Broadwind, Inc. (BWEN) Q1 2013 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to the First Quarter 2013 Broadwind Energy, Inc. Earnings Conference Call. My name is Shaquana, and I will be your coordinator for today. [Operator Instructions] I would now like to turn the presentation over to your host for today's call, Ms. Joni Konstantelos, Director of Investor Relations. Please proceed.

Thank you. Good morning, and welcome to Broadwind Energy's First Quarter 2013 Earnings Conference Call. With me today are Broadwind's President and CEO, Peter Duprey; and Broadwind's Executive Vice President and CFO, Stephanie Kushner. This morning's earnings news release is available on our website at bwen.com. Second slide, please. Before we begin today, I would like to caution you that this call will include some forward-looking statements regarding our plans and market outlook and also will reference some non-GAAP financial measures. Actual results may differ materially from these forward-looking statements. Please refer to our SEC filings and consider the incorporated risks and uncertainties disclosed there, including our Form 8-K and the attached news release filed with the SEC this morning, and our Form 10-Q, which will be filed later today. We assume no obligation to update any forward-looking statements or information. Having said that, I will turn the call over to our President and CEO, Pete Duprey.

Thanks, Joni, and thanks, everyone, for joining the call. Let's start out on Slide 3. This morning, we released our first quarter results. We had a solid first quarter, and we're positioned well to meet our goals for 2013. Our Tower orders were the highest we've seen since 2009. And these orders are coming from the more targeted set of customers. The revenue for the quarter was lower than last year, in part due to a small labor-only contract in our Abilene facility. On an activity-based measure, we produced 51 fewer tower sections than last year, which was quite remarkable given that we reduced production significantly at our Manitowoc facility at the end of the year due to the PTC exploration. In January, we were able to scale up quickly in response to the flurry of orders that begin coming in once the PTC was renewed. Towers and Services each showed approximately $1 million of adjusted EBITDA improvement over 2012. Our Gearing business faced a challenging first quarter with approximately $2 million of revenue falling out of the quarter due to production delays. Stephanie will talk about this in more detail when she covers the financials. In April of 2013, we closed down the sale of our idled tower facility located in Brandon, South Dakota. After the payment of the underlying mortgage on the facility, we put $8 million in our pocket, which improves our liquidity position and in addition to our $20 million borrowing facility. In April, some of the language around the PTC extension was clarified by the IRS. We believe the start of construction language in the renewal is effectively a more than 2-year extension, with net gas prices increasing somewhat and the cost of wind energy continuing to fall, we are more optimistic about the wind energy market going forward. Natural gas new exploration remains weak, as the demand for gearing in this market is down. The oil market on the other hand, continues to be robust and we continue our selling efforts in this segment. Let's turn to Slide 4. New order intake was quite strong in the towers and to a lesser extent gearing. In Towers, we had sold most of the production capacity for 2013, and we received orders for deliveries in 2014. We see 2014 being a record year in our Tower business, and we are very focused on expanding our production capacity in our existing footprint through some of our continuous improvement initiatives. In Gearing, we took in new orders of $15.5 million. However, we had an order cancellation of $3.8 million from the weakening natural gas market, resulting in net orders of $11.7 million. Services also had $2.8 million of orders canceled related to some investor of gear box assembly work that they were doing in Abilene. The customer decided to in-source this work due to weakness in other parts of their business. This was particularly disappointing since it was one of the first contracts that Services picked up that was outside the wind energy market. It continues to pursue Industrial Services work as part of their diversification plan. Turning to backlog, the graph shows a nice uptick from all the tower orders that we received in Q1. These are follow-on orders with 2 customers, which will help reduce the amount of changeovers and will increase our throughput and efficiency in production. Let's turn to Slide 5. The wind industry just wrapped up their annual convention here in Chicago. There seemed to be a greater focus on getting projects advanced than lining up the supply chain. The graph refers to the number of gigawatts installed or expected to be installed through 2015. As we know, installations were pulled from 2013 into 2012 as a result of the PTC expiration. Installations are forecasted to drop 75% in 2013. However, the 2013 revenue in our Towers business will be about flat compared to 2012. Our team has navigated extremely well throughout this volatile period and the company is stronger because of it. Looking forward, in the graph, the top of the blue bar is the low end of the volume estimate. The top of the gray bar is the top end of the estimate and the dash line is sort of the base case or most likely case. Well, 2014 is less than 2012's record. With tariffs and posts on imposed Chinese and Vietnamese towers, we forecast 2014 to be a strong year for the domestic tower market. In terms of tower production, we expect to produce approximately 500 towers in 2014, which is close to our full capacity. Looking ahead to 2015 and beyond, the main drivers will be the general growth of electricity demand, a reasonable level of natural gas pricing and a continued support for cleaner fuel alternatives due to the RPS requirements. Turning to Page 6. The constant wind energy declined quite dramatically over the last few years. The U.S. natural gas prices are near historic lows due to expanded use of frac-ing technology. As a result, the wind energy market has accelerated the development of turbines that have better energy capture. With advanced blade design and carbon fiber blends, rotor sizes today will vary between 100 meters to 120 meters, whereas just 5 years ago, rotor sizes were averaging 75 to 95 meters. Tower heights have also increased, thus capturing stronger and smoother wind speeds that produce more energy over the life of the turbine. The industry has adapted and developed better technology to compete in a low fossil fuel environment. This means the industry is approaching parity with fossil fuels without incentives. Perhaps not when natural gas is at $3.50 a million Btu, but between $5 and $6 a million Btu, wind energy offers a strong value proposition. Slide 7. Natural gas pricing could have a large impact on our business since burning demand for wind turbines, gearing for drilling operations. The U.S. has gone through some great technological advances to unlock massive natural gas reserves. But the fact remains, natural gas in the U.S. is $4 a million Btu compared to Europe, that's around $10 and Asia around $16. These price disparities aren't likely to remain in the long term. Either manufacturing will shift to take advantage of the price differential or gas will be exported to other countries. Currently, 10 billion to 15 billion cubic feet per day of liquefaction terminals are in various stages of regulatory approval. This represents 14% to 20% of the current production. Assuming some of these terminals are developed, we expect that the price of natural gas will rise to become more in line with the rest of the world. Turning to Slide 9. Now I want to talk about the business transformation. Each one of the graphs on the slide shows the progress we're making as a company. We have reduced our footprint by over 400,000 square feet, which is about 2/3 of the way to our target. We're identifying growing new lines of business in both Services and Weldments, which has added 18 million of organic revenue over the past 3 years and enhanced our revenue diversification. We are focused on improving our operations and reducing waste; scrapping our Gearing business has been reduced by over 50%, which translates into an annual savings of $150,000 a year. We are paying down debt, which provides liquidity and support to continue to grow the business. Now these are not small changes and they do not happen overnight. Our management team is committed to maximizing shareholder value. Our operations teams are doing a great job in carrying out these changes and are resulting in positive effects that you are seeing today. At the end of the day, I think we are doing what we said we would do. I'll now turn the call over to Stephanie to talk about the financials in more detail.

Thank you, Pete and good morning. Turning to Slide 9 on $45.7 million of revenue. Our gross margin, excluding restructuring, rose to 5.7%, up sharply from Q4 of last year and increased 90 basis points from the first quarter of 2012. Operating expenses totaled $6.7 million, up from last year due to a $500,000 rise in restructuring linked to staff reductions in our corporate office. Our operating loss is $4.5 million, up from last year due $1.1 million of restructuring costs, up from $0.5 million in the prior year quarter. With nearly 70% of our footprint reductions behind us, our restructuring activities are accelerating as they approach conclusion. The EPS loss was $0.34, similarly up from the prior year due to the increased reconstructing. The next slide highlights our pathway towards an acceptable gross margin. The light blue portion of the bar shows our reported gross margin and the dark blue add-on represents the impact of the portion of restructuring costs that were charged to cost of sales. So the total height of the bar represents gross margin without restructuring. As I noted on the prior slide, the first quarter margin totaled 5.7%. The increase from last year reflects the benefit of our reduced square footage, improved productivity, lower material content and more stable pricing in towers and better utilization of our drivetrain service center asset and services. Headwinds for the quarter included the production impacts of the rising share of enclosed drives for gears, which caused some production issues in the first quarter. But it should, once the transition is complete, ultimately boost gearing margin, reflecting the higher value-add of these products. And the softer end markets in mining and natural gas are having an adverse impact on gearing volume, which are our highest incremental margin. This will be our lowest volume quarter in 2013 and we project the full year margin at restructuring to average between 6% and 7%, up 200 to 300 basis points from last year. Looking into 2014, we're targeting a 9% to 11% gross profit margin. With some leverage on our operating expenses, they should average 9% to 10% of sales and the company should be at or above breakeven profitability in 2014. Turning to Slide 11. Results for our Towers and Weldments segment improved sharply, both sequentially and from the prior year. Versus 2012, sections sold totaled $284 million, down 15% from the prior year because we started off slow at the beginning of the year and ramped up production during the quarter. I should note that we had previously reported tower volume in megawatt. We have shifted our reporting focus to sections, of which there are anywhere between 3 and 5 per tower as being a more relevant measure of activity. We should be producing 300 or more sections in each of the next 3 quarters. The decline in revenue reflects the lower production volume. The impact, as Pete noted, of a portion of tower is being fabrication only. And these factors were offset by a richer margin mix of tower sales and growth in our higher-margin Weldments business. Operating income and adjusted EBITDA, both rose as we benefited from an improved sales mix and more consistent volume throughput. In Towers, our focus today is on applying continuous improvement tools to increase efficiency and throughput in our Manitowoc and Abilene plants. As Pete mentioned, our plan is to boost production in 2014 to at or above our stated 500-tower capacity level. Moving to Slide 12. Gears had a disappointing quarter. Revenues dipped to $10.7 million, down $5.3 million from last year. The reduction encompasses 2 factors. Approximately $2.5 million due to weaker demand from natural gas and mining customers and about $2.8 million due to production issues associated with the strategic transition to a higher volume of enclosed drives for complete gearboxes rather than loose gearing. We believe the weakening demand is industry-wide. The American Gear Manufacturers Association is now forecasting about a 5% decline this year in demand for gears for mining and onshore oil & gas. And the impacts are obviously greater in the quarter because of our specific customer mix. For the full year, we have experienced some cancellations at our backlog and now expect our revenue to be down about 5% from last year. The drop in adjusted EBITDA was linked to the volume reduction, with some partial offset in savings due to lower operating expenses. We are focusing on improving the production flow, which is also being hampered by today's peak activity level relative to the plant consolidation. But we expect recovery volume and improved financial performance during the balance of 2013 as volume and throughput improve. Turning to Slide 13. Services continues to demonstrate improved financial results in a competitive environment. In the quarter, revenue more than doubled to $7.5 million with increased activity in our drivetrain service center in Abilene. Adjusted EBITDA was near breakeven versus the $900,000 loss last year. Fuel service activity was low however, as customers in-sourced more of their service needs because in early 2013 new turbine installation activities fell off following the rush for commissioning in late 2012. This was caused by the uncertainties surrounding the production tax credit renewal, which had been scheduled to expire at year-end. We continue to focus on diversifying our revenue base and developing proprietary service offering. At the American Wind Energy show this week, we launched our DriveMAX and the BladeMAX service offerings, focusing on delivering comprehensive maintenance and rebuild for wind turbine drivetrains and blades. Slide 14, please. Pete has already updated you on the progress we've made at reducing our operational footprint. With the completion of the Brandon transaction, we have now removed 400,000 square feet of office and plant space. This slide provides an update of the spending and P&L effect of this activity. As a reminder, the restructuring activities encompass a total of about $6 million in capital outlays mainly for consolidation of the gearing plant and $6.6 million in net charges to net income, both cash and noncash. Due to the higher-than-expected proceeds received for the Brandon sale in April, we have recently updated our total projected restructuring cost outlook to a net of $12.8 million, of which $5.9 million is capital and the net P&L effected $6.9 million. Of this total, $7.9 million has already been incurred and we would expect most of the rest to be behind us by the end of the year. We remain on track to generate $6 million of annual savings from the restructuring, and we are currently at a savings run rate of less than half of that. Turning to our next slide. Our operating working capital ticked up during the quarter to $23.5 million as we built inventory for our higher production level in Q2. Working capital averaged 13% of trailing 3-month annualized sales. We expect to receive additional customer deposits during this second quarter, which will reduce net working capital usage between now and year-end at or below the low end of the yellow banded area. Turning to Slide 16, our net-to-debt balance rose to $14.3 million at March 31, due to the working capital increase I just mentioned. The drawn balance on the line of credit rose to $6.2 million. But as Pete already noted, that line of credit is now 0 as a result of the receipt of the proceeds on the Brandon sale. And with some impending reductions in working capital, we expect our net debt balance to be negative through the balance of 2013. That is, cash on hand will exceed outstanding debt. With the committed and available $20 million credit line, our balance sheet will have strengthened considerably and we are well-positioned to grow the top line in 2014. Turning to Slide 17, our 2013 outlook is largely unchanged. We are projecting full year revenue in the $215 million to $225 million range, our third year of significant top line growth. And full year adjusted EBITDA of $9 million to $12 million. Due to the $3.4 million gain on the sale of Brandon, which will be reported in the second quarter, we have raised our full year EPS guidance to a loss of between $0.30 and $0.50. Referring to the far right-hand column on this slide, in the second quarter, revenue should accelerate to $54 million to $56 million and adjusted EBITDA should exceed $2 million, a healthy increase from prior year level. With the improvement in the EBITDA and the gain on the Brandon sale, we should record a slightly positive net income of approximately $0.01 to $0.03 per share. Turning to our final slide there, a couple of other items to note. First, we will report in the 10-Q, which we're filing today, that we have reached agreement with Tontine Capital regarding our outstanding legal issues associated with the securities litigation, which is winding down. In connection with that agreement, we have reimbursed Tontine for over $400,000 in legal bills and they have waived any further right to board representation or involvement at Broadwind. Tontine was an important early investor in the company and with these changes we have removed any residual uncertainty as to their role at Broadwind. And secondly, I'm happy to announce that the net operating loss shareholder rights plan was overwhelmingly approved by our shareholders at our annual meeting. This helps protect the $154 million tax loss carryforward for the company and its shareholders and should conserve considerable cash for a number of years as we turn profitable. This completes my prepared remarks, and I'll turn it over to Pete to moderate the questions.

[Operator Instructions] Your first question comes from the line of Mr. Sanjay from Lazard Capital Markets.

This is Sagrain [ph] for Sanjay today. I have 2 questions related to the Tower business. So with the strong start in Q1 and record orders, can you sort of help us understand how we should think about the profitability embedded in this backlog? And are you seeing any benefit in terms of pricing or being able to sort of increases in pricing or better terms and conditions on these new orders? And then I have a follow-up.

Yes. I'll let Stephanie take that question.

I think that it's fair to say that the margins at our backlog are better. They -- there has been less disruptive supply influence for sure over the course of the last quarter. So that is built in and is reflected in our projection for the year.

Got it, okay. And then another question on the Slide 5. As we look at the projections, which you have here over the next say, 2 years, is there any flex capacity which is available in your manufacturing plant say, by increasing the shift or so in case of demand in either '13 or '14 whether be greater than what you have on Slide 5, you would be able to meet the demand, especially given the fact that you have a very a strong position in the higher megawatt towers?

Yes. I mean, today in -- so we run 12-hour shifts in Manitowoc. So we are running 11 shifts out of a total 24/7 capacity of 14. And in Abilene, we're running about 1.5, so if 24/7 is 2, we're running at about 1.5. So there is some ability to flex up. But as you start to go to a 24/7 type of production, there are some potential inefficiencies. So yes, we're ramping up. As we said during the call, we would expect to be near our capacity of 500 towers for 2014, and we'll start to creep up towards that target in the third and the fourth quarter. So...

I want to add one other point to my -- what I said about the backlog. I think the other important thing about the feature of our backlog is we've been getting larger orders, which then provide longer run, which provide much better efficiencies within our plant. So I think that's also a very important feature that's going to help us deliver better margin.

Your next question comes from the line of Angie Storozynski, representing Macquarie.

I actually wanted to talk a little bit about projections for '14 and '15. So we have the PTC extension, which could help stimulate growth in new build for wind in those years and you're saying that you're getting more of a backlog for 2014. So how should we think about the level of sales roughly speaking for the wind and non-wind businesses in '14 and any indications for '15? And also, if you could remind me how the reduction in the cost of restructuring actually filters through the EBITDA expectations for, say, for '14 and '15?

Angie, so we haven't done a budget yet for '14 or '15, but I think what we did say was that we're going to ramp up from, say, 350 to 500 towers. 150 towers at an average selling price of $375,000 to $400,000 in and of itself could be a $50 million to $60 million bump to our top line in 2014. So you can see it, it should be significantly higher. And in addition to that, any growth that we are able to deliver in other our businesses. On the restructuring, what I commented is that right now, we are at a run rate of about $2.7 million out of that $6 million. And we will start -- so we will start to see next year the rest of the savings from our Gearing business. That's the most complex part of the consolidation. So I would expect we would exit 2014 with that full savings.

And that's showing up in the operating expense line?

A little bit of it is in SG&A. So like we closed our European sales office, I would say, I believe, $1.2 million of the $6 million is in SG&A and that benefit we already have. The balance will be in the cost of sales, yes.

Okay. And now you mentioned that you expect to break even on the net income level in 2015, is that right?

2014.

Okay. And that is -- I mean, is that an optimistic assumption? Or is that already supported by some of the backlog that you have in place?

We think the combination of the backlog and the volume growth and realizing the benefits of the restructuring. If you go back and look at the graph on our gross profit margin with a sort of a 10-ish percent gross margin and with SG&A in the sort of 9% or 10%, the formula give us a positive net income. So we're pretty confident.

Okay. And lastly, can you talk a little bit more about the oil & gas industry and the demand for gearing from that sector? And how should we think about it now that the natural gas prices have ticked up? Are you more correlated with the gas business or with oil business? And how about industrial demand besides at oil and gas business?

Two years ago, the natural gas business was very strong as everyone was going after these shale plays. As natural gas prices dropped fairly significantly, the whole industry kind of shifted to frac-ing for liquids, primarily oil in the Bakken and in Eagle Ford. And so the demand for gearing in that sector really picked up and we've been making the shift from natural gas to oil and then also working with customers on offshore as a standard offshore rig will have anywhere from 50 to 75 gearboxes on it. So today, it's really the oil play. I would say natural gas hasn't rebounded enough where we're going to see a significant demand for gearing in that sector. I think as we start to approach $5 a million Btu for gas, you're going to see more drilling and frac-ing starting to happen, which will increase the demand for gearing. On the industrial side, we're winning business in steel. Mining is a little soft right now, so again, 18 months ago, mining was very strong and we saw good demand there. That's softened a bit. We're still selling, obviously, some gearing in that space, but it's softened. I would expect that we'll start to see a rebound in 2014 at least that's some of the data we're getting out of the AGMA, the gear manufacturing association. So -- but again, we want to try to be very diversified.

How about last quarter, you mentioned that some of the strength that you're seeing in the towers business is not sustainable because some of your competitors might actually return to the market and refurbish their facilities back to produce wind towers, are you seeing that trend? And how sustainable is the strength in the tower orders?

Well, I guess we never underestimate our competitors. I would say in the tower market, it's particularly like Trinity Towers, there -- they have facilities that can toggle between rail cars and towers. They had in their conference call, they had order intake of, I think, it was $48 million of orders and we were double downwards, which was quite unusual given the size comparison. So it's hard to know exactly what they're doing and what others are doing. But I don't see a mad rush of at least at this point, of new manufacturers coming into the market. Vestas, in their large facility out in Colorado, they are now doing some towers for third parties. And we have Korea and Indonesia can still import towers. So I think there's enough demand as there are enough supply to meet the needs for 2014. And it will be a bit of a tight market, but I think there's enough supply to meet the demand in the projections that we have shown here.

Now that the existing fleet of wind farms is aging, I understand that you're struggling on the -- on your plain vanilla maintenance of wind farms with OEMs. But how about refurbishment of aging wind farms, are you actually seeing any traction in that field?

That's really what our Services business is about. Maybe 2 years ago, we were targeting O&M. And when we look at the pricing and the profitability, we really said, hey, we're going to be the non-routine maintenance provider. So blade issues, drivetrain issues, so we were sort of the major overhaulers and repairers in the wind sector. So we are seeing nice demand there. Stephanie mentioned our BladeMAX and our DriveMAX programs. Those are programs designed to educate and help owners understand the recurring maintenance that's needed, and we got some programs around that. We're on blades that every 3 to 4 years, you should be doing some blade inspections and checking the lightning protection and so to prolong the long-term life of the blade. So we're getting some good traction in our Services business on those programs.

Okay. And lastly, I'm actually not sure if you mentioned potential renewable MLPs, do you think that, that could actually have a substantial impact on your business going forward?

I really don't. And we're not an owner-operator, so it will have -- it really won't impact us. If you talk about the industry in general, I think MLPs can bring more capital into the wind industry, but there'll be some owners that won't want to use an MLP. Like a NextEra can't use an MLP. And could it help on the margins? Yes. But it's certainly not a replacement for PTC. And I think it's a long year -- a long-term extension on the PTC is really what the industry needs to have more investment come in and provide a more steady business, while we wait for, I would say, natural gas to kind of rebound to a more normal level. So I'm not all that optimistic.

[Operator Instructions] Your next question comes from the line of Mark Spiegel, representing Stanphyl Capital.

If I could, I'd like to try to back into some sort of big picture numbers for 2014. So let me ask you a few questions sort of based on your presentation. On Slide 10, you're targeting 300 basis points of additional gross margin for next year. Would all of that drop to the EBITDA line? Or what percentage of it would?

Yes, we would expect that to drop to the EBITDA line.

Okay. And then on the restructuring, you're anticipating an additional $3 million of savings for next year. Now I think I heard you say by exit of next year, so I guess that wouldn't be a full year $3 million, it would be what? A partial year?

And part of that is flowing through that gross -- that's part of the expansion. So that's not additive to the 300 basis points.

Okay, fine. So if we were just to say that another 300 basis points and then if we were to say that revenue were just flat next year with the 220 you're looking for this year -- and I did hear you say that, that there's some upside there because of the Tower business, so that would sort of be another roughly $6.5 million dropping to the EBITDA line, is that correct?

Yes.

So again, and tell me if I'm being too simplistic here, if I were just to add that to this year's range, which you've kept at 9 to 12, based on what we know today, would that make the 2014 EBITDA range sort of the $15 million to $18 million range?

Yes, yes. I think that's right, yes.

Okay. That was -- all right, one other follow-up question. On Gearing, I know you did speak about sort of half of it were production problems, half of it the shortfall versus last year and half were reduced orders. Can you get -- I know you hired a new guy, Mr. Johnny [ph], to head this in March from that press release. Can you give us a little bit in terms of specifics of what you're going to do to sort of turn Gearing around?

Well yes, I would say in Gearing, we're going through -- so we're going through the consolidation and I think is maybe caused a little bit of inefficiency in the business. As we're going into more enclosed drives, so the reason we want to move from loose gearing or at least a portion of our business from loose gearing into enclosed drives is there's more value to the customer. So it's a lot of little pieces we can help them design their gearboxes so you're providing a finish kind of product to the customer that should have higher margins. But as we make the shift from doing larger volumes of loose gearing to more one-offs of enclosed drives, that kind of changeover is creating this inefficiency and timing issues in our revenue flow. So I think this is a short-term issue and Dave is very focused on getting the right process in place to ensure that all the parts and pieces when the gearing is done is ready for the gearbox. So I do think that this is a short-term blip but it's -- long-term it's the right place for us to be.

Okay, okay, fine. And one last one. And I guess just on the last call so maybe this is a reiteration, annualized maintenance CapEx exclusive of this restructuring stuff. I think last quarter you said it would be running around $4 million a year sort of on a normalized basis, is that still accurate?

Yes. I think that's still good. As we look at -- we could end up spending a little more in our Tower business to tie in -- open up some extra capacity. But again it's maybe a couple of million dollars additional.

But presumably that's -- I mean, that's sort of not maintenance CapEx at that point, that's...

Right, it's more. Yes, that's fair.

At this time, there are no further audio questions. I will now like to turn the call back over to Mr. Peter Duprey for closing remarks.

Okay, thanks. I would just say we're off to the best start since I joined Broadwind. We have great visibility in the demand for towers. We continue to work on cost takeouts. We're starting to plant seeds for growth outside the wind market. Our liquidity position is very strong with the sale of Brandon. And frankly, I personally feel very proud of the progress that the team has made over the last 2 years. And I think 2013 is going to provide the company with a momentum to be profitable in 2014. And I think 2014 is going to be a record year. So I'm very positive about what we've accomplished and I appreciate everyone joining the call and the questions, and I look forward to updating everyone next quarter. Thanks.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect, and have a great day.