Earnings Call Transcript - MGPI Q3 2022

Operator, Operator

Good day, and welcome to the MGP Ingredients Third Quarter 2022 Financial Results. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions and please note that this event is being recorded. I would now like to turn the conference over to Mike Houston with Investor Relations. Please go ahead, sir.

Mike Houston, Investor Relations

Thank you. I'm Mike Houston with Lambert, MGP's Investor Relations firm. And joining me today are members of their management team, including Dave Colo, President and Chief Executive Officer; and Brandon Gall, Vice President of Finance and Chief Financial Officer. We will begin the call with management's prepared remarks, and then open the call up to questions. However, before we begin today's call, it is my responsibility to inform you that this call may involve certain forward-looking statements such as projections of sales, operating income, gross margin and effective tax rate as well as statements on the plans and objectives of the Company's business and overall consumer and industry trends. The Company's actual results could differ materially from any forward-looking statements made today due to a number of factors, including the risk factors described in the Company's most recent annual and quarterly reports filed with the Securities and Exchange Commission. The Company assumes no obligation to update any forward-looking statements made during the call. Additionally, this call will contain references to certain non-GAAP measures, which we believe are useful in evaluating the Company's performance. A reconciliation of these measures to the most directly comparable GAAP measures are included in today's earnings release and supplemental information furnished to the SEC under Form 8-K. If anyone does not already have a copy of the press release issued by MGP today, you can access it at the Company's website, www.mgpingredients.com. At this time, I would like to turn the call over to MGP's President and Chief Executive Officer, Dave Colo. Dave?

Dave Colo, CEO

Thank you, Mike, and thanks, everyone, for joining the call today. On this call, we will begin with an overview of our performance for the quarter ended September 30, 2022, provide updates on key financial performance metrics and discuss the progress we have made against our strategy. At the end of the call, we will open the line for Q&A. Our team delivered another strong performance during the third quarter as we continue to experience momentum from favorable consumer trends that support each of our business segments. Consolidated sales for the quarter increased 14% to $201.2 million, while gross profit increased 3% to $59.1 million, representing 29.4% of sales. Reported operating income increased 3% to $33.9 million. In our Distilling Solutions segment, we continue to benefit from strong demand for new distillate and aged whiskey. These favorable trends continue to support overall growth for this segment. For our Branded Spirits segment, we continue to experience solid consumer demand trends in our premium plus brands, which includes premium, super premium and ultra-premium spirits brands. Our premium plus American whiskey and tequila offerings continue to be the primary drivers of top line growth as well as gross margin expansion for the segment. As for our Ingredient Solutions segment, our team continues to execute at a high level. The team has done an exceptional job optimizing the product mix to benefit from the shift in consumer behavior toward adding plant-based foods in their diet. These continued efforts contributed to record segment sales in the third quarter. Looking at each segment in greater detail, we achieved a record third quarter sales within our Distilling Solutions segment. Sales increased 19% to $108.6 million. Gross profit for the quarter decreased from $27 million to $25.9 million or 23.9% of segment sales. The decline in gross profit can be primarily attributed to the negative impact of increased commodity and natural gas costs as well as excess supply in the markets for our industrial and white goods offerings. These factors were consistent with our expectations for the quarter. Sales of premium beverage alcohol increased 22%, while brown goods sales increased 34% from last year due to higher new distillate and aged whiskey sales. Demand from each of our customer categories within brown goods remained strong and contributed to the meaningful sales growth versus the prior year. We remain confident that our significant share, scale advantage and aging whiskey inventory position will further support ongoing consumer demand for the American whiskey category. We believe these trends will remain favorable through the balance of the year and into 2023. Moving to white goods, sales decreased 3% versus the prior year quarter. The decline was primarily due to lower volumes for our white goods premium beverage products. Sales of our industrial alcohol products decreased 27%, also due to lower volumes. With the additional supply that has entered the market as well as the impact of increased input costs, primarily corn and natural gas costs, we continue to believe that margins for both industrial alcohol and white goods products will remain at or below historical levels. During the quarter, industrial alcohol and white goods incurred negative gross margins as a result of these dynamics. We expect these headwinds to continue into the fourth quarter as well. Previously, we expected to see an approximate 1,100 basis point decline in year-over-year gross margin percent for our white goods and industrial alcohol products on a combined basis in 2022. Given these market dynamics, we now believe this decline could approach 1,500 basis points for the full year for a total year-over-year impact of $20 million, which is $5 million more than what we estimated last quarter. That said, we remain committed to pricing through these commodity increases where possible, and our full year consolidated guidance, which I will discuss in my closing comments, contemplates these inflationary and industry headwinds. Moving to Branded Spirits, segment sales for the third quarter increased 2% versus the prior year period to $62.8 million. We benefited from sustained strength in our premium plus brands, which grew revenue by 17% from the prior year period, primarily reflecting higher case volume and higher average selling prices. Gross profit for this segment increased to a record $25.1 million or 39.9% of segment sales. The increase can be attributed to increased distribution of premium plus brands and improved pricing on our brands as well as product mix. Since the Luxco acquisition, this was a record quarter for both sales and gross profit dollars for our Branded Spirits segment. We remain committed to successfully executing our premiumization strategy, and we'll continue to invest in marketing support to achieve sustainable and profitable growth as we continue to focus on brands that are positioned amongst growing spirit categories and price tiers. We continue to be encouraged by the top line growth and margin expansion we have achieved for our premium plus brands since closing the Luxco transaction last April. Turning to Ingredient Solutions, sales for the quarter increased 24% to a record $29.7 million. Consistent with the segment's recent performance, the increase in sales was primarily driven by higher average selling prices and increased volumes. Our experienced sales, innovation and R&D teams continue to execute at a high level, collaborating with our customers to meet specific needs. We believe the continued momentum we have realized across our products will enable long-term sustainable growth for the segment. We have also begun to receive initial orders from colleges and universities for our recently launched ProTerra brand of ready-to-use texturized pea-based proteins targeted against the foodservice channel. Before I turn the call over to Brandon, I want to thank our team for their continued execution. Their ability to build on the momentum we have generated throughout the year and the continued alignment of our product offerings to meet consumer trends enabled us to achieve strong results for the third quarter. This concludes my initial remarks. Let me now turn things over to Brandon Gall for a review of the key metrics and numbers.

Brandon Gall, CFO

Thanks, Dave. For the quarter 2022, consolidated sales increased 14% to $201.2 million as a result of record third-quarter sales across all three business segments. Gross profit increased 3% to $59.1 million, representing 29.4% of sales. Advertising and promotion expenses for the third quarter of 2022 increased $1.6 million or 29% to $7.3 million as compared to the third quarter of 2021. This increase reflects continued marketing investments as part of our premiumization strategy, primarily in the premium plus price tier products within our Branded Spirits segment. Our A&P spend this quarter was the highest of any since the merger. And as we discussed on the call last quarter and as Dave will share in a moment, we look to continue to increase our investment here during the fourth quarter. Corporate selling, general and administrative expenses for the third quarter 2022 decreased $600,000 to $17.9 million as compared to the third quarter of 2021, primarily due to lower incentive compensation expense and the one-time acquisition cost in 2021 related to the Luxco acquisition that did not recur in 2022. Operating income for the third quarter increased 3% to $33.9 million, primarily due to the previously mentioned increase in gross profit and reduction in SG&A. Adjusted operating income increased 2% from $33.2 million in the prior year period, which was adjusted for the aforementioned acquisition costs. Our corporate effective tax rate for the third quarter of 2022 was 24.2% compared with 24.5% from the year-ago period. The decrease was attributed to favorable tax benefits concerning our capital spend. Net income for the third quarter of 2022 decreased slightly from the year-ago period to $23.6 million, while adjusted net income decreased 1% from $23.9 million. For the third quarter of 2022 and compared to the year-ago period, basic earnings per common share decreased to $1.07 per share from $1.08 per share. Adjusted basic EPS decreased to $1.07 per share from $1.09 per share. Diluted EPS decreased to $1.06 per share from $1.08 per share. Adjusted diluted EPS decreased from $1.09 per share to $1.06 per share. Adjusted EBITDA for the quarter was $38.7 million, a 1% increase from the year-ago period. Corn, wheat flour and natural gas are our three largest commodity expenses and each continued to experience elevated prices throughout the quarter. Relative to the prior year quarter, our input cost for corn increased 56%, wheat flour increased 20% and natural gas increased 73%. Although the average selling price for white goods and industrial alcohol increased for the quarter, it was not enough to offset the higher input cost, as Dave discussed in his opening comments. Year-to-date cash flow from operations totaled $72.3 million, reflecting the consistent and strong cash-generating capability of our business. Strong cash flows further highlight the value and execution of our long-term strategy, providing MGP with adequate support for M&A and expansionary projects. MGP's balance sheet also remains strong, allowing us to continue to invest to grow. We remain well capitalized with debt totaling $231.1 million and a strong cash position of $50.7 million. Additionally, our previously announced expansionary projects remain on track from a timing and cost perspective, and we continue to project $47.2 million in total capital expenditures this year. The Board authorized a quarterly dividend in the amount of $0.12 per share, which is payable on December 2 to stockholders of record as of November 18. The Board continues to view dividends as an important way to share the success of the Company with shareholders. We believe the capital allocation strategy focused on organic and acquisitive growth aligns well with our long-term strategy as well as the underlying consumer trends our business is well positioned to leverage. We will continue to pursue M&A and conduct expansionary projects to accelerate growth and increase our capabilities and product offerings. And now let me turn things back over to Dave for concluding remarks.

Dave Colo, CEO

Thanks, Brandon. We are very pleased with the strong results delivered year-to-date despite increased commodity and energy costs. Demand for our products remains strong, and we believe our business continues to be well positioned to mitigate these challenges through the balance of the year. While we continue to further our premiumization strategy within the Branded Spirits segment, we expect increased investment in advertising and promotion to support continued growth in our premium plus tier spirits brands. We also anticipate inflationary pressures to persist in commodity and natural gas costs for the balance of the year. Taking into account these factors and in combination with the strength of the underlying business, we are again revising our financial outlook upward for the fiscal year ended December 31, 2022. Our increased guidance for the full fiscal 2022 year assumes the following: sales projected to be in the range of $765 million to $780 million, adjusted EBITDA to be in the range of $162 million to $167 million and adjusted basic earnings per common share in the range of $4.62 to $4.80 per share. We are confident that each of our business segments remains aligned with strong macro consumer trends, and we continue to believe that our strategy will drive long-term sustainable growth. We continue to make progress on our ESG initiatives. As you may recall, during the first quarter, we disclosed our environmental and sustainability policy statement and began disclosing our waste information. Then during the second quarter, we began providing disclosures on our energy management and greenhouse gas emissions. This quarter, we began disclosing our water management information. These disclosures can be found on our company website under the Social Responsibilities section. We plan to release our environmental sustainability report for calendar year 2022 in early 2023. We will continue to leverage the strong foundation we have established as we execute against our long-term strategy with the objective to deliver sustainable long-term value for our shareholders. That concludes our prepared remarks. Operator, we are ready to begin the question-and-answer portion of the call.

Operator, Operator

And our first question today will come from Marc Torrente with Wells Fargo.

Marc Torrente, Analyst

First, I wanted to ask about margins. Could you maybe provide some additional detail on puts and takes into Q4? And then maybe specifically on branded spirits, margins increased nicely here and that appears driven by improved mix. In the past, you've commented about how this segment contributes to gross profit. Any updated color on this and how mix can contribute going forward?

Brandon Gall, CFO

Yes. I'll go first, and then I'll let Dave fill in any blanks that I may miss. But on the branded spirits side, the gross margin in the quarter was about 39.9%. It was a record gross profit dollar quarter for the segment since the merger on April 1 of last year. And as we look forward for this business, that is part of our overall strategy. So premium plus sales in the quarter were up 17% in Q3 over last year. And it's going to be the performance of those higher-priced, higher-margin brands that are in on-trend categories that are going to continue to drive the improvement in performance in this segment. As far as the overall company, to the first part of your question, we expect gross margins to be in line with Q2 on a consolidated basis for the overall company. But one thing to note, and Dave mentioned this in his opening remarks, is we do anticipate higher A&P spend over the back half of the year.

Marc Torrente, Analyst

Okay. Great. And then, secondly, regarding momentum, trends on the spirit side were strong in the quarter. I'm curious if you've noticed any changes in demand trends or consumer behavior over the last month or so, particularly within branded spirits, where you have better visibility on the end market?

Dave Colo, CEO

We continue to see strong demand for our premium plus brands. So far, there has been no shift from premium plus to mid or value tier brands. This is evident in the 70% revenue growth in premium plus brands for the quarter. We frequently receive questions about this, and we believe that premium plus brands are seen as an affordable luxury. The purchase frequency of these premium plus brands, compared to consumer food items, is relatively low. Estimates suggest that the average consumer spends about $300 a year on spirits. Considering the purchase frequency and the value consumers receive, this likely explains why they continue to buy these premium plus spirit brands.

Marc Torrente, Analyst

Okay. And then just, lastly, on industry capacity on the selling side. Have you seen any sequential easing here, a change to this dynamic as it relates to your ability to supply ahead of the market?

Dave Colo, CEO

Yes. I think the supply side dynamics remain pretty tight in the industry, both for new distillate as well as aged products. And we really haven't seen a significant change there, Marc, from the previous quarter. And we continue to see very strong demand profiles, both against new distillate and aged whiskey.

Operator, Operator

And our next question will come from Gerald Pascarelli with Wedbush Securities.

Gerald Pascarelli, Analyst

Mine is on branded spirits. You've been pretty clear on the priority for further M&A within this segment to round out your portfolio. So as it stands today, can you talk about any gaps within the current portfolio that are a priority to fill over time just on the margin? It seems like tequila and RTD cocktail or even incremental exposure to Bourbon kind of all represent white space opportunities for faster revenue growth. So just would love your thoughts there.

Dave Colo, CEO

Yes. Yes, I think we like our American whiskey portfolio that we have today. However, definitely an area of focus would be additional American whiskey brands. We also like our tequila portfolio. But that's a high-growth category, so we're definitely interested in additional tequila brands. Another emerging category that we like is Mezcal. It's a small but high growth category. So we have interest there as well. And we also would like to have a more international presence in our spirits business. So we're always looking for opportunities internationally. Ideally, it would be a kind of a platform acquisition or a full company acquisition similar to the Luxco transaction. But those are some of the primary areas where we see opportunity.

Operator, Operator

And our next question will come from Bill Chappell with Truist Securities.

Bill Chappell, Analyst

A few questions. I guess, first, on the thought that there's a kind of slowdown in demand of brown spirits or post-pandemic, have you seen any kind of pullback from your customers for new distillate orders in the second half?

Dave Colo, CEO

No, Bill, we really haven't. We continue to see strong demand for both new distillate and aged products. As I mentioned earlier, capacity for new distillate is tight and demand remains very strong. Therefore, we haven't noticed any weakness moving from the first half of the year into the second half.

Bill Chappell, Analyst

I understand that you have a significant amount of aged distillate. You probably had to make some difficult decisions as you move into the second half regarding whether to monetize it or hold onto it for future years. Have those decisions been largely finalized, and do you have a clearer understanding of how this will impact the upcoming years? Also, is there a risk of losing customers or business by not fulfilling every order placed in the next few months?

Dave Colo, CEO

Yes. We have significantly better visibility regarding our new distillate and aged demand than we ever have in our history. Our sales plans for the remainder of the year, covering both new distillate and aged products, are reflected in the guidance we just discussed. As we've mentioned before, we could increase our sales this year if we chose to, but it wouldn't be prudent as we need to keep inventory to support growth in the coming years. That’s precisely what we are doing. In this process, demand exceeds supply, which has led us to make some tough decisions about our customers. However, we believe we are in an excellent position as we conclude this year and move into the next year in our brown goods business.

Bill Chappell, Analyst

Okay. And then on the branded side, growing 2%, it's tougher for us to understand whether you're growing with the category because you have brown, you have white goods in there, you have popular priced, you have premium priced. I mean, can you give us a little more color? Are you kind of keeping up with the segments of the category or your brands? Are you gaining share in certain areas? Are you losing share in certain areas? Any more color on that kind of 2% growth will be helpful.

Dave Colo, CEO

Yes. I think the area we focus on is in what we call the premium plus price tiers. This is important because that's where most of the brands we are heavily investing in from an advertising and promotion perspective are situated. The overall growth in the industry is happening here. Our American whiskey brands, tequila brands, and a few others fall into these categories. The growth was 17% in Q3 for premium plus brands, following a 12% growth in Q2. This is where we want you to focus. As we've mentioned before, the mid and value categories are declining, both for us and for the spirits industry overall, since most growth is concentrated in the premium plus sector. Therefore, that’s where we concentrate our efforts and attention, which also contributes to margin expansion for our branded spirits business.

Bill Chappell, Analyst

Got it. And then last one for me. Regarding industrial alcohol, I realize it's a smaller business, but this is typically the time of year when you are securing contracts for the next year along with pricing and capacity. Do you anticipate that margins will keep declining going into next year, or is there a way to stabilize them as the oversupply starts to ease?

Dave Colo, CEO

I don't think the oversupply situation is going to change as we finish this year and go into next year. A lot of capacity was added due to the COVID demand for industrial alcohol. So I see the oversupply as a long-term issue. I don't expect any relief as we move into next year. We are starting to contract for both industrial and GNS for next year, but it's too early to determine how that will play out. Overall, I don't anticipate a significant change in market dynamics next year compared to this year. I believe it will continue to be a challenging category.

Bill Chappell, Analyst

Got it. But I was trying to ask if you could walk away from the business, or are you primarily focused on filling capacity first and then looking at profitability as a second priority?

Dave Colo, CEO

Yes. We have aimed to shift a larger portion of our volume towards gray neutral spirits and away from industrial alcohol because we believe that profitability and customer retention are stronger on the GNS side. Over the past few years, we've successfully increased the share of GNS in our combined revenue from about 45% a couple of years ago to approximately 64% today. We've effectively altered the mix. In this current environment, we will also seek ways to minimize volume to lessen the impact on our profit and loss statement. This is something we evaluate on a weekly basis in our business.

Operator, Operator

And our next question will come from Ben Klieve with Lake Street Capital Markets.

Ben Klieve, Analyst

Congratulations on another really good quarter here. Two questions from me. First of all, Brandon, you commented on the expansion initiatives that are ongoing, that everything is on track, which is great and can't be taken for granted in this environment. I'm wondering if you can comment on kind of your expectations for those facilities next year in terms of timing of completion and the degree to which will be revenue contributors by the end of the year.

Brandon Gall, CFO

Yes. As you said and as I said earlier, all projects are on track. We are still targeting $47.2 million in CapEx spend this year. So just to highlight a few. We did accelerate the texture protein plant. That's going to come online during the second half of '23. So it's going to be Q3, Q4, but we do expect a little bit of contribution as we get that ramped up toward the end of the year. We have concluded the fermentation expansion in Lux Row. There's a distillation expansion going on there as well. That won't be online until the end of 2023. We've completed the third warehouse in Kentucky that we discussed on an earlier call, and we're now targeting an additional warehouse in Kentucky that should be ready by the fourth quarter of '23.

Ben Klieve, Analyst

Okay. Okay. Great. And one other for me and I'll get back in queue on the ingredient side on the ProTerra expansion. You recently announced the hiring of a foodservice veteran here to really exclusively focus on this pretty new end market for you guys. That was a really interesting hiring to me. And I'm wondering if you can elaborate kind of on your expectations for how material of a revenue contributor the foodservice space can become over the next couple of years? And kind of what elements within the foodservice space you really see yourself gaining market share?

Brandon Gall, CFO

Yes, Ben. I think the reason we hired the person is we launched this new ProTerra product line. It's a ready-to-use texturized protein. And we're targeting it initially within colleges and universities kind of as a test market. And we do think that the foodservice channel is a huge opportunity for the ProTerra product line, but we also think it can expand beyond foodservice. But that was the reason for the hire. If you look at the texturized protein facility that we're building, I think we shared in the past that it can produce around 10 million pounds of product. And if you're selling this at a $3 to $4 price point, that should give you a feel that's a $30 million to $40 million potential additional revenue in that business over time. But we do think foodservice is one of many opportunities for the ProTerra product line, and we're pretty excited about the potential of that brand.

Operator, Operator

And our next question will come from Sean McGowan with ROTH Capital Partners.

Sean McGowan, Analyst

My first question is a follow up on some of your margin comments in branded spirits. Would you say that margin improvement is being driven primarily by mix? Or is it more price relative to cost?

Brandon Gall, CFO

Yes. Great question. It's definitely mix driven because we are shifting more of our sales towards the higher end of our portfolio in the premium plus categories. But those are higher priced to begin with. And as time goes on, we expect that trend to continue as our average selling price increases, as does the volume in those product lines.

Sean McGowan, Analyst

Right. But within, let's say, ultra-premium, are you also seeing an increase in margin? Or you're seeing flatness or a decline there? Mix is going to drive it higher, but you could still see changes within each of those segments.

Brandon Gall, CFO

Yes. We are seeing average selling price going up in all three of those premium plus product lines on average. Yes.

Dave Colo, CEO

In our American whiskey category, our Yellowstone Bourbon brand is performing exceptionally well, along with our Remus bourbon brand. We also have some promising innovations connected to both brands that are thriving. Additionally, in the tequila segment, our El Mayor tequila brand and our new Dos Primos tequila brands are doing well, and we firmly believe there is significant growth potential ahead.

Operator, Operator

And our next question will come from Vivien Azer with Cowen.

Vivien Azer, Analyst

Just a follow up on the last question. Certainly encouraging that you guys are getting pricing up and down the branded spirits portfolio. That's also consistent with what we're hearing from your competitors. In order of magnitude, how are you thinking about rate increases between your price points? To put it another way, how are you thinking about price gap management within your portfolio?

Dave Colo, CEO

Yes, Vivien. As Brandon mentioned, we have seen increases in our average selling price across most of our brands, especially in the premium plus tiers. We manage our price gaps at a brand level by analyzing the competitive landscape for each brand. We have specific price ranges we aim to maintain, which we communicate to our sales team. It's then their responsibility to ensure our pricing remains competitive and relevant. As you've noted, with many companies raising prices, we typically follow that trend. In summary, this is how we approach pricing and manage price gaps.

Vivien Azer, Analyst

Okay. That's helpful. And then sticking with branded spirits, we are seeing a lot of new category entrants in the ready-to-drink and ready-to-pour canned cocktail subsegment, which does seem to be growing quite quickly. I'd love to hear your perspective on that segment and whether you view it as a competitive threat.

Dave Colo, CEO

Yes, we see the same growth occurring there, Vivien. I think there's room for that category to grow without significant cannibalization, if you will, in the categories in which we compete. It's not an area that we compete in today in any significant manner. We do have ready-to-drink products, but they're more in the larger sizes versus the individual serving capacity. So we do participate in it in that regard. But I think we've seen what played out in the seltzer category. We're watching the ready-to-drink spirits category. And we'll just see what happens there over time. But so far, we haven't seen any significant threats to our branded spirits business.

Operator, Operator

And our next question will come from Mitch Pinheiro with Sturdivant & Company.

Mitch Pinheiro, Analyst

Most of my questions have been addressed. I have one regarding your barrel distillate that you've been inventorying. The growth rate is slowing down. Does that suggest you're satisfied with the balance of what you've produced, or is it difficult to interpret anything from those figures?

Dave Colo, CEO

Yes. Mitch, I think, as we've discussed in the past, our objective here, our goal is to try to balance our inventory put away with our projected needs. And I think we've done a pretty good job of that over the last couple of years. We're continuing to lay down whiskey. I think what you see quarter-to-quarter is the fluctuation that occurs between selling our new distillate versus laying down new distillates. So we have to time the lay down sometimes in sequence to what we also need to sell. But overall, I think we're in a pretty good position at this point.

Mitch Pinheiro, Analyst

You've mentioned previously that in the past you had limited visibility with your customers, who would often come in late in the quarter and surprise you. Are you seeing a continued increase in long-term contracts that provide the visibility you need regarding what to lay down and the types of mash bills required?

Dave Colo, CEO

Yes, the answer is yes. We have been able to learn from past experiences and understand the right mash bills to set aside. Additionally, we've gained from the current market conditions over the past year and a half, where supply has been tight and customers are more willing to enter contracts. As a result, we've been more successful in securing new distillate volumes and even managing some of our aged business. This puts us in a better position to make informed decisions about what to set aside and how to manage our capacity for new distillate sales.

Mitch Pinheiro, Analyst

Are you currently accepting new customers for aged whiskey, or are you at full capacity with your existing clients?

Dave Colo, CEO

Well, we always have aged whiskey available for uncontracted spot sales. So it's really just a matter of matching that aged inventory with customers' needs and pricing. So that's kind of the way we manage that on an ongoing basis.

Operator, Operator

And this will conclude our question-and-answer session. I'd like to turn the conference back over to Dave Colo for any closing remarks.

Dave Colo, CEO

Thank you for your interest in our company and for joining us today for our third quarter earnings call. We look forward to talking with you again after the fourth quarter.

Operator, Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines at this time.