Transcript
Good day, and thank you for joining us. Welcome to the Legacy Housing Corporation Third Quarter 2021 Earnings Conference Call. I will now turn the call over to your first speaker for today, Mr. Curt Hodgson. Please proceed, sir.
Thank you for joining the call today. My name is Curt Hodgson, Executive Chairman. Before we begin, may I remind our listeners that management's prepared remarks today will contain forward-looking statements, which are subject to risks and uncertainties, and management may make additional forward-looking statements in response to your questions. Therefore, the company claims the protection of the safe harbor for forward-looking statements that is contained in the Private Security Litigation Reform Act of 1995. Actual results may differ from management's current expectations, and therefore, we refer you to a more detailed discussion of the risks and uncertainties in the company's annual report filed with the Securities and Exchange Commission. In addition, any projections as to the company's future performance represent management's estimates as of today's call. Legacy Housing assumes no obligation to update these projections in the future unless otherwise required by applicable law. Now let me turn to a discussion of our third quarter performance and provide additional corporate updates. I will then turn the call over to our Chief Financial Officer, Thomas Kerkaert, to discuss the financials in more detail. This quarter, Legacy continued its track record of delivering strong financial results. Net revenue increased to $56.5 million in the third quarter, representing a 29.1% improvement over the third quarter of last year. This revenue increase came from both volume and price increases. We experienced strong improvement in our income from operations for the quarter, which increased to $17.6 million from $10.8 million in the third quarter of last year. While managing ongoing supply chain challenges and inflationary cost pressure, we were able to increase our unit deliveries by selling to finished goods inventory and realizing better gross margins as we offset cost pressure with systematic and regular price increases. We will continue to focus on opportunities to protect and grow margins and leverage our SG&A footprint. Net income of $14.7 million for the quarter was a 74.4% increase over last year. Earnings per share grew to $0.61 per share in the third quarter compared to $0.35 per share last year. This is the metric that I followed the most, as many of you know. Legacy delivered an 18.9% return on book value on a rolling 12-month basis. We are pleased with our continued success in delivering value to both our customers and our shareholders. Overall, market demand orders in our loan portfolio are very strong. Of great importance to our future success, which is not reflected in our GAAP basis outcome, are the strides we have taken in our mobile home communities under development. During the third quarter, we secured water rights as well as cleared other development hurdles on our 400-acre projects in Ambassador County near Austin, Texas. Our strategic real estate portfolio of mobile home communities will be populated by Legacy-built houses and will serve to reinforce the demand for our homes for years to come. We see this as a major competitive advantage over our peer group and a key to our continued success. At this point, I'll turn the call over to Tom.
Thank you, Curt. Following up on Curt's comments regarding revenue, total revenue for the third quarter of 2021 was $56.5 million, a 29% increase over the third quarter of 2020. Product sales accounted for more than 90% of the revenue increase, and that was achieved while originating leases for 71 homes in the third quarter. Interest revenue from the company's retail and commercial loan portfolios expanded to $7.3 million for the quarter, which represents a 12.9% increase over the prior year. Compared to September 30, 2020, the retail loan portfolio increased by 12% to $121.6 million, while the consumer loan portfolio decreased by 22.7% to $100.1 million due to a customer prepaying a portion of its balance. Looking back on the quarter, the big highlight is that we successfully navigated a difficult commodity market through effective management of both purchasing and pricing while deepening our long-term position as a provider of choice for key customers. Further, we continued to keep our thumb on spending while making prudent investments. With that, I'll hand the call back over to Curt for final comments and any questions.
Well, thank you, Tom. I don't have any further comments, but you all are welcome to ask whatever questions you have.
And your first question is from Mark Smith of Lake Street Capital.
I've got a handful of questions here. But first, I just wanted to look a little bit at kind of price increases versus mix in kind of average selling price of homes and how that trended?
This is Curt. I don’t have the specific data in front of me, but we monitor it weekly in our management report. I believe I recall your question accurately. It generally depends on the timeframe we’re examining. Comparing the third quarter of last year to this year, our pricing metrics have increased by 25% to 30%. However, tracking the product mix has been quite challenging. There was a significant surge in double wides in the first half of this year, and currently, we're returning to single wides. In our metrics, we focus more on the number of floors constructed rather than the number of homes sold. Our floor volume has remained stable year-over-year. However, with the increased production of single wides, our home sales have gone up, leading to the observation that we have ramped up production. I’m pleased to share that our production has returned to pre-COVID levels, and in Georgia, we're achieving record output daily. We are currently producing 16 floors each day, which I believe is the best we've ever seen in the company’s history. This suggests that we still have some capacity for growth in deliveries from our current plants, roughly 10% of volume capacity remains. This is contingent upon overcoming the material and labor shortages we’ve faced this year, which many are aware of.
No, no, that's helpful on the price side. As we look at kind of channel mix, it looks like strong results in direct sales as well as retail store sales continuing to trend the right way. Can you just talk about kind of how you feel about that channel mix and how that's trending today?
We are seeing a slight increase in retail sales. Recently, we've brought in new management for that segment of our business. As we indicated when we went public, our goal is to focus more on retail and less on wholesale. However, it's challenging to turn down requests from long-time customers who need our support. We are facing production challenges, and even our own production lots have to compete for availability. This has impacted sales due to our production limits, which are a common issue across the industry. Our backlogs are quite extensive, exceeding a year, which complicates our distribution choices. We need to decide who receives the product, whether it be long-standing customers, our retail locations, or independent dealers. I've entrusted this decision-making to our general managers, but these choices are tough and happen daily. To clarify, our retail sales are somewhat constrained by our production capacity issues.
No, no, that helps. As we kind of look at price increases that you guys have taken, how do you feel about the competitive environment? Do you still have pricing power? And are the price increases that you've taken enough to fully offset inflationary pressure?
Each time we increase prices, we offer our customers the opportunity to opt out. This year, we've implemented 13 price increases, and we haven't lost 1% of our backlog. I find it hard to believe that we're selling single wide homes for more than we used to sell double wides, but we are. Our basic three-bedroom, two-bath home, which is our best seller, now costs $50,000, compared to $30,000 a few years ago. The price increases are astonishing to me, and it's not just our company; our customers are aware as well. We face significant cost increases from our suppliers, particularly in lumber and steel, but even in areas like sheetrock, windows, and other imports from China. We don't see modest price hikes of around 2% from our suppliers; instead, we experience increases of 40% to 50%. Our customers are aware of this dynamic. I can't predict how long this trend will last. Furthermore, our average loan payments have risen by 25% over the past 24 months, yet this hasn't dampened demand. I can't say when it will end, but we remain competitively priced compared to others in the industry, which is a significant advantage for us.
Okay. And the last one for me. I just wanted to look a little bit at this big repayment that you had in your MHP portfolio right at the end of the quarter. Kind of the impact on that going forward? And is there anything else to read into that as far as continued partnership with this kind of partner? Is there anything that we should be reading into given that big repayment?
I was initially open to having someone else address this question, but it seems I should take this one. This has been our top customer, a very financially strong one from the start. We were aware that this prepayment was forthcoming for quite some time, and we received a lot of advance notice. However, they are still purchasing from us and continue to do so on a financing basis. To put your question into numerical perspective, when we finance someone, we typically achieve a 5% margin between our borrowing costs and the finance price. Occasionally, this margin may exceed 5%. You can calculate the potential impact on our bottom line a year from now if we can't replace that $45 million prepayment. The reality is that we do find alternatives, including ongoing sales to the customer who made the prepayment. We intend to increase our loan back to the $50 million to $60 million range, which will enhance our financial leverage. In terms of return on equity, I believe we will remain stable. However, when a strong customer can repay a loan at 7% and switch to a 3% loan, we cannot realistically compete with that financial option. This situation will likely pressure us for a while. Therefore, we need to maintain a healthy spread between the price of our products and our costs. Currently, our gross margin is around 30%, which is quite healthy. As long as we can profit from our products, we will be able to generate the return on equity that you are looking for.
Next, we have Alex Rygiel from B. Riley.
Great quarter. Curt, a couple of questions here. Let's start with the community development program. So you mentioned Austin. First on Austin, when should we expect homes to start to be delivered to that property? And then what is your longer-term view on liquidating that asset?
Well, as you may know, I live in Austin, so it's pretty much in my backyard. In an ideal world, you wouldn't liquidate; you'd continue to benefit from the project for a long time. However, the slow development of our projects across the United States makes it challenging to engage government regulators and contractors effectively in 2021. Additionally, since we don't really need the orders right now, it’s difficult to get motivated about developing this project, especially considering my neighbors who started construction in the third quarter. I expect that we will be able to start product sales within 12 months. While we might not proceed due to manufacturing capacity limitations, the project itself is performing very well. It's an exciting project located just a few miles from the new Tesla facility, and we have another 2000 spaces in pre-development. In terms of land and improvements, we estimate about $20 million, which has been dormant from a return on equity perspective, waiting for the right opportunity to be utilized. This will take place south of Austin, and I anticipate that we will see progress in the calendar year 2022 as we are investing millions in building roads and installing a water system. Regarding the exit strategy, it may be tempting to sell to one of the REITs because they are paying top dollar for spaces. This presents a dilemma between what is best for the company's long-term interests versus what is more immediately beneficial. Ideally, a long-term landlord would maintain ownership indefinitely, but in the short term, it's hard to overlook two or three appealing exit options. We will reassess when the time comes.
And then next question, are there any other strategic initiatives or activities that are ongoing right now, either as it relates to your Georgia plant or as it relates to the type of home you're building, the size of the home you're building or geography that you're in?
We believe we are the most innovative company in the world. To your question, I can simply say yes. However, I prefer not to share too many details that might reveal our plans to competitors. Nevertheless, we have a significant event scheduled for this weekend, with 250 attendees, making it the largest event in the industry. From a product perspective, we have exciting things planned for next year. Regarding our strategic initiatives, I would rather not discuss that right now. I apologize for not being able to provide a more detailed answer, Alex.
Fair enough. Nice quarter.
All right. Anybody else?
Next, we have Michael Chapman from Aviance Capital.
Just a couple of follow-ups on the homes leased, 71 increase. What's the total number of homes you have leased now in the portfolio?
Tom, do you now take the question, will you?
Yes. I believe my schedule tells me 398 is our total count. That's what I got in front of me.
Given your capacity constraints, how do you determine what to allocate? Clearly, you factor in costs, and there seems to be substantial demand. However, lease rates are not particularly favorable. What criteria do you use to decide whether to invest more in that area or sell to third parties?
I can answer that one. We kind of left the decisions of who gets what to the General Manager level. It keeps upper management out of the politics and it seems to be more satisfying. So that General Manager is flying, whether or not it's a lease or it's a sale for cash or it's a finance sale or it's even a sale to our own lot. He might be blind to that. He's looking to maximize his production number of floors. That's the #1 priority. #2 priority is to look at the customer and decide whether or not that personality, that situation is going to be long-term or whether it's just appeared because of the imbalance between supply and demand. So we don't really recognize that. But to embellish on something that you already observed, I think I can mathematically tell you something that will be of interest. The lease rate that we're getting is close to 2% of the bases we have in that property on a monthly basis. So those 398 leases will be paying dividends in the form of earnings and top line for many, many years to come. And on top of that, these are not closed-end leases, they're open-end leases where we get the residual and the residual has gone up in value markedly since most of these leases were put in place. So it's one of many hidden gems in our balance sheet. While we might be showing it at X, the actual cash flow and residual value of that X is probably closer to 2x or maybe even more.
Okay. And so on those, do you get inbound calls from investors wanting to buy those from you and you just hold on to them because of the basically annuity that you guys get on that and the increased kind of residual value?
Well, the only interest we have in getting us out of it is the unless he sells. He calls and says, okay, where is my cash at? And thus far, when we do a cash analysis on a return on investment, they think they're going to get a discount from the original invoice price, but it's just not that way. Between the rate of return we get on lease payments and what the expected residual value, if anything, they've increased, they've appreciated since they first went. It'd be like buying a car for $30,000 and 3 years later, it's worth $40,000, you know it's used. I mean that's kind of the market that we're in right now.
Right. Okay. And then just kind of on capacity. It sounds like you're kind of tapped out on capacity in Texas. If you didn't have the labor constraints that you do have. Is there the possibility in those plants to run more than 1 shift or run on weekends?
We've explored that option multiple times in the past. Naturally, the decisions made a decade ago may differ from what would be decided today. Historically, I am not aware of any plant that has successfully operated multiple shifts in a single geographic area. The costs associated with construction are not significant. Therefore, if you weren't in a position to increase that capacity and had some lead time, it would likely be more advantageous to build a new facility nearby. Workers typically prefer to return to their familiar environment with their tools exactly where they left them, so they can resume their work seamlessly. From my perspective, we've never attempted a double shift. However, when assessing past imbalances between supply and demand, we concluded, after extensive thought, analysis, and discussions with experienced colleagues, that it simply wouldn’t be worthwhile. We've discovered that sometimes the last few homes produced by a plant can actually be unprofitable. There is an optimal production level for these facilities. If we can stabilize the labor shortage, so that workers stay for at least 12 weeks before moving to another job, we could increase capacity by about 10% to maybe 12%. Our geographic situation is not problematic, but we are facing high turnover as workers constantly seek better opportunities, resulting in a workforce that is largely inexperienced. In Fort Worth, we have a core group of 120 workers, but usually around 100 newcomers every day. Furthermore, attendance has become an issue, with few workers showing up for five consecutive days anymore. This inconsistency makes it challenging to run an assembly plant when the workforce is unpredictable.
Yes. I mean, so that must be systematic across the industry. I mean, do you think that a lot of the pricing you're getting is just capacity constraints industry-wide in production? And everybody is kind of assuming that, that's going to be consistent unless there's some change in either the work ethic or the ability to bring in outside workers.
I believe the issues are global and pervasive. When boats are circling in the Pacific unable to dock and unload, it highlights systemic problems that will require substantial efforts to stabilize. When I speak to the top leaders at my suppliers, I often find myself pleading for building materials like shingles or appliances, and they continuously apologize, stating they can’t sell due to shortages of essential materials like steel and asphalt. We are facing global supply chain challenges, and our team spends more time requesting products than negotiating prices. When this situation will improve is uncertain; it may not happen this month and could extend into next year.
The number of floors you can produce is currently maxed out. Even if there is demand from the Georgia plant where you could potentially expand production, you are unable to add facilities due to a lack of available workers. It's a situation that remains unchanged until conditions improve. Would you agree with that?
I feel like if we build a plant right next to the one we have in Fort Worth, we couldn't build any more houses because we've employed everybody that knows how to rough or how to do electrical work within a 5-mile radius as it is. So I mean the capacity problems aren't physical as an industry. They're people and materials. These buildings aren't that hard to build. You can put up a manufacturing facility in 24 months for, say, less than $10 million. It's the staffing and the materials and the systems that we have in place, it's hard to duplicate. We're all sitting there. There aren't many plants in the United States that are actually in construction at least in our industry. I do understand the RV industry has got quite a bit on the construction in Indiana. But in our industry, you could probably count the number of new plants under construction in one hand in the entire United States, even with the imbalance between supply and demand.
And next, we have DeForest Hinman from Walthausen and Company.
Somewhat new to the name, just to get a little bit more color on the comment on the valuations for developed parcels. I believe you were referencing the UMH call, they put out a number. I think it was in excess of $100,000 for developed paths. Is that the type of number you're referencing? Or is that something different?
That's an excellent question, and it's the first time it's ever been asked. The figure you're hearing represents the market value at which they're trading, which is in the upper five digits. The actual replacement cost, and I hate to burst the UMH's bubble, is that you can purchase the land, make improvements, and fill it up for under $50,000 per space. There's a significant imbalance between market value and replacement cost in the space business. Even with our best properties, our total investment will be under $50,000, including holding costs. In some cases, we may invest as little as $30,000 to $35,000 per space. The REITs believe there's a limited supply of land available for mobile home spaces. However, in Texas, the top state in the U.S., where I've lived most of my life and have been in this industry for over 41 years, that's simply not true. With a four-year plan and the right political connections, you can secure entitlements and create thousands of spaces. It does take about four years to complete the process, but there aren't the barriers to entry that people perceive in Oklahoma. To compete in that space, you still need to find a good location, within a decent school district, and close to an employment center. We can't just place it in a remote area. If you’re following the REITs, you’ve asked a great question, as I don't understand why they reach prices two to three times replacement costs, but they do. Some of these people are my customers, but that's the reality.
Well, my short uninformed answer is people are very impatient so if the asset is there and they don't have to deal with the 4 years of development pain, they pay that premium. But more specifically, on your locations that you've disclosed in the queue. I believe you have 7 parks that are disclosed. Can you just help investors understand where those parks are in that timeline that you just described? Are 2 parks placing units right now or 1 park's done? I mean any color you can provide there, I think, would be very helpful for shareholders to just really get a better understanding of what you have done and what you're hoping to accomplish and how much revenue stream those developments are currently providing at this time.
I can provide some insight on that. All of those locations are already approved for developing manufactured housing units in communities or parks, including subdivisions. There are no entitlement barriers to any of those. There are some engineering challenges related to water supply and electricity, along with contractor coordination and tax filings. However, we face no entitlement obstacles. The delays are partly due to the slower systems during the COVID era, and it's also challenging to generate more demand for our factories than we currently have. Therefore, we are essentially holding these locations until we need to utilize them. Additionally, regarding your earlier question, our land cost averages around $4,000 to $5,000 per space among the various parcels we own. In that range, the cost can go up to $6,000 per space depending on the specifics. Any additional costs per space relate solely to development expenses like roads or water infrastructure. We are actively involved in most major markets in Texas and are not just holding the seven sites; we also provide financing to key developers in this area, with approximately $15 million to $20 million in loans to those developing manufactured housing communities outside Texas. We profit from both lending and home building, so I stay well-informed about market conditions from South Carolina to New Mexico. I'm aware of developments that are planned, including their expected costs, but very few are actually starting construction because they can't obtain the necessary products. Still, there are around $20,000 to $30,000 per space that are at advanced planning stages in our markets across the Southern United States, perhaps a little more than that. While it is significant, it is not overwhelmingly so.
No, that's very helpful. And then if we look at those 7 parks that you have discussed right now, is the math for pads per acre. Is that a number that makes sense or is that off base?
There's a decision to be made. If we're selling land in a subdivision, the price is likely around 1-point-something per acre, but under 2, as these usually involve septic systems. In the case of a rental community, similar to what we have in Austin or Venus, we aim for around 5 per acre. While we could potentially achieve 6, it's more attractive at 5, since residents prefer a space that includes new land. One of the main benefits of living in a mobile home is having an area for children to play and for dogs to enjoy, which is preferable to an apartment. Without that aspect, we lose our competitive advantage. The top developer we are financing has significant investments with us and believes in providing around 5,000 to 6,000 square feet per pad, netting less than 5 per acre with that strategy. Our operations are on a slightly smaller scale, so our range is likely between 5 and 6 per acre, leaning closer to 5.
Okay. That's very helpful. Can you discuss your vision for capital in relation to park development? I understand you mentioned that building a park without units does not make sense. However, can you provide a rough estimate of the total cost to fully develop the parks as you envision them, rather than focusing on just one year?
Well, if we were to develop everything on our agenda, we're probably looking at around $100 million. So where would that money come from? Currently, we're generating about $14 million to $15 million each quarter, and we need to find a good place to invest it. Therefore, it shouldn't be difficult to grow it organically. Regarding the availability of funds for development, it appears to be limited since we are working with some very experienced individuals. Fortunately, we don't have any immediate cash needs, or we might find ourselves investing significantly in finished products, but there doesn't seem to be a lot of funds available for developments that I'm aware of.
Okay. That's very helpful. And then just really big picture. At some point, hypothetically, maybe some of the demand for units falls from the 3 customer groups that you believe you laid out retail dealer and then the big park owners, REITs, et cetera. I mean, do you envision transitioning these high levels of production over to our own parks to fulfill their needs? And then having said that, is this a period of time where you're thinking about 2 or 3 plus years of very high levels of production?
I believe it will take at least another year. The industry needs to shift from being like Jim Walter's homes to more like Pulte Homes. We must integrate better by providing space for vehicles and areas for children to play. I've been advocating for years that unless we compete with the major homebuilders' subdivisions, we will remain a niche market. We're working on being more integrated and offering consumers a more complete product. Currently, there is a significant trend toward renting houses, with prices around $1,200 to $1,400 per month. However, homeownership has traditionally been favored over rentals. I'm not sure if I'm directly answering your question, but Legacy's development philosophy is shaped by the lack of do-it-yourself capabilities in the customers today. People can no longer build their own homes as they once did. We need to provide a more comprehensive solution; otherwise, we risk staying a niche industry. We can compete directly with Horton and Pulte, but we need to expand beyond just selling the house itself. Our approach will involve becoming more comprehensive, whether through rental income or sales revenue, both of which are important. The goal is to be more complete and operate more like a true home builder.
I appreciate that color, and I'm a young guy, but I do remember Jim Walter homes. So that's a good comparison. I guess just in terms of educating shareholders at some point, does it make sense to do something on, you know, an investor deck where we kind of talk more about the development projects, maybe some pictures to help people visualize what you guys are doing and what you're trying to accomplish. I mean is that something that makes sense?
We have made some changes in our Investor Relations department. While we may not excel in this area, I want to share that I'm 67 years old, and Kenny recently turned 63. We are beginning to implement a succession plan. Both of us come from very small, rural backgrounds that were largely agricultural. We understand how to capitalize on good times, as reflected not only in our financial results but also in how others operate. Furthermore, we have strategies for tougher times, which will become evident with our LEGH approach. We had an exceptional week recently; it might have been the best we've ever seen, although we're not entirely sure what triggered it. In fact, our performance will shine even brighter if conditions worsen, as that will highlight our capabilities based on our core values. For those of you focused on long-term investments, it's worth mentioning that we have never incur losses and have consistently achieved double-digit returns on equity since our inception. Therefore, I’m not concerned about potential negative events. In fact, sometimes I wish they would occur sooner so that I could demonstrate the point I've been making for several years.
Well, we are shareholders, and I don't want you guys to shortchange yourself. I mean I can certainly follow up and give you guys some ideas that we would have in terms of describing what you're doing because...
We'll try to be more transparent about some of these matters. If given the choice between discussing it and taking action, we are focused on taking action. I know I've been the main speaker on this because these topics are part of my daily responsibilities. While we could delve into retail discussions with McKinney and talk about various ratios, the questions you ask are related to my everyday tasks. We are confident about our performance in the near future, and in comparison, we will perform exceptionally well during any downturn. We have been discussing the potential downturn for years; who could have predicted that COVID would last only two months? I certainly didn't foresee that. However, our backlog is stronger than ever, our margins are solid, our relationships with customers are positive, and we continue to innovate. We are showcasing some truly remarkable products at the show this week.
Okay. Well, I look forward to learning more. The strategy makes a lot of sense, and I'll circle back with the team, and we'll have a detailed conversation. I appreciate you taking the calls and keep a good work.
Next, we have Brian Glenn from Olcott Square Investment Partners.
I have a question. I know you all are strong advocates of lending and see it as a strategic asset. This dates back to the letter you wrote to Cavalier when you were shareholders while it was divesting its lending arm, and I'm sure this perspective has been consistent throughout your career in the industry. Could you explain in simple terms the structure you use with your third-party dealers regarding the preferred return and the split on the residual? Additionally, is the gross margin holdback part of the dealer incentive liability or is it a separate matter? I've encountered opinions suggesting that the loan side carries significant risk, which seems to be misunderstood. I know this is detailed in your filings, but I'd appreciate if you could elaborate on it a bit, as I find the risk mitigation incentives in your structure quite interesting.
We have four major lending branches, and you're referring to one of them. When we sell to an independent retailer who seeks financing through us, we provide 80% of their profit upfront, allowing them to retain 20% of the backend profits. This setup has resulted in over $6 million in participation checks issued to our dealers, with no one losing money in this arrangement. However, it's important to note that the market has been favorable during this period, which may skew analysis. We collect significant down payments, employ credit analysts effectively, and maintain an 8-person bilingual collection team, which has contributed to our delinquency rate being at a record low. This success is partly because our clients aren't facing losses on what they purchased five years ago. In fact, many may need to break their current products multiple times before considering a replacement, leading to high product demand. Our existing portfolio of $133 million in retail paper is stronger than ever, with yields for our team or joint venture hovering around 13% to 14%. We're fortunate to be selling one of the highest-value items globally, with consumers capable and willing to accept internal rates of return on their debt in the range of 12% to 14%. Thus, we earn both from the product and the associated margin, while also providing services to the retailer. While I'm not in a position to specify the exact impact on our bottom line, it is a substantial contribution to our earnings, given our involvement in the retail finance sector.
And there are no further questions at this time. I will now turn the call back to Curt Hodgson for closing remarks.
Thank you all for joining us. I appreciate your understanding regarding the short notice for this earnings call and your participation. It seems we've received more questions than usual, and I notice some new attendees as well. Your support is invaluable to us. We will schedule another earnings call in three months. Thank you all, and have a great day.
This concludes today's conference call. Thank you all for your participation. Enjoy the rest of your day, stay safe, and you may now disconnect.