United Parks & Resorts Inc. Q2 FY2020 Earnings Call

Good morning, and welcome to SeaWorld's Second Quarter 2020 Earnings Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note, this is being recorded. I would now like to turn the conference over to Matthew Stroud. Please go ahead.

Thank you and good morning, everyone. Welcome to SeaWorld's second quarter earnings conference call. Today's call is being webcast and recorded. A press release was issued this morning and is available on our Investor Relations website at www.seaworldinvestors.com. Replay information for this call can be found in the press release and will be available on our website following the call. Joining me this morning are Marc Swanson, Interim Chief Executive Officer and Elizabeth Gulacsy, Chief Accounting Officer and Interim Chief Financial Officer and Treasurer. This morning we will review our second quarter financial results and then we will open up the call to your questions. Before we begin, I would like to remind everyone that our comments today will contain forward-looking statements within the meaning of the federal securities laws. These statements are subject to a number of risks and uncertainties that could cause actual results to be materially different from those forward-looking statements, including those identified in the Risk Factors section of our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission. These risk factors may be updated from time to time and will be included in our filings with the SEC that are available on our website. We undertake no obligation to update any forward-looking statements. In addition, on the call, we may reference adjusted EBITDA and free cash flow, which are non-GAAP financial measures. More information regarding our forward-looking statements and reconciliations of adjusted EBITDA and free cash flow to the most comparable GAAP measures is included in our earnings release available on our website and can also be found in our filings with the SEC. Now, I'd like to turn the call over to Interim Chief Executive Officer, Marc Swanson. Marc?

Thank you, Matthew. Good morning, everyone, and thank you for joining us. This continues to be an extraordinary time for all of us. We hope that you and your loved ones continue to be safe as we manage through this crisis. I'd like to start by expressing how proud I am of our team's performance during this unprecedented and challenging time. Together, we have taken significant actions to reduce our cost, carefully manage our cash flows, fortify our balance sheet and liquidity position, implement new and enhanced operating and safety protocols to meet the realities of the current environment, and successfully reopened and welcomed back guests to 9 of our 12 parks. As you all know, our second quarter financial results were significantly impacted by the global COVID-19 pandemic. As we previously announced, from March 16, 2020 to June 5, 2020, all of our parks were closed. Turning on June 6, we began the process of reopening some of our parks, beginning in Texas and then in Florida, and by the end of the second quarter, 7 of our 12 parks were open and operating with limited capacity, limited hours, and/or limited days. Due to the park closures, our second quarter of 2020 had only a total of 7 parks partially open, with 98 operating days compared to a total of 12 parks fully open with 861 operating days in the second quarter of 2019. Attendance since the parks reopened in June has been impacted by capacity limitations due to COVID-19 social distancing guidelines, fewer operating days per week versus the prior year, limited marketing spend and a limited events lineup. Despite these limitations, total park attendance at parks that have been open for at least 30 days has increased 15% on a same-park basis from the week ended June 28, the first full week these parks were open, to the week ended August 2. While the future remains highly uncertain, based on what we have seen recently, we believe attendance trends compared to prior year will continue to strengthen as we reintroduce special events, interactive experiences, and other in-park offerings, which were temporarily suspended, and we thoughtfully ramp up marketing spend. Since the start of the third quarter, we have opened two additional parks, Sesame Place located in Langhorne, Pennsylvania and Busch Gardens Williamsburg located in Williamsburg, Virginia. Sesame Place opened on July 24 on a three-day-a-week operating schedule and we are pleased with their early performance. Since reopening, we have seen high demand and we are adding additional operating days. Our Busch Gardens park in Williamsburg opened last week with a Coasters and Craft Brews event and is currently subject to a state-imposed, very limited 1,000-person capacity. Our Williamsburg team has been creative and has developed a business plan that makes sense, even at those very low capacity levels. We have seen strong demand for the event and are actively adding more operating days and we are developing additional event concepts that we expect to roll out going forward. Overall, for the parks that have reopened, attendance versus the prior year period has ranged from approximately 10% to 15% on the low end and up to approximately 50% on the high end, depending on the park and day. Without the capacity limitations, attendance versus the prior year would likely have exceeded 50% in some parks on certain days. From a forward-looking perspective, we have seen some positive indicators. Our Discovery Cove park which accepts reservations up to 18 months in advance, is showing strong 2021 bookings and significantly outpacing prior year to-date. In particular, 2021 forward bookings for Discovery Cove as of August 6, 2020 are 176% higher than 2020 bookings as of the same time one year ago. With respect to California, while we don't have a park opening date for SeaWorld to announce today, we are in regular contact with state and local authorities and we sincerely look forward to opening in San Diego and welcoming back our guests as soon as it's safe and permitted to do so. As we announced this morning, we do not currently plan to open up our Aquatica waterpark near San Diego or our Water Country USA waterpark in Williamsburg this year. Looking forward to the fall and winter, we're planning to operate a modified version of our popular Halloween and Christmas events at several of our parks. We know how much these are loved by our guests and we are confident we will deliver compelling, exciting, and most importantly, safe events with relevant and appropriate operational changes. More details will be forthcoming as we finalize those plans. We are confident we can not only operate these events safely, but we can operate these events profitably. Let me offer a few comments regarding our capital structure. We recently completed a $500 million notes offering and covenant adjustment that among other things further revise our financial covenants to suspend testing of the covenant through 2021 and modify the testing of the covenant in 2022. Adjusting for the gross proceeds of the notes offering and related transactions, as of June 30, 2020, we would have had approximately $565 million of cash and cash equivalents on the balance sheet and $311 million available on our revolving credit facility, resulting in total liquidity of $876 million. By issuing these notes, we have significantly strengthened our balance sheet and liquidity position, providing us with enhanced operating flexibility, creating the ability to continue to make long-term investments in our business, and increased our capacity to take advantage of strategic opportunities that may arise from market dislocations. With that, I would like to turn the call over to Elizabeth to discuss our financial results in more detail. Elizabeth?

Thanks, Marc and good morning everyone. As Marc mentioned, our second quarter results were significantly impacted by the temporary park closure resulting from the COVID-19 pandemic which led to all of our parks being closed for the vast majority of the quarter. Our Florida and Texas parks were able to reopen in June but with capacity limitations, reduced operating hours and reduced operating days. As a result, attendance for the second quarter decreased by approximately 6.2 million guests, or 96%, when compared to the prior-year quarter. We generated revenue of $18 million, a decrease of $388 million, or 96%, compared to the second quarter of 2019. The decrease in revenue results from the decline in attendance due to the park closures. Second quarter total revenue per capita was $66.27 compared to $62.82 in the second quarter of 2019, an increase of 5.5%, driven primarily by an increase in in-park per capita spending and admission per capita. Admissions per capita increased by 2% to $35.94 for the second quarter of 2020, primarily due to the realization of higher prices across admission products and partially offset by the net impact of mix related to higher pass attendance when compared to the prior-year period. In-park per capita spending increased by 10% to $30.33 in the second quarter of 2020, primarily due to increased sales of certain in-park products and higher realized prices and fees, partially offset by reduced in-park offerings during the quarter. We generated a net loss of $131 million compared to net income of $52.7 million in the second quarter of 2019. Adjusted EBITDA for the second quarter was a loss of $53.8 million, a decline of $203.5 million compared to the prior-year quarter. Adjusted EBITDA was negatively impacted by the decrease in total revenue, partially offset by a decrease in operating expenses and selling, general, and administrative expenses. The decrease in operating expenses largely results from a reduction in labor-related costs, due primarily to the COVID-19 temporary park closures. Operating expenses also declined due to a reduction in non-essential operating costs, which were deferred or eliminated due to the park closures, as well as cost savings and efficiency initiatives. Selling, general and administrative expenses decreased primarily due to reduction in marketing and media-related costs due to the COVID-19 park closures and the impact of cost savings and efficiency initiatives. Now, turning to our balance sheet. Our total deferred revenue balance related to all of our products as of the end of the quarter was $138.1 million, down approximately 15.6% from June of 2019. Total deferred revenue related to our pass product was down approximately 9%. As of August 5, our total pass base, which includes annual pass and fun cards, was down 31%. However, for parks which opened in the quarter, our total pass base has grown a low double-digit percentage since May, which is the month prior to reopening these parks. As Marc mentioned, we have also taken additional steps to further strengthen our financial position and flexibility and enhance our liquidity. We issued $500 million in second-priority senior secured notes due in 2025. Additionally, in July, we entered into another amendment to our senior secured credit facility to, among other things, further revise our financial covenants to suspend testing through 2021 and modify the testing of the covenant in 2022. As a result of this amendment, beginning in the first quarter of 2022 for covenant purposes only, our 12-month trailing adjusted EBITDA used in the calculation of our leverage ratio will ignore the second, third, and fourth quarters of 2021 and we'll use adjusted EBITDA for the corresponding quarters in 2019 instead. While we are temporarily exempt from complying with our leverage ratio covenant, we will be required to comply with a quarterly minimum liquidity test of not less than $75 million through the third quarter of 2022 or the date on which we elect to use actual adjusted EBITDA to calculate the leverage ratio covenant. This amendment, along with the senior notes transaction, further strengthens our cash position and increases our financial flexibility and liquidity. As you have heard, we have taken a number of proactive measures to manage costs and expenditures and to increase liquidity, both during the temporary park closure and as we have begun to reopen. With the resumption of limited operations across most of our parks, we are even more focused than ever before on driving attendance and total revenue, while eliminating unnecessary cost and continuing to identify more efficient ways to operate. Now, let me turn the call back over to Marc who will share some final thoughts. Marc?

Thank you, Elizabeth. Before we open the call to your questions, I have some closing comments. During the quarter, our rescue teams continued to operate helping wildlife in need. In the second quarter, we helped rescue over 430 animals and we have now exceeded 37,000 animal rescues over the company's history. We are one of the world's leading animal rescue organizations and we are proud of our efforts to protect and save wildlife. We want to thank our employee ambassadors for their dedication and effort to reopen our parks and welcome back our guests. We want to thank our guests and loyal pass holders for trusting us and returning to the parks that have reopened. And finally, we would like to thank our financial and operating partners for their support and understanding during these extraordinary times. Our business model is flexible and resilient. While the future remains uncertain today, we feel very well-positioned with the right assets, team, balance sheet and liquidity, to navigate through this storm and emerge an even stronger and more profitable business. We continue to have great confidence in our long-term strategy and sincerely look forward to fully opening all of our parks and driving improved operating and financial results and long-term value for all stakeholders. With that, let's open up the line to take your questions.

Thank you. We will now begin the question-and-answer session. We ask that you limit yourself to one question and one follow-up. If you have additional questions, you may re-enter the questions queue. At this time, we will pause momentarily to assemble our roster. And the first question will come from Steve Wieczynski with Stifel. Please go ahead.

Hey guys, good morning. So, in the release you have a line in there talking about the opportunity to take advantage of strategic opportunities that may arise and I'm wondering if you can give us some color around what that line actually means? And then, maybe, what type of opportunities or strategic opportunities are out there today that you might look at?

Hey Steve, it's Marc. Good to talk to you. I think what we mentioned is with the notes offering, we like the flexibility that gives us for a number of reasons. As I mentioned, one of them being the potential for strategic opportunities. There might be situations where there's market dislocation or competitors or others in the industry who aren't able to weather this storm. And so, whether it's a waterpark, a hotel or something like that, a park that we could look at and convert to a Sesame Place for example. Those are the type of things we're talking about. And we'll obviously make sure before we would do anything like that that we feel comfortable about the future. But those are the type of things we're talking about.

Okay. Got you. That's really good color, thanks. And then, I wonder if you maybe could give any color on what the parks look like during July and August. I know in the release and in the prepared remarks, you talked about attendance being up very nicely. But maybe specifically what you saw in Orlando as Florida has obviously been a virus hot spot, did you see any material changes in visitation over the last couple of weeks as virus news kind of picked up that make sense?

Sure. I can take that question. So, one of the reasons we pointed out the increase in attendance from the week ending June 28 to the week ending August 2 was those seven parks that are included in that comparison have been opened more than 30 days and all seven of them are in Texas and in Florida. And we know those have been in the face of a tough new cycle. So, it's good to see them grow. Obviously, you would expect some growth in July, but I would say the trend improved slightly as well. And more recently here, the last couple of weeks, we've been pleased. We've been adding back events. We've been adding operating days. We've been giving people a reason to come and visit. So, we feel good about the current trends. And I would say, more so in Florida than in Texas, although I will say just here in the last week or so, I think Texas is picking up a little bit as well. But I think Florida is hanging in there and we feel pretty good about overall the parks that are open. And obviously getting Sesame Place open and getting Williamsburg open has been good as well.

Okay. Can I ask one more super quick one? I guess in the release you were talking about Discovery Cove and how the forward bookings for 2021 are up — I think the number was 176% — is there any way to tell how many of those are new bookings versus somebody who was going to come in 2020 and pushed that out into 2021?

Yeah. What I would tell you is, we won't break it out specifically, but keep in mind those people have chosen to come back. They could have chosen to get a refund and instead they chose to rebook with us. And then, obviously, there's new bookings as well. So, it's an indicator that we feel good about that people are going to come and visit Discovery Cove, which as you know, is in Orlando. So, that's one of the few forward metrics that we have. We feel good about where it's at right now.

Okay. Great. Thanks, guys. Appreciate it.

Sure.

The next question will be from James Hardiman with Wedbush Securities. Please go ahead.

Hey. Good morning. And thanks for taking my questions here. So, I guess two things. You had given us sort of a range versus a year ago of anywhere between 10% and 50%. I was hoping we could maybe narrow that down a little bit. Is there a way to think about sort of an average run rate of attendance versus where we were last year? And then in terms of capacity caps, where you started out and where you are today with the various parks?

Sure. Hey James. This is Marc. Good to talk to you. So, on attendance, we did give you the range, kind of 10% to 15% all the way up to around 50%, depending on the park, depending on the day. I think, as we normalize out when you look at the open parks in total for the month of July, you're probably in the range of about 20% of prior year, but it's going to be higher at some parks. And I think, we've been pretty pleased with especially our waterparks and some others as well. So, we'll keep working towards that. I mentioned, we added events and days and other reasons to come and visit, and we've been pretty pleased with that at a number of the parks and that would include the non-waterparks as well. As far as capacity, those are limitations that we have in place so that we can do social distancing within the parks. There's been a handful of days where we would have liked to have more capacity at a park or two. But I think, we've been able to manage and will be able to continue managing going forward. As you know, there's not too many days that we operate at peak capacity as we talked about last quarter. So, I think we feel pretty good about being able to navigate through this, especially as we move into the shoulder season where attendance, obviously, would be lighter with schools back in session in the fall. So, we'll keep monitoring that. But what we're really focused on is giving people reason to visit, adding events and days and hours where it makes sense. And we'll continue to monitor that.

Thanks. And then as I think about the path back to profitability, I'm assuming the parks that are currently open are profitable in their own right. Is there a way to think about where they would be, assuming no more parks open from here, is there a way to think about how profitable those parks would need to be for you to get back to breakeven from an EBITDA perspective?

Sure. So, you're right. I mean, the parks that are open collectively are operating pretty well. So, we feel good about the performance from those parks on a collective basis. Is it enough to offset debt and other things? Not at this point. But as far as what we need to do to get to that point, I think we'd have to be in the range of 40% of the prior year. And there's a lot of variables that would depend on your capital spend and whatnot. So, we need to see those parks do a little bit better. That's our focus. I can tell you one of the things we're really focused on is trying to drive to that enterprise breakeven level, getting enough with the open parks to cover our corporate overhead and debt service. And then, anything beyond that related to CapEx and whatnot, would be more at our discretion.

Thank you. The next question will come from Brett Andress with KeyBanc Capital. Please go ahead.

Hey. Good morning. Hoping you can provide some detail on the mix of attendance that you've been seeing here for water parks recently. Does that 85% drivable attendance estimate still hold from the last time we talked? Has it played out as you expected?

Yeah. Hey Brett, it's Marc. So, what I can tell you is, if you look at June and July, we not surprisingly have seen an increase in local attendance. But at the same time, domestic attendance has held pretty steady to prior year. So, I do think the advantage of people driving into our parks is holding. That 85% is across the whole company, it's still significant in Orlando, not quite that high, but we are pleased with the attendance we're seeing. So if local is roughly a little more than 50% of the attendance that tells you that we're getting others who are definitely driving into the parks, which we're pleased with. And for domestic tourism, it's on par with prior year. So, we're not dependent on airfare or air travel into the market; we have a lot of people that can drive and access our parks.

Got it. Thank you. And then, last one, it seems like you've been adding more operating days here recently. So, what number of operating days should we put in our model for 3Q and 4Q at this point? And then, just a clarification question, I think you've said 20% of prior year in answer to James' question, is that consolidated or is that same park? I just wanted to make sure I understood that number.

Yes. So, as far as operating days, we're going to be opportunistic. We're adding days where it makes sense and where they're profitable. I don't have an exact number for you, but we're going to run events, we're going to do Halloween, we're going to do Christmas. Whether we run every single day like last year remains to be seen. And then, we'll have to see as we get into the fall the dynamics with schools and whatnot. But our goal is to be open if it makes sense to be open. In some of our seasonal parks where we would typically go to a more seasonal schedule, we'll probably do that. So that's kind of how to think about operating days on a go-forward basis. Regarding the 20% comment, that was on a same-park basis and includes every day in the aggregate for the month.

And the next question comes from Tim Conder with Wells Fargo Securities. Please go ahead.

Yeah. I just wanted to clarify again to Brett's question on James' answer: the 20% attendance average in July, that's up on a comp park basis that were open, correct?

Yeah. That would be comparable parks that are open, yes. And to clarify, it's same parks but includes every day, so it's an aggregate of all the days for the month. As far as pass visitation, similarly to how local attendance was up in June and July, pass attendance was up as well. Normally, as a company, we do about 40% of our attendance is pass related. We saw that probably closer to the 50% range, maybe a little bit higher in June and a little bit lower in July. So that tells you that there's still probably about half of the attendance coming on something other than a pass. Again, people drive to our parks and so we feel pretty good about that going forward. As far as cash burn, you saw what we did when we were closed and I think we did a good job of managing. We're very focused on cash flow. If you had to use a number, and we're a little hesitant because there's a lot of variables, I would continue to use $20 million to $25 million on average per month. But it's going to be influenced by the number of parks that are open and how those parks perform, how we address CapEx and payments for CapEx already incurred and going forward. There are invoices already incurred that will require payments, and there's other payments we may make. So could it be a bit higher at times? Yes. Could it be lower? Yes. We'll come back in November with more of a view of how we used cash during the quarter. We will be opportunistic and to the extent parks perform well we'll deploy cash accordingly for CapEx and payables. We're very focused on it and we like the position we're in with our liquidity and flexibility.

At this point, Marc, the CapEx and D&A for the year, any specifics on that?

Hey Tim, it's Elizabeth. Good morning. As we mentioned last quarter, we're about 87% complete on our construction projects for the rides that we were planning to open in 2021. So, we've got about $15 million or so left to finish those rides. I would point out though that we do have some spend we've already incurred where invoices have been incurred but the timing of cash payments hasn't gone out the door yet. That's to the tune of about $40 million to $50 million. So, as you look at the latter half of the year, it'll be a combination of both that $15 million in new spend plus this $40 million to $50 million to get the timing of cash payments out the door.

And I would add, we're really excited about the lineup for 2021. As we noted, removing most of the attractions that didn't open this year, our plan is to move them to 2021. If you recall, we felt this was going to be our best lineup of new attractions in our history. Many of those are now going to carry over: Iron Gwazi, the coaster in Tampa; Ice Breaker, the coaster here in Orlando; Pantheon in Williamsburg; Emperor, the coaster in San Diego. There's a lot of great attractions and we feel really good about the 2021 lineup of rides coming to the parks. We're excited to continue to make progress towards that.

Thank you. And the next question will come from Jason Bazinet with Citi. Please go ahead.

Just had a two-part question. Can you quickly review: I think there are some parks that are closed because of state mandates and other parks that are closed based on your managerial decision. I want to make sure I have that dichotomy right. And second, you mentioned the 1,000-person capacity constraint at Busch Gardens in Virginia; are there any other imposed constraints by state regulators?

Yeah. Right now, the one big park that's not open is SeaWorld San Diego in California. We are in touch and work through the trade association out there along with Disney and Universal and others. We'll continue to monitor that situation and hopefully get that park open, but we don't have anything specific right now. As I mentioned, the water park near San Diego, Aquatica, and Water Country USA in Williamsburg, we're not going to open those parks this year. They have a pretty limited operating season, so ramping them up if they're not allowed to be open right now didn't make sense. We're obviously disappointed for our fans, but we'll continue to monitor the situation. As far as constraints, Williamsburg is the one place where we have a hard cap of 1,000 people in the park. We have other caps that we've put in place from a standpoint of how many people we can have in the park and maintain proper social distancing. We do monitor that and there are some days at a park or two where we would have probably done more if we had more capacity. But Williamsburg is the one where the government has imposed the 1,000-person limit.

Okay. That's great. So, the way to think about it is there is a California moratorium maybe, and for the seasonal parks in Virginia it's more a function of not wanting to open them because they're seasonal. Is that right?

Yeah, Water Country USA in Williamsburg typically operates until about the second week of September. Even if we could have opened it under 1,000 people, there were other restrictions as well. It didn't make sense to open it for four weeks given ramp-up costs. Similarly, Aquatica San Diego doesn't have a green light to open in California. We're not sure when we would get that. That park typically closes around October, so we made the decision not to open them this year. We're disappointed for the fans, but those were the right decisions at this time.

And the next question will come from Dan Jenkin with Credit Suisse. Please go ahead.

Hey, guys. Thanks. In Virginia, can you talk about the thought process with the 1,000 people per day? I imagine that's only a few percentage points of your daily attendance. I think some of your peers decided not to open in Virginia; I'm not opining on their decision, but can you talk about your thought process and strategy? Presumably you're taking into consideration pass sales and customer goodwill. Any other information would be helpful. And I have one more.

Sure, Dan. In Williamsburg what we've done is a couple of things. If you haven't checked out the website, check it out. The event we're running now is called Coasters and Craft Brews. We are opening small sections of the park and if you've been to that park, you know it has different countries, so we can segment the park pretty easily. The whole park is not open, just certain sections. We have certain rides open, certain food and other attractions open, which makes it compelling. On certain days we're running two shifts: a four-hour block in the morning where we welcome up to 1,000 people and a four-hour block in the evening where we can welcome up to 1,000 people. In our mind, it was a creative way to operate while under the cap. To your point, our pass holders can come and enjoy it, and we are selling tickets for non-pass holders as well. We're pleased with the event and will continue to look at events like this for that park while there's a cap. Hopefully over time the cap will be lifted or increased so we can open more of the park.

That's helpful. And on the cost side, obviously it's a unique environment. Have there been cost areas that are incremental to the buckets you were previously considering, since shutting down the parks was not part of the original plan?

What I would tell you is we have a tremendous focus on cost now. As I mentioned last quarter, one of the advantages of going through this pandemic is we really were able to strip our cost down to the most essential level. We have great visibility into our costs and we're being methodical and careful as we add back costs. Things we thought were essential previously we might view differently now, and we're trying to move more cost to a variable model. That's a strategy we think over the long term will be good for efficiency. We've found new insights and we'll continue to deploy those as we reopen parks and ramp up operations over time.

Thank you and our next question will come from Paul Golding with Macquarie. Please go ahead.

Thank you so much for taking my question. Around admission, you mentioned admissions per capita were up 2% but offset by mix. Could you give any color around your revenue management strategy during this period to get positive growth there despite a dilutive pass mix?

We continue to have a lot of strategies around pricing, which prior to the pandemic we had spent a lot of time on. We're pretty pleased with what we've seen in that area and there's some pass mix impact in there as well. But overall, looking across all our products, we're pretty pleased with the pricing environment in June and July. We'll continue to execute our strategies and feel good about them.

Is there any color you could give around what it would have looked like on a like-for-like basis adjusting out the mix shift, or is that too tough to tell?

No, I don't think we can break that out specifically. On a sales basis, we're doing relatively better on passes than on single-day and multi-day tickets, so that helps somewhat. But overall, we're pretty pleased with the results.

Ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over to Marc Swanson for any closing remarks.

Yeah. Thank you, Chad. On behalf of Elizabeth and the rest of the management team at SeaWorld Entertainment, I want to thank you for joining us this morning. As you heard today, we are confident in our business and strategy and sincerely look forward to coming out of this crisis and continuing to drive improved operating and financial results and long-term value for all our stakeholders. With that, I want to say thank you and I'll look forward to talking to you again next quarter.

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