Earnings Call Transcript - MFIC Q1 2021

Operator, Operator

Good morning and welcome to Apollo Investment Corporation's Earnings Conference Call for the period ended June 30th, 2020. At this time, all participants are in a listen-only mode. The call will be open for question-and-answer session following the speakers' prepared remarks. I will now turn the call over to Elizabeth Besen, Investor Relations Manager for Apollo Investment Corporation.

Elizabeth Besen, Investor Relations Manager

Thank you, operator and thank you for everyone for joining us today. Speaking on today's call are Howard Widra, Chief Executive Officer; Tanner Powell, President and Chief Investment Officer; and Greg Hunt, Chief Financial Officer. I'd like to advise everyone that today's call and webcast are being recorded. Please note that they are the property of Apollo Investment Corporation and that any unauthorized broadcast in any form is strictly prohibited. Information about the audio replay of this call is available in our earnings press release. I'd also like to call your attention to the customary Safe Harbor disclosure in our press release regarding forward-looking information. Today's conference call and webcast may include forward-looking statements. Forward-looking statements involve risks and uncertainties, including, but not limited to statements as to our future results, our business prospects, and the prospects of our portfolio companies. You should refer to our most recent filings with the SEC for risks that apply to our business and that may adversely affect any forward-looking statements we make. We do not undertake to update our forward-looking statements or projections unless required by law. To obtain copies of our SEC filings, please visit our website at www.apolloic.com. I'd also like to remind everyone that we posted a supplemental financial information package on our website, which contains information about the portfolio, as well as the company's financial performance. At this time, I'd like to turn the call over to Chief Executive Officer, Howard Widra.

Howard Widra, CEO

Thanks, Elizabeth. Good afternoon and thank you for joining us today. Before we begin, I'd like to say we hope everyone is healthy and doing well. I'll begin today's call with an overview of our portfolio and a review of our financial results for the June quarter. I will also discuss today's distribution announcement. Following my remarks, Tanner will review our investment activity for the quarter and will discuss the impact of the COVID-19 pandemic and economic shutdown on our portfolio in greater detail. Greg will then review our financial results and provide an update on liquidity. We will then open the call to questions. During today's call, we will be referring to some of the slides in our investor presentation which is posted on our website. As we all know, the COVID-19 pandemic has been an unprecedented shock to the global economy. We believe our portfolio repositioning over the last several years has allowed us to enter this challenging period with a well-diversified senior corporate lending portfolio invested in less cyclical industries with granular position sizes. Despite the significant economic headwinds through the pandemic, our corporate lending portfolio continues to perform well as evidenced by a net gain during the quarter. We believe the performance of our corporate lending portfolio during this challenging period demonstrates its resiliency and quality. No investments within our corporate lending portfolio were placed on non-accrual status during the quarter. The corporate lending portfolio, which represents 79% of the total portfolio, is 85% first lien, 100% floating rate, and 86% sponsor-backed. We continue to work closely with our sponsor clients and portfolio companies and we have generally been pleased with how sponsors and borrowers have been managing through the current environment. Away from corporate lending, results for the quarter were negatively impacted by non-core and legacy investments. On our last call, we mentioned our intention to reduce the fund's leverage over the coming quarters. During the June quarter, we made considerable progress deleveraging the balance sheet by exiting approximately $233 million of assets on a gross basis, or $95 million on a net basis, which reduced our leverage to 1.66 times down from 1.71 times. Since the end of the quarter, we have received net paydowns of approximately $50 million, including one loan with documents in escrow. Pro forma for these additional paydowns and assuming no changes to fair value up or down, net leverage is currently approximately 1.61 times. We have visibility into meaningful additional repayments in the remainder of the September quarter and for the December quarter. We may focus on further deleveraging to within our target range of 1.4 to 1.6 times over the coming quarters. As the pandemic began, many of our portfolio companies drew on their revolvers during the March quarter to shore up liquidity. Many of the drawdowns were repaid in the June quarter. Our role as the agent for nearly all of our revolver and delayed draw term commitments remains active as we monitor every commitment. For context regarding mid-cap leveraged loan revolvers, utilization was 23% before the pandemic, and it peaked at 70% in mid-April and has since declined to 48% today. Greg will discuss our liquidity and unfunded commitment exposure in greater detail later in the call. Moving to our financial results, net investment income for the quarter was $0.43 per share, reflecting a smaller portfolio given the reduction in our leverage and a lower contribution from Merx, which Tanner will discuss later. Additionally, given the total returns feature in our incentive fee structure, no incentive fees were accrued during the quarter. The portfolio had a net loss of $25.2 million or $0.39 per share, driven by a net loss on non-core and legacy assets, partially offset by a net gain on corporate lending. Slide 16 in our investor presentation shows a net loss for the quarter broken out by strategy. Net asset value per share at the end of June was $15.29, a 2.6% decline quarter-over-quarter. Turning to our distribution, in light of the challenges and uncertainty created by the COVID-19 pandemic and our plans to further reduce the fund's leverage, we have reassessed the long-term earning power of the portfolio and deemed it prudent to adjust the distribution at this time. We believe that the distribution level should reflect the prevailing market environment and be aligned with the long-term earnings power of the portfolio. Going forward, in addition to a quarterly based distribution, the company's Board expects to also declare supplemental distributions in an amount to be determined each quarter. We believe a $0.31 distribution reflects the long-term earning power of the core portfolio including Merx. We also anticipate several sources of earnings which will allow us to pay an ongoing supplemental distribution, including the redeployment of non-earning or lower-yielding assets from our non-core and legacy portfolio, the recovery of earnings from Merx, and the rebound of fee income to historic levels. The base supplemental distribution construct is intended to provide shareholders with a minimum annualized yield on NAV of 8%, a level which is consistent with some of our peers and allows for some upside via a supplemental distribution. To that end, the Board has declared a base distribution of $0.31 per share, payable on October 7th, 2020, to shareholders as of record on September 21st, 2020. The Board has also declared a supplemental distribution of $0.05 per share payable on October 7th, 2020, to shareholders of record as of September 21st, 2020. Again, the Board expects to declare quarterly supplemental distributions in the amount to be determined each quarter. With that, I will turn the call over to Tanner to discuss our investment activity and our portfolio.

Tanner Powell, President and Chief Investment Officer

Thanks, Howard. Starting with the market environment, since the March lows, leveraged loan prices have recovered and loan spreads have tightened significantly, which had a positive impact on the fair value of our corporate lending portfolio. Given the economic backdrop, middle market loan volumes during the period were light in both the syndicated market and the private credit market. Activity in the middle market remains slow as sponsors and lenders continue to struggle to evaluate how to price risk. While deal activity has been light, we do see that pricing terms have shifted in favor of lenders. In addition, borrowers are increasingly seeking asset-backed lending solutions, an area where we in mid-cap have expertise and significant market share. Given the composition of our corporate lending portfolio, which is primarily first lien loans to less cyclical businesses, we believe that the credit quality of our corporate lending portfolio has held up relatively well during this period. However, we have seen an increase in requests for loan amendments. Today, AINV has completed or is in the process of completing 23 amendments across the portfolio, representing 15% of portfolio companies. Most of these amendments have been for covenant waivers or resets, generally in exchange for a new covenant. To date, only four amendments have impacted interest rates or principal payments. Given the lack of investment activity in the overall market and our focus on reducing leverage, new investment activity was limited during the quarter. New corporate lending commitments for the quarter were only $17 million across two companies. Sales were $68 million, repayments were $49 million, and revolver paydowns were $116 million for total exits of $233 million. These sales were executed at prices around our marks at the end of March. Net repayments for the quarter were $95 million, including $31 million of net revolver paydowns. Going forward, given our visibility into upcoming repayments, we expect to be in a position to make new commitments as market activity resumes. Moving to Merx, our aircraft leasing portfolio company, as discussed on our last call, the pandemic has caused an unprecedented decline in global air traffic, which has led to widespread lease deferrals throughout the industry. Although air traffic trends have improved slightly more recently, they remain significantly below pre-pandemic levels. Merx has been working with its lessees to provide the necessary flexibility during these unprecedented times. During the June quarter, AINV converted $105 million of Merx revolver into equity and reduced the interest rate on the revolver from 12% to 10%. Accordingly, at the end of June, our investment in Merx totaled $329 million at fair value, consisting of a $200 million revolver at 10% and $125 million of equity, which also reflects a $4.3 million write-down during the period. This partial equitization will reduce the interest Merx pays to AINV from $36 million per year, or $9 million per quarter, to $20 million per year, or $5 million per quarter. We believe this reduced debt burden will provide Merx with the cash flow relief needed to navigate this challenging period. We expect Merx will be able to make dividend payments on our equity investment, improving AINC's return on its overall investment when the industry recovers. We believe Merx's portfolio compares favorably with other lessors in terms of asset, geography, age, maturity, and lessee diversification. Merx's portfolio is skewed towards the most widely used types of aircraft, which means demand for Merx's fleets should be somewhat more resilient. Merx's fleet predominantly consists of narrowbody aircraft serving both the U.S. and international markets. At the end of June, Merx's own portfolio consisted of 81 aircraft, 10 aircraft types, and 40 lessees in 26 countries with an average age of 9.5 years. Merx's fleet includes 75 narrowbody aircraft, two widebody aircraft, and one freighter. As mentioned last quarter, the majority of rents deferred impacted cash flow in the June quarter. We expect to recover in lease payments going forward given the significant amount of capital that has been raised by airlines in the public markets and the level of government support around the world. So far for the month of July, cash flows are at or above expected levels. Merx continues to diversify its revenue sources beyond aircraft leasing. Merx has built a best-in-class servicing platform which generates income from aircraft managed on behalf of other Apollo-affiliated capital. As you may have seen during the quarter, Apollo Global's dedicated aircraft leasing fund, Navigator, entered into a sale-leaseback transaction with Delta Airlines for 10 aircraft. As Navigator acquires additional aircraft, Merx will generate incremental income from servicing fees. Across Merx and PK AirFinance, the aircraft lending platform which was acquired by Apollo Global, Apollo's aviation platform has 45 professionals dedicated solely to aviation located across North America, Europe, and Asia, providing expert in-house support to the platform's various aviation strategies. The aviation team has the experience to skillfully navigate this period of market stress and the requisite capabilities to mitigate potential adverse outcomes. In addition, the Apollo Aviation platform will seek to opportunistically deploy capital in the face of widespread uncertainty and marked disruption. To be clear, Merx is focused on the existing portfolio and is not seeking new investing opportunities. However, growth in the overall Apollo Aviation platform will inure to the benefit of Merx as the exclusive servicer for aircraft owned by other Apollo Funds. Moving to overall credit quality during the quarter, our two first lien positions in carbon-free chemicals were placed on non-accrual status. The company has been facing earnings headwinds due to an unprecedented slowdown for the demand for one of its products, hydrochloric acid, or HCl, which is used in the fracking process. Due to the decline in oil prices and production, the company's profitability has been negatively impacted by the lack of HCl offtake. At the end of June, investments on non-accrual status represented $182 million or 6.1% of portfolio cost and $47 million or 1.7% at fair value. Looking ahead, we anticipate the continued need for covenant relief in our portfolio over the next few quarters. We believe these amendments will provide our portfolio companies with the flexibility needed to operate in the economic downturn. We can use such amendments to reprice our risk, tighten loan documentation, add covenants, and secure additional equity capital. With that, I will turn the call over to Greg who will discuss financial performance for the quarter.

Greg Hunt, CFO

Thank you, Tanner. Beginning with the statement of operations, total investment income is $56.7 million for the quarter as interest income declined due to the reduction in income from Merx, non-accrual investments, and the decline in LIBOR. The decline in LIBOR was primarily offset by a corresponding decline in AINV's interest expense for the quarter. The remainder of the decline was primarily as a result of muted origination and prepayment activity during the quarter. Approximately 97% of contractual interest payments for the quarter were collected and the weighted average yield at cost on our corporate lending portfolio was 8.1% versus 8.5% last quarter, reflecting a decline in LIBOR to floor levels. Expenses for the quarter were $28.4 million, down $4.4 million quarter-over-quarter, primarily due to lower interest expense and lower management fees. Interest expense declined due to the decline in the average portfolio and the decline in LIBOR. The average weighted average cost declined 81 basis points from 3.93% to 3.12%. Management fees declined due to the decline in the average portfolio and there were no incentive fees paid during the quarter. Net investment income per share for the quarter was $0.43. As Howard mentioned, leverage at the end of the quarter was 1.66 times, down from 1.71 times at the end of March due to $95 million of net paydowns, partially offset by the net write-down on the portfolio. The net loss on the portfolio for the quarter totaled $25.2 million or $0.39 per share. On page 16 in the earning supplement, we've broken out the net loss by strategy. Spreads in the syndicated market tightened meaningfully since the peak decline in March, and as a result, we saw several reversals of unrealized losses from last quarter. Our corporate lending portfolio had a net gain of $4.7 million or $0.07 a share during the quarter. Merx had a loss of $4.3 million or $0.07 a share, reflecting the continued stress in the aviation industry. Non-core and legacy assets had a net loss of $25.6 million or $0.39 per share due to carbon-free legacy positions in our shipping and oil investments. The loss in shipping primarily reflects the decrease in the residual value of the underlying assets in our dynamic shipping investment. The loss in our oil investments was primarily due to the weakness in the forward oil curve. NAV per share at the end of June was $15.29, a 2.6% decline quarter-over-quarter. Moving to liquidity and capital, at the end of June, we had $1.76 billion of debt outstanding, down $40 million from the prior quarter. Adjusting for settlements at quarter end, we had $243 million of immediately available liquidity, up from $224 million at the end of March, and we had $205 million of additional capacity under the credit facility, up from $131 million at the end of March. The net effect of the quarterly activity improved our available borrowing capacity from $350 million to $450 million. As Howard mentioned, the activity post-quarter end has added to our overall borrowing capacity for this quarter. Lastly, we were pleased that Kroll affirmed our investment-grade rating in July. Moving to our unfunded commitments, on page 18 in our earnings supplement, we have laid out the outstanding commitments at the end of June. During the quarter, we experienced significant revolver paydowns from our portfolio companies, as many of them opted to pay down the revolvers because they had better visibility regarding the impact of the pandemic on their respective businesses. Of the $275 million of unfunded revolver commitments outstanding at the end of June, $180 million is available to borrowers and $95 million is not available to borrowers. Availability is based on borrowing base limitations and other covenants. There were no significant drawdowns on delayed draw term loans commitments during the quarter, which are generally used to support portfolio company acquisitions and have current covenants. As noted, a significant portion of our unfunded commitments are not available to borrowers. Most of our revolver commitments are subject to borrowing dates, and many of the companies do not have the requisite collateral. Delayed draw term loans are typically used to support portfolio company acquisitions and have current covenants, and therefore, we do not expect these facilities to have any material utilization in the current environment. Turning to the portfolio composition, our investment portfolio had a fair value of $2.67 billion at the end of June, across 149 companies in 29 different industries. We ended the quarter with core assets representing 91% of the portfolio. Non-core assets decreased to 9% of the portfolio at the end of June, down from 10% at the end of March. First lien assets comprised 85% of the corporate lien lending portfolio. The weighted average attachment point decreased to 2.8 times. Investments made pursuant to our co-investment order were 77% at the end of the quarter. We continue to remain focused on preserving liquidity, and accordingly, no stock repurchases were made during the quarter. As our leverage and liquidity continue to improve, we will continue to evaluate repurchasing our securities as appropriate. This concludes our prepared remarks, and we would like to open the call up to questions.

Operator, Operator

Thank you. The floor is now open for questions. Our first question comes from the line of Kenneth Lee of RBC Capital.

Kenneth Lee, Analyst

Hi, thanks for taking my question. Just one follow-up on what was mentioned during the prepared remarks: you said that you have some visibility into investment repayments over the next few quarters. Just wondering if you could expand upon that and what gives you some comfort around that visibility? Thanks.

Howard Widra, CEO

Yes, this is Howard. As we review the portfolio, we have several companies that are involved in strategic transactions, either for sale or pending closure. Many of these are already under contract and may require just regulatory approval to finalize. Others are currently in the auction process. These are valuable platforms that will not go unexecuted. Additionally, this is a detailed list, and we anticipate activity to continue over the next few quarters.

Kenneth Lee, Analyst

Got you. Very helpful. And just one follow-up, if I may. Regarding the new distribution policy, you mentioned the supplemental dividend and a couple of factors that could support it, including non-core migration and the recovery of Merx. I'm curious how outside observers should best understand the supplemental dividend. Is there a clearer way to determine when the supplemental dividend could be available, perhaps in 10 days? Any guidance on that would be appreciated. Thanks.

Howard Widra, CEO

Yes, so I'll take a crack at it first. So, we tried to set the base dividend based on what sort of corporate portfolio was earning, or will earn at the size it's expected to be at, plus what we expect Merx to produce currently, with relatively sort of moderated assumptions in terms of fee income there, and that will enable us to sort of pay that base dividend. We do think, in addition to that, we would expect to generate income from a number of different items. One is returns off our non-core portfolio, which we get some today. What we said in the prepared remarks were repositioning that non-core portfolio and earning even more off of those, but even offer, you know, the sort of a moderate amount of cash that's produced off that, which is incremental on top of that. Merx could basically pick back up to a level of distributions above where we model that, which could still be below where it was historically, and there's room for upside there. In the interim, there's also further earnings coming over the next few quarters because we won't be paying an incentive fee for a little while, because of the total return feature. Lastly, that base dividend was set on a fee level that is relatively conservative based on historical levels over the past four or five years, and that was with a smaller portfolio. So our view is that we can support that base dividend with just the very basics of the business. There should be meaningful opportunities to produce each quarter income above that, which we will then be distributed based on what the board decides each quarter, meaning the expectation is that we would declare some each quarter and potentially retain sound to drive NAV up and leverage down each quarter as well.

Kyle Joseph, Analyst

Hey, good afternoon, guys. Thanks a lot for taking my questions. Just in terms of capital allocation going forward, the key focus here is delivering. But in terms of new investment opportunities, would we expect those to be primarily focused on the existing portfolio or, you know, subject to market conditions, would you look to rotate some of your portfolio into new investments?

Howard Widra, CEO

Yes, Tanner mentioned that we are currently at the top end of our leverage range. As we receive payments, we plan to reinvest in opportunities that we believe have a favorable risk-return profile, whether they are in our existing portfolio or new prospects. We have a few opportunities lined up for this quarter, which we expect to fund. We believe these will offer a significantly high return for the associated risk, given our visibility into paydowns. Our strategy remains consistent and focused on first lien floating rate investments. Our ability to deploy capital will depend on the cash we can generate, but we anticipate normal portfolio churn allowing us to invest in the best opportunities available.

Kyle Joseph, Analyst

Got it. And one follow-up from me. So, given that sort of investment considerations, and then in light of the rate environment, the LIBOR floor you have on your portfolio, do you think the first quarter could reflect kind of the nature for and for yields or any sort of outlook in terms of the yield on the portfolio?

Howard Widra, CEO

So, it should be the case, because LIBOR is unlikely to decrease significantly, but that's not a concern. We have a yield floor in place, ensuring that our returns won't drop lower. We expect to invest at high rates due to our selective approach. However, we won't be able to rotate 20% of the portfolio every quarter, so we won't see a 50 basis point increase every quarter, but I believe that's a reasonable expectation for how quickly it will progress.

Finian O'Shea, Analyst

Hi, good afternoon. Hope everyone's doing well. First question on Merx; you gave a lot of input there. I apologize if I missed this; was the reorg on your capital structure just the more conservative play on what cash comes in, or was there any form of stress trips underneath on the securitization there?

Tanner Powell, President and Chief Investment Officer

Yes, I am.

Howard Widra, CEO

You go ahead.

Tanner Powell, President and Chief Investment Officer

Yes. So, hey, Finian. The change was, as Howard alluded to, to more appropriately reflect the earnings power that we anticipate from Merx. It was not driven by issues in the underlying financings; we remain to be in good covenant compliance in those facilities. There is some cash, not only unrestricted cash that's trapped in those facilities, but also restricted cash that sits in those facilities and unrestricted cash that sits at Merx, to help defer cash needs going forward.

Finian O'Shea, Analyst

Thank you for that information. I have a follow-up question for Howard: I've been reviewing the Apollo parent call, and it seems that Apollo is launching a new private credit platform for strategic opportunities. How does this compare to the mid-cap and private credit group? Is this a separate entity, or to what degree are you integrated? How should we interpret the impact of this on your current group?

Howard Widra, CEO

From the BDC perspective, this is just another product offering available for the BDC if it chooses to participate in financing related to the exemptive order it has rights to. Essentially, it's an adjacent product to large market origination, dealing with billion-dollar transactions that historically haven't been common in the private market. This allows us to provide scaled solutions for underwriting deals privately and engaging in capital market solutions for providers. The borrowers that would typically take advantage of this would be those who were previously BSL borrowers, rather than mid-cap borrowers. The initial funding for these companies usually comes from larger corporates or sponsors that are more diversified than mid-market sponsors, similar to Apollo rather than the core mid-cap sponsors we usually cover. It’s essentially about ensuring we can offer varied solutions in the lower BSL market and upper middle market. Moreover, the coverage and origination of this product will be a collaborative effort, leveraging resources from both mid-cap and Apollo, and utilizing our established relationships in the BSL market since we are one of the largest holders in that space. The sponsor origination for these transactions will be managed by our combined teams at mid-cap and Apollo. However, when transactions reach a certain size suitable for the DSL market, they will use this alternative solution instead of relying primarily on mid-cap’s balance sheet. For those on the call who might not be as familiar with Apollo, the BDC has the right to engage in any transactions it finds suitable, although it is less likely to pursue these because of yield and structure, and particularly when it’s focusing on the highest-yielding options that are asset-secured or first lien. Nonetheless, it is still a possibility.

Finian O'Shea, Analyst

That's a lot of information, thank you. Regarding the amendments you mentioned, you said 23 have been completed or are in progress. Are these primarily from the core mid-cap originated book rather than from legacy assets? Additionally, can you provide any insights on whether these companies are close to breaching covenants? If they are, are these maintenance covenants based on EBITDA, or are they being proactive to avoid breaching a covenant later this year? Any additional context would be appreciated.

Howard Widra, CEO

It varies by company. Typically, there is hardly ever a situation where they unexpectedly violate a covenant and we receive their numbers after it's happened. They will reach out ahead of time, and we will work together to address the issue. In many instances, the violation of the covenant or the expectations arises several quarters in advance, which is what you’re inquiring about. They inform us that they are managing this over the next two to three quarters and are seeking a solution to navigate through it. As Tanner mentioned, there have been 23 instances, only four of which were significant amendments that we would categorize as major. The others tend to involve anticipatory covenant relief or even less significant matters. Tanner, do you have anything to add?

Tanner Powell, President and Chief Investment Officer

Yes, that's spot on. And then we're very sensitive not to be subjective in the aggregate of data. A much smaller subset of that 23 would actually be more benign, as in certain of the borrowers that had access to the PPP program and would need relief there. We didn't want to cherry-pick, to give a more comprehensive proposal. Other than that comment, I would echo or corroborate what Howard described.

Ryan Lynch, Analyst

Hey, good afternoon. Thanks for taking my questions. Just had a follow-up question on the supplemental dividend. I wanted to clarify that the supplemental dividends are expected to oscillate on a quarter-by-quarter basis, and your expectation is that it will not necessarily 100% payout net operating earnings, but supplemental dividends will probably come under net operating earnings and you will actually use some to build up book value. Is that correct?

Howard Widra, CEO

Yes.

Ryan Lynch, Analyst

Okay. And then as far as your guys, right side your balance sheet, your capital position today, I've been a little bit surprised that you haven't made any material changes really to the right side of your balance sheet as we've entered into this downturn. Do you foresee the need for making meaningful changes to the right side of your balance sheet, or are you pretty happy with how it sits today, managing through this downturn?

Howard Widra, CEO

Greg, you want to go first?

Greg Hunt, CFO

Yes, and I think currently, I mean, we continue to look at it. One thing that was really important for us to do was to update our crawl rating, which we were able to accomplish in July and also create our own liquidity within the portfolio. Our next step will be to look at maturities. One of the things we haven't wanted to do was to ladder another five-year maturity on top of the five-year maturity we have with the 350s. We are looking at that from a ladder point of view. And then we're also looking at spreads. We know that there's been a sizable amount of capital issued. We are looking at our cost of capital overall. It’s something we continue to look at and may or may not act in the next few quarters.

Howard Widra, CEO

I want to emphasize, Ryan, that our funding situation is stable, we have sufficient liquidity, we maintain strong relationships with the bank, and we've demonstrated our ability to operate in this environment. Our decisions will be influenced by opportunities rather than pressing needs, which is beneficial since some immediate actions taken by others turned out to be quite expensive. As Greg mentioned, we will keep assessing the situation. We anticipate diversifying and making decisions over the next couple of quarters, but we prefer to do it on our own timeline, as that will likely be more cost-effective. Thank you. And thanks for everybody for listening to today's call. We all thank you for your continued support and interest in this environment. Obviously, please feel free to reach out and call any of us if you have any other questions. We hope everybody stays healthy and safe. Have a good day. Bye.

Operator, Operator

Thank you, ladies and gentlemen, this does conclude today's conference call. You may now disconnect.