Q2 2022 Enova International Inc Earnings Call
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Good afternoon, and welcome to the Nova International Second quarter 2022 earnings Conference call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
After today's presentation there'll be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad to withdraw your question. Please press Star then two please.
Please note this event is being recorded.
I would now like to turn the conference over to Lindsey salaries Investor Relations for Nova. Please go ahead.
Thank you operator, and good afternoon, everyone and never released results for the second quarter 'twenty 'twenty. Two ended June 30th 'twenty 'twenty. Two this afternoon after the market close if.
If you did not receive a copy of our earnings press release, you may obtain it.
The relations section of our website at IR Dot Dot com.
With me on today's call are David Fisher, Chief Executive Officer, and Steve Cunningham, Chief Financial Officer. This call is being webcast and will be archived on the Investor Relations section of our website.
Before I turn the call over to David I'd like to note that today's discussion will contain forward looking statements and as such is subject to risks and uncertainties actual results may differ materially as a result from various important risk factors, including those discussed in our earnings press release and in our annual report.
On Form 10-K quarterly reports on forms 10-Q, and current reports on forms 8-K. Please note that any forward looking statements that are made on this call are based on assumptions as of today and we undertake no obligation to update these statements as a.
A result of new information or future events.
In addition to U S GAAP reporting and never 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 and non-GAAP measures are included in the tables found in today's press release.
As noted in our earnings release, we have posted supplemental financial information on the IR portion of our website and with that I'd like to turn the call over to David.
Good afternoon, everyone. Thanks for joining our call today I will start with an overview of our second quarter results now I'll discuss our strategy and outlook for the remainder of 2022.
After that I'll turn the call over to Steve Cunningham, our CFO will discuss our financial results and outlook in more detail.
In the second quarter, we once again delivered solid top and bottom line results driven by strong demand and stable credit across all of our product revenue in the second quarter increased 54% year over year, and 6% sequentially to $408 million adjusted EBITDA was 102 million.
And adjusted EPS was $1 64.
We are committed to producing sustainable and profitable growth and are pleased with our continued execution on this front.
Despite the turbulence in the macroeconomic environment, including elevated inflation and recession.
Our customer base remains stable with better than expected demand.
Strong credit performance.
I know these results will come as a surprise to stop the macro trends for our target customers remain positive non prime customers are actually I'm pretty solid footing with strong wage growth, particularly at lower income levels and excess saving levels two to three trillion dollars in total according to bark.
More importantly, the labor market remains hot.
Latest data from the Bureau of Labor Statistics shows that there were more job openings than people seeking jobs for the first time ever.
In addition, the unemployment rate remains historically low and wages are growing.
Well real rage growth has been negative the last couple of months because it elevated inflation remains very positive over six months, one year and five year periods.
At a more focused level electronic based statement data, we obtain shows a meaningful increase in our customers.
Income over the past year.
The electronic bank statements out are also shows healthy spending as consumers still have savings accumulated during the COVID-19 pandemic and appeared to be trying to make up for lost time by increasing their spending in dining travel and clothing.
Despite the higher savings and wages many of our customers still live paycheck to paycheck and that's temporary dislocation between the earnings and the expenditures.
As we've mentioned before low unemployment plus inflation generally mean consumers may need bonds for additional capital would have earnings to pay those loans back and.
And as our results demonstrate our customers continue to manage well through the current rising inflation.
Looking forward, while the academy could dip into the recession and possibly already had recessions tend to have less of an impact on our customers than I'm, Brian parks. They.
They are experienced and living paycheck to paycheck and are able to quickly adjust their finances as needed.
As far our SMB customers the surge in consumer spending I mentioned is helping small business.
And businesses have been able to pass along pricing freaky bolstering their bottom line and creating a strong credit environment.
So while we feel very good about the performance of our customers in this current environment. We are cognizant of the fact that economy continues to deteriorate.
As a result, we are taking a more balanced approach between growth and risk at the moment, while we always keep a sharp focus on credit in late 2020, you began aggressively increasing our origination coming out of the pandemic and by Q2 of 2021 focus was to grow as fast as possible given the strong demand.
Ma'am.
Very strong credit metrics and supportive macroeconomic environment.
But beginning in late Q1 of this year, we shifted our focus but credit performance on a more even playing with Brett.
As you can see from origination growth in Q2. This does not mean, we are attractive, but it does increase the resiliency of our portfolio.
We do this by increasing our R&D targets across our products.
Q2 R. R. O E was more than double our weighted average cost of capex showing that we have plenty of room for credit performance to deteriorate, while still generating healthy Richard.
And finally, the high payment frequency and relatively short duration of our portfolio provides fast feedback and incorporate into ongoing decision, making enabling us to react quickly if the economic environment changing.
The result is that credit quality remained strong with net charge offs of seven 2% in the second quarter compared to seven 6% in Q1.
Notably net charge offs remain well below pre COVID-19 level of 11, 8%.
In 19, and 12, 4% in Q2 28.
Total originations for the second quarter totaled just over $1 billion up 5% sequentially from an unusually strong Q1 and up 60% compared to our second quarter of 2020.
While our portfolio grew 68% nearly $2 $4 billion.
Our marketing efforts have been highly effective as originations from new customers or 42% of total originations.
Strong new customer growth, we have seen over the last several quarters provides a big tailwind as those customers return for additional credit over time.
We're encouraged by this growth is returning customers with a successful history of performance typically default at a much lower rate than new customers.
Yeah.
As we've discussed in depth, our highly diversified portfolio provides us additional protection against changes in the macroeconomic and regulatory environment and changes in the competitive environment.
In the second quarter small business products represented 57% of our portfolio, while consumer accounted for 43%.
Within consumer line of credit products represented 30% of our consumer portfolio installment products accounted for 69% and short term loans now only 1%.
We continue to expect the next between consumer and small business to fluctuate over time based on both macroeconomic factors and seasonality.
We continue to see strength in small business that had been beneficiaries of economies reopening at the pandemic.
Q2, small business originations were 3% higher than Q1 and credit performance and the portfolio remains strong.
We do continue to analyze real time cash flows as well as external data to monitor industry that are more prone to recession.
And over the last couple of quarters, we have been pulling back on a few recession prone industry like construction and transportation.
As we've discussed previously we have demonstrated a prudent approach to growing our small business book.
Looking further out we believe we are competitively well positioned given our strong brand presence and diversity of our portfolio.
And success of the <unk> acquisition continues to exceed our expectations.
We delivered on our divestiture strategy. This year that we communicated at the time of the acquisition and monetize our investments in Ods and that Canada and Australia.
These transactions will enables us to focus our resources on our core consumer and small business brands in the U S and Brazil.
In sum, we've been successful through a number of economic cycles, including the great recession, and the onset of the Covid pandemic.
Our success is a testament to the strength.
Terry technology, and analytics and our extremely talented employees.
In addition, our diversified product offering provides additional resiliency and our portfolio is more diversified than ever.
We continue to see solid momentum across Inova with a very strong start to Q3 origination and continued stable credit.
We will as always manage the business to drive profitable growth and believe that our highly flexible online only not extensive track record of navigating different market condition strong balance sheet and talented team will drive our performance in the years to come.
Now I would like to turn the call over to Steve Cunningham, Our CFO , who will discuss our financial results and outlook in more detail and power in Steve's remarks, we'd be happy to answer any questions that you may have.
<unk>.
Thank you David and good afternoon, everyone as David noted in his remarks, we delivered another solid quarter of top and bottom line financial performance as our team leveraged our diversified product offerings machine learning powered credit risk management capabilities and effective marketing to drive meaningful growth.
While maintaining solid portfolio credit performance and attractive unit economics.
Turning to our second quarter results total company revenue for the second quarter Rose, 6% sequentially and increased 54% from the second quarter of 'twenty 'twenty $1 million to $408 million.
The increase in revenue was driven by the continued growth of total company combined loan and finance receivables balances, which.
On an amortized basis were $2 $4 billion at the end of the second quarter.
10% sequentially and 68% higher than the second quarter of 2021.
As David noted total company originations for the second quarter totaled $1 $1 billion up 5% sequentially and 60% higher than originations during the second quarter of 2021.
Originations from new customers remain strong totaling 42% of total originations as their marketing activities remained highly effective.
Small business revenue increased 13% sequentially and 75% from the second quarter of the prior year to $150 million.
Small business receivables on an amortized basis totaled $1 $4 billion at June 30th a 13% sequential increase and 75% higher than the end of the second quarter of 2021.
Small business originations increased 70% from the prior year quarter to $679 million.
Revenue from our consumer businesses increased 2% sequentially and 45% from the second quarter of 2021 to.
The $253 million.
Consumer receivables on an amortized basis ended the second quarter at $1 billion up 6% from March 31st and 59% higher than the end of the second quarter of 2021 is consumer originations rose, 74% from the prior year quarter to 410 million.
Yeah.
Looking ahead, we expect a sequential growth rate in total company revenue for the third quarter to be slightly higher than the sequential growth rate for the second quarter.
This expectation will depend upon the timing speed and mix of originations growth.
As expected the net revenue margin for the second quarter was 65% as credit quality, which is the most significant driver portfolio fair value continues to perform in line with our expectations.
The change in fair value line item included two main components.
Net charge offs during the quarter and changes to the portfolio is fair value, resulting from updates to key valuation inputs, including future credit loss expectations prepayment assumptions and the discount rate all.
I'll discuss both items in more detail.
First the total company ratio of net charge offs as a percentage of average combined loan and finance receivables the second quarter was seven 2%.
Down from seven 6% last quarter.
From two 4% in the second quarter of 2021.
The second quarter net charge off ratio for small business receivables was two 2%.
Up from one 9% last quarter and 70 basis points in the second quarter of 2021, but below pre pandemic periods as we continue to see strong payment performance across all of our small business products.
The consumer net charge off ratio for the second quarter declined to 13, 7% from 14, 2% last quarter and is higher than the 4.6% ratio in the prior year quarter, which preceded the acceleration of growth in consumer receivables over recent quarters.
Especially from new customers.
The percentage of total portfolio receivables past due 30 days or more was five 1% at June 30th down.
Down from five 2% at March 31st and.
Lower than the five 7% ratio at the end of the second quarter a year ago.
A decrease in the consumer portfolios 30, plus day delinquency ratio drove the sequential decline.
As a result of solid credit performance and a stable outlook for the expected lifetime credit performance of our portfolio.
Fair value of the consolidated portfolio as a percentage of principal at June 30th increased slightly from March 31st to just over 107%.
As we've noted in our 10-K the portfolios fair value is most sensitive to changes in the expected lifetime credit performance of our receivables.
Our analytics team forecast expected lifetime credit loss expectations for our products.
Using estimation methods and machine learning powered models that had been the foundation of our ability to successfully manage credit risk over the life of our company.
The cumulative lifetime credit loss estimate is a critical input for both our unit economics that drive decision, making as.
As well as our initial fair value calculations for new vintages.
For previously originated vintages, the cumulative lifetime loss estimate is updated each quarter in order to calculate the current fair value for the remaining receivables.
These lifetime loss forecasts and related fair value estimates received significant review and validation internally from senior management, and our analytics accounting and model risk teams and externally by our external auditors from Deloitte, who have built their own models to test the accuracy of our fair value.
<unk> each quarter.
As we've noted for several quarters the credit performance of our portfolio has been in line or better than our expectations. This would lead to stability or improvement in the cumulative lifetime loss estimates for the portfolio using the aforementioned highly controlled estimation process.
The ability or improvement in the cumulative lifetime loss estimates for the portfolio all things being equal would result in stability or improvement in the fair value premium as a percentage of principal.
Even with $4 $1 billion in originations over the past year and record levels of new customer originations.
This quarter marks the third consecutive quarter that the fair value premium as a percentage of principal for both our consumer and small business products has increased its payment performance for both portfolios continues to be in line or better than our expectations.
In addition to future credit loss expectations every quarter, we also evaluate discount rates and other key valuation assumptions used in our fair value models.
As a result of this analysis for the second quarter, we increased discount rates used in the fair value calculations by 25 basis points for most of our products to incorporate observed market information.
To summarize the change in fair value line item. This quarter is driven primarily by improved levels of net charge offs.
Slightly higher discount rates and credit metrics and modeling at the end of the second quarter that continued to reflect solid outlook for expected future credit performance for our growing portfolio.
Looking ahead, we expect the net revenue margin for the third quarter of 2022 to be similar to the second quarter net revenue margin.
Our future net revenue margin expectations will depend upon portfolio payment performance and the timing speed and mix of originations growth.
Now turning to expenses total operating expenses for the second quarter, including marketing were $168 million or 41% of revenue compared to $129 million or 49% of revenue in the second quarter of 2021.
Our operating expenses this quarter reflect increased marketing spend from solid customer demand that drove stronger than expected originations as well as continued scaling of our fixed costs.
Marketing expenses totaled $92 million or 22% of revenue.
Compared to $55 million or 21% of revenue in the second quarter of 2021.
As a reminder, under fair value accounting, we recognize marketing expenses in the period. They are incurred instead of deferring a portion and recognizing them over the life of the loans as we did prior to 2020 and as many in the industry still do today.
Looking forward, we expect marketing expenses as a percentage of revenue to be in the low 20% range for the rest of the year, but will depend upon the growth in originations, especially from new customers.
Operations and technology expenses for the second quarter totaled $42 million or 10% of revenue compared to $35 million or 13% of revenue in the second quarter of 2021.
Given the significant variable component of this expense category sequential.
Sequential increases in O a T cost should be expected in an environment, where originations and receivables are growing.
You should range between 10 and 11% of revenue.
General and administrative expenses for the second quarter totaled $34 million or 8% of revenue compared to $39 million or 15% of revenue in the second quarter of 2021.
While there may be slight variations from quarter to quarter, we expect G&A expenses as a percentage of revenue to remain below 10% as these expenses scaled with growth through the remainder of 2022.
We recognized adjusted earnings a non-GAAP measure of $55 million or $1.64 per diluted share compared to $1.67 per diluted share last quarter and $2.26 per diluted share in the second quarter of the prior year.
We ended the second quarter with $232 million of cash and marketable securities, including $144 million in unrestricted cash and had an additional $803 million of available capacity on $2 billion of committed facilities.
As we announced earlier in the month during June we increased our funding capacity by $550 million.
We closed a new two year $420 million small business securitization warehouse with two new bank lenders that is priced at 271 basis points over the applicable base index and will support funding small business customer demand.
In addition, we increased the capacity of our existing secured revolving corporate credit facility, which is used for working capital and other general business purposes by $130 million to $440 million.
The maturity of the facility was extended to June 2026, and is priced at Sofer, plus 350 basis points.
These new committed facilities further enhance our solid liquidity profile and financial flexibility and the attractive terms reflect the solid credit performance of our portfolio the strength of our bank partnerships.
Our cost of funds for the second quarter was five 8% versus seven 8% for the second quarter of 2021.
Currently our marginal cost of funds ranges from approximately 2% to 6%.
Depending on the facility utilized.
Yeah.
Demonstrating our confidence in the continued strength of our business relative to our current valuation during the second quarter. We acquired 743000 shares at a cost of approximately $25 million.
At June 30th we had $47 million remaining under our $100 million share repurchase program.
Our solid balance sheet and ample liquidity give us the financial flexibility to successfully navigate a range of operating environments and to continue to deliver on our commitments to long term shareholder value.
Through both continued investments in our business as well as share repurchases.
To summarize our third quarter outlook with continued strong customer demand and meaningful growth in originations and receivables.
We expect revenue to increase sequentially and a slightly higher rate in the second quarter sequential rate.
As we continue to see strength in both consumer and small business credit metrics across our portfolio.
We expect the total company net revenue margin will be similar to the second quarter.
In addition, we expect marketing expenses in the low 20% of revenue and.
And continued scaling of our fixed costs with growth.
These expectations should lead to adjusted EBITDA margins in the mid 20% range.
We also expect quarterly year over year increases in adjusted EPS to resume in the third quarter of 2022.
Our third quarter expectations will depend upon the timing speed and mix of originations growth.
We remain confident that the demonstrated ability of our talented team has us well positioned to adapt to the evolving macro environment.
Our resilient direct online only business model diversified product offerings nimble machine learning powered credit risk management capabilities and solid balance sheet support our ability to continue to drive profitable growth, while also effectively managing risk.
And with that we'd be happy to take your questions operator.
We will now begin the question and answer session.
To ask a question you May press Star then one on your telephone keypad.
If you're using a speakerphone please pick up your handset before pressing the keys.
To withdraw your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.
Our first question is from David Scharf with JMP. Please go ahead.
Hey, good afternoon, thanks for taking my questions.
Sure.
You know what I had the usual laundry list of generic questions on credit, which everybody seems to line up with these days.
And you you addressed a lot of them proactively.
But you know.
Maybe looking ahead, though David.
A couple of things I was curious about and it's really sort of how you know what what levers.
You know get pulled first I guess, if you know we we do see some.
Deterioration in credit quality, whether it's from inflation finally, some loosening of the labor markets or whatnot and can I start with the new customer concentration you know I can recall a few years ago.
When the percentage of originations from new customers or new borrowers.
I think it you know it.
<unk>, 30% and that was kind of called out.
It's sort of a milestone that now it's north of 40.
As you know if you start to see any kind of stress on payment rates is that usually sort of the first thing you pull back on.
The percentage of new borrowers you take on or is that kind of too simplistic because is it a much broader sort of tightening of underwriting.
I mean at a high level that is correct I mean, obviously the math is much more complicated than that so it is a bit it is a bit simplistic. It doesn't mean, we don't do anything on the existing customer side, but yeah, you tend to take more action with new customers.
Is there is there is more risk there.
And you do it by I mean, theres two ways, there's two ways of doing it pulling back on marketing, especially your least efficient marketing so at least the customers you're bringing on and have higher ROE targets are high.
Hikes higher expected Roe.
Hum.
And then tightening in credit you know we can we can do we can do both but I think it is important you know when you're comparing to a few years ago, yeah, when 30% new customers. You know kind of was at the high end is that mix has changed significantly so net credits of much bigger portion.
Of the business.
And with longer term, you know longer term loans.
And F&B is a much bigger part of the business also with long alarms, where there's there's fewer refis and I think most importantly, or just as importantly.
Single pay where there was a lot of.
Refinances, and rollovers, where new customers became returning customers very quickly that is a minuscule portion of our business now sub sub 1%. So that's largely been replaced by a line of credit business, where you don't those customers stay as it is but.
Don't don't become repeat customers until they completely pay off their lines and take on a new line. So some of it is.
Some of it is mix, but we clearly have lots of levers to Paul when we're saying if and when we see them credit deteriorate and we see it very quickly right because of the high payment frequency across all of our even our longer term products I mean, the average duration of those products as you know kind of at two two <unk>.
And then the near Prime side everything else is below a year. So we have very high planet payment frequency in very short long. So we can act very very quickly.
Got it.
Listen I E.
I.
We certainly don't expect you to comment on specific.
Competitors or other lenders.
During this reporting season, we are hearing about.
In contrast to your experience increasing delinquencies among subprime auto some other subprime unsecured lenders.
And you know.
Just to make sure I kind of heard correctly I mean is there anything in the month of July just as you know post Q2, just with respect to 30 more days of exorbitant gas prices I mean is there anything in the electronic bank data or otherwise.
Suggest any change in behavior among your.
Yeah.
Let me ask let me answer the second part first time I go back to some other competitor so no.
If anything I would say things look a little better even.
In July so.
Business is looking very very good.
You know look subprime auto you just got to put it in a separate bucket, it's an entirely different business driven by different factors largely like the price of cars I mean, we've.
We've seen over the years Theres almost no correlation between subprime auto lenders and unsecured near Prime subprime lenders.
But look it's not all bad news you know there are there are you know kind of near Prime Prime lenders that have reported today that reported a very good credit data. So you.
A couple of data points when people struggle, a little bit and some other data points, where people. You know are doing are doing really really well. So I'm you know see how the.
The rest of the reporting season goes but.
Look I mean, we look at the data and so many detailed ways you know.
10 times, a level deeper than we report publicly.
And credit is looking great across across our products right now.
Got it.
Fair enough.
Last question another one that's a little tough to answer with a.
You know you know.
Perfect quantification, but you know as we think about the balance between you.
You know the ROE.
Currently delivering.
Particularly on the higher margin consumer loans versus SMB versus buying back your stock at these levels. You know is there a certain.
You know multiple or just you know benchmark stock price, where it just becomes a no brainer to allocate more capital towards buying back the shares even if youre seeing no deterioration in.
Credit or marketing efficiencies.
Yeah for sure I think [laughter].
Yeah.
For sure I think if these levels yeah. We are excited to buy back our stock and we have we have been.
When the stock was at these levels and you know.
This time, a little later last year, and we're really aggressively by buying back our stock.
And the only thing that really holds us back from.
Buying more is.
You know, our bond covenants, which will limit how much of or how much of our net income we can use each quarter to buyback buyback our stock. So yeah, we've been aggressive buyers of our stock and will continue to be.
Yeah, I need anything around these levels near these levels continue to be aggressive buyers of our stock.
Got it.
It's a $1 billion with the affiliates when others gave with $1 billion of liquidity. If we don't have to make that choice. So we can do both.
Right right right I mean, it obviously twentyfold factor of borrowing capacity versus the authorization. Just lastly can you just remind me what what what the covenant caps basically 50% of net income is kind of the easy way to think about it okay got it perfect alright, well. Thank you.
Yeah absolutely.
The next question is from John Hecht with Jefferies. Please go ahead.
Hey, guys congratulations on a good quarter.
I guess a little tag.
Great question.
Hum.
This is for the business.
On the new business side.
The consumer side mirror or are they pretty more of a mix in that regard.
Yeah, I mean, I, you broke up a little bit, but I think I got your question like you know kind of capital allocation between small business and and near but in a small.
Small business and consumer.
Well, we love both businesses, we love being diversified and again with a.
The $1 billion of liquidity, we don't have to make a choice of capital allocation. We can grow both as fast as you know makes sense given our ROE target.
So yeah.
Ah yes.
And the Treasury team has done a terrific job, making sure our balance sheet, our balance sheet is super strong. So we're not having to make tough choices between two businesses that are doing really well right now.
I appreciate that actually the question was.
Apologize if I'm, having a bad thing to hear but the question was more tied to the mix of new versus recurring customers.
Similar in both of those segments.
Yeah, it's totally different byproduct not even by segment I mean, if you look at installment loans versus line of credit. Some of that is just what we call new versus returning on a line of credit products versus installment products.
But you know at a high level subprime has the fewest number of new customers just because there's so many recurring.
Near Prime has.
The most just because they're longer term they're longer loans, so you're not you're not bringing back as many returning customers and small businesses in the middle.
Okay.
Then.
You guys have done a good job, obviously really growing originations this year without really sacrificing credit is there anything on the customer acquisition side.
It's immediate whatever channels of marketing or customer acquisition costs that are worth calling out to us.
No I mean, we have as you know I think as you've now we've really diversified our marketing channels as well not only our products, but our marketing channels over the years you know they used to be very very leads focus. Historically then they became really direct mail focus and you know now we've really strengthened our capabilities. Both in then.
Hum T V.
Their broad based media as well as digital so you know they certainly fluctuate across products and fluctuate from quarter to quarter, but it is a pretty diversified marketing mix at this point.
Great. Thanks, very much guys yep. Thank you.
Again, if you have a question. Please press Star then one the next question is from John Rowan with Janney. Please go ahead.
Good afternoon guys.
Hey, John .
So I think the guidance if I correct me, if I'm wrong was that year over year EPS growth will resume in the second quarter correct.
That's right.
Does that apply for the fourth quarter as well or is that just second quarter.
They're there.
Yes third quarter guys.
Yep.
So I'm sorry.
It was just the third quarter, that's not the fourth quarter correct.
That's correct.
Okay do we obviously you know this quarter you know it was the first quarter, where we've seen the gross profit margin kind of in line with the long term guidance of 55% to 65%.
You know I E are we still is that still a good range you know.
I just want to make sure there's no update to kind of that range.
Yes, John I think that's still the right range I mean, if you look across the different products I'm just.
Just given what we've done with consumer it's a little it's a touch below like our more normal range, but we've also seen strong growth in <unk>.
High mix of new customers as David mentioned and small business credit.
It's really continuing to drive a high net revenue margin for small business, which I would expect to settle in.
Somewhere between the low sixteens to little 70, So still think the 55 to 65 is a good range and you know as we move continue to move forward. If we're in a more normalized environment and you'll see.
Those two products segments Atlanta, there at their more normal ranges.
Okay. Thank you very much.
Thanks, Chad.
This concludes our question and answer session I would like to turn the conference back over to David Fisher for any closing remarks.
And thanks, everyone for joining our call today, and we look forward to speaking with you again next quarter have a good evening.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Yeah.
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