Q3 2023 Algoma Steel Group Inc Earnings Call
Hello and welcome to today's conference call to discuss Algonma Steels fiscal third quarter 2023 financial results. My name is Shamali and I'm your operator for today's call. At this time, I'd like to hand the call over to Mike Maraka, Treasurer and Investor Relations Officer for Algonma. Mr. Maraka, please go ahead.
Good morning everyone and welcome to Algonma Steel Group Inc.'s financial and operating results conference call for the fiscal third quarter ended December 31st, 2022.
Leading today's caller, Michael Garcia, our Chief Executive Officer, and Roger Marwa, our Chief Financial Officer.
As a reminder, this call is being recorded and will be made available for replay later today in the Investors section of Algoma Steelís corporate website at www.algoma.com. I would like to remind you that comments made on todayís call may contain forward-looking statements within the meaning of applicable securities laws.
which involve assumptions and inherent risks and uncertainties. Actual results may differ materially from statements made today. In addition, our financial statements are prepared in accordance with IFRS, which differs from US GAAP, and our discussion today includes references to certain non-IFRS financial measures.
Last evening, we posted a presentation on our financial and operating results to a company today's prepared remarks.
The slides for today's call can be found in the investor section of our corporate website. With that in mind, I would ask everyone on the call to read the legal disclaimers on slide two of the accompanying presentation and to also refer to the risks and assumptions outlined in Algonma Steel's financial statements and management discussion analysis for the full year ended March 31st, 2022.
Please note that our financial statements are prepared using the US dollar as our functional currency and the Canadian dollar as our presentation currency. Our fiscal year runs from April 1st to March 31st and our third quarter financial statements have been prepared for the three months and December 31st, 2022.
Please note all amounts referred to on today's call are in Canadian dollars unless otherwise noted. Following our prepared remarks, we'll open the call to conduct a question and answer session.
I will now turn the call over to our Chief Executive Officer, Michael Garcia.
Thank you Mike. Good morning and thank you for joining us today.
As we always do, I would like to begin my remarks by addressing Algonma's top priority, which is the safety of our employees.
At Algoma, safety is non-negotiable and is firmly rooted in our corporate values, where with every decision, every action, and every day we will work safely with teamwork, integrity, and a deep care for our people, their families, and the environment.
Our continued dedication has led to a significant improvement in our lost time injury frequency rate over the past decade.
We will continue to work diligently as we relentlessly pursue our goal of achieving zero workplace injuries.
Next, I'll cover key events and milestones during our fiscal third quarter and subsequent to its end.
I will then turn the call over to Roger for a deeper dive into the numbers before closing with an update on market conditions and our strategic investments.
Set to deliver long-term value for all of our stakeholders.
Our performance in the third quarter was largely in line with our pre-announcement on January 9, 2023.
Shipments of 458,000 tons were sequentially higher, though still below our normal run rate as we completed commissioning of our plate mill modernization phase one.
Our overall financial results also reflected lower pricing in the third quarter.
Steel prices for hot-rolled coil have recovered meaningfully since early November and plate pricing has maintained a significant price premium.
While commissioning of the plate mill modernization phase one was a challenge in the second half of calendar 2022, it's important to highlight the reasons for the project and the value delivered from it.
Our plate mill is the only discrete plate mill in Canada and it produces a full range of high-quality rolled and heat-treated plate products.
including the widest plate manufactured in Canada.
Our products can be tailored for high-strength abrasion resistance and military applications among a wide range of other end uses.
Completion of Phase 1 will now deliver enhanced capabilities, including improved surface quality and shape.
Importantly, plate shipments return to normalized levels by the end of the third quarter, and we expect shipments in calendar 2023 to be consistent with historical production levels.
The next phase of our Plate Mill Modernization Project phase 2 will focus on increasing mill throughput and is expected later in 2023.
As we outlined on our last quarterly call, we will be mindful of Mark conditions before commencing phase 2.
and we will be laser focused on utilizing lessons learned from Phase 1 in its implementation.
Looking forward on the cost-dye, we expect a quarter-over-quarter improvement on cost of good sold per tonne as we return to normal production levels.
It should be noted that we continue to experience some headwinds on account of higher priced purchased coke.
Our demand for Coke at the blast furnace outstrips our production capacity, requiring us to supplement with purchased Coke.
In an effort to mitigate this, we are focused on operational improvement initiatives at our Koch making facilities to increase three-plip.
We anticipate to complete these improvements over the next few months providing additional internal Coke production by the end of fiscal Q1 2024.
As previously disclosed, we have a long-term contract with a third-party co-producer, which provides us with the co-needed to maintain still production at normalized levels.
The fiscal third quarter was also characterized by a volatile market for steel and raw material inputs, which continued to impact realized prices and costs.
pricing reached 2022 lows in early November before recovering through the end of the quarter and into 2023.
During the quarter, we continued to advance construction of our transformative electric arc furnace project.
which remains on budget and on time for our planned mid-2024 startup.
Piling and foundational work is largely complete.
Cranes are in position and the first structural steel components are being raised as we speak, an exciting milestone in the project.
On the capital allocation side, we declared our regular quarterly dividend of US $5 per share, and we remained active on our normal course issue or bid program.
Now I will pass the call over to Ruget.
to go over the financial results of the third quarter. Roger? Who is an enterprise?
Thanks Mike.
Good morning and thank you all for joining the call.
A fiscal third quarter results while challenging for the operational reasons Michael Oedertio.
came in line with a guidance for shipments and a bit of provided in January .
I will remind you again that all numbers are expressed in Canadian dollars unless otherwise noted.
However, a functional currency is the US dollar.
For the third quarter, we reported a net loss of 69.8 million.
or 64 cents per diluted share compared to net income of 123 million or 92.
sense per diluted share in the prior year quota.
with the decline attributable to weaker steel market condition as well as lower than expected shipments due to the commissioning delays at the plate mill.
Now let me summarize the key drivers of our performance.
We shipped 458,000 net turns in the quarter down 17% as compared to the prior year quarter.
As we previously disclosed, delay is experienced during the commissioning of a pletimal modernization project at the largest impact on shipments.
Let's say it was realization average 1116 Patan down 38.9% versus the prior year period.
The decrease versus the prior year level primarily reflects weaker market conditions during the quarter relative to record pricing levels seen during the prior year period.
This resulted in steel revenue of 512 million in the quarter down 49.3% versus the same quarter of last year.
On the cos side, Algoma's cost of goods sold average 1157 per tonne in the quarter up 22.3% over the prior year period.
This includes approximately $100 per ton of cost attributed to previously disclosed operational challenges flowing through inventories.
Further cost pressure comes from higher prices for key input including metallurgical coke, natural gas, alloys and scrap as well as the impact of lower shipments.
Adjusted beta for the quarter was a loss of $35.9 million as compared to $457.3 million in the prior year comparable quarter.
The year over your decrease was driven primarily by the decline in real-life steel pricing and no-orshipment volumes.
from a cash flow perspective.
Caselo from operating activity was a use of 128.6 million in the quarter compared to Caselo's generation of 318.4 million in the prior year comparable quarter.
The main drivers include lower a better and a significant investment in the working capital in the quarter as we continue to build both raw material and working progress inventories given seasonal inventory build and lower the normal production volumes.
For context, our inventory position has at December 31, 2022 stood at 912 million versus 616 million in the same quarter of the prior year.
This nearly 300 million increase in inventory was partially attributable to higher prices and exchange variation. However, approximately 55% of the variance relates to higher inventory quantities.
The expected gradually release this excess inventory in the coming quarters which will add to our liquidity levels.
We finished the quarter with $245 million of cash and equivalents on the balance sheet and our asset backed credit facility was undrawn with $239 million in availability.
As an update to EF project spending through the end of the third fiscal quarter ended December , we have spent approximately 220 million on the EF project and issued letters of credit of US 48 million securing fabrication and delivery of key components.
While this aggregate spending level is lower than originally anticipated for the quota rate, it is primarily due to timing differences in fabrication and erection of EF building and the delivery of offshore equipment.
This timing difference does not affect the critical path of the completion of the project, and we remain on time and on budget for a mid-2024 startup.
To date, approximately 70% of the total EF investment amount has been contracted that fixed price commitments that the balance still to be contracted.
Supporting the remaining items to be contracted, we maintain approximately 50 million of available contingency.
We expect to spend approximately $70-80 million on the EF project in the fourth fiscal quarter.
Putting this all together, I would like to highlight a few points.
As of December 31, Algoma's networking capital plus cash total $1.15 billion and we have full access to our undrawn ABL facilities.
We have a conservative and prudent approach to a balance sheet with virtually no long-term debt except for attractive government financing.
We have access to an additional 168 million of funding available on the SIF facility, which is supporting the development of the EF.
All this together puts us in a strong position to advance on our strategic capital initiatives, including the transformation to EF, which we expect to deliver improved operational performance, enhance cash flow, and a bitter through the cycle and reduce earnings volatility.
I'll now like to turn the call back to mic for a market update and close into marks.
Thank you, Roger.
Now, turning to the North American steel market.
2022 was marked by significant volatility in pricing.
Hives that were reached in March around the start of the Ukraine War quickly reversed, testing various support levels through the summer and fall before bottoming in November .
We are encouraged by the recent price improvements in hot-rolled coil and continued robust plate pricing.
The market indicators, including extended lead times and a strengthening forward curve, support our expectation of improved performance in calendar 2023.
Our order book, supported by a significant portion of contract sales, shows consistent demand for our products, including sales to the automotive, construction, oil and gas, and other steel intensive industries.
And from a global perspective, price dynamics and trade measures continue to reduce the attractiveness of imports into our North American markets.
For the fiscal fourth quarter, we expect sequentially higher shipments.
More consistent with our normal operating levels. And in combination with current steel pricing, we expect sequential improvement in net sales realizations and eBotop performance.
That said, we continue to experience pricing pressure on our key inputs, including metallurgical coke
Coking coal, alloys and general inflationary increases on other goods and services.
which will have an effect on margins for our products.
In calendar 2023, we expect to benefit from normalized and consistent operating performance, labor stability, a strong and flexible balance sheet and great support from our government partners and our community.
We expect this year to yield a combination of improved operational results and accelerating progress on our transformative EAF investment.
As the market is showing signs of greater stability, we expect to generate significant free cash over the longer term, which supports our two main capital improvement programs.
The second phase of the plate mill modernization and the EAF investment.
Our focus remains on prudent financial discipline, maintaining full operating capability, and completion of our EAF project, ushering in the next era for Algoma Steel and providing long term value creation for our stakeholders.
As the world transitions towards a more sustainable future, it will continue to need steel for decades to come.
At Algoma, we are building on our proud 120-year-plus history to serve our customers today while simultaneously becoming one of the lowest cost producers of Green Steel in North America.
We are very excited for our company and employees and look forward to what the future holds.
Thank you very much for your continued interest in Algoma Steel.
At this point, we would be happy to take your questions.
Operator, please give the instructions for the Q&A.
Thank you. At this time we will be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue.
You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
and one moment please while we pull for questions.
Our first question comes from the line of David O'Campo with core Mark securities. Please proceed with your question.
Thank you. Good morning, everyone.
I was wondering if we could, yeah, good morning everyone. I was hoping we could touch a little bit on the working capital, particularly as it relates to the inventory. You called out that 55% of it is due to higher inventory levels. I was wondering if you could break that down between potentially...
How much of it is related to unfinished slabs versus say higher inventory levels of iron ore?
So, maritime reserve.
So on a very, very high level.
Let's say 40 percent.
will be in
in with and finished and the balance will be in in rest of the raw materials. So roughly 4060.
Okay, and then on the work in process, in our own progress, is there potentially a catch-up in shipments that we could expect that sort of unwinds in Calender 23?
Yeah, we should as we start reducing our pit and finished. We should expect that to flow into the shipments over the next couple of quarters.
Okay, that's good. And then on the plate mill modernization phase two component of it.
Should we expect any downtime if you guys do decide to go forward with this for the end of the year? How should we think about any disruptions to your production levels as you move forward with that next phase?
Yeah, David, this is Mike. So the Phase 2 implementation of the Plate Mill Modernization Project.
It involves two components. One component is to...
bring online the new inline high capacity shear that will replace a small undersized shear that's there currently and replace most of the gas flame cutting that we need to do in the facility.
anything under two inches. That portion of the
Phase 2 does not require any mill downtime. So as we're doing that, we can continue to produce both plate and strip. The small amount of cutting that would be done on the small shear will do with an outside processor. The other component is the replacement and the upgrade of drives on the four high stand and the hot mill.
And again, the timing for...
the outages the sheer work and the The finishing and work will begin in May Take approximately five months again no impact ongoing operations and then the the 40-day mill outage for the drive upgrade has not been
outage, the sheer work and the finishing and work will begin in May, take approximately five months, again no impact on going operations, and then the 40-day mill outage for the drive-up grade has not been scheduled.
with a final implementation date and that will depend on both market conditions and our readiness for the down.
Is that help?
That's extremely helpful. That's all the questions I had all up back in the day. Thank you guys. Thanks.
Our next question comes from the line of Ian Gilles with Steve who, please proceed with your question.
Good morning everyone.
Morning in. I just wanted to start on the volume side. As you think about it from a business planning perspective, are you anticipating?
pretty standard volumes across all the quarters this year. Do you think we should be thinking about it as a build through the year given that there is still a little bit of ancillary repair and maintenance work left to be completed?
Yeah.
So we anticipated to be pretty standard other than the plate mill outages that I spoke about which we haven't decided when exactly we'll take that it should be relatively standard and somewhat equal across the four quarters.
with maintenance kind of spread evenly throughout the steel works.
Okay, that's helpful. Switching gears to the pricing side, obviously there's been two increases by one of your competitors in the last, call it 11 or 12 days. Are you able to provide any initial feedback from how your customers are feeling about these price increases and how you're thinking about that in the context of current market conditions?
Sure. I mean, I think.
difficult for me to speak for the entire market, but I think the price increases have been
received
relatively well by the market with an understanding that
the price is moving up and I think as we go forward into the remainder of this quarter and into the first quarter of the new fiscal year we will start to see that
displayed in our in our own.
order book and results. Our lead times are going out a little bit so there is a matter of weeks before price increase that hits the market kind of today is reflected in our bookings even if.
It's a new price today and we book it at that new price today. It's still six, seven, sometimes eight weeks, but more six or seven weeks before that product is produced and shipped and realized as revenue for us. Is that helpful? No, no, that's very helpful. I appreciate that.
And then on the cost side, they have two separate questions. The first one, you made some commentary in and around Coking Cole, this quarter, and buying from a third party. Just to clarify, is there anything unusual expected to happen in the fiscal fourth quarter relative to say last year on the Coking Cole side? Or was that...
more of just a general comment that you're working on getting that cost lower over the course of time.
you don't get in that cost lower over the course of time.
So, cooking coal, there is no change from pricing perspective.
between last quarter, this quarter and going forward, I think we indicated that the pricing year over year is very similar on the co-king co-production, metallurgical co-production.
the change will start coming from end of the first fiscal quarter where we will start not getting more off.
More of internal growth produce, which will definitely help us on the on the cost side. We don't we are not expecting significant change, quarter to quarter on the on the cost side. We are expecting it to improve as we get into the second fiscal quarter off next year. Okay, understood.
And then, reshought the last one for me. There is...
I think at $19 million inventory impairment in the quarter. Are you expecting this should we expect to see much more of those sorts of items or do you think you've largely worked through that piece?
I think it's worked through the pricing from realization perspective was pretty low at $600 and now when we are hovering around $980 to $900, it's...
It's not there. So at $600 or $700, those were the adjustments that came through. And that reflected lower production and the cost challenges that we faced in the first in the last two quarters. So most of it is taken care of. We should not expect.
If the market conditions continued where they are, with our production levels, we don't expect that to happen.
Thank you very much. That's helpful. I appreciate you taking all my questions. I'll turn it back over.
Thanks again.
Our next question comes from the line of David Gagliano with BMO Capital Markets. Please proceed with your question.
Hi, great. Thanks for taking my questions. I just wanted to drill down a bit on the near-term outlook.
If possible. We've had a few of the US She-producers Report and Guide.
pricing down quarter of a quarter in the first quarter mainly because the lags, you know, versus the pricing increases that That a reasonable assumption and can you frame the magnitude of the the client and pricing expected on a pretend basis in the first quarter?
Yeah, I'll start David. If you think of finding the bottom of the market in November .
In November , the business we were booking at that time, the majority of it would have shipped in January .
I think that would kind of agree with what you were picking up and what you mentioned earlier.
I'll reshot you at any other.
So I think the expectation is
definitely to come down to some extent. For us it's slightly different we do have.
We do have advantage of our quarterly contracts and
and monthly contracts, more so on the quarterly contract side, which gives us some advantage. The other big portion for us definitely will be on the plate side. We will be having higher plate volume coming into this quarter versus last quarter.
So when you factor all of this in, we should see some decline less so than what others would have faced.
Okay, that's helpful. Thank you. And then just...
I know there's been obviously clearly commentary here. And I believe mentioned was expectations for a cost of goods all per ton to improve largely to the obviously to the improve volumes.
You know, although somewhat offset by these higher price, you know, for example, Merchant Coke and you know the other input cost, can you frame?
You know, the net result of those two in terms of the quarter of a quarter expectations on cost of your total per time.
So, I think what I am going to do. So, I think what I am going to do.
I'll try and see if I can provide some more clarity, but what we said is that, you know, there is a hundred dollar per ton One time impact that was in the cost last time which Should go away and then we should see further improvements coming Because of volume because of you know lower cost of some of the some of the input items primarily on the
of cost items, whether it's cooking coal, cook, we should see, you know, probably very similar impacts, quarter to quarter, from cost perspective.
So, it will be it will be.
You know, the trajectory will be down. Their cost will come down 100 plus dollars and that's because of some of the input material as well as...
as well as the high production.
Okay, that's helpful. And then just to wrap up the same line of questioning here, this will be my last question. We throw it into the mix, at least for my view, it looks like it will be a positive EBITDA per tonne quarter. I just want to confirm, based on the moving parts that we just talked about, is that a reasonable expectation that EBITDA turns positive on a per tonne quarter?
Yeah, good morning. I just want to ask you a couple of questions on the plate. Now that I could, I noticed in the MDNA you talk about the CAPEX there being 135 million. Has that number increased from the 120 you were using previously?
I think we disclosed it last quarter that the number went up for just because of the delays during COVID and the other pressure that we had with some changes that was coming. So yeah, it went up from 120 to 135.
Can you give us an idea of how much is left to spend there on Phase 2?
It will be around 20 to 25 million dollars.
Okay, and we should assume basically throughput returning to normal in Q4.
On the plate so that's good. Yes, all right
Okay, and just last thing on the quality. So the quality coming out of the plate mill now is it higher than what it was before you guys?
started the expansion. In other words, the quality improvements that Phase 1 was supposed to achieve. Have they been achieved?
I know if yes they have. One of the, and the critical, there's a couple of critical pieces that were involved in phase one that are delivering that quality, primarily the new leveler, which gives us much better control and...
levelness of the product. We also have a new descaler, which descales the plate as it comes out of the the reheat furnace before it hits the first rolling operation, the forehigh. So those two new pieces of equipment especially have delivered.
significantly better surface quality and profile of the plate.
But what's the reason for expectation then for when you will be able to get a higher realized price for that improved quality product?
Well, it will still be...
Some months probably this.
Probably the earliest the second half of this calendar year, you're going to appreciate that we have...
some amount of work to do with our current base of customers and any new customers that we want to work with given our difficult start-up over the second half of last calendar
We're working very hard on that now. We're restocking our, or repopulating our stocking program so that we have heavy, heavy runners in terms of specific dimensions of plate. We have those on hand ready for quick...
delivery and we are working through and with the intention of eventually eliminating any remaining backlog orders that built up over the startup from phase one.
And Mike just lost it just to be clear what's the reasonable expectation for sort of the net margin improvement that you could realize when you are actually in a position to get a higher price?
You know that?
It's difficult to give you a specific number of nukes. There's a lot of kind of moving.
moving pieces within that. But obviously we're going to want to buy us our ratio of plate and strip as much as we can to the plate side and take advantage of that historically high.
spread between as-road play and hot-road coil. I think looking at last week's CRU number that that spreads down at 657 bucks which is
you know against a historical spread of
150 between one and two hundred dollars usually over the years Now how much incremental above that can you know can we get with kind of the higher margin?
part of the plate market kind of remains to be seen, but it's our intention to position ourselves in that area.
That's great. Thank you.
In.
And our next question comes from the line of Ahmad Shah with Beacon Securities. Please proceed with your question.
Hey guys, thanks for taking the questions. I guess just one for me on the Capix gift for the EF. I noticed about 25% kind of spilled over from fiscal point of view to 24. It can give us a little more color on that. Thanks.
Yeah, I think at a high level the main reason is because even though the overall timeline and completion date of the project has not moved or slipped within that timeline there's certain components of the way the project is unfolding that have moved. I think a very good example of that is the erection of the
of the building, the main steelworks building that we're building originally.
The original project schedule contemplated starting that building in October of last year and kind of being heavy into the erection of it You know through the current period as we as we reworked the project that confirmed you know all of the
the different components of the project completion. We moved the erection of that building to...
beginning this month actually. I think our first pillar, our column is going above ground today. So obviously the cash flows associated with that building to that contractor have shifted into this this quarter versus beginning in the last quarter.
And then as a part of that, we've got all this built components and machinery sitting in the build shops and various parts of the world, whether it's Thailand or Europe . And of course we've been over there and done all the factory acceptance testing. But originally in the project schedule we contemplated.
shipping that equipment here as the building comes up. Now that the building is coming up a few months later, there's no need to ship it on the original schedule. We'll ship it a little bit delayed so that the cash flow is associated with that because that's largely triggered upon shipment.
move to the right as well. So kind of all of that is happening within the overall project schedule, but the overall timeline has not shifted.
Does that help? Yeah, that's very helpful. And I noticed maybe on your MDNA.
That is some commentary around discussions of the Ministry of Energy, for securing power for the full AF transformation.
Any positive or progress development there that transpired since the last quarter given the change in the disclosure?
Yeah, we've had a lot of interaction with the ministry, with the local utility entity, PUC, with the provincial power provider, Hydro One, and the provincial grid operator.
as well. So there's a lot of stakeholders or entities that we are in pretty much constant contact with them. I think the support we've seen has been overall very, very positive. There's nobody in the province from the political or the...
ministerial level that isn't a very strong supporter of this project. It moves the province exactly the direction it wants to move in terms of reducing CO2 emissions. We've gotten great support from that perspective. Of course, they are responsible for the stability and the...
the performance of the overall grid. So they're very mindful of what the new load in Sioux St. Marie will mean for overall grid stability and robustness. So we continue to have those conversations with them because not only do we look to be a future.
customer of the grid, but we want the grid to be very stable as well, so we'll work with them and make sure that everything we're doing to bring all this demand online keeps the grid very stable.
So if I gather correctly, positive development, but still too early to make any assumptions about earlier timeline for full VF production, then we previously discussed.
Correct. Correct. But I would note that regardless of the developments of grid power and the local 230k volt line, part of our project involves the installation of two new turbine generators at our Lake Superior power plant, and that will give us a hundred and –.
15 megawatts of internal generation, and that combined with the available power already taking off the grid will allow us to proceed with startup without any type of delays.
Yeah, for sure, that's great, Karl. And thanks again, guys.
Yep.
Our next question comes from the line of Ian Gilles with Stiefel. Please proceed with your question.
Hi everyone, thanks for taking my follow up. With respect to the remaining items to be ordered for the EAF and the $50 million contingency, do you see anything in those remaining items that need to be ordered that are have undergone significant inflationary pressures since the initial cost estimate?
Is that 50 million contingencies still looking like a very healthy amount in the context of estimated total project cost?
like a very healthy amount in the context of estimated total project cost.
That's a great question. No, we haven't seen any specific, you know, inflationary base contingencies or escalations that we are expecting. But we do, you know, the contingency is there almost, you know, to be spent, if you will, if we're not going to be...
disappointed or we're not going to make short-sighted decisions in order to protect the remaining contingency. It's therefore unseen.
areas of factors of cost and that's what we'll use it for. So, you know, we do expect to contract out the remaining scope of work for this project at that 170, 175 million dollar range.
But if it happens a little higher, then that's what the contingency is therefore. No, that's helpful. That's the last thing for me. I'll turn the call back over. Thank you.
You're welcome. Thanks Ian.
And we have reached the end of the question and answer session and I'll turn the call back over to Michael Garcia for close remarks.
Okay, thank you again for your participation, our third quarter fiscal 2023 conference call, and for your continued interest in Algoma Steel.
We look forward to updating you on our results and progress when we report our fourth quarter and full year fiscal 2023 results this spring.
And this concludes today's conference and you may just connect your lines at this time. Thank you for your participation.