Good morning, ladies and gentlemen, and welcome to the M/I Homes, Inc. Third Quarter Earnings Conference Call. At this time, all lines are in listen-only mode. Following a presentation we will conduct a question-and-answer session. [Operator Instructions]. This call is being recorded on Wednesday, October 25th, 2023. I'd now like to turn the conference over to Phil Creek. Please go ahead.

Thanks. Thanks for joining us. Joining me on the call today is Bob Schottenstein, our CEO and President; and Derek Klutch, President of our Mortgage Company. First, to address Regulation Fair Disclosure, we encourage you to ask any questions regarding issues that you consider material during this call because we are prohibited from discussing significant non-public items with you directly. And as to forward-looking statements, I want to remind everyone that the cautionary language about forward-looking statements contained in today's press release also applies to any comments made during this call. Also be advised that the company undertakes no obligation to update any forward-looking statements made during this call. I'll now turn the call over to Bob.

Thanks, Phil. Good morning, and thank you for joining our call to review M/I Homes third quarter results. We had an outstanding quarter, one of the best in company history, highlighted by record revenue, record income, a 50% increase in new contracts, and very strong margins and returns. In addition, we ended the quarter with record shareholders equity and a balance sheet that's as strong as at any time in our 47-year history. Our third quarter results build upon the very strong results we previously reported in the first and second quarters of this year. We are particularly pleased to report these results, notwithstanding an unprecedented rapid rise in interest rates, continued concerns from all kinds of macroeconomic factors, as well as heightened conflict in the Middle East and across the globe. We increased our revenues during the quarter by 3% to a record $1 billion, deliveries during the quarter also increased by 3%. Pre-tax income improved by 7% to a record $178 million. Gross margins for the quarter improved to 27%. That's 10 basis points better than last year and 140 basis points better than our second quarter. We also benefited from the continued improvement in our construction cycle time, 50 days better than a year ago, and we are focused on further improving that in future quarters. Pre-tax income equaled 17% of revenue and our return on equity equaled 23%. As previously noted, new contracts improved by 50% from a year ago, reflecting the strength of our product offerings, our intense focus and success in designing more affordable product, quality of our communities, and our ability to selectively use below-market financing incentives to drive both traffic and sales. Over 50% of our buyers are first-time buyers, and our Smart Series, which is our most affordable line of homes,…

Thanks, Bob. Our new contracts were up 62% in July, up 14% in August, and up 85% in September, and our cancellation rate for the third quarter was 10%. 55% of our third quarter sales were first-time buyers, and 52% were inventory homes. Our community count was 204 at the end of the third quarter, compared to 178 a year ago. The breakdown by region is 101 in the northern region and 103 in the southern region. During the quarter, we opened 22 new communities while closing 13. We currently estimate ending 2023 with about 225 communities, a 15% increase from year-end 2022. We delivered 2,096 homes in the third quarter, delivering 60% of our backlog. And as of September 30th, we had 4,600 homes in the field versus 5,800 homes in the field a year ago. Our average closing price for the quarter was $481,000, a 1% decrease when compared to last year's record third quarter average closing price of $487,000. Backlog average sale price is $510,000, down from $533,000 a year ago. Our third quarter gross margin was 26.9%, up 10 basis points year-over-year, and up 140 basis points from our second quarter. Our construction costs were flat in the third quarter, and we benefited from improved building cycle times. Our third quarter SG&A expenses were 10.5% of revenue, compared to 10.3% a year ago. Our third quarter expenses increased 5% versus a year ago, due primarily to higher third-party broker costs and expenses related to our higher community count. Interest income, net of interest expense for the quarter was $5.8 million. Our interest incurred was $9.4 million. We are pleased with our returns for the quarter. Our pre-tax income was 17%, and our return on equity was 23%. During the quarter, we generated $185 million of EBITDA, compared to $179 million in last year's third quarter. Our effective tax rate was 22% for the third quarter, compared to 21% in last year's third quarter. Our earnings per diluted share for the quarter increased to a record $4.82 per share from $4.67 per share last year, up 3%. And our book value per share is now $87, a $16 per share increase from a year ago. Now, Derek will address our mortgage company results.

Thanks, Phil. Our mortgage and title operations achieved pre-tax income of $9.9 million, a 25% increase from $7.9 million in 2022's third quarter. Revenue increased 17% from last year to $23.6 million due to higher margins on loans sold, a higher average loan amount, and an increase in loans originated. The average loan-to-value on our first mortgages for the third quarter was 82%, which is the same as last year. 72% of the loans closed in the quarter were conventional, and 28% FHA or VA, compared to 79% and 21% respectively for 2022's third quarter. Our average mortgage amount increased to $394,000 in 2023's third quarter, compared to $385,000 last year. Loans originated increased to 1,469 loans, which was up 16% from last year, while the volume of loans sold increased by 13%. Our borrower profile remains solid, with an average down payment of almost 18%, and an average credit score of 748, compared to 745 in 2022's third quarter. Finally, our mortgage operation captured 86% of our business in the third quarter, which was up from 76% last year. Now, I'll turn the call back over to Phil.

Thanks, Derek. For the balance sheet, we ended the third quarter with a cash balance of $736 million and no borrowings under our unsecured revolving credit facility. We have one of the lowest debt levels of the public home builders and are well-positioned with our maturities. Our bank line matures in late 2026, and our public debt matures in 2028 and 2030, and has interest rates below 5%. Our unsold land investment at 9/30/2023 is $1.3 billion, compared to $1.2 billion a year ago, and at 9/30/2023, we had $718 million of raw land and land under development, and $608 million of finished unsold lots. During the third quarter, we spent $106 million on land purchases and $151 million on land development, for a total of $257 million. In year-to-date, our land spent totaled $600 million. At 9/30/2023, we owned 23,000 lots and controlled 45,000 lots. At the end of the quarter, we had 414 completed inventory homes and 2,021 total inventory homes. And of the total inventory, 914 are in the northern region and 1,107 is in the southern region. And at 9/30/2022, we had 200 completed inventory homes and 1,855 total inventory homes. We spent $25 million in the third quarter repurchasing our stock, and $53 million remaining under our current board authorization. This completes our presentation. We'll now open the call for any questions or comments.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. [Operator Instructions] Our first question comes from the line of Jesse Lederman at Zelman & Associates. Please go ahead.

Hi. Congrats on the strong quarter, and thanks for taking my questions.

Thanks, Jesse.

Can you just walk us through the sequential improvement to gross margin? I remember last quarter you noted that your backlog gross margin was relatively flat compared to what you were delivering, and you noted your construction costs were about flat. So, can you just walk us through, what drove the sequential increase to margin?

I think it's a number of things. Clearly, we've had some benefit from the flattening of hard costs, the items that you mentioned. But I think it's -- as much as anything, the continued increase in the mix of more affordable product, which we call our Smart Series, which typically carries higher margins than the other -- the more move-up product that we sell. We have really focused, it began several years ago. I'm glad we did. Sometimes you focus on things that don't work out as well as others. But several years ago, we really began to focus on designing even more affordable product that we could sell under our Smart Series umbrella. Some of it's attached. The number of attached communities that we currently have in the market right now is roughly 50% more than it was a year ago. A year ago, we had about 20 communities across our various markets selling attached product. Today, it's close to 30. In addition, more narrow single family. This product offering has been very successful for us, and is selling not only at good pace but at better margins, lower cycle time, when you put all this into the mix. And one other factor; we've opened up a number of new communities this year. Our new communities are quite candidly performing even better than we, not all, but many, even better than we anticipated. So it's not one thing, its many things. We, at the beginning of the year, did not believe our margins would be as strong as they are. Mainly because at the beginning of the year, business conditions were much more challenging in terms of demand than they have been thus far this year. But we're very pleased with our margins. It's possible there could be a little bit more pressure on them going forward for the reasons that I mentioned with doing more to incent below-market financing. But look, we're going to do what we need to. We're really proud of our results. We want to continue to maintain our momentum. We think the underlying demographics in our industry, as you pointed out, as much as anyone has, frankly, are very strong, with household formations, millennial home ownership rates increasing incredibly low levels of inventory of existing homes. We know things are by no means perfect. We know there's still inflation. We know rates are in an unsteady state. But we're bullish on the homebuilding industry, and we're bullish on M/I Homes.

And Jesse, just as a specific for you, as Bob mentioned, we have opened 56 new stores this year, and we've been very pleased with the way they've performed.

That's helpful. Thanks. Could you give maybe – you noted that your orders were up 85% at September, which I look back to your comments from last year, and you were down 35% a year ago. So, a lot of that's comp-driven also. But maybe if you could talk about demand trends in September, and maybe if you could comment on October as well, that'd be helpful, along with maybe some pricing action that you may need to take to keep sales strong with rates continuing to rise?

Yes. First of all, the last six months of last year was rough, as you recall. I think throughout the better part of the last six-month – well, throughout the last six months of last year, I think we averaged maybe 380 or 390 sales a month, which is not good. So, going into this year, we knew at some point we were going to have some pretty low comps, if you will. Interestingly, our sales since January and through September have averaged in the high sixes, low sevens, 100 a month. It wasn't that September was such a blowaway month. It's just we had a particularly low comp from a year ago. Sales throughout the quarter were pretty steady month to month to month, although September was probably a little better in some ways aided by new community openings. I think things have slowed a little bit in October, as I mentioned. It's a little bit market-to-market. Some markets are – the demand is a little stronger than others. But clearly, there's inconsistencies, choppiness, whatever words you want to use. We've been essentially using below-market mortgage rates to incent sales for quite some time. When the par rate was 7.5, we knew we had to get it below that. Now that the par rate's hovering around 8, we know that to get sales, we've got to continue to incent. We may have to do a little bit more. We're going to continue to watch. We're also entering into a normally seasonally slow time as we get here into November. We don't want to overreact. But we're going to do what's necessary. There could be a little bit of pressure on margins. I don't want to spook people, but that's just the reality. I think that our results have stood tall for the last year-plus, and I suspect that they will continue to for the next several quarters and beyond.

Also, Jesse, we're trying to balance things. I talked about as far as houses in the field. We have 4,600 homes in the field today versus 5,800 a year ago. So, we do have fewer houses in the field. We did slow our business down, especially the last couple of quarters of last year. We do have 400 completed specs kind of versus 200. So, again, we're trying to be very mindful of all those things. Slashing prices and those type things is not the way we operate in general. We try to run a very conservative business. It's hard to get these subdivisions approved and land development houses built. So, we're trying to balance all those things off, but…

Every subdivision is a little different. What I'm particularly inspired by, is the number of communities that we have. In the last week, I've been out driving communities in Houston, Orlando, and Columbus. I spent quite a bit of time in the field in all three within the last week. And the number of communities that we have, we're still seeing very strong activity. It's not all of them, but there's certainly a healthy number of them that are still running at that three, four, five, in some cases six sales a month. And the demand is there. Obviously, the demand slows as rates go up, but I still think that there's strong desire for home ownership across a number of sectors, particularly millennials and right behind them, the Gen Zers [ph]

Thanks for the commentary. That's really helpful. One last one for me just on the mortgage rate buy-down. You talked about maybe needing to do a little more. What exactly would that entail? Would that mean, if you were buying down rates from seven to six and if rates go up to eight, would you still buy down from eight to six?

That differs from market-to-market. There's some we may have to do more. Some of our markets as long as, I mean, I don't want to get into too much of this because some of our competitors might be listening. But in some of our markets, if we can just be in that six and a half to six and three quarter buy-bought-down rate, we can see really good activity. Over half of our sales are specs, so we don't have to provide long-term forward commitments. When over half your sales are specs, you can deliver the house within 30 or 60 days, and that helps as well. Some markets we have to get in the low sixes. It's very expensive to get into the high fives. A lot of the fine print with that product, exceptionally high, credit scores north of 780 [ph] and so forth, very few buyers can even do that. It might draw traffic, but then it might create frustration. A little bit of the two-one buy-down we're seeing. That’s -- I've never personally been a big fan of that, because I've never been a big fan of adjustable rate mortgages. But we're seeing some buyers take that. This is a subdivision business and within each market. There are certain communities where we're doing more even within the same market, and that's how we're managing it. Right now, it takes a lot of precision and a lot of focus. And it's day-to-day, week-to-week.

Very helpful commentary. Thank you, and good luck on the upcoming quarter.

Thanks a lot, Jesse.

Thank you. Our next question comes from the line of Carl Reichardt at BTIG. Please go ahead. Your line is open.

Thanks. Hey, guys. Hope you're doing well.

Hi, Carl. Good to just talk to you.

Me too. Just a big picture once again for me. So, your owned options split on your lots is roughly 50-50. I'm curious, A, if you're expecting that over the next couple of three years to change in any meaningful direction. Then second, what you're thinking about in terms of finished lot options on the option side versus land bank options versus self-development on the owned side? And then last, whether or not that mix is going to shift over time as you continue to do more Smart Series if we're expecting future lots to be more supportive of lower-end homes or if you're happy with your split right now between move-up and Smart Series?

So, the answers are no, not sure, and probably, no. Let me be more specific.

Okay. Thanks. I'll get out of queue.

Right. Sorry for the sarcasm. I'm going to take part of that, and then maybe Phil will jump in on. First question about owned versus optioned. As long as I think I've sat in this chair, the person sitting next to me has been iron-assed, and that's Phil Creek, about not letting us ever get in a position where we own more than a two- to three-year supply. And he's right, and that's the way we think about the business. On top of the two- to three-year supply that we own, we try to control another several years beyond that so that we can achieve 10% to 15% top-line growth if the market will allow. I don't see that changing. That is as -- there's not a lot of things in this world that are black and white. That's pretty black and white at M/I Homes. So I don't see that changing. The second question, remind me what it was again.

I was asking about finished lot option contracts versus land bank on the option side. And then, what percentage of the business is subsidized?

Yes. Land banking is not something that we're very interested in. We don't feel – we've never felt we needed to do it. I know some builders do and maybe they understand it better than we do. But it's not something that we've ever felt we needed to do. Our number one priority with respect to land, and frankly, even now that's even more emphasized in our company, is to do what it takes to secure premier locations. Things get choppy and we're seeing it now with rising rates. Many of our locations are still performing at a very, very high level. Shockingly so, in light of the fact that rates have just gone up as fast as they have over the last 12 to whatever number of months. So job one, premier locations, and land banking not particularly interested in, we'd love to maintain, if we could, a roughly 50% balance between that which we internally develop and that which we buy from developers on option contracts. Honestly, if we could, we'd love 80%, 90% to be bought from third-party developers under option contracts. That's not rational. We wouldn't have a business if that's all we did. There's too many markets where there's virtually no developers and we're not going to use our balance sheet to support land bankers. So right now, the 50-50 is a little bit skewed towards our own development. I'll let Phil jump into that. That's moved closer to 60% to 70% internally developed here over the last year or so.

Yes, Carl, just to stay on that a little bit. We like to own a two to three-year supply of land based on current closing rate to stay with our closing run rate of about 8,000, we own about 23,000. So that's kind of where we are. And inside that two to three-year supply, we like to have a one year of finished lots. And again, that's about where we are also. So we feel good about what we own. As far as off the books, tying up another year or two is fine. We have a little over 20,000 lots off the books. The risk dollars we have in that is about 75 million bucks. It's about 8% of the value of the contracts. We believe kind of the best land bankers, the land seller. But again, every deal is a little bit different. Bob talked about, job one is premier locations. Today, we are developing 70% to 80% of our own land depending on the market. What we need to do, we really try to make as much as we can, the competitive -- the land area, a competitive advantage for us. We have spent a lot of time the last couple of years on our land acquisition teams, our land development teams, helping sellers, get land through zoning, through approvals before we take title to it. But we feel very good overall about our land position. And as we've said before, when you look at our 17 markets, we just opened our first community in Nashville in the last month. We're starting to get some things going in our Fort Myers/Naples area. So, we think we have room to do 12,000, 13,000 units in our existing 17 markets. And we think our land position is really in good shape for the next couple of years.

Guys, thanks so much for all the detail. Just the last one is on the mix going forward between Smart Series and other product. If you look at your home bots plus your control bots in the future, if that's going to alter any meaningful way? Thanks.

I think it's going to go up a little bit more. We've talked about this, it seems, a number of times over the last two, three, four, five calls like this. I remember when it was 25%, we said we thought it could get to 30% or 35%. Then when it got to 35%, we thought it could get to 40% to 45%. Then when it got to 40% to 45%, we thought it could get to 50% to 55%. It's at 50% to 55% now. We continue to really push with more affordable product. I mentioned in my remarks earlier that several years ago, it's probably been three or four years ago, frankly, when we really set out and focused on designing even more affordable product with narrower single family, expanding our attached townhome product offering from. It was pretty good then. It's a lot more robust now. So I think that with all that, and just because of what's going on, I could see it getting up there to 60% or 65% at some point. When you look at our new communities and where things are headed, and we're getting better absorption. So even if the community mix stayed the same, the fact that the absorptions with the more affordable product are holding up better. Having said all that, our move-up product is outstanding. It sells well. It bears well. It margins well. I like the diversity. We don't have to put all our eggs in one basket, and we're not going to. So I like the mix. I like the small component of empty nester that we offer as well. I think we've sort of got the pieces in the right place, but it could go up a little bit, Carl, just because of what's happening in the economy. And 55% of our buyers are first time buyers now. And I think that's likely to -- if that continues to stay about that level or even go up a little, fueled by millennial and Gen Zers, which it likely will be, that could also push that Smart Series mix number up.

Interesting, Carl, is that, last year we opened a little over 100 new stores. This year we're on target to open about 85. We've opened like 56 through the first nine months. So if we end the year with 225 or so, 185 of them will have opened the last 24 months. So again, that's been a great opportunity for us, not only location, product and price point. We're really trying to pay attention to affordability for sure.

That's great detail. Thank you so much, Phil. Thanks, Bob.

Thank you.

Thanks, Carl.

Thank you. Our next question comes from the line of Alex Barron at Housing Research Center. Please go ahead. Your line is open.

Yes. Thanks, guys, and great job so far this year.

Thanks, Alex.

Obviously, your leverage has come down significantly. You've build a nice cash balance. I mean, if things continue as they are, do you guys see the potential to increase the stock buyback activity, given that, I mean, I don't know what else you guys plan to do with the cash. But can you comment on that?

Sure, Alex. And that's something obviously we watch very close. I mean, job one is always, how the business is doing. What do we think the outlook is for the business? And again, we feel really good about that. We will be spending, continuing to spend money on land. Year-to-date, we've spent about $600 million. We're spending a little more on land development. Right now, they are land purchases. So, land spend will continue to take part of it. We did spend more on stock buyback in the third quarter than we did in the second. And we spent $25 million in the third quarter. And that's something we'll just continue to look at, because we do have a whole lot of liquidity, a little more cash than we thought. It is benefiting from improved cycle time in that we have been closing a few more houses than we thought we would. And again, we're hoping to catch up in the field. I mentioned before, right now we have about 1,200 less homes in the field than a year ago. We do expect we'll put quite a few more houses in the field in the fourth quarter than we did a year ago. And that'll take some cash also. But the short answer is we will continue to look at stock repurchases as part of what we do for capital.

Yes, it seems very interesting given that, especially the market doesn't want to give you and other builders credit, and the stock is trading below one times book. So it seems like a great allocation of capital. But anyway, my next question is, you guys mentioned that your sales went up, I think, north of 80% in September. I wasn't sure what the actual number was relative to August. So was that actually sequentially higher? Or it just looks bigger because of what happened last year? And if it was higher, was that because you guys did some type of sales event or like what drove that?

Alex, as Bob said, the months and the quarter were pretty comparable. Last year we only sold 1,300 homes in the third quarter. We sold about 650 in July and August and a little over 700 in September. We did open a number of stores toward the end of the third quarter. So, I wouldn't say there was really anything big different months-to-months in there.

No. I mean, we did have some, end of month promotion that we typically do every September around this time. I think it was largely new communities. I don't think there's anything really more to read into that. It was an easier comp also, which skews that somewhat. But relative month-to-month, it was pretty close, certainly within 10%.

Got it. And if I could ask one more. Some builders are offering money to, I mean, everybody to some degree or other is buying down their rates below market rates. But are you guys using more just money that you give individually to buyers to buy down their rates? Or are you spending more of the money on forward commitments? How are you going about, lowering the interest rate for buyers?

Well, I'm going to let Derek answer that because he understands that a lot better than I do. But basically, the short answer is, it's all done through our mortgage operation at M/I Financial. We don't give the money to the buyer and let them go market and figure out who to do business with. Derek, if you want to talk about it.

Yes, sure, Alex. It's -- and Bob had mentioned earlier, it's really division by division, and even community by community. And we do a combination of individual interest rate locks and forward commitments. We work with the divisions, what it's going to take, what the market's looking for. We don't -- it's not a one size fits all. We mix it up.

It's all done through M/I Financial.

All done through M/I Financial with the below market interest rates offered through our mortgage company.

And is that a large percentage of your buyers that are taking advantage of those types of promotions? Or are there still some people who would rather use the money for something else?

Well, one thing I'll add, Alex, is that when we price our houses, there's a certain amount always priced in for financing and closing costs. And again, that's a subdivision by subdivision decision. Some people need help in closing costs. Some people need rate bought down for different reasons. And as I mentioned earlier, we had an 86% capture rate in the quarter. So I think that shows that a majority of the buyers like to use the mortgage company for the lower interest rates.

Got it. Well, keep up the good work. Thanks, guys.

Thank you.

Thanks, Alex.

Thank you. We have one further question in the queue. [Operator Instructions] And our next question comes from the line of Jay McCanless at Webush. Please go ahead. Your line is open.

Good morning, guys. I think Derek, you may have just answered my first question, which what percentage of either closings or orders in the third quarter where people who use some type of financing incentives?

Yes. We don't necessarily track that, but just generally, it feels like the vast majority are using the below market interest rate.

It's got to be in the high 80s.

Yes.

Okay. And then a couple of different questions on price. The first one, what percentage of communities were you able to raise or hold price this quarter? And how has that been faring in October?

And Jay, that's a really hard answer. Every subdivision is a little different. The communities that opened during the quarter, we feel very good. They performed a little better than our expectations. Now, we track very careful what the margins are overall, because that's the ultimate test and our margins have really continued to be pretty strong. But, as Bob said, I mean, demand's okay. It's definitely been impacted a little bit recently with rates getting up at that 8% range. We feel pretty good about our pricing and our margins, but there may very well be some pressure the next couple of quarters.

Jay, knowing what we know at this moment, likelihood that we're going to have any kind of pricing power over the next number of weeks, I don't see it. I mean, right now, demand's a little choppy. I think it's going to be sit tight. Let's see how things are for a while. Plus, we're entering into a normally, as we get closer to I can't believe it's almost here, but Thanksgiving, things start to slow down anyway. So, I think right now there's a little -- I don't see much pricing leverage right now, in other words, our ability to raise prices.

The second question I had on price, if you look at the southern segment's average backlog price that went down from 543,000 last year to 503,000 this year. Is that shift lower permanent, because of what you talked about with more attached product, more Smart Series, or was that just kind of a one quarter anomaly and it should start to gravitate back higher?

I think that we're very, first of all, a large part of it is because of a greater mix of Smart Series in a number of those markets. And we're -- I don't know how much lower it'll go. I think at some point average price starts to level off. But I think it's -- that that was not an accident. That was not something that, oh, my God, what happened? That's a result of very intentional new communities, more affordable product, more attached, more narrow single family trying to continue to offer what we think we do really well at even lower price points. Phil, I don't know if you have any thing to add to that.

Jay, if you look, the backlog average sale price was 507 at June 30th. It's 510 at September 30th. I would expect that to come down a little bit next year as Bob said, with more affordable product and those type things. In particular, the next gets to be San Antonio and Houston is our most affordable price points. Again, as those divisions go up and down, some of that impacts it. But throughout our divisions, again, townhome communities, I think we had 24 of them at the end of the first quarter. At the end of September, we had 30. We had six more attached townhome communities. And in general, those are more affordable price point. So, again, we're trying to pay a lot of attention to that, because primarily we are in the payment business. And we really want to watch affordability.

Understood. And so, continuing on, maybe a little bit of a look ahead to 2024, do you feel like you can still generate double digit community growth? And you're going to end up with, I think, like 15%, 20% growth this year. Should we expect something in that range for going into 2024?

Jay, we don't have any projections out there at this stage. But, do we expect the average community count next year to be up over this year? The answer is yes. We can't really hone in yet on a point in time because we do develop a lot of our own stuff. It's taking a little more time to get things open. But we do expect average community count to be up next year compared to this year. Jay, we're looking to grow the business. We're not going to get our leverage out of whack. We want to keep our leverage really low. We're not going to start getting our land-owned versus optioned out of whack. That's already been addressed during this call. But our goal is to grow the business and to continue to gain market share. That's going to take more communities.

Understood. Okay. That's all I had. Thanks, guys. Appreciate it.

Good to talk to you.

Me too.

Thank you. And as there are no further questions in the queue at this time, I'll hand the floor back to our speakers for the closing comments.

Thank you for joining us. Look forward to talking to you next quarter.

This now concludes the conference. Thank you all very much for attending. You may now disconnect your lines.