Local Bounti Corporation (LOCL) Q4 2021 Earnings Report, Transcript and Summary

Hello, and welcome to the Local Bounti Conference Call and Webcast to Discuss the Strategic Acquisition of Pete’s and Full Year 2021 Earnings. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It’s now my pleasure to turn the call over to Jeff Sonnek with ICR. Jeff, please go ahead.

Thank you, and good morning. Today’s presentation will be hosted by Local Bounti’s Co-CEOs, Craig Hurlbert and Travis Joyner; Chief Financial Officer, Kathleen Valiasek; and Brian Cook, President and CEO of Pete’s. The comments made during today’s call contain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts are considered forward-looking statements. These statements are based on management’s current expectations and beliefs, as well as a number of assumptions concerning future events. Such forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from the results discussed in the forward-looking statements. Some of these risks and uncertainties are identified and discussed in the company’s filings with the SEC. We will also refer to certain non-GAAP financial measures today. Please refer to the press release, which can be found on our Investor Relations website investors.localbounti.com for reconciliations of non-GAAP financial measures to their most directly comparable GAAP measures. With that, I’d now like to turn the call over to Craig Hurlbert, Co-CEO.

Thank you, Jeff, and good morning, everyone. I’ll start by sharing some summary remarks about the transaction; then have Brian Cook, President and CEO of Pete’s, give some perspectives on their business and brand; and then ask our Co-CEO, Travis Joyner, to provide some commentary around the operational synergies that we are so excited about. Kathy Valiasek will round out our call with a 2021 financial summary and some select updates on our operational progress. This morning, we announced our definitive agreement to acquire Pete’s for $122.5 million. Pete’s marks our first acquisition since the closing of our business combination in November of 2021. This transformational acquisition is immediately accretive and derisked near-term operational execution, while instantly creating a coast-to-coast footprint covering existing relationships at approximately 10,000 retail grocery stores. We are funding the purchase price in a manner that preserves liquidity, expecting to utilize our existing credit facility with Cargill for the cash consideration, and including approximately $30 million of stock consideration. This transaction also enhances Local Bounti’s financial leadership within the controlled environment agriculture industry, our leading unit level economics, which are enabled by our efficient and cost-effective Stack and Flow system supports our pathway to cash flow breakeven. This is further bolstered by Pete’s own unit level economics and operating performance, which are similarly strong and generated an estimated $22.7 million of revenue in 2021 consistent historical gross margins of greater than 45% and consistent positive EBITDA. As you’ll hear today, there are numerous operating synergies between our two businesses. Pete’s growing model is an ideal fit for the implementation of our patent pending, high-yield Stack and Flow Technology. This technology can easily retrofit into Pete’s system, expanding yield per square foot productivity and further enhancing their unit economics. We are thrilled to leverage our combined strengths through this transaction, which brings significant opportunity to implement best practices across sales, procurement and operation, while creating operational efficiencies at scale to further improve unit economics at the company’s facilities. We see this as a unique opportunity to combine a highly complementary and profitable CEA market leader in Pete’s, with Local Bounti’s technological solutions to significantly accelerate market access of our fresh and local loosely and living lettuce varietals, creating one of the largest CEA companies in the United States. With that, I’ll pass the call to Brian Cook, President and CEO of Pete’s for some of his thoughts. Brian?

Thank you, Craig. Pete’s is a California-based indoor farming company focused on growing leafy greens for the last 25 years. I’ve been in the produce business for over 20 years and have been fortunate to serve this great business since 2017 as its President and CEO. Today, we operate two growing facilities in California, with a third in late stages of construction in Georgia, that’s slated to become operational in the second quarter of 2022. As Craig alluded, Pete’s has a nationwide sales network that reaches approximately 10,000 retail locations across 35 states and Canadian provinces today, primarily through direct relationships with over 140 customers, including blue chip retailers, such as Albertsons, Kroger, Target, Walmart, as well as Whole Foods and AmazonFresh. We believe it to be the broadest retail distribution of any CEA grower in North America. Moreover, the 10-year of our relationships is notable. Customers that we’ve done business with over 10 years equates to nearly 50% of our revenue, and another 30% with those over five years. Our commercial success has been driven by our clear focus on establishing a strong CEA brand to take share within the lettuce category. Today, Pete’s commands in approximately 64% share of the total butter lettuce market in the Western U.S. for nearly 80% share amongst CEA competitors. We’ve leveraged the strength of our living lettuce products and expanded into living crops and other living varieties throughout the years, achieving organic certification in 2011 and our greenhouse fresh package salad program in 2020. Pete’s leadership is apparent in our legacy of being a first-mover. We were first to produce butter lettuce hydroponically on the West Coast. We were first to automate our packing systems. We were also first to adopt technological advancements in gutter and channel systems in our market. Today, we have developed proprietary best practices that provide the foundation for successful geographic and product level expansion. Our extreme focus and drive for continuous improvement on growing systems resulted in several 100 basis points of expansion to our lettuce gross margin in just two years, from 2017 to 2019. This speaks to our long and established history of completing transformative capital projects that benefit top and bottom line growth. As we look ahead, operating as a single company alongside Local Bounti, we find ourselves in a very familiar and comfortable position. Fundamentally, we are an organization driven by an insatiable quest for efficiency and improvement to enhance yield, expand crop turn and drive ROI. This core foundational philosophy that we share with a Local Bounti team, along with our shared commitment to nonstop innovation, is the reason we are excited to create alignment with this transaction today. Travis, over to you for your remarks.

Thank you, Brian. While walking the Pete’s facilities in California and Georgia with Brian and team, it was crystal clear that for many years, the Pete’s team has aggressively attacked cost of goods sold and plot to increase efficiency. Crop turning is learning and no one in CEA has turned the greenhouse more times than Pete’s. At Local Bounti, we like to say we do the math when it comes to facility and unit economics. And the same can be said for Pete’s, which is why a combined company and culture driven by unit economics is so exciting for both sides. So now, I’ll take a few minutes to probe deeper into the operational synergies that we’ve identified, which makes this transaction particularly well suited for Local Bounti, as we seek to drive value creation for shareholders. First, with the integration of Local Bounti’s proprietary Stack and Flow Technology into Pete’s existing growing systems, we expect to accelerate crop cycles and unlock significant yield improvements and expand SKUs, resulting in a step-change improvement to organic revenue growth and provide us margin tailwinds. Ultimately, this is just one example of the unique impact that Local Bounti’s differentiated technology and retrofit capabilities can have on existing operations. The nature of our Stack and Flow Technology, coupled with the modularity of our facility build outs, allows us the flexibility to integrate with a broad range of greenhouse leafy green operations to unlock 1.5 to 2 times yield improvement. This is highly disruptive and highly differentiated. And it’s why we’re so excited about opportunities that lie ahead as we continue to execute on our plan to be the leader in CEA. It’s important that I touch on technology as well. We plan to deploy the latest innovations and automation, IoT computer Vision, AI and controls to drive yields even higher, while reducing costs and ways to ensure that we deliver the highest return on capital for investors. Simply put, our technology strategy gives us an advantage to make a direct iterative improvement on existing infrastructure in a capital efficient manner, which will drive higher return on investment while minimizing required capital. This isn’t necessarily the status quo for our peers who are either using pure vertical or pure greenhouse CEA technologies, but it’s foundational to the Local Bounti commitment to achieving best-in-class unit economics. Second, the instant impact on customer reach is transformational for Local Bounti. Pete’s expansive retail distribution network of approximately 10,000 retail doors provides us with immediate and significant scale relative to the approximately 500 doors Local Bounti currently serves. Specifically, we will immediately leverage Pete’s existing customer base to sell local bounties products in the Northwestern U.S. and beyond, and provide us a more efficient path into the large California market, as well as the Southeast. We will also benefit from a multi-tiered brand strategy that will support our growing SKU assortment as we roll out into other markets. Of particular note is the coming launch of Pete’s Georgia facility, anticipated to be online in the second quarter of 2022. This facility will house at CEA packaged salad offering, which is a large and underpenetrated market by CEA, representing only a fraction of the total approximate $6 billion lettuce and salad market in the U.S. today. And third, for over 25 years, the Pete’s team has done a fantastic job of building a cost efficient supply chain. And together, we expect to realize significant supply chain-related benefits in key areas such as raw material procurement and packaging associated with greater purchasing scale, all of which will improve our operating efficiencies and business economics at scale. This translates to a favorable impact on our cost of goods and is anticipated to drive a positive impact on margin. And now, I’ll turn the call over to Kathy, our fearless CFO for her remarks.

Thanks, Travis. The terms of this transaction are favorable and are immediately accretive with an initial purchase price of $122.5 million comprised of financing of $92.5 million that is expected to be provided pursuant to our existing lending facility with Cargill, and the $30 million balance to be paid in Local Bounti stock. We anticipate that all of Pete’s 130 employees will join Local Bounti for a combined total headcount of 250 employees. The Pete’s management team is expected to remain in place as the company becomes a wholly-owned subsidiary of Local Bounti. We are very excited to work together and build upon their success to date. As you heard, the operational synergies are expected to be significant. I’d like to point out a few key elements for you. First, the addition of the Georgia farm, which is slated to open in second quarter, provides much needed capacity to meet known demand from Pete’s existing customers, including the two California farms, we believe that the three facility will generate run rate sales of at least $30 million on an annualized basis once Georgia production ramps up. Second, the transaction of significant operational synergies, and the company expects to achieve an estimated 10% savings on Local Bounti’s existing cost of goods sold from raw materials and packaging in the first full year of operation. And third, we have the good fortune to become significantly more efficient with our capital allocation decisions as they consider our own pipeline of farms, the locations of those facilities and the design equipment and technology that we deployed to meet the known demand from Pete’s existing customer base that reaches 10,000 retail doors across the country. This brings me back to our operations here at Local Bounti. Due to the transformational nature of the anticipated Pete’s transaction, we paused our construction of the Pasco, Washington farm to ensure that its design is fully optimized to drive best-in-class unit economics and the synergies with Pete’s existing rolling systems are considered prior to continuing construction. Despite the delay, we remain committed to the build out of Pasco and has completed site preparation as well as obtained the necessary local and state permits. We are similarly undergoing an analysis of our pipeline for future prime locations to maximize Pete’s national distribution footprint. Key considerations include meeting known demand from key existing customers within the network, as well as optimizing freight routes to minimize costs, while enhancing customer service with consistent delivery schedule. Now that the transaction has been announced, we are taking a deeper dive on our facility planning analysis and expect to provide an update on locations and timelines to include Pasco during our first quarter 2022 earnings call in May. From a capital structure perspective, our balance sheet as of December 31, 2021, reflects the business combination with Leo Holdings III Corp, that was completed on November 19, 2021. We ended the year with cash and cash equivalents of $96.7 million and $183.7 million in total availability on our credit facility. In conjunction with the anticipated Pete’s acquisition, we amended our credit agreement with Cargill to utilize the facility for use in the transaction. Finally, a brief note on our full year 2021 financial performance. We drove sales of $638,000 in 2021 and generated gross profit of $206,000 in 2021, representing a positive gross margin of 32%. I point out that this margin performance is well in excess or expectations and is also burdened by depreciation within cost of goods sold, splitting that depreciation to make an apples-to-apples comparison to our long-term projections that we provided during the [deep back] [ph] process, gross margin would have been approximately 43%. We are pleased with the margin performance, which was again, speaks to our focus on unit level economics and the advantage model we have with our Stack and Flow Technology. Net loss was $56.1 million in 2021. But it includes approximately $8.3 million of non-comparable expenses associated with the business combination, $17.9 million of stock-based comp of $11.4 million in other income and expense items and depreciation of $700,000. Adjusted EBITDA loss was $17.8 million in 2021 and compares to a $4.3 million loss for full year 2020. As we look ahead to full year 2022, we are extremely excited about the scale that Pete’s provides to our business, and to begin to incorporate our Stack and Flow Technology into Pete’s California and Georgia farms over 2022 and 2023. On a pro forma basis, including partial year contribution of Pete’s, assuming the closing of the transaction in the second quarter of 2022, we are guiding to consolidated sales of at least $20 million for full year 2022. In summary, the Pete’s transaction is focused on building upon our financial leadership in the CEA industry, with a proven operator that brings significant scale, while affording us an opportunity to drive costs lower while simultaneously improving on their operations with our proprietary Stack and Flow Technology to drive best-in-class crop cycles and further improve upon our industry-leading unit economics. We are thrilled to share this transformational and immediately accretive transaction with you today, and are now ready to take your questions. Operator?

Thank you. We’ll now be conducting a question-and-answer session. [Operator Instructions] Our first question today is coming from Colin Rusch from Oppenheimer. Your line is now live.

Thanks so much, guys, and congratulations on this transaction. I’m curious about the history of the company’s relationship and how long you guys have known each other, how long this process is done, and how you’re expecting to integrate the senior management into the end of the organization?

Yeah. Hey, Colin, this is Craig, thank you so much for the question. Nice to hear your voice again. So, Local Bounti kind of started this whole process high level. And if I could before I answer your question, I just want to say a couple of things. Number one, this transaction is transformational for Local Bounti. I believe it’s transformational for the entire CEA business model, the whole industry. And I think what it does, we’ve all been talking about consolidation ever since Travis have been in the industry for 3.5, 4 years, and I think what you’re going to see with this transaction is really cream of the crop two companies coming together to really create two plus two equals seven type of a scenario. We’re super excited about the transaction. As it relates to your question, we started looking at the whole concept of what I will call M&A in mid-October. And from that, we started looking really at buy versus build giving pending supply chain issues, et cetera. And the whole concept of Pete’s really didn’t come about right at that point in time. But Pete’s was in a process and we basically got involved in that process and we really got excited about the two companies coming together. And as it relates to the integration we’ll be working on that over the next few months and you’ll be hearing more about that in our first quarter earnings report out here later, in the middle part of this year.

Great. And then the second question really is around customer relationships. And what this enables by having this level of scale and technology integration. How is that impacting your strategy around customer approach and your expectations around how those relationships will evolve?

That’s a great question, Colin. And I think, really, think about the business from the customer back perspective, what Pete’s combined with Local Bounti brings is really, as we mentioned, 10,000 doors. But really, it impacts almost every decision we’re going to make, because we’re kind of a customer back company, anyway. We’re not a contract farmer. We are someone that is looking from the customer backwards. So it’s going to impact where and when we build our facilities. We’re now planning our future facility build out to meet to some extent Pete’s existing pent-up customer demand. And so that kind of changes things like where we’re going to be putting our capital to work, it really – it helps us kind of focus on where is the best place to place capital, based on the customer backwards.

Great. And then the last question, this is really about incremental cost synergies beyond just existing footprint. Can you talk a little bit about the potential to improve unit economics on these go-forward facilities, both from learning and from purchasing power? It seems to me that there’s probably based on what your recent comments that there’s still some work to do there. But just curious what the early returns are on that separate from the synergies that you’ve already identified?

Great, Colin. Thank you for that question. Travis, why don’t you tackle that one?

Yeah, I think the exciting part of this transaction from an operations perspective is you’re really putting best-in-class technology with Stack and Flow with very experienced management on Pete’s side as it relates to satisfying customer demand, first and foremost, but also driving tremendous efficiency in cost of goods sold, as well as unit economics for their core product, which is butter lettuce, they have 80% market share around that product. So they have already driven lots and lots of efficiency throughout their supply chain. And I think we will together benefit from that, to a great degree, but also adding our Stack Technology to the California facility – the two California facilities and the Georgia facilities will enable us to really increase organic growth from those two facilities. And also, I think, to Craig’s point, look out into the future as to where we will place our next facility, which will combine Stack and Flow and it’ll also combine Pete’s deep experience in supply chain and lots and lots of customer relationships as we look into the future.

All right. Thanks so much, guys.

Thank you, Colin.

Thank you. Our next question is coming from Ben Klieve from Lake Street Capital Markets. Your line is now live.

All right. Thanks for taking my questions. We got a few here. First of all, regarding the Pasco facility. It sounds like the construction process hadn’t even really done beyond the site prep. I’m wondering when the decision was made to postpone this facility?

Kathy, do you want to address that?

Yeah, sure. I would say it was in actually really early January that we made that decision.

Okay. And then around that, not just Pasco, but the other location, do you have kind of had ambition for here over the kind of medium-term. What’s really the limiting factor here that’s making you guys decide to kind of pause construction on these facilities and focus on the retrofit here pieces it? The human capital, the financial capital, is it something else? What made you decide to go in the retrofit direction versus your own build?

Yeah. Hey, Ben, this is Craig. I think the answer to that question is relatively straightforward. It’s customer-focused backwards. We – Pete’s has an existing footprint, with what I would call, as I just mentioned, existing pent-up customer demand. So for us not to take that into consideration as where we place our capital, would be silly. So really, what we’re doing is we’re kind of taking a relook at the map and we’re saying, where are the customers that want the product today, let’s place our capital there first, and then expand past that. So it’s really refreshing in the sense that we’re able to focus from the customer backwards to be able to place capital. And really the whole buy versus build concept is was in play for us, as I mentioned, since October timeframe. And I think as the supply chain issues, et cetera, have kind of played out, it’s become even more, I’d say relevant. So yes, we’re focusing on customers backwards is the way I would make it. That’s the point I would make. Also, the Georgia facility on the East Coast is just – it’s a facility that we would have looked to build on our own anyway, as we kind of looked at where the customers were backwards.

Got it.

And let me add a comment. So if you think about our – the Nevada facility, right, that we had been considering them, we realized that the two California facilities, we are going to need a Nevada facility.

Gotcha. Now that all that makes sense. Perfect. And then one other question for me that that Craig you kind of touched on here is regarding Georgia, and really, potentially other locations on. Can you guys give us just any kind of sense of the scale of what the Georgia facility is going to be? And then also looks like Pete’s – it shows locations in Virginia and Texas. I’m curious what the locations are? These – are these commercial facilities than anyway? Are they planned facilities that maybe that I’m reading too much into, both of those would be helpful?

Yeah, thanks. So hey, Travis, why don’t you tackle the first part of that question on Georgia sizing?

Yeah. So the facility in Georgia is three acres under grass and it will begin commissioning in April. And I think the exciting part about the Georgia facility is that we expect it to begin to ramp-up production through this year. And simultaneously, we will begin working on integrating our stack phase with that facility. It has tremendous capacity at that particular site to expand well beyond three acres, and the production will begin kind of early April 1 harvest in Q2.

Got it. Thank you, Travis. And then are there other locations in Texas and Virginia? Or am I reading that wrong?

There are no current operating facilities in Texas or Virginia, Ben. But as you can tell, again, we’re going to kind of be looking here over the next few months, we’ll have more to report on that in our next – at our next earnings call.

Got it. Okay. Very good. Thanks, everybody, for taking my questions. I’ll get back in queue.

Thank you, Ben.

Thank you. Next question is coming from Chris Barnes from Deutsche Bank. Your line is now live.

Hey, good morning, and thanks for the question. I guess just to build on the topic as you’re with the acquisition, like could you just discuss sort of like the, I guess the cost and just the time it would take to retrofit these Pete’s facilities with the Stack and Flow model? Like, just as the first question.

Hey, Chris, nice to hear your voice. Travis, why don’t you talk about Stack and Flow what it takes to retrofit that in Georgia, for example?

Yeah, I think it’s kind of back to principle number one at Local Bounti, which is we do the math. And when we do the build versus buy analysis, which is really kind of the tangible side of things, we’re looking at the ROIC of greenfield versus buying retrofit. And in this case, buying retrofit just made a tremendous amount of sense. And then when you add in the customer access and the market reach, it kind of entered no-brainer territory. So as you compare a greenfield versus a buy and build, or excuse me a buy and retrofit, in this case, the buy and retrofit math made a lot of sense. You got two existing facilities in California, with the add of a Stack phase, you’re looking at a tremendous increase in output at those facilities. And then in the Georgia facility, same thing, a retrofit is going to increase the output substantially there as well. So, I think we did the math and I think there’s the tangible side of it, but there’s also the intangible side of it, which is the people side. And I think, here Local Bounti code of conduct number one is humility. We’re always looking for people who are additive to the company, who share our values. And in this case, we found great people, a great management team, who has a tremendous history innovating NCEA, [ph] and they’re driven by the same things as us unit economics. So I think when you do the ROIC math here, the build versus buy was kind of a no-brainer. And I think as we get deeper into reporting out on both the California and the Georgia facilities, you will see that in spades.

Yeah. Hey, Chris, this is Craig. One other thing I’ll add to Travis’ point there is this whole concept of our technology Stack and Flow being retrofittable, for example, to Pete’s existing facilities, really is a very unique part of our business model. And as Travis and I mentioned several times months and months ago, the Stack and Flow technology came about striving for unit economics. But today, when we look at buy versus build, we’re able to add our proprietary technology on top of targets to really, I would say, unlock higher yields and better unit economics. So it’s kind of a unique part of us and our M&A strategy. But I don’t think others can do, given that many are just applying the same technology. So it’s kind of when we started looking at it and looking at the synergies that were there, as Travis just mentioned, it became very obvious to us that this was something we needed to do.

Got it, that’s helpful. Are you able to share any of that ROIC math, right? Are you willing and able to share any of that, or I think now?

I think let us get the organizations integrated. And I think maybe over time, we can begin to share more of that.

Got it. That’s fair. And then, like you mentioned a few times, like just working to meet some of the pent-up demand on the Pete’s side, like, are you able to share any of like, any perspective in terms of like how much revenue like upside you see longer-term just by meeting like existing customer demand in that business?

Right. Well, I think maybe just speaking at a very high level, there’s a lot of demand for indoor product in general. The problem is, there’s so many, what I will call, the whole space is very cluttered right now. And candidly, the whole industry has been long on promise and short on execution. What we get with Pete’s is a whole lot of execution, a whole lot of meeting customer demands every single day, for years and years and years. And as a result, there’s tremendous loyalty from the customers towards Pete’s just like, there’s tremendous loyalty for Local Bounti in the 500 doors that we’re in. But what that really means is, we could put the pedal to the metal with proven relationships that Pete has, and really grow the business quickly. With the customer-facing backwards towards us, it really is a powerful combination between the two. So what I will say to you, is over time, Chris, you’re going to hear more and more about what we’re doing with our customers. And I think some of that demand will come into view more clearly over the next few earnings calls.

Okay. And then I guess the last one for me was just about like the multi-brand strategy intend to run like, post closing like, could you just like maybe provide a little bit more detail around that, like how do you intend to position the brands and how customers – yeah?

Yeah. It’s a great question, Chris. And what I’ll say is the important thing to point out here is both Pete’s and Local Bounti are brand focused, which again, is something that isn’t always the case with CEA players. So Travis, why don’t you get into a little detail on how we’re looking at that?

Yeah. So on day one, the two companies together will have right around 20 SKUs. And I think that as we look into the future, when you think about brand strategy, we’ve now got multiple different brands to work from. And I think having a good, better, best brand strategy in retail, ultimately, you think about like a store white label. Pete’s obviously has a tremendous national brand presence already. And then Local Bounti being local, in more places, I think, ultimately, it’s going to lead to more doors in retail and broader distribution of our SKU. So we’re beyond excited to have access to a great brand, like Pete’s, that has a history of delivering delicious product and continuing to expand their SKU count. In Georgia, we’re looking at some exciting opportunities in terms of getting in new doors with multiple different brands. So I think it really gives us the ability to move faster and get in more retail doors.

All right. Thank you very much.

Hey, thanks, Chris.

Thank you. Our final question today is coming from Brian Wright from ROTH Capital. Your line is now live.

Thanks. Good morning. Quick question. Can you help us out with the current production capacity before Georgia comes online with Pete’s to the differential between revenue expectations versus capacity?

Yeah. I don’t think we’re prepared to get into that today, Brian, thanks for the question. I think we’ll be focused on integrating here. And that’s something maybe we can follow-up with you on or report out on our next earnings call.

Great. No problem. Thank you.

You bet. Brian, thank you for your question.

Thank you. We’ve reached the end of our question-and-answer session. I’d like to turn the floor back over to management for any further or closing comments.

Yeah, so this is Craig Hurlbert. And I would like to just close by saying thank you to everyone on both sides. Brian, thanks for your team. It’s interesting that all this kind of came together here on the same day as we’re reporting our fourth quarter earnings. And obviously, the Pete’s transaction, I’d like to reiterate, we view this transaction as a complete game changer, not just for Local Bounti, but also for the entire CEA industry. We’re very excited. As Travis said, we’re very humbled, and we’re going to hang up the phone here. We’re going to get back and dig in and go back to work for the shareholders. Very excited about the transaction. I’d like to thank everybody for their time. Travis, do you have anything you’d like to add?

No, sir, you said it well. Thanks all.

Thank you to everyone.

Thank you. That does conclude today’s teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.