Q4 2023 CTS Corp Earnings Call
Participants
Kieran O'Sullivan; Chairman of the Risk Committee, Member of the Audit Committee; CTS Corp
Ashish Agrawal; VP, CFO; CTS Corp
Joshua Buchalter; Analyst; TD Cowen
Justin Long; Analyst; Stephens Inc.
John Franzreb; Analyst; Sidoti & Company, LLC
Hendi Susanto; Analyst; Gabelli Funds, LLC
Presentation
Operator
Hello, everyone, and welcome to the CTS Corporation Fourth Quarter 2023 conference call. My name is Daisy, and I'll be coordinating your call today. If you would like to register a question, please press star one on your telephone keypad. I would now like to hand over to your host, Kevin Sullivan, CEO again, Kevin, please go ahead.
Kieran O'Sullivan
Great.
Thank you, Dave, and good morning and thank you for joining our fourth quarter and full year 2023 earnings call. We continued to experience soft demand in the industrial distribution and commercial vehicle markets as outlined in our last earnings call, the light vehicle market is more stable across medical and defense. We saw good growth and see continued momentum in the year ahead. We are committed to a disciplined capital structure focused on supporting organic growth, strategic acquisitions and returning cash to shareholders. Our Board recently approved a $100 million share repurchase program that replaces our existing program authorized in February 2023.
Ashish will now take us through the Safe Harbor statement.
Ashish Agrawal
As usual, I would like to remind our listeners that this conference call contains forward-looking statements These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Additional information regarding these risks and uncertainties is contained in the press release issued today, and more information can be found in the Company's SEC filings. To the extent that today's discussion refers to any non-GAAP measures under Regulation G. The required explanations and reconciliations are available at today's earnings press release and supplemental slide presentation, which can be found in the Investors section of the CTS website. I will now turn the discussion back over to our CEO, Kieran O'Sullivan.
Kieran O'Sullivan
Thanks, Ashish. Overall, 2023 was a challenging year. We finished with sales of $125 million in the fourth quarter, a decline of 12% from the fourth quarter of 2022. For the full year, sales were $550 million, down 6% from 2022. For the full year, non-transportation sales were down 12% and Transportation sales were down 1% from last year. Customer demand remained soft as expected in the fourth quarter. Our book-to-bill rate was 0.96 in the fourth quarter and 0.97 for the full year. I want to thank our teams for their support as we carefully managed operating expenses while we navigated the challenging revenue environment, particularly in the fourth quarter of 2023, we expect a soft revenue environment in the first quarter of 2024, similar to the last quarter. Adjusted gross margin in the fourth quarter was 34.2%, down 215 basis points, partially driven by the impact of lower volumes this quarter and the mix shift to TRANSPORTATION. Full year adjusted gross margin was 34.8%, down 177 basis points versus 2022, we expect some cost pressures to persist in 2020 for especially for certain materials and from labor cost increases. We expect pricing pressure to return, particularly in the transportation markets. We remain confident in our ability to drive costs in our supply chain and manufacturing sites to improve our operational performance and profitability.
Fourth quarter adjusted diluted earnings per share of $0.47 were down $0.09 from the same period last year. Full year adjusted diluted earnings per share of $2.22 decreased $0.24 from 2022 later, Ashish will add further color on our financial performance. Although 2023 was a challenging year, we continued to make significant progress executing our long-term strategy. Our focus on profitable growth, driving diversification through our Advanced Materials capability and growth through electrification in mobility, markets with innovative new products remain our highest priorities. During 2023, we made solid progress across our non-transportation end markets in multiple areas with new customers and applications. In industrial, we had wins in areas such as automation flow, metering and climate control. In medical, we expanded our reach beyond traditional ultrasound, securing several awards for diagnostic and therapeutic applications.
In defense, we had strong traction in secure communications, autonomous unmanned vehicles and advanced undersea imaging in transportation we secured our first E brake and accelerometer awards and won a development contract for motor position sensing. Our MagLev acquisition made strong inroads on multiple opportunities for current sensing applications on the operations front, our plants work to drive improvements to offset the unfavorable impacts from the mix shift, lower revenue and currency rate changes. We made significant progress in the consolidation of our warehouse facility into our Matamoros site in Mexico, and the project is on track to be completed in the first half of 2024 earlier in 2023, our teams completed the consolidation of our two facilities in Denmark in 2024. We look to build on this momentum. Non-transportation sales declined 22% in the fourth quarter compared to the prior year period and declined 12% versus last year, driven primarily by the burn-down of customer inventories across the industrial and distribution markets.
In the industrial market, sales continued to be soft in the quarter, driven by decreased demand for micro actuators used in industrial printing applications due primarily to softness in China. We also saw softness across other industrial and distribution customers as inventory levels continue to correct. We were successful with several sales wins in the quarter, including in industrial printing, EMC components and temperature sensing with two existing customers. We added three new customers in the quarter, including one for temperature sensing for a heat pump application, one for a subsea PAs or sensing application, and another for condition monitoring in medical markets where sales remained more stable. We are seeing steady demand and expect further growth in 2024. We had multiple wins in the quarter for diagnostic ultrasound as well as with the therapeutics customer, we added one new customer in the quarter for therapeutic ultrasound. We expect the long-term prospects for the aerospace and defense end market to be solid, given our enhanced capabilities and material formulations. Aerospace and defense sales are expected to grow in 2024. We received multiple orders in the quarter for phones as to new programs for sonobuoys and had awards with multiple customers for temperature sensing as well as awards for aerospace beacons and an RF filter application. We added one new customer for an application and current sensing looking ahead to 2024 in non-transportation end markets, we expect continued softness in the industrial and distribution end market for the first half of the year with the potential to improve in the second half of 2024.
For defense and medical markets, we anticipate a stable environment with solid progress on the qualification of products for prospective new customers, long term, we expect our material formulations and in-house know-how to continue to support our growth in key high quality non-transportation end markets, in line with our diversification strategy. Additionally, we anticipate the mega trends of automation, connectivity and efficiency as well as growth in minimally invasive medical procedures will provide us momentum as we continue expansion in these markets.
Transportation sales were $69 million in the fourth quarter, down approximately 3% from the same period last year. For the full year, Transportation sales were $301 million, down 1% from last year, primarily due to the softening of sales of commercial vehicle products in the fourth quarter. We expect the softer demand environment for commercial vehicle products in 2024 on the light-vehicle front sales are expected to be flat, and we continue to track market share dynamics in China, given the competition between local and transplant OEMs, growth rates for ICE versus EV and hybrid moving into 2024 are less of a concern for us, given our products are agnostic to the drivetrain technology. In the fourth quarter, we had solid wins across various product groups of note is a large award for accelerometer sensors with a North American OEM, a follow-up award to the first win we had in this space earlier in 2023, we had wins across all product platforms, including accelerator modules, ride height sensing and passive safety sensors. We added new customers in China, Canada and Europe for current sensing, total booked business was approximately $1.4 billion at the end of the quarter. In 2023, we had a strong year of awards for electrified platforms and continue to make progress on our goal of having more than 25% of our light vehicle revenue come from electrified platforms by 2025, we gained momentum on securing electric vehicle business in the quarter as we added three new customers. Our electrification wins were primarily driven by accelerometer and current sensors, where we continue to gain momentum in the market, benefiting from our strong pipeline of new opportunities from our Magnet acquisition.
As we look to our future, we are excited by the opportunity the transition to electrification offers us even as penetration rates adjust near term, we continue to see the foot well in the vehicle as a space where we expect to expand our product offering with traditional accelerator modules, haptic modules, New Breed E brake product offering, weight and cost advantages and the future introduction of our DR pad technology, a low travel Accelerator product. We expect these and other sensor applications will increase our ability to grow content with a potential SAM of greater than $1 billion.
Turning to our outlook for 2024, the North American light vehicle market is expected to be in the $15.5 million to $16 million unit range. European production is forecasted in the 17 million unit range. China volumes are expected in the 28 million unit range. Overall, we anticipate a flat market for light vehicle production. We expect softness in commercial vehicle related revenue throughout 2024 due to lower end market demand as well as competitive pressures for the non-transportation markets. In line with our diversification strategy, we aim to expand the customer base and range of applications in the industrial, medical and defense end markets. Inventory levels continue to normalize at industrial customers and in distribution, while we are seeing some green shoots, it's too early to say this is a robust trend. We expect a soft first half with the possibility of strength in the second half of the year. Demand in defense and medical markets is expected to remain soft.
In terms of guidance for full year 2024, we anticipate sales in the range of $530 million to $570 million and adjusted diluted earnings per share in the range of $2.10 to $2.35.
And now I'll turn it over to Ashish, who will walk us through the financial results in more detail.
Ashish?
Ashish Agrawal
Thank you.
Can see fourth quarter sales were $125 million, down 12% compared to the fourth quarter of 2022 and down 7% sequentially from the third quarter of 2023. Sales to transportation customers were down 3% for the fourth quarter of last year from the fourth quarter of last year due to the softness in sales related to commercial vehicle products. Sales to non-transportation end markets decreased 22% year over year, driven by continued softness in the industrial and distribution end markets. Sales to the medical as well as aerospace and defense end markets remained strong with continued growth momentum going into 2024. Our adjusted gross margin was 34.2% in the fourth quarter, down 215 basis points compared to the fourth quarter of 2022 and down 29 basis points compared to the third quarter of 2023. The decline was primarily driven by the unfavorable impact of lower revenue, the change in market mix and approximately $900,000 from currency changes.
As Kieran highlighted, we made good progress on our project to transition production from our warehouse location to our site in Matamoros. We expect completion of the transition in the first half of 2024 as we navigate the challenging revenue environment, we reduced operating expenses in the fourth quarter through temporary cost reduction measures and released reserves related to incentive compensation. We do not expect to have the impact of these items in the first quarter of 2024. As a result and due to an increase in R&D spend, we expect our operating expenses in the first quarter of 2024 to be higher by slightly more than 3% of revenue compared to the fourth quarter. Our objective is to ensure we continue to invest in programs that will drive future revenue growth for our Company earnings per diluted share were $0.49 in the fourth quarter. Adjusted earnings for the fourth quarter were $0.47 per diluted share compared to $0.56 per diluted share at the same time last year. For the full year, revenue was $550 million, a decrease of 6% compared to 2022. Sales to the transportation end market were down 1% due to the softening of sales of commercial vehicle products. Sales to the other end markets declined 12% in 2023. We had good momentum in the medical as well as aerospace and defense end markets. As we had previously discussed, we saw softness in the industrial and distribution markets, which we expect will last into the first half of 2024 with a potential recovery in the second half. Foreign exchange rates impacted sales unfavorably by approximately $2.5 million in 2023 our adjusted gross margin was 34.8% in 2023 compared to 36.5% in 2022. The primary drivers of the reduced gross margin were the unfavorable impact of lower revenue and market mix. Foreign currency rates also impacted us unfavorably by approximately $6 million. Supply chain is in better shape than the last couple of years, although we still face pressure on certain material costs as well as labor, the impact of the recent events in the Red Sea has been minimal so far as Kieran highlighted, we expect pricing pressure from our customer base, primarily in transportation. Our global teams will continue to focus on operational and supply chain improvements with the goal to maintaining and enhancing profitability. For the full year of 2023, our earnings were $1.92 per diluted share. Adjusted earnings for the full year 2023 were $2.22 per diluted share compared to $2.46 per diluted share for 2022, we achieved a 21.9% adjusted EBITDA margin in 2023, despite the drop in sales and the unfavorable impact of end-market mix.
Moving to cash generation and the balance sheet, we generated $32 million in operating cash flow for the fourth quarter of 2023 and $89 million for the full year, down from $121 million in 2020 to the 2022 operating cash flow included $27 million in onetime inflow from the termination of the US pension plan. Our balance sheet remains strong with a cash balance of $164 million as of December 31st, 2023, up from $157 million at the end of 2022. Our long-term debt balance was $68 million at the end of 2023, down from $84 million in December 2022. During the quarter, we repurchased approximately 386,000 shares of CTS stock totaling approximately $16 million. And for the full year, we repurchased 970,000 shares, totaling approximately $41 million in total in 2023 we returned over $46 million to shareholders through dividends and share buybacks. As Kevin mentioned, our Board recently approved a new $100 million share repurchase program. We remain focused on strong cash generation and are committed to maintaining a healthy balance sheet to continue to support organic growth, strategic acquisitions and returning cash to shareholders.
This concludes our prepared comments. We would like to open the line for questions at this time.
Question and Answer Session
Operator
Thank you.
If anyone would like to ask a question, please press star followed by one on your telephone keypad. If you would like to withdraw your question, please press star by two. I'm prepared to ask your question, please ensure you are unmuted likely. So let's start that by one on your telephone keypad to register question. Our first question today is from Josh Buchalter from TD. Helen. Josh, please go ahead.
Your line is and.
Joshua Buchalter
And good morning here this morning, Ashish, this is Sam on for Josh. So third party appointed we're looking at so light vehicle according to third-party estimates for light vehicle builds are flat to this year in line with your expectations and what you've communicated, but I was wondering if you could give us some more details maybe by geography and magnitude for your expectations for commercial builds and how that's trending given that's where the weakness has been historically and today?
Kieran O'Sullivan
Yes, Emma, on the last earnings call, we talked about at the softer demand in commercial vehicles, and we even gave you some clear guidance on that in the fourth quarter and then it came in pretty much in line with what we saw there. And as I mentioned on the call, we expect a soft demand environment, more competitive pressures in the year ahead. So we're navigating it by quarter, but it looks like it's going to be a softer market for the year.
Joshua Buchalter
Understood and then moving to the industrial segment, what I believe you have most of your channel exposure where inventory is sitting today versus last June when you started to see industrial correct. And where are you guys trying to get at where you would feel comfortable with that now selling back into the channel more?
Kieran O'Sullivan
So Sam, we have been seeing inventories correct at the distributors. We don't have full line of sight into some of their customers like EMS, where we believe there's a build in inventory buildup as well. But we've seen it correcting and each quarter. And even if you look at the reports from other companies, some companies have said out there publicly that burn down of inventory is probably burned through somewhere between 60%, 70% plus so far. So with the guide we're given, we're expecting softness in the first two quarters of this year.
Joshua Buchalter
Understood. And one last one for me. And I'll get back in the queue. I'm glad to see the $100 million buyback authorization from the Board. I'm assuming that you guys are going to be opportunistic with those given there's no scheduled left for the program. But if you could, would you mind giving a sense for the cadence of deployment at 2024? If you have anything come down for that.
Ashish Agrawal
So we generally have been historically opportunistic. If you look at 2023 and we have had a regular cadence of buybacks. And depending on the share price it was heavier in the fourth quarter. So that's an approach that we would expect to continue taking as we move forward.
And then, you know, our primary objective is still to continue evaluating strategic M&A opportunities. So we will balance capital allocation from that perspective. If something is on the horizon, then we'll obviously look to do things differently from a buyback perspective.
Joshua Buchalter
Understood.
Thank you.
Operator
Thank you.
Our next question is from Justin Long from Stephens. Justin, please go ahead.
Your line is open.
Justin Long
Thanks and good morning.
Kieran O'Sullivan
So I wanted to start just with. (multiple speakers)
Justin Long
Good morning. Kieran, I think you made a comment about the first quarter radio revenue being soft similar to the fourth quarter. So I just wanted to clarify, are you assuming that revenue in 1Q looks similar to the fourth quarter. And if so, the full year guidance would imply that we see a pretty big sequential step-up in revenue after the first quarter. So is that just a function of what you've mentioned on the industrial markets hopefully picking up? Or is there anything else that you would point to that could drive that sequential acceleration through the year.
Kieran O'Sullivan
So just and the expected start of your question.
Yes, we said we're expecting a softer quarter in the first quarter of this year, similar to the last quarter, and Ashish also talked about the increase in OpEx that we're going to see as well.
And then to your second question, yes, we would expect an increasing trend and a little heavier on the back half of the year.
Justin Long
(multiple speakers) Okay. And that's natural pickup in industrial.
Ashish Agrawal
Yes, industrial is a part of that pickup. And we also see continued growth momentum in medical and aerospace and defense end markets. And as Kevin mentioned, commercial vehicle is another area that we are expecting some softness in 2024 and light vehicle seems to be stable right now.
Justin Long
Okay. And just to circle back on the operating of the expense commentary you had, Ashish, I just wanted to clarify, were you saying that operating expenses would be up roughly 3% sequentially in the first quarter?
Ashish Agrawal
Yes, that's what I was implying. We had some temporary cost reduction measures that reduced our operating costs in the fourth quarter and we also released some incentive comp-related expenses. I'm sorry, there's those. So we won't have the benefit of that.
And then I also highlighted the R&D costs will be higher in 2024 as we continue funding our growth programs. And you've seen us talk about some interesting wins, both in electrification as well as in the non-transportation market which we are really excited about.
Justin Long
Okay, great. And last one for me. I guess going back to the buyback announcement, this authorization for $100 million is a lot higher than the authorization roughly a year ago for $50 million. What should we read into that? Is it fair to say that the acquisition pipeline has maybe become a little bit more challenging just based on the availability of deals, valuations, et cetera? Or is that the wrong read? Maybe you could just provide an update on what you're seeing on that front?
Kieran O'Sullivan
Yes, and just on your board, and we feel we've got good cash flow generation, a strong balance sheet. And as she's already touched on, we're not backing off on strategic acquisitions that's something that's very important for us as we go forward as well. And we feel like we've got the balance sheet to do both.
Justin Long
Okay, understood. Thank you for the time.
Kieran O'Sullivan
Thanks, Justin.
Ashish Agrawal
Thank you.
Operator
Thank you. Our next question is from John Franzreb from Sidoti & Company. John, please go ahead your line.
John Franzreb
And good morning, guys, and thanks for taking the questions on management.
I'd like to go back to the pricing pressure that you mentioned, is that limited to the commercial vehicle market was extend into the light vehicle market?
Kieran O'Sullivan
John, I think we see it across all transportation markets, so commercial and light vehicle. And we think there's been nothing going on with the OEMs. They're just going to be pressure on the supply base and but that's something we're prepared for in terms of managing our own cost and supply base as well.
John Franzreb
So the contracts you have with the light vehicle market, they're not fixed price for the duration of the platform, the adjusted somehow?
Kieran O'Sullivan
No, John, there, they're fixed price, but it's a competitive environment out there is it has this is nothing new for us in the transportation. What I'd say to you is when it comes to getting new business awards, sometimes you get negotiated on existing business. So you've got to make sure you're balancing and protecting your portfolio profitability overall?
Ashish Agrawal
And John, in the transportation contracts, there's generally a price reduction built in on an annual basis. And if you look at the last couple of years, we have seen an opposite trend where we have been able to get price increases. So that dynamic was very different in the last couple of years due to the supply chain challenges and cost pressures on the materials side on the labor side. So and that's improved quite a bit. And the OEMs are feeling pressure from many other fronts like Ken highlighted. So we believe that that will drive increase focus on those contractual price obligations that we have in those contracts.
Kieran O'Sullivan
And John, just to add to that, in terms of just profitability. We will not lose our focus as we haven't in the past in terms of driving operational efficiency, material costs to compensate for that.
Ashish Agrawal
A little bit of return to normal, I would say on that side of the market.
John Franzreb
Perfect.
Fair enough. I mean, certainly there's an affordability issue out there with the light vehicle market has to be rectified from as far as on driving improved profitability as far as your restructuring actions that you said will be completed in the first half of the year, where do we stand and kind of incremental on operating improvements we should be thinking about as those moves become completed?
Ashish Agrawal
Yes. So John, in the past, we've talked about it's a move within two sites in Mexico. So we are not expecting a huge amount of improvement and there will be some improvements that that will benefit from the primary reason for us to do this move is to improve our capabilities on the delivery front on the quality front with our customer base and make sure we can be a good partner as we move forward. And the move is pretty much on schedule on the production there in what is was completed at the end of last year and we are in the process of gradually ramping up production in the first half of 2024.
John Franzreb
Okay.
And you have been highlighting over the past year that the transition from ICE to EV was a net positive. So the content was something I believe at two times on EV versus ICE, it seems like you backed off that a bit. I know 95% of content is transferable and what is there a difference between hybrid EV and ICE. Can you kind of walk us through what you're thinking now versus, say, six months ago?
Kieran O'Sullivan
Yes, John, we haven't backed off at all. Actually if you go back to my earlier remarks, we said we're well on track for the 25% of electrified revenues coming from light vehicle platforms by 2025. So we feel good about that.
And then the other thing we've highlighted in the transcript today as well is and the progress we're making on the electrified platforms with a break with motor position sensing, especially now with current sensing, where we've had multiple wins. And we've got a really strong pipeline, which goes across the hybrid and the platforms as well. So we feel very good about that and increasing content going forward.
We said it's worth assigned to us of about {$1 billion}.
Ashish Agrawal
Yet, John, the other thing Kevin highlighted is that the adoption rate of EVs can be a little bit different than what the market was expecting in the short term. We still feel good about the long term and the slower transition in the short term doesn't have a material impact on us because of our portfolio. It's mostly transitions between ICE and EVs.
John Franzreb
Okay.
And just one last question, and it's references back to an earlier question, second half of the year, that revenue number to hit your midpoint, what sectors have to come back to strongest of outperform compared to what they did in the first half.
Kieran O'Sullivan
We would expect and the industrial and the distribution markets to rebound in the second half.
John, to get there.
John Franzreb
Okay.
Thanks for the clarity and appreciate taking my questions.
Kieran O'Sullivan
Thank you, John.
Operator
Frankie.
Before we take our next question, I'd just like to remind everyone, it's star one to register a question. Our next question is from Hendi Susanto from Gabelli Funds, and please go ahead. Your line is open.
Hendi Susanto
Good morning, Ciaran And Ashish.
Ashish Agrawal
Hey, Andy.
Hendi Susanto
Yes.
So Kevin, I think you highlighted the three areas of softness, distribution, industrial end market and then the commercial vehicle market. And can you share with us whether you have seen the bottom of those? And I'm wondering whether some parts may still be seeing decline for well, let's say, for the next six months, just in Q1 and Hendi, I heard the commercial big of what was the first part of that question, what was the other market you mentioned up with it up in each of those three areas that are weak.
Kieran O'Sullivan
Okay.
Hendi Susanto
Have you like have you have we seen the bottom or whether we may see the bottom.
Kieran O'Sullivan
Okay,
Hendi Susanto
Later in Q. one or and then the second one is whether there are still some weakness is such that we are still seeing decline up perhaps from Q4 to Q1 and Q1, Q2.
Kieran O'Sullivan
And it feels like on the industrial and the distribution side, we're it feels like we're scraping along the bottom and that we should start to see improvement whether that's in Q1 or Q2, I can't tell you at this stage, but the inventory levels will burn down. Commercial Vehicle feels like it's still in a downward trend as we said that there'd be and from our perspective is softer demand and more competitive environment going forward.
Hendi Susanto
And then a question for us is, as you mentioned, a pricing pressure based on at Telik annual contractual price obligation and any insight into the timing, whether it would start on January first, whether and some would start later when it comes to the general price obligation, Andrew?
Ashish Agrawal
And Hendi, it depends on discussions with the customers. Contractually. It starts at the beginning of the year or depending on whatever the contract language says. But there's generally a dialogue between the customer's purchasing team and our sales team and it all boils down to negotiations. And as Kieran highlighted, it revolves around new business awards and a bunch of other considerations. So there's really no perfect clarity for us to say this is when it'll start kicking off, it can be scattered through the year based on the timing of the contracts.
Hendi Susanto
Yes.
Thank you, Kieran.
Thank you, Ashish.
Kieran O'Sullivan
You're welcome.
Ashish Agrawal
Thanks, Andy.
Operator
Thank you.
We have a follow-up from John. John. Please go ahead. Your line is open.
John Franzreb
And yes, I might have missed this, but did you say what the target R&D spend is going to be for 2024?
Ashish Agrawal
We didn't talk about specific dollars, John. We highlighted that there is an increase in the spend. And if you look at our investor presentation, we do have a range of 5% to 6% of sales, and we have BILL slightly under that number.
John Franzreb
Okay, guys.
Thank you.
Ashish Agrawal
Sure.
Operator
Thank you.
We have no further questions, so I'd like to hand back to Ciaran for any closing the remark.
Kieran O'Sullivan
Thanks, Dave, and thank you all for your time, despite the near-term headwinds, CTS's well positioned for future growth, driven by the megatrends of increased automation, connectivity, energy efficiency and minimally invasive medical innovation. Overall, we are focused on our long-term goals to drive profitable growth. The solid wins in the quarter, expansion of customers and pipeline of opportunities underscore our strong confidence in our future.
I want to thank our global teams for their support in driving our strategic initiatives, successfully launching several new products and continuing to give back to those less fortunate in our communities. We also continue to work hard to enhance our operational performance. Thank you all for joining us today.
This concludes our call.
Operator
Thank you, everyone, for joining today's call. You may now your line and have a lovely day.
