Greetings, and welcome to the Chatham Lodging Trust Fourth Quarter 2022 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.

Thank you, Vikram. Good morning, everyone, and welcome to the Chatham Lodging Trust fourth quarter 2022 results conference call. Please note that many of our comments today are considered forward-looking statements as defined by federal securities laws. These statements are subject to risks and uncertainties, both known and unknown, as described in our most recent Form 10-K and other SEC filings. All information in this call is as of February 22, 2023, unless otherwise noted, and the company undertakes no obligation to update any forward-looking statements to conform the statement to actual results or changes in the company's expectations. You can find copies of our SEC filings and earnings release, which contain reconciliations to non-GAAP financial measures referenced on this call on our website at chathamlodgingtrust.com. Now to provide you with some insight into Chatham's 2022 fourth quarter results, allow me to introduce Jeff Fisher, Chairman, President and Chief Executive Officer; Dennis Craven, Executive Vice President and Chief Operating Officer; and Jeremy Wegner, Senior Vice President and Chief Financial Officer. Let me turn the session over to Jeff. Jeff?

Thanks, Chris, and I certainly appreciate everyone joining us this morning for our call. Before talking about the fourth quarter and 2023 generally, I'm going to spend a few minutes highlighting some noteworthy accomplishments for our company last year. We increased cash flow before CapEx nearly fivefold from $12 million in 2021 to $58 million in 2022. We reinstated the common dividend for the first time since the start of the pandemic. Last year, we had the highest absolute RevPAR of the select-service REITs. We drove EBITDA margins higher by 31% or 900 basis points from 29% to 38%. We opened the $70 million 170-suite Home2 Suites in Woodland Hills Warner Center, and we acquired a 111-room Hilton Garden Inn in Destin Miramar Beach, Florida, for $31 million. Then we went ahead and sold four hotels with an average age of 27 years at a cap rate of 2% and 6% respectively, on 2021 and 2019 NOI. Strong, strong result there. Completed the refinancing of Chatham's existing $250 million senior unsecured revolving credit facility, with a new $250 million senior unsecured credit facility, and a new $90 million unsecured term loan. So we improved our overall liquidity from $199 million on January 1, 2022, to $376 million at the end of the year. By doing all that, we reduced our net debt by $82 million, and we reduced our overall leverage ratio from 31% at the beginning of the year to 26% at year-end. Our net debt reduction is the second-best among all the lodging REITs since the start of the pandemic. And for the first time, we participated in the global real estate sustainability benchmark assessment, most people say, GRESB, achieving green star status and achieving a rating 15% higher than our peers. We're very proud of that. Shifting back to our fourth quarter performance. RevPAR remained strong in the quarter, up 24% over the same quarter last year, driven by ADR growth of 20% and occupancy growth of 3%. And relative to 2019, fourth quarter RevPAR was off 4% with ADR growing 7% and occupancy declining 9%. November to February are always our seasonally slowest months of the year, given our strong reliance on business travel in certain of our key markets, but February is definitely showing signs of improvement, as we go through the middle of the back half of this month. In business travel relative to the past 90 days, forward demand trends are encouraging, and our tech-focused intern programs are planned to occur according to the companies and the conversations we're having in that regard. As business travel continues its recovery, we will post outsized growth. So our full year RevPAR of $124 recovered to 92% of 2019 RevPAR of $136, and our macro view is that business travel, including groups, will continue to gain traction in 2023, and leisure travel will remain strong, but some of the white-hot leisure markets of the past couple of years will give some RevPAR back. As this transition occurs in 2023, we will derive the most benefit in changing demand trends as compared to many of our peers who really have become more dependent on that leisure travel segment. Operationally, our margins remain high, and we should finish 2022 with the highest operating margins of all lodging REITs, attributed to our platform, which has delivered outstanding results even at RevPAR levels below 2019. Our fourth quarter adjusted EBITDA and FFO were up substantially. And as a result, we saw a healthy increase in free cash flow to $10 million, double our '21 fourth quarter. Hotel operating margin slipped approximately 100 basis points in the quarter due primarily to some one-time items that either benefited the 2021 fourth quarter or hurt the 2022 fourth quarter. Additionally, labor-related costs, including casual labor, adversely impacted margins by approximately 80 basis points. And these seasonally slower months, balancing labor efficiency is difficult, especially when weekend demand is higher than weekday demand. Of course, we're closely monitoring those staffing levels as we move through this year. Like others in the industry, we're seeing cost pressures impact other areas of the P&L. So it's not just labor, namely utilities, insurance, and general hotel supplies. Lastly, I want to touch on our financial condition, which is extremely healthy as we sit here at our lowest leverage levels in over a decade. In 2022 alone, we reduced our net debt by over $80 million and reduced our leverage to 26%. We ended the year with approximately $380 million of liquidity, including a new credit facility and term loan. As such, we have the flexibility to acquire hotels and/or address or refinance maturing debt over the next couple of years, and we have 24 unencumbered assets that could serve as additional sources of liquidity. During the 2023 first quarter, we've already paid off loans amounting to $73 million, including the high-interest loan on our Woodland Hills Hotel as well as two maturing loans. We only have three additional loans maturing in 2023 amounting to $77 million, and those maturities will be funded with the remaining borrowings on our term loan and free cash flow. Touching quickly on external growth. The transaction market has been dormant, but it seems like it's starting to ease up a bit with the significant rise in interest rates, and a bunch of maturing debt occurring throughout the industry. We believe there will be some opportunities to acquire hotels that fit into our high-quality portfolio in the back half of the year. So to finish up, we focused much during 2022, and we are well positioned to generate outsized growth, both internally and externally, given the strength of our balance sheet. With that, I'd like to turn it over to Dennis for a little more color. Dennis?

Thanks, Jeff. Our portfolio performed significantly better than the industry with fourth quarter RevPAR growth of 24%, exceeding industry performance by approximately 50%, again, I think noteworthy as this is a relative indicator of potential outperformance moving forward in 2023. If you look at our portfolio for the quarter, excluding Silicon Valley, our fourth quarter RevPAR was up 3% versus 2019 on ADR growth of 12%, offset by a decline in occupancy of 8%. Pretty good performance in what I think Jeff referred to as generally our seasonally slower period. During the fourth quarter, 19 of our 37 comparable hotels generated RevPAR greater than 2019. And for the year, 16 of our 37 comparable hotels were greater than 2019. Again, a bullet point with respect to upside in our portfolio as business travel recovers to 2019 levels. Weekday occupancy in the fourth quarter was down approximately 11% versus 2019, which represented a decline from approximately 6% in the third quarter. On the flip side, weekday ADR was up versus 2019, each of the last seven months in 2022, which bodes well as that business traveler continues to recover in '23. Weekend RevPAR remained strong, up approximately 9% in the quarter versus 2019. Silicon Valley, our largest market, continues to grow meaningfully over the prior year with fourth quarter RevPAR growth of 45%, but is still down basically 32% versus 2019. Year-to-date, our 2022 Silicon Valley RevPAR of $126 is also still down 32% to 2019 RevPAR of $185. Occupancy is getting closer to 2019 levels. It's off 8% to 68% versus 74% in 2019. The Silicon Valley EBITDA was $17 million in 2022, still below 2019 EBITDA levels of $29 million or approximately 41%. Fourth quarter air travel into both SFO and San Jose airports remains well below 2019 levels, of 22% and 37%, respectively, given its reliance on the international business traveler as well as a slower return to office, Silicon Valley has been, and I think will be still on the road to recovery compared to most of the rest of our markets. One thing to note is that, certainly within the last couple of weeks, we have seen, and I think Jeff alluded to this briefly, a continued increase in business -- international business travel coming into our hotels in Silicon Valley. In other key tech markets, Seattle RevPAR achieved 2022 RevPAR of $125, which represents 87% of 2019 RevPAR. At that hotel, our EBITDA in 2022 was $5.2 million, which is approximately 85% of 2019 hotel EBITDA. So that market relative to Silicon Valley is performing a little bit better on the road to recovery. Looking at the slow recovery in our Silicon Valley and Seattle markets, Austin is performing above 2019 levels. Our residence in Austin was -- RevPAR was up 8% versus 2019. The TPS was not open yet, and our two hotels at the domain should have a strong 2023. Our five highest hotels with absolute RevPAR in the quarter were at our residence in Fort Lauderdale at $184, our HGI, Marina Del Rey at $173, and then our Hampton in Portland at $172. Lastly, our fourth and fifth ranked hotels were the Hilton Garden Inn in Portsmouth, and the Residence Inn White Plains. Our Homewood Suites Maitland led portfolio occupancy at 89% in the quarter. We had eight other hotels achieve occupancy over 80%. Our top five hotels with respect to average daily rate, again, led by our Fort Lauderdale Residence Inn at $230, then our Hampton in Portland with an ADR of $226, followed by Portsmouth, Marina del Rey, and our Silicon Valley Residence Inn, Mountain View, all above $210. Twenty-nine of our 37 hotels achieved fourth quarter ADR higher than 2019. We continue to see an average length of stay approximately 15% to 20% longer than our historical levels, which translates to incremental GOP, because there's less required housekeeping that I think you've heard from others, that certain brands have started to roll out new operating procedures with respect to required housekeeping services. For the quarter, total hotel revenue of $70 million was up 23% compared to last year's revenue of $57 million, and we were able to generate incremental GOP flow-through of almost $5 million for flow-through of 35%. Our employee headcount remains down approximately 25% compared to pre-pandemic levels. And admittedly, we're still probably a bit understaffed there. Since 2019, our hourly wages have increased approximately 25%, so meaningful cost increases there. In the quarter, casual labor was up approximately $0.5 million or 50% over last year and reduced margins by approximately 50 basis points. On a per occupied room basis at our comparable hotels, our costs were approximately up 4% relative to 2019. Our top five producers of gross operating profit in the quarter were our Gaslamp Residence Inn, which was also the highest producing GOP hotel in the first three quarters of the year, followed by our Silicon Valley 2 Residence Inn and then our Hilton Garden Inn in Portsmouth, Courtyard Dallas Downtown, and then our SpringHill Suites Savannah. With respect to capital expenditures, we have spent approximately $21 million in 2022. And as we look ahead to '23, we expect to spend approximately $30.6 million, which includes $22 million of renovation costs at five hotels. With that, I'll turn it over to Jeremy.

Thanks, Dennis. Good morning, everyone. Chatham's Q4 2022 RevPAR of $117 represents a 23.9% increase from Q4 2021 RevPAR of $95 and was down 3.7% from our Q4 2019 RevPAR of $122. Q4 and Q1 are typically the lowest RevPAR quarters for our portfolio given the drop-off in business travel around the holidays and the start of the year and lower levels of leisure travel given the concentration of our leisure-focused properties and markets where summer is the peak season. In Q4, we continued to see business travel below 2019 levels and leisure travel above 2019 levels, although we believe business travel will continue to recover and that at some point, leisure travel could plateau or begin to decline. As we stated in our earnings release, January 2023 RevPAR was $92, and RevPAR through the first few weeks of February was $113. So absolute RevPAR levels are low for the first few weeks of the year. Our portfolio is generating strong RevPAR growth relative to 2022, and business is starting to pick up past early January, as is typically the case for us. We expect this seasonal recovery to continue throughout the balance of Q1 and into Q2. Just to provide some color on how this seasonal rebound has played out in the past, in 2019, March RevPAR was approximately 15% higher than February 2019 RevPAR. Our Q4 2022 hotel EBITDA was $23.3 million, adjusted EBITDA was $20.4 million, adjusted FFO was $0.20 per share and cash flow before capital was $10 million. And while we're starting to see cost increases due to the reinstatement of certain brand standards, wage increases, and increased staffing levels and increased utilities and insurance costs, we were able to generate a solid GOP margin of 39.9% and hotel EBITDA margin of 33.3% in Q4. Our Q4 GOP margin of 39.9% was down at 120 basis points from our Q4 2021 GOP margin. And our Q4 hotel EBITDA margin of 33.3% was 250 basis points higher than our Q4 2021 hotel EBITDA margin, primarily due to property tax refund of approximately $1 million. For the full year in 2022, we benefited from approximately $2 million of property tax refunds and also benefited from assessment reductions related to pandemic-related performance declines. Given the cost pressures the lodging sector is facing, as we saw in Q4, with GOP margins down 120 basis points, we believe margins are likely to decline slightly in 2023 if that trend continues, but we are proactively taking measures to mitigate cost increases where possible, and the ultimate impact on margins will depend on RevPAR growth. Over the last several years, Chatham has taken a number of steps to strengthen its balance sheet, and as a result, we now have the lowest leverage and most liquidity we've ever had. In 2022, Chatham reduced its net debt by $82 million or 16%. And since March 31, 2020, we have reduced our net debt by $331 million or 43%. In Q4, we replaced our $250 million revolving credit facility that was scheduled to mature in 2023 with a $350 million credit facility that consists of a $260 million revolving line of credit and a $90 million delayed draw term loan. Including all extension options, the new revolver and term loan have a final maturity of October 2027. In early 2023, we used $75 million of term loan availability to repay two maturing mortgage loans and the construction loan on our Home2 Warner Center. We intend to use the remaining availability under our term loan to repay a $16 million mortgage that matures in May 2023, and available cash to repay a $20 million mortgage that matures in July 2023. Over the course of 2023, we will continue to closely monitor our markets to consider opportunities to refinance a $40 million mortgage that matures in December 2023, and potentially address the portion of our 2024 CMBS maturities. Our undrawn $260 million revolving credit facility provides a valuable source of liquidity that increases our flexibility to address our remaining debt maturities. With our reasonable leverage, solid liquidity, strong operating performance, sizable portfolio of unencumbered hotels, and meaningful free cash flow, we are well positioned to refinance our remaining debt maturities when needed. As a reminder, our reported 2022 RevPAR figures did not include results for the Home2 Warner Center since it had been in operation for less than a year. And our reported 2023 RevPAR figures will include Warner Center's results starting on January 24, 2023, the one-year anniversary of its opening date. 2022 RevPAR, including Warner Center, was $90 in Q1, $138 in Q2, $151 in Q3, $118 in Q4, and $124 for the full year. This concludes my portion of the call. Operator, please open the line for questions.

[Operator Instructions] We take our first question from the line of Anthony Powell with Barclays.

I guess a question on margin. So I think, Jeremy, you said that margins could continue to decline this year if those trends continue. I just wanted to drill down on that. You get 27% RevPAR growth in the fourth quarter, but GOP margins were down. I guess, they should be up in the first quarter given the rough easy comps, but how should I think about the RevPAR growth needed to maintain margins throughout the year? I know there could be one-time issues, staffing up and whatnot. So just more color there would be great.

Look, I think our plan is not to give guidance at this point. I think you would need RevPAR growth in the double digits for the year to get to flat GOP margins, though.

Is that mainly just incremental wage growth, insurance cost, taxes, maybe -- what's driving that kind of requirement on a GOP basis?

Yes, on the GOP side, it doesn't include taxes, although property taxes go up meaningfully and will impact EBITDA margins. But on the GOP margin side, it's both wage increases given the inflation we're seeing and also kind of a recovery of staffing levels, again, in the pandemic, especially through the first three quarters of last year's staffing levels were very low with the hotels. And then we're continuing to see large increases in other costs as well. Things like utilities are up based on our internal estimates up about 13% next year. So -- and then on the property insurance side, I think those are expected to increase over 20% as well. So there's a lot of cost pressures.

Yes. I mean, I think just to add to what Jeremy was saying. I mean, obviously, I think you've heard from other REITs as well, and we're all kind of in a process where RevPAR growth year-over-year is pretty strong in the first quarter given the Omicron comparison. But I think as you've heard from most people, typically, you would see some pretty good expansion and a plus 20% RevPAR scenario that I think we saw in the fourth quarter. But in fact, our operating margins, as we indicated in our release, were down approximately 100 basis points or so. So I think it's certainly a challenging environment from an expense standpoint at the moment.

Maybe on Silicon Valley, and I think you talked about how the training business should be back this year. What about other business like product launches, things like that? What's your conversation like with the big tech firms in Silicon Valley in terms of just overall business volumes in 2023?

Yes. I will tell you that our team certainly were not surprised, but not overly encouraged by November and December, the lack of activity generally in Silicon Valley, and that continued into January for the other kind of business travel. And then, all of a sudden, in February, things have really started to perk up and overall bookings in the market and in the two hotels, specifically in Sunnyvale, which are the ones that really drive our results, as you know, really started to look way better. And we've seen international travel, particularly, for example, with Samsung from Korea and otherwise, it was nonexistent through the entire pandemic, all of a sudden, booking substantial rooms starting later in this month. So we -- they and we feel way better, and this is some real-time sort of week-by-week information I'm giving you relative to that. The interns -- and one reason why we're not giving guidance at this point in the year is, we want to see that -- are those contracts actually signed and conversations are being had around what the volume is going to be there. So I think over the next 30 to 45 days, those conversations should be finalized as well, and we'll feel a lot better about how 25% of our portfolio roughly based on old numbers should perform for the rest of the year. But it is significant and the team feels much better about the level of business activity there.

So I guess you should know by the first quarter earnings call kind of the plan for the interim business. Is that fair?

Without a doubt, that's the plan.

We take the next question from the line of Aryeh Klein with BMO Capital Markets.

Maybe just following up on Silicon Valley. It sounds like it's moving in the right direction, but obviously, still meaningfully lagging. From a portfolio construction standpoint, would you prefer to have less concentration to the market? And could you maybe look to sell something there, knowing that prices are probably not ideal, but maybe there's an opportunity to reposition capital to another market?

Look, I think there are two considerations, or way more than two, but -- short-term and long-term. Long-term, we've had a lot of strategic conversations with our Board and otherwise, just generally about how California feels. And we're kind of more concerned about legislative initiatives and things that are occurring on that front, that diminished value perhaps over the longer haul. So I think repositioning capital, as you're describing and cycling it into some markets, that have a little better long-term view and growth, frankly, is a good idea. In the near term, these hotels have great upside, and someone is going to really take advantage of us, frankly, if we're going to sell these hotels right now. Of course, there are multifamily opportunities. And actually, I'm going to take a visit out there and speak to some of the zoning officials relative to how that may pan out in that regard because there are very big numbers being paid, as you probably know, on a per-key basis, somewhere around $500,000 a door and more for apartments in that market. So we'll take a look at that, too. I mean, we've always said these hotels are very well positioned in the market. And with some visibility on this foreign travel coming back, which has always been a big piece of our business that's been nonexistent, together with the intern business, I think we're sort of going to hold them for the very near term, without a doubt. Sorry for the long answer.

And just maybe on flexibility overall with leverage improving and the balance sheet in good shape. Just for 2023, do you expect to be a net seller, net acquirer? How are you thinking about the balance there?

We really do believe, after just talking to our friendly owners and developers that we've kind of established or known for 20 and 30 years in some cases, that there will be some deal activity in the back half of the year. And I also think that our friends at the various PE firms that have frankly been buying a lot of things during the pandemic might not be as aggressive as they have been given the interest rate scenario. So on a relative basis, I think that bodes better for hotel REITs. So yes, I think we're net acquirers.

And just lastly, just a follow-up on the intern program. Have they given you a sense of just what the volumes could look like maybe relative to this past year?

We're still in negotiations with that. I mean, we're obviously not the only hotel that get this intern business. So as we kind of work -- and I think Jeff talked about the timeline, over the next basically 30 days, we're negotiating with them on volume and rate. So still kind of up in the air at the moment. The good news is, it appears as the programs are on both in Austin -- well, in each of Austin, Silicon Valley and Bellevue for, I think, all of the tech companies we've referred to in the past, that we've housed in our hotels. So it's encouraging at the moment, but still negotiating. And I think as we've talked about, we'll know in the next 30 to 45 days exactly what's under agreement and what our volume is yet. So as soon as we're able to talk about it, we will, but we're encouraged at the moment.

We take the next question from the line of Tyler Batory with Oppenheimer.

Just a follow-up again on the cost side of things. When you talk about margin, that could decline year-over-year this year. Can you give more detail on what's in your budgets in terms of year-over-year increases for wages, year-over-year increases for insurance and then utilities as well?

Yes. I mean, I think -- I'll chime in and Jeremy can chime in as well. I think for just a general labor assumption, it's essentially, hey, we're averaging kind of 5% a year since 2019. We're expecting another 5% or so in 2023. And I think Jeremy already mentioned with utilities being up kind of 13%, 14% and property insurance up over 20% year-over-year. So I think the biggest item from a year-over-year perspective is property taxes, which Jeremy alluded to in his prepared comments, that we benefited to the tune of, I think, around $2 million in 2022 that from refunds. So I think those are your big ticket items.

Yes. And I think, Tyler, the other thing to point out on the labor side, it's not just the 5% wage inflation we're assuming here. It's also the fact that brands are requiring us to clean rooms more often now. So there's an increase in staffing levels as well. So while wages are going up 5%, housekeeping costs per occupied room are going up more like 12% or 13% for the year.

Sorry, Tyler, I think as you look kind of to 2023, I mean, similar to what you've heard from other companies, obviously, first quarter RevPAR growth is going to be really strong with second to fourth quarter moderating kind of to obviously much lower relative to the first quarter. And I think as Jeff talked about, we should, given kind of our reliance on business travel, produce some decent RevPAR growth relative to the industry, even in those second, third, and fourth quarters. But I think, as we saw in the fourth quarter in terms of margins, certainly, there's a lot of cost pressures in there. So I think just to keep that in mind.

So how are you thinking about the interplay between occupancy, building that back and rate? Just perhaps given the difficult environment out there in terms of operating costs going up. I mean, does it make more sense to lean a little bit more into the rate side of things, a potential flow through there? Or maybe you do want to build back the occupancy a little bit more to get back to where you were in 2019?

I mean, it's market by market, obviously, Tyler. I think in my prepared remarks talking about how many hotels that had ADR up relative to 2019, so certainly, it's as it always has been a supply and demand issue. So in markets like Silicon Valley and Washington, D.C., it's more, hey, we still haven't recovered enough as a market from an occupancy perspective to really drive rates. But in markets such as Austin, Texas and the Northeast and Los Angeles, I think ADR growth is paramount. So in general, we believe our ADR growth is going to be stronger than our occupancy growth in 2023.

And then last one for me. I'm interested in the trends that you're seeing so far in 2023. I understand there's seasonality here on a ton of business travel. But I'm really curious on the leisure side of things, markets like Destin, you've done in Florida overall. Kind of what are you seeing -- Any indication that things are starting to soften a little bit?

Well, I mean, I think it's -- I hate to say it, but it's market by market, whereas our Fort Lauderdale Residence Inn even relative to 2019 and last year is still doing well, Destin is a little bit of a laggard compared to '19 and last year. But if you look to the Northeast Portland and Portsmouth outperforming still relative to last year and in 2019.

Even in the winter.

Yes, even in the winter. So I think of -- kind of what we would call more of our leisure markets, Destin is probably the laggard of the five or six hotels. Again, Savannah high leisure, really still doing well relative to last year in '19. So for the most part, leisure is still carrying the weight, and I think as you've seen that in a lot of the peer companies reporting as well.

We'll take the next question from the line of Bryan Maher with B. Riley Securities.

Most of my questions have been asked and answered. But maybe for Jeff, given the backdrop of what we're hearing for second half opportunities when people go to refi. As you think about your markets and your product, how deep of an opportunity do you think that can be? My suspicion is it's probably not going to be as relatively deep as maybe gateway markets like New York and others. But how are you thinking about the opportunity pool there as you approach the back half?

Well, I think the good news for us is we've only got 39 hotels. So we acquire one or two hotels, it really moves the needle and it really, really pushes our FFO up substantially. So it's hard to predict where and how much volume there will really be, but I don't want to get overly excited. I think you're right. I think that there will be selected opportunities. We're picky -- as you know, generally very picky about the kind of assets that we want to own. And we want to continue to increase our focus on the extended stay segment. Obviously, it's 60%. We're still trying to push that a little bit higher as an overall mix. So that even further narrows the field just a little bit because we're primarily hunting for Residence Inns, Homewood Suites, TownePlace Suites, and Home2 Suites. So in that way, we'll continue, I think, to produce margins and results that exceed for the most part, others. So we'll have to see how it plays out.

And not to beat a dead horse on the leisure component, but it was pretty profound on one of my covered companies this week. When you think about your leisure-ish properties in aggregate and RevPAR this year, do you think that that ends up being kind of flattish for the year or maybe down low single-digits?

I'm not looking for down really in those hotels. There's actually, I think we'll be up across the board or altogether, when you look at those five hotels or six or so that really comprise what we might or do call leisure for our portfolio. I think we'll be up. I don't think there's any huge pullback happening particularly in the kind of hotels that we've got. They are not ultra-luxury resort hotels.

But overall, I think a pretty low single-digit growth for those versus much higher growth for things. They're still recovering like Silicon Valley or the rest of the focus.

That's right.

Ladies and gentlemen, we have reached the end of the question-and-answer session. And I'd like to turn the call back -- the floor back over to Jeff Fisher for closing comments. Over to you, sir.

Thank you, and we really appreciate everybody being on the call this morning. We look forward to providing some more color and continued good results and better news as we move forward through the rest of the year for our next quarter conference call. Thank you.

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