Earnings Call Transcript - GLDD Q3 2020

Operator, Operator

Good morning, ladies and gentlemen, and welcome to the Q3 2020 Great Lakes Dredge & Dock Corporation Earnings Conference Call. Please be reminded that this call is being recorded. I would now like to turn the conference over to your host, Ms. Tina Baginskis, Director of Investor Relations. Please go ahead.

Tina Baginskis, Director of Investor Relations

Thank you. Good morning, and welcome to our quarterly conference call. Joining me on the call this morning are 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 market. 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.

Lasse Petterson, CEO

Thank you, Tina. Great Lakes had a solid third quarter financially and operationally. Financially solid product performance in the third quarter resulted in strong increases when compared to last year's quarter with income from continuing operations of $12.5 million and adjusted EBITDA from continuing operations of $32.2 million. The company ended the third quarter with a strong cash position of $229.7 million, and zero draw on the revolver, resulting in a strong balance sheet and substantial liquidity. Operationally, we saw a strong improvement in our backlog with the addition of several large projects, including the continuation in Jacksonville, winning the Contract C for $105 million, giving us a third quarter backlog of $661 million. Our new hopper dredge build program remains on budget and on schedule at the Conrad Shipyard in Louisiana. Finally, the announcement of our new operating model, which includes moving our corporate headquarters to Houston and opening regional offices in Jacksonville, Florida and New York, was well received by our clients and stakeholders. The new model situates the company with senior executives centrally located in our current markets on the East Coast and in the Gulf, positioning the company for the growth we see in the Gulf of Mexico for dredging projects related to oil and gas and LNG exports. Overall, we believe our improved financial position and new operating model strategically position us well for the future as we enter 2021. Turning back to the quarter, as we noted in our last earnings release, we continue to have vessels in drydock. During the quarter, we had Ellis Island, Liberty Island, Padre Island, Illinois, and New York in drydock. The Ellis Island has completed its drydock and returned to work while the drydocks for the other dredges are expected to conclude in the fourth quarter. The effect of these planned drydocks were offset by outstanding performance on the Jacksonville B deepening project in Florida and the Great Egg and Peck Beach renourishment work in New Jersey. As expected, bidding activity increased significantly with $926 million of projects bid in the third quarter. Great Lakes were awarded $466 million or 50% of these projects, resulting in a third quarter backlog of $661 million. One of the awarded projects was the Jacksonville Harbor Contract C Deepening Project totaling $105 million. After successfully completing Jacksonville Contract B ahead of schedule, we look forward to continuing to support the expansion of the shipping channel for the Port of Jacksonville. To expand on my opening remarks, Great Lakes continues to be well positioned to weather changes in the economic environment. Given our strong cash flow and balance sheet, we initiated a share repurchasing program in August, which demonstrates our confidence in our future and our commitment to delivering value to all our shareholders.

Mark Marinko, CFO

Great. 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 in the discontinued operations, and therefore, are not included in the results that I will discuss. For the third quarter of 2020, revenues were $175.8 million, income from continuing operations was $12.5 million, and adjusted EBITDA from continuing operations was $32.2 million. Total company revenues for the third quarter of 2020 represented a $6 million, or a 3.5% increase compared to the third quarter of 2019. This increase was caused by higher domestic capital and maintenance revenue, offset partially by lower coastal protection, rivers and lakes, and foreign revenue. Gross profit from continuing operations was $36.4 million compared to $31.8 million in the third quarter of 2019. Gross profit margin was 20.7% compared to 18.7% in the prior year quarter. For year-to-date 2020, 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 results. Total company operating income was $23.2 million, which is an increase of $4.8 million over the prior year quarter. This increase is a result of higher gross margin and a gain from a loss of use claim. Our general and administrative expense is $1.4 million higher in the current year third quarter than prior year quarter, primarily due to office rental expenses and higher technical and consulting expenses. Income from continuing operations for the third quarter of 2020 was $12.5 million compared to $8.8 million in the prior year quarter. The current quarter income includes net interest expense of $6.7 million and an income tax expense of $4.1 million. In comparison, income for the third quarter of 2019 included $6.3 million in net interest expense and $3.2 million income tax expense. Adjusted EBITDA from continuing operations for the third quarter of 2020 was $32.2 million compared to adjusted EBITDA from continuing operations of $27.1 million in the third quarter of 2019. Next, we turn to our balance sheet, where at September 30, 2020 we had $229.7 million in cash. During the quarter, we continued to maintain a zero cash balance on our revolver. Our net debt at September 30, 2020 was $93.8 million. Our total capital expenditures for the quarter were $7.4 million. This compares to $6.9 million in capital expenditures during the third quarter of 2019. The company expects total capital expenditures to be about $45 million for 2020, excluding the capital spending for the new hopper dredge. Also to date, we repurchased $3.9 million of Great Lakes common stock related to our previously announced repurchase program. Current backlog at September 30, 2020 totaled $661.3 million, an increase of $238 million from June 30, 2020. Backlog at September 30, 2019 was $653.7 million. In addition, at the end of the quarter, the company had $177.9 million in low bid and options pending award. With that, I will turn the call back over to Lasse for his remarks on the outlook moving forward.

Lasse Petterson, CEO

Thank you for that, Mark. As the country faces 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, at this capacity, has continued to follow the bid schedule and prioritize all types of dredging, including port deepenings, port maintenance, and expansion, as well as coastal protection and restoration projects that are necessary to avoid or minimize potential storm damage during the hurricane and winter seasons. As the projects move forward, GLDD remains committed to maintaining the health and safety of our team members through our 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. In the third quarter, several projects were impacted by COVID-19 positive cases within our site staff and vessel crews. Thankfully, all cases were mild, and our personnel have returned to work. The vessels were decontaminated, and replacement crews were brought on board to recommence dredging operations. Although some projects were impacted by the COVID-19 outbreak, to date, the majority of our project work has remained largely uninterrupted by the pandemic, and the U.S. Army Corps of Engineers is continuing to advertise new projects as evidenced by the large bid market in the third quarter. In the third quarter, a strong hurricane and storm season began, which has extended into the fourth quarter. Although these storms impacted our ongoing projects in the Gulf and on the East Coast, they also added to the recurring nature of our business and the need for more extensive coastal protection and port maintenance projects. Moving to the bid market. At the end of the third quarter, the domestic bid market for 2020 reached $1.6 billion. Great Lakes was awarded $630.6 million in projects year-to-date comprised of capital, maintenance, and coastal protection projects. Projects coming to the market pipeline in the fourth quarter include two large marsh creation projects in Louisiana, Spanish Ridge and Lake Borgne. The Boston Harbor Improvement Project is bidding the third phase of the deepening project. We continue to be confident in the market for the remainder of the year and onwards, and we anticipate the total 2020 bid market to even exceed 2019. The dredging industry and market have seen support in the CARES Act, which includes a provision that lifts the cap on the Harbor Maintenance Trust Fund. The 2021 House Appropriation Bill introduced in July 2020 showed an increase of $1.7 billion above the President's budget request for the U.S. Army Corps of Engineers. Although the Appropriation Bill was not passed before the close of the fiscal year, it is expected to pass by the end of this calendar year. This is not unusual. As a result, the Corps is working under a temporary funding called the Continuing Resolution to continue their work with minimal impact to our marketplace. The 2020 election campaigns on both sides have been positive on industry issues, as both candidates have indicated support for the Jones Act as well as continued major investments in infrastructure, including ports and dredging. As we have stated previously, we continue to support the domestic dredging market demand by investing in our fleet. As such, we continue to responsibly operate our existing U.S. domestic fleet with new equipment and technology to increase productivity and improve safety and efficiency on our projects. In June, we announced the execution of a contract with Conrad Shipyard in Louisiana to build a medium-sized 6,500 cubic yard hopper dredge with expected delivery in the first quarter of 2023. This project is moving forward as scheduled. To further improve our operations, we are building two Multi Cat support vessels to improve project efficiencies and enhance the working situation for our crews while placing submerged pipelines on our coastal protection projects. These vessels are the first of their kind in the United States and are targeted to be in operation in 2022. As discussed on prior earnings calls, we are excited about the potential opportunities in the offshore wind market. Internationally, this market has been very strong and developing over the last 20 years. This market is now opening up in the U.S., and offshore wind power generation is anticipated to install more than 30 gigawatts of power generation capacity on the East Coast over the next 10 years. As the timeline for these projects develops, we are continuing to engage with developers and partners on these projects to use U.S.-owned, U.S.-built, and U.S.-operated equipment, enhancing the local value creation and content, both in the construction phases and during operations. In conclusion, we remain confident in our 2020 outlook and look forward to implementing a new operating model and capitalizing on the opportunities that lie ahead. We also recognize that we must continue to adjust and develop our safety and operational contingency plans to be able to respond to potential changes in the evolving COVID-19 pandemic and its potential impact on the economic environment. We continue to maintain a sharp focus on employee safety and project performance, while continuing to advance our long-term strategy of investing in our fleet and strengthening our balance sheet. And with that, I'll turn the call over to questions.

Operator, Operator

Your first question comes from Jon Tanwanteng from CJS Securities.

Jonathan Tanwanteng, Analyst

Nice quarter considering the storms and everything that's been happening. My first one is, how much backlog is expected to liquidate in Q4, especially with more storms in the quarter? We had a number in October, and we've got something possibly hitting in November. How does that flow through to your revenue and gross margin in conjunction with the drydocking that's going on?

Mark Marinko, CFO

Yes. So I can answer that, Jon. A few will go out tonight, and about 28% of the backlog will be recognized through the end of the year. Okay? Looking forward to Q4 from a gross margin percentage perspective, I expect Q4 to be similar to Q3 from a gross margin percentage. We'll have fewer drydocks in Q4, but we did have some exceptional performance in Q3 on a couple of projects, Jacksonville B in particular. It will be difficult to replicate that, but without that replication, the margin percentage will be about the same as Q3.

Jonathan Tanwanteng, Analyst

Got it. That's helpful. Lastly, you mentioned a couple of big projects that you're looking to land in Q4, Spanish Ridge and another one. I didn't quite catch the name for Boston Harbor. How much of that is in the low bid number, that $177.9 million that you mentioned?

Lasse Petterson, CEO

We haven't bid those projects yet. So there's nothing in that number.

Jonathan Tanwanteng, Analyst

Got it. Those will be incremental and could be very significant. Understood. I was wondering if you could discuss the headquarters and corporate moves you're making. Are there any definite costs or savings associated with it? If not, what are the intangible benefits you are considering?

Lasse Petterson, CEO

I can begin by stating that this represents the next phase of the transformation we initiated in 2017. We have streamlined over 100 pieces of large equipment and dredges, reduced our corporate headquarters staff, and divested all unprofitable operations. This has allowed us to improve our annual run rate by over $40 million and reduce our debt-to-equity ratio from 7 to below 1. Currently, we hold nearly $230 million in cash on our balance sheet, and we are investing in our fleet. The next step is to position the company and its executives in proximity to markets, clients, and operations to ensure the successful implementation of the operational improvements we are targeting for the future. This is an important step in the company's development. Mark, would you like to elaborate on the costs involved?

Mark Marinko, CFO

Yes, we're currently going through a process to establish regional offices, some of which have already been set up prior to this quarter. We will maintain our presence in Oak Brook Terrace, Illinois. In the short term, we expect one-time items such as potential relocation expenses and recruitment fees, but we won't have definite figures until we complete our process at the end of the year, which will also consider remote work arrangements. For the time being, we will face a duplication of office rent since we are transitioning to a new headquarters in Houston. We are still assessing who will move and who will work remotely, but we expect to finalize this by the year's end.

Jonathan Tanwanteng, Analyst

Okay. Got it. Are you expecting to save anything as you move from Chicago to Houston? Maybe more people will work from home, you have lower space, and maybe rents come down. I don't know if there's anything associated with that.

Lasse Petterson, CEO

The savings we are looking for are really in the improvements in our operating model, where we ensure that we have decision-making power close to the projects, and we can coordinate both the projects and client interfaces as we go forward.

Jonathan Tanwanteng, Analyst

Understood. Lastly, when are you expecting offshore to actually make a meaningful impact on your P&L and what trajectory will that take?

Lasse Petterson, CEO

Yes. I think the timeline for the offshore wind is continuously evolving. As you can read in the press, changes are happening right now. We are looking at construction starts either in 2023 or 2024. As things develop, 2024 is more likely.

Operator, Operator

Your next question comes from the line of DeForest Hinman from Walthausen & Co.

DeForest Hinman, Analyst

I think I missed this. Can you say again what the repurchase activity was in the quarter? And then give us an update on pacing of the repurchase activity going forward? I think the previous commentary was an expectation that the repurchase authorization would be exhausted in 12 months. Is that still the case?

Mark Marinko, CFO

Yes. So in the quarter, we repurchased about $3.9 million, and it was approximately 425,000 shares. You can work out the average price was about $9.09 a share. All details will be in tables in the 10-Q that goes out tonight or is expected to go out tonight.

DeForest Hinman, Analyst

That's helpful. And then the low bids pending announcement, the $177 million, is that a handful of smaller projects? Or are there some bigger projects in there? Is there any private market awards in that number we should be aware of?

Mark Marinko, CFO

Yes, there is a handful of low bids pending. One of them is a large private client job, just south of $100 million. There are also four or five options pending, totaling about $40 million. These are bids we have won, but the options have not been awarded yet. So that's the breakdown, with the largest being the private client I mentioned.

DeForest Hinman, Analyst

Okay. I don't know if I heard it right. You talked about new vessels, Multi Cat. Was that the term you used?

Lasse Petterson, CEO

Yes. That is correct. I can explain the operations. As we conduct our beach construction work, we pump the sand through pipelines from the dredge to the beach. Those pipelines need to be connected. Currently, this connection happens in open water. To make that connection work more efficiently, we are constructing two Multi Cats, which are vessels equipped with cranes, so we can pull the pipelines up and do the connection on a dry platform, which is safer and much faster. This investment increases both productivity on projects and safe operations.

DeForest Hinman, Analyst

That's helpful. Can you help us understand the cost of a vessel like that?

Lasse Petterson, CEO

Yes. We have not contracted for those vessels yet, so the details will come later, but it's an investment in the range of between $25 million and $30 million for the two.

DeForest Hinman, Analyst

Okay. Can you just give everybody an update in terms of how you're thinking about the outstanding notes with the coming call? I think it's in May.

Mark Marinko, CFO

Yes, same. We’re in the same position as we were last quarter. We're monitoring the market; it's still a strong market, meaning yields are much better than our 8%. Even the tenure is potentially longer. It could be a 7- or 8-year level or size note or tenure on the note as opposed to our current 5 year. As we look at the call premium, we would have to pay $13 million. At this time, financially, it's best to wait until May of next year to refinance those at par. We're monitoring the situation in case something changes, and we need to react sooner than that.

DeForest Hinman, Analyst

Okay. Just a little more color on that. May is approaching; it's not incredibly far away. Is there any potential or desire to do a bond deal, redo the revolver earlier than the call, and then you'd have a little extra interest carry there? But if the planets align, is that a possibility? And when May comes around, you call that par?

Mark Marinko, CFO

First, I want to say regarding the revolver. The revolver is a little over a year old now, so it's got 3.5 to 4 years to go. The rates on the revolver are much better than the current market rates. It’s highly likely that we will not change that revolver, as it's better than what's in the market today. However, as we look forward, the Board has asked me to continue exploring options regarding our debt structure as we approach that date. But there is no news on that yet.

DeForest Hinman, Analyst

Okay. Last questions. Can you give us any color on drydocking activity over the next six months? I think you had talked in the past on a vessel basis count-wise; can you provide any color on that?

Mark Marinko, CFO

Yes. In Q4, I mentioned we'll have fewer drydock days than we did in Q3. Looking forward to next year, we will have a little less drydocking than we did in 2020. We expect to have about the same number of vessels but much shorter drydock durations. The Illinois drydock was the big driver this year in drydock and getting upgrades, so we won't have that next year. It should have a more positive impact from availability due to drydocks in 2021 compared to 2020.

Operator, Operator

Your next question comes from the line of Poe Fratt from NOBLE Capital.

Charles Fratt, Analyst

I just had a couple of questions about the bid market. You talked about the low bids pending award. I think the number was $178 million, Mark?

Mark Marinko, CFO

Correct.

Charles Fratt, Analyst

Okay. Can you give us a little more color on that private clients and the nature of that work? I'm not sure I heard the nature of that work.

Mark Marinko, CFO

Yes. For confidentiality reasons, I can't provide much detail, but it's an energy client. As I mentioned, it's just south of $100 million. As we talk through energy-type clients, the process involves signing a contract with them, but then you need FERC approval, their final investment decision, and notice to proceed. We categorize it as low-bid pending when we sign the contract. So that's where we are today. Similar to what we encountered with the Sabine LNG project we won earlier this year, it's in a similar status.

Charles Fratt, Analyst

So that was actually something that was signed in the quarter, Mark?

Mark Marinko, CFO

It was signed before this quarter.

Charles Fratt, Analyst

Okay. When we look at upcoming Louisiana bids, I think you've already bid on Spanish Ridge. Is the opening on November 18?

Mark Marinko, CFO

No, we have not bid on Spanish Ridge yet.

Charles Fratt, Analyst

Okay. The Spanish Ridge and Lake Borgne, my understanding is they're in the range of combined about $225 million. Is that in line with your thinking? Can you also quantify what you think Boston 3 might be regarding the scope of work there?

Mark Marinko, CFO

Yes. Expectations for Spanish Ridge and Lake Borgne are in the $200 million range, possibly north of $200 million. Regarding Boston, there's a wide range publicly from the Army Corps between $100 million and $250 million. It's a complex project with potential drilling and blasting involved. So there is a wide range, but yes, those three projects are all $100 million or more.

Charles Fratt, Analyst

Could you talk about the tone of competition? How do you think the stars are aligning for just the competitive landscape as we look forward? I’m not sure if you heard the same comment, but the entity administering the Spanish Ridge and Lake Borgne had a presentation from the top U.S. Army Corps of Engineers from New Orleans, cautioning them to expect higher dredging costs going forward. Did you hear that? Do you agree? Can you provide color on how the competitive landscape looks over the next 12 to 18 months?

Lasse Petterson, CEO

Yes, I can do that. As we've been saying, we believe that the dredging market will remain strong for several years as we see the port deepenings and the need for investment in coastal infrastructure developing. So we believe in a strong dredging market. The U.S. dredging industry is responding to this strong market by building new capacity. Over the last two years, we at Great Lakes have commissioned the Ellis Island hopper dredge, operated a large mechanical dredge, and we have brought two cutter dredges back to the U.S. market from overseas. We are now building a new hopper dredge. Simultaneously, our competition is also building new hopper dredges and cutter dredges. When we assess the bid results for the Army Corps of Engineers, we typically see bids falling below their estimated values. So it’s a competitive market, but a strong one. Regarding the comment from the Army Corps of Engineers official, I must say I don’t fully comprehend that.

Charles Fratt, Analyst

If we could go back to Mark, you had a loss of use claim of $1.7 million that positively impacted operating results in the third quarter. Was there any tax effect on that? How did that impact the earnings per share number?

Mark Marinko, CFO

Yes. The $1.7 million should be taxed at about 25%, which will impact your EPS.

Charles Fratt, Analyst

Can we talk about CapEx? You've announced two of the Multi Cat vessels, that probably didn't hit the third quarter CapEx or fourth quarter CapEx. But you said that you spent $7.4 million in the quarter, exclusive of new builds. Did you spend any money on the new builds in the third quarter?

Mark Marinko, CFO

No, there is no new build money in the third quarter. When I stated the $45 million excluding the hopper dredge, that included $12 million for one of the Multi Cats. Our normal CapEx was roughly $33 million, plus the $12 million for $45 million. The cash for the new builds this year will be about a total of $12 million, with about a little under $10 million payment in Q4 for the ordering of steel.

Charles Fratt, Analyst

Okay. Got it. So no change there. But you think you'll spend roughly half of the new announcement in the fourth quarter for the Cat vessels?

Mark Marinko, CFO

Yes, that's included in the $45 million.

Charles Fratt, Analyst

Got you. Do you have an option for a second new build, a second hopper dredge? What is your current thinking on that? When do you have to decide on executing that option?

Lasse Petterson, CEO

Yes. That option must be exercised within 12 months from the first contract award. We are still considering that and have not made any decisions yet.

Charles Fratt, Analyst

Lasse, could you expand on the new operating model you've been discussing in the next phase? Can you walk us through how you chose the locations of your regional offices? Do you expect another regional office to cover the other areas? Can you discuss how that process worked? How many employees will be impacted in Oak Brook? That would be helpful.

Lasse Petterson, CEO

The process we went through was thorough. Over the last couple of years, I looked at where we execute our projects and where our clients are located. This analysis helped identify the best opportunities to improve project execution and client interface. We execute a lot of work on the East Coast; thus, Jacksonville was a natural choice for that operation. We are currently deepening the Jacksonville channel, and we are involved in projects in Charleston, as well as significant beach work in the area. New York is key for us because deepening projects are complex, and it will likely be a hub for offshore wind activities. In Houston, we focus on oil, gas, and LNG export opportunities where private clients invest in channel deepening projects. The goal is to align our executive positions with potential new business opportunities. We are in the process of staffing those new locations with individuals from Oak Brook, and there will be new hires in the months and years to come.

Charles Fratt, Analyst

That's helpful. You had a very strong year for 2020, and it looks like the fourth quarter appears as strong as the third, which may land you in the $155 million to $160 million for EBITDA for the year. Can you talk about next year and sort of your outlook for 2021? You mentioned fewer drydocking days. Do you think you can improve on 2020 in 2021? Can you provide some preliminary thoughts on how you're thinking about 2021?

Lasse Petterson, CEO

I'll let Mark handle that question. However, I have a strong belief in the market going forward. Our backlog is strong, our product performance is solid, and I believe the outlook for both this year and next year remain positive.

Mark Marinko, CFO

Yes, at this point, we believe the market for next year will be as good as this year. It's crucial to consider the bids that are coming up in Q4. Additionally, the fewer drydocks will benefit next year as we have made significant improvements in our field performances despite COVID challenges this year. Those exceptional performances, particularly in Jacksonville B, will be difficult to replicate. So while it’s going to be hard to match those extraordinary performances, our overall field performance has been consistently strong this year. It's too early to predict exactly how the Q4 bids will impact 2021, but there are some good headwinds and tailwinds to consider.

Charles Fratt, Analyst

It sounds like the tailwinds might offset and potentially more than offset the headwinds. Is that a fair assessment?

Mark Marinko, CFO

That's possible. A couple of these fourth quarter projects could have a significant impact on 2021. Backing into the cash change for the quarter, it looks like working capital might have been significantly negative. Is that the plug? How do you view working capital changes for the fourth quarter? You're correct. We anticipated that the billings exceeding revenues or the deferred revenue would reverse this year. It did in the third quarter, with accounts receivable spikes. Some AR can and will come back, but the change in liabilities was significant. We used cash for CapEx and the share buyback program, leaving our cash flat with a slight dip in the third quarter. Moving into Q4, we expect a cash reduction due to new hopper dredge payments near $10 million and a $13 million interest payment on the senior notes.

Operator, Operator

Your next question comes from Max Batzer from Wynnefield Capital.

Max Batzer, Analyst

I didn't get to the pound key in time, guys. My question has already been answered, but nice work. Particularly, if you're not on the call, good work. Mark, Lasse, thank you very much, and we'll be in touch.

Operator, Operator

I'm showing no further questions at this time. I would now like to turn the conference back to Ms. Tina Baginskis, Director of Investor Relations.

Tina Baginskis, Director of Investor Relations

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. Thank you.

Operator, Operator

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