U.S. Markets closed

Edited Transcript of OPTT earnings conference call or presentation 11-Dec-18 4:00pm GMT

Q2 2019 Ocean Power Technologies Inc Earnings Call

PENNINGTON Jan 10, 2019 (Thomson StreetEvents) -- Edited Transcript of Ocean Power Technologies Inc earnings conference call or presentation Tuesday, December 11, 2018 at 4:00:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* George H. Kirby

Ocean Power Technologies, Inc. - President, CEO & Director

* Matthew T. Shafer

Ocean Power Technologies, Inc. - CFO, VP of Finance & Treasurer

* Michael J. Porter

Porter, LeVay & Rose, Inc. - President

================================================================================

Conference Call Participants

================================================================================

* Peter G. Ruggiere

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Good morning, ladies and gentlemen, and welcome to the Fiscal Second Quarter 2019 Ocean Power Technologies Conference Call. My name is Matt, and as a reminder, this conference call is being recorded. I'd like to turn the conference over to your host, Mr. Michael Porter, Investor Relations for Ocean Power Technologies. Thank you. You may begin.

--------------------------------------------------------------------------------

Michael J. Porter, Porter, LeVay & Rose, Inc. - President [2]

--------------------------------------------------------------------------------

Thank you, operator. Good morning, and thank you for joining us for the Ocean Power Technologies Conference Call and Webcast. On the call with me today are George Kirby, President and Chief Executive Officer; and Matthew Shafer, Chief Financial Officer and Treasurer. Following our prepared remarks, we will open the call for questions. This call is being webcast on the company's website at www.oceanpowertechnologies.com. It will also be available for replay after the call. On December 10, 2018, OPT issued its earnings release and filed its quarterly reports on Form 10-Q for the second quarter of 2019 with the SEC. All of our public filings can be reviewed on the SEC website at sec.gov or you may go to the OPT website, oceanpowertechnologies.com.

Now let me reference the safe harbor provisions of the U.S. securities law. For forward-looking statements, this conference call may contain forward-looking statements that are within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are identified by certain words or phrases such as may, will, aim, will likely, result, believe, expect, will continue, anticipate, estimate, intend, plan, contemplate, seeks to, future, objective, goal, project, should, will pursue and similar expressions of various -- variations of such expressions. These forward-looking statements are based on assumptions made by management regarding future circumstances over which the company may have little or no control and revolve -- involve risks, uncertainties and other factors that may cause actual results to be materially different from any future results expressed or implied by such forward-looking statements. Some of these factors include among are the following: future financial performance, expected cash flow, ability to reduce cost and improve operating efficiencies, revenue growth and increased sales, volume success in key markets, competition, ability to enter into relationships with partners and third-parties, delivery and deployment of the PowerBuoy, increasing the power output of the PowerBuoy, hiring new key employees, expected cost of PowerBuoys, product and building customer relationships.

Please refer to our most recent Form 10-Q and 10-Ks in subsequent filings with the SEC for a further discussion of these risks and uncertainty. We disclaim any obligation or intent to update the forward-looking statements in order to reflect events or circumstances discussed in this call. Now I am pleased to introduce Mr. George Kirby, President and CEO of Ocean Power Technologies. Good morning, George.

--------------------------------------------------------------------------------

George H. Kirby, Ocean Power Technologies, Inc. - President, CEO & Director [3]

--------------------------------------------------------------------------------

Thank you, Michael. Good morning, and good morning, everyone. I'm going to briefly discuss industry developments first. That will be followed with an update on the progress we're making on our commercialization plan as well as a little background on our ground-breaking new products. Then Matt Shafer, our Chief Financial Officer, will be up for a review of our financials. Then we'll open the floor for questions.

We're continuing to see signs of increasing demand for our PowerBuoy solutions. The last few months has seen more demand from firms involved in offshore Oil and Gas exploration as they're becoming more aware of our technology. From our perspective, the recent lower oil prices incentivize operators to reduce costs and make their operations more efficient, which in turn leads to interest in our solutions as a path to savings. Moreover, the offshore Oil and Gas sector is becoming increasingly aware that all of their operations should have a minimal carbon footprint. Taken together, this creates an environment where our solutions can fulfill a vital need, both financially and operationally. Evidence of this can be seen in the recent OPT contracts to supply PowerBuoys across a range of applications within offshore Oil and Gas. Last quarter, we shift our PB3 PowerBuoy to be deployed in Adriatic Sea, fulfilling a key milestone with our partner Eni. Likewise, we recently finalized the design work and customizations for a PB3 PowerBuoy to be shift to Premier Oil in the new year for an upcoming deployment in the Central North Sea. The values of these contracts could -- together could well exceed $3 million.

As noted in last quarter's call, OPT signed an agreement with Enel Green Power, a subsidiary of Enel Group, which is a multinational energy company and a leading globally integrated electricity and gas operator. In this contract, OPT completed the evaluation of a PB3 PowerBuoy deployment along the coast of Chile. The detailed feasibility study evaluated the PowerBuoy as an autonomous offshore platform hosting oceanographic sensor systems. This collaboration with Enel Green Power is opening new opportunities for OPT in the South American region and in the Marine energy space. Enel Green Power is a world leader in delivering renewable energy, and we're working to expand our presence in Chile and throughout South America. The sectors we're focusing on include monitoring, surveillance, subsea charging and connectivity for the offshore Oil and Gas science and research and telecommunications markets.

Our business development team has continued ongoing discussions of potential contracts with several defense contractors and government organizations. For instance, OPT continues to deepen its relationship with the Office of Naval Research, who's -- who has several projects in the works relating to autonomous power.

Also earlier this year, the Department of Energy announced $23 million in funding to support Marine energy technology projects. These initiatives are attractive sources of potential funding for us that we are actively pursuing. OPT has continued to develop a reputation as an innovator in offshore power, which has boosted demand for our solutions. We have a pipeline of more than 40 active opportunities right now and proposal and information requests are at an all-time high, which is yet more evidence of our successful brand in offshore power solutions. This is why we're confident we will receive more orders to deliver our solutions to prospective partners around the world over the coming months.

As mentioned previously, OPT recently received a new patent for a method to optimize energy in lower sea states. We've been highlighting this technology at industry conferences and exhibitions this fall, and we're including this important value-added technology into our solutions. A few weeks ago, myself and several other members of the OPT team attended a forum focused on innovation and the digital transformation of upstream Oil and Gas, cohosted by ExxonMobil and Vodafone Global Enterprise. My presentation elaborated on various new technologies and ways of working that would accelerate the digital transformation of upstream Oil and Gas. The presentation was well received and highlighted the numerous benefits of our PB3 PowerBuoy, hybrid PowerBuoy and subsea battery solutions to the offshore Oil and Gas industry.

Finally, I want to elaborate on the expansion of our suite of complementary solutions that leveraged the core technology of the PowerBuoy, particularly our new subsea battery solutions in hybrid PowerBuoy. We're in the process of developing these new products to provide further opportunities to monetize our existing expertise and technologies. Our innovative subsea battery solutions offer high-performance, cost-efficient energy storage. These robust subsea battery solutions will be designed for easy deployment and retrieval and will be able to cost-effectively withstand the pressures of the subsea world. Our energy storage solution will be modular and easily -- easy to assemble and will be used to provide modular power across a broad range of applications.

Last week, we announced the signing of a letter of intent with NEC Energy Solutions, a pioneer global and leader in the utility scale energy storage. Under the terms of the agreement, NEC Energy Solutions will be a supplier of lithium-ion batteries for our subsea battery solutions, adding further confidence to what we believe will be a very high quality and desirable subsea battery technology. We anticipate taking the first orders for our new battery solution in the coming year.

Our hybrid PowerBuoy is a smaller, liquid-fueled engine powered surface buoy. It has a high fuel capacity and provides reliable power to remote offshore locations. The hybrid PowerBuoy complements the PB3 PowerBuoy as OPT can now address a broader spectrum of customer deployment needs with the potential for additional power integration within individual projects. It's intended for shorter-term deployment such as electric ROV and AUV inspections and short-term maintenance, topside surveillance, communications and subsea equipment power support. The hybrid PowerBuoy is a lightweight and cost-effective solution with high capacity for communications in surveillance equipment. The device can be tethered to subsea payloads and subsea battery systems or can utilize a conventional anchor mooring system. The hybrid PowerBuoy can also be integrated with the PB3 PowerBuoy for standby and redundant power in lower sea states or where high availability is critical.

We believe that our hybrid PowerBuoy will outperform traditional diesel buoys that may be limited by severe weather conditions, more frequent service intervals and more frequent refueling requirements. The environmentally friendly hybrid PowerBuoy can operate for years without service and can operate in a wider temperature range than diesel buoys.

Last but not least, OPT also continues to develop its self-propelled anchorless PowerBuoy, which is designed for quick deployment and simple retrieval. This remotely controlled, self-propelled smart device generates power from the ocean waves and has a liquid-fueled engine backup system.

Ocean Power Technologies offers unique solutions to customers across the globe, and our technology and expertise continue to open doors. The fact that our ground-breaking technologies consistently point toward cost savings across so many remote offshore operations means that you can expect to hear more about new customers, new orders and continued growth in our sales pipeline in the coming quarters.

Now let me turn the call over to Matt to discuss the financials. Matt?

--------------------------------------------------------------------------------

Matthew T. Shafer, Ocean Power Technologies, Inc. - CFO, VP of Finance & Treasurer [4]

--------------------------------------------------------------------------------

Thank you, George, and good morning, everyone. The company recorded revenue for the second quarter of $141,000 compared to revenue of $94,000 for the second quarter of last year. The increase in revenues this year was due to the start of contracts with Premier Oil, Eni and Enel Green Power during this quarter. The net loss for the second quarter of fiscal 2019 was $3.9 million compared to a net loss of $2.6 million for the second quarter of fiscal 2018. The increase was largely attributable to the increase in our cost of revenues due to higher upfront spending and material costs on new projects as well as higher spending on new product development and personnel cost as we continue to scale the business towards fulfilling our current and future potential customer contracts.

Revenue for the first 6 months of fiscal 2019 was $172,000 compared to revenue of $289,000 for the first 6 months of fiscal 2018. The net loss for the first 6 months of fiscal 2019 was $7.1 million compared to a net loss of $5.2 million for the same period in fiscal 2018.

Turning now to the balance sheet. As of October 31, 2018, total cash, cash equivalents, marketable securities and restricted cash were $4.6 million down from $12.3 million on April 30, 2018.

Net cash used in operating activities during the 6 months ended October 31, 2018, was $7.6 million compared to $6.7 million during the prior year period.

Note, on August 13, we were pleased to announce that we had entered into a common stock purchase agreement with Aspire Capital. This agreement provides that Aspire is committed to purchase up to an aggregate of $10 million of our common stock over the 30-month term of the agreement. Additional details about the transaction are available in our August 27 filing with the SEC. We are encouraged and excited by this partnership with Aspire Capital. This agreement gives us greater flexibility and access to additional funding when we choose to use it.

With that, I'll turn it back to George.

--------------------------------------------------------------------------------

George H. Kirby, Ocean Power Technologies, Inc. - President, CEO & Director [5]

--------------------------------------------------------------------------------

Thanks, Matt. Before we move on to Q&A, I want to conclude by stating unequivocally that today OPT is in the best position it has ever been. We have a deeply committed team of professionals, tirelessly and aggressively pursuing and closing as many proposals as possible. Throughout the first 20 years of this company's existence, there was smart money invested in this company because of our technology. Now we are monetizing that technology. We aren't a science project anymore. We're proving that we can sell and that we can deliver to our customers. Our entire organization is excited to be where we are right now, but we're not close to being satisfied. We have high expectations as a company growing to be the industry leader in ocean energy solutions.

With that, operator, we're now ready to take questions.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) Our first question is from Peter Ruggiere from Dawson James.

--------------------------------------------------------------------------------

Peter G. Ruggiere, [2]

--------------------------------------------------------------------------------

So a question, looking at the slide the -- that you just had it. Did you guys already deploy this sort of early November in the Adriatic Sea? Is that true or is it on the way there?

--------------------------------------------------------------------------------

George H. Kirby, Ocean Power Technologies, Inc. - President, CEO & Director [3]

--------------------------------------------------------------------------------

What we said was, we had shipped the buoy. We are under a very strict confidentiality agreement with Eni, which precludes us from talking about their operations until they give us their written approval. So we really can't talk about anything more having to do with that deployment.

--------------------------------------------------------------------------------

Peter G. Ruggiere, [4]

--------------------------------------------------------------------------------

Did you ship one to Premier Oil yet? It says December 18 to ship up.

--------------------------------------------------------------------------------

George H. Kirby, Ocean Power Technologies, Inc. - President, CEO & Director [5]

--------------------------------------------------------------------------------

No, actually we were able to do even more value-added engineering and customization to this buoy. This is going to be a showcase buoy for Premier Oil and really for all decommissioning applications. So we just got done with all that design work and customization, and we're looking to ship that in 2019 -- for a 2019 deployment with Premier Oil.

--------------------------------------------------------------------------------

Peter G. Ruggiere, [6]

--------------------------------------------------------------------------------

All right. Here's a couple of questions for you. You guys have probably about $2.8 million in cash right now, that's 3 months. And this Aspire Capital, that $10 million, I mean, you can draw this down, how much have you have drawn down from the $10 million so far?

--------------------------------------------------------------------------------

George H. Kirby, Ocean Power Technologies, Inc. - President, CEO & Director [7]

--------------------------------------------------------------------------------

Well, first of all, backing up, Matt, what is our exact announced cash balance?

--------------------------------------------------------------------------------

Matthew T. Shafer, Ocean Power Technologies, Inc. - CFO, VP of Finance & Treasurer [8]

--------------------------------------------------------------------------------

Yes, so Peter, thanks for the questions. Our cash as of the end of the reporting period, October 31, was $4.6 million, and we're continuing to hold that, our historical burn rate, that we've talked about with you in the past. So we're expecting to have that cash on hand to get us into the quarter ended of April 2019. With respect to your second part of your question, we've drawn down a very limited number of shares, it's actually disclosed in our 10-Q that we filed last evening with the SEC, so far.

--------------------------------------------------------------------------------

Peter G. Ruggiere, [9]

--------------------------------------------------------------------------------

Okay. Now here's another [question]. Have you guys received a letter about a reverse split from NASDAQ yet?

--------------------------------------------------------------------------------

George H. Kirby, Ocean Power Technologies, Inc. - President, CEO & Director [10]

--------------------------------------------------------------------------------

Yes, Peter, we've talked about that a few times. Now that letter was received back in August, and it gives us 180 days to be able to correct until we have another discussion with NASDAQ about it.

--------------------------------------------------------------------------------

Peter G. Ruggiere, [11]

--------------------------------------------------------------------------------

Okay, so it puts us into January, right?

--------------------------------------------------------------------------------

George H. Kirby, Ocean Power Technologies, Inc. - President, CEO & Director [12]

--------------------------------------------------------------------------------

January, February, time frame.

--------------------------------------------------------------------------------

Peter G. Ruggiere, [13]

--------------------------------------------------------------------------------

I've been with you guys for over 2 years now. I mean, the technology is great, you guys have been around for 25 years. I just -- the only thing that upsets me is the stock price. And I don't -- I mean, why isn't someone just given like maybe -- like invested like a big chunk into you guys with all this potential?

--------------------------------------------------------------------------------

George H. Kirby, Ocean Power Technologies, Inc. - President, CEO & Director [14]

--------------------------------------------------------------------------------

Well, look, I don't think there's -- I think it's safe to say that we're at least as dissatisfied with the share price as our shareholders are. I really can't comment too deeply about your question. But I can say this, now that we are commercialized and further commercializing as more demands materializes into actual orders, we become attractive, and we will be able to have discussions more and more of those types of discussions with a wider birth of potential partners. So as we deliver more contracts, opportunities will grow, we believe anyway. That's why we are 100% focused on trying to build a pipeline and get as many contracts in that pipeline and get them close as quickly as possible.

--------------------------------------------------------------------------------

Peter G. Ruggiere, [15]

--------------------------------------------------------------------------------

In the next 6 months, with Premier, Eni and Enel, what type of revenue do you see possibly happening?

--------------------------------------------------------------------------------

George H. Kirby, Ocean Power Technologies, Inc. - President, CEO & Director [16]

--------------------------------------------------------------------------------

Well, we said that the potential revenue for Eni and Premier Oil combined is over $3 million. We've also talked about the fact that we have over $10 million of outstanding proposals right now, and these are proposals that -- I would say the majority of them we're hoping to close before the end of fiscal year if they close, if we win them. There are some that could trickle into fiscal year '20, and then there's also revenue-generating opportunities from additional value that we can bring to customers throughout the course of the contract. Things like change orders for additional customization, maybe a longer-term maintenance agreement or additional monitoring and surveillance. There's always opportunities in working with our customers to deliver more value to them and to materialize more revenues on our side. So that's how we're looking at revenue generation right now.

--------------------------------------------------------------------------------

Peter G. Ruggiere, [17]

--------------------------------------------------------------------------------

On the Eni and Premier Oil or all these other -- the $3 million you're speaking of, is that over a 3-month, 6-month, a year period time?

--------------------------------------------------------------------------------

George H. Kirby, Ocean Power Technologies, Inc. - President, CEO & Director [18]

--------------------------------------------------------------------------------

That's over the -- yes, that's a good question, Peter. That's over the course of their contracts. As you can -- we actually 8-K-ed the contracts. There were some pricing areas that we redacted simply because that's competitive information that we're launching into these markets with. So we want to maintain as much of an edge as we possibly can. But I will tell you that both contracts have the ability to actually buy our PowerBuoy throughout the course of the contract, which is a very favorable term, and it also points to credibility and confidence right out of the gate with what it is that we're trying to do with our product with these customers.

--------------------------------------------------------------------------------

Peter G. Ruggiere, [19]

--------------------------------------------------------------------------------

Right. And how many buoys are built right now?

--------------------------------------------------------------------------------

George H. Kirby, Ocean Power Technologies, Inc. - President, CEO & Director [20]

--------------------------------------------------------------------------------

We are working on numbers 3, 4 -- I'm sorry, 4, 5 and 6. So we're actually building 3 buoys right now in our new facility in Monroe Township. And I will point out that those buoys are not being built on spec. That's really all that I can tell you about that right now.

--------------------------------------------------------------------------------

Operator [21]

--------------------------------------------------------------------------------

(Operator Instructions) And if there are no further questions, I'd like to turn the floor back to management for any closing comments.

--------------------------------------------------------------------------------

George H. Kirby, Ocean Power Technologies, Inc. - President, CEO & Director [22]

--------------------------------------------------------------------------------

Great, thank you. I'd like to mention a few points since there -- we only had questions from Peter. I know that many investors either joined the call or listened in, maybe they choose not to ask questions. But there certainly is a lot of talk about, and there's -- I'm sure, there's a lot of questions out there. So I'll provide some more points and see if I can answer any of those unanswered questions.

Just to give a brief update on where we are with current customers. I really already talked about that, potential customers, our operations. Many of you may have seen on our social media that 2 weeks ago, we hosted the Korean Agency for Defense Development. They came to visit us by their request. They are looking at a possible powering of sonar arrays for the Korean Navy. So that was a very interesting first meeting with them. Tomorrow we'll be hosting a team from AT&T to discuss potential communications networks, powered by our PB3 PowerBuoy and other opportunities. It's really just an opportunity for this team, commercial and technical team coming into our facility to see our PowerBuoys being built, to see our operations, to really deep dive into our company and for us to mutually explore potential opportunities for the future.

I talked a little bit about our pipeline. The biggest thing that we can do right now for our company health as well as for our investors is to build a robust pipeline. The more real opportunities that we can develop in our pipeline and push towards the proposal phase, the more healthy we will be. And the reason why is, these are very long lead-time conversions for opportunities. It takes a long time to evaluate these proposals that we're putting out and also to bring a contract to fruition. So the best thing that we can do is have multiple opportunities in the pipeline and be working them simultaneously. I can't even begin to express how much effort this takes, it takes tremendous commercial and technical and project management and finance and legal effort, a very huge team effort. In fact, the demand that we're seeing by way of request for information and RFPs is causing us to really have to keep up with all of these requests, we're often times working throughout the weekend in order to respond and respond to deadlines imposed by customers. So really, our focus, right now, is to build this robust pipeline and deliver on the pipeline, to drive opportunities to closure. That is 100% what we're focused on as well as delivering on those contracts for our customers.

Our customers are really also excited about our new product developments. Our hybrid PowerBuoy is a much smaller PowerBuoy, and therefore, it's much more cost-effective when you compare the 2, but they're really 2 different missions. The PB3 PowerBuoy is really intended for a longer-term deployment. We would like to say, anywhere from 6 months to 3 or more years. Whereas the hybrid PowerBuoy was innovated in order to fill the gap for our customers for a much shorter-term deployments. It also enables topside management. So when fuel needs to be refilled, we don't even need to refuel the buoy at sea, we can do what's called a hot swap, where we're simply taking the buoy that is out of fuel and replacing it with one that is full of fuel. This is appealing, very appealing for our customers, and there's a lot of interest being generated and a lot of request for information that we're responding to.

Again, these products, these new products are still under development. Our engineering team is primarily focused on delivering for our current customer contracts, supporting our request for proposals and then as a final focus on new products. So that's where our technical team is focused. Our subsea battery solutions are really a natural fit. Number one, the markets that we're selling into are buying subsea battery systems. They take these battery systems, they put them on the seafloor and they'll have a period of weeks or months of continuous power before the batteries drain. Up until recently, these batteries really did not have the ability to recharge without a vessel coming out to sea plugging into them in some way or just simply replacing them. So what we offer is the PB3 as a perpetual recharge capability, and it's really attracted the attention of the customers that we're calling on.

The letter of intent that we signed recently with NEC for us is a very big deal. Number one, it's the start of OPT looking to partner with lithium-ion battery companies in order to supply these batteries into our subsea solutions. Deep-sea batteries often times, not always, but often times require things like a pressure vessel that you actually put the lithium-ion batteries inside. The pressure at subsea can be so great that these pressure vessels are needed in order to regulate the environment for the batteries to work. So a company like NEC Energy Solutions will only provide the lithium-ion batteries into our solutions. We'll develop with other partners the rest of the solution, and we'll will provide it into the market along with our PB3 PowerBuoy or our hybrid PowerBuoy. So this letter of intent with NEC is a fantastic opportunity for us. We believe it's a great opportunity for NEC to enter the subsea market, and what a great name to be associated with. A globally recognized name like NEC is going to be partnering with us to enter the subsea battery market. This is really exciting for us. So we're hoping to have that agreement in place early next year. That's what we're working towards. And by the way, what it takes to get to that agreement, there are technical considerations, there are commercial, and obviously, legal considerations. So there's a lot of work out with them. But we wanted to let our shareholders know that we are looking to enter into this agreement with a big company like NEC. We're really excited about that.

As we mentioned, we have cash runway into the quarter ending April 30, 2018, but we also have a very cost-effective agreement with Aspire. And this gives us the opportunity to raise as much as $10 million. So that coupled with the fact that we're beginning to recognize revenue and receive cash from our current contracts as well as that we're constantly evaluating and implementing opportunities to further reduce our cash burn, we feel that we're very well positioned right now. When you compare where we are today compared to where we were last year, we've made tremendous progress. We have 2 Oil and Gas contracts for PowerBuoys, we completed a study for another market, revenues are beginning to come in the door, new products are under development based on actual market demand, we have a pipeline of opportunities and that pipeline is building, we have several proposals under evaluation for over $10 million, a team and an operation that's securing and delivering on contracts. For the first time, this company has a product with more on the way, markets that want our solutions and a team that can close and deliver. When I arrived nearly 4 years ago, we had to start from scratch while also dealing with several, very big legacy issues. Today, just about all of those legacy issues are behind us, and in a very short time, our team has turned this business into a viable entity.

I'm extremely proud of what we've accomplished, and I'm extremely excited about how we're positioned and what's to come. We're healthier and stronger company today than ever before.

Before we conclude here, I want to thank everyone who has been a stakeholder in the company and who's been following us and helping us to grow. I want to wish everyone a wonderful holiday season, and I invite everyone to follow us on social media, including LinkedIn, Facebook, Twitter and to watch our YouTube channel for some terrific footage of the PB3 PowerBuoy's capabilities and other videos. We plan on utilizing these platforms to keep everyone up to date with our progress. In fact, we expect to have even more great footage released on YouTube soon. So please stay connected with us.

Thank you for joining, and we'll speak to you in 2019.

--------------------------------------------------------------------------------

Operator [23]

--------------------------------------------------------------------------------

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.