Ashford Hospitality Trust Inc Q1 FY2023 Earnings Call

Greetings and welcome to Ashford Hospitality Trust First Quarter 2023 Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jordan Jennings, Manager of Investor Relations. Thank you. You may begin.

Good day, everyone, and welcome to today's conference call to review the results for Ashford Hospitality Trust for the first quarter of 2023 and to update you on recent developments. On the call today will be Rob Hays, President and Chief Executive Officer; Deric Eubanks, Chief Financial Officer; and Chris Nixon, Executive Vice President and Head of Asset Management. The results, as well as notice of accessibility of this conference call on a listen-only basis over the Internet, were distributed yesterday afternoon in a press release. At this time, let me remind you that certain statements and assumptions in this conference call contain or are based upon forward-looking information and are being made pursuant to the Safe Harbor provisions of the federal securities regulations. Such forward-looking statements are subject to numerous assumptions, uncertainties, and known or unknown risks, which could cause actual results to differ materially from those anticipated. These factors are more fully discussed in the company's filings with the Securities and Exchange Commission. The forward-looking statements included in this conference call are only made as of the date of this call and the company is not obligated to publicly update or revise them. Statements made during this call do not constitute an offer to sell or solicitation of an offer to buy any securities. Securities will be offered only by means of our registration statement and prospectus, which can be found at www.sec.gov. In addition, certain terms used in this call are non-GAAP financial measures, reconciliations of which are provided in the company's earnings release and accompanying tables or schedules which have been filed on Form 8-K with the SEC on May 1, 2023, and may also be accessed through the company's website at www.ahtreit.com. Each listener is encouraged to review those reconciliations provided in the earnings release together with all other information provided in the release. Also, unless otherwise stated, all reported results discussed in this call compare the first quarter ended March 31, 2023 with the first quarter ended March 31, 2022. I will now turn the call over to Rob Hays. Please, go ahead, sir.

Good morning. Welcome to our call. After my introductory comments, Deric will review our first quarter financial results, and then Chris will provide an operational update on the portfolio. The main themes for our call today are: first, we are very pleased with the strong RevPAR growth we achieved in the first quarter; and second, our liquidity and cash position continue to be strong. We ended the quarter with approximately $442 million of net working capital. We feel well positioned for our upcoming extension tests and we continue to have access to undrawn capital, if needed, via our strategic financing. And third, the capital raising for our non-traded preferred is ramping up nicely and increased over 400% from the previous quarter. We believe this offering will provide an attractive cost of capital and allow us to grow our portfolio over time, subject to future market conditions. We believe access to this growth capital is a significant competitive advantage, particularly given the fact that lodging REITs are currently trading at material discounts to their net asset values. Our preference will be to use that capital for future growth, though we may use some of the capital to pay down debt as needed. We continue to build the selling syndicate and currently have 30 signed dealer agreements representing over 4,700 representatives selling the security. We are still very early in the capital raising process. To date, we have issued approximately $21.5 million of gross proceeds, including $9.1 million in March alone. We expect this fundraising momentum to accelerate as we get further into 2023. Let me now turn to operating performance at our hotels. RevPAR for all hotels in our portfolio increased approximately 30% for the first quarter compared to the prior year quarter. This RevPAR growth was led by occupancy, which increased 17% over the prior year quarter and we saw strong growth in average rates, which increased 10% over the prior year quarter. In addition to our solid hotel performance, the majority of our hotels are now out of their respective cash traps, and only 40% of our hotels remain in cash traps under their respective loans compared to 79% at the end of the fourth quarter of 2022. Further, the hotels that are now out of their cash traps generated approximately 70% of the company's full year 2022 hotel EBITDA. One of our main priorities for 2023 is maximizing our operating performance to minimize potential pay downs for any extension tests associated with our property-level loans. We continue to make great progress on this front, with the successful extension modification of the JPMorgan Chase eight Hotel loan as well as the completed extension of our BAML Highland Pool loan. We're also working with a lender on the refinancing of the La Posada to Santa Fe and Hilton Alexandria loans, which are the company's only final debt maturities in 2023. Deric will talk more about these in detail. While we feel well prepared for the remaining upcoming extension tests, there may be situations where we have loan balances that exceed current market values of underlying hotels. If those situations arise, we may give assets back to lenders or allocate additional capital to focus on maximizing value for our shareholders. Looking ahead, we believe our geographically diverse portfolio consists of high-quality assets with best-in-class brands and management companies is well positioned. We believe that our relationship with our affiliated property manager Remington really sets us apart as well. Remington has been able to consistently manage costs and optimize revenues aggressively, enabling us to outperform the industry from an operations standpoint for many years. Additionally, capital recycling remains an important component of our strategy, and we continue to pursue opportunities to sell certain non-core assets. We've identified several assets that we may bring to market for sale if market conditions warrant. We expect any net proceeds from these sales to go towards paying down debt. Turning to Investor Relations, we continue to have a robust outreach effort to get in front of investors, communicate our strategy and explain what we believe is an attractive investment opportunity at Ashford Trust. We have attended numerous industry and Wall Street conferences which have led to over 600 investor meetings over the past year. And we have several conferences coming up this year. We look forward to speaking with many of you at those events. We believe the right plan is in place to move forward and maximize value at Ashford Trust. This plan includes continuing to grow liquidity across the company, optimizing operating performance at our assets, improving the balance sheet over time, and looking for opportunities to invest and grow the portfolio. We have a track record of success when it comes to property acquisitions, joint ventures, and asset sales, and we expect that they will continue to be part of our plans moving forward. We ended the first quarter with a substantial amount of cash on our balance sheet. With the launch of this non-traded preferred offering, we are excited about the opportunities we see in front of us. I’ll now turn the call over to Deric to review our first quarter financial performance.

Thanks, Rob. For the first quarter, we reported a net loss attributable to common stockholders of $64.6 million or $1.88 per diluted share. For the quarter, we reported AFFO per diluted share of $0.19 compared to a loss of $0.04 per diluted share in the prior year quarter. Adjusted EBITDAre for the quarter was $75.6 million, which reflected a growth rate of 88% over the prior year quarter. At the end of the first quarter, we had $3.8 billion of loans with a blended average interest rate of 7.1%, taking into account the in-the-money interest rate caps. Considering the current level of LIBOR and SOFR and the corresponding interest rate caps, 93% of our debt is now effectively fixed as almost all of our interest rate caps are now in the money. These caps are typically structured to expire simultaneously with the maturity date of the underlying loans, and many of these caps will expire during 2023 as we have several remaining loans with initial maturity dates in 2023. Most of these loans have extension options that include the requirement to purchase additional interest rate caps at the time of the extension. In anticipation of these extensions, last year we purchased forward starting interest rate caps as a hedge against these future purchases. If interest rates remain elevated, the value of these pre-purchased caps should help defray the cost of any new caps we need to purchase. In fact, we utilized some of the value of these forward starting caps to defray the cost of the new cap we purchased for the recent extension of the BAML Highland loan. On the capital markets front during the quarter, we successfully modified and extended our $395 million JPMorgan Chase – 8 Hotel loan. As part of this extension, we made a $50 million principal pay down and reduced the 2024 debt yield extension test from 9.25% to 8.5%, giving us significantly more flexibility for the next extension. Additionally, subsequent to the quarter end, we extended our BAML Highland Pool loan until April 2024. As part of this extension, we paid down the existing loan balance by $45 million. We're also working with the lender on the refinancing of the La Posada de Santa Fe and the Hilton Alexandria loans, which are the company's only final debt maturities in 2023. As part of this expected refinancing, we do not anticipate paying down either of the outstanding loan amounts. Our property-level hotel loans are all non-recourse to the company, and currently, 40% of our hotels are in cash traps, which is down from 79% last quarter. A cash trap means that we are currently unable to utilize property level cash for corporate-related purposes. Importantly, after the first quarter, the Highland loan pool, Morgan Stanley 17 hotels pool, and the Indigo Atlanta loans came out of their respective cash traps, and approximately $19 million of cash that had been trapped was released to corporate after the quarter end. As the remaining properties recover and meet the various debt yield or coverage thresholds, any trapped cash will be released to us, and we will be able to utilize that cash freely at corporate. At the end of the first quarter, we had approximately $29 million in these cash traps, which is reflected in restricted cash on our balance sheet. We ended the quarter with cash and cash equivalents of $345 million and restricted cash of $144 million. The vast majority of that restricted cash is comprised of lender and manager held reserve accounts. At the end of the quarter, we also had $21 million due from third-party hotel managers. This primarily represents cash held by one of our property managers, which is also available to fund hotel operating costs. We also ended the quarter with net working capital of approximately $442 million. As Rob discussed, we've been pleased with the progress that we've made in the capital raise for our non-traded preferred stock, and we expect the momentum of this capital raise to ramp up as we progress through 2023. This is attractive capital for us that can be used for acquisitions, debt pay downs, or other corporate purposes, and we look forward to reporting back on our progress. As of March 31, 2023, our consolidated portfolio consisted of 100 hotels with 22,316 rooms. Our share count currently stands at approximately 36.1 million fully diluted shares outstanding, which comprises 34.5 million shares of common stock and 1.7 million OP units. In the first quarter, our weighted average fully diluted share count used to calculate AFFO per share included approximately 1.7 million common shares associated with the exit fee on the strategic financing we completed in January 2021. Assuming yesterday's closing stock price, our equity market cap is approximately $130 million. While we are currently paying our preferred dividends quarterly or monthly, we do not anticipate reinstating a common dividend for some time. Over the past several months, we've taken numerous steps to strengthen our financial position and improve our liquidity, and we are pleased with the progress that we've made. Our cash balance is solid. We have an attractive maturity schedule. Our non-traded preferred security offering is ramping up, and we believe the company is well positioned. This concludes our financial review, and I would now like to turn it over to Chris to discuss our asset management activities for the quarter.

Thank you, Deric. For the quarter, comparable hotel EBITDA for our portfolio increased 61% over the prior year quarter. In addition, our comparable RevPAR growth of 30% for the quarter compared favorably to the average RevPAR growth for the upper upscale and upscale chain scales. We are proud of the work that our asset management team has done to drive operating results and start the year off strong. I would now like to spend some time highlighting a few of the recent success stories across our portfolio, including increased ADR, group demand across our portfolio, and our tax assessment savings. Our team was successful this quarter in driving comparable ADR, which increased over 10% compared to the prior year quarter. Every month our revenue optimization team conducts deep dive calls related to each property focused on driving pricing strategy in each segment of top-line business, pushing premiums on club and suite-room types discussed in the property forecast, and ensuring our properties follow our optimized marketing strategy. Using this approach, the team was able to grow comparable total revenue by more than 33% in the quarter over the prior year quarter. In addition to all the strategies our team has implemented to drive comparable ADR, our team has been focused on building back the foundation of group business, which resulted in the portfolio achieving group room revenue in the quarter that was 37% higher than in the prior year quarter. That now marks the 8th consecutive quarter with positive year-over-year quarterly growth in group room revenue. That momentum continues to build as our pipeline of group leads increased by approximately 21% in the first quarter compared to the prior year quarter. We also saw excellent signs from our group booking volume in the first quarter, where revenue placed on the books for all future dates was up approximately 23% relative to the prior year quarter. We are excited about this momentum in 2023 and what the favorable group volume should mean for our portfolio moving forward. Another successful initiative for us has been led by our property tax team, which through their assessment appeal process was able to drive approximately $1.6 million in property tax savings during the first quarter. This represents a 210% increase in overall savings during the first quarter compared to the prior year quarter. Our team was able to identify trends through analysis and isolate multiple markets that were showing potential for additional property tax savings at our properties. The team used that data to focus their strategies within those areas. A great example of this is the Ritz-Carlton, Atlanta, where we saved more than $600,000 in annualized property taxes. All of these efforts and more contributed to our strong performance in the quarter. In fact, 35% of our hotels set all-time first quarter records in comparable RevPAR, and 20% of our hotels set all-time first quarter records in comparable hotel EBITDA. Collectively, these record-breaking hotels exceeded their previous comparable hotel EBITDA records by 16%. We are particularly pleased that these record-breaking performances are spread out over our hotel locations, including resort, urban, suburban, and airports. They are also in markets ranging from heavily leisure-focused areas like Miami and San Diego to major urban metros like Atlanta and Dallas/Fort Worth. Moving on to capital expenditures, we have noted in previous calls how we have taken a proactive approach to renovating and strategically repositioning our hotels. That commitment has now resulted in a competitive advantage as demand continues to accelerate. We are currently renovating the lobby and bar at the Ritz-Carlton Atlanta. Later this year, we plan to start guestroom and public space renovations at the Embassy Suites in Austin, Dallas, and Houston, as well as guest room renovations in industry suites at Flagstaff, Embassy Suites in Portland, La Posada in Santa Fe, Marriott in Memphis, and Marriott in Sugarland. We are also working to strategically reposition two assets. For 2023, we anticipate spending between $110 million and $130 million on capital expenditures. Looking forward, we have started a number of new initiatives, including looking at brand conversions and several hotel key addition opportunities and rolling out high-margin ROI projects. That concludes our prepared remarks, and we will now open up the call for Q&A.

Thank you. Our first question comes from the line of Michael Bellisario with Robert W. Baird. Please proceed with your question.

Thanks. Good morning, everyone. Rob, first I want to go back to your comments on potential jingle mail of certain debt pools and portfolios. Presumably, you're talking about the Keys portfolio. Maybe just big picture, which ones are most concerning to you? I mean we can look at the trailing EBITDA. We can look at the debt yield test debt service coverage ratios. What are the potential range of outcomes there? And what do you think the best solution is for AHT shareholders as you sit here today?

Thank you, Michael. Considering that this is the only significant extension test we have concerns about for this year, it’s the most complex issue we face. We are currently in the midst of negotiations with lenders and aim to find the best solution for our shareholders, as the situation is complicated. There are six different pools within the Keys, and while the senior loans have similar holders across all pools, each pool has different mezzanine holders. We are looking to optimize the right solution amidst the negotiations. We don’t have unlimited capital to address these issues, so the answer is intricate. It could involve paying down some pools or finding a comprehensive solution for all of them. This is a major loan, so I expect our approach will be similar and will involve some capital from our side, but we will only proceed with options that make economic sense. We are fortunate to have lenders who are knowledgeable and understand this business well. They recognize that we need to pursue what’s best for us, while they are also considering their own interests. The current transaction market is quite soft due to the state of the debt markets, and it's challenging to determine the exact values of assets. We certainly want to avoid being in a position where we have to sell an asset under pressure. However, it's often a result of a lack of transaction activity. We hope that as we continue our negotiations with the lenders, all these factors will be carefully considered.

Got it. Understood. And then, maybe sort of along the same lines of your comment about the capital being precious in the 10-K you guys filed from last quarter. You made a joint venture investment in Napa. Maybe help us understand why you made that investment with cash on hand today when capital is at such a premium? And then, also just more details on the investment, what are the hotels, what's your ownership, what are the economics of that deal?

Sure. Given that we know that at Ashford Trust, capital is precious and we don't have kind of enough to make significant investments just given some of the other cash we have over the short-term. But we are looking to continue to grow the platform and invest into great long-term assets that we'd love to own over the long-term. There was an opportunity to invest in a hotel called The Meritage in Napa, which was doing a recap of their hotel. There was an opportunity for us to put a small investment in, but that would give us certain rights on exits. It’s just a way for us to invest in a very high-quality asset that we like. We know that market very well given our experience on the Braemar side with hotel Yountville and Bardessono. So we like that market long-term. It was a small investment for us to be able to both get attractive returns on it and potentially have access to an attractive deal sometime down the road. We’ve got certain rights in there to be able to have kind of a first look at the asset if that’s ever going to be sold. So it was a small thing but a way for us to kind of get involved in an asset. I think, at least here in the short-term, that you see us making an investment, it will be something similar where we’re making small investments into really high-quality assets that give us a lot of optionality over time.

Got it. Understood. Just one last question for me, as a follow-up. You mentioned asset sales or potential asset sales. Did I hear you correctly that you might bring assets to market for sale, or do you currently have assets listed with brokers for sale?

We have both. We have assets that are currently for sale in the market, both portfolios and individual assets. We also have both portfolio and individual assets that may be brought out to market here in the next month or two. But it is tough going out there. What we're seeing is that if you've got kind of a one-off smaller asset that maybe doesn't require somebody to take down financing that's something that you can get done regionally. So we’ve got a couple of assets like that that are in the market right now and others that we may be putting on the market shortly. We've had a couple of portfolios in the market that are still in process right now. It’s a fluid situation out there given just with the financing world, and we're not really in a position where we're willing on some of these assets to provide significant seller financing, which seems to be for those deals that are getting done.

Helpful. Thanks for clarifying. That’s all for me.

Our next question comes from the line of Chris Woronka with Deutsche Bank. Please proceed with your question.

Good morning, everyone. I have a follow-up question to Michael's inquiry. If you were to return any hotels to the lender, would there be any tax or dividend implications associated with those?

Hey Chris, it's Deric. There's no issues that we're aware of at the moment on anything that we're looking at. I mean I don't know if something could come up down the road or something. But at the moment, there are no issues that would preclude us from doing any of that.

Thanks. A giveback would not trigger any rights since there are no proceeds involved; it shouldn't affect any taxable or dividend requirements. That's what I was getting at.

Yes, I don't think there would be anything on the dividend requirement side just given if there was any gain; we've got a lot of NOLs that we could use to offset any of those gains. So, I wouldn't anticipate that would be a problem for us.

And we at least during the downturn when we unfortunately had to hand back some assets, those didn't trigger anything historically. So, I don't know why it would be any different than this.

Thank you, everyone. I have a question for Chris. In Q1, I believe the flow-through was around 42%, which was driven by RevPAR growth from more than half occupancy. That seems quite impressive. Can you discuss the impact of property tax appeals on Q1? Specifically, could you provide insights on what influenced this figure and whether we can expect it to remain sustainable if occupancy continues to drive RevPAR growth in the future?

We were pleased with our margin performance, with EBITDA margins increasing by about 480 basis points compared to the previous year, largely supported by our revenue growth. When examining this further, our two revenue streams—rooms and food and beverage—show that F&B revenues rose by 60% year-on-year, while rooms increased by only 30%. Traditionally, F&B revenues yield a lower margin, but we managed to enhance margin performance as a greater share of our revenue came from F&B. Catering revenues also saw a significant boost, doubling compared to last year. Additionally, we are maintaining efficient operations, with staffing levels remaining lower than pre-COVID occupancy recovery rates. We are placing significant emphasis on energy and utility costs as these continue to rise sharply, and we've implemented several energy audits and ROI projects aimed at mitigating these costs. In terms of labor, which is a major part of our expenses and margin improvements, our use of contract labor has decreased compared to the previous quarter, as have our overtime wage rates. Hiring has become easier in most markets, although some areas still face challenges that necessitate reliance on contract labor, particularly in housekeeping and culinary departments. Overall, the reduction in high-cost contract labor is a positive sign, and we anticipate this trend will continue. Q2 is likely to be the most challenging quarter for margins due to revenue pull forward from last year's Omicron buildup, but we remain optimistic about our margins for the latter half of the year and the full year overall. I hope this provides some clarity.

Yes. Yes, very helpful. Thanks, guys.

Our next question comes from the line of Tyler Batory with Oppenheimer. Please proceed with your question.

Good morning. This is Jonathan on for Tyler. Thanks for taking our questions. First one from me. Can you provide some color on more recent demand trends? Any pockets of weakness or slowing that are worth calling out, whether that's in DC or leisure or wherever you may be seeing anything like that given some of the volatility that we've seen over the past few months?

Yes. Thanks, Jonathan. This is Chris. I'll be happy to take that. For this portfolio, we’re continuing to see strong signs of recovery. We’ve got sequential growth quarter after quarter. In Q1, we were 99% recovered to pre-COVID levels. We're seeing very strong signs out of group. I cited that Q1 group was up 37% year-on-year; within that segment it continues to be short term within 60 days. I think that's afforded us a lot of pricing power so we could take advantage of the groups that we are looking to take and build around the business we've got. We're seeing really strong growth in group from our full-service hotels, which is associated with additional catering revenue that I cited. We're seeing encouraging signs out of citywide and convention business within those markets. Business transient continues to improve quarter-over-quarter. One of the things I was most happy to see within that segment was the ADR growth; ADR for our BT business was up 15% year-over-year. That indicates the negotiations our brands and management companies took with the corporate accounts to use dynamic pricing and hold the line. No real signs of softening that we're seeing. Urban is growing. Leisure is growing. Resorts are growing at a slower clip, but still growing.

I appreciate all the information provided. In a similar context, I would like to hear Rob or Deric's thoughts on the financing markets currently, especially in light of the regional bank issues that arose in March. Have these events led to any noticeable changes in your discussions with lenders?

I haven’t noticed a significant change in the last six to eight weeks, considering the issues in the banking markets. However, the debt financing market for hotels has been challenging for several months and isn’t improving. Spreads remain historically wide. I am optimistic that we are approaching the end of the Fed's rate hikes, which should bring some clarity to the market and help lower spreads. It's unusual to see such wide spreads while credit conditions are improving, as our EBITDA is growing and the industry along with our hotels are performing well. There seems to be a disconnect between the capital markets and the actual fundamentals. Nevertheless, we believe this situation will eventually improve. Fortunately, we don’t have many final maturities requiring us to enter the market. For the few we do, we are collaborating with a lender on two final maturities this year with outcomes we find favorable and attractive. Our aim is to maintain our existing debt as long as possible through pay downs and some extension options.

Okay. Very helpful. Thank you for all the color.

Our next question comes from Bryan Maher with B. Riley. Please go ahead with your question.

No problem. Good morning. Just a couple of quick ones for me. Maybe for Rob and Deric, you might want to weigh in. How are you balancing your level of CapEx spend? I think you said $110 million to $130 million for this year versus saving at least some portion of that for debt reduction payments that you're going to have to put up, maybe not even this year, but a lot of expirations next year and the following year? And then as a second part of that question, are any of the extensions you're getting conditioned upon you spending capital on those properties that are getting the extensions?

Yes, this is Rob. To your second question, the answer is no. We haven't had any extension tests that require a significant amount of capital to be invested into the properties. As we consider this, much of our capital is a combination of different types. Most of it is for Property Improvement Plans (PIPs). I would categorize our activities into two main areas. The first is acquiring PIP CapEx, which includes the projects mentioned by Chris regarding the Embassy Suites and others that require our attention. At the same time, we have Return on Investment (ROI) and repositioning projects. We are excited about some upcoming projects that we will be addressing in the next quarter or two, as we believe we have valuable real estate that can deliver great returns. However, a significant portion of our CapEx is necessary due to PIPs with our brand partners. We negotiate these PIPs efficiently, leveraging our size and scale to collaborate with Hyatt, Hilton, and Marriott. Regarding value engineering, we are proactive in optimizing these projects to minimize costs as much as possible.

Yes. I’ll add to what Rob said. We’ve got monthly calls with our big brand partners where we discuss capital deployment and upcoming PIPs. They’ve been incredible partners—very understanding and willing to work with us. The planned spend in 2023 as a percentage of revenue is lower than our historic run rate and lower than a lot of our peers in the space.

Okay. And then maybe for Deric. On the CAP, I know you pre-purchased some last year that you're using this year. But do you have a rough estimate of what you think the balance of 2023 CAP cost might be?

It's impossible to know, Bryan. We used some of the value in the pre-purchased caps to offset the value dollar for dollar for the cap we acquired for the extension of the Highland Pool loan in early April. Ideally, I'd think we would do that on any caps we need to buy from here, and that would mostly be on the KEYS pools. We do have another loan, the Morgan Stanley 17 hotel loan, later this year. It’s just impossible to know what the caps are going to cost until the day we need to buy them because the pricing can be very volatile based on the market's perception of where interest rates are going and the term that we need to buy.

Okay. And then just last for me, on the non-traded preferred shares, is the goal to raise as much capital there as soon as possible as the market would bear, or are your plans more to try and match those capital raises with the needs for debt extension money?

Good question, Bryan. I wish it were as simple as we could time it as we'd like. It just doesn't work that way in terms of the process of how that capital is raised because it tends to grow and accelerate over time as you get additional signed selling agreements with different broker-dealers and registered investment advisers and their firms. It just tends to go up and accelerate until you tend to end it. If you look at the trajectory of Braemar's raise, of which right now Ashford Trust preferred rate is actually pacing faster than Braemar's did. It tends to accelerate as you go. We’ve got plenty of uses of capital. We still have absolute debt paydowns and see some opportunities. We have the strategic financing that we’d like to pay off at some point. In terms of this first offering, which is up to $500 million, we have plenty of opportunities to place that capital, whether it comes in tomorrow or if it comes in two years from now.

Okay, thank you. That’s all for me.

Thank you for joining us on our first quarter call. We look forward to speaking with you all in the next one.

Ladies and gentlemen, this concludes today's teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.