Park-Ohio Holdings Corp. (PKOH) Q1 2022 Earnings Report, Transcript and Summary

Good morning, and welcome to the Park-Ohio First Quarter 2022 Results Conference Call. [Operator Instructions] Today’s conference call is also being recorded. If you have any objections, you may disconnect at this time. Before we get started, I want to remind everyone that certain statements made on today’s call may be forward-looking statements as defined in the Private Securities Legislation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected. A list of relevant risks and uncertainties may be found in the earnings press release as well as in the company’s 2021 10-K, which was filed on March 16, 2022 with the SEC. Additionally, the company may discuss adjusted EPS and EBITDA as defined. Adjusted EPS and EBITDA as defined are not measures of performance under the generally accepted accounting principles. For a reconciliation of EPS to adjusted EPS and for a reconciliation of net income attributable to Park-Ohio common shareholders to EBITDA as defined, please refer to the company’s recent earnings release. I will now turn the conference over to Mr. Matthew Crawford, Chairman, President and CEO. Please proceed, Mr. Crawford.

Welcome to our first quarter 2022 conference call. I hope that all of you noticed the new disclosure we included on our website, a short presentation about the results during the period. Turning to my comments, I’d begin by highlighting that against an ongoing and very challenging business environment, Park-Ohio showed significant growth and improved earnings from the first quarter of 2021 and expect to continue this momentum through the remainder of 2022. During the past couple of years, I’ve often discussed during these calls the entrepreneurial culture which exists in our company and the value of decentralization and accountability. During 2021, a tremendous amount of work was done by our team throughout the world to meet accelerating demand against the backdrop of uncertainty at every turn. I want to thank our team for rising to the challenge in meeting these expectations while undergoing ongoing and numerous discussions around pricing and the effort to reduce operating costs. I believe firmly the challenging operating environments are an opportunity to strengthen our competitive position. Our assets, whether they be inventory, machinery and equipment, innovation know-how, and most importantly people, are more valuable to Park-Ohio and our customers when times are uncertain and costs are going up. We are fortunate to be well-positioned to continue to invest in all of these categories and intend to strengthen our strategic relationships during these turbulent times. As production supply specialists, Supply Technology continues to be vital to the performance of their customers, as they support close to 100,000 parts numbers, many of which in sole-source relationships. Maintaining service levels has been historic challenge during the recent quarter, while managing a particularly difficult freight and inflationary environment. By succeeding, we continue to demonstrate our value proposition as a provider of complex value-add supply chain solutions, all while providing steady and improving financial results. Assembly Components product portfolio continues to achieve strong revenue growth of greater than 26% year-over-year, led by light weighting, electrification and reduced fuel emission strategies. As a strategic supplier to an extremely large number of customers and auto platforms, and as we discussed in our fourth quarter call, a tremendous amount of work has and continues to be done regarding pricing strategies and the ongoing restructuring efforts. Those efforts have resulted in stabilizing our earnings picture, and we expect ongoing operating leverage throughout 2022. Those that have followed Park-Ohio for a while know that Engineered Products often leads our company from a margin perspective. We continue to see very strong backlogs across the segment and have an aggressive focus on execution to restore their margin leadership. Additionally, investments around high-margin aftermarket services and innovation will underpin strong performance through the business cycle. As I’ve alluded to several times, we continue to stay focused on our operating model to ensure our operations are positioned for long-term success. In some cases, that has and will provide opportunities to dispose of excess assets, which we will continue to benefit our cash flow. While we are still not in position to provide explicit earnings guidance, I’m optimistic about our ability to focus on strategic revenue growth, which will provide improved margins in both the near and midterm. I also know that in many ways the challenges of the last 24 months have made us a leaner and more agile company which is prepared to succeed in every business environment. Thanks. I’ll turn it over to Pat to talk about the quarter.

Thanks, Matt, and good morning. Our first quarter results reflect significant improvement compared to both the fourth quarter and the first quarter of last year. We saw increased customer demand in each of our business units and across all 3 business segments, which led to near record consolidated sales for the quarter. We achieved record sales for the quarter in both Supply Technologies and Assembly Components driven by strong end market demand and improved product pricing, which helped offset escalating raw material and freight costs impacting each business. While ongoing end market volatility will likely continue throughout the year given the current global supply chain environment, we believe each business segment is positioned to achieve record revenues this year. The first quarter was a good start to achieving our revenue goals for the year. In the first quarter, consolidated net sales were $418 million, up 13% sequentially compared to the fourth quarter of last year and up 16% year-over-year. Higher sales levels were driven by increasing customer demand across all 3 segments and in most end markets. Improved product pricing and the increased production of the strong bookings built up in our industrial equipment business. Our gross margins in the first quarter were 12.8% compared to 6.5% last quarter and 14.5% a year ago. The improvement from last quarter reflects the profit flow-through from higher sales and improved customer pricing in the current period. On an adjusted basis, our gross margins improved over 300 basis points compared to the fourth quarter of last year. SG&A expenses were $46 million compared to $40 million a year ago, with the increase due to higher selling expenses from the higher sales levels, an increase in personnel costs, and increased professional fees incurred during the first quarter. Interest expense totaled $7.8 million compared to $7.4 million a year ago, with the increase driven by higher average borrowings year-over-year. The income tax benefit of $3.4 million in the quarter on pretax income of $2.9 million includes a discrete tax benefit of approximately $4 million related to federal tax credits which we expect to realize in cash. Excluding the credits, our effective income tax rate in the quarter would have been approximately 24%, which is within our expected range of 20% to 25% for the full year. GAAP EPS for the quarter was $0.50 per diluted share. Adjusted EPS, which excludes onetime items related primarily to restructuring was $0.73 per share during the quarter, which was significantly higher than an adjusted loss of $1.08 last quarter and adjusted income of $0.53 last year. During the quarter, we used operating cash flow of $10 million to fund higher working capital levels, primarily due to higher accounts receivable balance driven by the sales growth during the quarter. We expect operating cash flows in the second quarter to begin to trend toward breakeven with positive free cash flows in the second half of the year. EBITDA, as defined by our credit agreement, improved year-over-year and totaled $27.6 million in the first quarter. We continue to focus on increasing operating and free cash flows and expect a $20 million reduction in our net debt balances by year-end from first quarter levels, with continued improvement in our net debt leverage as our EBITDA improves. CapEx in the quarter was $7 million and consisted of investments to support plant consolidation and cost saving activities and for new business awarded in our Assembly Components segment. Our liquidity at the end of the first quarter was $225 million, which consisted of $62 million of cash on hand and $163 million of unused borrowing capacity under our various banking arrangements, which includes $45 million of suppressed availability. We expect our liquidity to continue to exceed $200 million throughout the year and our net debt leverage to improve to 4.5x to 5x by yearend. Turning now to our segment results, in Supply Technologies, net sales were a record $169 million during the quarter, up 7% compared to $158 million a year ago. Average daily sales in our supply chain business were up 5% year-over-year. During the quarter, we saw significant year-over-year sales growth in most key end markets, with the biggest increases in semiconductor, civilian aerospace, industrial and agricultural equipment and heavy-duty truck. In addition, our fastener manufacturing business continues to perform well and achieved organic sales growth of 15% over fourth quarter sales. Operating income in this segment totaled approximately $12 million in the current and prior year quarter. Higher product and ocean freight costs continued to impact our margins. We continue to focus on price action strategies across the business and are having success recovering a high percentage of the increased costs with many customers in this segment. In our Assembly Components segment, sales for the quarter were a record $159 million compared to $126 million a year ago, an increase of 26% year-over-year. Sales in the current quarter were higher due to increased volumes from new business launch last year and increased customer pricing, which included the pass-through of higher aluminum and rubber compound prices. Segment operating income was $2 million in the first quarter compared to a loss of $18 million last quarter and income of $6 million a year ago. On an adjusted basis, operating income was up $17 million sequentially compared to the fourth quarter of last year. This significant improvement quarter-over-quarter was driven by the profit flow-through from higher sales, customer price increases and the benefits of restructuring actions taken over the last several quarters. In this segment, raw material inflation, higher labor costs, supply chain constraints and customer demand volatility continued to result in higher operating costs. During the first quarter, we finalized price negotiations with several customers to help mitigate these cost increases. The result of these negotiations allowed this segment to deliver improved operating income for the quarter. We will continue to take actions to improve profitability, including moving certain production to lower-cost facilities, consolidating manufacturing plants, and automating production where possible, in addition to strategic price actions with customers. In our Engineered Products segment, first quarter sales were $91 million, up 20% compared to $76 million a year ago. In our capital equipment business, sales were up 16% compared to a year ago as customer demand for our equipment is robust with double-digit year-over-year growth in the Americas, Europe and Asia. Bookings of $70 million in the first quarter were an all-time record for this business and were up 96% sequentially and 76% year-over-year. Backlog as of March 31 was $147 million, an increase of 22% compared to the end of last year. In our Forged and Machine Products business, sales in the quarter were at their highest level since the first quarter of 2020 as several key end markets continue the recovery, including oil and gas, rail and commercial and military aerospace. During the quarter, operating income in this segment was $2 million compared to a loss of $1 million a year ago. The profitability improvement year-over-year was driven by the profit flow-through from the higher sales levels, product pricing initiatives, the benefits of cost reduction actions, which included the consolidation of our crop forge operations, and significant operational improvements in our factory in Arkansas. And finally, corporate expenses totaled $7.9 million during the quarter compared to $5 million a year ago. The higher expenses in the current year were driven by higher personnel costs and incremental professional fees in the current period. And finally, with respect to our 2022 guidance, we continue to expect revenues to be at record levels for the full year, with revenue growth of approximately 15%, driven by strong customer demand in each segment. We also continue to expect significant improvement in profitability for the full year 2022 and expect positive adjusted net income in each of the remaining quarters of the year. Now I’ll turn the call back over to Matt.

Great. Thanks, Pat. We’ll open the line for questions.

[Operator Instructions] The first question comes from Steve Barger from KeyBanc Capital Markets.

Matt and Pat, really appreciate the supplemental deck, very nice addition. Thanks for that. It looks like you got some price realization and cost relief in Assembly, which is great, I know you’ve been working hard there. Should we be thinking that with the new programs that came online and better price that revenue can continue running at this level for the rest of the year?

I’ll let Pat comment more specifically, but giving him a moment to think, I think the lion’s share of the work on Assembly Components has been to recover changes in raw material. I think that that underpins, I think, much of the stability in pricing. Again, we’re not -- margin-wise we’ve got some work to do to recover, but I think the increase in raw material, I think, will set a new floor if you will for ongoing revenue. And then, of course, we’ve got the new business that we discussed. Certainly, we’ve seen some price action. Pat could talk more specifically, but let’s just say that the increase in volume is half pricing, half new business. I think we’ve -- we’ll continue, I think, to see a benefit to that realization going forward. And our task is going to be to recover at the margin line those costs that we’ve been unable to recover so far. And I think that some of that will happen as we lower operating costs and some of that’s going to happen as we rotate into more new business.

Yes. Steve, this is Pat. We expect our sales levels in this segment to be consistent throughout the year. We don’t expect to drop off partially because of a nice block of business that we won 2 years ago that was slow to ramp up in 2021. And that book of business is roughly $50 million relating to fuel products on the Gen 5 General Motors engine. We’re expecting volumes to continue or be up over each quarter throughout the year.

That’s great. With those higher volume levels and the cost recovery, then we can probably -- should we be able to see sequential margin improvement through the year as well in Assembly?

Yes. I mean I think the answer, again, the visibility in this business is just awful, both in terms of some of the costs, but I think we’re getting our arms around the cost side. Unfortunately, there’s been some margin compression. But I think we do have a sense of some stable profitability going forward. I think that the visibility is a little difficult because there’s still a lot of start/stop in the auto space as you know, Steve, sort of vis-à-vis the OEs and the Tier 1s and what their cadence is based on semiconductors and other parts. I would hesitate to say that this will be terribly predictable, but I do think that, again, my last comment I think is an important one in my opening comments which is, we are more flexible, more agile as a business across the board than we were a year ago. Nowhere is that truer than the Assembly Components group. I’d hesitate to draw a straight line, but I think that we’ve seen a worst-case scenario and now we’re resetting and trying to build back, and I think that’s going to be accretive as the year goes on and the year after that. Is that fair enough, Pat?

Yes. I agree with Matt’s comments. I will go back to the prior year and remind you, Steve, that much of our losses at least in our aluminum business was isolated in 2 factories. Both are in the process of being restructured. We have some business that’s low margin business coming out of one factory in the second half of the year, and we continue to work towards price increases with each of the customers. That will provide some benefit to us, especially in the second half of the year relative to our margins.

I think, Steve, said a little differently, but I think it’s a really important point we want to bring home, we -- the second half of last year and the fourth quarter, I think, was a perfect storm. That was an aberration. I think that we like to compare, we want to begin to compare ourselves not only in the first quarter of last year, which was more normalized, but even pre-COVID levels across the business. The revenue numbers are going to exceed it. We’re a strategic supplier across the board. Now it’s up to us to get either to increase our operating efficiencies or get the remaining pricing to make us whole and exceed our former records.

Yes, looking forward to seeing that progress. And bringing that back to free cash flow, negative $17 million for the quarter, and I know a lot of that was to support the increased working cap for higher sales. But is that all it is? Or are you buying ahead on some items to make sure that you can supply customers? I’m just trying to get a sense for when this normalizes.

Yes. I would say, Steve, that most of our increase in inventory was volume driven, that over the last year, we’ve -- the embedded increases due to supply chain constraints are there. And we expect those to hopefully come out of the system as we get through the year, although the challenges still present themselves relative to blockages at the ports, longer lead times, etc. I would say in the first quarter, the majority of that increase in our working capital related to the higher sales levels and the increase in accounts receivable.

Understood. And I’ll ask one more and get back in line. Pat, the $3.4 million income tax benefit on the income statement, you didn’t back that out of the EBITDA walk. Why was that included?

Yes. The EBITDA is a defined term, Steve, under our credit agreement. And because the federal tax credit is to be realized in cash, our bank in the definition of EBITDA allows us to keep that in our EBITDA because it’s a cash item.

Even though it’s nonrecurring, I got it. Okay.

The next question comes from Marco Rodriguez from Stonegate Capital Markets.

I wanted to kind of follow up on just kind of on the pricing actions that you guys have mentioned, and it sounds like things have been going well. But in relation to our call last few months back, Matt, specifically, you gave your thoughts in terms of the importance of Park-Ohio in the value chain, especially on the AC segment. And it sounds like, if I’m not mistaken, and correct me if I’m wrong, that perhaps these conversations you’ve had here over the last few months have gone to your expectations. But I was wondering if you can maybe kind of frame that if in fact those expectations have been met for you. I understand that there’s always going to be work and you need to recover some additional costs, but if you can just kind of talk a little bit about that, that would be helpful.

Yes. I would highlight that the diversity of sort of one of the things that we enjoy as a pillar of our success, is our diversity, whether it be product, whether it be end market or geography. We have embraced that diversity. One of the things that makes that interesting is the pricing conversations throughout our business are literally in the hundreds, probably approaching 1,000 different conversations that could be going on over the last 6 months. That’s a strength we think in our business, but there’s no shortage of discussions. It’s hard to answer that comprehensively. But I would say that the discussions have gone reasonably well generally as it relates to raw material. I think that there is a general understanding as it relates to strategic suppliers like ourselves that whether a relationship is built on a long-term agreement or one that’s not, that’s just based on a good relationship, we have been able to achieve our goals as they relate to raw material. I think that it has been more difficult and less certain as it relates to labor, as it relates to freight, and certainly any margin recovery. Those are sort of incrementally more challenging discussions, particularly when it relates to long-term agreements. Again, I think we’ve seen -- we have seen some margin compression versus the pre-pandemic numbers that I think are more appropriate to comp against now. And I think that while we will continue to seek pricing support there and probably get some in some locations, I think that the responsibility is ours also to continue to be more efficient. And we throw this word restructuring around quite a bit. In some ways, I like it because I think it continues to emphasize the size and the scale of what we’re trying to do across the business. But really, I’m talking about continuous improvement as well. Pat mentioned a number of other areas we’re focused on. It’s an obligation for us to lower operating costs and be more nimble in this what will continue to be a challenging time. I think that it’s -- there is some pricing work to be done. There is margin compression in the areas I’ve discussed and we need to earn that back. And then obviously, as we quote new business, generally new business for us is reasonably mid-cycle. It’s not -- it takes a little time to implement. We will see a rotation back to some of the historic margins. To the extent we are truly strategic and there’s been a shake out, we hope to see some premium margins. We want to come out of this a higher-margin business than we went in. But again, I’d give us an A for raw material and then things get a little tricky moving forward, but that’s as much our problem as it is the customers’ crops.

Got it. Very helpful. And Matt, also, if you could talk a little bit about the conversations you’ve been having with your auto clients. I know you kind of mentioned it, addressed the prior question in terms of I guess obviously still some volatility. There’s still some supply chain issues, but it sounded like maybe those conversations you’re hearing from the auto clients are maybe some improvements. And I was wondering if you could talk about whatever it is that they may be telling you in terms of their expectations as it relates to chip shortages or any other component supply chain issues they might be having?

Yes. No, I think I continue to hear that there’s more visibility on the semiconductor and I think we know by now that semiconductor chip shortages are sort of a euphemism for part shortages across the board. I do think like our company, the auto sector is getting more nimble, getting more agile in addressing these issues. I don’t think the visibility really has improved that much in this environment. I just think people are getting a little better at managing it and predicting it and getting ahead of it. I think that that will benefit the industry long term. I think from our perspective, I’ve said this a couple of times, but I think that those suppliers that are strategic, and we are strategic for many reasons including the fact we are across so many platforms on so many products in so many places. I think that we’ve been able to get a seat at the table, sometimes very high up in our customers’ organizations, and make our case. And I think we’ve made it successfully. And again, while we’ve seen margin compression, I think that we’ve been able to succeed. And I think where that really will resonate going forward is, our customers don’t help suppliers that they don’t need in the future. As we are launching lots of new business that show up in our revenue increases and continue to quote business, whether it’s around electrification or reduced fuel emissions, being strategic has its advantages. I expect to benefit from this ultimately as we come out of this product reshaping that’s going on in the auto space. I expect to be a beneficiary of it.

Got it. Helpful. And another quick question here. Some of the engineered products, you saw some really, really nice year-over-year revenue growth. Can you give us a sense there, just sort of the drivers or if perhaps maybe there are any sort of one-off items that sort of had an acceleration of revenue recognition in the quarter?

Yes, Marco, this is Pat. There were no onetime items like that in the quarter. We’re seeing very strong demand for our capital equipment and our aftermarket parts and services in our Industrial Equipment Group. In addition, we saw the rail market expand nicely year-over-year. There are 3 end markets that really have been slow to recover. I mentioned those in my script, rail, oil and gas, as well as military and commercial aerospace. We see increasing volumes in each of those end markets and across not only our forging business, but in cases where we’re supplying capital equipment through our Industrial Equipment group. Backlogs are strong in that segment. Bookings were at a record level at $70 million in the quarter. It’s really now a question of how we can quickly move those bookings through the production facilities and into our customer hands on a timely fashion without the supply chain constraints getting in our way.

Got it. And last quick question for me. If you can maybe talk about the M&A landscape, just kind of give us an update in terms of pipeline opportunities and valuations?

I’ll start briefly and then Pat more focused in this area. But I would tell you that our -- while acquisition is very much part of our DNA and will continue to be, we are focused right now on the revenue growth in the business, supporting current customer product launches, and battling to make sure that we are capturing the restructuring savings through investments in automation and people and the kinds of optimization of footprint. I just -- I want to say that we are very focused inside of our 4 walls. Having said that, I’ll give it to Pat, but there’s always a pipeline. There’s always strategic things that we’re looking at. And there’s always opportunities that I think will fit very nicely into our business and fit very well, not only in terms of our historic measures of valuation, but also do things that I think are extremely well suited to our mission to have a higher-margin business overall. With that, I’ll toss it to Pat.

Yes, Marco, with respect to valuations, although I can’t point to anything that is putting downward pressure on valuations, but intuitively, with the cost of money increasing, valuations are likely to come down a notch. Which bodes well for a company like Park-Ohio, who is very disciplined in terms of how we value acquisitions.

[Operator Instructions] The next question comes from Yilma Abebe from JP Morgan.

My question is on free cash flow. I think you said you expect the total debt to be down by about $20 million for I guess the last 2 quarters of this year. And I caught the comment that you expect free cash flow to be positive for the remainder of the year. Can I interpret this to mean that the free cash flow for the balance of the year will be also about $20 million? Or are you also expecting to use some of your cash balance for debt reduction?

Yes. I would expect our free cash flows to be sufficient to reduce our debt levels by $20 million from the first quarter. When you look year-over-year at our total debt, I would range that total debt to increase between $5 million and $15 million, primarily due to working capital and maybe the lower pace of getting inventory out of the system. As we move into the second half of the year, we’re able to manage our CapEx spend and produce positive free cash flows.

We talk a little bit -- we talk a lot about Supply Tech and the inventory we needed to protect our customers, which has been significant and we hope to bleed off starting in the latter half of the year. But I also want to highlight, I think that was $50 million year-to-date. I want to also point out though that the robust backlogs in the equipment business will also take bringing inventory on board. And with no ability to forecast it directly, I would say that the inefficiencies in that supply chain will also require probably a little bit slightly elevated inventory level. That business tends to operate at about 25% inventory to sales dollars. It would not be a surprise to me if that was a touch high as we see such elevated bookings and orders. We’re going to be fighting that a little bit alongside the growth. So I think that the rest of the year, there’s going to be a little bit of pressure on that number, but I don’t think the forecast should be hard to achieve. And again, it wasn’t long ago we were talking about a target of 3x leverage. Getting back to the 4.5x to 5x by the end of the year that’s articulated in the presentation seems fairly straightforward.

I think you touched on my next question, which is really thinking about working capital by segment. And as you look at for the balance of the year and trends up in working capital reductions and uses, how can we think about the working capital utilization by segment? Which segments do you expect to liquidate working capital versus using working capital or neutral?

Yes. And if I -- I’ll take it segment by segment. Supply Technologies, we expect our working capital to begin to decline in the second half of the year. In our Assembly Components segment, given where working capital is at the end of the first quarter, I would expect that to drop slightly as we built up inventory to support plant consolidations over the last couple of quarters. And then as Matt mentioned, within our Engineered Products group, the rising level of bookings will cause our working capital to increase. We work hard to offset those increase in inventory levels with deposits from our customers on capital equipment. But typically, our working capital in that segment is around 24% to 28%.

Okay. And the final question is on receivables. The growth in receivables, I think you described it as driven by increase in sales. Is there any other drivers around your receivable balances growing besides just the growth of the business? Anything of note there?

No. No, we have not seen any reduced or increased changes to payment terms. The growth in receivables in the quarter of $45 million solely relates to the increase in revenues since the end of the year.

The next question comes from Jim Dowling from Jefferies Capital.

It seems like we’ve been talking about plant restructurings broadly defined for the better part of a year. Where do we stand looking over all of the segments in that whole process? Are you 50% through, 80% through? Where are we in that process?

Jim, good question. I think that we have said over the past couple of calls that we have closed or significantly changed the footprint of about a dozen locations around the business. I think that the Supply Components group has been particularly touched as has Engineered Products where some of our higher-cost facilities have been. I would say that in terms of identification of the opportunities, we’re 80% done. I would say that in terms of final adjustments, meaning where we’ve truly gotten the benefit of all the cost savings, we’re probably 50% to 60%.

And a related question that if you mentioned it in your prepared remarks and I missed it, I apologize. As part of this process, one of the things you’ve been talking about at least in the past was the availability of labor at any cost. Where are we in that process of getting more labor into the plants?

Yes. Well, a couple of comments. One is, we have seen some level of improved hiring metrics and some reduction in -- some reduction in turnover. Both are unacceptable at this point, in certain locations. I don’t want to suggest this is a global problem or I don’t want to suggest that it’s even everywhere in the U.S. The issue is significantly U.S.-focused and candidly, probably a little more Midwest focused than other places. But we have emphasized growth and investment in areas where labor is available. We continue to do that and earmark that investment and that growth in new product launches for places where we can access labor. I don’t know that we’re through that issue yet, but I think it’s becoming more manageable and it’s becoming less of a line item so to speak on our quarterly financials in terms of variances.

Ladies and gentlemen, we have reached the end of the question-and-answer session, and I would like to turn the call back to Matthew Crawford for closing remarks. Please proceed, sir.

Okay, thank you very much. Thank you for your time and your support and your good questions. We are happy that we were able to accomplish improved results over the fourth quarter. We’ve got a lot of work to do to get to where we need to be, which is complement our record revenues from 2022 that we expect with record profits. But suffice it to say that’s what we’re working on every day. Thank you for your support. Bye, bye.

Thank you. This concludes today’s conference. You may disconnect your lines.