Earnings Call Transcript - ONDS Q3 2021

Operator, Operator

Good day. And welcome to the Ondas Holdings Inc.'s Third Quarter 2021 Earnings Conference Call. Today, all participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Before we begin, the company would like to remind you that this call may contain forward-looking statements. While these forward-looking statements reflect Ondas's best current judgment, they are subject to risks and uncertainties that could cause actual results to differ materially from those implied by these forward-looking statements. These risk factors are discussed in Ondas’s periodic SEC filings and in the earnings press release issued today, which are both available on the company's website. Ondas undertakes no obligation to revise or update any forward-looking statements to reference future events or circumstances, except as required by law. Please note that today’s event is being recorded. At this time, I would now like to turn the conference over to Eric Brock, Chairman and CEO. Please begin, sir.

Eric Brock, CEO

Thank you, operator. Good morning, and welcome to our third quarter Investor Call. I'm joined today by Stewart Kantor, our President and CFO; and Reese Moser, CEO of our wholly-owned subsidiary, American Robotics. I'd like to set the stage for today's call by providing an overview of Ondas Holdings. Now that we've closed the American Robotics acquisition, effective August 5, Ondas Holdings is now formally comprised of two wholly owned subsidiaries, Ondas Networks and American Robotics. Both companies, Networks and AR provide platform technologies as full end-to-end integrated mission critical IoT data solutions. Networks provide mission critical private wireless networks, offering unmatched data capacity and operating flexibility for industrial and government markets. American Robotics offers the Scout Systems, the first and only fully autonomous drone platform approved by the FAA to fly beyond visual line of sight without onsite human operation in industrial agriculture and government settings. Both companies have attractive, high margin, capital light, and high return on investment business models. Networks offers a large platform sale whereby our FullMAX wireless technology is able to generate significant revenue at network deployment, and of course, those networks then grow. The Network platform sale is complemented by recurring software and systems making this providing fast revenue and profit streams. Similarly, American Robotics deploys a Scout System in a turnkey robot-as-a-service, also known as data-as-a-service business model. The Scout Drone System is owned and operated by AR or the customer pays an annual subscription to receive the data analytics required for each of their use cases. Together, you will see tremendous synergy between the two companies as we scale. We have the opportunity to bring the FullMAX wireless platform to the Scout system and extend the reach of the scout system deeper across field operations for our customers. Similarly, we see customer interest in the Scout Systems driving new MC-IoT wireless network opportunities for Ondas Networks. We see significant customer marketing and field services synergy across the common customer end markets both companies target. In short, Ondas Holdings has a full suite of technology tradition to attack large end markets with significant growth potential. And we do this with businesses operating under attractive financial models. With that overview, let's shift towards outlining the agenda for today's call. First, I will highlight the progress we are making on the key business priorities of Ondas Networks and American Robotics. Then I'll ask Stewart to share our Q3 financial results. Next, Stewart and I will provide detailed updates on activity with the Rails, Siemens, and AURA Networks. Reese will then provide a similar update for American Robotics as we execute the go-to-market strategy with the Scout Systems. Then I will summarize the call and open the floor to questions and answers. So, let me start by highlighting that we've made significant progress over the second half of 2021 in executing on all our key priorities for both Ondas Networks and American Robotics. Importantly, at Ondas Networks, we are now marking this upcoming period as a transition. We are transitioning from investment mode to FullMAX platform delivery and adoption mode. I want to emphasize this. Commercial adoption of our FullMAX technology platform has begun, and we are transitioning towards platform delivery. Today, we are excited to announce that Ondas has received the first commercial purchase order for systems connected to the all-important Greenfield 900 megahertz network. This order has come from Siemens on behalf of a major Class 1 Rail. In addition, Siemens and Ondas are in conversations with other Class 1 Rails about additional 900 megahertz orders. This moment has been eagerly awaited by our investors, and we continue to be thankful for your support. Again, we have now transitioned Ondas Networks towards platform delivery. This is a huge accomplishment, and I want to take a moment to acknowledge the team at Ondas for all the hard work and talent that has gotten us to this point. It's really exceptional, and I'm very proud of our team and grateful for their efforts. In addition to the initial order for 900 megahertz, our partnership with Siemens continues to broaden. On the call, we will share details on the outlook for additional jointly developed products whereby Siemens continues plans to integrate our FullMAX wireless technology in the critical train systems that Siemens markets to rail customers worldwide. The Siemens partnership is also expanding on the marketing side. We've seen identified customer network opportunities in international markets and have also begun exploring near-term opportunities in transit markets as we expand beyond our initial focus on North American Class 1 Rails and an interest in IEEE 802.16s and .16t builds throughout the global rail sector. So the Siemens relationship continues to grow across products and markets, signaling the value which our FullMAX connectivity platform provides as we build our ecosystem. We've also now completed the Phase 1 effort with AURA Networks systems. We will provide more insight on the technical development there and the value created for Ondas Networks. Let's turn now to American Robotics. We are now in execution mode as AR focuses on scaling their business. We laid out the American Robotics business expansion plan in great detail in our Business Update Investor Call at the end of September. That plan has been launched. As you know, it's very ambitious. Key hires are being onboarded, and we're adding significant talent to help build our business. We have ramped production capability of the Scout Systems, and deliveries have begun. We believe field installations are poised to accelerate. Customer activities are expanding, and the ecosystem around Scout is also growing, as evidenced by the recently announced partnership with Dynam.AI. Dynam is a supplier of artificial intelligence technology with a physics-based foundation. Reese is going to provide important highlights of all this activity as American Robotics scales its Scout delivery platform. Stewart, I will now hand the call over to you to provide more details regarding the third quarter.

Stewart Kantor, CFO

Great. Thank you, Eric. As I share our financial results today for the third quarter and first nine months of 2021, please note that we've included our financial statements in this morning's press release and we'll be filing our 10-Q by the end of the day. The numbers we are reporting do include financials for American Robotics beginning August 6. Now moving to our third quarter results. Revenues decreased by 54% to approximately $0.3 million for the three months ended September 30, 2021, compared to approximately $0.6 million for the three months ended September 30, 2020. The decrease in revenue was primarily a result of lower product sales and development revenue in the three months ended September 30, 2021, compared to the three months ended September 30, 2020. Gross profit decreased by 95% to approximately $14,000 for the three months ended September 30, 2021, compared to $248,000 for the three months ended September 30, 2020, as a result of lower revenue and higher cost of goods sold related to development agreements. Gross profit on a percentage basis was approximately 5% for the three months ended September 30, 2021, compared to 40% for the three months ended September 30, 2020. The lower gross profit percentage was driven by lower amounts of product revenue, with higher gross margin and higher cost of goods in development revenue. Operating expenses increased by $1.9 million for the three months ended September 30, 2021, compared to three months ended September 30, 2020. The increase in operating expenses was primarily due to an increase of approximately $664,000 in professional fees related to the American Robotics acquisition, an increase of approximately $629,000 in depreciation and amortization expense due to the amortization of American Robotics intangible assets, and an increase of approximately $463,000 in R&D development expenses for the three months ended September 30, 2021. The company realized an operating loss of approximately $4.9 million for the three months ended September 30, 2021, compared to $2.7 million for the three months ended September 30, 2020. Operating loss increased primarily as a result of an increase in operating expenses of approximately $1.9 million primarily associated with the American Robotics acquisition and a decrease in gross profit of approximately $235,000 for the three months ended September 30, 2021. Net loss was approximately $4.9 million for the three months ended September 30, 2021, compared to a net loss of $3.3 million for the three months ended September 30, 2020. I'll now transition to our first nine months financial results. Revenues increased by 19% to approximately $2.3 million for the nine months ended September 30, 2021, compared to approximately $2 million for the nine months ended September 30, 2020. The increase in revenue was primarily due to larger amounts of development revenue from Siemens and AURA Networks during the first nine months of 2021 offset by lower amounts of product revenue. Gross profit increased by 5% to $929,000 as a result of higher revenue for the nine months ended September 30, 2021, compared to $882,000 for the nine months ended September 30, 2020. Gross profit on a percentage basis was approximately 40% for the nine months ended September 30, 2021, compared to 45% for the nine months ended September 30, 2020. Operating expenses increased approximately 36% to $11.9 million for the nine months ended September 30, 2021, compared to $8.7 million for the nine months ended September 30, 2020. The increase in operating expenses was primarily due to an increase of approximately $1.5 million in professional fees related to the American Robotics acquisition, an increase of approximately $644,000 in depreciation and amortization expense due to the amortization of American Robotics intangible assets, and an increase of approximately $743,000 in development expenses for the nine months ended September 30, 2021. The company realized an operating loss of approximately $10.9 million for the nine months ended September 30, 2021, compared to a loss of approximately $7.8 million for the nine months ended September 30, 2020. Operating loss increased primarily as a result of an increase of approximately $1.5 million in professional fees due to the American Robotics acquisition, an increase of approximately $644,000 in depreciation and amortization expense due to amortization of American Robotics intangible assets, and an increase of approximately $743,000 in development expenses for the nine months ended September 30, 2021. Net loss was approximately $10.9 million for the nine months ended 2021, compared to a net result of $9.4 million for the nine months ended September 30, 2020. Lastly, the company held cash and cash equivalents of approximately $47.5 million as of September 30, 2021, compared to approximately $26.1 million as of December 31, 2020. Now I'll turn this back over to Eric.

Eric Brock, CEO

Thank you, Stewart. Now let's transition to a more detailed conversation around the key elements of the business plan for Ondas Networks and American Robotics as we move through the second half of 2021. I will give an overview and ask Stewart and Reese to provide details. Let's start by again highlighting that we have now received the initial commercial purchase order for the Greenfield 900 megahertz network. In addition, we, along with Siemens, are finalizing terms with the Association of American Rails, or the AAR, regarding the strategically important MC-IoT Rail Lab, which we will discuss in greater detail in a moment as well. Stewart will also provide more insight into the Siemens partnership and the ways that it is growing and adding to the value creation at Ondas Networks. In addition, he will summarize where we were at with AURA regarding the critical technology and intellectual property we have created with our work there. Once Stewart is finished, Reese will provide an update on where American Robotics is on the business plan as we scale operations and deliver for customers at AR. Stewart?

Stewart Kantor, CFO

Great. Thanks again, Eric. During the third quarter, Ondas Networks, along with our strategic partners, Siemens Mobility, officially launched the Siemens’ New Airlink Mission Critical IoT radio platform. This family of software-defined radios is a result of our exclusive partnership with Siemens to bring next-generation wireless products to the North American rail market and are based on Ondas’s 802.16st software-defined radio technology. The product launch, which was held at the Railroad System Supplier Show in September, included the announcement of the completion of our first joint development program for the North American rail market. The program has now delivered a FullMAX integrated dual-mode base station and Wayside edge radio operating on the newly allocated 900 megahertz band. This radio has simultaneous support for the existing 900 megahertz ATCS spectrum. These radios enable a smooth and flexible migration path for the Class 1 Railroads to the new 900 megahertz frequency range. And as Eric just previously shared, we are also excited to announce that Siemens Mobility has now secured its first commercial order from a Class 1 Railroad for the new 900 megahertz dual-mode radio products scheduled for delivery starting this December. In addition to the North American products, we continue to advance our second major development program with Siemens for next-generation radio for the global rail markets, including support for our first onboard locomotive radio. Siemens has identified demand for this product in both North America and in international markets. Siemens’ confidence in us and our technology has now been further demonstrated by awarding Ondas a new development contract to customize the radio solution for a major rail customer in Asia. Our partnership with Siemens continues to broaden in scope and reach as both companies acknowledge that reliable wireless connectivity is a key enabler of the digitalization of railroads and a way for increased automation. We also expect additional joint development programs for global products to be secured by the end of the year. Finally, we expect during the fourth quarter to continue to build inventory and increase internal human resources to meet an expected increase in product demand for both North American rail and international markets. Now moving on to the MC-IoT Rail Lab. Ondas and Siemens are currently negotiating with the Association of American Railroads for the implementation of the MC-IoT Rail Lab to be hosted at our headquarters in Sunnyvale, California. We expect the lab to support not just the 900 megahertz band, but multiple nationwide frequencies held by the railroads, managed by the AAR as the industry standardizes on the 802.16 communications protocol. The lab will allow for next-generation applications and interoperability testing, optimization of various network configurations, and training of rail network engineers for deployment nationwide. We believe the lab validates the importance of the standard and the coordination of the industry around our technology. Now transitioning to AURA Networks. Also in the third quarter, we successfully completed our Phase 1 software and hardware development for AURA. AURA has constructed a private nationwide air-to-ground communications network using dedicated licensed frequencies based on our radio platform and is actively working with test customers as it pursues commercialization plans with NASA and the FAA. We expect additional orders in the fourth quarter to support their testing and commercialization efforts. Importantly, the new Phase 1 software release includes significant real-world airborne testing of Ondas’s C2 capability for unmanned aviation. Ondas’s proven C2 capabilities, along with its support for multiple licensed frequencies, continues to stimulate interest from additional drone operators, as well as our own American Robotics subsidiary. I'll now turn the call over to Reese Moser so he can provide an update and outlook for American Robotics. Reese?

Reese Moser, CEO of American Robotics

Thank you, Stewart. American Robotics continues to execute the business plan outlined in the Investor Call on September 28. Progress has been made on all fronts. Hiring has accelerated to a steady on-target growth rate, and headcount has increased over 200% from Q3 of the previous year. We've added key personnel and industry-leading talent at all levels of the organization, including VP of Sales; VP of Operations; VP of Engineering; Director of Talent; Director of Flight Operations; and Director of Product. This increased headcount is enabling American Robotics to accelerate sales, manufacturing, and deployment of Scout Systems. Additionally, we have made progress on maturing our supply chain and manufacturing capacity to satisfy existing customer demand. To this end, we have partnered with industry-leading contract manufacturers in the Northeast and have completed the training necessary for those partners to independently manufacture our products. Initial production units from this manufacturing line have been delivered and installed at customer sites. Customer demand remains robust, and our pipeline is growing. We received a purchase order in the third quarter from a Fortune 100 oil and gas company, and the initial unit for this contract has been delivered and installed in the Midwest. This oil and gas customer, ConocoPhillips, fits the characteristics of a franchise customer with the ability to move to fleet deployments. We expect this relationship to grow to additional units and expanded use cases. There are more than 90,000 oil and gas wells in the United States and 835 kilometers of pipeline that require constant monitoring and inspection. We've also secured a purchase order with Syngenta for Q2 delivery and look forward to working with them on ag-specific applications. We've made significant progress with Stockpile Reports, a customer who has contracted for multiple Scout Systems. We've deployed our Scout platform at a mid-Atlantic location and have been delivering data reliably and repeatedly. We have successfully completed a deep integration of our respective technologies enabling extremely accurate and reliable information and measurements about their assets multiple times a day. This contract calls for the scaling of the deployment of our Scout Systems throughout the United States. We expect additional Fortune 500 industrial companies to provide orders in Q4 for delivery in the first half of 2022. We currently have a backlog of customer interest that we expect to build in the coming months as we are able to support increased customer field activity. These franchise customers offer the ability to purchase and utilize fleet Scout Systems across the United States and the world. Lastly, we want to highlight a significant strategic relationship we recently established with Dynam.AI, a developer of artificial intelligence and machine learning capabilities. This partnership will allow AR to accelerate its product offering of cutting-edge AI and ML techniques to its industrial customers, further increasing the value proposition for these markets and accelerating customer demands. The joint work for this partnership has already begun, and we expect to announce these additional analytics-driven product offerings in the coming quarters. In connection with the AI partnership, Ondas Holdings has made an investment in Dynam.AI. We are very excited about the strategic value of this relationship as we continue to develop and enhance our library of proprietary AI-driven analytics features. To summarize, we're very happy with the pace of development at American Robotics. We believe AR is on the cusp of widespread adoption of market-leading Scout Systems for several critical industries. We look forward to providing more updates over the balance of the year regarding additional business accomplishments. Now I'd like to transition back to Eric to wrap up the call before Q&A.

Eric Brock, CEO

Thank you, Reese and Stewart. I'd like to take a minute to wrap up our prepared remarks before we move to Q&A. Ondas has made tremendous progress this year positioning the company for huge growth in large open-ended markets. We've worked extremely hard to deliver on these opportunities for investors, and we are grateful for your support as we execute these business development efforts. While there's clearly more work ahead, we have reached an inflection point in the business for Ondas Networks. At Networks, we are transitioning from investment to platform delivery as the 900 megahertz commercial build begins. As we engage in planning with Siemens and our rail customers, visibility on the ramp for wide deployment under the 900 megahertz system will improve. We expect to carve out time for an Ondas Networks rail update in Q1, either on a quarterly conference call or perhaps in a separate breakout meeting to provide an updated and more comprehensive view of the rail, Total Addressable Market (TAM), the cadence for the 900 megahertz deployment cycle, as well as opportunities that are emerging in international markets. At American Robotics, we are similarly in execution mode. Production of Scout Systems is ramping and, more importantly, the customer and field services platform is being scaled to support more customer activity. We are establishing critical business processes to serve our sophisticated customers, ranging from streamlining purchase order documentation and contracts at the time of sale to creating efficient Scout Systems installations in flight operations. This is all pointing towards preparation for both AR customers and the American Robotics team for fleet deployments by franchise customers. We expect to have a greater and more consistent volume of customer purchasing activity at both Ondas and American Robotics as we move into 2022. We look forward to wrapping up a strong year with significant strategic accomplishments, and we intend to build on the momentum we've generated for our businesses at both Ondas Networks and American Robotics. Operator, we can now open the call to Q&A.

Operator, Operator

We will now begin the question-and-answer session. It appears that our original questioner may have disconnected. I am going to take the next question now from Mike Latimore with NCM. Please proceed, sir.

Mike Latimore, Analyst

Great, thanks. Yeah congratulations with all the strong developments there. I guess in terms of the first commercial order, can you provide a sense of number of units or size of that order? And then also maybe just a little more color on the type of use case? And is it going to be in like a specific region? Any more color on that would be great.

Eric Brock, CEO

Sure. Thanks, Mike. We're not able to share terms at the moment; we need to let Siemens plan a marketing on the details of the orders. As Stewart mentioned earlier, Ondas and Siemens are in active conversation with multiple rails, and we do expect additional orders. So Stewart, would you add anything to that?

Stewart Kantor, CFO

No, I think that's right. In terms of applications, it's all the ones we've been talking about anywhere from crossings to higher rail. Basically, the way the rails view our network is that it's an IP network for all their advanced applications. Of course, they're going to be supporting their legacy ATCS, the train control system, as they migrate off the band.

Mike Latimore, Analyst

Okay. Got it. And then this order is separate from the MC-IoT Lab order, I believe. I guess, can you talk a little bit more about when you might see that kind of lab order?

Eric Brock, CEO

Yeah. So as we said, we're finalizing terms, and we're targeting a purchase order in Q4. This lab is strategically important for Ondas. As Stewart described the lab goes beyond 900 megahertz. It's really an evergreen testing environment for all the Class 1 communications network. So 150-160 as well. And it's another validation point for the important role Ondas and our FullMAX wireless platform has on the technology roadmap for the Class 1 Rail.

Mike Latimore, Analyst

Great. And then just on American Robotics and Dynam.AI. Maybe can you provide a little more detail there? What would be sort of the first type of analytics we might see or which vertical might they focus on first?

Eric Brock, CEO

Reese, you want to take that?

Reese Moser, CEO of American Robotics

Yeah, sure, I can take this. The applications for our products are quite broad, so there's a lot of options. As our business is ultimately about data, there's really an extensive list of opportunities to leverage and monetize the techniques that Dynam brings. But for example, our focus is going to be on the markets that we're most interested in right now, including oil and gas, rail, and both materials and mining.

Mike Latimore, Analyst

Okay, great. Thank you.

Operator, Operator

Our next question comes from Tim Horan with Oppenheimer. Please proceed, sir.

Tim Horan, Analyst

Hey, guys, congratulations. A couple of questions. One, do you think the rail industry can meet the requirements, the FCC requirements to vacate the 900 megahertz spectrum on time from what you can tell at this point? And can you remind us how large of an overall opportunity that is for you guys? I have a few follow-ups. Thanks.

Eric Brock, CEO

Yeah, sure. Thanks, Tim. So yes, it's been publicly disclosed by the FCC that the rails do have a 3 to 5 year requirement to retire their legacy 900 megahertz network. And of course, the clock began in 2020. We believe that they're going to have to retire the system by over 2023 to 2025. Certain portions of the legacy 900 network were negotiated to move sooner than others. As we've talked about previously, we believe the FullMAX with shared architecture is going to drive that network upgrade faster. So it's still the same outlook in terms of the timelines, and we do believe the rails can meet their timelines.

Tim Horan, Analyst

And any update on what the overall revenue could mean to you for this migration?

Eric Brock, CEO

We still see a very large system at 900 megahertz. Of course, we want to remind you that we also have 450 and 160 in the pipeline. The 900 megahertz network is substantial, with a total addressable market in the hundreds of millions of dollars. We are planning to share more details on that next quarter as visibility improves. Currently, we are in discussions with Siemens and railroads regarding the commercial rollout.

Tim Horan, Analyst

Great. And then just on the supply chain issue. Will you be able to meet the demand on both the rail side and the robotic side? And can you give us any more color on how rapidly and how many units you can kind of produce on the drone side and the timing on that?

Eric Brock, CEO

I’ll ask Stewart to take it on the supply chain question for Networks and then Reese you can do AR. Thanks.

Stewart Kantor, CFO

Sure. It's no surprise to anyone that there are supply chain issues. But we've been expecting some of these orders for quite a while, so we've been preparing. It's two areas. One is hiring the talent and then also acquiring critical parts. We're feeling confident that we've put in place a team that can secure orders. So one of the first orders here we’re shooting for delivery before year-end, and we feel we're on track for that. However, we are ramping up the team and acquisition of parts to ensure on the Network side, we hit our goals.

Reese Moser, CEO of American Robotics

Yeah, sure. Like everybody else, the supply chain is something that we're managing and thinking about. The milestone for us recently has been the completion of the training with our contract manufacturing partners and standing up a manufacturing line. We're transitioning to planning bulk purchases of parts and materials for the rest of this year and into 2022. So that's something we're going to be managing. As we've said in previous updates, we're aiming for tens of systems in the near term and working towards hundreds of systems by the end of 2022.

Tim Horan, Analyst

Congratulations. And I'm assuming demand is not the problem. Can you just maybe talk about how much demand you have or how many units? And is there a way to ramp that system up even faster to meet higher demand?

Eric Brock, CEO

Yeah. The demand is definitely there. It's an exciting time. In many ways, it's a bit too expensive. To remind everyone, this automated drone system that we developed is the required solution for about 90% of all commercial drone applications. It's extremely expensive. We're trying to take a thoughtful approach on how we grow each one of those markets. We're ensuring that everything's robust in our supply chain, manufacturing, and operations, et cetera. So I’d say in general, moving as quickly as we can, but certainly reliability and good customer services are on the top of our agenda right now.

Tim Horan, Analyst

Thank you.

Operator, Operator

Our next question comes from Bill Morrison with National Securities. Please proceed.

Bill Morrison, Analyst

Hey, guys, congrats on the rail order. A couple of questions. First of all, can you remind us what the software looks like for AI between Dynam.AI and American Robotics? Like how much of the platform has American Robotics developed for AI and ML?

Reese Moser, CEO of American Robotics

Sure. The engagement with Dynam I think could be grouped into two categories. One is the development environment to produce each analytics feature more quickly, which we think is an important competitive advantage. The other is just specific analytics products for each of these markets. The work has already begun with Dynam, and we are developing a set of projects that will make our use cases more valuable to our customers. There are a lot of different use cases, but I hope that answered your question. I could probably provide a bit more detail if you want to follow up.

Bill Morrison, Analyst

Yeah, I’ll follow up offline. And then, just do a little more color on the ramp for the rails. So how does that look going into 2022? 900 megahertz and 450 megahertz and how many rails would you envision deploying in '22?

Eric Brock, CEO

Bill, I like to give you as much information as we can, but we're still in active conversations and planning with Siemens as a customer. So I think we've got to defer, and I expect to have more visibility on that the next time we speak.

Bill Morrison, Analyst

Alright, good. Look forward to it. Thanks.

Eric Brock, CEO

Great. Thanks, Bill.

Operator, Operator

At this time, we are showing no further questions in the queue. This ends our question-and-answer session. I would now like to turn the conference back over to Mr. Eric Brock for any closing remarks.

Eric Brock, CEO

Thank you, operator. We can end the call now. As we do, I want to thank you again for joining us this morning. And I also want to express gratitude on behalf of the entire team at Ondas for your support. We do have momentum at both Ondas Networks and American Robotics, and we're going to remain incredibly focused on accelerating our business activity. We look forward to continuing to share updates on our key initiatives going forward. And again, thank you for joining us this morning. Have a great day.

Operator, Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.