Q2 2022 Ramaco Resources Inc Earnings Call
To to.
To for.
Good day and welcome to the Ramica resources.
2 Q2 022 results 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 will be an opportunity to ask questions.
To ask a question, you may press star then 1 on your telephone keypad. To withdraw your question, please press star then 2.
Please note this event is being recorded. I would now like to turn the conference over to Jeremy Sussman, CFO . Please go ahead.
Thank you. On behalf of Ramaco Resources, I'd like to welcome all of you to our second quarter 2022 earnings conference call.
With me this morning is Randy Atkins, our Chairman and CEO , Chris Blanchard, our Chief Operating Officer, and Jason Fannin, our Chief Commercial Officer.
Before we start, I'd like to share our normal cautionary statement.
Certain items discussed on today's call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements represent RAMACO's expectations concerning future events.
These statements are subject to risks, uncertainties, and other factors, many of which are outside of RAMICOS control, which could cause actual results to differ materially from results discussed in the forward-looking statements.
Any forward-looking statement speaks only as of the date on which it is made and except as required by law, RAMICO does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. I'd also like to remind you that you can find a reconciliation of the non-GAAP financial measures that we plan to discuss today in our press release.
Lastly, I'd encourage everyone on this call to go onto our website, RANACOresources.com, and download today's investor presentation under the events calendar. With that said, let me introduce our Chairman and CEO , Randy Atkins.
Thanks Jeremy and good morning to all.
When we telegraphed our first half results in May, we expected to ramp to a significantly stronger second half. That's still the case, despite our recent, and we hope temporary, closing of one of the three Berwyn mines.
Based on the $121 million first half of the dot print.
2022 safely looks to be a record year for us on about every metric by several multiples.
We now only have about 200,000 tons left to sell for this year.
Against sales to date, we have effectively generated earnings that currently guide to about $340 million of 2022 mine level EBITDA.
As you know, the 2023 domestic sales season is already now upon us with an extra twist this year.
Last year we had MET prices moving north during this period. This year European thermal customers currently seem willing to pay more than our traditional MET coal buyers here in the States.
We will soon see if our domestic steel customers adjust to the higher price and dynamic.
Like most producers, we will look to place our tons for next year for the best possible netback pricing.
Indeed, we placed a sale a few weeks ago to a European thermal buyer at a price well north of Met.
This may turn out to be a very interesting fall.
As we look at the first half, 2022 has turned out to be the, quote, downer year of the rails, unquote, for almost every producer.
We were dinged with about 200,000 ton first half inventory build, largely from missed or delayed rail shipments.
We are currently hearing all the right notes from the rails that the second half deliveries will improve.
All we can do is hope and see.
As I reviewed the peer group consensus earnings before this call, I noted how many of us had diminished rail capacity and mined tons we could not move.
Similarly, when coal is mined but cannot be sold because of delivery issues, the inventory bill does not improve cost.
We had some costs creep this quarter, which Jeremy will detail, but again, we expect second-and-a-half costs to come down meaningfully.
We are already starting to see improvements in some of the inflationary direct mine costs, like diesel fuels and rip bolts. Of course, the second half will see the full reduction on royalties from our recent Ramico coal purchase.
I think our main takeaway from the first half is despite some current softening and benchmark prices, we take a longer term view of continued strength in the medco markets.
There is still a multi-year mismatch between Metcoals supply availability and demand, and that is both in the U.S. as well as overseas.
We are witnessing current global market dislocations, which we also do not see resolving themselves in the near term.
Indeed, there may be several global events ahead which could exacerbate these already stretched markets and logistical supply lines.
Despite the backdrop of recessionary economic sentiments,
All this could lead to the same form of price volatility that we witnessed earlier this year.
From our vantage, we feel perhaps confusion breeds opportunity.
We are marching ahead in full growth mode to increase our long-term guidance to at least 6.5 million tons over the next 2-3 years.
This triples our production level from where we ended 2021.
This year, on the back of the Berwyn ignition incident,
We will slightly miss an earlier production forecast of roughly 3 million times.
But we are now looking to a total of roughly 4.3 million tons of production next year and over 6.5 million tons in 2025.
We have taken two steps since our last call to enhance that future production.
First, we have started an increase in the processing capacity at our Elk Creek Preparation Plant.
to now reach 3 million annualized tons by the middle of next year.
We had previously announced an increase of 2.5 million tons and have now bumped that figure.
Next, we have entered into an agreement, which we just announced yesterday, to acquire the 33 million ton Maben-Lovall mine reserves in West Virginia for $30 million.
After closing, we will begin mining later this year and expect a 250,000 ton high wall production level by 2023.
We also have the optionality in the future to build a permitted deep mine and prep plant to increase the maven production capacity to over a million tons.
The immediate spend involved in both the additional Elk Creek and Elk Creek, the Elk Creek area,
Capacity increase and the Mabon acquisition will add about 20 million in CapEx this year and 5 million next year.
For those interested in the metrics of our overall growth projects and the spend to get us above the 6.5 million ton annual level, they are outlined in some detail in the earnings presentation.
In addition to the Mabon Deep Mine, we also have other options which might indeed take us north of the 6.5 million ton level dependent upon future market conditions and permitting.
So with that, I would now like to turn the floor over to the rest of the team to discuss more detail on finances, operations, and the market. So Jeremy, please run down our financial metrics.
Thank you, Randy. I'll start by going over our 2nd quarter 2022 financial highlights.
Adjusted EBITDA of $58 million was 220% higher than our previous second quarter record.
We have now generated almost $122 million in adjusted EBITDA through the first half of 2022, which is more than 50% higher than our adjusted EBITDA for all of 2021.
Unfortunately, as Randy mentioned, the rail transportation issues that we flagged on our last two earnings calls persisted throughout the second quarter. We continued to build inventory, taking our total first half of the 2022 inventory build to more than 180,000 tons.
As we noted in our press release, had that call shipped, we believe earnings per share and adjusted EBITDA would have been higher by 65 cents and $40 million respectively.
The good news is that a meaningful portion of this inventory is now booked for delivery, mostly in the fourth quarter, against the API2 thermal coal index, which nets back to roughly $250 per short ton at the mine based on the curve.
Turning to our full year 2022 outlook, I would like to touch on a few key areas in our guidance tables. First
On production and sales, we are lowering guidance to 2.8 to 3.1 million tons from 3.1 to 3.4 million tons.
Most of this decline, of course, comes from our Berwyn mining complex, where, for guidance purposes, we assume that the Berwyn mine will be offline through year-end. I would note that we hope this turns out to be conservative and expect to know more over the coming weeks.
We anticipate normal production from Laurel Fork and Triad at our Berwyn complex.
Second, we are increasing our cost guidance to $89 to $97 per ton, up from $82 to $90 per ton.
Looking at year-to-date costs of $104 per ton, this is up over $35 from full year 2021. Putting this into a few buckets, roughly 40% of the increase is due to inflationary pressures such as higher raw material costs.
Roughly one-third is due to higher sales related costs, and another 25% is due to the combination of higher labor costs and lower productivity as new mines ramp up. We continue to anticipate better second-half costs on stronger production, moderating raw material prices, and the positive impacts from the Ramacocol transaction and the start-up of our Berwent Preparation Plant.
Lastly, on the 2022 Guidance Front, we are increasing our capital expenditure guidance to $105 to $125 million, up from $80 to $95 million.
Almost 60% of this increase is due to capex associated with the Maven transaction, with another roughly 20% due to the increase of the Elk Creek preparation plant expansion to a total capacity of 3.0 million tons, up from 2.6 million tons previously.
The rest of this increase is due to some incremental production at our Triple S and Big Creek Jawbone mines.
I would note that $70 million of our $115 million 2022 CapEx budget at the midpoint relates to growth.
This is perhaps a good segue to our new medium-term growth target of 6.5 million tons of production up from 5 million tons previously. I would like to point you to slide 6 and 7 in our presentation.
We now show our multi-year production growth in detail with an expectation of producing 4.3 million tons in 2023, 5.5 million tons in 2024, and 6.5 million tons in 2025.
I would note that some of this growth is still subject to Board approval, which of course is dependent on market conditions.
That said, as we show on slide 7, we believe we can get to 6.5 million tons of production in 2025 at a very favorable CAPEX intensity.
Specifically, we are increasing our 2022 growth capital by roughly $25 million, based largely on the Mabon acquisition and Elk Creek prep plant expansion, as previously discussed.
Then, for a total of $95 million in growth capital split between 2023 and 2024, we anticipate completing our full build-out of the 6.5 million tons of annual production. This, of course, is almost triple 2021 production levels of 2.2 million tons.
Importantly, I would note that in addition to our improved production growth profile, we continue to anticipate returning increasing amounts of cash to our shareholders, while also maintaining a very conservative balance sheet.
In short, we view Ramaco as both a growth story and a capital return story, which we believe positions us uniquely among our peer group.
I'd now like to turn the call over to our Chief Operating Officer, Chris Blanchard.
Thank you Jeremy and thanks everyone for joining us this morning.
We've had a busy several months as we continue to both grow.
and we plan to increase the pace of that growth over the next several quarters.
I'd like to touch on several of the milestones from the second quarter before talking a bit more about our immediate growth plans and then about the burrowing mine specifically.
We ramped production at our new Laurel Fork mine at the Berwyn complex during the quarter. This ramp will continue through the third quarter and should reach full production during the third quarter as we expect all equipment deliveries to be made and the full super section of equipment to be in place by late August .
Also, in the second quarter, we started a new underground mine at our Big Creek complex in the Jawbone seam of Cole, which will operate as a company mine now instead of as a contract mine.
Ultimately, this approach will give us higher overall productivity as well as lower overall total costs.
Our crucible mine at Elk Creek started in the second quarter and has ramped up and has largely reached its full production rate.
We have also moved forward some of our capital spend and equipment purchases for the RAM number 3 surface mine and the RAM number 3 hollow miner units at Elk Creek.
Finally, we have started to see the Berlin plant upgrade and rehabilitation pick up pace and we expect to be operational there by September .
with anticipated loadings of our first trains out of the Berlin plant.
in the fourth quarter.
On cost, as Jeremy mentioned, we continue to see inflationary pressures throughout the organization.
Raw material pricing generally continues to be elevated from historic levels, though we hope to see this moderate more in the second half.
I would note steel and diesel prices are down from the recent peaks.
Labor scarcity is still impacting not just the availability of coal miners, but all skilled labor throughout the supply chain.
All of these pressures are contributing to the cost creep and delays which Jeremy described.
Turning to the Berwyn Mine.
As we previously released, sometime between July 6th and July 8th, an apparent methane ignition occurred in the mine.
There were no injuries. The mine was fully idle at the time for a scheduled ventilation fan upgrade with all electrical power de-energized underground and no personnel present.
Since discovery of the accident, no additional personnel have been in the coal mine.
We are working with all the agencies to make the mine safe for mine rescue personnel to reenter the mine and start the reventilation process.
Once back in the mine, we'll take steps in conjunction with the appropriate authorities
to begin the investigation of the accident and the rehabilitation of the coal mine.
Of course, we will continue to keep everyone informed as we learn new information.
Finally, I'd just like to touch on the two major growth projects that we announced. At Elk Creek, we are increasing the annual throughput of our preparation plant from 2.1 million clean tons annually to approximately 3 million clean tons.
We anticipate this work to be done while the plant is still running at full current capacity with minimal interruptions.
We're also very excited about the Maven acquisition.
which is almost a low volatile mirror image of our Elk Creek acquisition from years ago.
We are acquiring an idle development reserve asset with surface and hollow miner permits that are immediately ready for production.
We expect to bring the first tons off the property late in 2022.
In addition, we are acquiring other underground mine and preparation plant permits that are in place.
as well as a proposed Norfolk Southern loadout.
The reserves acquired would easily support a future standalone complex capable of producing one to one and a half million clean tons annually at full build out.
With that, I'd like to turn the call over to Jason Fannin, our Chief Commercial Officer, to discuss the markets and our strategy and positioning there. Jason?
Thanks, Chris, and good morning, everyone. I will share what we are seeing in the markets in our current forward sales outlook.
The cooking coal market has pulled back from its historic highs over the last several weeks. There are several reasons. Following economic growth.
seasonal slowdowns and steel production.
and steel markets which appear to be pricing in some recessionary feel.
Nonetheless, U.S. steel capacity utilization remains strong. Our steel customers are expecting strong auto demand to bolster forward production and pricing.
The US high vol A spot price is currently assessed at $245 per metric ton.
Although that is down from its record highs immediately following the invasion of Ukraine, it is still up 20% over year ago levels.
The forward met curve remains in steep contango.
There remains a palpable supply-demand imbalance. There are a host of reasons for this.
Australian Met exports still lagged 2021 levels.
Shippings from Russia are both declining and will be outright banned by the EU later this week.
And North American exports show little year-over-year improvement, even with record high pricing.
This overall imbalance is predicated by structural underinvestment in the entirety of the coal sector.
We believe this supports continued future strength in MET prices. It also plays a large part in the current forward MET pricing contango and supports stronger for longer MET coal prices.
As we have recently seen, strong domestic and seaborne thermal demand continues to underpin US Met prices.
This is providing a price floor for US highball prices, which is currently more than 20% above Australian met prices.
Like many of our peers, Ramico has explored shifting met volumes to the thermal market.
As Randy mentioned, we have already transacted for a significant volume of thermal sales in T-URUP for the back half of this year. Their price is well above current med values.
We also are continuing to explore placing significant quantities of our Plan 2023 metallurgical production into Europe .
We have now committed roughly 95% of our planned 2022 production. Given current market dynamics,
We look to place our remaining time in those markets which will provide the highest margins.
As we look forward to our production growth in 2023, the focus of our sales efforts
Likewise, center around capitalizing on those markets most profitable to the company.
whether they be domestic or seaborne, metallurgical or thermal.
Overall, we like the current market conditions as they apply to RAMICO.
We see a protracted imbalance of cooking coal supply and demand.
which is supportive of a protracted period of elevated cooking coal pricing levels.
We also see a thermal market critically starved for certainty of supply and looking to the U.S. for solutions.
With that said, I would now like to return the call to the operator for the Q&A portion of the call. Operator.
Thank you.
We will now begin the question and answer session.
To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys.
To withdraw your question, please press star and 2.
At this time, we will pause momentarily to assemble our roster.
Our first question comes from Lucas Pipes with B. Riley Securities. Please go ahead. A question from Audience from Scott For a Robert
Thank you very much operator and good morning everyone. I first wanted to touch on the cost side a bit and apologies if I missed it but is there a way to bridge the current guidance versus the prior one in terms of what the major
components of the increased work between the issues of burn wind, inflationary pressures and so on. How would you frame that up? Thank you very much.
You want to take that one? Sure. Thanks, Lucas. I think a good chunk, obviously, when you lose about, call it, 300,000 tons of production at the midpoint, no change to our headcount plan. A lot of that is clearly going to be related to the impacts at Berwyn. Let me walk you through where we do see things going in the second half. Check that out.
Obviously, we see second half costs coming down meaningfully at the midpoint. To give you a sense of head count, we were over 600 people on June 30th, which was up over, call it 50% year over year. When I look to the back half of the year, even despite the Berwind ignition event, we do see production ramping, certainly at a number of mines. About half of the cost in the back half of the year decrease is going to come from labor and productivity gains.
we think call it another 25% or so from kind of raw material costs. And another, let's say about 25% from the combination of sales related costs and trucking due to the to the Berwyn plant start. So hopefully that gives you a little bit of comfort about where we are today and where we see the costs going in the back half of the year.
That is very helpful and I assume in 2023 you would continue to leverage these six costs. Is that the right way to think about it?
Yes, that's correct. Obviously, we'll get more detailed with guidance as we go through the budgeting season, but that's a good way to think about it. Lucas.
Okay.
That's helpful and then switching topics on the volume side. He you again built inventory in the second quarter
How confident are you about
you know, better rail performance from the second half of the year and the ability to...
to de-stock some of these levels here. Thank you very much.
Yeah, I mean I think I think the reality on the rails Lucas is we know they're trying
They've had issues, I think, with manpower, filling manpower requirements, which we gather there in the process of trying to rectify that. As I said in my remarks, we've had a tough first half. I know everybody else has as well. So I know that they have a large focus on that. Jason, would you like to comment any further on some of the more granular aspects of the delivery issues? Sure, Randy.
We recognize, certainly they struggle with labor just as the industry has here as well. We're encouraged by the hiring numbers in both the Eastern railroads that we've seen. We saw a blip of improvement throughout Q2 and those continue onwards.
just as the industry has here as well. We're encouraged by the hiring numbers in both the Eastern railroads that we've seen. We saw blips of improvement throughout Q2 as those continue onwards.
Like our competitors, we stay close to the railroads, you know, rising with forward schedules. Our back half shipment plan is in place with them both. We're confident they'll continue to improve as we started to see here lately as we finalize these back half deliveries.
I appreciate the color. Thank you. Randy, I'll try to ask another question for you. Met-coal contracting season for the North American market is upon us. Are you willing to venture any guesses as to prices for 2023 and more broadly, what's your contracting strategy, seaborne versus demand?
Thank you very much for your color.
Well, I think in general we see the market being a little stronger this year than we did last year. How much stronger will remain to be seen, but as I said in my remarks, the interesting kind of pressure is that last year, of course, a number of the U.S. customers came out in early August .
The settlement really didn't fully occur until sometime in mid-October because prices kept rising. This year, it's a slightly different dynamic because the pressure really on pricing is coming from not only overseas but from thermal. Although we've got a little softness right now, I think on the API, two numbers based on some... yeah...
issues with the water level of the Rhine River and a few things of that nature, we think sometime this fall that those pressures will be relieved and that the thermal prices in Europe will probably continue to go back up based on both factors such as that as well as some geopolitical aspects. I think it's going to be an interesting season.
And in terms of our approach to our book, we've historically tended toward being a little overweighted domestically. I think this year we were probably about 55% domestic, 45% export. And I wouldn't be shocked if next year we kind of reverse that, that we're a little stronger on the seaborne side than we would be on the domestic. But we will see, as I said, it will probably be a very interesting month and a half.
Thank you very much Randy and to you and the entire team, best of luck. Thanks Lucas.
Our next question comes from David Gagliano with BMO Capital Markets. Please go ahead. Thank you.
All right, thanks for taking my questions. Just 1st of all on the 2023.
volumes of production, 4.3 million tons.
and the interplay that you just flagged with regards to thermal versus MET. Realistically, in your opinion, how much of that 4.3 million tons would ceramic shift into the thermal market?
Well, I would say, let Jeremy get into some granular details, but the interesting part is that we've got some of our mid-vol.kill you here.
presents itself as a very good thermal product. That's frankly what we've been moving to for the second half of the year and then some of our highballs as well.
So.
I think that's right, Randy. We think the majority of our coal works in either market. As Randy said, David, we're going to go wherever the best net back lies. Chris, do you have any comment you want to make on that?
perhaps maybe topside million to a million and a half tons that potentially could switch. Jason Taylor, Chief Operating Officer, VMSI, California Department of Transportation Yeah, this is Jason. With the reception we've seen for several of our coal qualities in the VMSI, we've seen a lot of coal qualities in the VMSI, we've seen a lot of coal qualities in the
the thermal market as well as the industrial market.
and discussions we've got ongoing now towards 2023 shipments. Certainly the ability there to move a million million a half is out there.
Okay, that's helpful. Thank you. And I'm just shifting gears to the Maven acquisition. I just wanted to ask about the, you know, quote unquote, the other 31Million tons of the total 33Million tons of reserves. Press release indicated could be developed in the near. Near term, I think is what it said potential volumes of. A 1Million tons per year are up to, you know, what would that development and pale? What are the capital costs associated with that development? And when should we expect a decision on developing those?
the remaining reserves. Sure. So, I mean, the simple answer is that the thing that we've green-lighted right now is to go ahead and start a high wall operation for a quarter million tons. That's what we'll be doing next year. We've got the permits in place to do both of mine as well as a prep plant, the metrics that you set forth. We probably won't consider that until sometime, I would say, second half of next year or maybe even at 24. So I don't really wanna get too far ahead of what the...
the cost would be at this point, but they would be generally in line with building a plant that would be able to handle probably a 750.
ton operation per day at the plant. The operations will be at least one or more deep mines.
Okay, so it's a full on prep plant with an underground mine. Yes, sir. Okay. Got it. Thanks. And then just the last question, if you could just give us an update on the tracking stock that was announced, or the plan for the tracking stock and the status of that. You bet. So I think on the tracking stock, as you can understand, we're a little bit handcuffed because we haven't filed the registration.
which we frankly will probably do within the next few weeks. As soon as the registration is filed, you know, we will be able to divulge a lot more about that. But we're you know, hopeful that that process will go reasonably smoothly. Like most registrations, you don't know until you've filed it. But we're hoping for something that would probably be in the October timeframe that we will be able to discuss that with a lot more detail......................
Okay, that's awful. Thank you.
Okay, that's awful. Thank you. Thank you, David.
Our next question comes from Nathan Martin with the Benchmark Company. Please go ahead.
Hey, good morning guys. Thanks for taking my questions. Have a good night. Thanks for having me. Have a good night.
I think a lot of my topics probably touch on this point, but maybe how should we think about the cadence of shipments over the back half? When you expect to move with 180,000 tons or so of inventory you have, I know you mentioned the chunk is scheduled to go in the fourth quarter, I believe, to that thermal customer in Europe . Do you see any of those shipments, 180,000, kind of getting delayed at 23 at this point? Thanks. That's a great question, Nate.
shipment that we referenced in our prepared remarks in the press release. The majority of that is Q4, so hopefully that gives you a bit of a sense of the cadence.
Yeah, that's very helpful, Jeremy. Appreciate that. And then I think I asked a similar question last quarter, and this goes along with my first question. Can you give me an idea of the split between domestic and export sales in 3Q and 4Q, again, just trying to figure out how that would affect your average real-life pricing?
Yeah, also a good question, Nate. In Q3, domestic will still be a bit heavier than average. It will be, let's call it, in the 65 to 70 percent range. And in Q4, it should be a 50-50 split, again, in line with sort of the inventory online, a lot of which is going export.
Great. Thanks, Jeremy.
It may be a question of production. Could you guys maybe bridge us from the 3 million tons of production expected this year to the new target rate of 4.3 million in 23? Again, just to summarize, it sounds like maybe 250,000 from the high wall at Mayden. The prep plant expansion at Elk Creek sounds like maybe middle of next year. Also, are you assuming full return of the Burman line? Any color there would be great.
Chris, you want to handle that? Yeah, I'll sort of hit the high points and of course there's going to be some
some dogs and cats in there and if you go through the presentation you might look on slide seven.
But the big chunks of that growth is about a 400,000 ton increase year over year from what we now expect out of Berwyn to what we expect in 2023 out of Berwyn mine assuming that we get back into production.
We've got the ramp up of our RAM number three surface mine is approximately a little less than 200,000 tons next year.
We've got an additional section at our number two gas mine at Elk Creek, which is about 300,000 tons.
As you mentioned, the 250,000 tons from Maven. We've got some of the mines that we've started up this year, Triple S, the Big Creek underground mine in the Jawbone, those contribute another 400,000 combined. You add up all of those pieces and that gets you from the 3 million to 4.4. The biggest chunk is the restart of Burland.
Got it. Thanks, Chris.
And maybe just one final one kind of going back to the opportunity to sell met into the thermal market I think you guys mentioned earlier that the reception has been pretty pretty good so far I just just wanted to kind of dig into that a little bit. I mean From the chemical composition with vols first flowing properties. It's everything kind of look like it's being Reception is pretty pretty good there, and then maybe is there any opportunity to kind of increase yields? You know if you sell your your met is thermal. Thanks
And this is Jason. On the reception, on the qualities of the Medco, certainly there are limitations, particularly in terms of swelling and volatile content.
What we found is you've got to find the right users for the right coals. Either users are able to blend the swelling properties into their mix, or users that are accustomed to using those sorts of coals.
And we've just been able to make the right inroads with the right folks on that end for our particular mid-vault and high-vault calls both.
I'll leave it to Gris on the...
I'll leave it to Gris on the efficiency gains.
Now there definitely are some and we haven't.
And we haven't budgeted those into those production numbers, but obviously we'd run our preparation plants at a little bit higher gravity, have a little bit higher recovery, targeting thermal versus targeting metallurgical.
Thanks for that information guys. I think I'll leave it there. I appreciate the time and best of luck in the second half.
Thanks for that information guys. I think I'll leave it there. Appreciate the time and best of luck in the second half.
This concludes our question and answer session. I would like to turn the conference back over to Randall Atkins, Chairman and CEO , for any closing remarks. Great. Well, we appreciate everybody being on the call today, and we'll look forward to communicating with you here as we move into the next quarter. Thanks very much.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.