Element Solutions Inc Q3 FY2020 Earnings Call

Good morning, ladies and gentlemen, and welcome to the Element Solutions Third Quarter 2020 Conference Call. All lines are currently in a listen-only mode. Later you will have the opportunity to ask questions during the question-and-answer session. Please note today’s call is being recorded. I will now turn the call over to Yash Nehete, Associate Director of Corporate Development and IR. Please go ahead.

Good morning, and thank you for participating on our third quarter earnings conference call. Joining me are Executive Chairman, Sir Martin Franklin; CEO, Ben Gliklich; and CFO, Carey Dorman. In accordance with the Regulation FD or fair disclosure, we are webcasting this conference call. Any redistribution, retransmission or rebroadcast of this call in any form without the express written consent of Element Solutions is strictly prohibited. During today's call, we’ll make certain forward-looking statements that reflect our current views about the company's future performance and financial results. These statements are based on assumptions and expectations of future events that are subject to risks and uncertainties. Please refer to our most recent SEC filings for a discussion of the most significant risk factors that could cause actual results to differ from our expectations and predictions. In the earnings release and supplemental slides issued and posted yesterday afternoon, Element Solutions has provided financial information that has not been prepared in accordance with U.S. GAAP. For definitions and reconciliations of these non-GAAP measures to comparable GAAP financial measures refer to the release and slides which can be found on the company's website at www.elementsolutionsinc.com in the Investors section under News & Events. It is now my pleasure to introduce Ben Gliklich, CEO of Element Solutions.

Thank you, Yash, and good morning everyone. Thank you for joining. For a third consecutive quarter, the team at ESI managed to navigate a challenging environment gracefully and with resilience. I'd like to start by recognizing all of my global teammates for navigating COVID-related disruptions exceptionally well, through focus, hard work, and sacrifice. In a period of uncertainty, what began earlier this year with dropping volumes driving pay cuts and furloughs was followed by a sharp increase in activity this quarter. The team was consistently on task and delivered the quality products and services our customers demand, all without seeing other longer-term improvement projects derailed. We could not be prouder of our people. While COVID is still with us, during the third quarter our most impacted end markets rallied significantly from the second quarter lows. At the same time, our high-end Electronics businesses continued to demonstrate the same macro outperformance that characterized the first half of the year. The recovery we saw in our automotive and industrial-oriented businesses beginning in June and July accelerated into August and September. Sequentially, net sales across our industrial and assembly businesses increased roughly 40% in the quarter. We ended the third quarter with our industrial vertical down 7% organically year-over-year after having been down more than 40% in May. We entered the third quarter cautious about our high-end Electronics businesses, given their marked outperformance relative to the broader economy. Additionally, the third quarter of 2019 was particularly strong, creating a tougher comparison. Despite a lower than normal seasonal uptick from the circuitry business, our Electronics business grew year-over-year, bolstered by a robust rebound in our assembly business and the continued strength in our semiconductor business. Overall, this translated to a strong quarter. We generated $102 million of adjusted EBITDA on net sales of $478 million. Sequentially, adjusted EBITDA grew 20%, with sequential net sales growth of 23%. Year-to-date, net sales were down 7% organically and adjusted EBITDA was down 4%, which reflects a margin of 23%. These are good results in a turbulent time. Adjusted EBITDA margins in the quarter declined year-over-year, which we expected due to the strong mix of business in the third quarter of 2019. They were flat sequentially and would have been stronger were it not for year-to-date incentive compensation related accrual true-ups in the quarter, driven by the sharp increase in full-year earnings expectations. We expected operating costs to increase in the third quarter, and they did modestly, even before the compensation true-up. We expect OpEx to decline from Q3 to Q4, and the Q4 level of spend should be more reflective of the quarterly rate we expect in 2021 as well. Adjusted EPS in the quarter was $0.22 and $0.65 year-to-date, nearly flat versus the same period in 2019. We generated $63 million of free cash flow in Q3 and a total of $174 million of free cash flow through the first nine months of the year. That compares to $166 million in the same period last year on an adjusted basis. This is textbook performance from our business, demonstrating our ability to preserve profits in difficult markets and generate outsized cash flows. During Q3, we announced our acquisition of DMP Corp. and the formation of a new business, MacDermid Envio Solutions. The acquisition was modest in size, but not insignificant. We paid a mid-single-digit multiple for a few million dollars of adjusted EBITDA. It meets our acquisition criteria perfectly, as it is a tuck-in transaction opening an immediate adjacency with synergy potential, available at a reasonable multiple. However, we also believe this acquisition creates a pathway for substantial growth into a large and new addressable market for us. Our customers are eager for help managing their waste streams. We conducted a survey of the top 50 customers in our industrial solutions business, and 90% of them indicated that sustainability was among their top three priorities, while 25% said it was their primary priority. MacDermid Envio Solutions, through DMP and our Chemtech metal recycling business, offers capabilities that will allow us to assist customers with sustainability efforts. Both businesses have solid technology, but we have been limited to the Americas. We believe we can expand these capabilities globally and capture both mindshare and market share by adding to our already extensive list of critical solutions offered to our customer base. The commercial integration of this business is ongoing, and the MES sales backlog is growing rapidly. I look forward to providing more details on our progress with this initiative in the coming quarters. Carey will now take you through our third quarter financials in greater detail. Carey?

Thanks, Ben. And good morning, everyone. As Ben mentioned, our performance in the quarter was quite strong when assessed within the context of the macroeconomic backdrop of COVID-19. We exceeded our revised adjusted EBITDA guidance for the quarter, as September ended well ahead of plan. On slide four, we share additional detail on net sales in our two segments. In Electronics, we grew organic sales 2% year-over-year, reversing the 6% decline reported in Q2. Semiconductor performance remained the best in class. The proliferation of sensors and computing power are long-term trends continuing to propel this business. The Automotive recovery drove Q3 assembly net sales to nearly flat organically year-over-year, reflecting a sequential improvement of 36%. For the first time this year, Circuitry experienced a modest decline in organic net sales, despite a sequential improvement of 6% in that business as well. Circuitry, which is exposed to high-end mobile PPB, had a strong Q3 in 2019, creating a tough comparison for the quarter. Adjusted EBITDA margins in the segment were down approximately 300 basis points in the quarter, primarily influenced by negative mix contributions from Assembly, higher metal sales prices affecting margins, and the year-to-date variable compensation true-up that Ben referenced earlier. Electronics adjusted EBITDA margin would have only been down by 100 basis points versus Q3 2019, excluding the negative impact of the variable compensation change. Organic net sales in Industrial & Specialty declined 10% compared to the same period last year, but improved sequentially by 24%. All three verticals faced continued pressure this quarter on a year-over-year basis due to COVID-19 and various impacts on supply chains, oil prices, and consumer buying patterns. The industrial solutions vertical was down mid-to-high single digits but was up 41% sequentially as the COVID-related automotive shutdowns reversed course. Both offshore and graphics witnessed mid-teen organic sales declines. Graphics continues to suffer from weakness in the non-core newspaper business, which, although a minor percentage of the overall vertical, was the primary driver of the sales decline. The core flexible packaging business also faced delays in consumer packaged goods marketing initiatives, which we expect to resume to some extent in the fourth quarter. Sustained low energy prices primarily drove declines in the offshore segment due to reduced drilling activity, which led to minimal new production coming online. Adjusted EBITDA margins for I&S decreased year-over-year by almost 500 basis points, with approximately 300 basis points driven by the compensation accrual true-ups. This was partially offset by ongoing OpEx savings. The sequential adjusted EBITDA margin declines approximated 200 basis points, heavily influenced by the mix, as offshore and graphics are higher margin businesses than industrial. On slide five, we cover cash flow and the balance sheet. We generated $63 million of free cash flow in Q3. Year-to-date, we have generated nearly $175 million of free cash flow, approximately $10 million better than our adjusted 2019 year-to-date free cash flow. Working capital only grew modestly, in part due to a decline in inventories, as we continue to work through safety stocks we built at the peak of COVID disruptions. We expect working capital to be flat to modestly improve in Q4, although this will ultimately depend on demand patterns towards the end of the year. This quarter, we took advantage of our strong business execution and a recovering market backdrop to refinance our senior unsecured notes. Our 3.875% coupon set a recent record for high yield chemicals and reflects the improvements we are implementing throughout our business. We extended our maturity by three years to 2028, reducing our interest expense by 200 basis points or $16 million annually, of which we expect to realize $5 million this year. Our cash flow this quarter was burdened by approximately $10 million of accrued interest paid in conjunction with our refinancing. While this interest was paid earlier than expected in December's coupon, we will benefit from this refinancing in Q4, as our next bond coupon is not due until March 2021. Next year, our full-year cash interest should be closer to $50 million, reflecting a 30% reduction compared to our initial expectations for 2020. Cash taxes in Q3 remained lower year-over-year in line with lower earnings. Our full-year cash tax expectations are now approximately $70 million, representing a $5 million reduction from our previous outlook. CapEx is trending in line with our expected $30 million level. We continue to invest in our business as we would in a standard year. For the full year of 2020, we expect to generate around $215 million of free cash flow. Net leverage at the end of Q3 was consistent with previous quarters this year at 3.2 times adjusted EBITDA. Our strong cash flow generation and prudent balance sheet management largely mitigated the impact of COVID-related declines in earnings on our leverage ratio. We restarted our share repurchases in late Q3, acquiring approximately $3 million worth of stock over just a few days in September. Our buying window was limited due to the financial guidance revision we released in September. In October, we also repurchased an additional $70 million, or 1.5 million shares. As we move into Q4, we believe we have sufficient capacity to invest in growth and return capital to our shareholders. Ben will elaborate on this shortly. With that, I'll turn it back to Ben.

Thank you, Carey. For Q4 2020, we expect adjusted EBITDA of $90 million to $95 million, a slight increase for the quarter compared to what was implied by our updated financial guidance in early September, and a more significant increase for the back half of the year relative to that guidance. Built into these figures is the expectation that our automotive and industrial end markets do not improve much beyond the recovery we experienced in the third quarter. They are about 5% to 10% below prior year, which is where we believe they will remain through Q4. We expect the strength in our high-end Electronics business to continue, albeit sequentially lower given fewer operating days and the typical calendar year seasonality that we observe in that business, with the third quarter generally stronger than the fourth. The top line will therefore decline sequentially as usual in Q4 for our business. However, OpEx should also decline sequentially, given the variable compensation accrual true-up recorded in Q3. Overall, adjusted EBITDA margin in Q4 is expected to be roughly the same as in Q3. At current FX rates, we anticipate a modest year-over-year translational tailwind for the first time since late 2018. We've demonstrated in our first seven quarters at ESI that our business can generate strong cash flow in various market conditions. We are proud of our track record of capital deployment over that period. We've spent approximately $75 million on acquisitions, and these investments are on track to generate more than $13 million in adjusted EBITDA this year. Additionally, we have repurchased 5.5 million shares thus far this year. Even though our end markets have been weak and currency is expected to be a full-year headwind of $5 million, leading to a decline in adjusted EBITDA of about 6%, our adjusted EPS this year is projected to be approximately flat versus 2019. Our cash flow deployments in founding ESI have driven strong earnings per share performance. We expect earnings growth to accelerate our deleveraging into next year, along with free cash flow generation, creating additional capacity under our leverage target. We remain focused on growth, and we continually evaluate modest bolt-on acquisitions of businesses that we believe would thrive as part of ESI, bringing us talent and new capabilities, representing good value, and having the potential to accelerate our growth rate. We view our shares as an attractive acquisition alternative when trading below what we consider to be intrinsic value. As mentioned earlier, we began to repurchase shares modestly towards the end of the quarter, as our salary restrictions and furloughs rolled off. Our business generates significantly more cash than is needed for internal investment to fund CapEx, exceeding our typical deployment into suitable acquisitions. In this context, we believe it makes sense to initiate a regular cash dividend to return some of that strong cash flow to our investors. We believe we can do this without materially impacting our ability to compound earnings and without reducing our flexibility to opportunistically invest in inorganic growth or to delever. Though the actual declaration of future cash dividends, as well as their amounts and timing, will be subject to final determination by our Board, we anticipate initiating a dividend in the current quarter of $0.05 per share, to continue at that level into 2021. We've prudently deployed capital at ESI, and this step would further support our balanced approach. Between the mega trends driving our end markets and our capacity to outperform our markets through strong execution and strategy, we remain committed to our adjusted EPS target of $1.36 per share by 2023. Before opening the line for questions, I would like to conclude by emphasizing that our results this quarter reinforce two core convictions about our business that we build upon every quarter - firstly, we have a first-class operating team driving businesses with stable, defensible margins and robust cash flows that we are consistently improving through strategic implementation and process enhancement; and secondly, these businesses operate in growth markets, and ESI is providing enabling technology and service to end markets with promising demand drivers that we believe are only beginning to influence our top line. With that, operator, please open the line for questions.

Certainly. We'll take our first question from Steve Byrne with Bank of America. Please go ahead.

Yes, good morning.

Hi, Steve.

Ben, I wanted to drill in a little bit on this new business unit of wastewater treatment and more specifically, on the acquisition of DMP. What is particularly proprietary about their areas of expertise at DMP? For example, is this primarily about recovering metals out of wastewater, or is this about the removal of organics as well?

Yes. So we have two businesses within MacDermid Envio Solutions. The first is Chemtech, which we acquired over a year ago, that focuses on metals recycling. This involves a piece of equipment that we attach to customers' production lines to reclaim metals, whether it's nickel or chrome, from depleted baths. As a result, our customers can resell that metal in solid form and reclaim some value, thus eliminating it from their waste stream. It's an exceptional offering that provides swift paybacks for our customers and is proprietary in nature. DMP, on the other hand, specializes in equipment and chemistry for separating solids from water at production lines' endpoints. This technology purifies water, eliminating some solids commonly found in typical discharges, with the ideal being a circular line and a no-discharge line for recycled water, something we've achieved in certain instances. What differentiates this business is its engineering capability, which has primarily been focused in the US. They have many satisfied customers in the US, and our plan is to leverage that engineering capability internationally. We tell the folks at DMP that they were acquired by a 4500 percent lead generation engine because our customers could greatly benefit from their technology, and we've already begun to witness those benefits.

Would you characterize the value proposition of owning DMP as more about globalization or capturing more wallet share from your existing customers?

Yes, there are two ways to win with this. The first is to grow the business by offering it to existing customers who seek assistance in reducing their environmental footprints, which is a critical issue for the owners of our customer businesses. The second way is to utilize this technology to increase our mind share with those customers and capture more market share of future manufacturing lines by bundling it with our chemistry business. Therefore, we view this as not just a growth business from an Envio Solutions standpoint, but also a market share driver for our chemistry products.

Okay. And just curious about your outlook for this newly minted dividend policy over time. Do you see this as something you'd likely grow annually, or is it more opportunistic?

So, the plan with the dividend is to start at $0.05 a share, and as we've indicated in our comments, to maintain that into 2021. It's not a definitive percentage of free cash flow, but if free cash flow grows, we would expect the dividend to grow as well.

Thank you, Ben.

Thank you.

And we'll take our next question from Josh Spector with UBS. Please go ahead.

Yes. Hey guys. Congrats on a good quarter.

Hey, Josh.

I want to ask, if I look at the second half and consider the various moving parts from a cost perspective, could you help me bridge your second half cost structure into next year? I'm particularly interested in the OpEx influences and any temporary cost reductions associated with travel. Additionally, what should we keep in mind for next year's cost base?

Thank you for the question, Josh. Clearly, there are multiple moving parts. We eliminated $60 million of costs during the second quarter. We anticipated that costs would begin to rebuild with government subsidies ceasing and some salary cuts and furloughs ending as we entered the third quarter, which indeed occurred, as reflected in our prepared remarks. OpEx increased slightly coming into Q3, and then we had the accrual reversal, which was a year-to-date true-up, to consider, so you can regard that as a one-time impact in the high single-digit million dollar range. As we move into Q4, we expect to see OpEx decline from Q3 levels, and we anticipate that this will serve as a reasonable benchmark for the first half of 2021. So, consider where we settled this quarter and reduce it by around 10. There is still some travel that we haven't resumed that will hopefully come back to some extent as we return towards normal. However, we wouldn't rely on that returning in the first quarter of 2021 based on current observations.

Thanks. That’s helpful. Also looking at Electronics and the growth outlook there, you've had substantial growth in the semiconductor business all year, and now some recovery in the other sectors as well. Looking forward to Q4 and even next year, how do you foresee growth? Do you anticipate a tougher comparison for you to achieve growth from the semiconductors segment, or do you see enough positive signs to suggest growth will continue over the next year or two?

Thanks for the question, Josh. The semiconductor business has been remarkable throughout the year, with several consecutive quarters of nearly 20% top line growth. We expect it to remain a growth business for us. We anticipate growth into Q4 and next year as well. While I wouldn't expect 20% growth every quarter for multiple years, the underlying drivers of that business are genuine and consistently present. Our customers are demanding more sensors and enhanced computing power, which will sustain growth. Therefore, we expect that business to grow significantly next year and for several years beyond that.

Okay, thank you.

And we'll take our next question from Chris Kapsch with Loop Capital Markets. Please go ahead.

Yes. Hi, good morning. From your formal presentation materials, looking at the Electronics segment, specifically regarding the Circuitry business, you've referenced share gains alongside recovery from COVID weakness in China. I would assume those are mutually exclusive. So my question is, during this pandemic, it has become apparent that your company has showcased the capacity to provide technical support to customers effectively during the worst of the disruption. It suggests that this superior service might have yielded a tactical advantage in addressing some of your key end markets and customers. Can you elaborate on whether this has contributed to the referenced share gains?

It's challenging to attribute specific share gain to individual dynamics. We aim to lead with best-in-class service, reliability, and product offerings, and that is resonating now. The high-end Electronics business has been notably resilient amid COVID. New product launches in consumer electronics and mobile devices demand new production, and we're winning that business. Therefore, those comments in our prepared remarks, or in our presentation, refer to our continued success in business growth at the high end and our ability to meet customers' needs for innovative products, which were not disrupted by COVID, unlike some competitors.

Understood. That response sets the stage for my second question. As you noted, the Circuitry for consumer electronics is evolving, becoming denser and more complex. This complexity introduces more challenging interconnect applications, driving increased content per unit. I'm interested in understanding your current position in terms of these advanced smartphones. Are you beginning to see the increased content per unit from advanced smartphones manifesting at this juncture?

Thank you for that question, Chris. We're quite excited about this. Our estimates indicate that a 5G phone contains about 15% more of our content compared to a 4G device, which is promising for our growth. While we are starting to see this reflected in our performance, it is worth noting that this year's mobile phone units are projected to decline by 10% to 15%. Nevertheless, our Circuitry business has not been adversely affected by that decline. On a year-to-date basis, we've experienced growth, driven significantly by investments in data storage. As we look ahead to next year, we anticipate a rebound in mobile phone units, compounded by increased content per unit. Thus, we foresee a favorable growth trajectory for our Circuitry business over the next several years.

Thanks for the detail.

We'll take our next question from Bob Court with Goldman Sachs. Please go ahead.

Thank you. Good morning.

Good morning, Bob.

Ben, you've reaffirmed a commitment to an EPS target for the coming years, suggesting perhaps 18% annual EPS growth from this year's figures. In light of some shifts in telecom and electronics infrastructure, could you give us insight into your growth strategy? How do you perceive this in terms of bottom-line growth over the years ahead? What is your strategy for leveraging that growth at the EBIT line, and how does it culminate in the anticipated 18% EPS growth over the next several years?

The growth strategy for this business revolves around our markets growing low to mid-single digits through the cycle. We typically achieve a growth rate one to two points ahead of that. Our business generates significant free cash flow, which we can deploy strategically. Clearly, we're currently coming off trough earnings, which should lift our growth rates above those norms as we enter 2021 and beyond. Our focus is on improving business efficiency, resulting in better EBIT or EBITDA margins, improving our balance sheet, and optimizing our tax footprint. Also, despite this modest dividend we're discussing, we aim to generate over $150 million in free cash flow annually to compound earnings. Over three years, that can have a substantial impact; this combination solidifies our commitment to our target.

Got you. If I may, I have a couple of recent business inquiries. First, regarding the flexible packaging market, you've mentioned there were some product delays from consumer products companies. What specifically do you sell to those companies that makes it a campaign-driven cycle rather than a continuous sales cycle?

Certainly. Our graphics business comprises three components, two of which are smaller but have significantly driven the sales decline we encountered in the third quarter: the newspaper plates business and pagination, where printed pages have drastically decreased. The primary driver, however, remains the flexible packaging segment, where we provide flexible plates for printing on various packaging products. When consumer products companies launch a new chip bag or bottle wrapper, they require new plates, as these designs are unique to each wrapper. Consequently, sales are heavily influenced by redesigns and promotional activities in packaging. Those activities have dropped significantly this year. Nevertheless, the packaging business continues to demonstrate growth globally. Even with the issues linked to redesign delays, the core flexible packaging business is growing, which represents a positive outlook for next year.

That's helpful information. Thank you very much.

And we'll take our next question from Duffy Fischer with Barclays. Please go ahead.

Yes. Good morning, guys. I have a question about the free cash flow. With the dividend taking 20% now, that helpful chart you provided illustrates that will leave approximately $150 million in free cash flow that can grow over time. If you had a sufficiently long-term perspective to absorb that volatility, would it be reasonable to assume a 50-50 split of surplus cash flow - half allocated to buybacks, and half to M&A?

We're not going to be prescriptive about how we allocate surplus cash flow, as it ultimately varies. As you've seen, we've directed more of our capital toward buybacks and M&A over the past year and a half. We believe there's almost an unlimited list of opportunities that echo the small to mid-sized tuck-ins we've pursued previously, which align with our operations and offer synergistic potential. If our shares become less attractive for repurchase, we might increase our focus on M&A, but we are not averse to deleveraging. Hence, cash flow could equally lower our leverage multiple alongside earnings expansion. I don't know if Martin has anything to add regarding capital allocation.

Yes, I think it has always been about timing. Our main objective is to achieve fair value for our equity, and that depends on multiple factors. One of those factors includes driving our leverage ratios into the twos next year, which would be perceived as a positive. That being said, if our shares remain undervalued, we will continue to buy back stock.

Fair enough. And one more question regarding the deep water fluid business. Firstly, has the volatility in oil prices this year affected your ongoing operations? Secondly, with the increased focus on decarbonization and a trend toward smaller, less risky projects, do you project that this business might atrophy over time with large capital projects becoming less common?

Our offshore business is strong, maintaining a leading market share, which is essential for the operation of offshore drilling vessels and energy production. The business has been pressured due to reduced drilling activity resulting from low energy prices, along with limited new production coming online, as drilling has slowed. Reflecting on previous low energy price periods, offshore operators effectively reduced costs and improved their breakevens. I have reasonable confidence that this trend will continue. Additionally, we recently acquired a benchmark environmental technology, which should enhance our market position and grow our share, main engines for our offerings. While the current environment poses challenges for this business, it represents a smaller segment of our total revenue. As our other sectors grow, its relative significance decreases.

Fair enough. Thank you, guys.

We'll take our next question from Jon Tanwanteng with CJS Securities. Please go ahead.

Hi. Good morning, guys. Great quarter. Thank you for taking my question. Ben, last quarter you adopted a cautiously optimistic outlook, considering the channel inventories and restocking challenges. I'm curious whether your Q4 outlook similarly reflects any caution regarding inventory management. How do you perceive the utilization of inventories in the channel and customer replenishment strategies?

In our previous guidance, it was a challenging period; our forecast was more conservative compared to now. Our guidance was predicated on a plateauing at recovery levels we experienced through July, but we saw notable acceleration in August and September. At present, we don't face the same uncertainty impacting our projections. We are anticipating our end market stabilizing, and we are not factoring in significant conservative adjustments. Historically, Q3 to Q4 EBITDA usually declines by 10% to 15% due to seasonal factors, but our guidance indicates a smaller expected decline. Therefore, I don't anticipate the same caution as we had in our previous call.

Understood. Thank you. Looking toward 2021, I recognize that it’s early to estimate given the implications of COVID and elections. However, could you offer some insights into what year-over-year improvements you’re anticipating? Are you planning to return to profitable levels seen in 2019, and what adjustments in strategy will you consider in response to these factors as we progress?

It's a bit early to provide concrete guidance for 2021, but I can share a few insights. The growth trends that are currently propelling the high-end Electronics business will persist into next year, allowing for continued growth. While our Industrial segment had a volatile year, this provides more favorable comps, which should facilitate growth. Additionally, we currently have a currency tailwind, expected to positively affect our dollar-denominated earnings. We've effectively reduced permanent costs this year, indicating positive contributions to earnings growth in 2021. Overall, I have a promising outlook for 2021 based on current observations.

Got it. Thank you.

It appears that there are no further questions. I will now turn the call back over to Ben Gliklich for any closing remarks.

Thank you very much. Thanks to everyone again for joining. We look forward to speaking with you in the coming days, and please stay safe. Take care.

Thank you. This concludes today's program. Thank you for your participation. You may now disconnect.