Q2 2019 Earnings Call
Good day and welcome to the H C Holdings incorporated second quarter 2019 earnings Conference call.
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I would now like to turn the conference over to Brad Cohen of ice Yahr. Please go ahead.
Thank you operator, and good afternoon, we'd like to thank you for joining US to review agency to second quarter 2019 earnings result.
With me today are Mr., Philip Falcone, Chairman, President and CEO of eight C and Mr., Mike Yeah E C Chief Financial Officer.
Afternoon call is being webcast on our website at H.C. you got caught in the Investor Relations section.
We invite you to follow along with our webcast presentation, which also can be accessed on the agency to website again in the IR section in the pre Powerpoint presentation.
A replay of this call will be available approximately one hour after the call.
Before I turn the call over to Mr. Philip.
Our call I'd like to remind everyone that certain statements and assumptions in this earnings call, which are not historical facts will be forward looking and are being made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1995. These forward looking statements are subject to certain assumptions and risk factors that could cause eight feet to the actual results to differ materially from the forward looking statement.
The risk factors that could cause these differences are more fully discussed in our filings with the Securities and Exchange Commission. In addition, the forward looking statements included in this conference call are only made as of the date of this call and as stated in the company.
FCC report 82 disclaims any intention or obligation to update or revise any forward looking statements, except as expressly required by law.
During the call management will provide certain information that will constitute non-GAAP financial measures under the FCC rule as such as not limited to adjusted EBITDA insurance adjusted operating income in insurance pre price.
Prepaid tax adjusted operating income certain information required to be disclosed about these non-GAAP measures, including reconciliations to the most comparable GAAP measures is available in our most recent earnings press release, which is also available on our website and finally as a reminder, this call cannot be taped or otherwise duplicated without the companys prior consent with that I'd like to turn the call over an 80 two's chairman CEO and President Mr. felt Taco Bell.
Thank you and good afternoon, everyone. Thank you for joining us today as we did last quarter I'm going to deliver a more high level overview of the quarter and then highlight a specific segment of our overall business to provide deeper insight into our strategy for that specific segment. Our CFO , Mike Sena will then discuss the quarter's financial performance in more detail.
And then we'll open up the call for your Q when I first let's take a quick look at our overall performance in a newsworthy and success successful second quarter.
Core operating subsidiaries adjusted EBITDA was 34.8 million led by continued strong performance from our construction segment, which generated a 49% year over year increase in adjusted EBITDA.
Another excellent quarter for our insurance segment, which generated pre tax adjusted operating income of 33 million.
Bringing our six month total pre tax operating income to nearly 62 million and net income for that same period to 64 million.
In our life Sciences segment Hansen's portfolio company, our two dermatology announced it entered into a strategic partnership agreement with Wad down medicine, a leading pharmaceutical company in China.
Well done now has exclusive distribution rights to sell our choose products in the Chinese and Asia Pacific markets.
Our energy segment subsidiary American natural gas completed the acquisition of Amp, CNG, adding 20, new compressed Nat gas or CNG fueling stations located in the southeast and Texas to its portfolio, making it one of the largest owners and operators CNG stations in the U.S.
This acquisition was fully funded at the portfolio company level, Hence H.C. two did not incur any new debt at the holdco level or contribute any cash.
The amps CNG stations are highly complementary to angies existing station network as there's essentially no overlap it also positions and GE squarely in the growing south eastern us.
As we continue to expand and G.'s footprint and grow CNG volumes, we remain very optimistic about the long term possibilities for value creation as we believe the role CNG will play in the future will grow exponentially with respect to fuel in commercial vehicles.
Some questions have come up about the future role of the class eight electric.
Trucks in the space and whether they will put a dent in the CNG business.
We think the right answer to that is twofold one.
Dutch electric trucks are still a number of years away for a launch and even further for a rollout and if anything they will most likely make a dent in the diesel business before anything else. In addition, electric will still need additional infrastructure to be built to support electric vehicle roots as buses and trucks continue to transition away from environmentally unfriendly diesel gas the use of CNG fueling and the emergence of renewable now natural gas or RMG as a lower carbon footprint.
Fuel source provide a viable cost efficient clean emissions alternative to the status quo as lecter continues to require significant upfront spend.
Let me also take a minute to update you on our liquidity at the Holdco level as I noted on our prior call given the structure of our business, we pull cash from our operating segments up to our holding company throughout the year.
On our last call I noted that for 2019, we expected to receive 60 to 70 million and total dividend tax share and management fees from our construction telecommunications and insurance segments and that has not changed in the first half the year, we received nearly 33 million of that total.
Looking to the back half of the year, thus far in the third quarter, we pulled up 2.6 million in net management fees from Continental. We also expect to receive in excess of 9 million from the best of your escrow later in the quarter.
And as we move through the balance of the year, we expect to reach the liquidity levels. We previously shared and while our 15 million credit facility is fully deployed we would remind you that our cash needs for holdco expense levels are typically more weighted towards the first half of the year, which shouldn't necessitate lower need for capital in the back half of the year.
All in we Maine.
Very comfortable that we will be covered from a liquidity standpoint.
On the broadcasting side, we made significant headway in the quarter toward additional financing for the segment and hope to have some new news on that front in the coming days and weeks on how the fine now final financing package will look in the meantime, the segment improved in the second quarter on a year over year basis as the restructuring initiatives. We underwent last year had a significant impact.
Regarding global Marine and the ongoing sales process, we continue to pursue multiple paths to maximize value.
Including the steps we've taken to separate the Hmm joint venture from global Marine.
Since last quarter, when we discuss offering potential buyers the option of acquiring global marine either with or without Hmm.
We have experienced a much more robust sales process, having received multiple preliminary bids over the past month from high quality acquirers, including bids for global Marine as well as separate and distinct bids for the combined global Marine and Hmm JV.
This process has attracted significant interest given our willingness to be flexible in how we maximize value.
And we are working with our long term partner in Hmm to try to ensure a satisfactory outcome for all parties.
As in prior quarters, we cannot comment further or answer questions. At this time given it is still a very active and ongoing process.
We've also generated a considerable amount of exciting news that our pants and life Sciences segment in June our two dermatology entered into a strategic partnership with while Dong Medicine, a leading pharmaceutical company in China under an exclusive distribution agreement lot Don will distribute our two products in greater China and other Pacific countries. In addition, while Dong made a 10 million equity investment in our two at a post money valuation of $60 million.
That will fund the company's next phase product and market development, while donges committed to an additional $20 million in future funding at higher valuations upon the achievement of certain milestones.
We've invested $27 million in our too.
And at this point maintained nearly 58% ownership on a fully diluted basis, even after while dongs equity investment.
And what's key is that while our twos products are positioned to succeed in the marketplace in excess of 20 billion globally.
There are other novel potential medical and aesthetic applications and devices that could be created utilizing our two's core patent.
Net sales in greater China, and other Asia Pacific countries. In addition, while Don will make an initial equity investment of 15 million valuing medibeacon at a post money valuation of $315 million.
This will fund the company through upcoming FDA pivotal clinical trials.
And the FDA approval process, while Dong will also make a second equity investment of 15 million at a post money valuation for 15.
Million upon medibeacon, achieving us FTC approval for its TG fr.
Measurement system.
Having secured new funding with minimal dilution to Pan sends equity we have de risk the investment and then I'll now position to not only complete the clinical trials.
Through the FDA approval process, but also maximize the value of Medibeacon, we believe that once the company receives FDA approval it would be more valuable than one still in that.
Clinical trial process therefore.
We are deliberate in our approach, which we believe will add significant value.
For those of you new to walk down medicine, they're a terrific blue chip partner in China, and the broader Asia Pacific region that is providing us with access to markets that are challenging to enter without a local partner in China alone. They have already established sales force of 6500 sales reps.
Further while dong has the resources and regional presence to extend the reach of both companies and other key Asia Pacific markets. This makes them the ideal strategic partner in mitigates the inherent risks and challenges of building a sales force and operations in greater China and other Asian countries.
Currently while Dong has a significant focus in both in nephrology anesthetic markets. We believe this will be a tremendous benefit to both our two and medibeacon in achieving required local regulatory approvals approvals commencing the commercialization process.
And ultimately distributing the products across the broader Asia Pacific region were very excited about these investments having waddling as a partner in the Asia Pacific region, and the continued progress David and Tureen have made as we look to maximize value to shareholders.
Hi, all of that said Delevering. The Holdco remains our top priority while global is clearly at the forefront of this process. We continue to evaluate additional pass with our other global portfolio companies.
The HCT model works, yet it does require patience and as we show progress in improving our balance sheet. We believe investors will be able to see the value we are creating and the benefits of a diversified portfolio as we did on our last call with broadcasting I want to highlight this quarter and go into greater depth on our insurance segment.
As we've consistently noted.
We're always looking for opportunities to enter into markets and industries, where we see dislocation and where we believe the right strategy and our expertise can add significant value.
One of those markets was in long term care insurance for those who may be unfamiliar with long term care I will give you a brief overview.
Long term care insurance policies have been commonly targeted for purchase by 50 to 60 euros. The purchaser enters into a contract paying a monthly premium which provides the policyholder with benefits to cover costs associate associated with nursing homes assisted living facilities and home health care that they may incur at some point in the future.
Policyholders typically become eligible for long term care benefits. If they are unable to perform two or three of the six specific activities of daily living the length of time policyholders can receive benefits depends on the contract, but usually ranges from a couple of years, which are considered capped contracts to their entire lives uncapped.
It provides vital coverage and financial protection for individuals to be cared for as traditional coverage does not cover most long term care services and it is important that the policies be serviced properly for the sake of both the policyholders and the insurance.
Rising healthcare costs have created a tremendous amount of uncertainty.
And is precipitated in LTC insurance business with little to no reinsurance capability, hence no way for underwriters to get the risk off their books. This inability to reinsure not only ties up capital, but also left them.
At risk of rating downgrades, which of course could potentially result in an increased cost to their other lines of insurance.
Because of the complex nature of these policies and the uncertainty around FX on ratings and future increased health care costs. There were very few willing buyers.
To take them on.
As certain insurance carriers with these long term care portfolios became more willing to sell their blocks of now considered non core portfolios steeper diff discounts. We believed it was an opportune time to get our arms around the industry. We ultimately entered the space in 2015 with the formation of Continental Insurance Group closing, our first acquisition, which was a run off portfolio of approximately 1.5 billion.
The acquisition also included a servicing platform based in Austin, Texas that predominantly focuses on the servicing of long term care policies, which is the critical part of the business.
In building this business, we prioritized industry expertise, bringing both management and Actuarially actuarial consultants on board.
That had experience in the long term care space, enabling us to ascertain the risks of the various portfolios available in the market. The risks around these portfolios depend on a number of things, including but not limited to the length of the benefits and what is covered and what is not.
In addition, the creative structure that we have in place allows us to limit our corporate potential exposure, while ensuring cash flow through management fees servicing the portfolio.
Keep in mind. These are all run off books, meaning we're not underwriting new policies and consequently have no concern around ratings.
Unlike a traditional insurer.
As long term care became a non core segment for many insurers over time more of these portfolios have come to the market, creating a unique opportunity to purchase at attractive levels with little capital risk.
When identifying and assessing a block continental has three top criteria first getting comfortable with the level of reserving and how well capitalize the block is this is critical to continental's continued financial stability and our combined success second focusing on the structure of the transaction.
Long term care blocks that are separated into their own legal entity are much cleaner to acquire.
Third how are the policy benefits structured into fine policy benefits and policy language can have large impacts on actuarial assumptions, we model and the ultimate economic outcomes.
Continental reviews, the history of prior claims adjudication on a block and when necessary reads and understands each policy form prior to including any final assessment to ensure actuarial assumptions are not based on improper or unsustainable claims handling.
After closing our initial acquisition the team spent considerable effort and energy continuing to build and improve upon the platform, we streamline the corporate structure and unlocked.
Cost and capital efficiencies, while doing this the team remained committed and disciplined in identifying the next block that would be a match for us.
That will ultimately lead to late 2017, where after extensive due diligence continental announced it was acquiring humana's LPC business KMG America.
We view the transaction as a win win as we were able to provide the seller with solution for a non core asset.
Tripling the size of continental's portfolio, while increasing our surplus capital with very conservative actuarial assumptions.
Throughout the process our platform and our existing expertise was a key attribute to help secure that transaction.
We completed the transaction in the third quarter of 2018 and in the first half of 2019 alone we've already generated nearly $62 million in pre tax AOL ally.
This was driven in large part from the income incremental contribution of the Humana transaction as well as from an increase in net investment income earned from our legacy runoff block and from the benefit of certain claims reserve releases.
I would note that while the improvement in Alewine has been impressive we believed that overall growth in total adjusted capital serves as a greater validation of this acquisition and strategy, having grown from nearly $80 million at the time of our initial acquisition to approximately $331 million at the end of the second quarter.
As of June Thirtyth, we held cash and invested assets of over $4.4 billion.
As a reminder, this is a highly regulated industry in life and the liabilities are ring fenced. Consequently, holdco does not guarantee the long term liabilities.
We believe we maintain a healthy level of conservativism in our reserving relative to the sector and we will continue to apply the same level of rigor in pursuing future opportunities. As a reminder, the holdco receives net management fees each quarter and as we continue to acquire and grow the continental platform. The fee income will continue to rise providing near term returns on our investment in ongoing value to HC two shareholders. We've been very pleased that the value created by continental in just four years and especially in the first half of this year and we think they are just getting started consider this there are approximately $7 million long term care insured lives in America.
And our share is about 75000 or 1%.
While there are certainly blocks that will not meet our rigorous standards the opportunity to grow is quite exciting.
Insurance is a textbook example of the value inherent in our strategy. We started with a plan on paper, we then evaluated the industry and the competitive landscape.
And built a great platform business business with a fantastic management team.
Since that time, the team and business have grown and thrived under the HC two umbrella, we expect insurance will be a major value creator for HC two in the years to come as continental continues to grow and succeed to sum up our results in the quarter show continued strong operating performance and we remain well positioned to take advantage of our diverse hybrid portfolio strategy of solid cash generating businesses, such as construction insurance and meaningful value creation at global Marine Energy Broadcasting in life Sciences.
With that I'll now turn the call over to our CFO , Mike Sena, who will discuss some of our second quarter 2019 financial highlights Mike.
Thank you, Phil and let's get right into our second quarter performance consolidated total net revenue for the second quarter 2019 was $518.6 million, a 4.4% increase from $496.8 million in the prior year period, driven by higher revenues from our insurance and construction segments.
Net income attributable to common and participating preferred stockholders for the second quarter of 2019 was $9 million or 12 cents per fully diluted share compared to net income of $54.7 million or one dollar an eight cents per fully diluted share in the prior year period.
It's important to note prior year period results benefited from a $102 million onetime gain from the sale of pension expense and interest in bentonville.
At the Companys core operating subsidiaries, which comprises 80 twos construction Marine services energy and telecom segments. Adjusted EBITDA for the second quarter of 2019 was $34.8 million compared to $40.2 million in the prior year period as a decline in marine services, partially offset by strong improved year over year performance at our construction segment.
Total adjusted EBITDA, which excludes our insurance segment grew 22% to $27.7 million in the second quarter of 2019 compared to adjusted EBITDA of $22.7 million in the prior year period.
Year over year, adjusted EBITDA was driven by the improvement in construction and reduced spend at life Sciences broadcasting and non operating corporate.
Let's just take a couple of minutes to go into a bit more detail at our largest segments.
That construction, we recorded adjusted EBITDA for the second quarter 2019 of $23.1 million.
49% from the prior year period.
Construction continues to perform well for us driven by certain large scale DBM global commercial fabrication and erection projects.
As well as contributions from Grey Wolf industrial.
As of June 32019 backlog was 468 million comprised of $387 million of backlog at DBM.
And $81 million of backlog of Grey Wolf.
Adjusted backlog, which takes into consideration awarded but not yet signed contracts at DBM global and Grey Wolf was approximately $661 million.
Which comprises of $547 million at DBM and $114 million at Grey Wolf.
Constructions adjusted backlog is effectively unchanged from the prior year period, Despite strong project execution and revenue recognition in the second quarter of 2019.
Meanwhile, at insurance, we generated pre tax adjusted operating income for the second quarter, and first half of 2019 $33 million and $61.7 million respectively.
The improvement from the prior year was driven by higher net investment income and policy premiums from the addition of Humana's long term care business and higher net investment income related to the legacy C.G.I. block of business.
Further contributing to the improvement where reserve adjustments, taking as a result of higher policy terminations policyholder elections that reduced benefits driven by changes in premiums and favorable claims activity.
As of June Thirtyth insurance had cash and invested assets of 4.4 billion total GAAP assets of $5.5 billion and an estimated 331 million of total adjusted capital.
As Phil noted in his remarks insurance has been an excellent value creative for it should too and we continue to expect it will be a strong driver of cash flow for Ritchie to moving forward.
Finally at Marine services, we recorded adjusted EBITDA for the second quarter of 2019 of $9.6 million compared to $20.4 million in the prior year period.
As the core business and Hmm JV reported comparatively stronger results in the prior year period.
As noted projects that had been delayed for a couple of quarters began to commence in the second quarter of 2019.
As a result, we expect improved adjusted EBITDA performance in the back half of 2019 compared to the first half of 2019.
With a robust backlog of approximately 406 million as of June 32019, including approximately $92 million of install backlog.
Which is 59 million greater than the prior year, we continue to believe marine is well positioned.
To grow adjusted EBITDA overtime.
As of June 32019, 82 had consolidated cash cash equivalents and investments to 4.5 billion, which includes cash and investments associated with HG choose insurance segment.
Moving the insurance segment consolidated cash was just under 54 million.
Finally, we once again reaffirmed guidance at our construction segment for the full year 2019, and adjusted EBITDA of between 75 and $80 million.
Thank you for your time today and I'd now like to open up the call for your questions operator.
Thank you we will now begin the question and answer session.
To ask a question you May press Star then one on your telephone keypad.
If you are using a speakerphone. Please pick up your handset before pressing the keys if it anytime a question has been addressed and you would like to withdraw your question. Please press Star then too.
At this time, we will pause momentarily to assemble our roster.
The first question will come from Sarkies.
Sure bet Sheehan with B. Riley. Please go ahead.
Good afternoon, and thanks for taking my question here.
So you've reaffirmed the guide for the construction segment and implies roughly 40 million plus in EBITDA in the second half.
Can you share what you're seeing in your backlog maybe changes in the margin profile of your business being booked maybe whats kind of going on with regard to the health of the end markets served either pluses or minuses and I have some follow ups.
Yes sure.
As we kind of explained in previous.
Paul we fully expect that the backlog to come down as we focus more on that.
The.
Smaller truck smaller deals smaller projects.
And we're not necessarily seeing a.
Margin any any sort of substantial margin increase.
But.
There is just a phenomenal consistency that we're seeing in the number of opportunities out there and.
Clearly we don't take every project that's put in front of us and I think weve and rustin and team have proven that many times before so.
Wow.
Where we could no doubt have a larger backlog and there's just certain projects that we don't want to do that from margin perspective.
Are not doing it for us.
But.
From a visibility perspective.
Things are kind of going as we expected.
We haven't seen any deterioration in margin quite frankly at all.
So it's just kind of I don't want to say business as usual, let Chuck but things are going quite well.
Good that's helpful.
Just kind of switching gears here to Marine services I know, it's under strategic review you gave us a little bit of color in the prepared comments and Mike I know you mentioned you'd expect the second half EBITDA to improve versus what we saw here in the first half, yes, and if I look at the backlog disclosure peers, the installed projects or up nicely can you maybe help us understand what kind of the second half contribution could look like.
And then I have a follow up as well there.
Yes, I think because of the sensitive there because of the sensitive tivity around the sales process, we can't really discuss.
Specifically in the numbers, but that being said we are.
Very excited about the second half I think clearly the install backlog increasing is.
A big plus.
The maintenance business of course is the maintenance business, which continues to.
Perform as expected.
We haven't seen much of a pickup in the.
Offshore energy of course because of oil but.
At least it's not deteriorating and there continues to be a.
We continue to believe is a sizable opportunity in.
Offshore power so.
You know it's it's it's.
Im kind of.
Trying to give you some insight as to the excitement on the second half without going through numbers and we just can't do that but.
We are very.
Pleased of course with the sales process and the.
Changes that we've made there.
I think what you're seeing from.
Activity perspective is indicative of what we expected.
Upon making those adjustments from.
The first go around but.
Listen we're still very excited about this business is.
You know it ebbs and flows but not by virtue of.
Issues in the business, it's just ebbs and flows because of.
Projects in.
Complexity of the projects and the timing of the projects.
As you've seen last quarter, they had a 20 million dollar quarter.
Not last quarter, but last year this quarter.
That that volatility is.
Is unfortunately part of this business and.
No I think the buyers realize that and.
You know again, it's it's the good news is what you have to really focus on is that backlog and the backlog is probably as strong as ever.
Okay. Thanks for that so and I think just touching on the sales process you did mentioned multiple preliminary bids and attracting interest.
We have seen that it's been kind of widely reported that while we want to sell sell their stake in the Hmm JV.
Can you kind of comment on how that may impact.
Global Marine's process.
Yes, I think its from a public perspective, we've kind of everybody is seeing who they are in discussions with and.
The the progress there and.
The.
The again the interest around that project around that company.
I can't speak for Wawa, and what their plan is but.
Clearly the Hmm JV, if you really look under the hood its an expense.
Greenlee valuable company and.
So theres no question that.
Whether it's the existing buyer that walk away.
May or may not have lined up because of the the attractiveness of the business and the backlog.
Build and.
The just the ongoing demand in that sector Theres no question that my in my opinion that.
They would see.
Interest from others if.
They didnt have the one entity kind of.
I don't want to say locked in but.
At a point, where they are in their discussion. It's just it's a great business actually.
Okay. Thanks for the color there, so and I guess moving to the energy segment I think you added some some stations here and did it at the the sub sub co level.
Can you maybe give us some color or comments on the incremental sales or EBITDA to the add on stations brought to the segment and maybe if the economics are kind of similar to your existing footprint or if its.
Better or worse.
Yes, you know I think one of the one of the things.
In.
The LNG business is that you always.
Want.
To increase your customer base.
And clearly we've increased capacity.
With the with the addition of the 2020 stations, which means increasing the customer base.
And the possibility of those customers having distribution centers.
In now in in territories that we were we have stations and one of the things that we mentioned is that there is very little if any overlap and that could be very accretive if you've got.
Amp.
Having that has a customer in their existing territory.
And they also have that customer in our territory, but we don't have the contract with them.
Nor are they doing business with ADM, because amp doesn't have it.
In increasing capacity.
And people into the bigger you get in this space the better quite frankly, because of who youre dealing with they want the wherewithal they want to be able to know that they can expand to other distribution centers and while we have.
Our station base today of 60 plus.
Even though thats sounds small it's one of the top it's one of the most sizable in the industry.
And especially as it relates to CNG alone. So we like the model we like the Formula. The margins are are very strong and keep in mind, we're not operating anywhere close to capacity and quite frankly, not operating at even 50% capacity.
So.
If you can if you can if you are generating EBITDA positive EBITDA at 30% capacity or 20% capacity as you as you fill up those stations and get more volume the EBITDA contribution will be pretty phenomenal. So.
That's the one of the rationales behind the acquisition and.
The fact that we were able to do it and finance it down at the operating level without any means of financing from Holdco I think is a big plus.
And the entity down there has very strong relationships with some of the lenders I think thats kind of typical of people getting comfortable with that space and looking at those stations and under and understanding the value behind them. So we think it was a great acquisition.
We now are kind of positioned in the top one or two or.
Three at the at the at the most.
But I think you'll see some real excitement there going forward, we're very enthusiastic about that space.
Thanks, Phil I'll hop back in the queue.
Once again, if youd like to ask a question. Please press Star then one.
The next question will be from Nick Brown with Zazove Associates. Please go ahead.
Hi, Thanks for taking my question.
You obviously, we've spoken on lots of recent conference calls about the importance of paying down the holding company debt I'm, just sort of curious I mean, obviously the marine services sale as the timing is sort of not necessarily under your control, but what about why haven't you pulled any of the other levers you have at your disposal to reduce the principal of your debt or do you need all those levers just to make the.
Semi annual interest payments.
No I mean, there's no question, we have other levers.
We feel confident in what's happening at global Marine It's a very good business clearly there were some nuance is out of our control when we first launched.
Outside of the market being a horrendous market in December and January the whole.
Walkaway Association, you know quite frankly, a lot of people so we.
Took measures to two to alleviate any concerns around that and.
You know theres theres enough interest and enough momentum, where we we feel pretty comfortable now obviously there are no guarantees but the good thing is we do have a few other levers and quite frankly, you asked a good question.
There we will do what we have to do to get this debt down and.
You know I know I sound like a broken record on that but.
We.
Well were determined and.
Well, we don't feel like we need to announce that we are going down and alternative path just because of the progress we are seeing at global Marine.
Okay. Thank you for answering that question.
Welcome.
Ladies and gentlemen, this concludes our question and answer session I would like to turn the conference back over to Phil silicone for any closing remarks.
Great well, thank you everybody for.
Participating in the call today.
As you know we were we are always here to answer questions and we will answer.
However, we can within the.
The.
The metrics of what we're able to do.
But thanks again and.
Hopefully you'll be hearing from us soon on.
Other exciting things happening here. Thank you.
And thank you.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.