Greetings, and welcome to the VSE Corporation First Quarter 2023 Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Michael Perlman, VP of Investor Relations and Communications at VSE Corporation. Thank you, Mr. Perlman, you may begin.

Thank you, and welcome to VSE Corporation's first quarter 2023 results conference call. Leading the call today are John Cuomo, President and CEO; and Steve Griffin, Chief Financial Officer. The presentation we are sharing today is on our website and we encourage you to follow along accordingly. Today's discussion contains forward-looking statements about future business and financial expectations. Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties, including risks described in our periodic reports filed with the SEC. Except as required by law, we undertake no obligation to update the forward-looking statements. We are using non-GAAP financial measures in our presentation. The appropriate GAAP financial reconciliations are incorporated into our presentation where available, which is posted on our website. All percentages in today's discussion refer to year-over-year progress, except where noted. At the conclusion of our prepared remarks, we will open the line for questions. With that, I'd like to turn the call over to John.

Thank you, Michael. Welcome everyone and thank you for joining our call today. Before we begin, I would like to review yesterday's announcement, one that represents a major milestone in our company history. Let's go to slide three of our conference call presentation to review the transaction in more detail. Yesterday, we announced the sale of the Federal and Defense segment. This transaction represents a defining moment for VSE as it streamlines and repositions the business into a two-segment pure-play aftermarket business supporting Aviation and Fleet markets with MRO and distribution capabilities. More specifically, the company entered into a definitive agreement to sell the Federal and Defense business segment to Bernhard Capital Partners for up to $100 million in total cash consideration, including a $50 million cash payment and an earn-out of up to $50 million subject to the achievement of certain milestones. The transaction is expected to close in late 2023 to early 2024 and is subject to customary closing conditions and approvals, including the creation of a legal entity with appropriate security clearances to support the transition of the business to Bernhard Capital Partners. The net proceeds from the transaction are intended to be used to reduce borrowings, provide balance sheet optionality, and execute strategic inorganic opportunities. The decision to sell the business concludes the strategic review undertaken by the Management Team and Board of Directors in response to market and business dynamics with the goal of driving shareholder value. With this repositioning, VSE will become a 100% pure-play aftermarket business. This allows us to do three things: First, simplify the company to a two-segment business focused on Aviation and Fleet with distribution and MRO service offerings. Second, tailor capital allocation strategies to the high-growth Aviation and Fleet aftermarket segments to drive long-term shareholder value. And third, deepen operational focus and accountability and increase our agility to meet customer needs. We believe this creates a distinct and compelling aftermarket services investment profile, one that will appeal to a broader and deeper investor base. We have found our Federal and Defense business a strong home with Bernhard Capital Partners, a high-quality private equity sponsor, one who will enhance the business strategy and build upon a rich 63-year history of government and defense mission-critical support. Let's now move to slide four, where I will provide an update on the business and the strong first quarter performance by our Aviation and Fleet segments. We are off to a tremendous start to the year, as strong market tailwinds combined with operational execution and service excellence resulted in double-digit year-over-year revenue growth in both our Aviation and Fleet segments. Within our Aviation segment, we continue to see robust demand across all end markets and particularly strong activity and growth in MRO, driven by market share gains and strong flight activity. We also benefited from expanded MRO capabilities and new programs in both our Kansas and Miami repair facilities. During the first quarter, we completed the acquisition of Precision Fuel Components, a provider of MRO services for engine accessories and fuel systems, and that business integration is underway with the expectation for completion in the second half of this year. We experienced growth and performance excellence within our strategic distribution programs, including the ramp-up of the Asia Pacific geographic expansion of our 15-year distribution agreement with Pratt and Whitney Canada. Within our Fleet segment, we opened our new 450,000 square foot distribution and e-commerce fulfillment center in Memphis. This new facility supports growing demand for aftermarket products across our commercial fleet and e-commerce customers. The facility launched in January with both the new IT ERP and a new warehouse management system. Parts are shipping to customers with increased output daily as we drive to scale the business to contribute approximately $50 million in 2023 revenue. The Fleet segment also benefited from strong Postal Service demand in the first quarter due to the delay in legacy vehicle retirements and an increase in the overall installed vehicle base. Both the Aviation and Fleet segments continued to gain market share in the fragmented markets in which they serve and to deliver operational excellence, all while delivering improved results. Now let's move to slide five. We delivered strong first quarter results highlighted by a 10% increase in revenue, a 46% increase in net income, and an 18% increase in adjusted EBITDA compared to the prior year. Our Aviation segment posted a record quarter with revenues of $113 million, a 21% increase year-over-year with balanced growth across both commercial and business and general aviation customer segments and both distribution and MRO revenue channels. Adjusted EBITDA for the segment of $19 million increased by 75% versus the prior year, yet another record for this business segment. Aviation segment adjusted EBITDA margin increased by approximately 510 basis points year-over-year to 16.8%. Aviation segment adjusted EBITDA represented 72% of total company first quarter adjusted EBITDA versus 49% in the same period in the prior year. Our Fleet segment also achieved record revenue in the first quarter, increasing 12% to $75 million in the first quarter, driven by growth across all end markets. Commercial fleet revenue increased 17% year-over-year and now represents 43% of total fleet segment revenue, a 160 basis point increase over the same period in the prior year as we proactively diversify our customer base. As planned and previously communicated, fleet segment adjusted EBITDA declined 7% on a year-over-year basis driven by startup costs supporting the newly launched distribution facility. Finally, our Federal and Defense segment contributed $67 million of revenue in the first quarter, down 6% compared to the same period in the prior year. Federal and Defense adjusted EBITDA declined primarily due to the continued shift from fixed price to cost-plus contracts along with contract expirations. The strong first quarter results continue to validate and support VSE’s strategic shift to higher growth, higher margin commercial MRO, and distribution capability offerings. I will now turn the call over to Steve for a detailed review of our financial performance.

Thanks, John. I will now turn to slides six and seven of the conference call presentation to provide an overview of our first quarter performance. We had a strong first quarter in both our Aviation and Fleet businesses, driven by increased demand in end markets. We recorded $255 million of revenue, an increase of 10% versus the prior year period. Aviation recorded another record quarter, driven by organic growth from the execution of new distribution awards, continued recovery of commercial MRO activities, and strength in commercial and business and general aviation end markets. Fleet segment growth was supported by commercial fleet and e-commerce fulfillment together with higher contributions from the United States Postal Service. Federal and Defense segment revenue was lower driven by the completion of certain U.S. Army contracts, partially offset by growth in the U.S. Navy programs. We generated $26 million and $11 million of adjusted EBITDA and adjusted net income, an increase of 18% and 16% respectively. Now turning to slide eight, we'll cover our Aviation segment results. Revenue increased 21% versus the first quarter last year to a record $113 million; both distribution and MRO businesses grew by 14% and 43% respectively. Distribution growth was driven by a combination of new business and improved end market activity. MRO benefited from both higher commercial flight activity as it continues to track towards pre-pandemic levels and expanded capabilities in our core repair facilities. Aviation adjusted EBITDA increased by 75% in the quarter to $19 million, while adjusted EBITDA margins increased by 510 basis points to 16.8%. The improvement in profitability was driven by the implementation of new program wins, robust MRO activity, and favorable mix and price. Within our Aviation segment, we are narrowing our full-year 2023 revenue guidance range from 7% to 15% to 10% to 15%. We are increasing our full-year adjusted EBITDA margin guidance from 12% to 14% to 13% to 15%, driven by increased higher-margin product mix, continued MRO activity, and strong commercial customer demand. Now turning to slide nine. Fleet segment revenue increased 12% versus the first quarter last year to $75 million, driven by higher commercial sales and e-commerce fulfillment, along with increased USPS demand. Total commercial revenues were $32.5 million in the first quarter, an increase of 17% versus the prior year period. U.S. Postal Service revenue was up approximately 14% versus the first quarter of last year, which is included within our other government channel. Segment adjusted EBITDA of $8 million decreased by 7% and adjusted EBITDA margin declined by 220 basis points versus the first quarter of 2022. Our profitability was lower as a result of $950,000 of startup-related expenses for our newly launched Memphis, Tennessee facility at a higher mix of commercial customers. For the full-year 2023, we are reaffirming our revenue growth expectations of 12% to 20% year-over-year, driven by contributions from commercial revenue and the recent Memphis facility launch. We also continue to expect adjusted EBITDA margins to be between 11% and 13% and anticipate margins to continue to be at the lower end of the stated range in the first half of the year as we ramp up production at the new Memphis facility. Now turning to slide 10. Federal and Defense segment revenue decreased 6% versus the first quarter of last year, driven by the completion of certain US Army contracts, partially offset by growth in U.S. Navy programs. Federal and Defense adjusted EBITDA of $600,000 in the first quarter was down 83% year-over-year. Adjusted EBITDA margin declined 430 basis points on a year-over-year basis to 1%, driven by contract mix and completions. Between now and the closing of the previously announced sale of the Federal and Defense segment to Bernhard Capital Partners, we remain focused on driving shareholder value and preparing for the carve-out of this business. You should expect to see the business moved to discontinued operations as it is held for sale. Between now and the consummation of the transaction, the VSE and BCP teams remain focused on winning new awards to drive longer-term value for the business. Turning to slide 11. At the end of the first quarter, we had $93 million in cash and unused commitment availability under our $350 million credit facility. For the quarter, we used $49 million of operating cash flow and $52 million of free cash flow driven by previously announced initial inventory investments to support the successful execution of recent aviation distribution awards and commercial growth at our Memphis distribution facility. To date, we have spent $40 million of our estimated $70 million to launch these two initiatives and expect the remaining $30 million to be paid in the second quarter. At the end of the quarter, we had total net debt outstanding of $351 million and trailing 12-months of adjusted EBITDA of $96 million. Net leverage was 3.7 times at the end of the first quarter. We still anticipate net leverage to approach 4 times in the second quarter before improving in the second half of 2023 through improved profitability and free cash flow generation. With that, I will now turn the call back over to John for his final remarks.

Thank you, Steve. As we enter the next phase of VSE's transformation, we are excited about the opportunities for our Aviation and Fleet segments and for all that lies ahead for our Federal business with Bernhard Capital. Our focus remains on driving sustainable, profitable growth while enhancing the operating performance of these two businesses. I would like to conclude our prepared remarks by reviewing our key priorities on slide 12. First, to complete the sale of the Federal and Defense business, the sale will allow us to simplify our operations and drive even greater focus on addressing the distinct needs of our two core businesses, Aviation and Fleet. During the transition, we plan to ensure a smooth and successful hand-off for our employees and customers to Bernhard Capital Partners. Second, to reposition the business into two segments focused 100% on aftermarket distribution and MRO services supporting Aviation and Fleet customers. Third, to expand our full-service unique product distribution in MRO capabilities within high-growth, underserved portions of the aviation aftermarket. We remain focused on offering a bespoke solutions-oriented approach that addresses the ever-changing needs of our customers. Fourth, to drive commercial growth while supporting legacy programs within our Fleet business. This includes scaling our newly launched distribution and e-commerce fulfillment center to address robust commercial fleet customer demand and support both legacy and new U.S. Postal Service Vehicles. And finally, to deliver second-half 2023 positive free cash flow, driven by disciplined cash management. I'm incredibly proud of what the team has accomplished and how they serve our global customers each day. And I am excited about the opportunities ahead. Operator, we are now ready for the question-and-answer portion of our call.

Thank you. We will now be conducting a question-and-answer session. Our first question comes from Michael Ciarmoli with Truist. Please go ahead.

Good morning, everyone. I appreciate you taking my questions and it’s great to see a strong start to the year. John, considering the impressive results and the increased guidance, could you explain what has changed in the last couple of months? I might be nitpicking here, but while you reported solid aviation growth and strong EBITDA margins, it appears that the guidance suggests a decline from current levels. You mentioned improvements in end markets, but can you provide some insight into what transpired during the quarter and how you formulated this guidance for the remainder of the year? It seems like the margins may be expected to decrease to around the mid-13% range to align with the lower end of the forecast.

Sure. Steve, you want to talk a little bit about guidance, and then I'll talk about the market.

Sure. Michael, when we reported in the first quarter, we noted our expectations for end-market activity were either overly optimistic or pessimistic. However, through the first quarter, we have seen stronger results, particularly in business and general aviation. Additionally, our MRO shops have performed exceptionally well, with nearly a 40% increase in revenue driven by increased demand that has contributed to margin improvements across the business. Another positive factor, compared to our previous expectations, is the benefit we've experienced from product mix and pricing. As we start the year, we've had the opportunity to optimize pricing, which has supported our performance in the first quarter and may begin to stabilize as we move into the second half of the year. Consequently, we anticipate lower margin performance as we progress. Nonetheless, I am very pleased with how the business is performing and look forward to seeing how it develops throughout the year.

Got it. And then, John, maybe you want to maybe talk about the strength of the market?

Yes. So, from a market perspective, I think that a couple of things. I think the business in general aviation is continuing to perform strong, our MRO operations are quite robust, and backlog is strong, and the year has started out very strong. As we've continued, we've stated over the last two years as we saw commercial MRO start to recover, we would see that margin inflection point in the business. And I think that's why you say what really happened, that's a piece of it. And then candidly prices are high, I mean, I think we were all at a show a few weeks ago, and you saw that level of activity and discussion around price, which is something that people don't continue to talk about, but there obviously is an element of that that drove some of the margin improvement in the quarter.

Got it. And then you called out I think in the prepared commentary just maybe, kind of, some pickup expanded capabilities out of Miami and Kansas, did that contribute meaningfully in the quarter? Are you picking up share in certain areas with those capabilities?

Yes. More in Kansas, its share. We've got some work in Miami that we launched initially, but I wouldn’t say it's material to the quarter yet. You'll start to see more of that pickup back end of ‘23 or early into ‘24 and we announced that exclusive agreement with Honeywell to repair some avionics, but in our Kansas facility, we did have some share gain and a new program that also helped contribute to the strong quarter.

Understood. I have one last question before I step away. Steve, you mentioned cash and noted that the inventory investment suggests cash will be under pressure next quarter. Looking ahead, how do you view normalized cash conversion for the business? Given that you have distribution, there will always be investment in and carrying of inventory, which might make it challenging to convert at 100% or more. What should we expect for longer-term cash conversion in this business?

Yes, I think it's right to point out the distribution nature of the business and what I would say is, this year is an anomaly because if you remember the $70 million of investment, $50 million of it is tied to the new facility launch for Memphis, which is very much so something that we will not need to repeat in the future as we grow that business more stable going forward. We haven't necessarily given guidance yet as to which you should imply for longer-term cash flow conversion. But what I would say is that as we start to gain scale, we expect to be able to generate strong free cash flow on the existing investments in the business in the last three years of investment, whether it be in the Aviation business or in the Fleet business are not indicative of what we've expected to do on a go-forward basis because those were such sizable investments, but we will remain opportunistic as we seek opportunities to grow distribution, especially in spaces where we believe we can get strong margin profile going forward.

Perfect. Thanks, guys. I'll jump back in the queue.

Thanks, Mike.

Our next question comes from Ken Herbert with RBC Capital Markets. Please go ahead.

Hey, good morning, John and Steve.

Good morning, Ken.

Good morning.

Hey, nice quarter. I wanted to maybe first start on the Fleet segment. It seems like a bit of an opposite discussion relative to Aviation; the guidance implies some gradual margin improvement. How do we think about margins within Fleet sequentially into the second quarter, do you see sort of much acceleration there? And then how does this progress through the back half of the year?

We aimed to be quite clear about the current margin and the expenses associated with launching the new facility. In the guidance range of 11% to 13%, we indicated that for the second quarter, you should anticipate being towards the lower end of that range, with expectations for improvement towards the higher end by the year's end. This provides a framework for your expectations. Specifically regarding the new facility, we have personnel and new systems that are just being initiated, so completing training and getting our employees fully operational will help us scale and grow revenue, which will enhance our earnings profile in the latter half of the year. This will significantly contribute to margin improvement in the business. Additionally, there's a factor of commercial versus other government channels affecting the product mix. Overall, you can expect that the improvement from the Memphis facility will lead to better margin rates in the second half of the year.

Okay, very helpful. As we consider the Memphis facility and the additional $50 million in revenues, what is the long-term outlook regarding the utilization of this facility? How much more potential growth exists within the current setup heading into 2024? Additionally, how should we evaluate the run rate at the end of the year, given the investments and growth anticipated this year related to the facility?

Yes, Ken, we discussed this with our Board yesterday. I would estimate that we are utilizing about 20% to 25% of our capacity without accounting for weekend and night shifts. Therefore, there is significant potential for growth. Our immediate focus is on scaling up. The demand is present, and it’s essential that we perform well, especially in the aftermarket e-commerce segment, where most orders are booked and shipped on the same day. The quality of our performance is crucial. As I mentioned in my prepared remarks, we are actively managing demand and concentrating on increasing it each day as our teams are able to handle the workload.

That's great, very helpful. And then just, John, if I could, finally, on aviation, as you look at either within the Business GA market or commercial transport and you look at your distribution business, are there any concerns that inventory levels at either airline or Fleet levels could be inflated? Just as a result of a lot of the risk aversion by your customers to the supply chain pressures and disruptions and everything we've seen? And that then could we maybe see some risk to some of the distribution volumes, if things ever do slow on aviation, or how would you think about or talk about inventory levels at your customers within Aviation?

Yes, I think it's interesting, I had a lot of these conversations at the MRO Show a few weeks ago. I think for our specific business and our products, we don't see that. We're very focused on higher-end technical products that are expensive, and our customers are not heavily stocking the products. The second thing is, our performance has been so strong and stronger than some of the incumbents, and which we've taken the business from that it's also allowed some of our airline and aftermarket customers to destock a little bit lower their inventory levels. So, we don't see that as an issue where we need to focus is making sure that the supply chain allows us to continue to get the products and that we're stocked appropriately to manage the demand.

Excellent. Alright. Well, nice quarter, and great news on the divestiture. Thanks, guys.

Appreciate that, Ken. Thank you.

Our next question comes from Louie DiPalma with William Blair. Please go ahead.

Good morning, Louie.

Good morning to you, John, Steve, Michael, and Tarang. For you John, with the defense division pending sale, are you still interested in any aviation aftermarket services specific for the defense vertical, and does the divestiture also include the Heico special services from assets that you acquired a few years ago?

Yes. That was Heico special services, not Heiko. The business involves the KC-10 heavy maintenance MRO program and is part of our Federal and Defense business based on past performance and our team. Currently, our Aviation business focuses on MRO and distribution, primarily in commercial, business, and general aviation. We do support Defense customers within our operations. While it's not the core aspect of our business, they are our customers, and we plan to continue serving those markets in our existing aviation operations.

Great. And either for you, John, or Steve. Should this deal with the potential $50 million or $100 million in proceeds increase your appetite for M&A post-close?

Absolutely. As we've previously stated, our Fleet business is highly focused on scaling our new distribution facility and expanding our commercial and e-commerce operations. We see a significant pipeline from the organic investments we've made in that sector, and we also have numerous inorganic opportunities in aerospace, particularly in distribution and MRO. Identifying the right assets that align with our business is crucial. We currently have an active pipeline of potential acquisitions.

Great, great. And one final one is the difference between the $50 million in consideration and the $100 million mostly predicated upon renewing the Navy foreign military sales contract, or are there other important milestones that we should be paying attention to?

Yes. Louie, we're not going to necessarily publicly state all of the different milestones, but I think it is correct to state that the earn-out is tied to milestones associated with new awards, but at this point, I don't think we're ready to share the details of it. We're going to be happy to share more as time progresses here and we work through the process of getting to closing and setting up the entity as John referenced.

Excellent. Thanks, Steve, John, and everyone.

Yes. Thank you, Louie.

Thanks, Louie. Good to hear from you.

Our next question comes from Jeff Van Sinderen with B. Riley Securities. Please go ahead.

Good morning, Jeff.

Good morning, everyone, let me add my congratulations as well. Maybe you can speak a little bit more about what drove the strength of the USPS business, do you see a sustainable trend for growth there? And then maybe just comment on the outlook for the new Gen vehicle area?

The strength of the USPS can be attributed to two main factors. First, the delay in the delivery of the NGDB until 2024. Second, the fleet size has increased and is projected to continue growing. We are currently assessing the new installed base of vehicles and will provide more details in the next call regarding the expected numbers and percentage increase once we gain further insights from the Postal Service customer. We anticipate growth in the installed base, slower retirements, and while we hesitate to label it as a sustainable growth trend, we view this business as an annuity-type operation and are pleased to see such a strong quarter from the customer.

Okay, good. And then just kind of wanted to get a sense, I guess of what's left to do on the integration of Precision Fuel at this point?

So, yes, we acquired the business at the end of January, and as we've discussed, our integration model is a fully integrated model, so integrating the core home back office and full system integration. So, the systems integrations we kind of take the first 90 days to learn the business, learn the capabilities, learn how they go to work, rather than kind of forcing them into our systems that work has been done and I would say probably in the third quarter, you'll see the systems be fully integrated.

Okay. And then, just wanted to circle back and don't need to press on this, but just as we think more about potential acquisitions, particularly in the aviation area, now that you've got the FDA's decision somewhat behind you. Are you seeing it get easier or harder to come to terms on potential deals, I guess, any thoughts around that?

I believe that the market is more robust than it was a year ago. I think there was an element of waiting for commercial aviation recovery, I also think as a strong public company buyer, someone with a team, who has a history both at this company and at the company that we've worked on in the past of transacting in a fast and efficient manner and providing deal certainty in uncertain markets like today, it gives us an advantageous position in this market.

Okay, great. Thanks for taking my questions. I'll take the rest offline.

Thank you. Speak to you later.

Our next question comes from Josh Sullivan with The Benchmark Company. Please go ahead.

Hey, good morning.

Good morning, Josh.

I mean, obviously, we hear a lot about tight MRO markets broadly, what do VSEC slots or turnaround times look like between PG&A in the commercial aftermarket at this point?

We don't really have slotting in the traditional sense. It's not comparable to a full aircraft or engine coming in since we focus on smaller components. Our turnaround times are in line with industry standards, typically ranging from 15 to 30 days. Our operations are quite busy, and that's contributing to the opportunities we're pursuing. We are pushing a lot of throughput through our facility, which is reflected in the 40% growth you've observed. Overall, while the environment is tight and our shops are busy, our turnaround times are exactly as we anticipate.

And then just on the Memphis distribution facility maybe where you had a schedule and maybe what's taking a little more thought.

I would say we're right on schedule. We implemented an ambitious plan. Last year, we recognized that we had reached capacity, likely in the first quarter. By the second quarter, in May, we decided to launch that facility; at that point, we had not yet chosen a location. After conducting a full assessment and study, we selected a location, got it operational with two new IT systems, started managing the inventory, and began shipping products in January. It was a challenging timeline that the team has managed exceptionally well, and I believe we are on track.

Got it. And then just on the divestiture, how much of a cash usage was the Federal business, less or maybe over the last 12 months?

It's not that big of a cash usage per se. I mean you can look at the overall profitability of the business and just get a sense for how quickly it falls down, it's not that heavy of a balance sheet, certainly by comparison to the fleet business and aviation business, which obviously carries inventory. So, I wouldn't necessarily think of it as a significant drag over the last 12 months or so. We're excited about that business having a really strong partner now with BCP, where they can kind of continue to grow the business, where we can also refocus our attention and time and efforts around the two higher margin higher growth opportunities in Aviation and Fleet.

And then maybe just one last one, John, as you think about the long-term evolution of the company divestiture, the Federal business, what are the defining hurdles for kind of the optimal VSE assets as you go forward?

On the last page of our presentation, we highlighted our immediate priorities. The divestiture is crucial, as we aim to fully separate from a 63-year-old asset that has been central to our business, along with its excellent team, and help them transition to a new environment where they can thrive. This will allow our two core businesses to concentrate on their focus areas. Additionally, we are committed to scaling what we have, with an emphasis on differentiation. We plan to hold an Investor Day later this year to provide more details on the key components of our model. My approach to managing these businesses has always been to focus narrowly and deeply, as I believe that differentiation will be essential for sustaining and continuing revenue, as well as fostering strong relationships with our customers and suppliers, leading to the margin expansion that our investors expect. We will consistently refine our value proposition regarding products, services, and the kinds of deals we pursue.

Great. Thank you for the time.

Thank you.

Thanks, Josh. Good to talk to you.

There are no further questions at this time. So this concludes our question-and-answer session. I would like to turn the floor back over to John Cuomo, President and CEO for closing remarks.

Thank you to our shareholders for your continued support. Thank you to all the VSE employees, it's a defining moment here and we'll spend some time with our teams today working through our communication, we appreciate it. Have a great day and look forward to speaking with you next quarter. Thank you.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.