Consumer Portfolio Services Inc (CPSS) 2013 Q1 法說會逐字稿

Good day, everyone, and welcome to the Consumer Portfolio Services 2013 first-quarter operating results conference call. Today's call is being recorded.

Before we begin, management has asked me to inform you that this conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements made during this call that are not statements of historical fact may be deemed to be forward-looking statements. Such forward-looking statements are subject to certain risks that could cause actual results to differ materially from those projected.

I refer you to the Company's SEC filings and for further clarification. The Company assumes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

With us here now is Mr. Charles Bradley, Chief Executive Officer; Mr. Jeff Fritz, Chief Financial Officer; and Mr. Robert Riedl, Chief Investment Officer of Consumer Portfolio Services. I will now turn the call over to Mr. Bradley.

Thank you and welcome to our first-quarter earnings call. I think you can see from the press release we had a very good quarter. We are very pleased with the results in terms of the earnings, almost throughout. Both top-line expenses, the bottom-line earnings have all been what we would have expected and are certainly in line with our expectations. So, for us it is a very good start to the new year, just about in line with everything we talked about.

I think originations were -- they went up substantially, in line with what we would expect for the year. They probably didn't quite peak the way we thought they might. But I think part of that is just because of the sort of slow roll this year with the tax refunds. So we grew substantially but not quite as much as we might usually grow.

But again I think we will touch on that a little bit later, but there is a little more competition. And again, you can't really chase the loans.

In terms of collections, our collections continue to perform very well. Our portfolio is now growing, so we are in fact adding new collectors, but with very strong results there as well.

We did another securitization. It was the lowest cost of funds ever achieved in a securitization by our Company. We keep saying that rates keep getting lower, and it is surprisingly that they continue to still go down. I guess at some point they have got to bottom out.

But our margins have remained strong, and so we have plenty of room in terms of going-forward margin. We actually had a stronger discount in the first quarter than we would have expected, and our coupons have remained strong throughout. So in terms of our cost of funds, we have done very well.

We did in fact renew one of our warehouse lines. The Goldman/Fortress line was renewed as we announced during the quarter, and we continue to work on strengthening our balance sheet as we go forward.

We will talk a little bit more about the industry results in a minute. I will turn it over to Jeff Fritz to go through the financials.

Thanks, Brad. Welcome, everybody. Beginning with the revenues, the revenues for the quarter were $54.6 million. That is an 8% increase over the previous quarter, the fourth quarter of 2012, and a 23% increase over the first quarter of 2012 of $44.5 million.

The revenues, of course, are directly tied to our consolidated portfolio. It was aided by originations of $180 million here in this first quarter. The consolidated portfolio is up 9% for the quarter, quarter-to-quarter, and 31% compared to a year ago.

Moving to the expenses, $48.1 million for the quarter. That is an increase of 5% over the previous quarter and an increase of 9% over the year-ago quarter.

We have really fallen into a pattern on expenses over the recent quarters. We have had slight growth in the core operating expenses, reflecting the growth in the business, but somewhat offset by realizing some economies of scale. And we have had generally decreases in interest expense over the last, I think, five quarters now as a result of the runoff of the higher cost ABS and those being replaced by newer lower-cost ABS financings.

Then the other pattern we have seen regularly is an increase in our provision expense for credit losses, which have increased but are in line with our expectations and based on our originations (technical difficulty) portfolio growth. Looking at the loss provision specifically, $15.1 million for the quarter. That is a 31% increase over the previous quarter and a whopping 200% increase over the first quarter of 2012. Again, those increases are very much in line with our expectations and forecast and budgets, based on the growth in the originations volume and the growth in the consolidated portfolio.

Pretax earnings for the quarter, $6.5 million, a 41% increase over $4.6 million in the previous quarter and a giant increase over the $0.5 million in the first quarter of 2012. Net income for the quarter, $3.8 million.

That is -- here we are going to get into some comparison issues, comparing this quarter's net earnings after-tax with the previous quarter. As you will recall, in the previous quarter we had a reversal of our valuation allowance for deferred tax assets of $60.2 million, all in that fourth quarter. So last quarter's net income was $64.8 million, of course significantly reflected by that tax benefit.

A year ago, there was no tax income -- or income tax expense. And so the after-tax is the same as the pretax.

Diluted earnings per share for the quarter was $0.12. That is a significant increase over a year ago of only $0.02. Again the fourth quarter was impacted significantly by the reversal of the valuation allowance on the deferred tax assets.

Moving on to the balance sheet, unrestricted cash was $13.9 million. That is up a little bit from $13 million for the previous quarter, and up a little bit more from $10.6 million a year ago.

Our restricted cash balance is $139.4 million. That includes, as it does almost every quarter for the last five quarters now, a significant deposit associated with the pre-fund of our most recent securitization. Of that $139.4 million, $68.7 million reflected the pre-fund proceeds which were utilized in the pre-funding of the '13-A securitization.

Moving on to the finance receivables, the balance of finance receivables after the allowance for loan losses was $832.5 million, an increase of 12% from the fourth quarter of last year and an increase of 53% compared to the year-ago quarter. That does not include our Fireside portfolio, which (technical difficulty) reflected separately and recorded at fair value. That portfolio now we have had and owned for about 18 months. It is $43 million, and that continues to amortize. It's around 28% from the fourth quarter of last year, down 68% from a year ago.

Looking at the debt side of the balance sheet, the warehouse lines was $26.7 million at the end of the quarter compared to $21.7 million in December and $28.9 million a year ago. You will recall we have $200 million of aggregate warehouse capacity; but at the end of each of these quarters we will have -- we are always completing our quarterly asset-backed securitization and generally only have nominal use of those warehouse facilities at that time.

Most of these other captions are pretty static -- the residual financing, the long-term debt. The securitization of $901.7 million reflects our most recent securitization, '13-A, for $185 million. But this picture did change a little bit with respect to residual financing and long-term debt after the quarter, and Robert will go through a little bit more detail on that when I am through.

The managed portfolio, now $968.5 million, compared to -- that is an 8% increase over the fourth quarter and a 24% increase over a year ago. The non-balance-sheet components of the managed portfolio are really shrinking and running off. We have an off-balance-sheet securitization that is only $12 million at the end of this quarter, and a little third-party servicing portfolio that's down to $8 million.

Moving on to some of the performance metrics, the net interest margin for the quarter was $38.3 million. That is 16% increase over the fourth quarter of last year and a 72% increase over the first quarter of 2012, the year-ago quarter. Again, these numbers are significantly reflected by the very good cost of funds, low cost of funds that we are getting on the new ABSs, offset by the runoff of the higher-cost ABS which get smaller and wind down and get paid off with each successive quarter.

The risk-adjusted net interest margin, which reflects the provision for loan losses, $23.1 million for the quarter. That is up 8% from the previous quarter and up 33% from the year-ago quarter. So even with the increasing provision for expenses which I talked about and which are in line with our expectations, we are still seeing significant improvements in the risk-adjusted NIM.

Core operating expenses for the quarter were $16.6 million. That is down 1 percentage point from the fourth quarter and down 2 percentage points from the year-ago quarter.

As I alluded to, our core operating expenses are really starting to show the economies of scale. We have seen relatively little growth in the core operating expenses even as the portfolio and the revenues have grown significantly.

Looking at those expenses as a percentage of the managed portfolio, 7% for the quarter just ended; and that is a decrease of 8 percentage points compared to the fourth quarter of 2012, and a decrease of 19 percentage points from the year-ago quarter -- first quarter of 2012.

One last metric. The return on managed assets as a percentage of our -- the return on managed assets which is our pretax income as a percentage of our average managed portfolio, 2.8% for the quarter. And that is an increase of 32% compared to the previous quarter and a whopping increase of almost 1,000% compared to the first quarter of 2012.

And with that I will turn it over to Robert.

Thanks, Jeff. First of all, going through some of the portfolio performance metrics on the delinquency side, we finished the quarter at 4.16%, down from 5.55% at the end of December and up slightly from March of last year at 3.51%.

We are definitely seeing some impact from the first-quarter tax refund season in the improvement sequentially. We are up slightly year-over-year; and as folks have alluded to, tax refund delays I think definitely had an impact there. We would expect our delinquencies to improve through April, which is not typically the case.

On the net loss side, annualized net losses for the first quarter were 4.23%, up slightly from the December quarter of 4%, and as well up slightly from a year-ago quarter of 3.9%. Year-over-year we are up slightly; but compared to any of the first quarters in the last cycle we are still at a much lower level.

At the auction market we saw a strong seasonal uptick in the first quarter. We were at 49% in the first quarter this year, compared to 46.8% in the December quarter and 48% a year ago.

That is tied to tax refund season as well. We would expect going forward in the year to see a little bit of softening in that, but still we would expect a strong number given the industry dynamics of the lower production in the last few years.

Looking at the capital markets side, Brad and Jeff have alluded that we did have a busy start of the year. We did our first securitization in March, the '13-A, $185 million. Lowest cost of funds ever for the Company at 1.87%.

That deal was very similar to the last few deals where we had five tranches rated by both S&P and Moody's and a pre-funding structure. We continue to move that blended cost down from 2.05% in the December deal and 2.5% in the September deal, so we are still making strides there.

Brad mentioned we also renewed one of our credit facilities. It's a $100 million line with Goldman and Fortress.

We renewed the revolving period, so that is -- we have two years that revolves. And we also added a two-year amortization period. That will give us increased flexibility depending upon the capital markets environment at the time, at the end of the revolver. We were also able to move the advance rate from 82% up to 88%, which enhances our liquidity.

Last week we also did a couple of things that were important for the long-term improvement of the balance sheet. We entered into a new residual facility, $20 million, that is secured by two of our newer deals, the '12-C and '12-D transaction.

It is able to bring down the cost on that versus our existing residual at LIBOR plus 11.75%. And we were able to extend the majority on that also, so that is a five-year term versus the one-year terms that we have had in our long-standing facility.

We would expect to have interest-only payments on that for the first few months of the deal before we start amortizing. But we have five years to fully repay that.

With most of the proceeds there we paid down $15 million of our senior secured debt. That was the $50 million that was on the balance sheet at quarter end that is due in December. As part of that repayment we amended that transaction to decrease the interest rate from 16% down to 13%, and we extended the maturity of the remainder from December of this year to June of next year. So on a blended basis with this new residual and the decrease in the interest rate on our senior secured debt, we have decreased the blended costs of our corporate and residual debt on the balance sheet by over 200 basis points.

With that, let me turn it back to Brad.

Thanks, Robert. In terms of looking at the industry, I think everyone -- we certainly hear a lot of comments throughout that the industry has become very competitive. I don't know that it is particularly getting more competitive than we have seen in the past.

I think you have a combination today of a few, what we will call overly aggressive companies out there buying somewhat irrationally, because they either need the growth or for whatever reason. But we certainly see that often, and it happens every -- certainly every cycle, and we see it on a relatively frequent basis. And for the most part, you let those people run on towards the cliff, or whatever they are doing, and you don't worry about it.

On the other side of the spectrum we also are seeing and have continued to see for the last almost 18 months lots of new small startups. And to the extent they are well managed and well run, then they grow very slowly; so they are not particularly a factor in terms of what we are doing. To the extent they grow really quickly then they join that first group, where they are growing too fast and they cause their own problems.

Within that environment, we have always -- somewhat repetitive -- but in terms of our growth strategy with that is we never affect our credit in terms of how we grow. We grow by expanding our geographic footprint and adding more marketing people.

And as I have said many times in the past, you can put people in new markets and you are going to get some amount of business just because of your presence in that market, as opposed to having to truly compete until you have really saturated the entire country. And even at this point, as much as we have grown quite a bit, we have not even come close to reaching that saturation point.

Today, we currently employ 75 marketing representatives. We used to have as many as 125.

One of the things we mentioned in earlier calls or even last year was our strategy of doing a lot of hiring in the spring and summer and then getting those people trained. And then when they hit the growth period, which is usually the first six months of the year, that they would be well positioned to do well during that.

So we hired a whole bunch of people last year to get to 75 marketing reps, and it has turned out that that has paid off rather well in that they are all now experienced, they are doing a very good job of growing and achieving the growth we are looking for this year, because they have had six months of seasoning as we came into the growth season. We will probably do exactly that strategy again this year. Grow, maybe add another 25 or 30 reps, so that we will be well positioned to grow again next year.

So we really wanted to try that out. It has worked tremendously well for us, and we will continue. And one of the real benefits of that is that keeps you away from having to look at what you are doing and compete with anyone to the extent we are just adding people that are going to compete in those markets and achieve some foothold, regardless of what the other folks are doing.

So that's been our longstanding strategies. It's worked very well, and we are going to continue to employ it.

In terms of the collection branches, as everyone knows we have four collection branches. When we downsized because of the last recession a couple years ago, we kept all those branches in place.

As I think I mentioned earlier in the call, the portfolio is now growing again. We are in a terrific position in terms of having lots of well-seasoned collectors, middle management, in those branches. So as we expand and grow and we need to hire more collectors, we are going to have a very seasoned management team to train those new people. And so we should have rather seamless growth in the collection structure or infrastructure needed to handle the growth of the overall portfolio.

Again, I am not so sure all those other companies can say that. It is one of the things we certainly planned on, and it will pay big dividends as we grow this year and in the following years.

One other interesting note is, because of the high margins and the low cost of funds, we are developing a lot more cash than we have ever had on the balance sheet before. As Robert pointed out, we have done a couple of transactions to bring down our cost of funds, pay down some debt.

But not only do we have that, but now we are beginning to sit on significant amounts of cash, which again gives us a lot more liquidity. It gives us a lot more flexibility in terms of how we do things.

That I must admit we may not have planned on, because certainly last year or 18 months ago we wouldn't have planned on having the cost of funds in the industry remain so low, or on Wall Street, and [earn] us to maintain even higher margins than we expected. So we think that is a very -- obviously it is a very good result, and we don't see any reason why that won't continue in the future.

In terms of the overall economy, I think Wall Street is still doing what we have talked about. The rates are exceedingly low. We are getting tremendous execution on our deals.

It is also, as we pointed out, in redoing our balance sheet giving us real opportunities to bring down rates, get lower cost of funds, and in fact pay off some more debt. So that is real good.

I think the overall look in terms of car buying remains strong. I think this year we did experience a little bit of a different thing because of the fiscal cliff issues in Washington and then the slower tax season. Normally, we would see a lot of growth in the February, March, and April and based a lot on the tax refunds; and also the first quarter performs very well when all that money comes in, in terms of asset performance.

So this year we think it is drifting into the second quarter. So that April and May, which usually are a little softer than the first quarter, could be much stronger in terms of portfolio performance metrics or losses in DQ. And in the same token we may see a little more growth in the second quarter than we would in the past.

So we will have to see how that goes. Either way we have achieved enough growth this year to where we are very close to our targets anyway.

In terms of the future, I think ironically if you look at how the Company performed in 2005, 2006, 2007, that was a nice, big growth cycle for us. And it wouldn't be hard to imagine us doing very much the same sort of thing, with the exception that because of the low cost of funds and the better capital structures we are going to probably become less leveraged significantly in this run than in that run. But in terms of us growing and moving along it is not hard, given we have done this a few times, to look at those years as sort of a template for how we might achieve in the future.

Generally overall, as I said originations have been very good. The collections remain strong. In terms of our infrastructure, everything is terrific. In terms of our balance sheet, it is better than we expected and we will continue that trend.

So we are very pleased with how this year started off and certainly expect it to continue as we go through the next few quarters. With that, we will open it up for questions.

(Operator Instructions) Kirk Ludtke, CRT Capital Group.

Good morning, everyone. You mentioned in your remarks that there are pockets where the market is becoming more competitive, and yet you are not -- your underwriting standards have not changed.

You may have mentioned this, but I missed it. Can you talk a little bit about pricing trends?

Sure. I think we are willing to compete on pricing, not on credit. And so we have been a little surprised that this year we were able to maintain our growth strategy goals without really having to change our pricing.

That is probably much more because of the expansion of our marketing group. As I said, we added 30 or so people between Spring and Summer of last year till now, and so those people really gained their footing in the last six months of last year to where they were able to do lots of good things this quarter and hopefully in the quarters coming along.

So we really haven't had to compete particularly on pricing. We have kept our numbers about where we thought. I think we thought our discount could drift down the 3%; it has maintained closer to 4%. Our APR has sat around 20% the entire time, so we really haven't changed anything in pricing.

And like I mentioned we have actually done a little better on the discount. So we are very pleased with how that has happened.

Again I think in some certain places there is more competition. I think some places like Texas, we tend to see a lot more startups in Texas, there are a lot of bigger companies in Texas. So to pick a place where maybe they have been competitive, we lost a little market share, it would be there. But based on the overall geographics it wouldn't -- it doesn't really matter to us.

Thank you. That's helpful. You mentioned that you are building more cash than you may actually need to run the business. Is there a level of cash above which you would start using that cash to pay down debt? Or do you have a targeted cash level?

For a minute there I thought you were going to saying we were going to have a dividend. We have never really thought about a dividend.

(laughter) I didn't say --

That is certainly not on the horizon. But yes, I think to the extent we build up more cash, that we continue on the trend line of building up -- not excessive amounts of cash, but more cash than expected, yes, we would continue to look for ways to pay down our debt. A dividend is still a little in the future.

Is there a level of cash that we should think about as a target level?

Well, I think an easy way to think about it is, we have to have a minimum amount of cash on the balance sheet, about $8.5 million. And for a long time, particularly during the lean years, a few years ago, we would be skating right around that $9 million, $10 million range. Today, we probably carry something closer to $20 million to $25 million in cash.

So it's hard to say right off. One of the things you can do when you are sitting on cash is use it to supplement your warehouse lines, and so that is one area that we get an advantage.

In terms of how we are going to pay down debt, it is really when it comes due. The residual -- the old residual, as we will call it, is due in October, so there is a good chance we could pay that off if the cash continues to exceed what we expected.

We have the remainder of our senior lender debt due next April. We would expect to pay that off as well.

So you think you can pay that down with internally generated cash. Or would that be -- would some portion of that need to be refinanced?

if trends continue, we'd probably do some portion of it refinancing. Certainly to be safe that is what we assume.

If the cash continues to do what it has been doing, that would be an interesting decision to make next April. We certainly could pay the debt this fall with cash. Next April we would have to see how we do the rest of this year.

Great. The share count moves around with the share price. Could you remind us the total number of shares and warrants and options that are in the money?

Well, I think at this point if all the options and such were exercised, you could have something in the 33 million to 34 million share range.

Okay. I appreciate that. Thank you.

It is a little complicated given there is a treasury stock method in terms of how the shares are accounted for. But the answer is, if the stock continues to go up, those shares will become much easier to see on the balance sheet.

Right, right. That's helpful. Thanks. The provision for credit losses was up, as you mentioned, a little bit. Is there a normalized provision that you could -- I know you don't give guidance. But is there a normalized level of provisioning that we should think about?

Jeff, do you have -- it is really the methodology of how we achieve the provision. You got a thought on what the normalized level would be?

Well, I think we would be looking for it to settle in at around 7%.

Okay, so we're pretty close to that already. Okay. So it should level off.

Then lastly, Robert, you mentioned the seasonality of delinquencies. Is this the new normal? Should we expect this cadence going forward?

I don't think so, Kirk. I mean there is clearly some things that were going on in that, with the politicians in Washington and the budget deficit. So they didn't start accepting tax returns until two weeks later than typical. So for the moment we would say this is probably a one-off; but who knows?

Awesome. Great quarter. Thank you.

Thank you.

(Operator Instructions) John Hecht, Stephens.

Morning, guys. Thanks for taking my questions. Just a little bit more on the competitive environment. I am just wondering -- your key lending programs, where pricing and fees were, say, a year ago and where they are now? Is it across the board, or is it only in a few select FICA ranges that you are seeing the competition change?

Well, if you look back at -- I think from the way we would look at it, the APR has basically been the same for the last couple years. Our discount three years ago was nearly 10%, and so it has drifted from 10% down to 4%. That has probably been distributed across all the programs in terms of what we have given up.

I think last year our goal was to keep the discount around 5%, and we did just about that. Our goal this year was to keep the discount around 3%.

So we are expecting to give up some of that pricing, remembering in a fully normalized environment our discount used to be a point and a half. So this year we have done a little better than expected, in that we are still running close to 4% when we might've expected it to drift down into the low 3%s.

Now, it may still do that. To the extent we look at our growth targets and such, we could give up a half a point whenever we want. But I would imagine -- again if you are going to pick some numbers, we would expect the discount to stay around 3% this year, if not higher. But in terms of what we have given up since last year -- what did the discount end last year at?

4%.

Right. So we really haven't given up too much since last year. But the year before it ended at?

Jeff Fritz? 8% or 9%.

I think within the last year, John, we have given up some. First quarter last year we were around 7% on the discount, and we have strategically cut price to help volume grow.

Right, but I think what is interesting is that we went from 7% last year, ended the year at 4%, and we still have room to go. And we really haven't had to give up anything this year.

That is a little surprising to us. But again, we have the room to go to 3% if we wanted to and still be within our targets.

On the yield side, pricing you mentioned. Anything there to talk about?

In terms of the --?

Other than -- I mean you have talked about discounts; but about pricing?

No, we are pretty firm on keeping our APR with a 20% handle on it. It really hasn't gotten close to 21%, but it certainly hasn't gone below 20% either. So we would expect to maintain that number.

Just to give us context, in say 2007 where the environment was certainly competitive, where were yields at that time?

Five, six years ago, John, APRs were about 18%. So those were our coupons. And our fees, as Brad mentioned, were between 1% and 2%.

Okay, so there is still -- you have still got -- it is still a much better pricing environment than it was then.

Absolutely.

Right, both in terms of those two yield numbers and then the overall Wall Street pricing is still way better. So.

Okay. Then with respect to the securitizations, you mentioned the five tranches. Where are you selling down to with the five tranches?

Single-B.

Single-B? And what is the residual value that you guys hold after that in terms of the percentage of that to par?

We hold about 1%, John.

Okay. Rob, where do you think spreads could go in the near term? You think they are stabilizing at the low end or you still think you might get some release?

Well, for us, remember John, we still -- our senior tranche is a AA by S&P and an A1 by Moody's. So as we continue to show improved performance on financial statements and delever the balance sheet, we will have -- I would say within the next year or so we should be able to get to AAA levels. If we are able -- once we're able to do that, we should be able to bring our spreads in further.

In terms of -- with our current structure we are probably -- we are close. I think deals that continue to come out are still seeing very strong demand.

So I think our blended spreads today, for the next year, are probably going to be in the same ballpark. Once we get to that AAA on the senior tranche, though, we should be able to bring the whole thing in.

Okay.

That's probably the safe way to look at that, would be at some point these numbers have to go up slightly. So if we do get to AAA that would be a cushion against it going up, say, this year.

So we might look at it as much as we -- we have some little more conservative projections. It is probably not a bad guess to think our yield at least for the next six to nine months stays the same, in terms of our cost of funds.

Okay. In terms of the vintage analysis, I know it is young, but how does the '12 vintage look on a static pool curve basis relative to other years?

It is still really strong, John. I would say you go back and you look at our 2010 vintage is running much, much lower than anything we have seen before in the history of the Company, kind of mid to high single digits. 2011 is a little bit higher, maybe it gets to 10%.

2012 is a little but higher than that, but still as good or better than anything we saw from the first versus the last cycle, which '03 and '04 were 12%, 13%.

Okay, got you. That's good perspective. Finally, is there any other corporate debt that you guys can refi in the next few quarters? Or are we, in terms of your corporate interest expense, are we stabilized there?

Well, as I mentioned a little bit ago, that we do have the other residual deal which is around $14 million coming due in October. We could pay that off.

What is that -- your cost of financing?

About 13%.

Okay.

I think it's 12 and 7/8%, something like that. So we could take that piece out.

But we really only have that piece, the new residual of $20 million, and then the $37 million of our senior debt that is due next April -- or not due next April, but we could pay it sometime next year. So this would be the three pieces we look at.

In terms of the retail notes, we probably aren't as concerned about paying those, since what we can do is lower the rates as we continue to renew those.

Yes, okay. Great. Thanks very much, guys.

Thank you.

I am showing no further questions at this time. I would like to turn the conference back over to management for any closing remarks.

Well, thank you all for attending this call. I think as we said and gone through it, we had a very nice first quarter. It is right in line with what we would expect. We also think it positions us for a very good year in 2013.

We ironically have been here before, and it is nice to see that as we get to repeat what we have done in the past we have been able to tweak things and improve things. So as much as it's our third cycle through, we're at least starting on the right foot to make it the best cycle we have ever had. So thank you all for attending and we will talk to you next quarter.

Ladies and gentlemen, this does conclude today's conference. You may all disconnect and have a wonderful day.