Local Bounti Corp (LOCL) 2022 Q1 法說會逐字稿

Good afternoon, and welcome to the Local Bounti's First Quarter 2022 Earnings Conference Call. (Operator Instructions) Please also note today's event is being recorded.

At this time, I'd like to turn the conference over to Jeff Sonnek, Investor Relations for ICR. Please go ahead.

Thank you, and good afternoon. Today's presentation will be hosted by Local Bounti's Co-CEOs, Craig Hurlbert and Travis Joyner; President, Brian Cook; and Chief Financial Officer, Kathleen Valiasek.

The comments made during today's call contain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts are considered forward-looking statements. These statements are based on management's current expectations and beliefs as well as a number of assumptions concerning future events. Such forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from the results discussed in the forward-looking statements. Some of these risks and uncertainties are identified and discussed in the company's filings with the SEC.

We'll refer to certain non-GAAP financial measures today. Please refer to the press release, which can be found on the Investor Relations website, investors.localbounti.com, for reconciliations of non-GAAP financial measures to their most directly comparable GAAP measures.

With that, I'd now like to turn the call over to Craig Hurlbert, Co-CEO.

Thank you, Jeff, and good afternoon, everyone. Since we last spoke with you in mid-March, we closed our acquisition of Pete's and have been busy integrating the team into our business. And as a reminder, for those new to the Local Bounti story, we acquired Pete's in early April. This was a very important, transformational and accretive transaction for us in many, many respects.

From a distribution perspective, Pete's brings a national footprint and existing relationships with retailers covering some 10,000 doors. The opportunity that this creates for our entire business can't be overstated. The relationships with customers and the demand that they are generating is informing our build-out strategy, and we expect it to accelerate Local Bounti's brand building and market access on a national level.

In terms of operations, the transaction enhanced our set of capabilities and derisked our near-term execution. Our ability to tap Pete's wealth of knowledge and experience in growing techniques is invaluable as we embark on our own continuous improvement of Local Bounti's growing systems and contemplate new designs that are enabled by our patent-pending Stack and Flow Technology.

And of course, the financial considerations. The transaction brought with a degree of scale that we otherwise would have had to build from scratch, consuming precious time. Including our Georgia facility, which is nearing completion and is expected to come online in July, we will have 3 commercial facilities in production, not including our Montana facility, which was temporarily refocused on research and development activities in support of Pete's acquisition and other commercial facility plans.

As we look ahead to the balance of the year, we expect commercial production at the Montana facility to ramp up significantly in support of our pent-up customer demand in the Pacific Northwest. Upon the Georgia facility reaching full production, we expect to be generating run rate sales of at least $30 million on an annualized basis, producing positive gross margins and driving hard toward our goal of reaching breakeven cash flow in the near term. Financial leadership and capital efficiency remain at the forefront of the Local Bounti strategy.

With that, I'll pass it over to Brian.

Thanks, Craig. Over the past month, we have been on the road meeting with customers, sharing the wonderful benefits of our combined enterprise, and most importantly, reinforcing our commitment to quality and service across our network. Our conversations have been very productive and is reinforcing our build-out strategy so that we could be one of the key players to meet the demand present in the marketplace for high-quality, controlled environment, agricultural produce.

We expect to create immense efficiency for our operations as we execute the commissioning of the Georgia facility and begin the process of ramping up production. We have been working hard to put the staffing in place to ensure a smooth ramp-up and are excited to get to work.

Our customer interactions are also enhancing our visibility to the build-out of our next facility. While we are still in the planning stages, we have several key regions and focus that have strong customer overlap and who are demonstrating strong demand for our brands and products. As soon as we are able, we look forward to sharing the results of this work and our plans for the next phase of growth.

With respect to our greenfield build-out in Pasco, Washington, I'm pleased to share that construction activities have recommenced after a brief hiatus. As we noted during our last conference call, we have been working on our design to account for the learnings from both Local Bounti and Pete's operations to ensure that facility is optimized in every sense, whether that be operational design or CapEx. Again, as Travis loves to say, we do the math, and this dovetails back to our ongoing quest for capital efficiency and maximizing returns on capital.

We continue to see an opportunity to drive significant value creation with our united front. Pete's growth has been constrained for years. And with Local Bounti's sheet and access to public capital markets, our combined organization is energized to put our growth plan into motion. Customer response has been very positive, which is a wonderful endorsement of the trust we've built, the value of both brands and the strategy that we will employ to capitalize on the exciting opportunity that lies ahead.

I'll pass it back to Craig for his additional remarks.

Capital efficiency continues to be at the forefront of our strategy. We intend to be direct with the deployment of capital towards revenue-generating activities. This is visible in our buy versus build approach with Pete's, which brought what will be 3 facilities into our production network; cemented our presence in the West Coast market with its 2 California locations; and will add improved bicoastal service to customers via the pending Georgia facility.

The accelerated nature of our footprint growth is plain to see, but the quality of our team is invaluable, which is an element that has had increasing value in today's tight labor market. As we look ahead, we expect buy versus build to continue to be a key consideration for us, and we believe we are uniquely able to leverage this strategy on an opportunistic basis, given the advantages inherent in our flexible Stack and Flow Technology.

Stack and Flow provides the ability to unlock 1.5 to 2x yield improvement compared to a traditional greenhouse operation. This is highly disruptive and highly differentiated and why we are so excited about opportunities that lie ahead as we continue to execute on our plan to be the leader in CEA. Simply put, our technology strategy gives us an advantage to make a direct, iterative improvement on existing infrastructure in a capital-efficient manner, which we expect will ultimately drive higher return on investment while minimizing required capital.

This was foundational to our rationale for the Pete's transaction and the integration strategy that is underway. We expect to implement Stack and Flow into existing operations with minimal disruption to production levels and continuing to build capacity around the operations to enhance throughput and drive higher unit-level returns.

With that, I'll pass the call to Travis for a few additional remarks.

Thanks, Craig. Integrating Stack and Flow with our existing facilities is one of our highest priorities, and the testing and optimization of those systems is an area that we are keenly focused on at our Montana facility. In fact, we nearly doubled the rate of annual crop turns for our commercial head lettuce since last year, and we made some exciting advancements in our commercial loose-leaf lettuce as well. As of March 31, 2022, we generated approximately 26 crop turns annually, which compares to approximately 17 to 22 turns annually as of December 31, 2021.

To put it into context, in both instances, this performance already exceeds our long-term assumptions that we previously reported. We also have been hard at work translating our innovations into a robust IP portfolio across process improvements, genetics, computer vision, AI and controls, which will protect our investment and position the business for long-term growth.

I mention all of this as a window into the importance of Stack and Flow to our long-term strategy to drive additional capacity at the lowest possible cost, thereby optimizing our unit-level economics, which will enable value creation for our shareholders. We believe there is an immense amount of facility capacity that can be improved upon, and we intend to do just that.

In summary, the integration of Pete's is progressing nicely. There is an incredible amount of learnings happening across the organization, and I'm pleased with how our cultures are coming together. We have an amazing opportunity ahead of us within the CEA landscape, and we are focused on capitalizing on it quickly.

As we move our business ahead in the coming quarters and years, we expect to continue demonstrating wide strategy and sound capital allocation, all geared toward our goal of establishing a formidable CEA leader with a corresponding financial profile that investors can have confidence in over the long term.

Now I'll turn the call to Kathy for her review of the financials.

Thank you, Travis, and good afternoon, everyone. As previously announced, the company closed its acquisition of Pete's on April 4 for $122.5 million, creating a scaled CEA operator with a national distribution footprint that reaches approximately 10,000 retail doors. I'll cover our first quarter 2022 results briefly, which represents Local Bounti on a stand-alone basis prior to the transaction and reflects the performance of our Montana facility, which was temporarily geared toward innovation and R&D activities while we were closing the Pete's transaction. As Craig mentioned, we expect commercial production at this facility to ramp up significantly in support of pent-up demand from Pete's customers in the Pacific Northwest.

First quarter 2022 sales were $282,000 as compared to $57,000 in the prior year period. Just FYI, Pete's stand-alone sales for the first quarter were $5.9 million. Local Bounti's gross profit was $48,000, representing a gross margin of 17%. Excluding depreciation to make an apples-to-apples comparison to our long-term projections that we provided during the de-SPAC process, adjusted gross margin was approximately 39%, which was consistent with the prior year period.

Our results reflect a temporary increase in R&D at our Montana facility associated with the development of additional SKUs and crop cycle yield improvements. This is a critical element of our strategy behind the Pete's acquisition and other commercial facility plans, including the pending opening of the new Georgia facility. Looking ahead to the second quarter and beyond, our Montana facility is shifting back towards commercial production, and so we expect improved revenue and margin performance at that facility.

Net loss was $25.8 million in the first quarter of 2022 and includes approximately $3.9 million of expenses associated with the Pete's acquisition as well as $11 million in stock-based comp, $1.6 million in interest expense and $0.5 million of depreciation. Adjusting for these and other discrete items, adjusted EBITDA loss was $8.5 million.

We recently filed an 8-K with some historical Pete's figures as well as some pro forma combined company financials for 2020 and 2021, including detail of the various adjustments to bring Pete's reporting in alignment with GAAP. Included within is an adjusted EBITDA reconciliation. I'd like to call out a couple of select metrics and articulate some influences on those results so you better appreciate what this business is capable of achieving.

The gross margin is a key KPI for both Pete's and Local Bounti. Local Bounti has been driving positive gross margin on our low revenue base and Pete's 2021 adjusted gross margin was 45%, which is in the range of our expectations and should provide a great base to expand from as we implement our margin-enhancing Stack and Flow Technology.

Further, we are just beginning to work through actions to capture the COGS synergy opportunity, which we believe could approximate about 10% savings on locating existing cost of goods sold from raw materials and packaging in the first full year of operations. We are working hard to ensure we get our organizations aligned to extract these synergies.

The other key KPI is adjusted EBITDA margin. What you see with the Pete's performance in 2020 and 2021 is a more subdued margin performance because of the temporary impact of COVID-related factors. Over the long term, in the pre-pandemic era, Pete's was a consistent 20% adjusted EBITDA margin generator.

From a capital structure perspective, our balance sheet as of March 31, 2022, reflects the stand-alone Local Bounti business. At the end of the quarter with cash, cash equivalents and restricted cash of $76.4 million, as previously disclosed, in April, we utilized a combination of $92.5 million in debt through our Cargill facility and $30 million of equity to finance the acquisition of Pete's. So we had 86.5 million shares outstanding as of March 31, 2022. And on a pro forma basis, including the consideration for the Pete's transaction, our warrants and our restricted stock units outstanding, we have a fully diluted share count of approximately 150 million shares.

As we look ahead to the full year 2022, we are really excited about the scale that Pete's provides to our business. We are equally excited to begin the implementation of our Stack and Flow Technology into Pete's facilities over 2022 and 2023. We are reaffirming our 2022 revenue guidance of at least $20 million, which includes 3 quarters of contribution from Pete's. Additionally, we continue to expect to achieve initial run rate revenue from the 3 Pete's facilities of at least $30 million at full production, excluding the expected future positive impact from implementing our Stack and Flow Technology across these facilities. We look forward to continuing to update you on our progress as we execute on the achievement of milestones and identify new opportunities to drive growth in this exciting CEA marketplace.

That concludes our prepared remarks. Operator, please open the call for questions.

(Operator Instructions) Our first question comes from Colin Rusch with Oppenheimer.

This is Kristen on for Colin. I was wondering if we could start first with a little bit of color around the focus of the R&D efforts going on at the Hamilton facility. What are the levers specifically that you're looking at to drive those incremental turns and the results that you've shared with us?

Great, Kristen. This is Craig Hurlbert. Thanks so much for your question, and give our regards to Colin, please. Travis, why don't you take the first cut at that, please?

Yes, absolutely. Thanks for the question, Kristen and Colin. So specifically, as it relates to our R&D efforts, we're using, I think, kind of a combination of enhancements to the core Stack and Flow system and then as well investing in controls and computer vision, AI. And really, as we started to have line of sight on the Pete's transaction in the first quarter, we decided to really broaden and expand our near-term R&D at Hamilton to solve for increased and specific SKU demand from Pete's customers in California and Georgia.

So remember that Pete's, they're really the head lettuce kings, if you will, of CEA, lots of market share. They're in lots of doors and they have lots of SKUs. And so specifically, Pete's living butter lettuce is really where we're focused.

One of the things we are focused on in the first quarter is applying our Stack and Flow Technology and innovating around that technology to pull the crop cycle down and increase the turns that we could get out of our facility on a per annum basis. And what that resulted in is through our R&D efforts, we were able to cut the crop cycle by 7 days to pick up roughly 4 turns per year, 17.3 turns per year in total.

So as Georgia comes online, we'll be scaling down our Hamilton R&D and increasing commercial production. But the main areas of innovation that we're focused on are kind of core Stack and Flow patents as well as controls, computer vision, increasing the number of recipes, et cetera.

That's really helpful. And then as my follow-up, wanted to ask about just sort of the cycle times with customers. You talked about the change in the tone of your conversation with customers since the Pete's acquisition. Obviously, your ability to demonstrate the favorable unit economics in this space is something that we can see.

But I'm wondering how that's contributing to the nature of the conversations that you're having with customers? And any sort of commentary that you can offer around co-location opportunities? I'll leave it there.

Kristen, what a great question or, I guess, a series of questions. Brian, do you want to take that one, please?

Yes. Thank you for the question, Kristen. So when you think about the overall sales life cycle, when someone comes new to the market, the one thing that you have an appreciation for real quick is how relational our market is. And so it generally takes a -- it can take a solid year plus for a new company to start selling in any kind of significant numbers within our produce arena.

The one beauty about this combined effort is that we already had access to 10,000 doors. And through that, just long-standing, trusting relationships on new product launches. And so what it does is it really reduces the time to market, not only for just having more capacity and being able to do more with current SKUs, but also adding additional SKUs that are in the pipeline. And I think that answered part of your question. Let me know if there's something I missed.

No, that's really helpful. I appreciate the color.

Our next question comes from Chris Barnes with Deutsche Bank.

I guess just to start, I appreciate all the color around the progress on the Georgia facility update. But I was just hoping you could comment on the integration of Stack and Flow into the other Pete's facilities out in California. Like has that process started yet? Or has much of the time right now been focused on commissioning and ramping up Warner Robbins? And then relatedly, like could you share any details around the implementation and integration costs for like each of the 3 facilities?

Thank you, Chris. Appreciate the question. Again, I'll ask Travis to comment on the integration of the Stack and Flow Technology in California specifically, Travis?

Yes. So as I said, Pete's has a lot of doors and a number of successful SKUs. Those California facilities, however, are very focused on their core products, including butter lettuce. So a lot of the integration and R&D efforts that we did in Montana this year were really centered around specifically reducing the crop cycle at the existing Pete's facilities in California and in Georgia. And the result that I kind of highlighted as it relates to head lettuce, which is one of their core products, will be directly applicable to the California facility. So really, what we're trying to do within our growth systems right now are getting reps to prepare us to do the full technology integration in both California and Georgia, so that when we turn those systems on, it's plug and play.

Got it. That's helpful. And then as my follow-up, I just wanted to just dig a little bit more into the $30 million per year run rate that you guys are looking to achieve. Like excluding Stack and Flow, is there like any time line around that, that you think that you could achieve these goals? Like is that like 2023 potential? Or is that really a like medium term?

And then like maybe could you share what Stack and Flow would add to that? Because it seems like the crop turns you'd be able to drive after implementing Stack and Flow, like $30 million seems very conservative. So just any color you can share there would be great.

Chris, this is Craig. I love that question, and it's very -- it's a great question and very intuitive. Kathy, I'm going to ask you to kind of chime in on that. And then we can maybe follow up with Brian and Travis. Kathy, go ahead.

Yes, yes, sure. So the $30 million run rate is that full production for each of the facilities. So -- and obviously, excluding Stack and Flow, Stack and Flow will improve the yield 40%, right, which is obviously very significant. But the $30 million run rate is -- would start in Q1 2023. And it is considered...

In other words, the $30 million run rate is operating the horizontal assets without the benefit of the Stack phase. So when the Stack phase gets activated in 2023, that's when you'll see that incremental bump.

Our next question comes from Ben Klieve with Lake Street Capital Markets.

First question is around Pete's and kind of a follow-up to what you were just addressing. And first of all, I guess, congratulations on getting this closed as quickly as you did. I wish the rest of my coverage could announce the closure of an acquisition so soon after the announcement. So congratulations there.

But my first question is around the expected revenue contributions here. Because with the $20 million revenue guidance on the year and $6 million of Pete's revenue in the first quarter, it would seem to be that not much is expected to be contributed from the Georgia facility when Phase 1-A is complete this summer. So can you talk about kind of Georgia contribution specifically in the back half of this year, please?

Yes. Great Why don't we have a combination of Brian and Kathy answer that. Maybe, Kathy, you start, and Brian, you can top it off.

Yes. What we're trying to do, Ben, is just be conservative, right. We do say in the release that the Georgia facility Phase 1-A will be operational in July of this year. And we anticipate that it's going to do and be -- do very, very well. We're just trying to be conservative with the $20 million.

And then, my...

Let's have Brian comment. Sorry, let's see if Brian has any comments that he'd like to add.

Yes. No. I mean I think that the fact -- what Kathy is mentioning, I mean, we were conservative on the number. But there's also the inherent ramp that goes along with it that you want to be sensitive to. So we're strong in that $20 million number. So -- and we're hoping to see some significant upside to that.

Hey, Ben. It's Craig. One question -- or one comment. This whole industry has been plagued with what I would call overcommitting and underdelivering. And we talk about financial leadership. And one of the things we want to really emerge over time is that you can count on what we're telling you, that we will move heaven and earth to deliver on that.

And I understand your question. It's really good. And obviously, if you just do the math, it looks like we're a little light there, but there's a lot of moving parts.

You did comment on the integration moving very quickly. I don't want I don't want that to go without saying we have an amazing team involved in that transaction led by Kathy Valiasek and Brian on his side and Bill, their CFO. And I would tell you, I haven't been involved in many of these transactions.

One of the folks at Pete's said it was like a zipper coming together that we were almost meant to be together. I would say we're zipping it up, and that's kind of what's played out. And it's allowed us -- if you go down 3 layers, the integration has gone incredibly smoothly. Couldn't be more pleased with where we are and really has just helped really derisk so many different facets of the business. And I'll stop there.

Got it. No, that's helpful from each of you. And yes, congratulations, and I look forward to seeing the fully integrated business here in the coming quarters. So my second question is around your legacy efforts and the Pasco facility. Great to hear the construction there has begun again.

But given that you discussed the redesign of the facility and paused construction for a bit, I'm wondering if you can update us on expectations today for size and total revenue contributions from the redesigned facility? And then also give us an update on the expected timing for that facility to be completed.

Great. Great question, Ben. Maybe Travis, you start on that one again.

Yes. I'll just kind of comment and say that the facility -- and I've touched on this point again. Pete's had a very robust and diverse, not only customer base, but also SKU count. And so really, the Pasco facility is being redesigned to account for the demand side of the SKU mix that's desired by Pete's customers.

So some tweaks to the selection and mix of our growth systems as a result and really kind of all-around solving for capital efficiency. So we're still chipping away at the design. And I think next quarter, we should have a more wholesome update to the time line, estimated completion and revenue add on a go-forward basis.

Yes. That's a great answer, Travis. And I think, Ben, you can look forward to that next quarter.

Our next question comes from Brian Wright with ROTH Capital Partners.

I wanted just to get a little bit of more clarification on what consists of Phase 1-A and Phase 1-B in maybe in terms of square footage, number one, for each. And number two, is it also a function of Phase 1 is kind of the traditional high tech greenhouse, and then Phase 2 is the Stack and Flow? Or is there multiple dynamics to this? Just wanted to kind of understand that.

Yes. Hey, thanks, Brian. Appreciate the question. It is multiple. And I'll let Brian tackle that question.

Yes. So Phase 1-A is 130,000 square feet of actual production square footage and that's in our channel system. Phase 1-B is an additional 130,000 square foot. As part of 1-A, the head house work that was required was done as part of the original design. So Phase B becomes just a bolt-on as far as needs requirements from the head house. So there's no additional square footage required on the head house side.

Okay. And then I understand of the $30 million I think that we talked about, and I was kind of going through my notes, and I apologize if I haven't asked this before. But when everything is kind of fully ramped up, what is kind of the full capacity kind of revenue of the Georgia facility?

Yes. Kathy, do you want to take that, a look at that? I'm not sure we're giving that guidance. But Kathy, go ahead.

Yes. Yes, Brian, thanks for the question. We have not gotten that specific on the Georgia facility. I mean, yes, we've just not gotten that specific. Maybe we can give an update on the next call. But so far, we just haven't gotten that specific.

Okay. If I could just follow up on that, and that's totally understandable. Can you just remind us what the California facility sizes are for Pete's?

Yes. Hey, Brian?

Yes. No, definitely. So the Carpinteria facility is 16 acres and the Oxnard facility is 13 acres. And it's important to note that the Georgia facility has the same system as a newer retrofit that we did in part of our Oxnard facility, which is about a little over an acre. And so that's been producing for about 1.5 years now. So just kind of give -- I don't want you to make the leap between what those 3 acres in Georgia does to the 29 acres that we're doing in California because it's kind of an apples-to-oranges comparison.

Great. Brian, anything else?

That will do it for now.

Thank you, Brian. Appreciate the questions.

This last question comes from Pamela Kaufman with Morgan Stanley.

This is Matt on for Pam. I just wanted to touch base on the company's long-term facility expansion plans. So going back to your Investor Day, the company initially provided a facility outlook projected, having around 8 operational facilities in 2025. And this was prior to Pete's acquisition.

So now that the company gained 2 facilities in California and seem to have another operational facility in Georgia, what are the current projections of facilities through '25? And then kind of related to that, can you discuss the strategic priorities considered when it comes to timing of breaking ground for a new facility and then also determining the location of that facility?

Great questions, Matt. Thank you so much, and appreciate the questions. I guess maybe I'll take a start at this, and then others can add in. I think with the acquisition of Pete's, what's happened is we're now in 10,000 doors. We're now in conversations with people that just kind of accelerated the conversations we were having prior.

And as a result of that, we're really looking at the customer conversation backwards to where we're going to locate facilities. And there are some very hardy conversations there in the works around where we should be placing facilities.

So while Local Bounti pre-Pete's had a plan in place, with Local Bounti with Pete's will be developing that plan over time kind of customer backwards. And I think we can all agree there's a lot of change going on in the world right now. And I think supply chain, many customers are looking to -- back off for having quality product and also guaranteed supply or a higher risk of supply.

So we're in a lot of very interesting conversations. And that plan will develop over time, and we will be announcing each quarter kind of what we're thinking upon as it relates to that. I'll stop there. Travis, maybe you can add in on top of that.

I think you pretty well handled it. Kathy, I don't know if you wanted to give any specific guidance around 2025 though.

Yes. So I think what we've said in a public forum is that we're comfortable with the numbers as we had set forth last year in terms of the financial metrics, right. In other words, we're going to get there. We're probably just going to get there in a different way.

Like right now, we're -- as Craig alluded, right, we're not counting facilities. We're counting, hey, talking to the customer and then making sure that we fulfill all of their needs. And we're also spending quite a bit of time also considering build versus buy consideration.

Right. It's an important concept that -- yes, sorry, I interrupted you.

No, no problem. That's helpful for the color. And then just as a follow-up question regarding capital allocation. I mean you mentioned how you assess the return on invested capital when it comes to greenfield opportunities versus buying and retrofitting Stack and Flow Technology. So I guess on that basis, do you see more room for M&A as the company continues to scale? And at what point might you be ready to consider another transaction?

Right. Great question. Really good question, like an important question. I think you have to start answering that question by understanding what's happening at the ground level inside the industry of controlled environment agriculture or CEA. And that is, it's a very cluttered space today. There's a lot of smaller players, most of which may be considered undercapitalized. And I believe that consolidation, we talked about this ever since we started, is inevitable. And I think us and Pete's combining has us emerging as, if not the leader, one of the very few leaders in the space.

And I think what's going to happen is there's going to be more of this that plays out over time. But it will be, as we like to say, we will do the math and we will do the geography, and we will listen to our customers. We'll stay focused on delivering delicious products. And I think with all of that said, we will be making great decisions from a position of strength, which is really where I believe we sit today inside of the industry. So yes, I hesitate to give you a time line, but I would say that is a possibility over the pro forma period.

Ladies and gentlemen, at this time, I'm showing no further questions. I'd like to end the question-and-answer session, turn the conference call back over to management for closing remarks.

Well, we certainly, on behalf of all 250 employees at Local Bounti, we would certainly like to thank everyone for their time today, your interest in the company. Please reach out to us directly.

And I will put this offer out there as well. We would love to have you come to our facility and see with your own 2 eyes what we're doing and how we're doing. And I think it will really help all of your questions jell. So on behalf of all of us, thank you so much for your time and your attention today. Everybody, have a great day.

Ladies and gentlemen, this does conclude today's conference call. We do thank you for attending. You may now disconnect your lines.