FreightCar America, Inc. (RAIL) Q3 2018 Earnings Report, Transcript and Summary

Welcome to FreightCar America's Third Quarter 2018 Earnings Conference Call and Webcast. At this time all participants are in a listen only mode. [Operator Instructions] Please note this conference is being recorded. An audio replay of this conference call will be available from roughly 1 p.m. Eastern Time today until 11:59 p.m. Eastern Time on December 1, 2018. To access the replay, please dial 800-475-6701. The replay passcode is 455937. An audio replay of the call will also be available on the company's website within two days following this earnings call. I'd now like to turn the call over to Matt Kohnke, Chief Financial Officer of FreightCar America.

Thank you, and welcome. Joining me today are Jim Meyer, President and Chief Executive Officer and Ted Baun, Chief Commercial Officer. I'd like to remind everyone that statements made during this conference call relating to the company's expected future performance, future business prospects or future events or plans may include forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. Participants are directed to FreightCar America's 2017 Form 10-K for a description of certain business risks, some of which may be outside of the control of the company that may cause actual results to materially differ from those expressed in the forward-looking statements. We expressly disclaim any duty to provide updates to our forward-looking statements, whether as a result of new information, future events or otherwise. Our 2017 Form 10-K and earnings release for the third quarter of 2018 are posted on the company's website at www.freightcaramerica.com. With that, let me now turn the call over to Jim for a few opening remarks. Jim?

Good morning, everyone, and thank you for joining us today. Before we get into our standard quarterly discussion on FreightCar America's commercial and financial data, I would like to spend some time, at the top of the call, discussing the pushes and pulls that each impacted the performance of our business over the most recent quarter. While the third quarter was well below our expectations from a result standpoint, our team continues to stay focused on driving our most important agenda items forward and at a solid pace. Clearly, our performance in Q3 highlights why our Back to Basics transformation is so critical, and why we must continue to reposition our business into a broader array of products on the right cost structure, and with the highest quality and on-time performance in the industry. However, a transformation of this size comes with its own requisite challenges. Not only do we need to continue to sell, bill and take care of our customers as we proceed, but we also must be willing to accept some operational risk as we transform ourselves. There were two primary issues that impacted our quarter. First, we felt the pain of the volatile steel pricing environment. This was caused in part by the need to purchase materials from alternate sources to meet our delivery requirements and was further exacerbated by a one-time issue related to the integration of the Navistar sourcing function. The latter resulted in approximately $2.9 million and higher than expected material costs for the quarter. This integration issue is now behind us. The second issue that impacted our quarter was more closely related to the business transformation, and I would categorize it as part of the investment associated with Back to Basics, and it relates specifically to our key model changeover we executed during the quarter. This changeover resulted in lost productivity but was a necessary investment in additional engineering, processing, and tooling to better enable us to manufacture an important car type much more efficiently. As a result of the investment, we are now meeting our new quality, build rate and productivity benchmarks on this model. I want to clarify that not all changeovers are going to be this impactful to our results, but each first time changeover is the opportunity we need to put under processing and tooling for creating our planned best-in-class production capabilities. Now I'd like to shift gears and discuss where our product portfolio stands. As we have discussed previously, our engineering teams have put in years of important work to expand our product portfolio and to allow us to shift from coal cars to a much more diversified portfolio. While the car designs meet or exceed customers' expectations; in several cases, the cost to produce the designs are uncompetitive and the manufacturing processes are either too slow or insufficiently tooled in fixture to achieve the economics defined in our Back to Basics plan. And once more, Back to Basics is about offering the right products on the right cost structure. This is one of the reasons why we have not meaningfully participated in the recent uptick in the market and why we are not seeing a positive market share trend. We have an estimated 12 months of work left to complete our portfolio, including the underlying economics, process definition and tooling. This will be relatively modest in cost but extremely important to finishing the portfolio realignment. We fully expect this effort to lead to market share gains over time, strengthen our backlog, and solidify our reputation as a best-in-class supplier to the industry. Moving to different news. You will recall that, last quarter, I briefly touched on our plans to expand our Leasing business. I'm happy to announce that we've hired Dan Wallace, who serves as Vice President and General Manager of our Leasing business. Our leasing strategy is coming together. We hired the right leader and we are in the process of setting the foundation. There are a lot of back-office steps along the way that need to be established to be fully operational, but we are now in the marketplace working to originate deals. We look forward to updating you in 2019 about how this business initiative continues to develop. To conclude, we are working through years of systemic issues and we are encouraged by the progress we are making. Our plan is the right one, we will create a more competitive cost structure and we will continue to expand our product portfolio and challenge for greater market share. That said, this is not a simple transformation and there will certainly be a few ups and downs as we proceed. With that, I will turn the call over to Ted to discuss the commercial aspects of our third quarter. Ted?

Thanks, Jim. Moving to our commercial figures for the third quarter. Deliveries totaled 888 railcars, of which 498 of these deliveries were new cars and 390 were rebuilds. This compares to 829 railcar deliveries in the same quarter last year, all of which were newly built railcars. Sequentially, railcar deliveries were down compared to the 1,185 railcars delivered in the previous quarter, comprised of 368 new cars, 514 rebuilt cars, and 303 leased cars. We received 480 new orders for railcars during the third quarter of 2018, all of which were new railcars. This is down compared to the 920 new orders we received during the same quarter in 2017 and down sequentially compared to the 1,450 orders received in the second quarter of 2018. Our order backlog as of September 30, 2018 consisted of 1,911 railcars, with an estimated total sales value of approximately $167 million, down sequentially compared to our backlog at the end of the second quarter, which consisted of 2,319 railcars, with an estimated total sales value of approximately $190 million. Our quarter-end backlog figure consists of 1,691 new railcars and 220 rebuilt railcars to be manufactured for direct sale. Industry-wide non-tank car orders increased to 13,656 cars for the quarter ending September 30. This compares to 13,626 non-tank car orders received last quarter and 7,175 orders in the third quarter of last year. While our order level was substantially below expectations for the quarter, it is worth noting that 30% of all industry railcar orders, tank cars and non-tank cars, were attributable to a single long term agreement placed by a leasing company mostly involving tank cars. Looking specifically at the non-tank car orders within the quarter, roughly 60% of these orders or 8,200 units were concentrated among a few customers. In addition, another 25% of FreightCar orders were associated with one specific product segment, where we are currently uncompetitive but have an important product in facilities initiative planned in 2019. Several car type segments that have been strong for us recently, namely small-cube covered hopper cars, medium-cube covered hopper cars and open-top hoppers, saw industry order level subside in the third quarter due to a combination of an excess supply of existing railcars and moderating rail traffic levels in certain commodities such as stone, sand and gravel. Inquiry levels remained strong for many other freight car types such as large-cube covered hoppers, intermodal and non-intermodal flats, gondolas and boxcars. To summarize, while the concentration and mix of orders within the quarter were not favorable to us, we remain confident in the commercial part of the plan going forward. We are fine tuning the product portfolio to become fully competitive in the car categories important to us and will soon have a leasing business to complement those products. In addition, we have a large customer base and interface with them daily. It is our expectation that these customers will be buyers of railcars throughout the cycle, especially as we continue to improve our organization, so that those customers obtain the right products at the right price or lease rate, as Jim touched on earlier. With that, I would like to turn the call over to Matt, as he will detail our third quarter financial results.

Thanks, Ted. Consolidated revenues for the third quarter 2018 totaled $79 million compared to $72 million in the third quarter of last year and $66.7 million in the second quarter. The revenue increase is attributable to a larger number of new railcars delivered for direct sale in the third quarter compared to the second quarter. Our gross margin for the third quarter fell to negative 4.9%, due to three main factors. First, as we mentioned on our previous call, the second quarter results were favorably impacted by pricing on the railcars delivered, which we did not expect to recur during the second half of the year. Second, we experienced much higher labor costs associated with the investment made in incremental engineering, processing and tooling prior to accelerated production for a particular car type. And third, we encountered higher than anticipated material costs, primarily steel, as a result of supply constraints and the integration issue associated with the Navistar transition. As Jim mentioned, this one-time issue had a $2.9 million unfavorable impact on the quarter. In terms of targeted cost savings that were recognized in the third quarter, approximately $2.7 million, or $3,000 of material cost per railcar went through the P&L. The extra labor associated with the line changeover, I mentioned earlier, worked against us on the labor side during the quarter. However, we still continue to expect to realize our targeted run rate per car savings of between $4,000 and $5,000, exclusive of commodity price movements by the end of the year. The consolidated operating loss for the third quarter totaled $8.7 million, which included an approximately $600,000 gain on the sale of our Danville facility. This compares to consolidated operating loss of $18.7 million in the year ago period and a $3.5 million operating loss in the second quarter of 2018. SG&A for the quarter totaled $5.4 million compared to $10.7 million in the year-ago period and $8.4 million in the prior quarter. Our SG&A was lower on both a sequential and year-over-year basis as a result of the elimination of our incentive compensation accrual. As a reminder, SG&A in 2017 included a $2.9 million contingency charge related to patent litigation, as well as $1.2 million of CEO transition costs. Capital expenditures for the quarter totaled $600,000. For the full year, we anticipate our CapEx figures to total between $2 million and $2.5 million. Our financial position remains strong, with no outstanding debt and $65.6 million in the form of cash, cash equivalents, restricted cash equivalents, marketable securities and restricted certificates of deposit as of September 30. The decrease in our cash position for the first three quarters of 2018 was the result of 3 main factors. First, we delivered railcars to our short term lease fleet with an investment of $32 million in 2018. We will continue to look for opportunities to sell these assets and the related leases [attached to them] when economics make sense. Second, inventory levels were elevated at the end of the third quarter as we took the necessary steps to ensure we have adequate material on hand for an effective start up on new orders, as well as production delays on existing orders for which material was already on hand. We expect year-end inventory levels to be closer to year-end 2017 levels. Finally, accounts receivable increased due to the timing of deliveries near the end of the quarter. Although almost all these [monies] were collected in October, we expect year end accounts receivable levels to be similar to the third quarter 2018 levels based upon current delivery plans. With that, I would like to turn the call back to Jim for some brief closing remarks.

Before we turn the line over to questions, I want to further outline our Back to Basics strategy and where we are in the transformation. Please recall once more that Back to Basics is about producing the right products at the right cost. We know that our investors are not yet able to see the progress being made and so let me walk you through a little more as to where we stand today. Our initial steps were about assessing our business, formulating plans and bringing the right new people on board. Then at the beginning of this year, we shifted our focus to deployment, starting with fixing our Shoals factory. We have made a tremendous push forward on the three things that matter most in every factory: safety, quality and productivity. Shoals has seen a significant reduction in [indiscernible] recordable accidents in this time, which is a bellwether for quality and efficiency, a 70% reduction in manufacturing build defects and consistent progress in reducing our hours to produce a unit once we hit our intended line rates. The work at Shoals is far from done, but we have made some very substantial progress on our operational foundation that will have enormous benefit on the efforts to get our cost right. As you know, a bit more recently, but still relatively early in the year, we ramped up our strategic sourcing and overall cost reduction efforts. This allowed us to raise our original Back to Basics run rate targeted savings expectations by $1,000 per car to $4,000 to $5,000, and we remain on pace to attain that goal. And while it's too early to provide a cost reduction target for next year, next year will in fact be another very important year of delivery for this component of Back to Basics. More recently, we started ramping up the effort to enhance our product portfolio that I mentioned earlier. Getting the factory to run well is bedrock to our manufacturing efficiencies. Getting the cost right is akin to being able to price competitively and getting the portfolio right is the difference between having a seat at the table or not. Next year will be a full year of heavy-lifting for our engineering team. But when complete, this piece of Back to Basics will let us many more seats at the table. We are also very cognizant of the fact that our manufacturing footprint is too large and that this mismatch will only increase as our operational efficiencies improve. Today, we have made critical decisions involving the closure and sale of our Danville facility and the asset purchase of Navistar's rail operations at Shoals. We want our shareholders to know that we are working on additional measures to further reduce our plant fixed cost. We are now 14 months under our company's transformation and we expect to be through much of the heavy lifting in another 12 months. At that point, between our transformed operations, significantly improved cost structure, fuller product portfolio and growing leasing arm, we will have the business platform to be a competitive railcar provider. With that, I'd like to conclude our prepared remarks and turn the call over to the operator for Q&A. Thank you.

[Operator Instructions] And our first question will come from the line of Michael Gallo with CL King.

Jim, just to delve in a little bit on your comments. Obviously, you have some moving pieces that you don't control be it price or costs or some other things. I guess when you sit back and you look at the 400 basis points to 500 basis points you plan to take out and you're on target with that, is that enough to make you competitive in the current environment? Or do you really have to get through another year of further cost reduction, as well as some refinement on some of the cars to really have, what you think, will be a competitive product? And if not, what additional steps do you think you'll need to take to get competitive?

Mike, when we announced our cost reduction target at the start of the year, which was originally, I believe, $3,000 to $4,000 a car, that was never presented as the difference between where we were and where we ultimately want to be. It was a start. It was a start that we realistically believe we could achieve this year. And as we got started, then we raised that target to $4,000 to $5,000, which is very much where we expect to come out this year. Is that a difference between ultimate competitiveness? No. We've got lots more work to do. Next year is going to be, as I said in my comments, another very important year of product cost reduction, and that's really referring to material cost reduction and then labor productivity gains. We also have manufacturing fixed cost that need to be addressed. So, no, our business is no different than anyone else's business. It's about the right products at the right price, which quickly translates the priced piece of it and to having the right cost structure. So, again we're very -- I'm very pleased with the amount of cost reduction work we've achieved after really being at it for about 7 months now. But we're going to be very much at it over the next period of time, certainly the rest of this year and all of next year.

Next, we go to the line of Justin Long with Stephens.

So, thinking about the backlog, it looks like there are about two quarters of visibility at the current build rate. Are you planning to ramp down resources and production levels as we enter 2019? Or based on the increase in the market, do you think there's a chance you can keep production at a similar run rate to what you're expecting in the fourth quarter?

As we look forward to 2019, as you say, there's some cars to be delivered in the backlog, we'll continue to look at production rates and the related resource requirements for those and level set the operation as needed in order to build that backlog out. I'll let Ted comment on the, yes, the other spaces available.

Sure, Justin. Ted here. We remain positive with the number of inquiries we see in the marketplace. I think we've reported over the past couple of quarters that those inquiries have been on the rise; that continues. The quality of those inquiries, meaning can we get them to the finish line? A lot of folks are still hesitant to make any decisions on railcars. So we're at it every day and we've got a lot of customers that want to do business with us, and we're just trying to get them to the table.

And you gave some helpful color on some of the balance sheet changes you expect before year end. But if you look all in at that cash and equivalents balance today, how do you expect that to trend by the time we meet or get to year end? Do you think there's a chance we could see that balance kind of double back to where it was towards the beginning of this year?

We'll -- I called out the main components of uses of cash and some of the puts and takes that we'll see in the fourth quarter. I would not expect it to double, but certainly could see it -- expect to see it increase from third quarter levels. But again, the backlog, the timing of deliveries and receipts of cash always come into play, especially at the end of the year.

And last question from me and then I'll hop back in the queue, but you mentioned it was an extremely competitive pricing environment. We've heard about continued competition from some of the other manufacturers, but can you just give us a little bit more color around that? Has the pricing environment gotten more competitive here in the last few months? Is it stable and just still competitive? How would you characterize it?

Ted here, Justin. I would say that pricing has been competitive for the last 12 to 18 months. I don't think it's gotten any more or less competitive. It's been quite competitive during that time on most, if not all, product lines. So it's something that we keep a close eye on and evaluate that on a deal by deal basis.

And next we have a question coming from the line of Matt Elkott with Cowen.

Ted, we're hearing that lead times on tank cars at the other manufacturers are ballooning to up to 9 to 12 months. Are you guys seeing any evidence of -- as the tank car manufacturers probably get ready to switch over some lines to manufacturer tank cars in 2019, are you seeing any evidence of non-tank car orders coming to you guys, or inquiries escalating?

Matt, Ted here. It's a good question. We've heard the same things on the tank cars. We've seen it. As you know, we're not in the tank car market. But with respect to the non-tank cars, there are certain product types that stretch out there as well to those levels, and then there are product types that might only be a quarter or two out. So it's a case-by-case basis. Ideally, it does appear that overall capacity is filling up and that should present opportunities.

Because, if I remember correctly, the last time we had a tank car build cycle during the crude-by-rail boom, that helps you guys a lot even though you don't participate in the tank car market, but you were busy -- the other manufacturers are busy making energy equipment tank cars and frac sand cars, and you guys got a lot of orders at -- for non-energy orders and that was a good cycle for you. So I guess it's possible that this would happen this time around, if we have another tank car build cycle.

Yes, it's certainly possible. We'll just have to wait to see how that all plays out.

And maybe this one is for Jim. Jim, it's encouraging to see all the efforts that you guys are making on the cost side. But do you think that this is -- longer term, you think that -- with these efforts, do you think this model is sustainable enough in a downturn as well as an upturn? Or does there have to be a more conventional leasing component to the business? And is that the rationale behind appointing new leadership on the leasing side?

A couple of comments. First of all, when we complete our work around the cost structure for this business, the goal is to be in a position where we're not making money in a good cycle only to turn around and give it back in a down cycle, that's not the goal here, is to have a cost structure that lets us get through relatively unhurt in a down cycle and then keep what we earn in the good cycles, and there's no reason to believe that's not possible. So I guess that's sort of my quick comments on is it sustainable. And I'm sorry, what -- Matt, what was the second part of your question?

I was just asking if there needs to be a more conventional leasing component to kind of offset the cyclicality of manufacturing.

Yes. So leasing, as all of our competitors have been at it for some time, provides a lot of benefits to the overall business economics as well as to just the manufacturing operations. And we're in the process right now, as you know, from going from a very down [indiscernible] kind of supplier of -- on a leasing basis to being picking a more conventional approach. It's by no means is our expectation at least for now to ramp that up and bring it to the proportionate size of some of our competitors. That's not what we're trying to do at the moment. But we'll see where it takes us. We've got to go one step at a time here, and step one is to get to objectives we've targeted internally and that'll both be accretive to the overall business as well as give us, we believe, manufacturing smoothing and more volume. So which is why everybody out there is doing it. So we're going to go one step at a time and see where it takes us.

And just one last quick question. The backlog ASP went up, I believe, in the quarter. So was that all steel? And if so, is there any way to gauge what the ASP would have looked like adjusted for steel?

Matt, it is a factor or it's a result of just mix of product.

Next question will come from Willard Milby with Seaport Global. Please go ahead.

Wanted to talk about the, I guess, increasing portfolio competitiveness and the restructuring there. It sounds like in the quarter, maybe some more specialized cars kind of hit you on the cost front. Is it the restructuring broadening that portfolio maybe reducing car specialization? Can you kind of talk about what in the mix is changing of your offerings?

Yes. This is Jim, Willard. Let me try to put some clarifications around what exactly we're talking about with the product portfolio. We have a FreightCar family designs that clearly take us from where we were to how we want to be positioned. We have good competitive designs that meet or exceed customer expectations, and we can produce those cars. In some cases, we can produce those cars to our satisfaction and our economic expectation under Back to Basics. But in other cases, we can't. And so what we're really talking about when we talk about portfolio enhancement or further engineering, however you want to term it, we're talking about getting the engineering designs so that they're on a competitive cost basis, we can process them to our expectations in the factories. We get the tooling and the fixturing complete to where we have good efficient, repeatable process, and in some cases, enhancements to the facilities. We're going to be investing for, in instance, in further paint facility improvements to better enable us to be competitive in the plastic pellet car lining business. So, it's about taking the products that we have and making them so we can produce to our expectations and targets under our Back to Basics umbrella.

I think you touched on this in your prepared remarks, but the leased assets on the balance sheet remaining flat quarter-over-quarter, is that something you thought you'd be able to sell in this quarter? Or was that kind of expected to remain at those levels for maybe a little while? And what are your plans on getting those leased cars sold?

Willard, it's Matt. Thanks for the question. The railcars that we have in our short term lease portfolio continue to be marketed and made available for sale. We just haven't found the transaction at this point where the economics have made sense to sell it. However, those leased railcars are out there generating rental income for us and a consistent revenue stream, and we'll continue to do so in the future. And when the economics makes sense to sell, we'll pull the trigger at that time.

And last thing from me, the steel sourcing headwinds during this quarter, are those -- had those been able to be moderated at all as you look at production for Q4? And largely, I'm assuming you're -- all your order contracts have steel pass-throughs built in. And was there any help on that front? Or is there any kind of help coming on future deliveries?

This is Jim again. On a macro level, I know everybody knows this, but the steel environment in North America and even more so in the U.S. is very, very challenging. It's challenging from a overall cost standpoint, from a day-to-day cost variation or fluctuation standpoint, and it's also very challenging from an availability standpoint. And that is going to be with us, quite frankly, probably as long as tariffs are in place, the 332 tariff in particular. And the -- and so we, like our competitors and like every manufacturer in the U.S. that produces with steel and aluminum, it's a tough situation and it's something we're going to have to do the best we can and lift through. The other thing that was more specific to the quarter was this unique issue associated with the Navistar asset acquisition. And I just want to emphasize, again on that piece of it, that any kind of acquisition of that nature is always difficult. By and large, this thing went about as well as they could go, and it is truly giving us everything that we had hoped it would do. Unfortunately, on top of it, there was a one-time issue that caught us. And as Matt mentioned, it was worth about $2.9 million of [indiscernible] in the quarter, and that piece of it truly was tied to steel and it was a one-time event for us.

Actually, if I could sneak one more in, just housekeeping SG&A run rate going forward, what's a good number to think about?

Yes. I probably take the existing SG&A that we had and add back the incentive compensation reduction and that probably gets you close to that rate. And it's really been that hit about that level now for most of this year.

And the last question comes from the line of Mike Baudendistel with Stifel.

Just wanted to ask a little bit about the orders in the quarter. And I get that there were a lot of specific deals that you're not a candidate for, but just trying to understand under what set of circumstances would you do better with the orders in the context of the industry. I mean, does it have to be a situation where your competitors are full up and have long lead times and you can get a car quicker? Or why would someone come to FreightCar America versus one of the larger OEMs? And do you have some niche in a certain car? Just trying to understand those things.

When you look at the orders we received in the quarter, it actually comprised 4 different broad car type categories. So we were pleased with that. Obviously the quantity was well below our expectations. We're not beating ourselves up though. I mean, we look at what happened. There were -- as I mentioned, a large order that was placed on a multi-year basis. There's a number of large 1 or 2, 3, 4 customers that placed 8,200 cars. And there is a much broader customer base beyond that, that have been interested but on the sideline. So we have very good relationships with those customers. Those customers like our products. We're in active dialog with them. It's now just a matter of getting across the finish line, and we're at it every day. So it's quarter-to-quarter, as we've reported in the past, nothing has changed in that regard. We have good products, the products that customers want, and it's just a matter of getting those folks that haven't ordered to the table here.

Mike, this is Jim. Just to add to that a little bit, I think clearly we're all disappointed with the order intake in the third quarter. And until we have a business that is dialed in a 100% on the right products at the right cost, it's going to be tougher to perform than we wanted to be. But that said, you look back at our second quarter where we took in approximately 1,500 orders, that wasn't especially bad. So our -- we're going to -- our goal is to get through Back to Basics as quickly as we can, but to do it right so that we have it in place for the long term. And again, when we do have the right products on the right cost structure, we will have a very sound business and it won't be as lumpy as, say, Q2 to Q3 order intake.

And then just wanted to ask you on leasing. I mean, it seems like you're making a greater effort there. I just wanted to, if you've lost any sort of sales because you have not been able to have the leasing capability in place than in the past? And is that -- you think of that as being like a sales tool, because the customer wants to have a one-stop shop and not go to a third party for leasing? Am I sort of thinking about that right?

This is Jim, again, and then I'll let Ted jump in a second. There are customers out there that want to purchase, there are customers out there that want to lease, there are customers out there that want to look at a deal both ways. Being principally a seller in the past and not a leaser and being known as a seller and not a leasing business, obviously that comes with some deficits as compared to somebody offering both. That's why we're doing it. So going forward, as we bring this leasing company online, the whole idea here is, it's one more way more seats at the table, more success at the table. It's not just about creating an incremental revenue stream, it's about the benefits of portfolio management and it's also about the benefits of incremental home whole manufacturing. Ted, do you want to add to that?

Yes. I'll just say with respect to have we lost deals. I think, it's -- certainly, if we look historically, there have been several cases on a quarter-over-quarter basis, where we would have lost deals because we weren't able to get as aggressive as we would have liked to put railcars in our lease. Typically in the past, we had originated these deals with the sole purpose of flipping them. So with that, there's a level of conservatism built into that model. And now with a more longer term approach, we'll have a different outlook.

And at this time, there are no further questions in the queue.

Thank you, again, for your time today and for your continued support in our company. Have a great day. Thank you.