Preliminary Q4 2023 American Vanguard Corp Earnings Call

Participants

William Kuser; Director of IR & Corporate Communications; American Vanguard Corporation

Eric Wintemute; Chairman & CEO; American Vanguard Corporation

Don Gualdoni; Chief Transformation Officer; American Vanguard Corporation

Tim Donnelly; Chief Administrative Officer; American Vanguard Corporation

Scott Fortune; Analyst; ROTH MKM Partners, LLC

Chris Kapsch; Analyst; Loop Capital Markets LLC

Presentation

Operator

Hello, and welcome to the American Vanguard announces preliminary 2023 results and 2024 Outlook Conference Call web. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. You be placed in the question queue at any time by pressing star one on your telephone keypad. And as a reminder, this conference is being recorded. Based on my pleasure to turn the call over to Director of Investor Relations, Bill Cruz. Please go ahead.

William Kuser

Thank you very much, Kevin, and welcome, everyone, to American Vanguard's preliminary 2023 financial performance review. Our speakers today will be Mr. Eric Wintemute, Chairman and CEO of American Vanguard. Mr. Don go Dani, the president excuse me, the Chief Financial excuse me, the Chief Transformation Officer of the Company.
Mr. Tim Donnelly, our Chief Administrative Officer, and to assist with your questions Mr. David Johnson, the Company's Chief Financial Officer.
Before beginning, let's take a moment for our usual cautionary reminder in today's call, the Company may discuss forward-looking information. Such information and statements are based on estimates and assumptions by the Company's management and are subject to various risks and uncertainties that may cause actual results to differ from management's current expectations. Such factors include weather conditions, changes in regulatory policy, competitive pressures, and a variety of other risks that are detailed in the Company's SEC reports and filings. All forward-looking statements represent the Company's best judgment as of the date of this call, and such information will not necessarily be updated by the Company with that said, we turn the call over to Eric.

Eric Wintemute

Thank you, Bill. Hello, everyone, and welcome to the American Vanguard January '24 financial update. Today, we want to hold a brief call to give you our impressions of Q4 and full year 2023 and ahead of our formal 10-K issuance as well as to revisit our '24 outlook. We presented Slide 4 in our Q three '23 earnings call to show our financial expectations bottom line. While we have not completed the full audit cycle, we are broadly on track to meet our previously forecasted 23 numbers. Further, we remain pause positioned to meet our '24 targets. In short, our outlook is unchanged for the respect to '23 in our last call, we outlined that we had secured a supply of two important high-valued products, namely Aztec and Danko, both of which experienced availability constraints in early '23 due to supply chain issues. During the fourth quarter, we were able to produce volumes of these products sufficient to meet grower needs. Consequently, our quarter over quarter sales were up by about 8% in '23 as compared to '22. Further, we made up some of the ground that we had lost early in '23, such that our full year net sales declined by only 5% compared to the prior year. During '23, gross margins held up as we predicted and as I had predicted, and while still subject to completion of audit also appeared to be in line with our forecasted range. The same can be said for our adjusted EBITDA.
Let's turn to working capital, which we have captured on slide number five with improved sales, inventory management and robust prepaid collections. We generated enough cash and EBITDA to reduce debt, so about $139 million and inventory to about $220 million while increasing our borrowing capacity to about $100 million. In other words, we deleveraged the balance sheet significantly such that based upon initial numbers, we've been able to achieve our debt to EBITDA target ratio of 2.75 times. As you may recall, our lenders had loosened covenants during Q4 to give us sufficient room to meet working capital needs. This relief included an uptick in interest rates. If we are able to maintain our current trajectory, we should be able to return to lower rates and reduce interest expense. We will, of course, provide greater detail on Q4 and full year 2023 financial performance in our March earnings call and within our Form 10-K.
Before turning to our full year '24 outlook.
I want to report on our transformation efforts. With me today is John Bolzoni ongoing sorry, our Chief Transformation Officer, who will cover our plans to improve operating profit through cost margin and revenue initiatives. Also with me is Tim Donnelly, our Chief Administrative Officer, who is spearheading our digital transformation effort. At this point, let me turn the call over to Dan and Tim, after which I'll return with my thoughts on the 24th year. Dan?

Don Gualdoni

Thank you, Eric. It's a pleasure to be here with all of you on my two month anniversary at Ambac, as you'll see from slide 6, a robust and sustainable transformation has three core elements. First, it's multifaceted, not limited to a single area of the company or a single profitability lever.
Second, a sustainable transformation is about accountability, which requires transparency. And lastly, transformation done, right changes the DNA of the company, and that pays dividends well after the formal process completes. So where are we in this pursuit? We are drafting and implementing key performance indicators that will serve both as internal targets and as a set of vital signs for senior management and the Board. These will include factors such as sales performance against plan and compared to the prior year raw material costs, gross margin production to plan inventory, DSO, forecast accuracy and the like by driving these key performance indicators or KPIs into the organization will be driving profitability and measuring it as we go beyond KPI.s, we will take a deeper dive into our cost and capital structure, measuring fully burdened margins of our product lines, return on capital for our businesses, freight costs, selling expenses and the use of cash across multiple entities. The structural transformation should enable us to realize material improvement in our operating leverage and yield a lean platform for growth, as is typical in these types of transformation. We will also define a specific target for additional profitability on a year by year basis. We anticipate that during our next earnings call in early March we will have set the target for improved operating leverage for the balance of 2024 and full year 2025. I'm excited to be working with my and back colleagues to set our course deliver our plans and see the results flow through into our financials. We will be reporting to you on our progress quarterly. I will now turn it over to Tim to update you on our digital transformation progress.

Tim Donnelly

Thanks, Don. And let me start first by answering the question. Why are you doing a digital transformation? The short answer is so that we can grow and remain competitive.
Let's look back for a second following the point on slide number seven. As many of you know, we have grown and diversified over the past 10 years or so, largely through acquisition. When I started here nearly 20 years ago, we had maybe half dozen businesses. Today. We have 33 businesses throughout the world with that growth has come increased complexity, and we find ourselves at a stage in our growth cycle when it is necessary to step back, look at how we work and ensure that our processes are standardized and our information is current constant and easily accessible. That in a nutshell, is what we have been doing with business consultant Carney and our enterprise resource planning or ERP vendor QAD., we have conveyed to the owners of our major business processes, sales forecasting, inventory planning and to finance and define how we work today how we would like to work in the future and how we can work on the same ERP system globally.
I just signed the services and subscription contract with QAD last Friday, and we are now poised to move into the implementation phase of this effort over the next 18 months or so. Qad and our internal team will do two things. First, bring our users up on QA, DDi's latest Adaptive ERP system, and second, implement standard processes for these functions, processes that our people have themselves fashion. Through this process, we will be able to provide senior management. In fact, all users with a single source of truth through warehouse data that have gathered and rolled up in a fully automated manner in this way, management will have a top-down view of business metrics in real time. This in turn will enable us to make the best decisions in the shortest response time these days. External factors seemingly change with the wind and we cannot control them. We can, however, give our business leaders the tools to operate effectively in the face of change and in the process provide a platform for growth in order to take the next step in our evolution, digital transformation is essential.
With that, I turn the call back to Eric.

Eric Wintemute

Thank you, Tim.
Turning now to our full year 2024 outlook on slide 8, our assessment is unchanged versus our previous issued targets. That is we're still expecting revenue to rise by 8% to 12% and adjusted EBITDA to increase by 25% to 35%. One of the primary reasons for the improvement is that we do not anticipate any material supply chain savings as we had experienced last year on a relative I know many of you have heard of the shipping some impediments caused by military activity in the Red Sea. While it may have an economic impact beyond the Middle East. This activity does not directly affect shipping liners that we use for either supply or delivery. We continue to monitor developments closely, but at least for the present have not been adversely affected fundamentals. Look encouraging for '24 commodity prices, which are globally driven have been relatively stable. Interestingly, while Brazil had record crops in corn and soybean. In 2023, the ag chem industry fell by 33% within that country. By contrast, our sales in Brazil were down only 4% year over year for the adverse weather. Brazil crop numbers are forecasted by some to fall slightly in 2024. While this may continue to affect some in this industry, we do not expect a material effect on our global results with Brazil turning down, the U.S. farm economy should trend up or at least remain stable. We do expect some drag on herbicides sales for 2024 as the presence of low-priced generic herbicides within the US and international markets will remain with us. We have taken this into account in our outlook, our ex U.S. crop businesses should generate good results, bearing in mind that we have numerous portfolio in many regions. This breadth tends to blunt the effect of product specific market challenges on the non-crop zone. We expect the shift in procurement that occurred in '23. That is our customers shifting from building four to six months worth of inventory to maintain in 40 to 60 days worth of inventory will stabilize in '24. Even though retailers may buy smaller lots with greater frequency, assuming unchanged demand, the retailers will eventually buy a similar volume of goods on an annual basis. In other words, we took a hit in 2023 due to a shift in timing on orders for that timing that should even out in this current year.
That said, let me now connect up our outlook with the transformation discussion that John and Tim had covered earlier. First, our targets for '24 for that we will make host of changes that should generate $15 million in operating profit on an annualized basis. These include manufacturing optimization, reduced raw material costs, lower selling expenses and reduced freight and interest expense we have assigned these initiatives to our business leaders and are measuring them regularly in the short term. However, we have to cover additional costs, for example, relating to the transformation and implementation that will reduce the full year impact of these efforts in the 2014 year. The idea here, however, is to improve operating efficiencies so that we have stronger operating leverage in 2025 and beyond. At the same time, working with our human resources Head of Human Resources. Srini post driving down is leading the charge in defining and implementing key performance indicators that will serve to keep our team focused on the things that matter most to maintaining profit positive in May and the board a monthly health check.
In addition, Dan will establish targets for transformation transformative benefit. This is called sizing the prize. We should have that in hand this March, while not intended as a solution for improving operating leverage, our digital transformation is an accelerant to growth and increased speed of decision making. As Tim pointed out, we are a complex midsized operating company in many regions on many platforms as markets and conditions shift, we need the most comprehensive, accurate and current data to make the best decision. It's important to note that our entire team is committed to these transformation efforts. They can see the benefit from having more efficient systems and better real-time data. Further, these changes will make us leaner, faster supplier in the eyes of our customers.
Finally, we are confident that we can conduct our business profitably and efficiently, even while improving our costs and digital structures.
In summary, we are on track to achieve target performance for Q4 and full year '23, subject to the completion of the audit, our keeping our 2024 outlook unchanged and are positioning ourselves for maximize growth and profitability through transformation.
With that, I ask our operator KEVIN to poll the listeners for any questions.
Kevin?

Question and Answer Session

Operator

Thank you.
And we'll now be conducting a question and answer session. If you'd like to be placed into the question queue, please press star one at this time. One moment, please while we poll for questions. Our first question is coming from Scott Fortune from Roth and KM. Your line is now live.

Scott Fortune

Yes, good morning or good afternoon and thanks for the question on kind of big picture here. Just wanted to know if you can provide so more color on the inventories and the different geographies and channels now that we're into January here and kind of the ongoing destocking process, we're still seeing that destocking taking longer down in Brazil. But just kind of a sense of where we're at in that process, has it run its course? And are you starting to see and the although the ramp up to normalized inventories from that perspective, just kind of a big picture view of that would be great.

Eric Wintemute

Timing with regards to our specific inventories, we don't see that we've got in any areas where we're way over inventory. I would say the only it is a little bit on the on the herbicide line coming, maybe one that impacts that might have a little bit over what might be a normal inventory, but we've been pretty careful not to push and this last year.
Yes, it was that would have been difficult to tried to push people anyway because as I said, there are there were there were destocking and so on our outside of the United States, yes, we know that there are there are different products that have higher inventory.
But we're not we're not seeing it with our inventory.
So we think we have been there. If we look at demand, I mean demand was relatively stable, but there was an effort by everybody to trying to reduce their inventory. So I don't know if that's part of your question.
Fair enough, Scott?

Scott Fortune

Yes, that's great. And just kind of a follow up with, you know, building supply and inventory in as tech and data on kind of feel obviously you had supply issues last year, but kind of where are we in that process to get back to those normalized levels as you were before?
For those two?

Eric Wintemute

I mean, we started production on Aztec in September.
We completed the Aztec run in December. And with that, all of we started the production in November and still are in fact, although I think that we've produced, I think at this point enough to get us get us into May, but we'll be going into another production run and April. So I think we feel good about the supply chain of those two products.

Scott Fortune

Okay.
Any other big picture question kind of a Chinese generic as we call pressure hit more Latin American markets and down south, but just kind of a sense of the supply coming out of China on the generic side. And that is that going to run its course as the impact on pricing and margins have been hit from that kind of a little more color on where the Chinese generics are ending up here?

Eric Wintemute

I think the I mean, we track the import prices of the Chinese products. And as you noted that the cells are fairly dramatically a '23 year. We saw uptick on some of them such as the flight to safety with Classmates sorry, move back up some of the products have flattened out some of it trail down even a little bit further. But I mean there is pressure certainly on the Chinese producers, given the Chinese economy to export everything they can. But then as far as what's in the channel, we don't still have a lot of generics. We do have we do have probably maybe Central America might be might be where we have more, but we were relatively flat year over year, down, maybe three or four for I mean for 45%. I think in Central America so again, our emphasis is on our products that we manufacture.
It's where we get our best margins.
It's where it's where our focus of our of our total team is so not that we are unaffected certainly for sure, by buying lower abundance of Chinese products, but it's not certainly not an easy thing QUARTER.

Scott Fortune

Appreciate the color. And then one last one for me. Just kind of looking at your 2024 guidance. And can you are you looking to really drive growth in your same path and the green solutions kind of segments there. I know you have where you've had lofty targets there in for next couple of years. Obviously, that's probably been revised down, but just kind of put in perspective, some worse, Enpath and green solutions have fit in driving that growth in 2024? And any indications of kind of expectations for those two segments over the next couple of years?

Eric Wintemute

Here on?
Yes.
So both of them are again, technologies.
We've got intellectual property there, but we're excited about. I would say green solutions we took share didn't hit the expectations for growth that we were hoping that certainly and neither did the same path. But we did have we did have growth in both, but I think it people you are kind of dialing back investments that that's certainly out of position. But yes, going forward on the other, the commissions are sound again from the farm gate economy. I think it may have been down, but things we're kind of near record high. So there's plenty of them profit there. So I mean, there will be as moving out and we are showing the return on investments that that can be there with our Green Solution products. I think the demand continues to increase for four for green solutions as part of soil health, more efficient uptake of new trends within some patch, we continue to add to our portfolio of products. So I think we're adding several products here for this year and plan on more again for the '25 year. So as we add more products, it just builds the demand for multiple product's been applied at the time of plan.

Scott Fortune

Great. That's it for me. I'll jump back in the queue.

Operator

Thanks.
Your next question is coming from Chris Kapsch from Loop Capital Markets. Your line is now open.

Chris Kapsch

Hey, good afternoon.
I'll just pick up from that last question, I guess on the growth platforms, just curious if what you're saying just now, Eric, is Zoom or do you think that the growth objectives and trajectory for these platforms is still valid and are you going to have to adjust the time line over which you might achieve those targets? And then within peeling that back a little bit, which of the platforms are you based on the momentum or the commercial traction that you have, what which of the growth platforms do you feel most confident about in terms of the growth targets that you conveyed and which ones do you feel like maybe we're set back because of this supply chain craziness and so forth now?

Eric Wintemute

So I mean, the big growth that we're showing in that 8% to 12% is a combination of all three targets.
Yes, the we will have the March kind of kind of reset are our targets over the '25 and '26 year that we have previously given?
Yes, we obviously took a step backwards and '23, and I think we would like to go another month or so to kind of see how things unfold. So we can give maybe a little bit a little bit better update as to how we're going to look at our growth on all three platforms over the next coming years, three years.

Chris Kapsch

Okay.
We'll sit tight on that. But speaking, the market itself, I think you said that you would use that, that event to sort of quantify some of the expected transformation targets in terms of sizing the prize and just the overall transformation program. But I'm just curious, based on your initial guidance that you're reaffirming for '24, how much of a benefit and are you expecting just from the initial, you know, the transformation efforts that you're that are going to be in place this year.

Eric Wintemute

That some of the initial piece that we have identified, the 15 million that we did that really was not related to the transformation targets that we were looking to accomplish.
So there were I mean, certainly when you're looking at how to and how to how to improve operating margin and costs and that sort of thing. Those were those were efforts that we did without what we are now implementing. So that's that would be something that we would look at.
And how much of this is going to occur in '24 and then much more annualized on '25 and '26 going forward. So that's what we're in the process of pulling together now I mentioned for I mean, as far as improvements in freight, raw materials interest and also manufacturing optimization, those are part of those will certainly the things that are going to be measured as part of the transformation process and the KPI.'s. But those are efforts that we began early in '23 So time. So those are ever so I think here we think that's great, Frank. We think we've made good improvements on and in Q4 obviously mentioned earlier about the bank when we see an increase in interest. So of course, driving interest down is something that is key for us. Great job of have a slightly cash pools. I'm sure 20 on our inventory, we'd like to get that down, it may be in that 200 or below at the end of the year and then are our debt to equity ratio down. Of course, that just lowers our interest rates with banks. So those are I would say we still have we still have, I think, to report what the commitment and we did it with MedQuist currently several times and I meet with them once a week. But our teams meeting with some kind of daily here and they kind of laid out some initial targets, but feed the feed kind of bake those into the system, how much benefits we're going to get from the system itself and having more clear data, but they have given us some targets that we are looking at now and we'll do some testing checks on those and some could be in a position to kind of give you some guidance on the March call.

Chris Kapsch

Just to make sure I understand.
So your those opportunities that should manifest through the transformation process that's separate than the $15 million initial target that you referred to. I'm just curious about how much of that 15 might be expected to contribute to the bridge from, call it $58 million EBITDA to $75 million in EBITDA based on your guidance for that, that bridge is 17 -- a little over $17 million. So some of that is just business recovery, but it sounds like some portion of it is from costs, it's taking out costs as well. So I'm just trying to see announced front parcel out. (multiple speakers)

Eric Wintemute

Yes, yes, in that m, again, there were a number of pieces that we touched on having us all rowing the boat in the same direction with the same information make being able to make better decisions.
I mean, our sales team spends a lot of time putting in information, and we expect to be able to free up some of their times by having the systems automated. So that should result in and more sales because we're bigger, we'll have a little bit more time with which to focus on customer interaction so that that would be an example of something that we could not put in play, the good news quantify and then And so going back to part of what we're doing, Jose was optimizing manufacturing, how well our yields are raw material reductions. Those are those are pieces that we have baked into that 15, but we don't have things like I mentioned, benefits of sales and having better visibility, let's say, of our margins in build time. So the so that we're not we're not as visible to the market.
And Jim, here's where we are. I think I mentioned also that we were taking freight and we're taking freight into the cost of goods, but getting back available and real-time to any of our any of our people, it will be, I think, a valuable tool as we look to optimize our margins globally.

Chris Kapsch

Okay.
If I could just circle back to two more. One is on the comments about the generic pressure from China, particularly and you know, in broad-spectrum herbicide posted, I am so pleased to say fascinating. So you mentioned it doesn't really affect you directly. And I'm just wondering if there's an indirect effect on that it, particularly in your Central America, Latin American operations, is that that's aggressive exportation from China? Is that affecting just the pricing overall? Because you mentioned that your margins had been maintained, but you also mentioned that that this is a dynamic that's influencing the market. So I'm just one wanted to reconcile that.
Thanks.

Eric Wintemute

I mean I mentioned impact which, yes, it is an adjunct to players like us have a sticker rate that yields a little bit of cover for or hard to hard to kill weeds for glyphosate fascinating, but we have to broaden that into offering an impact. So fascinating combination, atrazine combination products suited for combination. So we broaden the spectrum of what we can do with that with that molecule. But as I said, there were there was a lot of Brian, yes, broad coverage herbicides that where the price came down. And that was probably, I would say, the biggest effect on those on pricing. So it's I mean, I mean, we certainly have some have some effect on the overall. They were down again, 5% for the year. And we had two key products that we weren't able to provide now in the season. And so I just and we're not quite in the same realm as it is people that are more reliant on generic products.

Chris Kapsch

Okay.
That's helpful.
And the last one is just sort of taking a step back. I mean, if you look at the share price has been halved over the last year and you've what you've conveyed today, you're saying and my interpretation right that Okay. There was obviously some industry issues and then some idiosyncratic issues that have affected American Vanguard's performance. But and you know that Q4 should restore some confidence. Your guidance if you hit it sort of suggests like, okay, this business isn't broken. We're just navigating some challenges. Now as you come through this, you have, if you come out at 2.7 times levered with that improving EBITDA trajectory, one could say you by the end of this year '24 to be overcapitalized, if that EBITDA levels hit, you're roughly?
Yes, rough math here, the companies are valued at 6.3 times, which is pretty attractive considering where these assets typically trade. So the question is, is this does this lead to an opportunity for American Vanguard to put some of it some capital to work in buying back stock at these beleaguered levels. Just what's your what's your view on that? What's the right leverage level for the Company to operate as you go through this transformation and navigating these issues?
Thank you.

Eric Wintemute

I mean, you're making recall that the stock is under undervalued and we certainly would agree with that. Now as far as stock repurchase, we did, we did participate at a greater level than previously with the leverage that we had. We've been in a kind of a temporary suspension of our bank from a client, but we but we are in a position that we can we can choose to come out of that of that covenant. And if we do so then we would be in a position it should the Board agreed that we could be back in the market purchasing stock. Of that being said, you know, we obviously have we're looking at what's the best return on the money that we have. And we obviously mentioned we've got a little bit more runway now with $100 billion to work with and to make sure that we deliver on our numbers because frankly, we deliver delivered on the numbers side, but at these levels and stocks.
So it's very attractive.

Chris Kapsch

That's it for me.

Operator

Thank you.
Thank you. As a reminder, that's star one to be placed in the question queue.
Our next question is coming from [Jeff Brunswick] from Scotia Capital. Your line is now open.

Good afternoon, everybody.
Hey, Eric.
So let's presume it's extremely doable. And within the core of your competence to reproduce your two products to, you know, see normal supply chain reversion and get inventories down as they have in the past and et cetera. But well, here's what I'm missing as someone who's followed the Company for a very long time. I know I don't see anything different. And then in other words, yes, a year, 18 months from now being a better organization and doing things today that maybe should have been done five years ago.
Okay, better.
But for example, is this process and the three new board members that came on is there a complete review of why this company exist as an independent company were a review on really why are we still devoting time effort and attention in same path, which I guess I would argue has been it's just never going to happen. Is there going to be an announcement of some sort of new strategic division or a vision for the next five to seven years, which I would argue that company had 15 years ago and sort of meander over the last 15 years. That's what I don't care.
What lets everyone on this call, I think can assume you guys can, I mean, revert back over and over the next 18 months to be back where you were, but then what and how does a company and a stock that's whatever been in the 10s, unquote for 15 years get better.

Eric Wintemute

So we've outlined a plan that has gone from what we say, our core business, which has been largely responsible for our growth for a number of years and going from and our market cap of less than $10 million to the.
And yes, we've gone through our down cycles on that front. But our core business has been acquiring products and growing those products that go longer. I'm fortunate to have here for improvement as Foundation activities consolidation, so got excess portfolio. So that part is still robust for us. Our peers, we're rationalization every three to five years so that that continues. But what we've what we've done is we've grown from being a US company to being a global company. We've acquired businesses as part of our core piece that would allow us to expand our strengths and leverage our manufacturing assets and vigorously bringing solutions happens to be one of the two biggest growth areas for our industry, which deal is something that you've seen strong investments and big investments from our bigger peers have put into getting into that space. We've had relatively low approval investments to acquire and have in position of pricing on the inventory still happens as well. So that's a growth cycle that we and the Board think is right.
And with regard to some pass.
Yes, the technology for precision, again as other big growth area for us for the for the industry. So we have we have three growth platforms that are interrelated and as the Board has reviewed and looked at it. But the consensus is we need to implement. We need to add to implement these growth patterns and feed upon them and grow them. So yes, that that's where the Board is now.
And as far as looking at acquisitions, mergers, divestments as a board out, obviously, we're always looking at the best opportunities to improve shareholder value. So I mean, steps that's the position. We're open to two alignments with other companies, and we have done so in the past. But we've got we've got a unique position here in the industry, and we think we're in a good position to exploit and execute on it.

Chris Kapsch

Eric, I appreciate your time.

Operator

Thank you.
We reached the end of our question-and-answer session. I'd like to turn the floor back over to management for any further closing.

Eric Wintemute

Well, look forward to talking about both providing additional color, but we felt it was important that that will give you an update of where we believe we are. We believe we are at this point rather than waiting until the early March period. So again, we'll touch with you shortly and appreciate the questions and the time that people spend on the call have a good evening.

Operator

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation.