Symbotic Inc. Q2 FY2023 Earnings Call

Thank you, Valerie. Good afternoon, everyone. Welcome to Symbotic's second quarter fiscal 2023 results webcast. Our press release and discussion today will include forward-looking statements, based on assumptions that are subject to risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements, including as a result of factors described in the cautionary statements and risk factors in Symbotic's financial release and regulatory filings with the SEC, by which any forward-looking statements made during this call are qualified in their entirety. In addition, during this call, we will discuss certain financial measures that are not recognized under U.S. Generally Accepted Accounting Principles, which the SEC refers to as non-GAAP measures. We believe these non-GAAP measures assist management in planning, forecasting, and evaluating our business and financial performance, including allocating resources. Reconciliations of these non-GAAP measures to their most comparable reported GAAP measures are included in our financial press release, which is available in the Investor Relations section of our website and is on file with the SEC. These GAAP measures may not be comparable to measures used by other issuers. Today, we will provide guidance for the third quarter, including revenue and adjusted EBITDA. We are not providing guidance for net loss today, which is the most comparable GAAP financial measure to adjusted EBITDA. We are not able to provide reconciliations of adjusted EBITDA to GAAP financial measures because certain items required for such reconciliations are outside of our control and/or cannot be reasonably predicted, such as the provision for stock-based compensation. On today's call, we are joined by Rick Cohen, Symbotic's Founder, Chairman, and Chief Executive Officer; and Tom Ernst, Symbotic's Chief Financial Officer. These executives will discuss our second quarter 2023 results, and our outlook followed by Q&A. Now, I'll turn it back to Rick.

Thanks, Jeff. Hello everyone. As I think about how to talk about and get perspective on our second quarter, it's interesting to look back two years to see the progress we have made since our second quarter of fiscal 2021. Back then, we were building individual prototype systems and, in that quarter, posted $23 million of revenue. We had a vision back then to radically transform the supply chain, and we had lots of challenges to overcome and we are successfully overcoming most of those challenges. Now just two years later, we have nine systems in full operation at multiple customer sites. We are currently deploying 28 additional systems and reporting over $0.25 billion of revenue in the quarter. So, in two years, we have grown from a company with a sub $100 million revenue run rate to one with a $1 billion-plus revenue run rate. In addition to our significant revenue growth, our quarterly results also reflect improving adjusted gross margin, improving operating margin, and additional liquidity. Our teams are working diligently to be more efficient as they keep our many deployment projects running on budget and on schedule and executing a new outsourcing strategy. We are now aggressively diversifying training and scaling up a network of supplier and contractor partners. We feel good about the progress so far and see many ways we can improve. As I said on our call last quarter, we are committed to building a team of world-class talent to help us remain a leader in transforming the supply chain. During the quarter, we added several key team members who are already making important contributions to operations. Scaling and execution are important in driving our near-term results, but we believe that constantly innovating will sustain those results over the long term. Thank you everyone for your support and interest in what we are doing. And for helping us as we realize our vision of transforming the supply chain. It's exciting to see our plans coming together and we have a long way to go, but we are making great progress. Thank you. Now Tom will discuss our financial performance and outlook. Tom?

Thank you, Rick. Second quarter revenue of $267 million grew 177% compared to a year ago, driven by incredibly strong deployment progress. We initiated seven new system deployments during the quarter and, as planned, advanced one system to full operation. We now have 28 active system deployments in process with multiple customers, an increase from 22 systems last quarter and nine systems in the second quarter of last year. Our rapid revenue growth was driven by progress on deployments, with particular strength from physical installation at our customer sites. As Rick mentioned, we are gaining efficiency in our deployments by standardizing our systems, streamlining our deployment processes, and realizing the benefits of outsourcing. Our cash and equivalents including marketable securities and restricted cash grew $17 million sequentially to $465 million, due to favorable working capital performance. We believe we have more than enough resources on hand to achieve our strong growth plans, and remain very well capitalized to execute our strategy. Recurring revenue continued to grow sequentially as deployments moved to production. We now have nine systems operating at customer sites. Over time, as system completions cascade, recurring revenue should grow to have a much higher gross margin of systems revenue, as well as becoming an increasing share of our revenue mix to provide powerful operating leverage to our business. Our second quarter adjusted gross margin increased 100 basis points sequentially. These results still reflect significant costs associated with lower-margin innovation initiatives. The burden of elevated pass-through skill costs, and costs associated with rapidly scaling our operations. Adjusted system gross margin improved by 70 basis points sequentially, after excluding $5.2 million of the $8.4 million in severance and restructuring charges that flowed through cost of goods sold. This charge was related to discontinued manufacturing activities in Montreal, where we were manufacturing robotic inbound and outbound sales and curtailed manufacturing capacity in Wilmington, Massachusetts, where we manufacture bots. Our outsourcing success enables us to continue to drive strong deployment growth, while also setting the stage for long-term cost savings and margin expansion. In the second quarter, operating expenses excluding stock-based compensation increased sequentially, as we continue to invest in innovation that can drive sustained growth and margin expansion. Finally, operating leverage improved as we achieved a 4% adjusted EBITDA loss rate compared to 8% last quarter and 27% last year. This was driven by our revenue growth and expanding gross margin. Turning to our outlook. For the third quarter of fiscal 2023, we expect revenue of between $245 million to $265 million, and an adjusted EBITDA loss of between $11 million and $8 million. We are through the midpoint of our fiscal 2023 and are excited about the second half, as we continue to transform the supply chain. We are scaling our business and innovating rapidly to deliver for our customers. We look forward to speaking with you again next quarter to provide an update on our progress and now welcome your questions.

Thank you. Our first question comes from Andrew Kaplowitz of Citi. Your line is open.

Good evening, everyone. Rick or Tom, can you give us more color into the transition outsourcing that you continue to see in terms of the restructuring charge you took? It looks like you expect to see maybe a slight improvement in losses and slightly lower revenue in Q3 than Q2. But are you experiencing in Q3 any of the impact of the restructuring? When would you expect to see the full impact of the restructuring benefit, and streamlining of manufacturing on your P&L and how much benefit could you see?

Yes. Thanks, Andy for that question. So, and as you saw, we took an $8 million restructuring charge. This included both inventories and property plant and equipment as well as $3 million related to people-related severance. So that's a little bit over a hundred full-time employees, along with a little bit over a hundred contractors. That was executed in planned four at the end of the quarter. However, we really begin seeing the benefit of those savings as we get into our fiscal third quarter. Again, those restructurings were associated with the discontinued manufacturing operations in Montreal, and then the significant curtailment of bot manufacturing in Wilmington, Massachusetts. This follows on the heels as Rick mentioned, of our successful transition of the manufacturer of all these goods to outsource partners.

Thanks. And then, I think last quarter you talked about maybe being a little more predictable in your revenue ramp, but you just beat Q2, beat the street by $50 million, and now you're predicting $10 million lower in Q3 despite your deployments continuing to rise. So, did you just somehow pull forward any revenue in Q2 or should we begin after Q3 to see more of a steady sequential increase? And I also noticed you didn't give us a backlog number if it's possible to give us that?

Our backlog remains at $12.0 billion, the same as last quarter. Our contributions match the outflows during the period, aligning with our remaining performance obligation that we plan to share in our 10-Q filing. As we scale and deploy more systems, our revenue fluctuations are becoming more stable. However, we are still experiencing rapid growth while onboarding new outsourcing partners, which means there is still significant variability in our quarter-on-quarter growth. To illustrate this, we anticipate rapid growth driven by the 28 systems currently in deployment. Looking into the second half of the year, the strongest contributions will come from the nine systems initiated in the second half of 2022. Minor timing differences in one or more of those systems can lead to substantial variations in our quarterly revenue growth. As we continue to deploy more systems concurrently, we expect these quarterly revenue fluctuations to decrease over time.

Our next question comes from the line of Matt Summerville of D.A. Davidson. Your line is open.

First, Tom, can you maybe comment on based on the successes you're having out without sourcing and the versus just when you believe the company will be achieved EBITDA positivity on a sustainable basis? And then I have a follow up.

Yes, thanks for the question, Matt. So, we are certainly encouraged with the successes we're having with our outsourcing partners and continue to work that program. As I think Rick highlighted, and I emphasize as well, we do believe that that will begin to see benefits and leverage in the near to midterm. And we continue to believe that over the long term, that while certainly, it'll help us achieve our primary goal in outsourcing, which was the ability to scale this business to a much greater scale that we think it will result in the higher long-term profitability as well. So, while we're not giving guidance. I think that consensus expectations in the street, many, many analysts are looking for profitability in Q4. So, we're not looking forward to the full year. But what I can say is that we do believe that our operating leverage is quite high. As we're able to scale revenue, we believe that we'll continue to benefit from expanding gross margins and we'll continue to see OpEx growth be moderate. And in particular, in the near term, we think operating expense growth can be curtailed significantly through the benefits of outsourcing, restructuring the plan we just put in place at the end of this last quarter.

And then maybe as a follow-up, can you talk a little bit about maybe some of the progress you're making with break pack and Symbotic and when you think those solutions will kind of be ready for game time, if you will?

We are very pleased with the progress we've made on the Symbotic project. This has been a significant technological shift for us, and while we haven't yet realized all the potential value, it will come over time. We are still releasing some software along with advancements in AI sourcing and predictive maintenance, which are all positive developments expected in the coming year. We are delighted with two major aspects: first, we have developed a fantastic new product, and second, we have successfully prototyped it and transitioned to outsourcing partners. This process will continue to enhance our offerings. Successfully managing this outsourcing without disrupting our supply chain is a noteworthy achievement over the past six months, and we are very pleased with the outcome. Regarding the break pack, I am present there about once or twice a week. It's going to be a strong product for us, although it is still in the early stages as our first prototype. We anticipate that within the next six months, we should see very favorable results from it.

I'll just add to that, Matt, that, we're still actively field testing Symbotic today too. So, we haven't announced the final general release of that product. But we have many, many of those units out actually running in product live production environments today at multiple sites, at multiple customers.

Our next question comes from the line of Mark Delaney of Goldman Sachs. Your line is open.

Good afternoon. Thank you very much for taking the questions. The first one is on the bridge from the fiscal first quarter to the most recently completed fiscal second quarter revenue is up roughly $60 million sequentially. I think EBITDA improved about $5 million. Tom, I know you called out a number of pass-through that were impacting that such as steel. Could you elaborate a little bit more on how much that was impacting both revenue and EBITDA sequentially and any other key puts and takes?

Yeah, thanks for the question Mark. So, you're right. We did see gross margin in particular improve by about a hundred basis points sequentially. So, let me address it maybe in two points versus gross margin, then I'll talk about OpEx. There are a few factors that benefited the expansion in gross margin. First recurring revenue. Margins are improving, and recurring revenue is increasing as new deployments are watering down. Still, while it's still significantly above the 10-year average, it was actually a modest sequential benefit, so that actually was a part of the 100-basis point expansion as well. And finally, while we are still experiencing 700-basis points of impact from rapid growth and innovation projects in our gross margin that are actually headwinds when we have talked about consistently. Quarter-on-quarter, those are our dimension as well. So, all three of those factors were directionally moving in the right way. OpEx increased by about $7 million which goes counter to the overall EBITDA contribution margin. And as we think about OpEx, a couple of factors there. First, the restructuring plans we put in place really didn't have a material financial impact in the fiscal second quarter. Those will begin betting for this and earn interest in Q3. Also, if you recall, when we talked about the second quarter, we had a lot less project and other favorable work in the quarter. We had some more of that just projects and variable types of activity in the fiscal second quarter. We are also continuing a long-term plan upgrade to transform our talent overall. And so, we are seeing a little bit higher average cost per employee, in particular as we look at the transformation of our workforce, we have had a material shift towards technical talent, and that was particularly strong in the second quarter.

Thank you for all the helpful color, Tom. My second one was on the backlog. And thank you for giving the update on where it stands in total. Could you comment anymore on the composition of it in terms of what kind of gross margin you might think is embedded in the backlog or relative to where you are running? And when you think about the backlog, how much is coming from hardware relative to some of these subscription elements and software? Thanks.

Sure. Thanks, Mark. And as you know Mark, our backlog disclosure, we tied to our accounting remaining performance obligation disclosure. So, therefore, our backlog only includes contractual commitments, which means that it's heavily populated by systems revenue, as some of our recurring revenue sources will have annual or only partial 10, 15-year type of contributions. And first part of your question, Mark?

Yes. It's a couple of things, Tom. But anything you can share on the gross margin embedded in the backlog relative to where the company is currently running, if you are able to comment there?

Yes, thank you. Overall gross margin is 18.3%. We expect that the structural gross margins reflected in our backlog are closer to 30%. The difference between the 18% and the high 20% is mainly due to three factors related to your first question, with the most significant being the financial impact on our cost of goods sold from our rapid growth and shift to outsourcing, as well as our innovation projects that are front-loaded in terms of revenues in that backlog. The close to 30% structural gross margin applies only to systems revenue. For the recurring component of that backlog, we anticipate structural gross margins to be well above 50%, in the 60% range. When combining these two, the result falls in the mid to high 30s.

Our next question comes from the line of Nicole DeBlase of Deutsche Bank. Your line is open. Your line is open.

Maybe just starting on the restructuring. So, with the continued focus on outsourcing, should we expect more of these restructuring charges to come, or do you think this was more of a one-off, and any color at all on quantifying the benefit that we should see from what you spent in the quarter over the next several quarters? Thanks.

Yes, thank you for the question, Nicole. As I mentioned in my prepared remarks, the restructuring involves completely stopping the manufacturing of our cells in Montreal and significantly reducing it in Wilmington. This represents a large part of our manufacturing activities so far. We are still working on our outsourcing initiatives across various operations, so there may be more changes in the future. We will discuss those when the time is right.

Got it. Thanks. And then, just shifting to the steel dynamic. So steel inflation has continued to take a bit higher year-to-date. Is the expectation that this quarter is kind of the maximum benefit that you should see from steel? You talked about it being a sequential good guy, like does it then turn into a sequential bad guy in the second half of the year? Thanks.

Thank you for the question, Nicole. As you mentioned, the steel chart has shown significant volatility. Based on current observations, our steel purchases are primarily weighted in the 10 to 12 months leading up to actual installation, which is when we generate most of our revenue. Therefore, we anticipate that our maximum benefit will occur in fiscal Q4 before the recent uptick starts to introduce some challenges. Predicting future movements is difficult due to the inherent nature of these factors. However, one advantage of our business model is that it allows us to mostly pass these costs onto our customers, ensuring that our profit margins remain predictable, despite some impact on gross margin percentages in our reported results.

Our next question comes from the line of Jim Ricchiuti of Needham. Your line is open.

I have a question about gross margins. You mentioned that there could be more positive factors affecting gross margins. I'm curious about the progress with your outsourcing partners. Are you making sufficient progress early on that we can expect this to be beneficial in the next one to two quarters, or are there still additional costs involved in ramping up these outsourcing partners?

Thank you for the question, James. We do anticipate more positive trends as we move forward. However, we still have a considerable amount of work to do with our outsourcing partners. While we are actively outsourcing across our entire value chain, we are continuing to seek additional partners in each area. We believe that our collaboration and communication with these partners will enhance our joint operations over time. This is expected to provide opportunities for improving our efficiency over several quarters rather than just weeks. Additionally, we are now able to discontinue some of our own operations thanks to the confidence and capacity we've built with these partners, which leads to immediate benefits. Overall, it's a mix, Jim, but we have a significant roadmap of opportunities ahead of us over many quarters.

And I don't know if you want to comment on this, but what I'm thinking also trying to understand is the rate at which you're scaling, how many system deployments would you anticipate advancing in the current quarter?

Yeah, so, we initiated seven system deployments in the last fiscal quarter. We just reported in our fiscal second quarter. We don't tend to guide for the one quarter four. I do think that there can be quarter-on-quarter variability in those numbers. So, as we think about multiple quarters over time, we look to grow that number. But Jim, you should assume that there will be some ups and downs in terms of quarters and we feel like the seven we did this quarter and the six we did last quarter is an exceptionally strong quarter relative to our growth plans.

Our next question comes from the line of Mike Latimore of Northland Capital. Your line is open.

Just in terms of supply availability is that improving, is there further improvement that could occur? Can you just give some tone around that?

We do continue to believe that the supply chain environment is improving. It is still not a normal supply chain environment, so we are still clearly battling things that would've been atypical pre-COVID in terms of canceled orders and things like that. In addition to perhaps a supply chain environment getting better, we are a much more formidable buyer, so we're getting the attention of suppliers and partners, and so those we think as well are continuing to improve our ability to execute.

And then in terms of the future plans on outsourcing, is the main focus here adding more partners to current sort of functional categories or are there other functions you're looking that you will eventually outsource?

No. We have mostly chosen our partners. We have partners that will assist us with site installations, partners that will support us in building Symbotic, and partners that will help us create the cells. We have effectively implemented our outsourcing strategy, and these partners will continue to improve and support our innovation. The last two quarters have been significant for us in accomplishing this task.

And so, we have got the functions covered, Mike, and now our goal is to deepen the bench in broaden events.

Our next question comes from the line of Greg Palm of Craig-Hallum. Your line is open.

Yes. Thanks for taking the questions. Here, I wanted to follow-up on the outsourced commentary, now that you are several more months into that. Can you just comment on how that's translating the speed cost as you have shifted more of that to partners? And I guess I'm asking relative to maybe what your earlier prior expectations was?

Greg, it has enabled us to continue to execute to our plan. So, we are seeing our targeted deployments set with a little bit faster timeframe than we were executing to the systems that we are just completing for example. And as we have engaged with these partners, and talked about the kind of structural improvements both in terms of processes and collaboration, but also in terms of technology, we are further encouraged to that the opportunity to compress deployment timeframe is real tangible. It's something that we are going to work on together over the coming multiple quarters to years.

Okay. And then just following up on an earlier question, about EBITDA profitability. Tom, you commented on, I guess consensus estimates for Q4, and I guess my question is, were you effectively blessing those or what was the rationale for commenting on those directly?

Thanks for the question, Greg. No, we are not providing full-year guidance, but I wanted to give some context. We believe that as revenue scales, we are in a strong position to achieve high operating leverage.

Our next question comes from Joe Giordano of Cowen. Your line is open.

Yes. Rick, just given your comments about break pack and you are making good progress there planning over the next six months, how should we think about, like, R&D levels post 2023? Like, could we see a step-down in spend now that you have kind of gone through Symbotic and you are going through break pack to a large extent now? Like, how should we think about the required levels to keep the organization on the cutting edge?

Yes, I don't think you will see a reduction in R&D. I think we will look to pull money out by just being more efficient with the organization, but we are going to continue to fund R&D, simply because we have a lot of great products that we haven't talked about, that are in the works that are going to help us a lot. And so, this is just a great innovative lab here and we continue to recruit really great talent. So, the answer to your question is no, I don't think you should expect irony to drop.

I'll add to that, Joe. You're right that, break pack along with Symbotic are very significant projects in our innovation budget. So, as we complete those projects, we have a big war chest to do some of the other things that we haven't talked about yet that Rick mentioned looking forward.

How should I consider additional aspects, such as when you have the final output of Symbotic and the process of getting that output onto a truck? Are there forklift drivers involved, or is it an automated forklift? How do you assess what equipment or services we should provide versus what should come from a preferred partner, like an autonomous forklift? More broadly, how do you determine which components should be part of Symbotic and which ones should be handled by Symbotic partners?

We are focused on fostering strong partnerships at Symbotic to maintain control over as much software as possible within a warehouse. If we can collaborate with a partner who offers an Automated Guided Vehicle or an Autonomous Mobile Robot and integrate our software with theirs for loading trucks, it benefits our customers and enhances value. Innovation is central to our culture at Symbotic, and often I couldn't find partners to meet our specifications, which drove me to develop solutions independently. The significant value lies in areas where we are creating products that align with our high standards, and we will keep pushing forward with those innovations. While I can't disclose specifics, we are working on some intriguing products that will enable us to develop compelling systems.

And last for me, just to clean up, are there any lockups left at this point? Stocks been over 12 bucks for the required time. Now I'm just curious if any, if there are any lockups remaining inclusive of like you guys on the senior team.

There are. So, some of the affiliated shares are still locked. But everything is unlocked saved for board members, Rick and family trusts and myself and we're our lockup is in effect until a year post the public listing.

Our next question comes from the line of Rob Mason of R.W. Baird. Your line is open.

Good evening. Thank you for taking my question. I wanted to clarify the backlog, which you mentioned was flat quarter-to-quarter, while you reported $267 million in revenue. I'm curious about what the offset was. Was there a new customer involved or did you have additional systems from existing customers? What accounted for the flatness?

Yes, thanks for the question, Rob. So, no new customers booked in the quarter. What we're seeing is a higher variable consideration than what we contemplated when we entered the period.

As a follow-up, you've brought on many partners over the last two quarters. Have you observed any of them completing projects or deployments to assess their timelines, including their ability to commission and finalize projects? What are your thoughts on that timeframe?

Thank you, Rob. This highlights that, about a year ago, we expressed our intention to accelerate our outsourcing initiatives, and we have achieved full outsourcing across most aspects of our value chain. However, this was not the beginning of our outsourcing efforts. We have had significant components outsourced from the outset, like our lift systems, for instance. Our experiences in these initial phases have been successful, characterized by strong teamwork with our partners. In this latest phase, we have finalized a substantial part of the outsourcing cycle with them. We have a proven track record of successful outsourcing from initiation to completion, followed by one or two years of positive results.

Our next question comes from the line of Derek Soderberg of Cantor. Your line is open.

Thanks for taking my questions. Sort of related to the question just asked, just as regarded, just looking at the system deployments initiated this quarter is the expectation that those deployments today will sort of reach live production faster than maybe those initiated six months to 12 months ago? Just curious if you can update us on your progress shrinking those deployment timelines and if you can quantify any of that progress, that'd be great.

Just to give you a sense, Derek, so, as the supply chain environment got tighter looking backwards, we actually extended the timeframe a bit. So, we got an earlier start on procurement. Since that timeframe, we've been able to pull in a couple of months. Part of that's related to partners and part of that's just the efficiencies that we're able to gain in getting new systems out in the field. So short answer to your question is yes, the systems we're initiating in this period we're targeting a shorter deployment than the ones we initiated say six months to 12 months ago.

Got it. That’s helpful. And then I was wondering if you could talk a bit about your ability to add another large customer this year. Lot of progress on concurrent deployment. Sounds like you're happy with the outsourcing partners. Do you think you guys have the ability to add sort of another multi-billion-dollar customer this year and are those some agreements? Are you actually actively pursuing those agreements right now?

Thanks, for the question, Derek. So, as we added UNFI as a customer and discussed that last period, our business plan continues to be here in the near term to add new customers by the ones or twos per year. So, we are continuing to evaluate. We didn't add one in this quarter, we're reporting now. But we are continuing to look at that and do expect that here in the near-term one to two customers per year.

Thank you. Our next question comes from Chris Snyder of UBS. Your line is open.

Thank you. When we see the implied improvement in fiscal Q3 margins, is this primarily driven by better gross margin? And with that, how far do you think the business is from hitting that 30% target gross margin level for systems? Because it seems like price cost pressure is going away over the next couple of quarters, but I'm not sure if a higher level of scale is needed to get to that number.

Yes. Thanks for the question, Chris. So, we think that we will continue to see gross margin expansion, as we look forward over quarters. And that is consistent to improving gross margins is implicit in our outlook. But we also do expect that we will see some efficiencies in our OpEx primarily from the benefit of the restructuring program that I discussed in my prepared remarks. So that's the real fundamental basis we are seeing the bit of operating leverage on slightly lower revenues implicit in our guide. Thinking about structural gross margins, we think that, that's an effort that will take us several quarters to a couple of years to really get the benefit. Here in the near term what we are focused on is driving strong long-term profitability. And so, where we think we can drive the greatest present value of our business by achieving scale and getting in and penetrating the market. And while we are doing that, we are focused on smart execution and ramping profitability over the course. So, we want that balanced approach of maximizing long-term profitability and scale while executing with expanding margins.

Yes, Rick can comment too at a high level for these large customers. Every distribution center we go into is fully mechanized with conveyance-based automation. So, generally, we go in and we are replacing a highly functioning world-class conveyance system.

I mean most of the systems we are replacing are 20 years old. And so, most of the customers we have look at everything in the world. And so, they have had some type of automation. What of course is exciting for us is that, we believe we are the next generation of that automation and these systems have a long life once installed. So, the focus has really been making sure these customers are just frankly happy with what we are selling. And then we think we can sell a lot more.

Thank you. I'm showing no further questions at this time. I'd like to turn the call back over to Jeff Evanson for any closing remarks.

Thank you, Valerie, and thank you everyone for joining our call this afternoon. We appreciate your interest in Symbotic, and we look forward to seeing you at our Investor Day on May 18th in Tampa or when we are out visiting with investors. Thank you. Have a good day.

Thank you. Ladies and gentlemen, this concludes today's conference. Thank you all for participating. You may now disconnect. Have a great day.