Dycom Industries, Inc. (DY) Q3 2023 Earnings Report, Transcript and Summary

Good day and thank you for standing by. Welcome to the Dycom Industries, Inc. Third Quarter 2023 Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would like to hand the conference over to your host today, Mr. Steven Nielsen, President and Chief Executive Officer. Please go ahead.

Thank you, operator. Good morning, everyone. Thank you for attending this conference call to review our third quarter fiscal 2023 results. Going to Slide 2. During this call, we will be referring to a slide presentation which can be found on our website's Investor Center main page. Relevant slides will be identified by number throughout our presentation. Today, we have on the call Drew DeFerrari, our Chief Financial Officer; and Ryan Urness, our General Counsel. Now, I will turn the call over to Ryan Urness.

Thank you, Steve. All forward-looking statements made during this conference call are provided pursuant to the Safe Harbor provisions of the Private Securities Litigation and Reform Act of 1995. Forward-looking statements include all comments reflecting expectations, assumptions or beliefs about future events or performance that do not relate solely to historical periods. These forward-looking statements are subject to risks and uncertainties which may cause actual results to differ materially from current projections, including those risks described in our annual report on Form 10-K filed March 4, 2022, together with our other filings with the U.S. Securities and Exchange Commission. Forward-looking statements are made solely as of the original broadcast date of this conference call and we assume no obligation to update any forward-looking statements. Steve?

Thanks, Ryan. Now moving to Slide 4 and a review of our third quarter results. As we review our results, please note that in our comments today and in the accompanying slides, we reference certain non-GAAP measures. We refer you to the quarterly report section of our website for a reconciliation of these non-GAAP measures to their corresponding GAAP measures. Now for the quarter. Revenue was $1.042 billion, an organic increase of 22.1%. As we deploy gigabit wireline networks, wireless/wireline converged networks and wireless networks, this quarter reflected an increase in demand from 4 of our top 5 customers. Gross margin was 18.4% of revenue and increased 103 basis points compared to Q3 2022. Improved operating performance of 123 basis points in Q2 was partially offset by 20 basis points of higher fuel costs. General and administrative expenses were 7.6% of revenue and all of these factors produced adjusted EBITDA of $114.6 million or 11% of revenue and earnings per share of $1.80 compared to $0.94 in the year ago quarter. Liquidity was ample at $444.3 million, improving sequentially. Now going to Slide 5. Today, major industry participants are constructing or upgrading significant wireline networks across broad sections of the country. These wireline networks are generally designed to provision gigabit network speeds to individual consumers and businesses either directly or wirelessly using 5G technologies. Industry participants have stated their belief that a single high-capacity fiber network can most cost effectively deliver services to both consumers and businesses, enabling multiple revenue streams from a single investment. This view is increasing the appetite for fiber deployments and we believe that the industry effort to deploy high-capacity fiber networks continues to meaningfully broaden the set of opportunities for our industry. Increasing access to high-capacity telecommunications continues to be crucial to society, especially in rural America. The Infrastructure Investment and Jobs Act includes over $40 billion for the construction of rural communications networks in unserved and underserved areas across the country. This represents an unprecedented level of support. In addition, substantially all states are commencing programs that will provide funding for telecommunications networks even prior to the initiation of funding under the Infrastructure Act. We are providing program management, planning, engineering and design, aerial, underground and wireless construction and fulfillment services for gigabit deployments. These services are being provided across the country in numerous geographic areas to multiple customers. These deployments include networks consisting entirely of wired network elements and converged wireless/wireline multiuse networks. Fiber network deployment opportunities are increasing in rural America as new industry participants respond to emerging societal initiatives. We continue to provide integrated planning, engineering and design, procurement and construction and maintenance services to several industry participants. Macroeconomic conditions, including those impacting the cost of capital may influence the execution of some industry plans. In addition, the market for labor remains tight in many regions around the country, automotive and equipment supply chains remain challenged, particularly for the large truck chassis required for specialty equipment. Prices for capital equipment continue to increase. It remains to be seen how long these conditions may persist. Looking ahead, these factors will increase the likelihood that demand could fluctuate amongst customers. These fluctuations may result in a wider range of potential outcomes moving into next year. Within this context, we remain confident that our scale and financial strength position us well to deliver valuable service to our customers. Moving to Slide 6. During the quarter, organic revenue increased 22.1%. Our top 5 customers combined produced 66.5% of revenue, increasing 27.4% organically. Demand increased from 4 of our top 5 customers. All other customers increased 13.3% organically. AT&T was our largest customer at 24.8% of total revenue or $258.2 million. AT&T grew 29.4% organically. This was our seventh consecutive quarter of organic growth with AT&T. Lumen was our second largest customer at 13.7% of revenue or $142.9 million. Lumen grew organically 64.5%, excluding from both periods, operations sold to Brightspeed. This was our third consecutive quarter of organic growth with Lumen. Revenue from Comcast was $108.8 million or 10.4% of revenue. Comcast was Dycom's third largest customer. Verizon was our fourth largest customer at $94.9 million or 9.1% of revenue. Verizon grew 1.7% organically. And finally, revenue from Frontier was $88.9 million or 8.5% of revenue. Frontier grew 115.4% organically. This is the second consecutive quarter where our top 5 customers grew organically in excess of 25% and the 15th consecutive quarter where all of our other customers in aggregate, excluding the top 5 customers, have grown organically. Of note, fiber construction revenue from electric utilities was $82.4 million in the quarter and increased organically 53.6% year-over-year. We have extended our geographic reach and expanded our program management and network planning services. In fact, over the last several years, we believe we have meaningfully increased the long-term value of our maintenance and operations business, a trend which we believe will parallel our deployment of gigabit wireline direct and wireless/wireline converged networks as those deployments dramatically increase the amount of outside plant network that must be extended and maintained. Now going to Slide 7. Backlog at the end of the third quarter was $6.116 billion versus $6.028 billion at the end of the July 2022 quarter, an increase of $88 million. Of this backlog, approximately $3.276 billion is expected to be completed in the next 12 months. Backlog activity during the third quarter reflects solid performance as we booked new work and renewed existing work. We continue to anticipate substantial future opportunities across a broad array of our customers. During the quarter, we received from Lumen construction and maintenance agreements in Washington, Oregon, Nevada, Utah, Wyoming, Colorado, South Dakota, Nebraska, Minnesota, Iowa and Florida. For AT&T, a utility line locating agreement in Florida. From Charter, construction and maintenance agreements in Texas, Michigan, Ohio, New York and Florida. For Windstream a construction agreement in Georgia. And various rural fiber construction agreements in Oregon, Wisconsin and Missouri. Headcount was 15,167. Now, I will turn the call over to Drew for his financial review and outlook.

Thanks, Steve and good morning, everyone. Going to Slide 8. Contract revenues were $1.042 billion and organic revenue increased 22.1%. Adjusted EBITDA was $114.6 million or 11% of revenue compared to $83.1 million or 9.7% of revenue. This reflects an improvement of 126 basis points compared to Q3 '22. Gross margin was 18.4% of revenue and increased 103 basis points. Improved operating performance of 123 basis points of gross margin was partially offset by 20 basis points of higher fuel costs. G&A expense of 7.6% decreased from 7.8% of revenue in Q3 '22 from improved operating leverage at the higher level of revenue and tight management of costs. Net income was $1.80 per share compared to $0.94 per share in Q3 last year. The results for Q3 '23 included tax benefits of $3.2 million or $0.11 per share compared to tax benefits of $3 million or $0.10 per share in Q3 '22, for the vesting and exercise of share-based awards and credits related to tax filings for prior years. The increase in earnings reflects higher adjusted EBITDA, lower depreciation and amortization and higher gains on asset sales, partially offset by higher stock-based compensation and interest expense. Going to Slide 9. Our financial position and balance sheet remains strong. We ended Q3 with $500 million of senior notes, $336.875 million of term loan and no revolver borrowings. Cash and equivalents were $65.3 million and liquidity was ample at $444.3 million. Our capital allocation prioritizes organic growth, followed by opportunistic share repurchases and M&A within the context of our historical range of net leverage. Going to Slide 10. Cash flow used for operating activities was $4.5 million in Q3 to fund the sequential growth in operations. Capital expenditures were $49.2 million, net of disposal proceeds and gross CapEx was $54.8 million. The automotive and equipment supply chains remain challenged and we now expect fiscal 2023 full year capital expenditures net of disposals to range from $165 million to $175 million. This is a decrease compared to the low end of $180 million from our outlook previously provided. The combined DSOs of accounts receivable and net contract assets was 112 days, an increase of 5 days sequentially as we grew with several large customers during the quarter. Going to Slide 11. Each year, our January quarterly results are impacted by seasonality, including inclement weather, fewer available workdays due to the holidays, reduced daylight work hours as well as the restart of calendar payroll taxes. These and other factors may have a pronounced impact on our actual results for the January quarter. As we look ahead to the quarter ending January 28, 2023, we expect contract revenues to increase mid- to high-single digit as a percentage of contract revenues as compared to the quarter ended January 29, 2022. And we expect non-GAAP adjusted EBITDA percentage of contract revenues to increase modestly compared to Q4 of last year. We also expect $11.8 million of net interest expense, reflecting higher market interest rates, a 27% effective income tax rate and 30.1 million diluted shares. Now, I will turn the call back to Steve.

Thanks, Drew. Moving to Slide 12. This quarter, we experienced solid activity and capitalized on our significant strengths. First and foremost, we maintained significant customer presence throughout our markets. We are encouraged by the breadth in our business. Our extensive market presence has allowed us to be at the forefront of the evolving industry opportunities. Telephone companies are deploying fiber to the home to enable gigabit high-speed connections. Increasingly rural electric utilities are doing the same. Dramatically increased speeds to consumers are being provisioned and consumer data usage is growing, particularly upstream. Wireless construction activity in support of newly available spectrum bands is increasing this year. Federal and state support for rural deployments of communications networks has dramatically increased -- increasing in scale and duration. Cable operators are deploying fiber to small and medium businesses and enterprises. A portion of those deployments are in anticipation of the customer sales process. Deployments to expand capacity as well as new build opportunities are underway. Customers are consolidating supply chains, creating opportunities for market share growth and increasing the long-term value of our maintenance and operations business. As our nation and industry navigate increased economic uncertainty, we remain encouraged that a growing number of our customers are committed to multiyear capital spending initiatives. We are confident in our strategies the prospects for our company, the capabilities of our dedicated employees and the experience of our management team. Now operator, we will open the call for questions.

[Operator Instructions] Our first question comes from the line of Sean Eastman with KeyBanc.

So I just wanted to start on the revenue guidance for the fourth quarter. I think last quarter, you guys had highlighted normal seasonal moderation going into the fourth quarter. Obviously, now the third quarter revenue came in higher and it seems like a bit of a more pronounced seasonal moderation into 4Q. So was there some pull forward there? Maybe just what's happening under the hood? And what should we take away from this step down from the low 20% growth to sort of the mid- to high-single-digit growth in the guidance for the fourth quarter as we think about the growth prospects into next year?

Yes. So Sean -- and I think we commented on this on the last call that when you have a really strong year and we've had a really strong first three quarters, it's not unusual for the fourth quarter to be somewhat weaker. With respect to growth rate and we talked about this last time, we have a quarter that's disproportionately impacted by weather, by holidays, by daylight hours. And so I think that that is certainly a factor. I think the other thing that we highlighted in the comments and the slide is as we're looking ahead, we're taking a prudent view towards the kind of the macroeconomic effects of an increased cost of capital. And that's just something at this point. We're not giving guidance for next year but we’re just thinking about kind of what the consequences of that are on the overall economy.

Okay. And then just drilling in on that comment specifically around cost of capital and the potential for a wider range of outcomes moving into next year. I mean, is that comment sort of in advance of some potential squishiness just given the development since we heard from you last quarter? Or are you starting to see evidence that some work is going on the shelves around the kind of macro uncertainty?

With respect to kind of that macro uncertainty, Sean, I mean, we look in our short-cycle businesses, we continue to have signals that the economy is growing. It's a little slow but it’s continuing to grow. I think we were encouraged. We've had a number of customers in the last month, two that have reiterated long-term plans around large fiber deployments. But that being said, with the increase in the cost of capital, if you look at where interest rates are, we think it's just prudent to remember a couple of -- three things. So when we've been through periods of higher cost of capital, that does pressure short-term investment cases. On the other hand, what we hear from our customers is that what we're -- many of the programs that were on -- are strategic. The more strategic, the better. The more strategic, the more durable. And so you balance that against as things -- as interest rates have gone up, that if they go up further, cost of capital goes up further. Or there's a pronounced impact on the consumer that there could be an impact on the business. So just trying to take a prudent outlook as we look ahead.

Our next question comes from the line of Alex Rygiel with B. Riley.

Couple of quick questions here. First, your comment about anticipating substantial future opportunities. Does this suggest you expect your backlog to increase substantially in the near term?

Alex, as we've talked about before with backlog, it's calculated looking backwards. We've had strong growth. So that's not necessarily reflected in the backlog. I think we were encouraged with the awards that we had this quarter. I mean we had some -- a broad set of renewals as well as a little bit of new work with Lumen, nice new locating agreement with AT&T as well as other renewals with other customers. So we feel good about the opportunity set in the business again, hard to not be encouraged when you have a customer last week outline their fiber plans in 30 markets across the country.

And then you lowered our CapEx budget this year. Is this due to difficult supply chain or a softer demand outlook?

No. We have $80 million of equipment on order and we're looking at an order on one particular type of equipment that would be the largest, I think, probably in the company's history. So we have lots of appetite for equipment, just a little bit slow to arrive. But we'll be happy when it gets here.

Our next question comes from the line of Adam Thalhimer with Thompson Davis.

Nice quarter. Steve, in terms of the wider range of outcomes next year, are you trying to say that you see a scenario where revenue is down? Or it's just hard to tell how much it could be up?

Adam, we're not giving guidance again. I guess what I would say is if you think about when we had this call a year ago, the Fed was still buying mortgage and government securities and hadn't raised the rate. The rate was effective -- the Fed funds rate was effectively zero. And so if you think about the cumulative effect of all those increases since then and one probably coming up. I'm not a Fed watcher but probably another one coming soon. We just want to make sure that people say -- understand that there's a little more uncertainty as we go ahead. We've got lots of opportunity but we’ve also been around enough to know that when the cost of capital goes up, it can have an effect on economic activity which may affect our customers. I mean we're encouraged; we work for big customers. They have long-term programs. We -- we're working on a program now that's coming on 2 decades of continuous employment on that fiber program and they're -- actually that customer is accelerating right now but we just want to make sure we have a prudent expectation for next year.

And then related to that customer you just mentioned, are you -- or the large -- the large program from them that was outside of their traditional footprint, was there still a negative impact from that in your third quarter?

Yes. There was still an impact. It will be less in this quarter and we think it will be immaterial next year. The year-over-year growth was really driven by increased activity around fiber deployments in their footprint as well as the addition of another state that we started during the quarter. So happy with the progress there.

Okay, great. And then, the last one for me. Can you comment at all on Brightspeed, I didn't see any awards from them in Q3? There were some in Q2. And I'm just curious if that over time could become a top 10 customer.

Well and one way to think about it, Adam, is we had just, call it, $8 million of revenue in the quarter because the deal closed at the beginning of October. So there was only a month of activity for modelling purposes. If you look backwards, about 20% to 25% of our historic Lumen revenue is associated with what's gone to Brightspeed. So I think if you can do the math, I think it will definitely be a top 10. We'll hope they get even bigger. We're ramping up activities with them right now.

Our next question comes from the line of Eric Luebchow with Wells Fargo.

Great. So Steve, your margins have been moving up nicely this year. I know the strong revenue growth and operating leverage has certainly been a big driver of that. But just wondering if you feel like you're getting better economics or turns on newer contracts you're signing or renewed based on a fairly tight labor market in still a very high level of demand. Or has there been any pushback from customers on kind of new contract pricing reflecting the new economic reality?

Yes. I don't know that we have much to add from what we said last quarter, Eric. I mean we're encouraged with the dialogue that we're having with customers and really don't have a whole lot to add on that topic.

Okay, fair enough. And just curious, any update you're seeing from the cable companies? I know that they've been embarking on these mid split upgrades and one of the largest hoping to launch DOCSIS 4.0 as soon as next year. Just wondering if you kind of see a path to returning to growth with cable, particularly with your largest cable company that's been a little bit softer over the last couple of years.

Yes. We actually did have growth in the quarter with Charter. So that was encouraging year-over-year. And I think what we generally said for all the cable operators is they're aggressive competitors. They've got big plans for their network. They're primarily addressing increased capacity through technical upgrades. We're happy to participate in those. But they've also said they'll do that within their normal capital intensity range. So some good opportunities there and working hard.

Great. And I'll just squeeze one more in, Steve. Just on the cost of capital discussion. Just wondering if you think maybe private capital could provide -- help provide a boost to some of the fiber builders. We've heard about 2 large carriers potentially assessing JVs. And it seems like that could become another avenue for them to source capital, maybe at more attractive terms in the public market. So just wondering if we can get your thoughts on that.

Yes. I think we're encouraged anytime we read press reports that our industry or our customers are attracting interest from outside capital. I think fiber has clearly become an asset class that infrastructure funds want to invest in. And so we're following the reports just like everybody else. And we think they're encouraging. I think the other source of capital coming in next calendar year, of course, is the federal capital but we're already seeing from the BEADs plan but we’re also seeing states invest in broadband. We saw good activity with our rural fiber deployments for the electric -- the rural electric utility. That was up 53%, almost 8% of revenue. So there's lots of sources of capital but interest rates are higher and you have to consider that as you look ahead.

And our next question comes from the line of Brent Thielman with D.A. Davidson.

Steve, you're still experiencing substantial growth despite the issues of labor, sort of availability or access to specialty equipment. I'm just curious how you're sort of finding ways to navigate around some of these issues and are these sort of less efficient temporary measures that might be weighing on otherwise great margins that you put up today?

Well, Brent, I mean, look, it has -- our folks in the field have worked really hard. If you think about this quarter, it was up $188 million year-over-year. I think through 3 quarters, organic revenue growth was in excess of $500 million. So they're working really hard. There are cost to growth. And certainly, those are things that we're working with. I think the good news is, with the breadth of our footprint and the experience of our field management that -- these are organizations that have been through growth before and we can always do better. We're always learning. And as I always say, Brent, half the business is worse than average, so there's always something to work on.

Okay. I appreciate that. And then, Steve, I mean, it looks like still good operating leverage here. Maybe if you could just speak to some of the upward pressures you're seeing on G&A, just beyond the need to support the growth? And can we still kind of think of a high-single-digit percentage is the right long-term range?

Sure. Look, I think, again, we've had a number of initiatives that we have been working at for years because with G&A, you're never done, right? There's always something else to work on. And we don't see real pressures in G&A. I mean we've actually streamlined the organization in a lot of ways because of the pandemic and the way we think about back office functions. And -- so there are certainly pressures there but all of the things that we have been -- all the projects we are working on to take those costs out, we're encouraged by their progress.

Okay. And then Steve, I guess, if you do see sort of a reversion to mid- to high-single digits this quarter, I know any number of things could play out but would you expect to see more benefits to cash flow?

Yes, absolutely. And Drew, why don't you talk that through.

Yes, Brent, clearly, we've grown sequentially in the quarter and then for the full year as well so far. We're going to use some working capital as we have grown the revenue. We're working at it every day and working hard on collecting the working capital in the fourth quarter.

Yes. And I think Brent, as you know, you've followed the company for a long time, fourth quarter tends to be a seasonally strong quarter for operating cash flow. And based on seasonality and we're working hard to make that happen this year, too.

Our next question comes from the line of Noelle Dilts with Stifel.

First, I just had a housekeeping question. I was wondering if you had wireless as a percentage of revenues.

Yes, we're just less than 6%, Noelle, it grew over 30%. So it was a nice quarter for wireless.

Perfect. Then AT&T on its call and in its release, look like home passings declined pretty substantially in the third quarter and they talked about their CapEx being weighted towards the first half of the year. You're not -- doesn't seem like you're seeing any of that in your revenue with AT&T. So I was curious if you could expand upon how we should think about the type of work that you're doing for AT&T? Is that -- should we be focused on home passings? Or are there other buckets of CapEx that have become important? And to what extent a potential maybe moderation in AT&T spending is embedded in your fourth quarter guidance?

Yes. So we do provide a wide range of services. AT&T, Noelle, as I mentioned or as we had in our comments, we are starting a large locating agreement with them. We're going to hire 200, 300 people for that contract in the fourth quarter. So we see that as a growth area. We have the wireless. And then, of course, we have the maintenance MSAs as well as the fiber programs. And I guess what I would say is last week at an investor conference, AT&T reiterated a long-term plan through 2025, talked about the components of those fiber passings. And certainly, that is a significant factor in our business. But it's not the only thing we do for them and we still see some good opportunities there.

Okay. And then, just on -- you mentioned the federal capital coming into the market. It looks like they're moving through the mapping process. Any thoughts on how you're thinking about the timing of the federal capital flowing in? Is that kind of a late calendar 2023, 2024 event? Any thoughts there would be appreciated.

Yes. So the map was, I think, published November 18 or sometime last week. And that starts a challenge process to refine the addresses that are truly unserved or underserved. That concludes in January. And then the NTIA announced that they'd like to have final decisions made by the end of June. I thought it was interesting, Noelle in the approach that they're taking around the challenges that you can both challenge on actual capability to an address or also what's advertised to that address. And so we may find out that there are more underserved addresses than people think. So I think it's encouraging but I don't want to diminish the impact that we've seen in the rural fiber with RDOF with state funds and actually CARES Act and ARPA, there's just a number of programs that are already underway in providing public capital.

And our next question comes from the line of Avi Draswood [ph] with UBS.

It's Avi Draswood [ph] on for Steve Fisher. So it looks like headcount is continuing to grow at about 2% year-over-year. Just wondering you could have hired more people; would you have done so? Or how much of a restraint on growth has labor been?

Yes. I think what we'd say, Avi, is that it's still a tight labor market. We're sub-4% unemployment. It's a little bit easier to hire than 6 months ago. But that just means a little bit. There's still -- it's still something that we're working hard at. We continue to improve on our ability to recruit and onboard. And so I do think that it's a little bit better. It's always -- we always get the work done that we get done. Had we got more people, we probably would have gotten more work done but it’s always hard to quantify that exactly.

Makes sense. And I guess also, so you booked a few 3-year contracts. Are you getting more comfortable booking muti-year deals? And how are you managing the cost risk in these contracts compared to, say, earlier in the year or a year ago?

Well, I think clearly, we as well as everybody else in our industry is aware of the effects of inflation. So we have to be thinking about when we make those commitments, what the cost curve is going to be not only now but next year and the years after. I think we continue to be comfortable in doing that as long as we make sure that we get it right because we don't want to make commitments that we can't keep. And that's always our first objective, particularly in a time of uncertainty and where you still have pretty significant inflation. I mean, cost inflation, particularly on the capital equipment side, labor, I mean it's still there.

Our next question comes from the line of Alan Mitrani with Sylvan Lake Asset Management.

The story here has been a recovery from really what was the worst margins in your history last year and you're comping against probably the worst quarter, this coming quarter. And you haven't made it back anywhere close to where margins were years ago, even just 5, 6, 7 years ago, we know there's the Verizon impact on the industry, has hurt you as well which should be finished, as you said, basically by the end of the year. But can you talk about the prospect of margin expansion regardless of where revenues are?

Well, clearly, Alan, we have talked about the impact of this large customer program. And so getting that out of the way certainly is helpful. I think the other thing, as we've always said, is to continue to get a broad distribution of growth, the public capital coming into the market this year or the next calendar year, certainly is helpful. I think it's also helpful when we see customers that have large, announced growth plans where we're in -- where we've already got existing facilities so that we can get operating leverage initially rather than having to go through the start-up phase from a facilities perspective. So I think as we said earlier, there's always work to do. But we are encouraged that some of the headwinds that we've had to deal with are dissipating, offset in part by what's going on in the overall economy with respect to inflation.

Right. But you start comping a lot easier comps on gas prices this coming year. So that should be...

[Indiscernible] here in the October quarter, it was about a 20 basis point headwind. So that gets better but labor costs more, equipment costs more. So there's certainly -- there are certainly other cost elements where we're still working hard to manage their effect.

Are you finding that industry capacity is constrained in general, given you're one of the larger players and it's costing you more. It's clearly costing some of the smaller players with a lot more without access to capital. And I'm assuming that the customers understand that as well and you're getting some pricing to offset that? It's still going to have a [indiscernible] in 12 to 18 months?

I mean, we're not going to talk any specifics about customers other than to say is we are encouraged with the continued dialogue that we're having, that we make sure that we identify those opportunities where we can perform best for the customer. And if we perform well for them, then we'll have opportunities to have good returns for investors.

And I'm showing no further questions at this time. And I'd like to turn the conference back over to Steven Nielsen for any further remarks.

Well, we thank everybody for your time and attendance. Wish you a good holiday and we'll talk to you at the end of February. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.