PlayAGS Inc. Q1 2023 Earnings Call
One of our content creation teams over the past several years has arm the business with the deepest and most diverse game content offering in the Companys history.
We currently have seven game development studios, creating over 75 titles per year, nearly doubling our game output compared to just a few years ago.
In addition to added breadth of our portfolio, we remain laser focused on ensuring we maintain our reputation as a provider of high performing content featuring themes and game mechanics players love.
This focus was prominently reflected in the most recent eilers game performance report as Ags titles, including one of our initial game themes and the high denomination category accounted for over 10% of the top 50, new core games.
Supported by the teams we have in place today, we are now able to deliver new high performing hardware targeting a variety of market segments and an increasingly diverse content portfolio expanding multiple game category types with greater consistency.
This consistency positions us for sustainable market share growth in the quarters and years ahead.
In addition to leveraging very strong R&D organization. We are also benefiting from the work of our sales and product management teams.
By carefully investing in our customer facing teams, we have successfully increased the frequency of our interactions, resulting in better sell through of our products.
Along with this we have deployed a stronger go to market strategy, which better positions our products for success in the field.
During the first quarter, we sold games to over 110 different customers, including five of our largest corporate customers, representing an increase of more than 45% versus the prior year.
All told given the diverse array of customer accounts touched cabinet type sold end market segments penetrated I consider Q1 2023, the healthiest AGM sales quarter in our company's history.
Moving outside of <unk> sales the initiatives underway to further strengthen our domestic AGM recurring revenue business continued to deliver consistent results as reflected by our record setting performance in the quarter.
During Q1, we successfully grew our premium AGM footprint for the 13th consecutive quarter, pushing our premium mix to over 15%.
Although our premium strategy has come a long way in a relatively short period of time, we continue to see considerable growth opportunities in front of us supported by new customer Activations gain theme launches and hardware introductions.
In addition to our success on the premium game front, we continue to leverage the added depth of our game content portfolio and product management team to further optimize our core unit performance.
The compound benefit of our premium market penetration and optimization initiatives has structurally transformed the composition of our domestic installed base.
Resulting in eight consecutive quarters of 30, plus dollar domestic RPG performance.
Looking beyond the Gms the momentum building within our cable products business is as strong as it's ever been.
Our packs as single deck shuffler footprint grew by more than 40% sequentially topping 200 units at the end of the quarter.
The competitively priced shufflers reliability and our service team is laser focused on ensuring a seamless conversion experience continues to resonate with our customers.
With several multi site operators currently trialing packs and rebuy momentum amongst early adopters building, we remain in the very early innings of realizing the products full growth potential.
In addition to packs, we continued to leverage our commitment to being an innovator of choice to expand the reach of our progressive products and operators table pits to.
To that end our bonus spin extreme footprint Eclipse 500 units at the end of Q1 with units installed across 20 jurisdictions, while <unk> is off to a hot start we see considerable growth in front of us as the product was installed at fewer than 50 casinos at quarter end.
Finally, our interactive business is quickly approaching launch mode supported.
Supported by forthcoming introduction of a new platform expanded game content portfolio and recent new customer end market Activations. We continue to expect the growth trajectory within the business to improve in the back half of the year.
With a record first quarter behind us our focus now shifts to Q2 and beyond while we are acutely aware of the macroeconomic uncertainty in the financial markets. Today, we believe our ability to leverage the unique growth catalysts I just described coupled with our outsized recurring revenue mix and strong.
Quiddity position provide a level of resiliency within our business that is grossly underappreciated by investors today.
These same attributes are also provide a path to sustainable multiyear growth in turn further balance sheet deleveraging positioning the company to outperform over the longer term.
In closing I would like to thank our Ags team for their continued hard work focus and execution, which remains the foundation of our record setting financial performance.
Continue to believe we have the strongest team in the deepest product lineup in my tenure and I'm encouraged by and look forward to what lies ahead for our company with that I will turn the call over to chemo.
Thank you David and good afternoon, everyone.
I'll start off today's call by reviewing a couple of highlights from the first quarter and providing some perspective on how we see each of our business segments trending as we look ahead into Q2.
I will also share some thoughts on our free cash flow outlook for the year and close by addressing a few items related to our balance sheet.
Turning first to our domestic AGM gaming operations business first quarter revenue increased 10% year over year to a record of nearly $48 million as.
As we noted on our Q4 call the first quarter got off to a strong start in January and trends strengthened throughout the quarter with March revenues, reaching an all time monthly record.
During Q1, we expanded our domestic installed base sequentially for the fourth consecutive quarter supported by our 13th straight quarter of premium unit growth and a relatively stable core unit footprint.
Domestic RPT increased 7% year over year topping $30 for the eighth quarter in a row.
Our growing premium unit mix with premium gains accounting for over 15% of our installed units at quarter end further installed base optimization and a generally stable macroeconomic backdrop, all contributed to our improved <unk> performance in the quarter.
Looking ahead to Q2, the opportunity to simultaneously activate new premium unit customers and broaden our penetration with existing customers combined with continued stability in our core unit footprint should allow us to expand our domestic installed base for a fifth consecutive quarter.
Consistent with the expectations, we articulated at the start of the year. We continue to believe our ability to leverage multiple company specific catalysts, including our high performing spectra cabinet increasingly deep and diverse core content portfolio and consistent premium gain market penetration momentum should allow.
How us to comfortably sustain domestic AGM RPT above the $30 level throughout the second quarter.
Shifting to <unk> unit sales first quarter global unit sales increased by more than 15% year over year.
<unk> 1100 units for the second consecutive quarter.
Growing customer demand for our chart topping spectrum cabinet with spectra sales more than doubling versus Q4, 2022 levels and over 45% increase in the number of customers sold two complementary sales into international markets and an increase in market wide purchasing demand paced our improved unit.
Sales performance in the quarter.
As we look ahead to Q2, the same set of strategic initiatives underpinning our outsized first quarter unit sales growth, coupled with an anticipated normal seasonal lift and operate our slot capital spending should allow us to deliver global AGM unit sales volumes that exceed Q1 levels.
Moving onto AGM pricing first quarter global average selling price or ASP.
<unk> increased 2% versus the prior year to over 19500 <unk>.
Driven by a greater mix of premium priced spectra cabinet sales and continued implementation of our price integrity initiatives.
Based on our anticipated Q2 unit sales mix, we expect asps to look relatively similar to the level achieved in the first quarter.
Turning to our international AGM business recurring revenue increased by more than 15% year over year and improved sequentially for the 11th consecutive quarter.
The continued strong performance of several established Ags franchise game themes throughout Mexico further installed base optimization stable macroeconomic trends and favorable FX movements contributed to our improved recurring revenue performance in the quarter.
International RPT topped $8 for the first time since Q2 2019, increasing by more than 30% year over year on an as reported basis and by over 20% when adjusted for FX.
Exiting Q1, our Mexico recurring revenue business was run rating at approximately 75% of 2019 levels compared to a little over 60% one year ago.
Supported by the consistent operating trends, we continue to observe throughout Mexico. We believe we should be able to further close that 2019 revenue gap during the second quarter.
Looking beyond the Gms, our table products business delivered another record quarter with revenues topping $4 billion.
Our software revenues more than doubled year over year, driven by growing customer adoption of our <unk> S single deck shuffler progressive revenue increased by more than 10% versus the prior year and we activated our second largest ags Arsenal site license contract during the quarter.
With momentum in the business accelerating we believe we should be able to improve upon our record setting Q1 performance in the second quarter.
Shifting to interactive trends within the business once again prove stable throughout the first quarter as revenue exceeded $2 5 million for the fourth consecutive quarter, while the segment continued to generate positive adjusted EBITDA.
Real money gaming revenues increased by approximately 5% versus the prior year supported by continued outsized growth within the North American RMG channel.
Looking ahead, we expect Q2 segment level revenues to look relatively similar to those achieved in Q1 with a more pronounced lift off occurring in the back half of the year as pay off from recent investments into our technical and commercial teams and upside from recent new customer activations become better reflected in there.
Quarterly results.
Turning to margins first quarter adjusted EBITDA margin was approximately 44% inline with expectations articulated on our Q4 call.
Although we continue to expect full year adjusted EBITDA margin to land in the <unk>, 44% to 45% range I would note seasonal costs associated with our game on customer conference are likely to push our second quarter margin slightly below the low end of our targeted full year range.
First quarter capital expenditures totaled $14 million, we continue to expect full year capital expenditures to land in the range of 65 million to $70 million inclusive of anticipated capitalized R&D expenditures cash.
Cash interest in the quarter was approximately $13 million a level. We believe serves as a good run rate for the remainder of the year barring any material change in market level rates.
First quarter free cash flow defined as net operating cash flow less capex was negative $10 million inclusive of approximately $7 million related to annual employee bonus payments, which we highlighted on our Q4 call.
Additionally, the timing of AGM unit sales in the quarter and an increase in <unk> component inventory to allow for timely fulfillment of the demand we see building within the business impacted Q1 free cash flow by a little over seven 5 million.
Adjusting for these timing related items free cash flow would have been nicely positive for the quarter.
Looking out over the remainder of the year, we expect to neutralize a significant portion of the Q1 working capital related impact.
That said when coupled with the relative consistency, we continue to observe within our day to day operations and our organizational focus on capital deployment discipline, we remain confident in our ability to deliver positive free cash flow over the remainder of 2023 with the level of free cash flow building sequentially as we progress.
Throughout the year.
Finally, turning to the balance sheet net leverage at quarter end was three eight times consistent with the prior sequential quarter.
Supported by our solid first quarter performance the relative stability, we continue to observe across our recurring revenue business channels, the growing demand for our high performing for sale products and our confidence in our ability to deliver positive free cash flow over the remainder of the year, we remain on track to exit 2023.
With net leverage in the range of three to five times to 375 times.
I would remind everyone the assumptions underpinning the three five times mid point of our targeted leverage range continue to contemplate a modest pullback in prevailing market level conditions as compared to those encountered in 2022 and 2023 year to date period.
That said should the broader market trends remained relatively consistent with those we are currently experiencing we would expect to exit 2023 with net leverage in the bottom half of the range.
Finally, it is important to note we intend to pursue a balanced approach to deleveraging the business supported by a combination of adjusted EBITDA growth and consistent free cash flow generation.
Operator. This concludes our prepared remarks, we would now like to open the lineup for questions.
Thank you.
Ladies and gentlemen, if you would like to ask a question. Please press star followed by one on tap from key patent now.
To ask a question. Please ensure your phone on mute locally.
With our first question comes from Jeff <unk> from Stifel.
Your line is now open.
Hey, great. Thanks, Good afternoon, everyone and thanks for taking our questions.
Starting off on the game ops business, we've heard some operators this earning cycle called out some softness.
Kind of select southern states.
Kind of leader in Q1 and into Q2, just curious if youre seeing any sort of interesting dislocations. When you look at your game ops business, whether thats by geography by customer or just any sort of bifurcation in kind of patterns.
Hey, Thanks, So broadly we see a lot of consistency right as far as youre getting into the specifics of jurisdiction by jurisdiction I think that we've seen a little bit of that that up and down a little bit from from time to time, but broadly across.
The United States, when we look at.
The nation as a whole we do see this stability in its continued and theres nothing in sight right now, where we see anything changing in particular.
Great. That's helpful. Thank you David and then for my follow up Chemo I wanted to revisit the capital allocation strategy, a little bit you've mentioned several times, the deleverage and investment into the business and various growth opportunities as our main priority here, but with that in mind is there a certain level I guess, where the yield on your stock is just too compelling.
Kind of warrants revisiting potential share repurchases, just kind of any thoughts there on how you view the calculus there would be helpful. Thanks.
Yes.
We said at 1.3 times, then we'll say it again I think are 100% focused on deleveraging the business and I think if you look at.
Our outlook for the year, we gave a pretty broad range, but we said that the midpoint should come in at call. It three five times and with that we do have an assumption.
Is that range, we do have some moderation in the back half of the year, but.
Bringing it back to your original question.
Our singular focus I think the topic come up yet, but I think over and over and our focus is to continue to deleverage the business as opposed to entertaining using free cash flow to do something like buying back stock.
Yes.
Optionality is great right. So I think.
Cumulated cash on the balance sheet as we move through the year and moving forward into next year I think that puts us in such a great position.
Options as well.
And that question does come up because obviously, our valuation is where it is and we think it's extremely undervalued.
We do ask ourselves the question frequently, but we do come back to the same thing which is.
Our investors largely and we believe.
<unk>.
Deleveraging is the way to go.
Great. That's very helpful. Thank you both I'll pass it on a nice quarter.
Okay.
Thanks, Joe.
Thank you Jeff.
Our next question comes from Barry Jonas from choice Barry Your line is now open.
Hey, guys.
David we've been hearing trends stable for some time now despite all the stock market volatility.
I guess I don't think we've talked about this but I'm curious to get your perspective on it.
At what point do you think gaming operators start tailing back on on their spend is there sort of like a 10%.
Reduction in <unk> like I, just would love to get your thoughts.
At what point does the stock market volatility justified by bi because.
Because it doesn't seem to make sense today.
Sorry, you're asking me to agree with you that it doesn't make sense.
I agree that it doesn't make sense right and I think what you are saying is should should al should.
This thing around the corner show up right I mean should things get soft youre asking when do how much do operators pull back on.
Capex.
And other things and I think thats very difficult to say I think it's a scale again stock markets all over the place.
If this were to come to fruition, what's the scale of it and I think based on that scale. They would make decisions I think they are good.
True to operators.
At their end.
But to date Youre asking of the hypothetical question, but to date, especially in the Capex space. That's the one thing thats the barometer for what's happening or what they believe might happening theres no pullback. So the current scenario is operators have not shown us anything to say.
We believe things are are.
We're going to get solved so right now Capex is strong I think their beliefs are strong I've been following the calls and I think that overall, it's been a positive tone.
Yeah.
Okay, Okay, Great and then last quarter, you announced entrance into three new States, Colorado, Mississippi, Missouri. Just curious if you can give us any update on how thats trending so far.
Yes, so I mean, I think it's early in the game, but it will it will go well for US we're pleased with where we stand there and how things will go.
The bear market for us it's all Greenfield.
They are decent sized markets. So we're excited about it.
I'm excited to get in there and do some business obviously, we've got some great products.
I think that the table teams crew is anxious to get in there and start moving product and I'm sure they will and.
Our slot product with what's going on with respect to <unk> 43, and our premium business I think we've got plenty of plenty of work to do and there are plenty of progress to pick up.
So we're excited about it.
Okay, great. Thank you so much.
Thanks Barry.
Thank you Barry.
Okay.
We have our next question comes from Chad Beynon from Macquarie Chad. Your line is now open.
Afternoon nice quarter, Thanks for taking my question.
First just wanted to ask about Asps.
You guys have talked about.
Your price integrity initiatives and Asps were strong for another quarter.
Particularly in a quarter when you sold record unit. So just wondering what the competitive landscape is like is there anyone discounting or if youre, putting up the numbers and strong indexing that warrants your ability to continue to raise prices.
Yes, Yes, I think you answered the question actually.
I think it's a great question and you sort of answer which is if youre indexing, well and you are performing well.
Like us youre going to have really good asps.
<unk>.
Youre not performing that well I think that there is as per usual in any business out there I think that <unk> got a discount a little bit I have not seen any dramatic deep discounting at all I'm sure. There's some bundling and packaging that you see across different companies.
But I haven't seen anything that I would refer to as aggressive or access and so I think everybody is pretty stable, but you can look at asps on islands and that sort of gives you a good read on who is performing in what way.
Great. Thank you.
And then separately just on the skill or Texas in general is there any update there or anything that we should be mindful of from a.
Opportunity your timing standpoint as we.
Think about our model for the next several quarters here.
Yes, so Texas in general Youre, asking sort of the Texas question There, Texas in General we continue to believe that that's not a 2023.
Sure.
Event, if you will bearing in mind, even if it was a 23 event it happens way down the road, but we don't we do not believe in something that's happening in 2023 as.
As far as <unk> goes no news at the moment, we continue to track. It obviously, we have very good relationship with them.
Sure.
Just waiting on them to make their final decisions and I mean, just to know as <unk> continued to perform amazingly from.
At least our side of the business and I'm sure they're packed to the gills there as usual.
Okay. So theres, nothing really kind of baked into that three and a quarter to $3 75 leverage guide at this point.
No no no no no.
We didn't do that okay.
Okay.
Okay.
Thank you very much nice quarter guys.
Thanks, Chad I appreciate it.
Thank you.
With our next question comes from Edward Engel from rock at Cannes and Whats. Your line is now open.
Okay.
Hey, Thanks for taking my question.
Nice quarter on the sales it sounds like Q2 is going to be even stronger.
Is there any kind of lumpy items in either of these quarters in terms of expansions or anything and then typically <unk> is kind of your biggest quarter.
<unk>.
Q the high watermark or do you actually expect a similar seasonality as the past.
So I'll start with the lumpy and then I'll turn it over to Brad So he can sort of.
Fine tune the rest of those questions. There so nothing terribly lumpy within the quarter and.
I think youre looking for hated someone come in with a huge buy and no.
That is not the case again, we sold to a record number of customers for us right.
And we anticipate.
Not only was it a record when we anticipate that that will expand going forward into Q2. So I think the way to look at that is again very little lumpiness going forward, as well and sort of going wider and deeper into the.
Into the customer base.
So so I think that we can feel comfortable with that not only in the quarter, but going forward as far as the rest of your question I'll, let Brad.
<unk> talked us through.
Yes, Ed.
I think it's a little bit early to be thinking too far out as far as what Q4 may or may not look like.
I think as David said overall demand trends in the market or are remarkably consistent on the purchasing side.
And obviously it helps to be in the market with really strong performing product.
As it relates to Q4.
<unk>.
Decent factor in Q4s is sort of year end capital spend of use it or lose it capital budgets with the operator, so sometimes.
Get some some color on that until we get closer to Q4.
We can talk about that a little bit more concretely.
I think from a high level right now we like what we're seeing out there from a demand perspective, both from from the market level and as it relates to.
The momentum that we have on the product side.
Helpful. Thanks, and then it looks like your gross margin on <unk> was the best it's been.
<unk> been a while.
Are you starting to see some of these supply chain issues kind of in the rearview mirror.
Yes, so there's two factors in there and we talked about this little last quarter.
From a high level as it relates to supply chain things are definitely.
Largely speaking back on track.
Mrs have not obviously, just linking the broader economic sense not completely round trips back to say pre COVID-19 type levels, but a lot of the craziness in the market has moderated lead times are relatively back to normal. So we're obviously benefiting from that trend.
And then the other thing that you really see from a sequential perspective is that cetera. As we've said before is a value engineered product.
And so.
It has very strong gross margins attached to it as a result, and so as spectra.
Those two account for a greater portion of our mix there will be continued gross margin benefit there. So it is really a factor of those two things spectrum mix and then just continued normalization on supply chain broadly.
Got it thanks, and congrats on a nice quarter.
Okay.
Thanks, Ed.
Thank you.
With our next question comes from David Katz from Jefferies. David Your line is now open.
Okay.
Hi, good afternoon, everyone. Thanks for.
Working again.
Just a little longer term perspective, I mean, you're obviously getting a lot of traction spectra.
I guess I'll apologize I missed the first 10 or 12 minutes of the call.
Talked about it but.
What's next right is there.
The sort of spectra too.
Some new version right what does your pipeline look like so that you can sort of build on the success that you've had so far.
So I'm going to I'll give a little bit on this David but.
And lastly, sort of show our product.
We don't until we see the whites of their eyes because.
With our rollout of all our products one of the things that we have to manage very closely.
Is sort of like that pipeline and that road map and so at the moment.
We always have something coming right. There is always something that works we have a specific roadmap I think we've been pretty consistent in how we release our products, but at this point, we haven't announced anything thats sort of the official.
The official end of that there so, but obviously with win every cabinet line, we come out with we continue to expand and do new things, Yes, David I would just add.
As we've said.
In the prepared remarks.
And as you are aware.
We have.
<unk> really made some considerable investments in our R&D team over the last two to three years and we really feel like both on the content and hardware side.
We're where we need to be we're in a position now to to bring 70% 75, plus games to the market every year across a variety of different channels and at the same time, we feel like we're in a position to be able to.
Insistently bring some new hardware to the market.
On an annual basis so.
We really like where we are from a resource perspective, and I think that sort of puts the pillars in place to support really.
Nice consistent long term growth trajectory.
Got it.
Can we just talk a bit more about the international opportunities.
So many of US as you are aware.
We feel like we have our intellectual arms around what goes on in North America relatively well.
But the international stuff is just harder.
In that respect so.
David what can you sort of help us paint a picture of.
Where you are trying to enter where you think you can penetrate.
If you could just give us some confidence we could maybe drill down a little deeper and do some more work around it.
Yes, so for now.
We're definitely as you know focused on North America, which is pretty much domestic Canada U S. Mexico is considered domestic in my eyes.
Latin America, all of Latin America, South America, if you will in the Caribbean as our quote unquote International focus at the moment and then from there.
Yeah.
I don't know if its going to be Europe , or it's going to be Asia, or it's going to Australia, and New Zealand or something of the like.
The good news is as we have development teams in Australia. They know the market very well so should we choose to expand into Australia. We're in pretty good position, but we really haven't talked about.
Made a firm decision on after Latin America on what direction, we're going to go we do get we do get some pretty good inquiries out.
Out of Europe as far as our product goes, but we haven't made a decision to enter that market, yet, but Latin America Slash South America, and then you can looking honestly Europe Asia, and Australia, all Optionality for Us with Australia, maybe being one of the good ones I.
I guess when you say, Australia, you should really say all of Asia Pac but.
Our team is dialed into that of course, because that's where they reside.
Understood I appreciate it and nice quarter. Thank you very much.
Thanks, Dan.
Yes.
Thank you David.
As a reminder, ladies and gentlemen, if you would like to ask any further question. Please press star followed by one on platform keep hat now.
With our next question comes from David <unk> from B Riley David Your line is now open.
Great. Thanks, so much and echoing the nice quarter.
I know you have a lot of runway, but I was hoping to follow up on David <unk> question.
Regarding maybe not new cabinets coming out this year or anything like that but if you could help us think about new categories that could come out in the next 12 to 18 months I mean, there seem to be a lot that are still white space for Ags like Mac reals lap vlt's et cetera can those be 2024 events.
Can you remind us for Colorado, Missouri, and many are those kind of back half of this year or are we already starting to see some benefit there.
So I'll start with the categories.
Again haven't announced anything on the category front, either I think that with the way we're set up as an R&D team and the investments that we made I think that some of those those categories are optionality for us.
Nothing nothing to report.
At the moment, but we're pretty we're pretty well positioned if you will.
To pick a new category. If we go that route and then I'll turn it over to Brian on the on the new jurisdiction front, yes, David as it relates to the new jurisdictions just to reminder in aggregate.
Rado, Missouri, and Minnesota are about 40000 units.
As a market opportunity.
We are currently underway with some of our product testing.
And we would expect to have our initial.
Installs into those markets in the back half as you said.
I think it is important to remember that.
In the case of two of those markets, Colorado, Missouri. They are very heavily dominated by multi jurisdiction operators, who know our product well and with whom we already have existing relationships. So.
We think we'll be able to hit the ground running in those markets. So really excited about the opportunity there both on the slot and table side of the business.
Yeah.
Okay Awesome and then.
If I could.
I don't know if you already covered this but given the momentum that you have and sometimes we've seen.
Suppliers in the past when they really start to move higher kind of builds on itself.
Factors that big category.
Obvious success, there are you beginning to see.
Customers say kind of what else you got or like how does that sort of work towards other products.
Can you just sort of add on effect.
I think that I mean, I think you know this is something we've seen in the industry.
It also David exist in the table game space. This isn't just.
Restricted to the slot space like table games, where we started with a little bit of content and we add some takers and then we got into progressive and progressive became a very dominant product and clearly we had some takers. There. So we've got to take those on progressive and and content now we have shuffler.
And so as you know that momentum you're referring to in a very accurate way momentum starts to build much more than when you have one successful thing within a category. For example table. So thats worked for us very well in tables, you can see it in the results, yes on the slot side I think that.
With everything that we've done prior to spectra, we had a lot of success in various areas categories products titles et cetera, but I think spectra is now taking us to another level.
And it's it's.
Our expansion into most customers customers, we've sold to ever has to do with obviously, some approvals and has to do with having a better.
Structured sales team geography, and the quality of the team and of course I think that.
As you roll out something like spectra, and it's had the success that it's had so far yes. You now have this synergistic momentum from a number of different things core products doing very well historically, the Orion portrait being the cabinet than it was then you go Orion curve with our premium product that's been success.
And last but not least what you mentioned, which is spectrum 43, So I think theres that synergistic momentum there for sure and I think I think it's helping us sell not just to more customers, but getting a little wider and deeper into each customer and then of course, we picked up some corporates that have been a little bit more of a <unk>.
And now we're breaking into those as well.
Okay.
Perfect very helpful. Thanks, guys.
Thanks Steven.
Thank you David.
As a reminder, ladies and gentlemen, if you would like to have any further questions. Please press star followed by one on tack on Keybanc.
We have no further questions on the line.
Ladies and gentlemen. This concludes today's call. Thank you for joining you may now disconnect your lines.
Okay.