Kestrel Group Ltd (KG) 2014 Q2 法說會逐字稿

Good day, ladies and gentlemen and welcome to the Maiden Holdings second-quarter 2014 earnings conference call. (Operator Instructions). As a reminder, this conference call is being recorded. I would now like to turn the call over to Noah Fields. Sir, you may begin.

Good morning and thank you for joining us today for Maiden's second-quarter 2014 earnings conference call. Presenting on the call today, we have Art Raschbaum, Maiden's Chief Executive Officer, along with Karen Schmitt, our Chief Financial Officer. Also in attendance today are John Marshaleck, Chief Operating Officer and Pat Haveron, President of Maiden Reinsurance Limited.

Before we begin, I would like to note that the information presented here today contains projections or other forward-looking statements regarding future events or the future financial performance of the Company. These statements are based on current expectations and future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially from these expectations. We refer you to the documents the Company files from time to time with the Securities and Exchange Commission, specifically the Company's annual report on Form 10-K and our quarterly reports on Form 10-Q.

Some of our discussions about the Company's performance today will include reference to both non-GAAP financial measures and information that reconciles those measures to GAAP, as well as certain operating metrics that may be found in our filings with the SEC and in our news release located on Maiden's Investor Relations website.

Please also note that unless otherwise stated all references to common share data in today's discussion are on a diluted share basis and comparative comments will refer to Maiden's results in 2014 relative to the corresponding period in 2013. I will now turn the call over to Art.

Thank you, Noah. Good morning. Welcome and thank you for joining us today for our second-quarter earnings call. We are very pleased with our operating results for the quarter and we believe they demonstrate the continued strength of our non-catastrophe, lower volatility strategy, which was developed to specifically serve the reinsurance capital needs of regional and specialty insurers. Highlights of the quarter include improved quarterly operating earnings, strong levels of investment income, increased book value, robust growth in Maiden's two active business segments, Diversified and AmTrust, and strong operating returns.

As you will have seen in the earnings press release we issued last night, Maiden reported operating earnings of $28.2 million, or $0.37 per diluted common share for the quarter and operating earnings of $53.7 million, or $0.70 per diluted common share for the first half of 2014. The improved earnings resulted from increased net investment income benefiting from a larger pool of investable assets and an improved cost of capital following the refinancing of the trust preferred securities in the first quarter of 2014.

For the second quarter of 2014, we achieved annualized operating return on common equity of 13%, while book value per common share increased 8.6% during the quarter as earnings were strong and mark-to-market values of fixed income securities were up at the end of the quarter. In the first six months of 2014, Maiden achieved an operating return on common equity of 12.6% as compared to 10% in the first half of 2013. Our combined ratio for the quarter was 98%, which is 4/10 of a percentage point higher than in the second quarter of 2013. The 2014 second-quarter combined ratio reflects non-operating losses related to the Company's excess and surplus lines property business, which was sold in the second quarter of 2013. Absent these losses, Maiden's combined ratio would have been 97.5%.

For the second quarter of 2014, Maiden enjoyed growth from each of its two major active business segments, Diversified Reinsurance and our AmTrust Quota Share, with net premiums written increasing 5% in the first half of 2014. But if we exclude the prior-period National General Holdings Corporation, or NGHC, quota share reinsurance premium, which was terminated in August last year, the growth rate was closer to 21%.

Beginning with a review of our Diversified segment, in the US, we had excellent growth primarily from the expansion of existing client relationships and to a lesser extent the addition of a number of new client relationships. While we are seeing an elevated level of competition, we are focusing our efforts on our core clients and growth in our higher-margin business segments. Importantly, deal flow remained strong.

Outside of the US, business developed by our International Insurance Services unit or IIS benefited from increased revenue in German and UK auto reflecting the impact of both marketing campaigns and rate increases. IIS is focused on partnering with insurers and auto OEMs to deliver branded products to their consumers. We have also begun to see the benefits of our efforts to diversify our clients and partners in Europe in this segment. As we mentioned last quarter, we have a relatively new business development team working diligently to expand our OEM client base. The business development team is entertaining a significant number of new opportunities today.

In Bermuda, we are starting to see a flow of international reinsurance opportunities develop in regional markets, predominantly in Europe and continuing to gradually expand our facultative reinsurance segment as well. In the aggregate through the first six months, Diversified segment growth is up over 14% year on year and 25% in the quarter. While we are encouraged by this growth, I would caution against taking the current period revenue increase in the Diversified segment as run rate. It is a highly competitive market and as I have commented in the past, disciplined underwriting is essential.

In the AmTrust segment, we continue to see strong growth primarily driven by the expansion of their small account workers' compensation segment. The pricing environment remains strong in this segment and AmTrust continues to benefit from their strong market position. Importantly, they remain disciplined and true to their small account, lower volatility hazard classes. Written premiums increased 28% in the quarter and through the first six months have grown 25%.

During the first half of the year, Maiden's combined ratio was 97.8%, higher than the 97.6% in the corresponding period last year and above our 96% target. The Diversified reinsurance segment combined ratio was 99.6% and higher than the 97.4% recorded in the first half of 2013. While some of the difference can be attributed to the previously mentioned non-operating charge, as well as changes in business mix, Maiden's US non-catastrophe property results continue to impact our earnings, but to a lesser extent than what we experienced in the first quarter. We are responding to this activity by honing our risk selection, as well as adjusting pricing as necessary.

Our non-US IIS business results were on target. Absent the excess and surplus lines property-related losses, the six-month diversified segment results would have been 98.9%. AmTrust continued to perform at or better than target with a combined ratio for the first six months of 2014 coming in at 95.3%, an improvement over the 95.7% combined ratio that was posted in the first six months of 2013. A strong workers' comp pricing environment continues to benefit the AmTrust segment. Karen is going to provide a bit more commentary on underwriting results for the quarter.

I will also discuss the reinsurance market in my closing remarks, but in general we are seeing increased competition from a variety of sources. Competition in our space is not new and we are working closely with our clients. We regularly are in communication with them to better understand their needs to maintain strong product differentiation. To counter the competitive environment, we are leveraging our competitive position as a highly efficient, attentive and nimble specialty reinsurer of low volatility, non-catastrophe risk for regional and specialty insurers. I'd like to now turn the call over to our CFO, Karen Schmitt, to review the quarter in greater detail. Karen?

Thank you, Art and good morning. As Noah said earlier, unless otherwise stated, all references to common share data are on a diluted share basis and comparative comments will refer to Maiden's results in 2014 relative to the corresponding period in 2013. We are pleased to report second-quarter 2014 net operating earnings of $28 million, or $0.37 per diluted common share, compared with $20 million or $0.28 per diluted common share in the second quarter of 2013. Maiden has now reported record operating earnings and investment income in the first two quarters of this year. Net income attributable to Maiden common shareholders was $26 million compared to net income attributable to Maiden common shareholders of $20 million in the second quarter of 2013.

Second-quarter 2014 operating results exclude an established provision of $2.8 million resulting from loss activity and additional reinstatement premiums related to ceded losses in the Company's divested excess and surplus lines property insurance business that was sold to Brit Global Specialty in May of 2013. We view this provision as non-operating and not reflective of our ongoing core business performance.

We managed strong growth in net premiums written during the second quarter totaling $541 million, an increase of 9%. If we exclude the prior-period premiums from the terminated NGHC agreement, the growth rate was actually 27%. The Diversified segment's growth rate was a healthy 25% with net premiums written totaling $169 million. The growth in the Diversified segment's premium was the result of both new business wins and increased premiums from existing client relationships in the US and internationally.

The AmTrust segment also saw a strong growth rate of 28% with net premiums written of $372 million driven by favorable trends in lines of business such as workers' comp. Net premiums earned increased 4% to $532 million. In the Diversified segment, net premiums earned increased 13% to $201 million. The AmTrust segment earned premiums grew 24% to $325 million. The NGHC segment net premiums earned were $6 million in the second quarter of 2014, down 92% reflecting the termination of the NGHC contract as of August 1, 2013. Net loss and loss adjustment expenses of $351 million were up $8 million during the quarter. The loss ratio of 65.7% was lower than the 66.5% reported in the second quarter of 2013 primarily due to changes in the business mix.

In the second quarter of 2014, Maiden reported a combined ratio of 98.0% compared with 97.6% in the second quarter last year. As Art mentioned earlier, the Diversified segment experienced continued elevated losses from non-catastrophe US property reinsurance contracts. The second-quarter 2014 Diversified segment combined ratio also included the previously mentioned non-operating provision of $2.8 million. These factors drove the combined ratio in the Diversified segment to increase to 99.9% compared to 97.4% in the second quarter of 2013.

Excluding the impact of this divested business, the combined ratio for the Company would be 97.5% and the Diversified segment combined ratio would be 98.6%. The AmTrust segment reported a combined ratio of 95.3% in the second quarter of 2014 compared to 95.5% in the second quarter of 2013. Maiden's net investment income increased to $28.1 million in the quarter, up 35% compared to the second quarter last year. The improved run rate of the investment income was driven by growth in investments of $517 million, a 19% increase compared to the end of the second quarter of last year.

We have maintained a consistent investment philosophy, which continues to focus on putting money to work in an investment-grade corporate debt and to a lesser extent government-sponsored entities. The new money yield on fixed maturities in the second quarter was 3.19% while the overall second-quarter book yield, excluding cash equivalents was 3.54%. At June 30, 2014, the average fixed maturity duration, including cash and cash equivalents, was 4.36 years compared to 4.33 years as of year-end. We have not changed our investment strategy and are not targeting an extension of our investment duration.

For the six months ending June 30, 2014, operating cash flow was $236 million versus $150 million in the first half of last year. Total cash on hand was $292 million, or 34% higher than at year-end. Total assets increased 6.5% to $5 billion at June 30, 2014 compared to $4.7 billion at year-end. Shareholders' equity was $1.2 billion, up 8.8% compared to December 31, 2013. Book value per common share was $12.46 at the end of the second quarter of 2014, an increase of 11.8% compared to December 31, 2013.

Also during the second quarter, A.M. Best improved Maiden's outlook to positive and affirmed our A- rating recognizing the strength of Maiden's business model and the progress we are making. I will now turn the call over to Art for some additional comments.

Thank you, Karen. I would now like to put our results into context with some brief commentary on the markets in which we operate. As I indicated earlier in the call, and in the past several conference calls, in general, competition in the reinsurance sector is intensifying. While for much of 2012 and 2013 this was primarily a catastrophe reinsurance market phenomenon, today, we believe that all segments within the reinsurance marketplace are experiencing elevated levels of competition.

In our core regional and specialty company market in the US, we see much more activity from the larger multinational multiline diversified reinsurers. Importantly, this heightened degree of competition is driving buyers to remarket programs at renewal and to much more actively seek improvement in terms and conditions. As I have indicated in the past, we believe that Maiden remains well-positioned with a variety of competitive advantages in our target market, but ultimately discipline will be key to maintaining profitable results.

In Europe, overall the market remains competitive. I have commented before that our unique International Insurers Services business development platform is somewhat insulated from broader market competition. The programs that IIS helps its insurer and auto OEM partners develop and implement are designed to be marketed through their own proprietary distribution channels. We do not compete with the broad reinsurance market for these programs. Additionally, we are continuing to push forward with a view that the regional insurer market in Europe remains vulnerable to more stringent capital requirements that will be required as part of Solvency II.

We are working on solutions and have begun actively marketing to potential small to midsize insurer clients in Europe. As we've seen in the past several quarters, with the growing earnings power of Maiden, we continue to move closer to achieving our target operating return on equity level of 15%. Going forward, we are committed to achieving that targeted level of performance by maintaining discipline while enhancing underwriting returns. That concludes our prepared remarks. Thank you for listening. Operator, could you please open the lines for Q&A?

(Operator Instructions). Randy Binner, FBR.

So on the Sandy losses that you picked up kind of via Brit, I guess, can you just describe the nature of those losses? It seems like that is a pretty long tail for that type of event, so can you describe like the nature of the losses and then maybe how reinstatement premiums made up the $2.8 million or what portion of the reinstatement was versus actual loss?

Karen, being fresh out of the US, I will have Karen field this call.

Hi, Randy. Sure. Actually the $2.8 million was a combination of Sandy losses and a little bit of non-Sandy losses. You might recall when we sold the business to Brit May 1 of last year, we retained the runoff of that business. So we did have a little bit of loss activity in that runoff and then the remainder was an increase in the Sandy loss, which generated a reinstatement premium. We buy a lot of reassurance or we bought a lot of reinsurance on that business and so to the extent that we have a large loss that goes into an excess layer as this one did, we have some additional reinstatement premium. There are a number of those losses that are still open. They are very complex claims. We are very comfortable with our loss reserve position right now, but in the event of a loss of that magnitude, it's not unusual for it to have a little bit of a tail.

Is it a property loss? I mean is it a casualty loss at this point? What is it?

Yes, it's all property. These losses are all from our excess and surplus lines property area. They wrote only property on a primary basis.

So Randy, as an example, if we were sitting on a property loss excess of a certain threshold and the claim was slowly developing and still sort of increasing in value, eventually it might breach our layer. We try to take a fair assessment of that when the claim is reported, but, in some cases, losses develop beyond that and that is really what this represents. Not new reports on Sandy.

Right. I am just trying -- I am not trying to be difficult, I just -- if it is a property claim and the event happened two years ago, are they still rebuilding the site? Like what develops in a property claim like that?

In some cases, they are rebuilding sites.

Okay, so you are still rebuilding something two years after the fact and that is causing more than expected and so you breached a new layer. I mean so I guess the next sense we are trying to get is if this could happen again, I suppose, right?

It's property rebuilding; it's also business interruption claims that are being discussed. So could it happen again? We still do have some claims open, but, as I said, we are very comfortable with the reserve positions that we have, but anything can happen.

And maybe putting it in context, this is not a huge part of our open reserve portfolio. We have about $15 million to $20 million of claims outstanding.

Okay. And then on the competitive environment, then I will give the floor over, I guess I am more interested in not so much how you are performing because you are doing very well in getting business, it sounds like. But is there a way -- your capital position is -- I'd say it is adequate to support growth. It is probably not excess given kind of AmTrust's growth and now you just did 25%. It was over a low comp. You did 25% in Diversified. So we have your premium surplus going over 1.5X in full-year 2015 and so I think you could do a little bit of debt, maybe $50 million. So can you confirm that that is the debt number and could there be like a sidecar or some alternative structure that you can take advantage of in this very capital heavy reinsurance market?

Well, first of all, probably at this point it is about $50 million. Although keep in mind we had a significant amount of growth in book value. So in the quarter, we had $75 million of increase from unrealized gains. So that has helped significantly and that certainly strengthens our breathing room. But beyond that, we've talked before about our efforts to constantly evaluate potential retrocessional purchases and we have active discussions -- we've had active discussions underway for quite some time. We want to make sure it makes sense that what we do creates economic value for our shareholders. But, as we've said before, we have a lot of capital options to choose from. We are not going to suppress profitable growth. We have sources of capital and we will use them when we need them.

So if you could rank order it, would it be debt, the sidecar or retro and then equity very last? Is that fair?

It might be preferred, sort of retro debt, but, look, I'd say retro is probably one of the most appealing if we can find it under the right circumstances, obviously, because it certainly doesn't have an adverse influence on our debt leverage or capital leverage. But, again, as I say, we have headroom and then keep in mind that, within a couple of years, we will be sort of converting the mandatory convert and that will change our position quite a bit and give us access to more capital. So I think, at this point, we feel comfortable with our capital position. We feel that we are in good shape and we think we have tools to grow it.

All right, great. Thank you very much.

You are welcome. Thank you, Randy.

Matt Carletti, JMP Securities.

Hey, good morning. Just a couple questions. They both relate to the Diversified segment. First is, just as I kind of look at Q1 to Q2 kind of movements in loss ratio and expense ratio, if we back out the E&S noise in the quarter, there was a nice 3-point improvement quarter to quarter. I know weather is part of it and I know mix was cited as part of it. Also, kind of offsetting that, the expense ratio climbed. So I guess my question is how much of that is mix in that we are just seeing the same combined, but a different loss and expense ratio mix by product and is any of it kind of true margin at the end of the day that we are starting to see some of the pricing in the prior years come through and is called sustainable?

Matt, hi, Karen. Well, we actually saw less of an issue with excess property during the quarter. It certainly is not performing at our expectations still, but it was less of an issue. So I would say that, as I think you mentioned, that is really the largest impact.

The other thing I would say, Matt, is that our mix can change -- between loss ratio and expense ratio, it can change quarter to quarter if we write a big book there. That is going to bring a big chunk of expense relative to the ceding commission, probably a lower relative loss ratio. On the other hand, if we see growth in excess, we are going to see a lower expense, but a higher loss ratio. So we tend to look at the combined ratio of the target business that we get as the more kind of valuable number in terms of the way we manage the business. And I would say nothing unusual went on there. In terms of mix, if we write a bit more quota share business, that is probably going to push our combined up a little bit, but, on balance, absent the comments that Karen made about property, we think we are reasonably in line.

Okay, so the 98.6% I think is the number that was the clean number in the quarter. That is kind of a fair enough where we stand sort of run rate?

Well, some of that -- there is still some influence of excess property. I think our view is, in the world we are in today, probably 97% to 97.5% is a reasonable mix.

Okay, great. That's helpful. And then, secondly, just on the top line in Diversified, your comments at the opening of the call sounded obviously very positive in terms of prospects, but I completely understand the don't carry forward the 25% sort of caveat. When you look at six months and you look at 14% growth and then you look at where we stand today, I know you can't predict tomorrow, but in the environment we are in today, is that a level that you are comfortable with, you think those opportunities are out there, that something plus or minus low mid-teens is something that business can run at and if the competitive environment changes then obviously all bets are off, but as you see it today?

Well, I'd say that's certainly a target for us. We want to achieve that and I'd say to the extent we've got robust quoting opportunities ahead of us, that certainly helps our odds. The other thing I mentioned was our IIS business, which has been a little more flat over the last few years. I think we see a number of opportunities to build that business. Most of those may probably come more in 2015 than 2014, but we see a lot of areas of the business in the Diversified segment that can experience growth. The big caveat is the one I always mention, what the market has launched, but, yes, from our perspective, success for us would be to achieve sort of that low to mid-teen growth rate.

Great, thanks for the answers and congrats on a nice quarter.

Thank you very much, Matt.

Bijan Moazami, Guggenheim.

Good morning, everyone. I just want to follow up on Matt's question and get a little bit more details in terms of what is growing and what is not growing in the Diversified reinsurance. So if you have existing clients buying more reinsurance, what are the kinds of stuff they are buying -- workers' comp, commercial auto? Why are they doing that? If you are getting new clients, how many of them are from Europe versus US? What kind of business are they writing with you -- long tail, short tails? Just getting a little bit more detail in terms of the growth rate there.

I think that a couple of things. Internationally, the growth rate is kind of matched between IIS, as well as the US. They both grew at about a 25% clip in the quarter. So in the case of our international business, it is really coming from expanded marketing programs from existing clients and some level of price strengthening that took place. We have talked in the past that some of the insurance, particularly in places like Germany and the UK, experience some cat activity. Fortunately, we did not, but that has resulted in a market where pricing has been strengthening.

In the US, we've had quota shares that have been expanded from existing clients that are growing, that are finding the need to expand their capital base to support profitable growth. We've added in the quarter three or four new clients as well and even some of our excess customers have come to us and asked us to consider quota share opportunities. So to the extent that we have been providing them excess protection, we think that growing with customers that you know is certainly a good strategy and we want to be there to serve their needs and to the extent that they are experiencing opportunities to build their business, we want to support them. So I think mostly we are seeing really expansion of new clients and then some requests from clients to either expand existing contracts or provide quota share support as well.

How much of that is driven by a very strong pricing dynamic in the agency primary insurance business? So what have you, workers' comp and smaller account category?

I think it probably falls into two categories. I think to a large extent, a lot of this has been driven by increased pricing and the effect it has had on revenue for some of our clients. It is also obviously driven by -- it is not necessarily -- it may not be that current pricing is growing exponentially, but they have had to absorb a fair amount of strong pricing over the last year or so and that is putting pressure on their balance sheet. So I think we still think that the US primary pricing environment is net positive, but obviously not at the level of rate increase activity that we saw last year and the year before. But, yes, I think some companies, they are finding opportunities to build and grow their business. Maybe they are acquiring other books of business and that all requires some currency to help them acquire.

Just to understand a little bit better the timing of all of that, so as higher pricing is earned, there is going to be a higher demand for reinsurance and as the statutory capital of some of these primary companies is going to recuperate, I assume at some point the demand for reinsurance is going to come down. Right?

In our space, it kind of varies over time over the cycle. We always have some segment of the marketplace that needs almost permanent pro rata support. And then there is companies that may start to move their retention along as the market gets more competitive. So it's generally a slower phenomenon, but that does occur and we've commented about it over the last three or four years, seeing periods where clients decided to raise retentions. We've not seen a lot of that at this point, but that certainly can happen.

Thank you.

Ken Billingsley, Compass Point.

Good morning. I wanted to just follow up on a couple of the questions and comments that you made. One of them was you talked about competition in reinsurance expanding from just property lines into other spaces. When you are talking to customers and clients, can you talk about what is your diversification? What are you offering the clients as you are obviously selling yourself over your competitors who are trying to horn in on the space?

Sure. I mean we always like to offer customized solutions, things that are more responsive to their specific needs rather than sort of a generic incumbent program. Beyond that, we focus a great deal on building relationships with our clients. So to the extent that we do pre-quote audits, we get very involved, we try to understand what the clients' needs are and we sort of develop a plan. Whether it is something that structurally we need to build into the contract or it is a service or additional value added that we bring, at points like this, we heavily emphasize the fact that we do collateralize obligations, which is a very significant advantage that we have. And I'd say loss costs being equal given our expense efficiencies, we do believe that we have a pretty competitive position without undermining underwriting discipline. So comparatively speaking, that efficiency helps us a great deal in our market segment. Karen, do you want to add anything to that?

No, I think that is right. I think, from a pricing standpoint, we are certainly not always the cheapest market, but we have got very strong relationships with our customers and we are there to provide services that they need when they need them. So the collateralized trust is something that today no other US market is doing. So that is definitely a differentiation for us.

What does the customer retention ratio look like?

Our target is 85% and we are right around there at this point. And I think sometimes we have been running a little bit closer to 100%. We keep customers for a very long time period. Some of our relationships go back over 15 years back to our GMAC RE days. But with the competitive market right now, it is a little bit lower than it was, but still very strong.

And moving onto -- you talked about E&S, their property business losses in the second quarter continue to come. Where are those coming from and what are -- are there any levers that you guys can turn to actually adjust that as opposed to just stop writing them? What is the plan going into 2015?

Well, it's important to note, Ken and it is one of the reasons that we have characterized this as non-operating, we sold this business actually. We do not write this business anymore. So it has been in runoff. In fact, we have really virtually no more earned premium to flow, no unearned premium left. So it is in complete runoff. When we sold the business, we kept kind of the in force and so it is really just loss activity on the in force mostly from known losses that developed a bit. And as Karen said, a chunk of that was just reinstatement premiums on reinsurance that we bought behind that business, as well as a small amount of new loss activity. (multiple speakers).

I apologize. I asked the question wrong. I thought your comments were that you still had other property losses. Did I miss hearing that?

Sorry, yes, I thought you were referring to the E&S. So our other property losses are really just part of the normal business that we write supporting our clients. I mentioned in the last quarter that while we had seen kind of an elevated level of frequency of severity in that quarter, for the most part, they were coming from long-standing client relationships that had been relatively profitable. This quarter, we saw a muting of the severity, but still a bit of higher-than-expected frequency loss, non-cat related. So our response on that is really to look at kind of our risk selection and look at where we need to attack pricing as necessary. In some cases, they're excess accounts. This just happens to be the year we had a loss. In other cases, we may need to take a bit more action.

And are these -- is this on the auto side or can you say where they --?

It would be commercial property. Geographically, it's in different parts of the country. So it is not that we can say that it is a geographic trend or anything of the sort. You probably heard a number of primary companies in this last quarter reporting an elevation of non-catastrophe property losses. And I think some of that is affecting us as well. But they generally are comparatively smaller properties for the regional companies that we reinsure.

And the last one now, I do want to get to the E&S business that you guys did sell and just following up I think on Randy's question earlier. With the reinstatement premium in place, what is the next threshold where you guys would have to actually put up more reserves here?

We do have a number of losses that are still open and are still actively being settled and negotiated. So to the extent that those reserves don't hold, we could possibly put up some more reserves. But it's as equally likely I suppose that some could settle lower than the reserves. So at this point, we have the reserves up that we feel are sufficient for the remaining cases that are open.

And again, as I mentioned in the question earlier, we are not holding hundreds of millions of reserves. It is a fairly small defined universe of outstanding losses.

Well, thank you for taking my questions.

Thank you very much, Ken.

Thank you. At this time, I would like to turn the call back to Noah Fields for closing remarks.

Thanks all for joining us today and we look forward to speaking with you in the future. Have a great day.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. You may all disconnect. Everyone, have a great day.