Moog Inc. Q2 2023 Earnings Call
Speaker 1: Good morning and welcome to the MOAG second quarter fiscal year 2023 earnings conference call. Today's conference is being recorded. At this time I would like to turn the conference over to Erin Astecan. Please go ahead, sir. Sure.
Speaker 2: Good morning and thank you for joining Moog's second quarter, 2023 earnings release conference call. I'm Aaron after can director of investor relations.
Speaker 2: With me today is Pat Roach, our Chief Executive Officer, and Jennifer Walter, our Chief Financial Officer.
Speaker 2: Earlier this morning, we released our results and our supplemental financial schedules, both of which are available on our website. Our earnings press release, our supplemental financial schedules and remarks made during our call today contain adjusted non-GAAP results. Reconciliations for these adjusted results to GAAP results are contained within the provided...
Speaker 2: risks and uncertainties that are described in our earnings press release and in our other SEC filings. Now, I'm pleased to turn the call over to Pat.
Speaker 3: Good morning and welcome to the call.
Speaker 3: Today we will share our update on a quarter marked by record sales, solid earnings and the cash commitment to support the growth.
Speaker 3: We reiterate our full year guidance for margin and reflect a heavier demand on cash.
Speaker 3: Before getting to the details, I'd like to briefly remind you of several broad themes that I shared during my first earnings call and highlight how these are driving change in the organization.
Speaker 3: Every day, our motivated employees are driven to improve the lives of millions across the globe through the application of our deep technical capabilities in solving our customers most difficult motion control challenges in applications when performance really matters.
Speaker 3: I described the three areas in which we are focusing our attention to improve the business. Namely, customer focus, people, community and planet.
Speaker 3: and financial strength.
Speaker 3: and I highlighted simplification as key to enhancing the performance of our company.
Speaker 3: To advance this agenda, our Board of Directors, after the Q1 earnings call, appointed several new officers to the leadership of our company.
Speaker 3: These leaders bring the necessary experience and skill to deliver on the ambitious plans we have to grow our company, to achieve great results in each of the areas of focus, and to take us to the next level of performance.
Speaker 3: With these appointments, we have started to transform our organization and the way in which we work.
Speaker 3: Over the next few months we will separate the commercial and military business within our current aircraft segment.
Speaker 3: Fundamentally, the business models for commercial and military aircraft are completely different. I want these businesses to have the flexibility to more effectively respond to the needs of these two distinct end markets.
Speaker 3: When the separation is complete, each business leader will have direct responsibility for the focused factories, the dedicated engineering and manufacturing staff,
Speaker 3: and the production resources for their respective business.
Speaker 3: They will be fully accountable for the operational and financial performance of the business.
Speaker 3: We've taken a big step forward in our simplification journey by moving away from a matrix structure in aircraft controls towards two separate businesses.
Speaker 3: This change will drive greater clarity and performance.
Speaker 3: There should be no doubt that we are following a clear philosophy to align our organization around the end markets we serve and the specific business model we need to succeed.
Speaker 3: and to give our leaders the dedicated resources they need and the accountability to deliver so that they can make the best decisions to run each business.
Speaker 3: We will apply this philosophy throughout the organization.
Speaker 3: I am confident that this approach will enhance customer focus through improved operational performance.
Speaker 3: and drive improved financial results as we concentrate on value creation in each segment of the business.
Speaker 3: The separation process will be completed by the start of fiscal 2024.
Speaker 3: Now, there is a lot more that I would like to share and I'm thrilled to let you know that we will host an investor day in New York City on June 6, 2023. I want to use that opportunity to provide more detail on the organizational change.
Speaker 3: and many other initiatives that we are driving to grow our company and deliver stronger margin performance.
Speaker 3: Jennifer Walter, Mark Travert, our Chief Operating Officer, and I will explain our exciting plans for the business over the next few years.
Speaker 3: And we will also be joined by other members of the executive team.
Speaker 3: Now, let me turn to the macro economy.
Speaker 3: Not much has changed in the last 90 days. Overall, the context continues to support the growth of the company in each of our end markets.
Speaker 3: Unfortunately, and tragically, the war in Ukraine continues as a war of attrition.
Speaker 3: Anticipation of a spring offensive is driving intense efforts to resupply the Ukrainian military with increased commitments from the US, NATO allies and European countries.
Speaker 3: In addition, each of these countries are intent on rebuilding their own depleted inventories.
Speaker 3: This will drive defense spending for the next decade.
Speaker 3: In a significant political change, Finland was formally admitted to the NATO Alliance on April 4th.
Speaker 3: in global air travel continues rapidly. Each of you who have traveled over the last month or so has experienced the busy terminal buildings, full flights and travel delays.
Speaker 3: The commercial in-service fleet has almost recovered to the 2019 levels.
Speaker 3: This strength is predominantly in narrow body aircraft on domestic routes.
Speaker 3: Long-haul travel, especially to Asia, still lags, but the opening up of China and increased travel through the Middle East, a boosting wide-body utilization.
Speaker 3: Finally, business jet flight hours are already above 2019 levels.
Speaker 3: We are already seeing the benefits of these factors in our commercial business.
Speaker 3: Industrial markets continue to be more resilient than we anticipated. Bookings are solid with a strong backlog covering our fiscal year. Sentiment remains mixed with the March purchaser managers index indicating contraction in our major markets. Yet German industrial production is up sequentially.
Speaker 3: Now let me turn the focus to our company operations.
Speaker 3: We continue to invest in the growth of the business. We have building upgrades and expansion plans at several sites globally. Most notably, within this quarter, we acquired a 200,000 square foot building adjacent to our headquarter site in East Aurora to address immediate space needs.
Speaker 3: And we also started site clearance for the construction of a 150,000 square foot advanced integrated manufacturing facility on our main campus.
Speaker 3: Within the next month, we will officially open a new purpose-built 200,000 square foot manufacturing facility in Tewkesbury, England that consolidates three existing buildings at that location.
Speaker 3: In all cases, our manufacturing teams are re-architecting machine layout
Speaker 3: material flow and automation for improved production efficiency.
Speaker 3: We continue to drive operational improvement across all segments with a clear goal.
Speaker 3: to simplify our business and eliminate waste.
Speaker 3: This drives operational performance to the benefit of our customers and drives financial performance to strengthen our company. It takes time and consistent management focus to build this continuous improvement muscle.
Speaker 3: Our Costa Rica facility has been at the forefront of these efforts.
Speaker 3: I'm proud to share that the D'Sengo Institute has recognized our journey with an award for our Costa Rica facility. This is a credit to the more than 600 employees that built this world-class facility from Greenfield site over 15 years ago. Costa Rica is our reference site that helps show us the way as we continue to build continuous improvement capability across the company.
Speaker 3: aircraft, or FLARA, to the Bell Textron team. This clears the way to progress the development of the V-280 replacement for the Black Hawk helicopter. This will be a substantial program for Moog for years to come.
Speaker 3: On the commercial side, both Airbus and Boeing confirmed plans to increase production rates on narrow body and wide body aircraft over the next few years.
Speaker 3: Airbus announced their intent to increase A350 production to nine a month by the end of 2025. And Boeing confirmed their intent to ramp the 787 to five.
Speaker 3: per month in late 2022-3 and to 10 a month in the 2025-2026 timeline. We continue to accelerate electrification and autonomy in construction equipment.
Speaker 3: At Con Expo 2023, the largest North American trade show, MOG Construction launched TeraTek, which is our electrification solution for compact construction equipment.
Speaker 3: and also hosted a live demonstration of our autonomy software and hardware fitted to a Bobcat skid steer. There was strong interest in our offering.
Speaker 3: Now, turning attention to our financial performance. Our sales were remarkable in the quarter. A proud record for our company. Adjusted operating margin performance through the first half of the year was better than the prior year and will be yet stronger in the second half of FY23.
Speaker 3: We delivered sales of $837 million, up 9% on prior year, reflecting strength in each segment.
Speaker 3: These sales were particularly strong in several areas, in commercial OEM and aftermarket due to the aviation recovery.
Speaker 3: In defense, due to the ramp to full rate production of our reconfigurable integrated weapons platform at F.
Speaker 3: and in space due to our differentiated electronics and satellite components offering. And finally in industrial due to capital investment in automation applications.
Speaker 3: Our 12-month backlog now stands at $2.3 billion, up 1% year over year. And our bookings remain strong.
Our adjusted operating margin was down 20 basis points on prior year.
Strong operational performance was masked by charges on developmental programs and an unfavorable mix. At the bottom line, we delivered adjusted earnings per share of $1.42, exceeding the midpoint of our forecast. Our cash flow was clearly pressured in this quarter.
due to some atypical outflows and increased working capital requirements required to support the growth in our business. Now I'll hand over to Jennifer to review our financials in more detail.
Thanks Pat. I'll begin with a review of our second quarter financial performance. I'll then provide an update of our guidance for all of FY23. It was an exceptional quarter from a sales perspective. We hit a record level of sales for the company and for each of our segments.
We achieved $1.42 of adjusted earnings per share just over the midpoint of our guidance.
Sales in the second quarter were $837 million. Total company sales increased 9% over the same quarter a year ago. Considering the impact of divestitures and foreign currency movements, sales were up 11%.
The largest increase in segment sales was in aircraft control.
Sales of 347 million dollars increased 11% over the same quarter a year ago.
Commercial OE sales in the quarter were especially strong, driven by market recovery in wide-bodied platforms as well as growth in business jets.
Commercial aftermarket sales were also very strong, particularly on the A350 program, with this program steadily ramping over the past four quarters.
Military aircraft sales declined in the second quarter compared to the same quarter a year ago. The military sales decreased reflects lower funded development activity, including the delayed start on the FLRRA program. In addition, military aftermarket sales were down from a particularly strong quarter a year ago.
Sales and space and defense controls of $246 million increased 10% over the second quarter last year.
for satellites. The ramp-up in production on the reconfigurable turret program, which hit full-rate production levels in the first quarter this year, also drove sales this quarter.
Industrial system sales increased 3% to $244 million. Excluding foreign currency movement and the divestiture of our sonar business last year, sales were up 8%.
Sales increase was driven by elevated investment and capital equipment for our industrial automation products following the pandemic.
Sales and energy, adjusting for the divestiture last year, were relatively flat compared to a year ago, as was medical, while simulation and test was down slightly on timing of orders. We'll now shift to operating margin.
Adjusted operating margin of 10.4% in the second quarter decreased 20 basis points from the second quarter last year.
Our margin was pressured this quarter by charges on development programs and an unfavorable mix.
On the positive side, these pressures were mostly offset by strong operational performance on our underlying business.
marginal return on the sales increase, and lower research and development expenses.
Adjustment to operating profit this quarter were $3 million, reflecting restructuring and other charges in each of our segments. Adjustments for last year's second quarter were $25 million related to the delayed recovery in the commercial aircraft business, our response to the Russian invasion of Ukraine, and refinements in our portfolio.
I'll now describe the key drivers of our adjusted operating margins for each of our segments. Operating margin in aircraft controls decreased to 9.5% in the second quarter from 10.0% in the same quarter a year ago. The 50 basis points decrease resulted from an unfavorable sales mix driven by the
270 basis points worth, masking the benefit associated with higher sales and improvements in the core business.
Operating margin in industrial systems was 10.4%, down slightly from 10.5% a year ago. We incurred a few operational charges this quarter, which were offset by incremental margin from strong sales.
Interest expense is another area that's impacting your financial results. In the second quarter, interest expense was $15 million, up $7 million over the second quarter last year.
The $1.42 adjusted earnings per share this quarter is down 5% from the same quarter a year ago due to higher interest expense, partially offset by increased operating profit.
Let's shift over to cash flow. For the quarter we had a use of free cash flow of $101 million. We had nearly $60 million of atypical outflows this quarter, $28 million to purchase a building, $15 million of cash taxes for the R&D expense amortization law that was not repealed, and $14 million for timing of compensation payments.
Beyond these, the negative pre-cash flow this quarter was driven by working capital growth.
Working capital grew significantly this quarter. Receivables increased associated with supply chain constraints, the ramp up in commercial aircraft activity, and higher industrial sales particularly late in the quarter.
Inventories also increase related to supply chain pressures. We continue to strategically purchase those components and advance the deployment to reduce the risk of shipment delays. Despite that, we've experienced situations in which we can't ship products and the necessary component isn't available.
We are now expecting these pressures to continue longer than we had anticipated. In addition, we've worked down customer advances across programs.
Capital expenditures came in high at $60 million as we purchased the building for $28 million just off campus from our headquarters in East Aurora, New York. We're expanding our space and defense operations in western New York to support our growth and are glad to have acquired this building so close to our other facilities.
We continue to invest in our facilities to accommodate our growth, focus our factories, and enhance our capabilities through automation.
Excluding this building purchase, capital expenditures were 32 million dollars up slightly from our first quarter but down from the same period a year ago.
Our leverage ratio, calculated on a net debt basis, was 2.5 times as was the end of our second quarter. Our leverage ratio is in the middle of our target range of 2.25 times to 2.75 times.
Our capital deployment priorities, both long-term and near-term, are unchanged. Over time, we look to have a balanced approach to capital deployment, growing our business both organically and through acquisitions, while also returning capital to shareholders in the form of dividends as well as share repurchases. Our current priority and where we see the greatest potential return is to develop a
continues to be for investing for organic growth.
We're building up new businesses that we believe have huge potential, like the electrification of construction equipment.
We're also investing in our core businesses and capital expenditures are a part of these investments.
In addition to investing for organic growth, we'll continue to look for strategic acquisitions to complement our portfolio. We also remain committed to our dividend policy. We'll now switch over to guidance for the full year.
We are reiterating our fiscal year 2023 guidance for the company's adjusted operating margin and adjusted earnings per share on slightly higher sales. Our backlog remains solid and our performance is on track to achieve these results. Based on second quarter pressures on cash, we are decreasing our free cash flow.
and 7% when we adjust for divestitures over the past year and the impact of foreign currency movement. We expect sales growth in each of our segments with the biggest driver being commercial aircraft. Our control sales are projected to increase 6% to $1.3 billion.
The increase is all on the commercial side of the business. Commercial OE will be up across the board with growth on Airbus and Boeing platforms, business jets, and the Genesis business we acquired a couple years ago.
We'll also see growth in an already strong commercial aftermarket business. To account for strong sales this quarter, we're increasing our commercial OE forecast by $5 million and our aftermarket sales forecast by $15 million.
We expect an offsetting decline in military craft sales driven by lower aftermarket sales. We're decreasing our military aftermarket sales guidance by $20 million to reflect the relatively slow start to the year. Base and defense control sales are projected to increase 5% to $920 million.
Adjusting for the divestiture of a security business late last fiscal year, sales will be up 8%. When looking at our numbers in the segment, it's helpful to remember that we shifted the product line from defense into space at the beginning of our first quarter. Adjusting for that shift, we're expecting nice increases in both space and defense. The increase in defense sales reflects the production ramp for the reconfigurable turret.
Our sales forecast is unchanged from our previous forecasts. Industrial system sales are projected to increase 4% to $940 million. Adjusting for the sales of sonar business and foreign currency movements, the increase is 7%. Growth will come from each of our sub-markets reflecting our solid backlog.
Our sales forecast is up $15 million from our previous forecast on our strong sales this quarter. Moving over to operating margins. We're holding our forecast for adjusted operating margin at 11.0% in FY23, which is up from 10.2% in FY22. We're expecting stronger performance in each of our segments. Industrial systems will increase to 70 basis points to...
percent. This will benefit from factory utilization as sales in the commercial OE business increase. However, this benefit will largely be offset by an unfavorable mix with a relative increase in commercial OE.
Higher interest expense and a higher tax rate will depress earnings per share by 68 cents relative to FY22.
For FY23, we're continuing to project adjusted earnings per share of $5.70, plus or minus 20 cents, which is up 3% over FY22. Adjusting for interest and taxes, EPS would be $6.38, an increase of 15%, reflecting strong operational performance.
Next quarter we're forecasting earnings per share to be $1.45 plus or minus 15 cents.
Finally, turning to cash. We're projecting free cash flow for FY23 to be zero, down from the $100 million we were projecting to generate 90 days ago.
The change largely reflects our second quarter experience in working capital and to a lesser extent growth in capital expenditures.
As we move into the back half of the year, we expect receivables to level off with strong collections on our balances offset by normal growth in the business. We expect that the use of cash for inventories moderates in the remainder of the year due to consumption of program specific inventory.
Customer advances will be a source of cash later this year with advances coming in aircraft control and space and defense control. Girls for compensation will normalize by the end of the year.
In addition to working capital, our capital expenditures forecast for the year is up. We are managing capital expenditures for the year to be approximately 165Million dollars. We're reprioritizing some of our spend later in the year to partially offset the building we acquired in the 2nd quarter.
As always, our aim is to share a forecast that represents a balanced outlook for the year. We're assuming that supply chain disruptions continue throughout the year. Other external factors, such as geopolitical landscape, could also impact our performance.
Overall, we had a good first half to the year and our outlook for the rest of the year looks strong. We're positioned nicely from a liquidity and leverage standpoint, enabling us to invest for future growth of our business. With that, I'll turn it over to Pat.
Thank you, Jennifer. As you've heard, we closed out a remarkable quarter, delivering record sales, and we're on a path to deliver a fiscal year with 7% organic growth.
and 80 basis points margin improvement. We are now happy to turn over to you and take questions. Thank you. If you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is on.
Morning morning. How are you Christine?
In your remarks, you talked about portfolio shaping. If you look at the company over the past 10 years, revenue on a bigger basis is up single digits. Margins are up 200 basis points.
If you think about the actions that you want to take to shape the portfolio now, and then you've got the aerospace and defense upcycle coming.
Where does the company look like five years from now? Do you see this as a higher growth or a higher margin company? Which direction are these actions that you're taking? Where do you wanna go? Well.
If I try to answer the question which we will do in more detail at the investor day in June , but the first response to your question is, I think we've demonstrated as a company an ability to innovate and grow organically and we've had strong underlying organic growth. That's continuing. And we have.
As you said, we have some tailwinds coming from the markets that we're in. Defence is really significantly growing, so is space. So they're helping us, they're assisting in the innovation that we've done in growing those underlying core businesses. I think we also have the opportunities arising from the new areas that we've endeavoured to develop. Space vehicles where we're building full satellites.
construction equipment and Agile Prime which gives upside potential I believe on top of an already strong core growth. So that's the growth side of the business. I think for us the focus shifting to margin enhancement is a significant change in our direction as a leadership team and over the next number of years you will see
stronger margin growth than we've had in the past. And that's what we'd like to describe in more detail in June . Great, looking forward to that. And maybe a follow-up question on the free cash flow outlook. Do you talk about what's why in this quarter there was a big change in expectation for free cash flow? Did a particular event happen or what made you more conservative? What did you see?
where you're expecting even free cash flow this year instead of positive. Yes, thanks Christine, I'll take that. Yeah, there are a number of things that actually happened in the corridor and as I mentioned, the building that we acquired for 28 million dollars was part of that change in the forecast. We are going to change some of the prioritization of activities that were
So it's about $30 million for the year. That's not necessarily a change in the forecast, but that is something that contributed to the Q2 low level of cash, or the use of cash rather. As I look at the rest of Q2, there's a number of things that happened. And I would say supply chain is definitely a big thing.
aircraft business that was significant growth that also gets caught up in receivables. And we had timing of sales late in the quarter, particularly in our industrial business that was high. Supply chain continues to impact things in our inventory as well. The other thing that we had is a timing thing. It's really in the customer advances where we work.
receivable generation associated with the late sales and industrial so that'll come back to us. And we also have some programs for instance where we're consuming some long lead materials, for instance electronics in our space business for orders that'll get fulfilled in the second half of the year so we won't.
use cash to the same level that we did in the first half. And we've got some nice customer advances that are coming in within our aircraft and our space and defense business. So I would say overall we're being pressured by supply chain and it takes a while for this to actually manifest some of the decisions that
We're making as far as which components to buy long lead and buy in quantity so that we have them. It takes several quarters for those decisions to actually manifest themselves into our numbers and actually inflate them from a balance sheet perspective.
but we believe that we're balancing that appropriately. One thing that we are doing too right now is we're starting to look at some components that are not as...
I would say risky or worrisome. I would say electronics and space and electronics and other parts of our business continue to be something we want to focus on and make sure that we've got on hand because of the difficulties associated with that part of the supply chain. But there's other components throughout the business that are kind of softening from
takes a while to work those down so that and obviously a delay when we'd be able to see those come down.
Thank you, Jennifer. And if I could add a third follow-up, when do you anticipate working capital headwinds to start reversing? And could we see at some point working capital becomes a tailwind? And is it going to be at the end of this year? Or is this more fiscal year next year?
It's not going to be in this year. I think as we look to the back half of the year, the back half of the year is going to look better than the experience that we had this quarter. But before it becomes a real tailwind, we'll be outside of this year.
It's not going to be in this year. I think as we look to the back half of the year, the back half of the year is going to look better than the experience that we had this quarter, but before it becomes a real tailwind, we'll be outside of this year. Great, thank you very much.
And our next question will go to Michael Ciaramoli. Please go ahead. Hey, good morning, guys. Thanks for taking the questions. Maybe just to stay on that last topic that Christine and Jennifer you were talking about on supply chain. I mean, are you guys a little late to the game here? You know, it seems like you know.
building buffer stock, looking at component sourcing, build versus buy. I'm just trying to understand what, maybe just more of the dynamic around there. I mean, it seems like we've heard a number of other entities putting these actions into place several quarters ago.
I would say that we have been doing these for quite some time for a good solid year or so. In certain, maybe a year or so, it was a number of different components. And I would say in the past quarter or two, it's been more limited to the electronics and that's the era that's kind of sticking and not coming to an end.
Earlier on maybe a year or so ago, we had other components that were causing issues. We also had fright, we had epoxies, we had a bunch of these types of things. They were a challenge for a quarter or so and then they eased up and some came back or different ones replaced them. So I would say that I don't feel like we're late to
the party we have been doing this, we have been doing these electronics for a while. Some of the electronics that we have are 18 to 24 month lead times. So they're long in duration to react to. Michael, I think the dynamics changed and so we're continuing to respond to them. I would have said if you were back in quarter.
4, Quarter 1, we had significant challenges getting space rated componentry. That was our big challenge then. Electronics has been a continual challenge for us down through the last year or so and continues to be. Other issues around forging eased up at certain points last year and are becoming a little bit more challenging.
the mid-year the supply chain challenges would begin to ease up and I think our perspective at the moment is it's not going to come back soon it's going to go out through to the end of the calendar year at least.
So that's a change in assumptions and therefore we are holding on to more infantry than we had originally intended. We may have intended to start working, turning the oil tanker around and starting to try and reduce down inventories but that's not possible at the moment given the situation on supply.
Got it. Okay, that's helpful. And then just, I think in the prepared remarks, you called out FLARA. What sort of R&D effort is going to come along with FLARA? I mean, I know we've seen kind of the R&D way on aircraft in the past. Is this something that would be similar in nature? Certainly it's going to be a bigger...
The work will begin to ramp up towards the...
into Q3 and into Q4 and then continue on for the next three to four years. Are you going to comment on the level? Yeah, this contract, just so you know, it doesn't flow through R&D. It actually flows through sales for us. So this year we are projecting $10 million in sales. We had previously projected $25 million in sales.
But due to the timing of the award, we're now expecting to be getting an award around the June timeframe. We should have 10Million dollars of sales this year. It doesn't go through R&D. But presumably it's low margin customer funded revenue. So would it be a drag on margins?
the timing of the award, we're now expecting to be getting an award around the June timeframe. We should have $10 million of sales this year. It doesn't go through R&D. But presumably it's low margin customer funded revenue, so would it be a drag on margins? It's a drag on margins.
Okay. And then last one, Pat, I mean, I just, I know you guys have the upcoming investor day, you know, I mean, you've got AC revenues at a record level, margins are down. They've kind of been range bound here. I mean, you mentioned this, this matrix structure and aircraft controls.
I mean, there was a period of time where you guys did mid-teen margins. Is that something that kind of this moving away from the old structure to the separate business, is the path or the goal to get back to mid-teens where some of your peers with proprietary sole source components products, they're generous.
when we lay it out in June . We have specific plans in place that are helping us to achieve that. We've been working very hard over the last year on trying to improve the gap between cost and price. There's been a lot of change in the supply chain side. We've been working through those issues.
actively with our suppliers, but also working with the OEMs to see how we address that challenge. And I think towards the tail end of this year you'll begin to see that improvement flowing through on our commercial business.
Got it. Okay, perfect. I'll jump back in a few guys. Thank you.
Thank you. I have no further questions in the queue at this time.
And I'll turn the call back over to Pat Rochi for closing comments or additional remarks.
All right, thank you very much. I'd like to thank you for joining the call and for all of the questions. I look forward to meeting you again in 90 days time. Thank you. This concludes today's call. Thank you for your participation. You may now disconnect.