V2X, Inc. (VVX) Q4 2019 Earnings Report, Transcript and Summary

Thank you for joining us for the Vectrus Fourth Quarter 2019 Earnings Conference Call and Webcast. Today's call is being recorded. My name is Daryl, and I'll be the operator for today's call. At this time, all participants have been placed in a listen-only mode. Following management's presentation, I will open up the call for a Q&A session. [Operator Instructions]And now, I'll pass the call over to your host, Mike Smith, Vice President of Investor Relations and Corporate Development at Vectrus.

Thank you. Good afternoon, everyone. Welcome to the Vectrus fourth quarter 2019 earnings conference call. Joining us today are Charles Prow, President and Chief Executive Officer; and Susan Lynch, Senior Vice President and Chief Financial Officer. Slides for today's presentation are available on our Investor Relations website, investors.vectrus.com.Please turn to Slide 2. During today's presentation, management will be making forward-looking statements pursuant to the Safe Harbor provisions of the federal securities laws. Please review our Safe Harbor statements in our press release and presentation material for a description of some of the factors that may cause actual results to differ materially from the results contemplated by these forward-looking statements. The company assumes no obligation to update its forward-looking statements.Additionally, I would like to point out that we will be discussing and reporting adjusted non-GAAP metrics, including adjusted operating income and margin, adjusted EBITDA and margin, adjusted net income, and adjusted diluted earnings per share. The definition of these non-GAAP metrics can be found in our presentation materials, press release, and Form 10-K.At this time, I would like to turn the call over to Chuck Prow.

Thank you, Mike. Good afternoon, everyone. Thank you for joining us on the call today. Please turn to Slide 3. 2019 was a year of continued strategic and financial momentum for Vectrus, and we progressed toward our goal of making Vectrus the premier converged infrastructure company in our market. Our momentum is reflected in our results. Revenue grew 11% in the fourth quarter and 8% for the year, which was supported by a strong organic growth of 7% in the fourth quarter and 6% for the year. Organic growth was driven by expansion on our core program and continued Faison and performance of $350 million of new business won in 2018, and programs won in 2019.Importantly, through our continued focus on growth related programing capability enhancements, in 2019, we won approximately $1.2 billion of new business and protected our base by winning significant recompetes, which will drive revenue growth in 2020 and beyond. We continue to diversify our client portfolio and our revenue base by expanding our market share with the Navy and the Air Force, and added clients new to Vectrus, including the Department of State, and our first foreign military client, Japan's Ministry of Defense. As we anticipated, we also improved our profitability throughout the second half of 2019, as a recent new award phased in.Adjusted EBITDA margin expanded to 4.9% in the fourth quarter, the highest in our history. We grew fourth quarter adjusted EPS by 27%, and the full year by 6%. We achieved these results despite continued investment in our business, including preparation for LOGCAP V and the execution of our enterprise-wide performance improvement initiatives we refer to as Enterprise Vectrus. Enterprise Vectrus includes a series of program operations and business advisory related initiatives, which include the implementation of new systems, standardizing our core processes, establishing our global supply chain at a core competency, and strengthening our global talent chain, to name a few. We expect the investments made in 2019 and continue to make to result in stronger EBITDA margins in 2020 and beyond. As you know, in 2019, we were awarded a seat on the $82 billion LOGCAP V IDIQ, with task orders in the CENTCOM and INDOPACOM AORs, the largest award in our company's history. This 10-year contract with us in every time zone around the globe, positioning Vectrus they compete for additional future revenue growth and geographic expansion in all AORs.We also expanded our strategic position as a converged marketplace leader through the acquisition of Advantor. Advantor's well respected and leading integrated electronic security system offer practical solutions that are in demand in the marketplace and advance Vectrus's position as an innovator in this market. We are very pleased with Advantor's progress and the integration of its talented team into our business. This acquisition exemplifies our understanding of our clients' demand for converged infrastructure services and solutions. We continue to look for similar investments in the emerging converged infrastructure market to support our growth and our stated objective of being a $2.5 billion company with 7% EBITDA margins by the end of 2023.In 2019, we expedited the pace of Enterprise Vectrus and other internal investments in order to enhance our capability and foundation to support significant volume growth in 2020 and beyond. The Vectrus team that we have assembled in the past several years has been instrumental to our success. In 2019, we continued to enhance our leadership with strategic hires, while continuing to invest in the development of our people. I am pleased to report that in the last year, we internally promoted nearly 400 individuals around the globe, and formally launched our top talent mentoring program, and enhanced our diversity and inclusion program globally. I am very proud of our talented team, more than 35% of which are veterans, who are uniformly aligned to our mission and to our strategy.Our balance sheet remains strong, and we are making progress towards putting in place an expanded credit facility that is better suited to Vectrus's business and growth strategy today, particularly as we align to our operating and financial foundations in preparation for faster growth in the coming year. The initial 2020 guidance that we are issuing today represents 7% to 10% revenue growth and 18% to 19% EPS growth from last year. This is supported by our strong backlog of $2.8 billion and bids submitted for new business of $2.5 billion. The midpoint of our 2020 guidance represents 8.5% revenue growth and 14% earnings growth from 2019. Our revenue guidance range reflects the current status of the LOGCAP V protest process. With regard to LOGCAP V protest, we continue to have positive view of the status, as evidenced by the Army reaffirming its initial awards on February 5, and by the Court of Federal Claims denying three of the four protests on February 21. The low end of our guidance reflects a conservative view of LOGCAP V, with minimal revenue from the program in 2020.Now, I would like to turn the call over to our Chief Financial Officer, Susan Lynch, for a review of the financials.

Thanks, Charles, and good afternoon, everyone. Turn with me now to Slide 4 to discuss our fourth quarter results. Fourth quarter 2019 revenue was $365.3 million, up $35.7 million or 11% year-on-year. Organic revenue growth was 7% year-on-year, excluding the contribution from Advantor, which was acquired early in the third quarter. Total revenue growth resulted from an increase of $17.2 million from our Middle East programs, and an increase of $18.7 million from U.S. programs, partially driven by the acquisition of Advantor, which contributed $12.4 million. Our K-BOSSS contract contributed $127.1 million or 35% of total revenue in the fourth quarter.Operating income for the fourth quarter of 2019 with $15.6 million, or 4.3% margin compared to 3.8% in the fourth quarter of 2018. Adjusted operating income for the fourth quarter of 2019 was $16 million or 4.4% margin, compared to 3.8% in the fourth quarter of 2018. Adjusted operating income increased $3.4 million year-on-year due to an increase in revenue and improved program performance. Adjusted operating income was up $1 million sequentially or 7%, in line with our expectations for sequential improvements throughout the year. Fourth quarter 2019 interest expense with $1.7 million, up $207,000 year-on-year, reflecting the financing of the Advantor acquisition and short-term working capital requirements. Interest expense was down $248,000 on a sequential basis due to lower usage of our revolver.Adjusted EBITDA for the fourth quarter of 2019 was $18 million, up 29% from last year. Adjusted EBITDA margin was 4.9%, up 70 basis points from 4.3% last year, and up 30 basis points from the third quarter of 2019, which was in line with our expectations for sequential improvement. Net income for the fourth quarter of 2019 with $10.6 million, as compared to $6.1 million in the prior year. Last year's fourth quarter was positively impacted by a one-time tax reduction of $1.8 million associated with tax reform under the Tax Cuts and Jobs Act. The effective tax rate in the fourth quarter 2019 increased to 23.9% from 9.6% in the fourth quarter of 2018, primarily due to tax reform. Adjusted net income was $10.9 million, up 32% compared to prior year. Diluted earnings per share for the fourth quarter of 2019 was $0.91 compared to $0.89 in the prior year. Adjusted EPS was $0.93 and was up 27% year-on-year and 11% on a sequential basis.Turn now to Slide 5 to discuss our full year 2019 results. 2019 revenue was $1.38 billion, up $103.3 million or up 8% year-on-year. Organic revenue growth was 6% year-on-year through the acquisition of Advantor. Full revenue growth resulted from increases in our Middle East programs of $50 million, and an increase in our U.S. programs of $35.2 million, which includes $22.7 million from the acquisition of Advantor, and our European programs of $18.1 million. Our K-BOSSS contract contributed $495 million for 36% of total revenue in 2019. 2019 revenue with the Navy grew by 45%, while Air Force grew by 22% from 2018. Our work with intelligence and other federal clients increased 30% year-on-year. 2019 operating income was $51.6 million, or 3.7% margin compared to 3.8% margin in 2018.2019 adjusted operating income was $54.9 million or 4% margin compared to 3.9% margin in 2018. The $5.1 million increase in adjusted operating income was driven by improved program performance, and include the investments in global operations throughout the year. 2019 interest expense was $6.5 million, up from $5.1 million last year, reflecting the acquisition of Advantor and short-term working capital requirements.2019 adjusted EBITDA was $61.4 million or 4.4%, compared to 4.3% last year, and was in line with our expectations, as we realized improved performance from the investments made into our recently won programs. The effective tax rate in 2019 was 23.1%, as compared to 18.4% in 2018. The tax rate in 2018 was lower due to one-time tax benefits associated with tax reform. Diluted earnings per share for 2019 was $2.99, compared to $3.10 in 2018. Adjusted earnings per share was $3.21, and was up 6% from $3.04 last year.Turn now to Slide 6 to discuss cash and liquidity. Net cash generated from operating activities in 2019 was $27.6 million, compared to $40.1 million in 2018. During the fourth quarter, we experienced a temporary delay in cash collections with a handful of customers. This matter has since been resolved, but resulted in a net cash usage from operations in the fourth quarter of $900,000. Going forward, we expect return to over 100% cash conversion, compared to net income.Total debt at year-end was $70.5 million, down from $75 million at year-end 2018. The company's leverage ratio was 0.97 times, and well below our covenant level of 3 times. Cash at year-end was approximately $35.3 million for net debt of approximately $35.2 million. At year-end, our revolver was undrawn, with $117 million of available borrowing capacity with the possibility to expand borrowings by an additional $100 million subject to lender consent. In order to better support the growth of the business, our fees [ph] to working capital needs and lower our interest expense, we had begun to evaluate opportunities to update and expand our current credit facility.Turn now to Slide 7 to discuss our backlog. Fourth quarter 2019 full backlog was approximately $3.8 billion. Funded backlog was $707 million compared to $689 million last year and was down 12% sequentially due to the timing of awards and funding being added to contract. Full backlog includes both funded and unfunded backlog and represents firm orders and potential option period. Our contracts are multiyear contract and the right to exercise an option is at the stage of the U.S. government for the prime contractors when we are subcontract. Total backlog excludes potential orders under indefinite delivery and indefinite quantity contracts and contract awards that are under protest. Importantly, we were recently awarded a $122 million six month extension on our program and expect an extension of approximately $275 million per table we issued very shortly.We were also recently awarded a new $45 million contract with the Navy in Romania. It is important to note that those extensions in our recent navy win would add $441 million to backlog. The company's trailing 12-month book-to-bill ratio was 0.8x. As a reminder, our book-to-bill does not reflect contracts under protest and in particular LOGCAP V. Our book-to-bill reflects the award timing associated with on the quarter [indiscernible] associated with LOGCAP V. Taking into account LOGCAP V on the quarter table in our recent navy win our pro forma total backlog to $4.6 billion.Turn now to Slide 8. We expect our record of solid revenue and EPS growth to continue in 2020. We are establishing an initial revenue guidance range of $1.475 billion to $1.525 billion reflecting 7% year-over-year growth. The low end of this range reflects a conservative view on LOGCAP V timing that would equate to minimal revenues from the program in 2020. Importantly, our expectations for overall growth on LOGCAP V remain unchanged. We continue to drive margin performance in our business and expect 2020 EBITDA margin in the range of 4.6% to 4.8% compared to 4.3% in 2019. Our 2020 EBITDA margin range compares to an adjusted 4.4% in 2019. Our pass the higher EBITDA margin by the end of 2023 include a component involving working with clients for the more advantageous contract structures to include fixed price and as a service model.Our foreign fixed price contracts generally have margin profiles that build overtime as process and technology insertion generate efficiencies. We have continued to invest in our fixed price program, which includes the over $200 million of new programs won in 2018. The outcome of these investments is now starting to become visible in our financial results and 2020 guidance.Our estimates for 2020 interest expense is $5.6 million, down from $6.5 million in 2019 due to continued debt reduction and lower revolver usage. Depreciation and amortization is anticipated to be $8.4 million, up from $6.5 million in 2019 due to the acquisition of Advantor. We estimate a 2020 tax rate at 23% flat with 2019. Our 2020 diluted earnings per share guidance is in the range of $3.48 to $3.81. The midpoint of our 2020 EPS guidance represents a 14% growth from our 2019 adjusted diluted EPS. Weighted average diluted shares are estimated at 11.8 million shares. We expect revenue EBITDA margin and EPS to demonstrate a similar cadence to what we saw last year and build frequently through 2020.In the first quarter, we expect margins to show year-over-year improvement that did from the fourth quarter of 2019. We anticipate our 2020 revenue and earnings per share to be 40% in the first half and 50% in the second half. For 2020, we expect net cash provided by operating activities to be $45 million to $55 million representing 125% conversion at the midpoint. Operational capital expenditure guidance is approximately $7 million compared to $10 million in 2019. As a reminder, program-related capital expenditures are considered in contract pricing and will be recouped over the duration of the contract. Finally, 2020 mandatory debt payments are $6.5 million.I'd like to now turn the call back over to Chuck. Thank you.

Thank you, Susan. Now let's move to Slide 9 to touch briefly on LOGCAP V. As you are aware in April of 2019 sector for the water to position on the LOGCAP V contract. The army $82 billion 10-year multiple award IDIQ contract. We won the CENTCOM and INDOPACOM AOR task orders which carried at an initial value of approximately $1.4 billion or 40% of the $3.5 billion total initial value of task orders awarded to all four winners. The contract has been under protest since the award in April. As I previously stated the Court of Federal Claims denied three of the four protests and we expect a ruling on the final protest in the coming days. Just yesterday, the court denied the remaining protester's request for a temporary refraining order through March 11. We continue to anticipate revenue from these task orders will occur in 2020. We are ready to proceed and deliver on these critical missions for the Army.Let's move to Slide 10 to discuss our organic growth. This table shows our update of contract wins from 2019 to date in the first quarter of 2020. Vectrus has received over $2.5 billion in award by adhering to our commitment to deliver exceptional program performance to our client and to our growth strategy of conducting targeted campaigns designed to communicate the value we deliver. Additionally, we continue to make significant investments in our growth focus talent and capabilities we continue to extend our differentiation in the marketplace and support our growth in 2020 and beyond. During the first quarter of 2020, our Navy growth campaign continued to pay off with few additional awards. First we were awarded an eight-year, $45 million contract to provide base operations support at the Naval Station facility in Deveselu, Romania.Deveselu is the first Aegis ashore missile defense facility placed into operation providing support to NATO's overall ballistic-missile-defense system. This base is made up of approximately 200 personnel and is the first Navy base to be established since 1987. Importantly, this award is fixed price and demonstrates how Vectrus plans to increase its fixed price revenue base from which we can apply our program phase process discipline and technology enhancements that will ultimately lead to higher margin and better buying outcome. Second, we won a two-year $7 million contract to provide concept and development prototype software to integrate fared onboard center feed this support signal discovery and exploitation. This win was based on our strong history of sensory integration which is a key component and differentiator and are becoming a leader in the converged infrastructure market.Please turn to Slide 11 to discuss our new business pipeline. Our award activity remains solid and our pipeline of new business opportunities supports continued growth in backlog and revenue. We currently have approximately $2.5 billion in bids submitted for new business awaiting award. Which includes protested contracts another high for this metric. Additionally, we have identified opportunities of over $9 billion that we plan to bid over the next 12 months. Our growth focus activities have driven solid win rates to date and we are confident in our ability to successfully compete for business and our almost $12 billion new business pipeline.Let's move to Slide 12 to discuss our strategic execution. Over the past several years, we have made great progress, delivering on our strategy three core element, enhance the foundation, expand the portfolio and add more value to capture our opportunity to transform Vectrus into a larger scale higher value differentiated platform. This transformation is all about understanding our clients' need to move from our traditional way of operating their facilities, supply chain and network to a more instrumented and converged approach. As we progress toward our five-year objective, this converged approach is central to what we do. We have significantly enhanced our client portfolio mix and successfully integrated two acquisitions that have improved our operating technology capability. We have proven that the refinement to our growth-focused efforts are working and we have expanded our share with current client.We are now providing thought leadership to the marketplace on the installations in the future and have grown our talents to support strategic execution for future growth. Looking ahead to the next 18 months, our immediate priority is affecting a flawless LOGCAP V startup in both the CENTCOM and INDOPACOM AOR. Leveraging the investments we have made to support this growth and continuing to deploy capital on strategic M&A and organic pursuit. Additionally, through enterprise Vectrus, we will continue to advance our program processes and our internal systems modernization initiatives to better drive client outcomes and lower cost. We will continue to ensure operational technologies into our new and existing program as we take advantage of converged infrastructure such as the perimeter security through Advantor and many other technology-enabled solutions many of which can be viewed on our website. We are also leveraging Advantor capabilities into our existing client footprint that improve service delivery and create converged solutions of the future, increasing our address for market and supporting our growth.In terms of client, we will focus on delivering seamlessly for the Army. Additionally, we will advance our successful growth campaign such as the Air Force, Navy, intelligence community and State Department to further expand our share while leveraging our presence around the globe to build and execute an international pipeline of opportunities. In terms of M&A, we will continue to explore opportunities to make strategic acquisitions to expand clients' capabilities and to strengthen our leadership in the converged market.Let's move to Slide 13 to review our tracking toward our growth goal. The near-term priorities I just discussed will advance our progress toward our objective for $2.5 billion in revenue and 7% EBITDA margin. Here is the updated scorecard that we use to track our progress towards our long-term growth goal. The first component, volume and contract mix seeks to drive 80 basis points of margin improvement by revenue growth and working with our clients toward more advantageous contracting structure to include fixed price and as a service model to drive operating leverage. For 2019, our percentage of contracts were fixed price was 24% up from 22% in 2018. On a raw dollar basis, our fixed price contract stands at $336 million, an 18% increase from last year.In the near-term, as we phase in LOGCAP V which is cost plus our percentage mix could shift but we are continuing to work aggressively with our client to migrate the fixed price as a service contract structure. That component enterprise Vectrus. It plans to deliver another 80 basis points of margin expansion through increasing process discipline, cost efficiency, supply chain leverage and technology enhancements in both our programs and support functions. The processes that we have had in 2019 are now expected to contribute to EBITDA margins in 2020 and beyond.The third component solutions and client mix plan to contribute 130 basis points of margin expansion. For example we plan to take solutions similar to Advantor into our current customer set to augment the capabilities we offer. The client mix side we will continue to grow revenue with the Air Force, the Navy, the State Department and the Intelligence top client and our plans for 2020 is to further build our pipeline of opportunities within these client. 2020 promises to be another strong year for Vectrus. I want to thank our team for their continued hard work and dedication in support of our servicemen and women in their critical missions around the world.Our aim is to transform Vectrus into a higher value and differentiated platform and together we are making great progress.Now I'd like to open the call for questions. Operator?

Thank you. [Operator Instructions] Our first question comes from the line of Joe Gomes of Noble Capital. Please proceed with your question.

Good afternoon, nice quarter and thanks for taking the question. My first question, just to circle back on LOGCAP for a moment; I think it was earlier this week or late last week the GAKO [ph] announced -- put out a release that at least one of -- I think it was floors arguments, let's say, they would have ruled that there was a case like -- I know it was for the KBR. One of the KBR -- against KBR; do you see that having any potential impact here allowing some of the other people that have been denied coming back again for another bite at the apple, so to speak, or do you think some of the recent rulings by the court has stopped all of that?

Yes. I'd feel a little careful here obviously but let me summarize the current state of play this way. So, we understand what that ruling was in floors case; that in essence moved into the next round which was a quarter Federal Claims. As we found out on the 21st three of the four cases at the Court of Federal Claims were dismissed. The one remaining case DynCore's [ph] case is due to be concluded kind of on or shortly after April 10. I guess a final point too and this literally happened while we were on the phone here today is that we were given a lifting of the stop work and an authorization to begin the transition planning aspects of the of the LOGCAP contract. So I would summarize by saying we're not completely out of the woods yet from the legal processes but we are certainly trending in a very positive way and we really look forward to beginning to work with the government and transition planning.

Okay, great, thanks for that. And I just -- I kind of wanted to look on the new business pipeline. You increased the amount of bids plan to submit to about $9.2 billion from a roughly $7.1 billion at the end of last quarter. Just trying to get a little more color on how did that expand so much on a quarterly basis?

Well, we are -- the proposal activity we have is a direct result of the campaign that we have been executing overtime. So, I really like the rate and pace of our organic growth-related activities. Now that -- as you know, it doesn't mean the government is going to award any quicker than they normally do, but we are seeing very important and good opportunities for us in the marketplace. The point that I would like to continue to make as well, which I guess further reinforces the point that I'm on here; is that other than the initially awarded task under LOGCAP, our pipeline essentially include essentially no additional work other than the five tasks we've already been awarded. So once the Army clears and is ready to continue to issue additional task against LOGCAP now, we see that as an additional demand stream that is going to be obviously, very favorable from our -- from a pipeline perspective.

Okay. Thanks on that one. And one last one and I'll let someone else ask some questions. When you talk about the strategic M&A to expand the client's capabilities, I wonder if you could kind of give us a little more -- drilldown a little more to that as to what exactly are you guys looking at? Are there specific areas that you feel the company needs to expand it's capabilities? And -- I mean, we're kind of like, where is the focus or is it more as opposed to a rifle shot more of shotgun looking at -- I would say a much broader space of client assets and capabilities?

Yes. I would answer your question based upon the two acquisitions we've done in the past. So, the acquisition of SENTEL introduced a new client, the intelligence community, and a new set of capabilities, IT capabilities around operational technology and spectrum management. Advantor, as you know, was all about deepening and broadening our operational technology solutions capabilities; so there are other assets in the marketplace today that will allow us to expand wider than our existing client footprint, and there are countless new technologies that will be additive to our operational technology portfolio.

Okay, great. Thank you very much. And again, congratulations on the quarter and the year.

Appreciate it. Good talking to you.

Our next set of questions comes from the line of Joe DeNardi of Stifel. Please proceed with your question.

Thanks, guys. This is John on for Joe, good quarter.

Thank you.

So I guess the first question I have kind of pertains to the Army, do you guys mind updating us on how the Army's is thinking about it's supply and logistics management? And specifically, has the hold around the boss [ph] work kind of been lifted? And are they starting to get some proposals out there for you guys to pursue?

So the Expeditionary Army, the Army essentially outside of the continental US is largely enabled by LOGCAP V because as you know, LOGCAP V unlike LOGCAP IV is both, for enduring as well as expeditionary emissions. So, I would believe that once we move past the protest process which it appears like were there; I would expect to see significant new activities around the army logistics and supply chains, from our perspective, particularly into the INDOPACOM AOR. If you are student of all this, which I know you are, there have been several articles written to that effect here over the last six to nine months. So I really like the op tempo of not only the army, all of the services; I think this whole notion of the installations of the future and how do we digitize supply chains from both, a security and efficiency perspective is right in line to the capabilities that we have been building and the messages that we have been sending to our clients.

Good. One of the things that's been coming up, especially in the news a lot has been obviously the coronavirus. Given your footprint in the Middle East, how are your customers responding to that? And how is that affecting Vectrus's work there in the year?

It's a complicated as you know, subject. We as Vectrus and the Department of Defense as an institution have dealt with pandemics in the past. We've been working with our clients in terms of our procedures and as a provider to the military, we worked very hard to keep our restrictions of travel in our preparedness in line, not only to the areas of responsibility we have but really down to the country and base level. So sufficed to say, the number one priority is the safety of our people and that is jointly with the operational readiness that has a military provider we have to have. So it's complicated, we have people working 24/7 around the clock, and we are in more than daily, probably hourly conversations with our clients to this effect.

Okay, that's good. Then I guess the last kind of part, and just one more pivot again this time is talking about the awards environment; we've just kind of touch base around the Army. But can you kind of talk about how the Navy and the Air Force is approaching 2019 awards? Are they looking to get this stuff into on contract faster? Any color on that would be greatly appreciated. And then, I'll…

Fast and government contracting is always relative, I'll process my statements with that. But, if I look at our $9 billion plus of pipeline, we are as balanced across the services as well as to our other strategic clients such as the intelligence community and the Department of State and we ever have been. The rate and pace by which awards happen are always very difficult to predict as you know, but I will say is that this whole notion of the installations of the future, the digitization of infrastructures and trying to drive more efficiency out of the current O&M dollars are pervasive across our government clients. So again, we like how that direction is really playing to the capabilities and messages that we have been projecting into the marketplace now for two or three years.

[Operator Instructions] We have reached the end of the question-and-answer session. I will now turn the call back over to Chuck Prow for any closing remarks.

Very good. We appreciate everybody's time and attention today, and we look forward to updating you on our progress in the next quarter's call. Thank you very much.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.