FuelCell Energy, Inc. (FCEL) Q1 2016 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to the FuelCell Energy First Quarter 2016 Conference Call. At this time, all participants are in a listen-only mode. Later, there will be a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, today's call is being recorded. I would now like to turn the conference over to Kurt Goddard, Vice President of Investor Relations. Sir, you begin.

Good morning, and welcome to the first quarter 2016 earnings call for FuelCell Energy. Yesterday evening, FuelCell Energy released financial results for the first quarter of 2016. The earnings release, as well as a presentation that will be referenced during this earnings call, is available on the Investor Relations section of the company website at www.fuelcellenergy.com. A replay of this call will be available two hours after its conclusion on the company website. Before proceeding with the call, I would like to remind everyone that this call is being recorded and that the discussion today will contain forward-looking statements, including the company's plans and expectations for the continuing development and commercialization of our FuelCell technology. I would like to direct listeners to read the company's cautionary statement on forward-looking information and other risk factors in our filings with the U.S. Securities and Exchange Commission. Delivering remarks today will be Chip Bottone, President and Chief Executive Officer and Mike Bishop, Senior Vice President and Chief Financial Officer. Now I'd like to turn the call over to Chip Bottone. Chip?

Thank you, Kurt. Good morning, everyone, and welcome. Please turn to Slide 4, Q1 2016 highlights. Our first quarter of 2016 included new contracts which increased our backlog, further execution on carbon capture and renewable hydrogen infrastructure plans, utilization of our PNC project financing facility, and the growing recognition of our solutions as a preferred resource. As announced in January, we are installing a 5.6 megawatt system for Pfizer, a leading global biopharmaceutical company. Configured as a micro-grid the system will enhance energy reliability and security at Pfizer's 160-acre R&D facility in Groton, Connecticut. The unique attributes and appeal of our solutions offer utility and on-site customers a compelling value proposition which is why they're referred to as preferred resources. We affordably generate clean power where it is needed without costly transmission infrastructure. Our plans are easy to permit and can be sited on small parcels, important in urban areas with scarce and expensive land. The ideal operating characteristics ability to generate renewable energy credits and financial returns are attractive. Our grid support solutions enable urban redevelopment by converting unused brownfields and are taxpaying projects that also enhance power resiliency delivered in an environmentally friendly manner demonstrated in the bottom left. A number of our customers use both fuel cells and solar. Continuous and reliable power for the fuel cells complements intermittent sources like solar and wind contributing to energy availability. Our solutions compact footprint relative to solar facilitates siting in urban areas and our continuous operation generate substantially more megawatt hours of electricity over time than a similar sized solar array. These attributes enhance project economics in land scarce regions and contribute to meeting renewable portfolio standards. To illustrate, at the bottom middle, United Illuminating, now known as Avangrid after the merger with Iberdrola USA one of our repeat utility customers incorporated one of our power plants into a renewable energy park at a former urban landfill site where it complements a solar array. Our power plant uses only about a quarter of the acreage of land to generate 2.8 megawatts of power versus solar arrays' eight acres to generate substantially fewer megawatt hours of power annually. As announced in November, Avangrid repurchased a multi-megawatt power plant for a micro-grid application for the town of Woodbridge in Connecticut. We are modeling, designing and building the micro-grid. This capability is a differentiator in the industry. I will update you on our activity, outlook and markets in greater detail after Mike Bishop, our Chief Financial Officer reviews our financial results for the quarter. Mike?

Thank you, Chip. Good morning and thank you for joining our call today. Please turn to Slide 5 titled Financial Summary. FuelCell Energy reported total revenues for the first quarter of 2016 of $33.5 million compared to $41.7 million for the prior year period. Revenue is consistent with the average quarterly guidance provided during the December 2015 earnings call. Compared to the prior year, activity in this first quarter of 2016 was weighted towards kit sales to Asia. Also as previously disclosed, we chose to retain the University of California Irvine Medical Center project and fully monetized the value of the power plant totaling $8.8 million through a sale-leaseback transaction which does not qualify for revenue recognition treatment under U.S. GAAP. The company began recognizing electricity revenue for this project in January. For the first quarter of 2016 a gross loss of $200,000 was incurred compared to a gross profit of $4 million in the same period last year. Higher service expense recognized in the quarter and lower advanced technology activity in this period negatively impacted margins. Total operating expenses were $11.4 million for the first quarter of 2016 compared to $9.1 million for the prior year period reflecting increased R&D expense related to the high-efficiency fuel-cell which will enhance our product offerings to utilities and data centers as well as certification efforts related to megawatt class product entering the European market. Net loss to common shareholders for the first quarter of 2016 was $12.5 million or $0.48 per basic and diluted share. This compares to $4.9 million or $0.20 per basic and diluted share in the first quarter of 2015. The company's cash, restricted cash and financing availability totaled $174 million at January 31, 2016 a sequential increase of $52 million reflecting the addition of the PNC Energy Capital project financing facility, receipt of $10 million of funding from the State of Connecticut for the manufacturing expansion discussed last quarter and working capital management. Backlog increased sequentially for the third consecutive quarter totaling approximately $404 million. Service backlog totaled $303 million, product backlog totaled $66 million or 34 megawatts and Advanced Technology contracts backlog totaled $35 million. These numbers do not include the Beacon Falls project which could add over $500 million to backlog between product and service. Turning to the inventory and project assets graph in the middle of the slide, inventory decreased $5.5 million in the quarter from product sales. Long-term project assets increased as we had two previously announced projects under construction that we anticipate financing through PNC later this year. Please refer to the chart at the bottom of the slide as I would like to make a couple of points on contribution margins. The first point is that the contribution margin from 35 megawatts of kit sales to Asia is equivalent to the royalty that would be received on the sale of 35 megawatts of complete power plants that POSCO Energy manufactures for the Asian market. Next point is that complete power plant project sales by FCE has the highest margin as we provide turnkey projects for our customers versus just selling components. The contribution margin of 35 megawatts of complete power plants built in the U.S. is approximate 10 times that of equivalent kit sales. Also helping our cost model is the shared global supply chain with POSCO Energy meaning that both partners benefit as greater purchasing volumes reduces the per unit cost of raw materials. So to summarize, as manufacturing transitions from kits to royalties in Asia and turnkey projects in the U.S. and Europe, our margin profile improves significantly from where we are today. Please turn to Slide 6 titled financing structures. I want to continue to outline the importance in the revenue recognition and margin differences of three financing structures for our power generation solutions. Providing different financing and ownership options is important to attract a wide range of prospective customers and also benefits FuelCell Energy. The project sale column on the left is a model we have used extensively in the past recognizing revenue under the percentage of completion method. Examples include the fuel-cell project sold to United Illuminating and E.ON. The middle column, titled sale to project investor reflects projects developed and constructed by FuelCell Energy that are then sold to a project investor at or near the commercial operation date or COD. Using Pfizer project as an example, we are currently building this on balance sheet and once operational we may sell it to an investor likely generating all of the project revenue in the quarter of the sale. Under these two examples, FCE also recognizes revenue under the service agreement for periods of up to 20 years. The column on the right titled FCE Retains PPA are projects that we developed and retain on balance sheet after COD such as the UCI Medical Center project. A typical 1.4 megawatt project expected to generate about $1 million a year in electricity revenue. This structure maximizes recurring revenue and margins over the life of the project. A sale-leaseback can generate more cash for the company and COD by efficiently monetizing tax benefits. We forecast full utilization of the $30 million PNC facility during 2016 resulting in additional electricity sales to be recognized over time. The projects finance outlook remains favorable and the growing pipeline and size of our projects are attracting a lot of interest from project investors that value the consistency of our project cash flows and return profile. In closing, the first quarter of 2016 financial results reflect the continued transitioning of the business as we selectively retain projects on the balance sheet to add future predictability to revenues and generate the greatest amount of cash. We are well-positioned to execute on near-term opportunities and expect higher revenues and margins in the second half of fiscal 2016 based on timing of existing backlog and projected pipeline closure. I will now turn the call back to Chip. Chip?

Thank you, Mike. Please turn to Slide 7, Execution Progress. We have made significant progress across all segments of our global markets leveraging our common technology platform, development and financing models. Our growing sales pipeline stands at over $2 billion primarily from a broad range of utility scale on on-site preferred resource projects. We are developing larger on-site projects. The Pfizer project for example, is our second largest individual project to date in North America. This was developed and executed outside of any utility or state-sponsored RFP process showing the competitiveness and replicability of our offering. Our commercial fuel-cell power plant can be used for carbon capture applications as concentrating carbon dioxide is a side reaction of the plant's normal power generation process. We effectively offer emission reduction solutions while supplying electrical and thermal energy simultaneously. Our offering covers three distinct carbon capture markets. These include coal and gas powered power plants and applications for Oil Sands where we can reduce emissions and supply power and steam to the oil recovery process. In the coal-fired market, we are in discussions with owners of potential power plant sites for large carbon capture projects. This project is in conjunction with the U.S. Department of Energy and potentially other partners. Expect a decision on the siting of this project soon. This is an important opportunity that we expect will lead to additional carbon capture projects in North America and Europe. We recently announced a project that is targeting oil processing at a Canadian Oil Sands reportedly reducing in carbon emissions produced during the Oil Sands operations with our fuel-cell power plants is a very potential market for us. Our solution is also applicable to steel and cement industries. In Europe there is a strong interest in affordably capturing carbon while maintaining industry competitiveness and we are beginning to pursue some potential opportunities. Our tri-generation distributed hydrogen system is a key potential solution for the infrastructure needed to facilitate widespread adoption of fuel-cell electric vehicles. It is superior to conventional alternatives as affordability generates 100% renewable hydrogen with the project structure that attracts private capital offsetting the need for public funding. We are pursuing a well defined pathway for development, establishing attractive regulatory framework, discussions with potential partners and our hydrogen facility of takers. Simultaneously, we will secure power purchase agreements or PPAs with the site owners or municipalities. During the first quarter, our solution received contingent certification under the Low Carbon Fuel Standard Administration by the California Air Resources Board and classified our 100% renewable hydrogen solution as carbon negative. This is unique in the hydrogen generation market. CARB's classification takes into consideration the fact that the biogas fuel for our solutions is renewable. CARB then compares fuel-cell electric vehicles are renewable hydrogen to gasoline powered cars, ultimately certifying our solution as carbon negative due to the emissions from gasoline powered vehicles. This is superior to solar-based electrolyzers and far superior to traditional steam reforming, which were the other methods of generating hydrogen today. Please turn to Slide 8, On-site Project Update. Recent results validate our focus on larger projects that help to illustrate why our solutions are preferred resource. They also point to ways in which we have strengthened our value proposition by offering financing options. As shown on this slide, we progressed from installing sub megawatt projects 10 years ago to multi-megawatt projects today. We are currently targeting behind the meter multi-megawatt projects up to 11 megawatts. Project activity in this segment of the business continues to increase from both new and existing customers. We have recently strengthened our commercial team with the addition of several people with relevant industry and business model experience. Energy independence and security are highly valued. The fuel-cell in Pfizer's micro-grid for example will operate in parallel with the grid. In the event of a grid disturbance will continue to generate power for Pfizer's R&D facility by switching to an island mode that is grid independent. This has value for users that lose productivity when the power supply is disrupted. Our power plants can serve as the sole power source from micro-grid is the town of Woodbridge micro-grid project or they can be combined with other technologies. We have the capability to model, build and operate the micro-grid which is an important differentiator for us. We are actively marketing our micro-grid capabilities and are witnessing increasing interest as evidenced by the RFP activity in our markets. Customers like Pfizer also value CHP attributes of our fuel-cell solutions, by generating electricity and heat using the same unit of fuel CHP configured solutions enhance economics and contribute to sustainability. We are currently constructing more than 16 megawatts of projects in multiple geographic markets. These projects increase the current service revenues. Our power plants are capable of operating in a variety of fuels that include both renewable biogas and directed biogas. Renewable biogas must be cleaned prior to the use as fuel source and our team has developed proprietary gas cleaner process and equipment. This equipment will be incorporated into our power plants we are installing the regional water treatment plant operated by the City of Riverside, California. This ensures the customers quality of one point of contact and demonstrates how our R&D investment is enhancing our value proposition while generating new revenue and margin opportunities. Expanding the availability of financing options allows us to meet the budget and capital needs of our customers while providing FuelCell Energy with the flexibility to selectively retain projects to maximize revenues, margin and cash generation over the term of the project. Financing options avoid capital investment power generation assets making our project more attractive to some customers. Please turn to Slide nine, Utility-scale Project Update. Large fuel-cell parks in South Korea and Connecticut validate the use of our solutions for utility customers who wanted to generate affordable, clean and reliable power in large-scale applications. We see strong interest by utility companies in our portfolio of resource solutions and value proposition. I would like to provide an update on the Beacon Falls project as it is in the public domain and a good example to illustrate the multiple steps in development while I can take some time to close. O&G Industries is the project owner and Beacon Falls Energy Park is the project developer. FuelCell Energy is a designated supplier of all the power plants for the project. This will be a direct sale of equipment and services meaning we will recognize revenue as the power plants are shipped and installed and we will also recognize service revenue over the life of the project. The potential value of this project to FuelCell Energy is more than $500 million including both equipment and services. We expect the project will be executed in multiple phases beginning in 2016. We have already passed a number of significant milestones. We began by associating with partners who have gas plant development experience and own the land. The team gained local government support while undertaking interconnect studies leading to siting Council approval from the state. A property tax stabilization agreement was executed. Contracts have been exchanged between the parties and the project business submitted into the tri-state RFP in January. The tax stabilization agreement is a reflection of why these projects are highly attractive to the local municipalities. The improved property value per square foot generally exceeds by a substantial sum any other productive use of brownfield and other projects are constructed relatively quickly boosting the local tax revenue from what was an empty lot. The tax stabilization agreement recognizes the high per square foot value and adjusted tax payment due over the life of the project to fairly represent the value and support project economics. Unintrusive, clean and quiet, these power generation sources can also enhance local power resiliency in the event of storm outages. The next step for Beacon Falls project is to identify the power up taker which is the purpose of bidding into the tri-state RFP, closing on project financing and commencing construction. According to the tri-state RFP structure, selection of bidders is to be announced between April 26 and July 26, 2016. Our pipeline of big projects includes multi-megawatt projects for East and West coast U.S. utilities. Our list of developing projects and active utility RFPs is expanding rapidly and we expect to bid multiple sites of multi-megawatt projects into each RFP. As an example, the Connecticut Department of Energy and Environmental Protection's RFP for Class 1 resource is in the range of 2 to 20 megawatts was released yesterday, March 9. We expect to bid multiple projects and have been developing throughout Connecticut size ranges of up to 20 megawatts. Bids for this RFP are due May 4, with selections dated for June to July 2016. We expect the Long Island Power Authority or LIPA to issue an RFP for 40 megawatts of fuel-cell generation soon. We continue to develop numerous multi-megawatt projects for Long Island and recently bid into an RFP that addresses a low pocket shortfall in a specific region. Municipalities and site owners are eager to talk with us. For example, as we have been reporting in the local press referenced on this slide we are in discussions with the officials in the Town of Bristol in Central Connecticut to develop a fuel-cell park on a vacant brownfield site. We continue to enhance our solutions investing resources into new offerings and enhancements including those for utility markets. Notable enhancements include advancing our $3.7 megawatt configuration for utilities and data centers that may not have heat applications. We can provide 60% electrical efficiency which rivals much larger combined cycle plans. Capacity support as utility scale projects are eligible for capacity payments, KVAR support with utilities valued particularly on the outskirts of the service territory, demand response utilizing multiple plants, primary frequency response, black-start capabilities mean we do not need the grid to be operational to commence power production. These capabilities dramatically increase the competitiveness and financial returns are often globally. Please turn to Slide 10, Summary. Our affordable ultraclean solutions are recognized as preferred resources in our markets. The team is working to increase volume and top line revenue by focusing on larger projects and address adjacent markets via our common technology platform. We are making solid progress on these initiatives. The PNC facility has expanded our access to project capital, giving us greater financial flexibility and support margin expansion. Demand for our solutions is increasing. We achieved our third successful quarterly increase in backlog supported by larger projects like Pfizer and by growth in services. We've grown the scale of our behind the meter applications highlighted by Pfizer's 5.6 megawatt systems, customers are choosing our reliable systems for their micro-grids. We are actively bidding on utility scale RFPs. While large projects take some time to develop, we are intently focused on advancing multiple large projects to closure. Municipalities are expressing interest in fuel-cell parks like Beacon Falls. Production capacity is in place to deliver to the requirements of these numerous projects. Our business model is also aligned to the project contractual and execution requirements. Prospective utility scale opportunities like Beacon Falls and carbon capture are drivers for undertaking the capacity expansion in North America. In terms of the graph on the bottom right, we continue to forecast EBITDA breakeven of 70 megawatts with the appropriate sales mix and net income breakeven at 90 to 100 megawatts annually. The current 100 megawatt capacity of our North American manufacturing facility supports our net income breakeven target. The second phase of our expansion will provide an additional hundred megawatts capacity to support further growth. Operator, we'll be happy to take questions at this time.

Thank you. [Operator Instructions] Our first question is from Carter Driscoll with FBR. You may begin.

Hey guys.

Good morning Carter.

Good morning Carter.

Sorry, multiple calls, so I apologize. Maybe a first question, the carbon capture updates where you've obviously had a nice little additional project, can you give me an update maybe on the DOE, maybe the site perspective, timing there of when you can pull through some of those and then maybe some other engagements that are not so apparent to us? And then I have a couple of follow ups.

Carter, this is Chip. I'll take that one there. Yes the most recent announcement was just kind of an expansion of what we deemed is using that carbon capture technology and also we're looking at opportunities like I said in the Oil Sands beyond coal and gas, but also for individual other markets such as cement and steel making. I just returned from Europe and talking to some people about that there. But the short answer is the coal project is still our number one focused at the moment and what I said there is that it will be soon. I can't go into more detail than that, but we do have a defined project. We're trying to finalize some details and we'll announce that soon. And there'll be others in addition to the projects that we announced couple of weeks ago that we'll follow on from there as well.

So just to read a little more into that, so you do have a site selection for the DOE you just can't share with us currently is that correct?

Yes, we are in negotiations on those matters Carter and there is not much I can say, but that project will move forward is the short answer, yes.

Okay, okay, you talked about expecting LIPA to offer its 40 megawatt RFP award soon obviously that's the re-bid from late last year. Any thoughts as to timing, I know you talked about soon, is that imminent and your potential participation on that, any additional color will be helpful?

Yes, so couple of things. Specifically to that 40 megawatts you are correct. That’s kind of a, that’s a new solicitation on the back of the solicitation from prior year and that’s imminent to come out and it will typically give you a 30, sorry about three months or so to respond to that. So, I would say that right now from what I understand Carter, that’s announcement of not only the project, but the selection of who might be the winners for that would be a 2016 item. And we will propose we have many sites that we have access to land and well propose more than 40 megawatts on that particular project. There are several other active proposals, both submitted and about to be submitted LIPA. There is a lot going on in addition to that 40 megawatts RFP that will be out shortly and we're participating in all of these different RFPs.

And then just lastly, Beacon Falls, obviously it’s a very large project for you and I’m assuming when you talk about 500 megawatts I mean $1200 million [ph] in potential revenue that doesn’t assume, I mean that seems pretty like you are not typically offering any discount to your standard prices for such a large project I find that very positive, but that’s only surprising that there isn’t any discount necessarily off of your kind of your standard list price. Is that the case first of all and then what gives you confidence that when it eventually gets bid out that there won’t be some of that potential aspect from your partners?

Well, so it’s a good question. So, the way we approached this with our partner O&G was that we first had to put together a very, very good project, both in terms of what the pubic thought about it and I've addressed some of those issues here, huge tax revenue, but also we have to be comparative against what else is out there. I will tell you that we went into this being very, very aggressive together and we did a lot of work on this collectively. When I say we, the FuelCell Energy team with the O&G folks and so, we were very aggressive on this Carter. And basically we’ve got this everything set out. So if we're the ones selected, those discussions are finished and it just becomes a question of execution. So we’re very comfortable with a partner such as O&G which I said in my script had, has experience with developing power projects, actually has been a land owner and located in Torrington, Connecticut doesn’t hurt either. So, I won’t - there is no - all that was done upfront, so there should be no backend discussion on those kind of issues.

Understood, I appreciate that. I’ll say [indiscernible] I appreciate it. Have a good day. Thank you.

Thank you.

Thank you. Our next question is from Jeff Osborne with Cowen and Company. Your may begin.

Great, thanks for all the details on the call. I just had a couple follow up questions. Chip, I was wondering if you could just give us the status update on NRG how things are proceeding with that partnership?

Yes, thank you Jeff and good morning. The, I mean first of all the relationship we have with them hasn’t changed in terms of their involvement with us, their facility that Mike if you have any questions you comment on that, that’s nothing has changed. We are working with them Jeff on two things. One as an investor in some of these projects that we talk about which I can’t say anything more than that, but that’s just was before there is still a need for that or the interest in that and secondly, they have assets in some of these places that we are looking at different RFPs and we’re working with them on using those sites or coming up with offers for these different RFPs. So I would say it’s kind of business is usual and were also working with their team frankly in California because they operate assets out there as well Jeff, but the RFPs are slightly different out there than they are in the East.

And Jeff, this is Mike, just a follow on for what Chip said there. On the project finance side, very active relationship with NRG and you'll see that's in our numbers at the end of calendar year as we closed on the PNC financing facility, paid back down the NRG's debt that we had on the UCI project, but then drew down new debt for the projects that were starting to build on balance sheet this year and expect that to continue to grow as we execute on projects like the Pfizer project this year.

Got it, that’s helpful and then just with all of these new growth initiatives that you have and the robust level of RFP activity kind of coming to a culmination here over the next couple of quarters, it sounds like just how should we think about expenses in the near term? And in particular, you mentioned in the prepared remarks about the R&D level being a bit higher given the high efficiency development which is part of the, it is my understanding the Beacon Falls RFP would include that in the later stages, but can you just touch on how we should think about expenses for the calendar year?

Sure Jeff, this is Mike again. As you saw in our results last year, we did ramp up R&D spending. So when you look at sequentially expenses were up about $300,000 from the fourth quarter last year, but up more compared to the first quarter last year. We’re comfortable at the level that we’re at right now. You'll see pluses, minuses during the year, but this run rate for this fiscal year we’re comfortable with and don’t see any significant ramp in expenses from here.

And Jeff…

Okay, go ahead.

Just to add what Mike said is, on the commercial side of things, we’ve been, we’ve obviously had expenses as we developed these projects. I have mentioned we've added people. So those kind of things I will expect that run rate to kind of continue at kind of where we’re at right now. So we have the capacity now to respond to these different projects and develop them as our model would suggest.

Got it. And the last question I had was just on working capital given that there are so many balls in the air right now with decisions coming out over the next, call it easily three to six months. Is there a bias to build inventory ahead of that, how do you think about that playing out and then if assuming you’re awarded Beacon Falls progresses as planned in one or two of the RFPs and New York pan out in the second half of the year, just how do we think about the cash needs of the company relative to the credit lines that you have and partnerships that you’ve established so far?

Sure Jeff, this is Mike. So as we said in the remarks, total cash and borrowing availability including restricted cash fell $174 million, we added the PNC financing facility in the beginning of the year. So we have three projects that will go under that this year, so that is committed financing. As far as inventory, what you’ll see, you'll see a potential little bit of inventory build, but what you will see is project assets increasing during the year as we’re building the Pfizer project in these other smaller 1.4 megawatt projects, those will turn to permanent financing later in the year and as I said in my remarks, we expect the Pfizer project to come through revenue recognition or permanent financing late in the year. So that will be one shank of activity there. So we're comfortable with the cash and borrowing availability that we have today.

Okay. Just want to make sure you’re not building up 10, 15, 20 megawatts of inventory here in the near term hoping that one of these things crosses the finish line over the next three months or so?

No, we haven’t allocated for what we have in backlog and near term pipeline execution.

Got it, perfect. Thanks so much.

Yep, thank you.

Thank you. I’m showing no further questions at this time. I'd like to turn the call back over to Chip Bottone for closing remarks.

Okay, thank you. Thank you everybody for being on the call today. I think what hopefully you took out of the call is that we do have a lot of stuff going on. We have our hands on it very, very carefully. We have the tools in place. Mike talked about financing. Jeff raised some good questions about that. I didn’t mean quarter to be somewhat vague on some of these things, but there is a lot of things for us are close to the goal lines. So we’re going to work them all and we don’t want to get them all, but if we just get a few of them that is going to be very good for us. So there will be more to report on over the next few weeks or months and we look forward to having everybody on the call for the second quarter. Thank you very much and have a great day.

Ladies and gentlemen, this concludes today’s conference. Thank you for your participation and have a wonderful day.