The Andersons, Inc. (ANDE) Q2 2020 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by, and welcome to The Andersons' 2020 Second Quarter Earnings Conference Call. [Operator Instructions]. I would now like to hand the conference over to your first speaker today, to Mr. John Kraus, Director of Investor Relations. Thank you. Please go ahead.

Thanks, Gilam. Good morning, everyone, and thank you for joining us for The Andersons' Second Quarter 2020 Earnings Call. We have provided a slide presentation that will enhance today’s discussion. If you’re viewing this presentation via our webcast, the slides and commentary will be in sync. This webcast is being recorded, and the recording and the supporting slides will be made available on the Investors page of our website at andersonsinc.com, shortly. Certain information discussed today constitutes forward-looking statements, and actual results could differ materially from those presented in the forward-looking statements as a result of many factors, including general economic conditions, weather, competitive conditions, conditions in the company’s industries, both in the United States and internationally, the COVID-19 pandemic and additional factors that are described in the company’s publicly filed documents, including its ‘34 Act filings and the prospectuses prepared in connection with the company’s offerings. Today’s call includes financial information, which the company’s independent auditors have not completely reviewed. Although the company believes that the assumptions upon which the financial information and its forward-looking statements are based are reasonable, it can give no assurance that these assumptions will prove to be accurate. This presentation and today’s prepared remarks contain non-GAAP financial measures. The company believes that adjusted pre-tax income, adjusted pre-tax income attributable to the company, adjusted net income attributable to the company, adjusted diluted EPS, EBITDA and adjusted EBITDA attributable to the company and adjusted effective tax rate provide additional information to investors and others about its operations, allowing an evaluation of underlying operating performance and better period-to-period comparability. These measures do not and should not be considered as alternatives to net income or income before income taxes as determined by generally accepted accounting principles. On the call with me today are Pat Bowe, President and Chief Executive Officer; and Brian Valentine, Executive Vice President and Chief Financial Officer. After our prepared remarks, Pat, Brian and I will be happy to take your questions. Before Pat makes his opening comments, I want to inform you that we’ve rescheduled our Investor Day. We will present it in a virtual format on the morning of Tuesday, December 8, 2020. We look forward to sharing more details about that event with you soon. With that, Pat, the floor is yours.

Thank you, John, and good morning, everyone. Thank you for joining our call this morning to review our second quarter results. We posted solid second quarter results as all four of our business groups generated positive pre-tax income. The Plant Nutrient Group achieved a significant improvement in the second quarter. Wholesale fertilizer distribution volumes and retail farm center application services were both up substantially. The Ethanol Group continued to be affected by reduced gasoline demand, but still earned positive pre-tax income attributable to the company, as margins recovered late in the quarter. The group’s decision to extend normal spring shutdowns allowed the plant to quickly reach peak efficiency as we brought them back online. The Trade Group earned a small pre-tax profit during the quarter. The story was largely the same as for the first quarter. While the merchandising business stayed strong, income earned by the group’s assets was down significantly due to the small 2019 harvest in the East. In addition, farmers largely continue to hold on to their grain and ethanol customers' demand was lower. The Rail Group’s results were slightly lower as carload traffic continued to fall and a record nearly 1/3 of all North American railcars were idle. The implications of that reduction in rail traffic includes softening lease rates and lower demand for repair services. Before Brian reviews our second quarter financial results, I want to spend a couple of minutes discussing the business structure and organization changes we announced in our press release last night. We continue to look for ways to better serve our customers, leverage our knowledge base and reduce costs across the company. With that in mind, the company has combined the Trade & Ethanol Groups. Bill Kroger will lead the combined group as its President, and Jim Proly will continue to lead the Ethanol business, and will take on an expanded role within the combined group. We believe we will benefit from having all brand origination, co-product trading and risk management under one umbrella. This change will enable us to manage overall risk, logistics and arbitrage as one unified business. We’ll also allow for the management of food, feed and fuel products from one end of the supply chain to the other. While these strategic benefits drove this combination, we also expect to realize cost savings as the two units become further integrated. The company has also combined the Nutrient & Rail Groups under the oversight of Joe McNeely. Who is the President of the Rail Group. Cost savings was the main driver of this combination, though we also expect to identify business synergies. I’m now going to turn things over to Brian, and I’ll be back when he’s finished to discuss our outlook for the rest of 2020 and into early 2021. Brian?

Thanks, Pat, and good morning, everyone. We’re now turning to our second quarter results on slide six. In the second quarter of 2020, the company reported net income attributable to The Andersons of $30.4 million or $0.92 per diluted share and adjusted net income of $29.3 million or $0.88 per diluted share on revenues of $1.9 billion. In the second quarter of 2019, we reported net income attributable to the company of $29.9 million or $0.91 per diluted share and adjusted net income of $32.3 million or $0.98 per diluted share on revenues of $2.3 billion. The benefits of our cost reduction initiatives were evident in the second quarter, as operating general and administrative expenses declined 16% year-over-year. Pretax income was almost $33 million lower year-over-year with the Trade Group accounting for 2/3 of that difference. This was offset by a significant change in income taxes, as we recorded an income tax benefit of $12.2 million in the second quarter of 2020 compared to income tax expense of $11 million in the second quarter of 2019. Adjusted EBITDA attributable to the company was $70.7 million in the second quarter of 2020 compared to $90.1 million in the second quarter of 2019. Adjusted Trade Group EBITDA was lower by approximately $29 million, which was offset by improvements in Ethanol and Plant Nutrient. Our effective tax rate could vary considerably each quarter based on the amount of income or loss attributable to the non-controlling interest. As in the first quarter, the adjusted rate removes the benefits we expect to receive as a result of the Cares Act. These benefits had an impact of $0.11 per share for the quarter and $0.31 per share year-to-date. We generated strong cash flows from operations and continued to focus on working capital management and reduced capital spending. Short-term debt of $96 million was approximately $50 million lower than at year-end and more than $300 million lower than it was a year ago. Long-term debt has decreased to approximately $35 million compared to the beginning of the year as well as at this time last year. Long-term debt reduction remains a priority. Now we’ll move on to a review of each of our four business units, beginning with the Trade Group on slide seven. The Trade Group reported pre-tax income of $400,000, and adjusted pre-tax income of $1.4 million compared to pre-tax income of $22.6 million, and adjusted pre-tax income of $25.8 million in the same period of 2019. Income from merchandising grains, feed products and other commodities was on par with strong second quarter 2019 results. The group’s efforts to capture synergies from the integration of the legacy Lansing and Thompson’s businesses also provided benefits. Conversely, the group’s income from its grain storage assets was lower than in the second quarter of last year as the group-owned substantially fewer bushels year-over-year due to the small 2019 crop in the Eastern corn belt. Corn and wheat basis appreciation was also substantially lower than last year’s outsized results. The Trade Group’s adjusted EBITDA for the quarter was $17.5 million, compared to adjusted EBITDA of $46.8 million, recorded in the second quarter of 2019. Moving to slide eight. The Ethanol Group recorded second quarter pre-tax income attributable to the company of $900,000 compared to $3.7 million in the second quarter of 2019. Margins remained significantly negative in the early part of the quarter until the U.S. economy began to reopen and gasoline demand increased. As Pat explained earlier, the group extended its spring shutdowns until demand and margins improved enough to restart each plant. As expected, the group ran the plants at approximately 15% of total production capacity during the quarter. By the end of the quarter, all five plants were back online and margins had improved significantly. Results for the quarter also included the reversal of more than half of the first quarter’s $14.7 million in non-cash mark-to-market adjustments. The group recorded EBITDA attributable to the company of $11 million in the second quarter of 2020 compared to $4.5 million in the second quarter of 2019. I also want to remind everyone that year-over-year comparisons are difficult as 2020 includes the consolidated results of all five ethanol plants, whereas 2019 results included equity earnings for three of those plants. Turning to slide nine. The Plant Nutrient Group recorded pre-tax income of $19.4 million in the second quarter, which was a 22% improvement over second quarter 2019 results of $15.9 million. The second quarter marked the group’s fifth consecutive year-over-year quarterly improvement. Ag supply chain volume was up substantially, as the group benefited from a strong planting season. Other lines of business also grew as we expanded into new markets, products and sales channels. Operating expenses continued to move lower year-over-year due to cost reduction initiatives. Plant Nutrient EBITDA for the quarter was $27.2 million, up almost 10% from the $24.9 million the group recorded in the second quarter of 2019. Turning to slide 10. In the Rail Group remained profitable in a weak rail market, generating $2.6 million of pre-tax income in the second quarter of 2020 compared to $3.2 million last year. The year-over-year change was almost entirely due to a lack of income from car sales in the current quarter. Leasing results were unchanged as lower maintenance expenses partially offset the impact of lower lease rates, utilization and cars on lease. Service and other income was comparable to that of the second quarter of 2019. Finally, the Rail Group recorded $15.3 million of EBITDA for the quarter, which was in line with last year’s results. And now, I’d like to turn things back over to Pat for some thoughts about the remainder of this year and early thoughts about 2021.

Thanks, Brian. I’m excited about the strategic and cost savings opportunities that should result by combining our four current groups into two. And by the commercial benefits, we anticipate realizing through the combination of the trade and ethanol groups. These moves will also help us continue to make good progress on reducing expenses. Our ultimate focus is on generating positive free cash flow so we can reduce our long-term debt, all while devoting ourselves to providing extraordinary service to our customers. All this work will result in a stronger company and enable us to achieve our vision to be the most nimble and innovative North American ag supply chain company. A good planning season, followed by ample rains in crop friendly temperatures in most of the grain belt has a setup for what now looks like a plentiful harvest. That bodes well for the profitability of our grain storage assets and merchandising business. We’re optimistic about what our integrated trading and processing teams can accomplish. We feel much better about our Ethanol business fundamentals than we did three months ago. Supply and demand seem to be fairly well balanced at this time. All five plants are back online and operating efficiently, and we’re producing higher value feed products at two of them. The results of the business through next year will depend on an increase in gasoline demand with a return to more normal driving miles. An early large crop in our core geographies, could set up our Plant Nutrient business for a good fall season. The work we have done around controlling costs and improving our operational efficiency in the nutrient space will continue to pay dividends. However, the outlook for corn prices remains challenged, which could continue to be a headwind to profitability at the farm gate into 2021. As many of you know, the rail leasing business is closely linked to changes in GDP. With almost 1/3 of the North American fleet idle, we see demand for railcars and repair services continuing to be challenged well into 2021. We will shorten lease terms when appropriate, and continue to diligently manage customer credit terms and operating expenses. And finally, we remain focused on the health and safety of our employees and are thankful for all their efforts. We also are thankful for our strong customer and supplier relationships and hope everyone stays safe and well in these unusual times. Before I turn it over to Q&A, I’d like to make a brief correction. When Brian was covering the ethanol run rate for the quarter, our run rate was 50%, 5-0 percent. And it sounded a little bit like you said, 15%, 1-5 percent. So I just want to clarify that we get that number straight was 50% 5-0 percent for the quarter. So with all that’s completed, I’ll hand it back to Gilam, our operator, and we’ll be happy to take your questions.

[Operator Instructions] I show our first question comes from Ken Zaslow from Bank of Montreal. Please go ahead.

Hey, good morning everyone. First question, on the reorganization, you mentioned that there is operating efficiencies as well as cost savings. Can you put some parameters to that? And how were you thinking about the cadence of that?

Yes, Ken, I’m glad you brought that up. So we’ve been working on cost savings programs here for a couple of years. And especially when we’re looking at G&A reductions in the back office, we felt the combination of the four groups into two could help us lean that out and help us to achieve back office G&A synergies, which we’re well on our way to doing that right now. We see the combination of Ethanol & Grain more strategic with aligning our trading of byproducts and the front end origination of Grain. So I think there’s some more strategic benefits that happens in that side of the business. PN & Rail don’t have quite the same amount of combination that Grain & Ethanol does, but we do see that back office benefits by combining those two.

And Ken, this is Brian. As we get into 2021, I would probably characterize it as an additional savings of about $10 million annually. I think in 2020, cost to achieve some of that stuff and only being a partial year, we’ll make it kind of a minimal impact, but 2021, probably about $10 million.

Perfect. And then just thinking about the elevation margins as they start to widen. How much or how do you benefit from that as they keep I know it’s more of an export issue, but is there a kind of a domino effect that you guys start to begin to enjoy that? And can you talk about that for a second?

Yes. You hit that right on the head. It’s been tough right now in our Ethern assets, as you know, Ken, coming off a bad 2019 crop year here, that will continue to be tough sledding in the third quarter with farmers coming on. As you mentioned, we’re going to have a very big export season and margins are good for Oct through Jan in the export market, and that backs right up into margins for us. So I think the fourth quarter will be a very solid one, coming off the back of a big crop and a robust export demand. So fourth quarter, I think, you’ll see some good numbers in the industry, in general.

And I know it’s early on 2021. But if 2020 is kind of behind us a little bit, and I know you have still some work to do in 2020. But as I think about 2021, kind of, do you think it’s what’s in the past is in the past and now 2021, it’s I don’t know it’s like a different kind of a year where you have a different crop, you have the basis, you have all the stuff. With the exception of Rail, is it feasible to really actually come to your long-term growth target or earnings potential? It just seems like it’s framing to be a relatively normal year, not that COVID-19 makes it normal, but just how things are developing. It seems like things are actually working. Can you frame that? And maybe I’m overestimating, but kind of give some parameters to that?

No. I think you framed it just right. So we’re feeling more optimistic about the Grain business, in general. Coming off a tough storage year in 2019 with a robust crop, that’s going to help a lot. Margins look to be improving. We like the product lines that we acquired with the Lansing acquisition. They’ve been performing quite well all during this time. So 2021 is shaping up to be, like you said, a normal, a real good year, going into next year. Ethanol, we had a nice turnaround in the second quarter with margins coming back. The ultimate question for 2021 will be related to COVID. How much driving miles come back and thus, gasoline demand and what margins will look like in ethanol. If we manage supply and demand and keep margins positive, this could be very solid for Ethanol. But a lot needs to a lot depends on the overall economy in COVID and post-election and all that in 2021. So Ethanol probably has a little bit more uncertainty in it. We’ve made a lot of improvements in our PN business, in Plant Nutrients, and we’re excited about what the next year holds there. Rail is going to be sluggy sluggish with rates with so many cars parked. So we think rates are going to stay pretty soft in rail. But overall, we’re more optimistic about 2021, in general.

And my final question is just on the ethanol demand. Can you frame the extent to which recreational driving has actually recovered? Because, again, used car sales and rental car sales are off the chart. So is that making up for people not driving as much to the supermarkets, but more maybe driving long distances. Can you frame that at all? And I’ll leave it there.

Yes. I think that’s been the thing that’s helped. We came from a low of 50% of previous year’s gasoline demand earlier in the second quarter, and that’s just devastating, I mean, you’d say 1% or 2% movement in gasoline was a big shift, right? So to see that come back up to, let’s call it, the mid-70s is a return of people making, like you said, casual driving trips or if you want to call it a vacation trip or something instead of commuting to work every day. I think the return to work and getting more people driving, commuting every day, will make a big difference to gasoline demand going forward. That still kind of remains to be seen with the second wave of COVID that’s happened here in the last month. But as you mentioned, recreational driving has kind of picked up a little bit to help that. So right now, the balance is pretty good, and there’s margins in the industry, and we just hope that can continue and maybe improve.

I appreciate. Thank you, guys.

Our next question comes from Ben Bienvenu from Stephens. Please go ahead.

Continuing the thread from Ken’s questions, and I don’t want to overstate it, but it does seem like the setup is shaping up really favorably with the crop recovery, the size of the crop and to Ken’s point, should linger nicely into 2021 as it relates to storage income. Pat, can you help us frame up? It looks as if I mean, this is going to be one of the better setups on the trade group side since you’ve been at The Andersons. Any additional color or framing you could provide for us would be helpful. And then kind of what are the if I think about the ELEMENT’s variability to the upside and downside for that business, help us put goalpost on things?

Sure. I think it’s important to note that what’s going to the third quarter, we’re still struggling with Eastern assets because we just didn’t have that crop from last year. As you might remember, I know Ken follows us, wheat. We benefit from very wide carrying charges in wheat and making large wheat carries in previous years, and that’s not here in the marketplace for us now. So we’ll be missing that wheat storage income, which we had earned pretty well in the last two, three years. That’s one part we don’t have. Farmers has been a little bit of a reluctant seller with low grain prices. When the market rallied a little bit off the government report, and we saw corn get up to $9 sorry, bean to $9 and corn about $3.60, we saw some selling. But now we’ve settled back down. I think we’re low $3.20s and around $8.80 on beans right now, farmers have kind of shut off their selling to some extent, but they’re going to need to come to market this fall with a bigger crop. We’re excited about the exports. We’ve recently sold Chinese Milo and beans. So the export outlook going into the Oct-Jan window, as I mentioned earlier, looks to be really good. And with the return of some of the ethanol plants coming back online in the recent months has got that demand back a little bit. We had a really good results in some of our feed grain businesses. It’s interesting to note on the food-grade corn side, restaurant demand is soft, but consumer demand is high at retail storage. So it’s kind of a shift. And that is a little bit of different outlook for Grain. So in general, we’re optimistic, especially starting with fourth quarter as the new crops coming in as we kind of balance SND going into 2021.

Okay. Fair enough. On the Ethanol business, I might have missed this, but did you guys talk about the mark-to-market unwinding? Did that unwind in 2Q? And then if you think about what you’re seeing with industry S&D, the level of restraint you think we might or might not see as we progress through the back end of the summer and into the fall, and kind of help us get our bearings on what is reasonable to expect there and what you guys are thinking?

Ben, this is Brian. Yes, we did see roughly half of the first quarter mark-to-market come back in the second quarter. And then Pat, maybe I’ll comment a little bit about the some of the SND.

Yes. So that was pretty much a whipsaw coming from first to second quarter. When we took the plants down. The good news was we had scheduled spring shutdowns at all of our facilities. We did most of the work ourselves, got our plants highly tuned, and then they came up really well when we return. One of the challenges for our new plant, ELEMENT, was right in the middle of start-up when we need to shut down. So the timing of that wasn’t ideal for our new Kansas plant, but it’s up running, and running well. We mentioned earlier, we have two plants now making high-protein feed, which is encouraging for us and the outlook for expanding our feed products as we plan to in ethanol. So that’s a good sign. The macro question you asked is a good one, is that we have a little balance right now in SND with some assets down in ethanol production and demand holding in there at this time, as we talked about with Ken. We haven’t had a big boom in exports, it’s been relatively stable. So a little bit of an increase in exports, a little bit increase in driving demand, then we’ll can see margins appreciate and maybe some more capacity come back online. But in general, right now, it’s steady as she goes. That’s a good thing. We hope that, that can continue through the balance of the year. We should have reasonable corn prices, which is going to help the ethanol industry. And as we’ve said a few times and without trying to sound arrogant, our plants are really well built. They’re high scale. They’re highly efficient. We’ve put in a lot of new technology in the last several years in new investments. So we think we’re running in the top decile of the industry. So we should be plants that should be running, and running at high-efficiency and make margins during this period. So we feel pretty comfortable about that.

Okay, thanks and best of luck.

Thank you. Our next question comes from Eric Larson from Seaport Global. Please go ahead.

Two questions related to ethanol. So is ethanol in or out of the new government funding proposals that are in front of the House and the Senate right now? Is it in? And if it’s in, how much per gallon could you get? It seems like this is on and off like a light switch. Sometimes it’s in, sometimes it’s out. So I’d be curious on your thoughts of where we sit with maybe some help for the ethanol industry in the new funding program potential funding here for the U.S.

Right. For the first question, the answer is, we don’t know for sure. So just what you said, Eric. And first of all, Eric, welcome back to coverage in us, now with a different company. I was glad to have you covering us. On the ethanol funding, getting some in the new government bill, kind of the COVID support bill. I can’t remember the exact name of the title they’re calling it now. Ernie?

Heroes.

Oh, Heels. Heroes So there’s been a lot of discussion like some of the farm state senators, some of the names you had know that have been supported ethanol in the past, to have ethanol included into that period when the industry suffered. That would be encouraging and that would be really good for the industry. It’s not clear whether that will be both in the House and Senate bills still. So it’s being discussed on both sides right now. So simple answer is, we don’t know for sure. It’s something that’s been proposed, but not a clear path to say that, that’s going to happen for sure.

Have there been any rates and by the way, thank you for welcoming me back. It’s a pleasure to be back as well. Have they mentioned any potential range of rates of benefit that you could get on a gallon basis? Or is that still an unknown?

Yes, it’s still an unknown. I cover all over the map. So it’s too early to comment on that.

Okay. Then one more ethanol question here. A lot of your competitors have been out touting your high-grade alcohol for sanitizers and all this other stuff. Have you folks participated in some of the higher value-add stuff? I mean, it looked like even margins, if they came back kind of late in the quarter, it looks like you really had a pretty good second half of the quarter to be kind of profitable if only about half of your MTM gains came around. So did you are you getting any benefits from those types of products? Or are you producing them?

Yes. Good question. So we run fuel-grade ethanol plants as does almost everyone in the industry. There’s really four different grades of ethanol with the fuel grade for the motor fuel market. Second one is for USP grade or U.S. Pharmacopeia grade, which allows for some food-grade and sanitation purposes. Then there’s a higher grade called FCC, which does under food and chemical codecs. And then the highest one is grain neutral spirits, which is potable alcohol. We are in the gasoline market with the fuel grade. We have had discussions with major players in the industry, potentially looking at exploring options in space. But haven’t made a decision at this time, but it could be something that could be of interest. It’s interesting to note that having the right quality, these people want to have the really high-end quality of grain neutral spirits or really good food-grade that they can depend on. There has been some poor quality ethanol that’s been put out there, and that’s not a good thing. We wouldn’t do that. We just want to do a very high-quality product if we should do that. So at this point, it’s just something we’re exploring.

Okay. Sounds good. And then one quick follow-up on Plant Nutrient. I had really been anticipating a pretty good second quarter, and you did deliver that. And volumes were probably really strong. Were you able to hold margins in the quarter? Or what kind of the affordability index still under some pressure and margins under pressure. It looks like you obviously, you had a really good year-over-year dollar increase in pre-tax profits. But how did the components break out on that?

Yes. It’s a fair question. So we had a good year on the Spring season, mainly driven by a big push for more acres to corn. So our wholesale distribution volume was up under decent margins. Margins held, they didn’t really go up or down much during the quarter. It’s still tough, though, as you know, well, as a farmer, Eric, on the specialties, we haven’t had margin increases in that segment because it’s tough given the corn prices at this time. So I’d say the specialty margins are harder to get those to widen. In other parts of our business, it’s sort of interesting that while we did well with home lawn care products as people are working on their lawns and gardens, the export market was tougher, just with challenges with ports and stuff during the time of COVID. So those shipments we make of professional products for golf courses were down. But domestic golf course, demand was up. So it’s kind of the tale of two seasons in our specialty businesses. So in general, across the board, all aspects of the fertilizer business were better. A lot of that on the backs of better productivity and cost efficiencies, not on the back of a price increase across the board. So I’d say that pricing is relatively stable, and our volume was good and lower costs.

Good. That’s very helpful, Pat. And then I’ll just finish it with one other question. And I applaud your reorganization efforts here. I think, me, simplifying your model is really going to benefit you so you alluded a little to this already. The strategic benefit of merging Grain & Ethanol together makes a lot of sense. There’s cross obviously, there’s cross origination issues that can be beneficial. So you can really see the benefit there. And I think you kind of alluded to the nutrient rail consolidation more as maybe as an SG&A expense benefit. But thinking out loud, what could potentially be any strategic benefits with that as well? Any thoughts on that you could share with us, that would be helpful.

Sure. Sure. As we were have been working on cost reduction over the last couple of years, I mentioned that we’re trying to tackle G&A across the company. And we felt this combination could allow us to do that with the more back office synergies. As Brian mentioned, we’ve targeted a $10 million reduction on run rate for next year. We have some cost to achieve this year with severance, etc, that’s happening. But it’s a natural fit of Grain & Ethanol. It was they were together originally when The Andersons first got into the Ethanol business. So we see a lot of, like you mentioned, strategic benefits on DDG’s grain origination, etc. On the case of Rail & PN, they’re really two different markets that don’t overlap much. And it’s really a back office cost savings move, and we think that’s where we’re going to see the benefits there.

Okay, perfect. Thank you all. I’ll pass it on.

Thank you. I show no further questions in the queue at this time. I’d like to turn the call back over to Mr. John Kraus, Director of Investor Relations for closing remarks. Mr. Kraus?

Thanks, Gilam. We want to thank you all for joining us this morning. I also want to mention again that this presentation and slides with additional supporting information are available on the Investors page of our website at andersonsinc.com. Our next earnings call is scheduled for Wednesday, November 4, 2020, at 11:00 a.m. Eastern Time, when we will review our third quarter 2020 results. We hope you can join us again at this time. Until then, be well.

Ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect.