Open Lending Corp Q3 FY2021 Earnings Call

Good afternoon, and welcome to Open Lending's Third Quarter 2021 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. As a reminder, today's conference call is being recorded. On the call today are John Flynn, Chairman and CEO; and Ross Jessup, President and COO; and Chuck Jehl, CFO. Earlier today, the Company posted its third quarter 2021 earnings release to its Investor Relations website. In the release, you'll find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures discussed on this call. Before we begin, I'd like to remind you that this call may contain estimates and other forward-looking statements that represent the Company's view as of today, November 9, 2021. Open Lending disclaims any obligation to update these statements to reflect future events or circumstances. Please refer to today's earnings release and our filings with the SEC for more information concerning factors that could cause actual results to differ materially from those expressed or implied by such statements. And now, I'll pass the call over to you, John, for opening remarks. John?

Thank you, operator, and good afternoon, everyone. Thanks for joining us for Open Lending's third quarter 2021 earnings conference call. I'd like to start today by reviewing our third quarter highlights and the progress we've made on our growth objectives. Then Ross is going to discuss the broader car manufacturing and lending landscape and provide an update on our OEM opportunity. Finally, Chuck is going to review our Q3 financials and our updated outlook for full year 2021. Now to our high-level results, we're very pleased to report another record quarter at Open Lending. Q3 '21 certified loans increased by 138% to 49,332 certs. We reported revenue of $58.9 million, which was an increase of 98%, and adjusted EBITDA of $42.1 million, which was an increase of 113% as compared to the third quarter of 2020. We're very encouraged by the continued growth in our credit union and bank line, where we achieved a 91% year-over-year increase in certs for the third quarter 2021. This was driven by the addition of new accounts, further penetrating existing customers and expansion of our refinance program. First, on the existing customer side. During the quarter, our top 10 customers, excluding OEMs, increased their certification volume by 185% year-to-date 2021 as compared to the same period in 2020. One way we are growing our existing customer wallet share is by adding new credit unions and banks to the refinance program. During the quarter, we onboarded 11 new accounts and now have over 40 credit unions and banks that are acting as funding sources behind these refinance channel partners. Our refinance volume was nearly 30% of our total certs in the third quarter '21. As a result of our flexible business model, our refinance channel has accommodated consumers by allowing them to modify their existing terms and lower their payments during these challenging times. We mentioned on our last call that our largest credit union customer had recently implemented our refinance program, lowering the bottom credit score from 620 to 560. As a result of this implementation, we're happy to announce that this initiative has been a huge success, and they have increased their volume by 5x and continue to grow. This is one example out of many of how impactful our partnership can be with our customers. Continuing to grow the refinance channel is one way we'll be able to help offset the temporary headwinds associated with affordability due to inflated values of used cars and the chip shortage, which are, in turn, impacting car sales, both new and used. Again, Ross is going to touch base on this topic in a few minutes. On the new customer side, we signed 16 new accounts in the third quarter, and four of these were Tier 1 accounts classified as over $1 billion in assets and two with assets over $8 billion. Momentum has also continued into the fourth quarter with seven new contracts signed and nearly 20 have active implementations underway. In certain cases, where permissible, we will announce the names of these large new customers once they go online on the lenders protection program. Many of the inbound calls that we're getting from the larger credit unions are related to the fact that they're all going to need to comply with CECL in 2023. Based on the recent webinar that we co-hosted with KPMG, these financial institutions all have less than a year to prepare. We will continue to focus on this very important growth opportunity over the next 12 months. We're also focused on three other initiatives that position us for long-term growth. First, I know we've touched on this previously, but we continue to explore third-party funding sources to purchase loans, what we call a permanent capital vehicle. While the initiative is young, we're very encouraged by the progress to date of these third-party funding institutions utilizing our lenders protection platform to underwrite and decision loans. To clarify, we will not have any legal ownership in these funding sources. Second, we are in the early stages of work towards the ability to provide additional products to include better decisioning on prime loans as well as the ability to ensure other asset classes. Third, expanding our business insurance partnership relationships, as you know, we provided tremendous value to our insurance carrier partners, and we believe the ROE generated for the insurers is well in excess of other lines of business due to high underwriting profitability and low capital charges. Our current partners are very pleased, and we're in discussions with a few more that will give us even more capacity as well as help us with our initiative to possibly expand into other verticals. As a reminder, these are unique and value-added partnerships, which are exclusive in nature. On October 25 through the 27, we held our annual executive lending roundtable. We had over 200 credit union and bank executives joining us here in Austin, Texas, for three days of roundtable discussion. This event was the largest attended conference we've hosted since founding the Company. It was a clear indication that our lending partners are hungry for new ideas on how to grow their auto portfolio in the absence of chips and new car inventory. Before I turn it over to Ross to review our OEM business as well as the global semiconductor supply chain impact to our business, I would like to remind everyone of a few key points. As you've heard us say on previous calls, over 80% of our business is typically used cars. With inflated used car values, it's making it increasingly difficult for our target market, consumers with scores of 560 to 680, to qualify for a loan due to the payment to income threshold that we have in place. With that, I'd like to offer a couple of insights based on our prior experiences during these types of cycles. For starters, this pandemic-induced recessionary cycle has presented patterns that we're familiar with based on over 20 years of data and history. Heading into recessions, we typically see supply in excess of demand as end market conditions soften. Conversely, off the market trough, we experience a period of insufficient supply as demand returns. We also see specific metrics that at times can forecast the inflection point. Currently, we are experiencing very low levels of dealer inventory, low levels of incentives offered by dealers, and dealers transacting with the highest quality buyer from a credit score perspective. In some instances, new vehicles are selling over MSRP, and used car inventories are being priced up. While it can be challenging to know when we have precisely turned the corner and reached that inflection point, we do know that in prior cycles, the recovery spans a period of 6 to 18 months. Over that time frame, pricing inevitably moderates and consequently, volumes increase notably. We believe that we will be well positioned to captureour share of the estimated 5 million plus units of excess demand that currently are forecasted. It is important to note that we continue to be disciplined in the way we run our business. While others in the market are relaxing underwriting standards, we remain steadfast in our position that we want to set our partners up for long-term success by delivering appropriate risk-adjusted returns on their auto loan portfolio. And with that, I'm going to go ahead and turn this over to Ross.

Thanks, John. As John mentioned, I want to spend a few minutes to talk about the general auto lending landscape. First, on the chip shortage, OEMs are allocating the limited production of chips to the most profitable units, generally the more expensive and less affordable units. Due to this, new vehicle inventory continues to decline, down 67% from a year ago. This has also led to fewer incentives being offered, which impacts the near-term opportunity for our subvention offering. Average incentive spending per unit in October 2021 is expected to reach a record low of approximately $1,600, which is down from almost $3,500 in October 2020. This will obviously impact our business if the shortage continues for a long time. However, there are a few stats that are suggesting that we may be in a trough and that we should see an inventory recovery in the coming months. For example, the Vice President of Sales Operations at Key America recently stated that despite ongoing supply chain issues and chip shortages, we expect our available supply and robust customer interest will help us have a strong finish for the year. In addition, some of the largest OEMs have become more optimistic about supply. Ford recently predicted an increase in volume in the final months of 2021. GM plans to resume production of the Malibu for the first time since February 2021 as an indication that its chip supplies are stable enough to build even its lowest priority vehicles. Despite all these short-term conditions, we are still seeing a lot of engagement and excitement with the current and prospective OEM partners, similar to the credit unions and bank space. As a reminder, there are many benefits for them to partner with us. First, greater earnings and ROAs to captives, with credit performance net of default insurance payments comparable to prime loans. Second, they are able to generate low-risk revenues by leveraging their existing infrastructure and network. Third, they experience increased profitability due to credit loss release under the CECL standards, and most importantly, they increase repeat buyers by keeping consumers in the captive customer ecosystem. With that backdrop, I want to give you a brief update on OEM number one and two, which combined have grown 205% year-to-date in 2021. First, for OEM number one, in the third quarter of 2021, we experienced certification growth of approximately 38% compared to Q3 of '20. I mentioned the chip shortage earlier, and this is impacting new car volumes as over 65% of their volume was new vehicles earlier this year. For OEM number two, certified loan growth continues in Q3 of '21. As a reminder, OEM number two came back online in October 2020 after going offline due to the COVID-19 pandemic. The chip shortage also impacts this OEM, but we are excited by our ramp, and it's working just as designed and will be a major part of our growth plan as affordability and the supply of chips returns to normal levels. Fortunately, we've been able to grow our used volumes across all three channels, which has allowed us to continue growing our business during this time. We expanded terms of 75 months in early April 2021 as requested by the OEM and have seen the 75-month loans represent about 17% of their originations since April 2021. We continue to work through contractual and IT implementation workflows. We are entering into an SOW with one of these OEMs IT providers to expand our current integration to include the bells and whistles that their clients will need, including subvention and other dealer-facing enhancements. This work will enable our systems to be ready. We continue to make good progress with the IT provider and OEM, and we'll keep you updated on our progress. In summary, even though the light vehicle SAR is down nearly 25%, we continue to grow our year-over-year volumes with our two existing OEMs. We are optimistic that when inventories begin to build, and the SAR returns to a positive trend line, we will benefit based on the pent-up demand in the market. I'll now turn it over to Chuck to discuss our Q3 financials and outlook in more detail.

Thanks, Ross. During the third quarter of 2021, we facilitated 49,332 certified loans compared to 20,696 certified loans in Q3 of '20, a 138% increase year-over-year. We executed 16 contracts with new customers. In addition, we have nearly 20 active implementations with go-live dates in the next 60 to 90 days. Total revenue for the third quarter of 2021 increased 98% to $58.9 million as compared to $29.8 million in the third quarter of 2020. Profit share revenue consisted of $35.4 million of total revenue, program fees were $21.6 million, and claims administration fees were $1.8 million. Now we'd like to further break down the $35.4 million in profit share revenue recognized in the third quarter of 2021. Profit share associated with new originations in the third quarter of '21 was $27.9 million or $566 per certified loan as compared to $14.7 million or $711 per certified loan in the third quarter of 2020. As previously disclosed, in April of 2021, we removed the vehicle value discount established as part of our underwriting changes implemented at the onset of COVID-19, which had the effect of increasing insurance premiums and corresponding profit share to us during the pandemic by approximately 15% per certified loan. As a result of transitioning back to pre-COVID normalized underwriting standards, our average profit share unit economics in the third quarter of 2021 are comparable to pre-COVID profit share economics. This change in underwriting has improved our closure rates, driven record certified loan volumes, and expanded our competitive position in the market. Also included in profit share revenue in the third quarter of 2021 was a $7.5 million change in estimated revenues from certified loans originated in previous periods. As a result of improved macroeconomic conditions, and the continued overall portfolio performing better than we expected due to lower defaults and claims. As a reminder, profit shares are paid to us monthly by the insurance carriers from the underwriting profit associated with Lenders Protection's risk. Under ASC 606, we recognized the estimated profit share upfront in the month the loan is certified based on our forecast of defaults, prepayments, severity, outstanding principal, and premium on a loan-by-loan basis. We have adjustments to our contract assets due to estimation of revenue from loans originated in previous periods on a prospective basis. In our supplemental earnings slides posted on our website, we have slides to further explain changes in contract assets, profit share revenue, and unit economic trends. Consistent with last quarter, we break down the change in estimates over the past quarters between realized portfolio performance and prospective changes and assumptions for future periods. We would like to point out that during the last 12 months, almost 90% of our positive changes in estimates related to profit share revenue were due to actual realized portfolio performance. Basically, lower-than-projected claims and severity of losses in historical periods drove these positive changes, which increased our estimate in our contract asset, profit share revenues and in turn, drives near-term cash flows. Continued strong loan performance from a risk perspective will result in additional positive changes in our contract assets, profit share revenues, and near-term cash flows. Gross profit was $52.5 million in the third quarter of 2021, an increase of 93%, driven primarily by the increase in certified loans in the third quarter of 2021 as compared to the third quarter of 2020. Gross margin was nearly 90% in the third quarter of '21 compared to 92% in the third quarter of 2020. Now, let's turn to selling and general administrative expenses, which were $11.8 million in the third quarter of 2021 compared to $7.7 million in the previous year quarter. The increase primarily represents employee compensation and benefits including share-based compensation related to headcount addition to enhance internal controls, financial reporting and compliance functions, risk, and information technology for a public company. Operating income was $40.7 million in the third quarter of 2021 compared to $19.5 million in the third quarter of 2020. Net income in the third quarter of 2021 was $29.4 million compared to a net loss of $71.1 million in the third quarter of 2020. As a reminder, we had $83.1 million in expenses in the third quarter of 2020 that were associated with the business combination, specifically a noncash charge as a result of the change in fair value of contingent consideration earn-out shares, which were accounted for as liability awards. All contingent earn-out share milestones were met in the third quarter of 2020. Adjusted EBITDA for the third quarter of 2021 was $42.1 million as compared to $19.7 million in the third quarter of 2020. There's a reconciliation from GAAP to non-GAAP financial measures that can be found at the back of our earnings release. We exited the quarter with $293.2 million in total assets, of which $90.9 million was in unrestricted cash, $114.3 million was in contract assets, and $66 million in net deferred tax assets. We had $165.7 million in total liabilities, of which $147 million was outstanding debt. We had approximately 126.2 million shares outstanding on September 30, 2021. We posted an updated investor presentation and third quarter 2021 earnings supplemental to our Investor Relations website, which includes a slide that lays out our current share count. Now moving to our guidance for 2021. Based on third quarter results and trends into the fourth quarter of 2021, we are narrowing our previously announced guidance ranges as follows: total certified loans to be between $165,000 and $174,000. At the midpoint, our growth is approximately 80% against the backdrop of a SAR that has contracted over 25%. Total revenue is expected to be between $200 million and $212 million, adjusted EBITDA to be between $140 million and $150 million, and adjusted operating cash flow to be between $110 million and $125 million. Even though we are narrowing our previously reported guidance ranges, we're excited about the resiliency of our business despite inflated car values and the global semiconductor chip shortages. Further, we are still within the guidance ranges provided 18 months ago, which demonstrates the predictability of our business model. In narrowing our guidance, we took the following factors into consideration: Affordability Index for our target credit score of 560 to 680 due to continued inflated used car values, the global semiconductor chip shortage, OEMs that have streamlined their supply chain, having moved toward just-in-time manufacturing processes, disruption in the transportation networks and raw material shortages, and low levels of dealer inventory. With that, I will now turn it back over to John, who will make a few closing comments before moving to Q&A.

Thank you, Chuck. I want to thank everyone for joining us today for our third quarter 2021 earnings call. We remain excited about the future and the opportunity ahead for us. I do want to leave you with a couple of thoughts here. We successfully navigated through the first phase of COVID-19 in 2020. We also navigated through the surge of the delta variant throughout 2021, continuing to grow our business. We will navigate through the inventory and affordability constraints. Our business model has proven that it's very resilient, and we are well positioned as these headwinds subside. As you may recall, our TAM is over $250 billion. We only have low single-digit penetration today, which leads to significant wide space and more opportunity. I want to thank everybody again for joining us. Thank you.

Operator Instructions] And we do have a question from Vincent Caintic with Stephens. Please go ahead. Your line is open.

I wanted to discuss the guidance for the fourth quarter. If we look at the midpoint of the range for the fourth quarter, it suggests about 4,500 certifications. I'm curious about the decline in the third quarter and whether the fourth quarter guidance represents a solid run rate. You've been adding lenders, including non-OEM lenders, and I am wondering how these additions might impact certification volumes and whether they can help counter some of the industry challenges.

This is Chuck. Our guidance has been in the market for over 18 months, and we've recently noticed that factors such as chip shortages and affordability issues have significantly affected our target credit score since late September and into the fourth quarter. The primary issues are inflated car values, affordability, and inventory shortages. The Seasonally Adjusted Rate is down 25% for both new and used vehicles. We believe it was necessary to refine our guidance based on these conditions, especially after a record Q3. The business remains strong, and we are optimistic about our direction heading into 2022. There is considerable pent-up demand that we are well-positioned to meet when supply stabilizes and inventories are replenished.

And Vince, I want to add that we discussed the refinance channel during the call, and there was significant interest from credit unions and banks that we weren't aware of looking to join that refinance channel. There's a lot of opportunity as we onboard them. These are accounts that are currently active with us, so there's no long ramp-up time to get them started on the refinance channel. I anticipate positive momentum for refinancing.

Yes. And I'll add on a little bit more. We believe these are temporary headwinds, and this will work itself out over time. So I think we've already added 60-plus new customers in 2021 through October, and that's ahead of last year, full year. So continue having a lot of interest in new customers coming on board, as John said.

Okay. Great. Yes, I appreciate that. Regarding the more than 60 new customers, when considering the potential revenue from an average customer once they mature, what is your perspective on the timeline for them to become established in the non-OEM opportunity?

It will take about four to six months from when we start producing their first certification to ramp up, unless it's a refinance. The refinance process is different; it's more like a turnkey program. Once we connect them with one of our active refinance channels, they can begin generating loans in as little as 30 days.

Okay. And last one for me. I know you talked about kind of the OEM engagement is still high. Just maybe any updates you can provide on the OEM pipeline. We saw in the quarter, one of your lending partners is becoming a captive OEM lender, just if there's any thoughts you can provide on the pipeline?

Yes, Vincent, it's Ross. Yes, we have a great relationship with the party you're talking about and with that announcement with the just closing last week. We're excited about it. We've actually been in discussions with that particular captive for 14 or 15 months. We're ready to have those deeper discussions. We will let our client direct that, but we certainly are excited about it and happy for their success and the opportunity is going to be big, and we certainly are ready to have those deeper discussions whenever they direct us. But that's about all I can talk about today with that. As it relates to the other OEMs, that is extremely close with the work we're doing with that IT partner. We're looking at citing a statement of work here. We're financially obligating ourselves for that work, which shows our commitment and belief that this is going to go through. We have lots of implementation-type meetings ongoing with them, legal work right now, and contractual work evaluating the documents. Yes, we're excited about that as well. We look forward to giving more updates as we can on that opportunity, very exciting.

Our next question is from Joseph Vafi with Canaccord. Please go ahead. Your line is open.

It's great to see the continued growth despite the challenges. Following up on Vincent's question, this might be directed to Ross. It appears that OEM number three is progressing, and you're navigating through IT and legal processes. If you're able to share, is there more required from this OEM regarding their internal requirements compared to some of the other OEMs you've already signed?

I think there the level of enthusiasm on that side has not changed at all. The integration that we're building with the third party will have subvention. We'll have all of our certification piece of technology that needs to be added to our current integration with them. They will start the work and get it done here early next year, and we'll be able to launch afterwards. At the same time, we're working through the business side of it, about how we're going to use our program, where we are in legal. We've gotten management buy-in from this. We're working through it, and we look forward to when we could actually share a signing date and that implementation plan, which will definitely affect 2022.

That's great to hear, Ross. Do you think you'll be able to include some of that OEM number three in the 2022 guidance if everything goes well, or will you need to make a decision on that as we approach it, and how you explain it?

I think that's certainly our plan. Hopefully, there's another one as well. But for sure, that's part of our plan. We haven't finished the development of it yet. We're working with it, but it sure looks like that's going to be a part of it.

We have a question from Peter Heckmann with D.A. Davidson. Please go ahead. Your line is open.

Continued really strong growth on the bank and credit union side, just for just so I have the number right, how many bank FI customers do you have at the end of the quarter?

You have at the end or you can sign during the course.

You have resigned, Peter, or you're talking about total customers approximately 400 total active customers.

Okay. All right. And then when you think about relative sizing, you've had these top 10 customers that generally, I have characterized as a kind of mid-tier credit union, but you've talked in the past, up into the higher tiers. How do you see that progression happening? Any additional thoughts? I mean, right now, it looks to me like you're doing something like 100 certs per FI customer, but you talked about maybe some larger institutions that could potentially do a couple of thousand. Can you give us a little more color on some of those discussions?

Sure. This is Charles. We mentioned earlier, too, that the ones that we signed in the last quarter, there were four, I think, Tier 1 accounts over $1 billion in assets and two of those were over $8 billion. To your point, the average of 100 certs of an institution is kind of misleading in that we've got some shops doing as high as 2,500 a month, and then some of the smaller shops might do 50 to 100 and they're a good account. I think with the onslaught of CECL coming into light in 2023, we had a lot of interest at our user group meeting. We actually had KPMG as one of our presenters at the function that we held here a couple of weeks ago, and they made it very clear that these larger institutions all need to be compliant by 2023, which is really just a year out. So they're all starting to ask the right questions, positioning themselves for the ability to take advantage of that CECL reduction as a result of having these loans insured. Some of our larger shops that we're signing on are anticipating doing certainly more than 100 deals per month in those upper tiers.

Okay. That's really helpful. And then just if I could do one more. I mean how are you thinking about capital allocation going forward? Somebody's been generating really strong cash flow and should be in a net cash position according to my model about a year out? And how do you think about allocating that between potentially M&A, share repurchase, dividend, what are your early thoughts?

Yes. Peter, it's Chuck. Yes, I mean, obviously, we think about capital allocation all the time. First and foremost, investing in our business, our technology enhancements and development as we think about lenders protection going forward and our human resources. We invested in a lot of folks this past year, and we'll continue to invest in sales, marketing, and technology. We look at M&A and we first are focused on the organic just because the white space and the TAM is so large. As John was talking about, the credit unions, I think we're 400, call it, 390 credit unions today out of 5,000-plus. There's a great opportunity to continue penetrating there. M&A for the right opportunity is definitely something we'd look at to create value for shareholders and be accretive to our business. On the balance sheet, we've historically, as you know, done a couple of share buybacks and participated in the secondaries. We believe in the stock and the story, and that's definitely a priority and an allocation opportunity for us. So all of the above and low leverage and not a lot of debt on the balance sheet, so those are all opportunities for us.

Our next question is from Mike Grondahl with Northland Capital Markets. Please go ahead. Your line is open.

This is Michael on for Mike. Maybe first off, Chuck, you mentioned one large credit union customer moving from 620 to 560 for their credit scores with refi. Would you say that's sort of an average move that bottom of bracket? Or does that vary quite a bit across the customer base?

It's a mixed bag. We have some institutions that come out of the chutes doing 560 to whatever their cutoff is of $680 or 660. They all get to pick what they consider to be their triggers. But this was a big move for a big shop to go that low, and I think it's going to generate some significant volume in those lower tiers. But we have a lot of shops to go that low right now.

Got it. And then you just mentioned KPMG with your sort of customer conference. Do you get a lot of inbound interest through the conversations they're having with their customers?

We have seen an increase in calls from shops of all sizes that recognize the need to comply with the requirements we discussed. We delivered a solid presentation during our roundtable, and since then, there's been a lot of interest regarding the timeline and necessary steps leading up to going live. This has sparked significant interest across many of our offerings.

Our next question is from James Faucette with Morgan Stanley. Please go ahead. Your line is open.

I just wanted to ask about the economics. It seems like there has been a slight decrease. We're trying to understand our modeling better. Where do you forecast the average profit share revenue per cert will settle? We've noticed a slight decline as conditions have normalized, but we want to ensure we comprehend the various factors at play and where you anticipate it may stabilize.

James, this is Chuck. Yes, I mean, we talked about a little bit on the last quarter. In April of '21, we removed our vehicle value discount that we had in place on the onset of COVID, which increased premium and profit share to '20 and into '21. What we had in Q2, we only had two months of that impact, if you will. So, that 582 and profit share that we recognized on the new originations in Q2 came down slightly in Q3 just based on having three full months in there for that being removed. We feel like that 565 cert is based on the mix that we had this quarter is a good number to model. I would compare that back to Q1 of '20 prior to the underwriting changes when COVID came about, and we were about $564 a cert. So we're right in that pre-COVID normalized level.

That's very detailed, and I really appreciate it. When considering the current market, you have the advantage of additional banks joining and possibly an OEM next year. At the same time, are you expecting to see a bottoming out of the overall market size? Is the low 40s the right run rate to begin 2022? I'm trying to understand your goals and the various factors that will influence next year as we evaluate the potential drivers.

Yes. No, that's a great question. Our early thoughts on '22, and we'll provide more on '22 on the next quarter call. As the economy fully reopens, we're going to be a direct beneficiary of that. I mean, there's pent-up demand. I think in Ross's comments, there's over 5 million units of demand out there in the marketplace. We monitor inventory levels, pricing dynamics, the supply chain shortages. We believe we'll return to a significant growth profile as inventory restocks. The pace of recovery, we believe, based on the current data, we're close to a trough. We have no reason to believe that we can't get back to significant growth in Q3 record levels. We just came off a record quarter at the Company and believe we can get back to that soon and continue beyond that as our growth continues.

And there are no further questions. I'll turn the call back to management.

Appreciate everybody coming on today and the questions have been great. Anything else we can answer. We're an open book here. So look forward to continuing working with you and moving this forward. Thanks, everybody.

Thanks for your time, and good night.

That concludes the call for today. We thank you for your participation and ask you please disconnect your lines.