Great Lakes Dredge & Dock CORP Q2 FY2020 Earnings Call

Ladies and gentlemen, thank you for joining us for the Q2 2020 Great Lakes Dredge & Dock Corp. Earnings Conference Call. This call is being recorded. I would now like to introduce our host today, Tina Baginskis. Thank you. Please proceed.

Good morning, and welcome to our quarterly conference call. Joining me on the call this morning is our Chief Executive Officer and President, Lasse Petterson; and our Chief Financial Officer, Mark Marinko. Lasse will provide an update on the events of the quarter. Then Mark will continue with an update on our financial results of the quarter. Lasse will conclude with an update on the outlook for the business and markets for the remainder of 2020. Following their comments, there will be an opportunity for questions. During this call, we will make certain forward-looking statements to help you understand our business. These statements involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from our expectations. Certain risk factors inherent in our business are set forth in our earnings release and in filings with the SEC, including our 2019 Form 10-K and subsequent filings. During this call, we also refer to certain non-GAAP financial measures, including adjusted EBITDA from continuing operations, which are explained in the net income to adjusted EBITDA from continuing operations reconciliation attached to our earnings release and posted on our Investor Relations website, along with certain other operating data. With that, I will turn the call over to Lasse.

Thank you, Tina. The Great Lakes Dredge & Dock Corp has been fortunate to continue working as a federally designated critical infrastructure company. As such, during this unprecedented COVID-19 pandemic, we have remained focused on performing our projects effectively while ensuring the safety and continued functioning of our employees. The results of the second quarter of 2020 were less than the previous year, with net income from continuing operations of $9 million versus $11.5 million in the second quarter of 2019. For the first half of the year, net income from continuing operations was $42.9 million, which was an increase of 34% over the prior year, and year-to-date adjusted EBITDA from continuing operations was $89.5 million, a $6 million or 18% increase compared to 2019. In addition, our net debt decreased by an indiscernible amount from $89.8 million in 2019, resulting in a healthy net debt to adjusted EBITDA from continuing operations ratio of 0.6. As we noted in our last earnings release, planned dry dockings of certain vessels had an expected impact on second quarter results as we pushed dry dock pace from the first quarter into the second quarter. During the quarter, we had the hopper dredges Ellis Island and Dodge Island, as well as the hopper dredge Illinois and the mechanical dredge 58 in dry dock. We expect Ellis Island, Dodge, and dredge 58 will all be returning to work in the third quarter and Illinois will follow in the fourth. The effects of the dry docks were offset by better than anticipated productivity on ongoing projects such as the west of Shinnecock inlet project, the Jacksonville deepening project, and additional work on the Delaware River Reach B deepening project. During the second quarter of 2020, the domestic bid market was lower than the prior year, with $428 million in total products bid of which we won $92.5 million, comprising capital, maintenance, and coastal protection projects. Subsequent to the quarter end, we were awarded $63.2 million in project work and an additional $32 million in low bids pending award. Please remember that variable gain contract wins from quarter to quarter or year to year are not unusual, and the win rate is not indicative of the win rate the company is likely to achieve this year. Great Lakes' dredging dock continues to be financially well-positioned for potential changes in the current economic environment, and we continue to actively update our safety and operational procedures and plans. With those updates, I will turn the call over to Mark to discuss the results of the quarter for an update on backlog development.

Thank you, Lasse. I will start with the quarterly results and then discuss some specifics related to our dredging business. Please remember that all results from our E&I segment in 2019 were placed into discontinued operations and therefore not included in the results that I will discuss. For the second quarter of 2020, revenues were $167.9 million; income from continuing operations was $9 million; and adjusted EBITDA from continuing operations was $28.1 million. Total company revenues for the second quarter of 2020 represented a $16.9 million or 9.1% decrease compared to the second quarter of 2019. The decrease was caused by lower foreign, coastal protection, and rivers and lakes revenue, offset partially by higher maintenance and domestic capital revenue. Gross profit from continuing operations was $33 million compared to $37.5 million in the second quarter of 2019. Gross profit margin was 19.7% compared to 20.3% in the prior year quarter. The slight drop in gross profit margin is due to a change in project mix in 2020 versus 2019 and strong performance on the Jacksonville deepening project last year. During the first half of the year, the company did have some additional expenses related to the COVID-19 pandemic, related to additional equipment and procedural changes to keep our employees safe, but it did not have a material impact on our first half results. The total company operating income was $18.3 million, which is a decrease of $4.5 million over the prior year quarter. The decrease was largely due to lower gross margin while our G&A expenses remained flat between the current year second quarter and the prior year quarter. Income from continuing operations for the second quarter of 2020 was $9 million compared to $11.5 million in the prior year quarter. The current quarter income includes net interest expense of $6.8 million and an income tax expense of $3.1 million. Income for the second quarter of 2019 included $7.2 million in net interest expense and $4.2 million in income tax expense. Adjusted EBITDA from continuing operations for the second quarter of 2020 was $28.1 million compared to adjusted EBITDA from continuing operations of $32 million in the second quarter of 2019. Next, we turn to our balance sheet where on June 30, 2020, we had $233.5 million in cash. During the quarter, we continued to maintain a zero cash balance on a revolver. Our net debt at June 30, 2020 was $89.8 million. Our total capital expenditures for the quarter were $12.1 million. This compares to $19.2 million in capital expenditures during the second quarter of 2019. The company continues to expect total capital expenditures to be $40 million for 2020, excluding capital spending for the new Hopper dredge. Contracted backlog at June 30, 2020 totaled $423.4 million compared to a backlog at June 30, 2019 of $498.1 million. This decrease was expected as the company achieved below its historical bid market share in the second half of 2019, and the company earned additional revenue during the first half of 2020. With that, I will turn the call back over to Lasse for his remarks and the outlook moving forward.

Thank you, Mark. As the country is still facing the challenges of COVID-19, the dredging industry, deemed an essential service, continues to operate and work on critical and needed infrastructure projects. The U.S. Army Corps of Engineers oversees the majority of these infrastructure projects, and in this capacity has continued to follow their bid schedule and prioritize all types of dredging, including port deepening, port maintenance, and expansion, as well as coastal protection and restoration projects that are necessary to avoid potential storm damage during the upcoming hurricane season. Turning to safety and our COVID-19 response, Great Lakes Dredge & Dock remains committed to maintaining the health and safety of its team members through an incident- and injury-free safety management program. This value-based approach has allowed us to respond quickly and effectively to the COVID-19 pandemic and any challenges as a result of the pandemic. Through the first six months of 2020, the COVID-19 pandemic has not had a material impact on our operations. Any future impact from the pandemic to our employees, clients, suppliers, or shipyards with which we contract may lead to delays or cancellations in projects. Experts predict a potential new COVID-19 wave in the fall of June 2020, and we continue to be proactive in preparing and continuously planning should this occur. Moving to the bid market, we expect the 2020 bid market to be similar to 2019. We anticipate the remainder of the year's bid activity to be substantially more active than the first half of the year. Upcoming bids in the second half of the year include additional cases of Charleston, Jacksonville, and Corpus Christi port deepening projects, as well as new deepening projects for the ports in Mobile, Boston, and Sabine-Neches. We've seen support for the dredging industry in the CARES Act, which includes a provision that lifts caps in the harbor maintenance fund, and in the 2021 House Appropriation Bill introduced in July 2020 which showed an increase of $1.7 billion above the President's budget for requests for the U.S. Army Corps of Engineers. Additionally, Florida Engineers recently signed the chief's report for the Houston Ship Channel widening project. This major expansion project will be included in the upcoming legislation, which, when passed, will allow the project to proceed to construction. As for our domestic market demand, we continue to upgrade our existing domestic fleet with new equipment and technologies to increase productivity. Our upgraded and most powerful Cardia dredge, the Ohio, has returned to the U.S. market and is currently working on the Great Egg Beach renourishment project. In addition, in June, we announced the execution of a contract with Conrad's Shipyards in Louisville to build a 6,500 cubic yard Hopper dredge with expected delivery in the first quarter of 2023. This highly automated new build vessel will enhance the capabilities of our Hopper fleets in coastal protection and maintenance models, as well as address specific needs in the growing offshore wind market. As stated last quarter, several liquefaction, natural gas liquefaction, petroleum, petrochemical, and crude oil export projects are being developed in the Gulf of Mexico, meeting the need for port developments and navigational channel deepening and widening to accommodate the larger vessels involved. Last week, we signed an agreement with Bechtel Oil, Gas, and Chemicals, Inc. for dredging of the third marine park at the Sabine-Neches liquefaction project. This work involves complex dredging and long-distance pumping, beginning in the third quarter of 2020 and lasting for approximately 215 days. As discussed on prior earnings calls, offshore wind power generation is coming to the U.S., with more than 30 gigawatts of power generation capacity planned for installation over the next 10 years. The timeline for these projects is being developed as we continue to engage with developers and partners on these projects to use U.S.-built and U.S.-operated equipment, enhancing local value creation and content both in the construction and during operations phases. Related to a strengthened financial position, a fleet enhancement, and a strong market outlook, we announced this morning that the board authorized a share repurchase program by which the company may repurchase up to $25 million of its common stock. This repurchase program demonstrates the board's confidence in our future and our commitment to delivering value to our shareholders. In conclusion, through this pandemic, we have maintained a sharp focus on employee safety and project performance while continuing to advance a long-term strategy of investing in our fleet and strengthening our balance sheet. With that, I will turn the call over for questions.

Your first question comes from Poe Fratt with Noble Financial Capital Markets.

Hey, good morning. Thank you. I was hoping to look at the overall your award subsequent to the end of the quarter, it's $63 million that you had announced and then $32 million of pending. Can you highlight whether the Sabine Pass LNG was included in the awards in the quarter?

Yes. Poe, you broke up a little bit, but the Sabine LNG project is actually in the quarter. It was awarded in the quarter, so it's in our backlog in the quarter.

Okay. Great. And then the $32 million of pending, a little bit of pending was that the award that was announced by the DOD late last week, the great indiscernible in New Jersey?

Now, so, yes, the announcement was $30 million. $24 of that is awarded and $6 million of that is in low bid because there's a $6 million option there.

Okay. Is that the one that you referenced in your press release as far as low bids pending award?

No, we haven't announced that. Yes.

So that's incremental.

Correct.

Okay. Great. And then when we look at the wind market, Lasse, you've highlighted that you want to participate in the installation market. There was an interesting announcement after it closed yesterday where a dry bulk company is going to build installation vessels to the tune of what, $270 million or so; is that the segment of the market that you intend to compete in or is there another segment that you intend to compete in?

Well, when it comes to the offshore wind market, we are looking at which parts of that market that we can expand into from our capabilities and our existing equipment, particularly the work that is going on underwater. We are not targeting the heavy lift installation kit, and the investments needed to participate in that market are very high; it is also allowed for currently international installation vessels to come into the U.S. and do that lifting operation. So we're not targeting that part of the market.

That's good news because that's a fairly undisciplined and inexperienced competitor too that's generating that market. So watch out there, right? When we look at Mark, if we can just hone in on some of the mainly your SG&A, the run rate in the second quarter looked a little high relative to what it was in the first quarter, and could you give us an idea of whether there are any unusual expenses in G&A and then an outlook for the second half of the year?

Yes, sure. When we get to the second quarter, we reforecast for the year where we are. We adjust from there where G&A is related to incentive pay and things like that, so we kind of true-up for the year. As we look forward for the rest of the year, that would be the only change really from the first quarter would be additional incentive pay. So as we look out through the rest of the year, I expect G&A to be close to that number that we had in the second quarter.

Okay, flatten the second half and then one last one and then I'll come back if I need to but on the buyback, a positive announcement shows your confidence in the outlook, especially in the context of the new build program. Do you have any timing on when you expect to execute that $75 million or is it open-ended?

Yes. We're going to put that in place very shortly. We just received board authorization. We'll do that. It'll probably be, it's not finalized yet, but I expect it to be within a 12-month period.

Your next question comes from DeForest Hinman with Walthausen & Co.

Hey, thanks for taking my questions. I think the share purchase authorization is a positive announcement. Just so everyone understands, you said expectation to use that in 12 months; that's under the 10b5-1 so you can, in theory, buy during blackout periods, is that correct?

Correct.

Okay. It's very helpful. Can you give everybody an update on where we stand in terms of the refinancing outlook on our debt and give us an update in terms of where you think the rate on the borrowings could fall?

Yes, sure. So we can, it's actually kind of similar to where we were last quarter, maybe a touch better. So we continue to monitor it every day essentially, and it's an 8% senior note just to refresh everybody's memories. We can call them today but at a 104 premium. Next May of 2021, I can call at par, and right now the rates are in, if we were to refinance them today, they're in the middle 6s, so let's say in the 6.5 range; that was a little bit better than last quarter, maybe 25 basis points better. The market is obviously better than it was in the middle of COVID but still not as good as pre-COVID. So at the 104 premium versus that savings and the lower interest rate, it does at this point make sense to wait, but we are continuing to monitor that looking at risk going forward. But at this point, the math would tell you to wait.

Okay, that's a good update. You made mention of the house appropriations bill; interesting there. Can you just help us think about those numbers? It's a pretty sizable number to increase versus the request? Do you have any thoughts around how that might trickle into the markets that you serve, just generally?

Well, the request from the executive branch tends to be lower than what has been traditionally appropriated for the Corps of Engineers. So what we see here is that the appropriation from the house committee is supporting the U.S. Army Corps of Engineers at the same or higher level than what we had last year, which then translates into the funding of projects that the Corps is then contracting with us for. So it gives us a very strong confidence in the bid market for the remainder of this year and into next year.

Okay, that's helpful. And then can you help us think about the cadence of the dry dockings in the third quarter, either months or days, and how those would compare to the second quarter and how they would compare to the third quarter of last year?

Yes. Mark, can you take that?

Sure. So we had four vessels in dry dock in Q2. We have two vessels in dry dock in Q3, the Illinois and the Padre. As we move into Q4, we'll have those same two vessels in dry dock for about half of Q4. When we look at, yes, I'm trying to remember how many we had in Q2 last year or Q3 last year. I believe it was two, but I would have to double-check that.

Okay. I can circle back on that. I think that's it on the questions. Thanks.

Thanks.

Your next question comes from Poe Fratt with Noble Financial Capital Markets.

Yes. Thanks. I had a couple of follow-ups if you don't mind. On the Sabine Pass LNG, I noticed you didn't quantify the award on that. Can you help us frame sort of what the potential is there?

Mark, can you?

Sure. So, yes, per the agreement, I can't give you the pricing and dollar value, but that's why we kind of use these 215 days of work, so that's a fairly large amount of work. It'll be done and there's some windows where we won't be working on it. We finished that project leaving about the first quarter of 2021. So it's a very nice size project for us, but that's the extent of what I can give to you at this point in time.

Mark, is that an Ellis Island type of job or is it another?

No, it's actually the Alaska that will be working on that cutter dredge.

Okay. And then going back to dry dock activity, it sounds like the Ohio wasn't in the fleet at all in the second quarter and maybe is partially in the fleet in the third quarter?

That it was worked a little bit at the end of the second quarter. So yes, and then it's really full in the third quarter. That's correct.

Okay. And then looking at the cash flow statement, you generated a lot of cash in the quarter. Net income, depreciation were pretty much in line with expectations. It seems like the big variants might have been on non-cash items or working capital. Can you give us a flavor on what happened to both those items in the quarter and sort of an outlook for the second half if you wouldn't mind?

Yes. So we talked about this similar this last year a little bit; is the way some of our projects work depending upon how the project is structured in terms of timing. We do have some movements on billings and excess of revenues or the other way around depending upon the timing of the project. So we don't expect the positives for the rest of the year like we did see in the first half there. So some of that will reverse in the neighborhood of $10 million to $20 million. It just depends on the timing of the projects, but yes, we wouldn't expect that same level of working capital increase for the back half of the year.

Okay. Do you happen to have an operating cash flow number before working capital changes or a total operating cash flow number? It looks like either one of those items or when do you expect it to file the Q?

We are going to actually file the Q tonight.

Okay, great. You mentioned potential increases in appropriations, the harbor maintenance trust fund, and the bid market for the second half of the year, which I calculate to be over a billion, possibly around a billion one. Can you provide more details on the revenue opportunities regarding Charleston, Jacksonville, Corpus, and other pressing needs you discussed in Mobile? Also, isn't Spanish Ridge a significant opportunity for you, particularly at the state level? Is that part of your considerations for the bid market?

Yes. Well, I can comment on the market in general; when you look at the Corps of Engineers announced bid market ranges. Just to look at the major projects for the second half of the year, we're looking at somewhere between a billion or a billion and a half of bids, and that is the range that the Corps is giving for their list. In addition, there are several other smaller projects that are going to run a little less not simply not included in this. And as I said, there are some interesting opportunities coming up. Please remember that for core strength is when the projects are getting not necessarily large but are getting complex. And as we've seen on Jacksonville, on Charleston, that's where we excel; that's where you're working offshore, you're working in difficult soil conditions, and that is our sweet spot. So the projects coming up is further phases of Charleston which are mostly inland. It is the Jacksonville project and there is the Mobile start of the deepening and widening phase one and continued work on Corpus Christi and so forth. So it is a very active region for us here in the next quarter or two quarters.

Great Lasse. So it sounds like Charleston may be more less complex, but are all the other ones more complex and more in your sweet spot?

Well, as a general comment, when the soil conditions get difficult and complex, or we're working offshore where you have the impacts from the environment or the weather, when you go to very large complex pumping distances and so forth, that's when we excel due to our flexibility in our fleet and our ability to use specialized equipment for the special soil conditions that are or the varying soil conditions. So, in general, difficult projects are where we excel, and those are projects that we target. And they're clearly also large projects where you have to use a lot of equipment, but that may vary; as we've seen, over the last two years, there have been some larger projects that have been awarded to smaller local dredging contractors, but typically that has been fairly easy projects to execute. Hence, easier for them to target.

Okay. Great. That's helpful. And Mark, on the CapEx number, $12.1 million for the quarter, did that include any new build CapEx?

Yes, $2 million. Yes.

So $2 million, so when we compare the $40 million exclusive of CapEx, we should back out that $2 million in the second quarter, and then what do you think CapEx will be for the new build for the year?

Yes, we have another $9 million at the end of the year. So around $11 million to $12 million for the year.

Okay. So that's on top of the $40 million roughly that you expect to spend on your normal maintenance CapEx?

Correct.

Great. Thank you so much and congratulations.

Thanks, Poe.

Your next question comes from Richard Glass with Glass Capital.

Hey guys, nice boring quarter in a boring is good in this industry kind of way.

Thanks.

Lasse, can you maybe help us define how we should think about the LNG and wind opportunities longer term? I mean, are these niche opportunities that while sizable will be in passing or these are potentially more legs on the stool for buffeting tougher times in other markets and maybe lending some more stability over time? Where should we start with these?

Yes. Turning first to the LNG opportunities and the developments in the Gulf. What we have seen on the LNG front is that when there's an additional train being added to an existing facility or LNG facility, those projects are highly profitable for the operators and are very likely to go ahead as we saw on Sabine. When it comes to greenfield developments, the picture is a little bit more difficult because you then need both permissions and financing for the facility, and with the oil price war that started out with Saudi Arabia and Russia earlier this year that temporarily depressed LNG pricing in the international market, I anticipate that we will see about a year delay in the greenfield LNG market. But I do think that this is something that will be recognized getting into 2021, and those projects are substantial when it comes to dredging and very interesting opportunities for us. But it is our traditional business with very high focus from the oil and gas environment and contract material and owners on our safety procedures, our track record, our professionalism when it comes to executing these projects. So they are very good targets for us to get engaged in. When it comes to the offshore wind markets, timing is somewhat, I would say, uncertain. We've seen delays happening for those developments, but now it looks that market is taking off. If you take the view that it's a 10-year market that's being developed, the installation is 30 gigawatts, and you can just pick a nice number of 10 megawatts per turbine, you can see that is a very large construction market and it's a large maintenance market coming up. To participate in that market, we can modify our existing equipment or we need new equipment to target the niches of that market, and that's how I look upon it. There is clearly an interest from the international contractors to come into the U.S. and do most of the work. The international contractors have spent 20 years in the North Sea developing their techniques and their equipment. So they are very efficient and experienced, so it's a market which we have to approach in that where we have confidence and where we can define our niche and where we can generate some good margins for our shareholders.

Okay. That sounds good. Thanks a lot.

Your next question comes from Neil Indiscernible.

Yes. Thanks for taking the questions. Quick one, what are your outstanding, I guess you said the Q is coming out tonight are you secure your letters of credit outstanding number was and then if you can comment on the overall expected cost of the new Hopper dredge?

Yes, sure. So our outstanding letters of credit, I'm going to give a round number. It's in that about I think $36 million to $38 million. The cost of the new Hopper dredge is $97 million.

Your next question comes from Jon Tanwanteng with CJS Securities.

Good morning. Nice quarter, guys. My first question, I don't recall this being mentioned, but can you talk about the impact of storms in the quarter, first I guess Hannah and the Texas area and the indiscernible up on the Atlantic coast right now?

Yes, sure. I can take that, Lasse. So yes, with this tropical storm going through, it impacted or will impact four of our projects: Jacksonville, Charleston, New York, and Great Egg. Most of those projects are impacted by about four days. So we take before the storm comes in, we take it in, and then after the storm moves, we take it out. For example, Jacksonville is expecting that to be back at work today, actually. So it's already been in and out, and these weather delays, we've obviously, we put these contingencies in our estimates, especially when we know we're working at this time of the year in that area during hurricane season. So we're covered from in our estimates on these weather-type delays.

Got it. Thank you. And then just talk about your annual expectations from an EBITDA perspective now that you've outperformed for two quarters in a row. You've also landed the LNG project, which excluded from your prior flat up outlook. Just how are you thinking about the year either compared to last year or an absolute relative basis?

Yes. Just give you a few data points so, not too different from what we talked about in the first quarter, but we expect revenues this year to be above 2019. We expect our gross profit margin, I think last quarter I said to be about the same as 2019. Now I'm expecting it to be a little bit better. We expect G&A to be slightly higher than the prior year, and those are the data points I can give you at this point. So a little bit more positive than what we talked about in the first quarter.

Okay. Got it. And then just in terms of the win rate that you've been showing over the last few quarters. Now it's been under your market share. Can you just give us an update on how we should think about the competitiveness of your project lettings, the competitions out there, and the chances of you actually having a higher backlog by year-end as I know there's a lot of big projects coming up in the next two quarters?

Yes, I can start with that. Yes, sure. Yes. We're actually excited about the bid market that's coming up. As Lasse said, it's between just the large projects or between a billion and a billion and a half if you look at the range. So that's going to put our bid market close to $2 billion this year is the way this is looking. So we're expecting it could be close to that. One other thing to add is that bid market does not include any of the LNG opportunities that Lasse was talking about; those really will be 2021 type in that bid market. So a couple of these projects, these large deepening projects whether you're talking about the Jacksonville project or Boston, those are Boston, for example, complex or hard rock; those are projects that we've done before that we're well equipped to do and those are the larger ones in this bid market in the back half of the year. So the opportunities look good for us, and so that's why we're pretty excited about the back half of the year.

Okay. Great. Thank you very much, guys.

Sure.

Your next question comes from Matt Baxter with Wynne Capital.

Hi guys. Thanks for taking the question. Lasse, I heard you talking about the wind opportunity in foreign vessels, but it was my understanding that a substantial portion of the work is reserved for Jones Act vessels, that foreign vessels can't compete for. You didn't mention it. I wondered if you'd tell us a little bit about what portion is reserved for Jones Act and what portion isn't that would have to be competed against foreign vessels?

Yes, Max. There is some uncertainty around this, and as you know, there are several questions that are into the administration to the customs and borders to rule on some of these questions. What seems to be very clear is that the installation of the foundation or the monopile and the installation of the towers, blades, and turbines with heavy lift equipment is excluded from Jones Act, so there's no Jones Act protection. So the vessels can come in from the international market and do that work. You have to remember that not just is the U.S. market active, but the European and Asian markets are also extremely active the next 10 years in offshore wind generation installations. So there will be competition for these vessels, and there are several international and U.S. groups that are looking at that segment. The segment that we are looking at is what goes on underwater. So we're looking at rock installation, foundations installation, and we're looking at parts of the trenching which could be done by our equipment for cable installation and so forth. Our uncertainty around the Jones Act protection around this is clearly dredging that is required is Jones Act protected, so that is something we will compete for, but we are looking at these other segments to see how we can compete, making sure that we can maximize the local content requirements that the states are requiring and help the operators in achieving those goals for local content.

Lasse, I guess my point was it was I understood that any of the trenching that was coming back to the U.S. to bring the power cables back from these in U.S. waters would be Jones Act protected at this stage; is that correct, or is that still up in the air?

It is my understanding that that is not clear.

We hope it gets clear for you and us, thank you.

Thank you.

And at this time you have no further questions.

Thank you. We appreciate the support of our shareholders, employees, and business partners, and we thank you for joining us in this discussion about the important developments and initiatives in our business. We look forward to speaking with you during our next earnings discussion.

Ladies and gentlemen, this concludes today's conference. Thank you for your participation and have a wonderful day. You may all disconnect.