Perimeter Solutions, Inc. (PRM) Q2 2024 Earnings Report, Transcript and Summary

Greetings, and welcome to the Perimeter Solutions Second Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Seth Barker, Head of Investor Relations for Perimeter Solutions. Thank you, sir. You may begin.

Thank you, operator. Good morning, everyone, and thank you for joining Perimeter Solutions’ second quarter 2024 earnings call. Speaking on today’s call are Haitham Khouri, Chief Executive Officer; and Kyle Sable, Chief Financial Officer. We want to remind anyone who may be listening to a replay of this call that all statements made are as of today, August 1, 2024, and these statements have not been, nor will they be, updated subsequent to today’s call. Also, today’s call may contain forward-looking statements. These statements made today are based on management’s current expectations, assumptions and beliefs about our business and the environment in which we operate, and our actual results may materially differ from those expressed or implied on today’s call. Please review our SEC filings for a more complete discussion of factors that could impact our results. The Company would also like to advise you that during the call, we will be referring to non-GAAP financial measures, including EBITDA. The reconciliation of and other information regarding these items can be found in our earnings press release and presentation, both of which will be available on our website and on the SEC’s website. With that, I will turn the call over to Haitham Khouri, Chief Executive Officer.

Thank you, Seth. Good morning, everyone. Thank you for joining us. As always, I’ll start on Slide 3 with summary comments on our strategy. Our stated goal is to deliver private equity like returns with the liquidity of a public market. We plan to attain this goal by owning, operating and growing uniquely high-quality businesses. We define uniquely high-quality businesses through the following five very specific economic criteria: Number 1, recurring and predictable revenue streams. Number 2, long-term secular growth tailwinds. Number 3, products that account for critical, but small portions of larger value streams. Number 4, significant free cash flow generation with high returns on tangible capital. And Number 5, the potential for opportunistic consolidation. We believe that these five economic criteria are present at our current businesses, and we use these criteria to evaluate potential new acquisitions. As described on Slide 4, we seek to drive long-term equity value creation via consistent improvement in our three operational value drivers, which are; Number 1, profitable new business. Number 2, continual productivity improvements. And Number 3, pricing our products and services to the value they provide. In addition to our three operational value drivers, we seek to maximize equity value creation through a clear focus on the allocation of our capital as well as the management of our capital structure. Turning to our financial results on Slide 5, and starting with Fire Safety. I’ve repeatedly emphasized the belief that our Fire Safety businesses’ sustainable earnings power has increased significantly due to the rigorous implementation of our operational value drivers. I’ve also repeatedly suggested that this earnings power should be evident when comparing reporting periods with roughly similar levels of wildfire activity in our core North American market. While Q2 of 2024 experienced slightly lower U.S. acres burned ex-Alaska versus Q2 of 2023, Fire Safety’s increased earnings power is evident in the year-over-year comparison. Second quarter Fire Safety revenue increased 85%, while adjusted EBITDA more than tripled year-over-year. Both our global retardants and global suppressants businesses contributed to this growth. The significant improvement in Fire Safety’s financial results was driven by a combination of external and internal factors. On the external front, our retardant customers are increasingly utilizing aerial attack in their battle against wildfires. This was evident pre-season with robust air tanker contracting by our customers as well as during the season with active utilization of these aerial assets and by extension of our fire retardant. As I’ve referenced repeatedly, we believe that our customers increasingly proactive posture towards aerial attack coupled with steady growth in the air tanker fleet are two of the long-term secular volume drivers of our business along with longer fire seasons, increasing acres burned and growth in the wildland urban interface. The external environment was also supportive in our suppressants business in Q2, with strong conversion activity from fluorinated to fluorine-free foam, where Perimeter is a clear market leader. On the internal front, Fire Safety second quarter financial results are directly tied to the rigorous implementation of our operational value drivers. To further illustrate this point to our investors, I’ll provide examples that directly tie our Q2 financial results in each of our retardant and suppressants businesses to each of our individual value drivers. Starting with suppressants and profitable new business. We’ve significantly increased R&D investment into the business and focus this R&D spend on fluorine-free technologies, which we expect to drive significant customer value and therefore significant profitable new business. This strategy is clearly working. For example, we recently certified a fluorine-free foam for Aircraft Rescue Firefighting at FAA 139 compliant airports. A meaningful portion of airports have converted to fluorine-free aircraft rescue foam this year. And to-date, 99% of these airports have selected Perimeter Solutions, including 10 of the 25 most traveled airports in the United States. We expect the majority of the 517 FAA-139 comply the airports to convert to fluorine-free over the next several years. And, we also expect to capture an outsized portion of these opportunities. As an example of suppressants’ productivity, we’ve worked very diligently to improve our cost structure and believe that Americas suppressants average raw material cost per unit has decreased roughly 20% over the past 18 months. Finally, our fluorine-free products are highly differentiated and aligned with our customers’ objectives and we price these products to reflect this unique value. Moving on to retardants and again starting with an example of profitable new business. We’re investing heavily in our air bases including upgrading existing bases, building new bases and converting bulk bases to full-service. These investments increase the amount of retardant we deploy in support of our customers’ mission. For example, we significantly upgraded our Albuquerque, New Mexico air tanker base prior to the 2024 fire season, replacing the existing 10,000 gallon tanks with new 25,000 gallon tanks, upgrading the pumps, variable speed frequency drives an electrical infrastructure, building the capability to simultaneously load two air tankers versus previously only being able to load a single air tanker and introducing the capability to load VLATs versus previously only being able to load LATs. The results of this investment are reflected in our Q2 results. On June 18, our Albuquerque air tanker base loaded over 100,000 gallons in support of our customers’ efforts against the Salt and South Fork fires. This one day 100,000 gallon throughput compares to Albuquerque’s average annual throughput of approximately 144,000 gallons over the prior five years. This 100,000 gallon daily throughput would not have been possible without our significant pre-season investment into our base at Albuquerque. Albuquerque is one of several air bases we upgraded prior to the ‘24 season and we plan to upgrade several additional air bases prior to the ‘25 fire season. Moving on to an example of retardants’ productivity. We recently introduced a new and proprietary retardant mixing system to our McClellan and Redding air bases. This technology increases daily retard throughput while improving base labor efficiency and eliminating logistics and repackaging costs. We’re rolling out this technology to additional air bases and expect to realize additional productivity benefits as we do so. Finally, on retardants, we have more people spending more time with more retardant customers than ever before. We’re building an ever deeper understanding of our customers’ wants and needs and working diligently to deliver the products, services and solutions to best address these diverse customer objectives. As long as we consistently deliver ever greater value to our customers, we should share in this value creation. I hope these examples give our investors a sense for the amount of rigorous operational value driver activity throughout our Company. I also hope that our recent financial results provide a sense for how these initiatives are driving our financial performance. Optimizing our financial performance by a rigorous value driver implementation is a journey rather than a destination. As long as we maintain the intensity with which we chase each point of opportunity at each of our individual business units, I’m confident that we’ll continue to drive Perimeter’s long-term earnings power sustainably higher. Turning to Specialty Products. Like Fire Safety, Specialty Products year-over-year financial performance is markedly improved with adjusted EBITDA roughly doubling in both the second quarter and first half of 2024. Also much like Fire Safety, the improvement was driven by a combination of external and internal factors. On the external front, the market continues to emerge from the last year’s inventory destock period. On the internal front, the rigorous implementation of our operating model is paying off. As I just did with Fire Safety, I’ll provide specific examples tying Specialty Products’ financial results to specific three of these initiatives. Starting with profitable new business. Our R&D team driven by feedback from a key customer developed a novel P2S5 SKU for wind turbine applications. This difficult to replicate product expands P2S5 addressable market and drives profitable new business. On Specialty Product productivity, one of Specialty Products’ key raw material input is elemental phosphorus. We have invested significantly in logistics, plant capability and process technologies to utilize elemental phosphorus from various sources. This has reduced our raw material costs and increased surety of supply, while maintaining the industry’s highest quality standards. And finally, an example of pricing our products and services to the value they provide in our Specialty Products business. Customer feedback pointed to operational challenges associated with the industry’s most common bin closure valve. Our Specialty Products engineering team created a new patented closure valve, which is now standardized across our bin fleet. Customer feedback on our new valve technology and fully refreshed fleet bin is extremely positive and we’ve shared in the value creation through value based pricing. Turning now to M&A. We’re confident that our operational value driver focused operating strategy creates significant value when applied to the right businesses as defined by the five target economic criteria articulated on Slide 3. This confidence is reinforced by our progress over the past 18 months at all three of our businesses at Perimeter suppressants, retardants and specialty products. We’re actively searching for the right M&A targets, while also constantly evaluating the IRR trade-off between our various capital allocation alternatives. As I’ve stated previously and consistent with our brief track record as a public company, we expect to deploy all of our excess cash flow as well as the incremental leverage capacity we expect to generate through organic EBITDA growth towards the highest expected IRR combination of M&A, share repurchases and special dividends. I’ll end my remarks by reasserting the conviction that Perimeter is the gold standard as far as the efficacy and safety of our products, the quality of our service and the passion, dedication and integrity of our team. I’ll also reassure that we will never take our market leadership positions for granted rather we will always relentlessly push to raise the bar on ourselves. Many of the examples I provided today are evidence of this always-strive-for-better mentality. We serve our customers better each and every day and we earn the privilege of serving them in their life saving missions. With that, I’ll turn the call over to, Kyle.

Thanks, Haitham. We’ll stay on Slide 5, where growth figures shown are versus the prior year comparable period. Second quarter sales in our Fire Safety business were $98.5 million up 85%, and $123.7 million year-to-date up 72%. Second quarter adjusted EBITDA in our Fire Safety business was $55.6 million up 237% and $55.4 million year-to-date up 321%. As Haitham noted, both our Global Retardants and Global Suppressants businesses contributed to the improved year-over-year results. Second quarter sales in our Specialty Products business were $28.7 million up 25%, and $62.6 million year-to-date up 30%. Second quarter adjusted EBITDA in our Specialty Products business was $9.3 million up 108% and $21.6 million year-to-date, up 98%. The market recovery we experienced in the first quarter continued in the second quarter and again drove improved year-over-year quarterly financial performance. We’re increasingly comfortable that the market is steadily emerging from last year’s destock period and we’re confident in the financial prospects for our Specialty Products business. Moving on to the consolidated business, second quarter consolidated sales were $127.3 million up 67% and $186.3 million year-to-date, up 55%. Second quarter consolidated adjusted EBITDA was $64.9 million up 209% and $77 million year-to-date, up 220%. Moving below the adjusted EBITDA, interest expense in the second quarter was $10.6 million in-line with our regular quarterly run rate. Depreciation was approximately $2.6 million while amortization expense was $13.8 million. Cash paid for income tax was $3.6 million in Q2. CapEx was also approximately $3.6 million in Q2. Our long-term expectations for interest expense, depreciation and CapEx are unchanged and summarized on Slide 6. We hope to spend between $10 million and $15 million in CapEx this year. I’ll note that all incremental capital spend above our historical high-single-digit millions run rate is tied to incremental productivity or profitable new business projects with IRRs at or above our long-term return target. Our long-term expectation for net working capital is also unchanged. Although, as I’ve noted previously, we expect to receive a benefit from working capital in 2024 given our significant inventory position entering the year. We expect to generate the majority of this benefit in Q3. Turning to our corporate structure, we’ve begun the process of seeking shareholder approval to redomicile our parent company from Luxembourg to Delaware. This move will better align our legal structure with our U. S. operations, which generate the majority of our revenue and EBITDA. We expect the transaction to reduce our regulatory and reporting complexity, streamline legal, accounting and cash management and generate an improved tax profile. We will seek shareholder authorization for the transaction upon completion of the final proxy statement and expect the transaction to close in Q4. We ended the quarter with approximately $675 million of senior notes, cash of approximately $43.2 million and approximately $145.2 million basic shares outstanding. With that, I’ll hand the call back to the operator for Q&A.

Thank you. At this time, we’ll be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Dan Kutz with Morgan Stanley. Please proceed with your question.

Hey, thanks. Good morning.

Good morning.

Good morning. So, I just wanted to kick it off with kind of a high-level question about the relative intensity of depression spending in the [lower 48] (ph) given that in the first month of third quarter, we’ve seen pretty significant acres burned in California and also in the broader U.S. lower 48. We can kind of based on disclosure from you guys and from the NIFC and Cal Fire, we can kind of triangulate to what seems to indicate that California is significantly more depression spend intensive per fire or per acre burned versus the rest of the lower 48. And, but there’s a lot of guesswork involved in that. So, I just wanted to ask the question, Could you kind of talk us through, just kind of the relative spending per acre burn across the different regions in the U.S. or at least maybe California and the rest of the U.S. As we’re trying to kind of convert these acres burn numbers to financial estimates for the quarter? Thank you.

Yes. Thanks, Dan. I would advise against getting too caught up in exactly where the acres burn from a geographic perspective. I’ll just use California as an example. Considerable portions of California fall under the jurisdiction of Cal Fire, typically state lands. Significant portions of California fall under the jurisdiction of various federal agencies, be it Bureau of Land Management, U.S. Forest Service, Bureau of Indian Affairs, typically federally protected land. So, there’s a lot more mix even intrastate than one might expect. Now that said, California always has been and remains on the cutting edge from a sophistication and technological perspective as far as firefighting in general and certainly aerial firefighting. Cal Fire is just a remarkably, remarkably sophisticated impressive successful organization. But again, I wouldn’t over extrapolate whether an acre burns in Northern California or Southern Oregon or Southern California or Northern Arizona, the differences are relatively minor.

Great. Understood. That’s super helpful. And then, Haitham, I know you’ve kind of addressed this in the past on earnings calls, and I feel like it does come across here to some folks but maybe not to others. And, as we have more investors getting interested in the story, I just wanted to ask the question, which I think I’ve asked in the past and just give you a chance to kind of remind everyone. So, when you’re thinking about M&A and you clearly highlight the five targeted economic criteria, but then outside of that, the question comes up, are you looking for synergy, for vertical integration, for companies in similar industries to your existing businesses? And, I was just wondering if you could kind of refresh everyone on what the answer to , what the answer to that is? And then, if you could maybe parse it out for like a major transaction versus kind of a smaller like bolt-on acquisition? Because, I think, maybe the answers might be a little bit different between those two types of deals? Thank you.

Yes, yes, yes. Okay. I think very, very good question, hopefully, helpful question to much of the audience. We are, I would say, narrow and deep on our M&A focus, and that we have a very strong sense of where we have a right to win. The type of business, which we can simply do more with, create more shareholder value with long-term than in all humility virtually anybody else. And, we’re going to go after that type of business quite aggressively and that’s a very small subset of the businesses that are going to transact over the coming years and all the rest of the stuff. As interesting as the companies may or may not be, if we don’t have a clear and obvious right to win, we’re simply not going to participate. So, the question is, all right, where do you guys have a clear right to win? It’s businesses where we are highly confident we can implement our operational value driver strategy. If it’s a business where we can create our business unit structure, give operating segments and operating segment leaders lots of economy, drive lots of accountability, get them to truly think and act like owners and then rigorously drive and measure progress on profitable new business, productivity improvements and pricing to value, that makes a whole lot of sense for us. And again, you can look at our three businesses within Perimeter, retardants, suppressants and specialty products, really three very different businesses. If the results as far as EBITDA and cash flow growth are broadly similar, I think we’ve done quite well with all three. So, we want a business that fits that profile, the question then becomes, alright, what fits that profile and that’s why the five targeted economic criteria are so clearly articulated. If we can find a business that checks those five boxes, we are very confident we can create meaningful shareholder value with it by implementation of our operational value driver strategy. That’s almost all we care about. What industry it’s in matters much less, what geography it’s in matters much less. We frankly don’t care very much at all about synergies with our existing business because we’re not going to integrate anything we buy into our existing business. We’re going to keep it as a standalone company. We’re going to install a very high-quality or retain a very high-quality management team. We’re going to give them autonomy, accountability, incentivize them and act like owners and create value through our three operational value drivers.

Awesome. Super clear and helpful. And, if I could sneak one quick one in maybe for, Kyle. So, kind of endorsed the long-term $10 million to $15 million CapEx number for this year, but also flagged what I would assume would be some capitalized investments in air bases that you already completed at the Albuquerque base for 2024 and you said there’s probably going to be a few more going into the 2025 season. I thought that you kind of said that $10 million to $15 million I thought of that as kind of the underlying maintenance number, but I wanted to confirm that because it does seem like there was some capital investments that could maybe push that number higher, and I just wanted to square that with the comment that you were still endorsing the $10 million to $15 million CapEx number for this year? Thank you.

Yes, absolutely. So, when we think back to the historical run rate of high-single-digit millions that has both our maintenance and a little bit of growth CapEx in it historically. When we look at the opportunity set in front of us, we’re just very excited about the potential to be able to put some more capital behind the source of projects that you heard Haitham talk about, such as that Albuquerque air base. The opportunities that there seems pretty rich to us right now. We think that it’s an excellent use of capital that both supports our customers’ mission and drive the high IRR for the company. And so, we’re going to lean into that opportunity over both assured and hopefully next if we see a similar set.

Great. Thank you very much. I’ll turn it back and congrats on the quarter.

Thanks, Dan.

Thank you. [Operator Instructions] Our next question comes from the line of Joshua Spector with UBS. Please proceed with your question.

Good morning. This is Lucas Beaumont on for Josh. So, I just wanted to go back to the performance of Fire Safety in the quarter. So I mean, the acres burn data was down sort of 45% versus the 10 year average and down sort of a high-single-digit percentage year-on-year. But, I mean, you guys did really well on the sales side. So, you mentioned potentially some of the drivers there. I was just wondering if we could kind of pass this out a bit more. So, it sounded like you’re alluding to maybe higher intensity of usage on the aerial side. Were there any other sort of factors in the quarter to think about in terms of volumes not related to like the end acres burn data? I mean, is there anything for instance that we should think about like in terms of pull-forward from the main season in 3Q like stocking in advance or anything like that, that would be great? Thanks.

Yes. Thanks, Lucas. So, there is nothing in Q2 that’s sort of anomalous or non-recurring pull-forward or stocking or anything like that. I mean, our entire business is essentially just in time emergency response. Now, you can also and you clearly have inferred from our prepared remarks that we were that we did quite well from a volume perspective in Q2. I think there’s three drivers behind our volume performance. Number 1, you referenced, which is just a very proactive and aggressive posture by our customers throughout the world, by the way, in the U.S., very evident in Canada, in Europe towards aggressive aerial attack. And, like I mentioned in the prepared remarks, you could see this preseason with really, really robust and widespread and deep air tanker contracting. And, then these same customers put these aerial resources to active use in the second quarter. I’d say that was the first driver of volume outperformance relative to acres. The second is the investments we, Perimeter, have very aggressively made over the past, call it, nine months in our capacity and capabilities. I gave the Albuquerque air tanker base upgrade example, which is a very relevant one. I could have used it as we usually talked about our brand new air tanker base at Colorado Springs. I could have talked about our completely rebuilt air tanker base at Redding. I could have talked about our converted base in Casper. I could have talked about McClellan. I mean the list goes on and on. So, on the one hand, our customers have added lots of capacity and capability by air tanker contracting and then aggressive use of those assets. On the other hand, we’ve very much aided them in their mission by investing our own capacity and capabilities. And, then the third driver of volumes, I would say the distribution of fires from a timing perspective primarily in Q2 were just more conducive to retardant usage. The biggest point there is we had a very mild start to the second quarter and a more severe end to the second quarter. There’s three air tanker bases open nationally in early September. You’re approaching 100 air tanker, sorry in early April. You’re approaching 100 air tanker bases opened nationally in late June, there’s just a lot more capacity to fight these fires aerially. And, that did play some role in Q2 as well.

Right. Thanks. I mean, I guess, like the obvious kind of follow on from that then, is then just thinking about the third quarter. So, I mean, July has sort of been off to a strong sell. I mean it’s sort of 2x the 10 year average, sort of been tracking towards I guess 3Q 2021 levels, which was an above average year. So, I mean with the changes you’ve made to the business, how should we think about that pulling through to volumes with that sort of above average activity level?

Yes, so first of all, just rough numbers, think a $1.6 million give or take acres have burned in the U.S. ex-Alaska in July, the 10 year average is $1 million or $1.1 million. So, it’s certainly been above the 10 year average. I wouldn’t say it’s 2x, acres clearly matter for our business. A stronger year-over-year acre comparison and more severe fire season is simply going to increase the need for retardant. I would say it’s non-linear on the way up and that you start to hit the constraint of aerial resources. It’s unusual to run out of air tankers in a relatively mild month. You are much, much more likely to run out of air tankers and have incident commanders call for air tankers and there’ll be none available in severe months. So, I’d be careful about linear extrapolation, but certainly directionally more severe fire seasons increases the need for us to support our customers in their mission with retardant.

Right. And so, then just also going back to the second quarter, so I mean the EBITDA was really strong in Fire Safety as well. You had basically 85% incremental margins in the quarter, which is very high. So, I was just wondering if you can kind of talk to, I guess, what was the driver of that portion of it being so high on the drop through there? And, how should we think about the sustainability of that going forward as we get higher volumes as well?

Yes. So, at the risk of being a little redundant and repetitive, the driver of those incrementals truly is all three of the operational drivers working in concert. We had tremendous profitable new business across Fire Safety clearly much more dramatically so in suppressants. Suppressants gets lost in the shuffle a little in these retardant heavy quarters. But we just had fabulous, fabulous performance on all counts, certainly including profitable new business fire suppressants business in Q2, and that’s a real reactive chemistry manufacturing business, right. We have a couple of really serious chemicals plants around the world producing our suppressants and incremental margins on those are quite high. So, the profitable new business certainly helped and then we worked really, really, really diligently across every corner of our business retardants and suppressants to just grind out cost. I gave the example in our North America facility. We think our cost per unit on the suppressing side from a raw material perspective or billet materials perspective is down about 20%, little more than 20% actually over the past 12 months to 18 months and it’s not one big thing. It’s a 100 little initiatives by a team given lots of autonomy and accountability and incentivize to think and act like owners really delivering productivity savings. And then finally, as long as we’re really adding value to our customer, addressing their wants and needs, being responsive, solving their pain points, we should share a portion of that value creation through value-based pricing. When you hit on all three, when you have very strong volume growth at high incrementals, when you’re grinding cost out of your business on a per unit basis and when you’re able to provide value and share price, those come together at very high incremental margins and that’s what you’re seeing in the second quarter.

All right. Thanks. And, I guess just lastly, I mean, I just wanted to sort of give you an opportunity to help us maybe frame the third quarter a bit, if you can. So obviously, it’s off to a strong start. You’ve had those underlying improvements. It looks like it’s set up to be similar to probably the third quarter of 2021 the way things are tracking. Back then you did $98 million in EBITDA, but obviously the underlying sort of operating leverage has changed. So, I guess how should we think about how much better that would be in a similar volume environment this year? Any thoughts to upfront things? Thanks.

Yes, I’ll say two things while trying not to comment on anything other than a reported quarter. First thing I’ll say is, we’re 30 days into a 90 day quarter or 31 days I guess and July is not the most important month amongst the three, and therefore while acres burned are up in July and it’s been relatively severe and the book on Q3 is very, very far from written. So, I would just I used to be a little careful with the comparisons and the extrapolation until we see probably four to six more weeks. The second thing I’ll say is, we’ve just been and I personally have been emphatically clear on each and every one of these calls. We’ve done a tremendous amount of rigorous operational driver work in our businesses and the result of that is in a like-for-like volume scenario, our earnings should be higher. Our unit economics has to be improved, if you’re driving profitable new business at high margins, grinding cost out via productivity and creating value for your customers and sharing in it. So, our unit economics should be better, but we should also hold our horses a little bit and see how Q3 shapes up when it’s all said and done.

Right. Maybe if I could just ask one more follow-up. Just you mentioned earlier that there’s some seasons where, when the data is strong that basically they run out of aerial capacity. Is there any of those that you kind of point to historically when that happened? And, just any thoughts on how the aerial capacity has kind of evolved since then overall?

It essentially always happens, Lucas. There is a stat that’s published out there by the government, I forgot the exact acronym, resource not available or call not met or something. And, it’s very common even during short periods in otherwise mild season, short periods of high activity in mild seasons to run out of aerial resources. So, that’s nothing new. We’ve seen some of it virtually every year. We see much more of it in severe seasons. We’ve certainly seen some of it so far in July.

Great. Thanks very much.

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I’ll turn the floor back to Mr. Khouri, for any final comments.

Thank you. Thank you everybody for joining us. Thank you, operator for the good work and we’ll talk again in 90 days or so.

Thank you. This concludes today’s conference call. You may disconnect your lines at this time. Thank you for your participation.