Greetings and welcome to the Orion Engineered Carbons S.A. Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note this conference is being recorded. I will now turn the conference over to your host, Wendy Wilson, Head of Investor Relations and Corporate Communications. You may begin.

Thank you, operator. Good morning everyone and welcome to Orion Engineered Carbons conference call to discuss our third quarter 2021 financial results. I'm Wendy Wilson, Head of Investor Relations. With us today are, Corning Painter, Chief Executive Officer, Lorin Crenshaw, our outgoing Chief Financial Officer and Bob Hrivnak, Interim Chief Financial Officer. We issued our press release after the market closed yesterday and we posted a slide presentation to the Investor Relations portion of our website. We will be referencing this presentation during the call. Before we begin, I'd like to remind you that, some of the comments made on today's call are forward-looking statements. These statements are subject to the risks and uncertainties, as described in the company's filings with the SEC and our actual results may differ from those described during the call. In addition, all forward-looking statements are made as of today, November 5th. The company does not undertake to update any forward-looking statements, based on new circumstances or revised expectations. All non-GAAP financial measures discussed during this call are reconciled to the most directly comparable GAAP measures in the table attached to our press release. I will now turn the call, over to Corning Painter.

Thank you, Wendy. Good morning everyone and welcome to our third quarter earnings conference call. Before I get started, I'd like to share a few words about Lorin as this will be his last earnings release with us. You all know that he worked hard to help us weather the steep downturn last year so successfully. What people may forget is that he had only been with us for a few months before COVID-19 surfaced, and that he was immediately thrown into that storm. Being a quick study, Lorin was an able partner and leader during that time. Under his leadership, we completed the refinancing of our term loan B facility while adding a sustainability aspect to it. Lesser known to our investors perhaps was that Lorin revamped how we manage and think about risk and that he has been integral to our strategy development during this time. Lorin, thank you for your contributions and I wish you all the best.

Thank you for those kind words, Corning. It has been a privilege to serve Orion's Chief Financial Officer over the past two years, providing financial leadership and partnering with you and the leadership team to refine Orion's strategy and position the company for success. Orion has an extremely bright future. I truly believe that the capital allocation pivot presently underway and its impact on the intrinsic value of this company is not well appreciated, except by a small but growing number of long-term investors. I intend to remain a long-term shareholder myself, and look forward to seeing this leadership team execute the strategies that have been developed and realize the great promise of this company given the quality of its people and its assets, its competitive positioning, and core competencies. I want to thank you for the opportunity to serve this organization Corning, which from a financial leadership perspective will now be involved exceptionally capable hands as the search is conducted. Bob, I'm not sure I have ever made a finer hire quite honestly, you've made an enormous impact over the past 18 months, and I have thoroughly enjoyed our partnership. I wish you the best and look forward to working to make the upcoming transition as smooth as possible.

Thanks so much, Lorin. It has been a pleasure working with you and I look forward to continuing to implement the strategy that you and the leadership team have developed for Orion. I am also excited to leave the finance organization that you have developed, which I believe is very talented and dedicated to Orion's continued success. This company has a bright future and I am looking forward to the dual role of Chief Accounting Officer and Interim Chief Financial Officer to continue the path that has been established. It's going to be an exciting time for Orion now that we're close to finishing our EPA work and focusing on investing for growth, sustainability and returning capital to shareholders. I am glad to be part of that journey. Corning, let me hand the call back to you.

Thanks, Lorin and Bob. I'm pleased to report another solid quarter, continuing what has been an excellent recovery in our business. Specifically, third quarter adjusted EBITDA was $66.4 million, up 20.8% from the third quarter of 2020, which marked the beginning of the recovery in our business last year. Our results were powered primarily by the continued strong specialty performance, which represents 55% of our adjusted EBITDA year-to-date, overall, against the backdrop of the downturn a year-ago, both of our businesses have demonstrated substantial operating leverage and an impressive recovery immediate to surging demand for our specialty products across nearly all and geographies and applications. All that despite the reality that COVID is still with us, and global supply chain efficiency is not. As you're aware, we recently reinstated our dividend by declaring an interim dividend to be paid in the first quarter of 2022 in the aggregate amount of $1.25 million, which is equivalent to approximately $0.02 per common share of the company. Our primary capital allocation objective remains to make prudent investments in differentiated applications that drive profit and raise our long-term's earning capacity. The expansions underway in Ravenna, Italy, and Huaibei, China and the future efforts to advance our connectivity franchise are prime examples of this, with expected returns well more than our cost of capital. Reinstating our dividend reflects our high level of confidence in our business. It also reflects our commitment to regularly returning cash to shareholders, and maximizing the universe of potential investors in Orion shares. We believe our strategy of balancing capital reinvestment and a prudent capital structure, with returning a portion of our capital to shareholders positions Orion to maximize long-term growth and value creation. Aside from delivering solid financial results during the quarter, we also began construction of our second plant…

Thanks, Corning. Revenue increased 39.4% year-over-year, primarily reflecting the impact of passing through higher feedstock cost, with higher specialty volume and favorable mix contributing to a lesser extent. Contribution margin increased 18.9% year-over-year, mainly due to strong product mix higher cogeneration profitability, and the favorable effect of all price movements. Adjusted EBITDA rose 20.8% year-over-year to $66.4 million, reflecting higher contribution margin partially offset by higher fixed costs related to incentive comp and maintenance costs, reflecting a relatively heavy quarter for turnarounds as anticipated. Finally, we reported adjusted net income for the quarter of $27.2 million, up 32% year-over-year on higher adjusted EBITDA partially offset by higher fixed costs. It is also noteworthy that our effective tax rate year-to-date of 27% is tracking 400 basis points below our guidance heading into the year. This dynamic has also benefited our adjusted net income and reflects excellent planning and execution by our tax and business teams. We projected our full year effective tax rate will be in the range of 26% and 28%. We will provide 2022 effective tax rate guidance in February. However, I can say that we believe that the drivers of our lower effective tax rate are the result of structural changes that should prove sustainable over time, drive a higher cash flow and therefore intrinsic value of our company over time. I salute the efforts of both our tax and commercial teams and in pleased with their efforts. On Slide 6, you will find several useful bridges that provide greater financial details supporting the comments I just shared on our quarterly results. Slide 7 details our year-to-date cash generation, which is essentially flat with the favorable impact of strong financial performance and receipt of the Evonik settlement proceeds largely offset by a surge in working capital and EPA…

Turning to our outlook, as we approach the end of an exceptional year, we are narrowing our full-year 2021 adjusted EBITDA guidance to a range of $265 million to $280 million. Saving the top of the higher end of our range reflects the impact of the delayed startup at Ivanhoe, and dynamic market conditions including supply chain and inflationary pressures. Capital spending continues to be on track towards approximately $190 million to $200 million. And our estimate of the full ultimate cost of installing our U.S. air emission controls remains unchanged at between $270 million and $290 million. In closing, there are four key messages I would like to reiterate. First, we're excited to be laying the foundation to deliver substantially higher earnings power in coming years. By the end of 2022. Since the time of our IPO in 2014, we will have allocated over $600 million towards debt reduction, dividends, and EPA related emissions technology. As we approach the next five years, we expect to have the wind at our back from a discretionary cash flow perspective. With net leverage in line with targeted levels, the EPA investments coming to an end and our dividend rate at a fraction of prior levels, enabling our continued investment in growth opportunities, in differentiated applications, and sustainable offerings. Second, while we've highlighted the Ravenna expansion and the Huaibei in recent quarters as one of a very small handful of leading producers of acetylene black. We also see significant growth opportunities in conductive carbons. Acetylene Black is an important conductive additive in modern lithium ion batteries and other attractive markets. We have seen considerable traction on year-to-date in getting with battery customers and just completed a significant capability upgrade at our plant. This plant which we purchased in 2018 provided a foothold in the space. Going forward, we look forward to sharing more about our plans to take the next steps towards making this attractive near adjacency. A more substantial contributor and growth driver. Third, rubber carbon black marketing conditions are quite favorable and poised to take another step up in 2022 in terms of our goal to achieve higher returns on capital. Finally, I'm pleased that we have our most challenging air emissions control project commission, while I expect some challenges in the early months of operation. It's great that we will have about 70% of their projected EPA spending behind us by year-end. We look forward to the ongoing support of our investors. As we continue to grow Orion profitably and responsibly in the years to come. With that operator, please open the line for questions.

Thank you. At this time, we will be conducting a question-and-answer session. . Our first question is from the line of Josh Spector with UBS. Please proceed with your question.

Yes, hi guys. Thanks for taking my question. And first thanks, Lorin for the help over the past couple of years and welcome, Bob.

Thanks, Josh.

Just on the rubber side, specifically on the contracts, I mean, first congrats on getting higher pricing year-over-year that is certainly positive as we look to '22, is there any way to quantify what you'd expect from an EBITDA perspective or what you're getting price and that of the higher cost that you expect to see?

No, I mean, it's very commercially sensitive and we're still in the middle of this, so we're not going to be able to talk about that at this time.

Okay, then maybe I'll just go to the cost side near-term, is rubber EBITDA per ton stepped down a bit more meaningfully than we expect to Q-on-Q, understand some of that's probably downtime, but higher oil might be a bit more of a positive offset there. Can you maybe walk through some of the sequential puts and takes and what's temporary versus permanent, and how you see things perhaps shaking out over the next couple of quarters?

Well, so first of all, we had indicated that we thought it would come down from the GP per ton that we had last quarter. And I would just a one aspect of what played out for us was just a draw in terms of an inventory draw, which has implication on fixed costs. And we'll see similar activity in this quarter just because of the slow restart at Ivanhoe.

And Josh, I would add that, you had volumes down sequentially. And so our incremental margins work the same on the upside as they do on the downside. And you also had high turnaround. So that combination in addition to the draw, I would say were both unique. Our second half run rate is not going to be our 2022 run rate. And so I would suggest that both the volume dynamic and the turnaround dynamic are both unique, and unlikely to persist as we go into next year. And so you look at next year, I think if you look at that GP per ton, that's a good measure to use. And we're in the sort of 275 type range. And that's a good place for us to be next year.

Okay, thank you.

And our next question comes from the line of Kevin Hocevar with Northcoast Research. Please proceed with your question.

Hey, good morning, everybody. I wonder if you could comment on the mix in the specialty side of things, it seems like that's been nicely favorable here to the results, what's driving especially with the chip shorter diodes, and how that's impacting auto, we always felt that thought that the coatings and auto OE was probably the highest mix stuff. So could you kind of comment on what's driving the mix in the specialty business?

Yes, so mix, first of all, we're just going to say big picture, comparing it from a year-ago. I mean, it's up pretty much everywhere, all right. And if you were going to think sequentially, then you're correct, there's pressure sequentially in automotive as you expect. So coatings, adhesives, that sort of thing, but we also see strength for example in engineered plastics in that timeframe, including having made some gains with some new products and that sort of thing.

Okay, and then in terms of the dividend, it's good to see that get reinstated, what's the plans going forward with the dividend, I'm assuming this will be quarterly going forward and then do you it's just something you plan on raising going forward? And especially as you get say, 2023 when cash flow will approve meaningfully, could we see a step up in the dividend at that point? I'm just kind of curious your plans with the dividend from here?

Right, so ultimately these things are voted each time by a board, right. But I would anticipate yes, that we move back to a quarterly dividend from where we are, I'd encourage us to think about this in the broader picture, but just capital allocation. So we've got the balance sheet in a good place, we've got the net leverage in a good place, we're always going to prioritize safety and sustainability investments. And then we've got a trade-off between things like growth, and we've talked a little bit about projects we have going, I think we've made it clear that we see opportunities for us in connectivity moving forward, especially in acetylene black. And there's also the element of returning cash, whether that's in a dividend or a buyback to our shareholders. So going forward, I think we'll be looking at just what's the balance between those? I think our current dividend is one that you could grow off of, but I wouldn't necessarily signal necessarily a step change, I think a decision about a step change would be in context of what do you see as your growth prospects and other demands for the capital.

Okay, all right. Thank you very much.

Thanks, Kevin.

Our next question comes from the line of Mike Leithead, Barclays. Please proceed with your question.

Great, thanks. Good morning, guys. And I want to echo Lorin, best wishes moving forward and Bob, look forward to working with you.

Thank you.

I guess, first I want to circle back to Josh's question on rubber pricing into next year. And I fully appreciate you won't put numbers really around it, but just conceptually, you're talking about higher pricing, but your costs are also up meaningfully over the course of this year. So is it fair to assume that prices at some level that means higher unit margins for next year or just going to roughly offset that cost inflation?

Yes, it has to do more than offset the cost inflation. I wouldn't be saying this, if that's all I was expecting to achieve. I mean, think about all of the capital, we and other people are putting into it industry in North America in particular. So yes, no I feel strongly that margins and profitability and return on capital does need to improve, we see ourselves taking a meaningful step forward in that regard. And of course, that's more than just covering your costs, but costs are going up.

And I would also add, we have additional operating leverage, when you think about our total potential volumes for a full-year, it's in excess of a million, and we're going to end this year, somewhat shy of that. So just the operating leverage on the Rubber Carbon Black business could also drive higher profitability next year, in addition to the price.

That's great. Okay, that is what I just want to clarify. And then second, I did want to talk about '22 for a minute. And I think Lorin, you touched on a bit in an earlier answer. But just if I look at the EBITDA cadence this year, I think you averaged about $75 million or so a quarter in the first half, $66 million in 3Q and the midpoint of your guide is about $56 million for 4Q, now, Lorin you touched some one-off stuff this quarter, but just is the first half of this year that call it $300 million or so annualized level, the right run rate for earnings next year, or I guess I'm just really just trying to get my hands around the right earnings power level as we kind of move our models into next year?

Right, what I would tell you is that, it is not difficult to get to something with a three in front of it for next year. When you think about again, if our total volume is about $1,000,050, which we said in the past, and we in this year around say 975 ish, that incremental leverage and we've given you 30% operating margins, incremental margins for rubber, and mid-40s for specialty, just that incremental leverage, getting back to say 2019 would be an increment, and then the pricing would be an increment. So it's not difficult to get to something with a three in front of it. Our first half this year was very strong, in part because we waited our turnarounds towards the second half. So we can't get into quarter-by-quarter. But it's not tough to get yourself to that kind of a level, which I think is where consensus is.

Got it. Thank you.

Our next question comes from the line of Chris Kapsch with Loop Capital. Please proceed with your question.

Yes, good morning. Happy Friday. Lorin, congrats on the new role. Look forward to chatting with you about that.

Thank you.

Just yes, the follow-up was on really on the profitability of the Rubber business. Talking directionally, if you think about next year, if you look at the gross profit per ton TTM chart that you guys provided, I think Lorin, you said, you know, being kind of in that ballpark, next year would be something to think about. But if you look back to 2019 when the levels were north of 280, you got pricing in calendar 2020, although then the pandemic considered and then no pricing in '21 because of the pandemic, but then another level of based pricing in 2022, which was just referenced in contract negotiations, and operating leverage. So why wouldn't we be thinking something materially higher than kind of what your TTM is around now?

You're right between price and operating leverage, we should do better than that TTM average. You're absolutely right.

Okay.

And the way you think about that, again, if you assume incremental margins in the low 30s for Rubber, you can make your own assumptions about how much our incremental volume growth would be next year, but he used sort of low 30s incremental margins. And you can also make your own assumptions about what price we're going to get in excess of our costs. To Corning's point, we're not just going to cover our costs, then you're right, we could do better than that. On an oil price neutral basis, if oil prices go down, then that's to the detriment of the Rubber business. But on an oil price neutral basis, we can do better than that. Yes.

Okay, just sticking with the Rubber business and I'm totally appreciate the commercial sensitivity around these negotiations. But is there any way you can characterize maybe just the nature and tone of the conversations, because clearly you're sending the message to your customers that you need. And you've been stalwartly mentioned, conveying this to customers, since you arrived at the company, Corning is that you need, the industry needs better returns on capital. So just wondering, given the setup, and generally healthy trajectory and demand, what just -- any characterization of business, the nature and the turn of those conversations be interested to hear.

Yes, so, Chris, I think one element of it is just supply and demand dynamics, and what people see for next year, maybe there's a chip shortage in the beginning of the year, okay, but it just drives more replacement, tire demand, and that same timeframe. And you're basically reserving capacity, instantaneous, how much Carbon Black are you signing up for? So if he thinks the second half is going to be stronger, you need to make that commitment now. So I think all that plays out very well, I'd say the dynamics in South America are extraordinarily strong, it's positive in North America, Europe as well. So I think it's -- to a certain degree, it's simply supply and demand as well, as every supplier, well, I speak for ourselves, there is cost pressures, and there is big investment I think I had in the script that comment about loading, and that came from a third party data source. But that was saying, let's say overall, about a 300 basis point, tightening in terms of utilization of capacity, and it's cleanest to look at places like North America, because Europe, you've got this balance with what comes in from Russia. But I just say it's another data point that says that it gets tighter. And you can see that, because you can see the on-shoring, for example of tire capacity, and no increasing capacity in Carbon Black.

Okay, and can I just follow up on one by one prior mix in the specialty business, because there is a little counterintuitive, you improve sequentially, despite higher oil prices, where there's - you have to fight more to get that through, because it's not automatically contractually pass through. And you're in the past, you've described the automotive end market is being the more favorable mix. And then given to where the weakness in the automotive late in the third quarter, you would have -- that may have been a headwind for that segment. So just trying to reconcile a little bit more color why that mix on the sequential basis was so much better than second quarter. Thank you.

All right, yes. Good question, Chris. So one element of that is, we did have a fixed cost advantage. We had outages coming. So we had a bit of an inventory build. So that's a plus for us. I say without that looks like compared to prior quarter, it would have been roughly on par. In a broader sense across all the products that we make. We've been working hard to refresh our products to enhance our investments and innovation, we talked to over a year ago, we started up a lab in the United States, for example. And as you do these, you just upgrade your overall portfolio. So don't get me wrong, mix is still a factor right? And if certain segments go down and other segments grow, it can go down from where it is today, no question about it, or even where its natural runways without let's say that inventory build. But we have worked hard to improve that overall picture.

All right. I appreciate color. Thanks.

Our next question comes from the line of Jon Tanwanteng with CJS Securities. Please proceed with your question.

Hi, good morning, guys. Thank you for taking my questions. And again, congrats, Lorin on finding something new and Bob around for stepping up. I first want to -- Corning, I was wondering if you could talk more about that factory downtime, the EPA upgrade and just kind of maybe how it's taking longer than expected. Maybe you talked about earlier, but I missed it. What's the actual cause there and are you on track with the expected CapEx and spend in that facility?

Yes, I don't think it's going to have a huge impact on CapEx. There might be more startup costs that we have to end up capitalizing that kind of thing. I would describe it having been a startup engineer many, many years ago, that we're in the throws as a startup and you kind of work your way through kind of the typical issues that come up with that, it's a more complicated control system, but one that's got certain advantages. And we're just working our way through that. And I think this period of time, which I would refer to as sort of like a shakeout time as we go through that process to run well through this quarter and potentially interact slightly.

Okay, got it. And then just approaching the Rubber pricing question from another perspective. You mentioned getting paid for the capital investor makes the replacement cost. I'm not sure which one. Has the model itself changed how you price the customers? And are there better escalators and maybe de-escalators for how volatile inputs are now?

So they can one more comment to the startup, let me also just be clear, so that doesn't sound overly pessimistic. I mean, we're up and running. The issue is, you have trips, you have things you shut down for things, you want to shut down and check. Because we want to make sure we don't damage the equipment in a fundamental way like that. So again, I just mean that it's going to be a little less reliable in this timeframe. If I move, I'm sorry -- could you repeat your second question briefly…

Revisiting the Rubber pricing question.

All right.

I think earlier, you said you do it? Do you want to get paid more for the capital invested, maybe for, I guess the replacement costs? And I was wondering if the algorithm has changed how you price to customers? Or is it more of a traditional one, we just raise prices and hope for the best, are there escalators -- de-escalators in that just given how the input and supply chain has been so volatile?

Yes. So I think by and large, our formulas work well for us. A couple years ago, we made an enhancement on how we handle differentials and the pass through on that, and that the deal we have with our customers is essentially that we're going to pass through these variable costs as they go up or down. And that's what we strive to achieve within the contracts. I think that's understood. Perhaps the only, like structural thing I point to is that in Europe, many of our contracts had a CO2 clause in them. And as the trading scheme ratchets up in Europe, we're seeking in this round to have a CO2 aspect of those pricing formulas. So that's, I guess, I'd say that's the enhancement that we've made in that market plus.

Okay. Understood. And then last, just wondering as you look forward, I think one of the things that you'd been hoping for long-term was just increasing the mix of specialties as a portion of the business. I'm wondering if there are any updates to that outlook, and then kind of how that trends and if that does take any more rubber capacity online, if you are in offline as you do that?

Right. So I think first of all, you can already see it's moved up for us as those percentage of our EBITDA. It's going to step up with the Ravenna project. It's going to step up with Huaibei project. And we've obviously talked a bit and we're looking at conductive, a little bit of that might go into the rubber market, but the vast majority of that would be in a specialty area as well. So I think we'll continue to see a larger and larger proportion of our EBITDA coming out of specialty.

And just with regards to the rubber capacity business. Does that cannibalize at all?

It does in some cases. Yes, that's true.

Okay guys. Thank you.

. Our next question comes from the line of . Please proceed with your question.

Hi, guys, thanks for all the hard work at Orion the last few years. A couple observations and then maybe just some questions. First on the capital allocation side, OEC has been public for about six or seven years at this point. Paid some dividends in pay dividends. Now it's paying a very small dividend which is great. I think leverage is 2.3x your cost of capital for that, cost of debt is around 3%. Enterprise side EBITDA is around 5.5x and 6x depending on what you use for EBITDA next year. SID Richardson was acquired for over 10x when you adjust environmental spend. And next year even with let's say CapEx being $200 million, probably your last year elevated CapEx. You're still going to probably produce some free cash flow, unless working capital expands alive, oil goes from let's say $80 million to $100 million. I'm curious why, just from a board level, there hasn't been more of a thought about buying back and taking advantage of the market's view that you should only be valued at 5.5x. Where you have a specialty business it could probably sell in the private market easily double-digit multiple. And then let me add to that. I haven't even to what you said earlier today that these growth projects, which are sort of potentially adding $30 million to $40 million of EBITDA, which I don't think are any really are in the model for next year, that's probably in '23 even or '24. Why not buy backs and stock now prior to sort of all of these things, CapEx ending in terms of the environmental stuff. For the growth project EBITDA kicks in and spend some of your money that way versus not?

All right. Well, thank you . That's a question that I think is out there with some people. So they just take it back to the overall look at allocation of the capital. Right, that we would agree, we've got our balance sheet in a good position today. We've always put, I think we'd all agree safety and sustainability. We feel right now, number one, after robust discussion with management, with the board and so forth that we have some very important growth opportunities for it. And some of those like connectivity are essentially strategic, right. There's very few players in our particular area within the assembling black market. And either we move forward or we don't at this time, and we see that as important. I think when you look at what can be done with Huaibei and Ravenna and the gas black debottlenecking an expansion that we've talked about before you get yourself with that, I think well into the mid-300s. And we've going with a settling black, I think you can get yourself into the 400 at some point. So I think there's a positive path forward. And I think as a board and as a management team, as we look at it, it's just saying that that's important. It's strategic. And for some of that, it's now, now's the time. And it's a choice of strategic growth, I would guess I would say versus taking advantage of what I'd agree is an attractive purchase price today. I don't argue that.

What I would also add is that, since the IPO, we spent over $600 million. If you grant me through next year for the EPA, we would have spent over $600 million on initiatives that don't drive economic profit. EPA debt reduction, dividends, the pivot that's underway over the next five years is to allocate capital towards projects that drive a higher earnings for this business. And so we think we'll be rewarded eventually for doing that.

I guess the question would be, why can't we do both. Even if you're doing small share repurchases. If you're spending $200 million of CapEx to $300 million EBITDA, cash taxes a $40 million to $50 million, cash interest of around $25 million, $5 million through dividend today. You're still producing $70 million to $80 million of free cash flow. Why not allocate some of that to share repurchases at this point in time. And I appreciate a growth CapEx is always better. If you can show growth, you get a higher multiple, you need to be competitive. That's how businesses thrive. No question. But the question is, why can't there be a bounce even allocating $25 million of share repurchases? Just something to start reducing the float that's been out there for more than half a decade?

Well, I think this gets into that realm where reasonable people can disagree. And you can get to the point of well, what's the point of a purchase that is small, is that satisfying, and so forth. And I would just say that, a wide range of options have been really very thoroughly discussed and debated in with our board. And for the time being, your points are noted, but for the time being, this is what we thought made the most sense. Especially when you look at next year, where we still do have significant EPA spending.

Thank you.

And we have reached the end of the question-and-answer session. I'll now turn the call back over the CEO Corning Painter for closing remarks.

Okay, well, thank you all for your time and your attention today. We appreciate it very much. Lorin, thank you very much for the last couple years of partnership as we've gone through this. I'll miss not being able to do earnings releases with you going in the future. But Bob, looking forward to working with you even more closely now. Thank you all and have a good rest of your day.

This concludes today's conference. And you may disconnect your line at this time. Thank you for your participation.