OneSpaWorld Holdings Limited (OSW) Q4 2022 Earnings Report, Transcript and Summary

Good day, and welcome to the OneSpaWorld Fourth Quarter 2022 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Allison Malkin of ICR. Please go ahead.

Thank you. Good morning, and welcome to OneSpaWorld's fourth quarter and fiscal year 2022 earnings call and webcast. Before we begin, I'd like to remind you that certain statements and information made available on today's call and webcast may be deemed to constitute forward-looking statements. These forward-looking statements reflect our judgment and analysis only as of today, and actual results may differ materially from current expectations based on a number of factors affecting our business. Accordingly, you should not place undue reliance on these forward-looking statements. For a more thorough discussion of the risks and uncertainties associated with the forward-looking statements to be made in this conference call and webcast. We refer you to the disclaimer regarding forward-looking statements that is included in our fourth quarter 2022 earnings release, which was furnished to the SEC today on Form 8-K. We do not undertake any obligation to update or alter any forward-looking statements whether as a result of new information, future events or otherwise. In addition, the company may refer to certain adjusted non-GAAP metrics on this call. An explanation of these metrics can be found in our earnings release issued earlier this morning. Joining me today are Leonard Fluxman, Executive Chairman, Chief Executive Officer and President; and Stephen Lazarus, Chief Financial Officer and Chief Operating Officer. Leonard will begin with a review of our fourth quarter and fiscal year 2022 performance and provide an update on our operations and our key priorities. Then, Stephen will provide more details on the financials and fiscal year 2023 guidance. I would now like to turn the call over to Leonard.

Thank you, Allison. Good morning, and welcome to OneSpaWorld's fourth quarter and fiscal year 2022 results conference call. I'm very pleased to report an outstanding finish to an excellent year of growth. The fourth quarter saw our highest quarterly revenue, income from operations and adjusted EBITDA delivery in our history. These results clearly demonstrate that the strategies we implemented during the pandemic have not only led to our successful return to normal service, but importantly, raised our capabilities to deliver even greater levels of performance in the future. I'm proud of our team as their combined efforts executed a stellar return to service that included placing over 5,000 staff onboard cruise ships, embarking on 6,661 voyages, conducting 1,115 management visits to Ships in Port, operating 48 destination resort health and wellness centers and continuing to provide innovation in our products and services. All of this contributed to our achievement of double-digit increases across key operating metrics. Our fourth quarter and fiscal 2022 results once again attest to our company's unique positioning and capabilities as the pre-eminent operator of health and wellness centers at sea and on land, which drives extraordinary value for our cruise line and resort partners. Turning to the highlights of the quarter, total revenues were $168.9 million, increasing 97% from $85.7 million in the fourth quarter of 2021. This growth reflects contributions from health and wellness centers that reopened on 177 ships that resumed operations compared to 118 ships at year end last year and the contribution from 48 destination resorts bars that were open and operating as of December 31. Income from operations increased $14.7 million to $10.7 million compared to a loss from operations of $4 million in the fourth quarter of 2021 and adjusted EBITDA was $20.7 million, an improvement of $15.9 million from adjusted EBITDA of $4.8 million in the fourth quarter of 2021. For the year, total revenues increased 279% to $546.3 million compared to $144 million in fiscal year 2021. Income from operations increased $67.2 million to $15.1 million compared to a loss from operations of $52 million in fiscal year 2021. Adjusted EBITDA increased $69.3 million to $50.4 million compared to negative $18.9 million in fiscal year 2021. Unlevered after-tax free cash flow increased to $45.1 million compared to negative $22 million in fiscal year 2021, and we ended the quarter with total liquidity of $53.3 million. Our flawless return to service continued. The fourth quarter saw us commence service on board two new ship builds. At quarter end, we had health and wellness centers onboard 179 ships, of which 177 had resumed voyages as of quarter end. This compares to 172 ships that resume voyages at the end of the third quarter of 2022 and versus 118 ships that resume voyages by the end of Q4 2021. We continue to see record demand by cruise ship guests for our services. While load factors onboard cruise ships remained below historical and 2019 levels, we were very pleased to see continued high demand for our services. Key operating metrics during the fourth quarter of 2022 compared favorably with our fourth quarter 2019 performance, the most recent comparable period of normalized operations. Average guest spend and revenue per staff per day were up double-digits compared to Q4 2019. In addition, pre-booking as a percentage of service, revenue, service frequency per guest and guest penetration also compared favorably to the fourth quarter of 2019. These improved operating metrics were driven by the continued innovation in our offering and focus on staff training. In Q4 '22 versus Q4 '21 metrics also compared favorably, for example, average weekly revenue per ship rose 9.6% from Q4 2021 and revenue per ship, per staff, per day increased 13.5% from Q4 2021. In addition, average weekly revenue per resort rose 16% from Q4 of 2021. It's incredible to consider that just one year ago, we're in the midst of Omicron. Ships were still returning to service by cruise line services and load factors were below 60%. We are eager for load factors to return to a more normalized level, which our cruise line partners expect by the end of spring. This will allow us to increasingly showcase our even more attractive business model to passengers. As such, we continue to prepare for this by leveraging our unique capabilities, including our core competency of recruiting and training. In the fourth quarter, we on-boarded 1,068 staff members and by the end of the quarter, we had 3,566 cruise ship personnel on vessels for actual and expected voyages, and this figure is expected to grow to 3,663 employees by the end of Q1 2023. Our priorities in 2023 are focused on capturing highly visible new ship growth with current cruise line partners, which most recently was demonstrated by a new agreement with Norwegian Cruise Line Holdings through 2029, covering 29 ships currently sailing and eight new ships anticipated to come into service during the term of the agreement. Additionally, we expanded our contract with Marella, adding two new ships in Q4 and now operate health and wellness centers on their entire fleet. Second, increasing guest spend, spa capacity utilization and retail revenues. We expect to accomplish this as we continue to launch higher value services, including pain management and recovery technology, expand the adoption of dynamic pricing by cruise line partners and grow pre-booking and pre-payment appointments, which yield a 30% lift in revenue versus services booked onboard. Notwithstanding certain economic headwinds, our positive performance has continued in the first quarter of fiscal 2023, reflecting our outstanding guest service and product offerings, buoyed by the heightened consumer demand for hospitality travel experiences. With our full fleet of cruise ships finally sailing and 10 new builds commencing voyages this year, we expect fiscal 2023 to be another year of accomplishment and increasing value for OneSpaWorld shareholders. With that, I'll turn the call over to Stephen, who will comment on our fourth quarter and fiscal year 2022 results. Stephen?

Thank you, Leonard. Good morning, everyone. We showed significant progress across all of our key performance metrics through fiscal 2022, in addition to substantially strengthening our balance sheet position. I will now share more details on our fourth quarter and fiscal year results that we reported this morning. Total revenues were $168.9 million as compared to $85.7 million in the fourth quarter of 2021. The revenues generated in the three months ended December 31, 2022, were derived primarily from our 177 health and wellness centers onboard ships having resumed voyages and our health and wellness centers at 48 open and operating destination resorts. The three months ended December 31, 2021 revenues were primarily related to our health and wellness centers on 118 cruise ships and in 48 destination resorts that were opened during the quarter and e-commerce product sales to the company's timetospa.com website. Cost of services were $114.9 million compared to $58.7 million in the fourth quarter of 2021. The increase was primarily attributable to costs associated with increased service revenues of $139 million in the quarter from our operating health and wellness centers at sea and on land compared with service revenue of $68.8 million in the fourth quarter of 2021. Cost of products were $24.3 million compared to $15.5 million in the fourth quarter of 2021. The increase was primarily attributable to costs associated with increased product revenues of $30 million in the quarter from our operating health and wellness centers at sea and on land compared to product revenues of $16.8 million in the fourth quarter of 2021. Net loss was $2.3 million compared to a net loss of $10.9 million in the fourth quarter of 2021. The improvement in the fourth quarter of 2022 was primarily a result of the positive $14.7 million change in income from operations, the right from our operating 177 health and wellness centers onboard ships having resumed voyages, offsetting higher other expense attributable to increases in interest expense and the change in the fair value of our warrant liabilities. Adjusted net income was $12.8 million or adjusted net income per diluted share of $0.14 as compared to adjusted net loss $800,000 or adjusted net loss per diluted share of $0.01 in the fourth quarter of 2021. Adjusted EBITDA was $20.7 million compared to adjusted EBITDA of $4.8 million in the fourth quarter of the prior year. For the fiscal year, total revenues were $546.3 million compared to $144 million in the year ended December 31, 2021. The revenues generated again in the year drove primarily from our 177 health and wellness centers onboard ships have resume voyages and our health and wellness centers at 48 open and operating destination resort spas. Revenues for the year ended December 31, 2021 were negatively impacted by the COVID-19 pandemic and the resulting March 14, 2020, no sale order. With revenues derived primarily from health and wellness centers onboard 118 ships and in 48 destination resorts that were open and operating for partial periods during the 12 month period and e-commerce product sales through the company's timetospa.com website. Cost of services were $375.1 million compared to $108.9 million in the year ended December 31, '21. The increase was primarily attributable to costs associated with increased service revenues of $446.5 million in the year from our operating health and wellness centers at sea and on land compared with service revenue of $15.9 million in the 12 months ended December 31, 2021, and the increased costs related to the resumption of operations at our health and wellness centers at sea and on land. Cost of products were $87.6 million compared to $26.6 million in the year ended December 31, 2021. The increase primarily attributable to costs associated with increased product revenue of $99.7 million in the year ended December 31, 2022 compared to product revenue of $28.1 million in the year ended December 31, 2021 from our operating health and wellness centers at sea and on land. Net income was $53.2 million compared to a net loss of $68.5 million in the prior year. The improvement in the year ended December 31, 2022, was primarily a result of the $67.2 million positive change in income from operations derived from 179 health and wellness centers, having resumed voyages and the change in the fair value of warrant liabilities. As you know, the change in fair value of the outstanding warrants during the year ended December 31, 2022 was again a $54.4 million compared to a loss of $2.6 million during the year ended December 31, 2021. The change in the fair value of the warrant liabilities is the result of changes in the market prices deriving the value of these financial instruments. Adjusted net income of $26.7 million or adjusted net income per diluted share of $0.28 compared to adjusted net loss of $40.2 million or adjusted net loss per diluted share of $0.45 in the prior year. Adjusted EBITDA was $50.4 million compared to negative $18.9 million in the prior year. Turning then to our balance sheet, cash and borrowing capacity under the company's line of credit, which is fully available at December 31, 2022 totaled $53.3 million. In the fourth quarter, the company repaid $10 million on its second-lien term loan and in February, paid another $5 million, leaving $10 million remaining under this loan. The second lien carries interest at a rate of LIBOR plus 7.5%. We expect to continue utilizing cash generated from operations to extinguish this facility and have no material debt maturities until March of 2026. We ended the year with total cash of $33.3 million, and total debt net of deferred financing costs was $212.8 million. In the fourth quarter, unlevered after-tax free cash flow was $90 million compared to $3 million in the fourth quarter of 2021. For the fiscal year, unlevered after-tax free cash flow was $45.1 million compared to a negative $22 million in the year ended December 31, 2021. The company expects to continue to generate positive cash flow from operations in the first quarter of 2023 and throughout fiscal year 2023. Moving then on to guidance, with our full return to service, normalizing operations and operational visibility, we are pleased to reintroduce our quarterly outlook and have reiterated our annual outlook. For the first quarter, we expect total revenues in the range of $170 million to $175 million and adjusted EBITDA in the range of $16 million to $18 million. Our first quarter guidance assumes an ending ship count of 179, and we expect to have 3,663 employees on cruise ships by quarter end and to operate at 52 destination resorts. For fiscal 2023, we expect total revenues in the range of $660 million to $680 million and adjusted EBITDA in the range of $64 million to $70 million. We expect to end fiscal 2023 operating on 187 cruise ships and at 52 destination resorts. Overall, I feel very confident about our growth initiatives. We begin fiscal 2023 operating from a position of strength. Our health and wellness centers onboard cruise ships and our destination resorts on land are open. Our staff is providing exceptional experiences for guests, and we are continuing to innovate our product and service offering. This, in addition to our strengthened balance sheet, has us well positioned to continue innovating a highly complex business model to deliver annual year-over-year growth in revenue, earnings and cash flow. And with that, David, we'll open the call for questions. Thank you.

We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Steve Wieczynski with Stifel. Please go ahead.

Hey, guys. Good morning. So can you help us think about, how we should be thinking about any material seasonality this year? And I guess, what I'm getting at is, we go back and look at 2018, 2019, even when you guys were Steiner Leisure, again, there was a little bit of a different business. It seems like there really wasn't much seasonality here, except really around the fourth quarter. And I guess what I'm trying to understand is, based on what you just put up in the fourth quarter and based on what your first quarter guidance is, it seems to us if the consumer stays pretty much status quo through the year, shouldn't there be some upside to your current guidance range? Am I not thinking about that the right way?

Yes, Steve here. You're absolutely right. I mean, we have very moderate seasonality in our business. I mean, the second and third quarters have always been the strongest, I mean, clearly, 2022 fourth quarter surpassed our expectations. We had a very healthy fourth quarter even though you have a lot of ships that are repositioning back from Alaska in the mid, we just knocked it out the park completely. The first quarter is -- came out of the gates and it typically does. I mean, New Year fell at the right time this year. So we got a strong push off into the first quarter. But first quarter typically is not as strong as second and third, but it's decent. So to your points, we're really in the early innings of the year. I mean, the strength that we've seen thus far through 1.5 months is definitely gives us a lot of confidence. But I think it's premature for us to start guiding upwards, but we're very comfortable with the guidance that Stephen read out to on the call.

Okay. That's perfect. I didn't think you were really going to answer that too much, but I took my best shot at it. Second question, uses of your free cash, look, again, if we go back to your guidance, it seems to us you'll be generating, let's call it, $60 million to $65 million of free cash flow this year. You only got $10 million left to go on your second lien. So that's going to leave a sizable amount of cash to be put to use. I just want to understand maybe how you guys are kind of thinking about that once you do pay down that second lien?

Steve, I think I will answer that simply as it depends. Some of it will depend on what happens with interest rates and how they play out through the remainder of the year. But I will tell you that, as always, we evaluate uses for cash, given current interest rates, it's likely that we continue to pay down debt. But our overarching theme would be that we will continue to evaluate best uses of cash, including a dividend payment.

Understood. Thanks, guys. Really good quarter. Appreciate it.

Thank you.

Our next question comes from Max Rakhlenko with Cowen & Company. Please go ahead.

Great. Good morning and nice shot guys. So first, you discussed some of the ways that you're looking to increase guest spend, which initiatives do you think will be the top needle movers this year and how should we think about the cadence of the rollout?

So look, Max, we introduced [indiscernible] pricing at the end of the fourth quarter because of the Christmas, New Year. We continue to see strong demand, decent spend -- strong spend actually during January so far. Nothing to alarm that spend is falling off. And we introduced a bunch of new services in the medi-spa arena last year sort of in -- the IV, the immunity shots, acupuncture continuing to elevate itself. We're going to have a lot of compelling new programs in acupuncture and with attached retail spend. So we're continuing to focus on that. Bundling services together, getting more into our pre-booking engine is certainly helping. And that window has expanded from what we saw back in 2021. So that continues to give me confidence that demand and spend will continue to move in the right direction for us.

Got it. That's helpful. And then what about the product revenue line, what are the top opportunities there to accelerate growth, and then just your outlook for the segment, for the year, and then just any margin implications?

Yeah. So our number one, the guys who sell the most retail and I think we mentioned this before, is for fitness staff. They tend to do a lot of consultative work, nutrition counseling, a lot of supplements take home packages. Those continue to elevate as we've continued to staff better in our fitness complements. In the beginning of 2022, staffing in fitness was probably the lowest we had seen and we continue to strengthen in that arena right through the year and peaked in 2022 in the fourth quarter. And that's certainly a focus we're going to continue to watch, but there's also -- our biotech facials, the new ELEMIS facial continues to get a nice retail attachment and that continues to perform well. And I think when you see those kind of services continuing with the strength that we've seen even in the first month of 2023, it gives me real confidence that the attachment rates will continue to grow. We're going to continue to move a lot of our sales and revenue people around the different geographies, so we can do intensifications to continue to strengthen and motivate our staff to continue to grow retail attachment through 2023.

Got it. And just a very quick follow-up to that. Your staff levels onboard. How happy are you with those levels? Are you where you want to be or is there still more room to go, just to get more specialty of your best people onboard? Thanks a lot and best of luck.

Yeah. I'm very happy with staffing. I mean I think our London Wellness Academy, the recruiting and training teams have done a phenomenal job of getting our staffing levels above 90%. And we continue to look at the opportunity, where we can get closer to 100%, which historically, we've never actually been at 100% on all ships. But now we're looking at the opportunities across different modalities where we can load up more staff, and we'll continue to do that through the first and second quarters as load factors continue to climb.

Awesome. Thanks so much.

Yeah. You’re welcome.

The next question comes from Gregory Miller with Truist Securities. Please go ahead.

Thank you. Good morning, gentlemen. I'd like to start off asking about younger passengers, the generation Z customer that from my understanding is more focused on mental health and the read-through to how they spend their discretionary wallet on wellness. I'm curious, what you're seeing today in terms of the generation Z customer to your facilities and what opportunities that you might see to target the mental health interests of this customer base?

Yeah. So certain banners cater more to that demographic, and we continue to see very strong demand on ships such as Virgin, where we see a younger demographic onboard. A couple of the other banners as well tend to have quite a decent content. We'll see more of those people cruising in the summer again. And we expand. I mean, we cover a lot of areas in wellness, whether it be meditation, wellness programs on some of the more luxury ships, but those are definitely not your Gen Z people. But yes, wellness continues to be a category that we feel there is ample opportunity for us to load up on more types of services. So that's an area that we focus on. Acupuncture has been something that has grown the most in 2022 than we've seen historically. So there clearly is a demand for wellness, I think coming out of the pandemic, the immunity concerns, supplementation around immunity, immunity shots definitely is in high demand.

Excellent. I appreciate that. And then my follow-up, I was curious to get your thoughts about some of your ships that still don't have a significant medi-spa offering, perhaps some of your luxury ships are inclusive of that. Do you think that the medi-spa is better suited for, say, a contemporary ship versus some of your small luxury ships or do you continue to anticipate expansion of medi-spa offerings to some of the small luxury ships at you service?

Yeah. It's a good call out. I mean, as you move up the chain in age, medi-spa is something that becomes much more selective than opportunistic experience. We certainly feel that the breadth of demand is more in the contemporary mass market, and that's where we excel. Certainly, as you move up the age chain, people are set as to who their provider is and are very selective about it, but we still do nicely. The obvious problem and the constraints around real estate is what limits us onboard some of the luxury ships, whereas we will continue to get new ships this year that are going to have much better facilities than you find on the smaller ships. So we will see the mix of medi-spa move upwards, and we're excited about that as we continue to look at more opportunity to load in more staff, particularly, nurses, so that can complement some of the services that we provide onboard. So I think this year, we're going to actually see a very nice move up in medi-spa facilities onboard ships.

Great. Thanks very much, Leonard.

Yeah. You’re welcome.

Our next question comes from Laura Champine with Loop Capital. Please go ahead.

Thanks for taking my question. Wanted to get a sense of what the trend is in ship size and also the trend in average age of your customers?

So I think if you like to take a look out at the order book, you'll see that pretty much the biggest ship coming onboard that is being built right now is Royal Caribbean's Icon. That's the largest ship that's ever going to be out there. I think for the most part, cruise ships have settled into a size, where passenger on a lower basis is measured anywhere between, I would say, 4,500 and 5,500. Those are the largest ships out there. I think if you look at the average, it's probably closer to the 4,500. And I don't see ships getting much bigger than that. Certainly, the Icon is the newest one that will be of enormous scale. I mean, it's like it's bigger than a larger village. It's an incredible ship that's coming out. But that's something that's an outlier, and it's unique. And just as Royal Caribbean launched the largest certainly as they -- the wonder of the seas and similar classes of ships, this one is certainly going to set a new size, so to speak, in terms of ship build. But for the most part, if you look at the order book, I think it's pretty steady arena.

Got it. And then the second question was on your average customer age and how that may be trending?

Yeah. That varies across the different banners. I would say, the sweet spot somewhere between 45% and 55%. Obviously, that changes during the summer where you have a lot of kids go onboard so that could go lower. But generally speaking, it's anywhere between sort of early 40s and early 50s tends to be a general population. And then as you move to some of the luxury brands and some of the other brands, then the age group does move well above 65%.

Got it. Thank you.

Of course.

Our next question comes from Sharon Zackfia with William Blair. Please go ahead.

Hi. Good morning. I wanted to touch on pre-booking. If you could give us an update on kind of where that is as a percent of maybe services, transactions or revenues? And any insight into how the Norwegian launch has gone on pre-booking?

Hey, Sharon. So Norwegian, we just commenced the pre-booking in Q1, and we will roll out the entire fleet this quarter. We had taken bookings in Q4 for services in Q1. So we had started on one of the ships, the Encore, and we will continue to roll vigorously now through the first quarter. So we're on pre-booking at about 80%. Once we have Norwegian fully loaded, we'll get closer to 90%, which is incredible.

Okay. Thank you for that. And then just a quick question on payroll, it looks like the salary and payroll kind of jumped over 35% sequentially in the fourth quarter. Was there -- is something there with bonus accruals or anything that we should think about in that number in the fourth quarter?

Yes. That is exactly what you should think about. So as we headed into the fourth quarter, with the incremental performance that was achieved, there are performance bonuses that were accrued for in the quarter. So you're thinking of the reason there is spot on.

Okay. Well, congratulations on getting the bonus. We’ll chat later.

Thank you.

Our next question comes from Assia Georgieva with Infinity Research. Please go ahead.

I know, this is my turn. Congratulations on a very nicely done job in Q4. Keep it up. And again, I'm looking forward to a great fiscal '23. I had a couple of questions. First of all, it seems that you'll be adding about 500 more staff by the end of this quarter. So I would expect that there will be incremental expenses that we'll see in this quarter only, and that may not be repeated through the balance of the year. Is that fair?

Yes. So look, I mean, as you know, our onboard model is primarily variable. So adding staff in and of itself really has a very, very small fixed cost component, particularly, on the much bigger ships where they -- it's all commission-based, primarily, obviously, you've got lodging and food costs that you have, but it's more than offset by the revenue that they will generate. And yes, it is a big number that we're going to load up for. But quite frankly, all of that's going to complement and add to the revenue-generating capabilities as load factors continue to increase through spring. But it will obviously taper off as we get into the back quarters, correct.

I was thinking more about logistics of getting the staff to the ships and all that. But that's probably a small piece relative to the revenue generation.

Yes. Actually, looking at the number, just trying to see where you got the 500 staff, from I think it's more like 150 staffs. But look, all of that's in the guidance.

I may have misheard.

Maybe yes, because I don't think we're jumping by 500 in the quarter. I think if you take a look at the numbers we gave out, it's closer to about 150 staff.

Okay. I'm sorry. My bad. And the second question, we're still quite a ways away from the European summer season. But in terms of the numbers that I'm seeing from my pricing surveys, which cover about 30,000 voyages, it seems the Caribbean is doing extremely well, a lot more North American passenger demand than European. And given that you work with so many brands that are focused even during the winter months on European sourcing, whether it's to the Middle East or in the med. Are you seeing this dichotomy? Or is that something that I'm [indiscernible] seeing about it?

Look, certainly, the Caribbean is performing fantastically, and we've had a lot of ships here in the fourth quarter. As you well know, they'll start to reposition late -- sort of middle of April, beginning of May, to the various destinations such as Alaska and the med primarily. The med was a little soft last year. I'm expecting the med to be better this year. I think you're going to see -- given exchange rates extend on a strong dollar, I think Americans are going to continue to travel and experience perhaps things that they weren't able to do last year and take advantage of that. So yes, look, I mean Americans by far, North Americans particularly spend the best. But we do see the Europeans now coming as they've lowered the COVID restrictions. We've seen a lot more Europeans come into the Caribbean geographies as well this year.

Well, there -- does seem to be demand on both sides of the Atlantic in terms of travel. And I think last year, especially with the airlines, we saw how busy they were. So hopefully, we'll have a more streamlined, but just a busy season. And last question, in terms of MSC, is there an opportunity there? Is it something that we can consider, again, as a potential customer?

There are some things you wake up in the morning and you just hope it happens. And MSC would be lovely to have. It's definitely on my bucket list. And ultimately, hopefully, one day, I mean, maybe we can convince them to let us help them out. But at this point in time, there's nothing to report.

Okay. I appreciate that. Leonard, sorry for the very direct questions.

I’m used to it.

Again, thank you so much.

Okay. You’re welcome

[Operator Instructions] At this time, we have no more questions. This concludes our question-and-answer session. I would like to turn the conference back over to Leonard Fluxman for any closing remarks.

All right. Thanks, David. Thanks again, everybody, for joining us today. It is definitely a great year, a good return to service. We continue to look forward to 2023 with a positive outlook, and we look forward to speaking with you when we report first quarter results in May. Thanks, everyone. Bye-bye.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.