Rayonier Advanced Materials Inc. Q2 FY2024 Earnings Call

Welcome again to RYAM's Second Quarter 2024 Earnings Conference Call and Webcast. Joining me on today's call are De Lyle Bloomquist, our President and Chief Executive Officer; and Marcus Moeltner, our Chief Financial Officer and Senior Vice President of Finance. Our earnings release and presentation materials were issued last evening and are available on our website ryam.com. I'd like to remind you that in today's presentation, we will include forward-looking statements made pursuant to the safe harbor provisions of Federal Securities laws. Our earnings release as well as our filings with the SEC list some of the factors which may cause actual results to differ materially from the forward-looking statements we may make. They are also referenced on Slide 2 of our presentation materials. Today's presentation will also reference certain non-GAAP financial measures, as noted on Slide 3 of our presentation. We believe non-GAAP financial measures provide useful information for management and investors, but non-GAAP measures should not be considered an alternative to GAAP measures. A reconciliation of these measures to the most directly comparable GAAP financial measures are included on Slides 20 through 25 of our presentation materials. And now, I'd like to turn the call over to De Lyle.

Thank you, Mickey and good morning. I'll start with the financial overview for the second quarter of 2024. After that, I'll outline recent company actions before handing over to Marcus, who will provide more details on the business segments, capital structure, and liquidity. Following Marcus' remarks, I'll return to discuss our ongoing initiatives and updated guidance for 2024. This will include updates on the progress towards suspending operations at our Temiscaming HPC plant and brief comments on the sales process of our paperboard and high-yield pulp businesses. We will then open the floor for questions. Let's turn our attention to Slide 4, where we'll discuss our strong second quarter performance. Adjusted EBITDA reached $68 million, a $41 million or 152% increase from the same quarter last year. In the high-purity cellulose segment, EBITDA improved by $38 million or 136%, driven by higher sales volumes for cellulose specialties, decreased costs for key inputs and logistics, and improved productivity. Additionally, this quarter's results included a $5 million benefit from a Canadian Wage Subsidy received during the COVID pandemic, but it was recognized during this quarter due to the completion of the government audit of the benefit. The paperboard segment experienced a $5 million or a 50% increase in EBITDA, driven by higher sales volumes, lower costs for purchased pulp, and a $2 million benefit from the Canadian Wage Subsidy. These gains were partially offset by lower sales prices. In the high-yield pulp segment, EBITDA rose by $1 million, primarily due to reduced logistics and chemical costs, along with a $2 million benefit from the Canadian Wage Subsidy. However, these improvements were largely offset by the lower sales prices and volumes. Corporate expenses increased by $3 million, driven by higher costs related to the ERP project, variable compensation, and discounting and financing fees in support of our working capital initiatives. These were partially offset by a favorable foreign exchange impact. In summary, the overall performance was driven by strong results in our core cellulose specialty segment as we continue to pivot our mix to more specialty production and sales and focused cost reduction across the enterprise, which more than compensated for softness in some of our commodity businesses. Last quarter, we announced a significant transaction to monetize our lumber duty refund rights for $39 million. I'm happy to report that we finalized that transaction in June and have received $39 million as expected. This was reflected in our strong year-to-date free cash flow generation of $69 million. The process to indefinitely suspend operations at our Temiscaming HPC plant remains on track. Under current market conditions, the suspension is yielding positive EBITDA benefits and enhanced our consolidated free cash flows. Considering these updates and our strong performance in the first half of the year, I am pleased to increase our full year EBITDA guidance to $205 million to $215 million and to raise our full year adjusted free cash flow guidance to $100 million to $110 million. With that, I'll hand it over to Marcus to walk us through the financials for the quarter.

Thank you, De Lyle. Beginning with our HPC segment on Slide 5, quarterly sales increased by $32 million or 11% to $332 million. Overall, HPC pricing increased 5%, reflective of higher mix of CS products, whereas total sales volumes increased by 5%, resulting from a 25% increase in CS sales, partially offset by a 13% decrease in commodity sales. EBITDA margins in the HPC segment reached 20%, demonstrating the success of our initiatives to enhance product mix and prioritize specialties. The rise in CS sales volumes was supported by the closure of a competitor's plant in late 2023, the continued muted recovery in ether sales, and bridge volumes from the indefinite suspension of the Temiscaming HPC plant. Other sales for the quarter were $23 million, which included $13 million of green energy sales. EBITDA for the HPC segment rose by $38 million to $66 million, primarily due to an enriched mix of CS sales previously noted and the benefit of decreased costs for key inputs and logistics, along with the impact of improved productivity. This quarter's results also included $5 million for the CEWS benefit. Turning to Slide 6. Sales in the paperboard segment increased by $12 million, driven by higher sales volumes. EBITDA for the segment improved by $5 million, reaching $15 million, primarily as a result of increased sales volumes and the benefit of decreased purchase pulp costs. In addition, the segment included $2 million for CEWS. Turning to the high-yield pulp segment on Slide 7. Sales declined by $11 million in comparison to the prior year, reflecting a 25% drop in sales volumes and a 9% decline in sales prices due to overall reduced demand and the impact of market supply dynamics in China. Segment EBITDA improved by $1 million to $2 million as compared to the prior year quarter. The quarter's results also included a $2 million benefit for CEWS. Transitioning to Slide 8. Consolidated operating income for the quarter amounted to $28 million, reflective of a $35 million improvement versus the second quarter of last year. This positive change was primarily driven by improved product mix favoring HP CS grades, which more than compensated for lower sales prices. The increased sales volumes in CS and paperboard were partially offset by reduced sales for commodity HPC products and high-yield pulp. Other cost benefits, including the impact of favorable foreign exchange rates and a $10 million CEWS benefit, contributed to improved results. These positive gains were partially offset by higher costs to support the company's ERP project, increased variable compensation, as well as discounting, and financing fees incurred to support working capital initiatives. Now, let's turn to Slide 9. Gross debt ended the quarter at $795 million, a reduction of $44 million from the same period in 2023. Net secured debt, as reflected in our financial covenant ratio associated with the term loan, ended the quarter at $659 million. Net secured leverage reduced further and closed the quarter at 3.4 times, well within the covenant test. Liquidity remains strong at $260 million, reflecting $114 million of cash, $135 million available under our ABL facility, and $11 million from our French factoring facility. Year-to-date CapEx totaled $58 million, with $28 million allocated towards strategic capital to support the start-up of the Tartas bioethanol project and the implementation of our upgraded ERP system. Net of financing, strategic capital reached $17 million. Currently, all planned major maintenance outages for 2024 have now been completed. And additionally, as De Lyle mentioned, we successfully completed the sale of our annuity refund rights for $39 million. Overall, our liquidity remains strong, positioning us well to achieve our targeted $70 million debt reduction this year. We are actively pursuing the refinancing of our senior notes before going current in January of 2025 and expect the company's improving business performance and enhanced credit metrics will enable the company to complete the refinancing by year-end.

Thank you, Marcus. Let's now turn our attention to Slide 10, where I'll provide an update on our key initiatives for 2024. Our top goal this year is to refinance the 2026 senior notes before they go current in January 2025. Working closely with our advisers at Houlihan Lokey, we are actively exploring refinancing options and engaging with the market to secure the best terms. In support of this refinancing effort, we are also on track to achieve our target of reducing gross debt by $70 million in 2024, supported by business generated free cash flow, a tax refund, and proceeds from the recent sale of the duty refund rights. We enjoy strong interest among potential lenders, therefore, we are confident in completing the refinancing at satisfactory terms within the year. The sales process of our paperboard and high-yield pulp assets is progressing. We have received offers for the Temiscaming assets from multiple parties, but these parties have not met our criteria to transact a sale. Our continuing dialogue with various parties and we expect to continue diligence as we work through the complexities of the suspension of the HPC operations at Temiscaming. We are committed to completing a sale of these assets if we receive an appropriate offer, which values the high EBITDA margins in the low custodial capital intensity of the combined paperboard and high-yield businesses. While the proceeds from the sales would significantly reduce our debt load, we are carefully balancing the estimated annual $50 million in free cash flow from these businesses against any potential debt repayment. Given the length of the process, we expect to refinance the 2026 senior secured notes at satisfactory terms prior to a potential sale of these assets. In April, we announced our decision to indefinitely suspend the operations of our Temiscaming HPC plant. This decision in part reflected our commitment to mitigating the financial drag from non-fluff commodities, which we projected at the time would result in a 2024 EBITDA loss of $48 million. As a result of the suspension, we forecast these non-fluff commodity losses to be reduced by nearly half this year, while also improving the supply-demand balance in the core cellulose specialty market. The suspension continues per plan with operations suspended on July 16, 2024, slightly later than announced. We utilized all the raw materials. Mothball activities have commenced and will continue through October. The customer qualification process is ongoing, and we expect to retain approximately half of the CS sales volume and a significantly higher percentage of the EBITDA that was historically sourced from Temiscaming. Going forward, these CS products will be produced from our A and B lines at Jesup and our sulfide plants at Fernandina and Tartas. We remain committed to our fluff business with most of the production at Jesup continuing to focus on fluff production. We have upgraded our forecasted financial impact of the suspension for 2024 to a $10 million to $15 million positive impact on adjusted EBITDA and a $25 million to $30 million positive impact on free cash flow. We estimate one-time costs of $25 million to $30 million for severance, benefit extensions, outplacement services, and mothballing. The recurring financial impact remains as announced with an adjusted EBITDA improvement of $15 million to $20 million after customer qualifications are completed, primarily due to reduced EBITDA losses from commodity sales. Free cash flow is expected to increase by $30 million to $35 million due to the adjusted EBITDA improvement and avoided custodial CapEx for the Temiscaming HPC plant. As previously stated, we will routinely monitor the status of this indefinite suspension in light of economic conditions, market dynamics, and other relevant factors. One of our most promising initiatives involves our biomaterials business. We are nearing completion of the detailed engineering phase for our Fernandina bioethanol plant. The project's permitting timeline has been extended with public participation, which is not uncommon and is being addressed through the regulatory process. This could result in a delay of the construction timeline of this project. We have submitted a notice for self-certification for our prebiotics animal feed product and expect to begin production trials in September. We are advancing other projects in our biomaterials project pipeline, including the proposed AGE project at our Jesup facility, which will produce green energy for sale and crude tall oil operations in both France and the U.S. We aim to primarily finance these projects with green capital. Let's turn to Slide 11. We are updating our guidance and now expect to achieve adjusted EBITDA of $205 million to $215 million for the year. The first half results exceeded expectations as we benefited from the recognition of $10 million in benefits related to CEWS. We also benefited from customers advancing CS orders ahead of the indefinite suspension of our operations at the Temiscaming HPC plant. While we don't expect the advancing order to repeat in the back half of 2024, we do expect to retain the majority of these sales in the future as we requalify production at our other plants. Overall, we still expect solid results in the back half of 2024, driven by increased specialty sales and reduced operating costs. Cash interest expense is projected at approximately $85 million, which includes a $15 million payment made in early January for last year's Q4 due to the timing of the interest payment around the holidays. Maintenance CapEx is now estimated at $75 million, reflecting a $10 million reduction due to the suspension of the Temiscaming HPC plant. Additionally, we project a $35 million benefit from working capital, which includes $25 million resulting from the Temiscaming HPC plant suspension. Furthermore, we anticipate $15 million in tax refunds and have successfully completed the transaction for $39 million for the monetization of the lumber duties. These gains will be partially offset by impacts related to the Temiscaming HPC plant suspension and other accrued liabilities. In sum, we are raising our adjusted free cash flow guidance to a range of $100 million to $110 million for the year. These funds will be allocated towards debt reduction and strategic capital investments. On Slide 12, I dive deeper into the expected 2024 performance of each of our businesses. We project EBITDA for the HPC segment to be in the range of $205 million to $215 million. We anticipate cellulose specialty prices to increase by a low single-digit percentage compared to 2023 as we continue to prioritize value over volume. Sales volumes for cellulose specialties are expected to increase due to our competitor's plant closure and uptick in ether sales and bridge volumes from the Temiscaming HPC suspension. These gains will be partially offset by acetate destocking and changes in prior year contract terms. Demand for commodity HPC products remained stable with prices flat compared to 2023, and we project a slight increase in H2 2024 sales volumes driven by increased fluff sales. We expect overall costs to be lower in 2024 due to reduced input and logistics costs, improved productivity, and the Temiscaming HPC suspension, partially offset by net stranded costs related to the suspension. We anticipate Q3 2024 EBITDA to be significantly stronger than Q3 2023. However, it will be lower than Q2 2024 due to the end of the CEWS benefit and CS bridge volumes as well as increased stranded costs from the Temiscaming suspension of the HPC plant. Our growth strategy is centered on strategic investments in our biomaterials business. We have outlined several promising projects and have strong confidence in the earnings potential of both our current and upcoming initiatives. Our first project, the Tartas bioethanol plant, is already generating positive earnings and is expected to contribute $3 million to $4 million of EBITDA this year, growing to $8 million to $10 million in 2025 as we achieve targeted production levels. With the addition of the remaining projects in Portfolio 1, we anticipate achieving over $40 million of EBITDA from these initiatives on $100 million of revenue in 2027. Regarding paperboards, we expect to achieve EBITDA of approximately $50 million in 2024. Prices are expected to decrease slightly in the second half of 2024, while sales volumes are projected to increase slightly as inventories reduce, despite higher planned maintenance downtime for a distributive control system upgrade. However, raw material prices are expected to rise due to increased purchase pulp cost. Consequently, we anticipate EBITDA to decline in the coming quarter. We expect our high-yield pulp business to achieve EBITDA of approximately $5 million in 2024. Second half 2024 prices are expected to decline due to pricing pressures from stranded pulp capacity in China. However, sales volumes are projected to increase due to improved productivity. As a result, we expect EBITDA to be moderately higher in the coming quarter. For 2024, we expect corporate costs of $55 million, in line with 2023 as we are in the final year of our multiyear ERP project implementation. Corporate costs are expected to increase slightly in the second half of 2024 due to this project and less favorable foreign exchange rates. As the ERP project concludes, we anticipate system enhancements and cost reductions starting in 2025. It's important to note that these costs may vary due to factors like currency fluctuations, environmental charges, and other non-cash expenses. Turning to Slide 13. We want to provide an update on the current supply-demand dynamics in our core cellulose specialties market. Given the recent capacity reductions with the GP Foley facility and the indefinite suspension of our Temiscaming HPC facility, we have seen an approximate 10% to 12% reduction in industry capacity. We believe the current market dynamics indicate a tight supply-demand balance. Industry analysts project supply/demand ratios to be around 87% in 2024, growing to 92% in 2026, inclusive of debottlenecking capacity increases from the remaining market participants. We view anything above 87% as a supply-constrained market. With this favorable market outlook, we turn to Slide 14, where we illustrate the trajectory of our EBITDA margin growth and net leverage decline. In 2024, we anticipate our margins to be in the 12% range. The forecast for net secured leverage at the end of the year stands at 2.8 times covenant EBITDA. We are confident that we will achieve our target net debt leverage ratio of 2.5 times well before 2027. With that, operator, please open the call to questions.

Your first question comes from Matthew McKellar with RBC Capital Markets. Matthew, your line is now open.

Hi, good morning. Thanks for taking my questions. Maybe first, just on your sales process for the high-yield pulp and paperboard business. I think you mentioned that parties have submitted bids, but they have not met your criteria. Is this a comment on price alone? Or is there anything else worth considering here? And then are you able to give us a sense of how far apart the offers are that you've received from the value you think is fair for the business?

Good morning Matthew, this is De Lyle. I have a few points to clarify our position regarding the paperboard and high-yield pulp process. While I can't provide specific details about our diligence, I can share some additional considerations. When I refer to criteria, I'm talking about factors beyond just valuation differences. An important aspect involves the operational changes at Temiscaming. For instance, the bumping process resulting from the current reduction in force at the facility is significant. The unique contract allows more senior employees to have job rights over junior staff, which means they can choose to transition into paperboard positions if they wish. We need to navigate this process carefully as we undertake the mothballing effort. The turnover in personnel, both hourly and salaried, raises concerns for potential buyers. Therefore, we must ensure that, once this process is completed, the plant can operate efficiently and effectively moving forward. Another consideration is regarding the assets involved in the sale. There are shared utilities that both parties want to ensure are managed well. Discussions about ownership and operational responsibilities for these assets are still ongoing. When it comes to valuations, we are using the recent sale of the GP Augusta mill as a benchmark, which sold for approximately 6 to 7 times EBITDA and around 5 times after synergies. That's the framework we are using in discussions with potential buyers.

Great. Thanks very much for that color. Maybe next, it sounds like you continue to make good progress on the prebiotic initiative. Can you just maybe update us on how you're thinking about that project today? I think you previously talked about bringing that to market late 2025 or 2026. Is that still a relevant timeline? And then if you could just refresh us on any anticipated capital cost and targeted returns to the extent you're able to, please?

Yes. So, the prebiotics opportunity, I mean, it would be located at our Jesup facility, taking advantage of some pulp product streams that the craft mill generates and then purifying that stream and then spray drying and packaging material to be sold to various animal feed suppliers. We've gotten through what we call the self-GRAS approval process, GRAS standing for generally regarded as safe process, and are working closely with a couple of key potential customers as they go through their own independent validation of the benefits of our product versus competitive offerings. And come September, we're going to go through some production trials to make sure that we can produce this at scale before we start committing capital and doing the pre-engineering for the actual prebiotics plant. In terms of timing, we're still targeting late 2025 for a start-up. And though that's starting to get a little tight, we still think we can still hit that date. So, right now, really haven't hit any speed bumps on that. But as you expect, you have to go through quite a lengthy qualification process, and we're marching through that.

Thanks very much. And is there anything you're able to say around anticipated capital costs or targeted returns of that project?

The capital is an open question that needs to be addressed. We do expect that this capital will be mainly financed by green capital, which will be very inexpensive. In terms of return on equity, it will meet our thresholds, which are above 30%.

Thanks very much. And then last one for me. Could you maybe just provide a bit of an update regarding what you're seeing in the high-yield pulp markets and in particular, what you're seeing in China?

Yes. This is one of my favorite topics, at least something I just talk about with my team all the time about because it's really kind of a moving dynamic. What we're seeing is that the paperboard plants that were recently constructed in China are having trouble finding a home for the production of paperboard. So, to bring in any kind of cash flow, they're running their pulp lines and then selling those pulp lines to competitive paperboard plants. And that's obviously in competition with the pulp that we bring into China for the same purpose. That dynamic continues, and it's weighing heavily on the pricing in China. So, in response to that, we're working to reposition our sales outside of China into other large markets like India and Europe. But in terms of how long this is going to go on, given the questions around consumer activity in China, really don't have an idea right now.

Your next question comes from the line of Daniel Harriman with Sidoti. Daniel, your line is now open.

Thank you. Marcus, De Lyle, good morning to you both and congrats on the quarter. Just a couple of quick ones for me. First, any concerns at all about the refinancing before the end of the year? And should we think about that as a Q3 event or a Q4 event? And then finally, when we look at your viscose production, it's now down to like 3% of the sales total. So, obviously, you're managing the commodity volatility there. Is it safe to assume that that's going to continue to be a smaller piece of the revenue pie moving towards the end of the year?

Hi Daniel, good morning. Let me address the refinancing issues and where we currently stand in the process. We've been collaborating with Houlihan Lokey for a few months now, exploring various potential lenders and examining both private and public markets. We anticipate beginning to receive refinancing proposals in early September. As we evaluate those proposals and choose our preferred options, it's likely that the refinancing won’t be finalized until the fourth quarter. However, we do expect to complete this before the year ends. Regarding your question about viscose, we expect levels to remain similar to those in the first half of the year, with a projected decrease of approximately 3% in 2025 and beyond. We will continue efforts to bring that down to zero, primarily through ether sales as demand normalizes to historical levels.

Okay, perfect. De Lyle, thanks so much. It's very helpful and best of luck in the balance of the year, guys.

Thank you.

Your next question comes from the line of Dmitry Silversteyn with Water Tower Research. Dmitry, your line is now open.

Good morning gentlemen and congratulations on a strong quarter and good to see you guys swing back into the black. A couple of questions if I may. First of all, you mentioned that your paperboard business is being impacted by lower prices due to European imports. Can you talk about sort of the dynamic behind that? Why are Europeans becoming more aggressive in terms of importing their product into the U.S.?

Yes and it's, I think, no secret. The issue is just the generally weak economic conditions in Europe. And I can probably say the weak economic conditions worldwide is really driving it. So, you find the European holding boxboard producers have plenty of capacity looking for any kind of sales. And so we have been seeing imports from Europe, actually on an increasing basis here in the first half.

Okay. So, that's something that will be a longer-term issue. It has nothing to do with adjusting inventories or anything like that. That's just a concern.

No, I believe it's all generally driven by weak consumer demand in Europe. Until that improves and starts to recover, we will continue to experience that pressure.

And Dmitry, that's happened before. It ebbs and flows with, as De Lyle mentioned, the general economy in Europe.

Understood. Thank you. And then my second question is, you mentioned in your comments strong earnings for volumes, probably not to the level that you'd like to see in, but certainly getting better. You also talked about lower input costs, which I'm assuming are wood chips and some other chemicals. Typically, you can interpret these data points as being indicative of perhaps construction demand improving, given that it's a key market for ethers and your wood chip costs are inversely related to the growth in the construction market. So, am I reading this right? Are we starting to see an improvement in this important end market for you in ethers or am I reading too much into this?

Regarding ethers, we have noticed an increase in end market demand in certain areas. However, we believe that some of the rise in ethers is due to the value chain restocking. As we move into Q2, we are accounting for the increase observed in the first half that relates to this restocking. In terms of input costs, most of our key inputs have lower purchase prices compared to last year. It’s important to note that we are also benefiting from the capital investments made last year in our plants, which has led to improved material usage efficiencies in our operations that are likely to be more sustainable. Additionally, we are experiencing a positive impact on variable costs thanks to a better production mix across our facilities, making it easier to produce specialty products rather than commodities. On the fixed cost side, we have achieved significant improvements. Productivity is higher this year, especially since we had throttled back plant operations last year to manage inventories. This year, with the plants operating at full capacity, unit fixed costs have decreased. Also, you may recall that last year around this time, we announced a plan to aggressively reduce costs at our facilities. We are now seeing the benefits of those cost reductions reflected in the first half of the year and continuing cost savings that began in the latter half of 2023. That summarizes the situation on the cost side.

Okay, that's very helpful, De Lyle. Thank you for that color. And then one last question on the acetate market. You talked about continuing destocking by customers. Is the expectation still that this is going to wind down by the end of this year? Or do you now expect it to get into 2025, given that the global economy certainly isn't getting stronger?

Yes, let me make a couple of points about the acetate destocking. First, given that Jesup is sold out, we felt that there was a need to levelize the expected demand across the whole year of 2024. Previously, we had said that we would take the destocking hit in the first half, and then we'll start seeing improvements in the second half. After seeing the difficulties we would have on trying to make that happen with the plant being sold out, we worked with our customers and we leveled out that demand for the all of 2024. So, you're not going to see this huge uptick in 2024 because we essentially now have got a flat line for the whole year. More directly to your question, though, about do we think that it's going to end in 2024, the destocking is going to end in 2024. Unfortunately, we continue to see elevated inventories in Asia. And again, I think that's been indicative of the consumer weakness, principally in China, but Asia generally. And so there is a likelihood that we'll see some of the lower demand bleed off into 2025.

Understood. Thank you. That’s been helpful.

Your next question comes from the line of Sandy Burns with Stifel. Sandy, your line is now open.

Hi, good morning. Congratulations on a strong quarter in this environment. I’m curious if you can comment or perhaps break down the different factors contributing to the increased guidance compared to earlier in the year. Is this mainly due to improvements in the volume mix and heightened confidence, or is it more related to cost factors, the plant suspension, and better clarity on costs and their benefits? How would you assess the contributions to the increase in guidance?

Part of the increase in guidance is clearly attributed to the $10 million benefit from the CEWS that we recognized in the first half. Additionally, some of our customers advanced their orders to get inventory stocked before we paused operations at Temiscaming, resulting in some sales being moved forward. We also observed an increase in ether sales driven by underlying demand growth, contributing to the overall improvement. To summarize, I believe the overall increase in guidance is around $15 million to $20 million. This increase comprises the $10 million from CEWS, approximately $5 million from the rise in ether demand, and another $5 million from the advanced sales linked to the Temiscaming suspension.

Okay, great. That’s helpful. Thank you.

Your next question comes from the line of so, there is no further question at this time. I will now turn the call over to De Lyle for closing remarks.

All right. Well, thank you once again for joining our call today. We certainly appreciate your interest and support in the company. I'm very proud of the hard work and dedication that has been shown by the RYAM team and are very confident in our ability to continue to enhance our profitability and reduce our debt and leverage. I look forward to providing further updates on all our ongoing projects initiatives and value your contribution and support as we strive for the long-term success and growth of the company. We are committed to maintaining transparency and open communication. So, please feel free to contact us if you have any questions or need further information. So, thank you again for your participation.