Q1 2025 ATN International Inc Earnings Call
[music].
Good day and thank you for standing by welcome to the H N International Q1, 2025 earnings conference call and webcast.
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Please be advised that today's conference is being recorded.
Speaker Change: I would now like to hand, the conference over to your first speaker today, Michelle such Roski head of Investor Relations and Treasurer. Please go ahead.
Speaker Change: Thank you operator, and good morning, everyone I'm joined today by Brad Martin Etfs, Chief Executive Officer and Carlos.
Speaker Change: Atms Chief Financial Officer.
Speaker Change: Morning, we'll be reviewing our first quarter 2025 results in reaffirming our 2025 outlook.
Speaker Change: As a reminder, we announced our 2025 first quarter results yesterday afternoon. After the market closed.
Speaker Change: Investors can find the earnings release and conference call Slide presentation on our Investor Relations website.
Speaker Change: Our earnings release, and the presentation will contain forward looking statements concerning our current expectations objectives and underlying assumptions regarding our future operations.
Speaker Change: These statements are subject to risks and uncertainties that could cause actual results to differ from those described.
Speaker Change: Also in an effort to provide useful information for investors.
Speaker Change: Our comments today include non-GAAP financial measures for details on these measures and reconciliations to comparable GAAP measures.
Speaker Change: For further information regarding the factors that may affect our future operating results. Please.
Speaker Change: Refer to our earnings release on our website at IR <unk> com or the 8-K filing provided to the SEC.
Speaker Change: For having the call back to Brad I'd like to note that moving forward and in line with common practice, we plan to shift the timing of our earnings release and cause by approximately one week.
Speaker Change: The adjustment is intended to better align with the timing of our 10-Q filing.
Brad Martin: With that I'll hand, the call over to Brad.
Brad Martin: Thank you Michele good morning, everyone and thank you for joining us.
Brad Martin: I'd like to start by recognizing our teams across ATM for their continued commitment and execution.
Brad Martin: In the face of industry wide shifts and macroeconomic uncertainty we remain focused on what we can control operational performance disciplined investment in our long term strategy.
Brad Martin: Our Q1 results reflect that discipline.
Brad Martin: As expected our top line revenue declined year over year, largely due to the wind down of Cobot era government subsidy programs in the U S markets.
Brad Martin: We delivered 2% adjusted EBITDA growth.
Brad Martin: And cash from operations increased 55% to $35 9 million.
Brad Martin: These outcomes demonstrate early progress as we start the year and execute against our strategy.
Brad Martin: The strategic capital investments, we've made over the past three years are delivering tangible returns.
Brad Martin: In the first quarter, we expanded the number of broadband homes passed by high speed data services to 427000 households, and increase of 11% year on year and grew our high speed subscriber base by 2% year on year.
Brad Martin: We remain confident in our long term vision.
Brad Martin: Leveraging our fiber and digital infrastructure to deliver high value services, especially in markets, where connectivity is both under built an essential.
Brad Martin: Night vision is supported by our financial Foundation that continues to strengthen.
Brad Martin: Let me take a moment to highlight key themes from the quarter.
Brad Martin: In our international segment, we saw improved operating efficiency, resulting in an 11% increase year on year and adjusted EBITDA.
Brad Martin: Demand for high speed broadband and business services remained steady.
Brad Martin: Increases in postpaid mobile subscribers in mobile data consumption continue to drive improvements in Arco.
Brad Martin: The segment remains strong contributor to our financial performance and a framework for how we are positioning our U S business over time.
Brad Martin: Domestically, while revenue declined as expected we remain focused on executing our strategic shift our goal is clear.
Brad Martin: Our base of fiber and fiber fed business and carrier solutions as we transition legacy consumer services towards fiber and fiber fed broadband solutions.
Brad Martin: We are aligning our network.
Brad Martin: Go to market strategy and capital deployment with this long term focus.
Brad Martin: While the near term transition creates revenue pressure, we are building, a more resilient and higher margin business for the future.
Brad Martin: Importantly, we are advancing approximately $370 million in government funded broadband infrastructure projects.
Brad Martin: These projects are expected to be completed in 2025.
Brad Martin: These programs are essential to our longer term U S growth strategy.
Brad Martin: They enable us to expand our fiber footprint with reduced capital intensity and provide long term upside as projects come online and begin to generate revenue.
Brad Martin: In the first quarter, we submitted additional applications under the <unk> program in the U S southwest reinforcing our commitment to expanding broadband access and historically underserved regions.
Brad Martin: These efforts are a natural extension of our mission to connect people communities and businesses with the infrastructure that enables opportunity.
Brad Martin: We also made strong progress on cash generation in Q1.
Brad Martin: <unk> disciplined cost controls and focused capital allocation.
Brad Martin: We are encouraged by these early results and we are reaffirming our annual guidance as previously outlined on our Q4 earnings call.
Brad Martin: Looking ahead to the rest of 2025, our priorities remain unchanged.
Brad Martin: Expanding high speed broadband and business services, and our international markets, while improving margin and capital efficiency.
Brad Martin: Stabilized and repositioned our U S business around sustainable fiber and fiber fed revenue streams.
Brad Martin: And maintain a strong financial position through disciplined capital allocation and a focus on cash flow growth.
Brad Martin: On the broader policy front, we're also monitoring recent developments around trade and tariffs.
Brad Martin: While we do not source devices or equipment at the same scale as large national carriers any sustained increase in tariffs on network infrastructure, including fiber related components and electronics.
Brad Martin: Could introduce cost pressure over time.
Brad Martin: That said based on our current supply chain visibility and the fact that half of our revenue and our largest consumer markets are outside the United States and not immediately impacted we believe we can manage any near term impact within our existing 2025 financial outlook.
Brad Martin: We will continue working closely with our vendors and partners to mitigate cost volatility and ensure continuity of service delivery.
Brad Martin: While we recognize that the operating environment remains dynamic from policy shifts to competitive intensity. We believe we are executing the right strategy for the long term.
Brad Martin: Our focus is on monetization.
Brad Martin: Operational leverage and value creation.
Brad Martin: <unk> will take you through the numbers, but I want to reiterate we are making steady progress. We are focused on our goals and we remain confident in Atms future.
Carlos: With that I'll turn it over to Carlos.
Carlos: Thank you Brian.
Carlos: Good morning, everyone and thanks for joining us.
Carlos: Today, I'll walk through our first quarter financial results and our outlook for the remainder of 2025.
Speaker Change: As Brad mentioned, we entered the year focused on executing with discipline and our Q1 results reflect early signs of progress.
In terms of cash flow and operational efficiency.
Speaker Change: While the macro environment remains challenging, especially in our domestic markets. We believe the strategic actions taken in recent quarters, along with the benefits of our investment cycle has strengthened our ability to serve our customers.
Speaker Change: Support durable revenue generation and drive margin expansion.
Speaker Change: With that let's now review our P&L results for the first quarter in more detail.
Speaker Change: Total company revenue for the quarter was one kind of a $39 3 million down 4% year over year.
As expected this decline reflects the wind down of the emergency productivity fund on affordable care problem.
Speaker Change: Operating income for the quarter decreased to $2 7 million as cost management actions and ongoing efficiency efforts across the business were offset by increases in transaction related expenses.
Speaker Change: Losses on asset transfers and the restructuring and reorganization expenses.
Speaker Change: Net loss for the first quarter was $8 9 million or <unk> 69 per share.
Speaker Change: This compares with the prior year's net loss of $6 $3 million.50 per share.
Speaker Change: Factors influencing operating income similarly impacted net loss for the period.
Speaker Change: Adjusted EBITDA was $44 3 million up 2% from the prior year.
Speaker Change: Buoyed by continued growth and margin expansion in our international segment, partially offset by the anticipated decline in our U S segment.
Speaker Change: Looking now at our segments performance bigger.
Speaker Change: Beginning with our international segment.
Speaker Change: Q1 revenues increased to $94 5 million from $93 1 million in the first quarter of the previous year, driven partially by carrier services growth.
Speaker Change: Adjusted EBITDA for the international segment increased to $32 4 million for the quarter compared to $29 3 million in the same period last year.
Speaker Change: Cost containment efforts and operational improvements contributed to the quarter's performance.
Speaker Change: In our domestic segment first quarter revenues were $84 8 million.
Speaker Change: Down nine 5% year over year.
Speaker Change: As previously mentioned revenue was impacted by the conclusion of the ECS on ACP progress.
Speaker Change: The lower revenue led to a decrease in adjusted EBITDA to $17 5 million down 15, 4% compared with the same quarter last year.
Speaker Change: On to the balance sheet and cash flow highlights.
Speaker Change: We ended the quarter with $97 3 million in cash from.
Speaker Change: $89 2 million at year end.
Speaker Change: Total debt stood at $562 4 million and our net debt ratio was 252 taxes.
Speaker Change: Net cash provided by operating activities increased 55% year over year to $35 9 million driven by working capital management efforts capital expenditures in Q1 totaled $28 million net of $22 4 million in Reimbursable capital spending.
Speaker Change: This compares to $36 million in Capex and $13 $5 million in Reimbursable in the prior year's quarter.
Speaker Change: This reduction in expenditures reflects the shifting our framework to increase operational cash flow supplemented by available grant funding.
Speaker Change: We returned capital to our shareholders.
Speaker Change: Through $3 6 million in dividends during the first quarter of 225%.
With that let's move to our outlook for 2025.
Speaker Change: We are reaffirming the outlook for 2025 that we provided in our fourth quarter release.
Speaker Change: We continue to expect revenue for the year to be in line with 244, excluding construction revenue.
Speaker Change: Adjusted EBITDA to be essentially flat with last year.
Speaker Change: Net capital expenditures between 90 and $100 million.
Speaker Change: Net debt ratio to remain flat to year end 'twenty, two a floor with a slight potential improvement exiting the year.
Speaker Change: As we look ahead to the balance of the year. We continue to expect the second half to contribute a larger share of full year results.
Speaker Change: This reflects the timing of revenue stabilization efforts in the U S segment and.
Speaker Change: And the continued ramp up in our international markets.
Speaker Change: As part of our continued cost containment initiatives, we anticipate incurring further reorganization and restructuring expenses in the second quarter.
Speaker Change: In summary, we're executing on a clear set of priorities improve.
Speaker Change: Improving cash flow transitioning our U S business.
Speaker Change: Leveraging the strategic capital investments we've made in recent years.
Speaker Change: While we're not immune to broader market headwinds, we believe our strategy is sound our balance sheet is strong and we remain committed to delivering long term value for shareholders.
Brian: Thank you and now I'll hand, the call back over to Brian.
Speaker Change: Thanks, Carlos before.
Speaker Change: Before we open the call for questions I want to leave you with a clear message, we're focused on execution and committed to financial discipline and confident in the strategy we put in place.
Speaker Change: This is a year of transition and we are beginning to see encouraging signs of improved cash flow progress on our grant funded builds and consistent performance internationally.
Speaker Change: Our long term goal remains the same to create a stronger more efficient and more resilient ATM.
Speaker Change: With that operator, we'd like to open it up for questions.
Speaker Change: Thank you.
Speaker Change: At this time, we will conduct a question and answer session. As a reminder to ask a question and you will need to press star one on your telephone and wait for your name to be announced.
Speaker Change: To withdraw your question. Please press star one again.
Speaker Change: Please standby, we will compile the Q&A roster.
Our first question comes from the line of Ric Prentiss of Raymond James and Associates. Your line is now open.
Ric Prentiss: Thanks, Good morning, everybody.
Speaker Change: Thanks Margaret.
Speaker Change: Okay.
Speaker Change: Appreciate the comments on monitoring trade and tariff and it feels like your supply chains are good for this year.
Speaker Change: How much of the week.
Speaker Change: Obviously I've talked to a lot of the big Telcos, AT&T and Verizon reported last week and they felt that they were pretty insulated from private because a lot of electronic components are smaller compared to you by your fiber from outside the United States or is it really just more of the electronics side that youre exposed to.
Rick Prentiss: So Rick.
Rick Prentiss: So we have a lot of our construction materials for fiber construction are sourced in the U S and that's part of the reason we've looked at our build our build.
Rick Prentiss: Bill of materials for our build for 2025.
Rick Prentiss: I understand the dynamics in quite a quite a significant portion of that is sourced locally.
Rick Prentiss: The electronics and the variations of Wearables electronics are coming from would be China, Taiwan, Thailand, Vietnam on the major vendors like Cisco and others.
Rick Prentiss: Something we're watching closely.
Rick Prentiss: There are a lot of.
Rick Prentiss: Projects in place now that purchase orders have already been built.
Rick Prentiss: And we are and those are really immune we have major programs.
Rick Prentiss: That is dependent upon vendors like ericson with a lot of manufacturing in Mexico that are that are exempt U S. MCA exemption. So so it's dynamic.
Rick Prentiss: As we all know and we're watching it very closely but a really important dynamic for us is that our largest consumer markets with handsets.
Rick Prentiss: That have a lot of manufacturing in China are all in our international markets. So those are generally exempt from these tariffs so.
Rick Prentiss: So we.
Rick Prentiss: We said in our prepared remarks, we can our planning that 2025, we are going to be able to.
Rick Prentiss: Absorb any variations that we see within our guidance.
Speaker Change: Okay, and then remind us because obviously trade and tariffs have impacted interest rates they are impacted FX rates.
Speaker Change: Remind us how the U S dollar being a U S reporting company, what kind of FX exposure do you have in your international markets. When you bring it back to U S.
Rick Prentiss: So Rick.
This is Carlos.
Carlos: So the majority of the markets, where we operate international internationally, our bag to daughters I think.
Rick Prentiss: In Guyana, we haven't seen any.
Rick Prentiss: Significant.
Rick Prentiss: Titration so far.
Rick Prentiss: <unk> been the fact that right now they're there.
Rick Prentiss: Unable to be exporting a significant amount of oil out of the market.
Rick Prentiss: That allows them to have it a little bit of a buffer there. So we haven't seen yet any significant impact from from that front.
Rick Prentiss: Okay. Okay.
Rick Prentiss: And then obviously.
Rick Prentiss: We're seeing a lot of <unk>.
Rick Prentiss: <unk> of fiber companies or.
Rick Prentiss: And private multiples being higher than public multiples how are you viewing the to marketplace as far as that private versus public multiples in some of the roll ups that might be occurring.
Rick Prentiss: Yes.
Rick Prentiss: Watching those dynamics too rich and.
Rick Prentiss: And ultimately.
Rick Prentiss: So it is a vibrant market.
Rick Prentiss: And there are a lot of players that are performing well arbor space that our players have got some headwinds.
Rick Prentiss: But look we recognize that dynamic.
Rick Prentiss: And that's something that we're always trying to understand how we can best unlock value for our investors.
Rick Prentiss: Okay.
Rick Prentiss: Last one for me you mentioned some of the government funding.
Rick Prentiss: Is that something that's going to find its way through kind of gross capex reimbursement net capex is that something is going to find its way onto the revenue in the shorter term versus the longer term help us understand that the $370 million of government funding and half of it in 25, how do you think that might play into your financials.
Rick Prentiss: Yes, so just to clarify a couple of points on that so of the 370 <unk> about half of the projects will be complete are expected to be complete this year.
Rick Prentiss: And to clarify we had many of those projects going on even in 2024 under construction so a reimbursable capex.
Rick Prentiss: As of last for 2024 was around $108 million I believe for the year.
Rick Prentiss: If you see similar ratios, we have quite a bit of reimbursable this year as well.
Rick Prentiss: Those programs really there are some programs.
Rick Prentiss: That will be going live in mid two.
Rick Prentiss: Late Q3, we will see some.
Rick Prentiss: Revenue, but that's in our plan right now.
Rick Prentiss: The significant monetization of those is going to be in our out years 'twenty six 'twenty seven I will receive.
Rick Prentiss: The larger benefits, the monetization and to be clear $370 million.
Rick Prentiss: A significant portion of that or some very large subsea.
Rick Prentiss: Remote regional fiber projects in Alaska.
Rick Prentiss: So obviously these were not gets built without the subsidies. So there are definitely opening up opportunities, but there is not an equivalency of.
Rick Prentiss: Now the size of the grant to the size of the economic value, but those will certainly be something we'll be taking advantage up here 26, I will provide more visibility in what.
Rick Prentiss: With regard to that next year.
Rick Prentiss: Thanks.
Rick Prentiss: Thank you.
Speaker Change: Our next question comes from the line of Greg Burns of Sidoti. Your line is now open.
Rick Prentiss: Good morning, just to follow up on the.
Speaker Change: Government Grant funding you mentioned that the 370 million that you've won already.
Rick Prentiss: But you also.
Rick Prentiss: I guess mentioned some.
Rick Prentiss: Some bids <unk> under the <unk> program can you just talk about the relative size of what the opportunity is there.
Rick Prentiss: Yes, so so beads.
Rick Prentiss: So Pete is something that we are participating in the southwest as we mentioned the dynamics will be Greg are obviously fluid. So there are dynamics with NTIA and funding mechanisms.
Rick Prentiss: That need to be effectively.
Rick Prentiss: Pass through there is a commerce memo that scheduled for may 15th.
Rick Prentiss: They were watching closely that are that it's going to clarify some of the dynamics then administration around around beat so the general theme, we're seeing as there are delays most states are delaying the.
Rick Prentiss: The award timing or even the submission timing.
Rick Prentiss: One dynamic that we're seeing which is which is positive is that the basic financial technical requirements for the programs are going unchanged. So it allows us to leverage the work we've done around planning.
Rick Prentiss: For those projects.
Rick Prentiss: But yes at a high level of the six states we operate there is.
Rick Prentiss: 4 billion approximately of Av.
Rick Prentiss: A bead funding that is that is effectively.
Rick Prentiss: Provision for those states. So we obviously won't participate in all of that but.
Rick Prentiss: But in areas our view, Greg is we're going to look at it very strategically where it can build on.
Rick Prentiss: Two strategic network footprint that we have today, where we have good distribution and middle mile network because remember in many states are this is really to connect the end at the end users. So it's really a fiber to the home.
Rick Prentiss: Some states do allow for middle mile reimbursement. So we're trying to take advantage of that where that where that is possible and like kind exchanges is another important dynamic which offsets the matches the capital intensity for ETF.
Rick Prentiss: So we're looking at all the variations.
There are and we do expect that we'll be learning more about the grants that we've submitted here in the coming months.
Rick Prentiss: And it'll be an important dynamic for our continued.
Rick Prentiss: Investment in fiber, but the dynamics right now are watching this malware coming out of the 15 from commerce.
Rick Prentiss: Likely help the states finalize timing of their final submissions and awards.
Speaker Change: Alright, great. Thanks for that and then just lastly in terms of monetizing the investments organic investments you've already made over the last couple of years.
Rick Prentiss: Can you just talk about.
Speaker Change: Maybe give us an update on some of the.
Rick Prentiss: Changes, you're making in terms of leadership.
Speaker Change: Leadership processes to improve your sales motion are you.
Speaker Change: Seeing any.
Speaker Change: Maybe green shoots of progress in terms of those monetization efforts.
Speaker Change: Yes, so as we've talked we have we've got two new leadership teams are to U S markets.
Speaker Change: And really that started here in Q1.
Speaker Change: And look we're encouraged by some early progress obviously, new leadership brings into focus.
Speaker Change: There are one of the key themes. We are seeing is that there is a growing carrier demand for for access and transport in the markets that we operate that's a very good sign.
Speaker Change: One of the key services, we provide in the U S markets. So thats, a very positive dynamic that we continue to the.
Speaker Change: To maximize for the business, but that is a growing pipeline.
Speaker Change: We have had a more successful use tax season. This year. So these are programs that renew every one to two years and that season is in Q1, we did better this year those will be projects built and will start to monetize in the second half of this year.
Speaker Change: Again, all built into our current forecast.
Speaker Change: But again, a little bit better performance, there which is encouraging.
Speaker Change: But the teams are taking a focus I think that's one of the really important areas really renewed focus on how we're approaching this conversion of legacy technologies.
Speaker Change: To remind folks we exited our retail mobile operations, which is a pretty long process, but that was affected as effectively parts of January.
Speaker Change: And we have we have legacy broadband DSL. Some legacy expire list that we're looking to convert to fiber fiber fed fixed wireless.
And we are making some progress it's still a relatively smaller component of the revenue streams for our U S markets, but we are encouraged by some of that progress.
Speaker Change: And internationally, we continue to unlock the leverage of the investments that we've made we've seen we've seen some good.
Speaker Change: <unk> performance in inbound roaming.
Speaker Change: That's based upon the improvements we've made with data capacity in our <unk>.
Speaker Change: <unk> networks so.
Speaker Change: So that's again a good progress sign we've seen here in Q1, and we still see a significant data demand and data plan growth in our largest mobile market in Guyana, which is again another positive sign which is impacting our crews.
Speaker Change: Alright, great. Thank you.
Speaker Change: Thank you.
Speaker Change: Our next question, we will come back Ric Prentiss with Raymond James and Associates. Your line is now open.
Ric Prentiss: Hey, thanks for the opportunity for follow up.
Speaker Change: On the date finally, a follow up on the previous question.
Speaker Change: What are you hearing as far as NTIA confirmation and goodwill that slow anything down or its in Congress <unk> move forward and then MTI will fall kind of implement it but how is the NTIA leadership.
Speaker Change: Transition affecting it.
Speaker Change: So there's a lot going on I mean, there are several bills right now Rick as you know they are in front of Congress that relate to a lot of different topics.
Speaker Change: I think a couple of work through the house just this week.
Speaker Change: So there's everything from spectrum authority to some of the newer rules around <unk>.
Speaker Change: <unk>.
Speaker Change: B program.
Speaker Change: So look to be the primary impact we're seeing right now is the delay in the beef program.
Speaker Change: Effectively all of the subsidy programs, we participate in and Reimbursable Capex programs all of that has been on time.
Speaker Change: As expected here in Q1, so that is that is all moving as expected and we don't foresee any impact.
Speaker Change: This is servicing service subsidy programs like Caf or Reimbursable programs that we've already won.
Speaker Change: But beat is the primary and we're watching that closely there are states that are further ahead that people are moving forward with some early builds our states have not yet granted any funds yet. So the fund flow is still something that is important dynamic that we expect that to be delayed.
Speaker Change: As you read in the press so that's the primary dynamic.
Speaker Change: The timing of those delays could impact the ability to monetize.
Speaker Change: Those be builds.
Speaker Change: In which have a <unk> 26 of which have a 27. So that's what we're watching closely to our outward forecast.
Speaker Change: Okay.
Speaker Change: 2016, 27, and I know, it's too early to give official guidance, but how are you feeling about the prospects of being able to to grow.
Speaker Change: Businesses obviously.
Speaker Change: We would.
Speaker Change: <unk> from 23 to 24, we're flattish from 24 to 25, what does it take to be able to get growth.
Speaker Change: Or could there be further declines zone.
Speaker Change: So some of the things I mentioned, Rick are encouraging signs in our U S markets and enriched and remind the primary dynamic for revenue shifts and EBITDA shift was the loss of this ECF program.
Speaker Change: This COVID-19 era funding program so.
Speaker Change: So again with with that in mind.
Speaker Change: The fundamentals for carrier demand.
Speaker Change: Again remind you that our primary revenue streams in the U S markets, where we had some <unk> headwinds our carrier business and wholesale.
Speaker Change: So the demand we're starting to see for the support of transport.
Speaker Change: And that's coming from the carrier success in areas, where they are adding effectively fixed wireless.
Speaker Change: We're seeing improved.
Speaker Change: Improved performance around fiber.
Speaker Change: We sell transport services and we sell obviously, there's carrier managed services, which are tower services. So so we expect as they are improving their footprint, we are going to continue to leverage our wholesale arrangements.
Speaker Change: To see that growth again.
Speaker Change: The.
Speaker Change: Pipeline build is encouraging.
Speaker Change: On the on the consumer side in those markets. We are still in a transition as we've talked about legacy services to new fiber and fiber fed services.
Speaker Change: That was behind the 24, we are seeing some encouraging signs of a relatively small base.
Speaker Change: But we are continually improving that footprint programs like b programs that we have underway now for grants, which include fiber to the home and middle mile or all things are going to help us monetize.
Speaker Change: We go forward. So we see in the U S. The opportunity based on grants and based on carrier demand.
Speaker Change: Continued improvement, but the effective demand for broadband is still pervasive, which is which is a great sign for our business. Our belief is if we can provide that broadband on durable assets. We've got a great business Ron the long term.
Speaker Change: Okay and then.
Speaker Change: Carlos talk to us a little bit about the balance sheet, obviously rates or policy around that.
Speaker Change: But how are you thinking about managing.
Speaker Change: Interest costs, and particularly that as it affects for free cash flow.
Speaker Change: Yes, I think.
Speaker Change: Rick.
Speaker Change: We continue to work on.
Speaker Change: Improving margins.
Speaker Change: That way continue to work on Delevering.
Speaker Change: We're.
Speaker Change: Yes.
Speaker Change: So you can see that as part of the <unk>.
Speaker Change: Cost structure, how we have been moving in lowering capex. So all those elements that we have been acting on from the beginning.
Speaker Change: Actually from 2023 on.
Speaker Change: We believe we're going to continue to help us.
Speaker Change: And to improve leverage reduce our interest expenses and then also provide.
Speaker Change: Improved capital allocation Optionality.
Speaker Change: What timeframe does that capital allocation changes look like is it.
Speaker Change: Stroke 20 sensors are thinking is 27.
Speaker Change: I think we believe that we're going to continue to improve the position.
Speaker Change: Think that.
Speaker Change: If we continue to march towards that.
Speaker Change: Improve EBITDA margins as we go into 'twenty by Stacie Shirley.
Speaker Change: There'll be more options right.
Speaker Change: Finally for capital allocation.
Speaker Change: Okay.
Speaker Change: Thanks for the follow ups.
Speaker Change: Thanks, Rick.
Speaker Change: Okay Im.
Speaker Change: Showing no further questions at this time I would now.
Brad Martin: Now I'd like to turn it back to Brad Martin for closing remarks.
Brad Martin: Thank you operator, thank you all for joining US today, we look forward to continue our discussions.
Brad Martin: With many of you in the coming months I appreciate all your time and support have a good day.
Brad Martin: Ed.
Speaker Change: Thank you for your participation in today's conference. This does conclude the program and you may now disconnect.
Speaker Change: Okay.
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Speaker Change: Okay.
Okay.
Speaker Change: Yes.
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