Navios Maritime Partners LP (NMM) 2018 Q2 法說會逐字稿

Thank you for joining us for Navios Maritime Partners Second Quarter and First Half 2018 Earnings Conference Call. With us today from the company are Chairman and CEO, Ms. Angeliki Frangou; Chief Financial Officer, Mr. Stratos Desypris; and Executive Vice President of Business Development, Mr. George Achniotis.

As a reminder, this conference call is being webcast. To access the webcast, please go to the Investors section of Navios Partners' website at www.navios-mlp.com. You'll see the webcasting link in the middle of the page, and a copy of the presentation referenced in today's earnings conference call can also be found there.

Now I'll review the Safe Harbor statement. This conference call could contain forward-looking statements within the meanings of the Private Securities Litigation Reform Act of 1995 about Navios Partners. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are based upon the current beliefs and expectations of Navios Partners' management and are subject to numerous material risks and uncertainties, which could cause actual results to differ materially from the forward-looking statements. Such risks are more fully discussed in Navios Partners' filings with Securities and Exchange Commission, including the company's most recent 20-F. The information discussed on this call should be understood in light of such risks. Navios Partners does not assume any obligation to update the information contained in this conference call.

The agenda for today's conference call is as follows: First, we'll begin the morning call with formal remarks from the management team; and after, we'll open the call for questions.

Now, I turn the call over to Navios Partners' Chairman and CEO, Ms. Angeliki Frangou. Angeliki?

Thank you, Laura, and good morning to all of you who joined us on today's call. I'm pleased with the results for the second quarter of 2018, for which Navios Partners had $34.7 million of adjusted EBITDA and $9.2 million of adjusted net income. We declared a quarterly distribution of $0.02 per unit for the second quarter, representing a current yield of approximately 4%.

We used excess cash flow and new equity to renew and expand our drybulk fleet. As you can see from Slide 4, NMM owns 35 drybulk vessels. We also leveraged historic weakness in the container sector by establishing Navios Containers, a growth vehicle with 26 containerships. Having taken advantage of these opportunities, we restored distributions to unitholders in the first quarter of this year. I am pleased with our trajectory, although there is plenty of hard work ahead of us.

Slide 5 provides some Navios Partners highlights. NMM has no significant near-term debt maturities and has significant expected free cash flow generation. Our credit ratios are strong with 30.9% net debt to book capitalization, proforma for the recent sale of the 2 containerships.

Slide 6 highlights NMM's long-term strategy. NMM renewed and expanded its drybulk fleet. Since 2016, NMM has added on a net basis 11 drybulk vessels, increasing its drybulk fleet capacity by 52% on a deadweight ton basis and reducing the average vessel age by 15%. We are also focused on deleveraging.

We used sales proceeds of containerships to repay $20.2 million in bank debt. NMM's net debt to book capitalization ratio is reduced by 25.4% since fourth quarter of 2016. We will work to continue to bring this down.

Today, NMM owns 36% of Navios Containers, which filed an F-1 with the SEC to facilitate a U.S. public listing. In the past, we invested a total of $65 million of equity in Navios Containers. We recently sold 2 containerships to Navios Containers for $67 million and subsequently agreed to sell NMM's 5 remaining containerships to Navios Containers for $180 million, subject to various conditions. When the sales are completed, Navios Partners will host the drybulk business and Navios Containers will have the continued business, simplifying our structure.

Slide 7 highlights our deleveraging efforts. We intend to delever through internally generated cash flow plus cash proceeds from containership sales. In July, we repaid $20.2 million of debt, with the sale proceeds of 2 containerships. Proforma, Navios Partners' net debt to book capitalization decreased to 30.9%. This is a 25.4% reduction since Q4 of 2016 and a 16% reduction since Q4 of 2017. And we intend to repay an additional $180 million of debt from the sale proceeds of the 5 remaining containerships. Should this sale materialize as presently contemplated, our net debt ratio will further decrease materially.

Slide 8 details our recent agreed acquisition of 2 drybulk vessels from NM for an average purchase price of $79 million. The vessels include 1 2016-built Japanese Capesize vessel for $49 million and 1 2016-built Japanese Kamsarmax vessel for $30 million. Both vessels will be on the index charters. The acquisition will be financed with a $44 million bank loan and cash. The loan comes with favorable terms, a 14-year amortization profile, 5-year term and interest at LIBOR plus 2.9%. This 2 vessels acquisition will provide NMM a significant financial benefit.

At current rate and as currently financed, the vessels are expected to generate $10.7 million of EBITDA and $5.2 million of free cash flow annually, equating to a 14.7% of free cash flow yield. At 20-year average rate and as currently financed, the vessels are expected to generate $17.2 million of EBITDA and $11.7 million of free cash flow annually, equating to a 33.3% free cash flow yield.

Free cash flow is expected to increase by 126% if charter rate moved to long-term averages.

Slide 9 details our activity around our fleet renewal and expansion program. Since the beginning of 2017, we invested about $270 million and added 13 younger vessels to our fleet with an average age of 6.9 years. We also sold 2 vessels with an average age of 20.4 years. This S&P activity resulted in a 52% increase in our fleet capacity and a 15% decrease in the fleet average age.

Please turn to Slide 10, which provides further color to NMM's potential containership drop downs to Navios Containers that I touched upon earlier. We agreed to sell our remaining 5 containerships to Navios Containers for $180 million. Proceeds from this sale will allow NMM to further delever its balance sheet. The transaction was approved by the Conflicts Committee of Navios Partners.

Slide 11 shows significant cash flow potential. For 2018, contracted revenue fully covers total expenses. Therefore, NMM's fleet is expected to generate free cash flow through its 4,012 open and index days. At current rates with our current capital structure, NMM's fleet will generate about $73 million of free cash flow. As charter rates recover to almost 20-year averages, NMM's fleet will generate about $101 million in free cash flow. Such an event reflects an (inaudible) 41% potential upside in free cash flow.

Slide 12 shows our liquidity. As of June 30, 2018, we had total cash of $41 million and total debt of $494.5 million. Proforma for the completed sale of the 2 containerships, Navios -- to Navios Containers and the related $20.2 million in bank debt repayment, our cash balance is $87.6 million and our debt is $474.3 million. Our proforma net debt to book capitalization is 30.9%, a 13.5% reduction compared to the levels prior to the vessel sale. Moreover, we have no debt maturities until 2020 and have built up additional firepower for future growth.

At this point, I would like to turn the call to Stratos Desypris, Navios Partners' CFO, who will take you through the results of the second quarter of 2018.

Thank you, Angeliki, and good morning, all. I will briefly review our unaudited financial results for the second quarter and first half ended June 30, 2018. The financial information is included in the press release and is summarized in the slide presentation on the company's website.

Moving to the financial results, as shown on Slide 13. During the second quarter and first half of 2017, our results were affected by the 115 days of operations of Navios Containers, which was consolidated in our accounts.

During that period, Navios Containers recorded $3.1 million of revenue and $2.3 million of EBITDA. In order for the comparison to be more meaningful, the below discussion focuses only on Navios Partners' results.

Revenue for the second quarter of 2018 increased by 24% to $58.2 million compared to $46.9 million for the second quarter of 2018 -- '17. The increase was mainly due to the 522 additional days of a larger drybulk fleet.

Adjusted EBITDA for the second quarter of 2018 increased to $34.7 million compared to $30.3 million in Q2 of 2017, primarily due to the increase in revenues and a $1.6 million increase in equity and net earnings from affiliated companies. This increase was mitigated mainly by a $2.6 million increase in management fees due to the increased fleet.

Adjusted net income for the second quarter of 2018 amounted to $9.2 million, $5.1 million higher than the corresponding quarter of last year.

Operating surplus for the second quarter of 2018 amounted to $19.8 million. Replacement and maintenance CapEx reserve was $6.4 million. And fleet utilization for the second quarter of 2018 was almost 99%.

Moving to the 6-month operations. Time charter revenue for the 6 months increased by 24.5% to $111.2 million compared to $89.3 million in the first half of 2017. The increase was mainly due to the 913 additional days, reflecting the increased drybulk fleet.

Adjusted EBITDA for the first half of 2018 amounted to $66.2 million compared to $56.2 million in the same period of last year, primarily due to the increase in revenue.

Adjusted net income amounted to $15.2 million for the first half of 2018 compared to $4.8 million in the same period of 2017. Operating surplus for the 6 months ended June 30, 2018, was $37.2 million.

On Slide 14, I will briefly discuss some key balance sheet data. At the end of the second quarter, cash and cash equivalents was $41 million and net debt to book capitalization was 35.7%.

Long-term debt, including the current portion net of deferred fees and discount decreased by $0.9 million and amounted $494.5 million, reflecting the repayment of approximately $16.7 million and the additional $14.3 million financing for the acquisition of 2 drybulk vessels delivered during the quarter.

Shortly after the close of the second quarter, we completed the sale of 2 containerships to Navios Containers for $67 million and repaid $20.2 million of debt. Proforma for these transactions, cash amounted to $87.6 million. Also, proforma net debt to book capitalization reduced to 30.9%, representing approximately 16% decrease compared to the end of last year.

Moving to Slide 15. We declared distribution for the second quarter of 2018 of $0.02 per unit, equivalent to $0.08 per unit on an annualized basis. Our current annual distribution provide for an effective yield of approximately 4% based on yesterday's closing price. The record date for the distribution is August 7 and the payment date is August 10, 2018. Total distributions for the quarter amounted $3.4 million. Our common unit coverage for the quarter is 5.9x.

Slide 16 shows the details of our fleet. We have a large, modern, diverse fleet with a total capacity of 4.5 million deadweight tons and an average age of 9.8 years. Our fleet consists of 40 vessels: 14 Capesizes, 18 Panamaxes, 3 Ultra-Handymax and 5 containerships.

Moving to Slide 17. As Angeliki mentioned earlier, we have been actively renewing and expanding our drybulk fleet. From the beginning of 2017 up to date, we have grown our drybulk fleet by 11 vessels. We did this by selling 2 older vessels, purchasing 12 younger vessels and entered into 1 Northern bareboat charter. As a result, we have expanded the capacity of our fleet by 52% and we have reduced the average age of the drybulk fleet by 15%. The table below details the vessels we acquired.

In Slide 18, you can see the list of our fleet with contracted rates and the respective expiration dates per vessel. Our charters have an average remaining contract duration of approximately 2 years. Currently, we have contracted approximately 88.8% of our available days for 2018 and 35.6% for 2019, including days contracted at index-linked charters. The expiration dates extend to 2028.

As shown on Slide 19, we are an efficient low-cost operator. We will benefit from our sponsor's economies of scale. We recently expanded our management agreement until December 31, 2022, and fixed our operating costs until December 31, 2019. There is no additional charge for commissions -- or commissions for technical and commercial management nor any fees for S&P and financing transactions.

In Slide 20, you can see the details of Navios Containers. This entity listed in Oslo's over-the-counter market in June 2017 and has raised a total of $180 million of equity. It has acquired 26 containerships, with further visible growth pipeline. Currently, Navios Partners has a 36% ownership interest in Navios Containers plus 6.8% warrants.

I now pass the call to George Achniotis, Executive Vice President of Business Development, to discuss the industry section. George?

Thank you, Stratos. Please turn to Slide 22. The IMF forecast world GDP growth at 3.9% for both 2018 and '19. Emerging and developing Asian markets, which drive the bulk demand, are expected to grow at 6.5% in 2018 and '19. On the back of synchronized global economic growth, drybulk sales grew by 4% in 2017 and is forecasted to rise by 2.7% in '18, slightly higher than the expected 2.5% net fleet growth.

The current trade tensions, particularly between the U.S. and China, are not expected to have a significant effect on drybulk rate. On the contrary, this may initially have a positive impact on ton miles as commodities find new routes to the end users. We have already seen this year trains from the U.S. being sent to South America. The average bulk dry index over the first half 2018 recorded about 25% increase over the first half of 2017. The drybulk markets still have substantial upside as charter rates are still about 40% below the 20-year average.

Turning to Slide 23. Worldwide steel production increased by about 5% in the first half of 2018. Chinese steel production rose by 6.6%. Chinese steel exports continue to decrease on the back of increased domestic demand, which has been stimulated by large infrastructure projects and recovery in the housing market. The Belt and Road Initiative Project is a cornerstone of the Chinese economic plans for the next 5 years and supports steel and power demand inside and outside China. Substitution of Chinese expensive, low-quality iron ore with high-quality and lower-priced imports continues. Up to the end of May, domestic production was down by 36%, while imports were slightly up by 0.6%. In our forecast, we rise by 2.8% in 2018.

Vale recently reiterated that they expect to meet their 2018 production target of about 390 million tons, which will result in sizable increases in export volumes for Q3 and Q4 of '18 to over 100 million tons per quarter. The increased activity in the spot market is pushing to keep time charter index to over $25,000 per day. The Chinese continue to favor high-quality iron ore as they navigate new environmental restrictions.

Please turn to Slide 24. The Chinese government continues to rationalize domestic coal production, closing down small inefficient mines and encouraging consolidation of large mining groups. It is expected that the restructuring of the Chinese coal industry will continue to keep domestic coal prices high and encourage imports as inefficient, polluting mines are closed. Chinese electricity production continues to increase, and is up about 8% year-to-date. Through May 2018, Chinese seaborne coal imports were up by about 14%. U.S. coal exports have increased over 30% so far year-to-date, driven by Asian demand, increasing ton miles.

Moving to Slide 25. In spite of the significantly better market this year, the nondelivery rate remains about 30%, which has been the avergage over the past few years. Forecasts are for a low 2.5% net fleet growth in 2018. Based on the current low order book and shipyard availability, low net fleet growth is expected to continue over the next few years. New IMO regulations for balanced water treatment systems and similar regulations are expected to result in higher scrapping going forward.

Turning to Slide 26. Net fleet growth so far this year is low 1.7%. The number of vessels actually delivered in 2018 is running about 45% less than 2017. The current drybulk order book before nondeliveries is about 10% of the total fleet and vessels over 20 years of age are about 7.2%. Forecasted deliveries compare favorably to the overage fleet. The supply and demand fundamentals remain positive, supporting healthy charter rates.

This concludes my presentation. I would now like to turn the call over to Angeliki for the final comments. Angeliki?

Thank you, George. And this opens the call to questions.

(Operator Instructions) Your first question comes from the line of Randy Giveans of Jefferies.

A few quick questions. So it looks like 15 of your vessels have charter expirations in the back half of this year. What is your strategy for spot versus time charters to replace those in the quarters ahead?

That's a good question and is something that we are looking all the time. To be honest, you have seen that we already have fixed about 4 of our vessels until 2020. We have managed to do index, so well beyond '19 and in the late part of '20, and that gives us -- and we have managed to do that with the ability to close this low-shore fare. So -- and we have done that on index. Now on the way we are looking on the vessels that are coming up, we see now on stage, you can have a pure charter for about -- in the low 20s and is area where we are working carefully. And we will do a combination of 18 months, 24 months fix. Then a part of that fleet will also be indexed. There's the way we look that the market is still has quite significant strength.

Okay. And then looking at the balance sheet and kind of uses of cash, obviously, with your low leverage, minimum debt and amort, pretty significant free cash going forward. And then obviously, with the possible 5 containership sales totaling, I guess, $100 million, where do you expect the use of this cash in the coming quarters, looking at possible unit repurchases, increasing of distribution, additional acquisitions? I know you just announced 2 here, so kind of going forward, what's the strategy?

We are not -- with your remark about deleveraging, in essence, with the potential sales of the vessels, we will be able to get a charter adjusted valuations as we don't get any benefit in our -- from the capital market and take that cash upfront and delever. And as you can see, from -- we have quite significant cash generation. We are generating the current market of $17 million of cash. So that, with a modest level, will give us the ability to grow. So 2 levels. Deleveraging, we have one of the lowest leverage ratio at 30.9%, 31% debt to cap and grow carefully on a low level when we take away all the containerships and we clear out our fleets looking only on drybulk.

Right. And I guess, let me rephrase that. Is there a certain net debt to cap or leverage ratio you're looking for getting down to before possible distribution of increases?

The distribution, we already have established. I mean, if you see the dividend, we established it last quarter. I think the other major event that we'll be looking is to do some period charter fleet, so that we'll create this cash flow. So we are in an early part of the recovery. And there is 2 things we are looking, clear charters that we will be establishing a fleet and also taking part -- taking care of the maturity in 2020 so that, that goes further out. With these 2 things there, we will move to repay our capital to our shareholders via distribution or a buy back.

Okay. That's fair. And last question for me, just to bring it up. What's your strategy for IMO 2020 compliance? Any thoughts on sewing rubbers on some of your Capesize vessels in the coming quarters?

This is one thing that we have seen. First of all, I would say that the current market is very strong. We are looking on spot rates of over 26,000. So stopping of vessels today, I think, is a mistake because you drive yourself a very strong cash flows. And if you take that cost of fuel no matter what, it will increase in 2020, definitely, we will have accelerated cargo movement in 2019. So we look at -- our view presently is to keep our vessels operating because this is a good environment. Now I mean, if the -- if in 2020 we see that there's a material benefit on going -- wanting to scrap it for the bigger vessels, we always can stock -- we can always be able to get scrappers at usually declining prices because, as you know, if a known technology and as -- in shipping, if (inaudible) they will not try to reduce it and (inaudible). One thing that I like to mention, and you can see it in our -- in the features, we have presently done with a major charter, a major warehouse, 4 of our vessels that will sit well beyond beginning of 2020. So for the entire 2020, without affecting our overall index features that we have. So I think this is an interesting event that shows that charters are willing to fix longer and a charter really affects the profitability of the vessel.

Your next question comes from the line of Chris Wetherbee of Citi.

This is William on for Chris. I just wanted to ask a little bit about how trade tensions and discussions surrounding tariffs have potentially led to any uncertain as you engage in discussions with your charters for your drybulk fleet and how those potential tariffs might impact Chinese seaborne iron ore imports?

I think this is the situation. I mean, we always follow very carefully what is happening around the world. But the reality is in the physical market, it has not really affected. I mean, (inaudible) to all-time high, so it hasn't affected the market. You had sentiments being affected. I mean, we show certain weeks when they were first in the -- the first tariffs were shown that we show a little bit of -- it will not be easy. But overall, critical market has not been affected. Sentiment is -- generally, sentiment out of capital market is more affected. And this is something that we have to definitely watch, how it will develop, what form it will take. Generally, commodities, [it is nice] they will change direction. Meaning, soya beans will be needed in China, so it will be imported from other areas. Oil is needed. Generally, all commodities that are native, it will be taken from different places. So it may become more inefficient, the trade. So if I will say -- it may create, actually, a net benefit because of the inefficiency of trade. I mean, we have the recent example where we've seen that the -- even grains from United States is transported to Argentina, over 1 million tons. So -- it will create different efficiencies.

Got it. And I guess, just following up on that, there's kind of the thesis out there that demand for some of the goods has risen in recent months as companies are placing higher orders or more the typical seasonality for orders versus the good ahead of potential tariffs. Do you believe this is likely? And how could that have impacted rates and might impact them going forward?

I'm not -- I mean, this -- I think with the reality around the commodities, we have not seen something like that. I think the issue has been to -- is in inefficiency in the system. My -- and you'll see how this will generally end up. I mean, If you take it in a very, very macro level, the overall $0.5 billion level of tariffs is we are putting the entire $0.5 billion, it will affect about [traffic containers] of goods (inaudible). We are not there since the market is good. And on the present market, they effect of the tariffs, most probably, it will have more inefficiency of the commodities around the world.

Your next question comes from the line of Hillary Cacanando of Wells Fargo.

So you mentioned taking care of the 2020 maturity as one of the things you're looking to do before, perhaps, increasing distribution through buying back stock. So when would you start looking at refinancing the debt? And also, yes, what's the realistically -- realistic time line? And also you mentioned there were 4 drybulk vessels that were included in the collateral. Could you mention -- could you discuss which one?

Let me go to the very first question. I mean, from -- I think, from this quarter, we can actually finance our term loan at par. So this is part of the strategy we're working. So I think this is -- in the next 3 quarters, I mean, until beginning of next year, this is going to be a strategy to take that maturity out. Now on the collateral, Stratos will give you...

I mean, as part of the sale of the container vessels, we prepaid $20 million of our bank debt facility. So we released 3 vessels that had been part of the debt facility. It was the Fantastiks -- Navios Fantastiks, Navios Sagittarius and Navios Prosperity. And together with one unencumbered vessels that we had, which was the Navios Apollon I, there were all moved to the collateral part of the (inaudible) review.

Okay. Great. And then also you mentioned the -- you mentioned simplifying the corporate structure by NMM clearly focusing on drybulk and Navios Containers focusing on containers. So down the road, do you perhaps see NMM being rolled up into the parent as well to even simplifying the structure even further?

I think this is a very simple structure. The company is now focused on drybulk with a separate container strategy. We don't have -- I mean, there may be drop downs, as it is in a regular way of business. There is no any other (inaudible).

Your next question comes from the line of Espen Landmark of Fearnley.

Yes. Angeliki, and sort of following up on the last one, I mean, what kind of alternatives would you consider for the NM listing in terms of taking part in the offering or having some of the sale proceeds from the HMM vessels that are paid in shares?

I mean, I think there is already a press release out. And Navios Containers has an F-1 public filing. I will -- I cannot comment on the whole process. I mean, there is a press release and there is an F-1 that is already public.

Okay. Fair enough. And then the acquisition of Kamsarmax and Cape from a -- from the parent, I guess, acceleration-wise, it looks fine, in line with what (inaudible) levels. But I would still question why you decide to acquire vessels from the parent instead of a third party. Can you explain the decision behind that and maybe if you're intending to acquire more of the NM vessels in the future?

It's just like a third party. I mean, the better we acquire the Capesizes in Imabari ecovessel, one of the top-of-the-line. I can say it has agreement to work with any other vessels. And they are known performers, very good vessels, I mean, with the premium to a major charter. And the Kamsarmax is actually bigger. A Kamsarmax is an 84,000-tonner, a quite significant better vessel than can be found, that is very much treasured by the greenhouses. So known vessels, top performers, value vessels, I will not have seen a better profile for an acquisition in the open market. Even the ones that have been done are not as good. And if you see the actual returns, you are talking about 15% here on today's rate, so good transaction.

Right. So you wouldn't (inaudible) really acquiring more vessels from NM in the future?

There is a drop down. It can be done. I mean, if it's attractive, but it is -- I will not exclude, but this is a target to -- it will not be (inaudible) and the both of the profit committee approving the transactions.

Okay. And finally, I mean, for balance quarter, treatment-related expenses, 40 vessels or, say, 33 drybulk, I mean, how much do we factor in for '18, '19 and onwards for CapEx?

As you know that we already have given out, for this year, we have no vessels. Our vessels won't start here until 2022. Technology is exponentially going down. I mean, exponential is going down on IT as well as cost of installation is going down. Therefore, the installation of the ballast water is still to our benefit. We already have 3 suppliers that we will -- that have contact and we are working on the most appropriate one.

Your next question comes from the line of Amit Mehrotra of Deutsche Bank.

This is Chris Snyder on for Amit. So my first question is around potential cash flows from divesting the containership fleet. So first, on the sales to Navios Containers, you say that the sales are at the option of Navios Containers. Can you just talk maybe about the potential timing of any sale and the likelihood that NMCI will exercise these options?

I will let -- refer you to the public disclosures. There is -- the one vessel is within 2 3, and we have already given that, the one that is firm and the rest, you can refer in our public disclosure.

Okay. Are the sales contingent on, like, the potential IPOs going through? Or could they go forward without that?

There's a lot of conditions with -- I will suggest you refer to the public disclosure.

Okay. Fair enough. And then, I guess, just kind of thinking about proceeds from the containership fleet in general, should we assume that any proceeds you guys do receive you continue to reinvest in younger drybulk tonnage?

Yes. I mean, if you have seen what we have done over the last 1.5 years, we added 13 vessels, sold 2. And we have increased the deadweight capacity, increasing with larger vessels about over 50% in pure -- only drybulk and decreasing the age profile of our fleet. Today, the age profile of -- we are meeting the industry -- the drybulk industry average. And this is something that we will continue in the remainder of this year and next year.

Okay, yes. And I guess, just kind of following up on the S&P market. It seems like it's -- there's definitely been a bid up in prices for modern tonnage over the last couple of months. And just given you guys, you have additional firepower here with improving cash flows, the no debt maturity until 2020, any potential proceeds from the containership fleet, can you just maybe talk about the depth in the availability of modern tonnage in the S&P market?

There is availability. I mean, you have (inaudible) I mean, the focus on what is your target. I mean, we targeted larger vessels. And also what we target is vessels that are good performers with a concentration on same size and, of course, Panamax.

We have reached the allotted time for questions and answers. I will now turn the call to Mrs. Angeliki Frangou for any closing comments.

Thank you. This completes our second quarter results. Thank you.

Thank you for participating in today's conference call, you may now disconnect.