Orion Engineered Carbons S.A. Q1 2023 Earnings Call
Okay.
Anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded it is now my pleasure to introduce your host Wendy Wilson head.
Of Investor Relations. Thank you Ma'am you may begin.
White Chief Financial Officer.
We issued our press release after the market closed yesterday, and we also posted a slide presentation to the Investor relations portion of our website.
We will be referencing this presentation during the call.
Before we begin I'd like to remind you that some of the comments made on today's call are forward looking statements.
These statements are subject to the risks and all.
Certainties as described in the company's filings with the SEC and our actual results may differ from those described during the call.
In addition, all forward looking statements are made as of today makes sense.
The company is not obligated to update any forward looking statements based on new circumstances or revised expectations.
All non-GAAP financial measures discussed during this call are reconciled to the most directly comparable GAAP measures in the table attached to our press release.
I'll now turn the call over to Corning.
Thank you Wendy and good morning, everyone and welcome to our earnings Conference call. We're off to a great start for the year, having delivered a higher rubber pricing to the bottom line coupled with sequentially much stronger specialty results.
I believe this reflects how our position and the economy has been transformed.
With significant customer investments onshoring higher barriers to entry and a trend towards D. Globalization.
Well one of the few manufacturers on track for a stronger 2023 compared with 2022.
Thanks go out to the motivated and hard work in the Orion team for their foundation, we've built over the past years and for the progress, we're making in achieving our short term and long term goals.
We delivered record first quarter adjusted EBITDA of approximately $101 million.
A 21% increase year on year and 55% sequentially.
Adjusted diluted EPS of <unk> 74 cents up 30% year over year was also record with rubber pricing resetting in line with our expectations and specialty outperforming initial expectations we.
We have some timing benefits and a few non repeating items in the quarter, which helped our results our underlying adjusted EBITDA run rate was $92 million to $93 million.
Which would've been record results all the same.
We also delivered strong first quarter operating cash flow cutting the net debt ratio to just below two five times, we expect to drive that lower throughout the year.
Jack will discuss this further.
This morning, we announced that the board has authorized a new share repurchase plan.
We will complete our previously announced share buyback program later this month and this new authorization will extend through mid year 2027.
Combined with the soon to be completed repurchase authorization.
He has the potential to purchase up to 15% of its outstanding shares.
Of course, we're going to take a balanced approach between allocating funds for growth and productivity opportunities reducing debt further into our targeted leverage ratio range and supporting the second buyback authorization.
Let me highlight two additional key accomplishments for this quarter.
First our greenfield facilities and why they China is completed and shipping sample materials to customers, we expect to be ramping production in sales over the course of this year.
So our knowledge, we're the only carbon black producer two concluded three air emissions control projects in the United States at this point with our Borger, Texas plant upgrades now on what we have one more planned to go which we expect to complete in the second half of 'twenty to 'twenty three.
Before I turn the call over to Jeff I'd like to introduce an important additional metrics on slide four.
As you can see we have achieved exceptional gross profit per ton growth and record adjusted EBITDA.
I'd like to point you to are also exceptional our OCD progress over that same period of time, despite the substantial air emission controls investments the <unk> levels, which we achieved are significantly in excess of our weighted average cost of capital.
This is an indicator of our ability to generate significant shareholder value as we profitably invest in our business.
Business is not just about growth, it's about profitable growth and return on investment. This key metric keeps us aligned with our shareholders as stewards of their capital and the long term sustainability of the company.
With that Jeff, perhaps you could provide some more color on our financial results.
Thank you Corning.
On slide five you can see the consolidated results in the first quarter.
Contractual price improvements in rubber and mix improvements in specialty far outweighed the lower volumes most of which occurred in our specialty business.
The EBIT increase of $18 million and.
The EPS increase of 30% to 74 cents or a result of the aforementioned improvements in pricing and mix.
Please note that all key metrics in the first quarter showed solid sequential increases.
One thing I would add regarding the first quarter results is that there were some timing impacts and smaller non repeating items, which benefited the quarter.
This is one reason why we are not changing our guidance for the year.
On slide six the decline in Q1 volume versus last year was expected and is primarily in our specialty business. However, we continue to see strong gross profit per ton games. Both businesses. This helped us achieve the record adjusted EBITDA.
These margin gains are firm contractual.
Base price improvement and rubber mixing specialty as well as the timing and non repeating items I noted earlier.
Yeah.
On slide seven looking at specialty in Q1 volumes.
Decreased but were up 14% sequentially as demand held up well despite the overall economic conditions.
Adjusted EBITDA increased 50% sequentially, while decreasing 12% year on year.
Note that gross profit per ton continues to be strong and growing both in the quarter and the trailing 12 months and is now above $900.
Finally, we saw gains across all key metrics on a sequential basis.
Slide eight shows the key factors affecting adjusted EBITDA for the specialty business compared with last year as.
As noted earlier the volume reduction was significant however that volume reduction was nearly offset by improved pricing and mix.
You can achieve this when you don't try to chase volume in a soft market.
Slide nine looks at the rubber business with improvements to all metrics on a year over year basis, except for a modest volume decrease.
Also it is important to note here that all financial metrics in rubber, including volume were up substantially.
Gross profit per ton was up from $321 to $467 in the quarter.
I believe a good ongoing comparison as the 2022 full year average of 336.
You should expect GP per ton to be in the mid four hundreds throughout 2023.
We believe approximately $100 of this gain was due to pricing.
This improvement reflects the 2022 pricing cycle, which was driven by our requirement to achieve a market return on capital, including our air emissions control related investments.
We continue to believe that we and our shareholders deserve to achieve a market return on those investments.
Higher pricing enables plant reliability investments and supports our customers.
We are confident that the progress we have made in rubber pricing is sustainable due to the continuing trend toward localization or D globalization as well as the customer the significant customer investments in onshore.
Furthermore, there are ongoing regional supply demand imbalances in the rubber markets in both North America and EMEA.
Slide 10 shows the key factors adjusting affecting adjusted the adjusted EBITDA for the rubber business strong base price as discussed earlier.
Is acute is clearly the key driver.
Before I pass the call back to Corning I'd like to provide an update on our share buyback and debt low.
With strong cash flow in Q1, we were able to fund $29 million in share buybacks in the quarter.
As of the end of the quarter, we have completed approximately two thirds of our $50 million share buyback program at an average price of $22 per share.
We also reduced our debt by $36 million to $822 million.
Our debt to EBITDA ratio now stands at $2 49.
We expect this ratio will continue to decrease across 2023, with our improved EBITDA levels and likely further debt reduction.
I would expect.
We will end the year in the middle of that to point out that two five range.
As announced earlier this week, we achieved the emission targets tied to our term loans.
With a 10 basis point decrease in interest rate for those loans, we expect to save approximately $650000 over the next 12 months.
The strong cash flow was driven by earnings but also by improved payment terms. We believe the improved terms contributed $40 million of cash in Q1.
This step change will stay with us going forward and I expect some additional benefit in Q2.
We now expect to complete the current buyback in the next couple of weeks and we will initiate a new buyback afterwards.
We will pace, the new buyback slower and prioritize growth and profit enhancing projects first.
And as long as we stay in or near our debt range, we will opportunistically repurchase shares with a portion of our free cash flow.
I will turn the call back according to discuss our 'twenty 'twenty 2023 guidance for the rest of the year.
Thanks, Jeff turning to slide 12, as we said earlier, we benefited from timing impacts in the quarter, while Q1 was stronger than expected customers pulled back in April macroeconomics is almost exciting these days hard landing soft landing Doe lending against this backdrop.
We are confident about our business and what we can control and are reiterating our 2023 guidance of $350 million to $380 million up 17% at the midpoint, our adjusted EPS guidance range continues to be $2 30.
To $2 60 per share up 25% at the midpoint.
In closing I'd like to leave you with a few thoughts first the pricing we have achieved in our rubber business is sustainable and is our new baseline for future expansion.
Global trends like Onshoring and D globalization combined with higher entry costs have accelerated the reset that was already underway in this mark the.
The rubber business is not a commodity and our specialty business will continue to be special.
Second although tire demand is not immune to the business cycle hires are consumable and theyre not really a discretionary item.
While no one knows that hypothetical long planning, we're heading for we believe the tire demand will be relatively resilient. One indication of this is that the 2024 pricing cycle has already begun.
Third global demand for our highly differentiated specialty products will return with the business cycle, our focused investments in developing new innovative products, such as conducted and sustainable grades will help us fuel that demand.
Meanwhile, we will not destroy value by chasing volume.
For our Catholic conductors project in the Houston area is on track, we expect to start that plant up in 2025 with commercial product shipping in the second half of the year. We continue to see the conductive carbon market driven by growth in electric vehicles as a great opportunity.
Yeah Yeah.
You've seen that we increased our oce and other key metrics in the face of what was for US heavy environmental spending and we're on our way to reach our growth goals for 2023 and beyond.
I don't know about you, but that does not sound like a six to seven times business to me.
I see an exciting future for Orion, we have spent the past five years working to get us where we are today, we laid the foundation for sustained profitable growth free cash flow and exceptional returns for our shareholders. The next phase of the journey is upon us I expect to achieve strong growth in <unk>.
<unk> ability and cash flow over each of the next three years as discussed in our 2022 Investor day.
Thank you operator, please open up the line for questions now.
Thank you well now be condo.
A question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.
Sure.
Just a quick question queue, you May press star two if he would like to remove yourself from the questioning queue for participants using speaker equipment. It may be necessary because your handset before pressing the star keys. Our first question comes from Josh Spector with UBS. Please go ahead.
Yeah, Hi, Thanks for taking my questions and congrats on a strong quarter here.
Just wanted to follow up on special K and get some of the one time items. There just curious if you could comment how one time some of those are if there's any potential for the mix to hold and higher and if there's any change to kind of how you thought about specialty.
Is your outlook a quarter ago.
Sure. So most of the the non repeating items, we had didn't really play out in specialty that was more a factor for us in rubber so you're seeing really more of a clean performance of the specialty business and I think as the market has evolved since the last quarter, we probably see specialty.
In a little stronger than what we had suggested last time rubber really not based on pricing as you can see it but just underlying demand may be a little bit weaker.
Okay. No that's helpful and just I mean within rubber and I mean, I think since the last earnings call.
Our ups announced additional kind of controls against Russian carbon black and really looking kind of towards the import ban potentially mid 2024, just curious if that's resulted in a change of customer conversations there any increased in earlier discussions kit to prepare for that and if Europe can really be effective and basically implementing.
A full on ban against Russia.
Yes.
Absolutely Yeah. It was noted in the industry is as we said we are currently in negotiations for 2024 last year. We also early on got into negotiations for 2023, but I'd say both years a bit earlier than is typical I think it's on everybody's mind I think they'll do it I think their commit.
To doing it they cut back somewhat on Russian carbon black.
But.
It's clearly.
An opportunity for everyone first of all who has capacity in Europe .
<unk> gained from that.
Okay. Thanks, I'll leave it there for now.
Alright, Thank you Jeff.
Our next question comes from Chris Cutbacks with loop capital. Please go ahead.
Yeah, just to follow up on some of the commentary around.
Trends in specialty and there was some.
Some of the volume.
Year over year volume comp there was.
I would say, but the stocking I think with what you said and then.
You're also saying that.
It's looking overall, it's looking better than you had anticipated so I'm just wondering if.
If you could talk about how.
And that's included what and what what parts of the channel was that more pronounced and how thats playing out kind of thus far into the second quarter.
Sure.
In general I'd say, Chris that customers see the volatility in oil in banking and everything else.
Nobody wants to have a lot of inventory. So I would say there is certainly some signs with certain customers like this.
Look at their order pattern there back in at this point so are they perhaps destock to the point, where they want to be but I think people are going to be careful about restocking at least for a couple of more months until they see where things go out that said overall, if you look at this quarter in terms of volumes it was stronger than we expected.
I'd say, we saw that pretty broad based.
With the exception of perhaps Inc.
Probably get less junk mail these days and I think people like advertising that sort of thing is kind of a discretionary item, where you see businesses cutting back.
But it was fairly broad based.
But to be clear still down from last year, but just the trend maybe you can say the second derivative is little better than we had expected.
Got it and then.
And just sort of had a question about you know.
The board's endorsement of our <unk>.
Another buyback pretty good magnitude.
I'm just curious about you know just maybe you could provide a little bit more color on.
The thinking.
Behind that and also in parallel.
I think we can kind of based on the guidance and the assumptions that you've provided we can kind of get to a pretty great.
Pretty accurate free cash flow.
Generation number per metric for 'twenty, three but I'm curious about.
For I I know I don't think you provided there talked about capex for for next year, but directionally. It looks like there'll be a big step by step up in free cash flow does that feed into the you know the.
Half the type or the willingness I should say of the board.
Recognize the value here and expressed in it and its buyback. Thank you.
Sure well first of all as a <unk> company, we have to get an authorization from our shareholders conceptually around doing a buyback and we did that last year and that was 15%. So what we've said basically and this announcement is over the length of that authorization from our shareholders.
Elders that we know as management have authorization from the board to basically use that Paul will now to be clear we.
But growth we would put certain vessels sustainability productivity ahead of exercising on that we would do that opportunistically.
And so how much we're going to do next year is going to depend on how we see the growth opportunities and so forth as they come out I would not expect to do this at the same pace that we did the first one Jeff anything you'd like to expand on that sure Chris I think the the board.
Looked at our multi year cash flow expectations and looking at those and looking at the growth opportunities that we have.
And the ability to keep our debt.
Good level realized that we were still despite some really good growth opportunities have some cash available for our buyback so rather than doing this piecemeal going forward. They took the approach of let's look at this over a multiyear basis and again, we will we will purchase opportunistically, but it's Corning said those growth.
Those sustainability investments those profit enhanced hence the investments those will go first.
One final comment I think it just reflects that we the company the board management, we all see our share price is significantly undervalued and that's another reason why that just having this opens for us.
Got it.
One quick follow up that would just on the benefits regarding the what.
Would you just sort of characterize the timing in the first quarter in our rubber business.
Does that become.
A negative issue for for second quarter, I mean, with some of that we haven't characterized it with.
I'm just wondering if that was like a pull forward in demand or how to think about that.
So theres always second quarter. Thank you.
There is often some timing impacts we didn't talk about it but in the fourth quarter net timing impacts were negative a little bit there are positive. This time and when we wanted to call that out because we just to be clear. The 101 isn't a clean run rate I think it's you know nine.
90, 293 is still a really big step up for US something we're proud of I think it shows we're on track, but we just wanted to kind of give that and discourage a one on one times for kind of approach when people think about the year, just because I don't think that that's accurate at this point.
That sure will reverse in April was a little bit weaker so you can imagine us being.
Down in but we don't do guidance, but you can imagine us being down a little bit from where our.
The midpoint of our actual run rate was for the first quarter.
That said I mean, none of that board gave us a lower take us with these timing effects none of that affects how we see the overall year playing out the overall strength of our underlying business. We see ourselves is still very much obviously on track for the full year guidance that we provided.
Thank you.
Our next question comes from Jon <unk> with CJS Securities. Please go ahead.
Yes, hi, good morning, it's Pete Lucas for Jon.
I've covered most of my questions I guess, just maybe if you could update us on China, and how demand utilization. There is expected to trend in the short term going forward here or a short or medium term.
Sure well two things about China, if we think about the specialty market in that it's got a really trend with their economy and their exports, which for some areas are I'd say, a little bit slow right now in general in China for rubber and Chinese automotive again, a little bit slower than that.
Run rate the question of the opportunity for China in terms of rubber carbon black though is is Europe in 2024, and I think part of the solution for Europe next year will surely involve some exports from China.
Into Europe , and so I think thats.
Sort of a positive in terms of longer term outlook for China.
Oh very helpful. Thanks, I'll jump back in queue.
Alright, Thanks, Steve.
Our next question comes from Jeff Zekauskas with J P. Morgan. Please go ahead.
Thanks framework.
In the quarter.
Your cost per ton and rubber black.
<unk> about $110 sequentially.
And for specialty blacks it was about $2 50 a ton.
What's going on there because you would had sort of relative.
A relatively stable cost per ton and then what happened in this quarter is that it really came down to is that mix or is that something else.
So are you looking at the the walks, where we show now or whatnot.
I'm calculating it from your tonnage.
Okay, well, maybe one approach though is to look at for example, we're going to look at.
So for example, you say Theres, a 10 minute at 10 million benefit in costs in your in your EBIT a slide.
What's going on in that 10 million drop in costs.
Right. So if we were going to look at the specialty waterfall on slide for example, a lot of that is the timing of impacts.
So.
What happens in terms of how our pricing formulas work out that was a negative for us and for our past that sort of thing. It when there is a sudden move in the input costs. That's what can give you a dislocation there and the cost factor is no.
No like fundamental step change in our underlying costs are fixed costs for example.
So were the one time items I don't know $10 million in the quarter, how much were they.
Sure.
Jeff the onetime items, the combination of the timing and the onetime items were about.
About $8 million to $9 million in total of which about a third of that were one time items and two thirds of it where timing.
And how would you allocate it to the two businesses.
The one the one time items were essentially essentially all in rubber.
Very little specialty the timing I think there was a mix, but probably a little bit more in specialty.
So then what it but okay.
Because a lot of real strength within specialty rather than.
Robert in the quarter.
Okay.
You talked about the pricing negotiations beginning to open up is that true of both Europe and the United States are only Europe and does that have to do in Europe does that have to do with a disinclination of customers to buy from Russia.
So I'd say for next year because this band plays out mid June , but that's mid year and most of this pricing is done.
Longer term commitments with maybe some people would take some for half a year and I think all by spot from China, but I think that's that's not going to be a popular approach I think people are going to want to be totally free January one that would be my read of it and yes, I would say there is certainly more energy and.
This and concern around the European situation, though the U S market is also tight.
Our next question comes from Laurence Alexander with Jefferies. Please go ahead.
Hey, Good morning. This is Kevin I'll stop on for Laurence. Thank you for taking my question.
So you touched quite a bit on on this already.
Being confident with your outlook, but I guess.
What sort of downside scenarios are you sort of weighing in I guess in event of a recession in the back half of the year into 2020 for I guess I'm just curious what leverage you can pull them and pulled the cycle to sort of mitigate any deteriorating volumes et cetera, just curious to know how you because it's good for them and you kind of a downside.
Well, let me say this I would say our current guidance.
We think we can hold on let's say a mild recessionary impact so say I don't know five ish percent on our R&R volumes I think the second half of the year customers started out the year very bullish for the second half of the year, that's always a little bit.
Inserting I'd say right now our confidence is ebbing, a little bit in that regard for the second half, but again, we think we've got that the ability to take that in our current guidance.
Okay. Thank you very much.
Yes.
Yeah.
Our next question comes from Laurence Alexander with Jefferies. Please go ahead.
Okay.
Laurence.
Maybe you're on mute play I think.
I apologize I think we had both of us in the Q. So I guess the question then I'll just take advantage of it. The question I'll ask is just about specialty blacks.
Isn't a demand shock can you characterize how much of a mix you can see depending on which end markets accelerate strongest for what's driving the mix effects.
In other words could you have over.
Over the next few quarters.
Profit per ton decline purely on mix or would you be to just the demand shock for that to happen.
So.
Our end markets, we price based on the value, we're creating for our customer we have some very very different wide range of production technologies. So mix is always going to be a large thing for us. So if we saw.
Really really strong demand surge for example, some of the lower end grades some of the master batch grades yeah used for sure see mix deteriorate in that scenario. It doesn't really reflect the strength of the underlying business that you have to look at let's say the TTM a longer term trend and you can see the impact of.
Of new products, and so forth and that trend, but absolutely you can see that move.
It is definitely move outs.
Okay. Thank you.
Maybe just to clarify I mean, therefore, any given quarter I think with the new products that we're driving and when to conduct as we'll continue to see this upward trend, but there is room for noise in that.
Got it.
Our next question comes from Kyle Mori.
Grizzly rock. Please go ahead.
Good morning, and thank you for taking my question. My question is a follow up to Chris's question around the buyback versus.
Gross projects some of your growth projects in the last few years have been extremely high in terms of ROIC to debottleneck capped by a seasonally and come to mind.
What sort of when the board sitting there looking at buyback versus growth and your prioritizing growth are you willing to sort of break out the types of returns I mean, how many more of like 25% plus or C. E projects are there to be done.
Well some in the area of conduct is one element of our business is just access to the acetylene to be able to make that move and we do see additional sources, but I'd say, there's a limit to that and I think that's a real benefit for people who want this particular product with this sort of a very.
Low level of impurities high level of productivity and so forth it gives us.
A little bit of a moat around the business in terms of capacity come online. So as we do those that's an area that can be there we have been very cautious for many many years.
Even before we got carved out as a separate company around plant investments and as a result, there is opportunities to do things like the co. Gen unit that just came on in other investments like that where we can also just upgrade old plant equipment and get a step change in capacity or quality out of it. So we have more of that.
Those.
But I would say, even if something was tile in the 15% range. So its still substantially above our cost of capital and we would support that.
Way to understand this buyback is number one we see the share price is significantly under balance we see the ability to take a balanced approach as we look at these different ways, we can allocate capital moving forward and finally that we've got a much better cash flow moving forward. So the board.
Wanted to give us, let's say a longer range flexibility without needing to go to the board to set up and implement plans to make share repurchases as Jeff said, we don't plan to do this on anywhere near the speed what we did in the first.
Tranche of share purchases that we just had.
Does that help.
Absolutely those sound like great investments in the business. Thank you for taking my question.
Our next question comes from Josh Spector with UBS. Please go ahead.
Yeah. Thanks for letting me back in here a couple of follow ups I wanted to ask just on a kind of the earnings cadence I think Corning you talked about you think till Q2 to be slightly below your run rate level in first quarter typically there's a sequential step up in your earnings I'd say so from your comments on rubber.
Some of your customers over ordering in first quarter and now there's some normalization. So do you expect volumes down more than the 3% or is there something else driving that.
I think couple of things number one we just shared April was a little bit weak actually.
May looks pretty good so far as we go through it.
If you look at Doe indicators of rubber demand, let's just look at the U S.
So we saw trucking activity dropped a bit in March on the other hand, you saw gasoline consumption coming up when things like miles driven are nice, but they tend to be a lagging metric. So it's a little bit of a mixed picture whats happening in the marketplace, but all in all I think given April it's gonna be a little bit weaker.
For this quarter on that front.
We will do our best to make up that on the specialty side, that's what's nice about having the two sides of the business, but I think in general.
Really a little bit softer than where underlying rate was for the first quarter, but again I don't think any of that is really big and structural sometimes some of those onetime events are also going to reverse if oil prices stay low and it'll be an inventory reduction so our re pricing was the inventory so those.
The kinds of things that can kind of create some of this noise quarter to quarter stress I think the underlying business remains really strong, but I do think the second quarter is going to be a little bit weaker than the first one.
Okay, No I appreciate that and I wanted to ask on why they you had some comments in the front end of the deck about.
Commissioning its trials now, but I think he said.
Our first commercial product in 2024 was that it came for instance, like you expected previously or you're ramping that up more slowly or am I reading too much into that.
No. If I said that that was a miscommunication I mean, we've done some commercial sales already out of that site.
We're doing a real focus on getting your qualification samples out, especially on our specialty lines, but meanwhile, selling out some of that capacity into others like easier qualification markets. So now where we have commercial sales right now to be totally clear.
That's not likely to that big contribution right in the second quarter I think we'll see that more in the third and the fourth but that's something wrong.
Okay, Yeah, and I was actually more going the other way and trying to think if theres a cost burden baked in that has that facility fills up that we should be considering as we look to next year. I mean would you say there was much of a threat or is it not meaningful enough to really consider.
So first of all it's all in our guidance that we've given.
We have probably had most of the fixed cost of that site.
You probably saw most of that in this last quarter it would be a modest step up perhaps in the second quarter.
Okay alright, thank you.
Our next question comes from Jack's Calfskin with J P. Morgan. Please go ahead.
Thanks.
About some demand weakness in April should specialty volumes be sequentially stronger.
In the second quarter than in the first or the same or weaker.
Well. So these are predictions about the future, but I think our specialty in the second quarter.
We could build a little bit on where it was in the first quarter just on the trends we see.
And are your sequential prices lower because of changes in raw materials and that narrows your margins a little bit is that part of the one time items stuff.
No no. The one time is is more like if an input cost moves quickly. It can if it moves down it can move more quickly than the pricing index to be clear and for all my customers pay in Q4. It was the other way around right. So it's just a little bit of noise, we don't always.
Go into it but again, we just had a number of these items all tipped towards the favorable side I just wanted to clarify 101 isn't like our clean run rate right now.
Great. Thanks, so much.
Hey, Jeff Jeff like I, just wanted to clarify one thing on your earlier question.
Your costs versus.
Q1 of last year.
Goodbye fourth quarter versus the fourth quarter.
Sequentially fourth okay. Okay.
Never mind, Okay, I was wondering if I could.
I understand.
Yep got it.
Alright.
There are no further questions at this time.
I would like to turn the floor back over to Corning painter, Chief Executive Officer for closing comments. Please Sir go ahead.
Thank you everyone for joining us today and a big thank you to our analysts and our investors for your questions. Some of them very insightful and nursing and are getting good and further information out to the broader investment pool. We appreciate that we believe we can deliver further appreciation to you our investors is the restructuring.
This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
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