Rb Global Inc. (RBA) Q1 2021 Earnings Call Transcript

Good day, and welcome to the IAA, Inc. First Quarter 2021 Earnings Conference Call. Please note that this event is being recorded. I would now like to turn the conference over to Arif Ahmed, Vice President, Treasury. Please go ahead.

Thanks, Cole. Good morning, everyone, and thanks for joining us today for IAA's First Quarter Fiscal 2021 Earnings Conference Call. Speaking today are John Kett, Chief Executive Officer and President; and Vance Johnston, our Chief Financial Officer. After John and Vance have made their formal remarks, we will open the call to questions. Before we begin, I would like to remind you that certain comments made during this call regarding our plans, strategies, and goals and our anticipated financial performance constitute forward-looking statements and are made pursuant to and within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on management's current assumptions and expectations and are subject to risks and uncertainties that could cause actual results to differ materially from such statements. Those important factors are referred to in IAA's press release issued today and in the Risk Factors section in our annual report on Form 10-K for the year ended December 27, 2020, filed with the SEC on February 22, 2021. The forward-looking statements made today are as of the date of this call, and IAA does not undertake any obligations to update these forward-looking statements. Finally, the speakers will refer to certain adjusted or non-GAAP financial measures on this call. A reconciliation schedule of the non-GAAP financial measures to the most directly comparable GAAP measures is available in IAA's press release issued today. A copy of today's press release may be obtained by visiting the Investor Relations page of the website at www.iaai.com. I will now turn the call over to John.

Thanks, Arif. Good morning, and thank you all for joining us for our first quarter call. I'm going to make a couple of brief comments on the quarter before I talk about our initiatives. We were very pleased with a strong start to the year. We generated organic sales growth of 6% for the quarter. As we noted in our prior call, we came into the first quarter of 2021 with good momentum for assignments, volumes sold, and revenue per unit. As the quarter unfolded, revenue per unit continued to increase each month and assignments continued at a steady pace. In fact, March represented the first month of year-over-year assignment growth that we have seen since the pandemic began. Along with strong industry tailwinds, another key driver to our results continues to be the benefits generated from our Buyer Digital Transformation. BDT has contributed to the significant increases that we experienced in revenue per unit over the past year. So now let me turn to our strategic initiatives. We continue to make good progress and are seeing positive results from our margin expansion plan. As we discussed on our last call, with the completion of our BDT last spring, our focus has turned to the other elements of the plan. Towing Optimization, Branch Process Improvement, and Pricing Optimization all remain on track. Our restructuring and consolidation of towing resources in several markets is beginning to pay dividends, both in terms of improved service and lower costs. We're on target to complete these transitions by the end of 2021. We also made good progress in the quarter on both Pricing Optimization and Branch Process Improvement. Shifting now to other initiatives. We continue to be excited with the progress that we are making with loan payoff in support of our initiatives to broaden our service offering. During the first quarter, we added over 100 new lenders to our loan payoff platform, and we ended the quarter with over 1,600 financial institutions on our portal. We also expanded our national footprint with DDI, building out our electronic title and registration processing expertise in both Michigan and Indiana. Our negative equity capabilities of loan payoff, which are unequaled in the market, continue to be an important differentiator, particularly given the continuing increase in the percentage of vehicles with loans that exceed their pre-crash value. Our customers are continuing to see significant reductions, in some cases of up to 22 days in cycle times using loan payoff. For buyers, we continue to expand the enhancements that we've made to our tools and product offerings, and the growth and expansion of our global buyer network continues to be very successful. During the first quarter, we grew our international buyer network by 15% sequentially quarter-over-quarter and over 50% on a year-over-year basis. This growth is both from traditional broker buyers and market alliance partnerships and reinforces the great strides that we are making with digital marketing and search engine optimization to attract both domestic and global buyers to our platform. We also continue to make good progress in building out our strategic market alliance network, most recently announcing that we added CAROMOTO, an experienced export supplier based in Moldova, which is a key element in providing access to our buyers in the growing Eastern European market. We also introduced two new value-added features to our U.K. merchandising platform, IAA Engine Start and IAA Key Image. These tools will give buyers additional vehicle details, creating greater confidence to bid and purchase vehicles. We also expanded our merchandising platform, Interact, in Canada in the quarter after the positive reception that we received last year in the U.S. As we look ahead at the remainder of the year, we expect to continue to benefit from the progress we have made and continue to make with our strategic initiatives as well as industry tailwinds that continue to support strong revenue per unit trends. Our non-insurance business also continues to perform well with double-digit year-over-year volume growth in the first quarter, driven in part by growth in dealer volume. Our non-insurance team has done a nice job of growing both our base business and identifying and closing attractive new prospects in this space, and we will continue to pursue additional opportunities. As Vance will discuss in more detail, we are also in a position, despite the ongoing pandemic, to provide guidance with respect to our expectations for revenue and EBITDA growth for the year. For the year, we expect organic revenue growth of 15% to 20% and organic adjusted EBITDA growth in the range of 23% to 28%. Our expectations incorporate currently known volume shifts, both negative and positive, including a shift away of additional volume from a top 3 customer. The timing of these shifts will impact individual quarters differently, but we expect a strong 2021 overall, which also incorporates some wins to date from a top customer that are partially expected to offset the aforementioned negative volume shift. We also expect continued strong revenue per unit trends as well as continued improvement in vehicles miles driven. IAA has made enormous progress in improving and enhancing our offerings, and I believe we are very well positioned going forward to drive higher levels of performance and expand our market position. So before I close, I also want to spend a few minutes on another important initiative within IAA, the continued focus that we are putting on diversity, equity, and inclusion within our organization. It was my honor earlier this year to sign the CEO Action for Diversity and Inclusion Pledge, the largest CEO-driven business coalition to advance diversity and inclusion in the workplace. We've also established a formal diversity equity and inclusion program within IAA with three different areas of focus, each with strong involvement from across the organization. We firmly believe that addressing these issues with vigor and transparency will allow us not only to create greater employee satisfaction, but also allow us to better serve our buyer and seller customers. So in closing, I want to thank all of our teams for all their hard work and dedication to IAA. And I will now turn the call over to Vance to review our results and outlook in more detail.

Thanks, John. I will focus my discussion today on our adjusted non-GAAP results and just touch on key highlights from our first quarter financial performance before providing more detail on our outlook for fiscal 2021. Please see today's press release for more details on our financial performance and our methodology when calculating non-GAAP results. For the quarter, consolidated revenues increased 15.5% to $423.5 million compared to the prior year period. Organic consolidated revenue, which excludes the impact of foreign currency, increased 14.4% to $419.5 million as a 28.2% increase in revenue per vehicle more than offset the 10.7% decrease in volume. Service revenues increased 7.9% to $360.4 million compared to the first quarter of fiscal 2020, and vehicle sales increased 93.6% to $63.1 million compared to the prior year period. The total loss ratio increased to 20.4% from 20% in the first quarter of 2020. Looking at our geographic performance, revenues increased in both our U.S. and international segments, driven by higher revenue per unit, offset by lower volume. International revenue also benefited from a higher mix of vehicle sales as one of our providers switched from a consignment model to a purchased vehicle model during the fourth quarter of 2020. Gross profit increased to $172.7 million from $135.6 million in the first quarter of fiscal 2020. Gross margin increased 380 basis points in the quarter, primarily due to higher revenue per unit as well as benefits from our margin expansion plan. It's worth noting that we achieved this level of gross margin improvement even with purchased vehicles accounting for a much higher percentage of revenue compared to the prior year. SG&A expenses were $43.4 million compared to $38 million in the prior year. Adjusted SG&A expenses were $39.4 million, an increase of 11% compared to $35.5 million in the prior year period, due mainly to higher compensation-related costs. Adjusted EBITDA increased by 33.2% to $133.2 million from $100 million in the first quarter of fiscal 2020. Excluding the impact of foreign currency, organic adjusted EBITDA increased by 32.6% to $132.6 million for the first quarter of fiscal 2021. Interest expense declined by $3 million to $13 million compared to $16 million in the first quarter of fiscal 2020. The decline was primarily driven by lower interest rates on our floating rate debt. The interest rate on our term loan was 2.38%. The effective tax rate was 25.2% versus 25.3% in the first quarter of fiscal 2020. Net income increased to $72.5 million from $44.7 million in the prior year. Adjusted net income increased by 56.1% to $77.9 million or $0.58 per diluted share compared to $49.9 million or $0.37 per diluted share in the first quarter of fiscal 2020. Turning to our balance sheet and cash flows, capital expenditures for the quarter were $30.3 million compared to $10.6 million in the prior year. The increase was driven in part by a land purchase early in the quarter and increased investments in technology. We ended the quarter with total liquidity of $677.7 million and with a leverage ratio of 2.3x, which is nearly a full turn below the 3.2x level at the time of the spin. During the period, we generated free cash flow of $91 million compared to $86.7 million in the first quarter of fiscal 2020. Turning now to our outlook for fiscal 2021. As John mentioned, we are providing an outlook for fiscal 2021. For the year, we expect organic revenue to increase 15% to 20% from fiscal 2020 revenues of $1,384.9 million and our organic adjusted EBITDA to increase 23% to 28% from fiscal 2020 adjusted EBITDA of $398.5 million. As discussed, this outlook incorporates the benefits we expect to continue to realize from our strategic initiatives as well as industry tailwinds, which remain supportive of strong revenue per unit trends. As John reviewed, these expectations also include known volume losses as well as wins, including additional volume losses from a top 3 customer, which will partially be offset by known volume gains, including from some of our top customers. We expect this shift in volume to occur over the next few months, and we expect to be at a full run rate of these net shifts in the fourth quarter of 2021. For fiscal 2021, we also expect our effective tax rate to be in the range of 25% to 25.5% and for depreciation and amortization to be in the range of $88 million to $92 million. And as noted in our press release today, subsequent to quarter end, on April 30, we executed a new senior secured credit facility consisting of a $650 million term loan A and a $525 million revolving credit facility, both maturing on April 30, 2026. This replaces our existing $774 million term loan B and $361 million revolving credit facility. We are pleased that we were able to capitalize on strong market conditions to execute this transaction, which provides us with attractive terms and additional liquidity to support future growth. This facility will reduce the interest rate on our floating rate debt by 50 basis points for the next two quarters with a rate tied to the pricing grid after that, and the potential for an up to 87.5 basis point reduction in interest rate depending on leverage. For the full year, we expect interest expense of approximately $57 million, which includes a noncash write-off of deferred financing fees of approximately $10 million. On a cash basis, we expect our new capital structure to yield savings of approximately $4.4 million for the remainder of 2021 due to both a lower rate and a lower debt balance. We will have no mandatory principal payments required on this new facility in 2021. In closing, I want to reiterate John's comments that we are very proud of the progress we have made to improve our competitive offering and elevate the buyer and seller experience. With that, we'll open up the call to questions.

Our first question today will come from Daniel Imbro with Stephens Inc.

Congrats on the start to the year.

Thanks, Daniel.

Thank you, Daniel.

Vance, I'd like to begin with the volume backdrop, which has decreased slightly sequentially. Could you provide more details about the quarter in terms of assignments and volume growth? I heard from John that March was strong for assignments. Now that April has just concluded, can you discuss how assignments may have progressed throughout April as we compare against easier comps and as miles driven begin to recover?

Yes. Daniel, this is Vance. I'll go first and then John, I'm sure, will add in as well. So yes, through the first quarter of the year, we continue to see assignments kind of continue to increase more slightly relative to kind of somewhat of a pickup as it relates to vehicle miles traveled certainly in the U.S. What we're seeing overall is that vehicle miles traveled are still down from pre-pandemic levels, but not a lot. It's kind of in the 7% range down from pre-pandemic levels. And so that's what we're kind of continuing to see. Now we expect that to get better throughout the rest of the year. That's the expectation as restrictions are continuing to be lifted and markets open up. Internationally, we're continuing to see more restrictions in place. So vehicle miles traveled and assignments are down more internationally. But as you know, the bulk of our business by far is in the U.S.

Yes. I think Vance said it well, Daniel. I think that we do expect restrictions to continue to be reduced or limited, which is going to result in greater miles traveled, which will result in improving assignment levels.

Yes. Got it. That's helpful. And then moving to the gross margin side, Vance, really a nice service gross margin leverage. I think up over 600 basis points year-over-year. Is that just a byproduct of stronger revenue per unit? Is that your margin expansion playing? Can you maybe parse out what drove that core margin leverage?

Yes. No, I think, Daniel, you hit on it. The primary driver of that is going to be the really, really strong revenue per unit. And so that's, by far and away, going to be the biggest element of that. But in addition to that, we continue to see the impact of cost reductions as part of our Buyer Digital Transformation and moving to an all-digital auction platform. So that certainly is also contributing as well.

And then just a quick follow-up on that. You noted in the guide that you raised your revenue per unit assumption to kind of assuming it remains elevated. Should we interpret that as you're assuming stronger core gross margins through the remainder of the year?

Well, I think we haven't given anything by quarter in terms of kind of what our expectations are. But we do think, as we thought about guidance and the trends that we're seeing in revenue per unit, we do continue to see really elevated revenue per unit levels. And we, at this point, based on one, the things that we've done to our own model and the changes we've made and which we believe is the largest benefit that we're seeing in terms of driving higher revenue per unit, we expect those are clearly sustainable in our minds. But on top of that, there's also higher used car prices. The Manheim used car price index, for example, is at an all-time high and continues to go higher. And we expect that to stay from all the information that we see here, elevated throughout at least the remainder of 2021.

And our next question will come from Craig Kennison with Baird.

Just to follow up on that last point related to revenue per unit. You've seen phenomenal growth rates on a year-over-year basis. But is your guidance more that you think it could remain elevated such that as you face some of these difficult comps we might be flat or up a little bit? Or do you think these growth rates are partly sustainable?

I’ll start and then John might want to add something as well. As we have discussed, it’s challenging to completely separate what portion of our performance is driven by our internal actions and what portion is influenced by broader market trends. However, we currently believe that the majority of the impact is coming from our internal efforts, including our transition to an all-digital auction format, the significant growth in our global buyer network, and innovations like 360 View and Feature Tour, as well as other tools and information provided to buyers through our Interact merchandising platform. We consider these factors to be the largest contributors. That said, we do acknowledge that higher used car prices play a role since consumers may be more inclined to pay more for a vehicle if they know they can sell it for a higher price. We think this effect is present but is certainly less impactful at this stage than the changes we have made internally to improve our operating model and results. Over time, we would expect the used car price index to decline eventually, but based on our observations and the information we have, we don’t anticipate significant decreases in 2021; rather, we expect prices to remain elevated throughout at least the remainder of the year.

That's really helpful. And just to follow up on that. If you just isolate the things that are within your control and the impact on ARPU in the last year. Can you stack success on that and make further gains of the same kind of magnitude again in the year going forward? Are there many innovations happening on the platform that allow you to charge that extra fee?

Yes. We are continuing to add features and capabilities that we're able to charge for on the platform. So we do believe that we can continue to grow. Whether it's going to be at the pace it was or not, that remains to be seen for some of the things that Vance just described in terms of the macro factors. But we continue to, as I've said in my remarks, broaden our service offerings to both buyers and sellers. And to the extent we do that, we can charge for our services and products. So we think we can continue to grow ARPU in a sustainable way.

And just to add to what John was saying. The other thing to that is we believe a large contributor to it is the growth of our global buyer network. And certainly, we've made a lot of progress there, but we still believe we have a lot of additional opportunity there. And so as we continue to grow that global buyer network, add more bidders to the platform, they're bidding on more units and bidding more times, more unique bidders per unit, that obviously continues to drive up proceeds and revenue per unit as well.

And our next question will come from Bob Labick with CJS Securities.

It's actually Lee Jagoda for Bob this morning. Just a couple for me. Can you talk a little bit about your non-insurance progress? Obviously, a very large market. What, if anything, changed during the pandemic? And then maybe a little bit of how you're attacking it or which areas you find most attractive, whether it's dealer cars, repos or just non-insured end-of-life cars?

Yes, thank you. During the pandemic, there was significant disruption in the car market, which provided us with an opportunity to capitalize on these changes, and we are continuing to expand on that. We believe there is growth potential in all the areas mentioned, including fleet rentals, dealers, and the lower end of the market that is not insurance-related. There are still vast opportunities for growth. Through our digital platform, we have created some custom features to assist sellers in marketing their vehicles. The merchandising tools we offer have been well received and embraced by them. This remains a key focus for us, and we have experienced solid growth. We also see ongoing opportunities to further enhance this business beyond its current state.

Got it. And then just one more for me. So given the volumes have been down for basically the last year, how has that impacted your efficiency at your yards? And has the reduced volume changed any of your land expansion goals at all or your philosophy around the land?

Yes, this is Vance. I have an answer to that question. When considering our cost structure, it's clear that labor is a significant component. During the early part of the pandemic in 2020, we adjusted our hours in response to reduced assignments, but we did not cut any employees. Instead, we aligned our workforce with the incoming workload by lowering hours. We take pride in maintaining our employee count in the U.S. during that period. However, other costs, such as rent, tend to be more fixed, which limits our flexibility in terms of reducing those expenses. Additionally, tow costs vary with the number of units. As the number of units decreases, tow costs reduce accordingly since we only incur those charges when a unit needs to be towed.

And I would just add on land, we do take a longer view on. We think about growth, our customers' growth, and the market in making land decisions. So we continue to make sure we've got capacity to support our sellers for the long term.

And our next question will come from Stephanie Benjamin with Truist.

I wanted to talk about the changes in volumes from our top three customers, both the positive and negative aspects. It's understood that these shifts happen at various points during the year. I would appreciate any insights you can share about the background of these shifts. Specifically, on the positive side, do you attribute this to the investments made throughout the year to enhance the overall experience and tools available to the insurance carriers? Conversely, what do you think is causing the decline in volumes with the top three customers? Could you share your thoughts on what's influencing these changes?

Sure, Stephanie. Yes, as we've mentioned before, carriers have different criteria for their decision-making processes. They assess their own metrics and evaluate their claims operations in various ways. I feel very confident about the range of services and products we've developed. We have gained significant traction in the market with several carriers, both large and small. However, one carrier decided to move some of their business elsewhere. As we've discussed over the past couple of years, fluctuations in volume are to be expected. Nevertheless, I truly believe we are well-positioned to enhance our standing in the long term. Each company approaches these decisions in its own unique way.

Great. Absolutely. And then just a follow-up to your international expansion commentary. Can you maybe speak to the best you can about maybe some particular regions where you're seeing a lot of the expansion? Is it broad-based? You called out, I think, an opportunity in Eastern Europe. And any geographic commentary would be helpful.

Sure. Yes, it is fairly broad-based regarding our buyer growth, especially with international buyers. We continue to see growth in Central and South America, as well as in Eastern Europe, the Middle East, and West Africa, which are all strong markets. I wouldn't single out one region over another. I believe the tools we've implemented for our SEO and digital acquisition strategy have significantly contributed to this growth being fairly uniform.

And our next question will come from Chris Bottiglieri with Exane BNP Paribas.

I was hoping you could clarify the revenue guidance a bit. It seems that foreign exchange rates and the mix of purchased vehicles are quite beneficial at the moment. It appears you believe the average revenue per user will remain robust with pricing estimates looking reasonable. Can we assume that the two-year compound annual growth rate for volume may decline over the year due to net share count losses? How do you view volumes in comparison to pre-COVID levels as you progress throughout the year?

Yes, this is Vance speaking. We're not providing quarterly guidance, but to give you some context, we expect elevated revenue per unit levels to remain strong for the rest of 2021. This will have a significant positive impact. We've discussed the share shifts and the net negative influence they may have, so we can’t go into specifics. Overall, this will have a net volume impact. If you compare 2021 to 2019, coming out of the pandemic and accounting for some share movements, you will notice a higher ARPU in 2021 compared to 2019. However, the volume is expected to be lower due to the effects of the pandemic and some of the fluctuations in volume as well.

Got you. Okay. That's really helpful. And then wanted to just get a sense for towing costs. I think you mentioned this earlier, but can you just give us a sense there? I know you have a big optimization plan that you're hoping to take costs out of towing. I would think those costs are very inflationary now. Is that true? Is that what you're seeing? And then two, could you give us a sense for if your own initiatives are helping to offset that? And kind of like what inning are you in terms of optimizing those costs?

Sure, I'll start and then John may want to add some thoughts as well. Chris, we're not experiencing significant inflationary costs at the moment. There’s some inflation, but it’s not excessive. Regarding the Towing Optimization initiatives, which include changes like redistricting and moving from an anchor towing model to a more distributed model within markets, those are already in progress. We are on track with the timeline for these initiatives and are confident in the benefits we have previously mentioned. Any inflationary pressures we do encounter are being offset by these initiatives and then some.

Yes. To expand on that, when considering tow costs, fuel prices are likely the biggest factor. Therefore, any fluctuations in fuel prices could influence tow costs. However, fuel prices are the primary variable in the overall cost structure.

And our next question will come from Bret Jordan with Jefferies.

On the organic revenue outlook, is there any impact from the higher mix of purchased vehicles? Or are we pretty much lapping that and it's apples-to-apples?

So Bret, there is an impact because we had a customer we mentioned in the fourth quarter of 2020, an international customer that switched their agreement from a consignment model to a purchased vehicle model, which is not unusual in those markets. We didn't have that in the first quarter of 2020, so we haven't effectively lapped that. As a result, we are seeing some benefit from a revenue standpoint because of that.

Okay. And then a question, I guess you talked about the growth rate of the global buyer network program. Could you talk at all about maybe the volume impact from those foreign buyers or maybe the percentage of your bids that are coming from those foreign markets?

Well, Bret, I think we've discussed in the past that it continues to grow and remains strong. We haven't gone into specifics because of the nature of some of our domestic buyers who will export the vehicle. We're attempting to isolate the true international demand, which is challenging. We want to ensure we don't misrepresent it. That being said, we have observed significant growth in our volume to international buyers corresponding to that growth and their involvement. They are actively bidding and purchasing at a strong rate.

Okay. And one last question. I guess the ARPU in non-insurance, I guess I'd assume it's higher than your average or maybe more run and drive cars in that mix. Could you just talk about what you see in the economics of non-insurance vehicles versus the portfolio average?

We're observing increases in ARPU across the board. In response to your question about the differences between non-insurance and insurance, it's worth noting that on the non-insurance side, we need to differentiate between various non-insurance products. This category includes items like rental cars nearing the end of their life and dealer cars, which might have high mileage but are still considered good vehicles. Additionally, there are donated cars, some of which might not fetch higher proceeds. So there's quite a bit of variability within the non-insurance segment. However, we can confidently say that proceeds and revenue per unit are both increasing for both insurance and non-insurance sectors.

Our next question will come from Gary Prestopino with Barrington Research.

Couple of questions here. When you cited the buyer base, you said international was up 15%. Is that correct? Or is that the total buyer base, up 15%?

That's the international buyer network is up 15% sequentially quarter-over-quarter and over 50% on a year-over-year basis.

So how does that translate into your total buyer base then? How much has that increased year-over-year?

I don't think we've shared that information. Our international buyer base is significant and becoming increasingly important over time due to the growth we're experiencing. For instance, it has grown by 50% year-over-year. It's fair to say that while our domestic buyer base remains very healthy and strong, it hasn't seen the same 50% year-over-year growth.

Is the demand from international buyers possibly influenced by the fact that there are fewer cars available, making it difficult for them to acquire cars for export?

Yes, I think that's accurate. We believe there are several factors contributing to this. In many developing countries, their economies are progressing, leading to an increased demand for automobiles among the citizens. As disposable income rises, people are more willing to purchase vehicles. However, there often isn't a network of original equipment manufacturer dealers readily available in these densely populated areas. This situation creates an opportunity to acquire cars, refurbish them, and put them back on the road for drivers in these regions. It allows for a model where buyers can purchase higher mileage, low-value, and damaged vehicles, factoring in repair costs that help mitigate shipping expenses. Consequently, they can sell these vehicles in the developing markets, which benefits society as a whole.

Okay. Just a couple more questions here. You mentioned assignments, but you didn't talk about inventories as you started this quarter or ended last quarter. Year-over-year, can you give us some idea of the level of inventory percentage change year-over-year and maybe sequentially as well?

Yes, Gary. Year-over-year, it's up 3.7%.

And then just two more quick questions. The $10 million of fees that you're getting from refinancing, is that all going to be recognized in Q2? Or is that ratably across the next three quarters?

Yes. Gary, that gets written off. Those are just fees from the old deal. So those aren't new fees incurred. So those are fees that get written off from the previous transaction based on specific accounting. Those will all get written off this quarter.

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

Just want to say thank you again for your interest and participation this morning, and we look forward to continuing to update you on our progress. Thank you, and have a great day.

The conference has now concluded. Thank you for attending today's presentation. At this time, you may disconnect and have a great day.