Tecnoglass Inc (TGLS) 2017 Q4 法說會逐字稿

Greetings, and welcome to the Tecnoglass Fourth Quarter and Full Year 2017 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Rodny Nacier, Investor Relations. Thank you, sir. You may begin.

Thank you for joining us for Tecnoglass' fourth quarter 2017 conference call. A copy of the slide presentation to accompany the call may be obtained on the Investors section of the Tecnoglass website.

Our speakers for today's call are: José Manuel Daes, Chief Executive Officer; Chris Daes, Chief Operating Officer; and Santiago Giraldo, Chief Financial Officer.

Moving to Slide 2. Before turning the call over to José Manuel, I'd like to remind everyone that matters discussed in this call, except for historical information, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding future financial performance, future growth and future acquisitions. These statements are based on Tecnoglass' current expectations or beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary in a material nature from those expressed or implied by the statements herein due to economic changes, business, competitive and/or regulatory factors, and other risks and uncertainties affecting the operations of Tecnoglass' business. These risks, uncertainties and contingencies are indicated from time to time in Tecnoglass' filings with the SEC. The information discussed during the call is presented in light of such risks. Further, investors should keep in mind that Tecnoglass' financial results in any period may not be indicative of future results. Tecnoglass is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise.

I will now turn the call over to José Manuel, beginning on Slide 4.

Thank you, Rodny and thank you, everyone, for participating on today's call. I will begin with a review of our operating highlights. Chris will then discuss our backlog, followed by Santiago, who will take us through our market update, financial results and outlook.

We achieved record revenues in 2017 with net sales climbing to $314.4 million primarily representing consumable growth and market share gains in the U.S. This progress build on the long-term track record of expansion with the fourth quarter making our 12th straight quarter of the year-over-year revenue growth. While revenues remain pressured year-over-year in Colombia as a result of previously disclosed macroeconomic factors, we are beginning to turn the corner in that market with fourth quarter revenues up 36.8% compared to the third quarter 2017 and a solid pace of activity to start the new year.

In fact, looking at our second half 2017 results compared to the first half 2017, we improved by growing nearly all metrics, including sales growth, gross margin, SG&A and adjusted EBITDA margins. I am very proud of our organization's flexibility to respond to a range existing market dynamics as well as severe weather towards the end of 2017, which caused about $5 million of revenue to shift to 2018.

I'm also thrilled by our ability to end the year on a very strong note with backlog expanding by 26% year-over-year to a record $499 million. We are confident about the direction of our business based on a number of continued initiatives in 2017. In single family residential, we delivered on our $10 million sales target in 2017, which we anticipate to ramp to a range of $20 million to $25 million in 2018 given the strong interest in our innovative new products.

On the cost side, we virtually aligned headcount, reduced fixed cost and pursued dollar cost savings, largely remain possible by ongoing lean manufacturing initiatives. Additionally, in November, we completed the second phase of our Colombia solar panel installation projects, which is now driving incremental energy savings. All of these actions are in the interest of growing our business and generating additional value for shareholders. To that end, we were pleased to expand full year cash flow from operations by $17.3 million and free cash flow by $33.2 million.

We have a solid balance sheet to drive future growth and take advantage of value-enhancing investments. Our underlying dividend of $0.56 per share remains among one of the highest yields across the broader U.S. industrial sector. We continue to view this as an additional source of return for our shareholders.

On Slide 5, I'd like to highlight the tremendous progress we made to dramatically expand our mix of business in very good markets throughout the U.S. In 2017, the U.S. represented approximately 76% of sales compared to 60% only 2 years ago. The integration of GM&P continues to grow in according to plan, having heavily contributed to U.S. sales growing more than 25% in 2017, while achieving better-than-expected returns. We now have a more efficient platform to strengthen our U.S. position. We have also gained [multiples of] numerous projects with a vision of engineering and installation service capabilities that will allow us to extend our reach all the way to the end customer [of our products]. We have enhanced customer relationships, including our addressable U.S. customer base and expanded into other previously untapped U.S. markets.

Looking forward, we anticipate that we can continue to grow and drive industry-leading margin performance through our vertically-integrated business model and strategic location and low-cost footprint, especially as sales in our legacy business ramp up was well already seen during the first quarter.

Overall, we're pleased with the strength and direction of our business in 2018. We look forward to achieving double-digit percentage growth in revenue and adjusted EBITDA, while generating additional cash flow.

I will now turn the call over to Chris to provide additional details on our backlog.

Thank you, José Manuel, and good morning to everyone on the line.

Moving to our backlog on Slide 6. Total backlog climbed to a new record level of $499 million, which was up 26% year-over-year. Backlog expanded by $11 million sequentially compared to the third quarter 2017. This represents Q4 additions to backlog of approximately $95 million, which more than replenish record invoicing of revenue of $84.3 million during the fourth quarter. Additions to backlog include a balance contribution from attractive project wins both in the U.S. and also in Colombia, where we have seen a reactivation of quoting activity since the middle of 2017.

Our efforts to expand in U.S. residential with new products such as our Prestige and Elite lines in 2017 also added to our sequential improvement. Overall, we're encouraged by the solid foundation that we continue to build and by the visibility of our project pipeline afforded by our strong backlog, which represents approximately 1.6x 2017 total revenue.

Looking at our geographic breakdown on Slide 7. Our backlog includes a range of diverse projects with continued growth being driven by 3 primary regions. Our leading position in Florida, our expansion into additional U.S. markets and a resurgence in Colombia and Latin American markets. In South Florida, we have a dominant position that we estimate has allowed our windows and products to be installed in approximately 60% of high-rise buildings during the past 20 years. Following the impact of Hurricane Irma, we continue to anticipate a stricter building codes and/or inform consumer preferences to drive a long-term shift towards better quality exterior products, including windows. In that regard, we expect to retain our market leadership through a steady stream of new cutting-edge products to stay ahead of evolving market trends.

More broadly, in the U.S., we are sourcing project wins from a more diverse number of regions, where a structural Glass and Curtain Wall system continue to lead the architectural glass trend. Our expanded service capabilities through UMP are providing a lot of these opportunities to reach new markets in the Northeast, West Coast and Texas. We plan to further invest in our selling efforts to introduce our expanding product portfolio to new and existing customers.

In Colombia, we are pleased to see an improvement in midyear quoting activity that resulted in a strong backlog position at year-end. Additionally, activity in other Latin American markets is picking up, providing a pipeline of additional diversification opportunities into new markets. Collectively, project wins in Colombia and other Latin American markets reflects a portion of sequential expansions of backlog mix outside of Florida compared to the third quarter of 2017.

Since the beginning of 2018, we have continued to beat on a range of prototypes. We are actively diversifying our geographic and end market exposure to expand our backlog in a disciplined manner. Our backlog visibility gives us confidence in our revenue and margin potential as we look forward to execute on our multiyear project pipeline.

I will now turn the call over to Santiago to disclose our financial results and markets.

Thank you, Christian, and good morning to everybody on the line.

Beginning with our financial highlights on Slide #9. We recorded another year of revenue growth with stronger U.S. net sales more than offsetting a challenging environment in Colombia. Margins for the year were impacted by our mix of businesses and the timing of invoicing on certain projects, coupled with a more robust first half cost structure that was put in place to address higher-than-realized invoicing. That said, our second half of 2017 margin performance improved sequentially from the first half across nearly all metrics, helped by significant cost-saving actions and a modest recovery in deferred invoicing activity particularly, in Colombia. We remain very confident in our ability to generate additional operating leverage on higher sales, and we'll continue to source additional avenues to improve efficiencies and reduce our cost base.

Our cash flow performance was much stronger in 2017 compared to the prior year with higher operating and free cash flow, allowing us to end the year with a healthy cash balance of $41 million in a conservative leverage profile of less than 3x net debt-to-adjusted EBITDA.

I'd also like to mention that in connection with our filing of the 2017 10-K, we were very pleased to announce the remediation of our sole remaining material weakness and obtainment of full SOX compliance, which is in large part a reflection of the significant investments since 2016 to strengthen our financial operations.

Looking at the drivers of revenue on Slide #10. Fourth quarter revenues increased 5% year-over-year to $84.3 million primarily driven by U.S. commercial activity, representing an acceleration compared to full year growth of 3.1%. U.S. revenues increased by $12.6 million for the fourth quarter and $48.5 million for the full year. We were proud of our team's ability to accomplish that sales growth despite the significant business disruptions caused by Hurricane Irma and related flooding in Florida and the Southeast.

We estimate the impact of Hurricane Irma was unfavorable to revenues by approximately $3 million in the fourth quarter of 2017 and $5 million for the full year. U.S. revenues more than offset market pressures in other regions to grow total revenues by $4 million for the quarter and $9.4 million for the year.

On Slide #11, adjusted EBITDA in the fourth quarter of 2017 was $17.2 million and $62 million for the full year. Volume was up slightly and price was essentially flat year-over-year. The full year decline in EBITDA primarily reflects the heavier cost structure put in place to service higher-than-realized sales during the first half of the year. Both periods were impacted by the higher mix of revenues from engineering, designing and installation services in 2017. Despite the lower-margin profile, GM&P exceeded our projected profitability and more importantly, served our overall business as a strong U.S. growth platform.

Gross margin in both periods also including incremental depreciation and amortization resulting from our completed 2016 growth CapEx program. That said, gross margin in the second half of 2017 of approximately 32.5% was 190 basis points higher compared to the first half of 2017. This was a result of several previously announced actions taken at the beginning of the third quarter of 2017 to rationalize our cost base, along with ongoing companywide cost-cutting initiatives in labor, raw material sourcing, energy and other efficiencies through our plant network to enhance margins.

SG&A as a percent of sales was flat at 18.7% in the fourth quarter compared to the prior year quarter, excluding the impact of onetime items. Similar to gross margin, SG&A performance was better in the second half of 2017 compared to the first half due to the midyear cost-saving actions and to higher operating leverage generated on sequential revenue growth. We are very focused on additional efficiencies and productivity initiatives to further enhance profitability, while preserving a strong platform to support expected growth.

Looking at our balance sheet and liquidity on Slide #12. During 2017, we generated positive operating cash, which improved by $17.3 million year-over-year, helped by better working capital management. Trade accounts receivable generated $2.4 million, partly offset by a buildup in inventories ahead of a stronger anticipated Q1 amount of shipments. Our cash position also improved from lower CapEx spend, given the conclusion of our plant expansion phase, which has created ample installed capacity to address future growth. 2017 CapEx was primarily maintenance related with some modest investment in higher-return projects focused on innovation and productivity such as our solar conversion initiatives.

The combination of improved working capital management and minimal CapEx needs resulted in an improvement in free cash flow to $7.2 million, up $33.2 million year-over-year. As a result, our liquidity position improved significantly to end the year with a cash balance of $41 million in a conservative leverage profile. This balance sheet strength supports our future growth initiatives and operational enhancements, along with our direct returns to shareholders through our strong dividend policy.

Turning to our Colombian market update on Slide 14. As discussed on prior calls, throughout 2017, Colombia experienced project delays and an overall more tempered pace of construction activity, which has led to significant pent-up demand countrywide. This is due to macro factors, including the structural tax reform completed in January 2017, along with temporarily higher interest rates in 2016 and early 2017. Inflation and interest rates have since normalized gradually coming down and stabilizing at approximately 520 and 320 basis points below their mid-2016 peaks, respectively. As a result, we have observed renewed construction activity in Colombia from the lows of June 2017, with increasing number of contractors starting or resuming projects now that they have better visibility on a gradual reduction in corporate tax rates through 2019 and a stabilization of mortgage interest rates. These trends are in line with our increased quoting and bidding activity in Colombia since midyear, which drove stronger sequential invoicing activity for Tecnoglass in Q4 that has continued into Q1 of 2018. This is consistent with our typical multi-quarter lag between a quote and an invoice, so we are encouraged by these recent trends and our strong Colombia backlog, which should translate into a recovery in local revenues in 2018.

Looking at the construction fundamentals on Slide 15. We continue to see favorable construction activity in many markets in the U.S. The need for energy-efficient buildings, increasing environmental regulations, rapid advances in coding technology and demographic shifts to urban centers is expected to drive mid-single-digit growth until well beyond 2021. Additionally, we continue to diversify our mix of projects, which include multi-family, office buildings, high-rise hotels and more recently, single-family homes. ABI project inquiries and new design contracts remain healthy. And the continued strength in most sectors and regions indicate industrywide stability.

Looking at commercial, which still represents the majority of our business. Most of our indicators point to our single-digit market growth, consistent with our internal projections.

Moving to outlook on Slide #17. Based on our momentum into year-end 2017 and early Q1 performance, we anticipate stronger prospects for the company in full year 2018. We expect to see growth in commercial construction markets and additional market share gains in the U.S., Colombian and other Latin American markets. For the full year, we anticipate revenues to grow to a range of $345 million to $365 million with higher year-over-year growth in the first half of 2018 based on anticipated timing of invoicing in 2018 compared to 2017.

We expect benefit from significant pent-up demand in Colombia and Florida. Additionally, we have taken additional steps to reinforce the visibility afforded by our backlog through our bottom-up approach on a project-by-project basis, which gives us added confidence in our outlook.

Based on these sales, outlook and anticipated mix of revenues, we expect full year adjusted EBITDA to be in the range of $71 million to $81 million. Favorable operating leverage on higher revenues and an improved mix of sales from manufacturing operations, along with continued cost optimization efforts should allow us to drive higher margins.

With more than 2/3 of our first quarter complete, we have also shared with you today, our expectation for both Q1 revenues and adjusted EBITDA to be up in the range of 28% to 32% year-over-year, in part based on our performance in January and February. Our expectation is for Q1 to be our highest growth quarter during 2018 with approximately half of the Q1 improvement driven by like-for-like core growth. Beyond this core improvement, we expect approximately $5 million to $6 million of incremental sales from 2 months of our GM&P acquisition and $3 million to $4 million of deferred sales from Hurricane Irma pushed into new year.

Additionally, we are very pleased to see the recovery in Colombians' revenue already contributing to our growth outlook for Q1 and the full year 2018. Please note that, while we are providing Q1 color based on our progress so far in the quarter, we expect to limit our outlook to full year updates on future calls.

We expect to generate positive cash flow from operations for the full year. With the strength of our balance sheet and financial flexibility, we are extremely confident in our ability to achieve our growth objectives, while further improving our industry-leading margins. We have a highly efficient, vertically integrated and low-cost operation with an extensive portfolio of in-demand products, which allow us to best serve the abundant pent-up demand in our markets. We look forward to delivering improved results in 2018.

We thank you for your continued support in Tecnoglass. At this time, we'll be happy to answer your questions. Operator, please open the line for questions.

(Operator Instructions) Our first question comes from the line of Jeremy Hamblin with Dougherty.

Congratulations on getting the remediation of the material weakness and entity-level controls. I know you've been working on that pretty hard for a couple of years. I wanted to start with talking about the EBITDA guidance for the year. By my math, it implies about an 80 to 240 basis point improvement on the margins. Can you tell me or give me a sense of the split on that margin improvement? How much of it do you expect to come from gross margins improving versus getting leverage on SG&A?

Jeremy, this is Santiago. We're actually expecting about 150 basis points to come out of SG&A, which is where most of our fixed costs are located and then the remaining to come from the gross margin line.

Okay. And so if I then expand that further, are you implying that, maybe SG&A on an absolute dollar basis might be down slightly from 2017?

Maybe a little. We are still going through cost optimization measures. And then you also have everything baked in from the GM&P acquisition. So our idea will be to continue kind of looking for some optimizations there. But even at the same nominal level, we should be able to pick up leverage on the incremental revenues that we are expecting for the year.

Okay. And then wanted to ask a question too on taxes. And you had a relatively high -- very high effective tax rate last year. I think you've indicated that there is going to be some downward trend in that moving forward, both from a statutory perspective. But can you provide a little color on thinking about taxes for the year?

Yes. This year, we go to 37% on Colombian entities. And obviously, we'll have the relief on U.S.-based entities at 21% federal income tax. So our estimated blended rate is going to be close to 30%-or-so -- 30%, 32% depending on the mix of revenues at the end of the year. But we should certainly see a benefit from both taxes in Colombia and U.S. coming down. And then next year, you go to the Colombian tax at 33%.

Okay. Great. That's helpful. And then the other thing I wanted to ask about is, obviously, there's been a lot of noise in terms of regulatory environment, tariffs that are potentially being implemented. In terms of thinking about how it may impact your business, are any of these issues, whether it's steel tariff -- steel import tariffs, aluminum import tariffs, from a sourcing perspective for you, is any of this a positive or negative from your perspective? Or how do you expect these to impact Tecnoglass?

Jeremy, José Daes. They don't impact us necessarily because the tariff of material sourced in Colombia, so there is no tariff to import. And then when we import here, we import into the States finished product, so it doesn't have any tariff at all.

On the -- it is Christian. On the side of the aluminum, just aluminum, the exports are minimal, and we already pass it to the customers. All pricing of aluminum are going up even in the U.S. and there's not enough capacity to supply everything that is needed here. So actually, at least 75% of the tariff of the 10%, we pass to the customers and it has been affected and the orders have continued. So the cost at the end of the year if the tariff were to stay for Colombia, would be less than $200,000 in a year or $250,000. Now we are already making -- applying for the ascension, and we've been told that we have a very good chance of getting it.

Great. That's helpful color. And I did want to just ask a little bit, you have a great graph in there on the architectural billings index. And there has been some softness in the Northeast, whereas you've seen some strengthening in the South. In terms of thinking about your backlog, I know you have a fair bit of business that you do, both in New York City and in Boston, along the Northeast corridor, how -- could you give a little more color in terms of your U.S. backlog of how that's split by region between the South, the Northeast, West?

Well, Jeremy, we are growing in the Northeast. We are the new player in town -- in many towns. So even if there is a little softness, we can grow a lot and gain a lot of market share. So we don't feel that. We don't feel that. We are getting a lot of business, we're bidding a lot. People are liking what we do. We made a few mistakes at the beginning, they have been corrected. And now all our customers are very happy, and we're gaining more and more projects.

And Jeremy, just to follow up on that, if you go our Q4 presentation, there's actually a breakdown of backlog by region, which is exactly what you're looking for. So as a follow-up, you may want to take a look at that and that gives you a lot more color on the breakdown.

Fantastic. Okay. Yes, I see that. And then I wanted to ask about Florida, in particular. It's your largest exposure. Again, there had been some softness in the high-rise market in 2017 and maybe even a little in 2016 as well. My sense is that you're seeing some bounce back though, really a little bit of a resurgence in that market. But could you talk to some of these very large projects that you've been involved in, in Florida? And how that Florida market kind of compares to the rest of your growth in the U.S.?

Well, Florida '17 was very soft as for new projects, '18 is a lot better. And we're seeing a lot of -- instead of commercial projects, residential and commercial, we are seeing a lot of high-rises for rentals. We are seeing a lot of remodeling of old buildings, hotels. And we're getting a bunch of that and a lot of work from them. And also, some, let's say, like, I believe, 60 new buildings are coming up commercial, not quite as many as before. Before, we had 50, 60 buildings at the same time. But the market is good. I mean, it's getting better, much better in '17. And not the numbers that we could do in '15 and '16, but it's getting better, Jeremy, a lot better.

Great. Good to hear. And then just thinking about your outlook moving forward on -- and taking your 2 biggest regions, whether it's the U.S. or Colombia. In terms of -- Colombia has underperformed in the last couple of years really or certainly in 2017. But looking forward and thinking about kind of your implied growth, roughly $30 million to $50 million this year. How much of that do you expect to come from the U.S. versus Colombia?

What we're expecting, Jeremy, is that the year to end up with a breakdown of about 80% U.S., 20% Colombia and LATAM. At the year-end, we ended up closing with a breakdown of 76%. Colombia should certainly be up year-over-year versus quite soft 2017. We're expecting Colombia to pick up and certainly, the U.S. to grow as well to end up with above -- a slightly higher breakdown toward the U.S. than Colombia, but with Colombia growing probably above the overall implied guidance that we're providing.

Our next question comes from the line of Alex Rygiel with B. Riley.

Coming back to Colombia and Latin America, you mentioned that bidding activity improved in the fourth quarter of '17 and the first quarter of '18. Can you help us to understand when you would expect to be shipping product on those bids in 4Q? And when

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Yes, Alex, Q4 revenues ended up at $18.3 million and the expectation for Q1 is to be quite better than that. So we're already seeing growth for Colombia. So you're going to see right off the bat in Q1 of 2018, and that's along the lines of what we said, and we provided for flash Q1 financials. So the bidding activity and the pent-up backlog that we had during 2017 should be starting to materialize as invoicing right off the bat during the first Q of the year.

And on top of that, I want to add that, last year, the negotiations for the peace process and this year the election, things this year are going to be better, but not so much better as we see '19 and '20 because a lot of projects got delayed, waiting what happened in the election. And now that the election is looking that the right is going to win again, people are more confident in investing that is we went to the left.

And then secondly, you mentioned other Latin American markets starting to pick up. Can you go into a little bit more detail on that front? And maybe which market that is and the what the catalysts are?

Yes, we are bidding -- well, we have a good backlog in Bolivia. We started getting work in Peru, and we're working in Paraguay and Chile, also we're bidding a lot. And we believe we can get a couple of business soon. Also, we have a good footprint in Panama for many, many years.

And then lastly, as you think about the gross margin on revenue from Colombia and Latin America, obviously, I suspect it was severely depressed in 2017, and therefore, is going to be kind of an attractive rebound into 2018. But if you could confirm that and maybe put in perspective where the margin is relative to margins in the U.S.?

It depends on the type of jobs that we're doing in Colombia. We do ECOMAX line, which is more toward low-end residential, which obviously doesn't carry as big of a margin. But on the like-for-like type of commercial jobs, margins tend to be similar. The target of work that we do in Colombia is kind of high-end commercial buildings that are very high value-added type jobs. So there isn't a significant dip on margins there, Jeremy. I mean, the niche -- I'm sorry, Alex, the niche and the target of work that we do tend to carry similar margins in both regions.

And I do have one last question. As it relates to, coming back to Jeremy's question on tariffs, could you discuss how tariffs could be impacting your competitors in the United States? And therefore, does that put you in a more positive position competitor-wise?

Yes. I -- this is Christian. I think, Alex, I didn't want to be too optimistic about the situation. But everybody is increasing prices of aluminum -- of raw supply. So obviously, our competition is going to be impacted by this prices of aluminum going up. And I think at the end, is going to make our business even better, especially because we used to sell aluminum and continue to sell aluminum at market prices are not like other people who are exporting to the U.S. at ridiculous prices. So we are actually happy with the tariff. We are obviously applying for the ascension. We really believe that we have an 80% chance of getting that, especially that Colombia has a deficit with the U.S. in trade.

Our next question comes from line of David (inaudible) with [Amber Capital].

I have -- my first question is from your guidance in -- for 2018, are you considering further acquisitions? Or is that an organic growth that you see for the business lines?

No, that's strictly organic growth, David. Anything that we were to do would come incremental to that. So that's just our base business as we see it for 2018.

Okay. And are you seeing opportunities for acquisitions maybe in other U.S. regions or for that sake in other countries, for example, South America?

Yes, there are always things that come up and opportunities that arise. What you want to make sure is that they fit your strategic view and also that you don't end up overpaying for anything. If you look at the couple of acquisitions that we've done over the last couple of years, they were very fairly priced and valuations at this point in time are probably in the high end. So we would obviously consider any opportunity that comes our way. But you will have to meet the criteria of having adequate returns and valuations.

Okay. My next question is might be a little bit out of knowing exactly how you handle that. But when you publish backlog numbers, are those like signed commitments or hard commitments? Or are those -- what stage of the negotiation would you put into that number?

We only place those that we have firm contracts on, not even LOIs, I mean, Letter of Intents don't count.

Okay. Great. And my last question is, can you give a sense on -- and I can't remember if you spoke about that directly. But how is the evolution of the backlog in Colombia, just the Colombia numbers?

The Colombia numbers have gone up obviously because 2017 being a softer year with a lot of pent-up activity carried out into the end of the year. So at year end, we had a pretty healthy amount of backlog in Colombia, which gives us very good confidence that 2018 is certainly going to be a much better year in comparison to 2017, not only in the U.S., but also in Colombia.

We have no further questions at this time. I would now like to turn the floor back over to Mr. José Manuel Daes for closing comments.

Okay. Thank you, everyone, for participating in today's call. Things are finally coming along again. We had really soft not off-the-charts last year. But this year is a lot better. And we feel that we can keep the good news coming. Thank you.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.