XPEL, Inc. Q4 FY2021 Earnings Call

Good day, ladies and gentlemen, and welcome to the XPEL, Inc. Fourth Quarter and Year-End 2021 Earnings Call. It is now my pleasure to turn the floor over to your host, John Nesbett, Investor Relations for XPEL. Sir, the floor is yours.

Good morning, and welcome to our conference call to discuss XPEL's financial results for 2021. On the call today, Ryan Pape, XPEL's President and Chief Executive Officer; and Barry Wood, XPEL's Senior Vice President and Chief Financial Officer, will provide an overview of the business operations and review the company's financial results. Immediately after the prepared comments, we'll take questions from our call participants. I'd like to take a moment to read the safe harbor statement. During the course of this call, we'll make certain forward-looking statements regarding XPEL and its business, which may include but not be limited to anticipated use of proceeds from capital transactions, expansion into new markets and execution of the company's growth strategy. Often, but not always, forward-looking statements can be identified by the use of words such as plans, as expected, expects, scheduled, intends, contemplates, anticipates, believes, proposes or variations, including variations of such words and phrases, or state that certain actions, events or results may, could, would, might or will be taken, occur or be achieved. Such statements are based on the current expectations of the management of XPEL. The forward-looking events and circumstances discussed in this call may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting the company, performance and acceptance of the company's products, economic factors, competition, the equity markets generally and many other factors beyond the control of XPEL. Although XPEL has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that could cause actions, events or results to differ from those anticipated, estimated or intended. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date in which they're made and XPEL undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Okay. With that, I'll now turn the call over to Ryan. Go ahead, Ryan.

Thanks, John. Appreciate it. Good morning, everyone, and like John said, welcome to our 2021 year-end conference call. 2021 was another outstanding year for the company. I was very pleased with all that we were able to accomplish. For the year, revenue grew a little over 63% and despite challenges with new vehicle availability, our organic growth was still very strong, coming in at almost 53% for the year. We closed on and integrated the most acquisitions we've ever done in one year in terms of both quantity and purchase price, and we made great progress on growing and expanding our product line. All of these accomplishments have positioned us to have a great 2022. Looking at the fourth quarter 2021, revenue grew 44.3% to $70.1 million, which was a record quarter and the first time we exceeded $70 million in our history. Q4 organic revenue growth was 27%, which was solid in light of continuing new car inventory constraints, particularly in the US. In the US, we had a great quarter, revenue growing 69% and 37% on an organic basis, again, great growth. Q4 was pretty poor in terms of US new car sales similar to what we saw in Q3, with many domestic brands down double digits year-over-year. Our sales mix is becoming a bit more nuanced as our window film and dealership services business expands, and we see more attachment across makes and a range of price points. Historically, we would have had even higher exposure to premium makes which generally held up better as OEMs prioritized manufacturing those vehicles like Tesla, which did have a record quarter for deliveries in the fourth quarter. As we talked about on the third quarter call, our biggest acquisitions last year were in the dealership services businesses, which are high-volume installation, principally window films at dealerships, starting with our acquisition in May of Permaplate Films and then Tint Net in October. As we've discussed before, that business is tied more to new car inventory than the rest of our business. It is not skewed at all towards luxury vehicles. We didn't see much change in the new car inventory situation in Q4 as we had hoped in Q3. In this line of business, we were only operating at 65% capacity during the fourth quarter. This translates into approximately $2.6 million in lost revenue for us just from the run rate these businesses were doing prior to acquisition, and that doesn't include any growth that we would have expected in those businesses as we applied our sales team into that line of business. Our labor cost in the dealership services business is variable, so in a declining demand market, we would adjust the overall labor force to match demand. However, in the current environment, which is obviously a very tight labor market and with an expected return in new car inventories, it's even more imperative to maintain and support our team. With the variable pay model we use, supplemental pay is required to retain the team, which is temporarily impacting margins. With our current structure, this equates to about $1.8 million in gross margin and pretax income in the fourth quarter that were staffed to earn but missing the unit volume. For the quarter, this alone cost us approximately 250 basis points of gross margin. There is a little consensus on the new car inventory situation, but our view is that we should still see substantial recovery and we are operating under that premise. If that doesn't occur, we would revisit our overall staffing level at that time. We saw an impact from this dynamic in Q3, but it was magnified in Q4 as we completed our second acquisition in the space at the beginning of Q4. As the dynamic changes, we expect to see the substantial EBITDA contributions from this line of business we've talked about previously. Outside the US, Q4 saw a bit more divergence in growth rates than we've seen lately, maybe due to varying responses to Omicron. Canada grew around 30%, the UK 21%, and Asia Pacific only 10%, which was rather disappointing, though there were some outsized impacts there. Continental Europe had a strong quarter, revenue growing 55% in US dollar terms, our highest quarter ever in that region. In China, in Q4, we grew just under 9% year-over-year, which was up sequentially a little over 17% from Q3. With China, we have the sell-in versus sell-through dynamic from one quarter to the next. We expect China to be relatively flat in the first half of the year as they build some inventory and then accelerate mid-year. Our distribution agreement and forecast with our China distributor has strong growth for 2022 over 2021, and we're confident that they'll meet that. We have new products and a focus on both automotive and architectural films plus a number of projects in the channel, working with the distributor in China for dealerships known locally as 4S shops. That's a big focus for 2022. We continue to develop OEM relationships and work on OEM programs globally, which involve working with car manufacturers to install paint protection film around the time of manufacture. We have two new programs, one in Europe and one in the United States, that are now in a prelaunch mode, so they're not generating revenue yet, although they are generating expenses. One should be our largest program to date and we hope to talk more about that in the coming months. Additionally, we've received a request to double the output from an existing program, and that extra output would start in Q2. That's great validation that the concept is well received and that we've been doing a good job. OEM and dealership attachment are important to reaching more of the market for paint protection film beyond the enthusiast buyer. Our view is that a substantial 60% of new car buyers are open to paint protection film if presented with the product as part of the new car buying experience or shortly around that. This is in addition to the enthusiast buyer who's already well represented, knows the product, seeks it out, and is the recipient of most of our marketing and advertising. We are investing heavily in these areas because we know the opportunity size in addition to the momentum we already have in the rest of the channel that this can open up for us long term. OEM and dealership attachment is also good for the aftermarket. It increases awareness of the product and helps validate it. We know that once someone buys paint protection film once, they're very likely to buy it again. Some dealership and OEM sales will translate into aftermarket customers in the future. As the installed base for paint protection film grows, so does the need for repair and service in the field, both for warranty work from OEM business and repair to the installed fleet from the collision business. These are independently big drivers for the aftermarket going forward as well. Earlier this month, we held our annual dealer conference, which we last held in 2020, and it was our largest conference in history. We had a little over 500 customers attending. For context, the conference we had in February 2020 had approximately 300 customers attending. It's amazing to see this level of turnout even with more limited international attendance due to lingering travel restrictions. More than half of the customers attending had never been to one of our conferences before, which is incredible. We'll have a recap of the event on our website, and if you're at all interested in the company, you should watch it. We used the conference to launch new additions to our vision architectural film line as well as announce a new paint protection film, Ultimate Fusion, which combines the benefits of our existing Ultimate Plus paint protection film with hydrophobic properties from our XPEL Fusion coating. We're really excited about this new product, which will launch in April, and that product line will also be accretive to our gross margin profile. This was also the first time we really had dedicated architectural film dealers attending the conference who either are or are considering carrying our vision architectural film line. We want to be the same type of partner for these customers that we are for our automotive dealers. As we've said before, we started the architectural film business within the set of our core customers that do automotive products as well, but a large portion of the market is customers dedicated to architectural film products, and we want to be their number one partner. Seeing very well-known people in the industry attend was great. We also used the conference to announce our continuing investment in DAP, our software platform. We've greatly increased the size of our software engineering team in 2021 as part of our SG&A structure and are working diligently to turn DAP into a platform to run our customers' businesses should they choose. This is lead to quote, to schedule, to manage, to cash on the back end, and we think it's really important. Our customer base and the profile of that type of customer in the aftermarket remains very underserved by software, and we think we're well positioned to solve this for them and create a lot of value. In fact, we know this will be another huge value add and another great reason to be an XPEL customer. Overall, gross margin for the quarter finished at 35.2% compared to 32.8% in Q4 2020, and sequentially was down slightly from Q3, which came in at 35.7%. We experienced some headwinds to gross margin during the quarter against the longer-term backdrop of our improving gross margin profile. First, as I mentioned earlier, the increased cost to maintain our labor force in the dealership services business cost us about $1.8 million for the quarter in gross margin. This is the supplemental pay for our team for revenue that we didn't have. As volumes increase, that incremental revenue will almost fall entirely to the bottom line, up to the total capacity that we have. That dynamic existed in Q3, and it really grew in Q4 due to Q3 outperforming Q4 in some ways and the fact that we added more to this line of business by completing another acquisition in Q4, adding another 30 to 40% to that overall line of business. Secondly, our requirement to remain fully operational during the facility move in the fourth quarter created some logistical challenges during the period of the move, which required us to substitute a more expensive product for a less expensive product into a lower margin region. This cost us approximately $800,000 in gross profit in the quarter. This is really a timing issue, and as we use the inventory we didn't use for that, it will reverse and flush through in 2022. Together, those two items represent approximately $2.6 million of gross profit dollars for Q4. Adjusting for that, our gross margin would have been roughly 38.9%, which is a number we'd be much happier with and where we expect things to be going forward. These factors negated some of the positive impact from pricing changes we made in certain markets in Q4, but we will see the benefits of those changes in 2022. Given all this, our forecast to be close to 40% gross margin this year remains unchanged. We still have confidence we'll be approaching that 40% gross margin by the middle of the year. As you've seen, our inventory increased for year-end, and we've been using cash on inventory. We remain concerned about supply chain disruption, particularly in the TPU resin market, which has been severely constrained globally and remains so this year. Additionally, our new Ultimate Fusion product is net new and requires inventory to launch as part of the inventory growth we expect. We expect inventory to continue to grow in the first half of the year, peaking in early Q2 and then reducing after that point. At that point, we will have confidence that we've built sufficient stock to weather any of these disruptions or we'll learn that building such stock was unnecessary. Either way, we're ensuring no disruption to our customers at the expense of temporarily reduced cash flow and higher-than-normal inventory levels, but we see no other prudent choice. To recap and look forward to 2022, we see solid double-digit revenue growth in the 20% to 30% range for the year, with higher growth rates in the second half of the year than the first due to the expected timing of China growth as they work through some inventory, the rebuilding of new car inventory impacting our dealership services business, and the phase-in of revenue for our new and expanding OEM projects that are in various stages of launch or expansion. We remain committed and confident we'll see gross margin at 40% during the year, assuming we see the expected increase in new car inventory, which will help our labor cost of goods component. Our evolving product mix, channel mix, and focus on supply chain optimizations coming from our acquisitions will allow this to happen. Our SG&A cost structure is elevated due to amortization of intangibles against lower-than-expected revenue from dealership services acquisitions and lingering expenses related to acquisition integration. SG&A as a percent of revenue will remain elevated for Q1, in part due to timing of marketing expenses disproportionately hitting in the first quarter of this year, some of our racing events, and significant costs from the dealer conference I mentioned. There's no money better well spent than that, as well as start-up costs from the OEM programs I mentioned. That said, assuming we achieve the revenue growth we expect and get the gross margin profile we know we can achieve, we expect to be at a 20% or greater EBITDA margin run rate by the end of the year. All in all, I'm extremely pleased with our performance this year. I'd like to express my sincere appreciation to the entire XPEL team. The XPEL team really doubled in 2021. Every team member in the company has an unyielding commitment to serve our customers, and I know they wake up every day with that in mind. It was a challenging and operationally complex year: managing inventory, supply chain concerns, facility moves, completing and integrating acquisitions, scaling the business to meet demand, auditor change, SOX compliance, and many other things the team handled. I can't thank them enough. They stayed true to one of our favorite mottos, that there is no tomorrow. I can't thank them enough. With that, I'll turn it over to Barry, and then we'll take some questions. Barry, go ahead.

Thanks, Ryan, and good morning, everyone. Ryan already covered the overall revenue growth metrics, so I'll move directly to the revenue components. Product revenue grew 34.9% to approximately $56.0 million in the quarter and 59.5% to approximately $217.3 million for the year. In this product revenue category, paint protection film grew 31.2% to $45.6 million in the quarter and 53.3% to $169.9 million for the year. Our window film product line had another solid quarter, growing 55.6% to $8.7 million. For the year, window film grew 83.1% to $38.4 million and represented 14.8% of our total revenue. It was a great overall performance for this product line. Q4 2021 service revenue grew 104.2% for the quarter and 85.2% for the year. This revenue category contains software and cutbank credits and training and installation labor. The installed labor component is not only from our company-owned facilities but also from our newly acquired sublet labor businesses and OEM operations. If you factor out the acquisition, service revenue grew approximately 25% for the quarter and approximately 36% for the year. Our total installation revenue grew 177% and represented 15.3% of our total revenue for the quarter. Excluding acquisition-related growth, total installation revenue grew 24.4% for the quarter. For the year, total installation revenue grew 122%. Excluding acquisition impacts, total installation revenue grew 36.4% year-over-year. Again, we like to talk about our total installation revenue in our company-owned facilities because we believe it's a nice surrogate for what many of our customers are experiencing. Ryan also spent some time on gross margin, so I'll move straight on to SG&A. Our Q4 2021 SG&A expense grew 87.3% versus Q4 2020 to $16.2 million and represented 23% of total revenue. For the year, SG&A grew 71%. From a high-level view of our cost structure, we continue to invest in the business in multiple areas, as you would expect, but we're also incurring additional costs that we'll have to earn through over 2022 and beyond. This year, we became a large accelerated filer with the SEC. As a consequence, we went through our first integrated audit in 2021, meaning the effectiveness of our internal controls in addition to our financial statements were audited. Like most companies in their first year of SOX, we incurred significant internal and external costs to do all this; some of these costs were larger in 2021 since it was our first year, and some will continue going forward. As of year-end, we're still incurring costs related to our 2021 acquisitions that haven't been fully removed from our cost structure, such as facilities, IT, overlapping employee benefits and other administrative-type costs. That work will be complete in Q1 of 2022. Ryan also alluded to this, but we're incurring SG&A costs for some of our OEM projects in 2021 that are continuing, and we expect to see revenue gains from those projects beginning in 2022. These costs include personnel, facility, IT and other related expenses. These are the right investments for the business and we'll begin to earn through them in 2022. With that said, we remain disciplined in how we allocate our resources and expect to continue to see increasing leverage from these investments in 2022 and beyond. Our Q4 acquisitions are driving a lot of the Q4 increase in SG&A quarter-over-quarter, including approximately $1 million per quarter related to amortization on intangibles purchased with our seven acquisitions, which Ryan mentioned. Most of those acquisitions in 2021 relate to our sublet businesses. As Ryan mentioned, the dealership services businesses are operating at less than 65% capacity. Operating at reduced capacity creates a drag on operating margins given the gross margin impact Ryan referenced, as well as the acquisition-related amortization and associated fixed costs. As inventories come back, we'll see increasing leverage from these businesses, consistent with the post-integration EBITDA profile we discussed when we made the acquisitions. Until then, we expect higher SG&A as a percent of revenue to trend in a 20% to 22% range. Q4 2021 EBITDA increased 23.7% quarter-over-quarter to approximately $9.9 million, reflecting an EBITDA margin of 14.2% for the quarter. For the year, EBITDA grew 74.5%, reflecting an EBITDA margin of 17%. Q4 2021 net income increased 1.9% versus Q4 2020 to $6.2 million, reflecting a net income margin of 8.8%. EPS for the quarter was $0.22 per share. For the year, net income grew 72.3%, reflecting a net income margin of 12.2%, and our 2021 EPS finished at $1.14 per share. Cash flow used in operations in the fourth quarter was approximately $1.9 million as our increased inventory levels offset cash generated in the business. During the quarter, we increased our revolving line of credit capacity from $57 million to $75 million. As of 12/31, our line of credit balance was $25 million. We feel and remain financially well positioned to execute on our 2022 initiatives. With that, operator, we'll go ahead and open up the call for questions.

Our first question today is coming from Steve Dyer at Craig-Hallum.

Just a couple of points of clarification. Ryan, you had talked about the first half of the year, China being relatively flat. Just to make sure, are you talking about sort of absolute revenue numbers kind of quarter-over-quarter or are you talking about year-over-year?

When we're talking about China being flat, we're saying more year-over-year compared to 2021 for the first half of the year. That's correct.

So I have, I mean, because it took a pretty big step up in the back half of the year, I have them only at like $7 million and change, $7.6 million in the first half. That's sort of the number we should think about?

Yes, that's where it will be there or slightly higher, but it's definitely going to be at that lower level on the lower range of those two.

You usually guide for Q1 and you had given some commentary on a few moving parts. You talk about faster revenue growth in the back half of the year, but you have a fair amount of acquired revenue in the first quarter, so my guess is that might actually be one of the fastest overall quarters when you consider that. Are you talking about organic revenue, or am I missing something there? I just want to make sure I get the revenue cadence right.

No, I think you're thinking about it the right way. I mean we usually see in Q1, we've seen it from year-to-year. Q1 is the weakest quarter seasonally, and we've seen revenue down Q1 from Q4 in a number of years, and then occasionally, we've seen it up. And we're not looking right now for Q1 really based on that impact from just China on a year-over-year basis. We're not looking for a big step-up in Q1 from Q4, like we've seen. So we're looking for that to be closer to and then continue to accelerate Q2 and beyond, both as we see the impact from the China business and then also just as we see the impact from dealership services because we're at a reduced level with those even from where they were in Q1 and Q2 2021.

I guess sort of 30,000-foot type question. Much of your product line, PPF, et cetera, has been around for some period of time and you guys have sort of grown nicely throughout and added some products and so forth. But things sort of went parabolic this year in a really challenged year for vehicles. And I guess as you take a step back, what do you attribute that to? Is it an attach rate or what sort of finally clicked or a number of things sort of finally clicked that this year was start of the year, just given the difficulty that really took off.

Yes, I think you have a lot of different dynamics coming into play as we see it. Paint protection film overall has continued to see increasing adoption and awareness. Going into 2021, we really benefited from what we had been building over years, and you saw that throughout the first half of the year and into Q3. That speaks to the strength of the brands and the strength of paint protection film. An indicator of that is the dealer conference, with 500 attendees versus 300 and very little international, which speaks to the overall momentum. That momentum was happening in the first half of the year even as inventory was declining in the channel, and we were, I would say, largely immune to that. In the second half, as inventory became more constrained, you started to feel it. I think that is why you saw some of that momentum slow in the second half of the year and entering Q1, because as inventory is depleted and it impacts sales, it becomes harder for our customers and for us to grow at the same rate when the cars just aren't there. But as you saw coming into the year, this is really the culmination of a lot of the things we've been doing and reflects the strength of the market and the recognition that PPF is a great product.

Last one for me, and I'll pass it along. Just with respect to acquisitions, it was you noted a very active year, most active in the company's history. As you look to 2022, should we anticipate this is a bit more of a digestion year or are you guys still looking for additive pieces to this?

It's definitely a digestive process here in the first half of the year. I mean, we did a lot last year. We pushed the team really hard. And there's a number of pieces that just getting now to the beginning of the year that we're finalizing, integrating and still costs we're trying to take out. And so we've got a little bit of work to do there over the first quarter to finalize that. We've also committed a lot of cash to inventory and expect to do more of that, just looking at our overall world view of where things are. But then as we get through that and as we see what we expect to see with new car inventories return and how that will impact our cash flow as well as peaking with inventory and then releasing some of that from the balance sheet as cash. Then as we get into the second half of the year, we look to resume that acquisition cadence.

Our next question today is coming from Jeff Van Sinderen at B. Riley.

I know it's early in the year, but any more color you can give us on kind of the latest that you're hearing and seeing regarding what the ramp-up might look like in dealer inventory?

Jeff, I mean, you have kind of two core data points on that. You've got big picture, what is the industry saying in terms of their production estimates. And then you have what do we see on the ground in the particular markets, in particular makes that we're most exposed to. And I'll tell you, it's been really challenging to square those two feeds of information even over the past quarter. Our view is that overall, the sentiment of what's going to happen has turned more positive, big picture. And then we've seen pockets of some of our dealership customers getting inventory at levels that they hadn't individually received in a year. But that's been very scattered. And so from that alone, it's difficult to extrapolate. But when you start to see that on a one-off basis and then you see sort of the guidance from the Toyotas and the GMs on production numbers that's what gives us the position that we think that there is that substantial improvement. But I can't tell you January and February that you've seen a massive change with that thus far. I don't think we've seen that, but we've seen more individually positive data points than we've had. And so hopefully, those aggregate together to be meaningful like we expect them to be.

And then I guess I'll preface this question by saying I understand if you want to hold off on commenting. But I know you're working on a sort of a revised agreement with entrotech. And I guess just wondering if there's any progress that you can speak to or you want to speak to there? Anything you can say about what the terms of that might look like. And how that could impact, I guess, your supply and your margins going forward?

So I guess, first, just to speak to margins overall. So one of the reasons that we're really confident in this gross margin profile is that the dealership services business is going to be very accretive to us from a gross margin perspective once that new car inventory comes back. We're able to take a lot of cost out of that in terms of cost of goods that those businesses had priority being acquired. So that helps us, like we mentioned. Our overall product mix has moved in a direction that is accretive to gross margin. So both the mix, some of our new products are higher gross margin than older products like our Ultimate Fusion paint protection film will be accretive to gross margin. And then channel mix has been favorable, where you see US growth really growing the fastest in some of our other direct markets. These are higher margin markets overall. So from a gross margin standpoint, all of those things help. Now from a supply chain standpoint, entrotech has been a great partner of ours for a long time. I fully expect that we will have another agreement in place there just that particular form of agreement that we've had for many years is due to be updated. Certainly, there are plenty of commercial things anybody wants in an agreement, and that would include things around pricing and other business terms that we seek to obtain there. But I expect that that new agreement will be in place. And we've also added a lot of supply over the past the ability. We've also added the ability over the past year to get substantial supply for paint protection film from other manufacturers as needed. And we remain committed to, at this point, to an asset-light model for manufacturing. I think that, that works well for us. We want to continue to focus to put the majority of our cash flow to work in the channel. And sort of current issues with the dealership services business notwithstanding, we definitely think that that's the way to do it. So there's no risk to the supply chain as a result of renegotiating that contract with entrotech, do expect to arrive at another agreement with them. And you put all of those things together, which I mentioned, and that's what should set us up for a healthy gross margin profile going into 2022, which is what we expect.

One more question if I could squeeze it in. I understand the Dealer Services segment is somewhat in transition. Looking at the core, legacy part of the business before Dealer Services grew to its current size, what underlying trends are you seeing? How are those trends developing in the Window 10 area and in automotive? And could you also touch on architectural for the same?

I mean if you surveyed our dealer base in the aftermarket, you would find that pretty much every customer is coming off one of their best years in history. And I think that's represented in our results. Now you might hear depending on who they are and where they are, you may hear some comments even from our dealers about the inventory situation just does it impact sales. I mean if the car is not there, you can't put product on it if the car can't be sold. But I think you would hear that they had the best year. You would hear cases of dealers being scheduled out, our installers being scheduled out potentially days, sometimes weeks, not something that we like, but it is success indicator of where we are in terms of paint protection and where the demand has been. So I think from that standpoint, the state of the industry has been very strong. And I think you would have seen to the earlier question from Steve Dyer, I think you would have seen really that momentum that we saw in the first half of the year really continue and accelerate further in the second half even outside the dealership channel, just if the inventory situation was even better, even being down 20% or 30% sales on some mix, I mean, you're going to feel that. So I think from that standpoint, it's very strong. The architectural side, like I mentioned earlier, that's still a new space for us. And our progress there to date has really been about taking that product to our existing customers, which we want to do and we want to support them, and we actually have customers interested in expanding into that. But there's a large portion of that business that is run separately from automotive. And these tend to be the larger customers. They may be more established with competitive brands. And we're now seeing interest from them and really working to deepen those relationships. So that cycle is obviously completely different than the cycle we're seeing on automotive, that's really more on our own terms about us being perceived as a helpful partner and maybe a superior brand for the folks in that business. And we'd love to have them on board, and we're working very diligently to do that.

We have no further questions at this time. I would now like to turn the floor back over to management for closing remarks.

I'd just like to say again to our team thank you. It's been an incredibly busy year, and we've accomplished a lot and a lot planned for 2022. And thanks, everybody, for your time today and look forward to speaking to you again soon.

Thank you, ladies and gentlemen. This does conclude today's event. You may disconnect at this time, and have a wonderful day. We thank you for your participation.