Q3 2023 Eneti Inc Earnings Call
[music].
Good morning, and welcome to the <unk>, Inc. Third quarter 2023 conference call.
Speaker 1: Good morning and welcome to the Anetti Inc. third quarter, twenty twenty three conference call. All participants will be in listen only mode.
All participants will be in listen only mode.
Speaker 1: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.
Did you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
Speaker 1: After today's presentation, there will be an opportunity to ask questions.
After todays presentation, there will be an opportunity to ask questions.
Speaker 1: To ask a question, you may press star, then 1 on your telephone keypad. To withdraw your question, please press star, then 2.
To ask a question you May press Star then one on your telephone keypad.
To withdraw your question. Please press Star then two.
Please note this event is being recorded.
Speaker 1: I would now like to turn the conference over to James Doyle, Head of Corporate Development and Investor Relations. Please go ahead.
I would now like to turn the conference over to James Doyle head of corporate development and Investor Relations. Please go ahead.
Speaker 2: Thank you for joining us today. Welcome to the Annette Yank Third Quarter 2023 Earnings Conference Call. On the call with me are Emmanuelle Iloro, Chief Executive Officer, Robert Bugbee, President, Cameron Mackey, Chief Operating Officer, Hugh Baker, Chief Financial Officer, Michael Ferrante, Chief Accounting Officer, and Sebastian Crook, Chief Executive Officer of CJAC.
Thank you for joining us today welcome to the <unk>, Inc. Third quarter 2023 earnings conference call on the call with me are Emmanuel I wore our Chief Executive Officer, Robert Bugbee, President Cameron Mackey, Chief Operating Officer, Hugh Baker, Chief Financial Officer.
Michael for all day, Chief Accounting Officer, and Sebastian Brock Chief Executive Officer of see Jack's.
Speaker 2: Earlier today, we issued our third quarter earnings press release, which is available on our website, embeddinginc.com. The information discussed on this call is based on information as of today, November 14, 2023, and may contain forward-looking statements that involve risk and uncertainty.
Earlier today, we issued our third quarter earnings press release, which is available on our website at <unk> Dot com. The information discussed on this call is based on information as of today November 14th 2023 and May contain forward looking statements that involve risk and uncertainty.
Speaker 2: Actual results and events may differ materially from those set forth in such savings.
Actual results and events may differ materially from those set forth in such statements for a discussion of these risks and uncertainties you should review the floor and walking statement disclosure in the earnings press release issued today as well as <unk> SEC filings, which are available at <unk>.
Speaker 2: For discussion of these risks and uncertainties, you should review the forward-looking statement disclosure in the earnings press release issued today, as well as Eneti Inc.'s SEC filings, which are available at enetiinc.com and sec.gov. All participants are advised that the audio of this conference call is being broadcast live on the internet and is also being recorded for playback purposes.
Inc, Dot com and <unk> Dot Gov.
All participants are advised that the audio of this conference call is being broadcast live on the Internet.
Also being recorded for playback purposes.
Speaker 2: An archive of the webcast will be made available on the investor relations page of our website for approximately 14 days.
Archive of the webcast will be made available on the Investor Relations page of our website for approximately 14 days. After opening remarks, we'll go to Q&A now I'd like to introduce our Chief Executive Officer.
Speaker 2: After opening remarks, we'll go to Q&A. Now I'd like to introduce our Chief Executive Officer, hasen the R
In my World.
Yeah.
Speaker 3: Thank you, James. Welcome everybody and thank you for joining us today. The third quarter was a productive quarter for the company on many different levels.
Thank you James welcome everybody and thank you for joining us today.
The third quarter was a productive quarter for the company on many different levels.
Speaker 3: We have generated more than 53 million of revenue and an adjusted net income of 18.5 million dollars.
We have generated more than $53 million of revenue and our adjusted net income of $18 $5 million.
Speaker 3: Since September , we have announced three employment contracts which are expected to generate between 250 and 330 million dollars of revenue. This is figures of...
Since September we have announced three employment contracts, which are expected to generate between 250 and $330 million of revenue.
This is figures after project costs.
But our new buildings, we have secured two major contracts at rates in excess of $350000 per day.
Speaker 3: For our new buildings, we have secured two major contracts at rates in excess of $350,000 per day. And even more impressively, we secured the $255,000 per day contract for the Cilla, which is starting in 2024, with a perfectly timely start upon conclusion of our current employee.
Even more impressively, we secured the $255000 per day contract for the seller, which is starting in 2024 with a perfectly timely start upon conclusion of our current employment.
Recently, the increasing attention on the U S offshore wind markets and its challenges has somewhat overshadowed the strength in Europe and Asia for offshore wind.
Speaker 3: Recently, the increasing attention on the U.S. offshore wind market and its challenges has somewhat overshadowed the strength in Europe and Asia for offshore wind.
Speaker 3: We do expect the US to overcome these challenges, but we must highlight that this is a global market and one in which the US represents only a portion of the overall demand.
We do expect the U S to overcome these challenges, but we must highlight that this is a global market and one in which the U S represents only a portion of the overall demand.
Speaker 3: This is where an ETE via CJEX makes a difference with its global presence in markets like Asia and Europe as well as the United States.
And this is where our net to you by a C. Jake's makes a difference with its global presence in markets like Asia, and Europe, as well as the United States.
Speaker 3: The day rates on our new contracts are reflecting a tightening of supply and demand for offshore wind on a global level. And in addition, they are rates which generate significant returns on equity.
The day rates on our new contracts are reflecting a tightening of supply and demand for offshore wind.
On a global level and in addition, they are rates, which generate significant returns on equity.
Speaker 3: Today, our total contractual backlog, including options for 2024 to 2027, it is just shy of $450 million.
Today, our total contractual backlog, including options for 'twenty 'twenty four to 'twenty 'twenty seven it is just shy of $450 million.
Speaker 3: On the operational front, we expect to close very shortly the previously announced $436 million new building financing for our two vessels, which are currently under construction in Korea.
On the operational front, we expect to close very shortly the previously announced $436 million new building financing for our two vessels, which are currently under construction in Korea.
Speaker 3: In October , so last month, we completed the sale of the first NG2500 vessel, the Sejax Kraken, and we've delivered her to her new owner.
In October so last month, we completed the sale of the first N GT 1500 vessel the <unk> cracking and we delivered her to her new owner.
Speaker 3: In conjunction with this, the company has repaid $12.6 million of debt related to all three DNG-2500s and thus the subsequent delivery of the two additional sister vessels will not have any further debt repayment.
In conjunction with this the company has repaid $12 $6 million of debt.
Related to old three <unk> 2500.
And does the subsequent delivery of the two additional sister vessels will not have any further debt repayments.
Speaker 3: the merger front. As we all know in June we've entered into a business combination agreement with Kaddler.
On the merger front as we all know in June we've entered into a business combination agreement with caterpillar.
Speaker 3: the transaction remains on schedule. All antitrust and foreign direct investment regulators have either cleared the transaction or confirmed that they have no intention to do more work on this file. Last week, Caddler announced the commencement of the share exchange offer for NFTs outstanding shares.
The transaction remains on schedule all antitrust in foreign direct investment regulators have either cleared the transaction or confirmed that they have no intention to do more work on this file.
Last week Caldolor announced the commencement of the share exchange offer Fortinet is outstanding shares.
Speaker 3: The merits and rationale of the transaction remain the same as a combined entity. The scale and our respective capabilities will create significant value at a time when offshore wind needs reliable partners and reliable solutions.
The merits and rationale of the transaction remain the same as a combined entity the scale and our respective capabilities will create significant value at the time when offshore wind needs reliable partners and ribeye reliable solutions we.
Speaker 3: We are confident that this combined entity will continue to drive positive outcomes for our shareholders as well as our customers.
We are confident that this combined entity will continue to drive positive outcomes for our shareholders as well as our customers.
Speaker 3: Scorpio Holdings will remain the second largest shareholder after the BW Group in the combined entity and I myself will be nominated to serve as Vice Chairman of the board.
Scorpio Holdings will remain the second largest shareholder after the BW group in the combined entity and I myself will be nominated to serve as vice chairman of the company.
Speaker 3: Before turning the call over, I would like to ask you to continue to support us by tendering your shares in the exchange offer in support of the business combination.
Before turning the call over I would like to ask you to continue to support us by tendering their shares in the exchange offer in support of the business combination.
Speaker 3: Thank you very much and I would like now to open the call for questions if any. Thank you.
You very much and I would like now to open the call for questions if any.
Yeah.
Okay.
Speaker 1: We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad.
We will now begin the question and answer session.
To ask a question you May press Star then one on your telephone keypad.
Speaker 1: If you are using a speakerphone, please pick up your handset before pressing the keys. Thank you.
If youre using a speakerphone please pick up your handset before pressing the key.
To withdraw your question. Please press Star then two.
Speaker 1: At this time, we will pause momentarily to assemble the roster.
At this time, we will pause momentarily to assemble the roster.
And our first question comes from Greg Lewis of P. P. I G. Please go ahead.
Speaker 1: And our first question comes from Greg Lewis of BTIG. Please go ahead.
Speaker 4: Yeah, thank you. Thank you and good morning and thanks for taking my question. James, maybe you could remind us as we go through the tender process, how much of the shares need to be tendered to push the merger forward?
Thank you. Thank you and good morning, and thanks for taking my question, James maybe you could remind us.
As we go through the tender process, how much of the shares need to be tendered to push the merger forward.
85%.
Okay, and so in the event and the event week in the event they is that 85% of Av.
Of total shares outstanding.
Speaker 2: Of a netty, total shares outstanding, that's correct. 85.01% according to the perspective.
Total shares outstanding that's correct 85 point or 1% according to the prospectus.
Speaker 4: Okay, and so in the event, you know, just just, you know, for clarity in the event that we're unable to get to that, that has been the time, the timeline expand.
Okay and so in the event.
Just for clarity in the event that we're unable to get to that there's been the time the timeline expand.
Speaker 4: which could then result in maybe, yeah, I guess if we don't get to the 85%, how long of an extension do we get to kind of track down the other...
Which would then result in maybe yeah, I guess I guess, if we don't get to the 85% of it how long they've been extension do we get to kind of.
Track down the other outstanding shares for the vote.
There are mechanisms me Tim on whaler here, Greg there are mechanism to address debt. However at this stage, we are confident that we're going to reach that threshold. So.
Speaker 4: There are mechanisms, it's Emanuele here Greg, there are mechanisms to address that. However, at this stage we are confident that we're gonna reach that threshold. So we are looking forward to reaching that threshold very soon. Okay, perfect. Thank you very much, that's all for me.
We're looking forward to reaching that threshold very soon.
Perfect. Thank you very much that's all for me.
Thank you.
Yes.
Speaker 1: The next question comes from Ben Nolan of STIFL. Please go ahead.
The next question comes from Ben Nolan of Stifel.
Paul Please go ahead.
Speaker 5: Great, thanks. It turns out there are questions. Mine are, I have two actually. First of all, could you give a little bit of clarity with how the vessel reservation agreement works? At what point does that turn into a firm contract? Maybe just a little detail around that.
Great. Thanks, and it turns out there are questions.
My mind are two actually so first of all could you give a little bit of clarity with.
How the vessel reservation agreement works.
At what point does that turn into a firm contract or.
Maybe just.
A little detail around that.
Sebastian do you want to take this.
Yeah.
Speaker 6: Yeah, I think without getting into any more detail than been made public already. It depends on the specific contract. But typically, you will have a period of months during which time you will conclude the charter contract around prearranged terms effectively. So the main commercial terms and what have you and that period of time varies depending on the plot.
I think without getting into it.
Any more detail than it's been made public already.
It depends on the specific contract, but typically you will have a period of months during which time you will conclude the charter contract around Prearrange Toms actively so the main commercial times or what have you in that.
Care to time varies depending on the client.
Okay, and I guess in this case, it's you're not able to disclose that timeframe is that.
Speaker 5: OK, and I guess in this case, you're not able to disclose that timeframe.
Correct.
Speaker 6: Correct. It's okay. Yeah, maybe it's close. What's been made public?
Correct.
Okay, Yeah, that'd be it describes what's been made public.
Speaker 5: Yeah, all right. Actually, for you, Sebastian, the second question, my second question here is, yeah, obviously, in the last month or so, there's been all sorts of turmoil as it relates to US offshore wind. It's been a challenge for a while.
Alright.
Actually for you Sebastian.
The second question My second question here is.
Obviously in the last month or so there's been all sorts of turmoil as it relates to U S offshore wind, it's been a challenge for a while.
Speaker 5: In your opinion, are we getting to that point where things are finally starting to reach a level of rationalization where pricing is going to be adjusted accordingly and this is a sort of rip the band-aid off moment and finally the industry is in a position that it should be able to move forward or is it just going to take a lot longer to get there.
Did you say in your opinion or we're getting to that point, where.
Things are finally, starting to reach their level of rationalization, where pricing is as you know it's going to be adjusted Accordingly, and and you know this is a sort of rip the band aid off moment and finally, the industry is in a position that it should be able to move.
Forward or is it just going to take a lot longer do you think.
Speaker 7: No, I mean, I think the way I look at it is if you is the way that all the other markets have evolved. So, you know, there were these kind of turbulences in Europe in the early years when again, the industry is trying to rationalize itself, but in the end it works itself through. You see the same in the Asia Pacific market.
Well I mean, I think the way I look at it is if you like is the way to all the other markets in the bowl. So there were these kind of turbulence is in Europe in the early years when again the industry is trying to rationalize itself, but in the end it works itself through.
You see the same in the Asia Pacific markets.
Speaker 6: in Taiwan. So I think that the US is just kind of is just a reflection of those other markets and and it will be it will it will steady itself and it will perpetuate itself not but you know on a kind of more reliable footing. So I don't have any worries that it's that it's going to continue to develop like the other markets have it's just you know you have a few few tumultuous moments early on.
Taiwan, So I think that the U S is just kind of is it just a reflection of these other markets and it will be it will it will steady itself and it will perpetuate itself no, but you know on the kind.
More reliable footing so.
I don't have any worries that it's that it's going to continue.
The other markets.
A few.
Few tumultuous momentarily.
Okay and I.
Speaker 5: Okay, and I guess like, does this feel like a tipping point? Maybe is my question. Does it feel like finally
I guess like does this feel like a tipping point maybe it's my question is do you like finally.
Speaker 7: you know, things can begin to move forward from here. Yeah. Yeah, I think so. I mean, I think like you said, it's ripped the bandaid off and that's just trying to find a constructive way forward where it just becomes sustainable.
You know.
Things can begin to move forward from here.
Yeah, Yeah, I think so I mean, I think like you said, it's rip the band aid off.
And I'm not trying to construct the way forward, where it just becomes sustainable.
Business.
Speaker 5: business. So I think it is a tipping point. Okay. All right. I appreciate it. Thanks for.
Right, Yeah. So I think it is a tipping point.
Okay, all right I appreciate it thanks for taking my questions.
Thank you.
Okay.
Yeah.
Speaker 8: The next question comes from Liam Burke of B Riley. Please go ahead. Thank you. On the new builds the projects proceeding on schedule and on budget manually.
The next question comes from Liam Burke of B Riley. Please go ahead.
Thank you on the new builds are the projects proceeding on schedule and on budget.
Yeah.
Speaker 3: The short answer is yes, Liam. Proceeding on schedule and on budget so far. I don't know if any of my colleagues want to add something but that's the short version.
The short answer is yes Liam.
Proceeding on schedule and on budget, so far I don't know if any of my colleagues want to add something but that's our that's the short version.
That's fine work.
Speaker 8: That's fine. That'll work. And on the last two assets, will they be sold? Will you deliver them before the end of the fiscal year?
On the last two assets will they be sold will you deliver them before the end of the fiscal year.
The expectation is to do so.
Speaker 3: You know, we have time, I think, a month into the new year, but the expectation is to deliver before the end of the year. But it may vary for one ship. For the last vessel, it may vary, but it's, you know, largely irrelevant to the meaning of the transaction, right? It depends on the employment positioning and when the owner can step on board. So that's...
Uh huh.
We have time I think are a month into the new year, but the expectation is to deliver before the end of the year, but it may battery for one ship for the last special it may it may vary but it's.
Largely irrelevant to the meaning of the transaction right it depends on the.
The employment positioning and Wendy.
Owner can step on board so that's a.
Speaker 3: that's a variation which is not going to be meaningfully impacting an IT. Great, thank you.
That's a valuation which is not going to be.
It meaningfully impacting our <unk> great.
Great. Thank you Emmanuel Alley.
Pleasure.
Speaker 1: The next question comes from Adam Forsythe of Long Spur Capital. Please go ahead.
The next question comes from Adam or size of Longspur capital. Please go ahead.
Speaker 9: Thank you very much. Just some more questions probably around what we might describe as wider market turbulence. I just wonder what you're seeing in terms of competitors. Do you think there's any slowing down in terms of the competition putting on new orders for demand?
Thank you very much just some more questions probably around what we might describe as wider market turbulence I just wonder if what you're seeing in terms of competitors do you think there's any slowing down in terms of the competition, putting on new orders for for for vessels.
Speaker 9: And actually beyond that, do you think this could actually see a slowdown in the development of new turbines?
And actually beyond that do you think this could actually see a slowdown in the development of new turbine sizes. Do you think we might start to sort of cap around maybe slightly higher than current levels before we move to the next stage I Wonder also more specifically our developers now building in longer contract lengths are as a result of supply chain issues or are they taking more conservative.
Speaker 9: might start to sort of cap around maybe slightly higher than current levels.
Speaker 9: I wonder also more specifically, are developers now building in longer contract lengths as a result of supply chain issues? Are they taking a more conservative view and could that actually be beneficial to you? And then related to that, are you seeing any longer setup times between your own contracts? I know you spoke of Skyler moving effectively seamlessly between those next two contracts.
If you could that actually be beneficial to you and then related to that are you seeing any longer setup times between your own contracts I know you spoke of Sky that moving in fact, we seamlessly between between this next two contracts, but could that could that be a ray ritchey going forward or do you think that's something you you you should be able to continue to achieve in the future.
Speaker 7: If I start at the beginning of that, let me address the first two. So the first one was, scouting, deer, deerholes, districts, marshals,
If I start at the beginning of that.
The address to you so.
The first one was.
Do we.
Speaker 7: Sorry, can you just walk through the first question you had? Do you think, given obviously, you know, turbulence in the wider market... Yes, I'm sorry. So this is related to new buildings, right? Yeah. So this is due to additional supply. I think, ironically, that...
Sorry can you just walk through the first question.
Do you think given obviously the turbulence in the wider yes, I'm sorry, I did say this is this relates to new buildings right. Yeah. Yeah. So this is just due to additional supply I think ironically that.
Speaker 7: the current turbulence improve our market dynamic.
The current turbulence improve our market dynamics.
Speaker 6: for exactly that reason is that those who are not already operating and don't have a big footprint have got more queries rather than fewer queries over the last six months and that actually kind of strengthens the existing operator's footprint and I think the future kind of
For exactly that reason is that those who are not already operating and don't have a big footprint.
I've got more queries, rather than fewer queries at the last six months I'm actually kind of strengthens the existing operators footprint and I think the future kind of.
Speaker 9: the other the future profitability and what have you because it's just going to limit supply side additional supply side um sorry and then the second question was slightly more tangential i suppose but but do you think sorry the turbine sizes do you think sizes will just keep going up or again
Yeah, the future profitability of more high because it's just going to limit supply side additional supply side.
Sorry, and then the second question was.
Not any more tangential I suppose it's a bit but do you think I'm sorry, it's a turbine sizes features you think sizes would just keep going out for or against this turbulence. You know they are under a bit of pressure not maybe pass this et cetera.
Yeah, So I've actually thought for a while but all this you know they're going to continue to grow and grow and grow.
Speaker 7: Yes, so I've actually thought for a while that all this, you know, they're going to continue to grow and grow and grow.
Speaker 7: Was was kind of questionable Theory to be honest and the basic premise of that is that it costs hundreds of millions of millions of euros to develop a platform a turbine platform and over the last 10 years the turbine spires haven't been able to effectively get a decent return on that investment. I've got that's my understanding on a very very kind of basic level.
Well this was kind of questionable theory to be honest.
The basic premise of that is that it cost hundreds of millions and millions of euros to develop a platform a turbine platform and over the last 10 years. The tub launch costs haven't been able to effectively get a decent return on that investment.
My understanding of it.
Basic level, so that it was going to plateau anyway.
Speaker 7: so that it was going to plateau anyway. But yeah, I think you're going to see much more discipline, probably, given their results recently from the big turbine suppliers. And as part of that, you have to deliver on, I'm sure they will have to generate profits on the existing platform before they start developing the much larger ones. I've also kind of been pretty consistent in my view that.
But yeah, I think youre going to see much more.
Disciplined probably given their results recently from the big turbine suppliers.
And as part of that you have to deliver on you know I'm sure they will have to.
Generate profits on the existing platform when they start developing the much larger ones that have also been pretty consistent in my view, but I think that even if you do see some very large turbines going out.
Speaker 7: I think that even if you do see some very large turbines going out.
Hey.
Speaker 7: The scale of this market means that you don't or won't necessarily have to install the biggest turbines in the deepest water depths to be successful. You know covering 80% of the market or 90% of the market will be just fine.
The scale of this market.
Means that you don't.
Necessarily have to install the biggest headlines in the deepest water depth to be successful.
80% of the market, where 90% of the market.
Just fine.
Speaker 9: So yes, so that's what I think. On the turbines and then, sorry, the third question. Contract lengths, are you seeing any change in your own contract lengths for a like-for-like project?
So yes. So that's that's good I think.
On the turbines and then sorry, the third question.
Contract lengths are are you seeing any change in your own contract lengths for for like for like project, partly you know currently.
Currently driven by supply chain issues, which are still seem to be out there.
And the wider industry.
Speaker 7: Yeah, well I think Cilla was an interesting data point, right? You know, she's got direct continuation from the current employment and for an extended period.
Yeah.
Still it was an interesting data point right you know she's got direct continuation from current employment and for an extended period.
Speaker 7: which again we can't go into the detail you know but she could be used to cover multiple projects so it's
Which.
Again.
Can't get into the detail, but she could be used to cover multiple projects. So it's.
Speaker 7: Yeah, I think the lack of supply of installation vessels means that the utilization and the rate structures should improve for the contractors, the installation contractors. And with regards to length of contracts, kind of generally are we seeing length of contracts extend? Yeah, yes, you know, you've still got developers trying to find out how...
I think the lack of supply of.
Installation vessels means that the utilization and the rate structures should improve for.
For the contracts to your instincts and contractors.
And with regards to length of contracts kind of generally are we seeing like contracts extend yeah. Yes, you know you've still got developers trying to find out how.
Speaker 7: How do they secure a kind of critical part of the supply chain? Um, and, and it is a critical piece. So
How do they secure a critical part of the supply chain.
And and it is a critical piece so.
You have the more coverage they can get themselves the more comfort it gives them that they can deliver the project. So they come on the books.
Speaker 7: Yeah, the more coverage they can give for themselves, the more comfort it gives them that they can deliver the projects that they got on the books. And so yeah, I think, again, the opportunities are improving from the contractor side. And whether that be, you know, long term projects or us being able to determine what the start dates are projects, whereas up until now, someone may say, you know, you can't compete on our project unless you available from July the 1st.
And so yeah, I think again the opportunities are improving from the contractor side and whether that be.
Long term projects or us being able to determine what the start dates are projects for us up until now someone may say you cant compete on a project unless you are available from July the Pos.
Speaker 6: suddenly we might be able to say, well, actually, you know, we're not available till September one, but that's still good enough for the client because there aren't any other options. So I think just across the board, yes, you'll see improvements in utilisation term, the ability to tie together projects, which has been exemplified by what we've just seen with Zillah.
Suddenly we might be able to say well actually.
Available till September one, but that's still good enough for the client because I don't think other options. So I think just across the board, yes, you'll see improvements in utilization time, the ability to tie together projects, which has been exemplified by what we've just seen Mozilla.
That's really helpful. Thanks very much.
No problem.
This concludes our question and answer session I would like to turn the conference back over to Emmanuel will they Laura for any closing remarks.
Speaker 1: This concludes our question and answer session. I would like to turn the conference back over to Emmanuelle Laro for any closing remarks.
Thank you very much we don't have any closing remarks, we just think thank you all for listening and look forward to speaking to you soon have a good day.
Speaker 3: Thank you very much. We don't have any closing remarks. We just thank you all for listening and look forward to speaking to you soon. Have a good day.
Speaker 1: The conference is now concluded. Thank you for attending today's presentation and you may now disconnect.
The conference has now concluded. Thank you for attending today's presentation and you may now disconnect.
Yeah.
Speaker 10: seven seven
[music].
Speaker 10: You