Q2 2022 Shift Technologies Inc Earnings Call
Good day and welcome to the ship technologies second quarter 2022 earnings Conference call. All participants will be in a listen only mode should you need assistance. Please signal 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 one. Please note. This event is being recorded I would now like to turn the conference over to Henry Bird VP of strategy. Please go ahead Sir.
Good afternoon, and welcome to the shift technologies second quarter 2022 earnings call. Joining me on the call today are CEO , George Harrison, President, Jeff <unk>, and CFO Oded shein during our remarks, we will make some forward looking statements, which represent our current judgment on what the future may hold while we believe these judgments are reasonable these forward looking.
They are not guarantees of future performance and involve certain assumptions risks and uncertainties.
The outcomes and results may differ materially from what is expressed or implied in any forward looking statements. Please refer to our filings with the SEC for a full discussion of the factors that may affect any forward looking statements. We undertake no obligation to publicly update any forward looking statement, whether as a result of new information future events or otherwise after this conference call.
During the course of the call, we will be referring to non-GAAP measures as defined and reconciled in our earnings materials.
I will now turn the call over to George.
Thank you Henry and good afternoon, everyone. Thank you all for joining us today.
We certainly have a lot of information to cover today.
Change is happening.
I will touch on our pending merger with Carla.
What is your plan.
I mean, our CEO transition.
We'll go into more detail later in the call on major business changes.
Enacting and how they interrelate with a collar transaction.
And as to be the end to end destination for car ownership.
We're working towards achieving that vision, but it internally building a great technology platform that customers love and.
And by Opportunistically, adding valuable asset through M&A like we did when we acquired SaaS deal on marketplace now.
First Carlos Martin.
That ties directly into our product strategy I'm extremely excited today.
But we are entering into a definitive agreement to merge with Cogs.
Leading consignments retail used vehicle marketplace.
The acquiring party and the success of a company who spent auction.
Newly out these plans will discuss shortly.
We'll be in a position to pursue a fully funded business plan and achieve profitability in 2020 for the combined company.
And when he.
Synergies in combined cash position of the merged company will be able to do so without needing to raise additional funding.
Or does it will cover the specific transaction economics.
<unk>.
The shift in policy teams have known each other for quite.
Quite some time.
Indeed, this is not the first time, we discussed the possibility of coming together.
Always seen it.
In ruble amount of strategic and cost synergies and the combined entity.
And the last several weeks.
<unk> had a chance to get to know left in his new leadership and his colleagues.
On both sides are strongly convinced or the synergetic opportunities and cost savings presented by this merger to drive the combined company to a profitable future without needing additional capital.
Our margin was pilots will bring together the best most profitable.
Firstly in two businesses have complementary.
Sure.
Is concentrated on the West Coast Carlos has built a strong brand and has retail locations in the mid Atlantic region.
We will cover a much larger level without needing to watch in scale in your market.
Secondly, we see a massive opportunity to leverage <unk> proprietary inventory acquisition engine.
Our self service online checkout.
All stores to drive efficiencies at our at home delivery offering and make them sickness.
Yes.
We are building out our marketplace.
Potential leverage college student graph tends to quickly scale, but to.
To the East coast.
With any merger, we anticipate a significant amount of them.
Of course costs between the two businesses, especially in Q&A.
We seek to maximize efficiencies and the go forward company.
We believe the combined cash position of both companies will enable us to fully fund our updated business plan.
[laughter] based business.
Uh huh.
Today, we're also announcing an updated business plan for which I'll provide some initial context and Jeff will discuss in greater detail shortly.
Always believed in shifts I believe and capitalize on the massive market.
About 20 and become sustainably profitable maybe play out in the us automotive retail.
I'm not sure how much on the asbestos.
However over the last several months as we spent time and money.
Potential co investors it became apparent that our growth plan, which estimated achieving profitability across the 100000 units in 2025 will be extremely difficult to finance in the current market environment.
And usually come up with an alternative plan it accelerates profitability.
Lower volumes and lower cash burn.
We have developed a revised plan for the core business, which management and our board of directors are excited but notably this plan will allow us to achieve will be positive unit economics inclusive of marketing spend in 2023, and combined companywide breakeven EBITDA in 2024.
I would note that any synergies that we will recognize on the merger call us would be accretive to this plan.
That said implementing these changes comes with at home and food, even each will eliminate roles across our corporate team and you don't have locations.
The season this decision to pursue this strategy was very difficult.
The hardest one update and might not get the CEO .
I'm very aware of the impact.
As in our team members.
I want to express my deep appreciation for all of US are affected team members have done over the years for ships and our customers.
I only wish that this decision was not necessary.
<unk> founder and CEO I was responsible party clock off trajectory and I'm also responsible for the changes that we're making today this one's on me.
I mean, you can't see the most individuals impacted by this change has already happened we're committed to supporting them as best we can as it makes it difficult transition.
Third CEO transition.
Now I'd like to talk about something that's been in the works for some time and that's a really significant step in our company's life in its future.
Last year, just bottomed at about this probably not together engagement comprehensive thoughtful and focused succession planning exercise to help ensure that the company has the right leadership for the long term.
Our ideal Camden wasn't executive with a track record of operational excellence experiencing product leadership.
And the capacity to deeply understand complex e-commerce marketplace dynamics.
With this in mind that last year, we hired a gentleman.
No, but I'm actually seeing him elevated to the CEO role.
With the Thomas merger now is the right time to elevate you up to the CEO role since it is important for the person driving the implementation of our merger and your business strategy.
Oh.
For the foreseeable future.
To this and I'm excited.
The report is the final step in our leadership.
The board of.
<unk> has appointed Jeff to the road she thinks that Bob spoke ships.
Oh.
Over the past several quarters, just pulling himself with an outstanding leader with an opportunity towards the future.
He has a strong skill set necessarily go elite shift at this stage of the company.
Full support of the board myself and I'm committed to helping them succeed in any way I can.
With this transition I will maintain my current role on the board of directors and the chairman of the Board now welcome Jeff as a new member of our board.
With that I will have a handful what should the incoming CEO , Jeff comment further detail, but I'll call it strategy Jeff.
Good afternoon, everyone. Thank you George for the kind words.
I'm humbled to be taking on the role of CEO at this critical juncture.
I joined the company because I believe that shift is building the most customer centric car buying and selling experience with outstanding technology operations in a cost conscious retail mindset.
As George touched on earlier, some very difficult decisions needed to be made given our current circumstances and I would also like to thank our to partnership teammates for their contributions.
I'd like to note that the changes I'll discuss shortly or for the core Standalone ship business as part of our strategy to focus on the strongest most profitable aspects of our business and create a viable path to profitability.
Counterparts at Carlos previously announced that they are also executing on their own profitability focused plan.
This means that upon close of the merger expected towards the end of the year will truly be able to bring together two strong businesses.
Now to the Standalone shifts business strategy changes.
First we will be streamlining our sales channels to focus on our online checkout channel, which is our most profitable channels, notably this means that we will be eliminating test drives for the foreseeable future.
Well the test drive element and it's been a differentiator for shift increasingly we've seen that consumers are opting for a true e-commerce, offering where they can shop and purchase a vehicle online.
This change allows us to focus our efforts on optimizing this channel. So we can achieve unit economic profitability next year.
Secondly, we all continue to optimize inventory mix and assortment to favor value vehicles, which we define as vehicles older than eight years or over 80000 miles.
Over the past few months, we've already begun this transition as we talked about before value vehicles typically have more favorable front end Gpus and our core cars and also sell just as well in our online checkout channel if they do via test drives.
We're also cognizant that the customers are seeking out more value. During this time of macroeconomic uncertainty and rising interest rates.
Our current recon capacity and the process improvements that the team has made over the past year makes us confident that we will be able to handle value mix of more than 50% based on consumer demand.
Third we are refocusing, our physical footprint to our core west coast markets by rationalizing our 10 hubs to three.
Our Bay area hub in Oakland, and Los Angeles and Portland.
We built a great foundation on the West coast, and Theres still opportunity to grow significant market share.
<unk> seen our hub footprint will also enable us to leverage marketing dollars more efficiently and simplify and optimize operational processes.
However, this will not change our service area or the customers were able to reach our online checkout channel enables us to ship cars to any customer in the United States.
Since we launched this offering we've actually sent vehicles to customers in almost 50 states.
Well this means we'll be exiting or physical footprint in Texas. It doesn't close the door to geographic expansion in the future.
Actions are simply part of an overall strategy to simplify the business and focus on profitability.
As George mentioned above carloads footprint will enable profitable geographic expansion.
Fourth we are eliminating a significant number of positions across the business in both frontline roles in our corporate organization.
Well this is necessary to drive profitability and extend liquidity.
Want to express how difficult and painful decision this was.
Two business leaders, who have hiring needs and come across applicants with shift on their resumes.
No you were getting a candidate who is willing to roll up their sleeves and get the job done.
Lastly, we will continue to build and grow our marketplace business in Q2, we launched a beta version of the shifting marketplace powered by fair with a significant number of inventory listings from our dealer partners in the greater Los Angeles area.
The team continues to build out the shopping experience and what additional F&I partners and customer shopping options.
We continue to be excited about the dealer marketplace model and believe it can become.
A significant contributor to shifts future success.
We expect that these cost reduction initiatives will result in a reduction of annualized SG&A expense by approximately $80 million for the company.
We believe we will be able to achieve positive unit economics in 2023 inclusive of CAC.
And breakeven EBITDA in 2024.
This will be accomplished through GPU expansion from a higher mix of value vehicles, which are about 55% more profitable than our core cars selling cost in our online checkout channel that are about 40% lower than our in person selling model and.
And significantly reduce G&A going forward.
Can find more detail on drivers of our GPO expansion and cost levers in the presentation on our Investor Relations website.
As I mentioned earlier Carlotta team is also executing upon their own path to profitability focused on driving our retail locations to positive contribution.
They pursue this objective shifts proprietary inventory acquisition engine will provide car lots with unique.
You focused margin rich inventory and our e-commerce at home delivery offering will expand their geographic reach their stores, they're profitable stores combined with our strategy to drive our online checkout channel. The positive unit economics in 2023 will create a true omnichannel offering that is self sustainable without needing additional capital.
I look forward to working with the car lots team as they pursue their strategic objectives and bringing our teams together once we complete the merger later this year.
Going forward, our new strategic priorities are the following.
First achieve positive unit economics from GPO expansion and leverage in selling and marketing while tightly controlling G&A expenses.
To increase penetration of our west coast markets to grow E Commerce units sold.
Three scale, our marketplace business to become a significant profit center and four integrate the shift and Carla businesses. Upon the close of the merger to create a profitable leading used auto retailer.
Now I will hand, the call over to Oded to review the financial results and guidance for dead.
Thank you George and Jeff and good afternoon.
I will start with our strong second quarter results.
Our team continued to execute well despite facing macro headwinds in a sluggish economy, including rising interest rates and elevated gas prices.
Our second quarter adjusted results, mostly came in within our guidance with F N I continuing to be a highlight.
We're also able to successfully manage a higher mix into value of vehicles, which we have continued to see strong demand for it.
Total revenue for the second quarter grew to 224 million, an increase of 45% versus the prior year period, well E. Commerce units sold grew to 6872 up 17% year over year.
Adjusted gross profit per unit reached 1821 in the quarter versus 2826 last year and 1681 in Q1 of this year.
This was within our expectation and provided guidance range.
And please recall that the second quarter of last year benefited from steep price depreciation rather than the depreciation that the industry normally sees.
Other gross profit per unit, which is mostly F&I continues to be strong at 1364, 53% higher than last year due to both increasing profitability per F&I product sold.
And improving attachment rate.
SG&A expenses were $58 7 million or 26, 3% of revenue versus $48 1 million or 31, 1% of revenue last year.
And $63 5 million or 28, 9% of revenue in the first quarter.
Adjusted EBITDA loss for the quarter was $36 8 million better than the provided guidance range.
The adjusted EBITDA loss rate of 16, 5% compared to 21, 2% loss rate.
In the first quarter.
The improvement in adjusted EBITDA margin reflects continued operating leverage.
And the focus on cost reduction.
We ended Q2 with total cash balance of 123 million.
As expected second quarter cash benefits from the reduction in seasonally elevated first quarter inventories as well as meaningful inflows from accounts receivable collections.
Our borrowings under the floor plan was reduced from $100 million in Q1 to $93 1 million in Q2.
Notably.
Total second quarter liquidity comprised of $100 million in cash balances plus 7 million remaining under our flooring facility was approximately unchanged versus the first quarter.
I'd also like to note that the second quarter, we closed the acquisition of the dealer listings marketplace assets from favorite technologies.
Transaction was fully funded by a 20 million senior unsecured facility from Softbank.
Our financial statements now reflect the accounting for the acquisition.
And operation of our marketplace business.
Now turning to guidance.
Because Q3 will be a period of transition to our new Standalone strategy, we will be providing second half an updated 2020 to annual guidance.
For the second half of the year, we expect revenue to be in the range of 270 to 219 million and E. Commerce unit in the range of 8000 to 10000.
Adjusted GPU is expected to be in the range of 1500 to 1700 and adjusted EBITDA loss for the second half is expected to be in the range of 50 to 55 million or 17% to 20% of revenue.
For the year, our guidance is updated as follows.
Revenue in the range of $690 million to $710 million.
And e-commerce units for the full year in the range of 21000 to 24000.
Adjusted <unk> in the range of 1006 hundred to 1700, and we expect adjusted EBITDA loss to be in the range of $133 million to $138 million or 18% to 20% of revenue.
With higher loss in Q3 versus Q4, as we transition into our new strategy.
Now turning to the merger with carlock.
Based on the merger agreement shifts shareholders will own approximately 51% of the combined company.
We expect that transacted that transaction to close late in Q4 of 2022.
Subject to carlotta and shifts shareholder approvals and other customary and regulatory approvals.
Due to the timing of the transaction, we did not anticipate that it will have an impact on our 2022 financials.
However, we expect the combined company to have a cash position in excess of $125 million at closing.
With that I'll turn it back to George.
Thanks Oded.
This is certainly a bittersweet moment for me to close this earnings call given the mix of very exciting and integrating all of a sudden difficult decisions that we have spoken about today.
Well, we are certainly cognizant of the company's business changes will have on our team members are updated fully funded business strategy and much of it to Carla to allow us to create a strong future for shift and control our own destiny.
A transition this is the right move at this stage in my life I wouldn't be able to make this decision without knowing the right knee.
Sure.
I said, it's just because I knew that they used to come up it was ripe for disruption and I have more conviction in that now than ever before.
I'm confident in.
And Jeff and our team's ability to successfully integrate Carla.
And drive our company to profitability over the next two years without needing additional capital.
I want to end by expressing my deep gratitude to those who have been instrumental in building ships first and foremost I want to thank our employees both past and current for all that they have done selling a customer then turning ship from concept to reality.
I also want to thank our investors over the years corporate fate into our vision lastly.
Lastly, I want to thank the analysts on this call who have gone into our business.
It's been a pleasure working with you and I know you like getting to know Jeff.
I've been incredibly fortunate to have had the opportunity to found in building public company.
And it would not have been possible without support from so many.
You all.
Now I look forward to shift evolution under strong leadership.
With that operator, please open up the line for questions.
Thank you everyone I will begin the question and answer session.
To 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 withdraw your question. Please press Star then two and at this time, we will pause momentarily to assemble the roster.
And our first question today will come from David Kahn with true Securities. Please go ahead.
Yeah, Thanks, a lot.
Congrats on the on the merger.
Just they are just a few questions and maybe a clarification so.
Talk about sort of focusing more on value. It goes as a part of the strategy moving forward.
I'm curious if the the vehicle age.
It locks skus to value.
Or or something that's a that's newer and what that's.
That's gonna change and the other question is just around the omni channel aspect. So in the in the areas where <unk> has a presence obviously you have an omnichannel presence.
Do you expect to become Omnichannel, leaving them on the west coast markets as well.
Thank you.
Thanks, <unk>. This is Jeff and I'll take that question first is as we outlined in the opening remarks, we do see value of bringing the shift a customer acquisition engine, which does skew towards value margin rich value cars to the carload business that is one of the key synergies that'd be beltline, along with bringing our.
Our E Commerce online checkout self service capabilities to extend the reach of their service area and to drive incremental sales.
In terms of omni yeah as I've just mentioned, we will bring our Omnichannel technology.
Technology to Carla.
In the interim term AR.
For the shift Standalone plan, we're going to focus all of our energy on the online checkout and delivery or pickup business.
As I outlined in the Standalone plan, we feel like it's important to really focus our energy by simplifying our geographic footprint to the west coast by focusing on value and increasing our mix of value.
And then by focusing on really optimizing the unit economics, and the selling and fulfillment for our online checkout business. It doesn't mean that in the future we will not reintroduce that and certainly we hope to learn from our car lots team.
And that can be an option in the future, but for now we will run with that strategy.
Okay, and maybe just on that.
And as far as maybe another clarification, so so the west coast markets.
To be Omnichannel.
Because you're basically running with an e-commerce offering in March obviously.
Both okay.
That's exactly right. When we started by building the ship Standalone plan, which is focused on the online checkout and certainly fueled by the customer acquisition. Our assortment that we have today are Carlos it's been running in a different strategy, which is focused on our physical stores and digital physical Kelly, we will run those strategies in parallel.
Lots of the plan to achieve a breakeven of positive unit economics by the end of this year early next year and shift as we outlined has the same plan for our strategy and so we will then add on the synergies from shift into the carload business that I've outlined and then we will be eliminating duplicate G&A.
Okay. Thank you.
And once again, if you'd like to ask a question. Please press Star then one our next question will come from Seth Basham with Wedbush Securities. Please go ahead.
Thanks, a lot and good afternoon, I'm I have a couple of follow up questions on the strategy going forward. It seems like a car lots and shift have different approaches to disrupt the market, but you're going to maintain those different approaches for the most part are there really enough synergies that you are.
Outline to drive our.
Our successful merger here.
Let me walk through the logic that we took so first shift standalone, we started with the macro and economic environment that George outlined.
And we built a plan that would.
It would allow us to achieve profitability at a much smaller scale and with much less capital investment to the tune of $75 million. So we've executed a restructuring that will say roughly $80 million per year.
Then the second phase of that was to merge with Carlos which will bring a minimum of $75 million to fully fund this plan.
A lot in on their own has a plan to achieve their four walls.
<unk> ability break even or profitability by the end of this year, then we add on the synergies to the carload business.
We think will add incremental margin and drive incremental sales.
And then finally, we will eliminate duplicate SG&A costs, all told that plan will take us to a breakeven in 2024.
Got it and so it's not dependent on any significant volume growth from these levels.
Okay.
Our Oh plans to achieve profitability for shipped as a standalone was 30000 units.
And then again there would be accretive.
Margin from the car lots.
That there'll be driving into their stores.
Got it Okay, and then lastly, as it relates to car lots of strategy going forward. You know there's been an announcement that you're paring back some of the store growth should we expect that to be the go forward footprint through 2024.
Yeah.
So we've been impressed by the lab and it team and the and the strategy that they put in place to really focus the energy of the carload business much like where we're making the choice to focus the shift business on the west coast and so that team has a lot of confidence in their go forward footprint and their ability to drive to breakeven or profitability early.
Each year in each of those stores.
So assuming that those stores perform.
And then we add the synergies on top then yes that would be the go forward footprint.
Thank you.
Thank you.
And again, if he would like to ask a question. Please press Star then one.
Question will come from Brett <unk> with Cantor Fitzgerald. Please go ahead.
Hi, guys. Thanks for taking my question.
On the back half guidance related to the.
E Commerce units, which is down considerably from the last time, you guys provided guidance.
Can you just walk us through how much of that is you guys or how much of that is related to you guys pulling back maybe on the hub versus you guys increasing your focus on.
Value vehicles and that mix, just maybe help me understand that.
How that was going through that reduction in guidance.
Sure the chain.
Change in the volume has to do with the fact that we have less hubs, meaning we are out of Texas.
But that is not a big impact the biggest impact is that.
We are.
Moving to an online only.
Channel.
And the channel is more limited from a volume point of view, but as we said much more profitable.
So we're going to spend the third quarter.
In.
Transitioning from the old rather due to the new which means closing some of our hubs consolidating our business into the remaining hubs and shifting to the new strategy at the same time, we're going to go and.
Right size, our inventory, which we have already started to do.
With really good results. So that's why you're going to see a little bit more volume in Q3 as we had the transition. We also had a full month of July with the old strategy and then the fourth quarter will be much more of the pure new strategy.
Perfect.
I'm, sorry, just to add on the value side, we have learned that the online checkout.
Checkout channel has the same penetration of value card for us as it is into the you know the old strategy. So from that point of view, we're not going to see a change.
However, with value, becoming more prominent in our sales you're going to see much better unit economics.
Perfect. Thanks, that's very helpful. And then maybe you know as you kind of get past. This merger what should we be expecting you know at a steady state and mature business from a margin standpoint is it materially different to what you guys have kind of hinted that you guys can get to the past.
So it's gonna be different from both gross profit and definitely from an SG&A point of view as for gross profit we have for a while late of course of how we can increase our GPU, we had really good outcomes coming out.
You've been the past couple of quarters with the incredible growth in F&I are growing more than 50%.
Year over year. So we said of course, how we get to somewhere between 36 to 3800 G.
GPU by 'twenty and by 2024 on top of it.
Gonna see major improvement on the SG&A side, Jeff.
Jeff talked about the cost reduction initiative that will can save $80 million.
Throw out the SG&A, both in G&A and corporate overhead, but most importantly in the selling channel and marketing.
We go through the new strategy.
Okay understood. Thank you very much.
Thank you.
Okay.
And again, if you'd like to ask a question. Please press Star then one our next question will come from Brian Nagel with Oppenheimer. Please go ahead.
Hi, good afternoon.
So obviously a lot of a lot of news your diverse to digest this and maybe I'll ask a couple of questions.
Each of them together.
But me the first one we're just with respect I guess stepping back.
The overall operating environment demand environment.
What what youre seeing in the used car business right now.
An update there I mean, how how is demand progressed through the quarter, particularly in light of some of the challenges out there like still older used car pricing and then second with respect to the proposed merger with car watch. This will understand it goes back to maybe Stephens question. A couple of questions ago. If this is the synergy between Carlos.
So that shift.
Basically carwash will serve as a as a means to channel more vehicles to shift to ultimately solar so I want to make sure I'm understanding just not that simple nature well.
But Dan do you want to take the first question and I'll take the second.
From a demand point of view, we've seen good demand in in the second quarter.
And actually continued and into July what we are seeing is customers moving down the value curve, meaning there is higher demand for a less expensive vehicles.
That obviously are a function of the economic environment, but people are still buying cars and selling cars to us.
A lot of the purchases and that we are seeing are.
Necessary for the for the customers are not discretionary so from that point of view, we think we have an advantage over selling newer more expensive cars.
Mhm.
Great and then and just to double click on the synergies and again, Brian There's a lot of information we view it as a kind of a step stepping stone. So first Carlos it's already executing in their management team has already put in place a strategy to get to breakeven in their stores.
It gives us a lot of confidence. We then look at the profitability and the sell through of the sports increasing shift brings two core assets.
Shifted that had been investing in technology that technology forward used at a retailer and to the assets that we're most proud of would be our customer.
Acquisition engine, so that we can source margin rich car be it value cards work for core cars. It is something that really differentiate our business and we're proud of so bringing that acquisition engine to the.
Carlos scores.
Lee our E Commerce engine, which you know is going to be the full focus of the course, if business. We believe will drive incremental Audi to each of the car lot stores incremental sales broaden their reach increase their sell through.
Those two things we feel are very powerful.
And frankly, there are a lot of the premise on which we built the marketplace, especially in the second because we bought the fair marketplace to further enhance our self service checkout, our online checkout that integration is going exceptionally well and we think that that same technology that will help marketplace.
All our partners will help and support the growth of carloads.
Got it Okay. That's very helpful. And then maybe just one quick follow ups I mean clearly the.
Shifting then in the entire they're used car specie.
Sure very fluid at this point, there's a lot happening but is there something in particular that is driving the timing of the merger.
Well again, we we've gone through a process as the environment has changed.
Two first reset our strategy that would require less capital to fund to become fully funded.
The merger with Carlos allows us to fully fund our plan and then it provides the upside it's Carlos achieves breakeven when you drive the synergies that I've discussed.
And we eliminate duplicate SG&A or.
And focus on you know.
More units across the.
The G&A base that we've established.
Take one other synergy that I think will be in the future of and I'd love to explore Carlyle obviously has been a fantastic consignment retailer we've long been impressed with their.
Their partners their strategic relationships, and we think that there's an opportunity in the future to leverage those but that's a little bit of a future opportunity.
Got it I appreciate it thank you.
Yeah.
And again, if you would like to ask a question. Please press Star then one.
And this will concur.
<unk> a question and answer session.
Also concluding today's call we'd like to thank you for attending today's presentation and at this time you may now disconnect your lines.
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Okay.
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