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Edited Transcript of RRTS earnings conference call or presentation 6-Nov-19 3:00pm GMT

Q3 2019 Roadrunner Transportation Systems Inc Earnings Call

CUDAHY Nov 13, 2019 (Thomson StreetEvents) -- Edited Transcript of Roadrunner Transportation Systems Inc earnings conference call or presentation Wednesday, November 6, 2019 at 3:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Chelsea Mitchell

Roadrunner Transportation Systems, Inc. - Director of Marketing & Corporate Communications

* Curtis W. Stoelting

Roadrunner Transportation Systems, Inc. - CEO & Director

* Michael L. Gettle

Roadrunner Transportation Systems, Inc. - President, COO, Secretary & Director

* Patrick J. Unzicker

Roadrunner Transportation Systems, Inc. - Executive VP & CFO

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Conference Call Participants

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* Boris Senderzon;Hilbar Capital;Founder, Chief Investment Officer

* Jizong Chan

Stifel, Nicolaus & Company, Incorporated, Research Division - Associate VP & Equity Research Analyst

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Presentation

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Operator [1]

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Greetings, and welcome to the Roadrunner Transportation Systems 2019 Third Quarter Financial Results Conference Call. Today's call is being recorded.

At this time, I will turn the call over to CEO, Curt Stoelting. Please go ahead, sir.

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Curtis W. Stoelting, Roadrunner Transportation Systems, Inc. - CEO & Director [2]

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Thank you, and good morning. Welcome to today's conference call. Joining me are Mike Gettle, our President and Chief Operating Officer; and Pat Unzicker, our Executive Vice President and Chief Financial Officer. Also joining us is Chelsea Mitchell, our Director of Marketing and Corporate Communications.

To begin, Chelsea will cover the safe harbor statement.

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Chelsea Mitchell, Roadrunner Transportation Systems, Inc. - Director of Marketing & Corporate Communications [3]

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Before we begin, I would like to remind everyone that a number of statements made today will be forward-looking statements that relate to future events or performance. These statements reflect our current expectations, and we do not undertake to update or revise these forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied in these or other statements will not be realized. Please be cautioned that these statements involve risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from the forward-looking statements. These risks and uncertainties include the risk factors set forth in our SEC filings.

Our commentary today will include non-GAAP financial measures. Reconciliations between GAAP and non-GAAP financial measures for reported results can be found in our press release, which we have posted to our website.

Additionally, the slides accompanying today's presentation can be accessed in the Events and Presentations tab in the Investor Relations section of our website at rrts.com.

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Curtis W. Stoelting, Roadrunner Transportation Systems, Inc. - CEO & Director [4]

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Great. Thanks, Chelsea. Before we cover today's information, I'd like to again thank our management team, our team members, our pilots, drivers, independent contractors, customers, vendors and business partners for their ongoing trust and support. We're also happy to welcome Pat Unzicker to our executive management team officially on this call.

Today, on the call, we'll cover the following topics. I'll provide some opening comments. Pat will provide a summary of our consolidated results for the 2019 third quarter and the first 9 months. Mike Gettle will cover third quarter business trends in each of our 4 segments, and then I'll come back and provide an update on our strategic focus going forward, and then we'll take some time for Q&A.

So moving on to Slide 5. Just to cover the opening comments and the headlines. Our revenue and adjusted EBITDA declined in Q3 of 2019, primarily due to lower market demand and rates, amplified by the strike at our largest customer, General Motors, which reduced revenue by approximately $17 million for the last 2 weeks of September and an estimated $31 million in October.

The good news is the GM strike is now over, and we are seeing a ramp-up in production-related activities. Also, late in the quarter, we successfully managed a malware attack, quarantined servers and applications, primarily impacted the LTL segment, where revenues were reduced by approximately $7 million in September and an estimated $3 million in October.

Excluding the impact of the malware attack, the LTL segment grew revenue by 1.8%, and that's overcoming lower fuel surcharge revenues on a year-to-year comparison and a softening in the overall LTL market. Having survived the malware attack, we have accelerated our infrastructure security and resiliency measures.

In terms of IT investment plans, our Peak enterprise logistics technology platform implementation is on track, which covers both our Active On-Demand and Ascent segments, and we are increasing our technology investments in the LTL segment.

In all 3 segments, these IT investments are expected to improve our go-to-market, our customer visibility, our customer service capabilities as well as improve the efficiency of our operations and back-office functions.

As we announced at the end of the quarter, we initiated the downsizing of the dry van business within the Truckload segment and now have a path to improve operational performance.

Yesterday, we finalized the successful divestiture of the Intermodal services business within the Truckload segment. We sold that business for proceeds of over $51 million. These proceeds have been used to reduce debt and finance leases and provide additional liquidity for the business.

So despite a challenging quarter, we are making progress on our strategy to narrow our focus to the value-added logistics and asset-light LTL businesses in our portfolio.

We'll talk more on that topic later in the presentation. As we stated on prior calls, we expected some bumps in the road, and we've certainly got them in the third quarter. Although some of the businesses continue to experience some short-term volatility, primarily related to market conditions, our overarching focus continues to be to achieve improved performance and sustainable returns on invested capital in our core destination company segments.

I'll now turn the call over to Pat Unzicker, our EVP and CFO.

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Patrick J. Unzicker, Roadrunner Transportation Systems, Inc. - Executive VP & CFO [5]

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Thanks, Curt, and good morning, everyone. A summary of our financial results for the third quarter is on Page 7.

Third quarter revenues decreased $77.4 million or 14%. The strike at General Motors and the malware attack represented $24 million of decline. Excluding these 2 events, revenue decreased 10% in the quarter driven by declines in air and ground expedite at Active On-Demand and reduced volumes and rates at Ascent and within our Truckload businesses.

Our operating loss of $92.8 million widened by $82 million as compared to the year ago quarter. Primary drivers of the operating loss are noncash impairment charges of nearly $40 million related to our Ascent and Dry Van businesses. We also incurred operations restructuring costs and charges of $13.4 million, including a $10.1 million noncash impairment charge related to our Dry Van business to improve its operating performance and the impact of the General Motors and malware strike adversely impacting margin by approximately $6 million. Excluding the items of these nonrecurring events, our operating loss widened by approximately $23 million, reflecting lower volume and pricing from current market conditions.

For the quarter, we recorded a net loss of $97.8 million and loss per share of $2.60.

With respect to the malware attack, we are filing a claim to recover incremental expenses associated with restoring our systems as well as lost business profits under our insurance policy.

An analysis of our quarterly revenue by segment is on Page 8. Revenues in our LTL segment would have grown excluding the impact of the malware attack. Mike Gettle will provide additional context in his business review in a couple of minutes.

On Page 9, we've included a calculation for adjusted EBITDA. And for your reference, our financial results for the first 9 months are included on Pages 10 to 13.

On Page 14, we have a table of our outstanding debt. We ended the quarter with $240 million of outstanding borrowings. As of September 30, 2019, our cash on hand and availability under our ABL revolving credit facility was approximately $35 million. The net proceeds from the Intermodal divestiture provides additional liquidity.

And with that, I'll turn the call over to Mike.

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Michael L. Gettle, Roadrunner Transportation Systems, Inc. - President, COO, Secretary & Director [6]

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Thanks, Pat. Good morning, everyone. I'm pleased to be able to share additional commentary regarding operations in each of our segments starting with Ascent on Chart 16.

Our Ascent Global logistics revenue in Q3 was $125.9 million and decreased by 13.5%, and our adjusted EBITDA was 7.1% and was 18.5% lower than the prior year. Our strategy in Ascent is based on improving integration, which enables easier access for more of our brokerage capabilities by more of our customers, including Active On-Demand air and ground expedite service offerings. As part of this integration, we are consolidating our IT capabilities into one proprietary enterprise brokerage platform for both our Ascent and Active On-Demand segments.

Revenue was down 22.9% in our domestic freight management business because of lower brokerage load counts and rates as well as from the planned reduction in our fleet used to back up our brokerage in certain tight lanes. These declines were partially offset by improved brokerage margins and by reduced operating costs.

Our Q3 and year-to-date segment adjusted EBITDA declines are primarily due to the lower volume and rates in our domestic offering.

Our international freight forwarding revenue grew 4.4% versus the prior year due to increased volumes with current customers and recent new customer wins as a result of the focused investment in our sales force. We grew our export volumes in Q3, but this was partially offset by declines in ocean import volumes, which have been impacted by uncertainty caused by the current geopolitical climate.

In retail consolidation, we had modest revenue growth with improving profitability from improved freight margins and warehouse productivity.

Turning to Active On-Demand on Chart 17. Our revenue in Q3 was $108.3 million and decreased by 25.9% from 2018 Q3. Our Q3 adjusted EBITDA was $2.3 million and was approximately $5.4 million lower than a year ago. The strategy at Active On-Demand is to provide premium, mission-critical air and ground expedite logistics services or driving operational improvements and further execution of world-class client solutions, including the ability to quickly mode shift and to leverage IT scale with other Ascent brokerage systems.

Market demand in Q3 for expedited air and ground declined versus the prior year and resulted in lower volumes and rates, which were amplified by a $13 million revenue impact from the General Motors strike. While lagging prior year levels, our air and ground revenue trends during Q3 prior to the strike were improving over Q2 of 2019. The percentage of revenue captured on our own aircraft increased both sequentially and year-on-year due to improved fleet availability.

Our 2019 segment adjusted EBITDA decline was primarily driven by the reduced trip volumes and market rates in air expedite. It's important to note that Active On-Demand short-term volatility historically moderates over longer periods. Our business capabilities remain intact to capture revenue and improved profitability as demand improves.

Turning to LTL on Chart 18. Our revenue in Q3 was $107.3 million and declined 5.9% from the prior year. Our adjusted EBITDA was a loss of $9.8 million, which was approximately $5.6 million higher than a year ago. The malware attack, which created significant challenges in shipment visibility, billing and imaging systems played a significant role in this decline in profitability. Although we continue to pick up and deliver our customers free, we proactively reached out to customers to remove us from routings, and our team did a great job of keeping customers and partners abreast of network updates.

Financially, we estimate we incurred approximately a $7 million reduction in revenue. Our pickup in delivery and our dock costs were negatively impacted due to challenges with planning and lower route density, and we increased our bad debt reserves to account for challenges in billing and imaging systems.

Our LTL Q3 adjusted revenue decreased 2.7%, excluding fuel and 4.6%, including fuel, primarily due to the malware attack. Our revenue per day, excluding fuel, was growing 1.8% in the quarter-to-date prior to the malware attack.

Adjusted revenue per shipment was down 3.4% excluding fuel and 4.9% including fuel. Quarter-to-date shipments per day were down 3.2%, primarily due to the malware attack. Prior to the malware attack, quarter-to-date shipments per day were growing at 1.5%.

We continue to have success driving our tiered strategy, revenue in our Tier 1 major metro lanes was 67% in Q3 versus 62.3% in Q3 of 2018, while revenue in our Tier 3 rural area lanes declined from 12% in Q3 of 2018 to 10.6% in Q3 of 2019.

Our third quarter direct costs as a percentage of revenue remained flat year-over-year, primarily due to the operational inefficiency in pickup, delivery and dock operations stemming from the malware attack. Line haul cost and efficiency improved year-over-year due to improved operational planning and market conditions.

Finally, turning to our Truckload segment on Chart 19. Our revenue in Q3 was $127.2 million and declined by 9.6% over 2018 Q3. Our adjusted EBITDA was a loss of $5.6 million, which increased by approximately $3.6 million from 2018 Q3. We are currently assessing alternatives in this segment consistent with our strategy to simplify the portfolio by narrowing our focus to value-added logistics and asset-light LTL segments.

Our Intermodal Services business was divested on November 5 for $51.3 million and we're executing a plan to improve segment profitability by downsizing our Dry Van business.

Our over-the-road capabilities include dry van, temperature-controlled and flatbed fleets, which comprised 67%, 21% and 12% respectively of year-to-date 2019 over-the-road revenue.

Dry van revenue declined 11% in Q3 due to lower freight volumes, amplified by the $4 million impact from the General Motors strike. Temperature control revenue in Q3 declined modestly, primarily from a decline in rates, partially offset by increased fleet.

Our Temperature control profitability has improved versus the prior year, both in Q3 and year-to-date 2019. Our Intermodal Services revenue decline in Q3 was primarily from reduced load counts due to market softness as well as adverse effects from Hurricane Dorian and the malware attack.

That concludes our comments on the operating segments, and I'll turn the presentation back over to Curt.

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Curtis W. Stoelting, Roadrunner Transportation Systems, Inc. - CEO & Director [7]

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Thanks Pat, and thanks Mike.

Moving on to Slide 21. We'll just give a quick update on our strategic focus. As we've indicated on the call, we continue to work on our strategic assessment, especially in the Truckload segment. We covered our goal, which is to simplify our portfolio, and we are making progress on that goal as we've covered on the call. We also have a financial goal around the -- our strategy, and that is to improve our operating performance, increase our return on invested capital, and over time add significant value creation opportunities. And again, we think narrowing the portfolio is the way to improve in all those areas.

I just want to cover some specifics as it relates to the Intermodal Services divestiture, which we completed yesterday. Clearly, it simplifies our portfolio. We've eliminated 700 power units and over 200 -- I'm sorry, over 20 terminal locations. This transaction allows us to reduce debt and finance leases by over $22 million and also eliminates ongoing debt service and interest costs and related CapEx requirements around that business. This divestiture also reduces future auto liability and Workers' Comp insurance costs and claims exposure and reduces our future exposure to reclassification, litigation and legislation.

The proceeds from this transaction, as Pat mentioned, also provide additional liquidity for the business.

Simplification also allows us to increase the pace by which we can improve our internal control remediations.

Lastly, this transaction immediately improves our return on invested capital. I also want to talk about the dry van downsizing. Through this downsizing, we're reducing our power units by about 350. We're also reducing our trailer count in that segment or in that business unit. And we're reducing our terminal footprint by 5 locations. Many of the benefits I listed above apply here. It also allows us to improve our operating performance and allows for future divestiture of this business.

Finally, and I think equally importantly, we could -- equally important, we consider -- we are actively considering other divestitures that will enable our portfolio simplification strategy.

So that concludes our remarks. We'd now like to turn the call over back to Jimmy for a quick Q&A session.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from Bruce Chan with Stifel.

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Jizong Chan, Stifel, Nicolaus & Company, Incorporated, Research Division - Associate VP & Equity Research Analyst [2]

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A tough quarter for sure. You had a lot of one-offs, but also a lot of bigger picture issues that, I guess, are weighing on you just like everyone else. I'm wondering if maybe we can take a step back for a moment and talk about what the environment is like obviously outside of GM and the malware attack and all that stuff. Industrial and automotive, I know remain under pressure, but what are you hearing from your customers on the AOD side and on the LTL side? And then with Ascent, both domestic and international, what do you make of where we are in the cycle right now?

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Curtis W. Stoelting, Roadrunner Transportation Systems, Inc. - CEO & Director [3]

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Well, Bruce, that's a great question. I don't know that we have perfect perspective on where we are in the cycle. Clearly, the Truckload businesses have been mostly impacted here and the brokerage businesses as well on volume and rates followed as volumes have declined. So there's just been a lot of one-off activity in the macro environment too, the impact of tariffs, the impact of changes in seasonal patterns from what we normally experience. I think it made it a challenging year for everybody in transportation and logistics. So I don't know that we have any unique perspective to share that others haven't already.

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Jizong Chan, Stifel, Nicolaus & Company, Incorporated, Research Division - Associate VP & Equity Research Analyst [4]

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I guess there's been some talk of capacity coming out, but nobody really seems to be able to pinpoint it. Is that consistent with what you're seeing in the marketplace right now?

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Curtis W. Stoelting, Roadrunner Transportation Systems, Inc. - CEO & Director [5]

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Again, I don't know that we really have a great view on that. I mean, clearly, we're reducing capacity in our Dry Van business. And that's due for -- to do a couple of reasons, that's being responsive to customer demand as the micro environment. But more importantly, it's really based on our strategy to focus more on our value-added logistics and asset-light LTL segments.

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Jizong Chan, Stifel, Nicolaus & Company, Incorporated, Research Division - Associate VP & Equity Research Analyst [6]

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Okay. That's fair. I guess I just want to switch over to AOD and a little bit more specificity. I know, Mike, you mentioned that there were some sequential improvements over 2Q, but generally speaking, another quarter of soft activity there. And I guess I'm asking because we haven't seen this segment broken out for too long. So maybe you can give us maybe some color on what a typical cycle looks like for AOD? And then, also maybe talk about some of the vertical exposure, how much is heavy industry, how much is auto, any pockets or regions that were weaker than others? And I guess more generally, what do you need to see in terms of catalysts or an environment for this segment to really start working again?

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Curtis W. Stoelting, Roadrunner Transportation Systems, Inc. - CEO & Director [7]

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Bruce, that was like the best triple-compounded question I think I've ever gotten, so compliments to you. So we'll let Mike take that one on in 3 parts.

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Michael L. Gettle, Roadrunner Transportation Systems, Inc. - President, COO, Secretary & Director [8]

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So I think, Bruce, just starting with the overall environment, this business is a leader in this space. It's a very capable business with -- that's underpinned by terrific technology and strong customer relationships. We continue to have very strong customer support of the business. But it is an event-driven, more episodic and volatile business, and we're operating at a market that's relatively loose and haven't had a lot of supply chain disruption. I think if we look at this business over the longer term, what we've seen is the short-term volatility typically moderates into a more stable kind of rolling 12-month performance. We had a terrific performance in 2018 and a weaker market and performance in 2019. But the AOD capabilities and its leadership position in this space, I think remains intact.

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Curtis W. Stoelting, Roadrunner Transportation Systems, Inc. - CEO & Director [9]

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And an excellent management team and excellent team members there as well. So we couldn't be happier with that business.

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Jizong Chan, Stifel, Nicolaus & Company, Incorporated, Research Division - Associate VP & Equity Research Analyst [10]

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So looking at what's going on with the GM strike, and obviously we've seen a resolution there and maybe if we get a resolution or some resolution on the tariff front, is that the type of environment that would really spark a lot more activity in Active On-Demand?

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Michael L. Gettle, Roadrunner Transportation Systems, Inc. - President, COO, Secretary & Director [11]

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I would say anything that creates supply chain disruption is really good for us, and the restart of the strike and the level to which product is out of place in the cycle would be a tailwind for us. We expect that would take a little time. It wouldn't appear on day 1. So I think we'll know more about that over the coming weeks and months.

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Jizong Chan, Stifel, Nicolaus & Company, Incorporated, Research Division - Associate VP & Equity Research Analyst [12]

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Okay. And then maybe just one more on the LTL side here before I let you off the hook. Really just want to focus in on yield. It looks like -- well, I guess first a point of clarification, you mentioned in the slides QTD volumes and revenue. Was that quarter-to-date 3Q before the malware attacks, or was that quarter-to-date for Q4?

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Michael L. Gettle, Roadrunner Transportation Systems, Inc. - President, COO, Secretary & Director [13]

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That was Q3 quarter-to-date.

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Jizong Chan, Stifel, Nicolaus & Company, Incorporated, Research Division - Associate VP & Equity Research Analyst [14]

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Okay. Got it. So on the yield side, it looks like revenue per hundredweight was flattish even before the malware attacks and core yield may even have been negative with shipment size and length of haul adjustments, is that reflective of the competitive environment? Is that a function of some of the mix that's going on in the business with the long-haul metro-to-metro moves? What's driving that trend there and how do you see the LTL trends shaping up so far in 4Q on both the revenue and -- well, I guess, on both the shipments and revenue per shipment side?

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Michael L. Gettle, Roadrunner Transportation Systems, Inc. - President, COO, Secretary & Director [15]

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Yes. So that's a great question, Bruce. It really is more a mix impact in Q3. There are 3 factors that are driving it. The first is, we continue to grow our next day volume, our intra metro volume in our 19 brick-and-mortar locations, which obviously carry a lower revenue per shipment. But given our footprint, that's a very attractive piece of business for us that we hadn't historically pursued. The second thing is, we're targeting volume to intentionally drive our Tier 1 lanes, metro-to-metro rather than the more rural lanes, which would carry higher prices. And the third is, we did have an impact from the malware. We can't really overlook, it's difficult to measure, but we had a significant reduction in volume, and it also disrupted the mix. So I would say it's more mix related. As we look forward to Q4, second part of your question, we're getting contract increases on renewals. We are actively -- we're just rolling out an API spot quote tool, this will allow us to better price available capacity by lane. We're rolling out a new TMS called RapidShip that will allow us to better target small and midsized customers who don't have a TMS. So I think our activities around yield are as robust as they've ever been.

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Curtis W. Stoelting, Roadrunner Transportation Systems, Inc. - CEO & Director [16]

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And then I'll just reemphasize the point Mike made in his presentation about our -- increasing the density, our increase in Tier 1 lanes, increase in the third quarter of '19, up to 67%, and that's an increase from 62.3% in the prior year third quarter. So we think the strategy is working to create that density and ultimately take advantage of what Roadrunner freight is good at. And ultimately improve both our volume and our yield.

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Jizong Chan, Stifel, Nicolaus & Company, Incorporated, Research Division - Associate VP & Equity Research Analyst [17]

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Okay. That's great. And just a follow-up because I can't help myself, but this is the last one for real. Mike, you did talk about some of the technology implementations, and you've talked about them the past, the pricing intelligence software, the API Spot Quote tool and then the new TMS, which should be helpful. What's the time line on those initiatives? And when should we expect them to be complete or largely complete? Or when should we expect them to start having an impact?

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Michael L. Gettle, Roadrunner Transportation Systems, Inc. - President, COO, Secretary & Director [18]

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Bruce, I don't have all of those committed to memory, but the API Spot Quote tool was rolled out in the last 8 weeks or so. We are just now in the process of rolling out RapidShip, and we brought our first customers on here very recently, and we have some other very key pieces of technology in LTL. We're rolling out dock automation, which is going to improve the efficiency of our dock operations and really improve our shipment visibility. We're going live in our first terminal with that right now as we speak, and we intend to have all of our barns rolled out in the next, let's call it, 3 to 5 months.

Another key initiative for us is with our partners, to improve the real-time tracking and tracing of shipments, whether that's through EDI or API or mobile app technology, that's going to ensure that our visibility of shipment extends throughout our network, whether in our 19 owned facilities or with our partners. We're fairly well down the track on EDI. We have enhancements coming through API and our partner portal, which will roll out over the next few months. So hopefully that gives you a little bit...

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Curtis W. Stoelting, Roadrunner Transportation Systems, Inc. - CEO & Director [19]

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Yes, there's a lot going on. It's obviously very -- we're putting a lot of investment in the technology in both LTL and in our Ascent and AOD segments. But what I've learned over the years is, you're never done with technology. It's an evolution, and you just keep moving forward and keep building it better and better.

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Operator [20]

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(Operator Instructions) Our next question comes from Boris Senderzon with Hilbar Capital.

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Boris Senderzon;Hilbar Capital;Founder, Chief Investment Officer, [21]

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Could you give some more detail on debt and cash profile after Intermodal disposition? And how did you expect in savings from Dry Van downsizing?

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Patrick J. Unzicker, Roadrunner Transportation Systems, Inc. - Executive VP & CFO [22]

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Sure. So with respect to the Intermodal, our total transaction value was approximately $51 million adjusted for working capital, that allowed us to pay down about $18 million or so of capital leases associated with that transaction and about another $1 million of operating leases.

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Boris Senderzon;Hilbar Capital;Founder, Chief Investment Officer, [23]

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Okay. And on the savings that you expect going forward?

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Curtis W. Stoelting, Roadrunner Transportation Systems, Inc. - CEO & Director [24]

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Yes, I think we've announced on our announcement on the Dry Van downsizing that we would spend somewhere in the area of $12 million to $16 million to downsize that business. And we would expect to pay back within 9 to 12 months on that.

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Boris Senderzon;Hilbar Capital;Founder, Chief Investment Officer, [25]

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Understand. And from those charges that you just mentioned, how much of that is already incurred in this quarter versus going forward?

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Patrick J. Unzicker, Roadrunner Transportation Systems, Inc. - Executive VP & CFO [26]

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Sure. So with respect to Dry Van, our total charges recorded in the quarter were about $13 million, $3 million was cash related to employee severance and some other lease buyouts and $10 million of noncash related to impairments. So when we announced the Dry Van downsizing, we had an estimated range of about $12 million to $15 million of cash charges, and we've incurred about $3 million of that $12 million to $15 million to date.

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Operator [27]

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Thank you. And I am showing no further questions. I'd like to turn the call back to Mr. Curt Stoelting for any closing remarks.

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Curtis W. Stoelting, Roadrunner Transportation Systems, Inc. - CEO & Director [28]

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Okay. Thank you. I want to thank everybody for joining us today, and we look forward to speaking to you in the future. Have a good day.

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Operator [29]

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Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.