Q4 2024 Village Farms International Inc Earnings Call
Please note that today's call is being broadcast live over the internet and will be archived for replay both by telephone and via the internet, beginning approximately one hour following the completion of the call. Details of how to access the replays are available in the company's news release.
Before we begin, let me remind you that forward-looking statements may be made today during or after the formal part of this conference call.
Certain material assumptions were applied in providing these statements, many of which are beyond our control.
These statements are subject to a number of recent uncertainties that could cause actual results to differ materially from those expressed or implied and forward-looking statements.
A summary of these underlying assumptions, risks and uncertainties are contained in the company's various securities filings with the SEC and Canadian regulators, including its form 10KMDNA for the year ended December 31, 2024, which will be available on Edgar and Cedar Plus.
Speaker Change: These forward-looking statements are made as of today's date and accept as required by applicable securities law. We undertake no obligation to publicly update or revise any such statements. I would now like to turn the call over to Michael DeGiglio, Chief Executive Officer of Village Farms International. Please go ahead, Mr. DeGiglio. Thank you, Mr. Mayor.
Speaker Change: Thank you, Tonya. Good morning, everyone, and thank you for joining us today. With me, our Steve Ruffini, our Chief Financial Officer, Ann Gillin Lefever, Chief Operating Officer. Today we have Ovo Bovincen, President of Canadian Cannabis, and Patty Smith, our Corporate Controller, as well as Sam Gibbons, Senior Vice President of Corporate, for a more detailed review of the financials.
Speaker Change: Additive market and one of the only operators with a track record of positive cash flow from operations.
Speaker Change: We have been successful efforts to achieve a defensible leadership position the Canadian cannabis before expanding to other markets.
Speaker Change: Over the past couple of quarters, we have begun to focus more energy toward our international strategy.
Speaker Change: <unk> profitable sales growth over competing for low margin business to drive volume and market share.
Speaker Change: Uh huh.
Speaker Change: Current dynamics in the value end of the supply chain in Canada.
Speaker Change: And impacts of key account spend to maintain shelf space with retailers are not sustainable for the industry.
Speaker Change: We have made some conscious decisions recently to move away from lower tier categories that no longer aligned with our longer term global strategic objectives.
Speaker Change: And these decisions were reflected in the market share trends in the fourth quarter.
Speaker Change: However, I would also like to make it clear that the out of stocks strain impacts that we discussed on last year's conference call have been resolved as we anticipated they would be and we did begin to recover some share at the end of the year and in the first few months of 2025, SD Strange began making their way back.
Speaker Change: Onto shelves.
We have made incremental share gains and dried flower for the past four months in Ontario, and since December our national share of the dry flower categories gained 120 basis points.
Speaker Change: Even though we are prioritizing profitable sales growth over low margin volume in Canada. We remain one of the top three producers holding the number three market share position overall with Canada.
Speaker Change: Yeah.
The second fastest growing LP organically during 2024 and held the number two position in both Ontario, and Quebec. We also further expanded our number one national market share position in dry flower and moved into the number two national share position into pretty well category for 2024.
Speaker Change: All of this success has been achieved organically without M&A activity, which is a rarity in Canada and then incredible Testament to the hard work and dedication of our team who continues to drive our Canadian cannabis business forward with product offerings consumers love.
I would like to congratulate our entire Canadian cannabis team and he's great achievements.
Speaker Change: Improvements in market share in the early months of 2025 have coincided with our recent launch of a separate tell us all in one <unk>, which we launched in December and have quickly become the number six ranked vape offering offerings nationally and number two in Ontario over the past three months the strong market share.
Speaker Change: Sure I'd like to quality and consumer Trust, we have built without supercharged Brad.
As we mentioned last quarter, we in the process of moving our extraction and manufacturing capabilities in house in 2025.
Speaker Change: As we believe there are opportunities for us to capture profitable market share in these categories with new product offerings.
Speaker Change: I will note that the fourth quarter performance was impacted by our decision to take a $10 5 million noncash write down of non flower manufactured inventory.
Speaker Change: Gideon cannabis.
Speaker Change: This product was purchased primarily from third parties for vape and manufactured products and they simply did not meet our quality standards.
Speaker Change: We felt that selling sub optimal weight products and related inventory.
Speaker Change: Chip market into the market around the same time, we are bringing extraction and vape manufacturing back in house would have been detrimental to our brands and future product launches. This write down only enables our sales team to focus strictly on quality and profitability with a healthy inventory position in 2025.
Speaker Change: We exclude the inventory write down it was one of our best quarters for both Canadian cannabis and our own.
Speaker Change: <unk> business on a consolidated basis.
Speaker Change: In several years as we generated positive adjusted EBITDA in each of our Canadian cannabis and U S cannabis and fresh produce businesses.
Speaker Change: Excluding this impact gross margin for our Canadian cannabis business would have moved back into out 30% to 40% target range and adjusted EBITDA and net income was the highest in the last four years.
Speaker Change: We're also making steady progress on our international Canada strategy, which generates higher margins with no excise tax Q4 exports. The international medical markets were up 113% year over year, driven largely by increased sales in Germany as that market continues to experience.
Speaker Change: Exponential growth as well as continued volume increases in both Australia and the UK.
Speaker Change: Subsequent to the quarter end, we added a fifth international medical market without first shipments from our BC operations to New Zealand.
Speaker Change: Coach strain <unk>.
Speaker Change: The top selling dried flowers strain over the past four years in Canada is now available to patients in New Zealand.
Speaker Change: Established distributor medley therapeutics under its bloom brand.
Speaker Change: New Zealand medical cannabis market is forecasted to grow at a compounded annual growth rate of 58% over the next five years.
International cannabis sales for the year increased Canadian at $8 1 million and momentum has continued into 2025 with strong year over year International sales growth in both January and February.
Speaker Change: Combined with a very strong pipeline of potential new customers and markets. We are confident that we will be able to at least triple our international medicinal export sales in 2025.
Speaker Change: Outside of our medicinal export sales to international markets. Our other international opportunity of course is in the recreational market in the Netherlands, where our lately Holland subsidiary as one of 10 licenses display recreational cannabis coffee shops with a long established culture of cannabis consumption.
Speaker Change: Zero restrictions on vertical integration and a considerably more favorable pricing environment than Canada.
Speaker Change: We believe the Dutch market represents one of the most attractive cannabis investments globally and for us.
Speaker Change: December we completed our first harvest at our first facility in a dropdown on schedule and commenced sales as expected in February.
Speaker Change: We couldnt be happier with the yield and quality of the product coming out of the new facility.
Speaker Change: And the initial feedback from the coffee shops, we are selling is that our product is head and shoulders above expectations, and importantly pricing and margins are right in line with our forecasts.
Speaker Change: With such a great startup lately, we are pleased to announce today that we have broken ground on phase II.
Speaker Change: Two cultivation facility in China and Jim.
Speaker Change: That will quadruple our annual production capabilities.
Speaker Change: Our phase II facility is expected to be planted out sometime in the fourth quarter of this year and will be a brand new state of the art indoor facility.
Speaker Change: We are very excited about this new location, which already has a six six megawatts of power supply that will more than support our needs and give us a competitive advantage in market as it is our belief that other operators may face power constraints in the future.
Speaker Change: Moving on to results from our fresh produce business, we continue to benefit from a steady progress implementing new cultivation technologies, including AI and machine automation to drive operational improvements and efficiencies.
Speaker Change: Performance in the fresh produce included a $3 5 million of other income in Q4 related to vendor settlements associated with the partial recovery of previous operational losses from the tomato brand where goes virus that we experienced this impact contributed to adjusted EBITDA of $4 1 million and net income of approximately $2 million.
Speaker Change: Fourth quarter.
Our U S. Cannabis business also delivered a quarter of positive adjusted EBITDA, along with our clean energy business, which ended the year on pace to deliver approximately $2 million and net income.
Speaker Change: Our consolidated results in 2025.
Speaker Change: In summary, despite the Q4 inventory impairment, we are pleased with our fourth quarter and full year results and we believe we are well positioned to execute on the many growth opportunities we see in front of us to deliver a successful year profitable.
Speaker Change: Growth in 2025 and beyond.
Speaker Change: In addition to our base of expansion of Daily Holland. We're also in the process of optimizing our Canadian cannabis resources to it.
Speaker Change: <unk> operational efficiencies between our pure Sun farms.
Speaker Change: And rose subsidiaries and align our business with more profitable growth opportunities.
Speaker Change: These efforts are nearing completion at the end of Q1, and we expect them to result in lower cost and improved productivity efficiency and profitability moving forward.
Speaker Change: Before I turn the call over to Steve I would like to spend a few moments discussing the proposed Canadian and Mexican tariffs, which we now have been delayed until April.
So let me provide some perspective on how we plan to manage any tariff impacts and what we think this could mean for the business as always we will focus on controlling what is in our control.
Speaker Change: Approximately 60% about 2020 for fresh produce sales in the U S were imported either from our own facilities in Canada, or our third party partners in Mexico and Canada.
Speaker Change: If tariffs do go into effect.
Speaker Change: Tend to relocate resources to fulfill.
Speaker Change: Well as much about demand as possible from our Texas greenhouse operations and we do expect significantly increased demand for U S grown produce and higher market pricing in an environment of prolonged tariffs.
Speaker Change: For any of the demand that needs to be addressed with inputs Ironically, the tight margins and are proud of this business, resulting from Mexican competition under the previous free trade agreements means we have no choice, but to pass on the 25% tariffs to our customers.
Speaker Change: I will also note that 2025 sales from our Canadian operations began in early April as those facilities come into their season.
Speaker Change: We are also working with our third party supplier relationships in Mexico regarding the tariffs.
Speaker Change: Notwithstanding the short term impact we remain confident that as one of the largest and longest operating greenhouse protos companies in North America, coupled with our strong retail relationships, we have a significant advantage and an integral role to play in the evolution of the process.
Speaker Change: With that I'll turn the call over to Steve to review the financials before I make some closing.
Speaker Change: Closing remarks.
Steve Ruffini: Thanks, Mike.
Speaker Change: Starting with our consolidated results as Mike noted excluding inventory impairment in Canadian cannabis at year end Q4 was one of our strongest quarters in recent years.
Speaker Change: Total sales grew 11% year over year to $82 6 million with strong topline growth in both Canadian cannabis and fresh produce.
Speaker Change: Net loss improved to $8 6 million or <unk> <unk> per share from $22 5 million last year. The $8 6 million for Q4. This year includes the $10 5 million Canadian cannabis right down.
Speaker Change: Consolidated adjusted EBITDA was negative $3 5 million, if one were to exclude our fourth quarter inventory write down we would have reported adjusted EBITDA in the fourth quarter of $7 million. Our best result in four years.
Speaker Change: And our full year adjusted EBITDA would have been $12 2 million.
Speaker Change: I will now turn to the business segments individually, starting with fresh produce Q4.
Speaker Change: Sales increased 17% year over year to $43 3 million growth was driven by higher volumes from both our own production.
That of our partners.
Speaker Change: We can see the positive impact of our success around yield expansion and cost efficiencies in our gross margin for the quarter, which improved nearly 60% from Q4 last year.
Speaker Change: Adjusted EBITDA was positive $4 1 million compared with negative 600000 last year and net income was positive $1 9 million.
Speaker Change: Both include the $3 $5 million of other income, which is the result of the recovery of prior period Brown <unk> gross losses.
Speaker Change: Moving to Canadian canvas, which I will discuss in Canadian dollars net sales were up 10% year over year, driven mainly by non branded sales and international sales.
Speaker Change: As Mike mentioned, we benefited from the continued momentum in our international medicinal exports, which were up 127% from Q4 last year.
Speaker Change: On the Canadian dollar basis, or 113% on the U S dollar basis.
Speaker Change: Non branded sales were up 20% year over year to $9 5 million as we continue to be opportunistic where possible to align supply with demand.
Speaker Change: Retail branded sales were essentially in line with Q4 of last year at Canadian $35 1 million.
Speaker Change: Excluding our inventory impairment Canadian cannabis gross margin was 33% up from 23% in Q4 last year, well within our target range of 30% to 40% and demonstrating positive impacts of our recent decisions to move away from lower margin business.
Speaker Change: SG&A expense as a percentage of sales for Q4 was 22% compared with 21% in Q4 last year.
Speaker Change: Q4, adjusted EBITDA for Canadian canvas was negative $9 1 million as a result of the inventory impairment excluding the impairment adjusted EBITDA was positive $5 9 million.
Speaker Change: Which compared to last year was more than double.
Speaker Change: Finally, as we continue to report quarter after quarter I will highlight that in Q4, we paid excise taxes on retail branded sales of $44 1 million $44 8 million, which includes excise taxes paid for both the third and fourth quarters. This brought the total excise tax we paid in.
Speaker Change: <unk> 2004 to just shy of $100 million.
Speaker Change: For perspective that is more than double our SG&A any forward Canadian excise tax reform would be a welcome change given that Canadian cannabis excise taxes are one of our largest single expenses.
Speaker Change: Turning to our U S cannabis business.
Speaker Change: On our Q4 call I noted that we have stabilized the business within the regulatory headwinds and we are working on a number of initiatives in 2025 to reinvigorate sales of our responsible G&P produced natural hemp products that we continue and we continue to manage our costs.
Speaker Change: Although Q4 sales continued to be impacted by the state of attempts to deal with unregulated products by restricting all intoxicating, hence based products, we saw a 17% increase sequentially.
Speaker Change: U S $4 6 million in revenues with a healthy gross margin of 70% and adjusted EBITDA moved back into positive territory at $300000.
Speaker Change: Finally clean energy.
Speaker Change: Generated 400000 net income with royalty payments, we are now receiving from our energy partner, providing a healthy stream of incremental profits for the company.
Speaker Change: As Mike mentioned, we believe VF clean energy is on track to deliver approximately $2 million and net income to the consolidated company in 2025.
Speaker Change: Turning to consolidated cash flows and the balance sheet total cash flow from operations for the full year was $10 5 million.
Speaker Change: With 400000 in Q4, reflecting our third consecutive quarter of positive operating cash flow.
I should also reiterate that the fourth quarter cash flow from operations in Canadian cannabis was negatively impacted by the timing of the Q3 excise taxes.
Speaker Change: Payments of Canadian $24, 1 million, which occurred during the fourth quarter. In addition to the Q4 excise taxes of $27 million, which were paid at year end the timing of the Q3 tax payments falling in Q4 was due to a national holiday, which negatively impacted the cash flow from operations during the fourth quarter.
Speaker Change: <unk>.
We ended Q4 with cash of $24 6 million and working capital of $53 8 million total term debt at the end of Q4 was $41 million split equally between fresh produce debt due may 2027, and canvas debt, which matures starting in February 2026.
Speaker Change: We remain very comfortable with our net debt level of $15 9 million.
Speaker Change: All of our lenders remain very supportive of the company, especially considering our improving performance and growing international business.
Speaker Change: We are in the final stages of amending our produce debt, which will provide more favorable.
Speaker Change: Flexible financial covenants as well as other commercial changes recognized in the Companys change in focus from produce to candidates as this loan originated way back in 2013 long before I move to canvas.
Speaker Change: We are awaiting.
Speaker Change: Pretty appraisal to complete a refinancing of our Pearson farms debt maturing in February 2026, we expect to have the refinancing completed on or before March 31.
Speaker Change: With a new maturity date of February 2028.
Speaker Change: And finally, we have begun discussions with two decks lenders with respect to place in commercial bank debt Lely Holland operations, we expect to have something in place by the end of Q2 of this year I will now turn the call back to Mike. Thanks, Steve in summary, our fourth quarter and full year results reflected our continued success in building.
Speaker Change: Perennial profitable leadership position in Canada, and demonstrates that prioritization of profitable sales growth as we continue executing our international growth strategy.
Speaker Change: We are focused on establishing a global leadership position in regulated cannabis and we are beginning 2025 with meaningful new developments coming that position us for a transformational year in our pursuit of this objective.
Speaker Change: We believe we are well positioned to execute on the many growth opportunities, we see in front of us and to deliver a successful year of profitable growth in 2025 and beyond.
Speaker Change: Tanya we're ready for questions now thank you.
Speaker Change: Welcome as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please standby will be compiler Q&A roster.
Speaker Change: And our first question will be coming from Aaron Grey of AGP. Your line is open.
Aaron Grey: Hi, good morning.
Speaker Change: Thank you for the questions and address is first off I know many would have stripped out that one time impairment for more optically appealing adjusted EBITDA. So acknowledge that you guys made the tougher choice.
Aaron Grey: To do so.
Aaron Grey: So sticking on that point for the $50 million impairment 15 million Canadian I believe.
Speaker Change: For <unk>, you called out the gross margin and EBIT impact, but I am curious was there also some top line impact that you might be able to quantify due to not having the plant product available to sell into the provinces are.
Speaker Change: Was the lower branded retail more sort of just a function of the intentional efforts to exit those lower tier products.
Ernest Anne: Ernest Anne.
Speaker Change: Good morning, and thank you for the great question.
Speaker Change: Not impact our revenue.
Speaker Change: We made the decision that it was.
Speaker Change: Holiday enough to put into our revenue.
Speaker Change: And as Steve May want to just talk to you about the write off treatment as well yes.
Speaker Change: This is Mike alluded to is is <unk> pre rolls manufactured by others that wasn't up to our quality specs some of it we were moving.
Speaker Change: At at hurt our non branded margins.
Speaker Change: Last year. So we made the business decision to write these things down to net realizable value and or destroy some of it.
Speaker Change: Rather than continuing to put more costs into it just to move it out the door.
Speaker Change: For cash flow purposes, and very strong cash flow. Our obviously, our cash flow was significantly higher than EBITDA I don't think too many people industry can report that.
Speaker Change: And.
At any rate.
Speaker Change: I think your other question with respect to our.
Speaker Change: Our branded sales.
Speaker Change: <unk>.
They were flat because as Mike alluded to we have moved away started moving late in Q4 two to pushing this stuff.
Speaker Change: Trying to move away from some of the value offerings, Yes, I would add also if you look at the phenomenal results on the larger supercharged vape category, we made the right decision.
Speaker Change: To just do the right thing and get the most excellent product recurred and it's resonating in the marketplace.
Speaker Change: We feel it was the right thing to do for our customers and consumers.
Speaker Change: We're pleased with it.
Speaker Change: Yes, and certainly seems more onetime in nature.
Speaker Change: Second question from me.
Speaker Change: Just on some of the commentary on capacity being better allocated potentially to other markets at this time versus Canada that are more profitable.
Speaker Change: So high level commentary on the implications for your Canadian cannabis market share in your aspirations in the near term do you feel like you've finished exiting some of those lower tier products that you mentioned before and more. So now are you looking to to hold share in Canada are selectively increase where you find profitable categories, but most of that incremental product now will be going.
Speaker Change: Two international versus trying to build more Shannon candidates.
Speaker Change: Some high level commentary on how we should think about the allocation of product going forward.
Speaker Change: Well, we're really fortunate to have marvell here any office today, So we know it.
Speaker Change: I will answer that question.
Speaker Change: Thank you so much another good question.
Speaker Change: Canada is our foundation. So we believe in having a strong foundation so as not to have a short surfing the boards in Guyana.
Speaker Change: But we're not oblivious to the demand that is basically based on the high quality flower ever selling.
Speaker Change: And the quality international as well received as well so the demand is very very high and ultimately the overall demand is very high but having said that the demand for domestic we will always still the demand for domestic for high quality flower.
Speaker Change: Okay.
Speaker Change: Okay, Great I appreciate the detail there now go and jump back in the queue.
Speaker Change: Thanks Sarah.
Speaker Change: And our next question will be coming from Pablo <unk> of <unk> Associates. Your line is open Pablo.
Pablo: Thank you and good morning, everyone look just my first question is regarding Holland.
Speaker Change: So there are 10 licensed producers there.
Speaker Change: Do you have a sense of are they all up and running do you have a head start.
Speaker Change: Factoring the keen to bring over capacity what share of production do you think you will have it.
Speaker Change: Could you help us understand that part.
Speaker Change: And then in terms of the 85 coffee shops that are part of a pilot program.
Speaker Change: Are they being forced to buy only from the license to users starting when and how is that being enforced. Thank you.
Speaker Change: And congratulations again on the Harlem venture.
Speaker Change: Sure.
Shawn and then pass it over to horrible.
While there is a date right now for the coffee shops.
Speaker Change: Bye.
Speaker Change: 100% of that product from the license holder. So let me just say there are 10 licenses that ratio, but only seven operations.
Speaker Change: We have gotten into production three have not yet so.
Speaker Change: That's putting some constraints in that.
Speaker Change: That's government allowed the 85 coffee shops or so to buy.
Speaker Change: Continue to byproduct from illicit trade till April 7th now that date may be extended again, we don't know yet.
Speaker Change: So.
Speaker Change: That should answer that first part of the question of what you wanted to add some color.
Speaker Change: Yes, I think the April seven deadline as a very firm deadline for the government I know to coffee shops are concerned.
Speaker Change: About the.
Speaker Change: The supply that's being offered on the market right now the demand for our products is very high quality again supersedes the quality of the other producers in the experiment.
But absolutely there will be a timeline and now with this April seven that the <unk> software before only goodbye from illegal suppliers and to Mikes point only stephane at the starting line right now and still ramping up production.
Speaker Change: Okay.
Speaker Change: Okay. Thank you and then just one more on international I think you are giving guidance of about three times growth rate you need 6 million U S dollars and 24, so that's great outlook for 'twenty five but.
Speaker Change: My question was more about route to market are you going to make investments.
Speaker Change: Putting more feet on the ground, taking more control of the of the local supply chain and those market weightings of trial.
Speaker Change: Or Germany, or do you see going through MPD much shipping from D C and a leading distributors are handled those those businesses. Thank you.
Pablo: Well I can see your Crystal ball is working this morning that question Pablo so thanks.
Pablo: But I think youre on the right track, but rather not elaborate.
Pablo: On the call because of competition of what our plans are going forward, but I can tell you.
Pablo: Our international of additional export is front and center.
Pablo: About 25 and beyond plans.
Speaker Change: How's that.
Mike: Alright, that's good enough I guess, Mike Congrats again, thank you.
Speaker Change: Okay.
Speaker Change: And as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star One again, our next question will be coming from Frederick <unk> of ATB capital markets. Rodrigo Your line is open open.
Thank you good morning, Thanks for taking my question.
Speaker Change: First question on the comment about <unk>.
Speaker Change: Second.
Speaker Change: International sales tripling essentially five so just curious.
How much of that would be coming from the Netherlands, and how much would actually come from the other medical markets.
Speaker Change: While the Netherlands is separate so when we refer to our international export that's 100% medicinal to the five countries we have been selling.
Speaker Change: That quad that tripling of that business internationally is solely on the medicinal side does not include the Netherlands, which as you know is <unk>, so <unk> be no importation into or out of the Netherlands. So that's sort of a.
Speaker Change: Unlimited license country in a way.
Speaker Change: And that's totally a separate segment for us.
Speaker Change: Great perfect that clarify.
Speaker Change: And then a second question on.
Speaker Change: On the non branded market wholesale market in Canada.
Speaker Change: We've seen some companies announcing that they will be increasing cultivation.
Speaker Change: So I'm curious how you see that the risks that the market could get.
Speaker Change: It's I guess a.
Speaker Change: A new cycle of oversupply and <unk>.
Speaker Change: How do you see that developing in Canada. This year.
Speaker Change: Yeah.
Speaker Change: I'll start and you can see you want to add to it I don't really I know there is some expansion going on but specifically where that expansion some of it be debased, some probably most likely international but I think as long as you know.
Speaker Change: In our remarks, we made when you look at how the structure has developed in Canada. Both from what we've said many many times ridiculous, 40% topline excise tax.
Speaker Change: Working with our retailers.
Speaker Change: To keep products on the shelf.
Speaker Change: I think anybody looking at investing capital in the Canadian market would have to be looking.
Speaker Change: Either at B to B, but more I don't think they would build solely for beta bid has to be for international.
Speaker Change: But I don't see it nowhere getting to the levels that we saw two or three years ago as forest biomass right now there is which is limited.
Speaker Change: As limited biomass in the marketplace and I think that's all been cleaned up and you want to add any color to that.
Speaker Change: Or do you want to add anything.
Speaker Change: The tons that we are seeing price wise and volume wise, but again, it's quality driven high quality flower will always have a set of demand against it and we're one of the best producers out there when it comes down from a quality perspective, some demand for our flower remains very very steady and very high.
Speaker Change: Thank you very much.
Rick: Thank you Rick.
And I'm showing no further questions at this time I would now like to turn the call back to Michael for closing remarks.
Okay, well, thank you for joining us today, and we look forward to reporting on that.
Rick: Progress in 2025, Thank you Tony.
Rick: This concludes today's conference call. Thank you for participating you may now disconnect.
Rick: Okay.
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Rick: [music].