World Kinect Corporation (WKC) Q1 2019 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by and welcome to the World Fuel Services’ 2019 First Quarter Earnings Conference Call. My name is Ash, and I will be coordinating the call this evening. During the presentation, all participants will be in a listen-only mode. After the speakers’ remarks, there will be a question-and-answer session. Instructions on how to ask a question will be given at the beginning of the Q&A session. [Operator Instructions] As a reminder, this conference is being recorded Thursday, April, 25, 2019. I would now like to turn the conference over to Mr. Glenn Klevitz, World Fuel’s Vice President, Treasury and Investor Relations. Mr. Klevitz, you may begin your conference.

Thank you, Ash. Good evening everyone and welcome to the World Fuel Services’ first quarter 2019 earnings conference call. I’m Glenn Klevitz and I’ll be doing the introductions on this evening’s call alongside our live slide presentation. This call is also available via webcast. To access this webcast or future webcasts, please visit the World Fuel Services’ website and click on the webcast icon. With us on the call today are Michael Kasbar, Chairman and Chief Executive Officer and Ira Birns, Executive Vice President and Chief Financial Officer. By now, you should have all received a copy of our earnings release. If not, you can access the release on our website. Before we get started, I would like to review World Fuel’s Safe Harbor Statement. Certain statements made today, including comments about World Fuel’s expectations regarding future plans and performance are forward-looking statements that are subject to a range of uncertainties and risks that could cause World Fuel’s actual results to materially differ from the forward-looking information. A description of the risk factors that could cause results to materially differ from these projections can be found in World Fuel’s most recent Form 10-K and other reports filed with the Securities and Exchange Commission. World Fuel assumes no obligation to revise or publicly release the results of any revisions to these forward-looking statements in light of new information or future events. This presentation also includes certain non-GAAP financial measures as defined in Regulation G. A reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures is included in World Fuel’s press release and can be found on its website. We will begin with several minutes of prepared remarks, which will then be followed by a question-and-answer period. As with prior calls, we ask that members of the media and individual private investors on the line participate in listen-only mode. At this time, I would like to introduce our Chairman and Chief Executive Officer, Michael Kasbar.

Thank you, Glenn. Good afternoon everyone and thank you for joining us today. We had a solid start to the year and I’m proud to say our team continued to make steady progress on our value creation strategy defined by our three pillars of sharpening our portfolio, driving organic growth and exercising cost discipline. I know you’ve heard me say this consistently over the last several quarters, but it is this mantra that is focused our execution driven our results, improve the health and providing confidence in the trajectory of our business. Through the first quarter of 2019, we continue to focus our efforts and financial capital into businesses that are predictable, sustainable, and scalable. The diversity of our business model, which we have long believed to be a strength, enabled us to offset the warm weather in the UK and continue our earnings momentum. Our solid financial performance this quarter evidences that our strategy of portfolio rationalization, organic growth and cost management is bearing fruit. Furthermore, we have built a robust pipeline of both organic and strategic opportunities that we are actively evaluating and pursuing, and for which we remain well positioned to execute on during the balance of the year. Our aviation segment performed well supported by supply chain optimization efforts and a continuing expansion of our physical operations into more locations underpinned by strict adherence to our cost management discipline. Our government business also delivered strong results, leveraging our supply capabilities in strategic areas of interest and demonstrating our reliability and expertise and energy and logistics to support these complicated activities as a trusted partner. Well, volume in this quarter was only marginally higher than last year. We expect organic growth to continue within our aviation services business over the balance of the year. Our marine segment delivered positive year-over-year results and made judicious choices about our portfolio while maintaining a focus on cost efficiency and prudent risk management. Gross profit margins remain strong in Q1 and our focus on returns on capital is designed to continue that trend. We are leveraging the supply and logistics competencies we already have in place across all of our businesses to capture internal synergies, which will further augment our efforts to address the industry challenge, its challenge is inherent within the IMO 2020 low-sulfur regulations. This quarter, we saw the benefits of the geographic diversity of our land business as it overcame the negative impact of a warmer-than-expected winter in the UK by continuing to grow our North American Commercial and Industrial or C&I fuel business and accelerating momentum of our global connect, gas, power and sustainability business. I remain bullish about my remarks during our last call that our land segment will continue to grow at double digit rates this year by increasing our value share with existing customers and by bringing together our capabilities and gas, power and sustainability to offer a compelling and comprehensive suite of energy solutions to our C&I customers around the world. Our MSTS payment solutions business continued to grow both gross profit and EBITDA at a double-digit rate. Our team continues to execute well on ongoing business activities while identifying new customers seeking cost effective business-to-business customer acquisition and payment solutions. I am truly pleased to see how our team has locked arms across all businesses and functions to simplify processes, improve organizational alignment, and beginning to drive shared services efficiencies by employing best practices through centers of excellence. Looking ahead, we are optimistic that our technology investments in operational streamlining will not only improve the ease with which our customers and supply partners transact with us, but would also lead to more collaboration within our team of over 5,000 talented professionals that I believe to be the most creative and innovative in the energy and logistics space and with whom I am truly very fortunate to work. So, I want to say thank you to my 5,000 colleagues in 38 countries that deliver comprehensive energy solutions in over 200 countries and territories. And I want to thank our shareholders who support our vision of a global energy management, fulfillment and payments business supporting the commercial, industrial and government sectors. I’d like to turn the call over to Ira at this moment, to do a further review of our first quarter results in greater financial detail.

You’re welcome, Mike by the way and thank you. Good evening everyone. I’m pleased to report that we continue the positive momentum from 2018 in the first quarter by starting off the year with solid results. Before I get into the details, some of the highlights are as follows. Adjusted EBITDA for the first quarter was $95 million. That’s an increase of $14 million or 17% compared to last year. We have now delivered year-over-year increases in adjusted EBITDA for eight consecutive quarters. We again improved the operating leverage making progress toward our goal of the 250 basis point improvement in our operating expense ratio for the full year. Adjusted earnings per share for the quarter was $0.66 including the impact of the prior period corrections, which principally related to tax referred to our earnings release. Excluding such corrections adjusted earnings per share was $0.50. And lastly, our balance sheet remains strong as our net debt to adjusted EBITDA ratio fell to 1.3 times. Consolidated revenue for the first quarter was $8.7 billion down $500 million or 6% compared to the first quarter of 2018. The year-over-year decrease in revenue is principally driven by the decline in volumes in our marine and land segments. Our aviation segment volume was 1.97 billion gallons in the first quarter, effectively flat year-over-year. For the full year, we expect volume growth to be similar to the growth experience in 2018 in the aviation segment. Volume in our marine segment for the first quarter was 5.2 million metric tons, which is down 575,000 tons compared to the first quarter of last year. The volume reduction principally related to our continued efforts to exit certain low margin business activities in Asia. The marine team continues to focus on growth opportunities, which means our return thresholds including the identification and penetration of new markets. Our land segment volume was 1.3 billion gallons or gallon equivalents during the first quarter down approximately 110 million gallons or 8% compared to the first quarter of 2018. The year-over-year decline in land segment volume was principally related to our continuing efforts to reduce non-core low margin supply and trading activities in North America. Total consolidated volume for the first quarter was 4.7 billion gallons or gallon equivalents, a decrease of approximately 260 million gallons or 5% year-over-year. Please note that the following figure is excluded income – the impact of pretax non-operational items in the first quarter as well as non-operational items in periods previously reported as highlighted in our earnings release. These non-operational items principally represent restructuring and acquisition-related costs. To assist all of you and reconciling results published on our earnings release, the breakdown of these non-operational items can be found on our website on the last slide of the webcast presentation. And now on to gross profits. On a consolidated basis, gross profits for the first quarter was $251 million, an increase of $8 million or 3% compared to the first quarter of 2018. Our aviation segment contributed $114 million of gross profit in the first quarter, that’s up slightly compared to the first quarter of 2018. Strength in our government related and international fueling operations, we’re principally offset by the effects of market backwardation, our domestic supply activity during the first quarter. We expect similar sequential growth in aviation gross profit in the second quarter to the growth experience last year, principally related to normal seasonality in our core resale business and international fueling operations. The marine segment generated first quarter gross profit of $35 million, an increase of $4 million or 13% year-over-year. Our team continues to execute well with core margins and returns remaining well above the prior year. Looking ahead to the second quarter, we expect marine gross profit to be similar to the first quarter, which would again, drive solid year-over-year improvement. Our land segment delivered gross profit of $102 million in the first quarter. While land gross profit did increase sequentially, such increase was muted by yet another unseasonably warm winter in the UK. Year-over-year gross profit was essentially flat with UK down from last year’s more seasonable winter offset by increased gross profit in our Connect global energy services platform and North American commercial and industrial and retail activities. Gross profit coming from our MultiService payment solutions business was $18.9 million, an increase of $2 million or 12% compared to the first quarter of last year, reflecting the continued strength of the MultiService business model. Looking ahead to the second quarter, while we expect gross profit in the land segment to be flat to slightly lower, sequentially driven principally by seasonality, we expect solid year-over-year improvement driven principally by increasing profitability in our commercial and industrial and retail activities. Operating expenses in the first quarter, excluding bad debt expense and non-operational items were $176 million, which is an improvement of $3 million year-over-year, an improvement of $2 million sequentially. Our total operating expense ratio as a percent of gross profit improved year-over-year to 71.1% from 74.5% in the first quarter of last year and from 72.7% for the full year of 2018 and we remain focused on achieving our target of a 250 basis point improvement in our operating expense ratio for the full year 2019. And as a reminder, this target is an addition to the 425 basis point improvement in our operating expense ratio, which we achieved in 2018, a testament to the focus of our entire team globally and controlling costs better than we have done in the past. In the second quarter, we expect operating expenses, excluding bad debt and any non-operational items to be in the range of $180 million to $184 million. Adjusted EBITDA was $95 million in the first quarter, up $14 million or 17% from the first quarter of 2018. Again, this represents the eighth consecutive quarter of year-over-year improvement in EBITDA. Over this period, trailing 12-month EBITDA has increased by nearly $100 million. Adjusted income from operations for the first quarter was $73 million, up $10 million or 17% year-over-year. And first quarter non-operating expenses, which is principally comprised of interest, expense and finance charges were $19 million, effectively flat compared to last year, and I would assume interest expense to be in the same $18 million to $20 million range for the second quarter of 2019. Our adjusted effective tax rate for the first quarter was 16.6% including the effect of the correction related to a prior period discrete tax items. This is down from 19.3% in the first quarter of last year. Excluding the impact of the discrete item, our adjusted effective tax rate would have been 32.4%, slightly lower than the rates we guided to going into the first quarter. but for the balance of the year, you still expect our tax rate to be in the range of 30% to 36%. Adjusted net income for the first quarter was $45 million, an increase of $9 million or 27% when compared to the first quarter of 2018. And adjusted diluted earnings per share was $0.66 for the first quarter, an increase of 27% compared to last year, again, impacted by a lower than expected effective tax rate. Our total accounts receivable balance was $2.7 billion at quarter-end, effectively flat sequentially as well as when compared to the first quarter of 2018. We generated cash flow from operating activities of $22 million in the first quarter despite a significant increase in fuel prices from year-end to the end of the first quarter. Despite the increase in fuel prices, we further strengthen our balance sheet reducing our total debt balance below $700 million, which is down nearly $140 million year-over-year resulting in reduction of our ratio of net debt to adjusted EBITDA to 1.3 times, down from 2.2 times in the first quarter of last year. This improvement increases our capacity to invest in both organic and strategic investment opportunities, while continuing to maintain a strong balance sheet. In closing, we delivered strong results in the first quarter, well further improving our balance sheet and liquidity profile, remain focused on sharpening our portfolio business activities by divesting of additional non-core businesses and reinvesting-related proceeds in core activities, we should drive additional profitable growth. Our continued focus on cost control resulted in a significant year-over-year improvement and our operating expense ratio in the first quarter, and we remained focused on delivering a 250 basis point reduction in the ratio for the full year. These opportunities remain bound tightly together in support of our principal goals of increasing returns on capital and increasing shareholder value. I will now turn the call back over to our operator, Ash to begin the Q&A session.

Thank you. [Operator Instructions] Our first question comes from the line of Ben Nolan with Stifel. Please proceed with your question.

Yes, thanks. Hey guys. So, I guess for my first question, you’d mentioned as it relates to the aviation business that you’ve done pretty well on the government contracting side. I know that’s always been kind of an ambiguous number or somewhat of a uncertain outlook and then it’s hard to pin down. But how are you feeling about the continuation of that government business going forward and both for the rest of the year and maybe into the future as well?

Yes. I’ll start. Mike could chime in. How are you doing, Ben? Thanks for the question. Look, that’s always a very, very difficult to predict long-term based upon a lot of factors that were all equally exposed to day to day in terms of what’s going on in that part of the world. We’ve been pleased that our relationship remains strong. Activity remains strong as a matter of fact or our first quarter was one of the strongest we’ve had in a very long time in that regard. And – it’s while we have contracts that doesn’t guarantee us any particular level of volume on any given day. But saying that the same time, those volumes have continued, but it’s impossible to project when they may change materially in one direction or the other. For now, we’re still relatively confident that will deliver similar results to what we did in 2018 in that area. But the caveat to that is that can always change on a dime if something develops in terms of troop withdrawals or border closures or anything that would have an impact on that business. But at the moment, our team has done a phenomenal job and the business continues to be generally robust.

I think, I’ll just add to that. In terms of what we’ve – and I’ve said this in the past, but I’ll repeat it, it’s worth repeating. It is the capability that we’ve developed there was instrumental in terms of our global petroleum logistics and the company has really transformed from an asset light company to fairly sophisticated logistics company and we benefited from our military logistics personnel. So that’s been tremendously helpful. And the objective and we’ve made progress on diversifying that military activity to a number of different locations. And we are making progress there. So, those are two dimensions that I think are noteworthy in terms of, just that military activity.

Okay. That would theoretically make it a little stickier and also more diverse. I guess this is kind of the idea, right?

Exactly, exactly. And the reputation, obviously, it’s serving very demanding clients. So, having that reputation and being able to handle that. Again, I’ve said it in the past, right. I make it analogous to Formula One racing to passenger car new companies. So that capability to be able to deal with that has really strengthened the logistics capabilities throughout the entire company. I made reference to our shared services and centre of excellence, and our global physical operations, capabilities driven by our military personnel and that has been a tremendous asset for us.

Okay. Great. And then my second question, it relates to sort of capital allocation. I know that in the last call, you’ve talked about the idea that maybe, you’re sniffing around perhaps a little bit more at some M&A opportunities. We’re curious if you have to call it there, but also I notice that the inventory levels are rising. And as you’re sort of becoming more of a logistics company and less of an asset light, sort of a broker effectively, how do you have to sort of weigh in the need to sort of support and build the balance sheet as a function of capital allocation in addition to M&A opportunities that are debt repayment we’re having.

I’ll list it in step-by-step, obviously, the returns are what keep you in the right place. So, you need to manage that carefully. If you get the returns, then you’re going to be able to grow your balance sheet. So, blending that within a combination of asset light inventory, lots of services are – we liked the services side. So, growing that services and those services have grown within the aviation side. So, it really is getting the balance right. And the notion of value share, where we are becoming a strategic partner for clients and also a strategic partner for our suppliers and refiners in terms of the offtake in bringing that demand to them. So, certainly, the balance sheet has implications there and it’s making sure that you’re getting the returns and growing your earnings, so that you continue to flex your balance sheet.

Okay. All right. Well, I’ll turn it over. I appreciate it. Thanks guys.

our next question comes from the line of Kevin Sterling with Seaport Global Securities. Please proceed with your question.

Well, thank you. Good afternoon gentlemen.

Hi, Kevin.

Hey, Kevin.

So, because you mentioned, I think for Q2, we should expect organic growth in the aviation. How should we think about growth in marine and land? I know, Ira, I believe you said gross profit improvement year-over-year in marine, I assume that’s mainly coming from price, not necessarily volume, but how should we think about marine and land organic growth, if you will?

So, within marine that we’ve got 2020, there has been a lot of wait and see on that. The forward curve isn’t really showing very much, but there have been a couple of select deals. But if you look at, and I’ve said this before, aviation being a manifestation for the entire company in terms of the combination of asset light, select physical inventory, distribution and technology, and that applies to both marine and land. So, we’ll have a selective approach to organic growth. We got tremendous capabilities. We are leveraging more of the capabilities within the company that cut across all of the “segments.” So, we’ll continue to grow organically, we’ll penetrate markets selectively both on the asset light side, which we’ve done a marine and aviation, but selectively, entered the physical side of the equation, try to add more services, where we can, utilizing technology. Within the land, as I’ve mentioned, I think last quarter, we are going to use the global platform that we have within marine and land at marine and aviation, to selectively grow our land business. So, certainly, the U.S. is an area of interest, where we’ve got a foothold within Europe. So, there’s acquisitions within the land space. We have very small market share. So that’s a fairly rich place for us to continue to grow our C&I business. Within connect, we believe that we’ve got good growth within our gas and power and sustainability business. Blending those together, on a go-to-market within our commercial and industrial users, makes a lot of sense. I made reference to that last quarter. So, it’s a combination of leveraging the corporations in the capabilities and applying that across the entire business, using our global platform to logically extend into those different activities. And then selectively looking at acquisitions. So marine, we feel good about in terms of getting some growth there, certainly with 2020; we are well prepared to support our loyal clients. And then the land has been a rough road, but we feel like we’re getting a solid team together and while technology is slow to come, we are focused very much on the customer experience and being able to sort of overcome some of the challenges in terms of putting together complex systems. So, we feel like we’ve got a much better growth curve and momentum and the land engine is starting to come together. It’s palpable in terms of a hell of a lot more engagement within the team, both on a diesel, gas and power and sustainability. So that feels good. We’re feeling very positive about that. And the marine team as well, is extremely engaged. So, it feels like all of the businesses are coming together. And the balance sheet looks good. So, we’re ready to roll, I mean, it’s never – it’s never simple. But we feel like we’re in better condition now than ever before.

Yes. Thank you, Mike. And I guess digging a little bit deeper into marine, and if you don’t mind and you guys have done a good job exiting some of the low margin business there, getting out of some of the Asian ports, how much more do you have left to exit? Is it possible to quantify it or ballpark it, we can see another quarter or two, where you continue to exit this business or how should we think about exiting how much more do you have left to exit in your marine business?

I would say, it’s Ira, Kevin. I would say we’ve been through – I would – if you put it in anything as in baseball and vernacular, we’re probably in the eighth inning or so. So, if you look at our – if you look at it from a volume perspective, I would hope no guarantees that we kind of bottomed out in the first quarter. I don’t expect that volume number to grow materially in the second quarter. Mike talked about the opportunities that may come to pass in terms of 2020, we’re always – I would say we’re permanently more seriously looking at pieces of business that maybe we should have never been doing in the first place. obviously, the low-hanging fruit has been called, they’re always going to be opportunities to identify more of that, but hopefully, replacing that going forward, more than on a one-to-one basis. So, we think we’re going to start seeing some uplift in volume over the course of the year. Not material uplift, but I also – it’s pretty safe to say we don’t expect the number two, calling from the first quarter over the next three quarters. So, it’s activity that had low returns. We’re also looking at – that market is still kind of fragile, right? So, we’re looking at various relationships and some of them continue to make sense, some of them may not from a credit perspective. And so we’re looking at it from a whole bunch of angles and focusing on driving the parts of the business that makes the most sense to us, our guys have done a great job and in doing that and improving overall margins and returns and that quest will continue over the balances here. So, we expect a pretty good result out of marine this year, because of all those efforts despite likely limited volume growth.

Got it. Okay. Thank you. And last question here and then Mike, you briefly touched on this. I’m going to ask it if you don’t mind. You talked about M&A opportunities; obviously you mentioned that the balance sheet leverage, it’s low. It’s my gosh, it’s probably one of the lowest levels I’ve seen in quite some time. So, how does M&A pipeline look and if that doesn’t come to fruition, how can we think about maybe a stock buyback or dividend increases as well?

I’ll start with that and Mike, I think we get that question on every call. So, we should probably record our answer. Look, a great point on that from the standpoint that we’ve got a good job as a balance sheet, maybe a little more conservative and trying to clean up that balance sheet over the course of the last 12 months and put it in a much better position going forward. We didn’t do any M&A in 2018 purposely. So, our balance sheet is in good shape. We spent a lot of time focusing on cost. We’ve gotten that in much better shape. So, we’re much better positioned our minds now to go out and look at opportunities. The pipeline is extensive, there are a lot of opportunities in our core businesses that are out there. We’re scrutinizing many of them and we’re hopeful that a couple will come to fruition some time in the near future, but there’s a lot of heavy lifting to occur before that happens. So, I believe we could do that and find some opportunities without really changing, the beauty of the current balance sheet, so to speak. We’ll always look at buybacks and dividends. We’ll always evaluate the level of our dividends. We reviewed that with our board on a regular basis. And buybacks, as you know, I don’t think we’re ever going to be a large buyback type of company. We try to do that opportunistically. We tried to buy back enough shares every year to cover the dilutive impact and stock awards. We’re probably never going to do a whole lot more than that unless we were really generating tremendous amounts of cash and didn’t feel we had any better use for it. So, investing in our business and our core organic business today is number one, investing in strategic opportunities, that would be number two. And then finding ways to return additional value to shareholders with, I would say limited buybacks and dividends would be tied for third.

Okay. All right. Would you say most of your M&A opportunities are in land or is it spread across the board?

Land.

Yes. I mean if you look at it mathematically, I planned, obviously we have the lowest market share in the largest business by far in terms of the overall markets worldwide. So that there are clearly more opportunities in land and anywhere else, but we’re not only looking at opportunities in land there. There are always opportunities to look at and then the other businesses as well.

Okay. Got it. That’s all I had on. Thanks so much for your time this evening.

Thank you, Kevin.

Thanks, Kevin.

Our next question comes from the line of Ari Rosa with Bank of America. Please proceed with your question.

Hey, good afternoon guys. Congrats on what it looks like a pretty solid [indiscernible]

Ari, we can’t quite hear you.

Can you hear me better now?

A little bit, yes. So aesthetically, go ahead.

I apologize for that. I’m just asking to what extent, do you think that some of the improvements you’ve made, put you in a position, where you’re sensitive to just swings in the environment or the term macroeconomy?

Macroeconomy. Ari, we got the question right, I’m going to repeat it, because you can hear you well, let me everyone else was, I think what you’ve asked was how do we feel that we’ve positioned yourselves better to insulate us from the macroeconomy? Is that correct?

Yes, exactly correct.

I’ll take a crack at that. One of the beauties of our business model is we’re still primarily an asset weight business. So, we’re diverse, right? We’re doing business in lots of different geographies and we’re doing business in lots of different end markets. We don’t have concentration in different business segments. So that gives us a certain amount of insulation in terms of macroeconomic moves. So that was by design as opposed to having a monoculture so to speak, something hits and it has a catastrophic impact. So, from that perspective, if you’re looking at interest rates, if we’re looking at the price of oil, certainly, is the volatility that could impact, we generally, benefit from just we’ve got the ability to pivot. If we’re looking at economic downturns, sometimes the risk goes up. I’ve commented in the past that with 2020, one of the things that, not a lot of people are thinking about is, credit risk, because undoubtedly the price is going to go up. Some shipowner is going to be able to pass on the cost. Some maybe not so much. So, there potentially is going to be some risk is going to be some, I think quality risk and performance risk there. So, by and large, we are one big risk management company. So, to the extent that you’ve got global downturns. We’ve got the ability to dial back better than most companies. And the improvements that we’ve made, I think certainly from a balance sheet perspective, certainly from a cost perspective, we are a stronger company. We’re more a resilient company. We’ve got a fairly diverse portfolio as I’ve mentioned both geographic and end market – from an end market perspective. On going through the rather unpleasant transformation that we have to go to, it’s the first time, we really have to do that. We’ve got a little bit of experience in terms of how to basically scale back. So I’d say that we got a more durable and a more resilient business model today, balance sheet, financial perspective, and frankly organization. So, that comes with time and I think that we’re in better shape than some companies. And when we look at our physical logistics capability, we’ve got the ability to have a preemptive exits, in terms of Exit A, we don’t really have very many long-term commitments. So, we don’t have heavy duty fixed assets with long-term commitments. So, I think that we’re better positioned than most companies and for all of the previous reasons. So I hope that, hope that gives you enough color to answering questions.

Yes. That’s a terrific level of detail. And also if you can, I’ll just ask one more, just hopefully, regarding like that – as you talked about acquisitions, maybe you talk about what you’ve learned from some of the past acquisitions that you’ve done, where maybe there have been a couple of pickups and how that’s influenced your thinking as you begin to evaluate acquisitions now going forward?

Yes. We’ve learned, yes. We went to the best school going as anyway. Now listen, we’re in a far better position now. As we look at sharpening our portfolio and looking at the organization at the end of the day, it’s very much about the people, it’s very much about the process and the platforms. So, having a more streamlined organization, having a clear idea of what we’re interested in, allows us to really focus on the – both selection for acquisition, the valuation and importantly, the integration, the realization of synergies, both on cost as well on growth. So, I think that those are areas that we’ve got a far greater focus. We’ve talked about readability, scalability, sustainability. So, I think that the entire organization is much more keyed into those areas. We’ve got a level of maturity. I think the organization is looking very good right now from that perspective. So, there’s always room for improvement, but we’ve come a long way. So, the – we’re feeling a lot more in the zone, relative to making those selections and being able to execute on that. So, there’s a higher level of organizational competence and engagement.

Yes. Absolutely. Thanks for your time. I appreciate it.

Okay.

Okay, Mr. Kasbar, there are no further questions at this time. I will now turn the call back to you for closing remarks.

Well, thanks very much for joining us. Thanks for this support and thanks for all the team members that may be listening for all of the engagement and the burning desire to succeed. It really is a pleasure working with all of you. So, thanks everybody and we’ll talk to you next quarter.

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your line.