ACI Worldwide, Inc. (ACIW) Q2 2024 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to ACI Worldwide, Inc. Second Quarter 2024 Financial Results. [Operator Instructions] Thank you. I would now like to turn the conference over to John Kraft. Please go ahead.

Thank you, and good morning, everyone. On today's call, we will discuss the company's second quarter 2024 results and financial outlook for the rest of the year. We will take your questions at the end. The slides accompanying this call and webcast can be found at aciworldwide.com under the Investor Relations tab and will remain available after the call. Today's call is subject to safe harbor and forward-looking statements like all of our events. You can find the full text of both statements in our presentation deck and earnings release, both of which are available on our website and with the SEC. On this morning's call is Tom Warsop, our President and CEO; and Scott Behrens, our CFO. Before I turn it over, I did want to mention that we will be participating in a few upcoming conferences. Canaccord Genuity's 44th Annual Growth Conference in Boston on August 13; the Seaport Financials and FinTech Virtual Conference on August 14; and the 9th annual Wells Fargo FinTech Information and Business Services Forum in Newport, Rhode Island on August 21. With that, I'll turn the call over to Tom.

Thanks, John, and good morning, everyone. I appreciate you joining our second quarter 2024 earnings conference call. I'll start this morning with some brief comments on the quarter and then hand it over to Scott to discuss the detailed financial results and our increased expectations for the remainder of 2024. As always, we'll then open the line for your questions. Second quarter results were ahead of expectations and of the guidance we provided earlier with total revenue up 16% year-over-year. This outperformance came from higher volumes in our Biller segment as well as increased deal activity within the Bank segment. So let me give you a little more color on each of those segments. In Biller, gross revenue was up by a record 13% and EBITDA increased 20% from Q2 of last year. Our Biller team was able to onboard new customer transaction volumes ahead of expectations, in particular, with an additional phase of one of our largest new customers in the utility space. We also benefited from very strong tax-related volumes in our government vertical. And as you know, many state and federal tax payments are made during the second quarter. So this is one of the seasonal areas of our business. And while we're very happy with this outperformance, both of those drivers were largely a second quarter phenomenon, we don't expect that level of outperformance to continue in Q3 or Q4 of this year. Overall, the Biller segment is performing very well and our high retention rates and growing qualified new bookings pipeline keep our optimism high. In the Bank segment, revenue was up 22% and EBITDA was up 53% compared to second quarter of last year. We signed important renewal contracts and some very strategic expansion including a top bank in Malaysia, partnering with ACI to do a multiyear full card modernization and real-time transformation program. In total, our issuing and acquiring solutions grew 38% and that's a testament to the continuing value and importance of our proven mission-critical solutions. As we mentioned to you at Analyst Day, the team had a very targeted program to sign second half renewal contracts earlier in the year. As you know, we generally cannot recognize the revenue from renewals until the contract start date. But getting them completed early helps derisk our full year forecast and allows the team more time to focus on new deals in the second half. To this end, we had a very productive first half, signing more than $100 million in renewal contracts that will be recognized in Q3 and Q4 of this year. This included the very strategic and expanded Worldpay partnership we announced last week. I move to our next-generation payments hub program. Investments are continuing, development is on track, and we're extremely focused. By year-end, we'll have a solution which customers can begin to evaluate. We're having great conversation already as we actively meet with customers to discuss our respective technology road maps. I would characterize interest level as high. Our customers are sharing their excitement about the functionality and AI capabilities as well as the flexibility of the cloud native architecture itself, which will allow customers to migrate volumes onto the platform at their own pace. This will give customers a twofold advantage, to consume new services as they become available and to move current services off of existing platforms and onto the new in a measured way as opposed to a high-risk big bank transition. I'm especially excited about the potential for new logos as many of the discussions I'm having are with noncustomers. And many of those are not fully satisfied with a current competitive solution, a solution from one of our competitors. Let me give you a quick overview of one such conversation I personally had with a top Asia Pacific financial institution recently. The bank has a solution from one of our competitors, which is moving out of support in the next 18 months or so. The Chief Information Officer was very clear that the bank has no interest in getting themselves into a position where they have to change platforms again in a few years, but he definitely wants a path to newer technology. When I described the payments hub strategy, which allows the bank to install our proven, scalable, highly reliable solution today and to move to the newer cloud-native payments hub solutions when they're ready, he literally jumped out of his seat and said, that's exactly what I need. Of course, this is a prospect. We have to get it closed over the coming months. but it was one of the most positive reactions I have ever had to a sales discussion. Please keep your fingers crossed for us. I have a very good feeling about this. Moving on to our Merchant segment. Revenue grew 4% and EBITDA grew 55% compared to second quarter last year. Obviously, the segment's revenue is not running as fast as we would like. But we're excited about the sales pipeline, and we continue to see the segment improving sequentially throughout this year and into 2025, as we have previously discussed. I'm very pleased with the continuing profitability improvement the team is delivering. Overall, we are focused. We're executing well. We're delivering on our promises in the investment community. I'm happy to report that our outperformance year-to-date allows us to again raise our guidance range for both revenue and adjusted EBITDA. I remain confident in the team and our plans to create significant shareholder value. I'll turn it over to Scott to discuss the details of our results and our guidance. Scott?

Thanks, Tom, and good morning, everyone. I first plan to review our financial results for Q2 and then provide our new outlook for 2024. We'll then open the line for questions. We are pleased with our strong financial performance in the second quarter. Revenue in the quarter was $373 million, up 16% compared to Q2 2023, and adjusted EBITDA was $93 million, up 62% from Q2 2023. As Tom mentioned, we had particular strength in the Biller and Bank segments. In the Bank segment, revenue of $144 million was up 22% compared to Q2 last year. Bank segment adjusted EBITDA of $79 million was up 53% compared to Q2 last year. Our Merchant segment revenue was $38 million, up 4% compared to Q2 last year and adjusted EBITDA was $15 million, up 55% compared to Q2 last year. We continue to see the Merchant segment improving sequentially throughout this year and into 2025. Lastly, our Biller segment revenue was $192 million, up 13% compared to Q2 last year and adjusted EBITDA was $37 million, up 20% compared to Q2 last year. And as Tom mentioned, we benefited from faster-than-expected ramping of one of our large new customers as well as better-than-expected tax-related volumes. Moving to cash flow and our balance sheet. We generated strong cash flow from operations of $55 million in the quarter, an increase of 215% versus Q2 last year. We ended the quarter with $157 million in cash on hand, a debt balance of $1 billion and a net debt leverage ratio of 1.9x, which is down from 2.3x at year-end and below our long-term stated target of 2.5x. During the quarter, our Board of Directors increased our share repurchase authorization to $400 million. In Q2, we continued executing our capital allocation strategy, repurchasing 1.7 million shares for approximately $57 million in capital and 3.7 million shares for $120 million in capital over the last 6 months. At the end of the quarter, we had approximately $380 million remaining available on the share repurchase authorization. Turning next to our outlook for 2024. Given the strength of our results following the second quarter, we are raising our revenue and adjusted EBITDA guidance for the year. We now expect revenue to be in the range of $1.557 billion to $1.591 billion, and we expect adjusted EBITDA to be in the range of $423 million to $438 million. And for Q3 2024, we expect revenue to be between $400 million and $410 million and adjusted EBITDA of $110 million to $120 million. So overall, we saw a strong first half of the year, and we are confident in our increased 2024 outlook. So with that, I'll pass it back to Tom for some closing remarks. Tom?

Thanks, Scott. So to summarize, we're pleased to continue delivering results in line or above expectations. Looking forward, our pipeline is strong. We're focused and optimistic regarding both our growth and our ability to deliver significant shareholder value. One last but certainly important comment, I'd like to reinforce some exciting ACI team news, CNBC named ACI as one of the world's top FinTech companies for 2024, a recognition that highlights our position as a FinTech industry leader and innovator and our dedication to delivering payment solutions to keep the global economy moving. Additionally, we were named as one of the best companies to work for by U.S. News and World Report and one of America's Greatest Workplaces by Newsweek, including multiple special designations for diversity and employee experience. These are industry survey-driven awards. They are not pay-to-play opportunities where you buy advertising and get an award. These awards underscore our commitment to fostering a collaborative, innovative and rewarding professional environment where ACI-ers can do their best work. Thank you to the entire ACI team. Operator, we can now take questions.

[Operator Instructions] Your first question comes from the line of Joe Vafi with Canaccord Genuity.

This is Pallav Saini on for Joe. It's good to see the momentum in the business and the guidance raise. First of all, Tom, it was good to hear the interest you're seeing from potential customers in the payments hub. How would you characterize your opportunity here internationally relative to the U.S. market? And I mean the time to market here. Also, how are you prioritizing your investments in this regard? And I have a follow-up.

Sure. Thanks. So we see opportunity around the world. And I think that's probably no surprise. Where we're seeing the most interest right at the moment is, I would say it's Asia Pacific one, I gave a specific example there. And one of the reasons for that is some of our competitors are removing competitive products from support. And that's always a good opportunity for us, but especially right now, so that's the driver there. But the biggest -- probably the largest source of interest is coming from Europe. And I may have said this on an earlier call, I don't remember, but the big driver there, one of the big drivers is that the European Central Bank has mandated faster payments, instant payments, it's called different things in different countries, but real-time payments. And what's happening is these chief information officers are realizing that they have some concerns about their overall payment infrastructure being able to keep up with the expected pretty dramatic increases in volumes because a lot of that instant payments cannibalizing cash transactions. Cash transactions have a very small impact on financial institutions, technical infrastructure, but they're moving to digital payments, and that obviously does have an impact. So there's a lot of interest in figuring out what do they need to do? What are the opportunities for their payments infrastructure generally. And when we talk about the payments hub, that gets them very excited. So I gave you an example where somebody literally jumped out of their chair, that was an Asia Pacific example, but I've had similar conversations in Europe. So just to sum that up, interest around the world, in particular, we're having lots of conversations in Europe and Asia Pacific right now.

Got it. That's great color. And relative to maybe 3 months ago when we had the Q1 call, can you speak to your pipeline across the 3 segments as we look to the second half and 2025, both from a renewal and a new business perspective?

Sure. I'll make a comment, and I know Scott is raring to go on answering this question as well. So our pipelines continue to grow and you asked about renewal and net new. So the net new pipeline continues to grow. Obviously, we understand the renewal pipeline extremely well -- we've known for 5 years what was going to renew this year. So no surprises there. I think the good news, I'm sure that -- I'm sure everybody was excited about what I said a moment ago with having I'm going to call it presold, it's not really that quite the right term. But we signed early $100 million plus of renewals. If we signed them in the first half of the year, but they won't be recognized in the second half. So as I said, that significantly derisks what we're expecting in the second half that makes us even more confident, and it's, again, a reason that we're comfortable increasing our guidance range. But the pipeline -- so renewal pipeline is what it is. We do sometimes get a little more than we expect from a renewal or when we build in the plan, I guess, I suppose, because we sell an additional service or we sell additional capacity. There are various reasons for that. But we understand that pipeline very well. The net new, that pipeline is growing very nicely, and we expect it to continue to grow. And that's -- 2 reasons for that: one is just our position in the market and the reliability, scalability, dependability of our solutions; and number two is this all of the dialogue we're having around payments hub.

Yes. And the only other thing I'd add to that is, I think it goes back to what Tom said about our focus in the first half on getting renewal done. What I'm excited about in terms of our pipeline progression is we're getting the renewals out of the way now, so in the first half of the year. Focus is turning now to closing out the key license, especially pipeline deals that we want to get done this year. We want to get those done here before the end of Q3. And then we can really start progressing further the 2025 pipeline. So I think everything is lining up so that we are not only tracking to deliver on what we're expecting this year and actually raising the guidance of delivering a bit more, but it will allow us to progress the 2025 pipeline as well.

Next question comes from the line of Peter Heckmann with D.A. Davidson.

Sure enough. Can you hear me now?

Yes.

Sorry about that. In terms of -- could you give a little bit of your thoughts or your outlook based on I'm sure you have very good insight into this. But over the next 2 years, how you see real-time payments evolving? Any major countries or regions planning major upgrades or adoption? And then as well, in terms of your comment on the -- I don't know if it's the European Union or European Commission mandating some real-time payment. Is that -- are they mandating -- like mandating all banks within a country connect? Or is it actually cross-border within the whole EU that covers that mandate?

Yes. So let me take the first one first, Pete. That's a mandate to accept real-time payments. And that's different, called different things in different countries. And that is clearly progressing towards cross-border. But honestly, it's not very well developed at the moment anywhere in the world, cross-borders because there's a lot of implications on the regulatory environment. So it will happen. I think that's going to be much slower than the initial acceptance. But specifically, the European Central Bank has said every financial institution must be able to accept and process real-time payments across the EU. So we're obviously -- we've been prepared to support financial institutions doing that for some time and it's -- but it's creating -- that's interesting, but actually, that's not why it gets me excited, because why it gets me excited is as I mentioned a minute ago, which is -- that is driving an entirely different conversation about the overall payments infrastructure and need to upgrade because our solutions -- our customers don't worry about being able to support these very high volumes. They know that our solutions can but some of the other pieces of their infrastructure, they're not so sure. So that creates a really interesting dialogue and that's where the payments comes in. Then you asked also about are there any countries where we expect to see major, I guess, pushes maybe for real-time payments? And there are a couple -- there are some countries that have no infrastructure. They tend to be a little bit smaller, but the larger countries, they now typically have a real-time payment scheme or maybe even more than one, like the United States has 2 now. We support both. And -- but just 1 example, and we had a press release, I think, on this a while ago, Colombia. So Colombia is a very important market for us. It's one of the largest economies in South America, and we support that real-time payment scheme as it's maturing. And so I expect to see increased volumes over the next couple of years. And that -- from that program and others, but I think what we're going to see mostly is just the maturing of the real-time ecosystem, we'll see increased volumes everywhere. That would be my expectation. And then we will see cross border become a bigger thing, and that's when some of the use cases become super interesting once that starts -- that's dependent on regulation, and I don't need to try to predict that.

Got it. That's really helpful. And then your third quarter guidance are very, very strong revenue and EBITDA guidance, and I infer that, that suggests that you have insight into another strong license fee rev rec quarter, just -- if that's correct, I guess, would you see it weighted approximately the same way primarily towards banks? Or do you expect some shift over to the merchant side?

Well, merchant will accelerate as we get into the second half of the year, but it's a small piece of the business. But you're right in terms of the license timing, and it's really more of a function of the banks and there's a merchant side of the business. Our focus here is as we try to get a lot of the renewal book done and signed here in the first half, we're focused on getting some of that new logo, new application sales done by the end of Q3 and reduce our reliance on the fourth quarter license deals that we need to get done. And so you're going to see pretty strong bank licensee growth year-over-year.

Okay. And then just to be clear, the Worldpay was that a second quarter item or a third quarter item?

That is the second half, item. It's already signed. We've announced it, but because of the accounting rules, that shows up, I think, it's Q3, right, Scott?

Yes. It will start with the new terms.

Next question comes from the line of Charles Nabhan with Stephens.

I wanted to ask about the contribution from value-add solutions such as fraud. I was hoping you could speak to how changes in your comp structure that you talked about at the Analyst Day are driving more uptake of value-add solutions as well as the degree to which that might have contributed to the outperformance this quarter?

Yes, I wouldn't -- Chuck, this is Scott. I really wouldn't look at it as a function of our cost structure. I mean, fraud detection in real-time have been our 2 fastest growing kind of cross-sells to our long-standing bank switching business. And so that has continued. So I don't really look at as much as the cost structure issue as much as -- that has been and continues to be one of our better cross-sell opportunities in the banks. But that has continued here in Q3. And so nothing has really changed in terms of the dynamics there.

Got it. Okay. My apologies. I mean comp structure, not cost structure. I'm not sure if I misspoke. But as a follow-up, I was hoping you could double-click on the Worldpay renewal. And maybe if you could talk about the types of products they're renewing on and whether the deal exceeded your expectations in terms of uptake?

I wouldn't -- well, I don't want to say too much about an individual customer's deal. But no, I mean, it was -- we've been working with them for a long time on that renewal and expansion. So it was quite in line with what we expected, absolutely in line with what they expected. It's a good relationship, both ways. We do a lot of things with WorldPay. And they use many of our products. They have for a long time. As I'm sure you know, they're splitting out or they have split out of FIS. So it's -- we spend a lot of time thinking about what we can do for each other. And we continue to do that. So nothing unusual.

Next question comes from the line of George Sutton with Craig-Hallum Capital Group.

Wonderful quarter. So Tom, I wanted to make sure we understand this incenting sales to get renewals done earlier. We long lived through the white knuckle year-end let's get these deals signed scenario. Can you just explain how it's different now. And just to be clear, we're talking within the year '24 versus pulling things from '25 further in. Is that correct?

That's correct. And on renewals, George, there is no pulling forward possible because of the accounting rules. We sign them early, but we don't recognize them early. But I think your -- the beginning of your question, and I think I talked about this at Analyst Day a bit about the way we're trying to tweak our incentive programs to encourage those early deals to get done. Actually, we kind of did it the other way around. So we didn't incent people to do them early, we disincented them to do them later. And that was true of our sales force and our customers. So -- but just basically the way it worked was if you didn't get these things done in the first half, and we had a very targeted list and we were super successful at it. But we told the sales guys your commission rate goes down a little bit, not dramatically, but it goes down a little bit, if you don't get it done in the first half, and that inspired them to do -- to work even harder. And then the second thing was with the customers, we -- of course, we have price increases every year, and I'm sure we've all gotten those e-mails from Netflix or whatever, I'm not comparing us to Netflix. But this strategy is a pretty good one where you say, "Hey, there's a price increase that's going into effect on July 1. If you do this renewal, commit to it now, you're not going to get that pricing. If you wait until later in the year, it's going to cost you more." And that -- we did do that. I think we -- I don't think we left any money on the table before you ask me. We -- but I think it was a very effective program, and we have put a price increase into effect, and we'll see the benefit of that next year.

Great color. On the biller side, I want to make sure I understand the growth opportunity, and we are hearing good things about new leadership there. We know there's been a struggle to add new logos over time, but you were referring to a growing qualified pipeline. I just wondered if you can give us a little bit more detail there.

Yes. I mean it's a pretty broad-based improvement. I'm going to call it, in the pipeline. So -- you're right. I think for 2 or 3 years, we struggled to get new logos interested. We were focused very much on transitioning out of the Western Union data centers, we did that. We've been focused on improving the performance of the applications, getting the right sales people -- there's a lot of things we work on for quite a while. But we're through most of those now, very focused on generating pipeline for new logos, and it's really working. So we're seeing the pipeline grow in all of our verticals. And I'm very pleased with how that's going. And I think, hopefully, I don't know if it will be the next call or later, but I am highly confident that we'll be able to report some very interesting new logos over the next couple of quarters.

Great. Well, here's hoping you get a Netflix multiple.

I would love that.

Next question comes from the line of Trevor Williams with Jefferies.

Yes, as we think about kind of the underlying drivers here behind the faster revenue growth, outlook. I mean it sounds like there's nothing that's being pulled forward from '25. So maybe just talk to the sustainability of some of these underlying drivers just as we think about 2025 and beyond the ability to sustain these growth rates?

Yes, I'll take that. This is -- maybe Tom can add some color. Well, certainly, I go back -- I previously said on the Bank side and our focus on the first half getting this year's renewals done were focused now in Q3 to get those deals that we expect to get done in '24 close to the finish line, then you can really start progressing the 2025 pipeline even later this year. So that bodes well for the Bank side in 2025. Merchant is, albeit small, their growth is accelerating. Last year, they were negative in the first half, exited positive. They'll be stronger here in the second half of this year as we exit 2024. So that sets up 2025 nicely. And then Biller has been strong, has really delivered strong results. The Q2 results was really a function of 2 things: we talked about the new logos in Billers, that's part of that growth here in the second quarter, 13% growth was from the ramping of the new logo; and secondary was just the existing book of business, particularly the tax business. So we're seeing both contributions from net new logos going live and that will contribute to 2025 well on a full year basis and the existing call it same-store sales growth in kind of our base, the core business and our existing basic business. So I think that, combined with again, focusing later this year and really getting 2025 deals progressed sets us up well to sell early and be able to contribute revenue in '25. So I think across all 3 of the segments, 2025 is setting up well.

Yes. Agreed and the only thing I would add is we've talked about the payments hub, and we are starting to build a pipeline with the payments hub. I think I've hopefully been clear that we're wanting to make sure that we don't get too far ahead of our skis, we want to show the customers what they're really going to get before we get too far down the path but there's significant demand, and we are having those great conversations, like I mentioned before. So I expect that to contribute beginning in 2025, the revenue growth as well. We're not counting on a lot from 2025, but we'll see it, and I expect that to be accelerated throughout next year.

Okay. No, that's great. Anything more specific on the updated expectations for at least at the segment level within the change to the full year guide this year. I think prior you said that the Banks would be at the upper end of the range, Merchant may be at the lower end, if there's been any change to the segment level assumptions?

Not particularly. We're generally in line. I would say Biller is performing better than we expected, obviously, coming in at 13%. That's well above our -- the high end of our growth rate. So the strong quarter in Biller -- strong first half Biller, I think, has helped us really get comfortable with raising our outlook. You can see on the Bank side that any license fees, especially new license fee, could be timing issues. But on the Biller side, this is fully recurring revenue, you really start to be able to bank that upside. So I would say if there's anything 6 months into the year that we're seeing better than expected to probably be on the Biller side.

[Operator Instructions] We do have a last question comes from the line of Jeff Cantwell with Seaport Research.

Just a couple of follow-ups, I have -- congrats on the results this morning. On your bank segment revenue, that increased by 22% in the quarter on. You talked some about the renewals, strategic expansion, the biggest drivers -- can you maybe talk some more about what's it out as far as the biggest contributor to those results in your banking revenue this quarter? Was there anything lumpy or onetime issue in this quarter's number? Or was this clearly execution and delivering above expectations with maybe some benefit from the secular trends that you mentioned like with real-time payments? Just kind of give a flavor for what's contributing to the strong results you're seeing there right now. And maybe you can talk about how the mix of revenue that you're seeing right now in Banks is changing over time if you compare now this quarter versus a year, 2 years ago.

Yes. I wouldn't confuse the getting renewals done sooner as being something that contributed related to Q2 results. The outperformance in Q2 is really coming from the Biller. That's where we saw the surprise. It wasn't in Banks. Yes, Biller delivered a bit more in terms of new license and service revenue than we were expecting, but really most of the outsized performance came from a Biller and that was again getting deals live and ramped sooner and getting higher same-store transaction growth. So less really a function of Bank overperformance as much as it was Biller. The point of getting the renewals done early is, again, we can turn our focus here in the second half to getting new license deals done, get -- new logos, new apps and then progressing in 2025. So that -- and so to the question is, is there anything in Q2 that was kind of lumpy and nonrecurring? And I would say, no, it would be kind of near our traditional license renewals...

Yes. Just to emphasize the point about the pre-signing of the renewals, that has 0 impact on the quarter. It's great and makes everybody more comfortable with the rest of the year, does not have an impact on the second quarter at all. We had a small amount of new logo business or -- new business and a little bit of additional cross-sell and banking that contributed -- did a little bit better than we expected, but that was not a big driver for the overperformance in the quarter, which actually makes me feel great because, as Scott said, when your overperformance is in recurring revenue, that's fantastic because it's -- as the name would imply, it keeps coming. And so we love that. And Banks is performing very well, a little bit better than we expected, and we've been able to retire a very significant part of the second half renewal book already. And as Scott said a couple of times, that allows us to focus on the new revenue and bring it in [indiscernible] '25 really solid.

Okay. That's great. And then a follow-up on Trevor's question. On your full year guidance raise, can you talk a little more about that for the revenue line? Is that raise that you're doing in the back half? Are you raising expectations for Banks revenue? Or maybe help us understand the segments, which are compelling to raise in the full year guidance. And the same thing on adjusted EBITDA, the same question. What are the call outs for that raise? How are you becoming more profitable, meaning where is the operating leverage coming from? Any way you can elaborate on the raise in the full year guide would be great.

Yes. I think let me take the leverage. I mean, we have traditional license SaaS model, incremental revenue really that we're seeing across all 3 of the segments is driving pretty high flow-through to profitability. So I would say the profitability growth is just coming from the scale of the business. The upside, again, I go back to my comments around Biller. I mean Banks look -- I'd be cautious about saying Banks going to over keep where we're at now. We've still got new logo business, new app business be done here in the second half. But I go back to saying it's really Biller at this point, coming in at 13% growth in the second quarter is higher than we were expecting. And so I wouldn't say at this point, I mean, I've been [indiscernible] the year, I think it will be both Biller and Banks. But again, that's 90% of the business. So the Merchant is basically tracking kind of where we thought.

There are no further questions at this time. Mr. John Kraft, I turn the call back over to you.

Well, thanks, everybody, for joining us this morning. We look forward to catching up the upcoming conferences in the weeks. Have a great day.

Thanks, everyone.

This concludes today's conference call. You may now disconnect.