Silvercrest Asset Management Group Inc (SAMG) 2018 Q2 法說會逐字稿

Good day ladies and gentlemen, and welcome to Silvercrest Asset Management Group Q2 2018 Earnings Conference Call. (Operator Instructions) As a reminder this conference is being recorded.

Before we begin, let me remind you that during today's conference, Silvercrest will make forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including statements regarding future events and developments and Silvercrest's future performance as well as management's current expectations, beliefs, plans or estimates or projections relating to the future are forward-looking statements. These forward-looking statements are only predicted based on current expectations and projections about future events. These forward-looking statements are subject to a number of risks and uncertainties and there are important factors that could cause actual results, level of activity, performance or achievements to differ materially from statements made. Among these factors are fluctuations in quarterly and annual results, incurrence of net losses, adverse effects of management focusing on implementation of growth strategy, failure to develop and maintain the Silvercrest brand and other factors disclosed in the company's filings with the SEC, including those factors listed under the caption entitled Risk Factors in the company's annual report on Form 10-K for the year ended December 31, 2017, filed with the SEC. In some cases, these statements can be identified by forward-looking words such as believe, expect, anticipate, plan, estimate, likely, may, will, could, continue, project, predict, goal, the negative or plural of these words and other similar expressions. These forward-looking statements are predictions based on Silvercrest's current expectations and its projections about future events. All forward-looking statements made on this call are made as of the date hereof, and Silvercrest assumes no obligation to update these forward-looking statements.

I would now like to turn the call over to our host, Rick Hough, Chairman and Chief Executive Officer. Please begin, sir.

Thanks very much, and welcome to our call for the second quarter of 2018. We once again concluded a successful second quarter supported by very strong new client acquisition, with $200 million in new client assets as well as strong equity markets. Our progress during the quarter occurred against the backdrop of client rebalancing and tax payments, resulting in a net increase of $300 million in discretionary assets under management. The firm ended the second quarter of 2018 with new firm-wide highs of $16.2 billion in discretionary assets under management and $21.8 billion in total assets under management. Our discretionary assets have grown 10% year-over-year as of quarter end.

Management fees also reached new quarterly record levels which are up 11% year-over-year. We have accomplished this while maintaining our average fee basis of 59 basis points on total assets. Silvercrest has recently completed building its investment in the previously announced outsourced CIO business with the addition of a new business development professional to complement the firm's first-class investment team. Silvercrest continues to invest in its business development and portfolio management teams to lay the groundwork for continued growth. We firmly believe that reinvestment in our business and in our clients will create the longest-term value for shareholders by continuing our established record of prudent growth, and we remain prepared to use our capital to grow the business with new strategic initiatives and intellectual capital, including new asset management capabilities.

Our new business during the second quarter was paced by our value equity team and the successful introduction of new strategies such as SMid-cap value to the marketplace. Our successful approach to active management continues to differentiate our firm against the backdrop of cheap beta and cookie-cutter asset allocations, and we expect our performance to support more opportunity in the institutional marketplace as well as providing a compelling and competitive offering to our high net worth clients and prospects. We now have over $4 billion in institutional client assets committed to the firm.

While the current M&A environment is competitive and expensive, Silvercrest continues to participate in acquisition discussions with culturally compatible firms to complement our organic growth, investment capabilities and professional talent.

I'll turn it over now to Scott Gerard, our CFO, and then we'll take some questions. Thank you very much.

Thanks, Rick. As disclosed in our earnings release, for the second quarter, discretionary AUM as of June 30, 2018, was $16.2 billion and total AUM as of June 30, 2018, was $21.8 billion. Revenue for the quarter was $24.6 million and reported consolidated net income for the quarter was $4.2 million. Looking into more detail and -- for the second quarter, revenue was again approximately $24.6 million. That represented approximately an 11% increase over revenue of approximately $22.1 million for the same period last year. This increase was driven primarily by growth in our management and advisory fees as a result of increased AUM.

Expenses for the second quarter were $19.1 million, representing approximately a 13% increase from expenses of $16.9 million for the same period last year. This increase was primarily attributable to increases in compensation and benefits expense of $1.4 million and G&A expenses of $0.8 million. Compensation increased primarily because of an increase in the accrual for bonuses and increased salary expense as a result of merit-based increases. The increase in G&A during the second quarter compared to the same period last year was primarily due to increases in the occupancy-related costs as a result of our new lease in New York City taking effect on October 1 last year and some advisory and referral fees expense went up as a result of sub-advised revenue that increased and portfolio and system expense was higher as well.

Reported consolidated net income was $4.2 million for the quarter as compared to $3.6 million in the same period last year. Reported net income attributable to Silvercrest or to Class A shareholders for the second quarter of 2018 was approximately $2.3 million or $0.28 per basic and diluted Class A share.

Adjusted EBITDA, which we define as EBITDA without giving effect to equity-based compensation expense and noncore, nonrecurring items, was approximately $7.1 million or 28.9% of revenue for the quarter, and this compared to $6.8 million or 30.7% of revenue for the same period last year.

Adjusted net income, which we define as net income without giving effect to noncore and nonrecurring items and income tax expense assuming a corporate of 26% for periods beginning on January 1, 2018, as a result of the Tax Cuts and Jobs Act, was approximately $4.2 million for the quarter or $0.32 per basic adjusted share and $0.31 per adjusted diluted share. Adjusted earnings per share is equal to adjusted net income divided by the actual Class A and Class B shares outstanding as of the end of the reporting period for basic adjusted EPS. And to the extent dilutive, we add unvested restricted stock units to the total shares outstanding to compute diluted adjusted EPS.

Looking at the first half. Revenue for the first half was $48.9 million. This represented approximately an 11% increase over revenue of $44 million for the same period last year. This increase again was driven primarily by growth in management and advisory fees as a result of higher AUM.

Expenses for the first half were $38.1 million. This represented approximately a 12% increase from expenses of $34.1 million for the same period last year. This increase was primarily attributable to increases in both compensation and benefits of $2.6 million and G&A of $1.4 million.

Comp and benefits increased primarily again because of an increase in bonus accruals and increased salary expenses as a result of merit-based salary increases. And this is partially offset by a decrease in benefits expense. Again, the increase in G&A was a result of higher rent and higher sub-advisory and referral fees due to higher sub-advised revenue, and these were partially offset by lower depreciation and amortization expense.

Reported consolidated net income was $8.2 million for the first half and this compared to $6.9 million in the same period last year. Reported net income attributable to Silvercrest for the first half was $4.6 million or $0.55 per basic and diluted Class A share.

Adjusted EBITDA for the first half was approximately $14 million or 28.7% of revenue for the first half and this compared to $13.3 million or 30.1% of revenue for the same period last year.

Adjusted net income for the first half was $8.4 million or $0.63 per adjusted basic share and $0.61 per adjusted diluted share.

Quickly looking at the balance sheet, total assets as of June 30 of this year were $108.8 million. This compared to $117.4 million as of the end of last year. Cash and cash equivalents were approximately $44.6 million at June of this year and that compared to $53.8 million at the end of 2017. We had no notes payable outstanding as of June of this year, and at the end of last year, we had $0.7 million outstanding.

Lastly, total Class A stockholders' equity was approximately $52.2 million at June 30 of this year.

So that concludes my remarks. I'll turn it over to Rick, and we'll take Q&A.

Thanks, Scott. We welcome questions at this time.

(Operator Instructions) Our first question comes from Andrew Disdier of Sandler O'Neill.

So a bunch of questions here, let's start with flows first. So the $240 million of new business, you talked about the value equity team's success in the introduction of new products. Are those kind of reflective of those types of wins? In short, would you be able to elaborate more on the gross sales side?

Yes, absolutely. So that $240 million in new accounts, those are new acquired clients, not inflows, is actually the best new business quarter that the firm has had since the second quarter of 2016. Just to put it in perspective, it's substantially higher than the past few quarters. The highest previous to that would have been the third quarter of '16, and we have about $110 million in the second of '17. Last quarter was $53 million, and then it was about $100 million at the end of 2017. So it was very strong. Of that, to break it out for you, about $162 million or so was new institutional clients investing in our value equity strategy. So it was driving a good portion of that growth. $78 million, however, was brand new, high net worth relationships. So a solid contribution there. And in fact, that amount was higher than all business development in the first quarter of 2018 and exceeded that of the third quarter of '17, and was very close to what it was in the first quarter of '17 in total development. So pretty strong from that quarter as well. With regard to the new markets, to answer your question, it -- we did have new mandates in SMid-cap. As you know, we really started to focus on SMid-cap and introducing that to the marketplace after we soft closed the small cap, it's still open for a couple of key consultants, and we kept some capacity for 1 relationship. So some of the flows are still in small cap, a meaningful percentage. But SMid-cap is getting traction. It's part of a sub-advised fund and it's on the Morgan Stanley Smith Barney platform, so we get UMA inflows there. We're working hard to promote that strategy as well as large cap and focused value and equity income. They all have very strong performance, including large cap. And as we get some more volatility in the marketplace, as things turn a bit towards value, which we're seeing a little bit over the past few weeks, I think that might become more compelling.

Got it. So to piggyback off of the SMid-cap mandates. It sounds like -- is there more runway to come with SMid-cap?

Oh, there's a lot of capacity there, yes, yes. So we're just getting started. As you know, we -- there's room for -- quite a lot of room, billions, just because it's a little bit up the market cap from small cap, and we're seeing kind of a steady backdrop of flows into it given the good performance. So there are 2 possible inflows, one is going to be from the platforms that we're on, and that provides a nice steady tailwind of allocated capital, especially from those who can no longer allocate to small cap. And if they're willing to go up a market cap a bit, there's capacity in SMid-cap, so we expect that to continue to be a nice contributor each quarter. But the big flows are going to come from our consultant relationships as you would expect. And the search environment looks good -- looks strong. In fact, our actionable 6-month pipeline of new business has increased a fair bit since the end of March, so we remain optimistic about these other capabilities taking on institutional mandates.

Got it. Understood. And let's go to the flip side, on the gross outflow side. Would you be able to talk about or size any tax-related outflows that you mentioned in the press release.

Yes. So I give a net number for the firm and a net number for existing accounts, net cash flow [went] out was just over $300 million. The vast majority of the outflows that contributed to that were for tax purposes. In fact, we had rebalancing in our institutional accounts as well as additions, just to give you an idea, and that was over $60 million in rebalancing. But then we also had $63 million of additions from -- so that was a net on the institutional side, a net -- only a net $2 million, but you can see, pretty big flows that balance each other. So most of the rest of it is high net worth tax payments. 2017 was a very good year. Some of it leaked out in the first quarter, most of it came out in the second quarter. It's a little bit different for the second quarter over history because we have actually done pretty well with regards to net flows overall since we've been public the past 5 years, but it tends to be a more volatile number. And in fact, in general, the net inflows from high net worth had been overcoming any outflows that people have from their living expenses and what have you. And so we're very pleased by that. I view this second quarter as a bit of a return to normalcy against a very good capital gain year. There's nothing troubling in the numbers, and it doesn't represent any lost client account, which is something we look at very carefully.

Understood. And then on the -- some of your comments and also within the press release, you commented on the $4 billion of institutional client accounts that are actually committed to the firm. So based on some of the numbers that you disclosed, and our math, we're looking at $3.9 billion of institutional AUM. Does that imply that there is some money that has not yet hit?

No. I'm talking about the past. So I can't reconcile what you've got now, but our institutional discretionary business has now eclipsed $4 billion. But that's...

It's reflected in the AUM base.

Yes. I think it's $4.1 billion to be precise.

Okay, understood. And then on the...

We ended -- in fact, -- just to -- you had $3.9 billion, we ended the first quarter with $3.8 billion. Okay?

Right. Yes. On the OCIO pipeline, can you characterize the types of assets that you're competing for? Are they going to be taking share from assets from other platforms? Are they more new searches? And then any update onto the overall pipeline and any numbers around it would be helpful, too.

Yes. Yes. So the -- first of all, the searches are sometimes led independently by the nonprofit or endowment boards themselves who are participating in searches that look like that. And then you have searches that are led by intermediaries like consultants for the purpose of helping them find a outsourced chief investment officer function. We're involved in both. So if you look at it on that -- in that way, it stands in between pure institutional business that you would you would see for our asset management capabilities and the high net worth business, which is much more relationship-driven and usually does not have a consultant or intermediary involved. So you get both types. The typical potential client is going to be in an endowment or foundation that's on the low end, maybe in the $20 millions or $30 million and could be up in the couple of billion on the higher end, definitely in the small to mid-range it's going to be, at least, our sweet spot initially. They're going to include discretionary tax exempt endowments and foundations. That, we hope, will be the bulk of the assets. Some of it will be nondiscretionary tax exempt mandates, where we are cooperating in serving a board to do their work on a nondiscretionary basis by providing advice but not necessarily directly executing portfolio full discretion. And it will include particular arrangements with larger family offices that may have a chief investment officer but are lacking meaningful capabilities internally, and our products are being brought, or our advice is being brought to the family to just round out their capabilities. So that's kind of the scope of work. With regards to where we are, we started building the team with our acquisition of Ten-Sixty in 2013 to establish an investment policy and strategy group here and to provide a lot more intellectual capital for the support of the investment function on the asset allocation and due diligence side as well as risk management. And then we started building an OCIO team on top of that in June of 2016. So that included hiring a prior chief investment officer of a college. It included hiring portfolio managers to handle relationships, RFP, marketing specialists, and we've just completed the build-out of the team as we announced I think a day ago the hiring of Chris Long, who is going to focus on the business development effort for the OCIO business. And we're very excited about his joining, his expertise and long history in the asset management business, both serving on the boards of foundations and endowments as well leading a foundation, and we're wishing him all the luck. We think we're really primed for success, we're done building the team. The pipeline's strong. We're looking at the decision-making period for a key number of the endowments and foundations in our pipeline during the third and fourth quarters.

Got it. And maybe to your last comments. In the past, there were about 3 roles that you've discussed as far as investments in human capital, really. We saw the announcement, and we just talked about Chris Long, so that's one. I think you've talked about institutional sales, two. And then also new portfolio managers as three. So I guess the question is, can you talk about the associated potential revenue and spend with these hires and how we should think about the flow-through to the P&L?

Right. With any hire, there's the potential to exceed our 55% compensation target, that is as a percentage of revenue. But we don't plan on that. Our company growth is covering these hires. We believe strongly in investment in the business for future growth. It's been a successful model in the past. We don't think things are going to get moved around on the compensation side from a ratio perspective at the company, just as you noted in your release this morning with regards to compensation versus revenue for the second quarter. With regard to the potential, I hesitate to put a number on it. Obviously, we get -- just getting the OCIO business undergoing. We would like to see that in the next few years to be a multi-billion dollar advisory business. So that gives you one target going out a few years. It's going to take us some time to get there, obviously. Just as it did with the institutional asset management business, but we're bullish on it and we think we have the right team. I will have potential announcements to make about additional hires during the third quarter. We have portfolio management lined up, and we also have other capabilities that complement the high net worth business lined up. Again, not going to move around the compensation needle in a way that I think investors should be concerned about. And frankly, even if we did, which I don't plan to, it should be welcome that we're investing in our business for future growth. If we don't, we're just going to die. Too many businesses, in our business in particular, become complacent and don't get ahead of the curve to keep driving future growth. There's a leak in the bucket with asset management as people age and have lifestyles to maintain, et cetera. We have to keep refilling it. And it's time we start reinvesting in portfolio management teams, either by direct hires, which we're doing in one case, or through potential mergers and acquisitions should we find the right cultural fit with a firm.

Understood. Understood. And really quickly 2 more questions, if you don't mind.

No. Take as long as you want.

To the point on PM, I guess, the real crux of the question is, and I know you mentioned maintaining the 55% core comp ratio, but with the PM, the intuition is that, if not right away in the very near term, we should see revenues begin to more than offset the related associated expenses. So I'm just wondering if that's kind of the right way to think about it, at least on the PM side.

Absolutely it is. There's no point in doing it otherwise. It depends on the kind of role someone's had. Typically, these are structured as a 2-year deal, but we should see a lot of activity in that first year. And new portfolio managers have every incentive from this company to make more compensation by growing their business more quickly. It's a big career gamble for the person coming here to do that in the sense that they have to be very confident that the high-quality asset management and asset allocation work we do here is going to benefit their clients and it's going to support them fully in building a business with high net worth families. We're obviously very confident that we have that firm, and we've been able to attract good talent as a result of it. But they have to have that confidence. And on the other hand, we're laying out capital for the exact purpose of growing in that way. So you're right, you should see it over a fairly short period of time. We're only reporting quarterly so that gets smoothed out, we [build] quarterly in advance, so you're always pushing it ahead a quarter, but you should see it in the flows that we report.

And then Scott, maybe a question for you, too. You got about $45 billion on your balance sheet of cash, and, we're kind of seeing a steady tick up of interest income over time. Would you be able to disclose the average yielding rate that you're collecting on that? I know we can look at the Q4, the level of securities that you're investing in, but trying to understand the yield.

Yes. So we have a portion of our cash that we have invested into short-term conservative, whether it's U.S. treasuries or cash equivalents that -- everything that matures within a few months. So the annual yield on the portion that we've been investing in is around 1.5%. So we're certainly getting more out of it than if we just kept in a money market account. And from a treasury standpoint, it gives us the flexibility in the sense that it's not locked up for an extended period of time should we have strategic uses for it.

Andrew, I'll make one other comment on the cash since it's kind of in the background, it hasn't -- it didn't come up. But as you know, earlier in the year, we increased the dividend. We believe paying a good dividend to our shareholders is important. It's important to our partners but it's important to our shareholders to return some of the capital with a -- such a cash flow-healthy business. We also increased, separately, the distribution from our operating business. And that is shared pari passu across all shareholders, whether they're Unit B partnership interests or the Class A public shares. That will provide further support for the dividend going forward and potential increases in the future as we grow the company. I think it's important to highlight that we had taken steps to support that dividend and to look for it in the future. We're also in a position now where we have no debt at the company, so we're in a very, very healthy balance sheet position. Quite conservative. You could argue, too conservative, but we obviously have uses that we're keeping in play with regards to M&A that could make use of that cash out for a higher return.

(Operator Instructions) Our next question comes from Brian Rohman of Boston Partners.

Andrew was pretty comprehensive there, but let me see if I can ask something he didn't. Margins or average fee, I didn't do the calculation, but could you just talk about the direction. Is it up, down? Certainly, everybody's seeing fee pressure. And is it different on the high net worth versus the institutional? And just talk about the issue and what was the experience in the quarter.

Yes. So on our discretionary assets under management, I think it was 59 basis points, Brian. That is basically the exact same number it was 15 years ago. It'll move 57 to 61. So that's to say that we had been able to position this business and the value that we are delivering to our clients consistently to the point that we have not faced a fee pressure. Obviously, our clients feel that it's an appropriate compensation. The institutional business trends a little lower given the size of large mandates. Not hugely, and it's something I welcome, quite frankly. It's got a little more leverage in the business, provides us that cash flow for other investments and supports a really high-quality investment function that we've been able to demonstrate with our performance now for quite a sustained period of time. The larger families, which we are more and more capable of attracting, are able to negotiate very favorable terms. It's the core of our business. The issue there is they expect and get a tremendous amount of service but they also want institutional pricing. And that could put a little pressure on that fee basis. I would just point out that we've always had very large clients at this firm. And given the stability of that, I don't expect much of a change at all going forward. I think the rest of the business, in comparison to what Silvercrest is doing, are putting themselves in a very difficult position by chasing assets in the hopes of seeing a whole lot of other services and things in the future. And by discounting the actual work of asset management through, as I put in my opening remarks, cheap beta. There's a use for it. Indexes have their role, but we have a contrarian view with regard to asset management. As markets potentially hit more volatility, we believe we'll preserve capital. We believe we do a better job at risk management. We believe we have a better discernment with regard to value of investments. And we are able to do things in a highly customized approach on our clients. Secondly, to the extent clients are using our capabilities, we're avoiding fee on fees. So all-in, for an investor at Silvercrest, their total combined fees, a custodian paying Silvercrest, is substantially lower in many cases than our open-architecture competitors who don't have a lot to differentiate between themselves.

So you're saying the all-in fee looks better. Okay. So you're not -- you're running against the stream here in terms of dramatic fee pressure.

Absolutely.

Yes. Question about new business, I think you said, it was at $230 million or $250 million of new flows this quarter. It sounds like 2/3 of that plus was on the institutional side, flows in general institutional, more specific. Were there large 1 or 2 or a handful of very large new mandates or were they a number of smaller mandates?

It was a mix. We have one that was pretty large up around $100 million. So...

(inaudible)

Yes. That about -- a little more than 1/3 of that. But we had everything from -- in the 20s down to inflows into trusts that may have been only $5 million or so. So yes, it's a broad range, it's pretty diversified. Our largest is a few hundred million. That got us started really with the institutional business several years ago. And occasionally, you're going to get these nice chunky ones that are in the pipeline.

Another question, Andrew touched on it, and I want to take it a little bit further. You mentioned this issue about outflows for tax purposes. I don't fully understand what happened, and is this typical for this time of the year?

For the second quarter, people paying and owing taxes is quite typical.

Oh, okay. Fine. Yes. Okay, I get it. That's specific just to the second quarter.

What I -- what is unusual is that our contributions of capital and net flows over many, many quarters has overcome any cash outflows on a net basis. And if you look over the whole history of the company, even before we were public 5 years ago, the second quarter was often a negative net flow quarter. The last second quarter negative outflow we had on a net basis was in 2016 and -- which is unusual. Usually, we see steady pressure against net flows as our wealthier clients spend money. They have other life events, yes, and pay tax.

Last general question, the Outsourced Chief Investment Officer business. Is this -- are the fees generated here going to be purely asset management fees or are there going to be other charges related -- fees related to offering expertise, offering insight, offering value-add for their (inaudible)?

Yes. Right. So it'll look more like the institutional business in terms of fees, especially if we do it on a discretionary basis. The difference is that for the outsourced CIO business, we typically will not be directly managing the assets on one of our strategies. It'll look more like an open architecture business. So put ourselves in the role as if we were the CIO at a university selecting managers, it's on that basis that we will be compensated. But the compensation looks much more like institutional. The kind of advice that comes along with what we're doing includes analysis of cash flows and positioning of endowments and foundations for their spend rates. There's a lot more involved than merely putting in place an asset allocation to achieve certain target returns and volatility. It -- there is a partnership that will occur between our advisory team and the management and board of these institutions to take the next step and position the portfolios with regards to those cash flow needs among the other elements that go into a foundation. This is why we have on the team a former college CIO because those folks are deep in the weeds on those issues, and we believe that his capabilities and the rest of the team will serve those folks well. There's also the potential for mandates that are sort of one-off project fees. We have quite a few of them. I think it'll grow. And that's risk analysis work and second opinions or specific searches for managers.

So for the time being, at least on the income statement, this will be inside of management and advisory fees?

Yes.

Maybe someday because it has a entirely different feel than true asset management, it might get another line? I'm just speculating. But for the time being, no?

For the time being, no, and I'd be speculating, too. But if you look at it, it's institutional, but it's also relationship driven. And it's advice. It's advisory business, which is exactly the same thing we do for our high net worth clients. So the function is not substantially different, it's just the audience and how you organize it. So it could very well stay in the same line. What I think I'll do for sure is as that business grows, as we get assets is talk about its contribution to the overall business. I'm hoping this is a few billion-dollar business in the next few years. You're darn right I'm going to highlight it. Whether it gets broken out on the P&L as a different line, I don't know.

Are you -- would you break it out? Because obviously, these aren't assets under management, they're assets under advisement or -- so would you break it out differently in terms of AUM or...

If -- actually, much of it will be assets under management. If we're doing it on a discretionary basis, which we expect we will be doing in most of the cases, that will be assets under management. If it's nondiscretionary, it would be assets under advisement. So there is a difference there, but we actually expect most as assets under management. Currently at the firm, we have -- if you look at different relationships we have that kind of add up to the OCIO business and that we'll be using in RFPs, it's about $740 million or so at the firm that is this kind of business to date. And of that, about $600 million or so is discretionary. So you can see the balance is weighted towards assets under management.

(Operator Instructions) At this time I'd like to turn the call over to Rick Hough, Chairman and Chief Executive Officer, for closing remarks.

Great. Well, thanks for joining us for the second quarter 2018 review. As we mentioned, it was a strong new business, new client acquisition quarter, and we're very pleased with where we stand as a company in terms of our new investments in the outsourced CIO business and the future that holds, some of the new hires we've done, not only to build-out that team but that are coming to the portfolio management team. And of course, we're seeing a nice pipeline and bright future given the performance of our equity products for continued institutional mandates. Thanks again, for joining us and look forward to speaking with you next quarter.

Ladies and gentlemen, thank you for your participation in today's conference. You may disconnect. Have a wonderful day.