Investcorp Credit Management BDC, Inc. (ICMB) Q4 2018 Earnings Report, Transcript and Summary

Before we get started I'd just like to highlight to people that we recently in the last half hour posted to our website under Investor Relations a schedule that we will walk thorough it at the end of this call that is titled Discussion of U.S. Well Services and Bird Electric as of June 30, to add some clarity around the NII as well as the taxes and gains. And with that I'll turn it back to the operator.

Welcome to the CM Finance Fourth quarter earnings release conference call. Your speakers for today's call are Mike Mauer, Chris Jansen, and Rocco DelGuercio. [Operator Instructions] a question-and-answer session will follow the presentation. I'll now turn the call over to your speakers. Please begin.

Thank you, operator and thank you all for dialing in today. Joining me are Chris Jansen, my Co-Chief Investment Officer; and Rocco DelGuercio, our CFO. Before we begin, Rocco will give our customary disclaimer regarding information and forward-looking statements. Rocco?

Thanks Mike. I would like to remind everyone that today's call is being recorded and that this call is the property of CM Finance Inc. Any unauthorized broadcast of this call in any form is strictly prohibited. Audio replay of the call will be available by visiting our Investor Relations page on our website at www.cmfn-inc.com. I would also like to call your attention to the Safe Harbor disclosure in our press release regarding forward-looking information and remind everyone that today's call may include forward-looking statements and projections. We ask that you refer to our most recent 10-K filing for important factors that may cause actual results to differ materially from these projections. We will not update forward-looking statements unless required by law. To obtain copies of our latest SEC filings, please visit our Investor Relations page on our website. At this time, I would like to turn the call back over to our Chairman and CEO, Michael Mauer.

Thanks, Rocco. Yesterday we reported our financial results for the fiscal fourth quarter and year ended June 30. We had an exceptionally strong quarter with net investment income of $0.62 per share more than doubly covering our dividend. A large portion of this came from the reversal of previously unrealized gains. While market conditions continued to be challenging, we have found attractive opportunities to redeploy our capital, both within the broader syndicated leverage finance markets and in competitive situations within our core middle market focus. Our team has identified lending opportunities in the primary and secondary markets. A ranger and lender competition for deals continues to be a common theme. However, we have begun to see transactions stall and get revised in a lender friendly way. Pricing in particular has moved favorably, although we have also seen tightening of structures and even the inclusion of covenants in deals, which launched as covenant light. As always, we try to be conservative and disciplined focusing on better structures, secured lending, and identifying quality companies and management teams. Since our last conference call in May, our origination has been a mix of directly sourced loans and syndicated transactions, as well as short-dated secondary opportunities where we can observe the borrowers’ performance for a period of several years prior to making an investment. Our new investments in the quarter were all first lien; and since quarter end, we have made several additional first lien investments. Our pipeline continues to contain a mix of directly sourced opportunities and secondary opportunities. We have recently made several secondary investments where our investment team focuses on loan tenure and structure, covenants, repayment provisions, and loan for value analysis. Generally speaking, we have purchased shorter weighted average life assets where we are comfortable holding a position to maturity. We have avoided second lien structures lately, especially in primary transactions as these deals remain long dated and typically covenant light and often have extremely weak lender protections. I'd now like to turn the call over to Chris to discuss our portfolio activity.

Thanks Mike. We made five investments during the quarter to four new portfolio companies, including two to the same new portfolio company. We also had three complete realizations and two significant partial realizations during the quarter. As discussed on last quarter's call, we made an investment in an outstanding club deal, the first lien loan to Hostway Corporation. Hostway provides cloud, managed, and dedicated server hosting services to developers, startups, small and medium -sized businesses, and large enterprises. Our yield at cost is approximately 9.9%. We purchased the first-lien loan and first-lien bonds of Exela Technologies. Exela is a publicly traded, global business process outsourcing firm. Our yield at cost in the aggregate is approximately 9.2%. Deluxe Canada there is a club deal for the Canadian subsidiary of Deluxe Entertainment. Deluxe Canada focuses on visual effects, production and media management, and other post production services for both Canadian and U.S. processed films, produced films and TV. Our yield at cost is approximately 8.5%. We also invested in the new first lien loan of RPX Corporation, which was placed in connection with the acquisition of the company by private equity sponsor HGGC. RPX provides the subscription-based, patent risk management solution to corporate customers. Our yield at cost is approximately 10.4%. We received a significant paydown at par from CareerBuilder of approximately $6.6 million. As of June 30, we maintained the position of approximately $11 million. We also sold all of our Class A and Class B shares of US Well Services during the quarter. These shares were marked at approximately $4.5 million at March 31, and we sold these shares for proceeds of approximately $4.85 million. We continue to hold the term loan and revolver of US Well Services. Our IRR on the entire position is approximately 15.6% inclusive of the loss we booked during the restructuring, the unrealized term loan position, and tax leakage at the Blocker Corp. We also had a partial realization of our position in PR Wireless. We continue to hold a small position in the delayed draw term loan and warrants , but we have sold our entire funded term loan position which was approximately $14.4 million. Our IRR to date on our entire investment inclusive of realized gains and unrealized losses is 10.9%. We fully realized our investment in Dayton Superior. Dayton's performance was significantly below what we expected when we made the investment and we exited the position at a loss. Our fully realized IRR was negative 4.5%. Finally, we also realized our position in Bird Electric. We made the investment in 2014, restructured the company in 2016, and witnessed a significant turnaround of operations in 2017 and 2018 after major hurricanes in the U.S. and Puerto Rico. We had a positive IRR on this investment on a pretax basis and an IRR of negative 1.4% including tax leakage at the Blocker. This quarter end we have been actively investing in the primary and secondary markets with a number of new investments and two realizations. Please bear with me as there is quite a bit to cover. We invested in the first lien loan of Fusion Connect. Fusion is a public company which operates as a telcom and internet services provider. Our yield of cost is approximately 11.4%. We also invested in the first lien loan of QualTek [ph] which backed the acquisition of the company by BrightStar Capital. QualTek is a provider of turnkey solutions including engineering, construction, and program management to the telcom and power sectors. Our yield to cost is approximately 8.8%. We purchased the first lien loan of Arcade Bioplant [ph] in the secondary market. Arcade [ph] is a leading provider of sampling solutions for the personal care and beauty industry. It is a short dated loan maturing in 2021. Our yield to cost is 10.4%. We also purchased a first lien term loan of Fodel [ph] Technologies in August. Fodel [ph] is a global leader in providing businesses with intelligent environmental solutions focused on the recovery, remanufacturing and remarketing of technology assets. Like our investment in Arcade, this is a short dated first lien term loan maturing in 2020. Our yield to cost is approximately 8%. Intermedia was both a realization and a new investment after quarter end. The company which is controlled by Madison Dearborn refinanced its capital structure into a new or first lien structure. Our second lien position was repaid with a realized IRR of 14.2%. We invested in the new first lien with a yield of cost at approximately 8.7%. Our other realization was International Wire. Recall that we had sold a portion of our position last quarter. In light of our concerns about global tariffs and the effect this might have on raw materials pricing and end market demand, we elected to sell the remainder of our position. The fully realized IRR was 9.8%. Our portfolio company account stands at 25 as of June 30, and has increased to 28 today with our new investments since quarter end. Using the GICS standard we adopted last quarter as of June 30, our largest industry concentration was professional services at 14% followed by Hotels, Restaurants, and Leisure at 11.4%, Energy Equipment & Services at 11%, Media at 10.9% and Commercial Services and Supply at 10.8%. I'd now like to turn the call back to Rocco to discuss our financial results.

Thanks Chris. For the quarter our net investment income was $8.5 million net of waivers or $0.62 per share. As of June 30, the fair value of our portfolio was $293.6 million compared to $297.2 million at March 31. Our investment activity accounts for $9 million decrease in our portfolio. We had $2.7 million of unrealized depreciation and $2.2 million of realized losses from investment in the quarter. As of June 30, the weighted average yield of our debt portfolio including amortization was 11.19% versus 11.12% at March 31. Our new investments had an average yield of 9.65% versus an 8.64% average yield on realized debt investments. We also had realization on our preferred investment in Bird Electric and common equity of US Well services which were helped due indirectly to Blocker corporations. Our debt portfolio was comprised of 95.8% floating rate and 4.2% fixed rate investments. Both, one and three-month LIBOR are in excess of the applicable floors on all our loans. Our average portfolio company investment was $11.8 million, our largest portfolio company PGi was $24.9 million, and our second largest portfolio Caelus was $24.2 million. As of June 30, 52.1% of the portfolio was in first lien investments compared to 48.3% the last quarter, 43.3% of the portfolio was in second lien investments, 44.2% in unit tranche loans, 0.2% in unsecured debt and the remaining 0.2% in equity and warrant positions. Additional information regarding the composition of our portfolio is included in our Form 10-K which was filed yesterday. We will 0.68 times levered as of June 30, compared to 0.72 times levered as of March 31. With respect to our liquidity as of June 30, we had $5.6 million in cash, $2.7 million in restricted cash and $32.2 million in capacity under our revolving credit facility with UBS. I'd also like to note that post our June 30, year-end we closed on a public offering of 6% and an 8% notes to 2023. Including the overall allotment we have issued $34.5 million of notes for aggregate proceeds to the company of $33.2 million providing us with substantially additional liquidity. With that, I'd like to turn the call back over to Mike.

Thank you, Rocco. As Chris noted, we made a number of new first lien investments during and after the quarter. Our focus has been on reinvesting capital conservatively including in short dated loans and selectively in new originations. We have also been actively managing our exposure to the energy sector. So far this calendar year, we received a partial repayment from Liberty, sold our A and B shares in US Well, we anticipate repayment in our US Well term loan later this year which was announced as part of Madeline Paterson acquisition quotes proposed merger with the company. From January 1 through June 30 the fair value of our positions in oil and gas, energy equipment and services was reduced by approximately $850,000 including realized and unrealized depreciation of $1.8 million. All of our energy related debt positions are first lien with the exception of KLAS [ph] which is the second lean, but has no borrowings under its first lien revolver. Our march this quarter increased by an aggregate of $1.1 million. Our largest changes in fair value were KLAS [ph] FTC Holdings in Montreal. KLAS continues to benefit from the rising price of oil and it is multiyear track record as an excellent operator. Oil prices have a double benefit, both increasing the value of the company's reserves and generating additional revenue. The loan has become a very short dated assets maturing in April 2020. We increase the mark from 90 to 93 this quarter. FTC Holdings, better known as fleet pride [ph] was an investment in the March quarter. Our mark improved from 97 to part of this quarter. Pre-price as a result results continued to improve. Pre-score is the only noticeably prior to investment in the March quarter. Our mark improved from 97 to part of this quarter. Pre-price results continued to improve with growing revenue and profitability. We have been lenders for several years now and are improved with the growth turnaround that management has management been executing. Finally, our position in Monterey [ph] was marked down in the quarter. This loan was funded, the construction of the Resorts World Casino in Upstate New York. The casino opened ahead of schedule in February this year and completed construction of a few months away. It is still very early, but revenue has been below the company's projections and our expectations. Our belief is that the difficult winter was the major contributor and that the summer season should bring additional traffic to the property. Over the next two years we expect the opening of the golf course entertainment village and water park to drive additional gaming visits. We mark down the position from part of 98. We fully earned out incentive fee in the June quarter, but waived approximately 500,000 all related to US Well. Our distribution for the quarter ended June 30, 2018 was $0.25 per share was paid on July 5. Our Board of directors has declared our next quarterly dividend of $0.25 to be paid on October 5, to holders of record as of September 17. While we significantly over earned our dividend in the June quarter, we continue to believe the $0.25 dividend level is consistent with our ability to generate NII. We are committed to paying a sustainable dividend to our shareholders without reducing our investment quality or changing our focus from secured lending opportunities. Due to the costs associated with the issuance of our 6% and 8% notes this quarter, we do not expect to fully earn our incentive fee in the September quarter. Our leverage was 0.68 times as of March 31. In light of our increased borrowing capacity from our new notes as well as in anticipation of the decrease in our asset coverage ration from 200% to 150% next year we expect to grow and we increase our leverage from our historical target of 0.75. The current target is 0.80 times plus or minus 0.1. Last quarter our board authorized a share buyback program. In the quarter ended June 30, we repurchased approximately 42,000 shares of stock at an average price of $9.10 representing a 27.5% average discount to our NAV. The increase in our NAV on account of the buybacks this quarter is $0.01. As a reminder, our total capacity for repurchases under this program is $5 million and we expect to continue to execute on the repurchases going forward. With that, operator, please open the line for Q&A.

[Operator Instructions]

Operator?

Yes sir?

If we can hold questions for a second because I just want to walk through one or two other things before we do that.

Sure.

So everyone, just one more additional comment on while we don’t expect to cover the dividend before the September quarter due to the issuance costs around the baby bond we would expect given where we are today to cover the dividend for the December quarter. And excluding the effects of the baby bond in the September quarter we would expect to cover September also, just to clarify that one point. The second thing is if people have had a chance to pull up the schedule that I referenced at the beginning, I'd like to just take a couple of minutes and walk through that, because I've tried to simplify and I'm sure I've probably over complicated the issues around US Well and Bird because there is a lot of accounting intact and legal liability. The blockers were set up for both US Well and Bird because of RIC issues and to shield against legal liability where you would either have equity or you have non-debt exposure. Bird Electric was not an equity position. Bird Electric is a minority owned business and we included from getting equity there, so we took a preferred security and in lieu of things like rate, discount, makeover [ph] got a conversion fee. So that is not ordinary income that was coming through on Bird. You'll see that on the schedule under the column that said block or ordinary income. We did not change the character of our income that would have been NII if we had not put it in the blocker and that's why we continue to treat that as it would have been treated outside the blocker for incentive fees and everything else. US Well, we did change the character of that gain in the $4.8 million between the A and B proceeds by putting it in the blocker. As a result of change in the character it became dividend and under our management contract we could have taken a fee on it that we feel is a wrong thing and would have been out of the spirit even if the contract says it our spirit of what we should be doing. You'll see a waiver in our income statement for $527,000 in the current quarter that is related to the capital gain in the blockers, so that we are within the letter of what we had agreed upon. The first column NII impact is the total dividend that came over net of taxes. For US Well that was $2.6 million and for Bird it was $3.87 million. If you took the reversal of the unrealized gains, US Well just shy of $3 million and about $1.5 million for Bird that's $4.4 and change in aggregate is your decrease if you look at the aggregate realized in unrealized gains from 330 to 630 to approximately $5 million, 90% of that is related to the reversals of the unrealized gains on these two positions. And the NII as we all know was at $0.62. After incentive fees and things like that it was about $0.36 give or take and the $0.26 covering the dividend. Down below we tried to show you the total investor amount because both of these were restructured over their lives and what we tried to do is make sure that we kind of laid out total invested amount US well $17.7 million in a couple different tranches, proceeds received to date which are equity and some debt 13.4. We still have the debt which is performing extremely well. This is one of these that we wish we could hold it longer, but based on what public announcements looks like is coming out in the fourth quarter of $10.5 million. We have the tax on the blocker. Pre and post IRRs including the piece that we hold today so that we think about it as an overall investment. It was about 18% pretax, 15% after tax. Bird Electric, we invested $14.7 million. Those of you who have been following us for a number of years know that a year or a year and a half ago this was one of our most troubled positions marked at about $7.5 million. We work to very hard to structure it and be able to recover was much as possible on this. We did a true conversion fee and preferred instrument. We were able to recover pretax $15.6 million and post tax just over $14 million for a pretax IRR of 1.89 and post tax of $1.41. Now down below we wanted to just reconcile the proceeds of $12.83 million on Bird so that you saw the components of it. There was the original cost basis on that piece of $7.85, after restructuring. We had an acceleration fee typical as any again debt pure first lien that's added OID [ph] you get paid back at par that's the acceleration. We had our conversion fee and we had accrued dividends in the proceeds to give us a total of the $12.84 million. With that, Operator I'd like to open to questions, please.

[Operator Instructions] Our first question comes from Robert Dodd from Raymond James. Please state your question.

Hi, guys. Few questions and then I'll hop back in because I'm sure I'm going to have some more, but on US Well what was the election? You were not obviously the only BDC that has a position in US Well and has a position in the OHAT [ph] position in the equity. All those others still have that equity at the end of the calendar second quarter, so what was the decision that you did different from everybody else to realize that and transform it into obviously a dividend income in the quarter versus everybody else who seems to be sitting on that and waiting, so it seems like that was an election by you guys rather than something structurally that the company did.

Yes, listen I can’t speak to why BlackRock or others have decided to hold it. I can speak to why we decided to sell it, and that is we restructured a piece of debt in the debt and equity, we felt that we were making a very good return on the overall investment as evidenced by the 15% net of everything. We had a non-interest earning piece of equity that had accreted and there was a good bid for it in the market. It was a chance to manage very junior energy risk, i.e. the most junior in the capital structure being equity, and we had a company who was talking about how they were going to realize and MatlinPatterson is one of the avenues and we decided that I think very similar we could have this exact same discussion around Virgin a couple of years ago, and we decided to exit six months after we made the investment and Cyris Capital being the largest holder held it until final sale. Our job we don’t believe is to be equity investors and to maximize the equity return, it is to make great investments, and so we want to do the right thing, but we’re not going to hold equity for equity sake. That is our view, it may be very different than other people's and there may be a fair return out there.

Got it. Next one will be -- I have got the schedule in front of me which is helpful, if complex. When I look at the tax expenses on US Well and Bird Electric, if I assume the tax is related to just the dividend income, I mean certainly US Well that works out to about 38% tax rate within the Blocker and for Bird depending on all the moving parts, something around 40%. Obviously, that seems a lot higher than the current corporate tax rates, so can you explain why the taxes are so high within those blockers relative to the size of the dividends?

Yes, Rocco, do you want to take that? I can if you want me to.

Yes, no problem. The tax action rate is 27.5 on both of them. The blocker has actually paid it. It's a blended rate of what it was because our year-end is June, it is whatever the copper rate is now versus what it was at the end of the year before the Trump Tax plan, so the actual tax rate comes up to 27.5.

Okay, got it. One second. Then another housekeeping one if I can, on the - you mentioned Mike the expenses related to the new bonds and that is going to impact the next quarter. Is it your intent to just it’s – I presume that is 230,000 offering expenses, are you just going to expense them in the quarter not amortize it over the life of the bonds outstanding?

No, we actually, I think we have been consistent on this on almost everything we do whether or not it's fee income or funding expenses. We’re amortizing it over the life, but there are some one-time costs, and it’s also the initial drag when we close this thing literally in the first week of the quarter and deploying capital, so there is some one-timer exogenous with doing it. But we are amortizing over the life, so it's more through cost of debt.

Okay, got it. And then one more if I can. On changing the nature of income on as you mentioned on US Well, if for the majority of other BDCs that I cover, the reality is if there is a gain on an LLC equity position or structured notes or whatever it is within a blocker, that is transparent to the BDC. It gets upstreamed as a capital gain and doesn’t generally for most other BDCs get treated as a dividend at all. So whether it gets upstream changes, whether it’s a taxable event for BDC, et cetera, et cetera for investment companies taxable [ph] income purposes, but if just to clarify, is it your position that any equity position in future that you have in a blocker, if there is a realization there, that is going to be dividend income to the top line rather than a realized gain?

Well, we will follow the GAAP, whether or not it comes up as dividend or whatever, but it is our position that as long as we are in a net realized unrealized loss under this period of our contract, if we change the character of equity investment by putting it in the blocker and we have a gain, we are not going to be taking incentive fees on that until we have refilled that bucket unless it was ordinary net income type in the blocker and we put it in there for protection purposes.

Okay, got it. Thank you. I will hop back in the queue. I will probably get in a minute. Thanks.

Thank you.

Our next question comes from Christopher Nolan from Landenburg Thalmann. Please state your question.

Mike, just a clarification, I know you changed the character of the income from US Well, but you did not do that Bird Electric, is that correct?

That’s correct.

Okay. And also I could not find that schedule.

It should be on the website under Investor Relations in Presentations.

Yes, I looked okay.

It should be there. And I went in and checked it myself before we started the call, it was there. So I’m sorry you are having trouble.

Okay. And then if I caught your comments right, after – and an operating EPS number seems to be $0.36, is that correct? Is that all the non-recurring stuff?

I’m going to say we have not calculated the number that way, so I’m not sure how you’re defining operating EPS.

So if I backup, if I exclude let’s say the non-recurring dividend income, the offsetting tax expense and then as well as the management fee waiver, I haven’t run the numbers myself, I'm just trying to read from the notes from your comments.

I think if you thought about this as if you excluded all that you also have to then do some offsets to that because these were not repaid on June 30, they would have been reinvested in interest earning et cetera. But if you turn around and say net-net where I think about $0.25, $0.26 net of everything, but EPS would have been like $0.32 attributable to US Well and Bird exclusive of them.

Okay. And then on the repurchases, I know you have $5 million authorization, is really the slowdown just the lack of liquidity in the stock, if that is the case why don’t you think about doing a tender?

Well it’s actually couple of things, one would be lack of liquidity but the other bigger one is, if you remember we’ve been in [indiscernible] Arcade blackout period, so we are unable to adjust the levels at which we want to buyback during the blackout and if the extended blackout just ran out. So we will be looking to continue buying back stock over the next quarter and we will have a shorter blackout for the next three quarters than we have the last 90 days.

Okay, so all other things being equal then we should see a step up in repurchases I guess.

We will see and it depends on where it trades and everything else. So I don’t want to give anything leading or misleading there.

If I can ask in a different way and then I will hop back in the queue. Given that your leverage target ratios are 0.8 that gives you a little room to go up, are you inclined to use that base up for your increased leverage for repurchases or for investments?

I would say all the above depending on the situation.

Okay. Thanks for taking my questions.

Okay.

Our next question comes from Chris Kotowski from Oppenheimer & Company. Please state your question.

Yes, good afternoon.

Hey Chris, how are you?

Good, I just wanted to go back to the 27.5% tax rate, I mean just if the transaction closed in the June quarter, you'd think that the new tax law is that an accounting, is the 27%…?

Yes, it’s Rocco, yes. So I thought the same thing as you and then when we went back to do tax returns, the orders look at it, they said no you can’t really do that it’s a blended rate. It’s actually right in the Reg 2 there they actually sent it to me.

And that’s representative of your cash taxes?

I’m sorry, say that again because we are at June year-end and at the beginning of our year-end the rate was higher than when it happened. That is why you have to use the blended.

That 12/31/18 you would have had the lower rate for the full-year.

Yes.

And is that your cash taxes or just the accounting taxes?

I'm not sure and I'm sorry Chris, you're kind of fading out I mean I'm not sure I heard the question.

Yes, sorry I'm just trying and that's not just an accounting thing that's the actual cash taxes you own.

That’s the cash tax that we have to pay, if that’s what you're asking, yes.

Cash and book are the same here.

Yes, I'm sorry cash and book, yes.

Okay. All right that's it from me. Thank you.

Thank you. We wish you were right on the tax one.

[Operator Instructions] We have a followup question from Robert Dodd. Please go ahead sir.

Hi, just to followup on Chris - on the question of tax, when so - I guess yes, the big [ph] rules are a little different acceptable, when's your tax return due, so what’s your tax, is your tax year and your fiscal year the same?

No, so here's the thing, so you have subchapter around right now based on your fiscal year end which is June right and then you have your excise taxes if that's what you're asking right is due on your yearend which is 12.31. So my [indiscernible] blocker tax will follow what the 630 is a 630 year end, so it would be due file an extension 8.5 months after.

Okay, all right. So it is just an oddity let’s say, okay just on obviously you gave me some kind of US Well on Bird, I mean US Well, I mean obviously you gave us some color especially last quarter and we've been able to see what's going on. There was no discussion that I can recall last quarter about Bird, so can you give us a little bit of color why that seemed to happen so quickly. And any kind of - wasn't expecting it to occur anything realization wise to occur for Bird and how much if any were you in the driving seat for that?

Robert, its Chris how are you?

Hey, how are you doing?

Good. We had no control to answer your question. We had no control over Bird because that was a refinancing and that was generated by the inordinate level of profits they were making off of increased business. The company had been working on it for a number of months, but we were totally, we were unsure of the timing. We quite frankly, I had anticipated personally this quarter or now versus last quarter, so it was kind of a pleasant surprise and something we didn't really expect. We didn’t know the time at the end of the day.

And as you saw where we moved the market March 31 to $9 million from the $7.5 million, but feeling better about it, but we did not know this would come.

Yes, we just didn't know how much excess cash the company was generating, how they were collecting their receivables.

Okay, I understand that if I get that last more of a comment that than a question I'll say. But on a quarter like this where there is noise and complexity I would request I think publicly, your shareholders would appreciate as well if the call was earlier in the day rather than letting half the trading, more than half the trading day go past without kind of color that you've disclosed on the call, but that's just a common. Thank you, guys.

Thank you, I appreciate that.

[Operator Instructions] At this time, we have no further questions. Michael Mauer Thank you everyone. We appreciate all your time.

Concludes today’s conference call. Thank you for attending.