Compass Minerals International Inc (CMP) 2018 Q3 法說會逐字稿

Good day, and welcome to the Compass Minerals' Third Quarter Earnings Conference. Today's conference is being recorded.

At this time, I would like to turn the conference over to Theresa Womble. Please go ahead.

Thank you, Lauren. This morning, our CEO, Fran Malecha; and our CFO, Jamie Standen, will review Compass Minerals' third quarter 2018 results and outlook for the rest of the year.

Before I turn the call over to them, let me remind you that today's discussions may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the company's expectations as of today, November 1, 2018, and involve risks and uncertainties that could cause the company's actual results to differ materially.

Please refer to the company's most recent 10-K and 10-Q for the full disclosure of these risks. And the company takes no obligation to update any forward-looking statements made today to reflect future events or developments.

Our remarks also include non-GAAP financial disclosures, which we feel are important to provide a full understanding of our businesses and operating conditions. You can find reconciliations of these measures in our earnings release or on our earnings presentation, both of which are available in the Investor Relations section of our website at compassminerals.com.

Now I'll turn the call to Fran.

Thank you, Theresa, and good morning to everyone on the call. Today, I will provide a high-level overview of our quarterly results, discuss some of the operational issues impacting our 2018 performance and outline our path forward from here. Although we've had challenges within our Salt operations, which have pressured our earnings in 2018, we have also made important progress in other areas, particularly in our Plant Nutrition South America business and in our investments in our sulfate of potash plant in Utah. In addition, our cash flow from operations continues to be strong, and we expect to generate positive free cash flow for the year.

Our total third quarter revenue increased 11% from last year's results, driven by improvements in both the Salt and Plant Nutrition businesses. As we have been discussing for a couple of quarters, the underlying market fundamentals of both these businesses have strengthened. Our Salt business has benefited from the very strong 2017, 2018 winter in the U.K., which has resulted in increased preseason deicing sales there.

In North America, sales have also improved as our deicing customers have returned to more typical buying patterns. In addition, our pricing results from the highway deicing bid season in North America have been very strong. Inventories throughout the North American market are limited due to various market-wide supply constraints, and that has resulted in a strong pricing result for the upcoming winter for deicing products. In fact, now that the full bid season is complete, we can report that our average contract price for highway deicing products for 2018, '19 winter is 18% above last year's result. The new prices will begin to flow through our results in the fourth quarter.

Despite these positive developments, our Salt earnings were disappointing. This is mainly due to the slow ramp-up of our continuous mining equipment at the Goderich mine and lower-than-expected production we achieved coming out the strike, which ended in July. These issues resulted in about a $15 million reduction in our expected earnings in the quarter, which Jamie will discuss in his comments.

What I like to focus on is the path forward and why we still have confidence that our investments in that mine will yield the production rates we are targeting and the savings we expect. Transformative change, like we are implementing at Goderich, is never without challenges. Be assured that we have dedicated resources to tackle the remaining issues at Goderich, from improving the engagement of our workers to working with our employees to fine-tune our shift schedules to mechanical adjustments underground. We have added external resources as well to evaluate our work processes and ensure our workforce is properly aligned and trained. All this is geared towards increasing the uptime of our equipment.

While we currently anticipate this ramp-up will continue into 2019, we expect to be able to meet our customer's demand, assuming average winter weather. When we exit, our annual shutdown of the mine in the spring of 2019, we expect to be at our targeted rates and building inventories for the next winter season. We believe this measured approach to ramping up production in this transformative environment is important in order for us to achieve sustainable, consistent production over the long term.

Now let's discuss our Plant Nutrition business. Our focus in specialty and semi-specialty high-value Plant Nutrition products continues to drive strong results for the company. Revenue for the combined Plant Nutrition business, which includes our North and South America segments, reached $425 million for the first 9 months of the year. This is 9% above prior year results. EBITDA for the business increased over the same period by 12% to $99 million. These are impressive results, particularly considering the strengthening of the dollar has materially impacted our translated results and the U.S. agriculture has been somewhat weakened by the current uncertainty regarding trade policies.

We believe our results reflect the strength of our product portfolio, both in North America and Brazil. First, as the only SOP producer in North America, we have further strengthened our ability to serve customers by our investments at our Ogden, Utah facility. In addition to providing us with additional capacity, we are now achieving greater efficiencies there and have greater ability to compact significantly more products. This means our cash costs have declined and that we have more of the granulated product that our customers most demand. With more product available and an improving price environment, we expect a strong end to 2018.

Our results in Plant Nutrition North America this quarter were also supported by increases in the sales of micronutrients. While the volumes are -- involved are small, they are impactful because of the strong pricing we achieved for these innovative products and they can generate attractive profit margins as well. The fourth quarter is typically the strongest quarter for these sales to our North American customers.

In South America, the strength in economics for Brazilian farmers combined with our high-value product portfolio resulted in very attractive year-on-year growth. In local currency, the business there reported the highest level of quarterly earnings in its history with revenues up 41% and operating earnings up 79% from 2017 third quarter results.

Underpinning our success in Brazil and increasingly in our North American Plant Nutrition business is our innovation platform. With over 70 R&D professionals working collaboratively in Brazil and the U.S., we have a robust pipeline of new or improved products at various stages of development. So far in 2018, we have advanced 16 projects in the pipeline and launched 5 new products, 3 in North America and 2 in Brazil.

One of the new products in North America provides a unique combination of SOP coated with proprietary mix of micronutrients, specifically for the tree nut market. In South America, we are excited to bring to the market a new product focused specifically on tree productions for the pulp and paper industry.

Before hearing from Jamie, I just like to share a couple of concluding thoughts. When we began our strategic plan in 2014, it included a significant capital spending plan intended to bolster the longevity of our assets, improve efficiencies and augment productive capacity at our 2 largest assets. In addition, we sought to grow our Plant Nutrition business to broaden our product portfolio and expand in additional geographies. Clearly, while the market conditions of our businesses were challenged for a significant portion of this period with either mild winters or down agricultural cycle impacts, we stayed the course and are complete with the majority of these initiatives. We have generated robust cash flow from operations so far this year and expect around $80 million in free cash flow at the end of the year.

These data points are indicative of the fact that we are nearing the end of our major capital investment program and beginning to reap benefits from the investments. While the recent bulge in major capital spending has ended, we will continue to invest strategically and in a disciplined manner to renew our assets and drive innovation.

Now Jamie will provide some additional details on our financial results.

Thanks, Fran. Before reviewing our segment results, I'd like to touch on our consolidated results. Our net earnings this quarter totaled $12.8 million compared to 2017 GAAP results of $32 million. The year-over-year decline resulted from lower Salt segment earnings as well as increased depreciation in our Plant Nutrition North America business, partially offset by increased earnings in our Plant Nutrition South America segment.

You may also recall that in the third quarter of 2017, we reported 2 special items which significantly impacted our GAAP results. First, we reported a tax benefit of $13 million due to the release of tax evaluation allowances related to our Plant Nutrition South America segment. Second, we initiated a restructuring plan in the 2017 period which resulted in a pretax charge of $4.3 million, which impacted our Salt and Plant Nutrition segments as well as corporate costs.

Details of these charges can be found in our press release. On a consolidated basis, the net impact of these items was an after-tax benefit of $10 million or $0.29 per diluted share.

Looking beyond net income, I'd like to note that EBITDA in the quarter was only modestly lower year-over-year at $67.2 million compared to $68.8 million last year. Additionally, we continued to generate strong cash flow from operations, as Fran mentioned.

Turning to our Salt segment results, which are detailed on Slide 8 of the presentation. Salt revenue increased 10% on 11% higher sales volumes, while average selling prices were flat. Looking specifically at highway deicing pricing, which was also flat, it's important to note that most of the salt sold in that business in North America was still under the prior season's contracts. We expect to begin enjoying the better pricing from this year's bid seasons beginning in the fourth quarter.

Adjusted operating earnings and adjusted EBITDA each declined significantly, 32% and 51%, respectively, from the third quarter 2017 results. As we've discussed, the key factor impacting these results was lower-than-expected production at the Goderich mine as we exited the strike period and resumed ramping up with the new mining equipment. We have estimated this cost at about $15 million for the quarter. We also experienced a 7% increase in shipping and handling costs due to increased fuel prices and freight rates, much of which was expected.

Moving to Slide 9. Plant Nutrition North America segment revenue rose 3% in the third quarter of 2018 as a 5% increase in average selling prices was partially offset by a 2% decline in sales volume. While SOP sales declined modestly from prior year results, micronutrients sales increased more than 60%. Operating earnings declined 34% from prior year's adjusted results. However, EBITDA increased 19%.

So while depreciation is higher as a result of our significant investments to improve the Ogden, Utah production facility, we are now realizing better cost efficiencies at that plant. These cost efficiencies, along with our reliable production and the fact that we are the only SOP producer in North America, puts us in an excellent position to be the supplier of choice in North America.

Our Plant Nutrition South America segment results were very strong in local currency and in U.S. dollars. Strong direct-to-grower sales fueled a 10% increase in agriculture sales volumes, and improved demand for chlor-alkali products helped our chemical solutions business to a 6% year-over-year increase in sales volumes. It is important to remember that last year's third quarter underperformed expectations due to the slow start to the buying season for inputs.

Average selling prices also increased, driven by a more attractive product mix as well as increases driven by the impact of higher input costs. The increase in sales volume and strong demand for our high-value specialty products also helped grow earnings and expand our profit margins. These attractive results demonstrate why we have been so bullish on our Brazilian-based specialty Plant Nutrition business.

Our fourth quarter's segment outlook is summarized on the Slide 11. Beginning with our Salt outlook, we have reduced our full year sales volume expectation by 2% to 3% to reflect the lower production of salt from our Goderich mine. While we have purchased salt to supplement our supplies, we also reduced our 2018, 2019 commitment levels to ensure that we are able to supply customers in an average winter.

Our year-over-year revenue expectations are being lifted by the 18% price improvement in North American highway deicing contract pricing. We also anticipate an improvement in our consumer and industrial pricing due to a more typical mix of product sales compared to last year when packaged deicing sales were depressed. Unfortunately, we will continue to feel some cost impacts from lower Goderich production levels, including the cost of purchased salt. As a result, we expect our fourth quarter 2018 operating margin to be similar to last year's results.

In Plant Nutrition, we expect the North America segment to realize volume and revenue growth based on solid demand indications for SOP and continued interest in our expanded micronutrient portfolio. While per unit costs are likely to increase modestly with higher micronutrient sales, we expect operating margins for the segment to improve as well.

The Plant Nutrition South America segment will likely experience flat sales volumes, given the fact that last year's fourth quarter sales volumes benefited from delayed grower purchases. The year-over-year change in product sales mix is also expected to modestly reduce operating margins in the fourth quarter of 2018 when compared to prior year results.

Our corporate items are listed on Slide 12. The major changes include a reduction in our corporate and other expense due to increased austerity measures in our spending, and our effective tax rate is expected to decline to 13% for the year.

Before concluding, I would like to spend a bit of time on our balance sheet and cash flow expectations. We are nearing completion of our major CapEx projects that began back in 2015. This elevated spending, 2 mild winters, a downturn in global agriculture markets and a difficult year we've had at Goderich have created short-term pressures on our earnings and, therefore, elevated our leverage ratio. Given where we are, it's important to understand our leverage sensitivities at the current debt and EBITDA levels. You can assume either a $20 million change in EBITDA or a $75 million change in our total debt will generate about a 0.25 turn change in our leverage. Given that we are currently sitting at trough earning levels in Salt, we are confident that we will start improving our leverage ratio next year.

The good news is that the market fundamentals for our businesses have strengthened. While we expect some cost impacts from lower production at Goderich to flow into 2019, strong pricing is expected to provide a meaningful offset. In addition, we've continued to maintain strong liquidity and expect to drive our leverage lower with a long-term target of 2.5x debt to EBITDA.

In conclusion, although we are disappointed in the slower-than-expected Goderich mine ramp-up, this, along with market-wide supply constraints, is likely to set up favorable supply and demand dynamic in 2019, even under an average winter scenario. And as Fran mentioned, we remain confident in our continuous mining and haulage program's ability to reach our targeted production. In Plant Nutrition, we will continue to focus on our innovative Plant Nutrition solutions to drive growth in both North America and Brazil.

Finally, I'm pleased to report that we were able to defer some tax settlement payments into 2019 at no cost. And now our full year 2018 free cash flow is expected to be about $80 million. We have now passed through that very important inflection point for our free cash flow going forward. As our cash generation grows, we will turn to strengthening our balance sheet, maintaining our assets, pursuing attractive strategic growth opportunities and returning value to shareholders.

Now Lauren, please start the Q&A session.

(Operator Instructions) We'll take our first question from Vincent Anderson with Stifel.

So when you look at this winter's won contracts on a like-for-like basis with last year, pricing is up 18%. But where did volumes go in terms of won contracts at the midpoint, knowing that there was, obviously, a stronger winter last year?

Commitment levels -- are you asking how far down commitment levels are year-over-year?

Yes.

There's a little bit of timing that's going to occur between fourth quarter and first quarter. Overall, commitments are down approximately 15% or so.

Okay. And then when you think about -- we had -- in the third quarter, deicing salt sales were largely customers pulling through last year's contracts. It sounds like you mentioned some of your competitors may be having some capacity constraints as well. Is it correct to assume that we would need to see an excessively mild winter to not see further price appreciation in next year's salt bidding season?

Vincent, it's Fran. I mean, my expectation would be, if we have an average winter -- the market's tight. Obviously, our situation is what it is. And we're coming off a reasonably good winter last year. So I would expect that we're going to have a positive pricing environment with an average winter for the next year contracts.

Great. And if I could ask a quick one on Plant Nutrition. Yes, you had a 60% year-over-year increase in the quarter for specialty nutrients in North America and you have -- you've started talking more and more about new product launches. Do you have -- I know we're early for 2019, but do you have an idea of at least what kind of targeted revenue contribution you'd like to see from your current portfolio, if not next year then, call it, over the medium term?

I mean, we don't have a target that we're ready to share today. I would say that as we introduce these new products, the initial take-up will be small. And then over the next season, it increases, and really, in the third season, you start to get up to kind of those higher levels. So it's just the nature of the cropping seasons in the ag cycle.

So the new products launched in 2018, the 5 new products, will those be available for farmers to buy for the 2019 season?

Yes.

We'll take our next question from Robert Koort with Goldman Sachs.

Yes. This is Ragnhild Stoeer on for Bob. In your press release, you're guiding to a modest revenue growth for the South America segment, which in Q4 '17 was $124 million. However, in the slides, you've guided to a range of $110 million to $130 million. So should we assume the range is actually $124 million to $130 million?

Yes. That's right.

And we'll take our next question from Mark Connelly with Stephens Inc.

Couple of things. You said that you've added resources at Goderich, and you've said it before. And you're still changing work schedules. Is the work schedule change a function of the disappointing results? Or was the original plan too aggressive? And how long do you expect to have those higher staffing levels?

It's Fran. We came out of the strike with a work schedule that we trialed. And we did that for, essentially, the quarter. And we've recently started a new shift schedule that we think will allow our employees to maximize the output in a 24/7 environment and then give them the best opportunity to be successful going forward. And then on the -- maybe just to comment on the ramp-up in the cost, as you've outlined. I mean, coming out of the strike, we underestimated some of the challenges to produce at these higher rates. And obviously we've adjusted our expectations as we move forward with a realistic plan. We talked about the shift schedule to give our employees the best opportunity to be successful. We have added additional internal and external resources and expertise to improve our maintenance. And we have outside experts working with us to optimize kind of the maintenance and production planning and execution, identifying gaps and then we're working to close those gaps. And then once we're certain that we can produce consistently at capacity, we'll continue to optimize our staffing and our support to ensure that -- when we're operating at that level, that the full cost savings will be effect -- in effect going forward. And as I talked kind of in my comments, we're ramping up into 2019. We normally take our annual maintenance shutdown in that April time frame. And coming out of that, mid-year, we expect to be at those levels and then fine-tuning our resources to get to the cost side of the equation. And assuming the average winter, as I mentioned, we expect the requirement to run full out to build inventories for the 2019, 2020 winter.

Okay, very helpful. Question's on Brazil. Can you give us a sense of where in Brazil, north versus south, direct versus dealer, your business was strong? Or was it across the board? And did I understand you just say that the LatAm margins in 4Q won't be as good as 3Q adjusted for seasonality? Or did I get that wrong?

I'll take the business question and Jamie can follow up on the margin side. I would say the business was strong overall in both the direct-to-farm business as well as into the dealer distribution network but stronger in our direct-to-farm. And that's where our higher margins are. And as we've been working in moving this business forward, we want to continue to really focus our growth there. We have 200-plus people -- salespeople on the ground and continue to go more direct to the farms, which is in -- more in that central and northern part of Brazil. The southern part is more into the retail and distribution network. But it's performing nicely and really moving along on our expectations.

And I'd just add a comment in terms of geography. 100% corn was planted in the south. And there was a really good -- we saw really good activity in the southern markets there in Brazil. Can you repeat your margin question?

I'm just trying to understand whether there was anything unusual in your margin this quarter. And did I hear you say that the fourth quarter margin in LatAm won't be as good?

Correct. So the -- what happened is it's on a year-over-year comparison basis. Last year, we had improved sales mix in the fourth quarter because of the delayed purchasing. So it was a late planting, late application season. And when we talk about sales mix, we were talking about full year versus soil applied often. And so our full year products, which are higher-value, higher-margin products were sold -- they slipped into the fourth quarter last year, which elevated margins. This year was a more normal season. And so this year, we sold some of those full years earlier, kind of in the September time frame, which boosted margins to the higher level this year versus last year, which was depressed. So that's going to happen from year-to-year. It depends on weather, plantings and timings and input purchases by growers, but this year would be more typical.

We'll take our next question from Joel Jackson with BMO Capital Markets.

Fran, what gives you confidence that you can get Goderich back and running here? Is there a chance we have to change the system a bit to be more of a hybrid of continuous mining but more drill-and-blast, maybe maintaining 2 systems, ending up with higher costs than what you had before versus your expectation of lower cost?

I mean, I think when we made the decision, Joel, to go to continuous mining, it was really around couple of major factors there. One was air quality in the mine. And by bringing in the mining equipment and moving out diesel vehicles, we've significantly improved that air quality to allow us to provide a safer environment for our employees and meet any regulatory metrics and then also to be more efficient on production and improve our cost base. But we're continuing, as I mentioned earlier, on a measured plan to improve and increase that production. And we're confident that we'll get there. It's -- as I mentioned, it's transformational. We had a number of position reductions in 2019 (sic) [2018], and we went through a work stoppage. And our employees are coming together and working to improve our results every day. So we remain confident. I don't see us going back to drill-and-blast. And as we move forward into 2019, we'll continue to assess our equipment requirements and our people requirements and then adjust accordingly, if necessary.

Okay. And following up on that. I mean, have you considered maybe going back to the conveyor system? I know you have a large conveyor network down there. Some other continuous mining systems and mines will use a lot less conveyors and trucks and maybe changing to a truck system help out. Or is the air quality issue a problem here? Like are you reassessing the conveyors?

Well, it is an end-to-end system, from the mine face where we're mining with these machines to our hoist. And that's where it gets more into the -- that optimization on the maintenance and production that I talked about earlier and just -- and fine-tuning that and ensuring that, that equipment is up to where it needs to be in terms of the performance.

Okay. And just finally, maybe you can give us a sense of -- once you get through the maintenance period in April at Goderich, what kind of salt costs or margin improvement could we see? Are we talking a couple of hundred basis points, a few hundred basis points? Or do you expect it against the middle of next year as you get past Goderich issues?

I don't think we want to give any specific description of what that looks like yet, Joel. I mean, I think, as we get through the rest of this year and as we continue to ramp up, we set our annual operating plan and we'll have a lot better insight into what that looks like in February, certainly. So I just -- we'd prefer to hold off on that. The timing, as I talked about before, of when these things hit certain rates are very impactful to the timing of when the lower costs start to flow through the P&L. So that's a -- we'd just prefer not give you any color on that.

We'll take our next question from Chris Shaw with Monness, Crespi.

I'd just follow up on, I guess, the previous type of question a little bit. Not, I guess, quantitative but qualitatively, for 2019, like what is the impact going to be? Is it from just merely this drop in commitment volumes of 15%? Is it that the cost of -- or will you still be selling imported salt or purchased salt? Or is it just that the mine will be operating at maximum efficiencies? I mean, what would be the drag? I mean, what part of those things was actually going to be the thing that would cause an impact in 2019 for the Salt business?

So we mentioned in our deck that there would be some carryover cost. You can see we've estimated $15 million to $20 million of cost. So that has -- the components of that are some carryover imported salt costs and higher production cost from this year. So that $15 million to $20 million is our current estimate of the impact of 2019, mostly Q1. Now as we, like I said, continue to ramp up, higher volumes produced quickly translate into lower unit costs of salt, which we would be selling in the second half of 2019. So the non-repeat costs are those that carryover this year. And as we produce at higher volumes and lower unit costs, we start to drop off in the second half of 2019. Is that helpful?

Yes. It helped a little bit. Then it sounds like it's all -- sort of all those things combined a bit. And then the 15% drop in commitments, is that -- was that what you were planning on when you entered the strike? I remember the initial guidance was sort of -- you could -- I think you would lower -- you're going to lower commitments then, but did you have to accelerate the sort of -- or [I don't know what I'm] asking. Did you have to drop that number even more once the strike was over and the ramp-up didn't go as quickly as you expected? Or is that sort of what you were always aiming at, that sort of 15%?

So it's a dynamic situation every year. So this year, we happen to be going through a strike. We had some contingency plans in place, and we're planning to produce with replacement workers. And you kind of know how the story unfolded over the summer and ended up with finalizing a new collective agreement in July. And so all that -- through all that time, we're bidding tons. Our highway deicing team -- our highway bid team is assessing bids, looking at production, assessing production. So we go through all those state and municipality bids, through -- mostly compete -- complete through August. And then at the end of the season, there's a commercial aspect where we've got another nice chunk of tons that is, we call, professional deicers. And so those are some of the tons late in the season that we can decide not to serve. And so those are kind of -- we have bites at the apple along the way as we manage our success and our bids are won and lost and our production plans throughout the process. They're connected.

And we'll take our next question from David Begleiter with Deutsche Bank.

Fran, I know you don't want to discuss too much about salt production cost, but what is the potential longer term for salt production cost on unit basis once everything is operating at design and optimal rate?

I think Jamie mentioned that, as we get through the balance of '18 and move into '19 and set our plans for the year and typically our guidance on the February earnings call, we'll be able to talk more about those costs and impacts and what the investors should expect into the future, whether that's for the balance of '19 and then beyond. And there are some of these timing impacts that are driven by -- certainly, our production levels and by winter, by the demand and the pull on the inventory at the end of the day that results on where those costs land. So I would just prefer that we get into that time frame and then are able to provide more concrete guidance to investors on the cost structure going forward. We still expect that we will reach our production capabilities with the mining systems that we have in place and that the cost savings at those run rate levels will be as we've discussed previously. I would just caveat that to say that we are adding additional resources here to get up to those levels and then optimize after that.

Very good. And Jamie, just a quick one on 2019 and beyond tax rate. How should we think about that going forward?

Yes. You should use in the 26% longer-term tax rate.

(Operator Instructions) We'll take our next question from Christopher Parkinson with Crédit Suisse.

This is Graeme Welds on for Chris. Just a question around the cost that we still have to see from the shortfall in production at Goderich this year in terms of the timing of how it'll flow into next year. I'm curious if -- obviously, a lot of it will be dependent on kind of the flow of sales. But I'm curious if there's any kind of color you can give us around the quarterly cadence of when you expect those costs to be realized?

Yes. So you can assume there's $7 million to $9 million of cost coming through in Q4. So we talked about the $15 million that just hit us in the third. There is $7 million to $9 million coming through in the fourth quarter. And then the carryover is -- has been estimated at the $15 million to $20 million. So again, the timing of weather and snow events can impact and move those numbers around.

Yes. Okay. Makes sense. And then kind of shifting gears over to Plant Nutrition South America. I just had a question on the volume outlook for the full year. I noticed that the guidance range for full year '18 came down quite a bit at the top end of the range. And I know that you've kind of had a more normal year this year versus last, but I was just curious as to what were the factors that led to that new guidance range versus the previous one that you put out last quarter.

Yes, sure. I mean, the easiest way to describe it is a focus on higher-value products. So we're really just -- we're selling higher-value products that have -- that are sold in fewer amounts of tons and have shed away some of the more commodity-type products. So we're focused on making more dollars, millions, and strong margins. Volumes will come over time. We have plenty of excess capacity down there. So yes, our guidance implies tonnage lower than 2016 levels, but we have improved profitability because of sales mix.

We'll take our next question from Mark Connelly with Stephens Inc.

And since we have no response, that concludes today's question-and-answer session. At this time, I will turn the conference back to Theresa Womble for any additional or closing remarks.

Thank you, Lauren, and thank you all for joining today. And if you have any other follow-up questions, you may contact the Investor Relations department. Information is available on our website. Thank you.

And that does conclude today's conference. We thank you for your participation. You may now disconnect.