LSB Industries, Inc. (LXU) Q1 2018 Earnings Report, Transcript and Summary

Greetings, and welcome to the LSB Industries' First Quarter 2018 Conference Call. 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 is now my pleasure to introduce your host, Kristy Carver, Vice President and Treasurer for LSB Industries. Please go ahead, Kristy.

Thank you, Kevin. Good morning, everyone. Please note that today's call will include forward-looking statements, and because these statements are based on the Company's current intent, expectations, and projections, they are not guarantees of future performance and a variety of factors could cause actual results to differ materially. As this call will include references to non-GAAP results, please reference the press release in the Investors section of our website, lsbindustries.com, for further information regarding forward-looking statements and reconciliations of non-GAAP results to GAAP results. At this time, I would like to go ahead and turn the call over to Dan for opening remarks.

Thank you, Kristy, and good morning, everyone. We're pleased to have you on our call and appreciate your time. Today, we'll discuss our 2018 first quarter results and share some early thoughts on both the second quarter and the second half of 2018. We'll also discuss our progress on improving our plan uptime. As we noted during our last quarter's call back in February, we are in full implementation mode of a new maintenance management system as well as overhauling our company-wide procurement processes. These activities are going well and I'm pleased with the Company's progress. Both John and Mark will provide further details during their discussions. In last quarter's call, we also discussed the engineering studies and review we had initiated on our prior plan. We'll provide an update on those activities during today's call. In summary, the outside engineering studies and review affirmed our internal assessments. We do as a follow-up work that we will undertake from those efforts. Lastly, we will provide a longer-term view on our strategic direction. We believe the nitrogen industry will further consolidate over time. During the first quarter of 2018, our revenues of $100.5 million were slightly lower than the first quarter of 2017 on a comparative basis. Our EBITDA increased by approximately $3.4 million on a comparative basis. In general, product pricing was higher with the exception of UAN. Mark will provide an analysis of the first quarter 2018 volume and pricing on UAN during his financial review. We believe our second quarter UAN prices will be much higher. Our current market pricing for UAN, ammonium nitrate and agricultural ammonia remain robust despite a slight softening in the Gulf urea market. To date, we have not seen the Gulf softness in our markets for UAN, ammonium nitrate or agricultural ammonia. We continue to reduce selling, general and administrative expenses during the quarter. We've made great strides in eliminating unneeded costs and becoming more efficient. Our overall ammonia on-stream rates were approximately 94% for the quarter. We have opportunities to improve those rates during the second quarter and the second half of 2018. El Dorado ran very well during the quarter and had a 100% on-stream rate. As we have said previously, we expect that plant to operate at 95% or higher. Cherokee had some repairs on reformer tubes during the quarter and has operated at a 100% on-stream basis since then. As you know, Cherokee has performed very well over the past several quarters. We expect 95% or better for that facility as well. They have a very experienced management team. Pryor made nice progress during the quarter and operated at 91% on-stream rates. We expect that facility to operate in the low-90's for 2018 as we continue to make mechanical improvements. Our goal is to have an on-stream rate at that plant of 95% in 2019. As you likely noticed, we successfully refinanced our senior secured notes last week that extended the maturity from 2019 to 2023. This refinancing due date extension will provide us with greater flexibility. We also extended the first put date on the preferred stock from 2019 to 2023. We believe the new North American nitrogen capacities that have been added during the past year and those currently coming online are more effectively integrating and improving the required distribution channels to efficiently place product to customers without incurring significant price reductions. As the distribution channel continues to mature, we anticipate product price volatility will be reduced and prices will improve. We are positive on both product demand and the product pricing outlook for 2018 as compared to 2017. I'll now turn the discussion over to John Diesch, who will cover our plan operations for the first quarter.

Thank you, Dan, and good morning. We continued to make progress on our reliability and operations improvement initiatives. The updated work order manager processes in place and training on its use has been completed. We have completed numerous deep dive analysis and critical equipment systems this has allowed us to improve our preventive maintenance programs on this equipment. We have added additional expertise and planning and scheduling a maintenance work, reducing the amount of emergency work on equipment. We expect the implementation phases of all the processes to be complete by midyear. We will however, continue to make improvements, including more deep dive analysis of equipment along with training and improving the skill of our people. Our maintenance departments are managing based on the data we collect, not based on a gut feel of how equipment is operating. I'm happy to say our El Dorado ammonia plant had 100% on-stream time for the first quarter, producing ammonia between 1,300 and 1,350 tons per day. Based on how well the plan has been running, the decision has been made to reduce the length of the upcoming September turnaround to 12 days. In doing this, we will be planning another turn around were approximate the same length in 2019 primarily focused on the required regulatory inspections. The Cherokee ammonia plant had 85% on-stream time during the first quarter. We took the ammonia plant down to make some needed repairs around the primary reformer and the ammonia synthesis area along with adding some instrumentation enhancements. We are planning a 35 day turnaround in late July. The extended link that is turnarounds for catalyst changes in major upgrades to the primary reformer. Our prior facility ammonia plant had 91% on-stream time during the quarter, downtime was to replace bearings and to ammonia plant compressors. In addition to the ROI implementation process, we have added maintenance, planning and scheduling expertise as well as in the process - we are in the process of hiring and experience reliability engineer. We have recently hired a new Plant Manager. He was previously the General Manager at CF Industries facilities in Woodward, Oklahoma and Yazoo City, Mississippi. The BD Energy Systems study on the front-end of the ammonia plant is nearing completion with a report and recommendations expected by midyear. This study includes a redesign and replacement of the main ammonia plant waste heat boiler. The Black & Veatch reliability risk assessment, draft report has been completed on the ammonia, urea, nitric acid plants, and electrical infrastructure. As we have just received a draft copy, we're still assessing. The study purposes identify reliability risk methods to reduce those risk and opportunities to upgrade a modernized - modernize all systems. I'm pleased to say there have been no surprises. This reaffirms our internal assessments. Now I will turn the call over to Mark to discuss the financial results for the first quarter.

Thanks, John and good morning to everyone. Page 11 of the presentation provides a consolidated summary statement of operations for the first quarter of 2018 as compared to the first quarter of 2017. Beginning in Q1, 2018, we adopted the new revenue recognition standards. We along with many public companies have chosen not to go back and restate a prior year financial statements for its impact. For us the biggest change from the implementation of the new revenue recognition standards is that sales and cost of sales from a daytime facility and no longer be grossed up on our income statement this has no impact to our EBITDA. As you know, we manage the Baytown facility for a third party and as such going forward revenues and costs will be recognized more in line with how we do this arrangement. From our perspective this is a good change as it represents the true economic earnings and margin of that business. In reviewing our continuing operations excluding the impact of new revenue recognition standards and revenue from businesses sold in the second and third quarter of 2017. Total net sales in Q1 2018 decreased 2% to $100.5 million from adjusted net sales of $102.1 million in Q1 2017. In our Ag business we experienced stronger average net selling prices for aged in ammonia as they increased 21% and 5% respectively quarter-over-quarter. However, as I mentioned last quarter our first quarter average net selling prices for UAN from our Pryor facility would be negatively impacted from fourth quarter 2017 downtime at that facility and carryover sales of low priced full fill orders that were planned to be sold during the fourth quarter of 2017. Therefore average net selling prices for UAN in the first quarter of 2018 and were $138 a ton versus $152 a ton for the first quarter of 2017. The impact for the quarter was reduction in EBITDA by approximately $2.2 million as without the impact of those orders the average net selling price for UAN for the first quarter of 2018 would have been $170 a ton were approximately 12% increase. Sales volumes for ag ammonia will lower quarter-over-quarter resulting from a slower spring application caused by wet cold weather and the resulting switch to sales of ammonia to the industrial market. Additionally, UAN sales volumes were lower in the first quarter of 2018 versus the first quarter of 2017. I will provide some additional color on the next slide. With respect to our industrial sales net sales of industrial ammonia increased from higher volumes from improved on-stream rates at our El Dorado facility and the above mentioned switch of sales of ammonia from the ag to the industrial markets. Low density ammonium nitrate sales volumes for mining applications also increased as a result of our sales and marketing efforts and stronger overall demand from this market. Gross profit decreased slightly as a percentage of adjusted net sales primarily from one-time expenses of approximately $1.3 million relating to certain key initiatives associated with improving the reliability of our plans and our overall procurement processes and increase in depreciation expense of $700,000 and the lower UAN net selling price as I discussed earlier. Lastly, adjusted EBITDA for the first quarter of 2018 was higher compared to the prior year period. Despite the one-time consulting expenses in the lower UAN realized net selling prices. I will bridge the EBITDA for you on Slide 13. Please refer to our reconciliation of non-GAAP measures beginning on Slide 19 for further information on non-cash and one-time costs incurred during the period. As I just mentioned sales volumes of UAB decreased quarter-over-quarter. Page 12 bridges the UAN sales volume for the first quarter of 2017 to the first quarter of 2018. As you can see the first quarter of 2017 included to 12,000 ton barges of UAN that we are expected to be sold in the fourth quarter of 2016, but were delayed and rolled into the first quarter of 2017. Additionally, a 12,000 ton barge that was expected to be sold in the first quarter of 2018 rolled over into the second quarter 2018. Lastly, ammonia on-stream rates have a direct impact on the production of UAN as it is a downstream product. During the first quarter of 2017 our Cherokee and Pryor plants had outstanding operating performance as with ammonia on-stream rates of 99% and 96% respectively. That compares to ammonia on-stream rates of 85% and 91% respectively for the first quarter of 2018. The lower ammonia on-stream rates for the first quarter of 2018 resulted in less UAN tons for sale during the quarter. To give further clarity on the results of the quarter. Page 13, bridges our consolidated adjusted EBITDA for Q1, 2018 to consolidated adjusted EBITDA for Q1 2017. The first quarter of 2017 adjusted EBITDA of $20 million included $1.7 million from businesses sold in the second and third quarters of 2017 including our working interest in the Marcellus Shale. For an apples-to-apples comparison excluding the EBITDA from those businesses adjusted EBITDA for the first quarter of 2017 was $18.3 million versus adjusted EBITDA of $21.7 million for the first quarter of 2018. That represents an increase of $3.4 million or 18.6%. The increase in EBITDA was driven by higher net selling prices, which contributed approximately $6.5 million to EBITDA as we achieved higher net selling prices for HDAN, ag ammonia, and industrial products. Additionally, the Tampa ammonia price averaged approximately $330 a metric ton for the first quarter of 2018 compared to $308 a metric ton for the same quarter of last year. Sales of ammonia and many of our industrial products which are indexed to the Tampa ammonia price improved with that increase. Lower cost of our natural gas feedstock contributed approximately $2.6 million to EBITDA as we averaged $2.79 in MMBtu for the first quarter of 2018 versus $3.15 in MMBtu for the first quarter of 2017. SG&A and other spending was down in Q1 2018 by approximately $700,000 after normalizing for businesses sold during 2017. The lower SG&A was a combination of lower overall compensation, reduced costs associated with a smaller Board of Directors, and lower legal fees. Offsetting these improvements to EBITDA, our lower overall sales volume was negatively impacted - which negatively impacted the quarter by approximately $3 million. This was driven by the lower UAN and ag ammonia sales volumes previously discussed, which were partially offset by the increased sales volumes of our industrial and mining products given our increased marketing efforts and the availability of additional industrial ammonia for sale at the El Dorado ammonia plant operated in an on-stream rate of 100% in the first quarter of 2018. As I discussed on the previous slide, UAN fall fill price carryover negatively impacted EBITDA for the first quarter by approximately $2.2 million. And lastly, the first quarter of 2018 included $1.3 million of one-time costs associated with the use of outside operational consultants that are assisting us in accelerating the enhancement of our maintenance management system and maintenance procedures and with centralizing and expanding our procurement and inventory management efforts. Also included in the first quarter of 2018 is the cost of several reliability studies being performed by third-party engineering firms at our Pryor facility. We believe these initiatives will lead to the improved overall reliability of our product facility to avoid significant unplanned downtime and the related impact to EBITDA. Overall, on a normalized basis excluding the one-time costs associated with our operational initiatives and the carryover impact on UAN net selling prices from our Q4 2017 downtime, our EBITDA would have been over $25 million representing an improvement of almost 40% compared to the prior year. Looking forward to the second quarter of 2018, please turn to Page 14. EBITDA for the second quarter of 2017 was $22.2 million. Listed on the page is the average Tampa ammonia price, our average realized net selling prices for UAN and HDAN and our average cost of natural gas for the second quarter of 2017. Also shown is the estimated annual EBITDA impact to us of $10 per ton movement in the Tampa ammonia, UAN, and HDAN prices based on the previously disclosed 2018 volume outlook, and a $0.10 MMBtu movement in natural gas prices. Current net selling prices for UAN and HDAN are showing increases of $15 a ton and $10 a ton over the second quarter of 2017 realized prices, and we expect our average natural gas pricing for the second quarter of 2018 to average approximately $2.50 in MMBtu or $0.69 in MMBtu improvement versus the second quarter of 2017. Offsetting some of the benefit of the higher net selling prices and lower natural gas costs we are experiencing is the lower Tampa ammonia pricing environment. The Tampa ammonia price was $275 a metric ton for April, which was $25 per metric ton below the average price for the second quarter of 2017. And that could continue for the remainder of the second quarter. We are however seeing a pickup in pricing of ammonia sold out of our Pryor facility and that will partially offset the impact from lower Tampa ammonia prices. Additionally, we expect to see increase sales volumes of certain products, particularly from our El Dorado facility, which had an ammonia on-stream rate of 87% in the second quarter of 2017. And we expect the overall ammonia on-stream rates to improve for the second quarter of 2018 versus the second quarter of 2017. So to sum up our view of the second quarter of 2018, we feel that we should have a material improvement in EBITDA versus the second quarter of 2017 providing we continue to operate that expected on-stream rates. Page 15 outlined our capital structure at the end of Q1 2018. We ended the quarter with over $28 million in cash. Additionally, our ABL facility was undrawn and had over $46 million of availability at quarter end, giving us total liquidity of approximately $75 million. Total outstanding debt at the quarter end was approximately $412 million, excluding the unamortized discount and issuance costs associated with our debt. We also had outstanding preferred stock of approximately $192 million, including approximately $52 million in accrued and unpaid dividends. Finally, as many of you saw last week we completed the refinancing of our senior secured notes by issuing $400 million of new five-year senior secured notes have been used to repay our existing senior secured notes paid a call premium and on those senior secured notes from pay fees and expenses of the transaction. The new notes have a five-year maturity our non-callable for the first two years and carry an interest rate of nine and five years. In addition, the notes include customary covenants relating to debt recurrence and restricted payments. However, in addition to the traditional two to one fixed charge coverage ratio needed to make restricted payments. We have included a provision that provides us an option to use any cash above a minimum of $65 million in total the liquidity to redeem preferred stock providing that we offer 50% of the potential restricted payment to note holders at a price of 103. Note holders choose not to accept the offer then we will have the ability use those funds to make further redemptions of preferred stock. As our financial results and liquidity position improves as a result of anticipated increased on-stream rates, expectations for continued growth in sales volumes and the forecast of continue recovery of ag selling prices. We expect to have the flexibility to de-lever with our excess cash. Additionally, in connection with our refinancing, as Dan mentioned we entered into an agreement with the holder of our preferred stock to extend the date upon which they have the right to elect to have as redeem their preferred stock from August 2, 2019 to October 25, 2023 which is six months beyond the maturity of the new notes. These were important steps for us they provide us with greater financial flexibility which we expect will allow us to execute our strategy aimed at delivering greater and more consistent cash flow and increase very for shareholders. We were happy to receive continued support from previous note holders and the investors in addition to our preferred stockholder. Moving to Page 16, we outlined our free cash flow. Cash provided by operations for the first three months of 2018 was approximately $1 million. Additionally, cash flow from operations includes the semi-annual interest payment on our senior secured notes that occurred in the first quarter each year. Capital expenditures in Q1 2018 were approximately $6 million a reduction of almost $8 million from the prior year period. Net cash used for financing primarily reflects regularly scheduled debt payments in our insurance premium financing. Lastly, during Q1 2018 we received the full indemnity escrow amount of $2.7 million related to the sale of our climate control business and we received $1.5 million relating to recovery from a property insurance claim. For the first quarter of 2018 we had a decrease in cash of $5 million which was an improvement of $10 million compared to the reduction in cash we had in the prior year period. As John mentioned earlier we have made a decision to reduce the length of the plant turnaround at our El Dorado facility that was scheduled for September of this year. We had indicated that the turnaround would be for 25 days and we are now planning for a 12 day turnaround this year with in approximate 13 day turnaround in 2019. This will allow us to spread out the capital spend over two years in addition to scheduling El Dorado's turnarounds in a different year than Cherokee's. The financial impact from the reduction in turnaround time is a decrease of approximately $2 million in CapEx this year. That contributes to a reduction of our annual CapEx budget from approximately $35 million to approximately $32 million. As well as lower turnaround repairs and maintenance expenses of approximately $2.5 million reducing the annual turnaround expenses from $11 million to $8.5 million and lastly, the additional contribution margin that will pick up from 13 additional production days. Given the issuance of a new senior secured notes, cash interest is now projected to be approximately $40 million for the full-year of 2018. Lastly, we previously disclosed several non-core asset sales. We are currently in discussions to sell several pieces of real estate that we believe can generate approximately $6 million in additional cash. I will update you on the progress next quarter. Now I'll turn it back over to Dan to wrap up.

Thanks Mark. Our second quarter of 2018 will be measurably stronger than the corresponding period of 2017. The fertilizer future markets indicate that values are $20 million to $25 million per ton higher on UAN and $30 million to $40 million higher for urea for the second half of this year. Our view of the second half of 2018 is that it will be stronger than the same period of 2017. We also believe the distribution channel for fertilizer products has gone through some significant changes during the past 12 months and it will continue to mature during the remaining portion of 2018. We believe the past habit of selling product at very low prices at or after the Southwest conference for fall fill tons will be moderated from past practices since the channel is being more highly served by core producers. We ask ourselves, why so a large portion of our production at low prices when the opportunity to enhance margin exists by developing strategies to better utilize storage facilities. Selling cheap and early dates has been a bad habit of the industry for numerous years. We see that activity starting to change and we support that. We also believe further industry consolidation should occur, significant synergies can be obtained and more diverse operations will have better operational flexibility and product diversity. Larger platforms will compete more effectively. We expect to participate in that consolidation. We will continue to upgrade our business and enhance our on-stream rates. We will drive better safety performance and broaden our distribution capabilities. We expect to sell more - we expect to sell our product more effectively to improve our overall margins on the products that we do so. Lastly, I just want to note that Mark will be attending the Goldman Sachs Leveraged Finance Conference in Los Angeles on May 10 and I'll be presenting at the BMO Farm to Market conference in New York on May 16. With that, it concludes our prepared remarks, and we will open it up for questions. Kevin?

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question today is coming from Karl Blunden from Goldman Sachs. Your line is now live.

Okay, thanks. It's actually [indiscernible] on for Karl today. Just quickly wanted to make sure to clarify the shift in El Dorado turnaround schedule, appreciate you're highlighting the CapEx adjustments for this year. Is it safe to sooner than that just I guess it's in addition to the 2019 CapEx expectation of roughly $35 million and do you see any additional impacts to 2019 on-stream rates for El Dorado because of that shift?

Well, it will obviously have the additional downtime during 2019 and the activities that we've really switched were primary the following. That's also require a certain inspection timeframes and those vessels are not yet due for inspection in 2018 and so the activities of the largely be done in 2019 really relate to regulatory inspection type of activity. So yes, the facility will be down additional days in 2019 that we hadn't originally planned, but it's a swap from 2018, the days that we had expected.

And as far as CapEx for 2019, we still are planning on $35 million - approximate $35 million. We will shift some CapEx around and potentially review some projects that maybe don't need to particularly get done in 2019.

Awesome, thanks for the color. And then I guess you'd still expect roughly two to three years until you have to revisit those turnaround times or I guess those turnaround schedule for El Dorado?

Three years after 2019 we would expect.

Yes. The Cherokee will do a turnaround this year and then the next one will be 2021. One of the shortened turnaround in the El Dorado this year, shortened turnaround - small turnaround next year, and then another turnaround until 2022.

Awesome. Thank you for that. Another quick one, you shared in the press release on the call, quarter to date on-stream rates for El Dorado and Cherokee. I was wondering if you could share quickly for Pryor if you have that just the on-stream rate quarter to date.

91%, we disclose that as well.

So I thought that was just for 1Q not 2Q.

We're operating up in Q2 to date. I mean we've only got about 26 days in Q3. We're operating well.

Great. That's great to hear. One last question. You mentioned in the release that mining volume should increase roughly 30% year-over-year as a result of new contracts. I was just wondering if you could help clarify whether your contracts have a volume commitment component to them. I mean if it do, is that all of your contracts are just a portion of them? Any color there would be helpful.

These are requirement contracts. There are no take or pay components of it, so there are requirements contracts. So they're not minimum volumes that have to be taken.

But remember these are all subject to contracts. We sell primarily almost exclusively to distributors. And those distributors have contracts with the mines themselves to provide our product for services. And those contracts run for a period of time. So it's not like they can just drop volumes up and down dramatically.

Great. Thanks for the time.

Our next question today is coming from Joe Mondillo from Sidoti & Company. Please proceed with your question.

Hi. Good morning, guys. I was wondering just regarding your pricing, your pricing seems to be doing better, trending better than sort of the Gulf pricing that I track. And generally historically that's been sort of mixed, so I'm just wondering what are some of the dynamics that's causing that, and do you expect that trend to continue relative to Gulf prices?

Well, historically we should get a little premium on Gulf pricing being inland and somewhat. So I think we attributed a lot of the - what I call a changing of the pricing situation as all these new plants were coming up. And as I talked about several times, the distribution channel needs to go through a maturation process and we think that is occurring. And as a result of that producers have to supply a lot more product to the channel. And I think producers are being more disciplined in their pricing in the way they approach the market. As I said in our prepared comments, we expect that to continue, and we expect that the historical practices of selling product cheaply to Southwest Conference or shortly thereafter, we think that bad habit will change, and it's starting to change. So I think you're seeing producers being more disciplined. I think people realize their strategies that they can employ to get a higher net back and we're certainly participating in that.

You mentioned in your press release regarding UAN prices, and I missed earlier in the call, so I apologize if you mentioned already. But it seems like the Gulf prices, the UAN prices that I track seemed to be turning over, but do you think there is potentially a dynamic given the late planting season that they could maybe stabilize and be a little supported for the next couple months as opposed to what we saw last year where at this point in time you saw the seasonal downturn from now until August, September?

I think our view and certainly what we talked about earlier was while there may be some softness in the Gulf, we're not seeing the softness in our current markets right now. So it's not hitting us up here in the market. It's been a wet cold spring. There's a lot of ammonia that didn't get put down up in the northern - mid to northern Corn Belt. So that would indicate that you're likely going to see more urea pick up here in the second quarter as a result of that. So we haven't seen softness in UAN or ammonium nitrate pricing or ammonia pricing for that matter in the ag markets that we serve. And so I think there might be some urea, ammonia switch to UAN as we go forward in the second quarter just due to the weather conditions quite frankly and did answer your question.

Yes. Regarding sort of one of the big topics in the markets right now is just sort of inflation. Just wondering if you're seeing any of your costs lines whether it's free or anything else that - you'll see a little bit of in place in on the cost side of your model?

Well, I think let's talk logistics in general. I think what we've seen certainly from the railroads is timeliness or the ability to turn cars. I think - not just our industry but everybody in the country has seen a deterioration of rail services and we've implemented some better rail tracking management things like that. But I think you'll see rail services still relatively poor right now. Although the costs are not - we're not seeing inflation on that. I think the trucking industry has seen a lack of drivers - you've seen a lack of drivers and with that traditional rates are probably moving up particular with electronic logs and it is hard to find drivers these days. So they keep in mind a lot of our product is sold out of the plant gate - at a gate price and the cost particularly our industrial contracts cost as freight is passed through. But yes, I would expect to see a little bit of increase in the trucking rates. But not anything material at this point time.

Okay. Okay I'll hope back in queue. Thank you.

[Operator Instructions] Okay. If no further questions, I'll turn the floor back for any further closing comments to Mr. Greenwell.

Great. Thank you. Well, thanks everyone for participating in our call this morning. I think we're making good progress on the operational enhanced ones and the reliability of our facilities certainly have done a lot of work and we feel good about where the company is headed on that. We also feel pretty good about where prices are shaping up for the second half. As we said we expect second half pricing, full season pricing to be higher than it was in 2017. So our view is fairly optimistic right now for the second quarter and then the second half of 2018. We appreciate your interest and look forward to speaking with you in July for our call. Thanks so much. Have a good day.

Thank you. Ladies and gentlemen, that does conclude today's teleconference. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.