Monroe Capital Corp (MRCC) 2015 Q1 法說會逐字稿

Good morning and welcome to Monroe Capital Corporation's first quarter 2015 earnings conference call.

Before we begin, I would like to take a moment to remind our listeners that remarks made during this call today may contain certain forward-looking statements, including statements regarding our goals, strategies, beliefs, future potential, operating results or cash flows. Although we believe these statements are reasonable, based on management's estimates, assumptions and projections as of today, May 12, 2015, these statements are not guarantees of future performance.

Further, time-sensitive information may no longer be accurate as of the time of any replay or listening. Actual results may differ materially as a results of risks, uncertainties or other factors. Including but not limited to the factors described from time to time in the Company's filings with the SEC. Monroe Capital takes no obligation to update or revise these forward-looking statements.

I will now turn the conference over to Ted Koenig, Chief Executive Officer of Monroe Capital Corporation.

Good morning and thank you to everyone who has joined us on our earnings call today. I'm joined by Aaron Peck, our CFO and Chief Investment Officer. Yesterday we issued our first quarter earnings press release and filed our 10-Q with the SEC.

I will provide a brief overview of the quarter before turning the call over to Aaron to go through the results in more detail. He will then turn the call back to me to provide some closing remarks.

On April 20, we successfully completed a public offering of our stock, raising approximately $36.4 million in gross proceeds. We are very pleased to have been able to complete a capital raise that was accretive to our book value in an environment when so many of our peers are trading at a discount to book value and when some have raised capital at a discount.

We are focused on putting this capital to work in an efficient manner in order to continue to grow the portfolio. As we did after our last capital raise, we are putting this capital to work carefully through a combination of our proprietary-originated assets, as well as some select transactions that are more liquid. Over time, as in the past, we will optimize those more liquid assets by selling them in favor of higher yielding, directly-originated and small club transactions.

We are very pleased to have announced another strong quarter of financial results. For the quarter, we generated adjusted net investment income of $0.44 per share, comfortably covering our first quarter dividend of $0.35 per share. This represents the fourth consecutive quarter adjusted net investment income has covered our dividend.

We are pleased to be able to continue comfortably outearning our dividend in environments when a large percentage of other BDCs have either cut their dividends or have been unable to generate net investment income in excess of their most recent dividend.

Our book value per share increased to $14.11 per share as of March 31. A $0.06 per share increase from the book value per share at December 31. We have achieved all of this in the quarter while continuing to be focused on safety and security. With approximately 94% of our assets representing first lien loans as of March 31, 2015.

I am now going to turn the call over to Aaron, who is going to discuss the financial results in more detail.

Thank you, Ted. Our investment portfolio continues to grow. We have continued to generate high yielding opportunities, which has allowed us to maintain our weighted average yield on the portfolio.

As of March 31, the portfolio was at $252.6 million at fair value, an increase of $19.1 million since the prior quarter end. At March 31, we had total borrowings of $87.7 million under our revolving credit facility and SBA debentures payable of $34.8 million. Also as of March 31, our net asset value was $135.9 million, which increased from the $133.7 million in net asset value as of December 31, 2014. On a per share basis, our NAV per share increased from $14.05 as of December 31, to $14.11 per share as of March 31.

Turning to our results for the quarter ended March 31, adjusted net investment income, a non-GAAP measure, was $4.2 million or $0.44 per share, a decrease of $0.04 per share when compared to the prior quarter. Net investment income was also $4.2 million or $0.44 per share, a decrease of $0.05 when compared to the prior quarter. At this level, we continue to comfortably cover our quarterly dividend of $0.35 per share.

Additionally this quarter we generated net income of $3.9 million or approximately $0.41 per share, a reduction from the net income in the prior quarter of $0.44 per share. Looking to our statement of operations, total investment income for the quarter was $8.1 million, compared to $8.7 million in the prior quarter. The reduction in investment income is primarily as a result of lower fee income in the quarter, as well as slightly lower interest income associated with the paydown of a higher yielding loan at the end of the fourth quarter.

Total expenses of $3.9 million included $1.1 million of interest and other debt financing expenses, $1.1 million in base management fees, $1 million in incentive fees and $701,000 in general, administrative and other expenses. Of the $1.1 million in interest and other debt financing expense, approximately $880,000 was cash interest expense, with the remainder representing non-cash amortization of the upfront costs associated with establishing our credit facility and our SBA debentures, as well as the interest expense associated with the secured borrowings we recorded under ASC 860. We also had a net depreciation on investments and secured borrowings of approximately $291,000 in the quarter, due to some net unrealized markdowns in the fair value of certain portfolio assets.

Turning to the portfolio, we have continued to be focused on first lien lending, with approximately 94% of our investments representing senior secured first lien loans. The remaining 6% of the portfolio investments were junior secured loans and equity securities. We believe our portfolio of investments is well positioned in this current business cycle.

As for our liquidity, as of March 31 we had approximately $22 million of capacity under our revolving credit facility and approximately $5 million in undrawn SBIC debentures. We plan to utilize this availability and the proceeds from our April 20 capital raise to fuel future growth in the portfolio.

I will now turn the call back to Ted for some closing remarks before we open the line for questions.

Thank you, Aaron. In our last four quarterly calls, we told you that we were singularly focused on generating net investment income in excess of our dividends. We have continued to demonstrate the success we have had in fulfilling that commitment.

In a very competitive market for lending today, we have been able to grow our portfolio, while maintaining our average effective yield at 11.6% as of March 31. We have grown our quarterly adjusted net investment income per share on a year-over-year basis, up by $0.11 when compared to the first quarter of 2014, when many of our peers have experienced declining net investment income trends.

We attribute this to our differentiated origination platform and the depth of the entire Monroe Capital platform, which has supported a high effective yield in our portfolio at a time when many others have experienced declining yields.

We remain very excited about our Company's prospects. Our BDC manager has continued to invest in high quality origination and underwriting staff, as well as operations and accounting personnel. These capital investments will continue to provide the Company with unique high quality, high yielding investment opportunities and the personnel to help manage the growth in our platform.

With a dividend yield greater than 9%, fully supported by net investment income and a stable book value, we believe that Monroe Capital Corporation provides a very attractive investment opportunity for investors. And continues to be significantly undervalued.

Thank you all for your time today, and with that, I'm going to ask the operator to open the call up for questions.

Thank you.

(Operator Instructions)

Our first question comes from the line of Mickey Schleien, from Ladenburg.

Yes, good morning, Ted and Aaron. Wanted to ask you about unitranche. You're obviously quite involved in the unitranche market, as is GE. So I'm curious what your thoughts are with GE's announcement. As to how you've seen or have you seen any change in borrower behavior, when you're competing with GE on a unitranche deal?

Good question, Mickey. Lots has been written about this over the last 30 days or so. Unitranche market hasn't really been affected yet. It may, depending upon who ultimately acquires the Antares platform from GE. But today, GE continues to be in business.

We continue to be very much in business. And in our markets, which is the predominantly $25 million EBITDA and below, we really haven't seen much changes. GE really starts at about $15 million and $20 million of EBITDA, and goes up from there. The market has accepted unitranche financing products in virtually most all M&A transactions right now in the middle market. So I don't anticipate much, if any changes to that. We'll have to wait and see what happens with the GE business, the sponsor business. But as of today, it's pretty much business as usual.

Thank you for that.

And one follow-up question. Ted, now that we've seen a lot of BDC earnings announced, I'm just getting the sense, despite the fact that spreads compressed in the middle market pretty meaningfully in the quarter, we're seeing quite a bit of distress in some portfolios. And it's starting to make me wonder where we really are in the credit cycling.

I thought going into the year, we were sort of in the middle, but now I'm getting the sense, maybe it's later than I initially believed or what the market believed. Where do you think we are, in terms of the credit cycle?

I was asked this question at a conference last week in New York for BDCs, and I think we're at the top of the eighth inning right now. I think that it's -- we're definitely in the very mature part of the cycle, and depending upon what happens in the future, with rates and performance.

You look at the large cap companies. Earnings reports for the first quarter have generally been down, and we've positioned our portfolio, as Aaron mentioned, at 94% senior secured. So I like where we sit right now. But I definitely think we're in the last third of the cycle.

And of that 90%, what proportion's first lien?

94% of the portfolio is in first lien, senior-secured credit securities.

Great. Thank you for your time.

Thank you. Our next question comes from the line of Bob Napoli, from William Blair.

Thank you. Good morning. And it looks like an excellent quarter.

I guess the question, Ted, and I think you explained it a little bit, but you're -- top of the eighth inning, but your credit looks pretty strong. And you match that with combination of steady yields at pretty attractive levels. And how long can -- if we're at that, top of the eighth inning, is this sustainable for you? And why would it be sustainable, if you think it is?

Good question.

The answer is yes, it's sustainable. And the reason why, Bob, is we've lived through -- unlike other platforms, I lived through the crisis in 2007, 2008 and 2009, and we know what is needed to do. What we've done here is we've gotten ourselves in position to hunker down and to protect the portfolio. And that's why we've rotated into senior secured first lien for 94%.

I think if you look at many of our peers, the average BDC I think today is somewhere around 55% first lien senior secured. And 2008 and 2009 were our best years as a firm, in terms of overall returns. There's plenty of product in the market. And transactions happen in good markets, in stable markets, and also in bad markets and unstable markets.

And the key that our platform has always been able to deliver on is because of the wide breadth of our origination. We're able to pick the very best transactions with the best management teams and the best structures and put those into our portfolio. Since we originate so much of what we do, we're not dependent on the underwriters and the distributors, and chasing transactions in the market by others and taking kind of the least common denominator, in terms of credit and pricing.

When I tell you that I'm very confident that our platform is solid, our portfolio is solid, and that we'll continue on the path that you've seen us on for the last 18 months. I do that because I've got 15 years experience with this platform, with our people and with our business.

Okay. How many of your loans are you -- do you have bank partners with? Or have you syndicated a piece of the loan out to, as I think it's been part of your strategy?

Yes. Aaron's going to dig in and get you the exact numbers, but I will tell you that -- you know this and I think others do -- is that what we do is we originate the loans. We put into our book and then on occasion, what we will do is we have a dozen bank partners, regional bank partners that are strategic to us.

And we may from time to time sell them pieces of our loans, not syndicating, but we may from time to time in a bilateral transaction, sell a piece of our loan to that bank partner, the effect of which will be to increase the overall yield to our shareholders.

Bob, when you look at the schedule of investments --

Yes.

Look at the loans that are called unitranche loans. Those are the loans that we brought in a bank partner and sold them a piece of our loan, as Ted described.

Okay. Great. Thank you very much.

Thank you, Bob.

Thank you. And our next question comes from the line of Chris York, from JMP Securities.

Good afternoon. And thank you for taking my questions.

So it looks like in the quarter, you issued about $50 million in SBA debentures. And it looks like you have about $5,000 in a commitment letter from the SBA. Just wanted to get an understanding, given your capital raise, what you are thinking going forward of additional SBA debentures for the remainder of the year.

Yes, so Chris, you're right. We've drawn about just shy of $35 million of debentures. We've allocated $40 million in total to the BDC, so that 5,000 is actually $5 million of remaining debentures that are available. That's what's available under the current regime.

As you probably have heard, there's been a lot of movement and effort being made in Washington, with regards to the possibility of raising the family of funds limit for SBICs. We feel -- and Ted and I were down in DC, meeting with a bunch of folks on the hill, and we feel pretty good about that possibility, of that getting through at some point in the near future, which would allow family of funds to have more debentures, at which point, the BDC would be allocated more debentures, and therefore have more access to SBIC funding.

Got it. So just to clarify, expectations are $40 million for MRCC and debentures. And then if the family of funds limit is passed, then there's upside there?

Correct.

Okay. And then secondly, on the pipeline. We're maybe halfway through second quarter here. You've raised some capital. Could you provide some commentary maybe about originations, quarter-to-date?

Sure. I won't give any specifics about quarter-to-date, but I will tell you that we are seeing originations pick up. The pipeline, which has always been pretty strong, is growing. We have a lot of velocity, in terms of opportunities.

And so we are starting to see some nice pickup in the second quarter and we expect to be in a good position to put some money to work in new assets. The market -- generally if you've been rehearing conference calls and talking to other managers, everyone's seeing some nice velocity this quarter, and we're not any different.

We're definitely seeing some pickup and we're definitely putting some money to work from the new capital raise. As you probably imagined, we took that capital and we paid down our revolver. And we're now redrawing on that revolver as we ramp the portfolio. And we'll probably -- you'll see this quarter a combination of direct originated transactions as always, as well as some more liquid club transactions, to try to get that capital to work accretively to NII during the quarter.

But you will see us. It would be surprising if you didn't see the average yield come down a little bit in the quarter, as we put some more liquid assets on the books until we can get that capital fully ramped and to work in the direct originated book.

Sure. That makes sense.

And then lastly here: I don't believe I saw it in the K. What did you guys have for undistributed income as of year-end? And is there an update that you can share for the quarter-end? And then, how you are thinking about dividend policy.

Because to your points in the prepared remarks, last four quarters covered the dividend well in excess from that investment income. And then potentially with spillover and growth ahead -- your thoughts on the policy.

Yes. I'll talk about the policy first. We're looking to see if we can provide some color as to the spillover. You can see it actually in the 10-Q. If you look on page 5, there's a column called undistributed net investment income.

You'll see that at March 31, there's about -- that doesn't seem like the right number. Let's come back. That's a small number. We'll come back to you on that.

But the dividend policy is that right now, we're paying $0.35 a quarter. We haven't made any decisions, with regards to what we're going to do yet going forward. Our plan and our hope is to distribute most of NII during the year. We do have some spillover, and we'll give you an update on that number.

We are not excited about the prospect of paying a big excise tax at year-end. We don't think that's beneficial to shareholders. So we will be monitoring that as the year goes on and making sure that we're in a position to distribute as much of the NII as is prudent.

We also don't want to do anything imprudent with regards to the dividend. So we're going to take a look at that and continue to monitor as the year goes on. And we'll make a decision with the Board at the right time whether we want to do anything with the base dividend or just consider special dividends in the future, in order to avoid paying an excise tax. But we haven't made a decision as of yet on that.

Great. Thank you for sharing your thought process on that. And that's it. Thank you, Aaron. And thank you, Ted.

Yes, I'll follow up with you and anyone else who's interested on the undistributed numbers post the call.

Thank you. And our next question comes from the line of Christopher Nolan, from MLV and Company.

Hello. Ted, given that we're at the top of the eighth inning, how does that inform on your outlook, in terms of interest rates?

I gave a statement about three months ago to Private Debt Investor magazine that I think interest rates will get increased in the fall. And I believe that it could happen sooner, but my gut is it will happen in the fall. If you look what happened here in the last couple days, interest rates shot up a little bit and it's causing some havoc on bond yields.

And I think you're going to start to see interest rates move over the next three months, which will be good for us. It will be good for our business, because we're an absolute return business, and as interest rates move, it will flow through to our shareholders.

Given expectations for rising rates and given the recent equity raises, should we expect a debt issuance? Some sort of baby bond, something at fixed rates or --?

You know, that's a good question. We haven't really made any decisions. I think that we're going to monitor the situation. I'd like to grow the portfolio, frankly a little more before we entertain that. But certainly in the future, it's something that we would look at, as well as other things to grow our book.

I'll just mention, Chris. Yes, we obviously also have the SBA debentures, which are fixed rate. So we do think about that. We are looking at our mix. We like the idea of being match funded, which to some extent we are with the floating rate revolver, as most of our assets are floating. Virtually all of them are floating rate today.

But we do also recognize that rates are likely to move up in the future. So we fulfilled some of that need to fix some rates by having access to the SBA debentures, which are fixed. We'll consider everything under the sun, with regards to possible financing. And we'll keep looking at the market and deciding what we think is the right thing to do. As you probably know, we have a pretty substantial give-up, in terms of cost of funds, if we did a fixed rate baby bond right now versus our revolving credit facility. So we have to really think about where we think rates are going to go in the long term before we would consider such a thing.

Final question, and it follows on Chris York's question, is if you decide you want to start locking in your debt cost, does that start informing, in terms of your dividend decisions? Because it sounds like you are angling a little more towards the supplemental dividend rather than raising the base dividend.

Here's what I'll say about that. We haven't signaled -- we're not trying to signal anything, with regards to that. I think what we're trying to say is that we're going to continue to watch where NII is and where it's going. And we think that our dividend should be reflective of a sustainable level of NII over time, our core NII. And that's in flux at this moment, as we raised the capital and are putting it to work. And we have to see as the yields fall through where the yields wind up.

So we're just being a little more patient about what decision we'll make, with regards to the dividend policy. But what we're not likely to ever do is to raise the dividend to the full NII if we've got fee income, substantial fee income in the NII. Because we don't think that's a wise decision.

We think that exposes us to being some point in the future distributing more than what we're earning, which is not something we want to be doing. So I don't mean to signal in any way that we're not considering ever a raise in the base dividend. We're just not sure yet. And we'll continue to monitor and make decision when it makes sense.

Thank you for the detail, Aaron.

Sure.

Thank you.

(Operator Instructions)

Our next question comes from the line of Bryce Rowe, from Robert W. Baird.

Hello, thank you. Most of my questions were asked. Wanted to follow up on the comment about velocity here, post first quarter. Can you talk a little bit about potential for prepayment activity, given that increase in velocity? Just curious on the prepayment side of things. Thank you.

Sure. We would expect, there's a reasonable amount of prepayment activity in the market in general and for us in particular. Part of it is just the natural progression of our business. Remember that we raised our first capital in late 2012 and put it to work in late 2012 and into the early part of 2013.

And so the natural life cycle that we see for deals like ours is that they tend to stay out between 18 months and 2 years, even though they tend to be 5 year pieces of paper. So we have seen some prepayment activity, as you saw come through this quarter and the previous quarter, which is expected.

I don't know if we're seeing any sort of otherwise unnatural level of prepayment activity across the portfolio. I think we're seeing the natural average life of deals like ours, which tend to be anywhere from 18 to 24 months. It's fairly typical to see some pickup in prepayment. That's what we've seen, and we expect to continue to see. And that's okay.

We're good with that. Because we have pretty substantial prepayment penalties on most of our transactions, and that's between the upfront fees that we can charge on new transactions. It's not a bad trade for us, to have a borrower prepay and us go into a new asset. That gives us a new upfront and a new prepayment schedule. That's not a bad thing for shareholders.

The only thing I will add to that, Bryce, is that I believe we're going into a period of higher velocity in the second half of the year than we experienced in the first half of the year, in terms of new transactions. Historically, the first half of the year is anywhere in the 30% to 40% of the total pie of transactions that we book. So I would expect the second half of the year to be a busier year for the Monroe platform than the first half.

Okay. That's helpful. Thank you.

Thank you, Bryce.

Thank you. And our next question comes from the line of Christopher Testa, from National Securities.

Good afternoon. Thank you for taking my questions. Just some housekeeping. Were there any one-time or nonrecurring items on the first quarter, in terms of fees or anything?

I will point you to something that we are disclosing separately in our Q in a table for the first time this quarter, as a response to many of the people on the phone's request. You'll find on page 32 of the Q, we break out for you the sources of income.

So we have interest income and we have fee income, and prepayment gains and losses, and those things broken out for you. Your question is about the nonrecurring nature. That's a very difficult question to answer because there is fee income in the quarter. And some quarters, we have more and some quarters, we have less.

And so we seem to have some fee income, but we may not one quarter have much in the way of fee income. So it's just difficult to say whether it's recurring or nonrecurring. The one thing I do want to point out for those of you who are going to try to run a model and look at average assets. You're going to have a hard time this quarter, because it's going to appear that our yield is lower in the period, if you run it on what we published. And that's because we did have one asset that came on right at the very end of the quarter.

So it's a pretty good sized asset and it has a pretty nice yield tot it. But it doesn't have any investment income in the quarter associated with it. It's the investment in Rockdale Blackhawk. You'll see on here. When you're running your modeling, consider that investment came on literally at the last day of the quarter, and will not have created any investment income in the period.

Okay. Thank you, Aaron. That's helpful. And also, what was the sponsored and non-sponsored mix this quarter? And where do you see the opportunities, in terms of that for the remainder of the year?

You know, we don't track and publish that number. On average, we typically see about a 50/50 mix between sponsored and non-sponsored. And I'm just thinking off the top of my head, the deals we closed in the quarter, and I think it was a nice mix. So I think we're going to stay consistent around that amount for the foreseeable future. When I think about the portfolio, that tends to be the way it works. I think you're going to expect to see the 50%s should be about average. Maybe it trends a little bit towards non-sponsored, but other than that, we haven't really published that breakout.

Okay. Just with regards to the unrealized loss on the unitranche loans. The marks this quarter, were those for any specific investments or was that from spreads widening? Just any detail on there is helpful.

Yes. You can see a few track records for the SOI. You can see that there were some marks up and down on certain assets. Some is just spread widening, but some is unusual credits being moved one way or another by a couple of points here and there. But nothing specifically substantial or anything meaningful. We haven't seen any major credit changes that would be worthy of any discussion. Sort of a little here and a little there.

Okay. Great. And just one final one is if the loan growth continues to be very strong, would you consider raising the commitments on the credit facility or tapping the accordion?

Yes, I think we're going to monitor that. We're also watching to see what happens with the family of funds limit. And so we're fine right now, but we have been in dialogue with our lenders, and they're very supportive of raising that accordion and taking some more debt. So all things being equal, if there's no family of funds increase, I think we would expect over time to exercise a portion of that accordion to put more revolving availability just for our portfolio.

Okay. Great. Thank you for taking my questions.

Thank you, Chris.

Thank you. And our next question comes from the line of Merrill Ross, from Wunderlich Securities.

Hello. Good afternoon. I'm wondering of the $18 million in paydowns roughly -- it shows in the cash flow statement. How much of that might have been sales, as opposed to repayment or prepayment?

We didn't have any sales in the quarter.

Okay. Perfect.

Can you give us a weighted average yield on the investments made in the quarter, of the $36.4 million? Because that would help me to understand how much of that was the more liquid transactions, as opposed to the really proprietary originations.

Yes. Unfortunately, I can't. Because I haven't disclosed that. But we have not been active. We were not active in the first quarter in market transactions.

Thank you.

Thank you. Our next question is a follow-up from the line of Bob Napoli, from William Blair.

Thank you. Just a quick question on the new loans and the floors that are embedded within new loans. Are all new loans have interest rate floors? I think you probably have a little bit of NIM compression in the first 100 basis points or so, that the Fed raises rates before you get the benefits. Is that right?

I think that's fair. I think we tend to have about a 1% floor, give or take, on average. So there is -- for small movement, there is some expectation of potential NIM compression.

The countervailing side to that, Bob, is we are in new funded transactions. We are minimizing the effects of any floors, going forward.

Okay. Great. Then the family of funds -- I'm sorry, I missed -- I'm not sure if you gave. Did you say when you hoped to have an answer? And what size potential you could possibly get under? Any discussions on timing and size of increase in family of funds from the SBA?

I can give you a current state of where things are as of last Friday, if that helps you.

That would be great.

I was in DC a little over a week ago and we met with a number of the senators on the banking committee in the House. We met with lots of Congressmen on the finance committee. And the bill that the SBIA, which is the trade association for the BDCs and for the SBICs, has been advancing a bill that is limited to increasing the size of the family of funds limitations for the debentures from $225 million to $350 million.

And that bill almost got passed last year, was very close. One senator held it up, because if it was unanimous, it gets treated in one way. If it's not unanimous, it gets treated a different way. And the senator that held it up was Rand Paul.

Mr. Paul is now running for President and he has chosen not to hold up this bill again. So now that we have his blessing, the bill has cleared the Senate and was presented to the House last week on Thursday for a markup in committee. It has moved out of committee, and so the understanding is as of last Friday, it has now passed the Senate. It has moved out of the House and it is prepared to be introduced by a Congressman from South Carolina very soon. And we expect that to get done in the near future, and I'm hopeful it will happen in the next 60 days, 90 days, 120 days.

But we have no control over the government process. But I believe it's certainly something that will happen by fall. And if it does, it will help a number of BDC platforms, especially us. Because this is a -- we're have a very active originator and as Aaron mentioned earlier, the overall fixed rate cost for these funds is about 3% for 10 years. And that's better than any baby bonds that we'd be able to achieve in the market today.

Great. That's very helpful. And it's your understanding the President would sign off on the bill presented?

Yes. He told me that last week at The White House.

Thank you. Perfect. Thank you, Ted.

Thank you. And our next question comes from the line of Mitchel Penn, from Janney.

Yes. Thank you. Quick question. If we do get into a rate rising environment, do you think that will impact hurdle rates on incentive fees for externally managed BDCs?

I don't think so. I think what will happen is that the absolute returns will go up. And the hurdle rates have stayed relatively constant for the last 25, 30 years in a variety of economic cycles. So I don't think, Mitchel, that will change much.

Thank you.

Thank you. And that concludes our question and answer session for today. I would like to turn the conference back over to the Company for any closing comments.

As always, I would just like to thank all of you for your time today. I know you're stretched. There's lots of companies reporting, so we appreciate your focus. And as I always say, we are always transparent. To the extent you have any questions, feel free to contact Aaron directly and we will try to answer them.

Other than that, have a good Friday and a nice weekend. It's not Friday yet today.

No, it's not.

Sorry. It's only Tuesday. It seems Friday for me. I've already had a full week. You have a nice day.

Thank you. Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program and you may now disconnect. Everyone have a good day.