Q4 2022 Interfor Corp Earnings Call
Speaker 2: Good morning ladies and gentlemen and welcome to the Interfour Quarterly Analyst Call Conference call. At this time, all lines are in listen only mode. Following the presentation, we will conduct a question and answer session. If at that time during the call you require immediate assistance, please press star zero for the operator. This call is being recorded on Friday, January 10, 2023. I would now like to turn the conference over to Ian Villenger. Please go ahead.
Speaker 3: Thank you, operator, and thank you, everyone, for joining us this morning. With me on the call, you have Rick Pausabon, Executive Vice President and Chief Financial Officer and Bart Bender, Senior Vice President of Sales and Marketing.
Speaker 3: Our agenda today will start off with myself providing a recap of our accomplishments in 2022 and our strategic positioning. I'll then pass the call to Rick who will cover off our Q4 financial results and then Rick will pass the call to Bart who will cover off the markets.
Speaker 3: Starting with our accomplishments this past year.
Speaker 3: 2022 was a solid year for Inter 4.
Speaker 3: We generated adjusted EBITDA of 1.1 billion with industry leading margins.
Speaker 3: We completed two acquisitions that substantially increased our capacity, expanded our footprint into new operating regions, and diversified our product mix.
Speaker 3: We continue to optimize our existing portfolio, selling our last mill on the BC coast while investing over 300 million in capital improvements mainly in the US South.
Speaker 3: In addition to our growth and reinvestment, we also returned almost $330 million to shareholders via share buybacks, reducing our share count by a further 15%. And last but not least, the combination of all of these initiatives, and the growth and reinvestment, has been a huge help to our community.
Speaker 3: resulted in interfore being able to generate industry leading returns on capital extending our multi-year track record on this all-important metric.
Speaker 3: The key takeaway I want to leave with you is that our strategy is working as we intended.
Speaker 3: The steps we have taken as a company and the ongoing initiatives give us great confidence in the future value creation potential.
Speaker 3: To our strategy and positioning, our acquisitions in the last two years have expanded our footprint in existing key regions in the U.S. South, the U.S. Northwest, planted our flag in Ontario and Quebec, and most recently added New Brunswick as we closed out the acquisition of Chellure Forest products.
Speaker 3: during the fourth quarter. At the same time, we've continued to trim and optimize the portfolio in regions where we see less potential, underscoring our decision to sell the ACOR facility in British Columbia, as well as continuing to monetize options for the remaining BC coastal timber tenures.
Speaker 3: We are now the only publicly traded pure play lumber producer of scale and the only lumber producer with operations in all major timber producing baskets in North America.
Speaker 3: We have also recently grown and become the largest producer of studs and MSR lumber in the world. And we are actively working to leverage this position to improve margins and increase market share.
Speaker 3: Our growth has been well timed and the integration has been smooth, and we have now placed veteran Interfer executives to oversee operations by country. Andrew Horahan for Canada and Bruce Lexmore for the US.
Speaker 3: Andrew and Bruce have deep expertise and will continue to advance our inter-four culture of operational excellence in capital discipline.
Speaker 3: Scale has also allowed us to realize significant synergies as we leverage our core lumber expertise across larger network.
Speaker 3: In addition to operating synergies, we also see opportunities in areas such as working capital.
Speaker 3: The previous owners had a much smaller scale and took a different approach than we can.
Speaker 3: We are running down the inventories and we are keeping them lower, which will free up cash and ultimately improve returns on capital.
Speaker 3: We have also grown our SPF volumes by expanding into Eastern Canada. This is enabled us to meet the demand left as some of our competitors have curtailed and continue to curtail SPF production in British Columbia.
Speaker 3: SPF is in limited supply both in North America and globally and our eastern Canadian growth is positioned as well to benefit from these trends.
Speaker 3: Rick will cover off our financial details shortly, but from a balance-cheap perspective, we continue to have significant financial flexibility to execute on our CAPX plans across the US so and pursue other value creation opportunities.
Speaker 3: Underlining our entire strategy is our track record on returns. As I mentioned earlier, Interfor is now the clear leader among peers for returns on capital.
Speaker 3: We are responsible and strategic with our investments in our capital allocation decisions.
Speaker 3: In summary, we feel very confident about how we are positioned for the medium and long term.
Speaker 3: Turning to the market.
Speaker 3: We have taken proactive steps to address the conditions over the last several months.
Speaker 3: We all know that volatility is given in our sector, and of course we're no strangers to the up and downs of the lumber market.
Speaker 3: One step we have taken is downtime and we've been an industry leader in matching our supply to the market.
Speaker 3: During the last two quarters, we reduced our lumber production by total of 300 million more feet, which represents about 25% of our quarterly capacity.
Speaker 3: Another step we have taken is our capital spending.
Speaker 3: We had recently guided towards 2023 CAP-X at approximately 300 million.
Speaker 3: However, considering the market conditions, we are now planning to reduce our strategic strategic cap-ex plans by 60 million throughout 2023.
Speaker 3: I will note that we were able to quickly make mid-plan adjustments of this scale because we have an extremely capable internal CAPEX team that oversees and implements our projects.
Speaker 3: If we invested based on turnkey projects and relied on external personnel, we'd have much less flexibility to pivot.
Speaker 3: Finally, we have also developed a comprehensive downturn playbook that has been refined over many years.
Speaker 3: This plan involves empowering all frontline managers from every business unit and workstream across the company and making them accountable to deliver on a wide variety of risk reduction, capital preservation and efficiency initiatives.
Speaker 3: These initiatives all have hard targets with a clear focus and discipline on all aspects of our business.
Speaker 3: We see these proactive steps as an opportunity to make our new company even stronger.
Speaker 3: With respect to the outlook, we remain positive on the medium to long-term outlook demand going forward, as demographic trends and years of underbuilding will continue to provide strong tailwinds. We believe that the underlying fundamentals remain favorable.
Speaker 3: On the supply side, we think the volume needs to continue to come out, and we expect that our competitors will follow our lead both on a temporary basis and on a permanent basis, particularly in British Columbia.
Speaker 3: to some things up before I turn it over to Rick and Bard. Our guarding principles are always operational excellence in capital discipline.
Speaker 3: We believe that this is always a path to success and also very important in challenging markets.
Speaker 3: Over the last several years, we have built what is in many ways a new interfer.
Speaker 3: Our Air Force team has used a recent downturn well, and we are stronger because of the efforts across our company.
Speaker 3: We are extremely enthusiastic about the months and years ahead and firmly believe that now is a great time to be invested in Interfor. With that, I'll turn it over to Rick who will walk through some of the detailed financials.
Speaker 3: Over you Rick.
Speaker 3: Thank you, Ian, and good morning. First off, I'll refer you to cautionary language regarding forward-looking information in our Q4M DNA.
Speaker 3: As Ian mentioned, 2022 is another transformative year for Interfore in several respects.
Speaker 3: With respect to earnings, 2022 is the second best year in interforce history, with EBITDA of nearly $1.1 billion and earnings per share of nearly $11.
Speaker 3: robust lumber markets in the first half of 2022, easily outweighed the impact of weakened demand in the second half of the year. This lower demand is mostly attributable to the negative housing affordability trend to do lack of supply from over a decade of underbuilding combined with significantly higher mortgage rates as central banks took action to clue inflation.
Speaker 3: With respect to returns, 2022 saw Interfore continued to build on its track record of generating industry leading returns with EBIT return on capital employed of nearly 30%.
Speaker 3: Successful capital allocation has underpinned this growing track record, including well-executed capital projects, well-timed acquisitions that attract evaluations,
Speaker 3: and significant returns of surplus capital to shareholders.
Speaker 3: Turning to Q4 financial results, Interfer generated an EBITDA loss of $69 million.
Speaker 3: This figure includes $59 million of expense from being required to write down log and lumber inventories under accounting rules to reflect the depressed lumber prices at your end.
Speaker 3: Also included is $8 million of non-returning expense related to purchase accounting for the Schular Acquisition.
Speaker 3: Excluding these two items, Q4 EBITDA would have been near a break-even level.
Speaker 3: Our Q4 earnings result reflects significantly lower lumber prices across all products and species, combined with the lag and log costs adjusting down to reflect the lower lumber prices.
Speaker 3: The lumber price declines near quarter end appear to have been exacerbated by inventory de-stocking from the distribution channel in an attempt to reduce risk.
Speaker 3: Despite the earnings result, we managed to generate positive cash flow from operations of about $10 million in the fourth quarter, benefiting from over $100 million of working capital being released.
Speaker 3: largely from lumber inventories and receivables.
Speaker 3: From a balance sheet perspective, we ended the fourth quarter in a comfortable position with a net debt to invested capital leverage ratio of 26%.
Speaker 3: which is well below our internal management threshold of 35%.
Speaker 3: To better reflect in it for a significantly increased scale, we bolstered our available liquidity in the quarter by securing additional fixed-rate, long-term debt financing and expanding our revolving credit facility.
Speaker 3: Available liquidity was $486 million at year end, which is more than sufficient as we look forward.
Speaker 3: It's worth noting that the year-end balance sheet includes a current tax receivable of $104 million from over-installments in 2022, which is expected to bolster our balance sheet leverage and available liquidity as it's recouped throughout 2023.
Speaker 3: Looking longer term, it's worth noting that the Interfore suffered lumber duties on the positive total $512 million US at year end, representing about $10 per share on an after-tax basis.
Speaker 3: Regarding capital allocation going forward, Interforce priorities and focus on a balanced approach remain unchanged, in conjunction with maintaining conservative leverage on our balance sheet.
Speaker 3: We currently anticipate capital expenditures of $240 million for 2023, of which about $140 million relates to discretionary projects largely focused in the U.S. South.
Speaker 3: While we've already reduced our plan 23 expenditures for conservatism given the current market.
Speaker 3: We maintain significant flexibility to reduce spend even further if appropriate.
Speaker 3: To wrap up, Interforest transformative year of significant growth combined with leading returns on capital has left this well-positioned for long-term success through all market conditions.
Speaker 3: Our focus going forward will continue to be on operational excellence and balance cap allocation decisions that maximize returns on capital for our shareholders.
Speaker 3: That concludes my remarks on now turning the call over to Bart.
Speaker 4: Thank you, Rick. Good morning, everyone. I'll provide an outlook on lumber markets through Q1 and into Q2 2023. Lumber markets are navigating through sizable shifts in demand and supply, which in the short term have resulted in volatility in lumber prices.
Speaker 4: The majority of the lumber demand shifts have occurred in the new home construction and use segment. As affordability, combination of house price and mortgage rates, push some buyers out of the market resulting in a reduction of housing starts.
Speaker 4: The resilience of the repair and remodel end-use sector has been a highlight for us. Our shipments in this end-use sector are stable and consistent.
Speaker 4: The lumber supply site has and is in the process of responding to adjusting to lumber demand through curtailents both temporary and permanent.
Speaker 4: Interforce position remains consistent in that we adjust our production rates to the market's demands.
Speaker 4: This market situation is short term. We continue to be optimistic as the fundamentals on lumber demand growth remain largely unchanged.
Speaker 4: The climate rates remain high. Demographics favor increased household formation rates.
Speaker 4: aging housing stocks encourage increased repair and remodel work, household balance sheets remain solid, led by equity in their homes.
Speaker 4: Underbuilt housing market, suggesting demand should exceed household formation rates for the foreseeable future.
Speaker 4: On top of these are a couple other areas that I'd like to highlight that bring further optimism.
Speaker 4: Builder confidence is on the rise.
Speaker 4: with current sales, buyer traffic and the outlook for sales all improving in January over December , suggesting a bottom may have been reached. Mortgage rates are declining from a peak of over 7% to the high 5% range and are forecast to continue to decline.
Speaker 4: Housing prices have declined and are declining and overall affordability is increasing.
Speaker 4: Existing home for sale inventories remain low, providing new homes for sale.
Speaker 4: New homes for sale, a greater access to the overall housing market.
Speaker 4: housing starts have not fallen to the degree to which some have expected.
Speaker 4: On the lumber inventory side, both manufacturers and distribution have remained disciplined. It's our perception that both are operating at historical lows for lumber inventory.
Speaker 4: We believe the last several months have seen downward inventory adjustments to the lower end of the consumption range, and we are signaling that as markets stabilize through Q1-23 and into Q2-23, tension on supply has the opportunity to increase.
Speaker 4: Lastly, we welcomed our Atlantic operations toward network of Interform Mills. We now have production from four Canadian provinces in the eight US states giving us North American white coverage.
Speaker 4: Our ability to service our customers with high quality interfer lumber has never been better.
Speaker 4: With that, I'll turn it back over to you Ian.
Speaker 3: Okay, thanks Rick and Bart. Operator, we can open the line for questions at this time.
Speaker 2: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a three-tone prompt acknowledging your request and your questions will be pulled in the order they are received. Should you wish to decline from the polling process, please press the star followed by the two.
Speaker 2: If you are using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question.
Speaker 2: The first question comes from Sean Stewart with TD Securities.
Speaker 5: Please go ahead.
Speaker 6: Good morning, everyone.
Speaker 6: Um, double questions.
Speaker 6: With respect to the leverage and your management around that, you touched on the 26% debt to cap being in your...
Speaker 6: comfort range but arguably higher than some investors want to see at this point in the cycle.
Speaker 6: And, um, behind the catbacks reduction, uh, just want to focus on a couple of other levers. You might be able to pull.
Speaker 6: working cap at this point other than the tax receivable that's coming in. Do you guys have further room to bring that down at this point from your perspective?
Speaker 3: Good morning, Sean. It's Rick speaking. Yeah, absolutely. That's a lever we're looking to pull as Ian mentioned in his remarks. We've got opportunities across our platform to reduce the inventory's further and we've got some solid targets in place and we're looking towards those in the first half of this year, largely. So both on logs and lumber inventory.
Speaker 3: So, year end we probably had around $400 million of log and lumber inventory is roughly and there's still a significant opportunity there to reduce that further on a permanent go for it basis.
Speaker 3: As Sean, I'll just add that to see in here that the legacy interformals ran within our thresholds. But as we...
Speaker 3: acquired our Ontario, Quebec and New Brunswick operations. It was clear to us that the previous ownership had a different look on inventories and the ECOM assets have been coming down and the New Brunswick assets are coming down.
Speaker 3: We're not all the way there yet. There's definitely room in Eastern Canada to bring those log inventories in particular down to the risk level and the threshold levels that exist in the other operations that we've owned for a long time.
Speaker 6: Thanks, Radeon. The Timbertenures on the coast.
Speaker 6: Can you give us a little bit more detail on how you expect to manage that process? There was mention in the MDNA of working with First Nations communities, but from a broader perspective, the monetization of what you have there, can you give us any context on time frame?
Speaker 6: you expect to unwind those assets.
Speaker 3: Yeah, Sean, I mean we have NDAs on most of this so it's going to be a little bit vague but I guess the most important thing is that you know there's interest.
Speaker 3: significant interest in the tenures that we want to monetize, so that's very positive. We have monetized some already in 2022, as you know. We have over a dozen, you know,
Speaker 3: term sheets, you know that have been executed and we're in purchase agreement details. But underpinning all of this is the BC government and you know obviously approval there and you know the team led by Andrew and others in the company have done a great job over the last...
Speaker 3: for both parties and we've got a very supportive BC government around this strategy. So I would say our confidence levels fairly high on...
Speaker 3: on some significant transactions this year and probably more to come over the next 24 months also.
Speaker 3: That's probably about as much I think as we can say just given that much of this is in process right now.
Speaker 6: Understood. Okay guys, thanks. I'll get back in the queue
Speaker 3: Okay, next, Sean.
Speaker 2: Your next question comes from Paul Quinn with our BC Capital Market. Please go ahead. So we lost her there.
Speaker 7: Good morning guys, just question on where you are at on your integration of all these new apps that you've got.
Speaker 7: You just acquired Schiller, but I'm also talking about the XGP nose.
Speaker 7: to start up as well as you come. It's like I'm going to take the balance of 23, and then you'll be ready to rock in 24, or how are you approaching that?
Speaker 3: Yeah, Shawnee in here, sorry Paul, in here. Yeah, the GP mills essentially were through that. We feel fully integrated, both operationally, financially.
Speaker 3: in our sales systems, all green lights there. In fact, we're looking at some opportunities to, you know,
Speaker 3: You know make those mills even better so they're sort of being papered up now from a concept standpoint
Speaker 3: The E-COM acquisition, I would say, largely, we're not completely done, but we've got systems integration that we need to do. That's mid-year to cut everything over that way. So the back shop is...
Speaker 3: I guess six months away. And then on the operation side, we've made definite progress. But under Andrews leadership and the team that we have in the east and the team that's being formed, I would say.
Speaker 3: you know, we're making progress every day, but as you know, you know, the inner four.
Speaker 3: standards and operating expectations are fairly high and it's going to take a little bit of time to get those where I think where the other ones are. And I often look at the East, Paul is...
Speaker 3: you know, kind of, you know, when we think about the south or, you know, other, you know, regions that we've gone into, you know, from an operating and standards and, you know, uptime, it takes a bit longer, but we're confident we're making progress. The mills are getting better every day.
Speaker 3: Great outterms are improving. We've made, you know, I would say significant improvements and pulling value out of the log that, you know, the previous ownership just...
Speaker 3: for some reason wasn't achieving, but we're making really solid progress in those areas.
Speaker 3: pulling great out turn, you know, is the greatest labor you can do to make a change.
Speaker 3: I'm missing anything guys?
Speaker 8: I apologize.
Speaker 8: Jump in and add that with both E-commerce and Shlory identified $30 million of synergies and were well underway, there were more than halfway through realizing that. We'll expect to achieve the balance of that by the end of this year.
Speaker 3: Yeah, and then turning to Schler Paul out.
Speaker 3: that's gone extremely well. So we took it over at the beginning of December . I would say internally, obviously there's little things to do, but the majority of the work, they're integrated, they're on our systems, the mills have not missed a beat, and they're performing very well.
Speaker 3: very pleased with that acquisition of course it's
Speaker 3: much smaller scale than E-Comb. E-Comb was an entire business sales accounting, HR, what have you, and Schiller with the two mills and Woodland's profit center was smaller scope. But I would say we obviously got a little bit of work to do, good bit.
Speaker 3: largely it was a plug-in play and I should say contributing positively in this market.
Speaker 7: Good to hear. Just lastly on you guys mentioned the 512 million US you've got on your deposit. What are you guys doing to get that back?
Speaker 7: You know, we heard President Biden stated the union address to buy America this week. How do you think that's going to affect your Canadian operations?
Speaker 9: Have them.
Speaker 3: Yeah, Paul, I would say that the Canadian side...
Speaker 3: is spending time discussing probably at a greater degree than we've seen in years.
Speaker 3: And so I would say alignment across.
Speaker 3: you know that the Canadian operations and mills and overships are.
Speaker 3: much closer than they ever have been and I think the key will be
Speaker 3: reaching to the US side and seeing if we can achieve a similar
Speaker 3: I guess similar feeling of trying to bring this forward and putting it on the agenda of federal governments. So there is more discussions than we've seen.
Speaker 3: over the last month than we have in years, so I think that's positive. I just don't have a good read on the US side at this point.
Speaker 7: All right, and then any comment on the Biden approach to buy American.
Speaker 3: No, not really. We haven't paid too much attention to that.
Speaker 7: All right, thank you very much. That's a lot.
Speaker 10: Alright.
Speaker 2: Your next question comes from the line of Keaton, Mamm Torah from B.M.O. Capital Markets. Please go ahead.
Speaker 11: Thank you and good morning. First question, maybe coming back to CAPEX, I'm curious how much flexibility do you have within that 140 million?
Speaker 11: Should the markets turn out to be weaker than what you guys are expecting? I know you talked about having some flexibility, but order of magnitude, what kind of room you have.
Speaker 3: We have another tranche that, you know, as the year goes on, you kind of lose that flexibility, just because equipment starts to get manufactured in facilities and delivered.
Speaker 3: month by month that flexibility kind of diminishes as it goes. So that's the process, King, but it's significant.
Speaker 3: And for us to kind of share that at this point, the only hesitation is that if we kind of share that, what ends up happening is the equipment manufacturers and contractors would hear that and then may get a little nervous with that.
Speaker 3: I would say it's significant if required. However, we don't see that at this point.
Speaker 3: I guess that would be my answer.
Speaker 11: Got it. Now I think that's fair. And then switching to log costs, can you give us some, just a quick update on kind of what you are seeing in the log cost trends in the different regions, B.C., Eastern Canada, North, West and South?
Speaker 3: Yeah, of course, as Bart said in four provinces in eight states, we've got a bunch of unique log cost shifts here and there, but I would say generally in all regions, it's a downward trend in 2023. In some, you know, more significant than others.
Speaker 3: But we do see our forecasts.
Speaker 3: All indicating that log costs will moderate through 2023 and in all of the regions and all four provinces.
Speaker 3: in most of our states. So overall for interforce log costs, we see a trend
Speaker 11: In BC, how much do you expect costs to come down as we move through Q1 and Q2?
Speaker 8: I think Rick's got the number, but I'm not sure if he's going to share the specific, maybe the range or something like that. It's probably going to come down by about 25% from Q1 and going into Q2 here in terms of stumpage in the BC Interior.
Speaker 11: I'll turn it over and jump back into Q. Thank you.
Speaker 3: Thank you.
Speaker 2: Ladies and gentlemen, as a reminder, should you have a question, please press star followed by the one.
Speaker 2: Your next question comes from Sean Stewart with PD Security Beasts. Please go ahead.
Speaker 6: Thanks just one follow up in
Speaker 2: I'm sorry, the line was disconnected.
Speaker 2: Your next question comes from Keaton, Mntora with BMO Capital Markets. Please go ahead.
Speaker 11: I mentioned about further opportunity to reduce working capital. Can you give us some sense of order of magnitude in terms of what we are talking about here in terms of opportunity?
Speaker 8: Hey, Kate, and it's Rick speaking. So if we think about lumber inventory in particular, we're carrying about 19 days of production on hand.
Speaker 8: We think there's at least a few days there that we can take out permanently going forward, and we're working on plans to achieve that within the first half to three quarters of this year. So that'll be quite meaningful from a dollar standpoint.
Speaker 8: And then on logs, we're looking at operating with, say, 10 to 20 percent less.
Speaker 8: Log in the tors overall.
Speaker 8: and sustainable.
Speaker 11: Yep, got it. Okay, that's helpful. And then perhaps give us a quick update on what you guys are seeing on the export side.
Speaker 4: I'll take that one, K-10. I would say overall the markets overseas are improving. The Q4 period was a lot of uncertainty over there. I would say overall high inventories.
Speaker 4: some currency fluctuations that were unfavorable. Things like that, I mean China obviously with their zero COVID policy made doing business difficult. Some of that stuff is cleared out. I think we're still dealing with
Speaker 4: some high inventories, particularly on the log side in China. So I expect that to...
Speaker 4: to be a factor going forward. But our markets in Japan are improving, so we're expecting that to show signs of more businesses we get further into 2023.
Speaker 11: And then this last one from me, do you expect any change in the price relationship of SPF and SYP? And this is not just sort of a 20-23 question, but as we move through the next few years. The next question is, do you expect any change in the price relationship of SPF and SYP?
Speaker 11: Do you expect any change at all? Yeah. It's... yeah...
Speaker 4: I guess the bottom line is yes. I mean to a degree they're very different markets. Some are, you know, SPF's a little more rail car driven in terms of sales and sending a little pine more truck. So there, there are some some fluctuations that happen because of that in this type of a market. But I would say in general,
Speaker 4: you look at where the curtailments are taking place in the species that are being curtailed, you're going to see the overall, I suppose, volumes of SPF available to the market start to tighten. And so we're thinking that that we should see some tension.
Speaker 4: Quite frankly, I have seen some tension so far this year on the SBF side versus Sedan Hill Pined. But when you get into these kinds of markets where demand moves around and shifts around, it's a little hard to predict exactly where it's going to reside.
Speaker 4: You know, in general, I think that SBF is under more pressure from a supply standpoint that's in the oil line.
Speaker 3: Yeah, you know, think about the capital investments in the industry generally being in the southern yellow pine baskets, you know, that potentially is going to grow a little bit over the next little while and then the massive sort of contaminants and...
Speaker 3: British Columbia had more to come. I mean, the SPF volume.
Speaker 3: You know, the tension on that is, can be pretty great. And we think, you know, given our platform and our strategic move.
Speaker 3: into Ontario, Quebec, New Brunswick to capture that volume was very timely and will benefit us as these dynamics play out over time.
Speaker 11: God is that's a helpful perspective. I'll do that in a go. Thank you.
Speaker 2: There are no further questions at this time, please proceed.
Speaker 3: Okay, well thank you everybody for your time and your interest in our company and we'll talk to you next quarter. Have a great day.
Speaker 2: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.
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The conference is no longer being recorded.