INNOVATE Corp. (VATE) Q1 2020 Earnings Report, Transcript and Summary

Good afternoon and welcome to the HC2 Holdings, Inc., First Quarter 2020 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I'd now like to turn the conference over to Garrett Edson of ICR. Please go ahead.

Thank you, and good afternoon. We’d like to thank you for joining us to review HC2’s first quarter 2020 earnings results. With me today, are Phil Falcone, President and CEO of HC2; and Mike Sena, HC2’s Chief Financial Officer. This afternoon's call is being webcast on our Web site at hc2.com in the Investor Relations section. We also invite you to follow along with our webcast presentation which can be accessed on HC2’s Web site, again in the IR section. The replay of this call will be available approximately 1 hour after the call. The dial-in for the replay is 1844-512-2921 with confirmation code of 10143550. Before I turn the call over to Phil, I'd like to remind everyone that certain statements and assumptions in this earnings call which are not historical facts will be forward-looking and are being made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 including among others statements related to the expected potential impact of the novel coronavirus COVID-19 pandemic and the related responses of the government and HC2 on our business, financial condition and results of operations in any such forward-looking statements whether concerning the COVID-19 pandemic or otherwise involve risks assumptions and uncertainties. These forward-looking statements are subject to certain assumptions and risk factors that could cause HC2's actual results to differ materially from these forward-looking statements. The risk factors that could cause these differences are more thoroughly discussed in our filings with the SEC. In addition, the forward-looking statements are included in this conference call are only made as of the date of this call and as stated in our SEC report. HC2 disclaims any intent or obligation to update or revise these forward-looking statements except as expressly required by law. During the call, management will provide certain information that will constitute non-GAAP financial measures under the SEC rules such as, but not limited to, adjusted EBITDA, insurance adjusted operating income, and insurance pre-tax adjusted operating income. Certain information required to be disclosed about these non-GAAP measures, including reconciliations with the most comparable GAAP measures is available in the most recent earnings press release, which is also available on our Web site. And finally, as a reminder, this call cannot be taped or otherwise duplicated without the company’s prior consent. Now, I’d like to turn the call over to HC2’s President and CEO, Phil Falcone. Phil?

Thank you, Garrett, and good afternoon everyone. Thank you for joining us and we hope you and your families remain safe and healthy. And it's been a challenging couple of months for everyone since our last call in March as everyone has been touched in some fashion by this pandemic. We're especially proud of the tireless effort and dedication from our employees at HC2 and our subsidiaries as they seamlessly work remotely and on site when necessary to continue executing for our customers. On today's call, I'll walk through the impact of COVID on our businesses, as well as our recent progress on our top priorities of debt reduction and overhead costs. Our CFO, Mike Sena will then provide more details on our first quarter performance. And then we'll take some questions. COVID-19 has had an unprecedented impact on the U.S. and the worldwide economy. We have evolved from when we last spoke in March from an environment that was clearly starting to implement targeted lockdown in select areas to one that saw the virtual shuttering of the U.S. economy and shelter in place fed-ex for the vast majority of Americans. What once looked like a temporary shutdown migrated into a nearly six weeks shutdown in most states. And while we are beginning to see states reopen mainly in the South and Midwest, there are still a number of major states including California, New York that remain on lockdown for the foreseeable future. Well, we are all hoping for a V-shaped recovery, the ultimate impact continues to be increasingly challenging to predict and as such, we and our subsidiaries are keenly focused on liquidity for the near-term future as well as our fundamental priorities of debt and overhead reduction. In terms of our COVID-19 response thus far, we want to provide an update on each of our segments to give you some more granularity as to our expectations as we navigate through these challenges. At the parent company, I'm pleased to say that we continue to operate uninterrupted and we've remained focused on working closely with the management teams of our subsidiaries to ensure we're aiding them in every way and to ensure they continue to operate as effectively as possible. Given our near-term priority of liquidity we have been taking action across the portfolio and at the holdco level to further rationalize costs and responsibly reduce spending. At construction DBM steel fabrication and erection group has seen minimal work stoppages to-date as most states considers construction and essential business. Demand is still there in the broader market as we are receiving a significant number of RFP requests, the new contracts are still not being awarded at this time as customers await a clear view of the pandemic impact. Fortunately, our substantial adjusted backlog of 781 million continues to remain near all time highs, which will provide a significant cushion. But like most project based businesses, that backlog needs to be replenished. Our Industrial Services Group has been somewhat impacted as non-essential maintenance repair services as well as various planned maintenance and CapEx projects included in the backlog have been pushed out and certain facilities have been temporarily closed. While we expect the COVID-19 impact will cause the steel and construction segment to see some reduction in adjusted EBITDA for 2020 compared to 2019. We remain confident in DBMs long-term potential once the pandemic impact dissipates. Importantly at this time, there have been minimal effects in accounts receivables, collections, which is a credit to DBMs high-quality customers. Turning to Energy, our compressed nat gas operation, ANG continues to operate without significant issue. While we've seen a drop-off in volume at certain stations and by certain customers, a significant number of ANGs larger customers are consumer staples, suppliers and grocers, which have seen increased demand in recent weeks. A number of our contracts are also under a taker pay structure, which requires a minimum fuelling requirement regardless of whether those customers fuel with ANG, which helps to insulate ANG against short-term volume fluctuations. But the recent downward trend in oil prices, it is conceivable that the adoption of natural gas vehicles could slow near-term but we continue to believe that clean energy from CNG will become the primary alternative to diesel for commercial fleets. At Broadcasting, we believe our broadcast distribution platform remains a significant growth opportunity for HC2, given the broad geographic reach of our station group and the ongoing acceleration of cable cord cutting across the country. At network group, however, Aztech America or Hispanic network will be impacted by the pandemic, a certain ad spend has been deferred and will affect the top-line in that unit. In addition, while our capacity lease deals, which are the bulk of our contracts remain unaffected. Some of the expected benefits from our revenue share agreements, such as with beIN SPORTS and Cheddar News will be delayed. Our Life Sciences Division we remain very optimistic for both MediBeacon and R2 Technologies. The recent additional 10 million equity investment from Huadong at post money valuation for 90 million further validates the viability of R2. That said the current environment may create a slight delay in R2s expected commercial launch. While the pandemic has not affected the regulatory process at MediBeacon, we could potentially see delays that could slow MediBeacon's progress towards regulatory approval. That being said, it has not changed our long-term belief and the value of those entities. And in fact, one could argue that the issues discussed around COVID-19 and its effect on the kidney could prove that MediBeacon is more valuable than previously thought. In addition, as a reminder, both R2 and MediBeacon have recently received new equity investments to fund ongoing activities and as a result we currently do not anticipate a need for further capital investment from HC2. Finally, at insurance continental continues to be well positioned with approximately 94% of its book comprised of investment grade securities. As with any asset book of this size, we expect certain rating agency downgrades, which undoubtedly will result in higher capital charges on these securities, but the impact will be greatly mitigated by CGICs strong RBC rating heading into the COVID pandemic. At this stage in the pandemic, we've not experienced any significant deviations from its standard liquidity needs. Given the challenges COVID-19 has presented to all of us, we expect there will be some near-term impact on our income statement. However, our overall strategic priorities have not changed. And to that end, we continue to make progress towards significantly improving our capital structure and reducing holdco costs. In doing so we continue to believe we will be able to fully pivot post-pandemic and be well positioned to execute on our growth and innovation strategy. At the end of February, we completed the sale of Global Marine Group and used the large portion of the net proceeds to redeem approximately 77 million of the 11.5% notes at the end of the quarter. In addition, we expect to close on the sale of our 30% ownership at HMN to Hengtong in short order. As a result, we will utilize the net proceeds HC2 receives from the sale to further reduce the amount of principal outstanding on our 11.5% notes by over 50 million. All-in, after the next partial redemption, our 11.5% notes will have a principal amount of approximately 340 million, a 28% reduction from where it stood at the beginning of 2020. The pay downs also allow us to realize approximately 15 million in annual interest savings while still retaining a 19% put option or $30 million toHC2 after taxes and customary transaction fees at today's valuation on HMN that is exercisable in two years. We're very pleased with the ongoing process for HC2 as we reach the finish line on HMN as the entire strategic process for global marine is a testament of our expertise and capabilities to effectively navigate through the complexities and roadblocks in order to realize stockholder value. Furthermore, beyond our marine services divestitures and the reduction of debt, we wanted to provide a brief update on our current strategic processes. With respect to Continental Insurance, we continue to progress in our discussions with our counterparty and have extended exclusivity to sell Continental, but are not able to comment any further at this point in light of the ongoing discussions. As we discussed in our previous calls closing on a sale of Continental will allow us to continue with our long-term goal of debt reduction while focusing on and simplifying our overall corporate structure. As it relates to DBM Global, we continue to explore all options, including both the sale and subsidiary refinancing to ensure that we deliver appropriate value to address our capital structure, liquidity and strategic plan as we move forward. And as we've noted consistently, we are always exploring other opportunities within the portfolio as we are sharply focused on continuing to improve our capital structure, particularly in these uncertain times. I will now briefly run through a few highlights of our first quarter performance. For adjusted EBITDA for the first quarter 2020 was $13.2 million versus $14.2 first quarter 2019. Our energy segment performed nicely in the quarter as it nearly doubled the amount of gasoline gallons equivalent from the prior year period, thanks to the 2019 acquisition of 20 additional CNG station. The segment was also partially buoyed by the alternative fuel tax credits, which will continue to be able to utilize through 2020. At DBM, construction was somewhat impacted in the first quarter by timing of commercial project work under execution, as well as seasonally lower contribution from maintenance repair work. But as a reminder, the first quarter is typically the lightest quarter from an adjusted EBITDA standpoint. And while there will be impact from COVID as I noted before, we would still expect adjusted EBITDA to be a good amount higher in the second quarter of 2020 compared to the first quarter. At our life sciences segment in April, R2 Technologies received an additional 10 million in equity investment from Huadong at a post money valuation of 90 million to further fund the company's efforts as it gets closer to commercialization. As a reminder under an exclusive distribution agreement, Huadong will distribute R2s skin lightning devices and products in Greater China and other Asia Pacific countries. And at broadcasting we increased the number of operating stations to 218 at quarter end, of which approximately 165 are currently connected to our central cast or cloud-based system. During the quarter as previously announced, we reached carriage agreements with both Dabl, a CBS Television Distribution lifestyle diginet and Cheddar News an Altice USA Company. Finally, in terms of our corporate overhead, we further reduced recurring SG&A by over $1 million on a year-over-year basis. Importantly, I believe our assets continue to have untapped value and we have the right long-term strategy in place to drive stockholder value. To reinforce my full and clear alignment with stockholders and desire to create value for HC2, I took the additional volunteer step a couple of weeks ago of committing to forego any potential bonus payments, I may be eligible to be rewarded in respect of 2020 or any future year performance until our stock reaches an average trading price of at least 750 per share over a 30 day period. This commitment is further proof of my complete alignment with our stockholders to successfully execute on HC2 growth and innovation strategy. As we look ahead, despite the pandemic and the effects, it will assuredly have in the near-term. We remain excited and energized about our longer term future and the prospects for a streamlined, sharply focused and financially flexible HC2. We continue to believe that by focusing on our unique higher growth and innovation strategy at HC2 of energy broadcasting and life sciences, while we continue to explore strategic options on DBM Global we will be best positioned for the long-term to strengthen our balance sheet and maximize the full potential value of our businesses. With that, I'll now turn the call over to our CFO, Mike Sena, who will discuss some of our financial highlights. Mike?

Thank you, Phil. Let's review our first quarter performance, consolidated total net revenue for the first quarter 2020 was 444.8 million compared to 449 million in the prior year period. As lower revenues from the insurance net of eliminations and construction segments were partially offset by increases in revenue from the telecommunications, energy and broadcasting segments. Net loss attributable to common in participating preferred stockholders for the first quarter of 2020 was 83.5 million, or $1.82 per share compared to a net loss of 1.6 million or $0.05 per share in the prior period. First Quarter 2020, net loss attributable to continuing operations was $0.85 per share, compared to the first quarter net income attributable to continuing operations of $0.04 per share. But the company's core operating subsidiaries, which now comprise of HC2's construction, energy and telecom segments, adjusted EBITDA for the first quarter of 2020 was 13.2 million, compared to 14.2 million in the prior year period, as improvements at energy were more than offset by reduced contributions from construction and telecom. Total adjusted EBITDA, which excludes our insurance segment was 1.4 million in the first quarter of 2020, compared to an adjusted EBITDA loss of 2.2 million in the prior year period, the improvement in year-over-year adjusted EBITDA during the first quarter was driven by reduced losses at the broadcasting and other segments and $1.1 million reduction in non-operating corporate adjusted EBITDA losses. Let's just take a couple minutes to go into a bit more detail in a few of our segments. At construction, we recorded adjusted a budget for the first quarter 2020 of $9 million, compared to $12.4 million in the prior year period. First quarter 2020 results were impacted by the timing of commercial project work under execution and seasonally lower contribution from industrial maintenance and repair project work. As of March 31, 2020, reported backlog was $486 million adjusted backlog which takes into consideration awarded, but not yet signed contracts was $781 million, mainly consisting of smaller to medium sized projects and provides construction with significant visibility. As a reminder, the first quarter is typically the lightest for construction in terms of generating adjusted EBITDA. Thus, we do not believe the first quarter is indicative of the run rate for adjusted EBITDA, which is consistent with what we generated in the prior year. At energy, we recorded adjusted EBITDA in the first quarter of 3.8 million compared to adjusted EBITDA of 1 million for the prior year period. As Phil noted in his remarks, the segment continued to benefit in the quarter from the renewal of the alternative fuels tax credit, or AFTC, which had not yet been approved in the first quarter of 2019. As well as a ANG's acquisition of 20 CNG stations at the end of the second quarter 2019. The AFTC is in effect through December 31, 2020. As a reminder, it is typical that the AFTC is only renewed for the current year and one year forward rather than for multiple years in advance. But we remain optimistic that compressed natural gas continues to receive support on Capitol Hill. The gross tax credit, which equates to $0.50 per gasoline down equivalent is shared with our customers as an incentive for them to continue the conversion of their fleets to CNG. And overtime, larger CNG fleets would mean greater volumes for our stations. Meanwhile, at insurance, we generate a pre-tax adjusted operating income for the first quarter of 6.6 million, compared to 28.7 million in the prior year period. The reduced pre-tax AOI was primarily driven by favorable claims activity recognized in the prior period and unfavorable claims activity. Claims activity for purposes of reserves is forecasted on a linear basis, while actual claims activity is not and as such periods of favorable and non-favorable claims activity is normal. Insurance also incurred larger expenses due to increases in headcount to support the segment's growth. As of March 31, 2020, insurance had cash and invested assets of 4.2 billion, total GAAP assets of 5.3 billion and an estimated 347 million in total adjusted capital. At the end of the first quarter, HC2 consolidated cash, cash equivalents and investments of 4.2 billion, which includes cash and investments associated with HC2's insurance segment. Excluding insurance consolidated cash was 64.6 million. Corporate expenses for the first quarter of 2020 were 5 million, a 1.1 million reduction from the prior year period, as we continue to focus on significantly and responsibly reducing overhead at the holdco level, particularly in the face of the pandemic. Our first quarter corporate expense is typically higher than other quarters through the normal year end activities such as our audit. In addition, subsequent to the end of the first quarter, we announced additional measures to further reduce CEO and Board compensation moving forward. At the end of the first quarter, we completed the partial redemption of 11.5% notes reducing our note principle by 77 million. Upon the closing of the sale of our 30% interest in HMN, which we expect imminently, we will announce another partial redemption from HC2s portion of the net proceeds, which we expect will further reduce our note principle by over 50 million. The redemption will be completed in compliance with our 11.5% notes in venture and the combined decrease in aggregate principal outstanding will provide us with annualized interest savings of approximately 15 million. For June 1 interest payment we will require a little under 25 million in cash with cash on hand, our new 15 million credit facility we entered into last month and upstream cash we will receive in the second quarter, including 14 million to be received from DBM later this month we are comfortably capitalized to make this June interest payments. Our plan for 2020 is to upstream over 40 million in cash from our subsidiaries remains unchanged. While we have the capacity to upstream additional cash from our subsidiaries if the need arises, we currently intend to keep capacity at our subsidiaries as they and we execute on their strategic plans. We remain comfortable with our overall liquidity position in 2020, while we continue to focus on further expense reductions and pursuing our strategic initiatives to reduce holding company debt, and unlock value within the HC2 portfolio. I'd now like to open the call up for questions. As you know we're here to talk today about the company's earnings announcement and not the pending consent solicitation and proxy contests with one of our stockholders. And we ask that you focus your questions on the company's first quarter earnings. Operator?

[Operator Instructions] And our first question comes from Sarkis Sherbetchyan of B. Riley FBR. Please go ahead.

Hey, good afternoon, and thanks for taking my question here. I will start off with the construction segment first. I know, you said the adjusted backlog was 781 million, nearing an all time high there? And how can we kind of reconcile that against the no new backlog awards stated on the call?

Well, that's the number as of March 31. I'm not quite sure how when you talk about reconciling.

So I think I heard in the commentary that you expect higher EBITDA in the second quarter versus the first quarter, is that correct?

Yes. That's typical. That if you look back over the last number of years, that's not a typical, first quarter is typically the lightest from an EBITDA perspective.

Yes. So the reason I'm using the word reconcile is because of the kind of pandemic updates so just trying to understand, I understand what's typical from 2Q versus 1Q, but given kind of the detailed release on construction and the pandemic and the lower, industrial services situation, kind of help us understand this time, the second quarter is going to be in line or better than the first quarter?

Well, I think as it relates to refilling the backlog that is more important for beyond the second quarter and the third quarter, if you get for instance in April, you get something if you're rewarded a contract if not like you start in May. So and that's one of the things with the backlog, there's very good visibility for over the next 12 plus months. But there's a lag time between getting a contract and then starting up that business. So, at some point where we believe we're in good shape now. But at some point, you have to fill up that backlog for future months or future quarters. I think, I'm not sure if that answers your question or not.

No. And then also, if you kind of step back and think about the historical margins that the construction business has generated, do you still think that margin profiles still kind of something that we should take into consideration as an or has that kind of been under pressure? Can you help us there?

Yes. From our best estimates and from our knowledge, we haven't seen any margin contraction per se. Again, it remains to be seen how future months and what that looks like, but there -- we haven't seen anything to give us pause or cause for concern around that.

Okay. Thanks for that. And I'll switch gears here into the broadcasting segment. You mentioned lower advertising kind of from heading into the pre-COVID situation. And if we kind of try to get a sense for when you'd expect the broadcasting to breakeven kind of given this changing environment?

Yes. I think as I mentioned from my first -- as I mentioned, from the perspective of broadcast, one of the reasons you've seen increased -- somewhat increased expenses is the number of stations coming online. For every station that comes online, you have expenses associated with it. You've got your utilities, you've got your tower rent, you've got your backbone expense. So if you bring on a tower or bring on a station today, you're going to be charged, you're going to incur additional expenses today. And by the time you fill that up there's again a lag time. So the business -- from a model perspective, we've actually built a lot more stations than we expected. I think as I mentioned, the number as of March 31 was 218 stations. I think we built maybe 80 to 90 plus stations over the past number of months. And it takes time to fill those up. So, it has slowed down, getting to cash flow breakeven, but that's the reason and our objective is not necessarily -- the key part of this is getting the platform complete and our goals are getting to the 250 station mark. So you will see some added expenses, but that's from a growth perspective and building out the stations, it's from a breakeven perspective. We've got a massive amount of capacity that we've got to fill up and we are doing a number of things, including working with various consultants on that. But there is a tremendous opportunity I don't want to give you a specific date, but that number of -- the negative number is not dramatic and is not unexpected. It is not an aberration from our goal, if anything, it's our engineering department doing much better than we expected. And I got an email today of a number -- few more stations coming online. So I don't think you're going to see anything dramatic on that bottom-line positive or negative over the next number of months. But, if you look at it from, again, from a station build perspective, we've been ahead of schedule on that and as a result, it is slowed down our breakeven number, but we're awfully, awfully close. But I just -- I don't want to be wrong and give you a bad time period. But it's not necessarily an aberration and what we expected internally.

That's fair. And I noticed there is kind of like over 30 active projects underway and if my calculation serves correct, like over 50 stations need to connect to the central cast system upgrade that you've basically been deploying it, maybe if you can kind of state, how much capital you'd expect to spend either kind of here in 2020, for broadcasting to achieve all of that, and then kind of how would that be funded given kind of the lack of cash flow here?

Well, I wouldn't say there's a lack of -- how you have to look at it as we do have cash on the balance sheet. We do have some flexibility with regards to the build out and slowing down the build out to make sure that one plus one equals two, so there's no cause for concern on that end. But if you look at from a station build perspective, we've got it down to about $160,000 for a station build, which is pretty darn efficient. Incorporating that station or not that necessarily that station but a station that's been online and putting it under central cast is about 15,000 to 20,000. So you're not looking at a lot of money as it relates to the CapEx necessary to get everything under central cash. I mean, there's granted there's no need to -- at this point, slow that down. But there's also no need to speed it up as well. I mean, we can operate just as efficiently under central cash as not, but it's just more -- it's more, I shouldn't say more convenient, but it is a bit more efficient because you're then delivering the content into one -- into one gateway. So it's more efficient to get every station under central cast, but it's not an absolute necessity. So we can manage that part of the business if we need to, if it looks like we need to manage cash flows, just like we can manage our build out. And then some stations are, if you're co-located, there are a lot less than 160,000. So there's things that we could do on that end, but we're getting down to a point where, we've got another 20 to 30 stations to get to our goal of the 250 and It's not necessary that we get that done, in two months or three months or four months, it's a kind of a high class problem to be in a position where we are because we have a pretty substantial amount of capacity. And there's been certain things that have slowed us down just from a pandemic perspective, finding, rigging units and getting everything on time from a labor perspective and making sure the various parties show up. Because there have been certain entities that have slowed down but, we're way ahead a plan on that perspective and we could slow it down accordingly, if need be, but at this point, there's no cause for concern there.

Okay. Thanks for the color. Just moving on to the insurance division. I know you mentioned again kind of in advanced discussions, and it sounds like you granted the party exclusivity. How should investors interpret the context you gave? Advanced discussions exclusivity? I mean, why bother even disclose that if we can't really get much more of an update?

Well, I mean, it's what we can disclose. So obviously, we want to try to be as transparent as possible. We just thought that we would be asked the question and quite frankly, we wouldn't have extended exclusivity, if we didn't believe there was a deal to be done, you don't just extend exclusivity for the sake of it. So I think that's indicative without going into too much detail of, yes, there's a rationale for extending that exclusivity and it's not to waste anybody's time.

Yes. And so you let's assume something happens. For example, in this quarter, right, regarding the insurance, how long would that take to close the sale? Obviously, there's regulatory things and whatnot, is that two quarters, three quarters, four quarters, can you maybe help us frame it, assuming a second quarter close, right?

Yes. Specifically it depends on the regulator's experience or comfort level with the buyer. When you don't have -- like, when we first stepped into it, we didn't have -- we weren't coming with the insurance platform. So it took us a bit longer. You could be looking at, three or four to six months plus or minus. I don't think that's out of the ordinary. The fact I think there's no reason to believe that this group that we're in negotiations with would have any issues over and above what a traditional insurance platform would face from a regulatory perspective, because they do have that experience. So I guess that, gives us comfort that the standard time could be three, four to six months. I wouldn't suspect in a while, I can't put my finger on it and say it'll be done within six months, or it'll be done in three months. I think that's reasonable to assume that one could suspect three to six months within that timeframe.

That's super helpful. And I'm going to switch over to marine real quick, I know that the business was sold, it's not core anymore. I guess on the 30% interest, that's going to be sold to Huadong and close your -- mentioned imminently close. How should we interpret the word eminently close?

Interesting, because we actually discussed that, we feel pretty good that it is going to close imminently that it's going to be in short order. We don't think that, I have to be careful with what I say but it's imminent means pretty soon, I guess.

I suppose the reason I asked is, how does that compare to the last calls, the first two weeks of April?

Well, you had people I think the pandemic kind of was in its relative infancy and clearly people's heads were spinning, but we're in different situation now we're in a different position now. There had to be -- there were certain steps that had to be taken for an app -- for closing, i.e., money transfers, et cetera that takes time. And when you get people out of the office and some entities shut down, you experience delay. I think we're at a point right now where we feel very good about from a timing perspective, where early April, it could have closed in one week, or it could take, four or five, six weeks because there were a lot of things that were unknown at the time from a timing perspective. We knew it was going to close. The question was, was it going to be the first week of April or the first week of June. So now it's to a point where based on what the events that have taken place and what things needed to be done. We're at the one yard line, quite frankly.

At this time, there are no further questions in the queue. I would now like to turn the conference back over to Phil Falcone for any closing remarks.

Okay. Well, again, thank you for your time today. I hope everybody is safe and healthy. And, again, we are very happy about the first quarter and especially that everybody on the team is safe. That is the most important thing. Furthermore, if you have questions that come up, over the next few days, you can always reach Mike or myself. So with that, thank you again and good evening.

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