Q3 2024 Ultralife Corp Earnings Call
The Earth is a very beautiful night.
Speaker Change: Good day and thank you for standing by. Welcome to the Ultralife Corporation third quarter 2024 results conference call. At this time all participants are in a listen-only mode.
Speaker Change: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again.
Speaker Change: Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today Jody Burfening, Managing Director Alliance Advisors, Investor Relations, please go ahead
Jody Burfening: Thank you, Dede, and good morning, everyone, and thank you for joining us this morning for Ultralife Corporation's earnings conference call for the third quarter of fiscal 2024. With us on today's call are Mike Manna, Ultralife's President and CEO, and Phil Fain, Ultralife's Chief Financial Officer.
Jody Burfening: The earnings press release was issued earlier this morning, and if anyone has not yet received a copy, I invite you to visit the company's website, UltralifeCore.com, where you'll find the release under Investor News in the Investor Relations section.
Speaker Change: Before turning the call over to management, I would like to remind everyone that some statements made during this conference call contain forward-looking statements based on current expectations. Actual results could differ materially from those projected as a result of various risks and uncertainties.
Speaker Change: The potential risks and uncertainties that could cause actual results to differ materially include uncertain global economic conditions, reductions in revenues from key customers, delays or reductions in U.S. and foreign military spending, acceptance of our new products on a global basis.
Speaker Change: Disruptions or delays in our supply of raw materials and components due to business conditions, global conflicts, weather, or other factors not under our control.
Speaker Change: The company cautions investors not to place undue reliance on forward-looking statements which reflect the company's analysis only as of today's date.
Speaker Change: The company undertakes no obligation to publicly update forward-looking statements to reflect subsequent events or circumstances.
Speaker Change: Further information on these factors and other factors that could affect Ultralife's financial results are included in the company's filings with the Securities and Exchange Commission.
Speaker Change: including the latest annual report on Form 10-K. In addition, on today's call, management will refer to certain non-GAAP financial measures that management considers to be useful and differ from GAAP. These non-GAAP measures should be considered supplemental to corresponding GAAP figures.
Speaker Change: With that, I would now like to turn the call over to Mike. Good morning, Mike.
Mike Manna: Thank you. Good morning. Welcome to our call on Ultralife's Q3 operating results. Earlier today, we reported Q3 sales of $35.7 million and operating income of $0.5 million, resulting in two cents of EPS.
Mike Manna: Battery Energy Products sales increased 1.9% over the prior year's Q3, with communications system sales decreasing 58% to 3.2 million as we continue to diversify that business.
Mike Manna: Our top three initiatives for the year, material cost deflation, lean productivity, and sales funnel improvement, continued progress in Q3, with multiple lean events completed in both businesses and captured future material cost deflation in several important areas, including lithium metal and printed circuit boards.
Speaker Change: We are seeing sales funnel opportunity growth, especially in thin-cell and thionyl chloride products, and are focused on closing long-term supply agreements with several customers in our target spaces. I will turn it over to Phil to talk through the detailed numbers.
Phil Fain: Thank you, Mike, and good morning, everyone. Earlier this morning, we released our third quarter results for the quarter ended September 30, 2024.
Phil Fain: We will be filing our Form 10-Q with the SEC in the next few days and have updated our investor presentation in the Investor Relations section of our website, which includes a summary and status of our transformational new products.
in a recap of our most recent acquisition, ElectriChem.
Phil Fain: Revenues from our battery and energy product segment were $32.5 million compared to $31.9 million last year.
Phil Fain: Sales toward government defense customers increased 28.9%, and oil and gas market sales increased 1.5%.
Phil Fain: These increases were, for the most part, offset by declines in medical battery and industrial market sales of 12.4% and 10.9% respectively.
Phil Fain: The sales split between commercial and government defense for our battery business was $69.31.
compared to 78-22, reported for the 2023 full year.
Phil Fain: and the domestic-to-international split was 56-44 compared to 49-51 for the 2023 full year, demonstrating the heightened domestic demand for our U.S. government defense products.
Phil Fain: Revenues from our communications system segment of $3.2 million declined 58.2% from the $7.6 million we reported last year.
Phil Fain: primarily attributable to large shipments in the 2023 period of vehicle amplifier adapter orders to a global defense contractor for the U.S. Army.
Phil Fain: in of integrated systems of amplifiers and radio vehicle mounts to a major international defense contractor for which shipments had been delayed from earlier periods due to supply chain constraints.
Phil Fain: The year-over-year comparison was compounded by the timing of a follow-on leader radio order expected in the third quarter of 2024 that was not received until October.
Phil Fain: On a consolidated basis, the commercial to government defense sales split was $63.37, almost identical to the $64.36 reported for the 2023 full year.
Phil Fain: Our total backlog exiting the third quarter was 78 million and remains diverse in nature across our commercial and government defense customer base.
Phil Fain: The backlogged decline from recent post-COVID periods reflects the return of more normalized recurring order flow with our larger customers with the resolution of significant supply chain disruptions and long lead times.
despite occasional blips.
Phil Fain: Our consolidated gross profit was $8.7 million, down 11.2% from the 2023 period.
Phil Fain: As a percentage of total revenues, consolidated gross margin was 24.3%, a 50 basis point decline from the 24.8% reported for last year's third quarter.
Phil Fain: Gross profit for our battery and energy products business was $8 million compared to $7.7 million last year, an increase of 4.1 percent.
Phil Fain: Gross margin was 24.7%, a 50 basis point increase from the 24.2% reported for last year's quarter.
Phil Fain: The year-over-year increase was primarily due to higher factory volume in our Newark, New York facility, partially offset by some inefficiencies resulting from delays in the receipt of a key raw material component, now rectified.
Phil Fain: Our LEAN initiatives continued as our internal LEAN expert has now expanded his reach into our operations beyond Newark.
Phil Fain: For our communications system segment, gross profit was $0.6 million compared to $2.0 million for the year earlier period.
Phil Fain: Gross margin was 20.1% compared to 27.0% last year, primarily due to lower factory volume and unfavorable sales product mix as compared to the year earlier period.
Phil Fain: Operating expenses were $8.2 million, an increase of $0.5 million, or 7% from the year earlier quarter.
Phil Fain: The year-over-year increase is attributable to 0.3 million of legal and other fees directly related to the signing of the stock purchase agreement on September 27th to acquire Electrochem
Phil Fain: and an increase of 0.2 million or 12.4 percent in new product development spending as we aggressively pursue both government defense major programs and large commercial opportunities.
Phil Fain: Our spending on the addition of experienced sales resources to drive future growth was offset by lower G&A expenses.
Phil Fain: As a percentage of revenues, operating expenses were 22.9 percent compared to 19.3 percent for last year's third quarter.
Phil Fain: The sales decline and the increase in operating expenses resulted in an operating margin of 1.4% for the third quarter compared to 5.4% for the 2023 third quarter.
Phil Fain: Other income, reported below operating income, was $0.2 million for the quarter compared to $0.4 million for the year earlier period, primarily resulting from the decrease in interest expense with our 2024 reduction in debt.
Phil Fain: Our tax provision for the third quarter was $0.1 million versus $0.4 million reported for the 2023 quarter, computed on a GAAP basis at statutory rates. Net income was $0.3 million, or $0.02 per share, on a GAAP fully diluted basis.
Phil Fain: This compares to net income of $1.3 million or $0.08 per share for the 2023 quarter.
Adjusted EBITDA, defined as EBITDA including non-cash stock-based compensation expense
Phil Fain: An expense or income that we do not consider reflective of our ongoing continuing operations
Phil Fain: was 1.9 million or 5.4 percent of sales compared to 3.5 million or 8.8 percent for the prior year quarter.
Phil Fain: Adjusted EBITDA on a TTM basis is $17.5 million or 10.5% of sales.
Phil Fain: Turning to our balance sheet, we ended the third quarter with working capital of $60.2 million in a current ratio of 3.3.
compared to $66.5 million and $3.8 million for 2023 year-end.
Phil Fain: During the third quarter, we further reduced our debt by $4.1 million, or 33.4%, from $12.1 million at the end of the second quarter to $8.0 million.
Phil Fain: This represents a 17.2 million or 68.2% reduction over the last two quarters.
Phil Fain: With delays in the receipt of certain purchase orders, our inventory increased sequentially by 2.6 million or 6.3 percent.
Phil Fain: Going forward, our backlog, diversified end markets, the sheer volume of our growth initiatives, and ongoing actions to improve our gross margins position us well to realize the leverage of our business model.
Speaker Change: Before turning it back to Mike, I just want to mention that we filed our Form 8K on Wednesday for our completion of the Electrochem acquisition on October 31st.
Speaker Change: As this is considered a material acquisition for SEC reporting purposes,
Speaker Change: We have 71 calendar days to file an amended Form 8K, which will include stand-alone audited financial statements for Electro-Chem's 2023 year, along with other required financial disclosures.
Speaker Change: 71 days equates to January 16th, 2025. I will now turn it back to Mike.
Mike Manna: Thank you, Phil, for the detailed review of the Q3 results.
Mike Manna: As I've mentioned on previous calls, we have three major 2024 priorities to accomplish. First, continued material deflation.
Mike Manna: In Q3, we favorably negotiated our lithium metal contracts in several of our printed circuit boards and expect to realize savings in the hundreds of thousands of dollars per year.
Mike Manna: We continue to work on Kanban and pull systems with key suppliers to smooth material and cash flow and positively impact inventory turns, which was hampered in Q3 with customer push-outs and inventory build for a large order shipping partially in Q4 in the remainder next year.
Mike Manna: Second, lean productivity. We continue to reduce waste and inefficiencies in all of our processes throughout the business. We completed high-value lean events at our Newark, Virginia Beach, and Houston facilities in Q3 with expected cost improvements of 2 to 3 percent in each area.
Mike Manna: These target areas produce items we ship at a regular cadence and we expect to see benefits as we go into Q4 next year.
Lastly, sales funnel improvement.
Mike Manna: We are seeing sales funnel growth, especially in thin cells and thionyl chloride.
Mike Manna: and are currently reviewing how we best deploy our business development resources.
to align sales assets to the target markets.
Mike Manna: of Medical, Government, and Defense, and Oil and Gas, especially with the electrochem acquisition now completed. I expect there will be some realignment of the team in Q4 to better focus and drive growth.
Mike Manna: Next, I will give updates on the organic growth projects and new product development underway for the businesses, which are key to future sales and market expansion.
Mike Manna: On our communications systems business, continues to ship EL8000 server cases to several customers. We have several alternate systems in the development pipeline to better service a broader range of customer applications.
Mike Manna: including a smaller 3U size variant versus the current 5U size variant.
Mike Manna: We are in validation testing with the earlier mentioned DC power supply to support vehicular remote use of the EL8000 case products, expecting that to be production ready and available for sale next year.
Mike Manna: The MRC-2104 radio power supply, supporting airborne communications platforms, transitioned to production in Q3, and the initial low-rate initial production quantity was delivered to our customer. We anticipate this project to ramp over the next few years with our prime partner, whom is supplying the system radios.
Mike Manna: Lastly, I'm happy to say we've launched a new amplification product, targeted to be radio-agnostic, which we believe is the smallest, lightest, most power-efficient 20-watt manned portable amplifier in the marketplace.
Mike Manna: which are all key benefits to our government and defense customers. This product is sampling now to partners and expected to be available for production orders by the end of the year.
Mike Manna: Meanwhile, we are advancing our next-generation high-performance amplifier engine to be used across all advanced frequency hopping radio platforms. This amplifier will add to our portfolio of high-efficiency amplification products, with the first variant available in 2025.
Thank you.
Thank you.
Mike Manna: On the battery and energy side of the business, we're excited about the opportunity funnel growth.
Mike Manna: across a variety of new and existing products and expect to see continued incremental orders this year.
and several applications in item tracking.
Mike Manna: The Thin Cell sales funnel continues to strengthen with multiple projects now in the qualification phase, primarily in the medical and tracking application space, with several new large-volume opportunities added to the sales funnel in Q3.
Mike Manna: The 1-2-3-A product line, supporting IOT and illumination markets, has seen opportunity funnel growth in medical battery pack assemblies, both domestic and international customers.
Mike Manna: We are in negotiation to supply several battery plaques servicing international medical customers and expect to start pack development this year for a 2025 production launch.
Mike Manna: Our Improved Thionyl Chloride product line targeting monitoring and telemetry applications continues qualification and field testing with several customers.
Mike Manna: We have successfully completed the year-plus test cycle with a major metering company for our flagship 19-amp hour D cell and are in discussions now for initial production and deliveries in 2025.
Mike Manna: We continue to advance the commercial version of the conformal wearable battery and continue validation and production readiness activities. We have quoted multiple international production opportunities in Q3 and expect award decisions in 2025.
Mike Manna: We expect a small low-rate initial production quantity to ship in Q4 to an international customer for evaluation and test.
Mike Manna: Sales funnel and opportunity pipeline growth in both businesses continues to be a key for 2024 and into 2025. And I expect with the added focus and resources, we will continue to expand our aperture and opportunity wins.
Mike Manna: We continue our gross margin initiatives and expect to see continued steady improvement as our CapEx investments, lean projects, and material efforts enter the production lines.
Mike Manna: Lastly, I would like to welcome the Electrochem business, a manufacturer of high-temp, high-reliability, non-rechargeable lithium cells in thionyl and sulfuryl chemistries with revenue of approximately $34 million over the trailing 12 months to the Ultralight portfolio.
Mike Manna: Having closed this acquisition October 31st, we see this as a synergistic business, with little customer and product overlap, vertical integration opportunities with our SWE and Excel business, producing products for similar high reliability niche markets, and position for future growth.
Mike Manna: We now look forward to working closely with Christine Carroll, president of Electrochem, and her experienced team to jointly implement our integration playbook.
Mike Manna: Together, we will advance our strategy to realize the operating leverage of our business model through scale and manufacturing cost efficiencies, while creating highly attractive opportunities to drive revenue growth.
Mike Manna: We expect the main integration activities to complete in the first half of 2025.
Speaker Change: Thanks, everyone. That concludes the prepared remarks for today. Now we'll go back to the operator for questions.
Speaker Change: Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster.
Fainc.
Thank you for watching!
Speaker Change: And our first question comes from Joss Sullivan of the Benchmark Company. Your line is open.
Hey, good morning. Hey, good morning.
Speaker Change: Just as far as within the battery and energy product segment, you know, if you were to bucket, you know, how much of the headwinds you're talking about were due to the supply chain versus, you know, the order delays, you know, how would you frame that?
Almost 50-50, I would say.
When you look at our customers, we're part of their...
Speaker Change: large supply chain, we're one component of many in the supply chain. And we may be all set and ready and willing to go with ready to ship our products and recognize the revenue. But there may be a delay and in
Speaker Change: Other components that they're experiencing or something going on with their customer. So at the end of the day, Josh, it's this.
Speaker Change: We try to control everything that we can control, we try to significantly influence everything we can't control, but then again, there are certain things that happen that you just can't control. But that's why our inventory has gone up, but I would say to answer your question, it's probably in the 50-50 range.
For more information go to www.fema.gov
Speaker Change: Got it. And as far as the delays, was it, you know, related to any one industry or was it kind of broad-based?
battery side of the business.
Speaker Change: On the communication system side of the business, there were a handful of orders we expected to have in Q3 that we had material to provide and actually service, which is another reason our inventory kind of went up. But then the orders just didn't come in time to actually service them.
Speaker Change: I'm not going to throw a whole bunch on the Helene thing, but we had labels on a FedEx truck in Helene that we couldn't get and we couldn't ship.
Speaker Change: I mean it was like little things like that which, you know, I'm not going to excuse it that means it's going to change the whole outlook of the quarter, but you know, it's those little things that you pull your hair out and it, you know, might have, you know, added a scent.
Speaker Change: I think it's important to say we have not lost any orders.
Speaker Change: Got it. Got it. And then as far as the thin cell opportunity, you know, where are your, you know, your medical customers as far as the approval timeline, do you think, or what can you share there? And then, you know, the customers you mentioned added to the funnel, you know, what products might those be?
Speaker Change: Well you know on the thin cell side it's such an exciting area right now because there's so many opportunities coming at us and you know some of them are just you know shake your head volumes.
Speaker Change: really make sure that the back-end part of the system that, you know, we're part of and supporting is actually functioning properly and, you know, it's a pretty complex puzzle that our customer is trying to work through and get qualified and make sure they're checking all their boxes.
Speaker Change: Beyond that, there's a bunch of different opportunities coming at us in electronic shelf labeling, some RFID tracking.
Speaker Change: And we've had a couple really large, you know, medical wearable opportunities come at us that...
Speaker Change: probably are still a couple years out, but the sheer volumes potentially are pretty exciting.
Speaker Change: Got it. And then just on the EL8000 direct current vehicle opportunity, how big of an opportunity do you think that is?
Speaker Change: Well, you know, we've come at this a couple different ways and, you know, you've got your commercial piece.
Speaker Change: which you know if you're there's definitely a lot of rugged applications out there just in the commercial space which you know for us we think is in that five to ten million dollar type of
Speaker Change: of area as far as opportunity there, just in, you know, just that piece. And then on the military side, you know, we're looking at probably $20 to $30 million. So, you know, we're in that $10 to $50 million type of, you know, available marketplace.
I will say this last quarter we had some delays.
Speaker Change: Nothing in our control with server blades actually being available to us in time.
Thank you. Bye-bye.
Speaker Change: is really starting to to really go. And then the DC power supply that we're in validation with right now is really the enabler to get it on the vehicles and Ford operating bases where they have DC only power typically.
Speaker Change: So as soon as that pops through, you know, I think that opens up a whole other channel for that product line.
Speaker Change: It's nice to know that we're the only authorized supplier for the EL8000 cases. Yeah, and as we expand, you know, expand into a couple different case sizes for different uses, I expect us to have a pretty rounded out portfolio of offerings there that could be.
Speaker Change: You know, it's only going to help to the aperture of the opportunity, right?
Speaker Change: Got it. That's great. And then just any early customer indication on Electro-Chem and what the capabilities might be? Is it driving any early interest?
Speaker Change: Well, we've definitely had a lot of customer congratulations and a lot of excitement around the acquisition internally and externally. They're another lithium metal primary battery company that has kind of been living in a...
I'm not going to see displaced there.
Speaker Change: parent, but you know, they've been kind of orphaned in that business. And you know, they didn't really have some of the synergies that we can bring them worldwide, not only in the manufacturing efficiency side and supply chain side. But, you know, as you start looking at the whole picture of how do you sell product in our space, it's
Speaker Change: You know, sells packs and then all the ancillary devices around it and, you know, they've been pretty much a sell provider with a little bit of pack business. And we really think they're going to, you know, really add to our portfolio because we can add a lot of, I think, pack business.
Speaker Change: And then we have some integration plays. I mean, we are also buying a small quantity of their product for our use. We think we have a pretty good opportunity to shift a much larger quantity of our purchases internally to them, so there's a good vertical integration synergy.
Speaker Change: As we collaborate, I'm sure we're going to find a lot more things that we'll get pretty excited about, I hope.
Perfect, thanks for the time.
All right. Thank you.
Thank you.
[inaudible]
Speaker Change: Our next question comes from John Dasher of Pinnacle. Your line is open.
Speaker Change: Good morning. Just a couple of quick questions. You mentioned, I think, an order that you expected to ship in third quarter that was pushed out.
Speaker Change: The shipping in the fourth quarter Could you give us an idea of how large that order was?
Yeah, yeah, for the com systems business that was...
Speaker Change: The total order was was just under 2.5 million dollars, so it's
It was sizable, and that's just.
Speaker Change: That's just one of the items, and there's always a shuffling between quarters, and sometimes you gain, sometimes you lose.
Speaker Change: One of many components that go into the end product and a lot of things can happen, we look at things over a 12-month basis and sometimes even a bit longer.
Speaker Change: There there were or at least we've been told there were and you know, we do know that our bid was not the highest
Speaker Change: Okay, so it was an auction process, you're saying? It didn't go to auction. It went to targeted participants before it may have gone to auction.
if it was decided that way.
But you never reach the auction process.
would never reach the auction process correct.
Speaker Change: Okay, fair enough. And on the disclosure, the coming disclosure of Electro-Chem, I think by January 16th.
Speaker Change: That will include audited financial statements for 2023 and will it include year-to-date perhaps through September of 2024, even if it's unaudited?
Speaker Change: Well, what's going to happen is, you're absolutely correct in the first part. The first part will be audited financial statements.
being a very, very small component of Integer Holdings Corporation.
Speaker Change: It was never audited, it fell below materiality level, so we certainly have our work cut out and not an expensive proposition to do the carve out and to get the audit done and all that stuff. And it's interesting because
Speaker Change: I know what you're looking for with regard to your next question, that'll happen as we complete our future filings, but an integers report...
Let's see, on October 30th.
Speaker Change: They indicated that expected sales in their model was $36 million with EBITDA of $5 million. So that was integers disclosure.
Speaker Change: on this and you know we of course wait until we've done a lot of work and due diligence we wait until the audit is a key part because the audit for us is also an enabler with the opening balance sheet as well.
Speaker Change: Okay, so will we see stand-alone results for 2024 for Electrochem?
Well, at some point you certainly will, yes.
Okay, as a carve out later when we, you know.
Speaker Change: Okay, that'll be very helpful to see. Yeah, there's pro forma. We have to show what our results would have looked like in future filings if we, let's see, if we acquired ElectraChem earlier.
Speaker Change: Okay, the more disclosure the better, I think, so it sounds like you're on the right track. Oh yeah, well, you know, we're totally transparent, we're happy, and we will be disclosing as
Speaker Change: The information, absolutely. We're very proud of the work that was done going into this acquisition.
Speaker Change: Okay, great. Sounds good. Thank you very much. Thank you, John. Sure. Thank you. Thank you.
Jody Burfening, Michael Manna
The End
And our next question comes from Stefano Bolleson, Vigil Investor.
Stefano Bolleson: Good morning gentlemen and congratulations for the progress in the product pipeline and acquisition.
Stefano Bolleson: The first one is about the backlog reduction end of the quarter. So this reduction is mostly due to a post-COVID normalization rather than the timing of expected orders, you said.
Speaker Change: Yeah, we think I mean, if you look at our back, we are in our investor presentation, we have a series of backlogs per year, going back even before COVID and
Jody Burfening, Jody Burfening, Michael Manna
Speaker Change: The other slight piece in going from Q3 to Q4 is we do have some, what I will say, yearly POs that start filling in towards the end of the year as they deplete off the volume throughout the year. So we do expect to see some...
Speaker Change: additional POs in Q4 for next year's volume from them from those particular customers.
Speaker Change: And, you know, I'll just say this, the information that we've reported on page 15 in our investor presentation, it's as of a single day.
Speaker Change: So, just as an example, a week later, after a week into Q4, it went up from $78 million to $83 million. So, it depends on what you're looking at, because of a more continual flow of POs.
Speaker Change: and Michael Manna, and I'm going to be talking about the new the new the new the new the new the new the new the new the new the new the new the new
Speaker Change: Okay, thanks. I have a second one on electrochemicals. So, you have already given some characteristics now in the call, but what is the one thing about the company that made you say, this is the one?
[inaudible]
Speaker Change: Well, for us, it's a key piece of the, one of the gaps we identified in our portfolio with the thionyl chloride chemistry and, you know, we've been looking at, you know, thionyl for the last ten years and we've invested pretty heavily in what I will call the smaller cell, lower temperature cells over the past three to four years to really target the metering applications and some of the telemetry RFID type of products.
Speaker Change: And we looked at the high-temp, high-reliability large cells, like DDs, CCs, as a 5-10 year development cycle and adoption for the marketplace.
So it really became a make versus buy and
Speaker Change: For us to make it you know, it'd be it'd be a 10-year enterprise. So it was really
Speaker Change: who could we buy that, you know, has the premier product in the world in this chemistry? And, you know, you look at the electrochem business dating back to 1979, you know, they're it. I mean, they're the top dog. So that's what we wanted.
For more information visit www.fema.gov
Great, then thanks a lot.
Thank you.
Speaker Change: Thank you. As a reminder, to ask a question, please press star 1 1.
Thank you.
Speaker Change: I'm showing no further questions at this time. I'd like to turn it back to Mike Manna for closing remarks.
Mike Manna: Thanks everyone for listening to today's call. We look forward to you during the 2024 Q4 conference call and earlier in December for those of you that may be attending the benchmark event. We'll see you then.
That's it. Thank you for...
and Jody Burfening.
Thank you.
Speaker Change: This concludes today's conference call. Thank you for participating and you may now disconnect.
Thank you.
Thank you.