wonder if you could just give us some color on <unk>.
The price market is what's the likelihood of it being sold as 1 unit.
Any more color you provided given.
Industry, it's called about this in November so that'd be helpful.
Yeah, I mean as you can imagine.
We're not going to get into any specifics at this point, but we have we have half a dozen active opportunities.
For Ford.
Divesting portions if you will.
But also for acquiring more metal coatings business units.
Particularly around the galvanizing side, so we're pursuing all of that.
And I don't want to speak for the board as we will have an upcoming meeting in the next few weeks.
Any thoughts about a timeline can help us out.
As I noted I think it will be ready by October to give.
Some specifics or make some some announcements.
Great great.
Can you talk a little bit about pricing.
In your prepared comments, you mentioned that you had price increases in metal coatings.
Does that play out for the balance of the year.
Yes.
You, usually with usually were mostly tracking zinc, but right now we're tracking basically all all of our expenses are up and same for our customers. So we've been able to 2.
Push pricing in line with those costs, we anticipate we should be able to to maintain that is we don't see any.
Any reduction in cost anytime soon.
And I think we track the zinc <unk>.
Is projected to remain fairly stable at this point.
Yes.
But it's at a relatively high level compared to the last couple of years. So.
So we're pretty confident that we can continue holding the value pricing levels that we achieved.
Okay and just switch.
Back to I guess infrastructure business.
How should we think about the bookings and the backlog for the quarter.
Sequentially.
Help us some thoughts on what's going on there whats the business environment Macquarie.
Yes, I think on the electrical side, we're we're winding down the backlog that we had in China.
But we're seeing really good opportunities in the transmission distribution and the utility sectors.
Around switch gear and the enclosure space.
So we really like that and while we don't talk much about the oil patch pieces anymore. That's also improve so pretty much all of the pieces are doing are doing well all the business units within infrastructure solutions are profitable and generate.
Pretty positive cash flow.
So we're feeling good about that.
This is about the time, we start to book some business for the fall turnaround season. So.
We're seeing good quoting activity in.
Feel pretty good about almost all elements of that business.
At this point.
Okay ill get back into queue and let some other people ask some questions.
And the next question will be from Noelle Dilts with Stifel. Please go ahead.
Hi, guys and congrats on a good quarter.
Thanks Noah.
Okay.
Was hoping that you could comment a little bit just total.
Labor, obviously throughout the industrial world and beyond we're hearing that it's just tough to find the folks that you need and that labor is becoming more expensive. So could you just expand on what youre seeing on that front ends.
To what extent, you're seeing any any wage inflation.
Yes, we are seeing both sides of that so we've had to increase our recruiting activities.
Sure.
And just to just to fill slots and get labor and so we've done that in but also to accomplish that we've had to increase starting wages and.
In specific plants, because it's theirs.
Pretty big differences of labor availability and the cost of that labor between municipal.
Metropolitan areas.
So we've got I'd say about half of our facilities have had to increase those starting wages to attract people in.
We've been fairly successful, we're having to use more contract labor.
In certain locations just to be able to handle our backlog. So we've tried to focus on maintaining our lead times and.
And keep attracting labor and just a steady stream of that but we have seen in states as they've done away with the unemployment premiums.
Labor becomes pretty quickly readily more readily available.
But quite often at slightly higher or somewhat higher starting wages.
Okay.
Okay. That's helpful.
Shifting over to <unk>.
With metal coatings.
Couple of questions here first just with these extreme increases in steel price is how are you.
Expecting that that will impact fabric.
Fabrication activity and are you seeing it yet.
And then if you could give us a bit of a rundown on the trends youre seeing in the end markets like OEM industrial construction utility et cetera, including Florida that would be helpful.
Sure.
We're seeing some projects be delayed because of the cost and also availability of steel and other construction materials. So while we've seen some delays we arent seeing a whole lot of cancellations.
But obviously some of these projects are becoming less viable as the as the costs continue to escalate so.
It's.
Kind of back to I would say most of the country were or at least most of the U S. We're seeing those projects move forward and there seems to be optimism among most of our OEM and fabricator customers.
When it comes to the different markets.
We've seen on the metal coatings side, we've seen a lot of activity in AG recreation.
As well as the bridge and highway activity.
Industrial has been solid we've even seen some petrochemical activity for the metal coatings side. So generally all markets are up somewhat and some are just extremely active the recreation.
<unk>, probably surprises us more than anything but.
But it's just been very very bullish.
Bullish.
When it comes to transmission distribution, we're seeing a lot of activity I think there is another several years of spending anticipated.
As as the grid gets renovated.
When I think electric utilities, we've seen.
Reasonable spend and continue to see power generation, particularly the solar stuff has been good and looks to continue that way.
David do you want to add anything to that no I think those are all.
The main drivers of the galvanizing and metal coatings markets.
We've seen some folks.
Returning back to normal production too on our surface technology side and of course those are very mixed markets.
Right Okay.
Just to follow up there in terms of where you are seeing cancellations, alright, I'm sorry delaying from.
Again, not a whole lot of cancellations, but is there a specific protocol, where youre seeing that more or is that kind of consistent across most of these markets.
It's fairly consistent and generally there are.
In the fabrication markets.
It's a whole host of different things, but.
I'd have to say most most of our customers remain optimistic for the year. So generally we're feeling really good about the outlook at this point across almost all the verticals.
Okay.
Okay. That's great and then I just wanted to go back to John's first question about the strategic review, but the way I read the information obviously limited in your presentation today, it sounds like you've at least determined that.
There is a portion of infrastructure solutions that youre viewing as core and a portion that you are viewing as non core.
Might look to divest is that is that the right way to think about that is it doesn't sound like you're looking at divesting the entire the entire division.
No. That's a good question and we're continuing this is Tom and noted in his comments that we've kind of completed.
Our initial reviews and had discussions at the board level and we're continuing to evaluate.
A number of different transactions and opportunities okay.
And so you'll see as we proceed through the next quarter, but let me jump in I don't I don't think we intended to preclude anything.
Okay. All options are still on the table.
Okay.
Right understood thanks for that clarification.
Again, if you have a question. Please press Star then 1.
The next question will come from Brett Kearney with Gabelli funds. Please go ahead.
Hi, Good morning, Thank you for taking my question.
Sure.
Just wanted to ask on the metal coatings side.
It sounds like the funnel of potential acquisition opportunities.
Fairly robust just curious on.
Site access to be able to I guess further those relationships and conduct the diligence that you'd like to and then also kind of maybe how you are balancing.
Opportunities to deploy capital on that side relative to.
Your share repurchase authorization.
Yes, I think.
We are finding it easier to travel and easier to get in.
And a lot of cases some of the owners are.
Our now more open to visitation and so our business development teams are getting back on the road.
There is still some areas, particularly as you get outside the U S where there are some restrictions but for the most part within the U S. We're now able to.
To make those visits and have had have made several either people visiting <unk> others.
And I anticipate that that's just going to get easier.
At least it as time goes on we'll see what happens with the Delta variant.
When it comes to.
Capital allocation I'm going to let Philip speak to that.
Because right now we have access to all the cash we need to.
For the whole gamut of capital deployment activities, including the acquisitions, we're looking at.
At the end of the day, we've got about $750 million of.
Credit available to us.
When you count the senior notes in the revolver and the accord and so.
Net debt's relatively inexpensive right now so so we're able to look at.
Basically everything.
At the moment net Philip Q&A add to that yes, and I think I would just add in on the share.
Share repurchase program.
See value in returning capital to shareholders at this time and as Tom explained we've got a really strong balance sheet at this point in time, and so we're able to leverage that balance sheet do stock buybacks as we continue to evaluate our opportunities on the acquisitions should we enter into a larger transaction then we will reevaluate our share.
<unk> program at that time.
Terrific. That's very helpful. Thank you so much.
Okay. Thanks, Brett.
And the next question will be from Deforest Hinman with raw files from <unk> Company. Please go ahead.
Hi, Thanks for taking my questions.
First off on the margin performance from our metal coatings is above our long term.
Performance range.
24% last couple of quarters do you foresee that in the current environment.
Maintain net 24% or above.
We're sticking to our committed range of 21% to 23% because there is a couple of things that will go on the balance of this year I think our galvanizing margins are in pretty good shape.
As.
We should be able to hopefully hold price and manage through our efficiencies and productivity.
2 to offset.
The cost inflation.
But surface technologies as well will increase its share of our revenue in the metal coating side, so and it does have somewhat lower margins. So.
I'm I'm pretty hopeful we can state at the top end of that.
21% to 23% range for the balance of this year.
As the team continues to manage value pricing versus the inflation inflationary cost.
So yes.
We talked about that the fact that we've exceeded the 23% for 2 or 3 quarters now so.
Okay. That's helpful and second question on.
Can you just give us a little bit more color on the spring turnaround season as it relates to our work on pressure vessels.
With some of these extended.
Terms between the maintenance intervals are we.
Once we get in there or are we seeing expanded scope.
Our number of hours worked on it.
These vessels and then as it relates to the fall turnaround does that make us.
In this day as well.
Yes, that's exactly what we've been seeing the interesting thing for us has been.
We are seeing in the spring we've seen.
Smaller.
Jobs, if you will that have.
<unk> continued to grow the scopes and then we've seen.
More emergent work than we're used to we did not have any of the big international.
Mega projects that we've had in.
Prior years. So so this was mostly smaller projects as well as quite a bit of shop work.
In both our U S facility as well as our new expanded Poland facility.
So to me that bodes well and we are seeing some bigger opportunities.
And what we're bidding so.
And I do think because of the deferred maintenance and the COVID-19 disrupt a year, we are seeing those scopes expand probably more so than we normally do.
Okay. That's helpful.
As touched on by a couple of the other analysts call just maybe ask the question a different way.
As it relates to this can you give your view of the infrastructure segment could is 1 of the outcomes potentially no incremental.
Because that secures within that segment you spend some time highlighting the improve.
The improved outlook for almost every 1 of the businesses within that segment.
Yes.
I think that there is some things we need to streamline so businesses we've.
We viewed internally as non core for some time now so I don't I don't I don't think I would.
Say that theres not going to be any activity there.
There is going to be some divestitures in and as I mentioned, we haven't precluded.
And anything we can do for the whole segment, although we do like those most of those businesses. So.
Positive EBITDA for us so.
But I think Theres, just we've got to focus better and.
And so actually in a couple of things at the very least.
Okay, and then just for clarity there were some comments as it relates to capital deployment.
The share repurchase.
Just can you update everybody in terms of.
Potentially doing.
Divestitures of businesses or we precluded at some point from.
Buying back stock or Roe.
Our program base.
Purchase authorization that we can bye bye.
By during that period of time.
Yes, I think on a couple of points there on the first plane with our new credit facility Theres baskets and limitations that are pretty large so based on our leverage ratio.
We're not limited from repurchasing shares except for what we've announced our limitations would be.
So we will continue to do that we do that under our <unk>..1 <unk> 5 plan. So that we can kind of manage that through.
Open and close cycles.
And then like I said earlier based on acquisitions and any potential divestitures, we will reevaluate our deploying that capital over time.
But also we still have we have lots of room within the current authorization to continue buying back shares too.
Okay and as it relates to capital deployment on the M&A side, I think Neil mentioned.
You mentioned this but I just want to make sure we're clear in terms of capacity.
The new revolver and the accordion feature that would.
Uh huh.
Be enough available capital too.
Purchased anything we'd like to look at and there is no need to issue equity for any type of deals that we're looking at.
No we're in we're in.
Really good shape.
We have a really active pipeline of acquisition opportunities.
Ill.
We can pretty much fund the entire pipeline with with our existing credit lines.
Okay, and then can you just update us on the.
Covenants that are on the new.
Revolver from the EBITDA perspective, I think you were at 325 on the old 1.
Yes were still at 3 to 5 we've retained in line with our senior notes that we refinanced last year. So our leverage ratio is 3.5 to 1.
Interest Covenant is 3 to 1.
And then there are some restrictive baskets.
Related to <unk>.
Acquisitions that we have to go back into the Bank group, if we did large enough transactions to notify them, but generally speaking.
We have.
Lots of room under our new credit facility.
Okay. Thank you for the clarity that was all my questions.
Thanks, Nick.
Ladies and gentlemen, this concludes our question and answer session I would like to turn the conference back over to Tom Ferguson for any closing remarks.
I just want to thank everybody for joining us this morning, and we look forward to completing our second quarter and hopefully have another.
Positive outcome in another good call. So thank you for your input and questions and we look forward to talking to you at the end of the second quarter.
And thank you Sir the conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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