Q3 2021 CURO Group Holdings Corp Earnings Call
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And now I'd like to teleconference over to Matthew Keating of Investor Relations. Mr. King. Please go ahead.
Yeah.
Thank you and good morning, everyone. After the market close yesterday <unk> released results for the third quarter of 2021, which are available on the investors section of our website at IR Dot Cura Dot Com with me on today's call I'm curious Chief Executive Officer, Don Gayheart, President and Chief Operating Officer Bill Baker.
And Chief Financial Officer, Roger Dean This call is being webcast and will be archived on the investors section of our website before I turn the call over to Don I'd like to note that today's discussion will contain forward looking statements based on the business environment as we currently see it.
As such it does include certain risks and uncertainties. Please refer to our press release issued last night and our forms 10-K and 10-Q for more information on the specific risk factors that could cause our actual results to differ materially from the projections described in today's discussion any forward looking statements that we make on this call are based on.
As of today, and we undertake no obligation to update or revise these statements as a result of new information or future events. In addition to U S. GAAP reporting we report certain financial measures that do not conform to generally accepted accounting principles. We believe these non-GAAP measures enhance the understanding of our performance reconciliations between these.
GAAP to non-GAAP measures are included in the tables found in yesterday's press release before we begin our third quarter update I'd like to remind you that we have again provided a supplemental investor presentation. We will reference this presentation and our remarks and you can find it in the events and presentations section of our IR website with that I would like to turn the call over to Dan.
John.
Thanks, Matt Good morning, everyone and thank you for joining us today.
The third quarter represented another period of strong performance as we continue to make significant progress with several key areas of our business all of the game of continuing to grow and evolve our company to drive earnings growth and value creation.
I'll briefly review some of the highlights from the third quarter.
Company, our loan balances grew 77% year over year fueling 15% revenue growth.
Canada is rapid growth continue the counting for about three quarters of consolidated loan balances at the end of the quarter.
We are starting to see significant balance increases in our Canadian business related to flexing as previously announced on E. L. F. L Group Canada.
Kansas largest home furnishing retailer, which we expect will help us become Canada's largest buy now pay later P O S lender.
But she's loan balances increased 37% sequentially and origination volume nearly doubled versus the same period a year ago.
We continued to experience tremendous loan growth.
Canada direct lending business is overall demand returned to pre COVID-19 levels and loan balances grew 34%.
This is the third quarter of last year or.
Sequential loan growth return for our U S business as absent the run off of our verge credit portfolio, earning assets in the U S grew 9% from the quarter ended June 30th.
Our net charge off rate improved year over year and delinquencies remained near historic lows as customers continued to demonstrate strong credit performance.
Additionally reflects these rapid growth.
Primarily prime customers, we anticipate not only faster balance sheet growth, but also lower overall loan loss rates.
Finally, we strengthened our financial position with a highly successful debt issuance.
In the U S. We returned to posting sequential loan growth was it that was at the high end of our expectations as we expect to see balances continue to increase U S. Gross combined loan receivable balances declined 5% compared to the prior year, but increased 4% sequentially, excluding the run off of California, and Virginia alone.
Portfolios U S. Gross combined loan balances increased $28 million or 15% year over year, and 9% sequentially adjusted or on the verge portfolio.
The year over year increase in U S loan balances was expected as the effects of the U S. Federal government stimulus payments from earlier in the year diminished, resulting in increased customer demand.
We continue to expect improvements in U S originations as the economic recovery continues.
Consolidated revenue for the third quarter was $209 million, an increase of 15% from the same quarter last year.
We reported adjusted EBITDA of $38 million and adjusted EPS of <unk> 15 per share compared to last year's adjusted EBITDA of $36 million and adjusted EPS of 27 sets our provision for loan losses grew 29% year over year, resulting in a 9% growth in net revenue Roger.
We'll have much more detail later, but.
Well, we think that the credit continues to be very strong.
For the quarter, our consolidated net charge off rate improved by 240 basis points, a stable performance in our Canadian direct lending segment combined with the additional lower net charge off Prime P. O. S book balances were partially offset by increases in the U S driven by portfolio and new customer growth.
Canada net charge off and delinquency rates remain at the low levels experienced during the pandemic, while U S net charge off and delinquency rates began to trend towards pre pandemic levels.
Normalized operating expenses compared to the prior year pandemic levels.
Primarily volume related variable expenses and performance based compensation.
And the operating expense base acquired with flexing in March of 2021 drove a $5 million decline in adjusted net income.
Recapping, the segment's carrying direct lending growth and loan balances fuel revenue growth of 35% year over year revenue growth combined with flat net charge off rates and operating leverage resulted in adjusted EBITDA growth of 68% for Canada direct lending.
For Canada, Pos flexi contributed $11 million in revenue during the third quarter, but posted a net loss is expected from provisions of loan growth and increased operating expenses primarily to support the rollout plex.
Flexes originations increased 174%.
$127 million Canadian.
$200 million Canadian compared to the prior year's third quarter, driven primarily by the continued addition of new merchant partners, including an initial L. F L volume and our newest partner London drugs.
Worth pointing out that revenue tends to lag origin nation volume for flexi because of its lower yields in the structure of some of its products.
We expect flex these growth trends to continue to accelerate as former day Jordanne cardholders will lose utility as of December 31 of this year. We estimate that these cardinal is create the potential for an additional $350 million Canadian.
At an annual volume across the L. F L group financing program.
These focus remains squarely on executing on the considerable L. S. L opportunity. It also has several other growth initiatives underway, including continually building on its established pipeline of prospective merchant partners as it strives to become Canada's leader in retail payment partnerships.
Investing in the direct to consumer channel with plans to launch a D to C. Digital campaign to further accelerate new customer acquisitions, devising strategies, including the development of our paying for product to address the sizable small ticket retail market in Canada, which is estimated to include coast close to 80%.
Of the total retail spend in Canada.
Investing in programs to serve more non prime customers cross selling initiatives between Kearl and flexi are already underway, but we have plans to rollout a separate flexi Wayne branded card next year that is designed for non prime customers.
Extending flexing historically prime customer base to non prime individuals' represents a true win win as it provides non prime consumers with the credit needed to improve their lives.
<unk> higher approval rates for our merchant partners, which serves to increase their top line.
We were happy to report that both our Canadian businesses are tracking very well to the upwardly revised earnings outlook, we provided in our investor presentation at the end of the third quarter.
U S revenue was basically flat to the third quarter of last year as loan balances were still down modestly year over year.
Higher loan loss provisioning relative sequential loan growth and more normalized levels of operating expenses for variable cost and performance based compensation resulted in a year over year decline in adjusted EBITDA of $8 million.
As mentioned on our last earnings call. We made the difficult decision to close 49 U S stores during the second and third quarters to manage local store market density and to respond to our customers' evolving usage patterns.
The closed stores represented 25% of our U S store footprint, but they only generated 8% our U S store revenue in 2020, the closed stores that annual operating costs of approximately $20 million Maggiore.
A majority of our customers and these impacted locations, we're able to take advantage of our Omnichannel model and transition to online to an adjacent store or to one of our contact centers.
I'm very happy with the work that we've done on our journey to transform.
Full spectrum, North American consumer lidar, while reducing risk and creating value by diversifying our product and channel mix.
Through both organic success on the Flexi acquisition, we have meaningfully grown in Canada, which accounted for 79% of our company owned loan balances at the end of the third quarter we.
We've made the tough decision to rationalize our U S store base to best meet customers evolving usage patterns, we continue to invest in new products, such as credit cards, which we plan to launch later this quarter in the U S.
You need to invest in our internal technology risk and analytics platform. The strength of these platforms helps us to quickly migrate customers, who are all Lauren channel and to continually refine our credit decisioning, creating new product opportunities in all geographies.
Finally, as always I'll close by thanking our 3700 team members, who continue to meet our customers' financial services needs and to help us execute on all of our strategic priorities.
I'll now turn the call over to Roger.
Thanks, Don and good morning.
Dan covered the consolidated and segment loan growth and earnings highlights. So I'll focus my comments on credit performance and a few other points.
Starting with delinquency and credit trends and other key drivers for Q3, I'll reference page pages, six and nine of our earnings supplement deck.
Looking at weekly delinquency trends by bucket.
Both countries continue to see historically low delinquencies, although the U S began to trend closer to pre COVID-19 delinquency rates more than Canada.
For example, you'll see from the chart that the U S pass through rate. This quarter was 110 basis points lower than the third quarter of 2019, while.
While the Canadian direct lending pass through rate was 180 basis points better than the third quarter of 2019.
Our third quarter consolidated net charge off rate improved 240 basis points year over year, while increasing 70 basis points sequentially.
Canada direct lendings net charge off rate was basically flat to the same quarter, a year ago, and improved 20 basis points sequentially.
Canada, Canada direct lending net charge off rate remained significantly below pre pandemic levels and we expect that trend to continue because of portfolio seasoning improvements in underwriting and servicing and the underlying financial health of our other customers.
The Canada P O S net charge off rate was flat sequentially as expected.
Finally loss rates in the U S increased 440 basis points year over year and sequentially bouncing off historic lows because of loan growth.
You'll see in the MD&A section of our earnings release that the increase was concentrated in Texas, CSO loans, where balances grew 17% sequentially.
The jumpstarted growth along with the related higher ratio of new to returning customers.
And origination mix shift from stores to online all caused higher net charge off rates for Texas, CSO volume, which would be expected.
It's due to demand mix and growth not deterioration in underwriting standards or underlying consumer credit quality.
Let's turn next to the provision for loan losses allowance coverage rates.
Declined from the fourth quarter more so in Canada.
On sustained overall improvement in net charge off rates.
Based on the trends we are experiencing we would not expect to see additional reductions in allowance coverage rates in Q4.
On page 10 of our earnings supplement.
You can see that for the third quarter of 2021.
Our consolidated loan loss provision was $7 million higher than net charge offs.
Last quarter that is Q2 of 2021.
The loan loss provision was $7 million less than net charge offs.
So sequential earnings were affected by that $14 million swing from Q2 to Q3.
Looking ahead to the fourth quarter of 2021.
I'll again point out that we expect sequential loan growth and generally stable credit quality through year end.
We also expect continued normalized provisioning relationships, where the loan loss provision on loan growth will exceed net charge off dollars likely to a greater extent than in this third quarter.
With continued sequential loan growth improvement in the U S and increases in operating expenses for advertising and flexi.
Q4 earnings will likely be lower than any quarter. This year.
We would expect the more normalized provisioning dynamic to extend for the U S business through 2022.
We also included on page 11 of our Investor supplement.
Recap of run rate operating expense levels to assist in analyzing Q4 and forward.
We posted at the Investor update to our IR site on September 28, 2021, where we raised our 2022 and 2023 revenue and earnings outlook.
For our Canadian businesses.
These revisions are also recapped on page eight of this quarters supplemental investor presentation.
Our update was based primarily on better than expected loan growth, resulting in higher average loan balances exiting 2021.
And continued strong credit quality trends for Canada direct lending.
Our revised outlook calls for Canada to contribute pretax income of 210 million Canadian dollars in 2023.
We also pointed out that based on this contribution from Canada, and the anticipated post pandemic recovery of U S earnings by 2023.
We believe we have visibility to adjusted EPS north of $3 per share in 2023.
Turning to the balance sheet.
On July 30 of 2021, we closed our successful offering of $750 million of seven 5% senior secured notes due 2028.
The new issue replaced our former $690 million of $8 two 5% senior secured notes due 2025.
In addition to upsizing, the offering lowering the coupon by 75 basis points and extending maturities by three years.
We achieved important flexibility and improvement on several indenture items, most notably additional flexibility to finance the growth of flexi.
We ended the third quarter with $206 million in cash and $377 million of liquidity, including Undrawn capacity on revolving credit facilities and current borrowing base levels.
We believe this provides more than sufficient capital to execute on several different organic growth opportunities in the U S and Canada.
While we continue to evaluate M&A opportunities and maintain return of capital to shareholders through quarterly dividends and share repurchases.
This.
Our prepared remarks, and we'll now ask the operator to begin Q&A.
Yes. Thank you at this time, we will begin the question and answer session.
I'll ask a question you May press Star then one on your Touchtone phone if youre using a speakerphone. Please pick up your handset before pressing the keys.
To try your questions. Please press Star then two at.
At this time, we will pause momentarily to assemble the roster.
And the first question today comes from Moshe Orenbuch with credit Suisse.
Alright, great. Thanks.
I was hoping you could talk a little bit about the flexing non prime card rollout just talk about the scope of that product and maybe.
Also perhaps the paying for product in Canada. It seems like two interesting kind of new potential products.
Yes. Good morning, Moshe This is bill Baker.
Yes, So we think it's a great opportunity with the flexing non prime card and the reason to have a separate card is really just the customer experience because if they are applying for a zero percent financing for 12 months and get decline, but then are offered something in the mid twenty's or high twenties.
We think it's a better customer experience just to be upfront with the offerings. So they understand what they're paying for.
And then just have a higher approval rate, we think acceptance will be better and again the customer journey will be better so.
But we're really excited about how that positions that products on that card.
On the paying for component to it that's really a competitive.
Move because a lot of our competitors offer that we hear that from the merchants that they would like to offer that to customers and we think it's a good way to not only.
<unk> retained the merchants that we have today, but attract new merchants and the sales pipeline by having that offering.
Also I should mention that its a much smaller purchase.
Enforced typically you're going to be maybe a three or $400.
Purchase where on the core Flexi project you are closer to a $1000.
Right Okay.
Apparel in cosmetics and stuff to some of those are suited for a smaller ticket.
Paying for applications. So that's in development up in Canada right now.
Just out of curiosity would you have to like we sign each merchant or your agreements with them.
Where you could just roll it out like how does how would that work.
I think if it's covered in the agreements we have.
I mean again, we think that we do.
Same as cash programs.
Jerry linked so it's really.
It's a bit of a variation.
And we Havent, we already have a longer term installment.
Product as well so it kind of gets covered on the agreements. We have I think the thing for US is to make sure that we work with the merchants that we tailor that product to the right kind of items in there.
The theory, because obviously something thats up.
Uh huh.
180 days same as cash just talking about furniture larger appliances et cetera that may work for a longer term installment program and this is some of the stuff that you know a firm and some of the bigger bigger final pay later companies in the states. So a lot as well. So so really it's working with our merchant partners to tailor a paying for product too.
Should the right kind of work.
For product that they're offering that theyre selling.
Perfect that makes sense.
Roger maybe just hey.
Kind of any any sense, a little bit more sense as to how to think about the credit normalization and the provisioning normalization over the next several quarters and you talked a little bit about Q4.
Just how do we think about it you know kind of over the course of the next few quarters.
Yeah I think.
This quarter was.
Kind of.
Indicative of kind of a return to normal.
The U S business.
For the Canadian two Canadian businesses, we're not seeing anything that even with the growth, but the growth has been more steady so we didn't get that crazy dynamic though.
Allowance release in provisions negative provisioning.
And in Canada, So Canada is kind of steady.
The relationship between the provision and loan growth should be stable through next year.
The U S. This quarter was indicative.
Quite good quite frankly, as you know the more we grow the more the more upfront provisioning, we're going to incur so.
<unk>.
I talked about it in the prepared remarks.
The delinquencies are.
Trade it back towards 2019 levels.
And that was concentrated in Texas.
It's driven by just the quite frankly, the mix shift to online and and the percentage of originations to new customers I.
I think the third quarter.
If you take the third quarter relationships between.
Provisioning net charge offs for the U S. I extend that through you know through next year.
We don't see anything that would indicate.
We're going to we're going to buy next quarter returned to 2019 levels, but we're trending that way in the U S.
Okay. Thank you.
<unk>.
Thank you and the next question comes from John Hecht with Jefferies.
Good morning, guys. Thanks, very much so real quick on that 23 guidance should we be thinking about kind of the.
The.
Call it the.
Net revenues as a percentage of total revenues minus the provision consistent with.
Kind of pre COVID-19 levels or does the flag city acquisition change that makes it a little bit.
Oh, I think yes, I think it changes a lot John.
Flex these allowance rate is 6%.
And the charge off rates in the fours.
Whereas the rest of Canada direct lendings in a low teens on the charge off rate.
U S runs in that.
$6, 50% to 60% range so.
On a quarter, even on a quarterly basis, so yes, John to your point.
If you look at the.
Relative revenues.
On the 20.
'twenty three guidance.
It does.
The implied provisioning on that.
Yes.
Does it change it does change.
The net revenue it doesn't.
It takes the net revenue margin down slightly.
But not but not not a lot.
Okay, and then U S can you tell us like what the mix of the new customers versus call. It recurring customers was in credit and in anything going on with customer acquisition costs.
Hey, John It's bill good morning.
So the current mix in the U S is 18% new customers.
And that compares to 15% last year, and 20% and 19.
And as far as I mean as far as credit goes I mean, I think as Don said in the prepared remarks.
Credit is strong and there is no question you do see some some mix because of the increase year over year also channel mix. So about 71% of revenue in the U S is coming online and that compares to roughly 50 50 in 19.
I'd mentioned that.
Okay 18, 19, there was.
Bigger delta and credit between store and online and we've done a lot of work to close that gap and I think it's really now just a modest difference.
But nonetheless, that's a big increase going from $50 $50 to 71% which contributes to.
Some of what you see there.
Okay, great. Thanks, very much guys.
Yes.
Thank you and the next question comes from Bob Napoli with William Blair.
Yeah.
Hi, guys. Thanks for taking the question. This is Spencer on for Bob Napoli.
Great I appreciate the color on gross margins could you guys provide any comments on operating margins.
Looking out through the forecast period, you guys provided.
Operator, I'm, sorry pre tax or.
Which margin Youre asking about.
Pre tax operating margins relative to 2019 levels.
By 2023, we're back at 2019 levels.
2020.
Yes, So 2020 was a pre tax margin was about 12%.
This year, we're going to we're working on around the high single digits.
We'll get back I think we'll get back to 2019 pretax margins certainly by 2023, probably not in 2022.
Okay. Thank you I appreciate it and then.
I. Appreciate you guys have provided some revenue mix for flex city in the past the different components.
Interest income versus fees.
What percent of that revenue is recognized at the time of origination.
Right.
Well the yield annual yield is about high teens 18, 19% and it depends on the merchant and what the mix of that is.
At the time of origination.
In the first months of origination Youre, recognizing one month's worth of about 18% I mean, it's not there's nothing the accounting doesn't frontload or backward the revenues.
It's Steven for lack of a reward it's even recognition on the part of it whether its departure discount or interest or.
Our fees nothing Theres, nothing really frontloaded or back loaded on the revenue side. It is worth pointing out and flexing, though that.
Such a.
To the extent that the merchant discount.
As spread.
It's basically earned upward.
You get it upfront from a cash perspective and its earned in its amortized over time.
It does make a difference between the GAAP earnings for flexibility and the cash earnings reflects city. This this quarter.
<unk>.
That difference was about $10 million.
Canadian.
Almost the entire amount.
If you took the it's about half and half.
The difference between cash and recognized merchant discounts.
It was about $5 million for the quarter and the excess provision over net charge offs was about $5 million. So if you added those two back flexi was about breakeven on a cash basis for this quarter.
Plus a little bit but almost breakeven.
Thank you I appreciate the color.
Thank you and the next question comes from Vincent can't take with Stephens.
Hey, good morning, Thanks for taking my questions. It was nice to see the sequential loan growth this quarter across all the different products and I was wondering if you could maybe describe sort of what youre seeing in terms of customer appetite and customer behavior.
And any any sort of changes you're seeing.
Trends youre seeing with these customers so.
You talked about the percentage of your mix I guess I'm wondering in terms of originations you know.
How much of that is new and is there anything specifically that's driving it sort of maybe just the government stimulus ending or.
Something else. Thank you.
Hey, David good.
Morning.
It sounds like kind of general trends I think we feel obviously, we felt really good about the quarter and just risk.
With respect to the U S are really good about the quarter.
Certainly we've been and then putting more money into the advertising channels.
And we would expect to see.
The continued kind of recovery of balances as we roll through 'twenty two.
And I think by and large we feel really good about that and really kind of have a pretty high level of confidence in that.
Just the things that we're kind of keeping an eye on us.
We've said a lot, but the best time to be in this businesses and this goes for a lot of lending businesses.
The first two to three years after a downturn and we obviously had a really severe downturn and we're recovering back from that you know the difference about this downturn is that it didn't come with a.
Hey.
Our credit cycle downturn.
So yeah, obviously between stimulus and customers sitting at home and not spending money on discretionary travel.
And.
You have dining out.
You had a severe downturn coupled with historically, great credit quality, maybe up pretty much across the board for every lender prime one prime et cetera, So and that's clearly.
Nominal.
Our current share.
Lease so we're coming out of not it's not kind of a normal.
Economic cycle credit cycle.
Recovery. So we're just kind of watching how that could influence.
Consumer behavior was coming out of that.
And then the second thing is just if you look at.
So I'll stop there.
A related show how.
Serving consumers, how they feel about the labor market versus the economy and the survey those separately and they typically those to run together and what that means that people are feeling good about the labor market. Good about the economy, that's going to drive a higher level of consumer confidence, which is what we kind of most closely think that loan demand is kind of tied to.
But what's happening now is if you look at the survey data consumers feel really good about the labor market, but there's a big gap between how they feel about the overall economy and if you dig into that if some of this sort of uncertainty about government policy and law.
Lot of it is it's uncertainty about inflation and wage growth is great, but if wage growth is coming as a result of inflation as opposed to just economic recovery, where the labor market.
The tightness in the labor market.
Make people a little bit uncertain, and certainly energy prices et cetera are priced.
Prices at the pump, we're going to play into that grocery prices et cetera. So I think those are the two things, we're kind of watching but from a kind of a credit standpoint.
And demand and demand standpoint, but again those are just those are the I guess, the kind of qualifiers, but I don't want to detract from the play that we do feel really good about where demand was in.
In the third quarter, where it's trending in the fourth quarter.
And how we feel about.
22 for the recovery of the U S business. So I don't think on your second part of your question about the origination.
New customer it takes so I don't look we have a follow up on that yeah. So so right now if you look at the accounts receivable, 18% of the accounts receivable is true new customers that we have never seen before so not returning but truly new and that compares to 15% a year ago and.
And then 20% and 19, so so getting getting much closer from a percentage of accounts receivable to where we were pre pandemic.
Okay. Great. Appreciate it that's very helpful detail. Thank you for that.
Separate question, then switching over to Canada, and flexibly, so nice to see.
Hear about the different products are nice to see the list of different merchants you have on your slides.
If possible if you could talk about say the potential pipeline of <unk>.
Merchants that youre working on and maybe even going beyond that when you think about the.
Potential I guess gross merchandise volume that you might get out of Canada, and what the addressable market is if you could talk about.
That as it relates to flexing that would be helpful. Thank you.
Yeah. So.
So there are continue to be some merchants that are.
Like <unk> group that are.
That were previously with Taser at ads and are sort of up for grabs stay shorthand winds down their point of sale business. So we continue to pursue some of that obviously all of that was the biggest.
Piece of there.
Matt.
The <unk> business.
We've captured that so it wont be anytime on on that kind of scale I think we have really good potential and there's a couple of them one is categories like jewelry, which.
And I think.
It's really important for us to keep kind of a healthy mix.
Of our merchants and merchandise that we're financing so we're not overly levered to one to one category, but I think something like jewelry, where it was during the pandemic was there's a lot of jewelry stores were closed it's not it's not something that sells as well online versus in the certain items certainly is in and the retail stores. So theres good Rick.
Covered there there are some some opportunities there for us.
We think to win some business in that category.
I think.
As well on line, we do we have a nice program with with way fair in Canada, We continue to work with them to.
To increase some of the promotional.
Programs that we can run with them.
We do find the wafer cars actually as a brand and wafer card in Canada as well so.
We're happy with that relationship and hopeful that that just the organic growth of that business will be will be good for us in Canada.
I think the other part is we talked about both.
Both the.
The wave card in the non prime card and giving US an appeal for more sort of brands that are.
Are not as high end brands.
And particularly in some of the furniture and electronics categories are helping the sell through of more kind of middle market brands with the wave card is important and as I mentioned, the smaller ticket stuff again apparel cosmetics that they don't have enough of paying.
Paying for product and maybe even if it's.
You extended out a little bit beyond paying for depending on the promotion is going to help us we think 80% 80% of.
80% of retail spend and Canada's which had cost kind of small ticket. So I think theres a lot of opportunity in the small ticket world for us.
With our paying for product or maybe it's pay and six were paying it because you can run in different kind of promotions. Once you have that kind of functionality in the system.
Okay, Great. That's very helpful. Thanks, so much.
Thank you and this concludes our question and answer session and I would like to return the call Don Gayheart CEO for closing comments.
Yes, great. Thanks, everybody for joining us this morning, and look forward to talking again, when we report our year end.
2021 results in early February 2022.
Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.