永利渡假村 (WYNN) 2018 Q3 法說會逐字稿

Welcome to the Wynn Resorts Third Quarter 2018 Earnings Call.

(Operator Instructions) This call is being recorded.

If you have any objections, you may disconnect at this time.

I will now turn the line over to Craig Billings, Chief Financial Officer.

Sir, you may begin.

Thank you, operator, and good afternoon, everyone.

On the call today with me in Las Vegas are Matt Maddox and Maurice Wooden.

Also in the line are Ian Coughlan, Ciarán Carruthers, Frederic Luvisutto and Bob DeSalvio.

I want to remind you that we may make forward-looking statements under Safe Harbor Federal Securities Laws, and those statements may or may not come true.

I will now turn the call over to Matt Maddox.

Thanks, Craig, and welcome, everyone.

Before we get started today talking about the quarter, I want to take a few minutes and just lay out why we are very excited about the future of Wynn Resorts in the next 2 to 3 years.

First, I'd like to start in Boston.

We were there recently.

I was there recently.

And we have 200 people on staff right now and we're about to hire 4,000 more and open a $2.6 billion integrated resort in the heart of the Boston Metroplex in less than 8 months.

And some of the major issues that we're dealing with as a management team are how are we going to control the crowds and how are we going to control the traffic to make sure that the five-star experience that people expect from Encore Boston Harbor will be delivered.

It's a property that's about to open.

It will provide step-function growth in EBITDA.

We're really excited about it and we hope all of you will be able to join us in 8 months for the opening of that property.

Moving to Macau.

First, I'd like to congratulate the government of Macau for how the typhoon was handled this summer.

Not only were they very well prepared but in the aftermath and the cleanup, it was flawless.

We, as a company, our 13,000 employees and I know the entire community, greatly appreciate it.

And when we take a look back at what Macau has wanted to accomplish, since 2002, when it brought in the new operators, Wynn was brought in as the innovator, as a progressive company.

It's not going to compete with replitecture or copying other people but it's going to be new and interesting and that's what we've delivered.

$7 billion worth of investment there since we've started.

We have choreographed dancing fountains in front of both of our hotels.

We have a prosperity tree that has been a tourist attraction coming out of the ground of the chandelier falling from the ceiling that everyone in Macau and tourists constantly go to see.

And it's one of the most photo-ed opportunities in Macau.

And those innovations are part of the DNA of this company.

It's why we were chosen and it's what we are going to continue to do.

As we've talked about this year, we've been working on how are we're going to grow in Macau and continue to innovate because we believe it is the best place on the planet to invest in the integrated resort business.

We have a 7-acre parcel next to Wynn Palace.

It's right by the new Lisboa project and we've been working very hard on what could come next and what we have so far is a 1.5 million square foot facility that we think will be a must-see in Macau.

The podium level, which we're calling the Crystal Pavilion, is a large glass structure that's going to house lots of nongaming features.

In fact, some of the public entertainment attractions will be all around the Crystal Pavilion.

We have a 60-foot gong spire hanging in the center of it with acrobats on cables going up and down, lightly playing the gongs.

As you traverse through the pavilion, you will run into a theater and this theater is really going to be the first of its kind.

We got the idea from it actually when we were at the Vatican.

The Vatican launched a Michelangelo program with a theater.

It took an old theater, 1,500-seat theater and created an immersive experience with screens on the walls and on the ceiling.

So the audience had a 270-degree experience, including live entertainment on the stage.

It's been quite successful.

So we thought if we take that idea and custom build it in this area, with a great 600-seat hotel -- I mean, 600-seat theater and make it fully immersive, that, that experience will be like no other on the planet.

We actually have 3 shows that we're working on right now and these won't be long 1.5 hours shows, they'll be like 45-minute vignettes playing throughout the day and we think that everybody's going to want to come and experience this immersive theater.

Now connected to the Crystal Pavilion, we know one thing for certain.

Wynn Palace needs more hotel rooms.

In order to get Wynn Palace to go from where it is today and zoom over $1 billion in EBITDA, we need 3,000 hotel rooms.

So on the 7-acre site where we currently contemplated and designed a 671-room all-suite hotel connected to the Crystal Pavilion, with a bridge going over to the Lisboa Palace.

In addition, on the north 4-acre parcel, we're working on a 700-room all-suite hotel that will connect into the north side of Wynn Palace, which will take that property from 1,700 hotel rooms to over 3,000, which is really where we need it to be.

We're very excited about the future of Macau.

We have a lot of great things.

We plan on presenting this concept in the next couple of months, working on -- working through 2019 on the permitting, finalizing the design, getting everything together and beginning construction in 2020.

Moving to Las Vegas.

In Las Vegas, we have the marquee asset on The Strip and one of the things that we decided was that we really needed to take what we have here and add some new things, freshen it up.

So in the next 3 days, actually, we're opening Wynn Plaza.

Cipriani will be opening, the first in Las Vegas.

Urth Caffé will be opening, the first in Las Vegas.

SoulCycle will be opening this weekend, a first in Las Vegas, along with many other retailers.

It's a retail and lifestyle complex that we think will be very unique.

We've also been working on 2 new restaurant concepts that we'll be implementing in 2019 and these concepts are going to be higher energy than what we have right now.

It's really for the customer.

If they want to go to dinner but they're not quite wanting to go to the nightclub after or to bed, they want to keep hanging out.

So we have some great concepts that we're working on now for Las Vegas in 2019.

So we'll have 5 new restaurants, over 50,000 square feet of additional retail that we'll be opening and then at the end of 2019, at the beginning of January -- in January 2020, we'll be opening a 400,000 square-foot convention center here.

It's 200,000 square-foot of net rentable space, coming basically in 12 months.

We believe that, that convention center will add somewhere between 4 to 6 points of occupancy to this hotel, which will allow us to really drive rates in those peak times because we will have -- we will be in the low to mid-90s in occupancy over the full 365 days.

So we have a lot going on in Las Vegas from new restaurants, new retail and additional -- our convention center coming on board, all in the next 12 to 18 months.

But as for the rest of the development here in Las Vegas, in early 2016, we held an Analyst Day and we announced a project called Paradise Park.

That project is -- was over $3 billion, looking at it today with construction costs, and it included the convention center that we are building right now.

From April 2016 to today, we always struggled with phase 2 of Paradise Park.

How are we going to make a room tower in a town with a lot of rooms, pencil, along with a lagoon because we weren't really interested in building a large public swimming pool for the Las Vegas Strip.

So we just decided, let's go with Phase 1. We know the convention center is going to work.

It's what Wynn Las Vegas needs and let's continue to grind on phase 2, the rest of this golf course development.

Well, earlier this year, our optionality in Las Vegas changed when we purchased 38 acres of land on The Strip, a far superior site to the off-strip location of the golf course.

So what we've done is we actually went back and reengaged Tom Fazio, who was the original designer of our golf course, to come in and take a look at the couple of holes that were disrupted by this 400,000 square-foot convention center and see if we can design a new 18-hole golf course connected to Wynn and Encore and have that back in action before our convention center open.

The design of that is complete.

The work has commenced and the golf course will be restored and back in action by this time next year.

It's a great amenity for the resort.

We actually -- not only did we notice we lost 16,000 rounds of golf out there, 70% of which were cash but we lost probably $10 million to $15 million worth of domestic casino business.

People coming in for golf trips that had decided to go elsewhere.

So now that we have the 38 acres of land on The Strip to develop the next great thing for Las Vegas.

We can put our golf course back in as an amenity for the 10 million square feet and the 4,700 rooms that we have here.

For the 38 acres of land, we are just beginning the design and development of that.

It takes at least 2 years to get through properly what a new integrated resort on the Las Vegas Strip that's going to be innovative and progressive and drive new customers to this location, which I know that we can do but it's going to take 2 years of design and development for that project and we will be commencing that in 2019, the design and development program.

So our future is really bright over the next 3 years, from opening Boston in June of next year to all of the things we have going on at Wynn Las Vegas right now, which we're going to capitalize on the marquee asset that exists today.

The future opportunity in Macau that we're working on and hoping to be in the ground in 2020 and the 38 acres of land here in Las Vegas.

So our management team in Macau, in Boston and then in Las Vegas are very excited about everything that we have to do over the next 3 to 5 years.

Turning to the quarter.

Macau, results are strong.

We were happy with $409 million of EBITDA.

However, we did have about $20 million of high hold in that period but even at $390 million, it was a good quarter.

And in the third quarter, $390 million, we were happy with it.

But what we've seen recently has been more murky.

So October, Golden Week, as everyone has reported, quite strong.

We're really happy with it.

We had double the average EBITDA that we would get during that week.

But since Golden Week, we've noticed that, during the midweek, it's been quite choppy and the weekends have been sporadic.

We can have one big weekend, maybe 1 or 2 days are big as opposed to all 3. And so what we've seen post-Golden Week has been a slowdown and we've seen it in particular in the premium end of the business, premium mass, premium slots and VIP, and that is where the vast majority of our EBITDA comes from.

So what we've always focused on in our business is the premium end and we always will.

Because in Macau, while that will be the first to retract in these times, it's also the first to expand as you come out of these slowdowns.

So what we're experiencing right now, I think that the fourth quarter will end up in the neighborhood of $3.3 million a day to roughly $3.7 million a day, really just watching day-by-day and looking forward in the next 90 days as to liquidity, customers, who's coming and what we're seeing.

We do not anticipate losing share in our segments but we do think that the premium end of the market is feeling softer and that's our expectation for the fourth quarter.

Moving to Las Vegas.

$95 million of EBITDA, not acceptable.

We had $10 million on hold related, so even at $105 million of EBITDA, that's the normalized hold -- that's the normalized EBITDA for what we would have come out.

And really the story in Las Vegas was all about baccarat.

So all of our segments on the hotel front were in line with our expectations, except casino.

We were down about 11,000 room nights over last year and 8,500 of those came in the casino and the casino block was off approximately $6 million in revenue, which makes up almost all of the miss compared to last year.

So we know that a few of the players who bounce around town actually ended up at one of our competitors and were beaten quite quickly, and I think if you look at The Strip and look at an outlier, you can probably see who that was.

That's temporary.

That's just the nature of the baccarat business.

I don't anticipate us losing any share.

In fact, we'll continue to gain share.

However, as we've seen in the past, whether it was in 2003 with SARS and what happened in the -- at the VIP market and the recession in 2008 and 2009.

The -- in 2014, when we saw the premium in VIP market start to slow down globally, that always impacted Las Vegas as well.

So until there's more clarity around what's going on in Asia in the premium business, we are remaining cautious on the baccarat market for Las Vegas going forward.

So with that, I'm going to turn it over to Craig Billings to provide some more color on the quarter.

Thank you, Matt.

As noted in our release, our Macau operations delivered $409.1 million of adjusted property EBITDA on $1.3 billion of operating revenues on the back of growth of the VIP and mass, with mass table win a particular highlight, increasing 36% year-over-year.

In fact, over 70% of our departmental EBITDA in the quarter was generated in mass, slots and nongaming.

We continue to diversify our business in Macau.

While Macau's operations for the quarter were impacted by September's typhoon-related closure, the estimated EBITDA impact to the closure was offset by approximately $11 million of EBITDA in the quarter from the receipt of business interruption insurance proceeds related to 2017's Typhoon Hato.

Our results in Macau were also positively impacted by VIP hold, as Matt mentioned, primarily at Wynn Palace, increasing EBITDA from our Macau operations by approximately $20 million from a normalized level.

Bad debt in Macau was $2.8 million in the quarter compared to a $600,000 credit in the prior year.

Our Las Vegas operations delivered $95.3 million of adjusted property EBITDA in the quarter on net revenues of $398.9 million.

Las Vegas held low during the quarter, negatively impacting EBITDA by almost $10 million.

As the quarter developed, the property was increasingly impacted by market-wide declines in table revenues, which also negatively impacted ADR, RevPAR and hotel revenues with a loss of higher ADR casino nights in the room base, as Matt mentioned.

In addition, weather events also negatively impacted our nightclubs, driving year-over-year declines in food and beverage revenues.

In Boston, we incurred $193.3 million in total project cost during the quarter, taking the total spend to date to $1.83 billion.

The property really looks great and we remain on track to open in June of 2019.

We ended the quarter with total debt of $8.9 billion and total cash and investments of $1.9 billion, including $1.4 billion at Wynn Macau.

Subsequent to quarter-end, Wynn Resorts Limited issued $500 million of term debt, with the net proceeds to be used for general corporate purposes, CapEx and potential share repurchases.

Consistent with our announcement earlier in the year, our quarterly dividend is $0.75 per share, returning over $81.5 million to the shareholders for the quarter.

In light of the revised CapEx planning that Matt talked about, we anticipate generating meaningful cash flow after the opening of Encore Boston Harbor.

We look forward to continuing to prudently reinvest in our business while return excess capital to shareholders.

With that, we will now move to Q&A.

(Operator Instructions) Our first question comes from Joe Greff with JPMorgan.

Matt, just with respect to your comments about what you're seeing in Macau here since Golden Week, I mean, we could probably surmise some of these comments but what are you hearing from some of your players and what are you hearing from some of the junket operators as the drivers?

And maybe this is sort of a quixotic question but are some of the reasons for this murkiness or choppiness, do you think they're temporary?

Or do you think they are somewhat permanent?

Sure, Joe.

So what I'd start with is this does not feel like 2014.

There's not a large credit bubble looming.

As an example, we're generating roughly $120 billion of turnover annually between our 2 properties, which is the same as that we were generating back in 2013 with 1 property but the advances that we're making to our junket operators are less than half today that they were then.

So in talking to the junket operators, I was there recently and none of them feel like this is the 2014 credit bubble that's going to pop.

It really feels more macro.

So what I would say to that is, in the demand for our product and for Macau in China, is insatiable.

We are very big believers in the long term in Macau, and if there's a pullback for 3 months, 6 months, 9 months, not sure what it is.

We've been through these.

Then -- but we know that the underlying demand for this business is very strong.

So again, I think pullback is definitely temporary.

The growth of Macau is up and to the right and we're just -- we're well positioned to take advantage of that over the next 5 years.

Okay, great.

And then just to maybe to understand, in this environment, the operating expense structure.

Obviously, when we look at your historical results, we can see variable expenses between gaming taxes and the junket commission.

With that other sort of third bucket of OpEx, the nongaming tax, the nongaming commission, how much flex is there if revenues are flat or trending downwardly?

Joe, I wouldn't assume that many operators could be going on an expense diet, given the current structure of labor, which is going to be continually increasing and the commissions and taxes.

Our next question comes from Carlo Santarelli with Deutsche Bank.

Matt, when you think about the fourth quarter and obviously with the results that you had in the third quarter and some of the commentary that you made in the post-Golden Week, Golden Week generally tends to be a period where the wings of it, the short -- the period before and after could be a little bit softer.

When you're referencing the $3.3 million to $3.7 million of property level and I'm assuming that was the property level EBITDAR per day, it's a good range for the fourth quarter.

Is that just more or less extrapolating what you're seeing kind of month-to-date with the tail post-Golden Week kind of run out through the end of the year?

Or is there something else that's kind of influencing how you're kind of getting to that range?

Yes, sure, Carlo.

So just to be clear, the $3.3 million to $3.7 million is for the full fourth quarter, including Golden Week.

And as we've said, as I said earlier is, we -- Golden Week was quite strong but what we're experiencing midweek and weekend, midweek has been soft and weekends have been sporadic.

So I don't want to get into forecasting what 2019 is going to look like.

I think that's a market call.

We feel very comfortable with our position but that's what we're anticipating for the fourth quarter.

Okay.

And I guess just to follow up on that then.

Is some of the -- is the sporadic nature that you mentioned, is that kind of across the board?

Are you seeing that from VIP right through to your lower levels of mass?

Or is that just more of a VIP and maybe bleeding into premium mass?

It's VIP and premium business.

The grind business actually continues to grow.

So we are seeing our main floor business doing well.

And the premium business, it will grow and that is where you always want to invest in this industry but we're seeing a little bit of a contraction right now.

Understood.

And then just if I could, one follow-up.

As you talked about the 2 towers on the wings of Wynn Palace, could you kind of give us a ballpark estimate for how you're thinking about what CapEx would look like for the entirety of what you're doing there over the next several years, acknowledging this is a -- going to be a multi-year process?

It's really too early.

We'll be providing more detailed CapEx estimates in 2019.

But the one certainty is Wynn Palace needs more hotel rooms.

On the weekends, we can't accommodate all the customers that we need and we need to find a way to get to 3,000 hotel rooms and create what will be the tourist destination in Macau with our Crystal Pavilion.

Our next question comes from Felicia Hendrix with Barclays.

Matt, and Ian too, I know in this kind of environment, I know you're not going to get promotional to stimulate demand because that's never been how you guys operate but is there a concern that the market will, as everyone starts fight or get -- fight or compete for lower volumes of demand?

Ian, I'll let you take that one.

Sure.

In general, the competitors have been very measured about periods of downturns, either liquidity driven, policy driven.

So we don't get that kneejerk reaction we used to see 6 or 7 years ago.

And certainly, there's been a lot of stimulation in the junket market.

You've had 7 new junket rooms open and more on the horizon over the next 12 months, particularly in Cotai and that does tend to drive bigger profit share for the junkets.

It makes it hypercompetitive.

It's not a game we play.

We look at the long term and -- but nothing on the mass side at this moment and other than some of the new junket rooms that have opened that have increased their commissions, we haven't seen anything to be too concerned about.

And Ian, as you're trying to kind of spread a bit of a lower base among the 2 properties, can you just talk about how that strategy might look in a bit of a slower period?

We'll just continue to operate the way we've always operated.

We'll drive quality and leverage having the best product and service in the marketplace.

We've been in the rodeo for 12 years.

We go through these sporadic periods of volatility.

And then we see extreme bursts of growth.

So that's been Macau for 12 years.

We're not going to oversteer one direction or the other.

It's hard to look the whole way through 2019.

I think what's being overlooked here is a good Golden Week has colored the 2-week post Typhoon Mangkhut when business fell off considerably.

And that was a bellwether for the fourth quarter, in my opinion.

And so we're seeing a lot of softness during the week and some reasonable weekends, we've had 4 weeks post-Golden Week now to look at the business and it is soft.

Okay.

And by the way, thanks, everyone, for all this transparency.

I think it's very helpful.

Craig, just switching gears.

You guys -- you recently closed on a new $500 million term loan and the language in the 8-K was repurchases of common stock is one of the uses of net proceeds from the capital raise.

Yes, and so in your prior call, you indicated that dividends would be the preferred way to return cash but you also said then in the case the stock got extremely cheap, you would hoover it up.

So given everything that's going on, given what's happened when your stock since the last quarter and probably what's going to happen now, I'm just wondering, if you're pulling your vacuum out.

Sure.

Yes, it does.

We did say that.

We have been pretty explicit about our capital return policies.

We do -- we have a stated preference for dividends and I did say that if the stock got extremely cheap, we would buy it.

When outlandish market narratives or extreme market dislocation causes the stock to be really where we don't think it should be, then we'll back it with our own purchases.

Okay.

And just to -- as to make sure I'm right, you still have $1 billion on your authorization?

We do have $1 billion authorization, right.

And next, we'll go to Shaun Kelley with Bank of America.

Matt, you've already, I think, alluded to this in some of your prepared remarks and also in the answer to Joe's question a little bit but could you just kind of characterize the customer behavior in terms of just breaking it down a little bit by spend per visit and number of visits?

It seems like this is largely just a kind of a contraction of confidence by the consumer but could you just help us think about consumer behavior little bit more since you've seen this soft patch?

Yes.

I think you nailed it.

The contraction of confidence is the way to look at it.

When we look at our daily visitation to Wynn Palace, for example, it's roughly 20,000 people a day right now, in line with where it's been in the past.

So what -- we're not seeing a large fall off in visitation or -- the place feels really busy.

It's really in the premium segment where there's been a slight contraction in confidence.

And as everyone that's been following this space for more than 10 years know, it's temporary but it takes a little time to get that confidence back.

And then I think you mentioned this as well but just to clarify, I think you said you sort of expect your market share to remain consistent.

Is that -- was that the correct interpretation there, so this is really much more of a macro concern than what you're kind of seeing or a market overall concern than anything specific to your customers?

Yes.

We've been fairly consistent between 15% and 17% market share.

As you witnessed in the second quarter, we were a little lower because one of our competitors downtown opened a new junket room and flooded it with liquidity and we lost some customers and it was very temporary.

That could happen on -- in a quarter in 2019 when some of our competitors are opening new junket rooms.

But over a 12-month period, we do not anticipate that we will lose any market share.

Our next question comes from Harry Curtis with Instinet Nomura.

Matt, you made some comments about land on The Strip and how that was a preferential spot to develop.

Can you give us a sense of what your timing is on that anytime soon?

No.

I think I said in my opening statement that we're just beginning the design development of that area and it takes 2 years to really properly think through what is going to be the next great thing for Las Vegas.

We're just launching that process and we'll be doing it through '19 and '20 to really determine what's going to be the next great thing for this market.

The reason I ask is because you also comment that you're on the cusp once you open Boston of generating some significant free cash flow.

And it would seem to me -- and I don't know where the stock is going to be in 6 months or 12 months or 18 months but can you -- what sort of returns on invested capital are you going to need to see investing in The Strip versus your stock?

Sure, Harry.

I understand the question.

Again, we're investing in Wynn Las Vegas right now.

We have the restaurants opening, a new convention center opening, the golf course will be reopening.

And you're right on the free cash flow point.

Once Boston opens in 8 months, large-scale capital deployment will not be occurring until a couple of years later just because of the construction cycle.

So we're in the full design and development mode for what we want to build in Macau and we're at the beginning of that process here in Las Vegas.

And then switching to Macau.

It looked to me like you gained share in volume in the third quarter on the VIP side but you lost it in mass, which was the -- I mean, it was the inverse of what I would've expected.

Can you give us a sense of why that happened?

And is that continuing as we look into the fourth quarter?

Harry, our overall market share, including slots was over 17%, 17.4%.

So in looking at the various segments, we were not losing share.

Well, Okay.

The reason that's it's important, to me anyway, is because if you're at least during the third quarter, you gained share in VIP with a lower margin but you lost share in mass, that -- might that have an impact on our EBITDA margins going forward?

No, Harry.

Like we said in the prepared remarks, our mass business is doing quite well.

Matt referenced the state of the premium consumer post-Golden Week, not only in his prepared remarks but in all of the Q&A.

We anticipate holding margin in the near term as really the increase in the proportion of mass offsets any operating deleverage that may come from lower volumes on the premium side.

And next, we'll go to Stephen Grambling with Goldman Sachs.

I guess, first off on Las Vegas.

I guess, what's the customer overlap in your Las Vegas baccarat business with Macau?

Is there any change in behavior from those that do overlap?

As I've mentioned in the -- my opening statement that what we've seen in the past is when there's a slowdown in the premium market globally or in Asia and particularly in Macau and you're seeing it somewhat in Singapore, that the baccarat market in Las Vegas also experiences somewhat of a slowdown.

And then I guess as you look out for Vegas into 2019, I mean, any initial reads on how you're thinking about how that year -- how the year is shaping up based on what you're seeing?

Sure, no problem.

So on the group side, we're fine when we look out to 2019.

Matt alluded to the softness in Q3 on the baccarat side and we're watching that day-by-day.

As he just said, it's a global question.

And so could that impact Q4 and then into '19?

Certainly, it could.

So a little too early to talk about anything beyond that.

Yes, our group business is at 80% booked right now, revenue is at about 85% booked for next year.

So group feels fine.

Our last question comes from Cameron McKnight with Crédit Suisse.

So Matt, in terms of the development of the 38 acres on The Strip, I mean, given the difficulty that The Strip saw in the third quarter, do you think that The Strip can absorb additional hard supply here?

So Cameron, we don't plan our business, which grows in 5-year increments with these properties based on one quarter.

So what we're doing is we're starting the design development of the 38 acres, which will take 24 months to get through what it is that we think is going to grow this market.

So we're going to be staring at 2021 in terms of here's a new project that we're really excited about and should we move forward.

The best days for Las Vegas are ahead of it.

We have the Raiders coming here.

We have a massive expansion of our convention facility.

There's no other place on the planet where you can have 150,000 hotel rooms within 3 miles to host what will be the biggest events on the planet.

So we are long-term believers in Las Vegas and we're going to work over the next 2 years to determine what it's going to take to move the needle.

Perfect.

And then a follow-up, if I could.

In terms of the $3.3 million to $3.7 million of EBITDA per day in the fourth quarter, could you give us a sense of is that roughly the level that business has tracked at post-Golden Week?

And could you give us a sense of the drop off that you're seeing from Golden Week to post-Golden Week?

Cameron, it's Craig.

So as Matt mentioned earlier, that's inclusive of Golden Week and we -- as we indicated, we had a pretty strong Golden Week.

So Golden Week does increase that number.

We're not going to provide anything beyond the $3.3 million to $3.7 million.

I'll now turn it back over to our hosts for final remarks.

Thank you for joining us today and have a great day.

Thanks.

Bye.

Thank you.

That concludes today's conference.

Thank you for participating.

You may now disconnect.