Westport Fuel Systems Inc (WPRT) 2015 Q4 法說會逐字稿

Welcome to the Westport Innovations Q4 2015 financial results conference call.

As a reminder, all participants are in listen-only mode, and the conference is being recorded.

(Operator Instructions)

I would now like to turn the conference over to Darren Seed, Vice President of Capital Markets and Communications. Please go ahead.

Thank you, and good afternoon. Welcome to our fourth-quarter and year-end FY15 conference call. It's being held to coincide with the disclosure of financial results issued earlier this afternoon. For those who haven't seen the release and financial statements yet, they can be found on Westport's website at www.Westport.com.

Speaking on behalf of the Company will be Westport's Chief Executive Officer, David Demers; Westport's VP of Finance and Corporate Controller, Jim [McCallum]; and Nancy Gougarty, Westport's President and Chief Operating Officer. Attendance of this call is open to the public and to media, but for the sake of brevity, we're restricting questions to analysts.

You are reminded that certain statements made in this conference call and the responses to various questions may constitute forward-looking statements within the meaning of US and applicable Canadian securities law. And such forward-looking statements are made based on our current expectations, and involve certain risks and uncertainties. Actual results may differ materially from those projected in the forward-looking statements.

Information contained in this conference call is subject to, and qualified in its entirety by, information contained in the Company's public filings. And except as required by applicable securities laws, we do not have any intention or obligation to update forward-looking information after this conference call. You are cautioned not to place undue reliance on any forward-looking statements.

Now I will turn the call over to David Demers.

Thanks, Darren, and good afternoon, everyone, and thank you for your interest and support of Westport.

Despite energy market and currency volatility, 2015 ended well, particularly with Cummins Westport back delivering strong financial performance during the year, after two years of warranty reserve adjustments. And as you've seen, CWI had two important new product announcements that will set us up nicely for 2016. We've particularly proud of the Near-Zero emissions technology announcement, which will take the already-low NOx emissions from our current engines down by another 95%, which is virtually zero. On our Westport operations and the corporate investment side, we managed to cut our cash burn rate by more than half over 2014, while still continuing to advance our core strategic programs, including HPDI 2.0 developments, with a number of OEM partners.

Now, I told you a year ago that there were four key elements to our 2015 strategy, as we continue our transition from an R&D and market-creation company to a profitable, growing, operating business. I'm going to reiterate those, because it is the end of the year.

Number one, we said that we're going to continue to invest [with] committed OEM partners in commercial products for the next decade that contain strong technology content, but we would defer investments with uncertain market timing or commercialization risk or low market priority. Clearly, we've done that. You can see the reduction in burn rate. As we completed programs or reallocated resources to the core, new partners and new programs do continue, but these are increasingly being funded by customers or other partners.

We continue to invest heavily to bring our HPDI 2.0 program to the performance and durability standard that's expected by our OEM customers. But this program is on schedule; it's on budget. We expect to be ready for field test trucks late in 2016, and early production trials in 2017 with our first OEM customers.

Second, I said that we would continue to rationalize and consolidate our current product portfolio for cost reduction, for margin improvement, to ensure customer value and leading price performance, and achieve full system sales beyond just individual component sales. I think this year we saw lots of examples of this.

We can talk about our industrial products -- the new generation Volvo car launches, the Ford F-150 announcements. And of course, this process continues, and it will continue as we complete our impending merger with Fuel Systems Solutions and rationalize our joint product offerings. And there's lots of opportunities there.

Third, I said that we had identified $50 million in non-core assets. Despite a difficult market, we reached satisfactory terms with several counterparties, including the previously announced non-core asset sale with Cartesian. We'll announce details, as these transitions close. And then, of course, we will continue this through 2016 as we reach for synergies following the Fuel Systems transaction.

Fourth, I said we will continue to drive cost efficiencies and reduce our global overhead expenses. This year was a real challenge, with currency volatility, tremendous uncertainty, as I think everybody would understand, with global energy prices.

But even as we saw some lines of business seriously impacted by market conditions -- and our North American Ford business would be probably the best example of that -- we were able to reduce our operating expenses by $37 million for the year compared to 2014. This came through cost discipline; some favorable currency exchange factors with the Canadian dollar, for example, and euro against the US dollar; our prioritization [of investments work]; improved efficiencies; and just straight closing things down that we did not feel were strategic. As a result, despite a drop in revenue year over year, our operating adjusted EBITDA improved significantly to a $1.7 million loss in Q4, compared to $11.6 million the same period a year ago, an 85% improvement.

Our cash used in operations during the year saw a similar dramatic improvement at $46.8 million used in the year, compared to $97.6 million in 2014, an improvement of 52%. As you know, after the year end we announced a strategic financing with Cartesian Capital. And of course, the merger with Fuel Systems will also bring important cash and cash-generation opportunities to us as we move forward.

In 2016, we will continue to press down on expenses, while looking for market growth opportunities, and there are many, as we continue to target mid-2016 for crossing into sustainable operating cash flow from our operations. Now, we laid out specific key components to our 2016 strategy in the press release, and I encourage you all to have a look at that.

Just reflecting on 2015, I think we believe that the worst of the oil price shock and currency volatility is behind us. And as we and our customers look forward, I think what we see are the same key issues for the transportation industry as have been looming for the past decade.

First, continued relentless pressure on emissions reduction, including the recent global focus on greenhouse gases. It is really going to hit the transportation industry with some tough challenges. And regulators are increasingly demanding dramatic improvements on emissions with traditional pollutants like NOx and particulates, of course.

Natural gas, as we've been telling you for years, makes these targets much easier to achieve at lower cost to the OEM and to end customers, and with the economic benefits we're going to achieve for fuel. And on that point, although oil prices have fallen, natural gas prices -- particularly LNG globally -- have fallen even further. It's not always apparent to everyone that that's true. In fact, I think most people looking at the energy markets think that the supply and demand picture looks particularly favorable for customers of natural gas for many years ahead.

2015 also saw a surprising growth in the renewable methane market. And a milestone that I think was very interesting and encouraging is that more than 50% of natural gas vehicles in California are now powered by renewable gas, rather than the fossil-fuel version. This is a global trend that we're seeing a lot of interest in renewable methane. With price and supply advantages, with emissions advantages, I think OEMs and policymakers are clearly going to react by bringing more natural gas products into the transportation energy mix.

Finally, with first-generation natural gas vehicles now well established in the marketplace, and with some customers with years of experience, we are seeing the market mature with distinct characteristics in specific market segments. OEMs are asking us for specific cost-performance emission trade-offs in each segment, much as conventional products and fuel choices have developed over the years.

Our merger with Fuel Systems will dramatically improve our competitive positioning across the spectrum going forward. We'll have strong offerings at the low-cost end of the spectrum, but also unique technologies, such as HPDI 2.0, at the high end. And we believe that we will have unique systems development capability for those OEMs who are now looking to move into the next generation of differentiated product. So, we look forward to continued development of our global business in 2016, and continued progress toward our vision of a transition from oil-based fuels like diesel and gasoline, to clean, inexpensive natural gas.

Now, unfortunately, Ashoka has lost his voice. He is here in the room with us, so he might do some hand-signaling. But Jim McCallum has volunteered to step in and take his speaking time. After Jim is completed, Nancy will wrap up with her report on 2015 operations.

So, over to Jim.

Thanks, David, and good afternoon, everyone. I will be providing you with some highlights of our fourth quarter, our path to profitability, and cash position.

As David noted, despite overall weakness in the oil and gas sector, 2015 was a positive year for Westport. Westport reported record 2015 results at the Cummins Westport joint venture, we continued our progress on bringing HPDI technology to market, and decreased our cash usage, reporting a 52% reduction in cash used from operating activities compared to the prior year.

Adjusted revenue for the quarter ended December 31, 2015, was $32.1 million compared with $27.4 million for the same period last year. The increase in adjusted revenue for the fourth quarter of 2015 compared to the fourth quarter of 2014 was primarily related to the introduction into the market and first-time sale of low-pressure pump systems in China for $7 million. In accordance with GAAP, our revenue for the quarter was $25.1 million, as we determined that revenue on the $7 million China shipment will be recognized when the cash is received.

Adjusted revenue for the year ended December 31, 2015, was $110.3 million compared to $130.6 million in 2014. Our GAAP revenue for the year was $103.3 million. The reduction in revenue for 2015 compared to last year was primarily due to reductions in Ford product sales, and currency translation from euro to US dollars. Our European operations revenue in 2015 was EUR73 million compared to EUR67 million in 2014, an increase of 9%.

Our joint ventures, which we don't consolidate, are important to our Business. Including our joint ventures, our total 2015 segment revenue was $628 million, a decrease from 2014, largely due to the Weichai Westport joint venture.

As David mentioned, Cummins Westport had an excellent year. Cummins Westport revenue was $332 million on 9,940 units for 2015, a decrease of approximately 2% over the same period last year. Westport's portion of Cummins Westport net income for 2015 was $17.1 million, an increase of 111% over 2014.

The China economy and soft truck market continues to impact Weichai Westport. Weichai Westport's 2015 revenue was $186 million on 15,956 units for 2015, a decrease in revenue of 70% over 2014. The Weichai Westport results are in line with the general market conditions in China, and in line with diesel truck sales. Our equity pick-up from Weichai Westport for 2015 was $1 million, a decrease of 83% over the same period last year.

Next, I would like to move on to our cash position. As of December 31, 2015, our cash and short-term investment balance was $27.8 million. Cash used in operations -- excluding changes in working capital, plus dividends received from our joint ventures -- was $14.9 million in Q4 2015 compared with $33.4 million for the same period last year, an improvement of 55%.

Subsequent to year end, Westport announced that it had entered into an agreement with Cartesian Capital Group for up to $71.3 million in financing to support global growth initiatives. Westport received $17.5 million in January, and anticipates receiving additional capital, contingent on reaching key milestones and establishing new investment opportunities. The merger with Fuel Systems, along with sales of non-core assets, will further strengthen our balance sheet.

Moving on to adjusted EBITDA and our path to profitability, adjusted EBITDA from our operations segment for the quarter ended December 31, 2015, was a loss of $1.7 million compared with a loss of $11.6 million for the prior year. This significant improvement of 85% is the result of operational improvements and cost-management initiatives across our Business globally.

Consolidated adjusted EBITDA improved 47% in the fourth quarter compared to the same period last year. Adjusted EBITDA for the fourth quarter was a loss of $12.3 million compared to the loss of $23 million in the prior year.

Westport reduced its combined operating expenses by $8.5 million or 24% for the quarter ended December 31, 2015, compared to the same period last year, primarily due to prioritization of investment programs, cost discipline, as well as favorable impacts of foreign currency translation from the Canadian dollar to the US dollar. As mentioned in the press release, we will provide 2016 guidance after closing the merger with Fuel Systems.

With that, I will now pass the call to Nancy to discuss operational highlights for the quarter.

Thank you, Jim. Today I'm going to focus on providing some operational highlights and priorities for Westport, and discuss the upcoming merger with Fuel Systems.

Our operations teams have made significant strides in new products and in certain technology programs. We saw continued strength in certain natural gas engine markets, and reported record results in Cummins Westport joint venture.

From the product standpoint, we continued to make a number of product announcements in the last quarter of calendar-year 2015. Firstly, we announced the dedicated liquid propane system for the 2016 Ford 5-litre F-150 trucks.

Secondly, also on the F-150, a CNG, both dedicated and bi-fuel, was launched and approved and achieved EPA certification in quarter four. The popularity of this vehicle stems from the fact that this is the only half-ton pickup offered in the market in CNG or LPG by an OEM.

Thirdly, the introduction of Cummins Westport ISB 6.7G mid-range natural gas engine for type C school bus market, which will be launched in mid-2016. Fourth, the certification of Cummins Westport ISL G engine Near-Zero emissions, which is 90% below current regulated levels.

Fifth, the delivery of the first 2016 Volvo V6 bi-fuel vehicles to a key customer, Sunfleet, in Sweden. And lastly, as Jim mentioned, the launch of a low-pressure pump system, or LPP system, in China. This is first China-specific product launch for Westport, outside our joint venture, and was manufactured in our newly commissioned [Changning] factory near Shanghai.

In terms of results, we are seeing improvements in some of the business units, and stability on the back of a tough 24 months in energy price volatility. 2015 was a record year for income from CWI joint venture, as reliability improvements on the 9-litre ISL G engine have taken hold. Overall, engine volumes were down by 5%, with the North America business flat, in spite of low diesel fuel prices, but some weaknesses in the international sales.

But the highlight was 3,000 engines were sold in North America refuse segment. This was a 30% year-over-year growth. Waste management continues to be CWI's leading customer among private refuse fleets in service in North America. Other leading refuse companies remain committed to growing CNG use in their operations, and increasingly using renewable natural gas.

Our Volvo car business saw sharp increases in sales year over year, and achieved positive adjusted EBITDA for the first time since the business became part of Westport. As Jim mentioned, at Weichai Westport, the spark ignited engine sales were hampered by lower diesel prices and a weakened Chinese economy. That said, our HPDI 2.0 program continues to move forward in China.

Our Weichai Westport HPDI program started with earlier generation components, but our joint venture has now switched to the latest technology of HPDI 2.0 components to get better benefits of packaging and lower cost. We delivered early production samples of these components to Weichai Westport in December, and since then have been completing engine development and initial engine build. We expect to have field test trucks running shortly in preparation for performance and durability testing. Additionally, pilot HPDI trucks are expected to be on the road before the end of the year for further field trials.

Following up on what Jim Arthur said in November's operational update, our HPDI 2.0 components continue -- including the latest generation of fuel injectors and fuel rails from Delphi, are undergoing engine and truck testing at Westport throughout the first quarter. In the fourth quarter, we also completed key engine durability, while engine endurance and reliability testing is continuing.

HPDI 2.0 components have been delivered to OEM customers for additional validation and testing. This also was a critical step in completing the validation of HPDI systems to standards demanded by heavy-duty truck OEMs. As we've said in previous quarters, our commercial production will follow the testing and validation process in accordance with our OEM customer launch plans.

Additionally on HPDI, we are holding discussions with new OEM partners for HPDI 2.0, and expect more product development relationships for this exciting technology. We are working very closely with AVL to attract OEM customers, and we will continue to keep you updated as progress is made.

Now, on to the merger -- the merger with Fuel Systems Solutions is progressing as planned, with task forces and functional teams working in the areas included but not limited to sales, distribution and marketing, manufacturing, product range and development, direct material and purchasing, legal structure, IT, finance and tax, and communications. From a legal standpoint, I understand we're just awaiting for Fuel Systems' shareholder meeting to pass the merger resolution with their shareholders. But as you can see from my earlier comments, we are using the extra time to our advantage to hit the ground running from an operational standpoint.

With the teamwork both sides are undertaking today, we should be able to provide a combined outlook and operational update in a few weeks on our first-quarter 2016 conference call. What I can say is we are expecting to achieve $30 million of total annual savings and merger synergies by 2018, not including the one-time cost. So, from my point of view, the faster the integration, the better.

So, with that, I will now pass it back to the operator to open it for questions.

(Operator Instructions)

Pavel Molchanov, Raymond James.

Thank you for taking the question, guys. On the non-core asset sales, you said $50 million has been identified. Since you have not really pinpointed what exactly you are looking to monetize, what confidence can you give us that your $50 million estimate is representative of how much you can actually generate in proceeds?

Hi, Pavel, thanks for asking. And I think the first part is -- we have announced some of the non-core asset sales as part of the Cartesian Capital financing announcement just a few months ago. So, we announced some.

We do have some more on [the table]. We're in some, I would say, advanced stages with others, and even advanced agreements with some of them.

So, I think the planned announcements where we referenced non-core asset sales, Pavel, those should all be this year. This is not accounting for anything we may undertake as a combined Company with Fuel Systems; this is just non-core assets we've identified. And again, have announced some, but I suspect over the next few months we will be announcing a few more.

Okay. And I'm sure you've noticed last week, Quantum Fuel Systems filed for Chapter 11. Given that there is a reasonable degree of overlap between your Business and Quantum's participation in the value chain, I'm curious -- are there any fixed assets or intellectual property that you are looking to acquire from that bankruptcy estate, particularly since you are expecting to generate some cash proceeds later this year?

Yes, we did see Quantum's situation, and I think it is reflective of tough conditions in the industry for the last couple of years. I cannot say much about their business. They are a good supplier.

I can tell you that, for anybody listening, they are continuing to supply our Ford business and some of the other things that we've done with them in the past. So, I think this is a financial situation that they are going to have to work through, and hopefully they get through it successfully and continue in the business.

I wouldn't say that they are critically important to any of our businesses. As I said, they've been a good supplier, but we've always worked with other suppliers of CNG systems around the world.

And we continue to think there is going to be a next generation of CNG systems technology as products evolve. And we work with Quantum and others to help bring those technologies to market. So, yes, I was disappointed to see that they had to take that step to restructure their business, but I don't think it will affect us particularly.

All right. Appreciate it, guys.

Thanks, Pavel.

Eric Stine, Craig-Hallum Capital Group.

Hi, everyone.

Hi, Eric.

Hi. Just wondering if you could talk about your early impressions on the agreement with AVL? I believe that's been in place since mid-December -- just how your HPDI 2.0 pipeline has developed, and what kind of impact that's had with current customers, but also new customers?

Sure. Hi, Eric, it is Jim Arthurs. I will answer this one. For those who might not know me, I'm Executive Vice President that looks after HPDI.

AVL is probably the world's leading consulting and engineering firm in the heavy-duty diesel engine space, in both high horse power heavy duty, and even smaller, with 5,000 engineers on staff. They believe HPDI will be one of the leading technologies to enable natural gas in the heavy-duty space. And as we look at having more and more customers contacting us with interest in the technology, we don't have the bandwidth to develop these engines.

So, we and AVL got together with the idea that they can allocate some of these 5,000 engineers to specific projects with OEMs to develop and tailor the HPDI 2.0 system to their engines. They also bring a wealth of relationships with virtually every heavy-duty OEM on the planet. And so, we've been able to work together to jointly discuss with customers the opportunities HPDI can bring. So, we're really happy with the relationship, and it's starting out on an excellent footing.

Okay, thanks for that.

Maybe just turning to the low-pressure LNG pump in China, can you characterize that product launch? Should we think of that more as prototype, or is that actually a commercialized product? And then, what type of impact do you think that has in 2016?

Nancy, do you want to take that one?

Yes, I would say that it is our first step. We had some trial trucks, and this was the next step in the process. And so, we see that this is now -- as we get this into the field, it will lead to further opportunities for production.

As I mentioned, we have opened now a factory in Changning, which is near Shanghai -- the next province over. And that factory, a good portion of our space there is dedicated to the production of this product. So, we think that this was a good start. And we expect in calendar-year 2016 to see further opportunities around this product, and the systems that go with it, and our launch partners.

Okay, thanks a lot.

And then last one for me -- just any clarity you can give -- I know you've got the CWI 6.7 coming to market soon -- just any initial details on demand, you think, whether there are free buys, or how you think that plays out second half of 2016?

Eric, it is Jim Arthurs again. So, I happen to be Chairman of Cummins Westport, so I will take that one.

Yes, we've had orders on the books for the engine, and we expect it to ship very soon, targeted initially to the school bus segment, but then later on, into the straight trucks as well. Can't really give you any numbers, but let me give you one thing to look at, which is, if you look at our 9-litre ISL G engine, which we've been very successful with over the last few years, the Cummins 6.7-liter diesel engine sells in much higher volumes than the 9-liter diesel.

So, as we bring the 6.7-liter gas engine in, we think it will be a really good addition to the product line. And in particular, in the school bus segment, the environmental benefits of going to natural gas are well appreciated by parents and by school boards. And we're seeing just a lot of emotional connection with driving the kids to school in a cleaner, greener vehicle. So, we are really enthusiastic.

Okay. Thanks a lot.

(Operator Instructions)

Rob Brown, Lake Street Capital Markets.

Good afternoon -- just wanted to follow up on the low-pressure LNG pump. That $7 million in revenue you got, was that just an initial test shipment, or could you just characterize what that $7 million was for?

Actually -- this is Nancy speaking -- we had done some production testing that we had done. So, the intent of this is to be able to provide units out for fleets, for -- I'll say to feed the market, and get the fleet operators familiar with the product. And we have obviously started that process at this point in time, and after we have completed the testing of the vehicles that we have already done.

So, this, at this point in time, really is intended to be the lead production for us. And it will lead into, we believe, a significantly new market for us into China, as we get the market prepared for HPDI and the use of LNG for that application as well.

Okay, thank you.

And then, David, I think you said that you still were tracking to mid-2016 EBITDA positive. Is that correct, and are you still on track for that?

Yes, I think we are on track. I think the big unknown in all of this -- and if Ashoka had his voice back, I'm sure he would be beating on me for saying this, but he's quiet. The unknown is still, frankly, the merger with Fuel Systems. There is going to have to be some investment and expense as we go through that merger, and seek the synergies and the cost improvements.

So, the timing and the nature of those costs and expenses is what Nancy was alluding to earlier. We are going to have to get the teams together. We are going to have to really look at what the business looks like and what we have to do in 2016.

But certainly our goal is to get that business back on its feet and growing, and get the synergies with our Business as quickly as we can. But obviously there is going be some transition work to get the merger under way. So, that, I think, would be the major caveat on what we said about positive adjusted EBITDA from the Westport side.

You heard Nancy talk about the Volvo car business hitting positive EBITDA. I can tell you, every one of our lines of business has exactly the same metric and milestone, and they are all pushing towards that. And as we roll over the heavy investment on HPDI into more funded work and selling of components, that business will also turn positive.

So, it is a critical year for us. It is all looking good. We think we have a plan going forward, but the merger is a bit of a wild card.

Okay, thank you.

And then last question, quickly, can you remind us again how many OEM providers are working toward HPDI 2.0 at this point?

I'm looking at Darren and Jim. I think we've said five publicly -- four publicly? What's the right number, Darren?

Yes, I think right now, it's about four [broad]. And we are -- through the [AVL] relationship, we are obviously courting a number of new OEMs in there as well.

Okay, thank you.

John Quealy, Canaccord Genuity.

Hi, good afternoon -- just two questions for me. First, as much as you can, with the integration with Fuel Systems, is this a timeline whereby if the deal closes in this April time frame, that you would be done with identifying activities, and perhaps by the end of calendar 2016 have a realigned, refocused Organization? Or can you just give us some insight about how you are thinking about re-imagining the Business once that deal is closed, in terms of timelines?

Do you want to jump in, Nancy?

Well, I would -- again, this is Nancy -- just want to -- in terms of -- we have been working very, very nicely together in terms of working on a variety of different synergies. And as I mentioned, we've got many different work groups working on a variety of different areas.

We do -- and because of the time that it has taken us to get this merger closed, we have really taken advantage of this time to really try to advance as much as we possibly can. We have had several teams that have been in clean rooms and that kind of thing, in order for us to be well prepared, and so we can get a real good leap here on calendar-year 2016. So, I would say, in certain areas, in terms of how we plan to make sure that we work successfully with customers and distributors and our suppliers, I think that we've got really well-identified plans, in order for us to move very swiftly forward in a merged Organization.

I think that the good news is that the Companies come together without much conflict. Because of the type of businesses that we are in, we merge very nicely together. So, our ability to bring out the synergies, I think, will be enhanced because of the fact that we don't have a lot of, I will say, duplication in terms of the kinds of markets and the customers we serve.

Okay, thank you.

And I think, John, one other thing is, we are expecting to provide -- there is a combined outlook in what I guess here is about six weeks for the Q1 conference call. So, I think, to what Nancy said about how the two Companies have been working together, we're pretty confident on coming out with something at that date, which really just gives us the rest of the year to execute, make it happen.

Okay, great.

And then my last question, given the depressed oil prices and the shake-out that's been alluded to throughout this natural gas technology value chain, would you consider doing additional acquisitions, perhaps not as big as Fuel Systems? But talk about your willingness to do more activities, even though you are quite busy at present? Thank you, folks.

I will jump in on that one. I would say we are always looking at strategic opportunities, and I can tell you, we are seeing lots of them these days. In these markets, in these circumstances, there are a lot of very interesting things going on.

But to be honest, we're pretty happy with our Business and where we are positioned. So, I think we will be looking at new investment opportunities. And if they make more sense than what we've got on our plate today, obviously we will get interested and get engaged.

But I think the Fuel Systems transaction is a very significant strategic step for both of us. It is going to open up a lot of opportunities for them to take advantage of our technology portfolio, as well as us to take a look at some of the businesses that they have built so well over the last couple of decades.

So, do we need to add more to the portfolio? I think we will always be interested in taking a look and talking to people. But we've got a lot on our plate today, and why don't we just leave it at that.

We have no further questions at this time. This concludes the question-and-answer session. I would now like to turn the conference back over to Darren Seed for any closing remarks.

Thanks very much, everyone. And as I mentioned, we look forward to seeing everybody in roughly six weeks for the Q1 conference call. We will provide a combined update. Thank you.

This concludes today's conference call. You may now disconnect your lines. Thank you for participating, and have a pleasant day.